World Trade Center lease transaction: Vornado Realty Trust vs. Silverstein Properties

You may have heard about the lease transaction of the WTC 1 and 2 to Silverstein properties back in spring 2001.
But what most of us are not aware of, is that there was a bid-request by the port authority, originally won by Vornado Realty Trust.
Enough suspicion, though, to ask Vornado about a comment. See below.

First, he is the brief history about the bids and the negotations with Vornado and Silverstein:


23 Feb: It's been fulfilled:
The World Trade Center lease transaction will be completed for a tidy sum of $3.25 billion, with even the first installment estimated at staggering $700 million.
The deal between the Port Authority of NY and NJ and Vornado Realty Trust is expected to be completed on March 14, when the largest office complex in the world changes hands for the largest sum ever.
"At $325 per square foot, the World Trade Center is more valuable than Rockefeller Center, the landmark Midtown complex that sold last December for $1.85 billion, or $284 per square foot. Steven Roth, chairman of Vornado Realty Trust, set his sights on the World Trade Center after being deeply disappointed in losing out in the bidding for Rockefeller Center, according to real estate executives."
"Because the building was financed with Port Authority bonds, which place restrictions on any sale, Vornado would actually lease the complex, rather than buy it. But the deal would effectively give the publicly traded company full control of the the 110-story Twin Towers and two other office buildings, 4 and 5 World Trade Center, for the rest of the century."
In other words, the deal excludes the WTC Marriott hotel, the low-rise U.S. Customs Building on the north-western corner and the 7 WTC across Vesey Street.
As well as the Hadars of the Citigroup Center deal, Vornado is another relative newcomer in the NYC office market:
"It would also be an enormous plum for Vornado, which had until recently owned a collection of shopping centers across the country. But in 1996, Vornado plunged into the Manhattan market when it bought a group of office buildings. The company now owns or manages 66 million square feet of real estate in the United States, including 23 office towers in the New York region."
The office high-rise market in the city has been recently far from stagnated: in addition to new construction, also the existing large towers change hands.
"Mary Ann Tighe, vice chairwoman of Insignia/ESG, a real estate company [...] "All the great landmarks of the city have changed hands," she said, "each at a price more extraordinary than the last.""
To alleviate fears about Vornado pulling out at the last moment, due to its current extensive commitments,
"the authority has told another bidder, a joint venture of Boston Properties and Brookfield Financial Properties, that it would resume discussions if it could not agree on a contract with Vornado within 20 days."
The Authority has been criticised about selling a profitable money-maker in the Center (producing annual profit of $120 million), but by leasing the property it will still get income from the complex, without having to get involved in its upkeeping.
Dramatic increases in the current tax payments to the city could of course reduce these profits:
"Under the deal, the Trade Center's new operator would pay the city under the old formula, and any increase resulting from a new arrangement with the city would be covered by the Port Authority."

Source: The New York Times, 23 February 2001


15/17 Mar: Or not quite:
Seems that the "elbower", Vornado's Stevie Roth, is in the process of adding another group of opposing negotiators to the users of the (semi)famous T-shirt "We Survived Talks With Steven Roth", printed after a past slugging match of negotiations.
"The Port Authority had given Vornado until yesterday to sign a contract for the Trade Center, after selecting the publicly traded real estate company as the winning bidder on Feb. 22. But several days ago, Vornado tried to make substantive changes to what was supposed to be a 99-year lease for the property, according to three executives involved in the negotiations."
That is, changing the 99-year lease to a 39-year one, with possibility for renewal(s) after that.
"The authority refused, and yesterday morning it decided to end its talks with Vornado and to reopen negotiations with the second place bidder, Silverstein Properties. The Silverstein company's offer last month was only about $30 million less than the $3.25 billion bid from Vornado. The authority's real estate advisers also notified the third-place bidder, a joint venture of Boston Properties and Brookfield Financial Properties, that the deal with Vornado had collapsed."
After retracting its 39-year lease requirement, Vornado then returned to negotiations, retreated from them and restarted again after requests by the top officials from the Authority.

Source: The New York Times, 15/17 March 2001


20 Mar, 2001: Manual recount time:
Is the thriller over already? Steven Roth's Vornado has been ousted from the race.
"The authority failed to complete the deal with Vornado because "seven or eight substantial issues" remained unresolved yesterday, according to several authority commissioners. One sticking point was the company's refusal to put up $100 million in a show of good faith as the contract was signed but before the deal closed, two commissioners said."
Steven Roth stated that the Vornado board first vetoed his concessions, but even a weekend of restarted negotiations produced nothing.
"It's both a surprise and yet completely predictable given Vornado's historic negotiating approach," Ms. Tighe [chairwoman of real estate brokers Insignia/ESG] said. "These guys know how to win a bid, but they also know how to attempt to restructure the deal to make it more favorable."
It now seems that the Silverstein Properties, which already owns the off-the-complex 7 WTC, is going to add also the main WTC buildings to its roster.
Source: The New York Times, 20 March 2001


This letter I sent to Vornado 2 weeks ago:

Vornado Realty Trust
888 Seventh Avenue

New York, NY 10019


Hamburg, Germany, 2007-01-17

Request for info about WTC acquisition attempt

Dear Sirs!

As I have learned from this link below your cooperation was the one with the best conditions for the NYPA lease offer for the WTC complex back then in 2001.

As in regard to what have happen to the buildings, and some allegations against Silverstein Properties for insurance fraud, aka Silverstein said on a PBS documentary that “they made the decision to pull the building (7) and then we watch it collapse”, can you say what was your reason to terminate negotations with the PA?

Did your due diligence check examined potential renewal costs? What this issue theme in the contract draft?

Did you have the feeling that the submission was committed orderly?

You can mail me at

I’m a 30 year old investigative researcher in Germany, connected to glasnost.lists, a powerful newsletter for alternative media used by several other news outlets and journalists.

I do understand if you can not comment on this because of interior business secrets, but ask for an short answer if so also politely.

Kind regards

Dirk Gerhardt
Aka Sitting-Bull


Yesterday I received a polite answer. Joseph Macnow, Executive Vice President and CFO told me, that he [Quote] " might not be appropriate to comment the potential deal with the PA and their subsequent decision to award that transaction to Silverstein properties."[End-Quote]
But: [Quote] "Unfortunately, I agree with your concern and we cannot comment." [/End-Quote]

You decide- does it mean something, that he agrees on my concerns?

Keep Digging -

I am a forensic accountant. I started looking into the events of 9/11/01 in the beginning of 2006 in addition to my full time job.

I just spent 2 hours adding a comment with links to other info that goes back to Port Authority press releases in 1998. The following link will get you to the Press release dated 9/18/1998
The release indicates that the firs flight was expected to land on 9/21/1998.

On 9/24/1998 the Port Authority released an announced "IN HISTORIC SHIFT, PORT AUTHORITY PUTS WORLD TRADE CENTER ON THE MARKET".

My first attempt included information regarding the separate lease for WTC 3 and the 2003 settlement with the insurance company & Port Authority. It was lost due to an attempted attack from another computer that set off my Intruder Protection software.
I don't have sufficient time to redo the entire thing but I want to tell you that I think that there is some connections between the Port Authority, Silverstein Properties and Westfield America regarding the lease that was signed on July 24, 2001, the events of 9/11/01 and the insurance settlement for WTC 3 in December 2003.