LUCKY SEVEN:Silverstein Properties and law firm WilmerHale are working on a lease deal at 7 World Trade Center. (Lorenzo Ciniglio/Freelance)
Major law firm WilmerHale wasted no time choosing a new home for its New York practice after being shut out of WorldWide Plaza.
Silverstein Properties and the firm are nailing down the fine points of a lease for more than 200,000 square feet at 7 World Trade Center, sources said.
Although not yet done, the deal appears highly probable.
The two sides signed a term sheet several weeks ago and “the lease is out on the space — they’re moving ahead,” one source said. The relocation of a prestigious Midtown tenant to downtown will be another coup for Larry Silverstein and a morale-booster for Lower Manhattan.
According to sources, WilmerHale, now at 399 Park Ave., would move into 210,000 square feet on floors 41-45 of the 52-story tower. No word on what the rent might be.
Online databases including Mrofficespace.com list “asks” of $62 and $65 on those floors. The tower is being marketed by CB Richard Ellis.
Although 7 WTC is properly regarded as a success for Silverstein — who built it despite much skepticism in the years after 9/11 — it still has space available on floors 46-49. The expected WilmerHale lease would bring the 1.75 million square-foot tower to over 90 percent occupancy.
Since 7 WTC opened in 2007, Silverstein has made no secret that he’d keep certain high floors vacant until he got tenants willing to pay premium rents. Major tenants there include Moody’s and WestLB.
WilmerHale had been in talks over WorldWide Plaza in Midtown until the landlord decided to hold the space for Nomura, which has yet to decide whether to move there.
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Meanwhile, Silverstein’s patience in holding out for his desired rent at 7 WTC raises an obvious question:
Why did he decide to lock in an agreement for the city to take nearly 600,000 square feet at his now-rising 4 World Trade Center, at a below-market starting rent for a brand-new, world-class tower costing $1.7 billion to construct?
As The Post City Hall Bureau chief David Seifman first reported, Silverstein locked in the city lease two weeks ago. The rent would start at $56.50 a square foot when the tower opens in 2013.
A nonbinding deal was announced in 2006. It gave Silverstein the right to reject the lease if a tenant came along willing to pay more. At the same time, The PA signed a binding deal to move its headquarters to 4 WTC, with about 800,000 square feet.
But, again — why would Silverstein embrace a second public-sector lease costing considerably less than the tower is worth?
Lay it on turmoil in the muni-bond market, which caused Silverstein to postpone placing $1.3 billion in tax-exempt Liberty Bonds allocated to 4 WTC — which account for most of the tower’s construction financing (the rest is from $400 million in insurance).
Although Silverstein will likely market the Liberty Bonds in the months ahead, he originally planned to do so last November. Then, overblown forecasts of defaults combined with exaggerated fears of a glut in tax-exempt municipal bond offerings to set off a mini-panic.
Even as stability shows signs of returning, locking in the city lease “simply diminishes the sense of exposure that Liberty Bond investors would perceive,” a source points out.
The PA and city leases will eat up about half of 4 WTC’s “rentable” space of over 2 million square feet.
But private-sector tenants will still have access to the tower’s best space — its top half.
“This wasn’t a choice Larry preferred to make, but it was the right strategic move,” a brokerage source said. “And he can still make out like crazy on the higher floors.”
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The Bowery is about to lose its last remaining atmospheric links to CBGB, which closed three years ago.
The 3300-square foot space at 313 Bowery now occupied by the Morrison Hotel music-photo gallery — named for the famous Doors album and a spiritual successor to the CBGB gallery that was adjacent to the club — has been put on the market by Elliott Azrak‘s The Max’s Kansas City Co., which netleases the property’s retail space from the Bowery Residence Committee.
Up for grabs with it is the secretive, underground performance venue known as Extra Place by Max’s Kansas City, which is beneath the Morrison gallery and accessed by an alley off East First Street.
The former CBGB venue at 315 Bowery — the same building as 313 — is now occupied by hugely successful boutique John Varvatos.
Sources said both the Morrison gallery and the performance space are there on month-to-month leases. “The netlease holders are looking for not just any tenant, but one who can leverage the history of the block and the unique Bowery demographic,” one source said.
That could mean a restaurant/lounge — or another store similar to John Varvatos. Brokers in the neighborhood said the space would probably fetch around $150 a square foot on the ground floor; no one would guess at the basement value.
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Digital music club eMusic — which Rolling Stone calls “the iTunes stores’ cooler, cheaper cousin” — is moving and growing its office headquarters. The company is leaving 18,000 square feet at 535 Fifth Ave. to 25,000 feet, the entire third floor of 39 W. 13th St.
Newmark Knight Frank’s Brian Rovell and Dan Madison represented eMusic while landlord Samson Associates acted in-house. The deal required creativity on the part of the brokers, as the space wasn’t on the market and was occupied by an architectural firm with a year left on its lease.
But Newmark helped convince Samson to release the firm early to accommodate eMusic in a 10-year lease. The asking rent was $50 a square foot.
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A certain retail brokerage posted signs in the windows of vacant stores at 1115 Third Ave. at 65th Street boasting that it had leased them. The brokerage strangely declined to tell us who the tenant would be, even though it will soon be obvious to anyone strolling by.
It took us at least five seconds of intensive research to learn it will be a Walgreen drug store, taking up nearly 8,000 square feet formerly used by Aldo and Club Monaco. Sources said Walgreen, parent of Duane Reade, originally wanted to install another Duane Reade there — but the landlord, a retail- condominium owner, preferred the Walgreen brand’s slightly more upmarket image.
Lansco President Alan Victor, who was not involved in the Walgreen deal, noted, “This corridor has become very active again and prime locations are being filled. This is a prime corner for Walgreen, with great windows and maximum exposure.”