Brokers aid smaller WTC tenants.

Following the explosion that hocked out all power in One and Two World Trade Center, New York real estate brokers last week found themselves serving the temporary relocation needs of some smaller tenants as most of the larger companies relied on contingency plans and their own networking.

A table set up for tenant relocations by the Real Estate Board of New York, in conjunction with the city and the Port Authority, focused its efforts on smaller tenants who did not have pre-planned alternatives.

The board, with the help of the Building Owners and Managers Association (BOMA), is fielding questions from tenants and making referrals from a list of availabilities compiled from its membership and other sources.

According to Jack Hill, vice president for Brokerage Services of The Real Estate Board of New York, early last week:

"The larger tenants put something in place over the weekend. I haven't seen any requests for more than 5,000 feet."

By Thursday, REBNY President Steve Spinola said they had made three dozen referrals.

"We told them to call if there was a problem and we haven't gotten any calls," he said.

Larger Tenants Take This 'in Stride'

Larger companies sent executives to branch offices or moved in with other firms or used vacant space that they learned was available through friends. Some used emergency operations centers away from Downtown Manhattan that had been reserved in advance.

"The larger users have back-up facilities whether in Midtown or New Jersey," said Rick Doolittle, director of Leasing, Newmark Real Estate Services. "The desperate ones are the smaller tenants who do not have that ..."

Dean Witter, a tenant in Two World Trade Center that rents slightly under 1 million square feet, moved traders to branch locations and a number of executives to New Jersey. They also moved some functions into an emergency operations center in Manhattan.

Phil Sprayregen, managing director, CB Commercial, said he leased this space for Dean Witter last year following the Gulf Crisis.

"The larger tenants seem to have taken it pretty much in stride," he said.

The law firm of Brown & Wood contacted Steve Hammerman, vice chairman and general counsel for Merrill Lynch, and inquired about the space that the company's law department had occupied at 2 Broadway until two weeks ago. They viewed the space on the weekend and moved in Monday.

"It's configured as a law firm would be," said Michael Bradley, a Brown & Wood partner and member of the firm's executive committee.

The company will also use the services of an office technology center in Fair Lawn, New Jersey.

The accounting firm of Deloitte & Touche moved into their Midtown office at 1633 Broadway.

Cantor Fitzgerald, a dealer in stocks, treasury notes and corporate bonds, sent employees to branch offices and took advantage of offers for temporary lodging from other companies in the industry, like Salomon Brothers at 7 World Trade Center.

Sumitomo Bank took over the fourth floor of the Millennium Hotel, which is located across from the World Trade Center complex.

The Port Authority is offering vacant space in its waterfront buildings in New Jersey and Brooklyn to the towers' maritime-related tenants.

Don Schnabel, vice chairman, Julien J. Studley, Inc., said he did not see a lot of formal "deal making" even on the part of the larger tenants.

"Most of what we've seen is tenants camping out with other tenants," he said.

Tenants Need Equipment

So, while most of the corporate and financial giants resumed business on their own, New York real estate brokers came to the aid of the many small and mid-sized tenants that call the World Trade Center home.

Barry Gosin, president of Newmark Real Estate Services, said he had a team of brokers in on the weekend to field calls, show space and "point people in the right direction."

Doolittle said he helped some shipping companies move into 17 Battery Place for the time being.

As of last Tuesday, Mike Burgio, a broker with the Downtown office of Cushman & Wakefield, had placed two tenants -- one for 40,000 square feet and another for 15,000 square feet.

Companies were not signing leases per se, Burgio said, but rather one-page documents stating the use of the "as-is" space and the rental rate for a period of usually one week.

Galbreath Riverbank's Karla Kudatzky, on-site leasing manager for 90 West Street, located across from the World Financial Center, said she showed space to one tenant who before the crash was considering leaving the World Trade Center. That tenant, she said, is looking for permanent possibilities. The building also offered phone lines to the mayor's office.

The hot commodity last week, according to Hill, was space that is already equipped with furniture, phone jacks and, in some cases, computers. Due to the number of consolidations and business failures that the city has seen, there is some of this available, but, says Hill, not enough.

Kathy Donahue, president and general manager, Headquarters Companies ("HQ"), which offers fully-equipped office space and shared support staff for temporary use, said they received many calls from real estate brokers seeking accommodations for World Trade Center tenants. With a number of locations around the city, she said, they could accommodate companies with up to 100 employees.

Furniture rental companies. brokers say, were able to satisfy demand and the phone company, according to one broker, was being "fairly cooperative."

Communication between real estate brokers and displaced tenants, however, was difficult. Brokers were using beeper numbers and home phone numbers to contact tenants that may require office space.

"I don't really know how to get in touch with them," said Sprayregen. "Unless you have a personal relationship ..."

Changing Needs

But while many tenants have taken care of their own short-term requirements, many believe those needs will change. Last Wednesday, the Port Authority dashed hopes for a quick reopening of the buildings and announced that the structures would be closed for up to a month.

Ray O'Keefe, executive director, Edward S. Gordon Company, said after the crash many tenants made arrangements over the weekend for just enough space to get "skeleton" crews working by Monday. At some point, he said, they will need to get more people back on the job.

"... they might need a larger space -- somewhere where they can get the whole operation working," ..O'Keefe said.

The Port Authority announcement was reflected in the calls from brokers, said Kudatzky. Most brokers who called to inquire about space on Monday, she said, asked about week-long stays. On Wednesday, she said, brokers wanted to know about one month or more.

But, many of the city's real estate brokerage companies that had dedicated phones for calls from panicked tenants were surprised at how few requests came in.

Jerry Cohen, vice chairman, Cushman & Wakefield, said his company set up such a hot-line but there were not as many calls as expected. In some cases, Cohen said, clients and brokers contacted each other directly.

Cohen said the Real Estate Board of New York receives much credit for coordinating a "smooth" relocation effort. Also in the city's favor, he said, was the weather and the tenacity of New Yorkers.

"I think in a strange way New York comes together at the right time," he said.

No Ambulance Chasing

While there is no denying the glut of office space, many brokers stressed that they did not view the disaster as a financial opportunity, but as a chance to offer assistance to those in need. Many landlords rented space at cost and there was some talk of free rent.

"This hasn't really been a business effort," said Gosin. "It's been helping our clients and friends of clients."

Doolittle concurred. He said "dollar rental was the last thing mentioned" and many brokers, he said, are getting involved merely by sharing information with their fellow brokers.

"Basically, it's a very close-knit community down here," he said. "We're trying to help each other out and, more importantly, help the tenants who are in desperate need of space."

By charging companies $50 a day and $10 for the phone, Donahue said, Headquarters Companies is only covering expenses.

Burgio of Cushman & Wakefield said many of the brokers see their role as one of disaster relief.

"Though our business is commission-driven," he said. "We have to spread a certain amount of good will."