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OAK BROOK, IL-Despite a lower occupancy rate across its Midwest suburban office portfolio, led by a 59,000-sf vacancy caused by the move by Wausau Insurance from One Park Place in suburban Milwaukee, Great Lakes REIT eked out an increase in funds from operations of $0.02 per share. The REIT reported funds from operations of $9.4 million, or $0.56 per share, while its overall occupancy rate dropped nearly 2 percentage points to 90.5%.

“Due to current economic conditions, we continue to see leasing challenges ahead for the remainder of 2001,” says Chairman and CEO Richard A. May. “Uncertainty is the problem. Tenants are taking a ‘wait and see’ attitude in determining their office space needs and, as a result, net absorption has turned negative in most of our markets.”

The 198,304-sf One Park Place was nearly half vacant at the end of the second quarter. Meanwhile, the REIT continues to cure a vacancy problem closer to home, in the 149,494-sf Lisle Executive Center. A 29,000-sf lease with Intrado has increased occupancy from 69% to 89%, and “a prominent international company” may take another 5% of the total space in the fourth quarter. “We made getting that space leased a top priority,” says President and COO Patrick R. Hunt.

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