Daniel Geiger Crain’s New York Business
China-based Vantone only wants to take one floor, instead of multiple, at 1 World Trade Center.
Vantone Industrial, the first tenant to sign up for office space at 1 World Trade Center, is seeking to dramatically slash its space at the 1,776-foot tower. The request comes a year after it asked to cut its original commitment in half.
The Beijing-based company now wants to downsize its lease by 85% to take only a single floor in the 104-story tower for a total of 31,344 square feet, down from 202,000 square feet. The Port Authority of New York and New Jersey, which owns the tower along with the Durst Organization, is expected to vote on the matter at its board meeting scheduled Thursday at 4 World Trade Center.
Last year, Vantone sought to shrink its space to about 100,000 square feet at 1 WTC. The company planned to set up what it called a “China Center”—a facility with conference and meeting rooms—as well as amenities such as a restaurant and spa. The space was meant to serve as a hub for Asia-based companies to conduct business in the city, hold meetings and entertain clients. Originally envisioned as a large outpost to be used by hundreds of companies at a time, its grand vision has been revised as China’s economy falters. A spokesman for the Durst Organization said the center’s facilities and restaurant will be open to other 1 WTC tenants.
“China Center’s business model changed,” the Durst Organization said in a statement. “When a tenant’s circumstances are altered, we seek a solution that keeps them in the building.”
Vantone was the first tenant to commit to 1 WTC when the 3.1 million-square-foot tower was still in the beginning stages of construction in 2009. It was an encouraging and much-needed deal for the Port Authority at a time when few office tenants were taking space because of the recession and as concerns began to mount whether 1 WTC would be financially viable. In 2011, Condé Nast signed a 1 million-square-foot lease to anchor the tower, vastly improving the skyscraper’s financial position.
If the Port Authority approves Vantone’s request, the company will take the entire 89th floor for about $100 per square foot. If there is a silver lining in the revised lease, it is that Vantone will pay a rental rate substantially higher than what it had agreed to pay for floors 64 to 69, where asking rents are in the $70s per square foot.
However, in order to downsize, Vantone will likely have to pay the Port Authority and Durst a termination fee on the space it relinquishes. The size of the penalty payment was not immediately clear.
