Exclusive Investment Offering: Condominium Interest - Transwestern

and 

Exclusive Investment Offering: Condominium Interest

ASSET INVESTMENT SALES GROUP 

Andy Stape 

Senior Vice President 

301.896.9139 

andy.stape@transwestern.net 

Howard W. Mersky 

Senior Vice President 

301.896.9017 

howard.mersky@transwestern.net 

Joe Friedman 

Vice President 

301.896.9096 

joe.friedman@transwestern.net 

Will Wheeler 

Associate 

301.896.9159 

will.wheeler@transwestern.net 

Mat Adler 

Associate 

301.896.9110 

mat.adler@transwestern.net 

Tanya Slesinger 

Senior Project Manager 

301.896.9090 

tanya.slesinger@transwestern.net 

Yurita Suwandi 

Senior Financial Analyst 

301.896.9042 

yurita.suwandi@transwestern.net 

Verónica Sandoval 

Graphic Designer 

301.896.9080 

veronica.sandoval@transwestern.net 

Confidentiality & Conditions 

This Investment Memorandum (“Memorandum”) 

is furnished to prospective purchasers solely to 

facilitate the purchaser’s consideration of The Shops at 

the Broadway and The Shops at the Palladium, located 

at 502 West Broad Street in Falls Church, Virginia and 

1445 Laughlin Avenue in McLean, Virginia, respectively 

(“Property”) .The selling entity is Broadway Commercial, 

LLC and Palladium Commercial, LLC (“Owner”). The 

Memorandum contains proprietary information and 

was prepared by Transwestern Carey Winston, LLC 

(“TCW”) using information compiled from sources we 

consider to be reliable. By receipt of this Memorandum, 

you agree that: (a) the Memorandum and its contents 

are of a confidential nature and that you will hold and 

treat it in strictest confidence in full compliance with the 

separate confidentiality agreement you have executed; 

(b) you will not reproduce, transmit or disseminate the 

information contained in the Memorandum through 

any means, or disclose this Memorandum or any 

of its contents to any other entity without the prior 

written authorization of TCW nor will you use this 

Memorandum or any of its contents in any fashion or 

manner detrimental to the interests of TCW or seller; 

and (c) upon request you will return the Memorandum 

without retaining any copy or extract of any portion 

thereof. 

This Memorandum does not purport to be all-inclusive 

or to contain all the information which prospective 

purchasers may desire and is a summary upon which 

prospective purchasers are not entitled to rely. Certain 

documents and materials are described herein in 

summary form. The summaries are not complete 

descriptions of the documents and materials. Interested 

parties are expected to review all such documents 

and materials independently. Market financial 

projections are provided for reference purposes only 

and are based on assumptions relating to the general 

economy, competition and other factors beyond the 

control of TCW and are, therefore subject to material 

variation. Additional information and an opportunity 

to inspect the Property will be made available to 

qualified prospective purchasers upon request. Each 

purchase offer is to be based strictly and entirely upon 

the purchaser’s independent investigation, analysis, 

appraisal and evaluation of facts and circumstances 

deemed relevant by the purchaser. Neither Owner, 

TCW nor any of their respective directors, officers or 

affiliates have made any representation or warranty, 

express or implied as to the accuracy or completeness 

of this Memorandum or any of its contents, and no 

legal commitment or obligation shall arise by reason 

of this Memorandum or its contents. 

This offering is submitted and received with the 

understanding that all negotiations for the acquisition 

of the herein described property will be conducted 

through TCW. The sellers and TCW expressly reserve 

the right, at their sole discretion, to reject any or all 

expressions of interest or offers to purchase the 

Property and/or terminate discussions with any entity 

at any time with or without notice.

and 

4 Executive Summary 

• Offering Highlights 

• Investment Details 

• Driving Directions 

15 The Shops at the Broadway 

• Property 

• Location 

• Market 

• Tenancy 

• Financials 

49 The Shops at the Palladium 

• Property 

• Location 

• Market 

• Tenancy 


ASSET INVESTMENT SALES GROUP

4 

TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING 

Executive 

Summary 

and

The Shops at The Palladium

6 

Offering Highlights 

100% Leased, Award-Winning, Upscale Retail 

Condominium Interests 

The Shops at the Broadway and The Shops at the 

Palladium is a 100% leased, 24,074 square foot retail 

portfolio, each part of an award-winning, mixeduse 

complex developed by renowned Waterford 

Development LLC. The retail components are the focal 

point for these highly successful mixed-use residential 

developments. 

The Shops at the Broadway, recently built in 2004, 

features 14,583 square feet of ground level upscale 

boutique and national retailers. Patrons enjoy pristine 

brick walkways and 145 feet of attractive streetscape 

on the highly traveled Route 7. 

The Shops at the Palladium consists of 9,491 square 

feet of ground level upscale boutique retailers and 

a bank. The property features a spectacular water 

sculpture in the center of a tranquil, public Civic Green 

where residents, patrons, and citizens of McLean can 

gather for community events. The entire project was 

awarded the Best Mid-Atlantic Condominium Project 

of the year by Delta Associates in 2005. 

WEST BROAD STREET 

Unparalleled Infill Locations with Significant 

Neighborhood Revitalization 

Both The Broadway and The Palladium enjoy 

unparalleled locations within the Capital Beltway, just 

miles from Washington D.C. in Northern Virginia. The 

Broadway, in Falls Church, is conveniently positioned in 

the epicenter of the bustling Route 7 corridor between 

Tysons Corner and Seven Corners with over 27,000 

cars passing daily. The Falls Church Comprehensive 

Aerial view of The Shops at The Broadway 

Plan is transforming the landscape; since 2004 over 

1,200 residential units, 146,000 square feet of retail, 

and 280,000 square feet of office space has been 

approved. The Broadway serves as the eastern anchor 

of what is rapidly becoming a vibrant live, work, and 

play community. 

Likewise, The Palladium, set in the heart of 

McLean’s Central Business Revitalization District, 

is the cornerstone of the “Main Street” vision 

which bridges private spaces with public spaces. 

The Property sits strategically at the intersection of 

Chain Bridge Road and Old Dominion Drive with a

7 

combined traffic count of over 50,000 cars passing daily. 

With the utmost commitment from both communities 

to neighborhood revitalization, the Subject Properties 

should enjoy significant future gains in patronage. 

Premier Demographics; Rapid Population Growth 

with High Disposable Income 

The success of these dynamic developments is bolstered 

by superior demographics in both Falls Church and 

McLean. The population in Falls Church is anticipated 

to grow 41% by 2025. As of the 2000 Census, the City 

ranked 3rd in the state for median household income 

and 12th in proportion of households with incomes of 

$150,000 or more. Similarly, residents within a one mile 

radius of The Palladium boast an average household 

income of $158,000, one of the highest in the nation 

and nearly triple the state average. Housing values in 

McLean have benefited from its affluent residential 

base; the average home is valued at $865,000 which has 

grown 120% since 2000. Retail tenants at these premier 

Properties are both entrenched in neighborhoods 

with some of the highest disposable incomes in the 

country. 

Supply Constrained Retail Markets with High 

Barriers to Entry 

Retail under-supply is even more profound in McLean, 

which records a negligible 0.3% retail vacancy rate. 

Despite rampant efforts to consolidate parcels for 

redevelopment, retail infill sites are extremely rare 

and therefore command above average rents for 

Washington D.C. suburban cores. The Shops at the 

Palladium are leased well below market with market 

rents averaging $48 psf triple net. Market rents have 

experienced 4.3% annual growth since 2004. 

Given the infill nature of these markets, rent growth is 

anticipated to continue to increase at above inflation. 

Both the Subject Properties are located within 

consistently strong retail submarkets. Each submarket 

registers low vacancy rates which perpetuates high 

demand and corresponding rent growth. The City of 

Falls Church, occupying just 2.0 square miles, has a 

retail inventory of 683,000 square feet at a low 1.3% 

vacancy. Current rental rates are well below market 

as market rents range from $40.00 to $60.00 psf triple 

net in the City. Significant revitalization of this affluent 

neighborhood has encouraged 7% average annual 

rent growth over the past four years. 

Aerial view of The Shops at The Palladium 

LAUGHLIN AVENUE 

Sold Separately or as a Portfolio 


9 

Investment Details 

Investment Summary 

Asking Price $8,090,000 $6,430,000 

Year 1 NOI $485,399 $386,068 

Initial Capitalization Rate 6% 6% 

Building Summary 

Address 

Property Description 

502 West Broad Street 

Falls Church, VA 

1st Floor Retail in 

Mixed-Use Complex 

1445 Laughlin Avenue 

McLean, VA 

1st Floor Retail in 

Mixed-Use Complex 

Square Footage 14,583 SF 9,491 SF 

Year Built 2004 2005 

Percent Leased 100% 100% 

Tenant Summary 5 Tenants 3 Tenants 

Marketing Schedule 

Property Tours Available Upon Request Available Upon Request 

Offers Due Wednesday, December 19, 2007 Wednesday, December 19, 2007 

Hoang’s Grill and Sushi Bar at The Shops at The Broadway 


10 

Driving Directions 

From Ronald Reagan National Airport (DCA) 

to The Shops at The Broadway 

Approximate Driving Distance: 

