Besides Los Angeles, Brookfield owns office buildings in New York City, Boston, Houston, Toronto, Calgary, Ottawa and Washington, DC. The Los Angeles leases, some of which were reported during the quarter on GlobeSt.com, range from a 10,000-sf deal at the Toronto-based property owner's Landmark Square in Long Beach to a 32,000-sf lease at Ernst & Young Plaza in Downtown L.A. John Barganski, Los Angeles-based vice president of leasing for Brookfield, says that the leases included a number of expansions and renewals with existing tenants as well as new tenant demand that "has fueled a decrease in vacancy rates in the Central Business District over the past few quarters."

As GlobeSt.com reported recently, the Downtown Los Angeles leasing market has remained surprisingly strong lately despite the economic slowdown. That previous GlobeSt.com article cited 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 year include companies in finance, capital management, insurance, law, banking and other industries.

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

Ric Clark, president and CEO of Brookfield, pointed out in the company's recent conference call with financial analysts that this year's leasing thus far, "obviously is down from last year's record levels but probably is closer to historical averages." There is little doubt, Clark said, that activity has slowed in New York City and Boston because of the impact of the problems in the financial services industries. However, he added "the balance of our portfolio has seen pretty decent activity."

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

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

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