Commercial market very active once again.

Six of the buildings in the Anderson Organization portfolio have achieved 95 to 100 percent occupancy in the last quarter of 1993 and the first quarter of this year. While the market has rebounded to some degree, I believe that it is our organized and whole-hearted approach to leasing that has been the main catalyst for our success.

Aggressive marketing and close follow-up are not just buzz words for us, but rather our way of doing business. We work closely with our print media advertisers and are able to implement changes and updates which appear within three days in the New York newspapers and the Real Estate Weekly. As our units are leased and our inventory of available space changes, we need to provide fresh and accurate information to brokers and prospective tenants alike. We update our listings with several brokerage firms by fax and make sure that the market is aware of any changes in spaces or terms.

Our personal networking with the brokerage community and the good relationships that we have established provide the foundation for working closely during the showing of space, the submission of an offer and the negotiation of lease comments, thus substantially cutting the necessary time between viewing of the space and signing of the lease.

But our leasing efforts at Anderson start before the space is offered for viewing. All vacant spaces are inspected and cleaned. All debris and unnecessary wiring is removed and the space is painted with its carpet shampooed or replaced as appropriate and the windows are washed. Each space contains a folder with several sets of floor plans, pictures of the building, and business cards. It is amazing to hear how many prospective tenants remember Anderson spaces because they were clean, presentable and had a floor plan in it.

Our long experience in tenant improvements as well as our in-house construction team allow us to work closely with the tenants and their architects in order to effectively offer the workletter that the ownership provides. And since we handle all lease comments in-house, we maintain a good control of the transaction and do not allow for the momentum to be lost.

Despite the recession of the last years and the frequent negative press comments about the market, most companies seem to have understood that the market bottom is now behind us. Rent concession packages have been substantially reduced and rents have started moving upwards. Until recently it was not unusual to get a free rent concession equivalent to one month of rent for each year of the lease, and this on top of a generous work letter. This is clearly no longer the case as conditions are improving.

As I mentioned earlier, two thirds of the buildings in our portfolio are at or close to 100 percent leased. I think that this shows once again that there is a "flight to quality" aspect in the market and in each category, tenants will flock to the better managed buildings. Our newest challenge is the Heyden Building, located at 130 William Street, in the heart of the Financial/Insurance district. We firmly believe that despite the softness in the Downtown market, the Anderson approach, linked with strong management committed to the upgrading of the building, will bring about a successful leasing and tenant retention program.

In the old days, "tenant retention" was thought of only during the last six months of a lease when the renewal negotiations were going on. We believe that tenant retention is a constant and ongoing process and it starts with the prospective tenant's first visit. The tenants must understand that by renting into an Anderson building they will be comfortable during their whole stay and not be forgotten after the lease is signed.

With these principles in mind, we expect to continue to see improvement in this market.