At press time, details were being finalized. The present plan is to raise $15 million of equity for leveraged acquisitions, primarily in the Eastern U.S.

"The Malkin family has invested profitably with the planned fund's adviser for more than five years. The strategy is simple: find warehouse/distribution property that is under-performing, more due to ownership and management than location or asset quality fundamentals, buy it, and improve performance through investment and better management and marketing," says Anthony E. Malkin, president of W&M Properties. "We will be looking for choice property that can be purchased under favorable terms and redeveloped for higher economic use."

'Buy Value / Add Value'

Mr. Malkin says the fund will mine opportunities in the industrial property sector, "in a manner very similar to the way we have successfully acquired and repositioned office, retail and residential properties. This is a 'buy value/add value' strategy. The warehouse/distribution sector offers more investment opportunity suitable for this strategy than do office, residential, and retail."

As with Wien & Malkin's traditional long-term direct investments in real estate, the industrial property fund's objectives will be to provide cash distributions with the potential for capital appreciation, along with modest tax shelter, an inflation hedge, and estate planning advantages. It is intended that the fund will dispose of its properties after ten years, at which time the proceeds will be distributed to investors.

According to Ned H. Cohen, vice president of Wien & Malkin Securities Corp., the industrial fund will be under the day-to-day guidance of an outside fund manager, who will serve under the supervision of Anthony and Peter L. Malkin. The Malkins will have approval rights over purchases, financings, major leases, and sales.

Mr. Cohen adds, "an operating agreement will provide for Wien & Malkin to assume control over fund operations and liquidate investments under certain circumstances." The fund is expected to be offered to accredited investors in late fall or early in 2005.