The drone of generators fills the silence of lower Manhattan ona weekday afternoon. A newsstand is open at the corner of Wall andWater streets, its main customers now cleanup crews rather thanbankers, lawyers and other financial district office workers.

Such is the scene downtown, where damage from Hurricane Sandy iskeeping properties empty more than a week after the storm struck.There are 445 office and residential properties in the area thatthe city determined may be uninhabitable even while they may haveno structural damage. Almost 33 percent of the 101 million squarefeet (9.4 million square meters) of lower Manhattan office spacewas out of operation as of Nov. 7, according to brokerage JonesLang LaSalle Inc.

“We have water in basically every building downtown,” saidJoseph Moinian, who owns and manages more than 4 million squarefeet of commercial and residential space in the area.

“I was always taught that salt water kills germs,” Moinian said.“Now I find out that it kills equipment too.”

The flooding in lower Manhattan after the biggest Atlantic stormin history is displacing workers at companies including AmericanInternational Group Inc. and Morgan Stanley as landlords drainbasements, remove debris and repair electrical equipment. In theaftermath, commercial property values and leasing demand may fallwhile insurance premiums could rise.

“Lower Manhattan was just starting to come back to a very solidfooting,” said Howard Lutnick, chairman and chief executive officerof investment bank Cantor Fitzgerald LP. His firm is a tenant at199 Water St., where a flooded basement will take six to eightweeks to clean up, he said.

“This is going to have a material effect on values downtown,”said Lutnick, who also runs BGC Partners Inc., owner of propertybrokerage Newmark Grubb Knight Frank.

Cantor Fitzgerald moved most of its downtown employees to itsMidtown headquarters. Lutnick declined to say whether the companywould renew its lease at Water Street when it is up in about 16months.

“We will see,” he told reporters at the NYU Schack Institute ofReal Estate's capital markets conference on Nov. 7.

Jack Resnick & Sons, the family-run real estate investmentfirm that owns 199 Water St., is working “as hard as possible” tofix the damage, said Steve Solomon, a spokesman.

Daily News

The New York Daily News is preparing to be out of its offices at4 New York Plaza for between six months and a year, Bill Holiber,the newspaper's president and chief executive officer, said in aninterview. The newsroom has been relocated to its printing plant inJersey City, New Jersey.

“We're still waiting to hear” from the landlord, he said. “Wejust feel based on our knowledge and observations, it can be up tothat period of time.”

Calls to Edge Fund Advisors, a Washington-based real estate firmthat bought the building with another company in May, weren'treturned.

Several of the area's buildings that are more inland arewrapping up their cleanup and should be open by early next week,said John Wheeler, head of Jones Lang's lower Manhattan office.Those properties are easier to fix because they didn't have a lotof water pouring into their basements, he said.

Landlords in the area include Brookfield Office Properties Inc.,which has 22 percent of its portfolio in lower Manhattan, and SLGreen Realty Corp., with 16 percent of the assets it owns there,according to a report by Bloomberg Industries.

UDR Inc. entered the Manhattan market last year with twopurchases downtown: 10 Hanover Square and 95 Wall St., both ofwhich had no power as of yesterday afternoon and where residentsare allowed in during the day only to retrieve belongings,according to the company's website. The firm is working with localutility Consolidated Edison Inc. to determine how much of theproperties' electrical gear is salvageable.

UDR, based in Highlands Ranch, Colorado, is prorating rents fordays the properties are uninhabitable and offering $100 credits tohelp tenants “restock their refrigerators,” it said on itswebsite.

The company said in a Nov. 1 statement that its liability couldtotal $11 million to $14 million before insurance proceeds. Underan “optimistic” scenario for 95 Wall St., tenants could return noearlier than the middle of next week.

While it repairs the damage to eight of its downtown buildings,Moinian Group is offering rent credits, the company said in a Nov.6 statement. Properties where tenants will see refunds on theirDecember bill include luxury apartments at 100 John St., a buildingthat offers amenities such as 24-hour concierge service. It'sexpected to open to residents this week, Moinian said in aninterview.

W Downtown

Credits will also be issued at the W New York Downtown Hotel andResidences at 123 Washington Street, where point guard Jeremy Linrented an apartment during his time with the National BasketballAssociation's New York Knicks, according to Moinian.

The complex at 17 Battery Place, which includes offices and aresidential building known as the Ocean, will take longer torehabilitate, in part because of flooding to an underground parkinggarage that makes the damage to the electrical equipment stillunknown, he said.

“We have to think about what's going to happen to some of thosebuildings” in the area, Bill Rudin, CEO of landlord RudinManagement Co., said at the NYU conference.

“Simple things like move the electricity and power boxes fromdownstairs, upstairs” will need to be done soon, said Rudin, whose80 Pine St. and 110 Wall St. properties sustained damage fromSandy.

