Try to imagine having four high-powered real estate developers and two real estate lenders in the same room, agreeing on one major theme: “We all love Lower Manhattan – it is the place to be, with great opportunities for owners, investors, companies planning to relocate, and for first-time purchasers of residential apartments.” That generally expresses the opinion of these six industry insiders: the president and CEO of The Moinian Organization, Joseph Moinian; the president of Rockrose Development Company, Kamram (Tom) Elghayan; the chairman and CEO of the Witkoff Organization, Steven Witkoff; the principal of the Swig Burris Organization, Kent Swig; the managing director of Wachovia Securities, Robert Verrone, and the vice president and regional manager for Fremont Investment & Loan, Patrick Crandall. These men joined me last week for one hour to discuss the state of Lower Manhattan, three years after the tragic events of September 11.

Mr. Moinian, the largest private owner of commercial and residential real estate in Lower Manhattan with more than 4 million square feet of space, and Mr. Elghayan remember the way things were in 1994, a time when 25 million square feet of office space was vacant downtown. In response to this and other conditions affecting downtown, Mayor Guiliani introduced the Lower Manhattan Revitalization Plan in December 1994. These incentives provided reductions in real estate taxes, commercial rent taxes, and energy costs. Probably most importantly, the mayor introduced various abatement and exemption programs over 14 years that would be available to developers who converted commercial properties into residential or mixed-use developments.

In 1994, Mr. Moinian purchased commercial buildings at 90 and 100 John St. for a price of $15 a square foot. This past August, Mr. Moinian paid $365 a square foot for the 1.1 million-square foot office building at 180 Maiden Lane. Also in 1994,Rockrose purchased a number of buildings, including one at 127 John St. for a price of $6 a square foot (It subsequently bought the land on which the building sat for an additional $6 a square foot). Today, Rock rose is in the process of completing a $242 million development of the 60-story, 650-unit residential rental building at 2 Gold St. In the early 1990s, Mr. Witkoff purchased a Class A office tower at 10 Hanover Place for $12 a square foot, and paid $28 a square foot to acquire the building at 33 Maiden Lane from Mitsubishi Bank.

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Few people remember that after September 11, the government offered residents subsidies of up to $500 a month, with a maximum of $12,000, as an incentive to rent or remain in Lower Manhattan. This program ended on May 31, 2003, and many owners were concerned that people reaching the end of their leases would move out. Last year, Mr. Elghayanhad said he was concerned that tenants might leave at the end of the incentive program. Nevertheless, today, these tenants are renewing their leases at higher rents without these major financial incentives.

“Lower Manhattan is one of the few places in New York City where an individual can rent a 600-square-foot one-bedroom residential apartment in a brand-new office building for $2,000 per month,” said Mr. Elghayan. The only way these rents can be offered is because of Liberty Bonds, he said.

“There is a huge demand for product,” said Mr. Swig. “People want to live there.”

Over the past 18 months, Mr. Swig has purchased three class B office buildings at 44 Wall St., 5 Hanover Square, and 80 Broad St. The new residential developments and conversion of office buildings to residential space, along with the proximity of four major hubs of transportation, has attracted Mr. Swig to purchase these buildings and upgrade them for tenants. “Lower Manhattan has transportation second-to-none in the nation,” said Mr. Swig. “Few people realize that Lower Manhattan is the third-largest business district in the U.S. and the fastest-growing residential area.”

Companies are relocating to Lower Manhattan because of incentives and abatements programs. In a recent study of people who live in Lower Manhattan, 75% said they plan to live in the area for at least five years. Unfortunately, the area needs schools and other amenities, including supermarkets, dry cleaners, and restaurants to make it a community with services around the clock. Yet people forget that prior to 1980 only 791 individuals lived in Lower Manhattan.

Lower Manhattan is in desperate need of schools to serve the community.

A few weeks ago, an agreement was signed, paving the way for new elementary and middle schools downtown. In September 2005, the Claremont Preparatory School will open at the 9-story former office building at 41 Broad St. The school will accommodate 1,000 students in kindergarten through eighth grades.

Mr. Witkoff said, “Downtown is the last great real estate deal. It is the first real estate deal for a young professional in renting or buying an apartment. Many people want to have a place to live near the place they work. When you buy an apartment, you own a piece of the rock,” he added. Mr. Witkoff will be offering apartments in his planned conversion of the top floors of the Woolworth Building, which he purchased with his partners in 1999. Unfortunately, the projected prices for the units will be in excess of $1,200 a square foot, which is the market price for units in other parts of Manhattan.

“When I paid $100 a square foot for the former headquarters of JP Morgan at 15 Broad Street in 2003, I questioned if I would be able to sell a residential apartment for $450 per square foot at a building located directly across from the New York Stock Exchange,” said a principal of the developer of the property A.I. Boymelgreen, Shaya Boymelgreen. Patrick Crandall of Fremont Investment and Loan said, “We were comfortable with the economics of the deal, and we provided Mr. Boymelgreen with a loan in excess of $70 million for the acquisition and conversion.” Neither Mr. Boymelgreen nor the lender had expected the initial strong demand for the units. More than 65% of the more than 500 condominium units have gone under contract for sale since the sales office opened in August. Units are selling for close to $700 a square foot.

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The publishing company Hachette Filipacchi commissioned a study of its employees and learned that a large portion of its staff is between 25 to 30 years of age and that more than 50% of its staff live in downtown Manhattan, said Mr. Swig. Hachette is reviewing the possibility of relocating to 55 Water St. from Midtown.

“Every one of my tenants in Midtown who have their leases coming up for renewal are evaluating relocating their offices to Lower Manhattan,” said Mr. Moinian. “Downtown Manhattan is a city within a city that offers everything without the hustle and bustle of Midtown,” he added.

Mr. Moinian continued to show his interest in owning real estate in Lower Manhattan this week, when he entered a contract to purchase the 422,000-square-foot office building at 17 Battery Place North for $70 million, a price of $170 a square foot.

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Last Thursday, the Senate passed legislation extending the city’s ability to use billions of dollars from a September 11 federal aid package to rebuild Lower Manhattan. This move to provide a new five-year Liberty Bond extension through December 31, 2009, unlocks $5.7 billion in unused bonding authority for new construction.

In 1994, the city provided incentives to help Lower Manhattan, and last week’s congressional agreement to extend the Liberty Bond program continues to help. The entire $1.6 billion of Liberty Bonds for residential rental apartments have been issued and authorized. The extension of Liberty Bonds is intended to help Lower Manhattan, yet one would not be surprised if a significant portion of the $5.7 billion in bonds will be provided to developers working on projects in all the boroughs. The Liberty Bond program provided much needed residential rental housing in Lower Manhattan. Unfortunately, very few affordable rental units were made available by the Liberty Bond program.

The big question is, when new office towers are built in Lower Manhattan, will tenants be interested in relocating to Lower Manhattan? The managing director of Wachovia Securities Rob Verrone, who provided financing for Mr. Moinian on his acquisition of 180 Maiden Lane and Mr. Swig for his purchase of the building at 80 Broad St., posed an interesting contradiction to his fellow panelists last week, “You all love Lower Manhattan, but none of you have your corporate offices in Lower Manhattan.”

Downtown has always been the low-cost alternative and there is at least a differential of $20 a square foot. The significantly lower costs for rents, coupled with the extensive incentive program, will aid in future development of commercial office space in Lower Manhattan. The combination of more individuals living and working in the area will only help to strengthen Lower Manhattan’s status as one of the greatest places in the world.