NEW YORK — Following what has been deemed "the longest week," tenants and commercial real estate officestill are working around the clock to find office space for tenants displaced by the destruction of the World Trade Center. Many have moved to other locations, others have signed leases and yet others are still searching for space that fits their price and square footage requirements.
"There are massive efforts to help tenants relocated as quickly and painlessly as possible," said Woody Heller, managing director of the New York capital markets group at Jones Lang LaSalle, a global real estate investment and services firm.
Some space is being found in less conventional places, said John Fox, senior vice president of San Francisco-based PKF Consulting, a real estate consulting firm specializing in hospitality research. Fox said the financial services firm Lehman Brothers is using space in the Manhattan Sheraton Hotel for corporate offices, a source of revenue for hotels facing dropping occupancy levels.
For the most part, the attacks have spawned a new, more forgiving attitude in New York. "Some of the commercial real estate agencies offered to find their tenants space for no fee," Heller said. "Everybody is doing what he or she can do to help."
Most landlords are charging pre-Sept.11 rent rates. Some brokers even have said they won’t work with landlords who raise rents to take advantage of the situation.
Trying to find space for three clients who were displaced by the WTC attacks, Drew O’Malley, managing director of CSFB Realty in New York, hasn’t uncovered any evidence of landlords trying to gouge displaced tenants. He explained there might be isolated incidents of tenants trying to get more money out of subleasing excess space, but he hasn’t heard of too many landlords doing the same.
For now firms are scrambling to find space. The short-term goal is to locate space and then purchase equipment. "Over the next few months spending will resume on furniture, computers and telephones in order to get things working," Heller said. He added thatwill pick up as rebuilding eventually begins as well.
For the time being, many firms will be forced to relocate out of the city, according to Heller. "There aren’t enough large spaces to accommodate them," he said. He explained the relocation will also take taxes and spending by office workers out of the city.
Over the long term, Heller and O’Malley expect tenants that relocated for short-term space or pricing reasons will return to the city, attracted by the unique quality of life and vibrancy of the Big Apple. But a lot depends on the environment of the city, Heller concluded.