Outlook strong for Downtown.

Despite a projected rise in the vacancy rate to nearly 15% for the first time since the mid-1990s the majority of owners, developers and brokers remain upbeat about the future of commercial real estate in Downtown Manhattan.

According to a recent report, over half of the tenants dislocated eight months ago have made long-term recommitments to alternative Downtown Manhattan properties. Of the rest, the vast majority have remained in the city, signally the long-term health of the economy and the continued perception of New York as the business capital of the world.

While office vacancies may reach a 10-year high, it wasn't too long ago that Downtown vacancy hovered in the low 20s. A 10% vacancy rate was considered a desirable state of equilibrium, but somehow that figure now is considered worrisome. Perhaps we've gotten a little spoiled by good times of the late 1990s.

As always, economics will dictate business returning to Lower Manhattan. As the economy recovers from a short-term recession and the psychological effects of Sept. 11, new space in Midtown will get absorbed and corporations that need to expand will once again look Downtown. As always, lower rents Downtown will be a major factor in tenant decisions regarding real estate.

Already, signs of Downtown's resurrection are apparent. Ground Zero is now a construction site, with the creation of a major transit hub the first priority in the emerging reconstruction plans. This transit system will be key to Downtown's revitalization, making the area more accessible than ever before. While design and construction of a fitting memorial to the victims of Sept. 11 will undoubtedly be the next priority, plans are also beginning to take shape for re-establishing the street grid by extending Greenwich and Fulton streets, to create new north-south and east-west corridors that will facilitate the flow of street traffic through the area. Eventually, a large percentage of the 13.5 million SF of office space destroyed in the attack will also be rebuilt

In the meantime, signs of Downtown's resiliency are everywhere. The law firm of Richard Spears Kibbe & Orbe recently made a long-term commitment to over 87,000 SF at One World Financial Center. While that may seem like a drop in the bucket compared to the more than a million SF available for sublease in the area, it is a good sign that the legal and financial companies that have been the stalwart of Downtown tenancy will continue to be attracted to the area.

At JEMB's 75 Broad St., we have seen a lot of activity in recent months, signing new leases and renewals with such tenants as Access Integrated Technologies, Peer 1 Network and IP-Only.

Recognizing 75 Broad St. as the ultimate mission critical facility, Access Integrated Technologies recently leased 20,000 SF of first class built-out data center space on the 19th and 28th floors of this prominent building.

As survivors of the recent high-tech shakeout reorganize, 75 Broad St. has been recognized as the premier mission-critical facility in Lower Manhattan. The 675,000-SF property is the ideal home for a wide range of companies that rely on technologically advanced systems for daily business activities.

Not only does 75 Broad St. offer the best in mission critical capabilities, but it also boasts outstanding executive office space, often in conjunction with built-out data center space. The office space at 75 Broad St. offers a unique opportunity for companies to combine their executive and mission critical needs all under one roof. With outstanding views, built out space and a spectacular lobby, 75 Broad offers all the amenities of a Class A office building with technologically advanced systems required by its tenants.

The $30 million refurbishment of 75 Broad did not end with just the technological aspect. The lobby's marble floors, walls and ceiling murals were restored to their original brilliance. The revitalization also included the installation of a state-of-the-art, virtual, holographic building directory, extensive upgrades to all common areas, new elevator controls and cabs and individually controlled, high-tech A/C systems.

JEMB Realty, which also owns the 250,000-SF office property at 150 Broadway, remains committed to the future of Downtown Manhattan. We are confident that Lower Manhattan will rebound quickly and not only recover, but emerge as an even better location for the world's leading companies.