1.5 Million and Counting: Robert Becker of The Durst Organization on Leasing Remaining Space at 1 WTC
Robert Becker, senior leasing manager at The Durst Organization, joined the company eight months ago. Having previously worked closely with the firm as an executive with Bank of America’s global real estate transactions and leasing operations team, Mr. Becker jumped on board with inside knowledge of the firm’s pivotal role in shaping the landscape of the city—most recently with the shining gem at 1 World Trade Center, where Mr. Becker is leading efforts to fill the remaining space. Condé Nast, the General Services Administration and Vantone China are sealed in, but there’s more work to be done. “The most exciting thing for me is to be leasing the last million and a half feet at 1 World Trade Center,” he told The Commercial Observer last week during an interview that touched on his role at the company, the leasing efforts at 1 World Trade Center and the renaissance of lower Manhattan.
The Commercial Observer: What’s the status of the leasing and construction at 1 World Trade Center?
Mr. Becker: The construction is nearing an end within a year, and we’re about to turn over space to our first tenant [Condé Nast] on January 1. Earlier this week, we had a tour with a potential tenant that had visited the site months before, and they just could not believe the progress that was made on the entire Trade Center development and particularly on our building. Getting that type of reaction from potential tenants is really exciting.
How important was the Condé Nast deal to the success of the building?
Condé Nast took over 30 percent of the building, so by its size alone it was very important, but I think that even having that type of user moving Downtown was probably the most important part of it. It really showed that Downtown is more than just a traditional financial hub. It is a broader base of tenants, and I think that’s what really makes a dynamic market—you need to have that tenant mix.
What types of tenants are you marketing the remaining space to?
We’ve had all different types of tenants and interest from a variety of different industries. The building lays out very well for executive offices—it has that executive feel to it. It also has a column-free design for tech companies, so we’ve had interest from all those types of users because of the flexibility of the design.
How do you characterize the changes taking place in lower Manhattan, and how does The Durst Organization fit into the equation?
There are a number of things that are really reshaping Downtown. First of all, everyone knows about the transportation, with connections to all the transit centers and hubs and the New Jersey PATH. But one of the things we’re finding most exciting is the talent and the number of potential employees that are within 30 minutes of Downtown, and the growth Downtown has had from a residential standpoint in the nearby neighborhoods that are within 30 minutes of a subway ride—in Brooklyn, Queens and New Jersey. Access to that talent is important and is really an enabler for businesses to relocate Downtown.
To make a great submarket, you need a real diversity in building types, and I think now, with the Trade Center coming in, offering that trophy building along with the other product types really offers tenants choices, as far as what type of product that they want.
What’s happening with leasing rates and vacancies Downtown?
Downtown is having a good pace this year. So far they’ve leased nearly 1.5 million square feet this year. And in the subdistrict that we’re in—at the World Trade Center—they’ve leased about 350,000 square feet. That’s a little bit down from last year, but overall the vacancy and forecasted vacancy is actually dropping, so we’re seeing a lot of activity, and I think that’s because of that activity and some of the things that we’re seeing in the future. The vacancy in the market of 15 percent, if you look 12 months out, is actually declining month-over-month. So we’re seeing a lot of good activity.
The other thing that is interesting with this is that the actual average rates are increasing Downtown, because a lot of the buildings that are coming online are these new Class A buildings and the premier buildings at the World Trade Center.
Had you seen anything like Hurricane Sandy before—and how do you view it in retrospect?
Throughout the years I’ve seen these kinds of impacts, in New Orleans and in Texas, with hurricanes and other disasters. My initial reaction was that I could not believe how fast the city was able to respond and get back on its feet. It was very reassuring to me how quickly they were able to get the transportation systems back up, how most of the buildings were able to come back online very quickly, and the entire city’s reaction and support was tremendous. It would probably be wrong to pinpoint any one person, but it’s the entire city and its organizations and how they responded—the MTA, the city— every one of them.
Your building on Front Street—a 200-year-old landmarked complex with 95 apartments and 13 commercial tenants— is currently undergoing reconstruction in the wake of the storm. What are you doing to appease tenants?
There was significant damage to the building. As the waters rose, the buildings had about nine to 11 feet of water, depending on what street you were on, so the entire mechanical system in the buildings is now being reconstructed, making it more resilient to any kind of future issues. We’re moving the HVAC up, the electrical up. HVAC is going to the roof. The businesses are waiting to come back, and we’re in active talks with each one of them. The good news is that 90 percent of them are going to be coming back, which is good both for the community and the tenants in the apartment section of the building. After the storm, availability of parts was an issue, so we’re also ordering spare parts and keeping them in stock in the event that those parts ever have to be replaced.