CHICAGO-Equity Office Properties Trust has combined 169 management offices into 48, with eight of the company’s 10 regional office consolidations now complete. President and CEO Richard Kincaid said during a recent earnings conference call the EOPlus initiative is on track toward generating at least $75 million in costs savings in 2004.

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.

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