Part of that savings will come at the expense of about 400 employees who have been part of a 16% cut in the REIT's payroll, which Kincaid says is mostly complete.
The company expects $45 million to $50 million in savings next year to come from procurement of products and services, about 10% higher than previous estimates. The savings comes as a result of reducing the REIT's list of vendors from 950 to 88.
While the REIT expects to see a benefit of $40 million to $45 million in its corporate bottom line, another $35 million to $55 million is expected to be flow back to tenants in Equity Office Properties' 125.7-million-sf portfolio in the form of reduced lease escalations.
"People in our industry have tended to take the escalating costs for granted," Kincaid says.
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