Originally designated as New York City’s first “association center” in 1992, 120 Wall Street has stood as a beacon of adaptability and strategic evolution in the ever-dynamic Manhattan real estate landscape. Silverstein Properties’ visionary approach three decades ago, aimed at retaining non-profit organizations within Manhattan through financial incentives, laid the groundwork for the building’s unique identity. This initiative, a response to rising costs that threatened to displace non-profits, marked 120 Wall Street as a pioneering space, blending commercial viability with civic contribution.
In the intervening years, Lower Manhattan has undergone a significant transformation, emerging as a vibrant hub for tech and media companies. This shift has seen an influx of for-profit tenants into the area, and 120 Wall Street has adeptly mirrored this evolution, welcoming a diverse mix of organizations while maintaining its commitment to its founding principles. The 35-story tower, strategically located on the East River waterfront, successfully navigates the balance between attracting contemporary, market-driven businesses and honoring its initial purpose as a haven for non-profits.
Recent financial activities further highlight the building’s robust position in the market. In September of last year, 120 Wall Street secured a substantial $165 million CMBS loan, facilitated by prominent financial institutions Wells Fargo, JPMorgan Chase, and Citigroup. This refinancing, subsequently securitized into CMBS conduit transactions, offers a transparent glimpse into the building’s financial health and operational success. As of August, the property boasted an impressive 95 percent occupancy rate across its 670,000 square feet. This space isLeased to a diverse portfolio of 28 office tenants, alongside five telecom and two retail tenants, demonstrating broad appeal and effective management. The average annual rent stands at a competitive $40 per square foot, according to loan documents, reflecting the building’s desirable location and quality.
Among its notable tenants, global advertising powerhouse Droga5 holds the largest footprint. Droga5’s move to 120 Wall Street in 2013, incentivized by city and state grants under the World Trade Center Job Creation & Retention Program, underscored Lower Manhattan’s growing attractiveness to major creative industries. Expanding its presence in both 2016 and 2018, Droga5 now occupies approximately one-third of the building’s space and contributes to a third of the total rent roll, solidifying its commitment to this Lower Manhattan address.
Non-profit organizations also remain integral to 120 Wall Street’s tenant ecosystem. Success Academy Charter School, a significant educational network in New York City, and AFS-USA, a renowned international youth exchange organization, are key tenants. Reflecting the building’s foundational commitment to non-profits, both Success Academy and AFS-USA benefit from annual rent credits of approximately $4.5 per square foot. This continuation of reduced rents for non-profits honors the original “association center” designation and supports valuable community-serving organizations within a prime Manhattan location.
Despite economic headwinds, particularly the challenges posed by the pandemic, 120 Wall Street has demonstrated remarkable financial stability. Rent collections remained strong at 97 percent as of October, indicating tenant resilience and effective property management. While some tenants, representing about 10 percent of the underwritten base rent, requested rent modifications or deferrals due to pandemic-related impacts, the overall financial performance underscores the building’s inherent strength and appeal.
Silverstein Properties’ long-term ownership of 120 Wall Street since 1980, coupled with ongoing investments in capital improvements – $11 million since 2012 – reflects a continuous commitment to modernization and tenant satisfaction. A strategic sale-leaseback arrangement with Empire State Development further exemplifies innovative financial management, enabling tax benefits for its non-profit tenants through annual payments in lieu of real estate taxes. Currently, twelve non-profit tenants, accounting for 33 percent of the rent roll, participate in this program, realizing significant tax savings, estimated at $1.6 million last year.
Looking ahead, the ground lease structure offers an intriguing long-term perspective. With the ground lease expiring at the end of 2032, Silverstein Properties retains the option to repurchase its fee interest in the property for a nominal sum of one dollar. This unique arrangement underscores the long-sighted planning and enduring value associated with 120 Wall Street, a building that continues to embody both historical significance and forward-thinking adaptability within the competitive New York City commercial real estate market.
