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Free Commercial Lease Agreement Template

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Free Commercial Lease Agreement Template Powered By Docstoc
					      Term
Abatement




Absorption Rate




Net Absorption

Asking Rent
Availability


Asking Rent
Base Lease

Base Rent

Base Year


Boilerplate Lease

Build Out

Build to Suit

Building Shell



Building Skin
Class "A" Office
Space

Class "B" Office
Space
Class "C" Office
Space
Clear Span
Common Area
Common Area
Maintenance (CAM)



Concessions


Concession Values
Credit Tenant
Effective Rent
(Landlord Basis)

Effective Rent
(Tenant Basis)
Effective Useable
Area
Efficiency

Expense Stop


Face Rent
Flex Space


Floor Area Ratio
(FAR)

Floor Load Capacity
(Floor Loading)

Floor Plate
Footprint
Free Rent

Gross Area
Gross Leasable
Area (GLA)
Gross Rent
Multiplier (GRM)
HVAC
Leasing Activity

Load Factor (Loss
Factor)



Loss to Lease
Master Lease

Net Absorption
Net Effective Rent
Net Operating
Income (NOI)
Punch List




Rent Abatement
Shadow Market
(Shadow Space)

Shell Space


Stacking Plan
(Tenant Stack)
Taking Rent

Taking Rent Index
T.I.




Useable Area


Vacancy
Work Letter
                                           Definition
Often and commonly referred to as free rent or early occupancy and may occur outside or in
addition to the primary term of the lease; a decrease or reduction in the price of a property
(or in rent chargeable to a tenant). Usually occurs as a result of the discovery of a negative
fact about the property which decreases its value from the price originally agreed upon by
the parties.
1) The rate, expressed as a percentage, at which available space in the marketplace is
leased during a predetermined period of time; expressed as a percentage, the number of
properties that can be bought or sold in a particular market. May be broken down as to
types and sizes of properties; 2) The estimate of the rate at which office space will be
leased or occupied in a given market within a specified period (usually one year).
Net Absorption measures the total amount of square feet leased over a period of
time, minus the space that is vacated during the same period.
Asking gross “face” rents (excluding all concessions and tenant electric).
Space that is being actively marketed and is available for tenant build-out within 12 months.
Includes space available for sublease as well as space in buildings under construction.

Asking gross “face” rents (excluding all concessions and tenant electric).
A contract stating the minimum established requirements that are applicable to all tenants.

The primary rental to be paid, exclusive of expense pass-throughs, additional rent, or rental
increases. Usually computed on a per-square-foot-per-year basis.
A specific year of a lease against which certain rent escalations and additional expense
reimbursements to landlord may be calculated. Operating costs are judged higher or lower
during the next year when compared to the base year.
The owner's lease form containing clauses that the landlord considers to be standard for
tenant-owner relationships.
The interior construction of a tenant's space, whether new construction or the
reconfiguration of existing space.
A method of leasing property whereby the landlord builds in accordance with the tenant's
specifications, and the tenant takes possession when the space is completed.
The skeleton of a building to which the finished exterior and interior are applied. It includes
all necessary core materials, such as the building's foundation, walls and beams; but does
not include any tenant improvements, such as floor or wall coverings, dropped ceilings,
interior walls or partitioning.
All materials covering the building shell.
A building in an excellent location with high-quality tenants, finishes and maintenance. Class
A office space is usually in new buildings or older buildings that remain competitive with new
construction.
A building in a good location with fairly high-quality construction and tenants. Class B
buildings show only minimal deterioration or obsolescence.
All other office space that is not class "A" or class "B."

The length of floor area clear of interference from columns or posts.
Areas of a building used by or servicing two or more tenants and not under the exclusive
control of a single tenant (e.g., corridors, public lobbies, restrooms, janitorial closets, etc.).
Refers to the maintenance of areas which are for the convenience of all tenants. The
associated costs may be paid by the landlord by incorporating them into the rent structure
(using an agreed-upon base year to calculate increases which are passed on to the
tenants), or by a formula in which all costs, including the cost of management, are directly
passed on to the tenant.
Inducements offered by a landlord to encourage a tenant to sign a lease. Common
concessions in a slow market may include free rent, tenant improvement allowances,
absorption of moving costs, and lease assumptions.
The combination of rent abatement and T.I. allowance.
A tenant with a high credit rating
Gross rent minus operating expenses, real estate taxes, utilities, and amortized
concessions. This figure is calculated without regard to any payments or depreciation on the
property debit service.
Gross rent minus lease consessions (such as free rent, tenant improvement or other
allowances), amortized over the length of the lease.
Excludes those areas within the useable space that the tenant pays rent on but effectively
cannot use, e.g., columns or sharply angled surfaces.
The percentage of rentable area which is useable. For example, a 90% efficient floor
provides 900 useable square feet for every 1,000 rentable square feet.

A lease clause requiring a landlord to pay operating costs up to a certain amount per square
foot. Tenants are required to pay a pro rata share of any costs in excess of this figure.
Rental rate before adjustments for lease concessions.
A building capable of being used for offices as well as for other uses such as
manufacturing, laboratory, or warehouse; usually provides high bays and relocation flexibility
for overhead doors and other entrances.
The relationship between the total amount of floor space in a multi-story building and the
amount of land on which that building is situated. FARs are dictated by local zoning laws
and, in effect, regulate the maximum amount of space a building may have.
The weight per square foot that a building's floors are constructed to sustain. This capacity
limit is particularly important when determining the location of a major file room or a library.

The plan or configuration of a floor within a building.
The outline or exterior shape of a building on the site.
A concession, granted by a landlord to a tenant, which excuses the tenant from paying rent
for a stated period during the lease term.
The total floor area located within the exterior walls of the building.
The area for which tenants pay rent.

The figure with which the gross monthly income of a property is multiplied to produce an
estimate of the property's value.
Heating, Ventilating, and Air Conditioning.
Total amount of square feet leased within a specified period of time, including preleasing
and purchases of space for occupancy and excluding renewals.
A multiplier used to convert useable square foot measurements (the physical space actually
occupied by the tenant) to rentable square feet, which includes the tenant's proportionate
share of common areas (restrooms, elevator lobby, mechanical rooms, etc.). The load
factor is usually expressed as a percentage. Also called "Loss Factor."
The difference between the current market rental rate for a property and the rent being paid
for similar properties. Usually an indicator of the changing market conditions.
A primary lease that controls subsequent leases and which may cover more property than
each individual subsequent lease.
The change in the amount of occupied square feet within a specified period of time.
Rental rate adjusted for lease concessions.
The income projected for a property after deducting operating expenses, but before
deducting income taxes and financing expenses.
An itemized list of office space improvements expected to be finished or accounted for
before the tenant moves in. Used by building management and tenant representatives to
guide the final inspection of premises before delivery. A completed punch list certifies that
the items indicated were completed by the contractor in a good, workmanlike manner, as
specified in the contract documents, and clearly indicates which items are pending.

The time between lease commencement and rent commencement.
The portion of office market space that is available for sublease. Usually excess space
leased but not occupied by office users. Also space that while not officially available, likely
will become available in the near term.
The interior condition of either a new or existing building prior to improvements or finishes.
Typically denotes floor, windows, walls and roof of an enclosed premises. However, precise
definition varies by locale.
A graphic presentation illustrating the tenants of a building on a floor-by-floor basis.


Actual initial base rent in a lease agreement (excluding all concessions and tenant electric).
Initial taking rents as a percentage of asking rents.
Tenant Improvements; Improvements to land or buildings to meet the needs of tenants. May
be new improvements or remodeling, and be paid for by the landlord, tenant or part by each.
Typically, tenants are provided with a market rate TI allowance ($/sq. ft.) that the owner will
contribute towards improvements. However, the actual TI allowance is negotiated in the
lease (see Workletter).

