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Leaving Downtown

Crain's New York Business

By Matthew Flamm

March 22, 2002

The availability rate for lower Manhattan real estate could reach 20% by this summer, up from 8.7% on Sept. 10, according to market research firm TenantWise.com. The increase is expected despite the destruction of 13.4 million square feet of real estate in the terrorist attacks. As of last month, the availability rate had already reached 15.3%.

According to TenantWise's data, 29 tenants from the damaged and destroyed properties have planned to decentralize operations, moving jobs out of lower Manhattan. Of the tenants that occupied the 34.5 million square feet of downtown office space that was destroyed and damaged, companies occupying 55% of the space will stay in the area, keeping 76,294 jobs there. Companies that account for 44% of the space are leaving, taking 59,830 jobs with them. A small number are undecided.

More jobs are at risk—as many as 164,500, TenantWise conjectures—as leases expire over the next five years.

Companies are choosing to leave downtown despite having to pay more in areas like midtown and New Jersey, as they weigh factors like security, transportation, environmental safety and contingency planning, says the research firm.

 

Copyright 2002 Crain Communications, Inc
 

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