Grand Opening: Behind the Scenes of 4 WTC Debut
Gus Delaporte Nov. 26, 2013, 11:25 a.m.
Less than two weeks after a celebratory ribbon-cutting ceremony held to mark the official opening of 4 World Trade Center, the scene at the building was comparatively muted. Instead of welcoming tenants and checking in guests, security officers manned their posts as construction workers put the finishing touches on the building’s lobby.
That’s all about to change.
Within 12 months, the Port Authority of New York and New Jersey and New York City, the two tenants that have committed to space at tower, will complete their respective build-outs and commence moving in. Other tenants, it is hoped, won’t be far behind.
“The fact that [4 World Trade Center] is open brings another level of reality to the project,” said Adam Foster, senior vice present at CBRE, who is part of the leasing team at the Silverstein Properties-owned building. “It demystifies everything.”
From the completion of the 9/11 memorial to 1 World Trade Center topping out at 1,776 feet, milestones have come and gone at the World Trade Center site since the terrorist attacks of 2001 changed everything. But perhaps none have been as significant as the official opening of 4 World Trade Center.
After breaking ground in 2008, it took 1,200 construction workers some 3.2 million hours to erect the 977-tower. On November 12, 4 World Trade Center opened for business.
There were many who questioned whether it would ever get done. Larry Silverstein, who had acquired the leasehold on the World Trade Center just months before 9/11, spent years settling insurance disputes over the destroyed towers, calling into question more than once the viability of the project.
To say Mr. Silverstein feels a certain sense of vindication is an understatement.
“I just felt so deeply in my heart that it was essential to get the World Trade Center rebuilt; it needed so desperately to be done,” he said in an interview with The Commercial Observer. “I focused on this with enormous intensity and said from the very beginning that I was going to accomplish this. I put my head down and never listened to the naysayers.”
The first skyscraper to open at the site will almost certainly continue to be overshadowed by its high-profile neighbor, 1 World Trade Center, the Durst Organization-developed building that towers over lower Manhattan and has drawn publishing giant Condé Nast as a tenant. The significance of the opening at 4 World Trade, however, has not been lost on New Yorkers.
“The real story about this 72-story building that looks across at the Sept. 11 memorial’s south reflecting pool is that it is here, the way this part of the city is still here, people coming back down here to go to work,” Daily News columnist Mike Lupica wrote on the day of the skyscraper’s opening.
Now open, 4 World Trade Center has joined a burgeoning community in lower Manhattan that, against all odds, has thrived in post-9/11 New York.
“I think there was a concern in the period immediately after 9/11 that the amount of construction and the length it was going to take could have a negative effect on lower Manhattan in terms of businesses not being able to wait it out and the residential community not wanting to be here,” said Bill Bernstein, president of the Downtown Alliance. “We’ve seen just the opposite.”
The opening is the first step in a lengthy process by which the World Trade Center will integrate itself into the surrounding neighborhood, which looks little like it did in 2001. Pedestrians, many of them among lower Manhattan’s now 60,000 residents, who for more than a decade were separated from the site by fences, can now walk alongside the building.
The transformation of lower Manhattan, once a largely commercial district reliant on financial services, has been dramatic. Much of the neighborhood’s building stock, formerly home to stock brokerages and insurance companies, now houses many of the area’s 30,000 residential units.
“We are happy to see the streets open up to the rest of community,” Mr. Bernstein noted. “Being able to walk that stretch of Greenwich Street is a harbinger of the World Trade Center being open to the community again.”
So too has 4 World Trade Center’s opening drawn the attention of the nation’s most prominent architecture critics.
Setting aside the squabbles over the height of 1 World Trade Center in relation to the Willis Tower, Chicago Tribune critic Blair Kamin labeled the Fumihiko Maki-designed 4 World Trade as “subtle,” “self-effacing” and “appropriately dignified.”
Mr. Silverstein himself compared the impact of the rebuilt World Trade Center site favorably to that of the introduction of Rockefeller Center—a commercial complex built on a similar scale. He adds the important caveat that, unlike Rock Center, each building is to be designed by a different architect.
“It is something that will lend a much livelier scene; it makes for site and location that becomes really special, unlike anything we have in the city,” he said.
The positivity does not overshadow the economics of the situation: 4 World Trade Center has opened 40 percent vacant with nearly 1 million square feet left to fill. Those tenants that have committed to space at the Silverstein development are both government entities, the Port Authority of New York & New Jersey and the City of New York, which will base its human resources department there.
Reaction to questions about the building’s leasing status is at once optimistic and defiant.
“People always ask: ‘Are you confident in your ability to lease these buildings?’ And I tell them all the same thing: ‘Never bet against New York,’” Mr. Silverstein said.
The CBRE leasing team responsible for filling up the building understands the stakes.
The vacancy rate downtown hit nearly 11 percent in the third quarter, with total available space up 16 percent year over year to 9.2 million square feet, according to statistics from Cushman & Wakefield, a separate brokerage.
“Larry Silverstein, my boss, does not tolerate vacant buildings,” said Mr. Foster. “It’s important to populate the building as quickly as possible; we’ve got vacant space, and we realize that.”
Mr. Silverstein has been in this situation before with 7 World Trade Center. Located adjacent to the World Trade Center site at 250 Greenwich Street, the rebuilt 7 World Trade opened completely vacant—save for space occupied by Silverstein Properties—in 2006. Just one of the building’s 52 floors was occupied.
In a story told so often it seems rehearsed, Mr. Silverstein spins the yarn of the days following that building’s debut.
“It was kind of lonely here, but an amazing thing happened: Moody’s looked at the space once it was built and took 750,000 square feet,” he recalled. “Next thing we knew, we had a fully occupied building.”
The opening of 4 World Trade Center, it is hoped, will yield the same result and bring those long-awaited tenants to the table.
“Tenants like to touch and feel a building; they like to walk in the lobby and ride up and down elevators,” Mr. Foster said.
The leasing team is in the proposal stage with a number of companies, according to Mr. Foster. The earlier opening date has placed 4 World Trade Center in a competitive position in relation to its rival at 1 World Trade with one-, two- and three-floor tenants among those most ideally suited to the building.
“For those tenants that are ’14 and ’15 lease expiration, we’re the perfect candidate,” Mr. Foster noted.
Asking rents at 4 World Trade Center are $75 per square foot in the lower portion of the building, on par with what is being asked at 1 World Trade below the 64th floor. Prices in the upper half of the building, as at 1 World Trade, have not been set but will command a premium to lower floors.
“It’s certainly the highest-priced office building downtown, but when you look at the economics, it starts to become very, very competitive on a financial basis,” Mr. Foster said.
Mr. Silverstein, for his part, is confident that the quality of the property commands those prices. By his description, the building boasts virtually unobstructed floor space, with column-free space running 45 feet from the core wall to the curtain wall and 360-degree views in every direction, yielding an experience “unlike anything else in city.”
Already, it is said that the Port Authority has issued an RFP to sublease at least a portion of its space at 4 World Trade Center, where it signed a lease with rent starting in the $65 range.
The challenges do not end with leasing 4 World Trade Center, however. Towers 2 and 3 are stalled in development, with the completion of those buildings contingent on the signing of anchor tenants. Rumors have persisted for months that media and advertising giant GroupM is closing in on a large lease of space at 3 World Trade Center, yet confirmation remains elusive.
“We expect to sign a lease very shortly,” Mr. Silverstein said of negotiations. “Then we’ll get financing into place to build Tower 3, and once we get that done, all we have to do is focus on Tower 2.”