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Landlord Rent Increase Letter Template document sample
Document Sample
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
Term
Abatement
Absorption Rate
After hours
services
Net Absorption
ALTA Survey
American with
Disabilities Act
(ADA)
Assignments
Asking Rent
Attornment
Provisions
Availability
Base Lease
Base Rent
Base Year
Boilerplate Lease
Build Out
Build to Suit
Building Shell
Building Skin
Buyers
Representative
CAP Rate
Class "A" Office
Space
Class "B" Office
Space
Class "C" Office
Space
Clear Span
Commencement
Date
Common Area
Common Area
Maintenance
(CAM)
Concessions
Concession
Values
Credit Tenant
Effective Rent
(Landlord Basis)
Effective Rent
(Tenant Basis)
Effective Useable
Area
Efficiency
Estoppel
Certificate
Escalations
Executive Suite
Expansion or
Escape Clause
Expense Stop
Face Rent
Flex Space
Floor Area Ratio
(FAR)
Floor Load
Capacity (Floor
Loading)
Floor Plate
Footprint
Free Rent
Full Service Lease
Gross Area
Gross Leasable
Area (GLA)
Gross Rent
Multiplier (GRM)
Guarantee of
Lease
Holding Over
HVAC
Lessee
Lessor
Leasing Activity
Letter of Intent
Load Factor (Loss
Factor)
Loss to Lease
Master Lease
Modified Gross
Lease
Monument Sign
Net Absorption
Net Effective Rent
Net Operating
Income (NOI)
Operating Costs
Options to renew
Overages
Parking Ratio
Pass throughs
Percentage Rent
Permitted Uses
Phase One Study
Preliminary Title
Report
Pro-rata Share
Punch List
Real Estate Tax
Rent Abatement
Rental tax
Rentable Square
Feet
Reserved Parking
Security Deposit
Shadow Market
(Shadow Space)
Shell Space
Stacking Plan
(Tenant Stack)
Subletting
Taking Rent
Taking Rent Index
Tenant
Improvements
(TI's)
Tenant
Representative
Triple Net Lease
(NNN)
Useable Area
Vacancy
Work Letter
1031 exchange
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
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).
Many larger buildings will charge a tenant for electricity usage if they occupy their space beyond normal business
hours. Normal hours are usually 7 to 6 during the week, plus 8 to 12 on Saturdays. If you plan on working in your
space 24 X 7, then this could be expensive. Anywhere from $3 to $40 per hour for each hour beyond the normal.
If you are a typical tenant, this could be good, because it allocates the expense to the real user of the electricity
and you don't end up paying for the work-aholics electric overload.
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.
This is a document prepared under the direct supervision of a licensed Land Surveyor. This is dictated not only by
the Arizona State Code as directed by the Board of Technical Registration, but is also a requirement of the
current ALTA/ACSM Standards for Land Title Surveys. ALTA surveys are required anytime that "extended
coverage" is requested from the title company. An ALTA survey is a boundary survey, but will also locate all
observable improvements on the property and locate, where possible, all encumbrances of record (easements,
setbacks, flood zones). ALTA surveys are performed to a higher standard than a typical boundary survey.
Property corners may or may not be set, as requested in the optional Table A. In Arizona, if property corners are
set, a Record of Survey must also be prepared and recorded with the County Clerk's office by a certified Civil
Engineer that details where all the easements, right-of-ways, and property lines are. It is usually required by a
Title Company to confirm the accuracy of the title policy they are issuing in a purchase. Within an ALTA Survey,
Federal regulations intended to equalize access for people with disabilities in buildings. New buildings must
comply in order to obtain their building permits. Lease spaces being substantially remodeled need to comply in
order to obtain permits. Older buildings not being remodeled have not normally been required to change.
Changes can include wider restroom stalls, ramps, handrails.
The transfer of the obligations and rights of the lease or purchase contract to another party. This is often used in
an offer letter, so that a Buyer would have the time to establish its final form of ownership, such as an LLC. An
assignment does not necessarily relieve the assigning party of its obligation or liabilities. Confer with legal
Asking gross “face” rents (excluding all concessions and tenant electric).
Lease language provision in which the tenant agrees, in advance, to accept or pay rent to a new landlord or new
owner. This is important if the current landlord defaults on their mortgage.
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.
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. Amount of money paid to the Landlord, usually quoted on an
annual basis per foot or monthly amount. It typically does not include rental tax, but may include all other charges
for expenses related to the building operation (electricity, water, insurance, janitorial, repair). When the expenses
are included in the base rent, this is commonly called a full service lease. See Overages and Escalation terms.
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 owner's lease form containing clauses that the landlord considers to be standard for tenant-owner
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 Licensed Real Estate Agent working solely for the Buyer, not the Seller. Agency rules in Arizona allow the
Buyers Agent to receive a commission from the Seller even though he does not represent the Seller. Most Sellers
have their own Sellers agents working to get them the best price and terms. The parties to the transaction must
be informed ahead of the negotiations of this status. The Buyers Representative (agent) is normally paid by
splitting the commission already agreed to be paid by Seller to the Sellers agent.
Abbreviation for Capitalization rate. This is the financial rate of return an investor would receive if the property
continues to perform in perpetuity. For example, a 10% CAP rate means an investor would receive $10 every
year, in perpetuity, if they paid $100 for the building. It is supposed to measure the degree of risk of the
investment which would include quality of income stream, probability of continuing, and the overall market.
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.
A date which Landlord and Tenant agree the lease actually started. This may be different than the occupancy or
lease date. Often, a lease document has a commencement date exhibit that both parties sign. The
commencement date often triggers the start of rent and acceptance of the property condition.
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 document signed by the Tenant that confirms they are the Tenant, that their lease is legitimate, and the amount
of any security deposit the Landlord is holding. It is usually required to be signed by the Tenant when an owner
sells the property, or is refinancing their debt on the property.
Refers to how much a Tenants rent or obligation for expenses will increase. Usually quoted as a rate per foot per
year, or as an annual percentage. Some are tied to the Consumer Price Index (CPI). Others are just negotiated
up front. Not all leases have these.
An office within an office. Usually less than 200 square feet. In addition to the space, the tenant may receive
secretarial-receptionists services, copies, fax, phone. The price is usually 2 to 4 times typical space. Great option
for one or two man shows or startups. Lease terms may be as short as month to month.
Wording in a lease document that allows a Tenant to end their lease obligation earlier than the original term.
Used for rapidly expanding companies, or startups that may be at risk for success. Usually, there are associated
written notices required and payments of additional fees to the Landlord.
A dollar amount (usually stated as an amount per foot per year) that the Landlord agrees to pay for building
expenses. If expenses of the building exceed this amount, then the Tenant pays the amount above the expense
stop based on their square footage of the building.
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.
A term used to describe a lease in which the stated rent amount being paid to the Landlord includes all the
expenses of the building (electricity, water, gas, janitorial, RE taxes, insurance, etc..). Usually the tenant may
have to pay for the overages (see term) that occur as years unfold.
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.
Signer (guarantor) assures Landlord that Tenant signing the lease will pay the rent. If not, the signer (guarantor)
will be obligated to fulfill the lease. Used when the Tenant may be financially weak, or substantial tenant
improvement work is requested by the Tenant. Guarantor can be a corporation or a person.
A situation whereby a tenant is still occupying the space after their lease has expired. It can occur with or without
the landlords consent. Often, hold over periods are pre-stated in the lease, and the tenant will incur a rent
increase (i.e. 125% of current rate) until they vacate or renegotiate the lease. It causes the Tenant to agree on
renewing or vacate as the cost of making no decision could be excessive.
Heating, Ventilating, and Air Conditioning.
The Tenant.
The Landlord/Owner
Total amount of square feet leased within a specified period of time, including preleasing and purchases of space
for occupancy and excluding renewals.
A document that outlines the general terms of a proposed lease or purchase. Commonly called the LOI. It
becomes the basis from which a formal lease or purchase document is written. These may or may not be binding
between the parties, depending on language used. A more thorough Letter of Intent provides the parties with a
more clear understanding of what they will agree to in the formal lease or purchase contract.
1) 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." 2) That portion of the building which is shared by all tenants (ie. restrooms, enclosed stairwells) or is
within the physical structure (i.e. columns) but can't be accessed by Tenants. Typical load factors are 6% to 13%.
If a space is 1,000 square feet with a 13% load factor, it means the building is only 87% efficient. In real terms,
that means a 1,000 Rentable square feet with zero load factor is 13% cheaper than the 13% load factored 1,000
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
Contrasted with a full service lease, a modified gross lease has the tenant paying directly some of the expenses.
Typically, it is where the electric and water are separately metered and the tenant pays directly to utility. This may
be favorable in controlling expenses for frugal lessees. In comparing lease rates, make sure you consider who is
Signage that is normally not attached to the building. Often located at best street exposure for Tenant
Identification. Some Landlords charge for placement on a monument sign.
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.
Expenses related to the building and property. Typically includes electricity, water, gas, janitorial, parking lot
sweeping, landscape maintenance, building maintenance (except major renovations), real estate taxes,
insurance, and management fees. These items should be detailed in the lease document in order to avoid
The right of a tenant to extend their occupancy beyond the original term. The rental rate may or may not be pre-
set. Can be useful for a Tenant so they are not forced to re-locate.
This term refers to the increase in the cost to operate the property from one year over the last. If it cost $6 per
foot per year (for electric, water, janitor, taxes, etc) last year, and $6.40 per foot this year, then the overages are
$.40 per foot per year. The tenant would be responsible to pay this overage to the Landlord, calculated on the size
The number of parking spaces divided by the total size of the building. A ratio of 1:250 means there is one
parking space for every 250 square feet in the building. The lower the ratio, the more parking spaces there are,
Refers to expenses that are incurred on the property that are passed from the Landlord to the tenant. Both
Tenant and Landlord should have a lease that is clear on who pays what, when.
Not often used in office properties, but more typically in retail properties. This is rent above the base rent and
building operating expenses. Often it is based on business sales volume conducted in the rented space.
A paragraph in a lease which describes how the Tenant may use the space i.e.administrative office. Becomes
important if zoning is in question or if Tenant plans unique purpose, or if a sublease is pursued.
A review of the current and historical environmental condition of a property. Federal Lending guidelines impose
Lenders to have investigated the environmental soundness of a property. Furthermore, environmental risk and
liability is connected to ownership and may expose tenants to financial resolution costs. These studies are done
on behalf of specific parties and are not normally transferable. Tenants in industrial use properties or considering
very long term leasing may be advised to obtain a phase one study prior to committing to a lease. Almost always
Generated by a Title Company as a review of liens, encumbrances, ownership, and taxes on a property. Normally
done in preparation for a sale transaction. Large space Tenants may request a title report to confirm various
property information, rather than relying on Owner.
An amount calculated by dividing the square foot of the Tenants space by the entire building size. A 1,000 sq ft
Tenant would have a 10% pro-rata share of a 10,000 sq ft building. Attention should be paid to variances in
occupancy levels, particularly as it relates to expense overages.
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.
This is the property tax paid to the State, who collects and distributes portions to the County and City the building
is in. Similar to tax as paid for owning residential property. This is different than the Rental tax (see term).
The time between lease commencement and rent commencement.
An amount charged by the County and City that is against the rental income the Landlord receives from the
Tenant. Depending on the City, it varies from 1.4% of the rent, to close to 3%. It's usually paid on-top of the base
Refers to the square footage that is used in calculating rent. The rentable square footage normally exceeds the
usable square footage because the Landlords allocate the areas that all the tenants have in common (i.e.
Elevators, central lobbies, columns, restrooms, storage closets). BOMA (Building Owners and Managers
Association) is a national group that provides a written formula for measuring standards. The difference between
the rentable and the useable is called the load factor. Useable plus load factor equals rentable.
Spaces identified for a specific purpose, which typically excludes visitors. Important to consider how much of the
entire parking is established as reserved versus open (i.e. for visitors). Reserved usually means the Tenant is
paying for it, whether per space or as part of the lease. The reserved spaces are normally covered, but may be
Money collected at initiation of lease to provide additional confidence the Tenant will perform. It is not normally the
last months rent, but is typically equal to that amount. Also, most leases require the deposit be replaced if the
Landlord has to use it to cure a monetary default. It should be clear as to the space condition needed and timing
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.
The process of leasing space from a Tenant who is already obligated to a Landlord. A tool used to relieve a
current tenant from the space. Does not normally release the primary tenant or their guarantors from the original
lease. Most leases require Landlords consent. SubTenants need to confirm all aspects of the lease in writing with
both the original Tenant and the Landlord. to make them attractive, most subleases are done at a discount from
the face rate on the lease and the original primary Tenant absorbs the difference.
