Exclusive Investment Offering: Condominium Interest - Transwestern
Exclusive Investment Offering: Condominium Interest - Transwestern
Exclusive Investment Offering: Condominium Interest - Transwestern
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and<br />
<strong>Exclusive</strong> <strong>Investment</strong> <strong>Offering</strong>: <strong>Condominium</strong> <strong>Interest</strong>
ASSET INVESTMENT SALES GROUP<br />
Andy Stape<br />
Senior Vice President<br />
301.896.9139<br />
andy.stape@transwestern.net<br />
Howard W. Mersky<br />
Senior Vice President<br />
301.896.9017<br />
howard.mersky@transwestern.net<br />
Joe Friedman<br />
Vice President<br />
301.896.9096<br />
joe.friedman@transwestern.net<br />
Will Wheeler<br />
Associate<br />
301.896.9159<br />
will.wheeler@transwestern.net<br />
Mat Adler<br />
Associate<br />
301.896.9110<br />
mat.adler@transwestern.net<br />
Tanya Slesinger<br />
Senior Project Manager<br />
301.896.9090<br />
tanya.slesinger@transwestern.net<br />
Yurita Suwandi<br />
Senior Financial Analyst<br />
301.896.9042<br />
yurita.suwandi@transwestern.net<br />
Verónica Sandoval<br />
Graphic Designer<br />
301.896.9080<br />
veronica.sandoval@transwestern.net<br />
Confidentiality & Conditions<br />
This <strong>Investment</strong> Memorandum (“Memorandum”)<br />
is furnished to prospective purchasers solely to<br />
facilitate the purchaser’s consideration of The Shops at<br />
the Broadway and The Shops at the Palladium, located<br />
at 502 West Broad Street in Falls Church, Virginia and<br />
1445 Laughlin Avenue in McLean, Virginia, respectively<br />
(“Property”) .The selling entity is Broadway Commercial,<br />
LLC and Palladium Commercial, LLC (“Owner”). The<br />
Memorandum contains proprietary information and<br />
was prepared by <strong>Transwestern</strong> Carey Winston, LLC<br />
(“TCW”) using information compiled from sources we<br />
consider to be reliable. By receipt of this Memorandum,<br />
you agree that: (a) the Memorandum and its contents<br />
are of a confidential nature and that you will hold and<br />
treat it in strictest confidence in full compliance with the<br />
separate confidentiality agreement you have executed;<br />
(b) you will not reproduce, transmit or disseminate the<br />
information contained in the Memorandum through<br />
any means, or disclose this Memorandum or any<br />
of its contents to any other entity without the prior<br />
written authorization of TCW nor will you use this<br />
Memorandum or any of its contents in any fashion or<br />
manner detrimental to the interests of TCW or seller;<br />
and (c) upon request you will return the Memorandum<br />
without retaining any copy or extract of any portion<br />
thereof.<br />
This Memorandum does not purport to be all-inclusive<br />
or to contain all the information which prospective<br />
purchasers may desire and is a summary upon which<br />
prospective purchasers are not entitled to rely. Certain<br />
documents and materials are described herein in<br />
summary form. The summaries are not complete<br />
descriptions of the documents and materials. <strong>Interest</strong>ed<br />
parties are expected to review all such documents<br />
and materials independently. Market financial<br />
projections are provided for reference purposes only<br />
and are based on assumptions relating to the general<br />
economy, competition and other factors beyond the<br />
control of TCW and are, therefore subject to material<br />
variation. Additional information and an opportunity<br />
to inspect the Property will be made available to<br />
qualified prospective purchasers upon request. Each<br />
purchase offer is to be based strictly and entirely upon<br />
the purchaser’s independent investigation, analysis,<br />
appraisal and evaluation of facts and circumstances<br />
deemed relevant by the purchaser. Neither Owner,<br />
TCW nor any of their respective directors, officers or<br />
affiliates have made any representation or warranty,<br />
express or implied as to the accuracy or completeness<br />
of this Memorandum or any of its contents, and no<br />
legal commitment or obligation shall arise by reason<br />
of this Memorandum or its contents.<br />
This offering is submitted and received with the<br />
understanding that all negotiations for the acquisition<br />
of the herein described property will be conducted<br />
through TCW. The sellers and TCW expressly reserve<br />
the right, at their sole discretion, to reject any or all<br />
expressions of interest or offers to purchase the<br />
Property and/or terminate discussions with any entity<br />
at any time with or without notice.
and<br />
4 Executive Summary<br />
• <strong>Offering</strong> Highlights<br />
• <strong>Investment</strong> Details<br />
• Driving Directions<br />
15 The Shops at the Broadway<br />
• Property<br />
• Location<br />
• Market<br />
• Tenancy<br />
• Financials<br />
49 The Shops at the Palladium<br />
• Property<br />
• Location<br />
• Market<br />
• Tenancy<br />
• Financials<br />
ASSET INVESTMENT SALES GROUP
4<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Executive<br />
Summary<br />
and
The Shops at The Palladium
6<br />
<strong>Offering</strong> Highlights<br />
100% Leased, Award-Winning, Upscale Retail<br />
<strong>Condominium</strong> <strong>Interest</strong>s<br />
The Shops at the Broadway and The Shops at the<br />
Palladium is a 100% leased, 24,074 square foot retail<br />
portfolio, each part of an award-winning, mixeduse<br />
complex developed by renowned Waterford<br />
Development LLC. The retail components are the focal<br />
point for these highly successful mixed-use residential<br />
developments.<br />
The Shops at the Broadway, recently built in 2004,<br />
features 14,583 square feet of ground level upscale<br />
boutique and national retailers. Patrons enjoy pristine<br />
brick walkways and 145 feet of attractive streetscape<br />
on the highly traveled Route 7.<br />
The Shops at the Palladium consists of 9,491 square<br />
feet of ground level upscale boutique retailers and<br />
a bank. The property features a spectacular water<br />
sculpture in the center of a tranquil, public Civic Green<br />
where residents, patrons, and citizens of McLean can<br />
gather for community events. The entire project was<br />
awarded the Best Mid-Atlantic <strong>Condominium</strong> Project<br />
of the year by Delta Associates in 2005.<br />
WEST BROAD STREET<br />
Unparalleled Infill Locations with Significant<br />
Neighborhood Revitalization<br />
Both The Broadway and The Palladium enjoy<br />
unparalleled locations within the Capital Beltway, just<br />
miles from Washington D.C. in Northern Virginia. The<br />
Broadway, in Falls Church, is conveniently positioned in<br />
the epicenter of the bustling Route 7 corridor between<br />
Tysons Corner and Seven Corners with over 27,000<br />
cars passing daily. The Falls Church Comprehensive<br />
Aerial view of The Shops at The Broadway<br />
Plan is transforming the landscape; since 2004 over<br />
1,200 residential units, 146,000 square feet of retail,<br />
and 280,000 square feet of office space has been<br />
approved. The Broadway serves as the eastern anchor<br />
of what is rapidly becoming a vibrant live, work, and<br />
play community.<br />
Likewise, The Palladium, set in the heart of<br />
McLean’s Central Business Revitalization District,<br />
is the cornerstone of the “Main Street” vision<br />
which bridges private spaces with public spaces.<br />
The Property sits strategically at the intersection of<br />
Chain Bridge Road and Old Dominion Drive with a
7<br />
combined traffic count of over 50,000 cars passing daily.<br />
With the utmost commitment from both communities<br />
to neighborhood revitalization, the Subject Properties<br />
should enjoy significant future gains in patronage.<br />
Premier Demographics; Rapid Population Growth<br />
with High Disposable Income<br />
The success of these dynamic developments is bolstered<br />
by superior demographics in both Falls Church and<br />
McLean. The population in Falls Church is anticipated<br />
to grow 41% by 2025. As of the 2000 Census, the City<br />
ranked 3rd in the state for median household income<br />
and 12th in proportion of households with incomes of<br />
$150,000 or more. Similarly, residents within a one mile<br />
radius of The Palladium boast an average household<br />
income of $158,000, one of the highest in the nation<br />
and nearly triple the state average. Housing values in<br />
McLean have benefited from its affluent residential<br />
base; the average home is valued at $865,000 which has<br />
grown 120% since 2000. Retail tenants at these premier<br />
Properties are both entrenched in neighborhoods<br />
with some of the highest disposable incomes in the<br />
country.<br />
Supply Constrained Retail Markets with High<br />
Barriers to Entry<br />
Retail under-supply is even more profound in McLean,<br />
which records a negligible 0.3% retail vacancy rate.<br />
Despite rampant efforts to consolidate parcels for<br />
redevelopment, retail infill sites are extremely rare<br />
and therefore command above average rents for<br />
Washington D.C. suburban cores. The Shops at the<br />
Palladium are leased well below market with market<br />
rents averaging $48 psf triple net. Market rents have<br />
experienced 4.3% annual growth since 2004.<br />
Given the infill nature of these markets, rent growth is<br />
anticipated to continue to increase at above inflation.<br />
Both the Subject Properties are located within<br />
consistently strong retail submarkets. Each submarket<br />
registers low vacancy rates which perpetuates high<br />
demand and corresponding rent growth. The City of<br />
Falls Church, occupying just 2.0 square miles, has a<br />
retail inventory of 683,000 square feet at a low 1.3%<br />
vacancy. Current rental rates are well below market<br />
as market rents range from $40.00 to $60.00 psf triple<br />
net in the City. Significant revitalization of this affluent<br />
neighborhood has encouraged 7% average annual<br />
rent growth over the past four years.<br />
Aerial view of The Shops at The Palladium<br />
LAUGHLIN AVENUE<br />
Sold Separately or as a Portfolio<br />
ASSET INVESTMENT SALES GROUP
9<br />
<strong>Investment</strong> Details<br />
<strong>Investment</strong> Summary<br />
Asking Price $8,090,000 $6,430,000<br />
Year 1 NOI $485,399 $386,068<br />
Initial Capitalization Rate 6% 6%<br />
Building Summary<br />
Address<br />
Property Description<br />
502 West Broad Street<br />
Falls Church, VA<br />
1st Floor Retail in<br />
Mixed-Use Complex<br />
1445 Laughlin Avenue<br />
McLean, VA<br />
1st Floor Retail in<br />
Mixed-Use Complex<br />
Square Footage 14,583 SF 9,491 SF<br />
Year Built 2004 2005<br />
Percent Leased 100% 100%<br />
Tenant Summary 5 Tenants 3 Tenants<br />
Marketing Schedule<br />
Property Tours Available Upon Request Available Upon Request<br />
Offers Due Wednesday, December 19, 2007 Wednesday, December 19, 2007<br />
Hoang’s Grill and Sushi Bar at The Shops at The Broadway<br />
ASSET INVESTMENT SALES GROUP
10<br />
Driving Directions<br />
From Ronald Reagan National Airport (DCA)<br />
to The Shops at The Broadway<br />
Approximate Driving Distance:<br />
10 miles | 17 minutes<br />
From Ronald Reagan National Airport (DCA)<br />
to The Shops at The Palladium<br />
Approximate Driving Distance:<br />
13 miles | 19 minutes<br />
1. Turn slight right toward us-1 / i-66 / Crystal City<br />
2. Turn slight right onto VA-233<br />
3. Turn slight right onto Crystal Drive<br />
4. Turn left onto 12th St S<br />
