The Port Authority of New York and New Jersey and the Westfield Group approved Westfield’s purchase of the Port Authority’s remaining 50% interest in the World Trade Center retail premises for $800 million.
Following the acquisition, Westfield will own 100% of the retail project.
The Port Authority opted to sell its stake to reduce its development risk, bring additional private capital to the redevelopment of the World Trade Center site, and repurpose capital to the Port Authority’s core mission as a transportation agency.
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Westfield originally acquired its 99-year lease interest in the World Trade Center retail facilities in July 2001. The Port Authority and Westfield entered into a joint venture to own and operate the retail space at the World Trade Center site in May 2012, with Westfield assuming responsibility for management and leasing on behalf of the joint venture. The $800 million purchase price is subject to a one-time additional contingent payment to the Port Authority within five years of the opening date if Westfield exceeds certain mutually agreed upon return thresholds.
Acquiring the remaining 50% interest from the Port brings Westfield’s total investment in the World Trade Center site to more than $1.4 billion. But the pending transaction represents a nominal valuation of $1.6 billion.
In connection with the transaction, the project budget will be increased from $1.966 billion to $2.06 billion. The initial phase of the retail complex is expected to open in 2015.
Westfield’s interest in buying the remainder of the retail space represents its confidence in the retail project at the WTC Site and its potential to make Lower Manhattan one of the world’s leading centers of retail activity, according to the Port Authority.
The WTC retail premises comprise 365,000 square feet of retail space across multiple levels with major street level presence along Church Street, Cortland Way and Dey Street, and three stories above grade in Towers 3 and 4.
An additional 90,000 square feet of retail space will be added when Tower 2 is developed in the future.
The transaction is expected to close within the next 30-45 days.
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