Actual initial base rent in a lease agreement (excluding all concessions and tenant electric).
Initial taking rents as a percentage of asking rents.
1) 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). 2) Refers to physical work done to a space to accomodate a specific tenants needs.
Can include many things, such as carpet, paint, new wall partitions, new sinks. Depending on negotiations, most
Landlords allocate money to pay for certain standard items. Unusual items may have to be paid by the Tenant, or
amortized over the lease term as additional rent. A full remodel could run between $30 and $50 per foot,
A Licensed Real Estate Agent working for the best interests of the Tenant, not the Landlord. They usually don't
have a listing agreement or agency relationship with the Owner or his Agent. This allows the Tenant Rep. to
commit fully to achieving the objectives of the Tenant.
A lease arrangement whereby the Tenant is obligated to pay for all the operating expenses associated with their
space. They would have to contract individually for janitorial, electricity, insurance, and repairs. Not often seen in
office buildings because many services overlap (i.e. there is a central air system, central restrooms). NNN leases
can become expensive if surprise maintenance issues arise, or the property does not have an established
1) 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. 2) The square footage that the individual
tenant can actually use to sit or work in. (see rentable square footage and load factor). Most leases use the
phrase...Rentable Square Footage, as it may cover up variations in individual suites and makes the rent seem
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.
Related to payment of taxes on the sale of commercial property. Allows the Seller to defer payment of certain
taxes if they buy another property(s) within a specified time frame. A reverse exchange is less common, but is
possible. Because of the implications, good tax and legal counsel is always recommended.
Offer Schedule for Security Title Plaza
Below is a time schedule detailing the anticipated milestones with respect to this sale. The Owner reservesw the right to mod
within the following schedule. Instructions regarding submitting offers will be provided approximately one week before the Ca
Duration
Task Name Start Finish (days)
Security Title Plaza 6/30/2006 10/10/2006 73
Flyers and CA Mailed & Emailed 6/30/2006 7/12/2006 13
Marketing Period 7/14/2006 8/9/2006 27
Call for Offers 8/10/2006 8/10/2006 1
Short List Recommended to Owner 8/11/2006 8/11/2006 1
Best & Final 8/14/2006 8/16/2006 3
Purchaser Recommended to Owner 8/17/2006 8/17/2006 1
Contracting 8/18/2006 8/24/2006 7
Due Diligence 8/25/2006 9/25/2006 32
Closing 9/26/2006 10/10/2006 15
reservesw the right to mod ify any and all time frames
ly one week before the Ca ll for Offers.
Leased Rent Rent per Lease Lease
Suite Floor Tenant RSF PSF/Yr Year Begins Ends
50 1 Deli/Harris (Gerlach) 1,993 $8.88 $17,697.84 Sep-04 Oct-12
60 1 Vacant 2,412
100 1 Vacant 8,144
140 1 Security Title Agency 3,268 $19.19 $62,712.92 Sep-05 Jan-11
150 1 Robert Wolfe 1,148 $20.86 $23,947.28 Aug-04 Jul-09
160 1 Curves 2,237 $17.96 $40,176.52 Feb-03 Jan-13
200 2 Security Title Agency 20,032 $19.19 $384,414.08 Sep-05 Jan-11
300 3 Security Title Agency 20,070 $19.19 $385,143.30 Sep-05 Jan-11
400 4 Vacant 18,596
500 5 Simek & Co 5,671 $18.79 $106,558.09 Jan-06 Jul-07
510 5 EP Asset Management 3,104 $5.39 $16,730.56 Feb-04 Apr-07
550 5 Law Offices of Mary Brooksby 982 $18.62 $18,284.84 Apr-05 Apr-08
560 5 Liberty Mutual Insurance 2,642 $22.21 $58,678.82 Aug-06 Jul-11
590 5 Policy Development Group 4,423 $18.38 $81,294.74 Apr-04 Sep-09
600 6 Folk & Associates 6,561 $19.50 $127,939.50 May-02 Aug-09
610 6 Vacant 1,145
620 6 Benchmark Financial 2,188 $18.11 $39,624.68 Jun-92 Nov-08
650 6 Gevity HR 5,986 $21.12 $126,424.32 Oct-03 Jan-09
700 7 Engleman Berger 9,109 $18.47 $168,243.23 May-04 Apr-12
705 7 Vacant (Storage) 204
710 7 XO Communication Inc 1,818 $19.00 $34,542.00 Feb-96 Jan-07
730 7 Taber Commerford 2,048 $19.92 $40,796.16 Feb-06 Jan-08
770 7 GSA (Department of Justice) 1,088 $15.47 $16,831.36 Mar-95 Jun-07
780 7 Vacant 1,145
790 7 Paul Lazarus 1,190 $15.84 $18,849.60 Aug-04 Nov-07
800 8 Law Offices of Cosmas Onyia 1,012 $18.84 $19,066.08 Nov-05 Dec-10
805 8 Roundpeg, Inc 2,341 $18.83 $44,081.03 Dec-05 Dec-10
810 8 Software Architects 4,391 $20.71 $90,937.61 Sep-04 Aug-08
815 8 Ace Parking 1,284 $19.08 $24,498.72 Oct-00 Oct-08
820 8 Vacant 2,164
850 8 Arizona Agribusiness 3,218 $18.03 $58,020.54 Oct-05 Jan-13
880 8 GSA (National Indian Gaming) 2,994 $24.75 $74,101.50 Feb-00 Jan-10
900 9 GSA (Army Corps of Engineers) 17,960 $15.14 $271,914.40 Jan-06 Jun-07
1000 10 Mullen Advertising 8,687 $20.06 $174,261.22 Aug-86 Dec-08
1050 10 Feller & Levine 5,871 $19.55 $114,778.05 Jun-04 Dec-08
1070 10 Raymond Greer Sassaman 2,604 $19.35 $50,387.40 Feb-97 Jul-11
1100 11 Shughart Thomson Kilroy 16,218 $19.23 $311,872.14 Aug-04 Aug-12
1200 12 Shughart Thomson Kilroy 14,472 $19.23 $278,296.56 Aug-04 Aug-12
Total (without Pad Site) 210,420
Pad Site Security Title Agency 2,469 $18.68 $46,120.92 Sep-05 Jan-11
Total (with Pad Site) 212,889
Expense
Reimbursement
Revenue '07
$1,807
$1,205
$20,812
$20,851
$2,460
$1,002
$1,103
$1,002
$2,209
$4,925
$3,214
$8,433
$5,622
$2,609
$18,490
$16,500
$2,282
Parking Space Summary
Floor Reserved Unreserved Handicap Visitor Total
1st Floor 95 7 0 0 102
2nd Floor 59 45 3 0 107
3rd Floor 62 42 3 0 107
4th Floor 88 20 0 0 108
5th Floor 58 49 0 0 107
Rooftop 63 0 0 0 63
Total Garage 425 163 6 0 594
Surface Lot 0 117 1 38 156
Totals 425 280 7 38 750
Market Leasing Assumptions
New Renewal
Market Market Average
Less than 10,000 square feet
Renewal Probability 75%
Market Rent (per sqft) $22.50 $22.50
Base Rent Increases (annually) 3%
Months Vacant 6 0 2
Tenant Improvements (TI) $20.00 $7.00 $10.25
Leasing Commissions 6% 3% 3.75%
Rent Abatements (months) 2 0 0.5
Term Lengths (years) 5
Greater than 10,000 square feet
Renewal Probability 75%
Market Rent (per sqft) $22.50 $22.50
Base Rent Increases (annually) 3%
Months Vacant 6 0 2
Tenant Improvements (TI) $20.00 $7.00 $10.25
Leasing Commissions 6% 3% 3.75%
Rent Abatements (months) 4 0 1
Term Lengths (years) 8
Deli
Renewal Probability 90%
Market Rent (per sqft) $15.00 $15.00
Base Rent Increases (annually) 3%
Months Vacant 6 0 1
Tenant Improvements (TI) $5.00 $2.00 $2.30
Leasing Commissions 6% 3% 3.30%
Rent Abatements (months) 0 0 -
Term Lengths (years) 5
Vacant Space Absorption
Expected Dates
Size Lease Lease Initial Free Rent
Suite Type (Sqft) Begins Ends Rent Term (months) TI LC
610 Office 1,145 Jan-07 Dec-11 $22.50 5 2 $20.00 6%
780 Office 1,145 Jan-07 Dec-11 $22.50 5 2 $20.00 6%
820 Office 2,164 Apr-07 Mar-12 $22.50 5 2 $20.00 6%
705 Storage 204 Jul-07 Jun-12 $12.00 5 0 $0.00 0%
60 Office 2,412 Apr-07 Mar-15 $22.50 8 4 $20.00 6%
100 Office 8,144 Apr-07 Mar-15 $22.50 8 4 $20.00 6%
400 Office 18,596 Jul-07 Jun-15 $22.50 8 4 $20.00 6%
Comments
Suite 60 & 100 are assumed to be
leased as one unit
Liberty
Security EP Asset Law (Mary Mutual
Tenant Deli R. Wolfe Curves Security Title Title Simek Mgmt Brooksby) Insurance
Suite 50 150 160 140, 200, 300 Pad Site 500 510 550 560
SqFt 1,993 1,148 2,237 43,370 2,469 5,671 3,104 982 2,642
Rent Rent Rent Rent Rent Rent Rent Rent
psf/mo psf/mo psf/mo Rent psf/mo psf/mo psf/mo psf/mo psf/mo psf/mo
Aug-06 0.63 1.63 1.46 1.47 1.42 1.50 0.45 1.46 1.83
Sep-06 0.63 1.63 1.46 1.47 1.46 1.50 0.45 1.46 1.83
Oct-06 0.63 1.63 1.46 1.47 1.46 1.50 0.45 1.46 1.83
Nov-06 0.63 1.63 1.46 1.47 1.46 1.50 0.45 1.46 1.83
Dec-06 0.63 1.63 1.46 1.47 1.46 1.50 0.45 1.46 1.83
Jan-07 0.66 1.63 1.46 1.51 1.46 1.50 0.45 1.46 1.83
Feb-07 0.66 1.63 1.50 1.51 1.46 1.50 0.45 1.46 1.83
Mar-07 0.66 1.63 1.50 1.51 1.46 1.50 0.45 1.46 1.83
Apr-07 0.66 1.63 1.50 1.51 1.46 1.50 0.45 1.46 1.83
May-07 0.66 1.63 1.50 1.51 1.46 1.50 1.46 1.83
Jun-07 0.66 1.63 1.50 1.51 1.46 1.50 1.46 1.83
Jul-07 0.66 1.63 1.50 1.51 1.46 1.50 1.46 1.83
Aug-07 0.66 1.67 1.50 1.51 1.46 1.46 1.88
Sep-07 0.66 1.67 1.50 1.51 1.50 1.46 1.88
Oct-07 0.66 1.67 1.50 1.51 1.50 1.46 1.88
Nov-07 0.66 1.67 1.50 1.51 1.50 1.46 1.88
Dec-07 0.66 1.67 1.50 1.51 1.50 1.46 1.88
Jan-08 0.69 1.67 1.50 1.55 1.50 1.46 1.88
Feb-08 0.69 1.67 1.50 1.55 1.50 1.46 1.88
Mar-08 0.69 1.67 1.50 1.55 1.50 1.46 1.88
Apr-08 0.69 1.67 1.50 1.55 1.50 1.46 1.88
May-08 0.69 1.67 1.50 1.55 1.50 1.88
Jun-08 0.69 1.67 1.50 1.55 1.50 1.88
Jul-08 0.69 1.67 1.50 1.55 1.50 1.88
Aug-08 0.69 1.71 1.50 1.55 1.50 1.92
Sep-08 0.69 1.71 1.50 1.55 1.54 1.92
Oct-08 0.69 1.71 1.50 1.55 1.54 1.92
Nov-08 0.69 1.71 1.50 1.55 1.54 1.92
Dec-08 0.69 1.71 1.50 1.55 1.54 1.92
Jan-09 0.71 1.71 1.50 1.52 1.54 1.92
Feb-09 0.71 1.71 1.54 1.52 1.54 1.92
Mar-09 0.71 1.71 1.54 1.52 1.54 1.92
Apr-09 0.71 1.71 1.54 1.52 1.54 1.92
May-09 0.71 1.71 1.54 1.52 1.54 1.92
Jun-09 0.71 1.71 1.54 1.52 1.54 1.92
