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Show 2F The Salt Lake Tribune Sunday, July BrokdS IVltlkc a Fortune Felines 15, 1984 Shared Office Concept Catching On In Area; Tenants Get Full Service Continued From Page F-- l it difficult to rely on using the common conference room whenever she needed because other tenants may be using it Among the businesses Ms. McFad-de- n named that would find the shared office suites ideal are law and certified public accounting firms. Short Periods Available And, because some suites can be leased by the hour and even a day, they are particularly well suited for small sales staffs which may fly in from another city to conduct business for a day and want to make an impression on clients by having a professional-looking office. Salt Lake City business people involved in property management including Mr. Coombs, said Paul Fegen, an attorney and founder of Attorneys Office Management Inc., likely started the shared office suite concept in the early 1970s in the Los Angeles area. Mr. Fegen structured the concept specially for law firms, offering for the cost of rent a number of central services, including a receptionist and even a law library. It wasnt long before Mr. Fegen brought the concept to other cities, including Salt Lake. Office Center about that time. I dont know if Salt Lake City wasnt profitable for us. But we had so many locations that it the reason for no longer managing the offices in Salt Lake City probably can be attributed to a cumulative effect of not operating a number of offices profitably. It was a matter of expanding too rapidly. Mr. Kitchell said since the bankruptcy courts order, Attorneys Office Management Inc. has been managing shared office suites only in Southern California, mostly in Los Angeles County. He said the firm of in the Gark-Leamin- g fers the space at about 25 different places. But the firm no longer manages the space for only law firms, said Mr. Kitchell. Most of our subtenants are attorneys. But we do lease space to other business people, including financial consultants and CPAs," he explained. Asked if the shared office suites the firm now manages are profitable, Mr. Kitchell said most of the sites tend to be self supporting and have at least 95 percent occupancy, adequate to provide enough staffing and Shearson Organized 30 Spaces Howard Gark of d Salt Lake property management and office design firm, said the space Mr. Fegen leased in Salt Lake City was in the Gark Learning Office Center, 175 S. West Temple. He said Mr. Fegen turned the space into about 30 shared office suites. Dennis Kitchell, lease preparation manager for Attorneys Office Management Inc., of which Mr. Fegen now serves as board chairman, said in a telephone interview, I dont know if we started the shared lease office concept But if we didnt, we were certainly one of the first to offer Gark-Leamin- g, City-base- it Mr. Kitchell said in November, the firm filed for Chapter 11 bankruptcy in hopes of reorganizing. He said the judge ruled the firm had to relinquish certain unprofitable properties. He said the firm gave up the space 1982, Kenneth E. Coombs, who subleases shared office suites at two places in the Salt Lake Valley, watches secretaries at his downtown location at work. The women do all the secretarial work tenants want them to, including answering their phones. Time Coming to Settle on Coatioaed From Page F-- l tween AT&T and its challengers is clearly changing. The antitrust settlement that split up the Bell System on Jan. 1 specifically called for AT&T to give up its local Bell companies on the theory that once set free, they could be required to treat all Arms equally. The agreement then set out a three-yeschedule for the Bell companies extending to Septo modify their teletember 1986 phone switches to offer equal access. The first battleground what MG Chairman William G. McGowan likes to call the New Hampshire primary of the telephone world is in Charleston, W.Va. Telephone exchanges there serving roughly 34,000 customers were scheduled to b cut over to equal access Sunday. Eight companies signed up with the local Bell company in Giarleston to fight for those customers, led by But that AT&T, MG and GTE-Spris is in Charleston. In other cities, liter- ally dozens of companies are expected to enter the fray. According to the Federal Communications Commission, there are now more than 300 interstate phone companies in the United States, most of them resellers long-distan- ar nt long-distan- long-distan- By Nancy L Ross Washington Post Writer Next month marks the second anniversary of Cats. Not the Broadway smash hit (thats in October), but the Wall Street winner. Cats stands for Certificates of Accrual on Treasury Securities. Just