The Sandy Effect

We also held our NYC Property Management Summit this week, where Rudin Management's Michael Rudin said his firm is negotiating a full-building net lease for its 200k SF 110 Wall St. The deal mandates that Rudin move mechanical systems to the second and third floors. (Circuitboards who like a view are over the moon.) Only two of Rudin's six Downtown buildings suffered major damage during Sandy, he says. Five million gallons of water flowed into the basement of the 1.1M SF 80 Pine St, which reopened two months ago with elevated mechanicals, and two million gallons invaded 110 Wall, which Rudin had to shut down. All of Downtown's buildings have replaced their copper wiring with waterproof fiber optics (800 miles of it), he says, and will come back online faster after the next damaging storm.

The next windstorm or nor'easter is a big concern for Zurich senior risk engineering consultant Jeff Shearman (with our moderator, CohnReznick's Ron Kaplan). The damaged buildings have been shored up and building envelopes sealed, but Sandy also stressed other properties, and that damage will show itself next time. And next time will indeed come, he says: Just because a building sits in the 500-year flood zone doesn't mean it'll sit pretty for another 499 years. (Next, someone's going to tell us the Hundred Years' War didn't actually last 100 years.)

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