10 miles | 17 minutes 

From Ronald Reagan National Airport (DCA) 

to The Shops at The Palladium 



1. Turn slight right toward us-1 / i-66 / Crystal City 

2. Turn slight right onto VA-233 

3. Turn slight right onto Crystal Drive 

4. Turn left onto 12th St S 

5. Turn right onto army Navy Drive 

6. Merge onto Washington Boulevard toward va-244 / Columbia Pike / 

S Arlington Ridge Road 

7. Merge onto us-50 w / Arlington Boulevard toward Falls Church 

8. Take the va-7 ramp toward va-338 / Falls Church / Alexandria 

9. Stay straight to go onto Arlington Boulevard 

10. Turn slight right onto va-7 W / Leesburg Pike 

11. Stay straight to go onto va-7 W / Leesburg Pike Continue to follow va-7 W 

12. Continue to follow va-7 W 

From Washington Dulles International Airport (IAD) 

to The Shops at The Broadway 



1. Merge onto Dulles Airport Access Road 

2. Merge onto VA-267 E toward I-495 / Exit 18-19 /VA-123 / Baltimore / Richmond 

3. Merge onto I-495 S / Capital Beltway via Exit 18 toward Richmond / Alexandria 

4. Take the Leesburg Pike / VA-7 E - Exit 47A-B toward Falls Church 

5. Merge onto VA-7 E via Exit 47B toward Falls Church 

1. Take the ramp toward I-395 / Washington 

2. Merge onto George Washington Memorial Pkwy N 

3. Take the VA-123 exit toward Chain Bridge / McLean 

4. Keep right at the fork to go on VA-123 S. 

5. Turn left onto Chain Bridge Road 

6. Turn slight left onto Old Chain Bridge Road 

7. Old Chain Bridge Road becomes Chain Bridge Road 

8. Turn left onto Laughlin Avenue 

9. Follow to 1445 Laughlin Avenue 

From Washington Dulles International Airport (IAD) 

to The Shops at The Palladium 



1. Merge onto Dulles Airport Access Road 

2. Merge onto VA-267 E toward I-495 / Exit 18-19 /VA-123 / Baltimore / Richmond 

3. Merge onto VA-123 N / Dolley Madison Boulevard via Exit 19B toward McLean 

4. Turn right onto Old Dominion Drive / VA-309 

5. Turn right onto Chain Bridge Road 

6. Turn left onto Laughlin Avenue 

7. Follow to 1445 Laughlin Avenue

11 


13 

x 

Offering Highlights 

Title of Paragraph 

x 

15 The Shops at the Broadway 

14,583 Sq. Ft. Retail Condominium Offering 

• Property 

• Location 

• Market 

• Tenancy 


49 The Shops at the Palladium 

9,491 Sq. Ft. Retail Condominium Offering 

• Property 

• Location 

• Market 

• Tenancy 

• Financials

15 

16 Property 

• Property Overview 

• Site Plan 

• Building Specifications 

• Parking Plan 

23 Location 

• Falls Church Overview 

• Demographic Summary 

• Falls Church Comprehensive Plan & Retail Future 

• Transportation Overview 

33 Market 

• Falls Church Retail Market 

• Retail Lease Comparables 

38 Tenancy 

• Tenant Profiles 

• Expiration Schedule 

42 Financials 

• Summary of Financial Assumptions 

• Detailed Rent Roll 

• Cash Flow Model

16 


Property 

Property Overview 

The Shops at the Broadway is an elegant retail condominium interest 

consisting of 14,583 square feet of first floor space in the award-winning, 

mixed-used development, The Broadway. Recently constructed in 2004 

by Waterford Development LLC, The Broadway is comprised of 80 luxury 

residential condominiums with extensive amenities. 

The property features an elegant residential lobby with onsite building 

manager, a clubroom with billiard tables, service bar and kitchenette, in 

addition to a state-of-the-art fitness center and executive conference room. 

The Broadway is beautifully designed with an interior courtyard and features 

impeccably landscaped grounds which highlight the pedestrian-friendly retail 

environment. 

Project Details 

Developer: 

Architect: 

Number of Residential Units: 

Waterford Development LLC 

Lessard Architectural Group 

80 Units 

Number of Residents: Approximately 160 

Square Feet: 

Stories: 

Unit Breakdown: 

Unit Pricing: 

145,586 Sq. Ft. of Residential Space 

14,583 Sq. Ft. of Retail Space 

4 Stories 

Luxury two- and two-bedroom with den 

units 

Averaged over $400,000, with units 

priced up to $800,000 at time of original 

sale 

Note: Only the Retail Condominium is part of this offering. 

Residential Corridor

At Left: Stephen Reception Area

18 

Retail Site Plan 

Hoang’s Storage 

208 Sq. Ft. 

Trash 

Room 

Nails Boutique 

1,227 Sq. Ft. 

N. Lee Street 

Hoang’s Grill 

and Sushi Bar 

3,149 Sq. Ft. 

Impulsive 

1,362 Sq. Ft. 

Spectrum Sales Office 

3,090 Sq. Ft. 

Hollywood Video 

5,547 Sq. Ft. 

N. Pennsylvania Avenue 

NOT DRAWN TO SCALE 

West Broad Street 

Please see pages 20-21 for detailed parking schematics.

19 

Building Specifications 

General Specifications 

Property Name and Address The Shops at the Broadway 

502 W. Broad Street, Falls Church, VA 22046 

Year Completed 2004 

Rentable Retail Area 

14,583 Sq. Ft. 

Stories One (1) 

Zoning B-1 

Exterior Construction 

Foundation 

Structural Frame and Floors 

Walls 

Ceiling Height 

Windows 

Doors 

Roof 

Retail Parking 

Signage 

Concrete spread footings 

Poured concrete columns, post-tension slabs 

above grade 

Brick and architectural precast 

13 Feet (First Floor) 

Retail storefront 

Full height entrance doors 

Original; rock ballast over insulation and 

membrane 

58 surface and covered parking spaces and 

6 unassigned garage spaces (Parking ratio of 

4.0/1,000 Gross Sq. Ft.). The Broadway has 

open parking to both Guests of residents (patrolled 

using guest passes) and retail clients. 

Façade signage available. 

Utility Services 

Electric 

Gas 

Water / Sewer 

Dominion Virginia Power 

Washington Gas 

City of Falls Church 

Fire / Life / Safety 

Fire Protection/ 

Security System 

Fire alarm enunciator panel. The building is 

fully sprinklered. 


20 

Parking Plans 

Surface Parking

21 

Garage Parking 

The Broadway has open parking to both guests of residents (patrolled using guest passes) and retail clients. 

58 surface and covered parking spaces and 6 unassigned garage spaces. 

Parking ratio is 4.0/1,000 gross square feet. 


Hoang’s Grill and Sushi Bar at The Shops at the Broadway


23 

Location

25 

Falls Church Overview 

Falls Church is an independent City in Virginia with 

a long and rich history that dates back to the late 

1600’s when it was an early colonial settlement. The 

community grew up around 

The Falls Church, which was 

founded in 1734 and whose 

congregation has included 

President George Washington 

and Virginia statesman George 

Mason. Falls Church slowly 

grew around the intersection 

of two Indian trails leading to 

the lower Potomac River falls, not far from the current 

intersection of Leesburg Pike and Lee Highway. By 

1875 it gained township status. Falls Church became 

an independent City in 1948. 

n its development 

es to shape its future. 

Today, the City is a dynamic, small scale community 

comprising 2.0 square miles that serves an affluent 

market, while still enjoying access to large scale 

amenity and business centers. Falls Church is ideally 

situated between Fairfax and Arlington Counties, just 5 

miles from the Washington D.C. line. Further, the City 

sits in the center of the bustling Route 7 employment 

and retail corridor that includes Seven Corners, Baileys 

Crossroads, and Tysons Corner with over 5 million 

square feet of retail. In a 2006 poll of Falls Church 

residents, 34% sited location and convenience as the 

best aspect of living in the City, while 19% cited its 

size and small town charm. Supported by Washington 

D.C.’s consistently stable economy, the City’s local 

economy remains strong with a core of national and 

international high-tech firms, including Computer 

Sciences Corporation and General Dynamics. 

Route 7 (West Broad Street) in Falls Church 

Tysons 

Corner 

Falls 

Church 

Remainder 

of Northern 

Virginia 

Falls Church is at a critical juncture in its development 

as a city with significant opportunities to shape its future. 

Rosslyn/Ballston Corridor, 

Seven Corners, 

& Baileys Crossroads 

Aerial View of Falls Church Looking East 


26 

Demographic Summary 

Falls Church has a reputation as an upscale and safe urban 

community which is upheld by its exceptional demographics. 

In 2005 the City had a population of 10,600 which is projected 

to grow 41% by 2025 to 14,900 residents. Along with dramatic 

population growth, the City’s employment base is also expected 

to experience a similar surge. The current estimate for total 

employment by the Metropolitan Washington Council of 

Governments (MWCOG) is 9,500 and is anticipated to rise by 

19% by 2010 and 52% by 2025. As of the 2000 Census, the City 

ranked third in the state in median household income (currently 

$89,500 within a 3 mile radius), third in per capita income, 

and 12th in proportion of households with annual incomes of 

$150,000 or more. The affluence of this community is further 

seen in its strong home ownership. Homeowners consist of 61% 

of the households in Falls Church, despite the high average 

cost of housing. Of the 3,141 counties and independent cities in 

the United States, Falls Church ranked 23rd in median housing 

value. Its housing inventory is compressed into a narrow and high 

price-band which continues to ensure the City’s elite residency. 

Retail investments in Falls Church are ensured a high level of 

Demographic stability due to this regions surging Profile populations, job growth, 

Broad and high Street disposable (Rte. 7) income. and Washington Street (Rte. 29) 

1 Mile 

3 Miles 

5 Miles 

The Shops at The Broadway November 2007 

502 WEST BROAD STREET, FALLS CHURCH, VA 

1 Mile Radius 3 Mile Radius 5 Mile Radius 

POPULATION 

2006 Estimated Population 16,494 143,143 391,127 

2011 Projected Population 16,823 146,050 402,393 

2000 Census Population 16,064 139,647 376,403 


Historical Annual Growth 1990 to 2006 0.6% 0.7% 1.0% 

Projected Annual Growth 2006 to 2011 0.4% 0.4% 0.6% 

2006 Median Age 39.9 38.6 38.7 

HOUSEHOLDS 

2006 Estimated Households 6,596 55,490 154,898 

2011 Projected Households 6,634 56,166 158,141 

2000 Census Households 6,397 54,423 149,296 




POPULATION BY RACE 

2006 Estimated White 78.5% 70.5% 68.1% 

2006 Estimated Black or African American 4.0% 4.5% 6.3% 

2006 Estimated Asian & Pacific Islander 11.9% 17.8% 17.2% 

2006 Estimated American Indian & Native Alaskan 0.2% 0.2% 0.2% 

2006 Estimated Hispanic 13.3% 17.5% 17.8% 

INCOME 

2006 Estimated Average Household Income $ 102,225 $ 107,997 $ 106,790 

2006 Estimated Median Household Income $ 89,332 $ 91,143 $ 89,508 

2006 Estimated Per Capita Income $ 41,165 $ 42,149 $ 42,751 

EDUCATION (AGE 25+) 

2006 High School Graduate 14.2% 14.6% 13.9% 

2006 Some College 12.9% 11.2% 11.2% 

2006 Associates Degree Only 5.4% 5.8% 5.3% 

2006 Bachelors Degree Only 30.8% 30.4% 30.8% 

2006 Graduate Degree 31.8% 32.1% 32.3% 

BUSINESS 

Number of Businesses 1,409 6,286 19,495 

Total Number of Employees 11,985 64,640 243,678 

Employee Population per Business 8.5 10.3 12.5 

Residential Population per Business 11.7 22.8 20.1 

.50 mi 1.00 mi 2.00 mi Trade Area

uide A Guide to the to the City City of Falls of Falls Church 

27 

Falls Church Comprehensive 

Plan and Retail Future 

Boundaries of the City of Falls Church 

Boundaries of the City of Falls Church 

Broad Street (Rte. Broad 7) and Street Washington (Rte. 7) Street and Washington 

(Rte. 29) 

