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NEW YORK CITY-Brookfield Properties Corp., managers/owners of Manhattan’s World Financial Center, said Thursday it was in dialogue with tenant Merrill Lynch over whether or not it would renew part, if any, of its lease at the Downtown complex. The company revealed the information during its full-year 2008 conference call where it discussed earnings and also announced several executive changes that included naming Steve Douglas as president of the company.

“As far as our general discussions with Merrill, there’s been a changing of the guard, we’re getting to know the new guard and hopeful to advance discussions soon,” said current president Ric Clark. “Given what’s been going on, we’re just prudently preparing ourselves as if we are going to have a lot of space to lease.”

Later, in response to an email from GlobeSt.com, a spokesperson for Brookfield clarified that Merrill Lynch actually owns a 49% interest in 4 World Financial Center. Merrill also owns zero coupon bonds in 2 World Financial Center, giving it an effective 25% interest in 2 WFC. Altogether, Merrill leases 4.6 million square feet at 2 and 4 WFC, of which it currently occupies 2.8 million square feet.

During the conference call, when asked about Brookfield’s Manhattan West Project and how its cost had gone from $207 million to $269 million in the last 12 months, Clark and Davis said that they continue to be comfortable with the value associated with the asset. “The increase in value was primarily for low grade infrastructure investment,” they said, calling it money well spent.

“To borrow an Obama term, the project is now shovel ready,” Clark said. To be built at Ninth Avenue and 33rd Street, Manhattan West would include a $630-million platform over Long Island Rail Road and New Jersey Transit tracks, with a pair of office towers built on top.

During the call, company leaders also said Brookfield would be selling some of its assets, but not because of corporate debt, since, they say, they have very little of it. They said it was more an issue of cash flow maintenance.

Commercial property net operating income for the year was $1.33 billion, compared to $1.26 billion in 2007, according to year-end financials. Commercial property net operating income for the three months ended Dec. 31 was $322 million, compared to $318 million for the same quarter in 2007.

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