The billion-dollar-plus makeover of W&H Properties' portfolio of Pre-War Trophy office buildings continues on schedule, resulting in higher rents to better credit tenants and providing good momentum and a strong footing to our investors as the market enters an uncertain period. There is broad market recognition among higher quality brokers and prospective tenants that the W&H portfolio presents a new set of offerings and alternatives in their space requirement considerations.

Most important, however, 1359 Broadway is almost completely full, with a diversified tenant roster that represents international trade, technology, finance and non-profit organizations. Li & Fung, one of the largest consumer products sourcing and supply chain management companies, serving retailers around the world, has its North American headquarters there. Four years ago, just before it became part of the W&H brand, the building was more than 50% vacant and attracting little if any attention within the brokerage community.

"What we've accomplished at 1359 Broadway not only benefits that building but also contributes enormously to fulfilling our goals for four other W&H properties nearby, where complete top-to-bottom upgrades are in earlier stages," observes Fred C. Posniak, W&H Senior Vice President. "When tenants and brokers come to look at 1333 Broadway, for example, we invite them across the street to 1359 and say, 'here's the model for what 1333 will soon be like.' It conveys a powerful and persuasive message."

With renovations now substantially complete at the four original W&H towers - including 501 Seventh Avenue (winner of BOMA's Best Renovated Building award in 2006 and Best Operating Building citation in 2007), The Lincoln Building (Best Historic Building award from BOMA last year), and 250 West 57th Street - the most intensive upgrading is now taking place within the five buildings added to the portfolio last year.

At 1333 Broadway, a $71-million comprehensive modernization is underway, including new windows, renovated lobby, renovated elevators and the addition of two new elevators, upgraded building-wide systems, such as electric and HVAC, and renovated façade, all of which make 1333 competitive with any brand new office tower. In short, the former garment center building is being transformed into a desirable home for mid-size and large, creditworthy users in virtually any industry.

The results already are evident, with Aetna signing a lease for 39,000 square feet to become the building's first major office tenant, Mr. Posniak points out.

"This is not easy work we are doing for our investors," he says. "Only through intensive, proactive asset and property management, centered around upgrading and repositioning to brokers, can 1333 and the other well located W&H buildings achieve their full potential as modern office centers, with commensurate improvement of tenant quality, growth in rents and market value."

Capital improvements on a similar scale are underway at nearby W&H buildings. Directly opposite 1333 Broadway is W&H's 1350 Broadway, at the north end of Herald Square, where a $53-million upgrade is getting underway.

And the world's most famous office building - the Empire State Building - at Fifth Avenue and 34th Street, is in the midst of a $500 million transformation that already is attracting larger, high-credit corporate tenants seizing full-floor opportunities.

In the case of each building, the retail space is being upgraded and repositioned right along with the office space, to take advantage of the great locations adjoining major transportation hubs.

"These properties share many attractive advantages," says Mr. Posniak, "and the capital improvement programs will enable us to make the most of them on behalf of our investors."