Major Roadways 

Major Roadways 

Encouraged by surging population growth and 

City of Falls Church Retail Centers 

City of Falls Church limited Retail Centers opportunities for residential development, 

over 15,000 sf 

over 15,000 sf the Falls Church Comprehensive Plan, originally 

Major Retail Centers 

adopted in 1997, was updated in 2005. The 

Major Retail Centers 

updated plan was in large part, designed to address 

Number of Average Daily (Vehicular) the changing preference for urban and mixeduse 

environments. Driven by population shifts, 

Number 

Trips 

of Average Daily (Vehicular) Trips 

increasing transportation costs and congestion, 

New Developments Under Construction 

New Developments the Under popularity Constructionof urban mixed-use developments 

has dramatically intensified over the past few 

1 years as they create vibrant, pedestrian-friendly 

0.5 Miles 

neighborhoods with neighborhood conveniences. 0.5 Miles 

2 5 

1.0 Miles 

1.0 Miles 

4 6 

Since 2004, 1.4 million square feet of mixed 2.0 use Miles 

space has been completed or is in the development 

3 

and planning stages. These developments include 

over 1,200 residential units, 280,000 square feet 

of new office space, and 146,000 square feet of 

retail space. When completed these projects 

are projected to generate $2.5 million in annual 

revenue and are estimated to total $493 million in 

assessed or estimated real .50 estate mi value. 1.00 mi 2.00 .50 mi mi Trade 1.00 Area mi 2 

Population 

At the City’s focal point 

Population 4,370 17,073 67,848 

will be the long-anticipated 

4,370 36,076 17,073 6 

Daytime Population 

landmark urban village Daytime 5,816 

project Population 15,577 26,911 

known as City 5,816 25,328 15,577 2 

Center Median (#6 HH on Income the adjacent Median $79,684 map). HH $86,415 Income Centered $85,779 $79,684 at $80,891 $86,415 $ 

Broad No. of Street Households and Maple No. Avenue, 1,797 of Households just 6,766 1/3 of a 26,146 mile 1,797 14,101 6,766 2 

east Education of The (B.A. Broadway, +) City Center will include 

Education 62.1% (B.A. 59.2% +) 48.1% 62.1% 50.6% 59.2% 4 

about six blocks and 22 acres of land between 

Source: U.S Census Bureau, Claritas, 

Little Falls Street on the Source: 

Inc., 

west, U.S 

Retail 

North Census 

Compass 

Bureau, 

LLC 

Washington Claritas, Inc., Retail Compass LLC 

ail Street on the east, Park Avenue to the north, and 

New Under Retail Construction 

Under Construction Falls Church 

Gibson to the south. The project to be developed 

513 1. 1 The West Byron, Broad 513 Street West • 9,000 Broad sf retail Street • 90 condominium • 9,000 sf retail units • 90 • Delivering condominium Mixed-Use Fall units 2006• Delivering Developments 

Fall 2006 

by Atlantic Realty is scheduled to break ground in 

2009 and will include 25,000 square feet of ground 

um, 2. 2 The 444 West Spectrum, Broad 444 Street West • 30,000 Broad sf retail Street • 30,000 • 30,000 sf office sf retail • 189 • condominium 30,000 sf office units • 189 • Delivering condominium 2007 units • Delivering floor 2007 retail, a Harris Teeter grocery store, more than 

1 THE SPECTRUM 

100,000 square feet of new office space, a 180-room 

uare, 3. 3 Pearson 500 South Square, Maple 500 Street South • 25,000 Maple sf retail Street • 85,000 • 25,000 sf office sf retail • 230 

2• condominium 85,000 THE sf BYRON office units • 230 • Delivering condominium Fall units 2007• Delivering hotel, Fall approximately 2007 500 apartment units, 67 

ls Contact Church Economic the City of Development Falls Church Economic Office for Development more detailed Office information more about detailed these information exciting retail about opportunities. these exciting retail opportunities. 

condominiums, a new Bowl America facility, and 

3 pEARSON SQUARE 

1,500 spaces of structured, underground parking. 

evelopment economic development office • (703) office 248-5491 • (703) 248-5491 

4 THE READ BUILDING 

5 NORTHGATE 

Demographic Demographic Profile Prof 

www.developfallschurch.org 

Please refer to the following page for other recent 

completed or planned mixed-use developments. 

Proposed Future Falls Church City Center 

6 Falls church city center 


28 

Falls Church Mixed-Use Developments 

1 THE SPECTRUM 2 THE BYRON 3 PEARSON SQUARE 

Developer Waterford Development & Akridge JPI Atlantic Realty & Carr Enterprises 

Address 444 West Broad Street 513 West Broad Street 410 S. Maple 

Assessed/ 

$133.4 Million $66.1 Million $165 Million 

Estimated Value 

Square Feet 355,000 Sq. Ft. 153,400 Sq. Ft. 434,000 Sq. Ft. 

Description 

Project Status 

Set in Falls Church’s historic district, this 

191-unit residential condominium project has 

approximately 33,000 square feet of Class A 

office space, and 33,000 square feet of retail 

space, and a 600-space garage. At this time, 

the retail component is nearing 70% leased 

with rentals ranging from $40 to $45 psf triple 

net. 

Under construction, estimated delivery in 

March 2008. 

The Byron is comprised of 90 residential units, 

10,000 square feet of retail space and 12,000 

square feet of Class A office space. Condominiums 

are selling for $500,000 to $700,000. The 

retail component is leased to Cosi and Verizon 

Wireless. 

Completed in 2006. 

This project consists of 230 residential rental 

units, 75,000 square feet of Class A office 

space, and 25,400 square feet of retail and restaurant 

space. The office building at 400 South 

Maple was completed in 2006 with 22,000 

square feet of space remaining and approximately 

8,000 square feet of retail space 

available. The retail space will also feature a 

3,000 square foot visual/performing arts center. 

75,000 SF of office delivered in 2006, residential 

and retail under construction and scheduled 

for completion in February 2008.

29 

4 THE READ BUILDING 5 NORTHGATE 

Developer Bob Young Hekemian 

Address 402 West Broad Street 472 N. Washington 

Assessed/ 

$21 Million $51.6 Million 

Estimated Value 

Square Feet 35,500 Sq. Ft. 161,000 Sq. Ft. 

Description 

This mixed-use development features two 

floors of commercial space, including a 

PNC Bank drive-thru and Vantage Health 

Club. There are 26 apartments on the third 

and fourth floors. Nine units are set aside as 

“Teacher Workforce Units” in cooperation with 

Falls Church City Public Schools. 

Hekemian has submitted plans for 105 rental 

units, 22,735 square feet of retail and 14,015 of 

office. It provides seven officially-affordable 

two-bedroom units for 20 years. The developer 

proferred a $687,372 gift to the City schools, 

as well as the streetscaping and lighting and 

undergrounding of utility lines in the block 

valued at $650,000. 

Project Status Completed in 2007. Approved March 2007, site plan under review. 


30 

The City of Falls Church by the Districts 

The City of Falls Church 

L 

ocated within the Capital Beltway, the City of Falls 

Church is building on its history, creativity, and 

“hometown” feel to expand its existing base of 

outstanding retail establishments. We seek an exciting mix 

of retailers who need a loyal audience — the residents and 

workers of Falls Church. 

The City of Falls Church has a strong day and 

evening population that is well-educated, wellcompensated, 

and committed to the community. They are 

underserved in grocery, goods and services, dining choices, 

and home goods retail, to name only a few. 

We are excited to fill these needs with new developments 

that will appeal to the retailer and the customer alike. Within 

the next three years, approximately 65,000 square feet of new 

retail space will be built in the City. 

1 

2 

4 

3 

T 

Lou 

of 

wo 

ev 

co 

un 

an 

th 

th 

re 

r 

y 

City of Falls Church Retail Study 

In 2005, the City retained Retail Compass, LLC to evaluate our place in the local markets and to provide a realistic 

perspective for our retail goals. They concluded: 

• The demand for retail within City borders exceeds what is currently under construction or planned by 

almost 90,000 square feet. 

• The City of Falls Church is vastly underserved in the Food and Beverages retail category. 

• In the next three years, over 500 new residential units and almost 120,000 square feet of new office 

space will further contribute to the growing retail demand. 

What You Can Expect: 

• The City’s willingness, interest, and drive to create new retail 

hubs will encourage retailers to reevaluate Falls Church. 

• New development under construction will offer retailers 

brand-new, retail-appropriate space. (However, if you are 

looking for funky, one-of-a-kind space, we have that, too.) 

• Our residents seek local options for their spending. They 

are no longer willing to regard Tysons Corner, Arlington, 

and Alexandria as their only shopping alternatives. 

• The City of Falls Church customer base has a long-standing 

tradition of supporting local retailers in the community… 

because they are OURS. 

1. West End 

The Western gateway to The City of Falls Church offers strong retail presence with the Giant-anchored Falls 

Plaza and West End Plaza. 

2. Broad-Penn 

An emerging retail district, three new developments give Broad-Penn identity. The Byron, The Broadway, and 

The Spectrum provide a solid base of new retail opportunities for this central section of Broad Street. 

3. City Center 

At the northwest corner of the busy intersection of Broad and South Washington, this area is preparing for 

redevelopment. It is the targeted site for the community-oriented retail, residential and commercial hub of the City 

of Falls Church. 

4. South Washington Street 

The high-volume of street traffic along this corridor creates significant retail opportunities that will be further 

enhanced by the introduction of the Pearson Square development, as well as numerous infill projects. 

Contact Information 

City of Falls Church, Economic Development Office (703) 248-5491 

Richard Goff, Director (rickgoff@fallschurchva.gov) 

Becky Witsman, Business Development Manager (bwitsman@fallschurchva.gov) 

C 

In 

pe

31 

Transportation Overview 

Residents and tenants at The Broadway enjoy superior 

access to the entire Washington Metropolitan area. The 

Broadway is ideally set on Broad Street known as Route 

7, a major corridor connecting southeastern Virginia 

at Old Towne Alexandria through Tysons Corner and 

northwest to Dulles International Airport. Over 27,000 

cars pass The Broadway daily, ensuring significant retail 

patronage. Falls Church is also served by Interstate 

66 just 1 mile west and I-495 (the Capital Beltway) is 

just 2.5 miles from the subject property. Access to 

two Metrorail stations is available at East Falls Church 

and West Falls Church, both located approximately 1 

mile from the subject property. GEORGE bus-service, 

through the Washington Metropolitan Area Transit 

Authority, provides city-wide bus service connecting 

major employment nodes at stops directly in front of 

the Broadway at West Broad Street and N. Pennsylvania 

Avenue. 

