When The Commercial Observer caught up with Tara Stacom last year, the Cushman & Wakefield vice chairman was positively beaming about leasing opportunities at 1 World Trade Center, the 1,776-foot, 3.1-million-square-foot tower she’s been billed with filling with tenants. “I’m more bullish today than I was in 2007,” she said last year, shortly after news surfaced that Condé Nast would serve as anchor tenant at the building. “I did not think one of the first tenants would be a million-plus feet.” Last week, Ms. Stacom’s confidence in the building, which remains far from leased up, was still brimming over. She spoke with The Commercial Observer about the impact of the Condé Nast deal, how the Downtown office market fared in the first quarter and what to expect in the next quarter.
The Commercial Observer: When Condé Nast did a deal for over a million square feet last year, it seemed to be a watershed moment for not only 1 World Trade Center but Downtown in general. But I haven’t heard about too many deals that followed Condé’s lead. What’s the status of activity at the tower?
Ms. Stacom: We’re been getting great interest, tenants who are coming to tour it, to see it, who want to understand it. We’re trading paper with half-floor users to full-floor tenants and exchanging paper with the larger tenants as well. We’re quite pleased.
Did doing the deal with Condé change anything though?
Condé contributes greatly to all of that activity. We really didn’t think we would have the million-square-foot user as early as we did and it really put us on the map. We have smaller companies thinking well ahead of the normal timeline for firms of that size and they’re coming to us with a clear interest in wanting to be here.
Is the bulk of activity from smaller users right now?
No, I’m not saying that. But it’s noticeable because you normally don’t have a half-floor user like we’ve been seeing in the market this far in advance. The building’s delivery is not until next year. Getting to use [it] early, though, gives them a better economic package. As we keep going with this building the cost to tenants may go up as we fill it and there may not be the opportunity for smaller deals if we get another large user like Condé. It’s been surprising. But then, this is 1 World Trade Center and nothing should surprise me. It’s such an amazing site that has so many more advantages than anything else out there, with Calatrava Station and the park. It shouldn’t surprise me that the companies with youth and talent would want to be here because this is where the workforce is.
The first quarter of leasing was pretty dismal according to early data. Did you feel the slowdown in your work?
What everyone is feeling is a change from 2011. That was an extraordinary year. According to the data I’ve seen, leasing activity during the first quarter was close to the 10-year average. We’ve got strong job growth and we don’t have much supply and certainly not of the quality of 1 World Trade Center, which has column-free space and huge floor-to-ceiling windows. I think things are looking quite good for the rest of the year.
So when do you think we’ll hear about the next deal at 1 World Trade?
I really don’t know. When I was doing the Lazard deal [last year], we thought that it would close eight months before it did. It was the same thing with Bank of America, another client. The timelines are so difficult to gauge and deals don’t always happen as we all expect.
Speaking of Lazard, they’re at 30 Rock, right?
Another tenant at 30 Rock, Chadbourne & Park, was rumored to be close to a deal at 1 World Trade Center but pulled out. What happened?
We’ll have to see where they go. We’re obviously disappointed. They were a tenant we would have liked, but interest remains really great. We expect we will end up doing a deal with a law firm.
Have you looked to achieve a mix of tenants at 1 World Trade Center?
We would definitely like a tenant mix. From different industries, different size variations and both domestic and international, which we did when we signed with Vantone. We wanted companies from outside of Downtown. We’re hoping we have a financial tenant too.
What about the government tenants that were originally slated to go to the tower?
We have an agreement to have the federal government take about 300,000 square feet in the building.
Which federal tenants are coming to the property?
I really can’t say. But 300,000 square feet is really a small minority of a three-million-square-foot building.
Have you been involved in helping the Port Authority fill the space Condé is leaving behind at 4 Times Square?
We’ll see how that unfolds. The Port assumed the obligation for 4 Times Square for the remainder of Condé’s lease [which stretches until 2019], but so far we haven’t gotten started on that.