- Real Estate
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BY ALEX ELLEFSON
One World Trade Center — the symbol of New York’s resiliency following the 9/11 attacks — is on the auction block, and could fetch a record-setting sum if the Port Authority finds a buyer.
A spokesman for the Port Authority, which poured $3.8 billion into the tower’s construction, confirmed that the agency plans to sell the 1,776-foot-tall structure.
“One World Trade Center is an iconic, 21st Century Class A-plus office tower with universal brand recognition and strong leasing momentum,” the agency said in a statement. “Its substantial and growing Net Operating Income will, when the time is right for the Port Authority to monetize all or part of its ownership in the building, support a premium, world-class valuation.”
Port Authority spokesman Steve Coleman emphasized the statement calls for the sale to occur “when the time is right” and added that “the building is not up for sale now.”
Coleman said One World Trade Center is one of many real estate assets from which the authority is seeking to divest.
He pointed to a 2014 mandate by governors Andrew Cuomo and Chris Christie, who have dual control of the agency, to shed its real estate holdings in order to focus on its original mission — developing and maintaining transportation infrastructure.
Crain’s New York reports the iconic building could sell for as much as $5 billion, which would be the most ever paid for an office building in the United States.
However, there are numerous challenges to finding a buyer. First of all, the property is in the red. It is only 70 percent leased and brought in just $13 million in revenue last year — a 0.35 percent return on the Port Authority’s investment, according to Crain’s.
Public scrutiny of the sale could also scare away deep-pocketed foreign investors, as would the property’s high security costs.
Crain’s also reports the Durst Organization, which owns a $100 million interest in the property, has the right to block any deal made before its investment becomes an ownership stake in 2019 — meaning any buyer might have to buy out the Durst Organization before it can claim the property.
Coleman said selling One World Trade Center is at most a “possible, future transaction.”