Contingency office space. (Brokers New Market).

After Sept. 11, many New York City-based firms are demanding contingency office space that's ready for use in the event of an emergency.

The trend is turning into a niche for some brokerages that now routinely work with clients on leasing satellite locations.

Prior to the terrorist attacks the corporate campus model was popular, whereby a firm consolidates its staff under one roof. But the terror attacks ruled this approach out as too risky.

The corporate campus became a buzzword a few years back. Now, we've done studies for firms on how they can disperse their staff," said Michael Monahan, executive managing director at Cushman & Wakefield.

The new approach, said Monahan, is known by the corporate world as "geographic business diversity strategies" i.e dispersing staff. Many of the firms that Monahan has worked with have expressed an interest in this approach.

Cost can be an issue for many firms, as renting satellite space isn't necessarily cheap.

Nonetheless, the potential risk incumbent upon a firm that chooses not to set up this space can be very high. Even a 24-hour business disruption can wreak havoc on a firm's balance sheet.

"Instead of vertical integration, it's now horizontal. Firms are warehousing space now," said Dan DePalma, a senior associate at CB Richard Ellis' Paramus, New Jersey office.

DePalma said that the secondary office market is becoming a niche, at a time when the activity is needed.

"Nobody is expanding right now. But they are looking for back-up space," said DePalma.

Particularly in northern New Jersey where a lot of satellite offices are located. Along, with these offices are data centers, highly secure buildings that house a firm's precious reserves of information.

"Now, a lot of insurance companies are requiring firms to secure data center space out of town," said Mitchell Consker, an executive vice president at Cushman & Wakefield.

"And the tenants are now very conscious about being housed in one location," added Consker.

Consker should know--he helped Cantor Fitzgerald secure office space at 135 East 57th St. after Sept. 11.

He does not see New York City losing many firms to New Jersey or the suburbs for one simple reason.

"If you move outside of the city, you lose your talent. Companies are very sensitive to attrition," said Consker.

Many of the new data centers serving Manhattan-based firms are located in northern New Jersey. Others are scattered throughout the tri-state area in anonymous pockets of the countryside. A typical data center will have 24-7 physical security, and according to someone who took some photographs of one recently--that security is formidable.

"Within a few minutes, there was a helicopter above us with a security detail inside," said the source, who asked not be named.