Financial District

Steve Cuozzo reported earlier this week in the Post that Broadcast Music Inc. (BMI) is heading downtown from West 57th Street to sublease 58,000 square feet on the 30th and 31st floors of 7 World Trade Center from Dutch bank ABN Amro, which signed up for 140,000 square feet 3 years ago but never moved into the space. Italian insurer Generali will take 17,000 square feet from ABN, and two undisclosed financial services firms are close to signing deals for the remaining space. Cuozzo notes these transactions in the context of 7 World Trade Center's "continued appeal even as demand for downtown office space has lagged amid expectations that huge amounts of space will soon be put up for grabs by such firms as Goldman Sachs and Merrill Lynch." How much of that appeal stems from its LEED certification is difficult to quantify, but it's clear that Larry Silverstein is enjoying a competitive advantage in an incredibly challenging commercial leasing market thanks, in some part, to his tower's green design features.

Last Friday, I gave a presentation at the Albanese Organization’s LEED Platinum hopeful Visionaire condominium project in Battery Park City to an audience of mostly real estate brokers. After presenting the CoStar and RICS studies (both of which we have reviewed in detail over at GRELJ), I put up two slides that I had converted from articles here at gbNYC setting forth the top fifty leasing transactions in Manhattan for 2008 and 2007. If you remember, we used the lists prepared by CoStar and plucked out leases that were finalized in LEED-certified, LEED-registered, or Energy Star-certified buildings during the course of each year. I noted to the audience on Friday that although such data is purely anecdotal, it does suggest the importance for brokers to understand the purview of third-party rating systems, including some of the risk management issues which I identified later on in the presentation.

Chinese real estate investment firm Beijing Vantone Industrial Co., Ltd. formally signed its 20-year, 190,000-square-foot lease with the Port Authority at 1 World Trade Center yesterday. Numerous media outlets are reporting that the Port Authority has decided to drop the "Freedom Tower" moniker for the project, but GlobeSt.com quotes Port Authority spokesperson Steve Colman as confirming that "Freedom Tower" will still be retained somehow as the second half of 1 World Trade Center’s name. Vantone will pay $80 per square foot to start, with escalations during years 7, 11, and 16 of the lease; the firm has an option to add an additional two contiguous floors to its lease by December 31 of this year. At the lease signing, the firm gave the Port Authority a $10 million letter of credit; total aggregate rent over the lifetime of the lease is estimated to be approximately $333 million.