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Tri-party agreement ups occupancy at Diamond Bldg.

Through a tri-party workout agreement with the owner and mortgagee of the Diamond & Jewelry Exchange of America Building on West 47th Street, Waldron Associates, Ltd. has dramatically increased the building's occupancy from 60 to 95 percent in only ten months.

"The building now enjoys a reputation as one of the premier properties in its area," notes Eric Waldron, managing director of Leasing for Waldron Associates." However, this hasn't always been the case."

A pre-war, 100,000-square-foot building which is home to many of the country's largest jewelry companies, the Diamond & Jewelry Exchange building experienced tough times starting with the 1987 stock market crash and ensuing recession.

"Sales plummeted in the jewelry business," Waldron explained. "Consequently, a significant number of tenants fell behind in their rent, while some moved out and others refused to renew their leases, occupying their space on a monthly basis. This caused a host of asset and management problems."

Recognizing that the challenges they faced required the help of specialists, the building's owner and mortgagee finalized a workout agreement with Waldron Associates in April of last year.

The real estate company re-constructed the building's rent roll by interviewing all management personnel and tenants involved in verbal deals. Then Waldron Associates negotiated two-and three-year leases with tenants occupying space on a monthly basis. The shorter-term leases would allow the owner to benefit from the next market upturn.

Another key problem was the lack of cashflow to pay for building maintenance, as well as the mortgage and other debts. By negotiating with tenants in arrears, and through other financial strategies, Waldron Associates increased collection from 58 to 90 percent of billings and substantially improved the property's cash flow.

"We also negotiated the building's unpaid obligations to contractors and mechanics," Waldron said. "Consequently, building services were resumed, including basic maintenance, repairs, and tenant renovations."

Additionally, Waldron Associates initiated a marketing campaign which attracted tenants and thereby increased the building's occupancy to 95 percent.
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Title Annotation:Diamond & Jewelry Exchange of America Building, Manhattan
Publication:Real Estate Weekly
Article Type:Brief Article
Date:Mar 18, 1992
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