The CEO of
TenantWise keeps his office downtown, but finds it’s not easy persuading
others to remain there
September 03, 2002
One Year Later — M. Myers Mermel lives and works just blocks from the
World Trade Center site, but he didn’t even consider leaving when terrorists
attacked his neighborhood last September. In fact, Mermel was back at his
desk the morning after the attacks—and would put in some of his longest days
ever over the following weeks.
HE IS THE CHIEF EXECUTIVE of TenantWise, a real-estate consulting company
that specializes in helping businesses find office space. After the attacks,
his company provided some of that aid free of charge as he helped the dozens
of downtown businesses whose offices were damaged or destroyed find new
space. Despite the availability of nearby office space downtown, however, he
found that the majority of companies whose offices were destroyed opted
instead to move to midtown Manhattan or to New Jersey—even though it often
cost them substantially more to do so. Tenants in one third of the damaged
office space also relocated. TenantWise tracked their movements and has now
published six special reports on the rebuilding of the downtown area since
Mermel says he’s noticed some disturbing trends, including the discovery
that only about 53 percent of the approximately 138,000 jobs in downtown New
York affected by the attacks have returned to the area—that, despite lower
rents and federal aid incentives. Nearly $131 million in federal grants have
been allocated to 40 companies who made commitments to stay in Lower
Manhattan for at least seven years, bringing with them about 34,000 jobs.
Yet, while commitments from high-profile companies like American Express and
Dow Jones have been widely-publicized, Mermel says the effects of their
return has been diluted by the exodus of many smaller companies. NEWSWEEK’s
Jennifer Barrett spoke with Mermel, whose company has been hired as a
resettlement adviser to New York’s Empire State Development Corporation,
about his decision to remain downtown—and what it will take to bring other
businesses back there as well.
You’ve written six reports about the impact of the September 11 attack on
the affected tenants in the WTC buildings and surrounding properties and
about the overall downtown office market. What have you learned?
The reports came out of our effort to track these companies and help them to
get resettled. It was so catastrophic that the real-estate industry wasn’t
prepared to respond quickly. We had a tremendous surge in traffic on our Web
site as people were trying to find space quickly. Our sole aim was to try
and inform these companies. But then as we looked at the patterns that
started to emerge, it was pretty striking.
What patterns did you notice?
Thirteen million square feet of office space was destroyed. Only companies
using 11 percent of those square feet decided to stay downtown, even though
the space is a lot cheaper and it is available down there. Twenty-five
percent of those in damaged properties decided to leave—a full quarter—and
these are long-term decisions. Many paid double to move to New Jersey or to
midtown. [Rent] is usually the second-largest expense after payroll, and
we’re in a recession. Companies are supposed to be cutting back but here
they’re paying double to move. It was that bad. One executive told me one of
his partners broke down in tears at the thought of staying. It was
emotional. People identified the place with an event—they identified it as a
place of terror. They felt lower Manhattan was inextricably linked with the
Has that changed much with time?
The emotional issues are fading, but there are concerns about environmental
issues, and about the rebuilding of transportation and infrastructure
downtown. There has been a lot of recommitment away from Manhattan. The
long-term fallout from this is as bad as we thought, or worse.
What will it take to bring all those businesses back—and to make sure
It’s not enough to just rebuild the World Trade Center. Obviously, it
doesn’t matter if they put in a bright, shiny apple if the rest of the tree
is dead. They need to keep the integrity of the business district. There
hasn’t really been a coordinated analysis of the area. The trick is not to
push the businesses back but to build something to pull them back. There
hasn’t been much thought about what will pull them back. There have to be
some novel and exciting plans on how to make lower Manhattan a better
business district, period—not just the area that was destroyed, but a focus
on improving the entire area.
Any specific suggestions?
Well, 81 percent of the affected companies were finance companies and they
are also the most likely to return to the area. Just 13 of those financial
companies accounted for more than half the jobs that left there. There seems
to be some pervasive sense that big companies are bad, but these big
companies employ a lot of people and they pay 11 different types of taxes.
We believe the state should move aggressively to make larger grants to bring
these large companies back in the future, as well as building more Class A
[prime office] space to replace the Class B [real estate that is less
expensive because of age, infrastructure, a lack of amenities or other
reasons] space. That will attract new companies in the future.
