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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM Digital Member, you’ll receive:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.