5. Turn right onto army Navy Drive<br />
6. Merge onto Washington Boulevard toward va-244 / Columbia Pike /<br />
S Arlington Ridge Road<br />
7. Merge onto us-50 w / Arlington Boulevard toward Falls Church<br />
8. Take the va-7 ramp toward va-338 / Falls Church / Alexandria<br />
9. Stay straight to go onto Arlington Boulevard<br />
10. Turn slight right onto va-7 W / Leesburg Pike<br />
11. Stay straight to go onto va-7 W / Leesburg Pike Continue to follow va-7 W<br />
12. Continue to follow va-7 W<br />
From Washington Dulles International Airport (IAD)<br />
to The Shops at The Broadway<br />
Approximate Driving Distance:<br />
24 miles | 33 minutes<br />
1. Merge onto Dulles Airport Access Road<br />
2. Merge onto VA-267 E toward I-495 / Exit 18-19 /VA-123 / Baltimore / Richmond<br />
3. Merge onto I-495 S / Capital Beltway via Exit 18 toward Richmond / Alexandria<br />
4. Take the Leesburg Pike / VA-7 E - Exit 47A-B toward Falls Church<br />
5. Merge onto VA-7 E via Exit 47B toward Falls Church<br />
1. Take the ramp toward I-395 / Washington<br />
2. Merge onto George Washington Memorial Pkwy N<br />
3. Take the VA-123 exit toward Chain Bridge / McLean<br />
4. Keep right at the fork to go on VA-123 S.<br />
5. Turn left onto Chain Bridge Road<br />
6. Turn slight left onto Old Chain Bridge Road<br />
7. Old Chain Bridge Road becomes Chain Bridge Road<br />
8. Turn left onto Laughlin Avenue<br />
9. Follow to 1445 Laughlin Avenue<br />
From Washington Dulles International Airport (IAD)<br />
to The Shops at The Palladium<br />
Approximate Driving Distance:<br />
22 miles | 31 minutes<br />
1. Merge onto Dulles Airport Access Road<br />
2. Merge onto VA-267 E toward I-495 / Exit 18-19 /VA-123 / Baltimore / Richmond<br />
3. Merge onto VA-123 N / Dolley Madison Boulevard via Exit 19B toward McLean<br />
4. Turn right onto Old Dominion Drive / VA-309<br />
5. Turn right onto Chain Bridge Road<br />
6. Turn left onto Laughlin Avenue<br />
7. Follow to 1445 Laughlin Avenue
11<br />
ASSET INVESTMENT SALES GROUP
13<br />
x<br />
<strong>Offering</strong> Highlights<br />
Title of Paragraph<br />
x<br />
15 The Shops at the Broadway<br />
14,583 Sq. Ft. Retail <strong>Condominium</strong> <strong>Offering</strong><br />
• Property<br />
• Location<br />
• Market<br />
• Tenancy<br />
• Financials<br />
49 The Shops at the Palladium<br />
9,491 Sq. Ft. Retail <strong>Condominium</strong> <strong>Offering</strong><br />
• Property<br />
• Location<br />
• Market<br />
• Tenancy<br />
• Financials
15<br />
16 Property<br />
• Property Overview<br />
• Site Plan<br />
• Building Specifications<br />
• Parking Plan<br />
23 Location<br />
• Falls Church Overview<br />
• Demographic Summary<br />
• Falls Church Comprehensive Plan & Retail Future<br />
• Transportation Overview<br />
33 Market<br />
• Falls Church Retail Market<br />
• Retail Lease Comparables<br />
38 Tenancy<br />
• Tenant Profiles<br />
• Expiration Schedule<br />
42 Financials<br />
• Summary of Financial Assumptions<br />
• Detailed Rent Roll<br />
• Cash Flow Model
16<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Property<br />
Property Overview<br />
The Shops at the Broadway is an elegant retail condominium interest<br />
consisting of 14,583 square feet of first floor space in the award-winning,<br />
mixed-used development, The Broadway. Recently constructed in 2004<br />
by Waterford Development LLC, The Broadway is comprised of 80 luxury<br />
residential condominiums with extensive amenities.<br />
The property features an elegant residential lobby with onsite building<br />
manager, a clubroom with billiard tables, service bar and kitchenette, in<br />
addition to a state-of-the-art fitness center and executive conference room.<br />
The Broadway is beautifully designed with an interior courtyard and features<br />
impeccably landscaped grounds which highlight the pedestrian-friendly retail<br />
environment.<br />
Project Details<br />
Developer:<br />
Architect:<br />
Number of Residential Units:<br />
Waterford Development LLC<br />
Lessard Architectural Group<br />
80 Units<br />
Number of Residents: Approximately 160<br />
Square Feet:<br />
Stories:<br />
Unit Breakdown:<br />
Unit Pricing:<br />
145,586 Sq. Ft. of Residential Space<br />
14,583 Sq. Ft. of Retail Space<br />
4 Stories<br />
Luxury two- and two-bedroom with den<br />
units<br />
Averaged over $400,000, with units<br />
priced up to $800,000 at time of original<br />
sale<br />
Note: Only the Retail <strong>Condominium</strong> is part of this offering.<br />
Residential Corridor
At Left: Stephen Reception Area
18<br />
Retail Site Plan<br />
Hoang’s Storage<br />
208 Sq. Ft.<br />
Trash<br />
Room<br />
Nails Boutique<br />
1,227 Sq. Ft.<br />
N. Lee Street<br />
Hoang’s Grill<br />
and Sushi Bar<br />
3,149 Sq. Ft.<br />
Impulsive<br />
1,362 Sq. Ft.<br />
Spectrum Sales Office<br />
3,090 Sq. Ft.<br />
Hollywood Video<br />
5,547 Sq. Ft.<br />
N. Pennsylvania Avenue<br />
NOT DRAWN TO SCALE<br />
West Broad Street<br />
Please see pages 20-21 for detailed parking schematics.
19<br />
Building Specifications<br />
General Specifications<br />
Property Name and Address The Shops at the Broadway<br />
502 W. Broad Street, Falls Church, VA 22046<br />
Year Completed 2004<br />
Rentable Retail Area<br />
14,583 Sq. Ft.<br />
Stories One (1)<br />
Zoning B-1<br />
Exterior Construction<br />
Foundation<br />
Structural Frame and Floors<br />
Walls<br />
Ceiling Height<br />
Windows<br />
Doors<br />
Roof<br />
Retail Parking<br />
Signage<br />
Concrete spread footings<br />
Poured concrete columns, post-tension slabs<br />
above grade<br />
Brick and architectural precast<br />
13 Feet (First Floor)<br />
Retail storefront<br />
Full height entrance doors<br />
Original; rock ballast over insulation and<br />
membrane<br />
58 surface and covered parking spaces and<br />
6 unassigned garage spaces (Parking ratio of<br />
4.0/1,000 Gross Sq. Ft.). The Broadway has<br />
open parking to both Guests of residents (patrolled<br />
using guest passes) and retail clients.<br />
Façade signage available.<br />
Utility Services<br />
Electric<br />
Gas<br />
Water / Sewer<br />
Dominion Virginia Power<br />
Washington Gas<br />
City of Falls Church<br />
Fire / Life / Safety<br />
Fire Protection/<br />
Security System<br />
Fire alarm enunciator panel. The building is<br />
fully sprinklered.<br />
ASSET INVESTMENT SALES GROUP
20<br />
Parking Plans<br />
Surface Parking
21<br />
Garage Parking<br />
The Broadway has open parking to both guests of residents (patrolled using guest passes) and retail clients.<br />
58 surface and covered parking spaces and 6 unassigned garage spaces.<br />
Parking ratio is 4.0/1,000 gross square feet.<br />
ASSET INVESTMENT SALES GROUP
Hoang’s Grill and Sushi Bar at The Shops at the Broadway
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
23<br />
Location
25<br />
Falls Church Overview<br />
Falls Church is an independent City in Virginia with<br />
a long and rich history that dates back to the late<br />
1600’s when it was an early colonial settlement. The<br />
community grew up around<br />
The Falls Church, which was<br />
founded in 1734 and whose<br />
congregation has included<br />
President George Washington<br />
and Virginia statesman George<br />
Mason. Falls Church slowly<br />
grew around the intersection<br />
of two Indian trails leading to<br />
the lower Potomac River falls, not far from the current<br />
intersection of Leesburg Pike and Lee Highway. By<br />
1875 it gained township status. Falls Church became<br />
an independent City in 1948.<br />
n its development<br />
es to shape its future.<br />
Today, the City is a dynamic, small scale community<br />
comprising 2.0 square miles that serves an affluent<br />
market, while still enjoying access to large scale<br />
amenity and business centers. Falls Church is ideally<br />
situated between Fairfax and Arlington Counties, just 5<br />
miles from the Washington D.C. line. Further, the City<br />
sits in the center of the bustling Route 7 employment<br />
and retail corridor that includes Seven Corners, Baileys<br />
Crossroads, and Tysons Corner with over 5 million<br />
square feet of retail. In a 2006 poll of Falls Church<br />
residents, 34% sited location and convenience as the<br />
best aspect of living in the City, while 19% cited its<br />
size and small town charm. Supported by Washington<br />
D.C.’s consistently stable economy, the City’s local<br />
economy remains strong with a core of national and<br />
international high-tech firms, including Computer<br />
Sciences Corporation and General Dynamics.<br />
Route 7 (West Broad Street) in Falls Church<br />
Tysons<br />
Corner<br />
Falls<br />
Church<br />
Remainder<br />
of Northern<br />
Virginia<br />
Falls Church is at a critical juncture in its development<br />
as a city with significant opportunities to shape its future.<br />
Rosslyn/Ballston Corridor,<br />
Seven Corners,<br />
& Baileys Crossroads<br />
Aerial View of Falls Church Looking East<br />
ASSET INVESTMENT SALES GROUP
26<br />
Demographic Summary<br />
Falls Church has a reputation as an upscale and safe urban<br />
community which is upheld by its exceptional demographics.<br />
In 2005 the City had a population of 10,600 which is projected<br />
to grow 41% by 2025 to 14,900 residents. Along with dramatic<br />
population growth, the City’s employment base is also expected<br />
to experience a similar surge. The current estimate for total<br />
employment by the Metropolitan Washington Council of<br />
Governments (MWCOG) is 9,500 and is anticipated to rise by<br />
19% by 2010 and 52% by 2025. As of the 2000 Census, the City<br />
ranked third in the state in median household income (currently<br />
$89,500 within a 3 mile radius), third in per capita income,<br />
and 12th in proportion of households with annual incomes of<br />
$150,000 or more. The affluence of this community is further<br />
seen in its strong home ownership. Homeowners consist of 61%<br />
of the households in Falls Church, despite the high average<br />
cost of housing. Of the 3,141 counties and independent cities in<br />
the United States, Falls Church ranked 23rd in median housing<br />
value. Its housing inventory is compressed into a narrow and high<br />
price-band which continues to ensure the City’s elite residency.<br />
Retail investments in Falls Church are ensured a high level of<br />
Demographic stability due to this regions surging Profile populations, job growth,<br />
Broad and high Street disposable (Rte. 7) income. and Washington Street (Rte. 29)<br />
1 Mile<br />
3 Miles<br />
5 Miles<br />
The Shops at The Broadway November 2007<br />
502 WEST BROAD STREET, FALLS CHURCH, VA<br />
1 Mile Radius 3 Mile Radius 5 Mile Radius<br />
POPULATION<br />
2006 Estimated Population 16,494 143,143 391,127<br />
2011 Projected Population 16,823 146,050 402,393<br />
2000 Census Population 16,064 139,647 376,403<br />
1990 Census Population 15,138 129,419 336,773<br />
Historical Annual Growth 1990 to 2006 0.6% 0.7% 1.0%<br />
Projected Annual Growth 2006 to 2011 0.4% 0.4% 0.6%<br />
2006 Median Age 39.9 38.6 38.7<br />
HOUSEHOLDS<br />
2006 Estimated Households 6,596 55,490 154,898<br />
2011 Projected Households 6,634 56,166 158,141<br />
2000 Census Households 6,397 54,423 149,296<br />
1990 Census Households 6,091 50,759 136,022<br />
Historical Annual Growth 1990 to 2006 0.5% 0.6% 0.9%<br />
Projected Annual Growth 2006 to 2011 0.1% 0.2% 0.4%<br />
POPULATION BY RACE<br />
2006 Estimated White 78.5% 70.5% 68.1%<br />
2006 Estimated Black or African American 4.0% 4.5% 6.3%<br />
