NEW YORK, Sept. 24 /PRNewswire/ -- Although the entire World Trade Center complex, 13.4 million square feet, was destroyed in the horrific terrorist attack on September 11, 2001, those buildings constitute less than four percent of Manhattan's entire office inventory of approximately 353.7 million square feet, according to a report by Insignia/ESG, New York City's largest commercial real estate brokerage concern. Seventy percent of the Downtown market survived intact, as some 28.7 million sq. ft of Downtown office space was affected by the incident -- either destroyed or damaged.
Three buildings comprising 4.8 million sq.ft. sustained some structural damaged -- 3 World Financial Center, 140 West Street and 130 Liberty (Bankers Trust Plaza). It is believed that these buildings can be repaired within nine months. Seven additional buildings suffered window and facade damage -- 1 and 2 World Financial Center, 1 Liberty Plaza, 101 Barclay Street, 90 and 100 Church Street and 22 Cortlandt Street. These buildings, comprising 10.1 million sq. ft., are expected to be habitable by office tenants within two to three months. Another building, 4 World Financial Center (American Express Tower), was not significantly damaged, but remains inaccessible at present due to debris, the destruction of the north pedestrian bridge and damage to the south pedestrian bridge.
``Although none of us will ever forget the horrific human toll at the World Trade Center, we firmly believe that the recovery of Downtown will move forward with dispatch,'' said John F. Powers, vice chairman of Insignia/ESG. ``By no later than January 1, 2002, we believe that the majority of dispossessed tenants will have returned to the buildings that sustained window and facade damage, and much progress will have been made in repairing the three most structurally damaged properties. Downtown Manhattan will continue to be one of the largest and most attractive office districts in the nation.''
According to Insignia/ESG, nearly 1,300 Downtown businesses were affected by the attack and 31 tenants occupying 100,000 square feet or more were displaced. Four of them occupied one million square feet or more. The largest companies displaced included American Express (1.2 million sq ft); Merrill Lynch (3.1 million sq ft); Morgan Stanley Dean Witter (1.4 million sq ft); Salomon Smith Barney (1.4 million sq ft); and Bank of New York (800,000 sq ft).
The vast majority of displaced tenants to date have been able to find space in Manhattan, which had 25.8 million square feet of available space at the time of the incident, according to Insignia/ESG. Relatively little of that available space was already built-out and much of the space was not scheduled to be available for occupancy until later in the year. Despite this, only a handful of displaced tenants have relocated outside Manhattan. The Hoboken/Jersey City waterfront -- an extension of the Downtown Manhattan market-has garnered the most interest outside Manhattan.
As of September 21st, only ten days after the terrorist disaster, ten deals have been confirmed for tenants with requirements of at least 79,000 sq. ft. Insignia/ESG sources indicate another 3.5 million sq. ft. of leases are pending. The completed deals are:
-- Bank of New York, two deals: 229,000 sq. ft. at 330 West 34th St., and
79,000 sq. ft. at 111 Eighth Avenue
-- Hartford Fire Insurance, 145,000 sq. ft. at 2 Park Avenue
-- US Customs, 118,000 sq. ft. at 2 Penn Plaza
-- Thacher Profitt & Wood, 100,000 sq. ft. at 11 West 42nd Street
-- Zurich-American Insurance Group, 95,000 sq. ft. at 601 West 26th St
-- American Express, three deals totaling 681,000 sq. ft. in New Jersey
-- Lehman Brothers Holdings, 175,000 sq. ft. at 70 Hudson in Jersey City
Another major World Trade Center tenant, Marsh & McLennan Companies, concluded a lease for 320,000 sq. ft. at 1166 Avenue of the Americas, a transaction that had been in progress before the World Trade Center incident.
The Insignia/ESG report includes statistics on availability of office space in Manhattan and the surrounding suburban markets prior to the September 11 attack. Downtown Manhattan had the lowest availability rate in the region, 6.2%, followed by Midtown Manhattan (7.0%) and Midtown South Manhattan (9.5%). In the suburbs, Long Island had an 11% availability rate; Fairfield County, CT, 12.7%, Westchester County, NY, 14.2%, and northern and central New Jersey, 14.7%.
``Although there was a marked slowdown in leasing velocity in Manhattan this year, Manhattan's overall availability rate stood at just above seven percent,'' said Powers. ``Ironically, largely due to the high volume of sublease space thrown onto the market following the demise of the dot-coms, the market is better poised to accommodate displaced WTC center tenants now than it would have been nine months ago.''
Insignia/ESG is one of the largest commercial real estate services providers in the United States, with comprehensive brokerage, consulting, property management, fee development, investment sales and debt placement operations. The company operates in top U.S. markets, including New York, Chicago, Los Angeles, Boston, Philadelphia, Atlanta, Miami, San Francisco, Dallas, Phoenix and Washington, D.C. Nationally, Insignia/ESG provides services for a property portfolio spanning approximately 230 million square feet. Insignia/ESG also delivers advanced commercial real estate services through Insignia Richard Ellis in the United Kingdom, and through other Insignia subsidiaries in Europe, Asia and Latin America. Insignia/ESG is a subsidiary of Insignia Financial Group, Inc., a publicly traded real estate company listed on the New York Stock Exchange under the symbol IFS.