to confuse matters further, they also are known as Tigrs (for Treasury Investment Growth Receipts). Both financial felines combine the features of zero coupon bonds with the security of the U.S. government behind them. Since being introduced in August 1982, they have occupied center stage, applauded by investors who appreciate the certainty of a guaranteed yield amid the vagaries of the bond market Salomon Brothers Inc., has sold Cats with a total face value of $30 billion, and more than $45 billion of the securities have been traded in the secondary market Merrill Lynch, the pioneer, has sold $14.5 billion in face value and $30 billion in the secondary market Salomon Bros., which had issued the securities previously through retail securities firms, yesterday announced that it will be joined by Service Long-Distan- ce firms that lease capacity from companies like AT&T or MCI to serve customers. That figure is not quite as startling as it may sound, given the fact the market is worth more than $40 billion a year. Financial analysts as well as the competitors themselves do not expect many of those firms to survive, however. They suggest the outlook is particularly bleak for firms that do not have their own facilities, because rate reductions by AT&T will squeeze the profit margins of resellers. In 10 years, there may be four firms left, says Peter J. Foster, a founder and executive vice president of U.S. Telephone Inc., a Dallas-base- d reseller that was just acquired by United Telecommunications Inc., a major independent phone company. Foster thinks U.S. Telephone will be one of the survivors, because United is committed to helping it build its own facilities. Predictions of a major shakeout in the industry do not make things any easier for consumers. But many observers reject the notion that customers will decide to just stick with AT&T as a safe harbor. In fact, says Steven G. Girust, an analyst with the New York investment long-distan- long-distan- long-distan- firm of Sanford C. Bernstein, the equal access .process is fraught with peril for AT&T. Given the huge share of the market they hold now r- we estimate 85 percent of the interstate market theres no question in my mind that AT&T will lose share, Chrust says. AT&T has become more price competitive than we would have thought, and theyve shown more marketing savvy than we would have thought. And while I dont expect the competitors to be able to undercut AT&T prices in the future as much as they do now, some will continue to be cheaper, he adds. Gearly, MG and GTE-Spriwill be two major winners. The rest is a toss-u-- nt p. Lehman-America- n Ex- press, Paine Webber and Gtibank in originating them. They will be distributed and marketed by 10 primary and 20 regional government securities dealers. At the same time Salomon announced a new offering of $3.75 billion in Cats. Merrill Lynch continues to market Tigrs exclusively. Sales of the government-backe-d zero coupon bonds have been so successful that Treasury Secretary Donald T. Regan announced late last month that the Treasury was considering whether to sell the securities directly, reasoning it coujd benefit by cutting out the middlemans profits. Zero coupon bonds are ordinary Treasury securities whose coupons have been stripped or removed by a broker who then sells the parts separately, usually for more than the whole. The stripped certificates are sold at a deep discount and pay no interest until they are redeemed at face value. However, holders must pay income taxes every year as if they were actually receiving interest in cash. Zero coupon bonds usually are sold in multiples of $1,000, with maturities ranging from 10 to 20 years. For exCat with a yield of ample, a 12.70 would cost $290 but pay $1,000 at zero yieldmaturity. A $1,000, ing 12.11 sells for about $100. The broker makes a profit by offering a yield slightly lower than the yield when the bond was issued. The attraction of zero coupon bonds is that the holder knows exactly how much money he or she will receive, whereas the holder of a regular bond must reinvest the semiannual interest payments at the same rate a near impossible task to get the same effective yield to maturity. Zeros work to the holders advantage when interest rates are steady or declining. 