2006 Estimated Asian & Pacific Islander 11.9% 17.8% 17.2%<br />
2006 Estimated American Indian & Native Alaskan 0.2% 0.2% 0.2%<br />
2006 Estimated Hispanic 13.3% 17.5% 17.8%<br />
INCOME<br />
2006 Estimated Average Household Income $ 102,225 $ 107,997 $ 106,790<br />
2006 Estimated Median Household Income $ 89,332 $ 91,143 $ 89,508<br />
2006 Estimated Per Capita Income $ 41,165 $ 42,149 $ 42,751<br />
EDUCATION (AGE 25+)<br />
2006 High School Graduate 14.2% 14.6% 13.9%<br />
2006 Some College 12.9% 11.2% 11.2%<br />
2006 Associates Degree Only 5.4% 5.8% 5.3%<br />
2006 Bachelors Degree Only 30.8% 30.4% 30.8%<br />
2006 Graduate Degree 31.8% 32.1% 32.3%<br />
BUSINESS<br />
Number of Businesses 1,409 6,286 19,495<br />
Total Number of Employees 11,985 64,640 243,678<br />
Employee Population per Business 8.5 10.3 12.5<br />
Residential Population per Business 11.7 22.8 20.1<br />
.50 mi 1.00 mi 2.00 mi Trade Area
uide A Guide to the to the City City of Falls of Falls Church<br />
27<br />
Falls Church Comprehensive<br />
Plan and Retail Future<br />
Boundaries of the City of Falls Church<br />
Boundaries of the City of Falls Church<br />
Broad Street (Rte. Broad 7) and Street Washington (Rte. 7) Street and Washington<br />
(Rte. 29)<br />
Major Roadways<br />
Major Roadways<br />
Encouraged by surging population growth and<br />
City of Falls Church Retail Centers<br />
City of Falls Church limited Retail Centers opportunities for residential development,<br />
over 15,000 sf<br />
over 15,000 sf the Falls Church Comprehensive Plan, originally<br />
Major Retail Centers<br />
adopted in 1997, was updated in 2005. The<br />
Major Retail Centers<br />
updated plan was in large part, designed to address<br />
Number of Average Daily (Vehicular) the changing preference for urban and mixeduse<br />
environments. Driven by population shifts,<br />
Number<br />
Trips<br />
of Average Daily (Vehicular) Trips<br />
increasing transportation costs and congestion,<br />
New Developments Under Construction<br />
New Developments the Under popularity Constructionof urban mixed-use developments<br />
has dramatically intensified over the past few<br />
1 years as they create vibrant, pedestrian-friendly<br />
0.5 Miles<br />
neighborhoods with neighborhood conveniences. 0.5 Miles<br />
2 5<br />
1.0 Miles<br />
1.0 Miles<br />
4 6<br />
Since 2004, 1.4 million square feet of mixed 2.0 use Miles<br />
space has been completed or is in the development<br />
3<br />
and planning stages. These developments include<br />
over 1,200 residential units, 280,000 square feet<br />
of new office space, and 146,000 square feet of<br />
retail space. When completed these projects<br />
are projected to generate $2.5 million in annual<br />
revenue and are estimated to total $493 million in<br />
assessed or estimated real .50 estate mi value. 1.00 mi 2.00 .50 mi mi Trade 1.00 Area mi 2<br />
Population<br />
At the City’s focal point<br />
Population 4,370 17,073 67,848<br />
will be the long-anticipated<br />
4,370 36,076 17,073 6<br />
Daytime Population<br />
landmark urban village Daytime 5,816<br />
project Population 15,577 26,911<br />
known as City 5,816 25,328 15,577 2<br />
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 $<br />
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<br />
east Education of The (B.A. Broadway, +) City Center will include<br />
Education 62.1% (B.A. 59.2% +) 48.1% 62.1% 50.6% 59.2% 4<br />
about six blocks and 22 acres of land between<br />
Source: U.S Census Bureau, Claritas,<br />
Little Falls Street on the Source:<br />
Inc.,<br />
west, U.S<br />
Retail<br />
North Census<br />
Compass<br />
Bureau,<br />
LLC<br />
Washington Claritas, Inc., Retail Compass LLC<br />
ail Street on the east, Park Avenue to the north, and<br />
New Under Retail Construction<br />
Under Construction Falls Church<br />
Gibson to the south. The project to be developed<br />
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<br />
Fall 2006<br />
by Atlantic Realty is scheduled to break ground in<br />
2009 and will include 25,000 square feet of ground<br />
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<br />
1 THE SPECTRUM<br />
100,000 square feet of new office space, a 180-room<br />
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<br />
2• condominium 85,000 THE sf BYRON office units • 230 • Delivering condominium Fall units 2007• Delivering hotel, Fall approximately 2007 500 apartment units, 67<br />
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.<br />
condominiums, a new Bowl America facility, and<br />
3 pEARSON SQUARE<br />
1,500 spaces of structured, underground parking.<br />
evelopment economic development office • (703) office 248-5491 • (703) 248-5491<br />
4 THE READ BUILDING<br />
5 NORTHGATE<br />
Demographic Demographic Profile Prof<br />
www.developfallschurch.org<br />
Please refer to the following page for other recent<br />
completed or planned mixed-use developments.<br />
Proposed Future Falls Church City Center<br />
6 Falls church city center<br />
ASSET INVESTMENT SALES GROUP
28<br />
Falls Church Mixed-Use Developments<br />
1 THE SPECTRUM 2 THE BYRON 3 PEARSON SQUARE<br />
Developer Waterford Development & Akridge JPI Atlantic Realty & Carr Enterprises<br />
Address 444 West Broad Street 513 West Broad Street 410 S. Maple<br />
Assessed/<br />
$133.4 Million $66.1 Million $165 Million<br />
Estimated Value<br />
Square Feet 355,000 Sq. Ft. 153,400 Sq. Ft. 434,000 Sq. Ft.<br />
Description<br />
Project Status<br />
Set in Falls Church’s historic district, this<br />
191-unit residential condominium project has<br />
approximately 33,000 square feet of Class A<br />
office space, and 33,000 square feet of retail<br />
space, and a 600-space garage. At this time,<br />
the retail component is nearing 70% leased<br />
with rentals ranging from $40 to $45 psf triple<br />
net.<br />
Under construction, estimated delivery in<br />
March 2008.<br />
The Byron is comprised of 90 residential units,<br />
10,000 square feet of retail space and 12,000<br />
square feet of Class A office space. <strong>Condominium</strong>s<br />
are selling for $500,000 to $700,000. The<br />
retail component is leased to Cosi and Verizon<br />
Wireless.<br />
Completed in 2006.<br />
This project consists of 230 residential rental<br />
units, 75,000 square feet of Class A office<br />
space, and 25,400 square feet of retail and restaurant<br />
space. The office building at 400 South<br />
Maple was completed in 2006 with 22,000<br />
square feet of space remaining and approximately<br />
8,000 square feet of retail space<br />
available. The retail space will also feature a<br />
3,000 square foot visual/performing arts center.<br />
75,000 SF of office delivered in 2006, residential<br />
and retail under construction and scheduled<br />
for completion in February 2008.
29<br />
4 THE READ BUILDING 5 NORTHGATE<br />
Developer Bob Young Hekemian<br />
Address 402 West Broad Street 472 N. Washington<br />
Assessed/<br />
$21 Million $51.6 Million<br />
Estimated Value<br />
Square Feet 35,500 Sq. Ft. 161,000 Sq. Ft.<br />
Description<br />
This mixed-use development features two<br />
floors of commercial space, including a<br />
PNC Bank drive-thru and Vantage Health<br />
Club. There are 26 apartments on the third<br />
and fourth floors. Nine units are set aside as<br />
“Teacher Workforce Units” in cooperation with<br />
Falls Church City Public Schools.<br />
Hekemian has submitted plans for 105 rental<br />
units, 22,735 square feet of retail and 14,015 of<br />
office. It provides seven officially-affordable<br />
two-bedroom units for 20 years. The developer<br />
proferred a $687,372 gift to the City schools,<br />
as well as the streetscaping and lighting and<br />
undergrounding of utility lines in the block<br />
valued at $650,000.<br />
Project Status Completed in 2007. Approved March 2007, site plan under review.<br />
ASSET INVESTMENT SALES GROUP
30<br />
The City of Falls Church by the Districts<br />
The City of Falls Church<br />
L<br />
ocated within the Capital Beltway, the City of Falls<br />
Church is building on its history, creativity, and<br />
“hometown” feel to expand its existing base of<br />
outstanding retail establishments. We seek an exciting mix<br />
of retailers who need a loyal audience — the residents and<br />
workers of Falls Church.<br />
The City of Falls Church has a strong day and<br />
evening population that is well-educated, wellcompensated,<br />
and committed to the community. They are<br />
underserved in grocery, goods and services, dining choices,<br />
and home goods retail, to name only a few.<br />
We are excited to fill these needs with new developments<br />
that will appeal to the retailer and the customer alike. Within<br />
the next three years, approximately 65,000 square feet of new<br />
retail space will be built in the City.<br />
1<br />
2<br />
4<br />
3<br />
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Lou<br />
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an<br />
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y<br />
City of Falls Church Retail Study<br />
In 2005, the City retained Retail Compass, LLC to evaluate our place in the local markets and to provide a realistic<br />
perspective for our retail goals. They concluded:<br />
• The demand for retail within City borders exceeds what is currently under construction or planned by<br />
almost 90,000 square feet.<br />
• The City of Falls Church is vastly underserved in the Food and Beverages retail category.<br />
• In the next three years, over 500 new residential units and almost 120,000 square feet of new office<br />
space will further contribute to the growing retail demand.<br />
What You Can Expect:<br />
• The City’s willingness, interest, and drive to create new retail<br />
hubs will encourage retailers to reevaluate Falls Church.<br />
• New development under construction will offer retailers<br />
brand-new, retail-appropriate space. (However, if you are<br />
looking for funky, one-of-a-kind space, we have that, too.)<br />
• Our residents seek local options for their spending. They<br />
are no longer willing to regard Tysons Corner, Arlington,<br />
and Alexandria as their only shopping alternatives.<br />
• The City of Falls Church customer base has a long-standing<br />
tradition of supporting local retailers in the community…<br />
because they are OURS.<br />
1. West End<br />
The Western gateway to The City of Falls Church offers strong retail presence with the Giant-anchored Falls<br />
Plaza and West End Plaza.<br />
2. Broad-Penn<br />
An emerging retail district, three new developments give Broad-Penn identity. The Byron, The Broadway, and<br />
The Spectrum provide a solid base of new retail opportunities for this central section of Broad Street.<br />
3. City Center<br />
At the northwest corner of the busy intersection of Broad and South Washington, this area is preparing for<br />
redevelopment. It is the targeted site for the community-oriented retail, residential and commercial hub of the City<br />
of Falls Church.<br />
4. South Washington Street<br />
The high-volume of street traffic along this corridor creates significant retail opportunities that will be further<br />
enhanced by the introduction of the Pearson Square development, as well as numerous infill projects.<br />
Contact Information<br />
City of Falls Church, Economic Development Office (703) 248-5491<br />
Richard Goff, Director (rickgoff@fallschurchva.gov)<br />
Becky Witsman, Business Development Manager (bwitsman@fallschurchva.gov)<br />
C<br />
In<br />
pe
31<br />
Transportation Overview<br />
Residents and tenants at The Broadway enjoy superior<br />
