California State Automobile Association, Glendale, AZ

Acquired in May 2005 for $9,950,000, this project consisted of $3.56 million of equity and $6.39 million of initial debt. The site was just over 31 acres and contained a 206,300 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.

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