Jul-09 0.71 1.71 1.54 1.52 1.54 1.92
Aug-09 0.71 1.54 1.52 1.54 1.96
Sep-09 0.71 1.54 1.52 1.58 1.96
Oct-09 0.71 1.54 1.52 1.58 1.96
Nov-09 0.71 1.54 1.52 1.58 1.96
Dec-09 0.71 1.54 1.52 1.58 1.96
Jan-10 0.74 1.54 1.56 1.58 1.96
Feb-10 0.74 1.54 1.56 1.58 1.96
Mar-10 0.74 1.54 1.56 1.58 1.96
Apr-10 0.74 1.54 1.56 1.58 1.96
May-10 0.74 1.54 1.56 1.58 1.96
Jun-10 0.74 1.54 1.56 1.58 1.96
Jul-10 0.74 1.54 1.56 1.58 1.96
Aug-10 0.74 1.54 1.56 1.58 2.00
Sep-10 0.74 1.54 1.56 1.58 2.00
Oct-10 0.74 1.54 1.56 1.58 2.00
Nov-10 0.74 1.54 1.56 1.58 2.00
Dec-10 0.74 1.54 1.56 1.58 2.00
Jan-11 0.77 1.54 1.56 1.58 2.00
Feb-11 0.77 1.58 2.00
Mar-11 0.77 1.58 2.00
Apr-11 0.77 1.58 2.00
May-11 0.77 1.58 2.00
Jun-11 0.77 1.58 2.00
Jul-11 0.77 1.58 2.00
Aug-11 0.77 1.58
Sep-11 0.77 1.58
Oct-11 0.77 1.58
Nov-11 0.77 1.58
Dec-11 0.77 1.58
Jan-12 0.80 1.58
Feb-12 0.80 1.63
Mar-12 0.80 1.63
Apr-12 0.80 1.63
May-12 0.80 1.63
Jun-12 0.80 1.63
Jul-12 0.80 1.63
Aug-12 0.80 1.63
Sep-12 0.80 1.63
Oct-12 0.80 1.63
Nov-12 1.63
Dec-12 1.63
Jan-13 1.63
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
GSA (Army
Policy Dev Folk & Benchmark Gevity Engleman XO Taber GSA (Dept Corp of
Group Assoc Financial HR Berger Comm Commerford of Justice) Engineers)
590 600 620 650 700 710 730 770 900
4,423 6,561 2,188 5,986 9,109 1,818 2,048 1,088 17,960
Rent Rent Rent Rent Rent
psf/mo psf/mo Rent psf/mo psf/mo psf/mo psf/mo Rent psf/mo Rent psf/mo Rent psf/mo
1.50 1.63 1.50 1.65 1.54 1.58 1.58 1.29 1.44
1.50 1.63 1.50 1.65 1.54 1.58 1.58 1.29 1.44
1.50 1.63 1.50 1.65 1.54 1.58 1.58 1.29 1.44
1.50 1.63 1.50 1.65 1.54 1.58 1.58 1.29 1.44
1.50 1.63 1.50 1.65 1.54 1.58 1.58 1.29 1.44
1.50 1.63 1.50 1.65 1.54 1.58 1.58 1.29 1.44
1.50 1.63 1.50 1.77 1.54 1.67 1.29 1.44
1.50 1.63 1.50 1.77 1.54 1.67 1.29 1.44
1.54 1.63 1.50 1.77 1.54 1.67 1.29 1.44
1.54 1.63 1.50 1.77 1.54 1.67 1.29 1.44
1.54 1.63 1.52 1.77 1.54 1.67 1.29 1.44
1.54 1.63 1.52 1.77 1.54 1.67 1.44
1.54 1.63 1.52 1.77 1.54 1.67 1.44
1.54 1.63 1.52 1.77 1.54 1.67
1.54 1.63 1.52 1.77 1.54 1.67
1.54 1.63 1.52 1.77 1.54 1.67
1.54 1.63 1.52 1.77 1.54 1.67
1.54 1.63 1.52 1.77 1.54 1.67
1.54 1.63 1.52 1.77 1.54
1.54 1.63 1.52 1.77 1.54
1.58 1.63 1.52 1.77 1.54
1.58 1.63 1.52 1.77 1.54
1.58 1.63 1.58 1.77 1.54
1.58 1.63 1.58 1.77 1.54
1.58 1.71 1.58 1.77 1.54
1.58 1.71 1.58 1.77 1.54
1.58 1.71 1.58 1.77 1.54
1.58 1.71 1.58 1.77 1.54
1.58 1.71 1.77 1.60
1.58 1.71 1.77 1.60
1.58 1.71 1.60
1.58 1.71 1.60
1.63 1.71 1.60
1.63 1.71 1.60
1.63 1.71 1.60
1.63 1.71 1.60
1.63 1.71 1.60
1.63 1.60
1.60
1.60
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.65
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.69
1.71
1.71
1.71
1.71
1.71
GSA (Natl Law Offices
Indian Paul of Cosmas Roundpeg, Software Ace Arizona Mullen Feller &
Gaming) Lazarus Onyia Inc Architects Parking Agribusiness Advertising Levine
880 790 800 805 810 815 850 1000 1050
2,994 1,190 1,012 2,341 4,391 1,284 3,218 8,687 5,871
Rent Rent Rent Rent Rent
Rent psf/mo psf/mo Rent psf/mo psf/mo psf/mo psf/mo Rent psf/mo Rent psf/mo psf/mo
2.08 1.46 1.42 1.44 1.54 1.54 1.35 1.58 1.50
2.08 1.46 1.42 1.44 1.63 1.54 1.35 1.58 1.50
2.08 1.50 1.42 1.44 1.63 1.54 1.35 1.58 1.50
2.08 1.50 1.42 1.44 1.63 1.58 1.35 1.58 1.50
2.08 1.50 1.42 1.44 1.63 1.58 1.35 1.58 1.50
2.08 1.50 1.48 1.48 1.63 1.58 1.35 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.58 1.42 1.58 1.54
2.08 1.50 1.48 1.48 1.63 1.63 1.42 1.58 1.54
2.08 1.48 1.48 1.63 1.63 1.42 1.58 1.54
2.08 1.54 1.53 1.63 1.63 1.42 1.58 1.58
2.08 1.54 1.53 1.63 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.63 1.47 1.58 1.58
2.08 1.54 1.53 1.47 1.58 1.58
2.08 1.54 1.53 1.47 1.58 1.58
2.08 1.60 1.57 1.47
2.08 1.60 1.57 1.51
2.08 1.60 1.57 1.51
2.08 1.60 1.57 1.51
2.08 1.60 1.57 1.51
2.08 1.60 1.57 1.51
2.08 1.67 1.57 1.51
2.08 1.67 1.57 1.51
2.08 1.67 1.57 1.51
2.08 1.67 1.57 1.51
2.08 1.67 1.57 1.51
2.08 1.67 1.57 1.51
2.08 1.67 1.61 1.51
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.67 1.61 1.55
1.55
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.58
1.63
1.63
1.63
1.63
1.63
1.63
1.63
1.63
1.63
1.63
Raymond Shughart
Greer Thomson Vacant
Sassaman Kilroy Vacant Vacant Vacant Vacant (Storage) Vacant Vacant
1070 1100, 1200 60 100 400 610 705 780 820
2,604 30,690 2,412 8,144 18,596 1,145 204 1,145 2,164
Rent Rent Rent Rent Rent Rent Rent Rent Rent
psf/mo psf/mo psf/mo psf/mo psf/mo psf/mo psf/mo psf/mo psf/mo
1.50 1.46 Vacant Vacant Vacant Vacant Vacant Vacant Vacant
1.50 1.50 Vacant Vacant Vacant Vacant Vacant Vacant Vacant
1.50 1.50 Vacant Vacant Vacant Vacant Vacant Vacant Vacant
1.50 1.50 Vacant Vacant Vacant Vacant Vacant Vacant Vacant
1.50 1.50 Vacant Vacant Vacant Vacant Vacant Vacant Vacant
1.50 1.50 Vacant Vacant Vacant 1.88 Vacant 1.88 Vacant
1.50 1.50 Vacant Vacant Vacant 1.88 Vacant 1.88 Vacant
1.50 1.50 Vacant Vacant Vacant 1.88 Vacant 1.88 Vacant
1.50 1.50 1.88 1.88 Vacant 1.88 Vacant 1.88 1.88
1.50 1.50 1.88 1.88 Vacant 1.88 Vacant 1.88 1.88
1.50 1.50 1.88 1.88 Vacant 1.88 Vacant 1.88 1.88
1.54 1.50 1.88 1.88 1.88 1.88 1.00 1.88 1.88
1.54 1.50 1.88 1.88 1.88 1.88 1.00 1.88 1.88
1.54 1.50 1.88 1.88 1.88 1.88 1.00 1.88 1.88
1.54 1.50 1.88 1.88 1.88 1.88 1.00 1.88 1.88
1.54 1.50 1.88 1.88 1.88 1.88 1.00 1.88 1.88
1.54 1.50 1.88 1.88 1.88 1.88 1.00 1.88 1.88
1.54 1.50 1.88 1.88 1.88 1.93 1.00 1.93 1.88
1.54 1.50 1.88 1.88 1.88 1.93 1.00 1.93 1.88
1.54 1.50 1.88 1.88 1.88 1.93 1.00 1.93 1.88
1.54 1.50 1.93 1.93 1.88 1.93 1.00 1.93 1.93
1.54 1.50 1.93 1.93 1.88 1.93 1.00 1.93 1.93
1.54 1.50 1.93 1.93 1.88 1.93 1.00 1.93 1.93
1.58 1.50 1.93 1.93 1.93 1.93 1.03 1.93 1.93
1.58 1.50 1.93 1.93 1.93 1.93 1.03 1.93 1.93
1.58 1.54 1.93 1.93 1.93 1.93 1.03 1.93 1.93
1.58 1.54 1.93 1.93 1.93 1.93 1.03 1.93 1.93
1.58 1.54 1.93 1.93 1.93 1.93 1.03 1.93 1.93
1.58 1.54 1.93 1.93 1.93 1.93 1.03 1.93 1.93
1.58 1.54 1.93 1.93 1.93 1.99 1.03 1.99 1.93
1.58 1.54 1.93 1.93 1.93 1.99 1.03 1.99 1.93
1.58 1.54 1.93 1.93 1.93 1.99 1.03 1.99 1.93
1.58 1.54 1.99 1.99 1.93 1.99 1.03 1.99 1.99
1.58 1.54 1.99 1.99 1.93 1.99 1.03 1.99 1.99
1.58 1.54 1.99 1.99 1.93 1.99 1.03 1.99 1.99
1.63 1.54 1.99 1.99 1.99 1.99 1.06 1.99 1.99
1.63 1.54 1.99 1.99 1.99 1.99 1.06 1.99 1.99
1.63 1.54 1.99 1.99 1.99 1.99 1.06 1.99 1.99
1.63 1.54 1.99 1.99 1.99 1.99 1.06 1.99 1.99
1.63 1.54 1.99 1.99 1.99 1.99 1.06 1.99 1.99
1.63 1.54 1.99 1.99 1.99 1.99 1.06 1.99 1.99
1.63 1.54 1.99 1.99 1.99 2.05 1.06 2.05 1.99
1.63 1.54 1.99 1.99 1.99 2.05 1.06 2.05 1.99
1.63 1.54 1.99 1.99 1.99 2.05 1.06 2.05 1.99
1.63 1.54 2.05 2.05 1.99 2.05 1.06 2.05 2.05
1.63 1.54 2.05 2.05 1.99 2.05 1.06 2.05 2.05
1.63 1.54 2.05 2.05 1.99 2.05 1.06 2.05 2.05
1.67 1.54 2.05 2.05 2.05 2.05 1.09 2.05 2.05
1.67 1.54 2.05 2.05 2.05 2.05 1.09 2.05 2.05
1.67 1.58 2.05 2.05 2.05 2.05 1.09 2.05 2.05
1.67 1.58 2.05 2.05 2.05 2.05 1.09 2.05 2.05
1.67 1.58 2.05 2.05 2.05 2.05 1.09 2.05 2.05
1.67 1.58 2.05 2.05 2.05 2.05 1.09 2.05 2.05
1.67 1.58 2.05 2.05 2.05 2.11 1.09 2.11 2.05
1.67 1.58 2.05 2.05 2.05 2.11 1.09 2.11 2.05
1.67 1.58 2.05 2.05 2.05 2.11 1.09 2.11 2.05
1.67 1.58 2.11 2.11 2.05 2.11 1.09 2.11 2.11
1.67 1.58 2.11 2.11 2.05 2.11 1.09 2.11 2.11
1.67 1.58 2.11 2.11 2.05 2.11 1.09 2.11 2.11
1.67 1.58 2.11 2.11 2.11 2.11 1.13 2.11 2.11
1.58 2.11 2.11 2.11 2.11 1.13 2.11 2.11
1.58 2.11 2.11 2.11 2.11 1.13 2.11 2.11
1.58 2.11 2.11 2.11 2.11 1.13 2.11 2.11
1.58 2.11 2.11 2.11 2.11 1.13 2.11 2.11
1.58 2.11 2.11 2.11 2.11 1.13 2.11 2.11
1.58 2.11 2.11 2.11 1.13 2.11
1.58 2.11 2.11 2.11 1.13 2.11
1.58 2.11 2.11 2.11 1.13 2.11
1.58 2.17 2.17 2.11 1.13
1.58 2.17 2.17 2.11 1.13
1.58 2.17 2.17 2.11 1.13
1.58 2.17 2.17 2.17
1.58 2.17 2.17 2.17
2.17 2.17 2.17
2.17 2.17 2.17
2.17 2.17 2.17
2.17 2.17 2.17
2.17 2.17 2.17
2.17 2.17 2.17
2.17 2.17 2.17
2.24 2.24 2.17
2.24 2.24 2.17
2.24 2.24 2.17
2.24 2.24 2.24
2.24 2.24 2.24
2.24 2.24 2.24
2.24 2.24 2.24
2.24 2.24 2.24
2.24 2.24 2.24
2.24 2.24 2.24
2.24 2.24 2.24
2.24 2.24 2.24
2.31 2.31 2.24
2.31 2.31 2.24
2.31 2.31 2.24
2.31 2.31 2.31
2.31 2.31 2.31
2.31 2.31 2.31
2.31 2.31 2.31
2.31 2.31 2.31
2.31 2.31 2.31
2.31 2.31 2.31
2.31 2.31 2.31
2.31 2.31 2.31
2.31
2.31
2.31
Office Building Name Street Address GLA Class Year Built Sale Date
National Bank Plaza (aka 3101 North Central Avenue 266,166 A 1981 Jun-06
CBIZ Plaza)
Viad Tower 1850 North Central Avenue 481,764 A 1991 Jun-06
Two Renaissance Square 40 North Central Avenue 476,373 A 1989 Sep-05
One Renaissance Square 2 North Central Avenue 489,157 A 1987 Jun-05
Camelback Esplanade 2555 & 2575 East 436,000 A 1999/2002 Sep-05
Towers IV & V Camelback Road
Camelback Esplanade 2425 & 2525 East 523,052 A 1989 May-05
Towers I & II Camelback Road
Canyon Corporate Plaza I 2510-2512 West Dunlap 321,274 B 1998 Sep-05
and II Avenue
Security Title Plaza 3636 North Central Avenue 217,249 A 1984
(Subject Property)
Asking Percent
Sale Price Price/SF Cap Rate Rents psf Leased Expenses Parking
$47,500,000 $178 5.20% $22.50 89.0% Covered spaces@$65/mo.