Just over 1 Mile from the 

East & West Falls Church 

Metro Stations 



33 

Market 

Impulsive at The Shops at The Broadway

34 

Market Overview 

The Falls Church Retail Submarket 

Ideally positioned between Washington D.C., Fairfax 

County and Arlington County, the Falls Church 

competitive market includes Seven Corners and 

other areas outside of the City limits. The greater 

Falls Church submarket has a retail inventory of 3.2 

million square feet in approximately 177 buildings. 

Nearly 59% of this inventory is comprised of shopping 

centers verses 41% in freestanding or mixed-used 

use complexes. The majority of this submarket was 

developed in the 1960s, however experienced a 

significant spike in construction starts in 2005, largely 

influenced by the updates to the City’s Comprehensive 

Plan. Today, Falls Church is a dynamic retail market 

offering neighborhood conveniences from small 

boutiques to large grocery stores, all serving the City’s 

affluent residential population. Premier retailers within 

a mile radius of The Broadway include Giant, Cosi, 

Baja Fresh, Verizon, Starbucks and Panera Bread. It 

is reported that the Panera Bread, located at 450 W. 

Broad Street, is one of the company’s top performing 

average vacancy of 2.7% over the last three years. New 

projects are commanding above average rents in the 

suburban metropolitan area at $40.00 to $45.00 triple 

net, which are comparable to major economic nodes 

such as Fairfax Center. 

The overall competitive market has also exhibited 

strong performance. The submarket is comprised of 

over 3.2 million square feet of retail space with just 

3.9% vacancy. Greater Falls Church has experienced 

significant stability, having never exceeded 5.7% 

vacancy over the last ten years. Year to date absorption 

totals positive 8,350 square feet of retail space and is 

backed by strong leasing in 2007 which saw 14 deals 

inked year to date, compared to 12 in 2006. Rental rates 

continue to see steady growth; the current average 

direct rental rate is $36.00 and has increased 3.0% over 

the last year and 7.0% average annual growth over the 

past four years. 

Deliveries and Development Pipeline 

There were no retail projects delivered in the third 

quarter of 2007, however the submarket gained 10,000 

square feet in the first half of the year with the delivery 

of The Byron. The project is directly across the street 

from the Subject Property and is a similar mixed-used 

format to The Broadway. The Byron has 2,600 square 

feet of available space and includes notable tenants 

Cosi and Verizon. 

locations in the nation, with retail sales estimated at 

over $500 per square foot. 

Submarket Fundamentals 

The City of Falls Church, occupying just 2.0 square 

miles, currently registers a low 1.3% vacancy out of its 

683,000 square foot inventory. The City has exhibited 

high demand for upscale retail while maintaining a low 

Currently there are two projects under construction 

in the City of Falls Church, the Spectrum and Pearson 

Square, scheduled to deliver a total of 58,400 square 

feet in the first quarter of 2008. The Spectrum, also 

developed by Waterford Development, will deliver 

33,000 square feet of retail space, of which currently 

70% of the retail tenancy is under lease negotiations 

for $40.00 to $45.00 triple net. In addition, as detailed 

in the preceding section, the City has additional 87,600 

square feet of retail in planning to contribute to the 

Nails Boutique at The Shops at The Broadway

36 

Retail Lease Comparables 

Property & Size Property Type Major Tenants Tenant Size 

Rent (NNN) & 

Escalations New /Renewal Term 

1 Falls Plaza Anchored Giant Food, CVS 1,500 SF $55.00 - 3%/yr Renewal - 2007 5 yr 

West Broad Street & Birch Street Shopping Center Staples 3,200 SF $45.00 - 3%/yr New - 2007 10 yr 

144,000 SF 

2 Idylwood Plaza Anchored Whole Foods 1,200 SF $70.00 - 3%/yr New - 2007 5 yr 

Route 7 & Pimmit Drive Shopping Center 3,000 SF $52.50 - 3%/yr New - 2007 5 yr 

73,000 SF 4,200 SF $63.00 - 3%/yr New - 2007 5 yr 

4,300 SF $50.00 - 3%/yr New - 2007 5 yr 

4,500 SF $50.00 - 3%/yr New - 2007 5 yr 

3 Tysons Station Unanchored Trader Joe’s 2,000 SF $60.00 - 3%/yr Renewal - 2007 5 yr 

7500 Leesburg Pike 

Shopping Center 7,392 SF $38.00 

New - 2007 5 yr w/5 yr 

50,000 SF 

No Increase 

option 

yrs 1-5. 

Option @ $43.70 

4 Barcroft Plaza Anchored Harris Teeter 1,500 SF $33.00 – 3%/yr Renewal - 2007 5 yr 

6345 Columbia Pike Shopping Center 1,525 SF $35.00 - 3%/yr Renewal - 2007 5 yr 

99,000 SF 

5 Loehmann’s Plaza Anchored Giant Foods, 2,000 SF $46.00 - 3%/yr Renewal - 2007 5 yr 

7235-7311 Arlington Blvd Shopping Center Loehmann’s 2,200 SF $38.00 - 3%/yr Renewal - 2007 5 yr 

251,000 SF 8,746 SF $30.00 - 3%/yr Renewal - 2007 5 yr

Little River Tpke 

37 

Map of Retail Lease Comparables 

For Properties Detailed on page 33 

1 

TYSONS 

CORNER 

3 

2 

Custis Memorial Pkwy 

2 

1 

FALLS 

CHURCH 

Lee Hwy 

SEVEN 

CORNERS 

Wilson Blvd 

3 

Arlington Blvd 

5 

Broad St 

4 

4 

Columbia Pike 

5 


38 


Tenancy

39 

Tenant Profiles 

Hollywood Video 

5,547 Sq. Ft. 

National Tenant 

From a single store in Portland, Oregon, Hollywood 

Entertainment has grown to become an industry leader 

with more than 2,000 Hollywood Video superstores 

and more than 600 Game Crazy specialty retail outlets 

nationwide. The first store opened in 1988 and in 1990, 

Hollywood revolutionized the home entertainment 

industry with the national rollout of 5-Day Rentals on 

everything in the store. 

In 2005, Hollywood Entertainment was acquired by 

Movie Gallery, Inc., creating a combined organization 

of more than 4,500 stores serving urban, suburban 

and rural markets. Under the terms of the Merger 

Agreement, Hollywood became a wholly owned 

subsidiary of Movie Gallery, however continues to 

operate under the Hollywood brand name. Hollywood 

Entertainment is still headquartered in Wilsonville, 

Oregon. Investor information for Movie Gallery can be 

found at www.moviegallery.com. 

In October, Movie Gallery, Inc. (which includes Hollywood 

Entertainment Company, MG Digital, LLC, MGA Realty 

et al) announced that it had filed voluntary petitions for 

relief under Chapter 11 of the U.S. Bankruptcy Code 

in order to re-align operations and restructure debt. 

They have entered into agreements with their various 

creditors, and are reportedly moving forward, business 

as usual. The tenant has neither affirmed nor rejected 

the subject lease. Hollywood Video is current on rent 

through November 1, 2007. 

Nails Boutique 

1,227 Sq. Ft. 

Local Retailer 

Impulsive 

1,362 Sq. Ft. 


Impulsive is a unique boutique featuring upscale hand 

crafted art and unique gifts. From the stained glass, 

pottery, hand carved wood, wall tiles, mirrors, masks, 

bronze sculptures, Red Hat Society Dolls, hand blown 

glass lamps & fountains, jewelry, furniture to sterling 

silver jewelry, each item is distinctive and original. 

Hoang’s Grill & Sushi Bar (Hoang’s, Inc.) 

3,357 Sq. Ft. (includes 106 Sq. Ft. of storage space) 


Featuring authentic Vietnamese, Thai and Japanese 

pan-Asian cuisine, Hoang’s Grill & Sushi Bar is new to 

Northern Virginia. The restaurant format created by 

Chef Hoang has previously enjoyed a history of success 

in Sanibel Island, Florida and Baltimore, Maryland. The 

restaurant has catering services for party trays, office 

luncheons, formal weddings, and corporate events as 

well. The restaurant was named the Best New Artful 

Asian Restaurant by Northern Virginia Magazine. 

Spectrum Sales Office 

3,090 Sq. Ft. 

Local Sales 

Waterford Development currently operates a sales 

office for its latest residential development, The 

Spectrum, directly adjacent to the The Broadway. The 

sales office features information on condominium 

models and exhibits the highest level of design and 

décor. 

Nails Boutique specializes in beauty services including 

manicures, pedicures, and waxing services. 

At left: Hollywood Video Storefront; Above: Nails Boutique Storefront; Far right: Spectrum Sales Office 


40 

Combined Tenant Expiration Schedule 

SQUARE FEET EXPIRING BY YEAR 

9,000 

8,000 

SQUARE FEET EXPIRING 

7,000 

6,000 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

2007 2008 2009 2010 2011 2012 2013 2014 

YEAR 

Calendar 

Year Expiring 

Number of 

Spaces* 

Net Rentable 

Square Feet 

Expiring 

Percentage of 

Square Feet 

Expiring 

2007 - - - 

2008 1 3,090 21.26% 

2009 1 1,362 9.37% 

2010 - - - 

2011 1 1,227 8.43% 

2012 - - - 

2013 - - - 

2014 3 8,904 60.94% 

Total 6 14,583 100.00% 

*6 Spaces, 5 Tenants 

Spectrum Sales Office at The Shops at The Broadway

42 


Financials

43 

Financial Summary and Assumptions 

PROPERTY DESCRIPTION 

Building Name 

The Shops at the Broadway 

Building Address 

502 W Broad St. 

Falls Church, Virginia 

Property Type 

Retail 

Size of Building 

Rentable SF 14,583 

GLOBAL 

Analysis Period 

Commencement Date January 1, 2008 

End Date December 31, 2017 

Term (Years) 10 

Growth Rate (CAM, Insurance and RET) 3.00% 

General Vacancy Rate (reduced by absorption & turnover vacancy) 

Hollywood Video 1.00% 

Other Tenants 3.00% 

EXPENSES 

Management Fee (% of EGR) 3.00% 

Operating Expense Source 

Based on 2008 budget 

Real Estate Taxes Source 

From the ownership 

FUTURE LEASING ASSUMPTIONS 

Retention Ratio 80.00% 

Lease Term 

Retail (0 SF- 2,999 SF) 

Five (5) Years 

Retail (3,000 SF & Larger) & Storage 

Ten (10) Years 

Current Market Rent (PSF Per Year) 

