Posted on 02/15/2021 8:29:02 AM PST by Red Badger
Media giant Condé Nast has refused to pay $2.4 million in rent for its office space at One World Trade Center as it tries to shrink its square footage in the building, The Wall Street Journal reported.
Condé Nast — which owns publications such as Vanity Fair, The New Yorker and Vogue — withheld its January rent for its space and could hold back on paying even more in the future, WSJ reported.
The publisher is withholding the rent in an attempt to further reduce its footprint in the 104-story building, co-owned by the Durst Organization and the Port Authority of New York & New Jersey, and lessen its rent per square foot.
The landlords are not having it.
“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,” a spokesperson for the Port Authority said in a statement to Commercial Observer. “These companies are entirely capable of satisfying their legal obligations, and the Port Authority has strong rights to enforce full payment.”
Durst also slammed the company for withholding rent. “Condé’s parent company is making a windfall in the stock market on IPOs and they claim they can’t pay their rent,” Jordan Barowitz, a spokesman for Durst, said in a statement.
A spokesperson for Condé Nast’s parent company, Advance Publications, said in a statement the company is in discussions with the landlord to bring the lease “into line with current market conditions and its ongoing needs at that location.
We are also considering alternative solutions to address these requirements,” the spokesperson added.
The news of Condé Nast’s rent withholding comes weeks after Bloomberg reported that the publisher was considering reducing its office footprint to 400,000 square feet split between Manhattan and New Jersey’s waterfront.
Condé Nast first took 1 million square feet spread out over 23 floors of One World Trade in 2014. However, in April 2018, the publisher hired JLL to put 350,000 square feet on the sublease market, and the next year offloaded 50,000 square feet to Ambac Financial Group.
Media companies have been struggling for years, but the coronavirus pandemic exacerbated their problems as advertisement dollars further dried up. In May, Condé Nast laid off about 100 of its U.S. workers and furloughed another 100, Variety reported. The publisher also laid off a small number of staffers on its public relations team earlier this year, Women’s Wear Daily reported.
And Condé Nast isn’t the only tenant at One World Trade Center ditching space. Commercial real estate brokerage Cushman & Wakefield plans to sublet about 10,000 square feet in the tower as it consolidates that office and one in Brooklyn.
Update: The story has been updated to include a comment from Advance Publications.
Why not? There’s a rent moratorium going on now, right?
I am thinking that a multi billion dollar firm should have the money to pay for decent lawyers. And a decent lawyer would have included both reduction and exit clauses in their lease contract.
Hey, why not - Everyone’s in Blue Cities is doing it and getting away with it.
Just the beginning.
When the financial sector finally bails out, pull the drain plug.
The “exit clause” in the lease is the expiration.
If either party can exit the lease, then what good is it?
Far left propaganda outfits.
Vanity Fair, The New Yorker and Vogue! Three fluff rag magazines written for shallow minded morons.
“The publisher is withholding the rent in an attempt to further reduce its footprint in the 104-story building,”
Great idea. “Mr. Landlord, this house is too big for us so I’m going to withhold rent until you reduce our footprint.”
Kicking their deadbeat asses out on the street would reduce their footprint......................
Magazie?
What’s a magazine?
Is conde Nast actually bankrupt but won’t admit it?
Magazine bankruptcy is in Vogue. Ask Fred Barnes and Bill Kristol
The landlord will argue (correctly) that the conditions are out of its control ... at which point the lease contract may have a force majeure clause that comes into play in the tenant's favor.
I would also consider the possibility that Conde Nast has established a separate corporate entity for its New York operations that could effectively modify the terms of the lease unilaterally simply by filing for bankruptcy.
"I wish my rent was cheaper."
...and Durst family with the brother that was the murderer...
interesting story...
My wife’s a slut..
Hell, evict them. All they do is hoard old magazines and pile them up to the ceiling. The neighbors are complaining. If they are not going to fork it over, what good are they?
I hope they are bankrupt.
Their publications are vile - all about wokeness and BLM these days.
The times have passed when one could look at a magazine just for visual pleasure and entertainment. They will insert completely ugly, unappealing features if they are contributed by the right BIPOC people or whatever.
Could have been someone betting a hot market would stay hot, and they could sublease it for more than they were paying.
Now, there is plenty of much cheaper space available. Let them evict you and you can rent commercial space much cheaper. The cost of litigating to settlement might be cheaper than staying with the current lease.
Commercial Real estate bankruptcies might be the trigger for the next financial crisis.
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