Merrittview Office Plaza, Norwalk, Conn.

That, in essence, was the strategy behind the proposed purchase of MerrittView Office Plaza in Norwalk, Conn., during the summer of 1994. But it would not be an easy undertaking. As Anthony E. Malkin, president of W&M Properties, recalls:

"The perception in the real estate community was that MerrittView was a very troubled property. It had fared poorly in the recession of the early '90s and was in foreclosure, suffering from inadequate management. Its main tenants were making plans to move elsewhere or had already vacated. Brokers were disparaging it. What's more, it was in need of corrections of deferred maintenance and upgrade.

"But we saw an opportunity, and even though this was a material departure from our prior investment history, our long-time investors put their faith in our track record, enabling us to raise the equity we needed to acquire MerrittView. It has become a great success story."

MerrittView Office Plaza, a 250,000-square-foot Class-A multi-tenant building on Route 7 (Main Avenue) at the Merritt Parkway, one of Fairfield County's most important intersections, today ranks among the key office buildings of the New York suburbs. Such international giants as Reed Elsevier, Nestle, Wells Fargo and Cisco Systems comprise its tenant roster, and their employees enjoy amenities that are unsurpassed in suburban work environments.

That was hardly the case in 1994, however, when the property was purchased by a Wien & Malkin partnership for $15.2 million from the bank that had foreclosed on it.

"The property was about 75% leased but only 36% occupied at that time," says W&M Properties executive vice president Jeffrey H. Newman. "That's because some of the larger tenants had vacated or reduced their actual occupancy and were seeking to sublease or preparing to leave when their leases expired."

Why the conviction that MerrittView offered a great opportunity for Wien & Malkin investors?

"Our market studies and our market experience told us that MerrittView had the potent advantages of extraordinary location and the ability to be subdivided efficiently for multi-tenancy," says Mr. Malkin. "In the hands of experienced owners with a highly skilled management and leasing arm, the property could be repositioned to enjoy a spectacular renaissance as the economy improved."

MerrittView, built in 1985, sits in the heart of Fairfield County in the town of Norwalk, affording tenants lovely river and woodland views. It is located just off the Merritt Parkway and Route Super 7, which links I-95 and the Merritt Parkway. The location also enables the building to draw upon a very desirable labor pool in northern Fairfield County.

Lobby reception desk at MerrittView

One Third of Replacement Cost

W&M Properties negotiated to buy MerrittView at approximately 33% of the building's replacement cost. The bank holding the property provided $10.5 million of acquisition financing and a $4.5 million revolving line of credit to accommodate re-tenanting and improvements.

"We had a lot to do, so we got started immediately on creating a whole new environment," says Mr. Newman. Under W&M Properties' direction, MerrittView was thoroughly upgraded, including the addition of a tenants-only fitness center with state-of-the-art equipment and locker room facilities, and a tenants-only multi-media conference center. An on-premises restaurant was renovated and expanded, restrooms and elevator cabs were modernized and refinished, and all common areas were redecorated. A shuttle was added, linking the property with the upgraded Metro-North train station in South Norwalk.

Building of the Year

"The perception of MerrittView began to improve rapidly, and as the economy percolated, there was suddenly strong competition for our space," Mr. Newman recalls. In recognition of the significant improvement to the property, the Building Owners and Managers Association named MerrittView the 1999 Building of the Year in its size class for Fairfield County.

"Perhaps the crowning touch, literally, was our addition atop all four sides of the building of a highly visible MerrittView sign, which has made the building a landmark to passersby on the Merritt Parkway, Super 7 and Main Avenue," says Mr. Newman. "We are a premier office property today, and no one even remembers the building's former image."

Says Mr. Malkin: "This was a classic value-driven Wien & Malkin acquisition, which continues to produce outstanding results for our investors. Recognizing its potential, we lifted the property from the ranks of foreclosure to become one of Wien & Malkin investors' most notable turnaround successes. And the seller, aware of the good work we did at MerrittView, later sold us 500 Mamaroneck Avenue."