access to the entire Washington Metropolitan area. The<br />
Broadway is ideally set on Broad Street known as Route<br />
7, a major corridor connecting southeastern Virginia<br />
at Old Towne Alexandria through Tysons Corner and<br />
northwest to Dulles International Airport. Over 27,000<br />
cars pass The Broadway daily, ensuring significant retail<br />
patronage. Falls Church is also served by Interstate<br />
66 just 1 mile west and I-495 (the Capital Beltway) is<br />
just 2.5 miles from the subject property. Access to<br />
two Metrorail stations is available at East Falls Church<br />
and West Falls Church, both located approximately 1<br />
mile from the subject property. GEORGE bus-service,<br />
through the Washington Metropolitan Area Transit<br />
Authority, provides city-wide bus service connecting<br />
major employment nodes at stops directly in front of<br />
the Broadway at West Broad Street and N. Pennsylvania<br />
Avenue.<br />
Just over 1 Mile from the<br />
East & West Falls Church<br />
Metro Stations<br />
ASSET INVESTMENT SALES GROUP
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
33<br />
Market<br />
Impulsive at The Shops at The Broadway
34<br />
Market Overview<br />
The Falls Church Retail Submarket<br />
Ideally positioned between Washington D.C., Fairfax<br />
County and Arlington County, the Falls Church<br />
competitive market includes Seven Corners and<br />
other areas outside of the City limits. The greater<br />
Falls Church submarket has a retail inventory of 3.2<br />
million square feet in approximately 177 buildings.<br />
Nearly 59% of this inventory is comprised of shopping<br />
centers verses 41% in freestanding or mixed-used<br />
use complexes. The majority of this submarket was<br />
developed in the 1960s, however experienced a<br />
significant spike in construction starts in 2005, largely<br />
influenced by the updates to the City’s Comprehensive<br />
Plan. Today, Falls Church is a dynamic retail market<br />
offering neighborhood conveniences from small<br />
boutiques to large grocery stores, all serving the City’s<br />
affluent residential population. Premier retailers within<br />
a mile radius of The Broadway include Giant, Cosi,<br />
Baja Fresh, Verizon, Starbucks and Panera Bread. It<br />
is reported that the Panera Bread, located at 450 W.<br />
Broad Street, is one of the company’s top performing<br />
average vacancy of 2.7% over the last three years. New<br />
projects are commanding above average rents in the<br />
suburban metropolitan area at $40.00 to $45.00 triple<br />
net, which are comparable to major economic nodes<br />
such as Fairfax Center.<br />
The overall competitive market has also exhibited<br />
strong performance. The submarket is comprised of<br />
over 3.2 million square feet of retail space with just<br />
3.9% vacancy. Greater Falls Church has experienced<br />
significant stability, having never exceeded 5.7%<br />
vacancy over the last ten years. Year to date absorption<br />
totals positive 8,350 square feet of retail space and is<br />
backed by strong leasing in 2007 which saw 14 deals<br />
inked year to date, compared to 12 in 2006. Rental rates<br />
continue to see steady growth; the current average<br />
direct rental rate is $36.00 and has increased 3.0% over<br />
the last year and 7.0% average annual growth over the<br />
past four years.<br />
Deliveries and Development Pipeline<br />
There were no retail projects delivered in the third<br />
quarter of 2007, however the submarket gained 10,000<br />
square feet in the first half of the year with the delivery<br />
of The Byron. The project is directly across the street<br />
from the Subject Property and is a similar mixed-used<br />
format to The Broadway. The Byron has 2,600 square<br />
feet of available space and includes notable tenants<br />
Cosi and Verizon.<br />
locations in the nation, with retail sales estimated at<br />
over $500 per square foot.<br />
Submarket Fundamentals<br />
The City of Falls Church, occupying just 2.0 square<br />
miles, currently registers a low 1.3% vacancy out of its<br />
683,000 square foot inventory. The City has exhibited<br />
high demand for upscale retail while maintaining a low<br />
Currently there are two projects under construction<br />
in the City of Falls Church, the Spectrum and Pearson<br />
Square, scheduled to deliver a total of 58,400 square<br />
feet in the first quarter of 2008. The Spectrum, also<br />
developed by Waterford Development, will deliver<br />
33,000 square feet of retail space, of which currently<br />
70% of the retail tenancy is under lease negotiations<br />
for $40.00 to $45.00 triple net. In addition, as detailed<br />
in the preceding section, the City has additional 87,600<br />
square feet of retail in planning to contribute to the<br />
Nails Boutique at The Shops at The Broadway
36<br />
Retail Lease Comparables<br />
Property & Size Property Type Major Tenants Tenant Size<br />
Rent (NNN) &<br />
Escalations New /Renewal Term<br />
1 Falls Plaza Anchored Giant Food, CVS 1,500 SF $55.00 - 3%/yr Renewal - 2007 5 yr<br />
West Broad Street & Birch Street Shopping Center Staples 3,200 SF $45.00 - 3%/yr New - 2007 10 yr<br />
144,000 SF<br />
2 Idylwood Plaza Anchored Whole Foods 1,200 SF $70.00 - 3%/yr New - 2007 5 yr<br />
Route 7 & Pimmit Drive Shopping Center 3,000 SF $52.50 - 3%/yr New - 2007 5 yr<br />
73,000 SF 4,200 SF $63.00 - 3%/yr New - 2007 5 yr<br />
4,300 SF $50.00 - 3%/yr New - 2007 5 yr<br />
4,500 SF $50.00 - 3%/yr New - 2007 5 yr<br />
3 Tysons Station Unanchored Trader Joe’s 2,000 SF $60.00 - 3%/yr Renewal - 2007 5 yr<br />
7500 Leesburg Pike<br />
Shopping Center 7,392 SF $38.00<br />
New - 2007 5 yr w/5 yr<br />
50,000 SF<br />
No Increase<br />
option<br />
yrs 1-5.<br />
Option @ $43.70<br />
4 Barcroft Plaza Anchored Harris Teeter 1,500 SF $33.00 – 3%/yr Renewal - 2007 5 yr<br />
6345 Columbia Pike Shopping Center 1,525 SF $35.00 - 3%/yr Renewal - 2007 5 yr<br />
99,000 SF<br />
5 Loehmann’s Plaza Anchored Giant Foods, 2,000 SF $46.00 - 3%/yr Renewal - 2007 5 yr<br />
7235-7311 Arlington Blvd Shopping Center Loehmann’s 2,200 SF $38.00 - 3%/yr Renewal - 2007 5 yr<br />
251,000 SF 8,746 SF $30.00 - 3%/yr Renewal - 2007 5 yr
Little River Tpke<br />
37<br />
Map of Retail Lease Comparables<br />
For Properties Detailed on page 33<br />
1<br />
TYSONS<br />
CORNER<br />
3<br />
2<br />
Custis Memorial Pkwy<br />
2<br />
1<br />
FALLS<br />
CHURCH<br />
Lee Hwy<br />
SEVEN<br />
CORNERS<br />
Wilson Blvd<br />
3<br />
Arlington Blvd<br />
5<br />
Broad St<br />
4<br />
4<br />
Columbia Pike<br />
5<br />
ASSET INVESTMENT SALES GROUP
38<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Tenancy
39<br />
Tenant Profiles<br />
Hollywood Video<br />
5,547 Sq. Ft.<br />
National Tenant<br />
From a single store in Portland, Oregon, Hollywood<br />
Entertainment has grown to become an industry leader<br />
with more than 2,000 Hollywood Video superstores<br />
and more than 600 Game Crazy specialty retail outlets<br />
nationwide. The first store opened in 1988 and in 1990,<br />
Hollywood revolutionized the home entertainment<br />
industry with the national rollout of 5-Day Rentals on<br />
everything in the store.<br />
In 2005, Hollywood Entertainment was acquired by<br />
Movie Gallery, Inc., creating a combined organization<br />
of more than 4,500 stores serving urban, suburban<br />
and rural markets. Under the terms of the Merger<br />
Agreement, Hollywood became a wholly owned<br />
subsidiary of Movie Gallery, however continues to<br />
operate under the Hollywood brand name. Hollywood<br />
Entertainment is still headquartered in Wilsonville,<br />
Oregon. Investor information for Movie Gallery can be<br />
found at www.moviegallery.com.<br />
In October, Movie Gallery, Inc. (which includes Hollywood<br />
Entertainment Company, MG Digital, LLC, MGA Realty<br />
et al) announced that it had filed voluntary petitions for<br />
relief under Chapter 11 of the U.S. Bankruptcy Code<br />
in order to re-align operations and restructure debt.<br />
They have entered into agreements with their various<br />
creditors, and are reportedly moving forward, business<br />
as usual. The tenant has neither affirmed nor rejected<br />
the subject lease. Hollywood Video is current on rent<br />
through November 1, 2007.<br />
Nails Boutique<br />
1,227 Sq. Ft.<br />
Local Retailer<br />
Impulsive<br />
1,362 Sq. Ft.<br />
Local Retailer<br />
Impulsive is a unique boutique featuring upscale hand<br />
crafted art and unique gifts. From the stained glass,<br />
pottery, hand carved wood, wall tiles, mirrors, masks,<br />
bronze sculptures, Red Hat Society Dolls, hand blown<br />
glass lamps & fountains, jewelry, furniture to sterling<br />
silver jewelry, each item is distinctive and original.<br />
Hoang’s Grill & Sushi Bar (Hoang’s, Inc.)<br />
3,357 Sq. Ft. (includes 106 Sq. Ft. of storage space)<br />
Local Retailer<br />
Featuring authentic Vietnamese, Thai and Japanese<br />
pan-Asian cuisine, Hoang’s Grill & Sushi Bar is new to<br />
Northern Virginia. The restaurant format created by<br />
Chef Hoang has previously enjoyed a history of success<br />
in Sanibel Island, Florida and Baltimore, Maryland. The<br />
restaurant has catering services for party trays, office<br />
luncheons, formal weddings, and corporate events as<br />
well. The restaurant was named the Best New Artful<br />
Asian Restaurant by Northern Virginia Magazine.<br />
Spectrum Sales Office<br />
3,090 Sq. Ft.<br />
Local Sales<br />
Waterford Development currently operates a sales<br />
office for its latest residential development, The<br />
Spectrum, directly adjacent to the The Broadway. The<br />
sales office features information on condominium<br />
models and exhibits the highest level of design and<br />
décor.<br />
Nails Boutique specializes in beauty services including<br />
manicures, pedicures, and waxing services.<br />
At left: Hollywood Video Storefront; Above: Nails Boutique Storefront; Far right: Spectrum Sales Office<br />
ASSET INVESTMENT SALES GROUP
40<br />
Combined Tenant Expiration Schedule<br />
SQUARE FEET EXPIRING BY YEAR<br />
9,000<br />
8,000<br />
SQUARE FEET EXPIRING<br />
7,000<br />
6,000<br />
5,000<br />
4,000<br />
3,000<br />
2,000<br />
1,000<br />
0<br />
2007 2008 2009 2010 2011 2012 2013 2014<br />
YEAR<br />
Calendar<br />
Year Expiring<br />
Number of<br />
Spaces*<br />
Net Rentable<br />
Square Feet<br />
Expiring<br />
Percentage of<br />
Square Feet<br />
Expiring<br />
2007 - - -<br />
2008 1 3,090 21.26%<br />
2009 1 1,362 9.37%<br />
2010 - - -<br />
2011 1 1,227 8.43%<br />
2012 - - -<br />
2013 - - -<br />
2014 3 8,904 60.94%<br />
Total 6 14,583 100.00%<br />
*6 Spaces, 5 Tenants<br />
Spectrum Sales Office at The Shops at The Broadway
42<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Financials
43<br />
Financial Summary and Assumptions<br />
PROPERTY DESCRIPTION<br />
Building Name<br />
The Shops at the Broadway<br />
Building Address<br />
502 W Broad St.<br />
Falls Church, Virginia<br />
Property Type<br />
Retail<br />
Size of Building<br />
Rentable SF 14,583<br />
GLOBAL<br />
Analysis Period<br />
Commencement Date January 1, 2008<br />
End Date December 31, 2017<br />
Term (Years) 10<br />
Growth Rate (CAM, Insurance and RET) 3.00%<br />
General Vacancy Rate (reduced by absorption & turnover vacancy)<br />
Hollywood Video 1.00%<br />
Other Tenants 3.00%<br />
EXPENSES<br />
Management Fee (% of EGR) 3.00%<br />
Operating Expense Source<br />
Based on 2008 budget<br />
Real Estate Taxes Source<br />
From the ownership<br />
FUTURE LEASING ASSUMPTIONS<br />
