X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-The largest US office REIT has put out the call to its leasing staff—start paring back on tenant improvement packages. Tenant improvement and leasing costs were $22.94 per sf for Equity Office Properties Trust on deals that took effect in the third quarter, when the REIT reported a 10.4% drop in funds from operations over the same period in 2002.

The TI and lease commission packages in the third quarter jumped nearly 48% over the previous three months, Equity Office Properties officials reported during their earnings conference call Tuesday. Those costs also are up 58% over the third quarter of 2002.

Over the first nine months of 2003, tenant improvement and leasing costs average out to $17.69 per sf, according to Equity Office Properties Trust, up almost 40% over the same period in 2002.

The upward trend in tenant improvement costs is part of the ride property owners are taking as the economy recovers, suggests president and CEO Richard Kincaid. However, it is time for his REIT to apply the brakes, he adds. “The trend in TI has to stop, and we have to stop,” Kincaid says.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.