Surface spaces@$40/mo.
Reserved spaces@$85/mo.
$105,500,000 $219 5.30% 89.8% 2005 Combined Tax/ 1271 Covered Parking
Ops@$11.17/sf @$55/month. Reserved
spaces@$80/month
$119,500,000 $251 6.30% $26.00 92.0% Covered Spaces@$65/mo;
Reserved Spaces@$95/mo
$128,800,000 $263 6.10% $27.78 98.0% 2006 Combined Est Reserved Spaces@$95/mo;
Tax/Ops @ $9.00/sf Covered Spaces@$65/mo
$155,000,000 $356 6.71% 100.0% 2003 Combined Covered Spaces@$55/mo;
Tax/Ops @ $7.99/sf Reserved Spaces@$75/mo
(IV) and $8.50/sf (V)
$169,500,000 $311 5.20% $31.50 97.0% Covered Spaces@$55/mo;
Reserved Spaces@$75/mo
$42,500,000 $141 6.74% $21.00 93.0% I) 500 Covered Spaces@
$45/mo II) 500 Covered
Spaces@$35/mo
750 parking spaces; Surface
Spaces @ $45/mo; Covered
Spaces@ $85/mo;
Reserved Spaces@ $65/mo
Land
Area Building Core
Parking Ratio (Acres) FAR Factor Zoning Financing
4 per 1,000 sft 2.87 2.13 12.3% C-2 Downpayment of $11.9M
(25.1%) with $35.6M from
Wachovia Bank
2.63 per 1,000 4.16 2.63 15.8% C-2
sft
2.33 per 1,000 0.95 11.20 14.0% C-2 Downpayment of $34,300,000
sft (28.7%) $85,200,000 from
Principal Com. Funding LLC
1.52 per 1,000 0.96 11.80 13.8% C-2 Downpayment of $25,200,000
sft (19.6%) $103,600,000 from
Bank of America; Assumed
loan type
3.15 per 1,000 3.94 2.54 10.00% C-2 Downpayment of
sft $155,000,000 (100.0%)
3.33 per 1,000 7.72 2.23 12.5% (I) C-2 Downpayment of
sft 13.4% (II) $162,500,000 (100.0%)
4 per 1,000 sft 12.0% C-2 Downpayment of $10,635,000
(I) 5 per 1,000 (25.1%) $31,750,000 from
sft (II) Citigroup Global Mkts Realty
4 per 1,000 sft 4.23 2.52 12.0% C-2
Buyer Seller
Hearn Co. Grossman Properties/UBS Realty
McCarthy Cook & Co/JP Morgan Chase Parkway Propertiesllnvestcorp
The Pauls Co. Crescent Equities
The Pauls Co. Mark Lammas
GE Asset Management Met Life
Metropolitan Life Insurance Property Arizona OBJLW One
Northridge Capital, LLC Met Life Insurance
Comments
This property, anchored by the National Bank of Arizona, includes a 16-story office tower, a two-story garden
building with restaurant, and a six-story parking garage. Grossman renovated the tower interior which was 93%
leased at the time of sale. Recent modemization included the expanded glass-enclosed lobby, updated elevator
cabs and newly appointed restrooms.
Viad Corporate Center is a 24-story class A office with 24-hour security including 21 closed-circuit video cameras,
and a 7-level parking structure. The exterior walls are constructed of granite panels and bronze tinted window that
reflect 80% of infrared rays. The property is 97% leased to tenant including Aon Consulting, Viad Corp., Dial
Corporation, LandAmerica Financial Group, Johnson Bank, Pricewaterhouse Coopers, and Standard Charter
This 28-story building was sold to The Pauls Co. that bought the adjacent tower, One Renaissance Square, for
$128 million three months prior. Two Renaissance Square was 92% Occupied at the time of sale.
The Pauls Co purchased One Renaissance Square, a 26-story, 489,157 square foot, class A CBD office building
in June 2005. The property is ground leased, which depressed the capitalization rate of 6.1 percent. The property
was 98 percent occupied at the time of sale and was competed in 1987. The exterior walls are constructed of
concrete and steel. The property reflects a high level of quality, including an underground parking garage with
escalator access, numerous retailers, and a high concentration of prominent law tenants with very high interior
GE Asset Management purchased Camelback Esplanade Tower IV & V, 10, eleven-story buildings
respectively, for $155,000,000 or $355.50 per square foot. The occupancy at the time of sale was 99%.
The two buildings are across the street from a specialty mall anchored by Sak's Fifth Avenue, and Macy's. Major
tenants include Gallagher & Kennedy, Washington Mutual, Veritas Software, Merrill Lynch, UBS, Paine Webber,
Met Life purchased Camelback Esplanade Tower IV & V, two eleven-story buildings, for $169.5 million or $310.68
per square foot in May 2005. The overall cap rate was 5.20% and the occupancy at the time of sale was 97
percent. Esplanade I was built in 1989 and totals 235,077 square feet. Esplanade II was built in 1990 and totals
235,182 square feet. The retail tenants include Houston's restaurant, Starbuck's, Wesley's Jewelers, and Cold
Stone Creamery. Major office tenants include Vestar Development, GE Capital, Tiffany & Bosco, Cushman &
Wakefield, Starwood Capital Group, ING Clarion, GMAC Commercial Mortgage, Lincoln Property Company, and
Metropolitan Life Insurance purchased Canyon Corporate Plaza I and II for $42,500,000 and at the time of sale
the property was 93% occupied.
Office Building Name Street Address Floor GLA Class Listing Price
Earll Professional Plaza 202 E. Earll Drive (Suite 140) 1 4,054 B $729,720
Earll Professional Plaza 202 E. Earll Drive (Suite 370) 3 5,131 B $923,580
Earll Professional Plaza 202 E. Earll Drive (Suite 430) 4 5,569 B $1,002,420
Phoenix Professional Towers 3033 N Central Avenue (Unit 8) 8 4,387 B $1,316,100
Phoenix Professional Towers 3033 N Central Avenue (Unit 7) 7 12,524 B $3,131,000
Phoenix Professional Towers 3033 N Central Avenue (Unit 6) 6 12,499 B $2,812,275
Phoenix Professional Towers 3033 N Central Avenue (Unit 5) 5 12,512 B $2,815,200
Phoenix Professional Towers 3033 N Central Avenue (Unit 4) 4 9,000 B $1,980,000
Phoenix Professional Towers 3033 N Central Avenue (Unit 1) 1 11,000 B $2,585,000
Phoenix Professional Towers 3033 N Central Avenue (Unit 2) 2 12,476 B $2,183,300
Total
Year Rent psf/ Land Area Building Typical
Price/SF Built per Year Stories Parking (Acres) Sqft Floor Size Zoning
$180.00 1985 $25.00 4 3.79 per 1,000 2.82 99,245 R-5
sft
$180.00 1985 $25.00 4 3.79 per 1,000 2.82 99,245 R-5
sft
$180.00 1985 $25.00 4 3.79 per 1,000 2.82 99,245 R-5
sft
$300.00 1960 $23.00 9 5 per 1,000 sft 4.14 140,840 11,000 C-2
$250.00 1960 $23.00 9 5 per 1,000 sft 4.14 140,840 11,000 C-2
$225.00 1960 $23.00 9 5 per 1,000 sft 4.14 140,840 11,000 C-2
$225.00 1960 $23.00 9 5 per 1,000 sft 4.14 140,840 11,000 C-2
$220.00 1960 $23.00 9 5 per 1,000 sft 4.14 140,840 11,000 C-2
$235.00 1960 $23.00 9 5 per 1,000 sft 4.14 140,840 11,000 C-2
$175.00 1960 $23.00 9 5 per 1,000 sft 4.14 140,840 11,000 C-2
Comments
Individual office condominiums available in a newly renovated 4-story office condominium building - one of the
few ownership opportunities in the Central Phoenix Corridor. Located in the Central Corridor with close proximity
to SR 51, I-10 & I-17. Numerous amenities nearby including Phoenix Country Club, Encanto Park & St. Joseph's
Individual office condominiums available in a newly renovated 4-story office condominium building - one of the
few ownership opportunities in the Central Phoenix Corridor. Located in the Central Corridor with close proximity
to SR 51, I-10 & I-17. Numerous amenities nearby including Phoenix Country Club, Encanto Park & St. Joseph's
Individual office condominiums available in a newly renovated 4-story office condominium building - one of the
few ownership opportunities in the Central Phoenix Corridor. Located in the Central Corridor with close proximity
to SR 51, I-10 & I-17. Numerous amenities nearby including Phoenix Country Club, Encanto Park & St. Joseph's
Phoenix Professional Tower is a first of its kind condo project located in the Central Corridor. Features include
Central Avenue frontage and a 3,600 square foot Fitness Center featuring state-of-the-art equipment. Within
walking distance to St. Josephs Hospital, across from Park Central Mall, Phoenix Plaza, and the planned Thomas
Road Light Rail System. Plaza is newly renovated with a landmark water feature. Ownership and tax advantages
Phoenix Professional Tower is a first of its kind condo project located in the Central Corridor. Features include
Central Avenue frontage and a 3,600 square foot Fitness Center featuring state-of-the-art equipment. Within
walking distance to St. Josephs Hospital, across from Park Central Mall, Phoenix Plaza, and the planned Thomas
Road Light Rail System. Plaza is newly renovated with a landmark water feature. Ownership and tax advantages
Phoenix Professional Tower is a first of its kind condo project located in the Central Corridor. Features include
Central Avenue frontage and a 3,600 square foot Fitness Center featuring state-of-the-art equipment. Within
walking distance to St. Josephs Hospital, across from Park Central Mall, Phoenix Plaza, and the planned Thomas
Road Light Rail System. Plaza is newly renovated with a landmark water feature. Ownership and tax advantages
Phoenix Professional Tower is a first of its kind condo project located in the Central Corridor. Features include
Central Avenue frontage and a 3,600 square foot Fitness Center featuring state-of-the-art equipment. Within
walking distance to St. Josephs Hospital, across from Park Central Mall, Phoenix Plaza, and the planned Thomas
Road Light Rail System. Plaza is newly renovated with a landmark water feature. Ownership and tax advantages
Phoenix Professional Tower is a first of its kind condo project located in the Central Corridor. Features include
Central Avenue frontage and a 3,600 square foot Fitness Center featuring state-of-the-art equipment. Within
walking distance to St. Josephs Hospital, across from Park Central Mall, Phoenix Plaza, and the planned Thomas
Road Light Rail System. Plaza is newly renovated with a landmark water feature. Ownership and tax advantages
Phoenix Professional Tower is a first of its kind condo project located in the Central Corridor. Features include
Central Avenue frontage and a 3,600 square foot Fitness Center featuring state-of-the-art equipment. Within
walking distance to St. Josephs Hospital, across from Park Central Mall, Phoenix Plaza, and the planned Thomas
Road Light Rail System. Plaza is newly renovated with a landmark water feature. Ownership and tax advantages
Phoenix Professional Tower is a first of its kind condo project located in the Central Corridor. Features include
Central Avenue frontage and a 3,600 square foot Fitness Center featuring state-of-the-art equipment. Within
walking distance to St. Josephs Hospital, across from Park Central Mall, Phoenix Plaza, and the planned Thomas
Road Light Rail System. Plaza is newly renovated with a landmark water feature. Ownership and tax advantages
U.S. Treasuries (June 28, 2007)
Bills
COUPON MATURITY CURRENT CURRENT PRICE/YIELD
DATE PRICE YIELD CHANGE
3-Month N.A. 9/27/2007 4.64 4.77 0.04 / .003
6-Month N.A. 12/27/2007 4.73 4.92 0.04 / -.007
Notes/Bonds
COUPON MATURITY CURRENT CURRENT PRICE/YIELD
DATE PRICE YIELD CHANGE
2-Year 4.875 6/30/2009 99-27 4.95 -0-00+ / .004
3-Year 4.500 5/15/2010 98-24 4.97 -0-00+ / .003
5-Year 4.875 6/30/2012 99-14 5.00 0-00+ / -.004
10-Year 4.500 5/15/2017 95-12 5.10 0-01 / -.004
30-Year 4.750 2/15/2037 93-08½ 5.20 0-02+ / -.005
Inflation Indexed Treasury
COUPON MATURITY CURRENT CURRENT PRICE/YIELD
DATE PRICE YIELD CHANGE
5-Year 2.000 4/15/2012 96-26 2.71 0-00 / .001
10-Year 2.375 1/15/2017 97-04 2.72 0-00 / .000
20-Year 2.375 1/15/2027 95-09 2.69 0-00 / .000
30-Year 3.375 4/15/2032 114-06 2.59 0-00 / -.000
Source:
http://www.bloomberg.com/markets/rates/index.html
Bond Spreads (June 28, 2007)
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 17 32 39 49 54 64 71 Example: Suppose that you want to find the de
Aa1/AA+ 22 37 42 53 58 77 87 bond rated AAA. The default premium is .