Retention Ratio 80.00%<br />
Lease Term<br />
Retail (0 SF- 2,999 SF)<br />
Five (5) Years<br />
Retail (3,000 SF & Larger) & Storage<br />
Ten (10) Years<br />
Current Market Rent (PSF Per Year)<br />
Retail $45.00<br />
Storage $12.00<br />
Annual Rental Escalation 3.00%<br />
Expense Recovery Type<br />
Triple Net (pro rata share)<br />
Tenant Improvements Per SF<br />
New<br />
Retail $7.00<br />
Storage $0.00<br />
Renew $0.00<br />
Leasing Commissions<br />
New 4.00%<br />
Renew 0.00%<br />
Downtime<br />
Three (3) Months<br />
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<br />
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<br />
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<br />
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<br />
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 ,<br />
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<br />
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 .<br />
The Broadway Residential Entrance Along N. Lee Street<br />
ASSET INVESTMENT SALES GROUP
44<br />
Rent Roll<br />
Tenant Name<br />
Type & Suite Number<br />
Lease Dates & Term<br />
Initial (11/07)<br />
Rate &<br />
Sq Ft Bldg<br />
Share<br />
Amount<br />
per Year Changes on Changes to<br />
Description of Operating<br />
Expense Reimbursements<br />
Imprvmnts<br />
Rate<br />
Amount<br />
Commssns<br />
Rate<br />
Amount<br />
Assumption about<br />
subsequent terms<br />
for this tenant<br />
1 Hollywood Video<br />
Retail, Suite: 101<br />
5,547 SqFt<br />
38.04%<br />
$33.00<br />
$183,051<br />
Apr-2011 $36.30 Tenant shall reimburse $15,930<br />
of CAM in 2008 with 5.00% annual<br />
increases. Tenant shall also<br />
Apr-2004 to Mar-2014<br />
reimburse 38.23% of insurance<br />
and real estate taxes and their<br />
120 Months<br />
submetered use of the water.<br />
Following the current<br />
term, it is assumed that<br />
the tenant is exposed to<br />
Retail (3,000SF & larger)<br />
market leasing assumptions.<br />
Tenant holds two 5-year renewal options at FMV with 9 months notice<br />
Tenant has right to terminate lease from and after April 2011.<br />
2 Hoangs, Inc<br />
Retail, Suite: 104<br />
Mar-2006 to Oct-2014<br />
3,149 SqFt<br />
21.59%<br />
$35.00<br />
$110,215<br />
Nov-2008<br />
Nov-2011<br />
$40.00<br />
$45.00<br />
Tenant shall reimburse 21.71%<br />
share of CAM, Insurance and<br />
Real Estate Taxes as well as their<br />
submetered use of the water.<br />
104 Months<br />
Following the current<br />
term, it is assumed that the<br />
tenant is exposed to Retail<br />
(3,000SF & larger) market<br />
leasing assumptions.<br />
Tenant holds one 5-year renewal option at FMV<br />
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.<br />
3 Impulsive<br />
Retail, Suite: 103<br />
Nov-2004 to Oct-2009<br />
1,362 SqFt<br />
9.34%<br />
$39.14<br />
$53,309<br />
Nov-2008 $40.31 Tenant shall reimburse 9.39%<br />
share of CAM, Insurance and<br />
Real Estate Taxes as well as their<br />
submetered use of the water.<br />
60 Months<br />
Following the current<br />
term, it is assumed that<br />
the tenant is exercise its<br />
renewal option.<br />
Tenant holds one 5-year renewal option at FMV<br />
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.<br />
Impulsive 1,362 SqFt $46.35 Nov-2010 $47.74 Tenant shall reimburse 9.39%<br />
$4.92 Following the current<br />
Option, Suite: 102 9.34% $63,129 Nov-2011 $49.17<br />
share of CAM, Insurance and<br />
term, it is assumed that<br />
2.00%<br />
Real Estate Taxes as well as their<br />
the tenant is exposed to<br />
Nov-2009 to Oct-2014 Nov-2012 $50.65 submetered use of the water.<br />
$6,703 Retail (0SF - 2,999SF) market<br />
60 Months Nov-2013 $52.17<br />
leasing<br />
assumptions.
45<br />
Tenant Name<br />
Type & Suite Number<br />
Lease Dates & Term<br />
Initial (11/07)<br />
Rate &<br />
Sq Ft Bldg<br />
Share<br />
Amount<br />
per Year Changes on Changes to<br />
Description of Operating<br />
Expense Reimbursements<br />
Imprvmnts<br />
Rate<br />
Amount<br />
Commssns<br />
Rate<br />
Amount<br />
Assumption about<br />
subsequent terms<br />
for this tenant<br />
4 Nail Boutique 1,227 SqFt $36.05 Aug-2008 $37.13 Tenant shall reimburse 8.45%<br />
Retail, Suite: 106 8.41% $44,233 Aug-2009 $38.25<br />
share of CAM, Insurance and<br />
Real Estate Taxes as well as their<br />
Aug-2006 to Jul-2011 Aug-2010 $39.39 submetered use of the water.<br />
60 Months<br />
Following the current<br />
term, it is assumed that<br />
the tenant is exercise its<br />
renewal option.<br />
Tenant holds one 5-year renewal option at 3% increase over the previous year rent<br />
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.<br />
Nail Boutique 1,227 SqFt $40.57 Aug-2012 $41.79 Tenant shall reimburse 8.45%<br />
Option 8.41% $49,785 Aug-2013 $43.05<br />
share of CAM, Insurance and<br />
Real Estate Taxes as well as their<br />
Aug-2011 to Jul-2016 Aug-2014 $44.34 submetered use of the water.<br />
60 Months Aug-2015 $45.67<br />
Following the current<br />
term, it is assumed that<br />
the tenant is exposed to<br />
Retail (0SF - 2,999SF) market<br />
leasing assumptions.<br />
5 Prospective Tenant (Currently $45.00 Apr-2009 $46.35 Tenant shall reimburse tenant’s $7.00 $20.63 Following the current<br />
occupied by Spectrum Sales Office) 3,090 SqFt $139,050 Apr-2010 $47.74<br />
pro rata share of CAM, Insurance<br />
term, it is assumed that the<br />
4.00%<br />
and Real Estate Taxes as well as<br />
tenant is exposed to Retail<br />
Retail 21.19% Apr-2011 $49.17 their submetered use of the water. $21,630 $63,762 (3,000SF & larger) market<br />
Apr-2008 to Mar-2018 Apr-2012 $50.65<br />
leasing assumptions.<br />
120 Months Apr-2013 $52.17<br />
Tenant is currently on a month-to-month lease and is expected<br />
to vacate the premise January 2008.<br />
Apr-2014 $53.73<br />
Apr-2015 $55.34<br />
Apr-2016 $57.00<br />
Apr-2017 $58.71<br />
6 Hoang's Storage<br />
Storage<br />
Mar-2006 to Oct-2014<br />
208 SqFt<br />
1.43%<br />
$11.54<br />
$2,400<br />
Tenant shall reimburse tenant’s<br />
pro rata share of CAM (excluding<br />
water), Insurance and Real Estate<br />
Taxes.<br />
104 Months<br />
Following the current term,<br />
it is assumed that the tenant<br />
is exposed to Storage<br />
market leasing assumptions.<br />
Total Occupied (Useable):<br />
14,583 SqFt<br />
Total Vacant: -<br />
Building Total (Useable):<br />
14,583 SqFt<br />
ASSET INVESTMENT SALES GROUP
46<br />
Cash Flow Model<br />
Cash Flow Model For the Years Ending<br />
Initial Period<br />
& PSF<br />
Year 1<br />
Dec-2008<br />
Year 2<br />
Dec-2009<br />
Year 3<br />
Dec-2010<br />
Year 4<br />
Dec-2011<br />
Year 5<br />
Dec-2012<br />
Year 6<br />
Dec-2013<br />
Year 7<br />
Dec-2014<br />
Year 8<br />
Dec-2015<br />
Year 9<br />
Dec-2016<br />
Year 10<br />
Dec-2017<br />
Year 11<br />
Dec-2018<br />
POTENTIAL GROSS REVENUE<br />
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<br />
Absorption & Turnover Vacancy ($1.59) (23,175) - - - - - (45,285) - (5,829) - (15,573)<br />
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<br />
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<br />
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<br />
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)<br />
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<br />
OPERATING EXPENSES<br />
Other Operating Expenses<br />
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<br />
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<br />
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<br />
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<br />
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<br />
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<br />
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<br />
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<br />
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<br />
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<br />
LEASING & CAPITAL COSTS<br />
Tenant Improvements $1.48 21,630 - - - - - 16,814 - 2176 -<br />
Leasing Commissions $4.37 63,762 6,703 - - - - 46,234 - 2971 -<br />
TOTAL LEASING & CAPITAL COSTS $5.86 85,392 6,703 - - - - 63,048 - 5,147 -<br />
CASH FLOW AFTER LEASING<br />
AND CAPITAL COSTS<br />
$27.43 $400,007 $526,674 $545,892 $569,492 $594,447 $602,613 $594,238 $753,874 $774,346 $809,908<br />
Purchase Price: $8,090,000<br />
Cap Rate: 6.00%<br />
Building SF: 14,583<br />
Price PSF: $554.76<br />
Spectrum Sales Office at The Shops at The Broadway
49<br />
50 Property<br />
• Property Overview<br />
• Site Plan<br />
• Building Specifications<br />
• Parking Plans<br />
56 Location<br />
• McLean Overview<br />
• Demographic Summary<br />
• McLean Revitalization District<br />
• Transportation Overview<br />
63 Market<br />
• McLean Retail Market<br />
• McLean Retail Competitive Set<br />
• Retail Lease Comparables<br />
68 Tenancy<br />
• Tenant Profiles<br />
• Expiration Schedule<br />
72 Financials<br />
• Summary of Financial Assumptions<br />
• Detailed Rent Roll<br />
• Cash Flow Model
50<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Property<br />
Property Overview<br />
The Shops at the Palladium is an exquisite retail condominium interest<br />
consisting of 9,491 square feet of first floor space in the award-winning,<br />
mixed-use development, The Palladium. The Palladium was developed by<br />
Waterford Development LLC in conjunction with Madison Homes and features<br />
unparalleled luxury condominium living, commercial and retail space. The<br />
attractive brick and architectural stone building was designed to anchor the<br />
revitalization efforts of downtown McLean. The unique, terraced park features<br />
a spectacular water sculpture, Oasis, by Baltimore sculptor Rodney Carroll<br />
which serves as the centerpiece of The Palladium’s tranquil Civic Green where<br />
area residents can linger after visiting retail stores or enjoying a walk.<br />
Other onsite amenities are abundant and include a conference room, an<br />
exercise room with personal earphones and TVs, a private training area, and<br />
yoga and karate classes. The lounge has a fireplace, quiet reading corners,<br />
a kitchen bar area, and a billiards room. Carlyn and Company decorated the<br />
elegant marble lobby, which offers a personalized concierge desk.<br />
Delta Associates, awarded The Palladium the Best Mid-Atlantic <strong>Condominium</strong><br />
Project at its annual Mid-Atlantic Apartment and <strong>Condominium</strong> Industry<br />
Awards for Excellence. This award is based on sales price, location, overall<br />
design, and marketing, among other criteria.<br />
Project Details<br />
Developer:<br />
Waterford Development LLC in alliance<br />
with Madison Homes<br />
Architect:<br />
Lessard Architectural Group<br />
Total Residential Units: 69 Units<br />
Number of Residents: Approximately 140<br />
Square Footage:<br />
Residential - 103,00 Sq. Ft.<br />
Retail - 9,491 Sq. Ft.<br />
Office - 6,500 Sq. Ft.<br />
Stories:<br />
4 Stories<br />
Unit Breakdown:<br />
Luxury two- and two-bedroom with den<br />
units<br />
Price: Units averaged over $1,000,000<br />
Note: Only the Retail <strong>Condominium</strong> is part of this offering.<br />
The McLean Civic Green at The Palladium
At Left: Stephen Gould Reception Area
52<br />
Retail Site Plan<br />
StarNut Gourmet<br />
2,256 Sq. Ft.<br />
The Vineyard<br />
1,570 Sq. Ft.<br />
Laughlin Avenue<br />
McLean Civic Green<br />
Chain Bridge Bank<br />
5,665 Sq. Ft.<br />
NOT DRAWN TO SCALE<br />
Lowell Avenue<br />
Please see pages 54-55 for detailed parking schematics.