Retail $45.00 

Storage $12.00 

Annual Rental Escalation 3.00% 

Expense Recovery Type 

Triple Net (pro rata share) 

Tenant Improvements Per SF 

New 

Retail $7.00 

Storage $0.00 

Renew $0.00 

Leasing Commissions 

New 4.00% 

Renew 0.00% 

Downtime 

Three (3) Months 

t h i s i n f o r m a t i o n h a s b e e n o b t a i n e d f r o m s o u r c e s b e l i e v e d r e l i a b l e. w h i l e w e d o n o t d o u b t i t s a c c u r a c y, w e 

h a v e n o t verified it a n d m a k e n o g u a r a n t e e, w a r r a n t y o r r e p r e s e n tat i o n a b o u t it. it is y o u r r e s p o n s i b i l i t y t o 

c o n f i r m i n d e p e n d e n t l y i t s a c c u r a c y a n d c o m p l e t e n e s s . a n y p r o j e c t i o n s, o p i n i o n s, a s s u m p t i o n s o r e s t i m at e s 

u s e d ar e f o r e x a m p l e o n l y an d do n o t r e p r e s e n t t h e c u r r e n t o r f u t u r e p e r f o r m a n c e o f t h i s p r o p e r t y. t h e 

v a l u e o f t h i s t r a n s a c t i o n t o y o u d e p e n d s o n t a x a n d o t h e r s f a c t o r s w h i c h s h o u l d b e e v a l u a t e d b y y o u r t a x , 

f i n a n c i a l , a n d l e g a l a d v i s o r s. y o u a n d y o u r a d v i s o r s s h o u l d c o n d u c t a c a r e f u l , i n d e p e n d e n t i n v e s t i g at i o n 

o f t h e p r o p e r t y to d e t e r m i n e t h e suitability o f t h e p r o p e r t y to m e e t yo u r n e e d s . 

The Broadway Residential Entrance Along N. Lee Street 


44 

Rent Roll 

Tenant Name 

Type & Suite Number 

Lease Dates & Term 

Initial (11/07) 

Rate & 

Sq Ft Bldg 

Share 

Amount 

per Year Changes on Changes to 

Description of Operating 

Expense Reimbursements 

Imprvmnts 

Rate 

Amount 

Commssns 

Rate 

Amount 

Assumption about 

subsequent terms 

for this tenant 

1 Hollywood Video 

Retail, Suite: 101 

5,547 SqFt 

38.04% 

$33.00 

$183,051 

Apr-2011 $36.30 Tenant shall reimburse $15,930 

of CAM in 2008 with 5.00% annual 

increases. Tenant shall also 

Apr-2004 to Mar-2014 

reimburse 38.23% of insurance 

and real estate taxes and their 

120 Months 

submetered use of the water. 

Following the current 

term, it is assumed that 

the tenant is exposed to 

Retail (3,000SF & larger) 

market leasing assumptions. 

Tenant holds two 5-year renewal options at FMV with 9 months notice 

Tenant has right to terminate lease from and after April 2011. 

2 Hoangs, Inc 


Mar-2006 to Oct-2014 

3,149 SqFt 

21.59% 

$35.00 

$110,215 

Nov-2008 

Nov-2011 

$40.00 

$45.00 

Tenant shall reimburse 21.71% 

share of CAM, Insurance and 

Real Estate Taxes as well as their 


104 Months 


term, it is assumed that the 

tenant is exposed to Retail 

(3,000SF & larger) market 

leasing assumptions. 

Tenant holds one 5-year renewal option at FMV 

Tenant is to pay 6% of gross sales on Percentage Rent. Percentage Rent Base amount is equal to the minimum rent for the applicable lease year divided by the percentage rent rate. 

3 Impulsive 


Nov-2004 to Oct-2009 

1,362 SqFt 

9.34% 

$39.14 

$53,309 

Nov-2008 $40.31 Tenant shall reimburse 9.39% 




60 Months 



the tenant is exercise its 

renewal option. 

Tenant holds one 5-year renewal option at FMV 

Tenant is to pay 5% of gross sales. Percentage Rent Base amount is equal to the minimum rent for the applicable lease year divided by the percentage rent rate. 

Impulsive 1,362 SqFt $46.35 Nov-2010 $47.74 Tenant shall reimburse 9.39% 

$4.92 Following the current 

Option, Suite: 102 9.34% $63,129 Nov-2011 $49.17 



2.00% 



Nov-2009 to Oct-2014 Nov-2012 $50.65 submetered use of the water. 

$6,703 Retail (0SF - 2,999SF) market 

60 Months Nov-2013 $52.17 

leasing 

assumptions.

45 

Tenant Name 




Rate & 

Sq Ft Bldg 

Share 

Amount 




Imprvmnts 

Rate 

Amount 

Commssns 

Rate 

Amount 




4 Nail Boutique 1,227 SqFt $36.05 Aug-2008 $37.13 Tenant shall reimburse 8.45% 

Retail, Suite: 106 8.41% $44,233 Aug-2009 $38.25 



Aug-2006 to Jul-2011 Aug-2010 $39.39 submetered use of the water. 

60 Months 





Tenant holds one 5-year renewal option at 3% increase over the previous year rent 

Tenant is to pay 5% of gross sales. Percentage Rent Base amount is equal to the minimum rent for the applicable lease year divided by the percentage rent rate. 

Nail Boutique 1,227 SqFt $40.57 Aug-2012 $41.79 Tenant shall reimburse 8.45% 

Option 8.41% $49,785 Aug-2013 $43.05 



Aug-2011 to Jul-2016 Aug-2014 $44.34 submetered use of the water. 

60 Months Aug-2015 $45.67 




Retail (0SF - 2,999SF) market 


5 Prospective Tenant (Currently $45.00 Apr-2009 $46.35 Tenant shall reimburse tenant’s $7.00 $20.63 Following the current 

occupied by Spectrum Sales Office) 3,090 SqFt $139,050 Apr-2010 $47.74 

pro rata share of CAM, Insurance 

term, it is assumed that the 

4.00% 

and Real Estate Taxes as well as 

tenant is exposed to Retail 

Retail 21.19% Apr-2011 $49.17 their submetered use of the water. $21,630 $63,762 (3,000SF & larger) market 

Apr-2008 to Mar-2018 Apr-2012 $50.65 


120 Months Apr-2013 $52.17 

Tenant is currently on a month-to-month lease and is expected 

to vacate the premise January 2008. 

Apr-2014 $53.73 

Apr-2015 $55.34 

Apr-2016 $57.00 

Apr-2017 $58.71 

6 Hoang's Storage 

Storage 

Mar-2006 to Oct-2014 

208 SqFt 

1.43% 

$11.54 

$2,400 

Tenant shall reimburse tenant’s 

pro rata share of CAM (excluding 

water), Insurance and Real Estate 

Taxes. 

104 Months 

Following the current term, 

it is assumed that the tenant 

is exposed to Storage 

market leasing assumptions. 

Total Occupied (Useable): 

14,583 SqFt 

Total Vacant: - 

Building Total (Useable): 

14,583 SqFt 


46 

Cash Flow Model 

Cash Flow Model For the Years Ending 

Initial Period 

& PSF 

Year 1 

Dec-2008 

Year 2 

Dec-2009 

Year 3 

Dec-2010 

Year 4 

Dec-2011 

Year 5 

Dec-2012 

Year 6 

Dec-2013 

Year 7 

Dec-2014 

Year 8 

Dec-2015 

Year 9 

Dec-2016 

Year 10 

Dec-2017 

Year 11 

Dec-2018 

POTENTIAL GROSS REVENUE 

Base Rental Revenue $35.94 $524,114 $555,998 $568,813 $592,888 $618,538 $626,731 $712,421 $774,851 $803,194 $834,249 $859,276 

Absorption & Turnover Vacancy ($1.59) (23,175) - - - - - (45,285) - (5,829) - (15,573) 

Scheduled Base Rental Revenue $34.35 500,939 555,998 568,813 592,888 618,538 626,731 667,136 774,851 797,365 834,249 843,703 

Expense Reimbursement Revenue $8.72 127,161 139,307 143,753 148,555 153,533 158,345 160,222 177,720 181,146 187,088 190,355 

TOTAL POTENTIAL GROSS REVENUE $43.07 628,100 695,305 712,566 741,443 772,071 785,076 827,358 952,571 978,511 1,021,337 1,034,058 

General Vacancy ($0.16) (2,281) (16,263) (16,746) (17,302) (18,092) (18,443) 0 (21,146) (16,047) (22,754) (7,794) 

EFFECTIVE GROSS REVENUE $42.91 $625,819 $679,042 $695,820 $724,141 $753,979 $766,633 $827,358 $931,425 $962,464 $998,583 $1,026,264 

OPERATING EXPENSES 

Other Operating Expenses 

Accounting $0.21 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 

Business Licenses $0.19 2,750 2,832 2,917 3,005 3,095 3,188 3,284 3,382 3,484 3,588 3,696 

Condo Dues $2.37 34,500 35,535 36,601 37,699 38,830 39,995 41,195 42,431 43,704 45,015 46,365 

Water $0.38 5,500 5,665 5,835 6,010 6,190 6,376 6,567 6,764 6,967 7,176 7,392 

Other Operating Expenses Total $3.14 45,750 47,122 48,536 49,992 51,492 53,037 54,628 56,267 57,955 59,693 61,485 

Management fee $1.29 18,775 20,371 20,875 21,724 22,619 22,999 24,821 27,943 28,874 29,957 30,788 

Insurance $0.32 4,700 4,841 4,986 5,136 5,290 5,449 5,612 5,780 5,954 6,132 6,316 

Real Estate Taxes $4.88 71,195 73,331 75,531 77,797 80,131 82,535 85,011 87,561 90,188 92,893 95,680 

TOTAL OPERATING EXPENSES $9.63 140,420 145,665 149,928 154,649 159,532 164,020 170,072 177,551 182,971 188,675 194,269 

NET OPERATING INCOME $33.29 $485,399 $533,377 $545,892 $569,492 $594,447 $602,613 $657,286 $753,874 $779,493 $809,908 $831,995 

LEASING & CAPITAL COSTS 

Tenant Improvements $1.48 21,630 - - - - - 16,814 - 2176 - 

Leasing Commissions $4.37 63,762 6,703 - - - - 46,234 - 2971 - 

TOTAL LEASING & CAPITAL COSTS $5.86 85,392 6,703 - - - - 63,048 - 5,147 - 

CASH FLOW AFTER LEASING 

AND CAPITAL COSTS 

$27.43 $400,007 $526,674 $545,892 $569,492 $594,447 $602,613 $594,238 $753,874 $774,346 $809,908 

Purchase Price: $8,090,000 

Cap Rate: 6.00% 

Building SF: 14,583 

Price PSF: $554.76 

Spectrum Sales Office at The Shops at The Broadway

49 

50 Property 

• Property Overview 

• Site Plan 

• Building Specifications 

• Parking Plans 

56 Location 

• McLean Overview 

• Demographic Summary 

• McLean Revitalization District 

• Transportation Overview 

63 Market 

• McLean Retail Market 

• McLean Retail Competitive Set 

• Retail Lease Comparables 

68 Tenancy 

• Tenant Profiles 

• Expiration Schedule 

72 Financials 

• Summary of Financial Assumptions 

• Detailed Rent Roll 

• Cash Flow Model

50 


Property 

Property Overview 

The Shops at the Palladium is an exquisite retail condominium interest 

consisting of 9,491 square feet of first floor space in the award-winning, 

mixed-use development, The Palladium. The Palladium was developed by 

Waterford Development LLC in conjunction with Madison Homes and features 

unparalleled luxury condominium living, commercial and retail space. The 

attractive brick and architectural stone building was designed to anchor the 

revitalization efforts of downtown McLean. The unique, terraced park features 

a spectacular water sculpture, Oasis, by Baltimore sculptor Rodney Carroll 

which serves as the centerpiece of The Palladium’s tranquil Civic Green where 

area residents can linger after visiting retail stores or enjoying a walk. 

