On Top of the World: Durst Organization Director of Leasing Eric Engelhardt on Leasing Up 1 WTC
By Gus Delaporte October 15, 2013 11:00 am
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Mr. Engelhardt speaks optimistically about his task at 1 World Trade Center, but the fact remains that no major corporate tenants have signed a lease at the building since Condé Nast committed.
However, the stagnant leasing activity has not been isolated at 1 World Trade. Larry Silverstein’s planned 3 World Trade Center development had struggled to find an anchor tenant, though reports indicate advertising giant GroupM has come to a preliminary agreement to take more than 500,000 square feet there.
The tide will soon change, Mr. Engelhardt said.
“2014 is going to be a very busy year for us and the Cushman team, and frankly, I hope so for Mr. Silverstein and their CBRE team,” he said.
Mr. Engelhardt is no stranger to difficult situations and complex deals. Twice in his career, the 41-year-old has been part of a deal that won REBNY’s Ingenious Deal of Year award—though not without hiccups along the way.
In 2000, just four years into his career, the Long Island native was part of an Insignia ESG deal team that worked to bring Arthur Andersen in as the anchor tenant at Boston Properties’ Times Square Tower. Though the leasing team had already lined up a number of tenants in the building, once the accounting firm expressed interest, a scramble was on to move those tenants elsewhere.
“Some of the tenants are confidential, but one of those happened to be Insignia ESG, so that was an easier conversation,” Mr. Engelhardt said. “I was the relatively junior guy on that team, but I think John Powers magnificently played mediator between multiple parties.”
But the ending was not all happy. Arthur Andersen soon found itself embroiled in the Enron scandal, and in 2001 voluntarily surrendered its accounting licenses following criminal charges related to the firm’s auditing practices for the energy company. In the summer of that year, it negotiated with Boston Properties to terminate its lease agreement.
“The intention at the real-estate level was still creative and complex within itself,” Mr. Engelhardt said of the outcome. “When Arthur Andersen went down, we went looking for new tenants and shortly thereafter, I went to Durst.”
Having started at Edward S. Gordon in 1996 fresh off earning a Bachelor’s degree in architecture, Mr. Engelhardt spent the early part of his career being acquired by larger firms, first by Insignia and later by CBRE. His experience, which stretched from consulting to agency, left him in a good position when the Durst Organization called him in 2003.
“Durst was going through growth,” he said. “They had just shaken hands with Bank of America to anchor 1 Bryant Park and they wanted to staff up.”
Despite the disappointing outcome of the Arthur Andersen deal, a successful conclusion to a complex transaction in his new position was right around the corner, and with a publishing company, no less.
In 2004, Mr. Engelhardt, a newly minted vice president at Durst, teamed up with colleague Tom Bow to carefully restack the developer’s 733 Third Avenue property for Rodale Press. The deal, which required Durst to accommodate the needs of seven tenants, concluded with Rodale locked in as the building’s largest tenant.
“Rodale moved into a large block of floors and now anchors the building and 733 holds their name,” Mr. Engelhardt said. “There were a lot of moving pieces and people with disparate goals and objectives.”
Not long after, it was developments and acquisitions that were the focus of Mr. Engelhardt’s attention, not 1 World Trade Center at first, but Hudson Yards, pitching the project to the MTA alongside Vornado.
Though that pitch ended in disappointment, with Related Companies taking the reins on the far West Side, the experience prepared Mr. Engelhardt for what was to come in negotiations with Port Authority for 1 World Trade Center.
“After that daunting task, we had our sleeves rolled up and were ready to hit the ground running,” he said.