The physical space which the tenant actually occupies. If the entire building is occupied by a
single user, the rentable and useable area (square foot) calculations may be the same.
Unoccupied space available for lease.
An itemized list of improvements that the landlord will provide for the tenant prior to or
during occupancy. Usually included in or attached to the lease as an addendum.
                                                                                        Number
                                                                             Building     of
      Name of Project                            Address                      Class     Stories
Phelps Dodge Tower       1 N Central Avenue, Phoenix, AZ 85004                  A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Arizona Center           400 E Van Buren, Phoenix, AZ 85004                     A         20
Collier Center Phase I   201 E Washington Street, Phoenix, AZ 85004             A         23
Central Park Square      2020 N Central Avenue, Phoenix, AZ 85004               A         12
Central Park East        NEC Central Ave & Van Buren St, Phoenix, AZ 85003                19
Viad Corporate Center    1850 N Central Ave, Phoenix, AZ 85004-4527             A         24
One N 1st St             1 N 1st St, Phoenix, AZ 85004-2357                                7
One N 1st St             2 N 1st St, Phoenix, AZ 85004-2357                                7
One N 1st St             3 N 1st St, Phoenix, AZ 85004-2357                                7
Security Title Plaza     3636 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3637 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3638 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3639 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3640 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3641 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3642 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3643 N Central Ave, Phoenix, AZ 85012                  A         12
Security Title Plaza     3644 N Central Ave, Phoenix, AZ 85012                  A         12
3300 Tower               3300 N Central Avenue, Phoenix, AZ 85012               A         29
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
U.S. Bank Center         101 N 1st Ave, Phoenix, AZ 85003                       B         31
One Renaissance Square   2 N Central Ave, Phoenix, AZ 85004                     A         26
Two Renaissance Square   40 N Central Ave, Phoenix, AZ 85004                    A         28
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower     3200 N Central Ave, Phoenix, AZ 85012                  A         24
Great American Tower   3200 N Central Ave, Phoenix, AZ 85012                   A         24
Great American Tower   3200 N Central Ave, Phoenix, AZ 85012                   A         24
Great American Tower   3200 N Central Ave, Phoenix, AZ 85012                   A         24


                       http://connect.costar.com/connect/MasterPage/main.aspx?SiteID=21497,74327&LogRedirect=1
                       http://www.trammellcrow.com/default.aspx?ServiceId=232&TabId=172
                                                                     Rental
  Space             Building Year                       Space         Rate       Date
Available Occupancy   Size   Built Suite/ Floor       Available    (SF/Year)   Available    Lease Type
  14,706     96%    420,000 2001         1              14,706      $28.00     Immediate    Full Service
  59,543     83%    354,480 1990       555               4,608      $27.50     Immediate    Full Service
  59,543     83%    354,480 1990       500              10,090      $27.50      12/1/2006   Full Service
  59,543     83%    354,480 1990       300               8,779      $27.50     Immediate    Full Service
  59,543     83%    354,480 1990       450               4,729      $27.50     Immediate    Full Service
  59,543     83%    354,480 1990       350               3,165      $27.50       4/1/2007   Full Service
  59,543     83%    354,480 1990       310               3,755      $27.50     Immediate    Full Service
  59,543     83%    354,480 1990       550              10,090      $27.50     12/1/2006    Full Service
  59,543     83%    354,480 1990       400              11,648      $27.50     Immediate    Full Service
  59,543     83%    354,480 1990       575               2,679      $27.50      12/1/2006   Full Service
  20,000     96%    512,266 2001         1              20,000      $32.00     Immediate    Full Service
  35,225     86%    247,906 1985         1              35,225      $19.00     Immediate    Full Service
 300,000      0%    300,000 2008        All            300,000      $33.00     Immediate    Full Service
   2,758     99%    483,745 1991        10               2,758      $18.75     Immediate    Full Service
  21,471     78%     97,773 1969       250               3,767      $19.50     Immediate    Full Service
  21,471     78%     97,773 1969       200               4,919      $19.50     Immediate    Full Service
  21,471     78%     97,773 1969       700              12,785      $21.50     Immediate    Full Service
  37,985     85%    217,247 1984        60               2,451      $25.00     Immediate    Full Service
  37,985     85%    217,247 1984       100               8,144      $25.00     Immediate    Full Service
  37,985     85%    217,247 1984       150               1,240      $25.00     Immediate    Full Service
  37,985     85%    217,247 1984       400          3,000 - 13,876 $25.00      Immediate    Full Service
  37,985     85%    217,247 1984       450          3,000 - 4,720   $25.00     Immediate    Full Service
  37,985     85%    217,247 1984       510               3,446      $25.00      30 Days     Full Service
  37,985     85%    217,247 1984       610               1,145      $25.00     Immediate    Full Service
  37,985     85%    217,247 1984       780               1,145      $25.00     Immediate    Full Service
  37,985     85%    217,247 1984       730               1,818      $25.00     Immediate    Full Service
  29,949     93%    434,491 1980         1              29,949      $19.50     Immediate    Full Service
  74,033     82%    371,727 1976 Partial BSMT           14,664       $20.00    Immediate    Full Service
  74,033     82%    371,727 1976       730                250        $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      750A               1,000       $26.00    Immediate    Full Service
  74,033     82%    371,727 1976       800          2,000 - 10,581   $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      1400          3,000 - 13,242   $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      1875               3,415       $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      1900               7,466       $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      2090               1,829       $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      2350               4,352       $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      2325                929        $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      2400               3,064       $26.00    Immediate    Full Service
  74,033     82%    371,727 1976      2700              13,241       $26.00    Immediate    Full Service
  19,500    90.3%   491,623 1987 7th Floor (Full)       19,500       $22.00    Immediate    Full Service
  27,757    94.1%   470,464 1988       NA                 NA           NA         NA        Full Service
  66,146   80.90%   334,660 1986       300               5,034       $24.50    Immediate    Full Service
  66,146   80.90%   334,660 1986       870               2,145       $24.50    Immediate    Full Service
  66,146   80.90%   334,660 1986      1230               1,722       $24.50    Immediate    Full Service
  66,146   80.90%   334,660 1986      1500               2,060       $24.50    Immediate    Full Service
  66,146   80.90%   334,660 1986      1600          5,000 - 14,985   $24.50    Immediate    Full Service
  66,146   80.90%   334,660 1986      1700          5,000 - 15,049   $24.50    Immediate    Full Service
  66,146   80.90%   334,660 1986      1850               7,573       $24.50    Immediate    Full Service
  66,146   80.90%   334,660 1986      1990               4,986       $24.50    Immediate    Full Service
             66,146    80.90%   334,660 1986   2180        977        $24.50   Immediate Full Service
             66,146    80.90%   334,660 1986   2200   5,000 - 8,149   $24.50   Immediate Full Service
             66,146    80.90%   334,660 1986   2475       3,466       $24.50   Immediate Full Service


21497,74327&LogRedirect=1
Covered    Parking
Parking   Ratio (per
(Month)   1,000 SF)                                Comments
             2.35      $5 Expense stop plus tax abatement
  75           3       3-10 yrs Relet
  75           3       3-10 yrs Relet
  75           3       3-10 yrs Relet
  75           3       3-10 yrs Relet
  75           3       3-5 yrs Relet
  75           3        3-5 yrs Relet
  75           3       3-10 yrs Relet
  75           3       3-10 yrs Relet
  75           3       3-10 yrs Relet
               3
               4       Base Yr Expense Stop Cov Res-$65 ROOF-$25 TI'S UP TO $8.00 (2nd generation space)

