Friday Letter After the storm

 New York, home to many private equity real estate firms, regroups in the wake of Hurricane Sandy.

Hurricane Sandy has come and gone, but many of us here in New York are still dealing with the aftermath.

Although there were many false rumours floating around, from sharks swimming in the subway tunnels to the New York Stock Exchange floor being flooded, the damage done by Sandy was indeed catastrophic. This was not last year's underwhelming Hurricane Irene.

Tragically, as of this writing, at least 133 people have been reported dead as a result of the storm, 32 of them in the New York area. Financially, too, the scale of the disaster has been enormous: forecasting firm IHS Global Insight is reporting that Sandy may wind up causing roughly $20 billion in property damage.

Fortunately, the worst may be behind us. And with Sandy finally gone, Manhattan has slowly been re-opening for business – including, crucially, city’s transport system.

The many private equity real estate firms are getting back to work, too. A good number of the major firms have re-opened their doors, but many still insist that their employees work from home if that remains the safer and more realistic option.

A spokesman for The Blackstone Group said that, although the firm's office was open on Wednesday, colleagues were encouraged to work from home if travel to the office proved too difficult. “Because Blackstone is an asset manager rather than a trader, working remotely is less of a problem,” the spokesman said. “All professionals are set up with either an iPad or laptop, and getting into the system remotely is not an issue.”

Morgan Stanley's employees based downtown at 1 New York Plaza are waiting to hear when they can return, according to a report from Bloomberg. Citing someone familiar with the matter, the news report stated that the firm's downtown office could face an extended shutdown, as the basement has been flooded with seawater.

Meanwhile, Prudential Real Estate Investors, a division of Prudential Financial, continued to have its personnel work remotely. “We continue to monitor the situation and our first priority is the safety of our employees,” said a spokesperson for the Parsippany, New Jersey-based firm.

Kohlberg Kravis Roberts also has instructed its partners to work remotely until further notice, and Franklin Templeton Investments also closed four of its offices in the area on Monday and Tuesday: its New York and Washington DC offices and two in New Jersey, with business critical functions transferred to non-affected sites. “As of Thursday, those offices were open and fully operational,” said the San Mateo, California-based firm in a statement. “Many employees were able to work remotely.”

Make no mistake: offices and transportation in the New York area may be re-opening, but things are still far from normal. We here at PERE want to remind everyone in the area to stay safe and wish those affected by the storm a speedy recovery.