EXECUTIVE
SUMMARY
Capital Commercial Investments, Inc. (CCI) is pleased to offer an investment
opportunity in Houston, Texas. The Boeing Building is a Class "A", seven-story,
multi-tenant office building containing 147,767 net rentable square feet
(SF) located in the heart of Clear Lake at 16055 Space Center. The Clear
Lake area is the home of the Johnson Space Center, headquarters of the
National Aeronautics and Space Administration (NASA). The property is located
just 15 minutes away from Hobby Airport and just 25 miles from the Central
Business District and benefits from the South Belt.
The building was completed in 1986 by Harvey Construction and designed
by House Reh Burwell Architects. The landscape is fully sprinklered, has
card-key and remote entry, and provides fiberoptic access. The property
has 670 surface parking spaces or approximately 4.6 parking spaces per
1,000 SF. Design, construction quality, appearance, and location make this
project very desirable.
We have agreed to purchase the building for $11,760,000or
$79.59/ SF. CCI will receive initial debt funding of $8,450,000
or $57.18/ SF with a $600,000 holdback for Tenant Improvements and $450,000
subject to achieving 95% occupancy providing a total of $9,500,000 or $64.29
of debt. In addition $1,850,000 of mezzanine financing has been obtained
from Canyon Partners. We are raising approximately $1,850,000 in equity
to complete the purchase. Exclusive of the holdbacks, the total capitalization
will be $12,150,000 or $82.23/ SF. Total funding inclusive of holdbacks
is $13,200,000 or $89.33/ SF.
The average rental rate for existing tenants is $15.25/ SF. Recent renewals
are averaging approximately $17.50/ SF. We expect rental rates to rise
to as high as $21.50/ SF within the anticipated holding period of 3 to
5 years. The current NOI is $983,938. At the end of the holding period,
we anticipate the building to have an NOI of approximately $1,800,000 capitalized
at 10% to sell for approximately $18,000,000
or $120.00/ SF.
The quality tenant base includes such well-known companies as Union
Carbide Corporation and Smith Barney. Union Carbide occupies
66,722 SF and expires January 14, 2004, while Smith Barney consists of
6,524 SF and ends April 30, 2000. The property is 84.63% leased with 26,988
SF vacant. This includes a 17,784 SF premier full floor penthouse on the
seventh floor.
CCI is agressively leasing the property to lease up the remaining vacant
space. In the month of July, we signed a lease with Greentree Financial/Conesco
for 4,284 SF on the seventh floor at an effective rate of $17.50 for 5
years.
The submarket consists of 5.61 million SF, of which there is 924,130
SF of Class "A" office buildings. According to the 1st Quarter 1999 Houston
Office Guide, the weighted average rental rate for Class "A" office buildings
in this submarket is $17.37/ SF, with an average occupancy of 95.91%.
In conclusion, the Boeing Building represents an excellent investment
for the following reasons:
· CCI is purchasing a Class A, high quality, multi-tenant
office building that has a replacement cost of $130.00-$140.00/ SF for
$79.18/ SF.
· Provides attractive upside being 84.63%
leased at an average rate of $15.25/ SF
in a 95.91% occupied market signing$17.37/
SFdeals.
· Stabilized cash flow that can from day one provide a 10% Preferred
return.
Please call us immediately if you have any interest or to request a
package. |