  65         3.5       Sublease; with Sublease Expiration 7/31/2011
  50          5
  50          5
  50          5
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  85          4         3-10 yrs Relet
  69         3.5       Base Year Expense Stop. TI's up to $8.00 psf on second generation space; Load factor: 18%
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  55          3        5 yrs. Relet, TI's negotiable
  65        1.52       5 yr. Sublet; TI's As Is
  65        2.33
  70          3        3-5 Relet
  70          3        3-5 Relet
  70          3        3-5 Relet
  70          3        3-5 Relet
  70          3        3-5 Relet
  70          3        3-5 Relet
  70          3        3-5 Relet
  70          3        3-5 Relet
70   3   3-5 Relet
70   3   3-5 Relet
70   3   3-5 Relet
nd generation space)




pace; Load factor: 18%
                   Firm                                  Website
CBRE                                http://www.cbre.com/USA/US/AZ/Phoenix/
Coldwell Banker Commercial NRT
Colliers International              www.colliersmn.com/phoenix
Commercial Properties, Inc.         http://www.cpiaz.com/
Cushman & Wakefield, Inc.           http://www.cushmanwakefield.com/
Cutler Commercial                   http://www.cutlercommercial.com/
Grubb & Ellis|BRE Commercial, LLC   http://www.brephoenix.com/
Lee & Associates                    http://www.lee-associates.com/phoenix/index.php
LevRose Real Estate                 http://www.levrose.com/
Metro Commercial Properties
NAI Horizon                         http://www.naidirect.com/brokers/profiles/html/NAN_00020715_proper.aspx
Ross Brown Partners, Inc.           http://www.rossbrown.com/
Shell Commercial                    http://www.shellcommercial.com/
Trammell Crow Company               http://www.trammellcrow.com/Default.aspx?tabid=103&locationid=29
Transwestern Commercial Services
00020715_proper.aspx


3&locationid=29
ONE RENAISSANCE SQUARE
LOAN SELLER:                                    Bank of America
ORIGINAL PRINCIPAL BALANCE:                      $103,600,000
FIRST PAYMENT DATE:                               May 1, 2005
TERM: (MONTHS)                                          84
AMORTIZATION: (MONTHS)                                   0
INTEREST ONLY PERIOD: (MONTHS)                          84
MATURITY DATE:                                    April 1, 2012
EXPECTED MATURITY BALANCE:                       $103,600,000
BORROWING ENTITY:                            One Renaissance, LLC
INTEREST CALCULATION:                              Actual/360
CALL PROTECTION:                        Lockout/Defeasance: 78 payments
Open: 6 payments
UP-FRONT RESERVES:
   TAX RESERVE:                                        Yes
   TI/LC RESERVE:                                  $1,711,613
ONGOING MONTHLY RESERVES:
   TAX RESERVE:                                        Yes
   TI/LC RESERVE:                                   $20,484
LOCKBOX:                                               Hard
CUT-OFF DATE BALANCE:                             $103,600,000
CUT-OFF DATE LTV:                                    80.00%
MATURITY DATE LTV:                                   80.00%
UNDERWRITTEN DSCR:                                     1.24
MORTGAGE RATE                                         5.13%

Source: http://sec.edgar-online.com/2005/09/23/0000950136-05-005964/Section4.asp
Source: RealtyRates.com

Investor Survey
Office - Central Business District (CBD)
First Quarter 2005                           RealtyRates.com                 Korpacz
                                     Minimum Maximum Average         Minimum Maximum Average
Debt Coverage Ratio                     1.45       1.90      1.68
Interest Rate                          0.052      0.0963    0.0742
Amortization                             30         15        23
Loan to Value Ratio                     0.70       0.50      0.60
Cash-on-Cash b/4 Taxes                0.0825      0.1565    0.1158
Going-in Cap Rate                     0.0673      0.1343    0.0957    0.06     0.10    0.0826
Going-out (Residual) Cap Rate                                         0.07    0.1075   0.0888
Discount Rate (IRR)                   0.0824      0.1368    0.1052    0.07    0.1225   0.0956

Market Survey
Class A & B Office Buildings in CBD
First Quarter 2005
                                          RealtyRates.com
Income                                 CBD
  Asking Rent                         38.00
  Effective Rent                      31.65
  Other Income                         1.58
  Total Income                        33.24
  Vacancy Rate                        11.1%
  Effective Gross Income              29.55
Expenses
  Total Expenses                      12.44
  Expense Ratio                       42.1%
Net Operating Income (NOI)            17.11

Average Sale Price (per sqft)          295
Going-In Cap Rate                     0.058
Gross Rent Multiplier                  9.32
Effective Gross Income Multiplier      9.98
U.S. Treasuries (March 11, 2005)

Bills
           COUPON MATURITY CURRENT CURRENT PRICE/YIELD TIME
                    DATE    PRICE   YIELD   CHANGE
3-Month      N.A.  6/9/2005   2.7    2.75   0.02/.015  11-Mar
6-Month      N.A.  9/8/2005  2.96    3.05   0.01/.020  11-Mar

Notes/Bonds
           COUPON MATURITY CURRENT CURRENT PRICE/YIELD TIME
                    DATE    PRICE   YIELD   CHANGE
2-Year      3.375 2/28/2007  99-11   3.72     -44.44   11-Mar
3-Year      3.375 2/15/2008  98-15   3.93     -70.18   11-Mar
5-Year       4.00 3/15/2010  99-00   4.22    -142.86   11-Mar
10-Year      4.00 2/15/2015  95-23   4.54    -239.44   11-Mar
30-Year     5.375 2/15/2031 108-08   4.81    -490.20   11-Mar

Inflation Indexed Treasury
          COUPON MATURITY CURRENT CURRENT PRICE/YIELD TIME
                  DATE       PRICE  YIELD   CHANGE
5-Year      0.875  4/15/2010 97-23   1.34 -148.1481481 11-Mar
10-Year     1.625  1/15/2015 98-09   1.81 -278.6885246 11-Mar
20-Year     2.375  1/15/2025 106-15  1.98 -538.4615385 11-Mar
30-Year     3.375  4/15/2032 131-07   1.9 -89.88888889 11-Mar

Source:
http://www.bloomberg.com/markets/rates/index.html
Bond Spreads (March 11, 2005)
Rating        1 yr     2 yr    3 yr     5 yr    7 yr   10 yr   30 yr   The numbers are stated in basis points (bps) w
Aaa/AAA         8       12      15       28      50      68      84    Example: Suppose that you want to find the de
Aa1/AA+        30       31      34       48      68      81      99    bond rated AAA. The default premium is .28%
Aa2/AA         32       34      36       55      71      84     107    premium to the yield on a 5 year treasury note
Aa3/AA-        34       40      42       65      77      87     109    debt for a 5-year bond rated AAA.
A1/A+          42       69      72       81      87     107     125
A2/A           57       74      76       82      89     109     126    To convert basis points into decimals, divide th
A3/A-          62       76      80       87      97     116     131    Continuing with our example, if the bps for a 5
Baa1/BBB+      77       95      96      108     125     146     165    translates to 28/10000 = .0028 or .28%
Baa2/BBB       82       99     104      120     133     156     172
Baa3/BBB-      87      100     105      128     147     171     183
Ba1/BB+       150      170     180      210     230     250     300
Ba2/BB        160      180     190      220     240     260     310
Ba3/BB-       170      190     200      230     250     270     320
B1/B+         265      285     295      320     355     380     430
B2/B          275      295     305      330     365     390     440
B3/B-         285      305     315      350     375     400     450
Caa/CCC       340      350     360      425     475     530     570

Source
http://bondchannel.bridge.com/EJVspreads.html
mbers are stated in basis points (bps) where 100 bps = 1%.
e: Suppose that you want to find the default premium for a 5 year
ted AAA. The default premium is .28% . You will add this default
m to the yield on a 5 year treasury note to obtain the pre-tax cost of
     year bond rated AAA.

ert basis points into decimals, divide the bps reported by 10000.
ing with our example, if the bps for a 5 yr AAA bond is 28 then this
es to 28/10000 = .0028 or .28%