Aa2/AA 27 42 47 61 66 82 100 premium to the yield on a 5 year treasury note
Aa3/AA- 32 45 52 65 71 87 105 debt for a 5-year bond rated AAA.
A1/A+ 37 48 56 68 76 91 110
A2/A 42 56 62 73 83 96 115 To convert basis points into decimals, divide th
A3/A- 47 61 68 81 92 101 125 Continuing with our example, if the bps for a
Baa1/BBB+ 52 66 75 91 99 113 150 translates to 49/10000 = .0049 or .
Baa2/BBB 57 71 83 101 129 133 178
Baa3/BBB- 71 87 101 122 149 160 205
Ba1/BB+ 95 105 130 160 195 205 245
Ba2/BB 115 130 155 210 222 230 280
Ba3/BB- 140 165 200 225 245 250 300
B1/B+ 160 180 215 250 270 290 325
B2/B 185 205 250 295 310 325 350
B3/B- 200 215 290 315 350 375 445
Caa/CCC 330 380 405 420 430 480 540
Source
http://bondchannel.bridge.com/EJVspreads.html
tated in basis points (bps) where 100 bps = 1%.
that you want to find the default premium for a 5 year
he default premium is .49% . You will add this default
year treasury note to obtain the pre-tax cost of
ond rated AAA.
oints into decimals, divide the bps reported by 10000.
example, if the bps for a 5 yr AAA bond is 49 then this
0049 or .49%
Listing
Building Name Street Address Floor Sqft Unit# Price Price/SF
Century Plaza 3225 North Central Avenue 7 1,297 701 $465,000 $359
Land Total Typical
Rent psf/ Area Building Floor
Bedrooms Baths Year Built per Year Stories #Units Parking (Acres) Sqft Size
2 2 17 147
Zoning Comments
Completion in spring 2008
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
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%
BOMA Leased Lease Lease Current
Suite Floor Tenant RSF RSF Begins Ends Month
50 1 Deli/Harris (Gerlach) 1,993 Sep-04 Oct-12 Aug-06
60 1 Vacant 2,412 Apr-07 Mar-15 Aug-06
100 1 Vacant 8,144 Apr-07 Mar-15 Aug-06
140 1 Security Title Agency 3,268 Sep-05 Jan-11 Aug-06
150 1 Robert Wolfe 1,148 Aug-04 Jul-09 Aug-06
160 1 Curves 2,237 Feb-03 Jan-13 Aug-06
200 2 Security Title Agency 20,032 Sep-05 Jan-11 Aug-06
300 3 Security Title Agency 20,070 Sep-05 Jan-11 Aug-06
400 4 Vacant 18,596 Jul-07 Jun-15 Aug-06
500 5 Simek & Co 5,671 Jan-06 Jul-07 Aug-06
510 5 EP Asset Management 3,104 Feb-04 Apr-07 Aug-06
550 5 Law Offices of Mary Brooksby 982 Apr-05 Apr-08 Aug-06
560 5 Liberty Mutual Insurance 2,642 Aug-06 Jul-11 Aug-06
590 5 Policy Development Group 4,423 Apr-04 Sep-09 Aug-06
600 6 Folk & Associates 6,561 May-02 Aug-09 Aug-06
610 6 Vacant 1,145 Jan-07 Dec-11 Aug-06
620 6 Benchmark Financial 2,188 Jun-92 Nov-08 Aug-06
650 6 Gevity HR 5,986 Oct-03 Jan-09 Aug-06
700 7 Engleman Berger 9,109 May-04 Apr-12 Aug-06
705 7 Vacant (Storage) 204 Jul-07 Jun-12 Aug-06
710 7 XO Communication Inc 1,818 Feb-96 Jan-07 Aug-06
730 7 Taber Commerford 2,048 Feb-06 Jan-08 Aug-06
770 7 GSA (Department of Justice) 1,088 Mar-95 Jun-07 Aug-06
780 7 Vacant 1,145 Jan-07 Dec-11 Aug-06
790 7 Paul Lazarus 1,190 Aug-04 Nov-07 Aug-06
800 8 Law Offices of Cosmas Onyia 1,012 Nov-05 Dec-10 Aug-06
805 8 Roundpeg, Inc 2,341 Dec-05 Dec-10 Aug-06
810 8 Software Architects 4,391 Sep-04 Aug-08 Aug-06
815 8 Ace Parking 1,284 Oct-00 Oct-08 Aug-06
820 8 Vacant 2,164 Apr-07 Mar-12 Aug-06
850 8 Arizona Agribusiness 3,218 Oct-05 Jan-13 Aug-06
880 8 GSA (National Indian Gaming) 2,994 Feb-00 Jan-10 Aug-06
900 9 GSA (Army Corps of Engineers) 17,960 Jan-06 Jun-07 Aug-06
1000 10 Mullen Advertising 8,687 Aug-86 Dec-08 Aug-06
1050 10 Feller & Levine 5,871 Jun-04 Dec-08 Aug-06
1070 10 Raymond Greer Sassaman 2,604 Feb-97 Jul-11 Aug-06
1100 11 Shughart Thomson Kilroy 16,218 Aug-04 Aug-12 Aug-06
1200 12 Shughart Thomson Kilroy 14,472 Aug-04 Aug-12 Aug-06
Subtotal
Pad Site Security Title Agency 2,469 Sep-05 Jan-11 Aug-06
Total
Time Time *
Remaining Leased Wtd Time
(Months) RSF (Months)
WALM
Major Tenant Expirations (Rollover of Key Tenants)
Total Net Rentable Sqft 0
Lease Pct of
Leased Expiration Total
Tenant RSF (Date) Sqft
Security Title Agency (with pad)
Shughart Thomson Kilroy
GSA (All 3 tenants)
Army Corps of Engineers
Department of Justice
National Indian Gaming
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
July 30, 2006.
Answer:
Lease Rollover Schedule
Total Sqft
of Leases Pct of Cumulative Cumulative %
Year of Expiration Tenants Expiring Total Sqft Total Sqft (Total Sqft)
2007
2008
2009
2010
2011
2012
2013
Vacant
TOTAL
Question: What are the critical years with respect to leases potentially rolling
over? Discuss why it is important to do a lease rollover analysis?
