View the Executive Summary - Transwestern

Corporate Plaza
98 Percent Leased, Class A, Value-Added Office Opportunity in West County, St. Louis
14528 S. Outer 40
Chesterfield, Missouri

Corporate Plaza
Chesterfield, Missouri
98 Percent Leased, Class A, Value-Added Office Opportunity Offers the Following to an Investor:
• Double-digit “cash on cash” returns for the next four and a half years
• Ability to offer a rare, large block of space in the future into the tightening West County market of St. Louis
• Opportunity to position asset into an improved future capital market environment with a large tenant-anchored, long-term lease after
current lease rollover
• High-teen levered IRR’s
Offering Summary
Transwestern is pleased to exclusively offer to investors the
opportunity to acquire Corporate Plaza located in Chesterfield,
Missouri (“the Property”). The offering contains 210,409 square feet
of Class A office space and is 98 percent leased overall and is 89
percent leased to the anchor tenant, Mercy Healthcare through
December 31, 2017. Mercy is a private, not-for-profit healthcare
provider that operates 32 hospitals and has $4.2 billion in revenues.
The offering allows investors an enhanced cash flow yield secured
by a mid-term, strong credit lease obligation with contractual rental
escalations. Corporate Plaza is well positioned in the infill West
County/Chesterfield market, a high visibility and accessible market
hub for local, national and international tenants in the St. Louis
market. The Property is directly visible from Interstate 64/Highway
40 and offers tenants an extremely salient and prominent corporate
identity.
Corporate Plaza is situated along the south side of I-64. The asset
is situated on a 12.5-acre site and provides 789 parking spaces for
tenants and patrons. The Property is a highly recognizable office
development within the St. Louis West County office market.
The building is offered free and clear of financing.
Offering Highlights
• A 210,409-square-foot Class A office facility
• 98 percent occupied with average occupancy of over 90 percent
since 2004
• Headquarters facility for Mercy, occupying 89 percent of the
building
• Year 1 net operating income of approximately $3.5MM
• Onsite amenities such as cafe, gym and conference center
• Executive covered parking and building connected parking
deck
• Opportunity to acquire below estimated replacement cost of
$225-$250 per square foot

Corporate Plaza
Chesterfield, Missouri
Investment Highlights
Strong Contractual Cash Flow and
Robust Investment Returns
The building has a Year 1 NOI of $3,503,864.
The investment offers excellent returns on
both a current in-place basis and on the
IRR basis. Double digit unlevered “cash on
cash” yields are generated during the next
four and a half years. The opportunity offers
investors healthy high-teen IRR returns on
a levered basis.
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
-$1,000,000
-$2,000,000
-$3,000,000
Pro Forma NOI
$3,874,952 $3,983,680 $4,092,481 $4,201,370
$3,503,864
$3,106,475 $3,127,039 $3,220,123
$729,108
Jun-2014 Jun-2015 Jun-2016 Jun-2017 Jun-2018 Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023
$(1,810,507)
Strong Anchor Tenant
Mercy is the sixth largest Catholic health care
system in the United States. Mercy operates acute
care, specialty care and critical access hospitals
and communities across four states. Mercy
currently serves more than 3 million people
annually. The Mercy organization includes 32
hospitals and 300 out-patient locations. The
system employs close to 41,000 people in
Arkansas, Kansas, Missouri and Oklahoma.
Corporate Plaza serves as the office headquarters
for Mercy’s executives and administrators, and is
also utilized as a training center and conference
center for Mercy employees.
Prominent Location
N
Corporate Plaza enjoys a highly visible and prominent
location on Interstate I-64/Highway 40, the main arterial
serving the prosperous western suburbs of St. Louis.
The Property gives tenants signage and visibility on one
of the most heavily traveled stretches of road in the St.
Louis Metro area. Corporate Plaza is adjacent to a full
four-way interchange, offering tenants ease of access to
the interstate system that serves St. Louis.
Maryville Center
Woods Mill Road
61
141
Corporate Plaza
14528 South Outer 40 Road
Market Leading Occupancy and Out-Performance
Corporate Plaza also boasts an enduring track record
of market-leading occupancy as the Property has clearly
outperformed the St. Louis Class A market with an
average occupancy of over 90 percent since 2004. This
is compared with 87 percent to 89 percent occupancy
for Class A space in the West County submarket over
this time period. Corporate Plaza’s long history of above
market occupancy serves as proof of the Property’s
position of prominence in the West County office
market and is a reliable indicator of its expected future
performance.
North Outer Forty Road
40
64
South Outer Forty Road

