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Market Analysis

WORLD TRADE CENTER TENANT RELOCATION: 40 OF 42 ANNOUNCED LARGE TENANTS COMMIT AWAY FROM LOWER MANHATTAN.
 
New York, NY. September 21, 2001.


According to our research today, 40 of 42 tenants that have indicated their relocation destinations are relocating outside of Lower Manhattan. This group represents 54% of all larger tenants in the World Trade Center and it represents 44% of the square footage including more than half of the Center’s top ten tenants. Many of the larger companies are finding new office quarters in Midtown Manhattan while some others are relocating to New Jersey.

Our research indicates that there were 78 non-governmental tenants of over 10,000 square feet in size in the World Trade Center buildings. These buildings account for 13.4MM square feet of space. Another 16.7 MM square feet was damaged in buildings adjacent to the World Trade Center. In total, according to our estimates, approximately 71% of all Class A buildings in Lower Manhattan have been damaged or destroyed. (For more details, view our Special Report: Damaged Areas at http://www.tenantwise.com/reports/wtc_damage.asp .)
Of the larger 78 tenants within the World Trade Center, a total of 42 companies have indicated relocation sites. These 42 companies account for 5.9MM square feet of office space which is 44% of the total square footage in the World Trade Center buildings. Thirty three have chosen Midtown, five have chosen New Jersey, two have chosen other states, and two will remain Downtown. The 40 companies exiting Lower Manhattan account for 99% of the square footage leased by the 42 companies. Whether these companies are leaving because some parts of Lower Manhattan are temporarily impassable, other remaining Downtown buildings lack needed infrastructure, or executives harbor general uneasiness with Lower Manhattan, tenants are choosing to pay costs in Midtown and the suburbs that are higher than what it would cost to remain in other buildings Downtown. (For more details view our Special Report: Tenant Relocation Summary at http://www.tenantwise.com/reports/wtc_relocate.asp .)

Eight of the top ten tenants in the World Trade Center have made relocation plans. These include Marsh McLennan, Guy Carpenter Company, Deutsche Bank, Fiduciary Trust, Brown & Wood, Salomon Smith Barney, Empire Health Choice and Morgan Stanley. All of these tenants are moving to Midtown.

Tenants in neighboring, damaged buildings are also leaving Manhattan. Lehman Brothers, Merrill Lynch and American Express have made long-term commitments in New Jersey. American Express is also committing to space in Stamford, Connecticut.

These largest tenants are leaving Lower Manhattan and are signing long-term leases that will impede – if not prevent – them from returning, even if a rebuilding of the destroyed/damaged area does occur.
 

For further information contact:
M. Myers Mermel
Chief Executive Officer
(212) 943-7777
Caroline McLain
Chief Financial Officer
(212) 943-1902


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