Other onsite amenities are abundant and include a conference room, an 

exercise room with personal earphones and TVs, a private training area, and 

yoga and karate classes. The lounge has a fireplace, quiet reading corners, 

a kitchen bar area, and a billiards room. Carlyn and Company decorated the 

elegant marble lobby, which offers a personalized concierge desk. 

Delta Associates, awarded The Palladium the Best Mid-Atlantic Condominium 

Project at its annual Mid-Atlantic Apartment and Condominium Industry 

Awards for Excellence. This award is based on sales price, location, overall 

design, and marketing, among other criteria. 

Project Details 

Developer: 

Waterford Development LLC in alliance 

with Madison Homes 

Architect: 

Lessard Architectural Group 

Total Residential Units: 69 Units 

Number of Residents: Approximately 140 

Square Footage: 

Residential - 103,00 Sq. Ft. 

Retail - 9,491 Sq. Ft. 

Office - 6,500 Sq. Ft. 

Stories: 

4 Stories 

Unit Breakdown: 

Luxury two- and two-bedroom with den 

units 

Price: Units averaged over $1,000,000 

Note: Only the Retail Condominium is part of this offering. 

The McLean Civic Green at The Palladium

At Left: Stephen Gould Reception Area

52 

Retail Site Plan 

StarNut Gourmet 

2,256 Sq. Ft. 

The Vineyard 

1,570 Sq. Ft. 

Laughlin Avenue 

McLean Civic Green 

Chain Bridge Bank 

5,665 Sq. Ft. 

NOT DRAWN TO SCALE 

Lowell Avenue 

Please see pages 54-55 for detailed parking schematics.

53 

Building Specifications 

General Specifications 

Property Name and Address The Shops at the Broadway 

1445 Laughlin Avenue, McLean, VA 22101 

Year Completed 2005 

Rentable Retail Area 

9,491 Sq. Ft. 

Stories One (1) 

Zoning 

PRM - Planned Residential Mixed Use 

Exterior Construction 

Foundation 

Structural Frame and Floors 

Walls 

Ceiling Height 

Windows 

Doors 

Roof 

Retail Parking 

Signage 

Concrete slab footings 

Poured concrete columns, post-tension slabs 

above grade 

Brick and architectural precast 

14’ 10” (First Floor) 

Retail storefront 

Full height entrance doors 

A combination of pitched roof and rock ballast 

over insulation and membrane 

27 dedicated surface parking spaces, 15 dedicated 

garage parking spaces, and 13 unassigned 

garage spaces. Total parking ratio is 

4.4/1,000 assigned, and 5.8/1,000 overall. 

Please refer to the following page for detailed 

parking plans. 

Façade signage available. 

Utility Services 

Electric 

Gas 

Water / Sewer 

Dominion Virginia Power 

Washington Gas 

Fairfax County 

Fire / Life / Safety 

Fire Protection/ 

Security System 

Fire Alarm Enunciator panel. The building is 

fully sprinklered. 


54 

Parking Plans 

Surface Parking 

Building Access Points 

Your Residence, Parking & Storage 

Assigned Storage Units 

Assigned Garage Suites 

Trash Room 

Parking Assigned to 110 (9 Spaces) 

Parking Assigned to Kontzlas (2 Spaces) 

Unit 101, 102 Parking (27 on level) 

Guest Parking (2 Spaces) 


The Vineyard 


Purple Spaces represent the 27 dedicated surface parking spaces and 15 dedicated garage parking spaces to the Right. 

Blue Spaces represent the 13 unassigned garage spaces. 

Total parking ratio is 4.4/1,000 assigned and 5.8/1,000 overall.

55 

Garage Parking 

Building Access Points 

Building Storage Rooms 

Assigned Storage Units 

Assigned Garage Suites 

Trash Room 

Parking Assigned to 110 (20 Spaces) 

Parking Assigned to Kontzlas (4 Spaces) 

Unassigned Parking (13 Spaces) 

Office/Staff Parking (3 Spaces) 

Commercial (101, 102) (15 Spaces) 

Remaining Guest (7 Spaces) 


56 


Location 

McLean Overview 

Ideally situated within the Capital Beltway, 

just 4 miles from the Washington D.C line, 

McLean is an unincorporated community 

located in prestigious Fairfax County in 

Northern Virginia. The highly populated 

community is situated between the 

George Washington Parkway and the 

town of Vienna at Interstate 66, a major 

east-west connector in Northern Virginia. 

The community is recognized for its 

affluent residents and luxury homes. Due 

to its proximity to the CIA in Langley, many high-ranking government 

officials, diplomats, and members of Congress reside in McLean. The 

community also boasts superior access to several upscale shopping 

centers, including the nearby 5 million square feet of big-box and national 

retailers at Tysons Corner, including Tysons Corner Center and Tysons 

Galleria. In addition to its abundant retail amenities, McLean is home 

to several major corporate headquarters and Fortune 500 companies 

including Freddie Mac, Mars, Capital One, Gannett, NVR, Bearingpoint, 

USA Today, and Booz Allen Hamilton.

Demographic Summary 

Fairfax County has been one of the most rapidly growing 

jurisdictions in the United States over the past three decades 

– more than doubling the size of its population since 1970. 

Despite this growth downtown McLean has been successful in 

retaining its small-town charm. Its current population is 67,500 

and is projected to grow 17% by 2025. Residents within a mile 

radius of The Palladium boast a median household income of 

$158,000, one of the highest in the country and nearly triple that 

of Virginia at $54,240. Income levels are likely to remain in the 

uppermost tier because of the area’s low unemployment rates 

(3.0%), high levels of educational attainment, and the diversity 

of public and private job sectors. Housing values in McLean 

also benefit from the region’s economic stability; the estimated 

home value is $865,000 which has grown 120% since 2000 when 

it stood at $388,000. 

The Shops at The Palladium November 2007 

1445 LAUGHLIN AVENUE, MCLEAN, VA 

1 Mile Radius 3 Mile Radius 5 Mile Radius 

POPULATION 

2006 Estimated Population 10,162 77,209 263,319 

2011 Projected Population 10,499 79,644 270,308 





2006 Median Age 46.0 41.8 40.6 

HOUSEHOLDS 

2006 Estimated Households 4,029 30,791 102,671 

2011 Projected Households 4,158 31,654 104,924 





POPULATION BY RACE 

2006 Estimated White 78.6% 78.2% 76.8% 

2006 Estimated Black or African American 2.1% 2.6% 3.9% 

2006 Estimated Asian & Pacific Islander 16.4% 15.6% 14.3% 

2006 Estimated American Indian & Native Alaskan 0.1% 0.1% 0.2% 

2006 Estimated Hispanic 5.5% 7.9% 10.8% 

INCOME 

2006 Estimated Average Household Income $ 158,572 $ 154,514 $ 150,072 

2006 Estimated Median Household Income $ 126,733 $ 122,395 $ 119,197 

2006 Estimated Per Capita Income $ 62,938 $ 61,863 $ 58,916 

EDUCATION (AGE 25+) 

2006 High School Graduate 8.4% 9.5% 10.0% 

2006 Some College 9.2% 8.6% 9.2% 

2006 Associates Degree Only 4.7% 4.6% 4.5% 

2006 Bachelors Degree Only 28.9% 32.2% 31.2% 

2006 Graduate Degree 47.0% 43.1% 41.3% 

BUSINESS 

Number of Businesses 1,390 4,836 14,166 

Total Number of Employees 9,969 67,776 178,633 

Employee Population per Business 7.2 14.0 12.6 

Residential Population per Business 7.3 16.0 18.6 

57 

At left: Tysons Corner Center 

Above: New Housing along Chain Bridge Road 


58 

Fairfax County Comprehensive Plan 

& McLean Revitalization District 

Located within one of the fastest growing counties in 

the nation, local officials enacted the Fairfax County 

Comprehensive Plan and Commercial Revitalization 

Districts in 1998 to ensure foresight and deliberate 

development patterns throughout the Fairfax region. 

The Palladium, set in the McLean Central Business 

Center, is the south anchor of the Plan’s McLean “Main 

Street” bound by Beverly Street and Chain Bridge 

Road. The “Main Street” vision is a new, primarily 

pedestrian friendly street which encourages leisurely 

window shopping as well as outdoor seating and 

dining. 

To encourage the redevelopment necessary for this 

vision, the McLean Revitalization District was created. 

The provisions are designed to alleviate constraints 

posed by small irregularly shaped parcels, in addition 

to providing flexibility for administrative approvals. 

The McLean Revitalization Corporation, a community 

organization of McLean business and residents is 

authorized to promote and manage the revitalization 

of the McLean Central Business Center. Since its 

inception dramatic infrastructure improvements have 

been put into action, current projects influencing the 

Subject Property include: 

Dolley Madison Boulevard 

- Pilot Project 

The Streetscape Improvement Pilot Project includes 

brick pavers, updated lighting, and landscaping. 

