Tuesday 26 March 2019

Silverstein weighs speculative build of final WTC tower

‘On spec’: Developer Larry Silverstein believes strong leasing activity at neighbouring towers may support a plan to begin construction of 2 World Trade Center. Source: Bjarke Ingels Group
‘On spec’: Developer Larry Silverstein believes strong leasing activity at neighbouring towers may support a plan to begin construction of 2 World Trade Center. Source: Bjarke Ingels Group

Lily Katz

Silverstein Properties Inc., the developer that rebuilt lower Manhattan after the destruction of the Twin Towers in the September 11, 2001, terrorist attacks, may begin work on its final World Trade Center skyscraper before signing a lease for the building.

The firm might build 2 World Trade Center 'on spec', or without a committed tenant, Chairman Larry Silverstein said in an interview. The building's foundation was started, with no further work done because the developer hadn't found a company to anchor the space. But a strong economy and leasing progress at neighbouring towers may change those plans, he said.

"I think we're in an increasingly good spot, in a good position, to do that," said the 87-year-old developer, who founded Silverstein Properties in 1957. "For all intents and purposes, it wouldn't be a bad idea to start on Tower 2 because it won't be finished until about 2022, 2023."

The 2.8 million-square-foot (260,000-square-metre) office building, designed by Bjarke Ingels Group, will be the last of Silverstein's four skyscrapers at the downtown site. It marks the culmination of the Financial District redevelopment undertaken by Silverstein, who also built towers 3, 4 and 7. The final skyscraper is slated to be about 80 stories and feature floor-to-ceiling glass windows, basketball courts, a running track and rooftop parks, with renderings showing a cascading, staircase-like silhouette for the building.

"It's a riskier strategy to start without the anchor tenant lined up, but it just speaks to the optimism in the marketplace," said Jeffrey Langbaum, a real estate analyst with Bloomberg Intelligence.

Finding a primary tenant for 2 World Trade Center has proven challenging, with competition from the new Hudson Yards development on the west side and hesitance among some firms to move all the way downtown. Citigroup Inc. had considered moving to the tower, but in 2013 opted to stay in Tribeca. Two years later, Rupert Murdoch's 21st Century Fox Inc. and News Corp. reached a tentative agreement to lease space in the building before deciding instead to stay put in midtown Manhattan.

Still, Silverstein has managed to attract high-profile tenants to the World Trade Center buildings, including Moody's Corp. and Spotify Technology SA. In June, the developer opened 3 World Trade Center, which is now more than 50pc leased.

With assistance from Patrick Clark (Bloomberg)

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