Pursuant to the underwriting agreement, Citigroup has been granted a 30-day over-allotment option to purchase up to an additional 825,000 common shares.

The company noted that the Internal Revenue Service is auditing the operating partnership's 2001 return. Rechler says he is "surprised by the attention this matter seems to be receiving" and that he believes this to be an "ordinary course selection by the IRS. The IRS has not identified any matter of concern nor has the examination process even commenced. We included this matter in our 10k consistent with our transparent disclosure policy."

For the year 2003, the REIT reported diluted FFO of $136 million or $2.07 after deducting $11.6 million or $.18 per share of non-recurring restructuring charges, on total revenues of $470.3 million, as compared to FFO of $181.5 million or $2.32 per share for the previous year, after deducting $2.6 million or $.03 per share as a result of the company's adoption of FAS 145.

Rechler sees a hopeful horizon. "I believe that it (increased leasing activity) is a positive indicator that our markets have gone from 'bouncing along the bottom' to beginning their recovery."

Last September, the REIT changed its strategic plan to focus on class A office properties, reduce costs and improve its corporate governance. As part of that, it sold its Long Island industrial portfolio to members of the Rechler family for approximately $315.5 million in cash and other consideration. The firm then acquired the 1.1 million sf 1185 Avenue of the Americas for $321 million and increased its New York City portfolio to more than 4.6 million sf of class A office space.