Improvements and development are expected to 

continue as several owners work to consolidate 

separately owned parcels throughout the district. While 

still tentative, significant consolidation at the corner of 

Redmond Drive and Old Dominion Drive could lead to 

Park Av 

Moyer Pl 

Old Dominion Drive 

Ingleside Avenue 

Dolley Madison Boulevard 

Chain Bridge Road 

Elm Street 

Fleetwood Drive 

Redmond Drive 

Tennyson Drive 

Beverly Street 

Old Dominion Drive 

Center St 

Park Av 


Curran Street 

Moyer Pl 

Emerson Ave 

Ingleside Avenue 

Lowell Ave 

Rt. 123 

Old Chain Bridge Road 

Whittier Avenue 

Elm Street 


Fleetwood Drive 

Rt. 309 

Redmond Drive 

a future mixed-use development; county officials 

and owners are discussing this potential. When 

fully realized The Palladium, already the showcase 

of this effort, will be an integral component of the 

new pedestrian-friendly center of McLean. 

Beverly Street 

Center St 


Curran Street 

Emerson Ave 

Lowell Ave 

Rt. 123 

Old Chain Bridge Road 

Whittier Avenue 


Rt. 309 

Tennyson Drive 

Westmoreland Street 

- Undergrounding Utilities 

Work has begun to move utility lines underground at 

Chain Bridge Road & Old Dominion Drive. 


- Pedestrian Safety 

MRC has arranged for the purchase and installation 

of several benches and bus shelters. 

Westmoreland Street 

McLean Revitalization District

FIGURE 2 

60 

Transportation Overview 

McLean benefits from an ideal location, just four miles 

from the Washington D.C. line, with several major 

regional highways and primary routes running through 

the community which ensures quick and easy access 

to and from the Subject Property. Further, The Shops 

at the Palladium are strategically positioned at the 

intersection of Old Dominion Drive and Chain Bridge 

Road; this critical intersection has 50,000 cars passing 

daily ensuring maximum patronage potential. Access 

to Metrobus service is directly in front of the subject 

property at Emerson Avenue and Chain Bridge Road, 

which provides transit throughout the metropolitan 

area. 

Distance to Major Transportation Routes 

State Route 123 

0.40 Miles 

(Dolley Madison Boulevard) 


1.15 Miles 

(Dulles Airport Access Road) 


1.20 Miles 

(Georgetown Pike) 

The Capital Beltway 

1.50 Miles 

The George Washington 

2.50 Miles 

Memorial Parkway 

Interstate 66 

2.50 Miles 

FIGURE 2 

ATTACHMENT 2 

Fairfax County, through a number of transportation 

improvement studies, has several infrastructure 

improvements in the planning stages which could 

dramatically bolster regional accessibility. 

Improvements detailed to the right include several 

new Metrorail stops through Tysons Corner and rail or 

rapid bus transit lines all within 2 miles of the Subject 

Property. 

Outdoor seating at StarNut Gourmet at The Shops at The Palladium

StarNut Gourmet at The Shops at The Palladium


63 

Market

64 

Market Overview 

The McLean Retail Submarket 

Ideally located within the Capital Beltway, between 

the George Washington Parkway and I-66, McLean is 

comprised of 770,000 square feet of retail space, 68% 

of which is found in shopping centers. The majority of 

this submarket was developed in the 1970s in response 

to the growing population and burgeoning federal 

contractor presence in nearby Tysons Corner. Today, 

the McLean retail submarket remains focused on 

upscale boutiques, service providers, and restaurants, 

supplemented by neighborhood grocery stores serving 

the community’s dense and affluent residential base. 

Premier tenants in the McLean submarket include 

Balducci’s, Giant, Safeway, Starbucks, CVS, Boston 

Market, and Blockbuster. 

Submarket Fundamentals 

Currently the McLean submarket is nearly at full 

occupancy, with only 0.3% vacancy. The submarket 

has historically performed with negligible supply, 

exacerbating pent-up demand and creating significant 

interest when available space becomes available for 

lease. Year to date absorption totals positive 2,600 

square feet, compared to positive 15,000 square feet 

in 2006 which was the result of retail leasing at The 

Palladium. Recent leases in this submarket include 

The Jewelry Store at the Madison Building which inked 

1,135 square feet of space for $45.00 triple net. In the 

same building Boone & Sons is offering a sublet of 1,325 

square feet at $50.00 triple net, with 3% escalations 

per year for five years. Further, retail at the corner of 

Chain Bridge Road and Center Drive is commanding 

rents between $45.00 and $57.00 triple net for leases 

consummated in 2006 and 2007. All leases include 

3% annual rent escalations for five to ten year terms. 

With little available supply, rents in the submarket have 

shown steady growth, increasing an average of 4.3% 

annually since 2004. McLean rents remain some of 

the highest in the region at an average of $48.00 

triple net. 

Deliveries and Development Pipeline 

There are no retail projects currently under 

construction in McLean nor has any product been 

delivered in 2007. The most recent deliveries 

include the Subject Property in 2006 and the 

Chesterbrook Shopping Center, a 9,300 square 

foot retail center which is fully leased including 

Wachovia Bank. Further, there are no new projects 

under construction in McLean as developable 

infill opportunities are rare. Many owners have 

begun to consolidate parcels in attempt to 

realize the “Main Street” vision as depicted in the 

Fairfax County Comprehensive Plan. Significant 

consolidation around Redmond Drive and Old 

Dominion Drive could result in a significant future 

mixed-use project; the County and property 

owners are currently reviewing this potential. 

Above: Elevation of Chesterbrook Shopping Center 

Opposite page: Aerial view of the Palladium along Lowell Street


Lowell Street

66 

McLean Retail Competitive Set 

Property & Size Property Type Building Size Year Built Major Tenants Percent Leased 

1 Chain Bridge Corner 

1446-1454 Chain Bridge Road 

Anchored Shopping Center 

118,000 SF 

1,500 SF Vacancy 

1973 Giant Food, CVS 98% 

2 6811-6815 Old Dominion Drive Unanchored Retail Strip 19,300 1956 McLean Hardware, Chesapeake 

Bagel Bakery 

100% 

3 McLean Center 

1427-1439 Center Drive 

Unanchored Retail Strip 9,420 n/a Pool Doctors, McLean Cigar 100% 

4 McLean-Chain Bridge Center* 

1451 Chain Bridge Road 

Anchored Shopping Center 

(Closed Former Giant) 

32,000 n/a Total Wine & More, 

Books A Million 

100% 

5 McLean Commerce Building 


2-Story Retail 25,000 1968 Minute Man Press, 

The Kitchen Guild 

100% 

6 Langley Shopping Center 


7 Old McLean Village 

1352-1354 Old Chain Bridge Rd 

8 Salona Village Shopping Center 

1313-1351 Chain Bridge Rd 

9 The Commons Shopping Center 

1330 Chain Bridge Road 

Unanchored Shopping Center 39,800 n/a R&M Lighting, Three Pigs 100% 

3-Story Retail 30,000 1978 Kwik Copy Printing, Nail Salon 100% 

Unanchored Shopping Center 26,900 1968 Le Grand Café 100% 

Anchored Shopping Center 37,000 1969 Safeway, Rite Aid, Blockbuster 100% 

10 The Market Place 

6830 Old Dominion Drive 

Retail building on 2-levels 25,000 1991 Sona Bank, The Greek Taverna 

Ocean M Restaurant 

100% 

11 6707 Old Dominion Drive 1st Floor Retail 30,300 1980 Hair Cuttery, Face & Body Spa 

Creative Hairdressers 

100% 

McLean Retail Lease Comparables 

Property & Size Property Type Tenant Tenant Size 

Rent (NNN) 

& Escalations Lease Type Term 

A 1436-1438 Chain Bridge Road Unanchored Retail Undisclosed 1,690 $57.00 - 3%/yr New 10 yr 

9,540 SF 1,220 $45.00 - 3%/yr New 5 yr 

904 $45.00 - 3%/yr New 5 yr 

870 $45.00 - 3%/yr New 5 yr 

B The Madison Building Anchored McEnearney Realtors 1,795 - 1,898 $65.00 - 3%/yr New 5 yr 

1320 Old Chain Bridge Road Boone & Sons Sublet 1,326 $50.00 - 3%/yr Sublet 5 yr 

81,200 Sq. Ft. The Jewelry Store 1,135 $45.00 - 3%/yr New 5 yr 

* Photo not available

67 

1 

8 

Map of Competitive Properties & Lease Comparables 

For Properties Detailed on page 67 

Old Chain Bridge Rd 

Ingleside Ave 

Dolley Madison Blvd 

9 

B 8 

2 

9 

Beverly Rd 

7 

3 

10 

5 

11 

Old Dominion Dr 

Park Ave 

10 

Elm St 

3 

Redmond Dr 

2 

Chain Bridge Rd 

6 

Spring Vale Ave 

11 

A 

Ingleside Ave 

6 

A 

Meadowbrook Ave 

4 

1 

Emerson Ave 

Whittiter Ave 

Laughlin Ave 

5 

7 

B 


68 


Tenancy

69 

Tenant Profiles 


2,256 Sq. Ft. 


StarNut Gourmet is a unique food and gift store that 

specializes in high quality chocolates and sweets, 

nuts, coffee and tea. The menu reflects international 

flavors including Europe’s #1 coffee. StarNut Gourmet 

also offers catering services. The comfortable café is 

designed with old world charm and casual elegance 

and features outdoor seating that attracts numerous 

patrons to its charming setting. 


5,665 Sq. Ft. 

National Association 

Chain Bridge Bank is a full-service regional bank, 

serving the businesses and residents of McLean and 

surrounding Northern Virginia communities. Chain 

Bridge Bank was launched in September 2007 by 

Peter G. Fitzgerald after leaving the U.S. Senate. 

Fitzgerald raised $18.2 million in capital from area 

investors. As part of the community, the bank is tuned 

into local business and individuals, and committed to 

the notion of personal service. At the same time, Chain 

Bridge Bank offers cutting-edge technologies and 

services such as online banking, personal banking, and 

business banking. The bank’s primary office is located 

at the subject property. 

The Vineyard 

1,570 Sq. Ft. 


The Vineyard offers a wide selection of wine, cheeses, 

oils, and specialty food selections. The independent 

producers who supply these goods are those who 

over-deliver quality at the best value in any price range. 

The Vineyard, through the use of technology, is able 

to keep customers abreast of the best offerings and 

information on current and new selections, provide 

links to the producers, and retain a history of your 

favorite experiences. The store features special events 

and holds wine tastings every Friday and Saturday. 

For more information please refer to their website at 

http://www.thevineyardva.com. 