Answer:
Present Value Calculations of Tenant Improvements (as if TI were a per period annuity)
Vacant Vacant Vacant Vacant
Space (< Space (=/> Space (< Space (=/>
10,000 sqft) 10,000 sqft) 10,000 sqft) 10,000 sqft)
Term of Lease (years) 5 8 5 8
Risk rating: CCC CCC CCC AAA
Treasury yield
+ Default Premium
Pre-tax Cost of Debt (Disc Rate)
Existing Existing
Tenant: New Lease New Lease Lease Lease
Rentable SqFt
* Tenant Improvements (TI) $/psf
Total Tenant Improvements (TI)
Divided by: PVIFA
Equivalent Annuity aka TI (Annuity)
Divided by: Rentable SqFt
TI psf (Annuity)
er period annuity)
Suite 60 100 400 820 610
Total Amt w/ Free Rent
÷ Rentable Sqft
÷ Years
Effective Rent psf/yr
Total Amt w/o Free Rent
÷ Rentable Sqft
÷ Years
Rent psf/yr (no PV)
Rent psf/yr (no PV)
- Effective Rent psf/yr
Rent Abatment psf/yr
Rent Abatment psf/yr
÷ Rent psf/yr (no PV)
Haircut
Tenant Vacant Vacant Vacant Vacant Vacant
Suite 60 100 400 820 610
SqFt 2,412 8,144 18,596 2,164 1,145
Term (yrs) 8 8 8 5 5
Free Rent 4 4 4 2 2
Rent Rent Rent Rent Rent
psf/mo psf/mo psf/mo psf/mo psf/mo
Aug-06 Vacant Vacant Vacant Vacant Vacant
Sep-06 Vacant Vacant Vacant Vacant Vacant
Oct-06 Vacant Vacant Vacant Vacant Vacant
Nov-06 Vacant Vacant Vacant Vacant Vacant
Dec-06 Vacant Vacant Vacant Vacant Vacant
Jan-07 Vacant Vacant Vacant Vacant 1.88
Feb-07 Vacant Vacant Vacant Vacant 1.88
Mar-07 Vacant Vacant Vacant Vacant 1.88
Apr-07 1.88 1.88 Vacant 1.88 1.88
May-07 1.88 1.88 Vacant 1.88 1.88
Jun-07 1.88 1.88 Vacant 1.88 1.88
Jul-07 1.88 1.88 1.88 1.88 1.88
Aug-07 1.88 1.88 1.88 1.88 1.88
Sep-07 1.88 1.88 1.88 1.88 1.88
Oct-07 1.88 1.88 1.88 1.88 1.88
Nov-07 1.88 1.88 1.88 1.88 1.88
Dec-07 1.88 1.88 1.88 1.88 1.88
Jan-08 1.88 1.88 1.88 1.88 1.93
Feb-08 1.88 1.88 1.88 1.88 1.93
Mar-08 1.88 1.88 1.88 1.88 1.93
Apr-08 1.93 1.93 1.88 1.93 1.93
May-08 1.93 1.93 1.88 1.93 1.93
Jun-08 1.93 1.93 1.88 1.93 1.93
Jul-08 1.93 1.93 1.93 1.93 1.93
Aug-08 1.93 1.93 1.93 1.93 1.93
Sep-08 1.93 1.93 1.93 1.93 1.93
Oct-08 1.93 1.93 1.93 1.93 1.93
Nov-08 1.93 1.93 1.93 1.93 1.93
Dec-08 1.93 1.93 1.93 1.93 1.93
Jan-09 1.93 1.93 1.93 1.93 1.99
Feb-09 1.93 1.93 1.93 1.93 1.99
Mar-09 1.93 1.93 1.93 1.93 1.99
Apr-09 1.99 1.99 1.93 1.99 1.99
May-09 1.99 1.99 1.93 1.99 1.99
Jun-09 1.99 1.99 1.93 1.99 1.99
Jul-09 1.99 1.99 1.99 1.99 1.99
Aug-09 1.99 1.99 1.99 1.99 1.99
Sep-09 1.99 1.99 1.99 1.99 1.99
Oct-09 1.99 1.99 1.99 1.99 1.99
Nov-09 1.99 1.99 1.99 1.99 1.99
Dec-09 1.99 1.99 1.99 1.99 1.99
Jan-10 1.99 1.99 1.99 1.99 2.05
Feb-10 1.99 1.99 1.99 1.99 2.05
Mar-10 1.99 1.99 1.99 1.99 2.05
Apr-10 2.05 2.05 1.99 2.05 2.05
May-10 2.05 2.05 1.99 2.05 2.05
Jun-10 2.05 2.05 1.99 2.05 2.05
Jul-10 2.05 2.05 2.05 2.05 2.05
Aug-10 2.05 2.05 2.05 2.05 2.05
Sep-10 2.05 2.05 2.05 2.05 2.05
Oct-10 2.05 2.05 2.05 2.05 2.05
Nov-10 2.05 2.05 2.05 2.05 2.05
Dec-10 2.05 2.05 2.05 2.05 2.05
Jan-11 2.05 2.05 2.05 2.05 2.11
Feb-11 2.05 2.05 2.05 2.05 2.11
Mar-11 2.05 2.05 2.05 2.05 2.11
Apr-11 2.11 2.11 2.05 2.11 2.11
May-11 2.11 2.11 2.05 2.11 2.11
Jun-11 2.11 2.11 2.05 2.11 2.11
Jul-11 2.11 2.11 2.11 2.11 2.11
Aug-11 2.11 2.11 2.11 2.11 2.11
Sep-11 2.11 2.11 2.11 2.11 2.11
Oct-11 2.11 2.11 2.11 2.11 2.11
Nov-11 2.11 2.11 2.11 2.11 2.11
Dec-11 2.11 2.11 2.11 2.11 2.11
Jan-12 2.11 2.11 2.11 2.11
Feb-12 2.11 2.11 2.11 2.11
Mar-12 2.11 2.11 2.11 2.11
Apr-12 2.17 2.17 2.11
May-12 2.17 2.17 2.11
Jun-12 2.17 2.17 2.11
Jul-12 2.17 2.17 2.17
Aug-12 2.17 2.17 2.17
Sep-12 2.17 2.17 2.17
Oct-12 2.17 2.17 2.17
Nov-12 2.17 2.17 2.17
Dec-12 2.17 2.17 2.17
Jan-13 2.17 2.17 2.17
Feb-13 2.17 2.17 2.17
Mar-13 2.17 2.17 2.17
Apr-13 2.24 2.24 2.17
May-13 2.24 2.24 2.17
Jun-13 2.24 2.24 2.17
Jul-13 2.24 2.24 2.24
Aug-13 2.24 2.24 2.24
Sep-13 2.24 2.24 2.24
Oct-13 2.24 2.24 2.24
Nov-13 2.24 2.24 2.24
Dec-13 2.24 2.24 2.24
Jan-14 2.24 2.24 2.24
Feb-14 2.24 2.24 2.24
Mar-14 2.24 2.24 2.24
Apr-14 2.31 2.31 2.24
May-14 2.31 2.31 2.24
Jun-14 2.31 2.31 2.24
Jul-14 2.31 2.31 2.31
Aug-14 2.31 2.31 2.31
Sep-14 2.31 2.31 2.31
Oct-14 2.31 2.31 2.31
Nov-14 2.31 2.31 2.31
Dec-14 2.31 2.31 2.31
Jan-15 2.31 2.31 2.31
Feb-15 2.31 2.31 2.31
Mar-15 2.31 2.31 2.31
Apr-15 2.31
May-15 2.31
Jun-15 2.31
780 705
Vacant
Vacant (Storage)
780 705
1,145 204
5 5
2 0
Rent Rent
psf/mo psf/mo
Vacant Vacant
Vacant Vacant
Vacant Vacant
Vacant Vacant
Vacant Vacant
1.88 Vacant
1.88 Vacant
1.88 Vacant
1.88 Vacant
1.88 Vacant
1.88 Vacant
1.88 1.00
1.88 1.00
1.88 1.00
1.88 1.00
1.88 1.00
1.88 1.00
1.93 1.00
1.93 1.00
1.93 1.00
1.93 1.00
1.93 1.00
1.93 1.00
1.93 1.03
1.93 1.03
1.93 1.03
1.93 1.03
1.93 1.03
1.93 1.03
1.99 1.03
1.99 1.03
1.99 1.03
1.99 1.03
1.99 1.03
1.99 1.03
1.99 1.06
1.99 1.06
1.99 1.06
1.99 1.06
1.99 1.06
1.99 1.06
2.05 1.06
2.05 1.06
2.05 1.06
2.05 1.06
2.05 1.06
2.05 1.06
2.05 1.09
2.05 1.09
2.05 1.09
2.05 1.09
2.05 1.09
2.05 1.09
2.11 1.09
2.11 1.09
2.11 1.09
2.11 1.09
2.11 1.09
2.11 1.09
2.11 1.13
2.11 1.13
2.11 1.13
2.11 1.13
2.11 1.13
2.11 1.13
1.13
1.13
1.13
1.13
1.13
1.13
Effective Rent from a Landlord's Perspective
Disc Rate
Office: < 10,000 sqft
Office: >= 10,000 sqft
Free Rent (Months)
Office: < 10,000 sqft
Office: >= 10,000 sqft
TI psf (New Space)
Leasing Commissions (New Space)
Lease Year 1-5
Lease Year 6+
Month 1 2 3 4 5 6 7 8 9
Suites: 60 & 100 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent
Month 1 2 3 4 5 6 7 8 9
Suite: 400 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent
Month 1 2 3 4 5 6 7 8 9
Suite: 820 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent
Month 1 2 3 4 5 6 7 8 9
Suites: 610 & 780 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07
Asking Rent (Market)
- Free Rent
- Leasing Commissions
- Tenant Improvements
Net Effective Rent
PV(Net Effective Rent)
Divided by: PVIFA
Equivalent Annuity aka
Effective Rent
10 11 12 13 14 15 16 17 18 19
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08
10 11 12 13 14 15 16 17 18 19
Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09
10 11 12 13 14 15 16 17 18 19
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08
10 11 12 13 14 15 16 17 18 19
Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08
20 21 22 23 24 25 26 27 28
Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09
20 21 22 23 24 25 26 27 28
Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09
20 21 22 23 24 25 26 27 28
Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09
20 21 22 23 24 25 26 27 28
Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09
29 30 31 32 33 34 35 36 37
Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10
29 30 31 32 33 34 35 36 37
Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
29 30 31 32 33 34 35 36 37
Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10
29 30 31 32 33 34 35 36 37
May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10
38 39 40 41 42 43 44 45 46
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
38 39 40 41 42 43 44 45 46
Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11
38 39 40 41 42 43 44 45 46
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
38 39 40 41 42 43 44 45 46
Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10
47 48 49 50 51 52 53 54 55
Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11
47 48 49 50 51 52 53 54 55
May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12
47 48 49 50 51 52 53 54 55
Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11
47 48 49 50 51 52 53 54 55
Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11
56 57 58 59 60 61 62 63 64
Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
56 57 58 59 60 61 62 63 64
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12
56 57 58 59 60
Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
56 57 58 59 60
Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
65 66 67 68 69 70 71 72 73
Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13
65 66 67 68 69 70 71 72 73
Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13
74 75 76 77 78 79 80 81 82
May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14
74 75 76 77 78 79 80 81 82
Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14
83 84 85 86 87 88 89 90 91
Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14
83 84 85 86 87 88 89 90 91
May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15
92 93 94 95 96
Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
92 93 94 95 96
Feb-15 Mar-15 Apr-15 May-15 Jun-15
Pro-Forma Analysis for Security Title Plaza
Year Ended Jul-07
Space Breakdown SqFeet
Total Rentable Square Feet (including Pad Site)
TI, Leasing Cost, & Capital Reserves Total 2006 $/PSF
Tenant Improvement (TI) on New Leases
TI on Existing Leases coming up for Renewal
+ Leasing Commissions/Costs (LC)
+ Capital Reserves
TI/LC (including Capital Reserves)
Rent Category $/PSF
2007 Rent on Occupied Space
+ 2007 Rent (Space Coming Up for Renewal in 07)
+ 2007 Rent (Vacant Space)
Total Rent (All Space)
+ Parking Revenue
+ Storage Income
+ Miscellaneous Income
- Base Rent Abatements (Free Rent)
+ Tenant Reimbursements
Potential Gross Rent B4 Reimbursements
Vacancy Category $/PSF
2007 Rent (Vacant Space)
+ 2007 Rent (Space Coming Up for Renewal in 07)
Maximum Potential Vacancy at Jul-07
Expense Category $/PSF
Property Taxes in 2007
Total Fixed Expenses
Personnel
+ Repairs & Maintenance
+ Utilities
+ Security/Life Safety
+ Miscellaneous G&A Expenses
+ Insurance
+ Management Fee
Total Variable Expenses
Total Fixed Expenses
+ Total Variable Expenses
Total Reimbursable Expenses
+ Non-Reimbursable Expenses
Operating Expenses (exclu TI/LC)
Tenant Improvements on New Leases
+ TI on Existing Leases coming up for Renewal
Total Tenant Improvements (TI) - All Leases
+ Leasing Commissions
+ Capital Reserves
TI, Leasing Commissions and Capital Reserves
Operating Expenses (exclu TI/LC)
+ TI/LC and Capital Reserves
Operating Expenses (inclu TI/LC)
Suite Floor Tenant Leased RSF Lease Begins
50 1 Deli/Harris (Gerlach) 1,993 Sep-04
60 1 Vacant 2,412 Apr-07
100 1 Vacant 8,144 Apr-07
140 1 Security Title Agency 3,268 Sep-05
150 1 Robert Wolfe 1,148 Aug-04
160 1 Curves 2,237 Feb-03
200 2 Security Title Agency 20,032 Sep-05
300 3 Security Title Agency 20,070 Sep-05
400 4 Vacant 18,596 Jul-07
500 5 Simek & Co 5,671 Jan-06
510 5 EP Asset Management 3,104 Feb-04
550 5 Law Offices of Mary Brooksby 982 Apr-05
560 5 Liberty Mutual Insurance 2,642 Aug-06
590 5 Policy Development Group 4,423 Apr-04
600 6 Folk & Associates 6,561 May-02
610 6 Vacant 1,145 Jan-07
620 6 Benchmark Financial 2,188 Jun-92
650 6 Gevity HR 5,986 Oct-03
700 7 Engleman Berger 9,109 May-04
705 7 Vacant (Storage) 204 Jul-07
710 7 XO Communication Inc 1,818 Feb-96
730 7 Taber Commerford 2,048 Feb-06
770 7 GSA (Department of Justice) 1,088 Mar-95
780 7 Vacant 1,145 Jan-07
790 7 Paul Lazarus 1,190 Aug-04
800 8 Law Offices of Cosmas Onyia 1,012 Nov-05
805 8 Roundpeg, Inc 2,341 Dec-05
810 8 Software Architects 4,391 Sep-04
815 8 Ace Parking 1,284 Oct-00
820 8 Vacant 2,164 Apr-07
850 8 Arizona Agribusiness 3,218 Oct-05
880 8 GSA (National Indian Gaming) 2,994 Feb-00
900 9 GSA (Army Corps of Engineers) 17,960 Jan-06
1000 10 Mullen Advertising 8,687 Aug-86
1050 10 Feller & Levine 5,871 Jun-04
1070 10 Raymond Greer Sassaman 2,604 Feb-97
1100 11 Shughart Thomson Kilroy 16,218 Aug-04
1200 12 Shughart Thomson Kilroy 14,472 Aug-04
Pad Site Pad Site Security Title Agency 2,469 Sep-05
Note: Please use template below to
calculate total leasing costs and the total
Aug-06 to Jul-07 rent for Occupied Space
and the Aug-06 to Jul-07 rent for vacant
space.
