15 years after 9/11, One World Trade Center may be for sale

One World Trade Center arose from the wreckage of the Sept. 11, 2001 terrorist attacks, a silver shard built to commemorate those lost in the attacks while also demonstrating New York City’s resiliency.

Yet One World Trade Center appears to be performing better as a symbol than an investment, with Crain’s New York reporting that the building remains one-third empty and its return on investment isn’t even meeting the rate of inflation. Its owner, the Port Authority of New York & New Jersey, is looking to sell the building for as much as $5 billion, the report notes.

One World Trade Center had a slow start, with issues ranging from economic weakness to its location on the site of the original World Trade Center, which heightened security concerns. Yet the $5 billion price tag would make the building the most expensive ever to be sold in America. While it’s unclear whether the Port Authority has received interest from any bidders, security concerns could be an issue if foreign investors are involved, especially those from the Middle East, Crain’s noted.

The Port Authority said it may at some point consider a sale.

“One World Trade Center is an iconic, 21st Century Class A plus office tower with universal brand recognition and strong leasing momentum,” it said in a statement emailed to CBS MoneyWatch. “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.”

The Port Authority has signaled since 2014 that it would at some point divest its real estate assets. A special panel recommended that the agency refocus on its transportation mission, while phasing out its real estate ownership​ and development.

Security has continued to be an issue around the World Trade Center site. While the Port Authority doesn’t break out how much it spends on security, Crain’s noted that it spent $121 million last year to operate the building, which includes security. It’s also been hit with a few embarrassing security lapses, such as a teen who snuck past guards and up to the 104th floor.

Not surprisingly, One World Trade Center was built with multiple security measures in place​, such as dedicated staircases for firefighters and sprinklers and communication systems that are protected by concrete.

While there are U.S.-based investors who might find the building appealing, many foreign investors are also on the prowl for American assets given instability in Europe following the Brexit vote and a weaker economy in China. Anbang Insurance, for one, bought the Waldorf Astoria hotel for a record $1.9 billion, while the Saudi Arabia-based Olayan Group recently bought 550 Madison Avenue in New York City for $1.4 billion, Crain’s points out.

“There are a lot of nuances that come into play that could stall a deal like this,” Giacomo Barbieri of TIAA Global Asset Management told the publication. “One investment group may be concerned about the building’s vacancy [rate], while another might be sensitive to the terrorism risk and then another might be concerned about lining up all the debt to buy something like this.”