              Mtg          0.051325
              rf           0.043800
              Spread       0.007525        75.25
                                                            Base
                                             BOMA Leased Rent Base       Lease      Lease
Suite                     Tenant              RSF    RSF PSF/Yr Year    Begins      Ends
     30   Quarles & Brady Streich Lang LLP       218    218 16.06 None   7/1/1994 4/30/2015
     40   Renaissance Athletic Club           19,199 20,153   4.00 N/A   6/1/2004 5/31/2005
     48   Renaissance Medical Consultants         53     56 128.57 None  1/1/2005 12/31/2005
     50   Building Conference Center           1,089  1,089
     80   Square One Café                        877    877 17.51 NNN 12/28/1992 8/31/2006
     90   Building Area                           69     69
    100   Quarles & Brady Streich Lang LLP       857  1,000 22.00 2004   7/1/1994 4/30/2015
101a      Management Office                    2,644  2,644 23.50 2004   7/1/2002 9/30/2009
    102   Tom's Tavern                         4,804  4,443 22.00 NNN 11/16/1999 11/15/2007
    103   Vacant                               2,101  2,101 24.00
    105   A Touch of Yogurt                      884    877 22.51 NNN    9/1/2004 8/31/2009
    120   Vacant                               1,323  1,323 24.00
  120a    Vacant                                 500    500 24.00
    125   Vacant                                 436    436 24.00
    130   Papa Christo's Restaurant            1,693  1,215 20.16 NNN   4/21/2002 4/20/2007
    150   Vacant                               1,151  1,151 24.00
    155   Renaissance Gifts & Sundries           721    752 21.50 NNN   1/10/1994   1/9/2009
    156   Renaissance Gifts & Sundries           121    121 12.99       1/10/1994       MTM
    160   Beyond Juice at One Renaissance        976    976 15.00 NNN    1/1/2005 12/31/2014
    170   The UPS Store                        1,035  1,035 23.00 NNN 11/26/2003 11/25/2008
200M      Quarles & Brady Streich Lang LLP    25,825 26,735 22.00 2004   7/1/1994 4/30/2015
    300   Quarles & Brady Streich Lang LLP    16,747 18,243 22.00 2004   7/1/1994 4/30/2015
    400   Quarles & Brady Streich Lang LLP    17,746 18,275 22.00 2004   7/1/1994 4/30/2015
    500   Quarles & Brady Streich Lang LLP    18,523 19,410 22.00 2004   7/1/1994 4/30/2015
    600   Quarles & Brady Streich Lang LLP    18,797 19,410 22.00 2004   7/1/1994 4/30/2015
    700   Quarles & Brady Streich Lang LLP    18,637 19,410 28.00 2005   5/1/2005 4/30/2015
    740   Dumbwaiter Space                       161    161
    800   Quarles & Brady Streich Lang LLP    18,797 19,374 22.00 2000   7/1/2000 4/30/2015
    900   Quarles & Brady Streich Lang LLP    18,797 19,225 24.96 2001 3/23/2001 4/30/2015
   1000   First Corporate Credit Union         9,373  9,373 19.38 2004   1/1/2004 12/31/2010
   1001   Master Lease                         9,424  9,424 25.10 None 3/15/2005 3/14/2007
   1100   Iafrate and Rai, PLC                 6,975  7,185 22.00 2002 10/1/2002 9/30/2005
   1125   Gage & Mathers                       1,840  1,763 21.73 2003   2/1/1993 1/31/2008
   1130   Vacant                               2,700  2,700 24.00
 1135b    Master Lease                         2,747  2,747 25.10 None 3/15/2005 3/14/2007
   1140   Iafrate and Rai, PLC                 2,887  2,887 22.00 2002 12/1/2003 9/30/2005
   1150   Sacks Tierney, P.A.                  1,647  1,647 20.14 2005   5/1/2005 4/30/2008
   1200   FTI Consulting                       3,867  3,867 21.00 2003 6/27/2003 6/30/2009
   1220   Vacant                               2,238  2,238 24.00
   1250   Master Lease                         6,522  6,522 25.10 None 3/15/2005 3/14/2007
   1275   FTI Consulting                       6,150  6,150 21.00 2003   7/1/2004 6/30/2009
   1400   Master Lease                        18,527 18,527 25.10 None 3/15/2005 3/14/2007
   1500   Bryan Cave LLP                      18,306 18,720 24.00 2001   9/9/1998 4/30/2017
   1600   Bryan Cave LLP                      19,189 19,624 24.00 2001   9/9/1998 4/30/2017
   1700   Fox Sports Net LLC                   7,535  7,281 25.27 2001 12/9/1996 12/31/2006
   1755   Fox Sports Net LLC                     189    131 12.00       12/9/1996 12/31/2006
   1760   Navigant Consulting                  9,439  9,113 23.34 2002 3/13/1998 4/30/2008
   1770   Stairway Space                         282    282
   1780   Mark J. DePasquale, P.C.             1,745  1,612 24.00 2003 5/15/2003 5/14/2005
  1800   Gammage & Burnham, PLC              19,189   19,561   24.00   2004    4/1/1987   9/30/2009
  1900   Bryan Cave LLP                       7,087    7,160   24.00   1998    5/1/2000   4/30/2017
  1910   Gammage & Burnham, PLC               4,766    4,766   24.00   2004    6/1/2003   9/30/2009
  1930   Gammage & Burnham, PLC               4,378    4,341   24.00   2004   10/1/1998   9/30/2009
  1950   Landry & Associates                  2,958    2,883   23.50   2003   4/15/1989   6/30/2008
  2000   Bryan Cave LLP                      19,189   19,283   24.00   1998    9/9/1998   4/30/2017
  2100   Bryan Cave LLP                      19,183   19,283   24.00   1998    9/9/1998   4/30/2017
2200M    Bryan Cave LLP                      19,183   19,283   24.00   1998    9/9/1998   4/30/2017
  2300   Ernst & Young LLP                   18,133   18,616   26.85   2000    7/1/2000   6/30/2010
  2400   Ernst & Young LLP                   18,133   18,616   26.85   2000    7/1/2000   6/30/2010
  2500   Greater Phoenix Economic Council    12,645   11,788   23.00   2003    5/1/1988   6/30/2009
  2600   Ernst & Young LLP                   12,645   12,971   26.85   2000    7/1/2000   6/30/2010

         Total Rentable Square Feet         483,852 491,623

         Legend
         Vacant
         Retail
         Master Lease
         Office
         Other
   CAM
Charges Comments/
 (if any) Options                                   Other
          Storage
                     Term will renew every 12 months unless either party terminates with 30 days written notice

         Amenity
 3.50     Retail
        Dead space
          Office
          Office
 3.50     Retail

 3.50      Retail



 2.00      Retail

 3.50     Retail
         Storage
 3.50     Retail   Free rent months: 1/2005 to 4/2005
 3.50     Retail
          Office
          Office
          Office
          Office
          Office
          Office
        Dead space
          Office
          Office
          Office   TI Allowance is $19 psf of usable sft
          Office   Part of master lease obligation to Maguire Properties
          Office
          Office

          Office     Part of master lease obligation to Maguire Properties
          Office
          Office
          Office

           Office    Part of master lease obligation to Maguire Properties
           Office
           Office    Part of master lease obligation to Maguire Properties
           Office
           Office
           Office
          Storage
           Office    Free rent last month of term

