Barter deals going mainstream.

On the heels of completing a barter deal for Luftansa, Cushman & Wakefield has dedicated a team of brokers to finding and completing these transactions for its corporate clients.

According to Tyson Maroon, who heads the company's bartering efforts, the real estate brokerage company has been working on these deals for two years and they are finding increasing acceptance.

"It's now coming into the main stream of corporate real estate," said Maroon. "We had to overcome the negative perception of bartering."

Last year Cushman & Wakefield helped Luftansa dispose of a 5,000-square-foot retail lease at 750 Lexington Avenue and they are working on other assignments for that user.

In recent years, surplus corporate real estate and plummeting values has led to the entrance of trading or barter companies into the real estate industry. Corporate rate tenants or owners who would have to settle for a depressed market value can realize the full book value of their property, not in cash, but in credits toward purchase of media time, travel, telecommunications or any other major corporate commodity.

Now, full-service real estate firms, like Cushman & Wakefield, are teaming up with these barter companies to offering the service to their clients as a viable alternative to losing value. Cushman & Wakefield has been working in collaboration with ICON International, a New York-based barter firm, on, Maroon said, some "two dozen" transactions in a variety of industries.

"It's really across the board," said Maroon. "I think they realize barter is beyond the cutting edge. It's the razor's edge.

Maroon said these transactions help corporations dispose of real estate that is owned or leased. They work best when the market value for the surplus property is well below the book value of that property or the leased space is worth, for example, $25 per square foot and the corporation's obligation is for $45.

After a value for the space in credits is set, Maroon said, the holder of the real estate turns over the property to the trading company in exchange for the agreed upon credits. Then, Cushman & Wakefield and the barter company begin marketing the property to the industry. When, in the case of a lease, a tenant is found, Cushman & Wakefield negotiates on its behalf with the landlord as it would any sublease transaction. The trading company is the holder of the lease.

Cushman & Wakefield makes a brokerage commission. The trading company, which has bartered for the trade credits, realizes a profit in the spread between what he has paid for the trade credits and the rent realized from the lease.

"That's how barter comes charging in on the white horse, but not for everyone," he said.

Maroon said they have turned down 20 to 30 percent of the potential transactions because they "just don't make it." The companies disposing of the property must be able to use a large amount of trade credits over a reasonable period of time.

The marriage between trading companies and real estate companies is essential, Maroon said, because the transactions are difficult to complete. In addition to a knowledge of the bartering technique, he said, "they require a keen understanding of the concept of real estate value."

"Frankly, there are a lot of pitfalls along the way," he said. "It's highly complex. Every property, every location, every floor is different in terms of pricing."

In addition to corporate downsizing, Maroon said, international competition has also led to the proliferation of surplus space.

It has forced American industry to think through how it can best compete by keeping its costs down," be said.

Calls to some of the city's major real estate brokerages revealed that few of these transactions have been completed and none of these firms have dedicated a group of brokers to this activity. This seemed to be a more a function of bartering transactions working only when a great number of criteria are met than there being a lack of confidence in this deal structure.

"It's a viable concept provided there is residual value for the real estate component of the transaction," said Andrew Roos, vice chairman, Williams Real Estate.

"We think it's an interesting concept," said Stephen B. Siegel, president Edward S. Gordon Company. "We haven't done any barter deals yet, but it is under active consideration."

While the concept of bartering is still strange to many, Maroon said, it is certainly not new.

"Manhattan Island was bartered," he quipped.