By Susan L. Harper
October 03, 2001
MANY TENANTS from the destroyed World Trade Center buildings and
surrounding damaged properties have relocated within New York, according to
Sept. 21st and Oct. 1st surveys conducted by TenantWise.com, an
on-line real estate services and information firm. A number of tenants
within the 14 damaged properties have also indicated that that they will
return to their former downtown offices once repairs have been completed.
However, many of the largest tenants from the destroyed and damaged
properties-accounting for the majority of the leasable square footage - have
made long-term plans to relocate outside of lower Manhattan.
"While it is clear that companies are supportive of the State of New York in
its time of crisis, it is also clear that many are not making plans now to
return to lower Manhattan," the Oct. 1st report concluded.
TenantWise.com surveyed 75 of the largest tenants from the destroyed
buildings. The online real estate services firm found that 40 of these
largest tenants, representing 82 percent of the square footage of those
surveyed have made plans to relocate outside of lower Manhattan. Also, 11 of
the largest tenants in damaged properties surrounding the World Trade Center
- representing 44 percent of the total square footage of the damaged
properties- are also relocating outside of lower Manhattan.
These findings, according to M. Myers Mermel, chief executive officer of
TenantWise.com, were achieved through interviews directly with tenants
or through their landlords and brokers.
"Many of the companies have chosen to pay higher rents in Midtown
Manhattan," said Mr. Mermel.
TenantWise.com also found that 31 of the total 113 companies located
in damaged properties, representing 17 percent of square footage in damaged
properties stated their intention to return to lower Manhattan. However, 71
companies representing 39 percent of the square footage within damaged
properties, according to the Oct. 1st report, have not specified whether
they will return to lower Manhattan once the repairs are completed.
The report included speculations that during this period of recovery many of
the companies "may be focusing on the grieving and healing process and
getting settled into temporary space." Further, the authors cautioned that
some of "these destinations indicate deals in progress and may be reversed."
"It is possible for companies to return to lower Manhattan as sufficient
Class A and Cass B space exists to house them," Mr. Mermel confirmed.
Some of the largest financial services tenants once housed in now damaged
buildings, including American Express, Merrill Lynch and Lehman Brothers
chose to relocate to New Jersey and Connecticut in the wake of the attacks,
signing long-term leases and taking 10,500 jobs out of state with them,
Mr. Mermel pointed out, however, that it may be possible for these
companies to sublease their long-term, out-of-state spaces if they decided
to move back to New York.
One out-of-state real estate developer commented this way on some New York
City companies' decision to relocate out of state:” Even if I had the space,
I would not offer it to a New York City company. There is adequate space in
New York City and State to house displaced tenants. Many corporations have
benefited tremendously from New York during the good times. They should
stick with New York during these challenging times as well."
Copyright 2001 ALM Properties, Inc. All rights reserved.