Post-Tropical Storm Sandy

Prepare They Did, Yet Property Owners Hit Hard by Sandy

In Lower Manhattan, Brookfield, Silverstein Properties, take hit from storm. Uptown, Gehry-designed IAC Building remains empty, could be weeks before Daily Beast, Newsweek, College Humor allowed to return.

In the face of one of the worst natural disasters in the city’s history, commercial real estate landlords braced for Hurricane Sandy, employing every measure possible to hold property damage to a minimum and keep tenants safe.

But not even prophetic foresight could have allowed the city’s landlords—or New York City as a whole—to prevent much of the destruction that the mammoth storm wreaked across the five boroughs.

The road to recovery, especially in low-lying coastal areas like Staten Island, Coney Island and the Rockaways, will take months, if not years. Lower Manhattan went dark for days, with many companies largely shutting down due to power outages and salt water flooding, which is especially corrosive to mechanical equipment.

“It’s—It’s—It’s just a mess,” said Jordan Barowitz, a spokesman for the Durst Organization, who struggled to find words to describe the destruction in Lower Manhattan.

2012 11 05 12 05 44 Prepare They Did, Yet Property Owners Hit Hard by Sandy

Inside IAC Building lobby, after Hurricane Sandy.

While the impact on most of the company’s 8 million square feet of property was minimal, its Historic Front Street residential and retail complex, a joint venture located in mandatory evacuation Zone A near the Financial District, was all but destroyed.

“It was a very violent scene, with cars and refrigerators floating down the street,” Mr. Barowitz explained, recalling what wide-eyed colleagues told him after arriving there post-storm.

Much of the buildings’ mechanical systems had been removed from basements and brought to ground level in an effort to stave off damage, but the ground floors themselves were flooded with six feet of ocean water.

“The mechanical systems were severely compromised or destroyed,” Mr. Barowitz said.

Construction ground to a halt across the city as the storm approached. Onlookers watched with unease as a crane boom dangled atop One57 at 157 West 57th Street (Extell Development Company did not return calls seeking comment).

Luckily the crane was secured on Sunday—one nugget of good news to emerge after the storm. But elsewhere, destruction was widespread

At the IAC Building, an iceberg-like 10-story structure designed by Frank Gehry at 555 West 18th Street, home to College Humor, Newsweek and The Daily Beast, management shut the property down through at least next week due to flood damage.

Workers filled the ground-floor lobby with sandbags to absorb floodwater, but despite the preparations, several employees who work in the building said, the first floor and an underground parking garage were ravaged by a tidal surge that destroyed most of the drywall.

“Full restoration of street power to the HQ remains weeks away but we believe we will be able to get full power to the building using a generator soon,” wrote Jason Stewart, chief administrative officer with building owner InterActiveCorp, in an email obtained by The Commercial Observer that was sent to all building tenants on Sunday.

“We still have more work to do this week getting other critical systems running that are required for occupancy so we can’t invite you back quite yet, but we’re hoping to make this the last week you will need to work remotely or from temporary offices,” the email continues.

To make matters worse, said one Daily Beast employee, the ground-floor lobby has been a frequent source of revenue, with deep-pocketed companies like Target regularly renting space for social events. It is unclear how soon that space, which has extensive water damage, will be fully repaired.

“It clearly wasn’t designed for any sort of flooding whatsoever,” said the person, who spoke on condition of anonymity because employees and building managers are both prohibited from speaking publicly about the damages. “It’s surprising because you’d think a Gehry building like that would be more heavily fortified.  They obviously weren’t expecting as much water as they got.”