Leasing Is Strong At Citicorp Project

The Bank One Center in Cleveland will officially open today nearly two-thirds leased, relieving concern that Citicorp might have one more troubled real estate loan on its books.

Galbreath Co., Columbus, Ohio, said the U.S. Justice Department signed a 10-year lease worth $2.1 million a year on 70,000 square feet in the 28-story office tower, making the government the second-biggest tenant, after Bank One.

The bank, a unit of Columbus, Ohio-based Banc One Corp., will occupy more than 100,000 square feet in the $95 million building, for which Citicorp led construction and permanent financing.

"That's respectable preleasing," said Lloyd Lynford, president of Reis Reports and a real estate data analyst.

The Bank One Tower's remaining 190,000 square feet of space will compete in a market characterized by Mr. Lynford as "softening." The overall vacancy rate for Cleveland will jump to about 25% with the addition of 2.9 million square feet of space, including the Bank One Center and the 1.35 million-square-foot Society Corp. headquarters.

The announcement is a rare piece of good news for Citicorp, which could ill afford to see another building struggling to meet debt service. It set aside $896 million for loan losses in the third quarter.

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