Morningstar to Move New York Office to 4 World Trade Center
September 18, 2014
Silverstein Properties announced today that leading independent investment research provider Morningstar, Inc. has signed a 10-year, 30,000 square foot lease at 4 World Trade Center. The company Read more...

Build ‘Em Now NYC Needs Modern Offices

 

The city's Economic Develop ment Corp. is crowing over a magazine report that named New York this year's "North American City of the Future."

Published by the Financial Times, fDi magazine, whose initials stand for "foreign-direct investment," cited Gotham's "large number of FDI projects into and out of the city and the number of megaprojects associated with the city."

But we'll look more like Ralph Kramden's "Chef of the Future" on "The Honeymooners" -- that's to say, a laughingstock -- if the big guns bickering over the World Trade Center site don't face up to the crisis that threatens New York's status in the not-so-long run: We need to replenish our aging office-building inventory.

It's obsolescent for many companies and utterly useless for the kinds of firms that generate the tax revenues to support New York's astronomical labor, service and infrastructure needs -- meaning Wall Street and associated industries, such as law and accounting.

The city simply must have all or most of the WTC's planned 10 million square feet of office space if it's to retain its global economic dominance -- or even to stay competitive.

CB Richard Ellis tri-state CEO Mary Ann Tighe sounded the alarm last year, pointing out that by 2010 an astonishing 64 percent of Manhattan's office buildings will be at least 50 years old, compared with the US average of 24 percent. This is heresy to those who buy into the baloney churned out by those plotting to kill office construction at Ground Zero.

The obstructionists include the Port Authority, which is battling developer Larry Silverstein over financing, and the Daily News, whose owner, Mort Zuckerman, is hopelessly conflicted as the chairman of real-estate giant Boston Properties. He recently pulled the plug on two Manhattan commercial projects, and he's loath to see anyone else build -- especially Silverstein, who whipped him in a fierce bidding war for the WTC leasehold in 2001.

They also include commercial real-estate brokers who fear that new construction will make it harder for them to lease space in existing buildings whose landlords they represent and that a "glut" will cause rents to fall.

Right now, there's anything but a glut. Even with the financial contraction under way, Downtown's vacancy rate is the lowest of any large business district in America, according to Cushman and Wakefield.

In all of Manhattan, exactly one large office project is going up: 11 Times Square, at Eighth Avenue and 42nd Street. It will add a scant 1.1 million square feet of office space to Manhattan's total of 361 million square feet when it opens next year. No tenants have signed on yet -- hardly surprising in an uncertain economy. But it's cited by some as reason to justify killing or stalling Ground Zero towers that are years from completion.

How's that for confidence in the "City of the Future"?

If Mayor Bloomberg isn't able to coax the two sides to make a deal and Ground Zero's Towers 2 and 3 are scuttled, the site could end up with less than half of what's planned.

Creating sophisticated office towers should be a local civic priority ranking with keeping crime down and improving public schools.

Why? Because the largest, globally oriented companies want and need the newest product. That's why Goldman Sachs is building a whole new headquarters in Battery Park City.

Buildings erected even as recently as in the late 1990s don't have such essentials as more efficient, column-free floor space, 14-foot "slab-to-slab" floor heights necessary to install modern fiber optics, and "green" features that lower energy costs and provide employees with a safer, more comfortable work environment.

Because there's been so little construction in recent years, Manhattan has precious few large towers that meet today's standards -- among them, the Durst Organization/Bank of America's One Bryant Park, Silverstein's 7 WTC and The New York Times' headquarters.

Their rare qualities explain why all the available space at One Bryant Park and the Times building was leased swiftly at the highest rents in town and why most of 7 WTC was taken despite having downtown's highest rents.

But what about the downturn? Shouldn't we take it into consideration?

Only to a point. If they could be built overnight, the four Ground Zero towers would add a scant 3 percent to today's total Manhattan office market. The percentage would be even smaller by the time they're actually finished, thanks to inevitable conversion of some older commercial properties to apartments or other uses.

All of this means the current talks between the PA and Silverstein must lead to one outcome only: a guarantee that New York gets the office buildings worthy of, and indispensible to, the "City of the Future."