|Project Size||206,300 Sq.Ft. Office Building|
|Acquisition Date||May 2005|
|Equity Invested||$720,000 (additional $3,600,000 institutional equity invested)|
|Sale Date||January 2008|
|Investor Cash Multiple||9.42x|
|Investor Level IRR||130.21%|
California State Automobile Association
Acquired in June 2005 for approximately $9 million, this project consisted of $3.5 million of equity and $5.5 million of debt. The site was just over 31 acres and contained a 206,000 square foot office building. The seller was Honeywell and they wanted a quick, quiet sale so as to not disturb their employees in the building or a neighboring project they also owned. Honeywell agreed to a lease-back for one year following the sale.
The reasons for acquiring the building principally revolved around the project featuring a large block of contiguous office space, a generous parking ratio, efficient floor plates and an attractive local work force. Within the first year after the acquisition, WCCP leased the entire project to California State Automobile Association for a 10-year lease term (an early lease termination was entered into with Honeywell). We also subdivided the 31-acre lot, creating an eight-acre parcel for future development along a major thoroughfare in the market while still providing a comfortable parking ratio for CSAA.
After borrowing to fund the leasing commissions, tenant improvements and costs to carry the building through CSAA’s startup, we had an adjusted basis of approximately $24 million. We prepared the project for sale in 2007 and CSAA made a pre-emptive offer of $44.8 million, which was accepted. WCCP still owns the remaining 8 acres, hoping to either develop buildings on the land or sell it to CSAA if they continue to expand their operation.