Fitting in Office Space

By Alan J. Wax
STAFF WRITER; Staff writer Graham Rayman contributed to this story.

December 19, 2002

If you can sell it, they may come.

That was the practical assessment of real-estate experts, who said yesterday that the World Trade Center rebuilding plan that excites a potential user for the office and retail space is the one that will be economically feasible.

The plans presented yesterday contain millions of square feet of offices, shops and hotels that along with public spaces, cultural and transportation facilities, will cost billions of dollars to construct.

"It's a good start," said Kathryn Wylde, president and chief executive of the New York City Partnership, a business group. "They certainly showed that people expect a tremendous investment in lower Manhattan, which we're glad to see."

The plans call for almost 11 million square feet of new office space to be built where 13.4 million square feet were destroyed.

Mayor Michael Bloomberg recently challenged the need to replace even 10 million square feet of offices, because of the severely weakened office market. Downtown availability now hovers at about 17 percent, according to Newmark & Co. Real Estate.

The final plan cannot be completed without officials determining how much office space must be replaced, said M. Myers Mermel, chief executive of TenantWise.com, an online property brokerage.

"It's not inconceivable that despite the job reductions [in the financial services industry], there could be a need for 12 to 15 million square feet of space by the time the building's finished," Mermel said.

Some of the architects called for developing several towers, but suggested they will be phased in over time. The economic feasibility "depends on when and how it's phased in and what plan they pick," said Cherrie Nanninga, former Port Authority real estate director and now chief operating officer of the tri-state region for CB Richard Ellis.

Nanninga said that at first glance the plan presented by a team led by the Manhattan-based architects Skidmore Owings & Merrill "would be most attractive to a tenant."

Ron Shiffman, director of the Pratt Institute Center for Community and Economic Development in Brooklyn, said he was concerned that plans to rebuild millions of square feet of offices could have a long-term adverse impact. "The potential of that occurring is quite dramatic," he said.

A phased plan proposed by Studio Daniel Libeskind was the only one not dependent on the offices and retail development to move forward.