Percent
Percent
Percent
Expected Amount of
Rent for Total
Year (Aug- Expected Leasing Leasing
Lease Total Sqft 06 to Jul- Rent from Cost Cost Free Rent Free Rent
Ends Per Floor 07) Renewal (Rate) ($Dollar) (Months) ($Dollar)
Oct-12
Mar-15
Mar-15
Jan-11
Jul-09
Jan-13
Jan-11
Jan-11
Jun-15
Jul-07
Apr-07
Apr-08
Jul-11
Sep-09
Aug-09
Dec-11
Nov-08
Jan-09
Apr-12
Jun-12
Jan-07
Jan-08
Jun-07
Dec-11
Nov-07
Dec-10
Dec-10
Aug-08
Oct-08
Mar-12
Jan-13
Jan-10
Jul-07
Dec-08
Dec-08
Jul-11
Aug-12
Aug-12
Jan-11
Assumptions (based on Jul-07)
Existing Vacancy Rate
+ Vacancy Rate (Space Up for Renewal) 0.00 4.0% 4.5%
Maximum Potential Vacancy at Jul-2007 3.0%
3.5%
Frontdoor-Cap Rate 4.0%
Question Purchase Price 4.5%
+ Immediate Capital Improvements 5.0%
Adjusted Purchase Price 5.5%
Total Rentable Area (sqft) 6.0%
Price per Square Foot of GBA 6.5%
* Market Going-In Cap Rate 7.0%
Expected NOI psf (per square foot) 7.5%
+ TI, LC and Capital Reserves per sqft 8.0%
+ Operating Expenses (exclu TI/LC) 8.5%
Income Before Vacancy 9.0%
(1 - Vacancy Rate) 9.5%
Required Asking Rent per sqft 10.0%
10.5%
Market Rent (Class A Downtown) 11.0%
11.5%
12.0%
Question: Is the deal financially feasible? Please explain. 12.5%
13.0%
Answer: 13.5%
14.0%
14.5%
15.0%
15.5%
Vacancy Rate 16.0%
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 4.0% 4.5%
5.00
Operating Expenses (exclu TI/LC) 5.25
5.50
5.75
6.00
6.25
6.50
6.75
7.00
7.25
7.50
7.75
8.00
8.25
8.50
8.75
9.00
9.25
9.50
Going-In Cap Rate
5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5%
Going-In Cap Rate
5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5%
One Variable Sensitivity Analysis
Scenario 1: None of current space is rented + None of existing tenants renew space up for renewal on Jul-07
Present Amount
or Percent For Solvency Percent -/+
Purchase Price
Going-In Cap
Rate
Vacancy Rate
Operating
Expense (exclu
TI/LC)
Scenario 2: None of current space is rented + All of existing tenants renew space up for renewal on Jul-07
Present Amount
or Percent For Solvency Percent -/+
Purchase Price
Going-In Cap
Rate
Vacancy Rate
Operating
Expense (exclu
TI/LC)
xisting tenants renew space up for renewal on Jul-07
Comment
ting tenants renew space up for renewal on Jul-07
Comment
Assumptions (based on Jul-07)
Existing Vacancy Rate Question: Given Alliance Commercial Partners
+ Vacancy Rate (Space Up for Renewal) purchase price for the property of $
Maximum Potential Vacancy at Jul-2007 4.25% going-in cap rate, is the property
solvent/breakeven using the “8d. Frontdoor (Ep
Frontdoor-Cap Rate worksheet? In other words, did Alliance Comm
Question Purchase Price Partners do a good job in structuring the deal fr
+ Immediate Capital Improvements solvency/breakeven perspective? Assume that
existing tenants whose space is up for renewal
Adjusted Purchase Price
before Jul-07 will renew their lease contract.
Total Rentable Area (sqft)
Price per Square Foot of GBA Answer:
* Market Going-In Cap Rate
Expected NOI psf (per square foot)
+ TI, LC and Capital Reserves per sqft
+ Operating Expenses (exclu TI/LC)
Income Before Vacancy
(1 - Vacancy Rate)
Required Asking Rent per sqft
Market Rent (Class A Downtown)
Vacancy Rate
Operating Expenses (exclu TI/LC)
ance Commercial Partners
e property of $38 million and their
ate, is the property
d. Frontdoor (Epilog)”
words, did Alliance Commercial
ob in structuring the deal from a
perspective? Assume that all of
se space is up for renewal on or
ew their lease contract.
9. Backdoor-DCR
Backdoor Analysis using DCR (Base Case)
Assumptions
Total Rentable Square Feet
$Vacancy per Square Foot
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)
9a. Question: What is the justified price per square foot of gross b
Security Title Plaza given the assumptions listed in the case and the
(DSCR)” worksheet? Is the deal financially feasible from a backdoor
explain. Is the justified price also greater than the actual price per sq
Commercial paid? Please use the Data Table command in Excel to
showing the justified price per square foot of gross building area at i
of interest rate and vacancy rate, ii) various combinations of the deb
the vacancy rate, and iii) various combinations of the before tax cas
vacancy rate. Are there any scenarios for which the deal is financial
your analysis suggest about their likely "implied" investment strategy
according to the Epilog section of the case, did Alliance Commercia
this implied investment strategy? Please explain.
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
Sensitivity Analysis is to the right below --->
Intere
5.00% 5.25%
he justified price per square foot of gross building area for $0.25
the assumptions listed in the case and the “9. Backdoor $0.30
e deal financially feasible from a backdoor perspective? Please $0.35
ce also greater than the actual price per square foot that Alliance $0.40
use the Data Table command in Excel to set up a two-way table
$0.45
per square foot of gross building area at i) various combinations
cy rate, ii) various combinations of the debt coverage ratio and $0.50
various combinations of the before tax cash on cash rate and the $0.55
ny scenarios for which the deal is financially feasible? What does $0.60
V
out their likely "implied" investment strategy? Ex-post e.g., $0.65
A
ection of the case, did Alliance Commercial appear to implement $0.70
C
rategy? Please explain. $0.75
$0.80
$0.85
$0.90
$0.95
$1.00
$1.05
$1.10
$1.15
$1.20
$1.25
$1.30
$1.35
Debt Cov
1.35 1.40
$0.25
$0.30
$0.35
V
$0.40
A
$0.45
C
$0.50
$0.55
$0.60
$0.65
$0.70
$0.75
$0.80
$0.85
$0.90
$0.95
$1.00
$1.05
$1.10
$1.15
$1.20
$1.25
$1.30
$1.35
2.0% 2.5%
$0.25
$0.30
$0.35
$0.40
$0.45
$0.50
$0.55
$0.60
V
$0.65
A
$0.70
C
$0.75
$0.80
$0.85
$0.90
$0.95
$1.00
$1.05
$1.10
$1.15
$1.20
$1.25
$1.30
$1.35
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
3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5%
8.50% 8.75%
Total PV of All Leases (Existing Tenants)
* Premium to Buyout Lease
Cost to Buyout All Existing Leases
Tenant Deli R. Wolfe Curves Security Title Security Title Simek
Suite 50 150 160 140, 200, 300 Pad Site 500
Square Feet 1,993 1,148 2,237 43,370 2,469 5,671
Bond Rating CCC CCC CCC BBB BBB CCC
Time Remaining
on Lease (Yrs)
Riskfree yield
+ Risk Premium
Discount Rate
PV of Lease
Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo
Aug-06 0.63 1.63 1.46 1.47 1.42 1.50
Sep-06 0.63 1.63 1.46 1.47 1.46 1.50
Oct-06 0.63 1.63 1.46 1.47 1.46 1.50
Nov-06 0.63 1.63 1.46 1.47 1.46 1.50
Dec-06 0.63 1.63 1.46 1.47 1.46 1.50
Jan-07 0.66 1.63 1.46 1.51 1.46 1.50
Feb-07 0.66 1.63 1.50 1.51 1.46 1.50
Mar-07 0.66 1.63 1.50 1.51 1.46 1.50
Apr-07 0.66 1.63 1.50 1.51 1.46 1.50
May-07 0.66 1.63 1.50 1.51 1.46 1.50
Jun-07 0.66 1.63 1.50 1.51 1.46 1.50
Jul-07 0.66 1.63 1.50 1.51 1.46 1.50
Aug-07 0.66 1.67 1.50 1.51 1.46
Sep-07 0.66 1.67 1.50 1.51 1.50
Oct-07 0.66 1.67 1.50 1.51 1.50
Nov-07 0.66 1.67 1.50 1.51 1.50
Dec-07 0.66 1.67 1.50 1.51 1.50
Jan-08 0.69 1.67 1.50 1.55 1.50
Feb-08 0.69 1.67 1.50 1.55 1.50
Mar-08 0.69 1.67 1.50 1.55 1.50
Apr-08 0.69 1.67 1.50 1.55 1.50
May-08 0.69 1.67 1.50 1.55 1.50
Jun-08 0.69 1.67 1.50 1.55 1.50
Jul-08 0.69 1.67 1.50 1.55 1.50
Aug-08 0.69 1.71 1.50 1.55 1.50
Sep-08 0.69 1.71 1.50 1.55 1.54
Oct-08 0.69 1.71 1.50 1.55 1.54
Nov-08 0.69 1.71 1.50 1.55 1.54
Dec-08 0.69 1.71 1.50 1.55 1.54
Jan-09 0.71 1.71 1.50 1.52 1.54
Feb-09 0.71 1.71 1.54 1.52 1.54
Mar-09 0.71 1.71 1.54 1.52 1.54
Apr-09 0.71 1.71 1.54 1.52 1.54
May-09 0.71 1.71 1.54 1.52 1.54
Jun-09 0.71 1.71 1.54 1.52 1.54
Jul-09 0.71 1.71 1.54 1.52 1.54
Aug-09 0.71 1.54 1.52 1.54
Sep-09 0.71 1.54 1.52 1.58
Oct-09 0.71 1.54 1.52 1.58
Nov-09 0.71 1.54 1.52 1.58
Dec-09 0.71 1.54 1.52 1.58
Jan-10 0.74 1.54 1.56 1.58
Feb-10 0.74 1.54 1.56 1.58
Mar-10 0.74 1.54 1.56 1.58
Apr-10 0.74 1.54 1.56 1.58
May-10 0.74 1.54 1.56 1.58
Jun-10 0.74 1.54 1.56 1.58
Jul-10 0.74 1.54 1.56 1.58
Aug-10 0.74 1.54 1.56 1.58
Sep-10 0.74 1.54 1.56 1.58
Oct-10 0.74 1.54 1.56 1.58
Nov-10 0.74 1.54 1.56 1.58
Dec-10 0.74 1.54 1.56 1.58
Jan-11 0.77 1.54 1.56 1.58
Feb-11 0.77 1.58
Mar-11 0.77 1.58
Apr-11 0.77 1.58
May-11 0.77 1.58
Jun-11 0.77 1.58
Jul-11 0.77 1.58
Aug-11 0.77 1.58
Sep-11 0.77 1.58
Oct-11 0.77 1.58
Nov-11 0.77 1.58
Dec-11 0.77 1.58
Jan-12 0.80 1.58
Feb-12 0.80 1.63
Mar-12 0.80 1.63
Apr-12 0.80 1.63
May-12 0.80 1.63
Jun-12 0.80 1.63
Jul-12 0.80 1.63
Aug-12 0.80 1.63
Sep-12 0.80 1.63
Oct-12 0.80 1.63
Nov-12 1.63
Dec-12 1.63
Jan-13 1.63
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Liberty
EP Asset Law (Mary Mutual Policy Dev Folk & Benchmark Engleman
Mgmt Brooksby) Insurance Group Assoc Financial Gevity HR Berger
510 550 560 590 600 620 650 700
3,104 982 2,642 4,423 6,561 2,188 5,986 9,109
CCC CCC BBB+ CCC CCC CCC CCC CCC
Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo
0.45 1.46 1.83 1.50 1.63 1.50 1.65 1.54
0.45 1.46 1.83 1.50 1.63 1.50 1.65 1.54
0.45 1.46 1.83 1.50 1.63 1.50 1.65 1.54
0.45 1.46 1.83 1.50 1.63 1.50 1.65 1.54
0.45 1.46 1.83 1.50 1.63 1.50 1.65 1.54
0.45 1.46 1.83 1.50 1.63 1.50 1.65 1.54
0.45 1.46 1.83 1.50 1.63 1.50 1.77 1.54
0.45 1.46 1.83 1.50 1.63 1.50 1.77 1.54
0.45 1.46 1.83 1.54 1.63 1.50 1.77 1.54
1.46 1.83 1.54 1.63 1.50 1.77 1.54
1.46 1.83 1.54 1.63 1.52 1.77 1.54
1.46 1.83 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.54 1.63 1.52 1.77 1.54
1.46 1.88 1.58 1.63 1.52 1.77 1.54
1.88 1.58 1.63 1.52 1.77 1.54
1.88 1.58 1.63 1.58 1.77 1.54
1.88 1.58 1.63 1.58 1.77 1.54
1.92 1.58 1.71 1.58 1.77 1.54
1.92 1.58 1.71 1.58 1.77 1.54
1.92 1.58 1.71 1.58 1.77 1.54
1.92 1.58 1.71 1.58 1.77 1.54
1.92 1.58 1.71 1.77 1.60
1.92 1.58 1.71 1.77 1.60
1.92 1.58 1.71 1.60
1.92 1.58 1.71 1.60
1.92 1.63 1.71 1.60
1.92 1.63 1.71 1.60
1.92 1.63 1.71 1.60
1.92 1.63 1.71 1.60
1.96 1.63 1.71 1.60
1.96 1.63 1.60
1.96 1.60
