BOSTON — The nation's commercial real estate industry is likely to feel the ripple effects of the Sept. 11 terrorist attacks longer than many had thought.

        Brokers say the first challenge was dealing with the loss of 25 million square feet of office space, destroyed or damaged in the attacks on the World Trade Center. That's more space than in all of downtown Houston.

        Now come the secondary challenges, felt far from New York: dealing with the economic slump the attacks compounded, and responding to clients' newfound concerns about security.

        “Tenants today, when they look at buildings, look at things a little bit differently,” said Stephen Blau, president of the Society of Industrial and Office Realtors, which held its annual convention for 700 brokers Oct. 27-28. “If a building is easy to get into, tenants aren't interested in it.”

        Suddenly, prospective tenants are asking about detailed questions about fire safety.

        “There were a lot things that people knew but curiously agreed to forget,” said David Houston of Colliers, Houston and Co. of Teaneck, N.J. “The fact of the matter is, a massive high rise fire can't be put out.”

        Other noticeable changes include little interest in high-profile properties in big cities, and clients insisting on dividing operations among several locations. Houston said one former World Trade Center tenant wants to disperse around the city.

        “I think there's a general sense that companies in the World Trade Center had way too many eggs in one basket,” Blau said.

        But the long-term worry is the economy. Commercial real estate usually rises and falls almost in lock step with employment, and some cities — especially with many technology companies — have been hit hard.

        In San Francisco, where office space went for more than $100 a square foot during the dot.com craze, vacancies more than doubled in the first quarter of 2001. Commercial agents report getting wooed to open houses with raffles.

        In Boston and eastern Massachusetts, 7.9 million square feet of subleased office space were available in the third quarter, compared with about 300,000 square feet last year, according to the research department of Cushman & Wakefield.

        Moody's reported this week that the national vacancy rate for office space was 10.8 percent in the second quarter, up from 9.5 percent in the first quarter and 8.1 percent a year ago. Supply is expected to rise 3.2 percent, more than twice as fast as demand.

        For industrial space, vacancy jumped from 7.2 percent to 8.6 percent in the second quarter.

        Still, brokers insist most areas haven't suffered as much as the dot.com centers. In most of the country, demand for industrial space is solid if unspectacular, and the slump in demand for office space is not catastrophic.

        “What's taking a little longer is getting to the finish line, getting somebody to ink the damn thing,” said J. Leonard Caldeira of The Staubach Co. in Chicago.

        This downturn, several veteran brokers say, pales in comparison to previous recessions.

        “I'm having trouble understanding that times are tough,” Caldeira said. “We're finding plenty of people that have one need or another: contract, expand, get an understanding of what they have.”

        The last slump began with the market already considerably overbuilt. This time, the market was tight to begin with, the brokers said.

        “We had relative balance... as opposed to 10 years ago when the throttle was wide open and buildings were coming out of the ground overnight,” said Peter Hanson of NAI James E. Hanson of Hackensack, N.J. “Then when the spigot turned off, then you had a real disaster, it took probably four or five years to get back in stride.”

        The industry could get a boost if Congress changes rules that prevent some properties funded with debt from refinancing to take advantage of lower interest rates, said University of North Carolina economist James F. Smith, scheduled to present an industry forecast to the convention.

        But while the economy is clearly in a recession and the international real estate market is “horrible,” Smith is optimistic about a quick turnaround.

        “The worse it is, the faster the rebound is likely to be,” he said.

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