The World Trade Center faces “a very competitive environment” that probably will remain for the next few years, said Michael Cohen, tri-state regional president of brokerage Colliers International. The first tower’s debut and the completion in January of 1 World Trade Center will add 2.4 million square feet of unleased space, testing a downtown market that’s already contending with more than 6 million square feet of offices left behind by shrinking financial companies. (Levitt, 2013)
For new buildings in the ever expanding New York city, being nearly half vacant is a definite waste. About 2.5 million square feet of vacant office space is expected to open in 2014 at 1 WTC and the neighboring tower under construction, 4 WTC. More than 2 million square feet are on the drawing board at 3 WTC, whose construction is stalled at seven stories for lack of commercial tenants.
With the events that took place in 2001, the World Trade Center brand has forever changed. Some speculators say that if the rent were lower the vacancies would fill up, but is rent the reason? 1 WTC will have an imposing, 120-foot-high bomb-proof concrete base and Times Square-like crowds queuing up to visit its observation deck (Geiger, 2013) People tend to be very cautious and often times superstitious. (Hence the reason why we never end up on the 13th floor of a hotel – as far as we know). If new occupants are not found soon the brand new buildings will have less occupants than older run-down buildings that are in a similar rent bracket. New York needs all the room they can get and the city itself cannot afford to waste a square foot. People will pay for space in New York no matter the cost. If they can successfully rebrand the World Trade Center the vacancies in these buildings will filled and some will be left wanting. In order to attract tenants 1WTC is offering incentives like:
- 8.875% Sales Tax Exemption and Abatement: Initial costs for furniture, fixtures and equipment and hard costs for initial construction, renovations and expansions
- 3.9% Commercial Rent Tax Abatement
- New York Power Authority low-cost electricity
- Savings of approximately 24% below Con Edison rates
- Substantially reduced real estate tax base
- Lower Manhattan Relocation and Employment Assistance Program (“LMREAP”) for : Available to tenants relocating to NYC. Job Creation and Retention Program (“JCRP”) Available to tenants that add 75 new jobs
Are these incentives enough?
More can be found about One World Trade Center on their website: onewtc.com