10-ye- 20-ye- ar First Equal Access Battleground Finds No Victors in Phone Fight By Norman Black Associated Press Writer - W.Va. Last CHARLESTON, April, after it had become clear this quiet mountain city would become the first ecual access battleground in the country, an AT&T executive predicted the coming fight between will be companies very entertaining. Three months later, the residents of Charleston have a different description of the process that is beginning to put companies on an equal footing like annoying, confusing and not worth the hassle. It is not hard to find people here who say they hope their friends across the country do not face the same barrage of ads, mail and telephone calls at home that they withstood from companies soliciting their business as the July 15 changeover approached. Indeed, it is not hard to find people who say they still do not understand why the federal government had to tamper with American Telephone & Telegraph Co. and its Bell System in the first place. Good People of Charleston And when you get right down to it, the good people of Charleston, W.Va., have a message for the MCIs and Sprints of the world that they will not like to hear AT&T, if nothing else, has proven reliable and deserves some loyalty, claims of cut rates are not enough. Ive had phone calls at home and theyre really pushy, said C.V. Lucas Jr. It makes me so mad Ive just hung up. Im satisifed with AT&T and have been for years. Theyve been running me crazy on the phone, said Harold Field, who owns an engineering firm in Charleston. But Im staying with AT&T. The little savings is not worth the bother. long-distan- nt long-distan- non-sto- long-distan- Well, Ive decided to try MCI but it does seem very difficult to determine which way to go, said David Shapiro, a lawyer. Yes, my wife and I have gotten phone calls at home. And I think everybody here wishes that federal judge in Washington who oversaw the breakup had gotten some of these phone calls. Taxi driver James Tucker summarized, The way I look at it, we got a whole bunch of confusion. These Charleston residents were not interviewed through any scientific sampling they were just people stopped at random who were willing to take time out from shopping trips at a local mall to talk. But local observers, such as Charleston journalists, and the companies themselves agree the marketing blitz irritated Charleston residents. That can be seen most dramatically in the fact that upwards of 40 percent of the customers who have been offered equal access in Charleston did not make a choice by Sundays start of the equal access system. There is an attitude of, If its not broken, don't fix it, said Samuel executive editor of the Charleston Daily MaiL The suggestion you should take a chance and change from AT&T is not that attractive an option, it would appear. And I dont think these companies had their act together when they came here. I think there are a lot of people who are annoyed, sure, said Thomas P. Bestor of GTE-SpriLets face it this city has been something of a lab. Annoyed maybe, but I dont think theres mass confusion, said Donald L Campbell of MCI. There might have been confusion in the first 30 p telecom days; 30 days of munications hype is a long, long time. But not now. And weve learned a lot from the process here. But Lowell A. Connor of AT&T Communications said, Generally speaking, Charlestonians will be glad when this event disappears. Advertising Blitz Does that mean other cities will face less of an advertising blitz as the system spreads across the nation into 1986? Maybe. I think you might see more of a targeted effort instead of a massive blitz, said John Smart, AT&T Communications vice president for marketing. Connor, on the other hand, said any similar campaign by competitors elsewhere might require more from AT&T to counter. Said Louise Weaver from the shopping mall, With any other of these companies, they can come and go and you dont know If theyll be around. Johanna Maurice, the Daily Mails business editor, points to another reason for the lack of sign-up- s that nor body anticipated equal access was introduced last Sunday, but many customers eventually realized they could wait as late as next Jan. 15 to pick a company without incurring a service charge. Im a Charleston native and I know no one is going to force these people to make a decision before theyre ready, said Ken Hambrick, a salesman with GTE-SpriAnd some people have held out to see what extra goodies will be offered, said AT&Ts Connor, referring to various promotional offers that have included such things as an hours worth of free calling. But back at the shopping mall, local residents said the promotional offers did not help much. Its mighty hard to get acquainted with them all, said Paul Sowards. onfused and Im a little of both annoyed, said Margaret Owens. I dont know why they didnt just leav it the same as it was. ,; Theres been a lot of garbage thrown out at once, Susanne Johnson added. , nt . long-distan- , Local Phone Exchanges to Be Converted -least Here is a' some local phone exchanges will be converted this year to provide customers equal access to competing firms. 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