Jones Lang LaSalle


NYC 01 24 06
BALANCE OF TRADE SHIFT AT 7 WTC?
Peter Slatin

For the politicians, bureaucrats and Larry Silverstein, it was a banner day.

Surrounded by the former, the latter signed a letter of intent with Beijing Vantone Real Estate Co. Ltd. to lease 200,000 square feet in the top five floors of Silverstein's gleaming 1.7 million-square-foot 7 World Trade Center. Although Silverstein has signed two much smaller leases, with Ameriprise and the New York Academy of Sciences, the preliminary deal announced Jan. 24 was the first serious indication that the developer's Liberty Bond gamble will pay off in the long run.

The shimmering clear glass of SOM's design for 7WTC nearly disappears into the skyline. A lease for the top five floors is approaching reality.

It's also quite fitting that the first major commercial deal in the World Trade Center redevelopment should go to a company representing the country that is rebalancing the scales of global trade. In addition, rather than being a part of downtown's traditional Old World tenant base, Vantone represents a creative and entrepreneurial bent to China's nascent, supercharged capitalism that is reminiscent of but far more likely to persist than the technology tenants that flourished in and fled Silicon Alley five years ago. The landlord's need to reach beyond a traditional tenant base, and to rely heavily on financial incentives and political pressures from government officials indicate that enormous hurdles remain in downtown's struggle to move beyond a boom-and-bust economy. On the other hand, the out-of-the-box nature of the tenancy could presage a healthy changing of the guard in the makeup of downtown Manhattan's commercial base.

Vantone's eventual program is still emerging, though those close to the deal say it will most likely act as a facilitator and executive-suite purveyor for Chinese businesses, and that the buildout could include a club or even sleeping quarters on the top floor. The ultimate scale of its tenancy at Ground Zero is another unknown: Vantone first emerged as a potential tenant for Freedom Tower, and sources say it remains interested in that possibility as well as in additional space at 7 WTC.

Sighs at the signing. New York City and State as well as Chinese government officials and Vantone's CEO join Silverstein.

While the deal is a true source of relief in the long, dry slog to heal the downtown office market, it thrusts a host of critical questions to the fore: first, is this the first wave in a surge? Silverstein spokesman Dara McQuillan thinks so, and tells The Slatin Report that the next deal is "not far off." Since the developer obtained a temporary certificate of occupancy late last year, he says, interest from potential tenants willing to accept the construction site sprawling around and in the building has grown rapidly. McQuillan declined to say whether the next deal would be for a small or large user, but said that Silverstein is targeting advertising agencies and design firms in an effort to get creative juices flowing in the building (and maybe to bring in tenants who will appreciate the huge Jenny Holzer sculpture in the lobby).

The Vantone deal also coincides with increasing talk, on this page and many others, about the tightening Midtown Manhattan market. Will the scarcity there lead tenants downtown? More to the point, it remains to be seen whether the lease, enabled by heavy lifting from all those politicians and bureaucrats, cements Silverstein's now-in, now-out, now-in role in the Ground Zero firmament.