          Office
Office   Refurbish allowance balance of $90,081 to be used by 9/2005
Office
Office
Office
Office
Office
Office
Office
Office
Office
Office
Office
written notice
                                                    Base                                        CAM
                                            Leased Rent Base         Lease       Lease       Charges
Suite                   Tenant               RSF PSF/Yr Year         Begins      Ends         (if any)
    50   Building Conference Center           1,089
    90   Building Area                           69
   740   Dumbwaiter Space                       161
  1770   Stairway Space                         282
                                              1,601
         Currently Vacant
   103   Vacant                              2,101   24.00
   120   Vacant                              1,323   24.00
 120a    Vacant                                500   24.00
   125   Vacant                                436   24.00
   150   Vacant                              1,151   24.00
  1130   Vacant                              2,700   24.00
  1220   Vacant                              2,238   24.00
                                            10,449
         Lease Expires at or b4 EOY2005
   40    Renaissance Athletic Club          20,153   4.00 N/A         6/1/2004 5/31/2005
   48    Renaissance Medical Consultants        56 128.57 None        1/1/2005 12/31/2005
 1100    Iafrate and Rai, PLC                7,185 22.00 2002        10/1/2002 9/30/2005
 1140    Iafrate and Rai, PLC                2,887 22.00 2002        12/1/2003 9/30/2005
 1780    Mark J. DePasquale, P.C.            1,612 24.00 2003        5/15/2003 5/14/2005
                                            31,893
         Master Leased by Seller
 1001    Master Lease                        9,424   25.10   None    3/15/2005   3/14/2007
1135b    Master Lease                        2,747   25.10   None    3/15/2005   3/14/2007
 1250    Master Lease                        6,522   25.10   None    3/15/2005   3/14/2007
 1400    Master Lease                       18,527   25.10   None    3/15/2005   3/14/2007
                                            37,220
         Retail Space
   80    Square One Café                       877   17.51   NNN    12/28/1992 8/31/2006       3.50
  102    Tom's Tavern                        4,443   22.00   NNN    11/16/1999 11/15/2007      3.50
  105    A Touch of Yogurt                     877   22.51   NNN      9/1/2004 8/31/2009       3.50
  130    Papa Christo's Restaurant           1,215   20.16   NNN     4/21/2002 4/20/2007       2.00
  155    Renaissance Gifts & Sundries          752   21.50   NNN     1/10/1994   1/9/2009      3.50
  156    Renaissance Gifts & Sundries          121   12.99           1/10/1994       MTM
  160    Beyond Juice at One Renaissance       976   15.00   NNN      1/1/2005 12/31/2014      3.50
  170    The UPS Store                       1,035   23.00   NNN    11/26/2003 11/25/2008      3.50
                                            10,296
         Office Space
    30   Quarles & Brady Streich Lang LLP      218   16.06   None     7/1/1994   4/30/2015
   100   Quarles & Brady Streich Lang LLP    1,000   22.00   2004     7/1/1994   4/30/2015
200M     Quarles & Brady Streich Lang LLP   26,735   22.00   2004     7/1/1994   4/30/2015
   300   Quarles & Brady Streich Lang LLP   18,243   22.00   2004     7/1/1994   4/30/2015
   400   Quarles & Brady Streich Lang LLP   18,275   22.00   2004     7/1/1994   4/30/2015
   500   Quarles & Brady Streich Lang LLP   19,410   22.00   2004     7/1/1994   4/30/2015
   600   Quarles & Brady Streich Lang LLP   19,410   22.00   2004     7/1/1994   4/30/2015
   700   Quarles & Brady Streich Lang LLP   19,410   28.00   2005     5/1/2005   4/30/2015
   800   Quarles & Brady Streich Lang LLP   19,374   22.00   2000     7/1/2000   4/30/2015
   900   Quarles & Brady Streich Lang LLP   19,225   24.96   2001    3/23/2001   4/30/2015
  1500   Bryan Cave LLP                     18,720   24.00   2001     9/9/1998   4/30/2017
  1600   Bryan Cave LLP                      19,624   24.00   2001    9/9/1998 4/30/2017
  1900   Bryan Cave LLP                       7,160   24.00   1998    5/1/2000 4/30/2017
  2000   Bryan Cave LLP                      19,283   24.00   1998    9/9/1998 4/30/2017
  2100   Bryan Cave LLP                      19,283   24.00   1998    9/9/1998 4/30/2017
2200M    Bryan Cave LLP                      19,283   24.00   1998    9/9/1998 4/30/2017
  2300   Ernst & Young LLP                   18,616   26.85   2000    7/1/2000 6/30/2010
  2400   Ernst & Young LLP                   18,616   26.85   2000    7/1/2000 6/30/2010
  2600   Ernst & Young LLP                   12,971   26.85   2000    7/1/2000 6/30/2010
  1800   Gammage & Burnham, PLC              19,561   24.00   2004    4/1/1987 9/30/2009
  1910   Gammage & Burnham, PLC               4,766   24.00   2004    6/1/2003 9/30/2009
  1930   Gammage & Burnham, PLC               4,341   24.00   2004   10/1/1998 9/30/2009
  2500   Greater Phoenix Economic Council    11,788   23.00   2003    5/1/1988 6/30/2009
  1200   FTI Consulting                       3,867   21.00   2003   6/27/2003 6/30/2009
  1275   FTI Consulting                       6,150   21.00   2003    7/1/2004 6/30/2009
  1760   Navigant Consulting                  9,113   23.34   2002   3/13/1998 4/30/2008
  1000   First Corporate Credit Union         9,373   19.38   2004    1/1/2004 12/31/2010
  1700   Fox Sports Net LLC                   7,281   25.27   2001   12/9/1996 12/31/2006
  1755   Fox Sports Net LLC                     131   12.00          12/9/1996 12/31/2006
  1950   Landry & Associates                  2,883   23.50   2003   4/15/1989 6/30/2008
101a     Management Office                    2,644   23.50   2004    7/1/2002 9/30/2009
  1125   Gage & Mathers                       1,763   21.73   2003    2/1/1993 1/31/2008
  1150   Sacks Tierney, P.A.                  1,647   20.14   2005    5/1/2005 4/30/2008
                                            400,164

         Total Computed                     491,623
Comments/
 Options                                  Other
 Amenity
Dead space
Dead space




             Term will renew every 12 months unless either party terminates with 30 days written notice

  Office
  Office
  Office


  Office     Part of master lease obligation to Maguire Properties
  Office     Part of master lease obligation to Maguire Properties
  Office     Part of master lease obligation to Maguire Properties
  Office     Part of master lease obligation to Maguire Properties


  Retail
  Retail
  Retail
  Retail
  Retail
 Storage
  Retail     Free rent months: 1/2005 to 4/2005
  Retail


 Storage
  Office
  Office
  Office
  Office
  Office
  Office
  Office
  Office
  Office
  Office
 Office
 Office
 Office
 Office
 Office
 Office
 Office
 Office
 Office   Refurbish allowance balance of $90,081 to be used by 9/2005
 Office
 Office
 Office
 Office
 Office
 Office   Free rent last month of term
 Office   TI Allowance is $19 psf of usable sft
 Office
Storage
 Office
 Office
 Office
 Office
written notice
Major Tenant Expirations (Rollover of Key Tenants)
Total Net Rentable Sqft

                                                  Lease
                                      Square    Expiration     Pct of
             Tenant                    Feet       (Date)      Total Sqft
Quarles & Brady Streich Lang LLP
Bryan Cave LLP
Ernst & Young LLP
Gammage & Burnham, PLC
Maguire Properties (Seller)
      Total/Weighted Average


 Question: Rollover of Key Tenants (5 points): Using the information on tenants in the “Rent Roll
 (Tenant Stack)” worksheet, complete the “1. Major Tenant Expirations” worksheet by filling in the area
 highlighted in yellow. Discuss whether the new owner has to worry about any of the major tenants
 leases expiring in the short term e.g., the next 3 years? Assume that the date of your analysis is as of
 April 16, 2005.

 Answer:
                                                           Base
                                               Square      Rent     Base    Lease        Lease
Suite                 Tenant                    Feet      PSF/Yr    Year    Begins       Ends

        Currently Vacant




        Lease Expires at or b4 EOY2005




        Total Net Rentable Sqft
        Potential Vacancy Rate EOY2005
        Vac Rate if Athletic Club renews


        Question: Maximum Vacancy Rate (1 point): What is the maximum vacancy rate for One
        Renaissance Square at end of year (EOY) 2005 assuming that no current vacant space is
        rented by year end 2005 and existing tenants whose lease will expire choose not to renew
        their leases? What is the vacancy rate if the Renaissance Athletic Club renews their lease?