1.96 1.60
1.96 1.65
1.96 1.65
1.96 1.65
1.96 1.65
1.96 1.65
1.96 1.65
1.96 1.65
1.96 1.65
2.00 1.65
2.00 1.65
2.00 1.65
2.00 1.65
2.00 1.69
2.00 1.69
2.00 1.69
2.00 1.69
2.00 1.69
2.00 1.69
2.00 1.69
2.00 1.69
1.69
1.69
1.69
1.69
1.71
1.71
1.71
1.71
1.71
GSA (Army GSA (Natl Law Offices
Taber GSA (Dept Corp of Indian Paul of Cosmas Roundpeg,
XO Comm Commerford of Justice) Engineers) Gaming) Lazarus Onyia Inc
710 730 770 900 880 790 800 805
1,818 2,048 1,088 17,960 2,994 1,190 1,012 2,341
CCC CCC AAA AAA AAA CCC CCC CCC
Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo
1.58 1.58 1.29 1.44 2.08 1.46 1.42 1.44
1.58 1.58 1.29 1.44 2.08 1.46 1.42 1.44
1.58 1.58 1.29 1.44 2.08 1.50 1.42 1.44
1.58 1.58 1.29 1.44 2.08 1.50 1.42 1.44
1.58 1.58 1.29 1.44 2.08 1.50 1.42 1.44
1.58 1.58 1.29 1.44 2.08 1.50 1.48 1.48
1.67 1.29 1.44 2.08 1.50 1.48 1.48
1.67 1.29 1.44 2.08 1.50 1.48 1.48
1.67 1.29 1.44 2.08 1.50 1.48 1.48
1.67 1.29 1.44 2.08 1.50 1.48 1.48
1.67 1.29 1.44 2.08 1.50 1.48 1.48
1.67 1.44 2.08 1.50 1.48 1.48
1.67 1.44 2.08 1.50 1.48 1.48
1.67 2.08 1.50 1.48 1.48
1.67 2.08 1.50 1.48 1.48
1.67 2.08 1.50 1.48 1.48
1.67 2.08 1.48 1.48
1.67 2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.54 1.53
2.08 1.60 1.57
2.08 1.60 1.57
2.08 1.60 1.57
2.08 1.60 1.57
2.08 1.60 1.57
2.08 1.60 1.57
2.08 1.67 1.57
2.08 1.67 1.57
2.08 1.67 1.57
2.08 1.67 1.57
2.08 1.67 1.57
2.08 1.67 1.57
2.08 1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
1.67 1.61
Raymond Shughart
Software Arizona Mullen Feller & Greer Thomson
Architects Ace Parking Agribusiness Advertising Levine Sassaman Kilroy
810 815 850 1000 1050 1070 1100, 1200
4,391 1,284 3,218 8,687 5,871 2,604 30,690
CCC CCC CCC CCC CCC CCC CCC
Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo Rent psf/mo
1.54 1.54 1.35 1.58 1.50 1.50 1.46
1.63 1.54 1.35 1.58 1.50 1.50 1.50
1.63 1.54 1.35 1.58 1.50 1.50 1.50
1.63 1.58 1.35 1.58 1.50 1.50 1.50
1.63 1.58 1.35 1.58 1.50 1.50 1.50
1.63 1.58 1.35 1.58 1.54 1.50 1.50
1.63 1.58 1.42 1.58 1.54 1.50 1.50
1.63 1.58 1.42 1.58 1.54 1.50 1.50
1.63 1.58 1.42 1.58 1.54 1.50 1.50
1.63 1.58 1.42 1.58 1.54 1.50 1.50
1.63 1.58 1.42 1.58 1.54 1.50 1.50
1.63 1.58 1.42 1.58 1.54 1.54 1.50
1.63 1.58 1.42 1.58 1.54 1.54 1.50
1.63 1.58 1.42 1.58 1.54 1.54 1.50
1.63 1.58 1.42 1.58 1.54 1.54 1.50
1.63 1.63 1.42 1.58 1.54 1.54 1.50
1.63 1.63 1.42 1.58 1.54 1.54 1.50
1.63 1.63 1.42 1.58 1.58 1.54 1.50
1.63 1.63 1.47 1.58 1.58 1.54 1.50
1.63 1.63 1.47 1.58 1.58 1.54 1.50
1.63 1.63 1.47 1.58 1.58 1.54 1.50
1.63 1.63 1.47 1.58 1.58 1.54 1.50
1.63 1.63 1.47 1.58 1.58 1.54 1.50
1.63 1.63 1.47 1.58 1.58 1.58 1.50
1.63 1.63 1.47 1.58 1.58 1.58 1.50
1.63 1.47 1.58 1.58 1.58 1.54
1.63 1.47 1.58 1.58 1.58 1.54
1.47 1.58 1.58 1.58 1.54
1.47 1.58 1.58 1.58 1.54
1.47 1.58 1.54
1.51 1.58 1.54
1.51 1.58 1.54
1.51 1.58 1.54
1.51 1.58 1.54
1.51 1.58 1.54
1.51 1.63 1.54
1.51 1.63 1.54
1.51 1.63 1.54
1.51 1.63 1.54
1.51 1.63 1.54
1.51 1.63 1.54
1.51 1.63 1.54
1.55 1.63 1.54
1.55 1.63 1.54
1.55 1.63 1.54
1.55 1.63 1.54
1.55 1.63 1.54
1.55 1.67 1.54
1.55 1.67 1.54
1.55 1.67 1.58
1.55 1.67 1.58
1.55 1.67 1.58
1.55 1.67 1.58
1.55 1.67 1.58
1.58 1.67 1.58
1.58 1.67 1.58
1.58 1.67 1.58
1.58 1.67 1.58
1.58 1.67 1.58
1.58 1.67 1.58
1.58 1.58
1.58 1.58
1.58 1.58
1.58 1.58
1.58 1.58
1.58 1.58
1.58 1.58
1.58 1.58
1.63 1.58
1.63 1.58
1.63 1.58
1.63 1.58
1.63 1.58
1.63
1.63
1.63
1.63
1.63
Office Condo Conversion Option
Number of Rentable Square Feet Question: Using the “11a. Office Condo Option” workshe
* Listing Price per Square Foot deal by filling in the boxes highlighted in yellow and discu
List Price (all floors combined) conversion from for-lease offices to owner-occupied cond
economic sense. Please explain why or why not. What is
Actual Purchase Price of Property the deal?
+ Cost to Buyout All Existing Leases
+ Cost for building and system upgrades Answer:
+ Soft costs
Cost of Conversion to Office Condos
List Price (all floors combined)
- Cost of Conversion to Office Condos
Profit from Conversion to Office Condos
ice Condo Option” worksheet, pencil out the
hlighted in yellow and discuss whether the
es to owner-occupied condos makes
ain why or why not. What is the key driver of
Residential Condo Option
Number of Rentable Square Feet Question: Using the “11b. Residential Condo Op
÷ Average Square Feet per Unit analyze the deal from a profit/loss perspective by
Number of Units (all floors combined) boxes highlighted in yellow. Discuss whether the c
for-lease offices to owner-occupied residential con
Average listing price per Square Foot economic sense. Please explain why or why not r
* Average Square Feet per Unit office condo option. What is the key driver of the d
Average listing price per Unit
* Number of Units (all floors combined) Answer:
Total Expected Listing Price (all units)
Actual Purchase Price of Property
+ Cost to Buyout All Existing Leases
+ Cost for building and system upgrades
+ Soft costs
Cost of Conversion to Office Condos
List Price (all floors combined)
- Cost of Conversion to Office Condos
Profit from Conversion to Residential Condos
b. Residential Condo Option” worksheet,
rom a profit/loss perspective by filling in the
in yellow. Discuss whether the conversion from
occupied residential condos makes
Please explain why or why not relative to the
n. What is the key driver of the deal?
Effective Rent from a Landlord's Perspective
Disc Rate
Office: < 10,000 sqft
Office: >= 10,000 sqft
Free Rent (Months)
Office: < 10,000 sqft
Office: >= 10,000 sqft
TI psf (New Space)
Leasing Commissions (New Space)
Lease Year 1-5
Lease Year 6+
Month 1 2 3 4 5 6 7 8 9
Suites: >=10,000 sqft Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Asking Rent (Market) 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88
Free Rent
+ Leasing Commissions
+ Tenant Improvements
FR, LC, & TI
PV(FR, LC, & TI)
Divided by: PVIFA
Equivalent Annuity aka
FR, LC, & TI
Month 1 2 3 4 5 6 7 8 9
Suites: < 10,000 sqft Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Asking Rent (Market) 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88
Free Rent
+ Leasing Commissions
+ Tenant Improvements
FR, LC, & TI
PV(FR, LC, & TI)
Divided by: PVIFA
Equivalent Annuity aka
FR, LC, & TI
Average of Equivalent
Annuity aka Effective #DIV/0!
Rent
10 11 12 13 14 15 16 17 18 19
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08
1.88 1.88 1.88 1.93 1.93 1.93 1.93 1.93 1.93 1.93
10 11 12 13 14 15 16 17 18 19
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08
1.88 1.88 1.88 1.93 1.93 1.93 1.93 1.93 1.93 1.93
20 21 22 23 24 25 26 27 28
Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09
1.93 1.93 1.93 1.93 1.93 1.99 1.99 1.99 1.99
20 21 22 23 24 25 26 27 28
Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09
1.93 1.93 1.93 1.93 1.93 1.99 1.99 1.99 1.99
29 30 31 32 33 34 35 36 37
Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10
1.99 1.99 1.99 1.99 1.99 1.99 1.99 1.99 2.05
29 30 31 32 33 34 35 36 37
Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10
1.99 1.99 1.99 1.99 1.99 1.99 1.99 1.99 2.05
38 39 40 41 42 43 44 45 46
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05
38 39 40 41 42 43 44 45 46
May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11
2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05 2.05
47 48 49 50 51 52 53 54 55
Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11
2.05 2.05 2.11 2.11 2.11 2.11 2.11 2.11 2.11
47 48 49 50 51 52 53 54 55
Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11
2.05 2.05 2.11 2.11 2.11 2.11 2.11 2.11 2.11
56 57 58 59 60 61 62 63 64
Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
2.11 2.11 2.11 2.11 2.11 2.17 2.17 2.17 2.17
56 57 58 59 60
Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
2.11 2.11 2.11 2.11 2.11
65 66 67 68 69 70 71 72 73
Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13
2.17 2.17 2.17 2.17 2.17 2.17 2.17 2.17 2.24
74 75 76 77 78 79 80 81 82
May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14
2.24 2.24 2.24 2.24 2.24 2.24 2.24 2.24 2.24
83 84 85 86 87 88 89 90 91
Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14
2.24 2.24 2.31 2.31 2.31 2.31 2.31 2.31 2.31
92 93 94 95 96
Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
2.31 2.31 2.31 2.31 2.31
Build Second Office Building Option
Vacancy Rate
Land Area (square feet) Question: Using the “12. Build 2
* Floor Area Ratio (FAR) Option” worksheet, analyze the deal from a frontd
Total Gross Building Area perspective by filling in the boxes highlighted in
* Building Efficiency Ratio (1 - Load Factor) yellow. Discuss whether it is feasible to build a
Net Rentable Area second office building on the existing site.
Total Gross Building Area Answer:
* Construction Cost per Square Foot
Total Hard Costs
+ Soft Costs
+ Costs for Parking Spaces
Total Construction Costs
Total Rentable Area (sqft)
Price per Square Foot of GBA
* Market Going-In Cap Rate
Expected NOI psf (per square foot)
+ Capital Reserves per sqft
+ TI and LC per sqft
+ Operating Expenses (exclu TI/LC)
Income Before Vacancy
(1 - Vacancy Rate)
Required Asking Rent per sqft
Market Rent (Class A Downtown) $0.00
4.0% 4.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
Vacancy Rate 10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
14.5%
15.0%
15.5%
16.0%
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%
4.0% 4.5%
5.00
5.25
5.50
5.75
6.00
6.25
6.50
6.75
7.00
Operating Expenses (exclu TI/LC) 7.25
7.50
7.75
8.00
8.25
8.50
8.75
9.00
9.25
9.50
. Build 2nd Office Blg
analyze the deal from a frontdoor
ng in the boxes highlighted in
ether it is feasible to build a
ing on the existing site.
Going-In Cap Rate
5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5%
Going-In Cap Rate
5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5%
