KOLL handles transformation at Two Rector Street.

One year ago, the State Teachers' Retirement System of Ohio (OTR) took KOLL's advice and opted for a new multimillion dollar lobby rather than a quick $200,000 cosmetic change of its office building at Two Rector Street, which it owned by default. Today, with the extensive renovations nearing completion and 120,000 square feet of new leases, another 85,000 square feet in renewals and a 30 percent reduction in operating costs, Andrew Paul, senior asset manager of OTR, says he "couldn't be more pleased."

To Executive Vice President Gil Robinov, who heads the KOLL team at Two Rector, a quick fix-up didn't stand a chance of accomplishing his client's objectives. "We were looking at a deteriorating foreclosed building in a weak market that was less than half occupied and virtually ignored by the real estate brokerage community," Robinov said. "Compounding the problem, most of the existing tenants were poised to relocate and some were even suing for lack of services. I knew only a major dramatic transformation would turn this property around."

In the 12 months KOLL has been leasing and managing agent for the building, occupancy has gone from 48 percent to 80 percent.

The first recommendation was for the building's entrance to be repositioned from Rector Street - where it literally had its back to Wall Street - to Trinity Place, facing Trinity Church, and a few doors from the American Stock Exchange. The world renowned Brennan Beer Gorman architectural firm was selected to design the new entrance, as well as an elegant new million dollar lobby which was just completed. The common areas, rest rooms and elevators have also been renovated and upgraded.

"Based on the enormous competition for tenants in the Downtown marketplace, this major financial commitment by the owner, in addition to the efforts of a strong KOLL leasing team, was the only path to success for this property," said Joseph A. Farkas, senior vice president and managing director of KOLL's New York office. KOLL Vice President Larry Smoler, Vice President Marion Campi and Leasing Associate Lisa Cear, are also members of the leasing team.

The commitment of the owner to make major improvements to the building expeditiously prompted tenants to renew leases rather than consider relocation. Bear Stearns, which was considered an unlikely renewal a year ago, extended its full floor lease for another 10 years. The New York City Department of Transportation, which had felt the frustration of being in a foreclosed building, also renewed its 72,000 square-foot lease for 10 years.

Despite the fact that brokers had not brought clients to the building in years, and some space had been vacant since 1980, KOLL initiated an aggressive marketing campaign to put Two Rector Street back on the map. Activity was jump-started with an opening broker luncheon and a bonus to brokers in addition to their regular commissions. "It wasn't long before brokers who had not been in the building for years started showing space," Smoler said.

The 26th floor, with an extra high ceiling and spectacular views, which had been vacant for more than 16 years, has been leased to Schnell Publishing. Another 12 new tenants have leased more than 100,000 square feet of space. They are relocating from other locations in Downtown Manhattan and have been attracted by the new lobby, the improved quality of the building, its competitive rents and its accessibility to public transportation.

Some of the new tenants include: Sage Clearing, Charles W. Cammack, Phoenix Third Markets, Netmatrix Corporation, and Dozortsev & Son.

In addition to the extensive renovation work, Two Rector Street features include Internet access, 24-hour identification security program, a messenger center, an economical air-conditioning package system, an abundance of light and operable windows, and extraordinary views of the harbor and the Statue of Liberty.