        Answer:
                    CAM
                 Charges Comments/
                  (if any) Options   Other




ate for One
ant space is
not to renew
s their lease?
Lease Rollover Schedule

                   # Leases         Cumulative    Pct of Cumulative Cumulative %       Base Rent
Year of Expiration Expiring Tenants   Sqft       Total Sqft Total Sqft of Total Sqft    Expiring
      2005
      2006
      2007
      2008
      2009
      2010
      2014
      2015
      2017
      MTM
Common Space
     Vacant

     TOTAL
Present Value Calculations of Tenant Improvements (as if TI were a per period annuity)
Risk rating: Average Tenant             CCC
10 Year Treasury yield
+ Default Premium
Pre-tax Cost of Debt (Disc Rate)

Total Rentable Square Feet
Term of Lease (years)

                                      New Lease   Existing Lease   Total
Rentable Square Feet
* Tenant Improvements (TI) $/psf
Total Tenant Improvements (TI)
Divided by: PVIFA
Equivalent Annuity aka TI (Annuity)
Divided by: Rentable SqFt
TI psf (Annuity)
were a per period annuity)
Analysis of Suite 700 Quarles & Brady

           Base Rent Rentable
 Year.Mo   per Month Sq Ft    Total Rent Year Rent
 2005.05                                             Total Amt w/ Free Rent
 2005.06                                             ÷ Rentable Sqft
 2005.07                                             ÷ Years
 2005.08                                             Effective Rent psf/yr
 2005.09
 2005.10                                             Total Amt w/o Free Rent
 2005.11                                             ÷ Rentable Sqft
 2005.12                                             ÷ Years
 2006.01                                             Rent psf/yr (no PV)
 2006.02
 2006.03                                             Rent psf/yr (no PV)
 2006.04                                        $0   - Effective Rent psf/yr
 2006.05                                             Rent Abatment psf/yr
 2006.06
 2006.07                                             Rent Abatment psf/yr
 2006.08                                             ÷ Rent psf/yr (no PV)
 2006.09                                             Haircut
 2006.10
 2006.11
 2006.12
 2007.01
 2007.02
 2007.03
 2007.04                                        $0
 2007.05
 2007.06
 2007.07
 2007.08
 2007.09
 2007.10
 2007.11
 2007.12
 2008.01
 2008.02
 2008.03
 2008.04                                        $0
 2008.05
 2008.06
 2008.07
 2008.08
 2008.09
 2008.10
 2008.11
 2008.12
 2009.01
 2009.02
 2009.03
2009.04   $0
2009.05
2009.06
2009.07
2009.08
2009.09
2009.10
2009.11
2009.12
2010.01
2010.02
2010.03
2010.04   $0
2010.05
2010.06
2010.07
2010.08
2010.09
2010.10
2010.11
2010.12
2011.01
2011.02
2011.03
2011.04   $0
2011.05
2011.06
2011.07
2011.08
2011.09
2011.10
2011.11
2011.12
2012.01
2012.02
2012.03
2012.04   $0
2012.05
2012.06
2012.07
2012.08
2012.09
2012.10
2012.11
2012.12
2013.01
2013.02
2013.03
2013.04   $0
2013.05
2013.06
2013.07
2013.08
2013.09
2013.10
2013.11
2013.12
2014.01
2014.02
2014.03
2014.04   $0
2014.05
2014.06
2014.07
2014.08
2014.09
2014.10
2014.11
2014.12
2015.01
2015.02
2015.03
2015.04
Effective Rent from a Landlord's Perspective
Disc Rate                                                          Growth Rate in Market Rents is assumed to be 3%
                                                                   are for 10 years with 4 months of free rent. Rent in
Mkt Rents in Year 2005
                                                                   3% per year. On new space, TI is $10 psf and TI i
  Office: Floors 1 - 22
  Office: Floors 23 - 26
                                     Input $ psf
  Retail
  Health Club
Growth Rate(Rents)        Office   Retail   Health
  Annual Growth Rate
Term of Lease (Yrs)
Free Rent (Months)
TI psf (New Space)
Leasing Commissions (New Space)
  Lease Year 1-5
  Lease Year 6-10

                           2005    2006     2007     2008   2009    2010     2011      2012     2013
Office: Floors 1-22          0       1        2        3      4       5        6         7        8
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent

Office: Floors 23 - 26      0        1        2       3      4        5        6         7        8
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent

Retail                      0        1        2       3      4        5        6         7        8
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent
Health Club              0   1   2   3   4   5   6   7   8
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent
Rents is assumed to be 3% in Year 2006. All new leases
months of free rent. Rent increases on signed leases are
pace, TI is $10 psf and TI is $5 psf on renewals.




              2014     2015
                9       10




                9       10




                9       10
9   10
Pro-Forma Analysis for One Renaissance Square
      Year Ended                                        12/31/2006

                      Space Breakdown                    SqFeet
      Total Rentable Square Feet

             TI, Leasing Cost, & Capital Reserves       Total 2006   $/PSF
      Tenant Improvement on New Leases                                                 Note: Please use
      Tenant Improvement on Existing Leases                                            leasing costs and
      Total Tenant Improvements (TI) - All Leases                                      Space excluding
      + Leasing Commissions/Costs (LC)                                                 2006 rent for vac
      + Capital Reserves
      TI/LC (including Capital Reserves)

                       Rent Category                    Total 2006   $/PSF   Percent
      2006 Rent (Occupied Space) exclu Master Lease
      + 2006 Rent (Master Lease to Maguire Pptys)
      + 2006 Rent (Space Coming Up for Renewal in 06)
      + 2006 Rent (Vacant Space)
      Total Rent (All Space)
      + Parking Revenue
      + Other Income
      - Base Rent Abatements (Free Rent)
      + Tenant Reimbursements
      Potential Gross Rent B4 Reimbursements

                      Vacancy Category                  Total 2006   $/PSF   Percent
      2006 Rent (Vacant Space)
      Existing Vacancy
      + 2006 Rent (Space Coming Up for Renewal in 06)
      Maximum Potential Vacancy at EOY2006

                      Expense Category                  Total 2006   $/PSF   Percent
      Property Taxes in 2006
      Total Fixed Expenses

      Cleaning/Janitorial
      + Repairs & Maintenance
      + Utilities
      + Security/Life Safety
      + Administration
      + Insurance
      + Management Fee
      Total Variable Expenses

      Total Fixed Expenses
      + Total Variable Expenses
      Total Reimbursable Expenses
      + Parking Garage Costs (Non-Reimbursable Exp)
      Operating Expenses (exclu TI/LC)
        Tenant Improvements on New Leases
        + Tenant Improvements on Existing Leases
        Total Tenant Improvements (TI) - All Leases
        + Leasing Commissions
        + Capital Reserves
        TI/LC and Capital Reserves

        Operating Expenses (exclu TI/LC)
        + TI/LC and Capital Reserves
        Operating Expenses (inclu TI/LC)




