Now that Condé Nast’s scheduled downtown move from 4 Times Square to 1 World Trade centre is finalised, details about how the deal came about (read: the case of the $1 million ventilation shaft) are starting to emerge.
Condé Nast signed a $1.9 billion, 25-year-lease for 1 million square-feet, and The media company’s new annual rent will start at a little over $60 per-square-foot before reported 2% annual increases kick in.
So, just how good of a deal did Conde get?
We took a look at some of the surrounding available real estate to compare:
- 120 Broadway: $34-36 per SF
- 1 Liberty Plaza: $6,000/mo (for largest available office)
- 7 World Trade centre: $62-65 per SF
- 120 Wall Street: $35 per SF
While it seems to be a bit high, there’s more to this deal than just the price tag.
As New York City-based real estate broker and developer Edward Mermelstein tells us, “Condé Nast got a great deal in setting a baseline rent for 2014 that is competitive even for today’s Wall Street rates. Although not a bargain, $60 per foot may make Si Newhouse look like a genius in two years [when rents in the area are much higher].”
Also, Condé Nast did win a few battles including site owner Port Authority of New York and New Jersey’s agreement to assume the last few years of the company’s Times Square lease. And, there’s the tax incentive package that includes “sales tax exemptions on interior building materials and furnishings, and $46 million in rent rebates over 17 years.”
So Conde is paying a lot of money for the building even while it sees decreasing numbers in even its best-selling ladymag. But in a few years, the deal might be the best one the company has made in some time.
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