The momentous lease that will bring GroupM to Larry Silverstein’s 3 World Trade Center — and allow the tower to rise to its full 80-story height — is worth about $800 million, real estate sources estimate.
That would work out to an average $77 per square foot, although later years in the term are likely to be considerably more expensive than the early ones.
We first reported GroupM’s 20-year, 516,000 square-foot signed lease with Silverstein Properties on nypost.com Monday morning.
GroupM will have nine floors in the tower’s base, above a seven-story retail podium that’s now nearly completed. The project has 2.5 million square feet of offices and 183,000 square feet of retail.
In a sense, the GroupM commitment is even more game-changing than Condé Nast’s 1.1 million square-foot lease at 1 WTC, signed in 2011, because the former “Freedom Tower” was already rising at the time.
But 3 WTC has reached only the podium level to accommodate stores and infrastructure, and would not have gone higher without a lease for an anchor tenant. The GroupM move all but assures that the full Richard Rogers-designed skyscraper will be completed by 2017, as Silverstein says it will.
By then, three of the WTC’s four planned commercial giants will be up, leaving only 2 WTC to come. Since ground was finally broken five years ago, the trickle of non-financial companies to Lower Manhattan from Midtown has begun to resemble a flood, best symbolized by Condé Nast’s relocation.
Silverstein has more work ahead. He spent $500 million in insurance proceeds to build the podium. The GroupM lease satisfied the major prerequisite for releasing $1.3 billion in low-interest Liberty Bond financing for the rest of the roughly $2.3 billion project.
Those bonds must of course be marketed. Silverstein also needs to raise $300 million in equity or debt to trigger a total $600 million backstop from the state, city and PA, under a 2010 agreement.
But all parties were confident those milestones would be achieved. Sources said JPMorgan Chase and Goldman Sachs have been tapped to place the Liberty Bonds offering and to help line up the rest of the financing.
Completing the lease is said to have exhausted its negotiators — for GroupM, CBRE’s Mary Ann Tighe, Gregory Tosko, Lauren Crowley Corrinet and Brendan Herlihy, and for Silverstein, Jeremy Moss in-house and CBRE’s Peter Turchin and Stephen B. Siegel.
The deal brings another media giant downtown from Midtown, where GroupM now has 2,400 employees at 498 Seventh Ave., 825 Seventh Ave. and 132 W. 31st St. — all of which will move to the WTC.
GroupM CEO Kelly Clark said the firm “looks forward to becoming part of one of the most vibrant and important neighborhoods in New York.”
Silverstein called the lease “another in a string of huge milestones at the World Trade Center.”
Tighe declined to discuss lease terms, but said GroupM chose 3 WTC after “a multiyear, exhaustive search of the market.”
She added, “Interestingly, GroupM did not start out looking for new construction. They tried very hard to find an existing building they could retrofit for their needs.
“But at the end of the day, they discovered nothing could support their operations as well as the high-ceilinged, column-free environment” of 3 WTC.
She noted that GroupM’s floors “were built as trading floors, which can accommodate large groups of people working in an open environment.”
That the floors originally designed for Wall Street will instead be used for a media operation “is an interesting testament to where city is going,” she said.