Liberty could charge above-market rents knowing that the additional cost would be offset by tenants' tax savings, they say.

They say they always trusted the state to invoke the executory clause only if an agency itself lost its funding, not just because they did not like paying above-market rents.

But Mr. Howard repeated the position of the Government that it would not bail out Canary Wharf and would not pay above-market rents.

The islanders who lease the land for the bases collect above-market rents, and local governments get public works money from Tokyo as a side payment for bearing the "basing burden."

It was less happy with the above-market rent to which it was committed for five more years.

Civilian landlords in neighborhoods near military bases often charge above-market rents because they know military families are a captive market.

Indeed, most tenants whose leases are winding down now are paying above-market rents.

One offered Michael Cohen's client a 10-year lease for 23,000 square feet of as-is space; the first five years would be rent free, the remainder would be $17 a square foot, an above-market rent.

"In general, the larger areas with greater demand and less utilization are paying below-market rent, while the smaller areas with less demand are paying above-market rent," Farwell said.

The above-market rents, in most cases, pay off loans to owners who would default if the rents were lowered.