Against the Odds

Lessons from Hurricane Sandy

By Paul Rosta on Jan 21, 2013 in News

During Hurricane Sandy, a 14-foot storm surge from the Hudson River triggered flooding that took offline 29.8 million out of 85.2 million square feet in one of the nation’s biggest office submarkets, according to a Cushman & Wakefield Inc. survey. While the majority of that space was expected to be back online at the beginning of this year, the situation raised plenty of new questions for owners and managers.

For one thing, owners and tenants alike often found themselves in a bind as the disruption forced tenants into an extended absence from their properties. In some cases the two sides strove to accommodate one another; in others, the question of owed rent led to friction. While leases should clearly spell out the conditions under which the tenant must still pay rent, there were cases where condominium associations raised the specter of lawsuits, alleging negligence on the landlord’s part for failing to protect their units from damage.

Meanwhile, property owners faced the issue of how well they could withstand the temporary loss of rental revenue and the cost of repairs. Well-financed institutional owners were in a better position than investors of more modest means, with the potential prospect of some lenders being unwilling to forgo loan payments for an extended period.

Sandy also challenged emergency preparation and response to a degree unprecedented for any natural disaster in the metropolitan New York City area. Much of the preparation involved taking steps that had been established well in advance. For years, most sophisticated owners and property managers had practiced for an event during tabletop exercises. Cushman & Wakefield set up a command center in each of the major markets in the storm’s path 24 hours before its arrival.

In the immediate aftermath of the storm, construction trades were at a premium, so owners and managers who had lined up resources in advance were in the best position to respond. A critical element was drawing on building managers’ established networks of vendors. Environmental remediation companies, pumping contractors, electricians and a wide variety of other specialty trades were on call and ready to mobilize, and owners marshaled their forces as the storm approached. For instance, as soon as the flood waters had retreated, a contractor was in place and ready to start the five-day process of pumping out 30 million gallons of water at One New York Plaza.

Another essential step to reopening that building was arranging for a temporary generator. It took a contractor 10 days to install the equipment, which extended for several hundred feet around the building’s perimeter. Of course, generators are an expensive option, and in the case of Sandy proved to be a difficult one, since power outages made fuel tough and in some cases impossible to procure.

Unexpected events occurred, too. In Downtown office towers, the emergency preparation plans called for elevators to be positioned in mid-shaft rather than at lower levels to protect them from flood damage. But some of the elevators returned to the lobby, as they are programmed to do when a fire alarm is triggered in order to provide access to firefighters. That exposed those elevators to damage from water infiltrating the lobby. As preparation for future incidents, property managers, elevator vendors and engineers will need to investigate why the elevators apparently did not perform according to specifications.

Sandy’s impact is also changing how owners of high-rise buildings think about configuring equipment. Salt water flooding in from the Hudson River destroyed generators, conduits and other electrical equipment situated in basement levels. Rather than rebuilding the power systems in their previous basement locations, owners are discussing relocating them to higher levels. Chillers, boilers and generators at One New York Plaza will be rebuilt on an upper floor. Similarly, switching gear previously located in the basement of a Downtown tower managed by Cushman & Wakefield will be moved to the second floor, and telecommunications equipment will be housed on the 21st floor rather than the basement level.

Fuel tanks, too, can be vulnerable in the basement, although whether the solution is just bolting them better to the floor and raising the vent—as one discussion went—or moving them higher up in the building remains a question; a higher location would protect the generators’ fuel source in a future flood, but it would require altering the New York City building code, which mandates locating fuel tanks in the basement as a fire prevention measure.

Rooftop options are also a possibility, but that too requires proper bolting to prevent rooftop damage in a windstorm.

Paul Rosta is senior editor of Commercial Property Executive, with a focus on property management. For more on lessons learned from Hurricane Sandy, see the CPE Special Report: After the Storm in the January 2013 issue. And look for more on the rising risk from windstorms in the upcoming February issue.