Jody Durst on Condé Nast’s Next Cafeteria, Filling 4 Times Square
Tom Acitelli June 21, 2011, 1:20 p.m.
The Observer: There was a lengthy gap between when the unofficial deal with Condé Nast leaked to the press more than a year ago and when the deal actually became official earlier this month. What transpired between then and now?
Mr. Durst: There were significant issues that needed to be worked out, and significant negotiations that took place. Condé certainly wasn’t going to tell us two years ago, before a deal had been structured, that they were going to come down. Obviously, they needed to ensure that it was under business terms that they could agree with, and that it was in the best interest of their company and employees to go down there.
They did a tremendous amount of due diligence between then and now, and there were, as I said, significant deal terms and issues that needed to be addressed.
Did those negotiations include everything from taking rent to new amenities?
It related more to them being trailblazers and understanding what the conditions would be at the site at the time they moved in. Certainly, rent and monetary terms were important as well, but everyone understood, I think, that they were concerned about what the site would look like.
They didn’t want their employees traveling through a construction zone traveling to the building. They wanted to ensure that conditions around the building would not be a factor, and I think we’ve done that.
Will Condé Nast be graced with a state-of-the-art cafeteria like at 4 Times Square?
Yes. That will be the case. As I understand it, they’re still determining where that cafeteria will be in terms of their block of floors. They’re looking at what would be most advantageous, whether it’s low in the block or at a crossover floor or etc. They haven’t determined that yet, but, yeah, they’ll have something very, very nice.
The Durst Organization got a sweet deal in that, through Condé’s remaining lease at 4 Times Square, the Port Authority will be paying rent at the space. In essence, that means you will be receiving rent there as well as at 1 World, in which your group has a 10 percent ownership stake. Can you give more details?
We will not be … Let’s see … We’re not really going to be receiving rent from both buildings, only to the extent that we can’t rent the space that they’re moving out of. You’re right, but only to the extent that once we get a new tenant those obligations vanish with regard to the Port keeping us whole. But this part of the deal has not been completely framed yet. I just don’t want to say anything more on that yet.
What are the current rents at 4 Times Square?
I wouldn’t want to say that, but what I would tell you is that Condé received a very preferential rent when they established residence at 4 Times Square because we needed the tenant and, essentially, they made the building possible.
What are the chances a tenant like Skadden Arps will simply expand into the space? Or is it more likely that you’ll find an 800,000-square-foot tenant to fill Condé’s void?
We have received significant interest from brokers in the market looking for a big block of space. But, essentially, the only other large commercial tenant in the building is Skadden Arps, so basically Condé had the bottom half and Skadden had the top. So, as I said, we’ve had some interest from the outside and, again, we’d like to sit down and discuss what [Skadden’s] future needs will be.
Considering your unique relationship with the Port Authority with regard to what’s happening with Condé, will the Port Authority also have a man on the ground looking for a tenant to take space at 4 Times Square, or just the Durst Organization?
It depends on the structure of our deal and whether they’re responsible for the leasing or whether we will be. It could go one of two ways.
It’s been a little more than a year since your cousin Douglas Durst stepped down as president and you took on the presidency alone. What’s changed since then?
The interesting thing is that, at just about the same time that I officially became president, we also became very involved with 1 World Trade Center. So we’ve become markedly busier. We were finishing up 1 Bryant Park—the last details of 1 Bryant Park—and we were all sort of in a construction or completion mode and then we got very, very involved, very quickly, with the Port.
But it was a fortunate transition in that all of our construction personnel and consultants were assembled and we diverted those resources to 1 World Trade. So it worked out well with the flow. But we went from a completion mode to being immersed in a building that was already up to the 40th floor. So everybody was immediately very busy.
I don’t know exactly how to answer that question except to say that we’re very, very focused on helping the Port improve what can be improved and finishing the building.
How would you characterize the New York market today compared to two years ago?
I think everybody was hopefully and wishfully thinking that things were going to improve here in New York and now I think that it’s fairly clear that, except possibly in a few isolated areas, we’re leading the country in economic recovery as it relates to the real estate market.