53<br />
Building Specifications<br />
General Specifications<br />
Property Name and Address The Shops at the Broadway<br />
1445 Laughlin Avenue, McLean, VA 22101<br />
Year Completed 2005<br />
Rentable Retail Area<br />
9,491 Sq. Ft.<br />
Stories One (1)<br />
Zoning<br />
PRM - Planned Residential Mixed Use<br />
Exterior Construction<br />
Foundation<br />
Structural Frame and Floors<br />
Walls<br />
Ceiling Height<br />
Windows<br />
Doors<br />
Roof<br />
Retail Parking<br />
Signage<br />
Concrete slab footings<br />
Poured concrete columns, post-tension slabs<br />
above grade<br />
Brick and architectural precast<br />
14’ 10” (First Floor)<br />
Retail storefront<br />
Full height entrance doors<br />
A combination of pitched roof and rock ballast<br />
over insulation and membrane<br />
27 dedicated surface parking spaces, 15 dedicated<br />
garage parking spaces, and 13 unassigned<br />
garage spaces. Total parking ratio is<br />
4.4/1,000 assigned, and 5.8/1,000 overall.<br />
Please refer to the following page for detailed<br />
parking plans.<br />
Façade signage available.<br />
Utility Services<br />
Electric<br />
Gas<br />
Water / Sewer<br />
Dominion Virginia Power<br />
Washington Gas<br />
Fairfax County<br />
Fire / Life / Safety<br />
Fire Protection/<br />
Security System<br />
Fire Alarm Enunciator panel. The building is<br />
fully sprinklered.<br />
ASSET INVESTMENT SALES GROUP
54<br />
Parking Plans<br />
Surface Parking<br />
Building Access Points<br />
Your Residence, Parking & Storage<br />
Assigned Storage Units<br />
Assigned Garage Suites<br />
Trash Room<br />
Parking Assigned to 110 (9 Spaces)<br />
Parking Assigned to Kontzlas (2 Spaces)<br />
Unit 101, 102 Parking (27 on level)<br />
Guest Parking (2 Spaces)<br />
StarNut Gourmet<br />
The Vineyard<br />
Chain Bridge Bank<br />
Purple Spaces represent the 27 dedicated surface parking spaces and 15 dedicated garage parking spaces to the Right.<br />
Blue Spaces represent the 13 unassigned garage spaces.<br />
Total parking ratio is 4.4/1,000 assigned and 5.8/1,000 overall.
55<br />
Garage Parking<br />
Building Access Points<br />
Building Storage Rooms<br />
Assigned Storage Units<br />
Assigned Garage Suites<br />
Trash Room<br />
Parking Assigned to 110 (20 Spaces)<br />
Parking Assigned to Kontzlas (4 Spaces)<br />
Unassigned Parking (13 Spaces)<br />
Office/Staff Parking (3 Spaces)<br />
Commercial (101, 102) (15 Spaces)<br />
Remaining Guest (7 Spaces)<br />
ASSET INVESTMENT SALES GROUP
56<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Location<br />
McLean Overview<br />
Ideally situated within the Capital Beltway,<br />
just 4 miles from the Washington D.C line,<br />
McLean is an unincorporated community<br />
located in prestigious Fairfax County in<br />
Northern Virginia. The highly populated<br />
community is situated between the<br />
George Washington Parkway and the<br />
town of Vienna at Interstate 66, a major<br />
east-west connector in Northern Virginia.<br />
The community is recognized for its<br />
affluent residents and luxury homes. Due<br />
to its proximity to the CIA in Langley, many high-ranking government<br />
officials, diplomats, and members of Congress reside in McLean. The<br />
community also boasts superior access to several upscale shopping<br />
centers, including the nearby 5 million square feet of big-box and national<br />
retailers at Tysons Corner, including Tysons Corner Center and Tysons<br />
Galleria. In addition to its abundant retail amenities, McLean is home<br />
to several major corporate headquarters and Fortune 500 companies<br />
including Freddie Mac, Mars, Capital One, Gannett, NVR, Bearingpoint,<br />
USA Today, and Booz Allen Hamilton.
Demographic Summary<br />
Fairfax County has been one of the most rapidly growing<br />
jurisdictions in the United States over the past three decades<br />
– more than doubling the size of its population since 1970.<br />
Despite this growth downtown McLean has been successful in<br />
retaining its small-town charm. Its current population is 67,500<br />
and is projected to grow 17% by 2025. Residents within a mile<br />
radius of The Palladium boast a median household income of<br />
$158,000, one of the highest in the country and nearly triple that<br />
of Virginia at $54,240. Income levels are likely to remain in the<br />
uppermost tier because of the area’s low unemployment rates<br />
(3.0%), high levels of educational attainment, and the diversity<br />
of public and private job sectors. Housing values in McLean<br />
also benefit from the region’s economic stability; the estimated<br />
home value is $865,000 which has grown 120% since 2000 when<br />
it stood at $388,000.<br />
The Shops at The Palladium November 2007<br />
1445 LAUGHLIN AVENUE, MCLEAN, VA<br />
1 Mile Radius 3 Mile Radius 5 Mile Radius<br />
POPULATION<br />
2006 Estimated Population 10,162 77,209 263,319<br />
2011 Projected Population 10,499 79,644 270,308<br />
2000 Census Population 9,709 74,118 254,849<br />
1990 Census Population 9,736 69,952 233,023<br />
Historical Annual Growth 1990 to 2006 0.3% 0.6% 0.8%<br />
Projected Annual Growth 2006 to 2011 0.7% 0.6% 0.5%<br />
2006 Median Age 46.0 41.8 40.6<br />
HOUSEHOLDS<br />
2006 Estimated Households 4,029 30,791 102,671<br />
2011 Projected Households 4,158 31,654 104,924<br />
2000 Census Households 3,877 29,705 99,570<br />
1990 Census Households 3,741 27,206 89,766<br />
Historical Annual Growth 1990 to 2006 0.5% 0.8% 0.9%<br />
Projected Annual Growth 2006 to 2011 0.6% 0.6% 0.4%<br />
POPULATION BY RACE<br />
2006 Estimated White 78.6% 78.2% 76.8%<br />
2006 Estimated Black or African American 2.1% 2.6% 3.9%<br />
2006 Estimated Asian & Pacific Islander 16.4% 15.6% 14.3%<br />
2006 Estimated American Indian & Native Alaskan 0.1% 0.1% 0.2%<br />
2006 Estimated Hispanic 5.5% 7.9% 10.8%<br />
INCOME<br />
2006 Estimated Average Household Income $ 158,572 $ 154,514 $ 150,072<br />
2006 Estimated Median Household Income $ 126,733 $ 122,395 $ 119,197<br />
2006 Estimated Per Capita Income $ 62,938 $ 61,863 $ 58,916<br />
EDUCATION (AGE 25+)<br />
2006 High School Graduate 8.4% 9.5% 10.0%<br />
2006 Some College 9.2% 8.6% 9.2%<br />
2006 Associates Degree Only 4.7% 4.6% 4.5%<br />
2006 Bachelors Degree Only 28.9% 32.2% 31.2%<br />
2006 Graduate Degree 47.0% 43.1% 41.3%<br />
BUSINESS<br />
Number of Businesses 1,390 4,836 14,166<br />
Total Number of Employees 9,969 67,776 178,633<br />
Employee Population per Business 7.2 14.0 12.6<br />
Residential Population per Business 7.3 16.0 18.6<br />
57<br />
At left: Tysons Corner Center<br />
Above: New Housing along Chain Bridge Road<br />
ASSET INVESTMENT SALES GROUP
58<br />
Fairfax County Comprehensive Plan<br />
& McLean Revitalization District<br />
Located within one of the fastest growing counties in<br />
the nation, local officials enacted the Fairfax County<br />
Comprehensive Plan and Commercial Revitalization<br />
Districts in 1998 to ensure foresight and deliberate<br />
development patterns throughout the Fairfax region.<br />
The Palladium, set in the McLean Central Business<br />
Center, is the south anchor of the Plan’s McLean “Main<br />
Street” bound by Beverly Street and Chain Bridge<br />
Road. The “Main Street” vision is a new, primarily<br />
pedestrian friendly street which encourages leisurely<br />
window shopping as well as outdoor seating and<br />
dining.<br />
To encourage the redevelopment necessary for this<br />
vision, the McLean Revitalization District was created.<br />
The provisions are designed to alleviate constraints<br />
posed by small irregularly shaped parcels, in addition<br />
to providing flexibility for administrative approvals.<br />
The McLean Revitalization Corporation, a community<br />
organization of McLean business and residents is<br />
authorized to promote and manage the revitalization<br />
of the McLean Central Business Center. Since its<br />
inception dramatic infrastructure improvements have<br />
been put into action, current projects influencing the<br />
Subject Property include:<br />
Dolley Madison Boulevard<br />
- Pilot Project<br />
The Streetscape Improvement Pilot Project includes<br />
brick pavers, updated lighting, and landscaping.<br />
Improvements and development are expected to<br />
continue as several owners work to consolidate<br />
separately owned parcels throughout the district. While<br />
still tentative, significant consolidation at the corner of<br />
Redmond Drive and Old Dominion Drive could lead to<br />
Park Av<br />
Moyer Pl<br />
Old Dominion Drive<br />
Ingleside Avenue<br />
Dolley Madison Boulevard<br />
Chain Bridge Road<br />
Elm Street<br />
Fleetwood Drive<br />
Redmond Drive<br />
Tennyson Drive<br />
Beverly Street<br />
Old Dominion Drive<br />
Center St<br />
Park Av<br />
Laughlin Avenue<br />
Curran Street<br />
Moyer Pl<br />
Emerson Ave<br />
Ingleside Avenue<br />
Lowell Ave<br />
Rt. 123<br />
Old Chain Bridge Road<br />
Whittier Avenue<br />
Elm Street<br />
Chain Bridge Road<br />
Fleetwood Drive<br />
Rt. 309<br />
Redmond Drive<br />
a future mixed-use development; county officials<br />
and owners are discussing this potential. When<br />
fully realized The Palladium, already the showcase<br />
of this effort, will be an integral component of the<br />
new pedestrian-friendly center of McLean.<br />
Beverly Street<br />
Center St<br />
Laughlin Avenue<br />
Curran Street<br />
Emerson Ave<br />
Lowell Ave<br />
Rt. 123<br />
Old Chain Bridge Road<br />
Whittier Avenue<br />
Chain Bridge Road<br />
Rt. 309<br />
Tennyson Drive<br />
Westmoreland Street<br />
