Executives at the real estate investment trust Brookfield Properties said in a conference call that it was looking at ways to reposition its World Financial Center office complex in Lower Manhattan.
The four building complex, comprises over 7.5 million square feet and is generally regarded by real estate experts as among downtown’s more prestigious and higher quality office locations.
Still, the complex faces an uncertain future. Some of its largest tenants have been contemplating relocation or a significant reduction in size. The World Trade Center also promises to offer newer office space in upcoming years that will be in even closer proximity to the area’s transportation hubs.
Speaking on a conference call this morning to discuss the company’s financial performance in the fourth quarter of 2009, Ric Clark, Brookfield’s chief executive said that the company was still considering “physical enhancements” at the complex.
Clark said that Brookfield been contemplating for the last seven years “repositioning and reletting the World Financial Center” and that the company was reaching the end of that evaluation and would soon release more details.
Clark wouldn’t go into specifics on what types of changes the company was considering but hinted that they may include improving access to the complex.
On Lower Manhattan’s western fringe and cut off by the West Side Highway, the World Financial Center has always to some degree removed from the rest of the office district. To get to the complex, tenants have had to cross pedestrian walkways that navigate over the busy road.
Clark said that the infrastructure being constructed at the World Trade Center site offered the opportunity to link into new transportation related pedestrian walkways.
“It will physically function differently,” Clark said of the transit infrastructure. “And we need to respond to those things to make World Financial Center more valuable. We feel there is no better investment than this.”
Brookfield’s plan to make the World Financial Center more attractive to tenants comes at a time when the company could be facing large impending vacancies at the complex.
The investment bank Merrill Lynch occupies over two million square feet in the two of the center’s buildings. Since the firm nearly imploded during the financial crisis in 2008 and subsequently was acquired by the midtown based Bank of America, there have been expectations that the when Merrill’s leases expire at the complex in 2013, it will either significantly downsize or vacate the property altogether.
Another large tenant, the accounting and consulting firm Deloitte & Touche, which occupies hundreds of thousands of square feet at World Financial Center, is also shopping around Manhattan for an office location in which to consolidate. Sources familiar with that firm’s search say there is a strong possibility Deloitte could remain at the complex and even grow because it would pull other offices scattered around the city into that location.
Still any openings that do come up in the buildings could be problematic.
Leasing activity, especially among big space users, has fallen around Manhattan. But as other districts such as midtown appear to emerging from the worst of the downturn, some experts say that downtown, which has held relatively strong so far, could significantly deteriorate.
For instance, the insurance company AIG and the investment bank Goldman Sachs, two of Lower Manhattan’s largest tenants, are both expected to create large vacancies that could weigh heavily on the market.
As of now, Clark noted that the World Financial Center is nearly fully occupied, with only a 200,000 square foot block of space available that was vacated by