Landlord Rent Increase Letter Template

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					                   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%

				
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