Trade Center tenants may stay away

Cleaning up World Trade Center rubble may take more than a year

		By David Schepp BBC News Online's North America business reporter

With the Twin Trade towers gone and several others damaged, 30 million square feet of office space has been eliminated or made unusable in lower Manhattan.

Now, some businesses that have called that part of the city home for years are now considering locations further uptown or in suburban areas surrounding New York.

Demand for offices in mid-town Manhattan could rise

Some businesses cite security concerns as their reason for not returning to lower downtown, while others voice concern about further terrorist attacks erupting in the area.

Leaving home?

American Express, the financial-services giant whose headquarters were damaged in the 11 September attacks, has taken up temporary digs across the Hudson River in New Jersey - and may stay there.

In wake of the attacks, American Express has leased 700,000 square feet in suburban locations in New Jersey and Stamford, Connecticut.

Another big financial player, Morgan Stanley, on Monday said it would sell its new 32-storey Manhattan office tower to rival Lehman Brothers.

While the purchase keeps the brokerage firm in Manhattan, the tower's location, in New York's Times Square neighbourhood, means Lehman Brothers is miles away from downtown.

Lehman Brothers now calls Times Square home

Lehman Brothers officials say, however, they remain committed to lower Manhattan.

The company's headquarters were located - along with American Express - in the World Financial Center, which is adjacent to the World Trade Center site.

Creating voids

For its part, Morgan Stanley says it remains committed to keeping its headquarters in Manhattan, keeping sales and trading units in their old offices in Times Square.

What remains in question is what Morgan Stanley will do with its employees who worked at the World Trade Center, where the firm occupied about 1 million square feet.

Morgan Stanley may move those workers to suburban locations in Westchester County, north of the city, or to New Jersey or Connecticut, a source told Reuters news agency.

Other companies which had substantial operations in the World Trade Center and have leased space outside of the city include Bank of America, Cantor Fitzgerald and Deutsche Bank.

Yet other firms have moved uptown, maintaining a presence in New York City.

Aside from Lehman Brothers, they include real-estate firms Marsh & McLennan and Thacher Proffitt & Wood and law-firm Sidley Austin Brown & Wood.

Unused space

Prior to the attacks, New York was looking at a softening real estate market as the real estate market was flooded with office space from failed dot.coms.

Other firms who have downsized in the face of the economic slowdown placed unused space on the market for sub-leasing.

That extra space has played a key role in helping some businesses relocate and keeping operations up and running after the attacks.

But it is far from enough. In response to the disaster, businesses have had to double up, backfill existing facilities and, in some instances, lease space outside the city.

Development rush

The rush for office space has also stimulated interest in unfinished developments going up around the city.

Former World Trade Center tenants who are looking for additional space will spur development of additional office space, analysts say, as will those firms whose temporary space becomes inadequate.

State and local officials are eager to get redevelopment of the World Trade Center site underway.

But they face a host of issues, not the least of which is whether dozens of firms and their thousands of employees want to return to a scene of such devastation.