Besides Los Angeles, Brookfield owns office buildings in NewYork City, Boston, Houston, Toronto, Calgary, Ottawa andWashington, DC. The Los Angeles leases, some of which were reportedduring the quarter on GlobeSt.com, range from a 10,000-sf deal atthe Toronto-based property owner's Landmark Square in Long Beach toa 32,000-sf lease at Ernst & Young Plaza in Downtown L.A. JohnBarganski, Los Angeles-based vice president of leasing forBrookfield, says that the leases included a number of expansionsand renewals with existing tenants as well as new tenant demandthat "has fueled a decrease in vacancy rates in the CentralBusiness District over the past few quarters."

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As GlobeSt.com reported recently, the Downtown LosAngeles leasing market has remained surprisingly strong latelydespite the economic slowdown. That previous GlobeSt.com articlecited the diversity of tenants driving the Los Angeles market.Brookfield's list of 2008 deals supports that claim of diversity:The tenants that have signed with Brookfield thus far this yearinclude companies in finance, capital management, insurance, law,banking and other industries.

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[IMGCAP(2)]The Los Angeles deals contributed to a first quarterduring which Brookfield leased more than one million sf of space atan average net rent of $32.71 per sf per year. That $32.71 per sfat the end of the quarter was an improvement of roughly $9 per sfper year over the average in-place net rent of $23.11 per sf at thebeginning of the quarter for Brookfield, which finished Q1 with aportfolio-wide occupancy rate of 95.4%.

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Ric Clark, president and CEO of Brookfield, pointed out in thecompany's recent conference call with financial analysts that thisyear's leasing thus far, "obviously is down from last year's recordlevels but probably is closer to historical averages." There islittle doubt, Clark said, that activity has slowed in New York Cityand Boston because of the impact of the problems in the financialservices industries. However, he added "the balance of ourportfolio has seen pretty decent activity."

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To illustrate the first-quarter activity, Clark noted thattenants signed leases for more than one million sf of leases in Q1.In addition to the 368,000 sf in Los Angeles, the tenants signedfor substantial amounts of space in Houston, Washington, DC,Toronto, New York City and Calgary.

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Clark cited "softening US economic conditions" as one of thefactors that will affect Brookfield's performance this year.However, he said the company benefits from "a strong tenant baseand a conservative lease expiration profile" that renders it"well-positioned" in the face of today's tougher economictimes.

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In remarks that echo those of many other company execs today,Clark commented that "money remains the most challenging part ofour business overall right now. Arranging a long-term, fixed-ratemortgage for a substantial amount is difficult. It can be done, butcovenant requirements are less flexible and often, basically, wehave to call on relationships to get it done."

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