Isn’t it a little late to try and bring some of the businesses back that
have already signed leases somewhere else?
It’s not too late because you are looking at forward commitments on the
companies’ behalf for space that will be built 8 to 10 to 12 years out. If
there is a commitment to improve downtown infrastructure and transportation,
which would allow commuting to Connecticut and New Jersey and other suburbs,
that will draw tenants back. In the short-term, we’ll need to see continued
incentive stabilization by the state and federal government to maintain the
nation’s financial capital.
What is it like for you personally these days, living and working so
close to Ground Zero?
It feels like we are all just holding on. We are doing the right thing by
being here, but we’re holding on. We’re fighting the good fight, but there
are no high-fives or big grins or easy days.
Your office is located on Wall Street, just a few blocks from the World
Trade Center. What do you remember from September 11?
We were as shocked as everyone was. The dust cloud was all around us—we
couldn’t see anything. We weren’t sure what had happened initially. We
waited a couple hours until the sun came through the dust and we could see
our way out. It seemed like we should do something, but no one knew what to
do. We have about 10 employees and a number of them live in midtown and
wanted to be home so I walked with them for two hours up along the East
River. Then I actually went back downtown because I live two blocks away
from Wall Street.
Were you able to get back to your office?
I was back in the office at 8 a.m. on Sept. 12.
Why so soon?
Just because I knew that we had information that would allow us to contact
these displaced companies and that all these displaced companies needed new
space immediately to continue their business. I stayed down there, though
the Army started evacuating the building for fear One Liberty Plaza might
fall on us. I think I was the only one—or one of the only ones—still in that
building. I had to have faith that the buildings would stand and things
would be fine. I didn’t think that there was necessarily any safer place to
run to then. And I wanted to stay focused on helping these companies
resettle. I had thought to volunteer on the pile but then it dawned on me
that I am not a big guy and I can’t run machinery, but I can work the phones
and I know the real estate market and maybe the Lord wanted me to work on
that side instead. So that’s what I did. By next Monday, everybody had come
back to the office.
Yours must have been one of the few businesses operating down there that
week. Wasn’t that difficult?
There was so much grief and so much loss that it was good to work. We wanted
to volunteer our time and our efforts and our knowledge to help these
companies get resettled. For some companies, of course, we didn’t charge
them anything but just wanted to help them set up shop and let them know
where they could continue to do business. I don’t think everybody realized
just how catastrophic it would be for the companies that were displaced.
When we first went back, we pulled two or three all-nighters getting as much
information up and out as possible and I remember crawling under my desk at
about 5:30 a.m. to sleep for an hour and a half. And I was so pleased that I
could sleep under my desk because I thought of all those people who didn’t
get the chance to wake up that morning—and all those loved ones who weren’t
coming home again. And I was pleased to have the opportunity to be able to
do something. I was just glad to be alive.
Now in the office, we don’t like to talk about it. Some things are just so
bad you don’t want to bring it up again. Not that this compares to a war.
There was no personal sacrifice, we were just bystanders. But there was so
much sacrifice made that we were just in awe of it.
Weren’t you concerned for your safety?
No, but I have to tell you that those couple weeks after [the attacks],
staying at my apartment late at night, it was very unsettling. Many times I
had to pray—it was just too heavy. The quietness of the night was too heavy.
Sometimes, you would hear the jets going overhead—the National Guard—and at
first it would startle you. You’d try to sleep and then you’d get up and
pray. It was really hard.
Why stay downtown?
It’s my home. My father’s people got off the boat at Ellis Island at the
turn of the century—my mother’s people got off the boat 300 years before. I
have ancestors buried down there. I feel a very special connection to that
piece of land. I grew up in Virginia but I’ve been in New York since
How optimistic are you about the future of lower Manhattan from a
It’s an open question. There has to be continued state and federal
involvement to fix what was a broken market even before. I think restoring
the area as a financial capital, as it was, is an economic and political
imperative not only for the region but also for the country. This is not
just any city we’re talking about. This is New York.
© 2002 Newsweek, Inc.