Companies renegotiating their property leases in New York are seeking lower rents by playing the World Trade Center card — threatening to move to the towers rising from the rubble of the 9/11 attacks.
But many brokers and landlords say they’re just bluffing. The WTC is struggling to fill its millions of square feet of office space at the southern edge of Manhattan amid a real estate slowdown all across the city. It is so bad that construction is set to be halted on two of the four towers planned for the WTC complex until tenants sign up.
The problem: The banks, law firms, advertising and accounting firms that dominate New York are comfortable in Midtown. In many cases, they are close to their clients, and transport links are convenient for people living in most parts of the region. Plus, Lower Manhattan has fewer amenities, such as shops and restaurants.
For some, there is another concern that is often left unsaid: Will staff be uneasy moving to a place that was the target of such a horrific attack, as well as the 1993 truck-bombing? Despite very tight security, could the WTC become a target again?
“Lower Manhattan in my mind has always been a second-tier location to Midtown Manhattan,” said James Meiskin, president of real estate brokerage Plymouth Partners Ltd. The 9/11 attacks only diminished the area’s standing, he said. “If you don’t have to go downtown, why would you?”
One broker said clients have used the WTC as a negotiating ploy. “We have been hired by tenants and they’ve said to us, ‘We do not want to go downtown. If we need to consider downtown to help the negotiation process for Midtown, we will do that.”
But, to be sure, there is hope for the WTC site. It often takes years for large office buildings to fill up. For the Empire State Building and the original WTC towers, it took decades.
An upgraded transportation system could drive demand for WTC office space. Traveling to and from the WTC will get easier, thanks to two new transit hubs linking city subways and trains to the suburbs, one on the WTC site and the other nearby at Fulton Street.
“When the transportation hubs open, the perception of downtown will start to change,” said Moshe Sukenik, of real estate services company Newmark Grubb Knight Frank.
At the same time, downtown neighborhoods, such as Wall Street and Battery Park City, are attracting young people. So for some, a commute to the rebuilt towers is easy.