Jersey City: "Wall Street West"
The nickname "America's Golden Door" never really caught on. So Jersey City officials tried to tag their town "Silicon Valley East"--then the Internet Revolution petered out. But the latest monicker for Manhattan's neighbor across the Hudson--"Wall Street West"--just might stick.
After all, 32,000 displaced World Trade Center area employees are now streaming into Jersey City daily. Suddenly, Wall Street-types are wondering about Hudson River ferry schedules. They're taking refuge in the pale stone- and-glass high-rises that blossomed on the New Jersey side of the river in the late '90s. And Jersey City officials are hoping enough of the newest arrivals stick around long enough to give it the critical mass it has long sought to become a financial-center player.
Within two weeks of September 11, 10 of the largest 18 firms from the World Trade Center moved at least some of their operations west. Among the arrivals were such heavy hitters as Lehman Brothers (LEH ), American Express (AXP ), Deutsche Bank, and Merrill Lynch (MER ). All told, the Manhattan refugees gobbled up over 1 million square feet.
For some of the dispossessed, it was simply the easiest move--they could quickly pack employees into buildings they already leased or owned. But even for others, Jersey City had plenty to offer, starting with a 6% vacancy rate on commercial space. Deutsche Bank, for example, had recently rented offices from a troubled dot-com.
Why all the empty space? Jersey City has been trying to lure Manhattan companies to its side of the river since 1996. But commercial building on the waterfront didn't start in earnest until 1998 when the city broke ground for an office tower quickly leased to U.S. Trust, Cigna (CI ), and UBS/Paine Webber. With the continued boom on Wall Street, five more towers went up by 2001.
Jersey City Mayor Glenn Cunningham says the city isn't actively recruiting companies to cross the Hudson, as that would be inappropriate. "Jersey City prospers as New York City prospers," Cunningham says. "We want to see them rebound." Still, Jersey City is set to roll out a tax plan that would give a break to waterfront developers who also invest downtown.
BETTER WIRING. But for now, most Manhattan refugees are heading for the waterfront. There, tenants are finding bigger offices better wired for high-tech equipment than many available midtown Manhattan locations. "New Jersey built buildings that you just can't get in New York City," says Don Eisen, managing director at realtor Cushman Wakefield.
Things are also cheaper. Companies generally pay 50% to 70% of Manhattan prices when they set up shop in Jersey City for everything from rent to electricity. And taxes run about $3 a square foot, vs. $12 to $14 in Manhattan.
The short distance from Wall Street has also been a big draw. Manhattan commuters can take a 10-minute ferry trip or a 30-minute ride on the PATH train, the century-old line that connects Manhattan to New Jersey. That's much quicker than a commute out to rival sites in White Plains, N.Y., or Connecticut. Still, travel isn't trouble-free. Morgan Fisher, an internal wholesaler at investment bank Lord, Abbett & Co., must now take four trains from the Upper East side to work. While the ferry is faster, she says, "that would be a $13 commute each day."
The prospect of more arrivals has revived many projects that were scaled back early this year as the economy slowed. On a riverside lot, Goldman, Sachs & Co. (GS ) is building the tallest structure in New Jersey, a 40-story tower set to open in 2003. Merrill Lynch & Co. is reportedly planning a trading floor, while some renters like Deutsche Bank are said to be considering a permanent move. A total of 5.8 million square feet of office space is being built, with 14 million more planned, nearly twice the size of the Trade Center.
Indeed, there's little question that a boom has hit. At the Iron Monkey restaurant a block from the waterfront, already brisk daytime business is up 20% since September 11. Still, the host of shops, restaurants, and bars that Wall Streeters are used to remains far off. "There's not nothing, but there's close to nothing," admits Dan Frohwirth, director of real estate for the Jersey City Economic Development Council. To many a Wall Street refugee, though, that's plenty for now.
By Heather Timmons in Jersey City