{"id":1004115529,"date":"2015-03-17T06:17:09","date_gmt":"2015-03-17T14:17:09","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004115529"},"modified":"2022-12-08T13:08:08","modified_gmt":"2022-12-08T21:08:08","slug":"march-issue-the-port-authoritys-new-plan","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/march-issue-the-port-authoritys-new-plan\/","title":{"rendered":"March Issue: The Port Authority\u2019s New Plan"},"content":{"rendered":"

By Gail Kalinoski, Contributing Editor\"BRIEFS_NEWS_PANYNJ\"<\/a><\/em>
\nA report on the future of the Port Authority of New York and New Jersey couldn\u2019t have been clearer about the agency\u2019s massive real estate portfolio: It\u2019s time to \u201cphase out real estate ownership and development\u201d and limit future investments to transportation-related projects.<\/p>\n

But the recommendations released in late December leave crucial questions unanswered. For example, how much of the Port Authority\u2019s 12,000 acres of land and 45 million square feet of office, industrial and retail space should be sold? Should the agency secure long-term ground leases for key assets?<\/p>\n

\u201cKeeping some assets and selling others could be prudent for the Port Authority,\u201d said Obie Walli, CEO of New York City-based Coldwell Banker Commercial Alliance. \u201cCore assets in the service of their mission should be retained, as control of their destiny is of course important.\u201d He added: \u201cClosing some select ground leases with committed parties seeking highest and best use could be smart from a cash flow and inflation hedge standpoint.\u201d<\/p>\n

Rick Lechtman, eastern U.S. director for Marcus & Millichap\u2019s national office and industrial properties group, suggested that the agency should engage in ground leases.<\/p>\n

Lechtman explained that transportation needs are often upredictable amd warned that the agency \u201cmay be handcuffing the region\u201d if it disposes of assets that might someday be critical to a transit project.<\/p>\n

New Jersey State Sen. Robert Gordon, who is among the state legislators seeking to reform the agency, said that real estate deals \u201cshould be in the light of day\u201d and wants disposition guidelines. What isn\u2019t divested should be monetized, the report stressed.<\/p>\n

Gordon said he is unaware of any plans for the agency to sell its signature real estate asset: One World Trade Center, the 3 million-square-foot office tower that opened last year in Downtown Manhattan. The Port Authority owns 90 percent of the tower, while The Durst Organization owns the remaining 10 percent.<\/p>\n

Nearby, the agency leases the sites of 2, 3 and 4 World Trade Center to developer Larry Silverstein. The Port Authority is expected to sell the site of 5 World Trade Center when ownership reverts to the agency. It made two deals worth $1.4 billion with Westfield Corp. to develop 350,000 square feet of retail, including more than 200,000 square feet at the Transportation Hub, which is scheduled to open this fall.<\/p>\n

Selling Rights
\n<\/strong><\/p>\n

In midtown Manhattan, the Port Authority is undertaking a $90 million makeover of its bus terminal at 42nd Street and Eighth Avenue. The report recommends replacing the 65-year-old facility, possibly through a public-private partnership. That may mean resurrecting a plan to sell the terminal\u2019s air rights. A proposal led by Vornado Realty Trust for a 40-story tower collapsed in 2011. In the meantime, the agency recently selected Cushman & Wakefield Inc. as the agent for the terminal\u2019s 163,000 square feet of retail.
\nThe Port Authority is also making deals in the Hudson Yards district on Manhattan\u2019s West Side, where several massive mixed-use projects are underway. In June, the agency\u2019s commissioners agreed to sell development rights on the Lincoln Tunnel Expressway below 34th Street to The Dermot Co. for more than $100 million. That was followed in September by a $31 million deal to sell the air rights above two Dyer Avenue lots to Extell Acquisitions L.L.C. for a multi-family project.<\/p>\n

\u201cWe will continue to take an aggressive approach to exploring options that offer significant value for non-core assets and recycle that revenue into our bus terminals, airports, bridges and port facilities,\u201d Port Authority executive director Pat Foye said at the time of the Dermot Co. deal.<\/p>\n

Industrial properties headed for the auction block could include the Essex County Resource Recovery Facility in Newark, N.J., which is currently leased to Covanta Energy; Teleport, a 100-acre mixed-use industrial park on Staten Island; and Bathgate Industrial Park, a 20-acre Bronx property.
\nThe report recommends modernizing the agency\u2019s port facilities to increase efficiency and handle the new generation of Post-Panamax cargo vessels. But it also suggests repurposing, redeveloping or selling underperforming assets like the Red Hook Container Terminal in Brooklyn, which loses $8 million per year on average and has low cargo volumes.<\/p>\n","protected":false},"excerpt":{"rendered":"

A report on the future of the Port Authority of New York and New Jersey couldn\u2019t have been clearer about the agency\u2019s massive real estate portfolio.<\/p>\n","protected":false},"author":1068,"featured_media":1004115531,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004115529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nMarch Issue: The Port Authority\u2019s New Plan - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/march-issue-the-port-authoritys-new-plan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"March Issue: The Port Authority\u2019s New Plan\" \/>\n<meta property=\"og:description\" content=\"A report on the future of the Port Authority of New York and New Jersey couldn\u2019t have been clearer about the agency\u2019s massive real estate portfolio.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/march-issue-the-port-authoritys-new-plan\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-03-17T14:17:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T21:08:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/03\/BRIEFS_NEWS_PANYNJ.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"681\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/march-issue-the-port-authoritys-new-plan\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/march-issue-the-port-authoritys-new-plan\\\/\"},\"author\":{\"name\":\"Gail Kalinoski\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/fc5b5df1393e5023d2417bd48c2fda57\"},\"headline\":\"March Issue: The Port Authority\u2019s New Plan\",\"datePublished\":\"2015-03-17T14:17:09+00:00\",\"dateModified\":\"2022-12-08T21:08:08+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/march-issue-the-port-authoritys-new-plan\\\/\"},\"wordCount\":694,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/march-issue-the-port-authoritys-new-plan\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2015\\\/03\\\/BRIEFS_NEWS_PANYNJ.jpg\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/march-issue-the-port-authoritys-new-plan\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/march-issue-the-port-authoritys-new-plan\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/march-issue-the-port-authoritys-new-plan\\\/\",\"name\":\"March Issue: The Port Authority\u2019s New Plan - 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