New York City — The Westfield Group has taken full control of the World Trade Center retail project by buying the 50 percent interest in the project held by the Port Authority of New York and New Jersey for $800 million. The acquisition represents approximately 365,000 square feet at the World Trade Center Transportation Hub.
Plans for the purchased space include bi-level retail offerings in the new WTC West Concourse pedestrian corridor. The sale also included an additional 90,000 square feet of retail when Tower 2 is developed in the future.
This transaction comes about one-and-a-half years after the initial 50/50 joint venture between Westfield and the Port Authority, for which both parties committed approximately $612.5 million. That brings Westfield's total investment in the project, which is set to open in 2015, to more than $1.4 billion.
"We have greatly valued our long-standing relationship with the Port Authority and will continue to work in close collaboration for the successful realization of the overall project," says Peter Lowy, co-CEO at Westfield. "Now, we look forward to 2015 and celebrating the distinctive character and vibrancy of this great city, while introducing Westfield World Trade Center — an iconic, spectacular and world-class shopping, dining, cultural, entertainment destination — to New Yorkers and global visitors alike."
The Port Authority will retain ownership of the World Trade Center Transportation Hub and continue as contractor for Westfield's retail assets at WTC West Concourse, the office portion of which — known as One World Trade Center — was completed in May.
The Port Authority also remains eligible for an additional one-time payment from Westfield within the first five years of the retail portion's grand opening, should returns exceed a previously agreed-upon threshold.
"Today's $800 million sale of the Port Authority's remaining interest in the World Trade Center Retail joint venture is a significant step in the Port Authority's continuing efforts to refocus agency resources on our core transportation mission," says David Samson, Port Authority chairman. "Westfield's $1.4 billion overall investment in the project, which represents the largest private sector investment at the site, underscores Westfield's commitment to provide an exceptional shopping experience to all who visit."
Sydney, Australia-based Westfield Group LLC manages a worldwide retail portfolio that totals approximately 94.7 million leasable square feet in Australia, New Zealand, the United States and the United Kingdom. The firm either owns or holds an interest in each of the 91 developments in the portfolio, which together are valued at more than $65 billion.
In May of 2001, Westfield partnered with Silverstein Properties to sign a 99-year ground lease at the World Trade Center, the retail portion of which — then known as the Mall at the World Trade Center — Westfield would manage. The company intended to rebrand the property as Westfield Shoppingtown World Trade Center prior to its destruction in the Sept. 11 terrorist attacks.
— John McCurdy