The Westfield Group has agreed to purchase the Port Authority of New York and New Jersey’s remaining 50% interest in the World Trade Center’s retail square footage. The purchase price is US$800 million. Following the transaction, expected to close early next year, Westfield will own 100% of the retail space, which totals 365,000 sq. ft.
“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,” said Peter Lowy, Westfield Group co-CEO.
The acquisition enables Westfield to begin carrying out a plan it made years ago. The company originally acquired a 99-year lease interest in the World Trade Center retail space in July of 2001, just six weeks before it was destroyed in the terrorist attacks of September 11, 2001.
The Port Authority bought the lease back Westfield in 2003.
But Westfield wanted to be part of the new World Trade Center. In 2011, the company paid US$612.5 million for a half interest in a joint venture with the Port Authority to own and operate the retail space. Under that agreement, Westfield would handle the management and leasing of World Trade Center retail.
Acquiring the remaining 50% interest from the Port Authority brings Westfield’s total investment in the World Trade Center to $1.4 billion, the largest private sector investment in the site. The agreement includes a provision that will subject Westfield to an additional one-time contingent payment to the Port Authority within five years of the opening date if Westfield exceeds certain agreed upon return thresholds.
The site’s retail space spans multiple levels in the Santiago Calatrava designed Oculus. It includes substantial square footage at street level along Church Street, Cortland Way and Dey Street plus three stores above grade in Towers 3 and 4.
The initial phase of the retail build-out is slated to open in 2015.
When Tower 2 is developed in the future, it will include an additional 90,000 sq. ft. of retail space.
Westfield and the World Trade Center have returned.