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Arden Realty Opens New Services Division


Arden Realty Inc. has launched a division called NextEdge to provide an array of real estate consulting services to the company's tenants--and to tenants in buildings owned by other landlords.

The new division is one of a number of moves by Beverly Hills-based Arden to increase revenue, according to Victor J. Coleman, president of the real estate investment trust. Many of the NextEdge specialties will lie outside the realm of services that REITs traditionally have been permitted to engage in, he said, but new federal legislation rescinds many of those restrictions and opens the door for REITs to offer a much broader array of services.

Coleman said Arden, Southern California's largest office landlord with more than 18.5 million square feet of space, has recognized that its tenants represent a significant source of potential new revenue in addition to the rents the company is already collecting.

Coleman said NextEdge will provide real estate consulting services in five primary specialties: technological services, space planning, managing tenant improvements, management of energy costs and other building operations, and finance and acquisitions.

Arden is already providing some of these services--technology consulting, for example--through its alliances with companies that offer high-speed wiring and related services, Coleman said. However, the opportunity to raise revenue through these and other consulting services "has not been tapped as much as it could have been," he said.

NextEdge's space planning services will employ new computer software to speed the design of office layouts, Coleman said. Office landlords typically face a delay of 90 to 180 days before a new tenant moves into empty space--a period when the space isn't generating any rent, he said.

The company's tenant improvement consulting services will assist tenants in the design and construction required to customize their offices, while its building management and efficiency consulting will capitalize on Arden's experience in managing energy costs and other building operations.

Arden recently was honored by the federal Environmental Protection Agency as the "2000 Buildings Commercial Real Estate Owner of the Year" for owning the most energy-efficient buildings in one portfolio. The company has saved $4.9 million a year in energy costs on its buildings, according to an Arden announcement.

The fifth NextEdge consulting specialty, finance and acquisitions, will provide a range of services for tenants and non-tenants. NextEdge could develop new buildings for existing tenants who are growing, for example, or it might acquire and operate buildings for companies that own their own real estate but aren't specialists in managing real estate, Coleman said.

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