As many media companies are still working out exactly when and how to return to the office, there’s been an update on Condé Nast’s rent battle at 1 World Trade Center where it has been the flagship tenant since 2014.
For a quick catch up, it first came to light in August 2020 that the publisher of Vogue, Vanity Fair and The New Yorker was mulling breaking its lease, which runs for almost two more decades, if it could not to negotiate a better deal with its landlords, powerful real estate magnate Douglas Durst and The Port Authority of New York and New Jersey. In a subsequent move that suggested no progress had been made, it started withholding rent in January.
Now, in a filing to investors, The Port Authority disclosed that Condé Nast’s owner Advance Publications paid its rent in May and June (thought to be around $2.4 million per month), but that it is still withholding approximately $9.6 million of rent payments for January through April 2021 as it continues to try to negotiate a better rate and reduce space. The landlord also expressed concerns over future payments.
“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 the filing dated July 9. “Advance paid its rent due for the months of May and June 2021; however, it may continue to withhold previous or future rents 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.”
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But Jordan Barowitz, a representative for the Durst Organization, appeared hopeful that the situation would be resolved soon, telling WWD in a statement: “We are having productive discussions with Advance, and expect to resolve our outstanding issues shortly.”
Both The Port Authority and Advance declined to comment further on the matter.
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.
Some companies are also still considering how much space they need as they mull office returns, with a hybrid model becoming increasingly popular. In the case of Condé, WWD understands that it is planning for the majority of employees to return on Sept. 7 using a combination of fully onsite and hybrid approaches, with some employees remaining fully remote through the end of the year.
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