Publishing house Conde Nast is reneging on its rent at One World Trade Center in a stand-off with the Port Authority to renegotiate the lease on its 1.2 million square feet of office space in the tower.
In bond documents published by PANYNJ, the Authority said Condé Nast is withholding $2.4 million in January rent and has warned it’s cancelling its rent until it reaches new terms.
In a statement, Conde Nast parent, Advance Publications, said: “Advance continues to be in discussions about bringing the lease in 1WTC into line with current market conditions and its ongoing needs at that location. We are also considering alternative solutions to address these requirements.”
But the Port Authority says it has “strong contractual rights” to enforce full payment of the rent “which it intends to assert.”
Conde Nast relocated from the Durst Organization’s 4 Times Square in 2014 after PANYNJ formed a partnership with Durst that gave the firm a minority stake in the landmark skyscraper and paid the rent on the Times Square space until Durst was able to find a new tenant to fill it.
It is estimated the Port Authority handed over around $200 million in rent payments to Durst before the dust settled.
However, Conde Nast was never able to fully occupy its new 1WTC space as it struggled with falling print revenue on its titles, including Vogue and Vanity Fair, and laid off a chunk of its workforce.
As early as last summer, the publisher said it was looking for alternative space in midtown Manhattan and possibly even New Jersey.
However, Jordan Barowitz, a spokesman for the Durst organization, sniped, “Condes’ parent company is making a windfall in the stock market on IPOs and they claim they can’t pay their rent.”
Founded in 1922 by Sam Newhouse, Advance Publications is a holding company that has grown to be among the world’s biggest corporations.
Among its many investor positions, the company is a major shareholder in the Reddit platform that just rocked the stock market with its revolt against short-selling hedge funds, and Compass real estate brokerage.
Reddit is currently valued at over $3 billion and Compass has filed its plans for an IPO that is expected to be a windfall for shareholder such as Advance.
Donald Newhouse, the owner of Advance Publications, has a reported net worth of $11.1 billion.
A spokesman for the Port Authority told Real Estate Weekly, “The companies responsible for this lease have many billions of dollars in assets and have seen their stockholdings explode in value during the pandemic, including the just-announced doubling in value of their investments in Reddit. These companies are entirely capable of satisfying their legal obligations, and the Port Authority has strong rights to enforce full payment.”
