Region may still lure Manhattan companies

Despite the decision of American Express Co. and RBC Dominion Securities to return to New York City after a short stay in the northern suburbs, real estate brokers still expect companies to trickle into Westchester (N.Y) and Fairfield counties from Manhattan in the coming months.

"It's going

The companies relocating are likely to be small firms requiring 10,000 to 20,000 square feet of space - not those big corporations occupying hundreds of thousands of square feet, he said.

His comments followed RBC Dominion Securities' announcements that it will move back to Manhattan from Purchase, where it had placed about 100 employees after the World Trade Center attacks and intended to add as many as 200 more.

Temporary space

The investment banking division of Toronto-based RBC Financial Group, formerly Royal Bank of Canada, leased 40,000 square feet at 287 Bowman Ave., Purchase

RBC Dominion lost four floors of space at 1 Liberty Plaza and temporarily housed employees in different locations in the New York metropolitan area, including Greenwich, Conn., where it has about 50 employees.

RBC was the second major company to decide to return to New York City American Express Co., which had placed an estimated 600 employees at 400 Atlantic St. in Stamford, is scheduled to begin moving back to New York City this month.

Although the companies cited their commitment to New York City and changing needs as their reason for the return, local real estate brokers are baffled.

Difficult commute

Some brokers said these corporations hastily made their moves after the terrorist attacks and then realized the moves were imprudent, but others still wondered why they are not taking advantage of the cheaper rents in the suburbs.

Gage speculated the decisions to return possibly had something do with commuting.

"The commuting pattern is affecting those types of decisions," he said. "People are having a hard time to commute from New Jersey to Stamford."

With the passage of time, he said, people are getting over the trauma caused by Sept 11 and companies are discovering "people are not as resilient as they thought they would be."

John McCarthy, principal at McCarthy O'Callaghan Co., a White Plains real estate brokerage, said he was puzzled that RBC would go back to New York City, where a square foot of space could cost as much as $50 more than in Westchester.

Obviously, I don't think it's good for the county," he said. "It's a little disconcerting. It sham the viability of New York City."

Attractive site

Sal Carrera, Westchester County's economic development director, however, is not surprised. He sad that when RBC came to Westchester, it had indicated it might return to the city, as did American Express.

He said the companies needed temporary space, and the county was only pleased to come to their aid at a critical time. He said he had never envisioned an exodus from Manhattan after Sept 11, nor did he try to lure business out of Manhattan after the attacks.

Yet, he said, Westchester is an attractive site for corporations, which he said is evident in Morgan Stanley's decision to buy the former Texaco headquarters in Harrison.

"Westchester County is on everybody's mind than ever before," he said. "That's because of the difference in quality of life."

He downplayed the county's high vacancy rate, saying Westchester sailed through smoothly during the recession because of its corporate diversity. Excluding a few. large blocks of space, Westchester's vacancy is in the single digits.

"We have been riding out the downturn in vacancy rates better than any other municipality because of our approach to rental situations," Carrera said.

Meanwhile, area brokers are reporting an uptick in inquiries for space in both Westchester and Fairfield counties.

"The phone is ringing more," Gage said. "That's for sure." But he did not expect many deals to occur in 2002.