At Left: StarNut Gourmet Entrance 


70 

Combined Tenant Expiration Schedule 

SQUARE FEET EXPIRING BY YEAR 

6,000 

SQUARE FEET EXPIRING 

5,000 

4,000 

3,000 

2,000 

1,000 

0 

2007 2008 2009 2010 2011 2012 

YEAR 

Calendar 

Year Expiring 

Number 

of Spaces 

Net Rentable 

Square Feet 

Expiring 

Percentage of 

Square Feet 

Expiring 

2007 - - - 

2008 - - - 

2009 - - - 

2010 1 2,256 23.77% 

2011 1 1,570 16.54% 

2012 1 5,665 59.69% 

Total 3 9,491 100.00% 

The Vineyard

71 


72 


Financials

73 

Financial Summary and Assumptions 

PROPERTY DESCRIPTION 

Building Name 

The Shops at the Palladium 

Building Address 

1445 Laughlin Ave. 

McLean, Virginia 

Property Type 

Retail 

Size of Building 

Rentable SF 9,491 

GLOBAL 

Analysis Period 

Commencement Date January 1, 2008 

End Date December 31, 2017 

Term (Years) 10 

Growth Rate (CAM, Insurance and RET) 3.00% 

General Vacancy Rate (reduced by absorption & turnover vacancy) 

Chain Bridge Bank 2.50% 

Other Tenants 5.00% 

FUTURE LEASING ASSUMPTIONS 

Retention Ratio 80.00% 

Lease Term 

Retail (0 SF- 4,999 SF) 

Five (5) Years 

Retail (5,000 SF & Larger) 

Ten (10) Years 

Current Market Rent (PSF Per Year) 

Retail (0 SF- 4,999 SF) $50.00 

Retail (5,000 SF & Larger) $50.00 

Annual Rental Escalation 3.00% 

Expense Recovery Type 

Triple Net (pro rata share) 

Tenant Improvements Per SF 

New $7.00 

Renew $0.00 

Leasing Commissions 

New 4.00% 

Renew 0.00% 

Downtime 

Three (3) Months 

EXPENSES 

Management Fee (% of EGR) 3.00% 

Operating Expense Source 

Based on 2008 budget 

Real Estate Taxes Source 

Based on 2007 Tax Bill 

t h i s i n f o r m a t i o n h a s b e e n o b t a i n e d f r o m s o u r c e s b e l i e v e d r e l i a b l e. w h i l e w e d o n o t d o u b t i t s a c c u r a c y, w e 

h a v e n o t verified it a n d m a k e n o g u a r a n t e e, w a r r a n t y o r r e p r e s e n tat i o n a b o u t it. it is y o u r r e s p o n s i b i l i t y t o 

c o n f i r m i n d e p e n d e n t l y i t s a c c u r a c y a n d c o m p l e t e n e s s . a n y p r o j e c t i o n s, o p i n i o n s, a s s u m p t i o n s o r e s t i m at e s 

u s e d ar e f o r e x a m p l e o n l y an d do n o t r e p r e s e n t t h e c u r r e n t o r f u t u r e p e r f o r m a n c e o f t h i s p r o p e r t y. t h e 

v a l u e o f t h i s t r a n s a c t i o n t o y o u d e p e n d s o n t a x a n d o t h e r s f a c t o r s w h i c h s h o u l d b e e v a l u a t e d b y y o u r t a x , 

f i n a n c i a l , a n d l e g a l a d v i s o r s. y o u a n d y o u r a d v i s o r s s h o u l d c o n d u c t a c a r e f u l , i n d e p e n d e n t i n v e s t i g at i o n 

o f t h e p r o p e r t y to d e t e r m i n e t h e suitability o f t h e p r o p e r t y to m e e t yo u r n e e d s . 

StarNut Gourmet Outdoor Seating 


74 

Rent Roll 

Tenant Name 




Rate & 

Sq Ft Bldg 

Share 

Amount 




Imprvmnts 

Rate 

Amount 

Commssns 

Rate 

Amount 




1 StarNuts Gourmet 

Retail, Suite: 101-A 

2,256 SqFt 

23.77% 

$36.00 

$81,216 

Nov-2008 

Nov-2009 

$38.00 

$40.50 



Real Estate Taxes 

Nov-2005 to Oct-2010 

60 Months 





Tenant holds one 5-year renewal option at predetermined rate 

Tenant to pay 5% of gross sales as a Percentage Rent. Please refer to Lease for Percentage Rent Base amount schedule. 

StarNuts Gourmet 

Option, Suite: 100 

2,256 SqFt 

23.77% 

$43.00 

$97,008 

Nov-2013 

Nov-2014 

$45.00 

$46.00 


share of CAM, Insurance and Real 

Estate Taxes 

Nov-2010 to Oct-2015 

60 Months 



is exposed to Retail (0 

SF- 4,999 SF) market leasing 

assumptions. 

2 Vineyard 1,570 SqFt $41.50 Sep-2007 $42.75 Tenant shall reimburse 16.63% 

Retail 16.54% $65,155 Sep-2008 $44.03 


Estate Taxes 

Sep-2006 to Aug-2011 Sep-2009 $45.35 

60 Months Sep-2010 $46.71 



is exercise its renewal 

option 

Tenant holds two 5-year renewal options. The rent on the first option is predetermined while the rent on the second option is FMV. The lease does not required percentage rent. 

Vineyard 1,570 SqFt $48.75 Sep-2012 $50.21 Tenant shall reimburse 16.63% 


Option 16.54% $76,538 Sep-2013 $51.72 Following the current term, 

Estate Taxes 


is exposed to Retail (0 

Sep-2011 to Aug-2016 Sep-2014 $53.27 

60 Months Sep-2015 $54.87 

SF- 4,999 SF) market leasing 

assumptions.

75 

Tenant Name 




Rate & 

Sq Ft Bldg 

Share 

Amount 




Imprvmnts 

Rate 

Amount 

Commssns 

Rate 

Amount 




3 Chain Bridge Bank 5,665 SqFt $43.75 May-2008 $45.06 Tenant shall reimburse 59.63% 

Retail 59.69% $247,844 May-2009 $46.41 


Real Estate Taxes 

May-2007 to Apr-2012 May-2010 $47.81 

60 Months May-2011 $49.24 





Tenant holds three 5-year renewal options at 3% increase over the previous year rent 

Chain Bridge Bank 5,665 SqFt $50.72 May-2013 $52.24 Tenant shall reimburse 59.63% 

Option 59.69% $287,319 May-2014 $53.81 


Estate Taxes 

May-2012 to Apr-2017 May-2015 $55.42 

60 Months May-2016 $57.08 





Chain Bridge Bank 5,665 SqFt $58.80 May-2018 $60.56 Tenant shall reimburse 59.63% 

Option 59.69% $333,081 May-2019 $62.38 


Estate Taxes 

May-2017 to Apr-2022 May-2020 $64.25 

60 Months May-2021 $66.18 



is exercise its renewal 

option. 

Total Occupied (Useable): 

9,491 SqFt 

Total Vacant: - 

Building Total (Useable): 

9,491 SqFt 


76 

Cash Flow Model 

Cash Flow Model For the Years Ending 

Initial Period 

& PSF 

Year 1 

Dec-2008 

Year 2 

Dec-2009 

Year 3 

Dec-2010 

Year 4 

Dec-2011 

Year 5 

Dec-2012 

Year 6 

Dec-2013 

Year 7 

Dec-2014 

Year 8 

Dec-2015 

Year 9 

Dec-2016 

Year 10 

Dec-2017 

Year 11 

Dec-2018 

POTENTIAL GROSS REVENUE 

Base Rental Revenue $42.41 402,550 416,867 432,413 447,651 458,840 470,447 485,764 504,986 549,893 573,283 590,482 

Absorption & Turnover Vacancy $0.00 - - - - - - - (11,561) (8,287) - - 

Scheduled Base Rental Revenue $42.41 402,550 416,867 432,413 447,651 458,840 470,447 485,764 493,425 541,606 573,283 590,482 

Expense Reimbursement Revenue $8.41 79,778 82,240 84,797 87,406 89,958 92,595 95,408 96,383 100,619 105,268 108,427 

TOTAL POTENTIAL GROSS REVENUE $50.82 $482,328 $499,107 $517,210 $535,057 $548,798 $563,042 $581,172 $589,808 $642,225 $678,551 $698,909 

General Vacancy ($1.75) (16,609) (17,222) (17,894) (18,546) (18,988) (19,447) (20,092) (9,271) (14,712) (24,111) (24,835) 

EFFECTIVE GROSS REVENUE $49.07 $465,719 $481,885 $499,316 $516,511 $529,810 $543,595 $561,080 $580,537 $627,513 $654,440 $674,074 

OPERATING EXPENSES 

Other Operating Expenses 

Accounting $0.32 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 

Business Licenses $0.19 1,830 1,885 1,941 2,000 2,060 2,121 2,185 2,251 2,318 2,388 2,459 

Trash Removal $0.32 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 

Condo Dues $3.44 32,651 33,631 34,639 35,679 36,749 37,851 38,987 40,157 41,361 42,602 43,880 

Water $0.05 500 515 530 546 563 580 597 615 633 652 672 

Miscelaneous $0.06 600 618 637 656 675 696 716 738 760 783 806 

Other Operating Expenses Total $4.38 41,581 42,829 44,113 45,437 46,801 48,204 49,649 51,141 52,672 54,253 55,881 

Management fee $1.47 13,972 14,457 14,979 15,495 15,894 16,308 16,832 17,416 18,825 19,633 20,222 

Insurance $0.17 1,581 1,628 1,677 1,728 1,779 1,833 1,888 1,944 2,003 2,063 2,125 

Real Estate Taxes $2.37 22,517 23,193 23,888 24,605 25,343 26,103 26,886 27,693 28,524 29,380 30,261 

TOTAL OPERATING EXPENSES $8.39 79,651 82,107 84,657 87,265 89,817 92,448 95,255 98,194 102,024 105,329 108,489 

NET OPERATING INCOME $40.68 $386,068 $399,778 $414,659 $429,246 $439,993 $451,147 $465,825 $482,343 $525,489 $549,111 $565,585 

LEASING & CAPITAL COSTS 

Tenant Improvements $0.00 - - - - - - - 3,884 2,784 - 

Leasing Commissions $0.00 - - - - - - - 5,892 4,224 - 

TOTAL LEASING & CAPITAL COSTS $0.00 - - - - - - - 9,776 7,008 - 

CASH FLOW AFTER LEASING 

AND CAPITAL COSTS 

$40.68 $386,068 $399,778 $414,659 $429,246 $439,993 $451,147 $465,825 $472,567 $518,481 $549,111 

Purchase Price: $6,430,000 

Cap Rate: 6.00% 

Building SF: 9,491 

Price PSF: $677.48 

Chain Bridge Bank Exterior at The Shops at The Palladium

Chain Bridge Bank at The Shops at The Palladium

Exclusive Investment Offering: Condominium Interest - Transwestern

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