The billionaire who is still rebuilding the World Trade Center might not live to see it finished (2024)

"In another three or four weeks, we would have had 100% of the tower filled," Silverstein said in a recent conversation with Insider from his conference-room-sized corner office on the 38th floor of 7 World Trade Center. "Then the damnedest thing happened. The pandemic hit, and those deals vanished."

The bird's-eye view from Silverstein's perch reveals a sweeping panorama of the megadevelopment that has replaced the rubble of the 9/11 terrorist attacks 20 years ago.

In addition to 3 World Trade Center, completed in 2018, Silverstein's real-estate firm, Silverstein Properties, built 4 World Trade Center in 2013 and has fully leased that tower. One World Trade Center, the site's tallest structure at 1,776 feet, which is owned by the Port Authority of New York and New Jersey and the large New York City landlord the Durst Organization, is nearly full as well.

The site's memorial, a pair of reflective pools in the footprints of the Twin Towers, has drawn millions of tourists and visitors. The Ronald O. Perelman Performing Arts Center, a theater and events space, is under construction and scheduled for completion in 2023.

In spite of the progress, the coronavirus reckoning threatens to complicate the last chapter in the $20 billion, two-decade effort to restore the site as the commercial center of Lower Manhattan and one of the most vibrant office complexes in America.

As with much of the rest of the office market across the city and the country, few corporate tenants have been willing to take major blocks of space at the World Trade Center since the arrival of COVID-19. More broadly, ominous signs about future demand have arisen from a corporate world that has been increasingly willing to embrace remote work.

That poses a problem for Silverstein, who must build 2 World Trade Center, a hulking 1,300-foot-tall tower with nearly 3 million square feet of office space, to finish the rebuilding. He estimates the tower will cost a staggering $4 billion. The spire will require huge commitments from anchor office tenants — precisely the kind of jumbo leasing transactions that have appeared to vanish as big corporate names rethink the future of the workplace.

Silverstein has long said he wants to complete 2 World Trade Center — the final commercial skyscraper at the site — in his lifetime, and he remains unbowed even after entering his 10th decade in May. Just as his pursuit to rebuild the World Trade Center site became a symbol for the resurgence of Lower Manhattan and America's psyche in the aftermath of 9/11, his effort now encapsulates the larger struggle of the multitrillion-dollar office industry to avoid being superseded by the work-from-home movement.

Silverstein is predictably bullish on offices. "When you see what happens when people get together and they start talking and they start thinking and thinking creatively and conversing with each other, it's the most amazing thing," Silverstein said. "It produces results that are remarkable."

And yet: Silverstein need not look further than the World Trade Center to see the mixed signals on whether major tenants agree.

Take Spotify, which occupies 500,000 square feet at 4 World Trade Center, a nearly 1,000-foot-tall, 2.5 million-square-foot office tower. The music-streaming giant has said that, going forward, it will allow most of its employees to continue to work remotely if they prefer to do so.

Uber, which takes up 300,000 square feet at 3 World Trade Center, is trying to offload 25% of its space. The ride-hailing app recently relaxed its return-to-work policies, granting employees more flexibility to log on remotely and offering them the option not to return to the office. In early September, it decided to push back the anticipated reopening of its offices across the country — when workers will be mandated to return at least half of the time — from October to the beginning of 2022.

The publisher Conde Nast, meanwhile, a tenant in One World Trade Center, is trying to sublease about 400,000 square feet of its roughly 1.1 million square feet of space in the building, according to a leasing broker working with it to dispose of that space. It recently struck deals to offload about 90,000 square feet of that to the message-board site Reddit, which is owned by Conde's parent company, and another tenant.

A total of 21.3 million square feet of sublease space was on the market in the second quarter of 2021, according to the real-estate services firm Savills — close to the record 22 million square feet available in the first quarter.

New development is generally viewed as difficult to undertake in a market flush with so much fallow space.

Silverstein insists he'll complete the challenging coda to the World Trade Center's redevelopment despite the headwinds. He's viewed as a relentless optimist — even in a business packed with boosters. After all, he bought the Twin Towers for $3.2 billion on July 24, 2001, mere weeks before the attacks brought everything crashing down. And he's come this far.

Asked whether he was in conversations with 2 World Trade Center office tenants who would commit to enough space at rents sufficient to justify such a costly endeavor, Silverstein said: "The answer is yes."

Last year, Silverstein Properties rehired the architecture firm Foster and Partners to take another stab at the aesthetic vision for gargantuan building. The company drafted the original plans for the tower 15 years ago.

A spokesperson for Silverstein Properties said the company will not be publicly releasing the new plans until it has struck a large leasing deal to allow it to proceed with the development. Silverstein began construction of 3 World Trade Center only after securing a 700,000-square-foot lease with GroupM at the tower, amounting to roughly 25% of that building's space.

"There is interest in space here," Silverstein said. "The question is what particular industries and what are the magnitudes of the needs going to be."

During the World Trade Center site's winding and difficult reconstruction, Silverstein has silenced naysayers before.

He recounted one particular instance in the mid-2000s, when former New York City Mayor Michael Bloomberg expressed doubt that Silverstein could fetch the $50-per-square-foot rents he was seeking for 7 World Trade Center, the first office tower at the site to be rebuilt, in 2006. In recent years, buildings at the site have enticed tenants at rents reaching past $80 per square foot and higher, but more than a decade ago, $50 was considered an ambitious target.

"I remember calling Mike and telling him, politely but firmly, that I disagreed with him totally," Silverstein said. "He said, 'Well, prove me wrong.'"

Silverstein wound up leasing 600,000 square feet of the 1.7 million-square-foot building's space to the ratings firm Moody's in 2006 at $50 per square foot.

"Next thing I know, I get a call from Mike and he said, 'I'm calling to apologize,'" Silverstein recalled.

It's not just 2 World Trade Center that's left to build. Silverstein Properties, along with the large real-estate firm Brookfield, jointly won a bid to develop 5 World Trade Center, a planned 900-foot tower on the site's southern end that will be predominantly residential space, with about 1,300 apartments. That tower's construction is considered less daunting because of resilient demand for housing in New York City.

The uncertainty surrounding the future of the office market now reminds Silverstein of the grave predictions for the future of Lower Manhattan after 9/11.

"'Would the last one out please turn out the lights?'" Silverstein said, remembering the prevailing sentiment at the time that no major office occupier would want to come back to a complex that was the scene of such a horrific event. Now it's "no one will need office buildings. It's ridiculous, more negativism. I don't believe in it."

He also conceded that his company has begun to diversify its focus beyond New York City to other markets around the country that have begun to see stronger growth, including Las Vegas and Philadelphia.

He credited that shift to his daughter Lisa Silverstein, the 54-year-old vice chairman of the firm. The real-estate executive Marty Burger, who is 56, was named as CEO of the firm in 2014 and oversees its day-to-day operations.

"I did turn the reins over to Lisa," Silverstein said. "She's making many more decisions, which is terrific. Young people think differently. People 90 years of age — we are a bunch of fossils."

While Silverstein has slowed down in some ways,he said he still maintains an hourlong morning ritual of swimming 20 laps in the 75-foot pool at the nearby Four Seasons hotel and residential tower that Silverstein Properties developed at 30 Park Place, an address just blocks from the World Trade Center.

Silverstein purchased one of the luxury condo's penthouses for $32 million three years ago and makes the short commute into the office most days.

"When I'm not in the office, I'm on the phone," Silverstein said. "I just love being part and parcel of everything that goes on here. It's exciting, and I find it stimulating as hell."