Sandy shutdowns could slam New York office market

Mon Nov 5, 2012 7:22pm EST
 
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By Ilaina Jonas

NEW YORK Nov 5 (Reuters) - The breakdown in services that lingers in lower Manhattan a week after super-storm Sandy may make tenants think twice before moving to or re-leasing office space in the area whose rebirth since Sept. 11, has been painfully slow, some brokers said.

Thousands of people who work south of 34th Street in Manhattan have been told that they may not be able to return to their offices for at least a couple of weeks due to power outages and flood damage.

Others have been told to dress warm or bring blankets as they return to offices that have no heat or hot water in an area nicknamed "SoPo" or "south of power".

While the storm could hurt office space demands across the New York Metro region, the hard-hit region south of Canal Street on Manhattan could suffer most, brokers said. Lower demand could put pressure on rents.

"I think it's going to have to impact the repricing paradigm downtown." said Dan Horowitz, a broker with tenant representative firm Studley. "It just makes the downtown decision a bit more complicated."

Eleven years ago, the attack on the World Trade Center left the downtown office market reeling as it not only wiped out structures but part of lower-Manhattan's transportation system.

Office tenants in that area and all over Manhattan may now be put off by concerns they could be vulnerable to the next super-storm to hit the city.

"I think this was a blow to all of Manhattan," Horowitz said. "It may impact space decision in Manhattan verses other areas and the way companies allocate their staffing decision and the extent in which they concentrate people in New York."   Continued...