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Competition the bottom line.

An old saying goes: one person's loss is another one's gain. When looking at New York's downtown real estate market, this adage proves doubly true. In spite of the extremely difficult market, many golden opportunities are available for both prospective tenants and investors.

Evidence of a turn around in the Financial District can be found. Wail Street houses have enjoyed record profits for 1992. Prospects of an improved economy are becoming more apparent, inflation has remained low for an extended period of time and the financial markets continue to improve. A great deal of major business restructuring has already occurred resulting in stronger, leaner and more viable companies.

As a result, there is increasing business activity throughout the financial fields, especially among stock brokers and the investment banking community. All of this bodes well for the future of the downtown real estate market.

The current economic hopefulness is but another sign that it is time for businesses to make their moves. Many owners and tenants have been simply hiding their time waiting for the market to "bottom out." It looks like the time is coming, and there are many terrific deals out there ready for the making.

The combination of an excess of commercial office space and a low absorption rate permits more aggressiveness on the part of tenant representatives and calls for greater innovation by building leasing agents. Competition is the bottom line and creativity is the key to viability.

For tenants who have the foresight to capitalize on the current renters' market, great opportunities exist to make fabulous long-term deals. Over the course of a 10 to 15 year lease, tenants will have a very valuable asset when the market turns around. We have in past economic cycles negotiated millions of dollars of profits for major tenants who have seized theses opportunities.

Buildings must remain determined to meet the current market, establish long-term relationships with their tenants, and adjust their marketing strategies to be successful. One must rethink, relearn and redefine one's goals in order to strengthen existing assets.

There are currently a large number of sizable deals in various stages of completion downtown.

140 Broadway is located in the central core of the Financial District. During the course of the past year, we were successful in extending the leases of the two anchor tenants: Marine Midland Bank and Donaldson, Lufkin and Janrette. Together, these two tenants represent about 75 percent of this 1.1 million-square-foot building.

The owners were able to maintain these leases for two basic reasons: their commitment to forging a good relationship with their tenants, and their commitment to maintaining a high quality building.
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Title Annotation:Review & Forecast, Section I; competition defines success in New York, New York real estate market
Author:Molloy, Howard P.
Publication:Real Estate Weekly
Date:Jan 27, 1993
Previous Article:Leasing: partnership between building, tenant.
Next Article:The light at the end of the tunnel.

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