Port Authority Close to Freedom Tower's First Private Lease with Chinese Real Estate Co.

2008

Jun

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The New York Observer reported yesterday that the Port Authority has reached a tentative agreement with China's Beijing Vantone Real Estate Company for 190,000 square feet of space in the LEED Gold hopeful Freedom Tower across its 64th and 69 floors. The firm will pay approximately $80 per square foot for a 22-year lease and create a "China Center" designed to be a cultural and educational portal for Chinese firms looking to do business in the U.S. and American firms interested in similar efforts in China. The China Center will involve a $90 million interior fitout, $5 million of which will come from local business policy and advocacy group Partnership for New York City. Kathryn S. Wylde, head of the group, told the New York Times that she sees the China Center as "a way of assuring that New York City businesses develop a primary relationship with the emerging economy of China. This has been an area of competition with other world cities. We want to nail it down for New York.”

The Port Authority has already agreed to lease just over 1 million square feet at the Freedom Tower (though not yet finalized either agreement) to a number of federal agencies and New York State's Office of General Services for approximately $59 per square foot. The 102-story, 2.6 million-square-foot project will include a number of green design features that have yet to be revealed in great detail, though according to the Port Authority the "design team is pursuing unprecedented collaborations with technology and energy leaders to take advantage of the next generation of innovative energy sources and management, such as fuel cells, as well as off-site renewable energy sources."

The news is of particular interest from a green leasing perspective given that Vantone came close two years ago to leasing the very top of Larry Silverstein's LEED Gold 7 World Trade Center- the first LEED-certified commercial building in New York City. You may recall that the deal fell apart after Vantone was unable to post a letter of credit; the firm looked into temporary space on Broadway, but held off on securing a lease given the expense of the China Center project. Vantone will pay about $30 more per square foot than it would have if the deal with Mr. Silverstein had been executed; the firm told the Times that it had wanted space in the Freedom Tower all along. At last word, only ten floors remain at 7 World Trade Center, where asking rents are between $70 and $75 per square foot. Steel for the Freedom Tower is already above street level and the project remains on track for 2012 occupancy.