- Undergrounding Utilities<br />
Work has begun to move utility lines underground at<br />
Chain Bridge Road & Old Dominion Drive.<br />
Chain Bridge Road<br />
- Pedestrian Safety<br />
MRC has arranged for the purchase and installation<br />
of several benches and bus shelters.<br />
Westmoreland Street<br />
McLean Revitalization District
FIGURE 2<br />
60<br />
Transportation Overview<br />
McLean benefits from an ideal location, just four miles<br />
from the Washington D.C. line, with several major<br />
regional highways and primary routes running through<br />
the community which ensures quick and easy access<br />
to and from the Subject Property. Further, The Shops<br />
at the Palladium are strategically positioned at the<br />
intersection of Old Dominion Drive and Chain Bridge<br />
Road; this critical intersection has 50,000 cars passing<br />
daily ensuring maximum patronage potential. Access<br />
to Metrobus service is directly in front of the subject<br />
property at Emerson Avenue and Chain Bridge Road,<br />
which provides transit throughout the metropolitan<br />
area.<br />
Distance to Major Transportation Routes<br />
State Route 123<br />
0.40 Miles<br />
(Dolley Madison Boulevard)<br />
State Route 267<br />
1.15 Miles<br />
(Dulles Airport Access Road)<br />
State Route 193<br />
1.20 Miles<br />
(Georgetown Pike)<br />
The Capital Beltway<br />
1.50 Miles<br />
The George Washington<br />
2.50 Miles<br />
Memorial Parkway<br />
Interstate 66<br />
2.50 Miles<br />
FIGURE 2<br />
ATTACHMENT 2<br />
Fairfax County, through a number of transportation<br />
improvement studies, has several infrastructure<br />
improvements in the planning stages which could<br />
dramatically bolster regional accessibility.<br />
Improvements detailed to the right include several<br />
new Metrorail stops through Tysons Corner and rail or<br />
rapid bus transit lines all within 2 miles of the Subject<br />
Property.<br />
Outdoor seating at StarNut Gourmet at The Shops at The Palladium
StarNut Gourmet at The Shops at The Palladium
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
63<br />
Market
64<br />
Market Overview<br />
The McLean Retail Submarket<br />
Ideally located within the Capital Beltway, between<br />
the George Washington Parkway and I-66, McLean is<br />
comprised of 770,000 square feet of retail space, 68%<br />
of which is found in shopping centers. The majority of<br />
this submarket was developed in the 1970s in response<br />
to the growing population and burgeoning federal<br />
contractor presence in nearby Tysons Corner. Today,<br />
the McLean retail submarket remains focused on<br />
upscale boutiques, service providers, and restaurants,<br />
supplemented by neighborhood grocery stores serving<br />
the community’s dense and affluent residential base.<br />
Premier tenants in the McLean submarket include<br />
Balducci’s, Giant, Safeway, Starbucks, CVS, Boston<br />
Market, and Blockbuster.<br />
Submarket Fundamentals<br />
Currently the McLean submarket is nearly at full<br />
occupancy, with only 0.3% vacancy. The submarket<br />
has historically performed with negligible supply,<br />
exacerbating pent-up demand and creating significant<br />
interest when available space becomes available for<br />
lease. Year to date absorption totals positive 2,600<br />
square feet, compared to positive 15,000 square feet<br />
in 2006 which was the result of retail leasing at The<br />
Palladium. Recent leases in this submarket include<br />
The Jewelry Store at the Madison Building which inked<br />
1,135 square feet of space for $45.00 triple net. In the<br />
same building Boone & Sons is offering a sublet of 1,325<br />
square feet at $50.00 triple net, with 3% escalations<br />
per year for five years. Further, retail at the corner of<br />
Chain Bridge Road and Center Drive is commanding<br />
rents between $45.00 and $57.00 triple net for leases<br />
consummated in 2006 and 2007. All leases include<br />
3% annual rent escalations for five to ten year terms.<br />
With little available supply, rents in the submarket have<br />
shown steady growth, increasing an average of 4.3%<br />
annually since 2004. McLean rents remain some of<br />
the highest in the region at an average of $48.00<br />
triple net.<br />
Deliveries and Development Pipeline<br />
There are no retail projects currently under<br />
construction in McLean nor has any product been<br />
delivered in 2007. The most recent deliveries<br />
include the Subject Property in 2006 and the<br />
Chesterbrook Shopping Center, a 9,300 square<br />
foot retail center which is fully leased including<br />
Wachovia Bank. Further, there are no new projects<br />
under construction in McLean as developable<br />
infill opportunities are rare. Many owners have<br />
begun to consolidate parcels in attempt to<br />
realize the “Main Street” vision as depicted in the<br />
Fairfax County Comprehensive Plan. Significant<br />
consolidation around Redmond Drive and Old<br />
Dominion Drive could result in a significant future<br />
mixed-use project; the County and property<br />
owners are currently reviewing this potential.<br />
Above: Elevation of Chesterbrook Shopping Center<br />
Opposite page: Aerial view of the Palladium along Lowell Street
Chain Bridge Road<br />
Lowell Street
66<br />
McLean Retail Competitive Set<br />
Property & Size Property Type Building Size Year Built Major Tenants Percent Leased<br />
1 Chain Bridge Corner<br />
1446-1454 Chain Bridge Road<br />
Anchored Shopping Center<br />
118,000 SF<br />
1,500 SF Vacancy<br />
1973 Giant Food, CVS 98%<br />
2 6811-6815 Old Dominion Drive Unanchored Retail Strip 19,300 1956 McLean Hardware, Chesapeake<br />
Bagel Bakery<br />
100%<br />
3 McLean Center<br />
1427-1439 Center Drive<br />
Unanchored Retail Strip 9,420 n/a Pool Doctors, McLean Cigar 100%<br />
4 McLean-Chain Bridge Center*<br />
1451 Chain Bridge Road<br />
Anchored Shopping Center<br />
(Closed Former Giant)<br />
32,000 n/a Total Wine & More,<br />
Books A Million<br />
100%<br />
5 McLean Commerce Building<br />
1471-1475 Chain Bridge Road<br />
2-Story Retail 25,000 1968 Minute Man Press,<br />
The Kitchen Guild<br />
100%<br />
6 Langley Shopping Center<br />
1362-1392 Chain Bridge Road<br />
7 Old McLean Village<br />
1352-1354 Old Chain Bridge Rd<br />
8 Salona Village Shopping Center<br />
1313-1351 Chain Bridge Rd<br />
9 The Commons Shopping Center<br />
1330 Chain Bridge Road<br />
Unanchored Shopping Center 39,800 n/a R&M Lighting, Three Pigs 100%<br />
3-Story Retail 30,000 1978 Kwik Copy Printing, Nail Salon 100%<br />
Unanchored Shopping Center 26,900 1968 Le Grand Café 100%<br />
Anchored Shopping Center 37,000 1969 Safeway, Rite Aid, Blockbuster 100%<br />
10 The Market Place<br />
6830 Old Dominion Drive<br />
Retail building on 2-levels 25,000 1991 Sona Bank, The Greek Taverna<br />
Ocean M Restaurant<br />
100%<br />
11 6707 Old Dominion Drive 1st Floor Retail 30,300 1980 Hair Cuttery, Face & Body Spa<br />
Creative Hairdressers<br />
100%<br />
McLean Retail Lease Comparables<br />
Property & Size Property Type Tenant Tenant Size<br />
Rent (NNN)<br />
& Escalations Lease Type Term<br />
A 1436-1438 Chain Bridge Road Unanchored Retail Undisclosed 1,690 $57.00 - 3%/yr New 10 yr<br />
9,540 SF 1,220 $45.00 - 3%/yr New 5 yr<br />
904 $45.00 - 3%/yr New 5 yr<br />
870 $45.00 - 3%/yr New 5 yr<br />
B The Madison Building Anchored McEnearney Realtors 1,795 - 1,898 $65.00 - 3%/yr New 5 yr<br />
1320 Old Chain Bridge Road Boone & Sons Sublet 1,326 $50.00 - 3%/yr Sublet 5 yr<br />
81,200 Sq. Ft. The Jewelry Store 1,135 $45.00 - 3%/yr New 5 yr<br />
* Photo not available
67<br />
1<br />
8<br />
Map of Competitive Properties & Lease Comparables<br />
For Properties Detailed on page 67<br />
Old Chain Bridge Rd<br />
Ingleside Ave<br />
Dolley Madison Blvd<br />
9<br />
B 8<br />
2<br />
9<br />
Beverly Rd<br />
7<br />
3<br />
10<br />
5<br />
11<br />
Old Dominion Dr<br />
Park Ave<br />
10<br />
Elm St<br />
3<br />
Redmond Dr<br />
2<br />
Chain Bridge Rd<br />
6<br />
Spring Vale Ave<br />
11<br />
A<br />
Ingleside Ave<br />
6<br />
A<br />
Meadowbrook Ave<br />
4<br />
1<br />
Emerson Ave<br />
Whittiter Ave<br />
Laughlin Ave<br />
5<br />
7<br />
B<br />
ASSET INVESTMENT SALES GROUP
68<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Tenancy
69<br />
Tenant Profiles<br />
StarNut Gourmet<br />
2,256 Sq. Ft.<br />
Local Retailer<br />
StarNut Gourmet is a unique food and gift store that<br />
specializes in high quality chocolates and sweets,<br />
nuts, coffee and tea. The menu reflects international<br />
flavors including Europe’s #1 coffee. StarNut Gourmet<br />
also offers catering services. The comfortable café is<br />
designed with old world charm and casual elegance<br />
and features outdoor seating that attracts numerous<br />
patrons to its charming setting.<br />
Chain Bridge Bank<br />
5,665 Sq. Ft.<br />
National Association<br />
Chain Bridge Bank is a full-service regional bank,<br />
serving the businesses and residents of McLean and<br />
surrounding Northern Virginia communities. Chain<br />
Bridge Bank was launched in September 2007 by<br />
Peter G. Fitzgerald after leaving the U.S. Senate.<br />
Fitzgerald raised $18.2 million in capital from area<br />
investors. As part of the community, the bank is tuned<br />
into local business and individuals, and committed to<br />
the notion of personal service. At the same time, Chain<br />
Bridge Bank offers cutting-edge technologies and<br />
services such as online banking, personal banking, and<br />
business banking. The bank’s primary office is located<br />
