"We're down to 262 tenants with an average occupancy of approximately 2,000 square feet, compared with 364 tenants," says Joe Rizzuto, Director of Strategic Asset Services for Cushman & Wakefield, which was assigned the management and leasing of the building in the fall of 2003.

250 West 57th Street

    "And progress is accelerating," he adds. "Building on 250's property-wide upgrade program, we've repositioned our marketing of the building to capitalize on the proximity of the new Time Warner complex and the rising international visibility of the Columbus Circle district. As a result, we're attracting bigger- name, higher-credit tenants, and our lease transactions have been for longer lease terms."

    Mr. Rizzuto emphasizes the importance of not letting large amounts of space go unoccupied for the sake of tenant reduction.

    "We can't afford to simply let leases lapse and warehouse the space while looking for larger tenants, because there's nothing more inefficient than space that isn't on the rent roll," he says. "So the process is a deliberate one. We look carefully for opportunities to time lease expirations of adjacent units, while considering the location on the floor and the market demand for that particular size of space. And when we find such an opportunity, we realistically target our goals."

    An example is the consolidation process that is nearly complete on the building's 24,500-square-foot fourth floor, Mr. Rizzuto explains. Previously, there were 19 tenants on the floor. But a combination of circumstances - including approaching lease expirations, changing business conditions for some tenants, and the interest of two new, larger tenants - made the fourth floor a logical target for consolidation.

    Some tenants agreed to be relocated to other floors, and some were not renewed. This paved the way for a law firm to lease 7,200 square feet, while Paymentech, a unit of JPMorgan Chase, signed on for 6,900 and then decided to lease an additional 3,000 square feet. A telecommunications firm subsequently renewed for about 5,000 square feet. Now, only 2,000 square feet remain available on the floor.

    "This process took about a year, but the result is that 19 very small tenants were replaced by three well established businesses, and we're confident that the modest amount of remaining space will be accounted for very soon," says Mr. Rizzuto. "This is a much more attractive floor which appeals to better tenants on longer term leases. As well, it is a less management-intensive floor, from which the rent comes in on time."