Advance Publications, the owner of Condé Nast, owes its landlord at One World Trade Center almost $10 million in rent, according to a new document by the Port Authority of New York and New Jersey.
“The Port Authority has received a request from Advance Magazine Publishers Inc., the anchor tenant at 1 World Trade Center, that it be permitted to reduce both the square footage under its lease and rent per square foot for the remaining space. Advance has, without being permitted to and without legal justification, unilaterally withheld approximately $9.6 million of rent payments due and owing for January through April 2021,” it said in an update to investors.
“It may continue to do so at that level or a higher level unless a resolution is reached. The Port Authority believes it has strong contractual rights to enforce full payment by Advance which it intends to assert,” the document added.
It first came to light in August that the publisher of Vogue, Vanity Fair and The New Yorker was among the many companies mulling breaking their lease that runs for almost 20 more years if it failed to negotiate a better deal with its landlords, powerful real estate magnate Douglas Durst and The Port Authority of New York and New Jersey.
A February bond filing by The Port Authority revealed that six months later this issue was no closer to being resolved and that Advance had withheld approximately $2.4 million in rent for January. This latest filing shows the two sides appear to still be far from reaching a conclusion in negotiations.
Advance is far from being alone in terms of withholding rent as the coronavirus pummeled the already fragile media industry, triggering an unprecedented advertising free fall. Tribune Publishing previously disclosed in a corporate filing that it has withheld rent since April 2020 at the majority of its facilities and requested rent relief in various forms, including lease restructuring, rent abatement, deferrals or lease terminations. In November, it reported that payments have generally resumed as the company completes the rent relief discussions.
Bloomberg News previously reported that Advance had been touring spaces located on the New Jersey waterfront, exploring the possibility of splitting office space between the Garden state and Manhattan. The goal of moving part of the office would certainly be to cut costs. According to data from Cushman & Wakefield, asking rent per square foot is $80.18 in prime Manhattan office space, versus $46.02 on the New Jersey waterfront.
Condé Nast’s global chief of people, Stan Duncan, has informed employees in a memo that remote working will be “a larger part of our future workforce strategy.”
A representative for Advance did not immediately respond to request for comment. A rep. for the Port Authority said: “The companies responsible for this lease have billions of dollars in assets, yet they have unilaterally withheld rent without any legal justification. These companies are entirely capable of satisfying their legal obligations and the Port Authority believes it has strong contractual rights to enforce full payment.”
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