at the subject property.<br />
The Vineyard<br />
1,570 Sq. Ft.<br />
Local Retailer<br />
The Vineyard offers a wide selection of wine, cheeses,<br />
oils, and specialty food selections. The independent<br />
producers who supply these goods are those who<br />
over-deliver quality at the best value in any price range.<br />
The Vineyard, through the use of technology, is able<br />
to keep customers abreast of the best offerings and<br />
information on current and new selections, provide<br />
links to the producers, and retain a history of your<br />
favorite experiences. The store features special events<br />
and holds wine tastings every Friday and Saturday.<br />
For more information please refer to their website at<br />
http://www.thevineyardva.com.<br />
At Left: StarNut Gourmet Entrance<br />
ASSET INVESTMENT SALES GROUP
70<br />
Combined Tenant Expiration Schedule<br />
SQUARE FEET EXPIRING BY YEAR<br />
6,000<br />
SQUARE FEET EXPIRING<br />
5,000<br />
4,000<br />
3,000<br />
2,000<br />
1,000<br />
0<br />
2007 2008 2009 2010 2011 2012<br />
YEAR<br />
Calendar<br />
Year Expiring<br />
Number<br />
of Spaces<br />
Net Rentable<br />
Square Feet<br />
Expiring<br />
Percentage of<br />
Square Feet<br />
Expiring<br />
2007 - - -<br />
2008 - - -<br />
2009 - - -<br />
2010 1 2,256 23.77%<br />
2011 1 1,570 16.54%<br />
2012 1 5,665 59.69%<br />
Total 3 9,491 100.00%<br />
The Vineyard
71<br />
ASSET INVESTMENT SALES GROUP
72<br />
TRANSWESTERN ASSET INVESTMENT SALES GROUP | EXCLUSIVE INVESTMENT OFFERING<br />
Financials
73<br />
Financial Summary and Assumptions<br />
PROPERTY DESCRIPTION<br />
Building Name<br />
The Shops at the Palladium<br />
Building Address<br />
1445 Laughlin Ave.<br />
McLean, Virginia<br />
Property Type<br />
Retail<br />
Size of Building<br />
Rentable SF 9,491<br />
GLOBAL<br />
Analysis Period<br />
Commencement Date January 1, 2008<br />
End Date December 31, 2017<br />
Term (Years) 10<br />
Growth Rate (CAM, Insurance and RET) 3.00%<br />
General Vacancy Rate (reduced by absorption & turnover vacancy)<br />
Chain Bridge Bank 2.50%<br />
Other Tenants 5.00%<br />
FUTURE LEASING ASSUMPTIONS<br />
Retention Ratio 80.00%<br />
Lease Term<br />
Retail (0 SF- 4,999 SF)<br />
Five (5) Years<br />
Retail (5,000 SF & Larger)<br />
Ten (10) Years<br />
Current Market Rent (PSF Per Year)<br />
Retail (0 SF- 4,999 SF) $50.00<br />
Retail (5,000 SF & Larger) $50.00<br />
Annual Rental Escalation 3.00%<br />
Expense Recovery Type<br />
Triple Net (pro rata share)<br />
Tenant Improvements Per SF<br />
New $7.00<br />
Renew $0.00<br />
Leasing Commissions<br />
New 4.00%<br />
Renew 0.00%<br />
Downtime<br />
Three (3) Months<br />
EXPENSES<br />
Management Fee (% of EGR) 3.00%<br />
Operating Expense Source<br />
Based on 2008 budget<br />
Real Estate Taxes Source<br />
Based on 2007 Tax Bill<br />
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<br />
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<br />
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<br />
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<br />
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 ,<br />
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<br />
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 .<br />
StarNut Gourmet Outdoor Seating<br />
ASSET INVESTMENT SALES GROUP
74<br />
Rent Roll<br />
Tenant Name<br />
Type & Suite Number<br />
Lease Dates & Term<br />
Initial (11/07)<br />
Rate &<br />
Sq Ft Bldg<br />
Share<br />
Amount<br />
per Year Changes on Changes to<br />
Description of Operating<br />
Expense Reimbursements<br />
Imprvmnts<br />
Rate<br />
Amount<br />
Commssns<br />
Rate<br />
Amount<br />
Assumption about<br />
subsequent terms<br />
for this tenant<br />
1 StarNuts Gourmet<br />
Retail, Suite: 101-A<br />
2,256 SqFt<br />
23.77%<br />
$36.00<br />
$81,216<br />
Nov-2008<br />
Nov-2009<br />
$38.00<br />
$40.50<br />
Tenant shall reimburse 23.9%<br />
share of CAM, Insurance and<br />
Real Estate Taxes<br />
Nov-2005 to Oct-2010<br />
60 Months<br />
Following the current<br />
term, it is assumed that<br />
the tenant is exercise its<br />
renewal option.<br />
Tenant holds one 5-year renewal option at predetermined rate<br />
Tenant to pay 5% of gross sales as a Percentage Rent. Please refer to Lease for Percentage Rent Base amount schedule.<br />
StarNuts Gourmet<br />
Option, Suite: 100<br />
2,256 SqFt<br />
23.77%<br />
$43.00<br />
$97,008<br />
Nov-2013<br />
Nov-2014<br />
$45.00<br />
$46.00<br />
Tenant shall reimburse 23.9%<br />
share of CAM, Insurance and Real<br />
Estate Taxes<br />
Nov-2010 to Oct-2015<br />
60 Months<br />
Following the current term,<br />
it is assumed that the tenant<br />
is exposed to Retail (0<br />
SF- 4,999 SF) market leasing<br />
assumptions.<br />
2 Vineyard 1,570 SqFt $41.50 Sep-2007 $42.75 Tenant shall reimburse 16.63%<br />
Retail 16.54% $65,155 Sep-2008 $44.03<br />
share of CAM, Insurance and Real<br />
Estate Taxes<br />
Sep-2006 to Aug-2011 Sep-2009 $45.35<br />
60 Months Sep-2010 $46.71<br />
Following the current term,<br />
it is assumed that the tenant<br />
is exercise its renewal<br />
option<br />
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.<br />
Vineyard 1,570 SqFt $48.75 Sep-2012 $50.21 Tenant shall reimburse 16.63%<br />
share of CAM, Insurance and Real<br />
Option 16.54% $76,538 Sep-2013 $51.72 Following the current term,<br />
Estate Taxes<br />
it is assumed that the tenant<br />
is exposed to Retail (0<br />
Sep-2011 to Aug-2016 Sep-2014 $53.27<br />
60 Months Sep-2015 $54.87<br />
SF- 4,999 SF) market leasing<br />
assumptions.
75<br />
Tenant Name<br />
Type & Suite Number<br />
Lease Dates & Term<br />
Initial (11/07)<br />
Rate &<br />
Sq Ft Bldg<br />
Share<br />
Amount<br />
per Year Changes on Changes to<br />
Description of Operating<br />
Expense Reimbursements<br />
Imprvmnts<br />
Rate<br />
Amount<br />
Commssns<br />
Rate<br />
Amount<br />
Assumption about<br />
subsequent terms<br />
for this tenant<br />
3 Chain Bridge Bank 5,665 SqFt $43.75 May-2008 $45.06 Tenant shall reimburse 59.63%<br />
Retail 59.69% $247,844 May-2009 $46.41<br />
share of CAM, Insurance and<br />
Real Estate Taxes<br />
May-2007 to Apr-2012 May-2010 $47.81<br />
60 Months May-2011 $49.24<br />
Following the current<br />
term, it is assumed that<br />
the tenant is exercise its<br />
renewal option.<br />
Tenant holds three 5-year renewal options at 3% increase over the previous year rent<br />
Chain Bridge Bank 5,665 SqFt $50.72 May-2013 $52.24 Tenant shall reimburse 59.63%<br />
Option 59.69% $287,319 May-2014 $53.81<br />
share of CAM, Insurance and Real<br />
Estate Taxes<br />
May-2012 to Apr-2017 May-2015 $55.42<br />
60 Months May-2016 $57.08<br />
Following the current<br />
term, it is assumed that<br />
the tenant is exercise its<br />
renewal option.<br />
Chain Bridge Bank 5,665 SqFt $58.80 May-2018 $60.56 Tenant shall reimburse 59.63%<br />
Option 59.69% $333,081 May-2019 $62.38<br />
share of CAM, Insurance and Real<br />
Estate Taxes<br />
May-2017 to Apr-2022 May-2020 $64.25<br />
60 Months May-2021 $66.18<br />
Following the current term,<br />
it is assumed that the tenant<br />
is exercise its renewal<br />
option.<br />
Total Occupied (Useable):<br />
9,491 SqFt<br />
Total Vacant: -<br />
Building Total (Useable):<br />
9,491 SqFt<br />
ASSET INVESTMENT SALES GROUP
76<br />
Cash Flow Model<br />
Cash Flow Model For the Years Ending<br />
Initial Period<br />
& PSF<br />
Year 1<br />
Dec-2008<br />
Year 2<br />
Dec-2009<br />
Year 3<br />
Dec-2010<br />
Year 4<br />
Dec-2011<br />
Year 5<br />
Dec-2012<br />
Year 6<br />
Dec-2013<br />
Year 7<br />
Dec-2014<br />
Year 8<br />
Dec-2015<br />
Year 9<br />
Dec-2016<br />
Year 10<br />
Dec-2017<br />
Year 11<br />
Dec-2018<br />
POTENTIAL GROSS REVENUE<br />
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<br />
Absorption & Turnover Vacancy $0.00 - - - - - - - (11,561) (8,287) - -<br />
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<br />
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<br />
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<br />
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)<br />
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<br />
OPERATING EXPENSES<br />
Other Operating Expenses<br />
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<br />
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<br />
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<br />
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<br />
Water $0.05 500 515 530 546 563 580 597 615 633 652 672<br />
Miscelaneous $0.06 600 618 637 656 675 696 716 738 760 783 806<br />
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<br />
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<br />
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<br />
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<br />
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<br />
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<br />
LEASING & CAPITAL COSTS<br />
Tenant Improvements $0.00 - - - - - - - 3,884 2,784 -<br />
Leasing Commissions $0.00 - - - - - - - 5,892 4,224 -<br />
TOTAL LEASING & CAPITAL COSTS $0.00 - - - - - - - 9,776 7,008 -<br />
CASH FLOW AFTER LEASING<br />
AND CAPITAL COSTS<br />
$40.68 $386,068 $399,778 $414,659 $429,246 $439,993 $451,147 $465,825 $472,567 $518,481 $549,111<br />
Purchase Price: $6,430,000<br />
Cap Rate: 6.00%<br />
Building SF: 9,491<br />
Price PSF: $677.48<br />
Chain Bridge Bank Exterior at The Shops at The Palladium
Chain Bridge Bank at The Shops at The Palladium