“We also have to look at bigger-picture issues — surgeprotections, things like that,” Rudin said. “Those are billions ofdollars of money and time.”

At the 39-story tower at 80 Pine, two blocks from the lowerManhattan waterfront, Rudin's building manager and engineer werenearly killed Oct. 29, as they were shutting steam lines andchecking equipment while the water began to flood in. With thebasement of the property, also known as 110 Maiden Lane, nowdrained, workers this week were tackling the piles of debris leftbehind.

In an underground level, beneath a Hale and Hearty soup shop atthe property, workers earlier this week were packing garbage bagsfull of wood and ceiling material, as well as wet cardboard boxesin what appeared to be a basement storage room.

Ceilings there sagged and collapsed, walls were knocked over anda food-storage refrigerator belonging to the restaurant was pushedinto the middle of the room.

'Messed Up'

Sandy's surges filled the basement and rose upward into the Haleand Hearty, partially submerging the refrigerated storage casewhere bowls of salad are usually displayed.

“This was all messed up,” Pedro Salabrria, a cleanup crewmember, said from inside the soup shop, where workers found servingstations and display cases flipped over.

The scene was similar all along Maiden Lane and Water Street,which runs parallel to the East River: dumpsters parked outside,filling steadily with garbage bags, and generators at the base ofthe buildings snaking power in for the cleanup crews. Outside theAndaz hotel at 75 Wall St., damp rugs were rolled up outside thelobby entrance and a note from management alerted passersby thatthe hotel is closed until further notice.

At 77 Water St., workers spent the afternoon of Nov. 7 rinsingoff decorative rock beds in front of the building with powerhoses.

At 1 New York Plaza, where Morgan Stanley leases more than800,000 square feet, Brookfield is “assessing the condition of themechanicals,” Melissa Coley, a spokeswoman for the landlord, saidin a Nov. 7 interview. She said the company was hoping to open thebuilding in three to six weeks.

The tower at 125 Broad St., also known as 2 New York Plaza,suffered “heavy flooding and related damage,” Edison, NewJersey-based Mack-Cali Realty Corp. said in a statement today.

It gave no timetable for its reopening. The company owns 525,000square feet in the 1.2 million-square-foot building, whoseoccupants include the law firm Sullivan & Cromwell LLP.

At 180 Maiden Lane, the headquarters of AIG, heavy flooding willkeep tenants out for 30 days, landlord SL Green said in a Nov. 7statement. All of SL Green's other properties are open.

Recovery Intact

The storm's effects are temporary and are unlikely to hurt realestate values downtown, said Jones Lang's Wheeler.

“The drivers of lower Manhattan's resurgence are still intactand valid,” he said in a telephone interview.

Those reasons include the rise of affluent residentialcommunities both in and near lower Manhattan, including Tribeca,downtown Brooklyn and Jersey City and Hoboken in New Jersey, hesaid. Leasing rates are also about a third cheaper than in Midtown,and the area also offers striking water views.

Insurance rates for office properties probably will increase inthe low-lying areas of lower Manhattan that sustained the mostdamage, according to Finley Harckham, a partner at Anderson Kill& Olick PC, who represents policyholders in litigation.

Sandy, while smaller than Hurricane Katrina, may cause similarlegal disputes as the 2005 storm over whether damage was caused bywind or flooding, he said.

“Even where there's coverage, in a situation like this theinsurance companies tend to be notoriously slow” in paying claims,he said. “In the next couple of weeks, we're going to seebusinesses screaming to get at least partial payment so they canmake the necessary repairs to restore their operations.”

While insurers have plenty of capital to continue writingcoverage, they will probably re-examine the risks they're taking inthe areas affected by Sandy and last year's Hurricane Irene, saidBrian Duperreault, chief executive officer of Marsh & McLennanCos., the second-largest insurance broker.

“We do expect the Northeast and mid-Atlantic regions will beunder more scrutiny from underwriters on the heels of two majorstorms within 14 months,” he said on a Nov. 6 conference call withanalysts.

Kathryn Wylde, CEO of the Partnership for New York City, a tradeorganization for city-based corporations, said her group isstudying whether to advocate for the federal government to offer aninsurance loss “backstop” to private insurers who are hesitant towrite policies for lower Manhattan properties.

“We certainly have a new definition of the flood plain and Idoubt federal flood insurance, available to homeowners, willsuffice,” she said in an e-mail.

Insurance may not cover all of the costs of flooding, such asrelocation of equipment, which may hurt individual property ownerswho can't afford repairs, Darcy Stacom, vice chairman of CBRE GroupInc., said at the Schack Institute conference.

“Will investors think about this when they look at buildings inhard-hit areas? Yes,” she said. “Unless you can show them theinfrastructure has been changed to deal with it, they're going totighten the core area that they're going to look to invest in.”

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