Press Release Article
PORT AUTHORITY TO LEASE WORLD TRADE CENTER TO SILVERSTEIN PROPERTIES, INC. AND WESTFIELD AMERICA, INC.
Date: Apr 26, 2001
Press Release Number: 68-2001
<<<<<99-Year Net Lease Worth $3.2 Billion; Richest Real Estate Transaction in New York History>>>>>>
The World Trade Center today became the richest real estate prize in New York City history as the Port Authority of New York and New Jersey reached agreement with a major New York City developer and an international shopping center operator on a long-term lease of the famous Twin Towers and other properties at the World Trade Center.
Silverstein Properties, Inc., and Westfield America, Inc. have agreed to a net lease transaction for a term of 99 years, worth an estimated $3.2 billion on a present value basis. The net lease covers four buildings at the World Trade Center, including the Twin Towers and the retail Mall. The lease was approved by the Port Authority\'s Board of Commissioners at their meeting today.
Governor George E. Pataki said, “When I became Governor, one of my first goals was privatization of this world-famous symbol of the vitality and economic might of the New York region. I am proud to announce that my administration has delivered. This is the largest real estate transaction in New York City history, and one of the largest privatizations ever of a government asset. This agreement allows the private sector to bring its expertise to managing this landmark, and it frees Port Authority resources for improvements in airports, tunnels and bridges and other parts of the region’s transportation network.”
Acting Governor Donald T. DiFrancesco said, \"The net lease of the World Trade Center will allow the Port Authority to maintain its revenue stream from the complex, while helping the agency to refocus on the transportation and trade projects in both states that constitute its primary mission. A strong Port Authority will be able to carry out even more projects such as the extension of the Newark Airport monorail to the Northeast Corridor rail line, the purchase of a new fleet of PATH cars, and improvements to the maritime ports and to the bridges and tunnels used by hundreds of thousands of commuters daily.\"
Port Authority Chairman Lewis M. Eisenberg said, \"Construction of the World Trade Center by the Port Authority was one of the greatest construction feats of the last century. And building prime office space in what was then a deteriorating area achieved its goal -- stimulating economic development, and sparking a renaissance in downtown Manhattan, which still continues. The Port Authority and the region both benefit from this transaction. By privatizing the complex at such a favorable time, the agency has provided a stable cash flow from the World Trade Center for the coming century, while reducing exposure to real estate market risk. The long-term lease also ensures that the World Trade Center will continue to meet the public purposes for which it was built, consistent with our bistate statutory mandate.\"
Port Authority Executive Director Neil D. Levin said, \"For the region we serve, privatizing the World Trade Center means a dependable source of revenue to fund regional transportation improvements over the next 99 years. During the last decade, the Port Authority has vastly increased the value of this public asset through effective management and by emphasizing service to tenants. Occupancy, at about 97 percent, is at a historic high. Asking rents for offices and retails shops have doubled in the last five years. And the Mall at the World Trade Center has become one of the country\'s most successful shopping malls. It was this excellent record of managing the complex that now allows the Port Authority to realize the enhanced value of the complex through this privatization agreement.”
Port Authority Vice Chairman Charles Gargano said, \"When the Port Authority built the World Trade Center 30 years ago, it stimulated a new office market in lower Manhattan. The agency has achieved its original goals of economic development. Now it\'s time for the public sector to step aside and allow the private sector to do what it does best. The Port Authority, meanwhile, will continue to enjoy revenues from the World Trade Center to help fund transportation initiatives throughout the region.\"
Considered a white elephant in its early years, the World Trade Center, an engineering marvel, became a highly successful office and retail complex in downtown Manhattan, attracting tenants from around the world and becoming an international symbol of New York. It is now the most valuable commercial property in the history of New York.
The buildings included in the net lease agreement are Number One and Two World Trade Center (the Twin Towers), Four and Five World Trade Center (two nine-story office buildings) and approximately 400,000 square feet of retail space. Numbers Three (the WTC Marriott Hotel), Six (the U.S. Customs House) and Seven World Trade Center (a 47-story office building) are already under lease.
The World Trade Center welcomed its first tenant in December 1970. More than 430 companies from 28 countries lease space in the complex. They are engaged in a wide variety of commercial activities, including banking and finance, insurance, transportation, import, export, freight forwarding, customs brokerage, trade associations and representatives of foreign governments. An estimated 40,000 people work in the World Trade Center, and another 140,000 visit the complex daily.