The U.S. General Services Administration has signed a 20-year lease for about 270,000 square feet at One World Trade Center (1WTC). The lease was signed with The Port Authority of New York and New Jersey and the co-developer of 1WTC, The Durst Organization Inc.
“The approval of the GSA lease represents another important milestone in the rebuilding of the iconic One World Trade Center,” William Baroni, the Port Authority’s deputy executive director, said in a statement.
The GSA has taken six floors, the 50th through 55th, in the 104-story tower. One World Trade Center will stand 1,368 feet above street level. With the addition of a 408-foot antenna/broadcast tower in lieu of a spire, its overall stature will be 1,776 feet.
“There will once again be a federal presence in the World Trade Center, as there was from its beginning,” Daniel Tangherlini, GSA’s acting administrator, said in a statement.
Lawrence Lenzner and Robert Safron, partners at Patterson, Belknap, Webb & Tyler, represented The Durst Organization.
Marc Hurel and Jeffrey Keitelman, partners at DLA Piper, represented the Port Authority. Hurel is based in New York City and Keitelman, who heads the firm’s government, corporate and green real estate groups, is primarily based in Washington, D.C., but has an office in Manhattan. In addition, Kimberly Pagotto, a partner in DLA Piper’s D.C. office, handled contractual issues.
Gary Rosenberg, a founding partner at Rosenberg & Estis, also assisted on the deal on behalf of the landlord.
According to a GSA spokeswoman, a team from the D.C. office represented the agency in-house, including Barry Segal, an associate general counsel, and Richard Hughes, a senior assistant general counsel, in the real property division.
One World Trade Center is about 55 percent leased, according to the Port Authority. Tenants include Condé Nast, with a lease of 1.2 million square feet covering 25 floors, and Vantone China Center’s lease of 190,000 square feet (NYLJ, May 25, 2011).
No one would discuss GSA’s rates, but the agency will reportedly be paying a market rate at 1WTC, and space above the tower’s middle section is considered premium. The rates on the other large deals ranged from $60 to $80 per square foot.
The agency worked with the Port Authority and Durst “to negotiate a lease that will result in the best value for taxpayers, the federal government and the City of New York,” Tangherlini said.
The federal agency has come under scrutiny over lavish conferences in Las Vegas and elsewhere. Congress and the GSA were in disagreement on how the lease at 1WTC was handled. Congress cited a statute requiring that the House Transportation and Infrastructure Committee approve leases over $2.66 million, according to Federal Times. The GSA contends the Government Accountability Office has disputed the statute in the past and that the agency had legal authority to proceed. The lease was also provided to Congress in advance of the signing, the report said.
Once construction is complete in 2014, 1WTC will be the tallest building in the Western Hemisphere. The GSA’s long-term lease is scheduled to start in 2015.
The GSA was established by President Harry Truman in 1949 to streamline the administrative work of the federal government. As of September 2011, it altogether had more than 12,600 full-time employees throughout the country. The GSA owns and leases more than 354 million square feet of space in 9,600 buildings in more than 2,200 communities nationwide, according to its website.
No decisions have been made as to the federal agencies that will be moving to 1WTC, a spokeswoman from GSA’s D.C. office said. The agency is looking at options, especially expiring leases for agencies in Manhattan, she said.
The GSA’s lease brings 1WTC “one step closer to being one of the most successful commercial developments in the world, and a significant generator of jobs and economic activity,” Scott Rechler, the Port Authority’s vice chairman, said in a statement.
The GSA’s brokerage team that handled the lease included T. Stanton Towne, a senior managing director and an attorney at the New York City office of Studley Inc., and David Lipson, an executive vice president and director at Studley’s Washington, D.C., office.
The tallest New York City office building outside of Manhattan, One Court Square, or 25-01 Jackson Ave., Long Island City, has been sold for $500 million.
The Queens tower has 54 floors, including concourse level and underground floors, and spans 1.4 million square feet. The property, also known as the Citigroup Building, is net-leased by Citibank N.A. until 2020.
Reckson Court Square LLC, care of SL Green Realty Corp., sold the tower to Waterbridge Court Square Holdings LLC, according to public records. SL Green acquired Reckson Associates Realty Corp. in 2007.
Real estate investor David Werner led an investment group in the purchase of the class-A office building. Neither Waterbridge nor Werner’s Real Estate Investors organization responded to inquires about the deal.
Jonathan Mechanic, a partner at Fried, Frank, Harris, Shriver & Jacobson and chairman of the firm’s real estate group, represented SL Green. Brian Lichter, a real estate partner at Fried Frank, along with associates Steven Fields and Lauren Smith, also represented the seller.
SL Green was internally represented by Andrew Levine, chief legal officer. Levine also serves as its general counsel, executive vice president and corporate secretary.
Public records show that attorney Jacob Weinreb assisted the purchaser on the deal. Weinreb, who did not return calls or email for comment, is also the president of Weinreb Management.
The construction of One Court Square was completed in 1989, and the building underwent renovations in 2002. The office tower connects to two low-rise buildings via a glass rotunda and bridge, and has a landscaped plaza, according to SL Green.
SL Green’s portfolio includes 58 properties in Manhattan plus 32 suburban assets across Brooklyn, Westchester, Connecticut and New Jersey, according to its website.
Douglas Harmon and Adam Spies, senior managing directors at Eastdil Secured, handled the marketing of One Court Square.
Cushman and Wakefield reportedly arranged a $125 million preferred equity for the purchaser.
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