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Financial Companies Begin Migration From Lower Manhattan

New York: Rising From the Ashes

Cristina Gair, Associate Editor

September 27, 2001

NEW YORK — The migration has begun. The firms of downtown Manhattan, arguably the financial center of the world, are being forced to relocate — at least temporarily — to Midtown Manhattan or the suburbs to after their offices were destroyed in the Sept. 11 terrorist attack on the World Trade Center (WTC).

For downtown resident Myers Mermel, CEO of online commercial real estate brokerage Tenantwise.com at 67 Wall Street, the migration of financial companies out of Manhattan to midtown Manhattan or Jersey City, N.J., is understandable, but unsettling.

"That’s a lot of jobs moved to Midtown, New Jersey and Connecticut," Mermel said. "The resettlement of these companies to other areas poses a risk to lower Manhattan."

After the attack, Mermel and his 10-employee group contacted decision-makers at 42 of 78 firms with more than 10,000 sq. ft. in the WTC. Out of the tenants contacted, Tenantwise.com found that 40 are headed for relocation destinations outside of lower Manhattan. The group represents 54% of the larger WTC tenants.

According to Tenantwise.com, the companies account for 5.9 million sq. ft. of office space, which is 44% of the total square footage in the WTC buildings. Thirty-three of the firms will move to midtown, while five will go to New Jersey, despite the higher rents of these areas. Two have chosen other states, and the remaining two will keep their offices downtown. The 40 companies exiting lower Manhattan account for 99% of the square footage leased by the 42 companies.

Mermel explained that tenants are choosing to leave lower Manhattan’s 6 million sq. ft. of available space because of impassable areas, poor infrastructure in remaining buildings or a general uneasiness about the city’s future. He believes the WTC site should be rebuilt with a memorial to its employees, but "a re-tenanting of lower Manhattan — the sooner, the better" will salvage the city from long-term effects of the attacks.

©2001 Bloomberg L.P. All rights reserved.

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