Corporate Plaza
Chesterfield, Missouri
Minimal Blocks of Large Space are Available
Corporate Plaza will potentially have the largest block of space
available in West County when Mercy’s lease expires December 31,
2017. Assuming the market dynamics are similar or better in five
years, Corporate Plaza will be in an excellent position to push rents.
This will be especially true for tenants needing more than 50,000
square feet.
The West County “Class A” office market currently provides only one
opportunity for a tenant requiring 50,000 square feet or greater of
contiguous space.
Even more compelling is the fact that a “Class A” tenant currently
searching for over 70,000 square feet of contiguous space in West
County does not have any alternatives. With any demand from large
tenants, the opportunity for premium pricing will exist for Corporate
Plaza.
There are currently over 30 tenants located in the suburbs (including
Clayton) that occupy between 40,000 square feet to 500,000 square
feet. In addition to suburban prospects, tenants located in the CBD
have been actively looking and moving to quality space in the
suburbs. To the extent suburban tenants are pushed to consider
new developments, they can expect to pay rents in the high 20’s or
low 30’s per square foot.
Stable Market Environment
The St. Louis office market remains stable. The overall vacancy rate
currently stands at 12.3 percent. This is a slight improvement from a
vacancy rate of 12.6 percent, 12 months earlier. The first quarter of
2013 is continuing this positive trend with a year to date absorption
of 120,000 square feet. With the lack of new construction and the
increased office employment, the 12.3 percent vacancy rate is
expected to decrease 100 basis points prior to year end. Class A
space has outperformed the overall market currently registering
an 11.1 percent vacancy rate. The amount of rentable space in the
St. Louis office market remained stable in the first quarter of 2013
as minimal new construction was delivered or is anticipated to the
marketplace.
All inquires should be directed to the attention of one of the
following representatives:
Gary Nussbaum
Managing Director
312.881.7090
gary.nussbaum@transwestern.net
Mike Donovan
Principal
314.802.0821
mike.donovan@transwestern.net
Thomas A. Gorman
Managing Director
312.881.7019
thomas.gorman@transwestern.net
David Matheis
Senior Associate
312.881.7022
david.matheis@transwestern.net
For debt financing information, please contact:
Michael Snodgrass
Managing Director
713.270.3342
michael.snodgrass@transwestern.net
TRANSWESTERN CHICAGO
200 West Madison Street
Suite 3300
Chicago, IL 60606
BALKE BROWN TRANSWESTERN
1101 Highlands Plaza Drive West
Suite 150
St. Louis, MO 63110
Jan sparks
Managing Director
713.270.3398
jan.sparks@transwestern.net
Discount to Replacement Cost
Corporate Plaza represents an exceptional opportunity to acquire a
Class A office building featuring a prominent location, an institutional
quality, credit tenant roster and an enduring trend of above market
occupancy. The building exhibits a high degree of physical quality
with a strong amenity package at significant discount to replacement
cost. While it is difficult to replace an asset such as Corporate Plaza,
it is estimated that reproduction of a new Class A office building in
the West County submarket would conservatively approach $240
per square foot with structured parking.
The information contained in this marketing brochure has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have
not verified it and make no guaranty, warranty or representation about it. It is the responsibility of each prospective purchaser to independently verify its accuracy
and completeness. Any projections, opinions, assumptions or estimates used are for example purposes only and do not represent the current or future
performance of the property. Each prospective purchaser is to rely upon its own investigation, evaluation and judgment as to the value and condition of the
property, the information contained in the marketing brochure, and the advisability of purchasing the property. This marketing brochure may be rescinded or
altered and the property may be sold, leased or withdrawn from the market without notice. Brokers are not authorized to make any representations or agreements
on behalf of the property owner or bind the property owner to any agreement for sale of the property.