Floor                         Tenant                  Square Feet   Commence Expiration
 26     Ernst & Young LLP                               12,971        7/1/2000  6/30/2010
 25     Greater Phoenix Economic Council                11,788        5/1/1988  6/30/2009
 24     Ernst & Young LLP                               18,616        7/1/2000  6/30/2010
 23     Ernst & Young LLP                               18,616        7/1/2000  6/30/2010
 22     Bryan Cave LLP                                  19,283        9/9/1998  4/30/2017
 21     Bryan Cave LLP                                  19,283        9/9/1998  4/30/2017
 20     Bryan Cave LLP                                  19,283        9/9/1998  4/30/2017
 19     Bryan Cave LLP                                   7,160        5/1/2000  4/30/2017
 19     Gammage & Burnham, PLC                           4,766        6/1/2003  9/30/2009
 19     Gammage & Burnham, PLC                           4,341       10/1/1998  9/30/2009
 19     Landry & Associates                              2,883       4/15/1989  6/30/2008
 18     Gammage & Burnham, PLC                          19,561        4/1/1987  9/30/2009
 17     Navigant Consulting                              9,113       3/13/1998  4/30/2008
 17     Fox Sports Net LLC                                131        12/9/1996 12/31/2006
 17     Fox Sports Net LLC                               7,281       12/9/1996 12/31/2006
 17     Mark J. DePasquale, P.C.(*)                      1,612       5/15/2003  5/14/2005
 17     Stairway Space                                    282
 16     Bryan Cave LLP                                  19,624       9/9/1998    4/30/2017
 15     Bryan Cave LLP                                  18,720       9/9/1998    4/30/2017
 14     Maguire Properties (Master Lease)               18,527      3/15/2005    3/14/2007
 12     FTI Consulting                                   6,150       7/1/2004    6/30/2009
 12     FTI Consulting                                   3,867      6/27/2003    6/30/2009
 12     Maguire Properties (Master Lease)                6,522      3/15/2005    3/14/2007
 12     Available                                        2,238      Available    Available
 11     Iafrate and Rai, PLC (*)                         7,185      10/1/2002    9/30/2005
 11     Iafrate and Rai, PLC (*)                         2,887      12/1/2003    9/30/2005
 11     Sacks Tierney, P.A.                              1,647       5/1/2005    4/30/2008
 11     Gage & Mathers                                   1,763       2/1/1993    1/31/2008
 11     Maguire Properties (Master Lease)                2,747      3/15/2005    3/14/2007
 11     Available                                        2,700      Available    Available
 10     First Corporate Credit Union                     9,373       1/1/2004   12/31/2010
 10     Maguire Properties (Master Lease)                9,424      3/15/2005    3/14/2007
  9     Quarles & Brady Streich Lang LLP                19,225      3/23/2001    4/30/2015
  8     Quarles & Brady Streich Lang LLP                19,374       7/1/2000    4/30/2015
  7     Quarles & Brady Streich Lang LLP                19,410       5/1/2005    4/30/2015
  7     Dumbwaiter Space                                  161
   6     Quarles & Brady Streich Lang LLP   19,410     7/1/1994   4/30/2015
   5     Quarles & Brady Streich Lang LLP   19,410     7/1/1994   4/30/2015
   4     Quarles & Brady Streich Lang LLP   18,275     7/1/1994   4/30/2015
   3     Quarles & Brady Streich Lang LLP   18,243     7/1/1994   4/30/2015
   2     Quarles & Brady Streich Lang LLP   26,735     7/1/1994   4/30/2015
   1     Management Office                   2,644     7/1/2002   9/30/2009
   1     Quarles & Brady Streich Lang LLP    1,000     7/1/1994   4/30/2015
   1     Tom's Tavern                        4,443   11/16/1999  11/15/2007
   1     A Touch of Yogurt                    877      9/1/2004   8/31/2009
   1     Papa Christo's Restaurant           1,215    4/21/2002   4/20/2007
   1     Renaissance Gifts & Sundries         752     1/10/1994    1/9/2009
   1     Renaissance Gifts & Sundries         121     1/10/1994      MTM
   1     Beyond Juice at One Renaissance      976      1/1/2005   12/31/2014
   1     The UPS Store                       1,035   11/26/2003   11/25/2008
   1     Available                           2,101    Available   Available
   1     Available                           1,323    Available   Available
   1     Available                            500     Available   Available
   1     Available                            436     Available   Available
   1     Available                           1,151    Available   Available
Ground   Building Conference Center          1,089                 Amenity
Ground   Building Area                         69               Dead space
Ground   Renaissance Athletic Club(*)       20,153    6/1/2004      5/31/2005
Ground   Renaissance Medical Consultants       56     1/1/2005    12/31/2005
Ground   Square One Café                      877    12/28/1992     8/31/2006
Ground   Quarles & Brady Streich Lang LLP     218     7/1/1994      4/30/2015
Note: Please use template below to calculate total
leasing costs and the total 2006 rent for Occupied
Space excluding Master Lease, Master Lease and the
2006 rent for vacant space.
             Rent psf   Total Rent    Total Rent Total Rent
Total Sqft   per Year   2006 (Occ.   2006 (Renew 2006 (Vac Total Potential Term of Lease
Per Floor     (2006)      Space)        Space)    Space)     Rent 2006      Lease   Year
               27.85                                                         10.0    6.4
               23.50                                                         21.0   18.6
               27.85                                                         10.0    6.4
               27.85                                                         10.0    6.4
               25.00                                                         19.0    8.3
               25.00                                                         19.0    8.3
               25.00                                                         19.0    8.3
               25.00                                                         17.0    6.6
               25.00                                                          6.0    3.5
               25.00                                                         11.0    8.2
               24.50                                                         19.0   17.7
               25.00                                                         22.0   19.7
               24.76                                                         10.0    8.8
               12.00                                                         10.0   10.0
               25.98                                                         10.0   10.0
                                                                              2.0    3.6

              25.00                                                         19.0       8.3
              25.00                                                         19.0       8.3
              25.10                                                          2.0       1.8
              22.00                                                          5.0       2.4
              22.00                                                          6.0       3.5
              25.10                                                          2.0       1.8
                                                                          Available   New
                                                                             3.0       4.2
                                                                             2.0       3.0
              22.06                                                          3.0       1.6
              23.06                                                         15.0      13.8
              25.10                                                          2.0       1.8
                                                                          Available   New
              19.77                                                          6.0       2.9
              25.10                                                          2.0       1.8
              27.48                                                         14.0       5.8
              22.00                                                         15.0       6.4
              28.00                                                         10.0       1.6
22.00      21.0      12.4
22.00      21.0      12.4
22.00      21.0      12.4
22.00      21.0      12.4
22.00      21.0      12.4
24.50       7.0       4.4
22.00      21.0      12.4
22.00       8.0       7.1
23.88       5.0       2.3
21.38       5.0       4.7
22.00      15.0      12.9
12.99     MTM        MTM
16.00       9.0       1.9
24.00       5.0       3.1
         Available   New
         Available   New
         Available   New
         Available   New
         Available   New


            1.0       2.5
214.29     12.0       1.9
           14.0      14.0
16.06      21.0      12.4
Leasing   Leasing
  Cost      Cost
 (Rate)   ($Dollar)
Master Lease
Current date                                 Assume that rent is due
Rent psf/year                  25.10         on the 15th of every
                                             month
Square Feet
* Rent psf/mo
Total Rent per Month

Risk rating: Maguire Pptys    CCC
2 Year Treasury yield
+ Default Premium
Pre-tax Cost of Debt

