Port Authority to Sell 1 World Trade Center 'When the Time Is Right'

FINANCIAL DISTRICT, NY — The Port Authority may be inching closer to a sale of One World Trade Center, according to Crain's New York.

The building, which remains one-third vacant, brought in a return on investment of just 0.35 percent in 2015. According to real estate executives, the building could sell for as much as $5 billion, Crain's reported. That would be the most expensive building sold in the country.

The Port Authority told Patch it has no sale in process yet, but it is waiting for the right time, according to a spokesperson. Recent statements from the authority said it is divesting from real estate to invest more in transportation.

"One World Trade Center is an iconic, 21st Century Class A-plus office tower with universal brand recognition and strong leasing momentum," the Port Authority said in a statement Tuesday. "Its substantial and growing Net Operating Income will, when the time is right for the Port Authority to monetize all or part of its ownership in the building, support a premium, world-class valuation."

When Patch asked whether this meant the authority was selling the tower, a spokesperson said, "the key phrase in the statement is 'when the time is right.' There is no active sale taking place as we speak."

Port Authority Chairman John Degnan was only slightly less vague about a potential sale in a statement to Crain's.

"Ownership of One World Trade is not a part of the Port Authority's mission to advance transportation infrastructure in the region," Degnan told the publication. "This asset will be monetized and the proceeds used for that core mission. The only question is how and when to proceed in a manner that ensures that the maximum return is yielded for reinvestment in facilities that do serve the agency's core mission."

The One WTC tower made a net profit of $12.5 million in 2015, according to the authority's budget report. That's a tiny gain in the context of a $3.8 billion price tag. Last year's profits, taken into account with the fact that the building is just 70 percent leased, brings up the question of whether it is a good time for the authority to sell the tower.

"At some point in the future, getting out of the real estate business is probably something that we think is a good idea for the Port Authority," Jamison Dague, research associate at the Citizens Budget Commission, told Patch. "But then it becomes a question of when that should happen, and that is a product of the real estate market and how much they can get out of that transaction."

Anyone who would bid on the tower would have to battle with the Durst Organization, a large NYC real estate company, which bought a $100 million interest in the building in 2010. The interest will be converted into an ownership stake by 2019, which means any bidder before then would have to buy out the organization. It also means Durst has the right to block any deal on the tower, according to Crain's.

The Durst Organization declined to comment on its plans for the tower until the Port Authority explicitly announced a sale.

Photo via Patch