In a move quite stunning for how sensible it is, the Port Authority of New
York and New Jersey is thinking of selling all or part of the Freedom Tower
at the World Trade Center site to developers or private equity operations. That’s
a great idea: office prices are in the stratosphere right now, and the Port
Authority has much better things to do with the cash than have it tied up in
office buildings for ever.
The story comes from Alex
Frangos and Jennifer Forsyth in the WSJ – and they have an even juicier
tidbit as well:
A move on Tower 5 by J.P. Morgan, on the other hand, could take place as
soon as a month, though people familiar with the matter stress the firm is
also exploring sites in midtown Manhattan or could choose to do nothing.
If a deal is made, J.P. Morgan would purchase a long-term ground lease from
the Port Authority for what is known on plans as Tower 5. J.P. Morgan would
build and occupy a 57-story, 1.6 million-square-foot office building, housing
its trading and analyst operations. Such a move would be a major shot in the
arm for the Trade Center site, which has so far failed to land private-sector
tenants.
Of course, one of the main reasons that the Trade Center site hasn’t landed
any private-sector tenants is that it doesn’t have any buildings to put them
in – besides 7WTC, of course, which, although not technically part of
the Trade Center site, is up and running with tenants such as Moody’s already
signed up.
It’s interesting that JP Morgan, which has been scaling back its property exposure
of late, would rather build its own skyscraper on a relatively small footprint
rather than simply lease space in one of the larger buildings being put up by
Larry Silverstein. But banks love to build their own towers, as both Bear Stearns
and Morgan Stanley did recently in midtown, and Goldman Sachs did in New Jersey
and maybe again next to the Freedom Tower. (Morgan Stanley ended up selling
its new tower to Lehman Brothers before it ever moved in.)
Frankly, I think that JP Morgan belongs downtown – its present location
in midtown is big and bland and has nothing of the presence that either Chase
Manhattan Plaza or 60 Wall Street had. A custom-built new bank tower could really
help the neighborhood – and it would finally replace the ugly old Bankers
Trust building which is slowly, now, being demolished.