                               Time       Mo. Lease          PV of Lease
                             (yy.mm) Time Payments PV Factor Payments
                             2005.05   1
                             2005.06   2
                             2005.07   3
                             2005.08   4
                             2005.09   5
                              2005.1   6
                             2005.11   7
                             2005.12   8
                             2006.01   9
                             2006.02 10
                             2006.03 11
                             2006.04 12
                             2006.05 13
                             2006.06 14
                             2006.07 15
                             2006.08 16
                             2006.09 17
                             2006.10 18
                             2006.11 19
                             2006.12 20
                             2007.01 21
                             2007.02 22
                             2007.03 23
                                                       Value
               Assumptions (based on Year 2006)
           Existing Vacancy Rate
           + Vacancy Rate (Master Lease)                            0.00   5.0%   5.5%
           + Vacancy Rate (Space Up for Renewal)                    3.0%
           Maximum Potential Vacancy at EOY2006                     3.5%
                                                                    4.0%
Question               Frontdoor-Cap Rate                           4.5%
           Purchase Price                                           5.0%
           + Immediate Capital Improvements                         5.5%
           Adjusted Purchase Price                                  6.0%
            Total Rentable Area (sqft)                             6.5%
           Price per Square Foot of GBA                             7.0%
           * Market Going-In Cap Rate                               7.5%
           Expected NOI psf (per square foot)                       8.0%
           + TI/LC and Capital Reserves per sqft                    8.5%
           + Operating Expenses (exclu TI/LC)                       9.0%
           Income Before Vacancy                                    9.5%
            (1 - Vacancy Rate)                                    10.0%
           Required Asking Rent per sqft                           10.5%
                                                                   11.0%
           Average Asking Rent (Class A Downtown)                  11.5%
                                                                   12.0%
                                                                   12.5%
                                                                   13.0%
                                                                   13.5%
                                                                   14.0%
                                                                   14.5%
                                                                   15.0%
                                                                   15.5%
                                                                   16.0%
                                                    Vacancy Rate   16.5%
                                                                   17.0%
                                                                   17.5%
                                                                   18.0%
                                                                   18.5%
                                                                   19.0%
                                                                   19.5%
                                                                   20.0%
                                                                   20.5%
                                                                   21.0%
                                                                   21.5%
                                                                   22.0%
                                                                   22.5%
                                                                   23.0%
                                                                   23.5%
                                                                   24.0%
                                                                   24.5%
                                                                   25.0%
                                   0.00   5.5%   6.0%
                                   4.00   0.00   0.00
                                   4.25   0.00   0.00
Operating Expenses (exclu TI/LC)   4.50   0.00   0.00
                                   4.75   0.00   0.00
                                   5.00   0.00   0.00
                                   5.25   0.00   0.00
                                   5.50   0.00   0.00
                                   5.75   0.00   0.00
                                   6.00   0.00   0.00
                                   6.25   0.00   0.00
                                   6.50   0.00   0.00
                                   6.75   0.00   0.00
                                   7.00   0.00   0.00
                                   7.25   0.00   0.00
                                   7.50   0.00   0.00
                                   7.75   0.00   0.00
                                   8.00   0.00   0.00
                                   8.25   0.00   0.00
                                   8.50   0.00   0.00
              Going-In Cap Rate
6.0%   6.5%    7.0%      7.5%     8.0%   8.5%   9.0%   9.5%
              Going-In Cap Rate
6.5%   7.0%    7.5%      8.0%     8.5%   9.0%   9.5%   10.0%
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
0.00   0.00    0.00       0.00    0.00   0.00   0.00    0.00
6b. Sensitivity Analysis
  One Variable Sensitivity Analysis
                   Present Amount
                      or Percent        For Solvency          Percent -/+
 Purchase Price     $120,000,000         $84,498,514            -42.0%

 Vacancy Rate           15.3%               -0.014             1192.9%

 Going-In Cap           5.80%               4.08%               -42.2%
 Rate

 Operating               8.04                3.85              -108.83%
 Expense (exclu
 TI/LC)

  Analysis Assuming Existing Vacancy Rate
                   Present Amount
                      or Percent        For Solvency          Percent -/+
 Purchase Price     $120,000,000
 Going-In Cap           5.80%
 Rate
 Operating
 Expense (exclu
 TI/LC)



 Question: Given this analysis, how important is it to the deal that Maguire leases back space in the building for two years?

 Answer:
                                            Comment
             This is too severe a drop in price given the recent sale of the
             subject property
             This doesn't make sense; even if the building is fully leased (100%
             occupied) the building is still not solvent.
             If the investor could borrow at the current 3 year Treasury bond
             rate the deal is feasible (because yield is3.93%). This doesn't
             make sense since this is a risky investor.
             This is highly unlikely. The decrease in operating expenses
             essentially means that most of the tenants are on a triple net lease
             (NNN)




                                         Comment




t Maguire leases back space in the building for two years?
10. Backdoor-DCR
Backdoor Analysis using DCR (Base Case)

Assumptions
Total Rentable Square Feet
Vacancy Rate
Operating Expense psf (exclu TI/LC)
TI/LC psf (inclu Capital Reserves)

Debt Service Coverage Ratio               Net Operating Income
B4 Tax Cash on Cash                        Debt Coverage Ratio
                                          Debt Service
Terms of Loan                             Divided by: Mtg Constant
Amortization Period (in years)            Justified Mortgage
Period of Loan (in years)
Interest Rate (Mortgage Constant)




                                             10a. Question: What is the justified price per square foot of gross
                                             Renaissance Square given the assumptions listed on page 6 throug
                                             Backdoor (DSCR)” worksheet? Is the deal financially feasible from a
                                             perspective? Please explain. Is the justified price also greater than t
                                             square foot that Pauls Corp paid? Please use the Data Table comm
                                             a two-way table showing the justified price per square foot of gross b
                                             various combinations of interest rate and vacancy rate, ii) various co
                                             debt coverage ratio and the vacancy rate, and iii) various combinatio
                                             cash on cash rate and the vacancy rate. Are there any scenarios for
                                             financially feasible? What does your analysis suggest about their lik
                                             investment strategy?

                                             Answer:
              Total Potential Gross Rent (All Space)
               Total Rentable Square Feet
              Potential Gross Rent psf
              - Vacancy psf
              - Operating Expenses psf (exclu TI/LC)
              - TI/LC psf (inclu Capital Reserves)
              Net Operating Income psf

                                                                      Net Operating Income
                                                                      - Debt Service
                                                                      Before Tax Cash Flow
                                                                       B/4 Tax Cash on Cash
              Justified Investment                                    Justified Equity
              - Capital Expenditures
              - Title Insurance & Ancillary Fees
              Justified Price per sqft (GBA)
              * Total Rentable Square Feet
              Justified Price

              Actual Price Paid per Sqft




                                                                                                                 Interest
                                                                               $0.00           5.00%   5.25%
 the justified price per square foot of gross building area for One             4.0%
 n the assumptions listed on page 6 through page 9 and the “10.                 4.5%
heet? Is the deal financially feasible from a backdoor                          5.0%
ain. Is the justified price also greater than the actual price per              5.5%
rp paid? Please use the Data Table command in Excel to set up
                                                                                6.0%
 he justified price per square foot of gross building area at i)
 terest rate and vacancy rate, ii) various combinations of the                  6.5%
he vacancy rate, and iii) various combinations of the before tax                7.0%
  vacancy rate. Are there any scenarios for which the deal is                   7.5%
                                                                      V
 does your analysis suggest about their likely "implied"                        8.0%
                                                                      A
                                                                      C         8.5%
                                                                                9.0%
                                                                                9.5%
                                                                               10.0%
                                                                               10.5%
                                                                               11.0%
                                                                               11.5%
                                                                               12.0%

                                                                                                               Debt Cove
                                                                               $0.00           1.35    1.40
                                                                               4.00%
                                                                               4.50%
     5.00%
     5.50%
     6.00%
     6.50%
     7.00%
     7.50%
V
     8.00%
A
C    8.50%
     9.00%
     9.50%
    10.00%
    10.50%
    11.00%
    11.50%
    12.00%


     $0.00   3.5%   4.0%
     4.00%
     4.50%
     5.00%
     5.50%
     6.00%
     6.50%
     7.00%
     7.50%
V
     8.00%
A
C    8.50%
     9.00%
     9.50%
    10.00%
    10.50%
    11.00%
    11.50%
    12.00%
                                    Two Way Sensitivity Analysis
          Interest Rate
5.50%    5.75% 6.00%      6.25%   6.50%    6.75%   7.00%    7.25%   7.50%   7.75%   8.00% 8.25%




        Debt Coverage Ratio (Debt Service Coverage Ratio)
1.45      1.50    1.55     1.60    1.65     1.70    1.75    1.80    1.85    1.90
              Before tax Cash on Cash Rate
4.5%   5.0%   5.5%     6.0%    6.5%    7.0%   7.5%   8.0%   8.5%   9.0%
8.50%   8.75%

				
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Description: Free Commercial Lease Agreement Template document sample