Buzzard Point / Reeves Building Swap

Transcription

1 Frank D. Reeves Municipal Center 14th and U Street, NW Washington D.C. Buzzard Point / Reeves Building Swap Washington D.C. Presented by: Tom Shields, MAI, Joseph J. Blake & Associates

2 Buzzard Point Akridge Parcel / Reeves Building Swap Washington D.C. Highlights The District of Columbia is evaluating a trade/swap of the Franklin D. Reeves Municipal Center at 14 th and U Street, NW for an 89,257 square foot parcel owned by Akridge Development in the Buzzard Point area of SW Washington D.C. The Akridge parcel would become a portion of the necessary land to develop a 20,000 to 25,000 square foot soccer stadium for the MLS team D.C. United. The Reeves building is currently under use as an office building for various agencies of the District of Columbia. The highest and best use was determined for multifamily development with first floor retail/restaurant space. The Reeves building was determined to have a total development potential of 525,936 sf with a valuation of $130 psf to $150 psf of FAR. Additional demolition costs reduced the FAR psf value estimate by $5 to $10 psf of FAR. The Akridge parcel was determined to have an FAR of 8.2 due to a bonus FAR of 1.0 and inclusionary zoning bonus of 1.2 FAR. Asset Summary Reeves Building Property Type Size Office Year Built ,250 SF (NRA) FAR 7.2 and 2.16 Potential SF 525,936 Asset Summary AkridgeParcel Property Type Size (SF) 89,251 FAR 8.2 Parking Lot/ Vacant Land Potential SF 731,858 Proposed Use Soccer Stadium The Akridge parcel $/FAR was estimated at $35.00 to $40.00 psf.

3 Redevelop or adaptively reuse to modernize and humanize the area Predicting whether office space, housing, hotel rooms or other uses will make the best financial sense five or 10 years down The last undeveloped space on Pennsylvania Ave J. Edgar Hoover Building Washington D.C. Presented by: Billy Brown, Alvarez&Marsal Real Estate Advisory Services

4 J. Edgar Hoover Building Washington D.C. Redevelopment Highlights Hoover site as trading chip GSA has proposed swapping the Hoover building site for the construction of a new, consolidated campus located in the Washington region. New FBI HQ site requirements: Minimum 50 acres within two miles of a Metro station and two and a half miles of the Capital Beltway Must include 2+ million sf of space Questions regarding constructing new HQ vs. price of the Hoover Building site on the open market. Scale of site 4 acres smaller than the 11 acre CityCenterDC (mixeduse office, retail, hotel and residential space ). Neighboring development Trump redevelopment of The Old Post Office $200 million makeover along with Penn Quarter arts/entertainment district to the north Asset Summary Land Size Building Size Address Redevelopment Considerations 290,000 sf / 6.7 acres 2,000,000 sf DC Height Restrictions Act of Pennsylvania Ave. Provides for open/public/green space recommendations Reestablish D Street NW (directly east of the subject) to the site Timing 5 to 10 years of potentially holding site while FBI moves to new headquarters; October 2020 earliest new HQ could be developed and site freed for redevelopment Adaptive reuse aging and deteriorating structure; netting on the facades of the tower because the concrete's been chipping away; costs to demolish building

5 Keystone Office Acquisition Philadelphia MSA Presented by: Royce A. Rowles, MAI, Colliers International

6 Keystone Office Acquisition Philadelphia MSA Transaction Highlights Repositioning asset. Buyer plans extensive interior renovations on several of the assets. Sellers divesting office portfolio to fund a transition into multi family assets. The transaction included excess land allowing up to an additional 162,000 SF of future office development. Properties located in key submarkets including several along Pennsylvania s Main Line. Minimal amounts of new supply coming into the market for the coming years. Market Cap rate estimated at 7.5% to 8.0% with 0 bps spread on reversion. However, purchase price permits seller to participate in value creation from the renovations and rights to future multi family expansion. Asset Summary Property Type Suburban Office Size 1.7 Million NRSF Number of Locations 7 Year Built 1969 to 1992 Average Occupancy 81% Transaction Summary Date of Sale August 27, 2013 Purchase Price $233 million $/SF $139 Buyer Keystone Property Grp. Seller Mack Cali Realty Corp. Cap Rate 9.8% (In Place)

7 Pacific Commons Fremont, CA Presented by: Michael Carey, MAI, MRICS, New Market Real Estate Group

8 Pacific Commons Fremont, CA Property Highlights Open air center located in Alameda County, CA in the Tri Cities area of the San Francisco Bay Region. Part of an 840 acre MPC with 100 acres of retail space. Ground Lease (GL) tenants include Kohl's, Costco and Lowe's. Owned anchors and majors include TJMaxx, Toys "R" Us, Old Navy, Bassett Furniture Direct, Staples, DSW, Nordstrom Rack, and Jo Ann Buyer Motivations Checks all of the boxes: Core, Class A, stable cash flow, dominant in trade area No true competition within 10 miles. Demographics are strong with a high HH income. Epicenter of retail. Freemont want this to be the center of the city. Catellus owns the adjacent retail property named The Pacific Commons (opened in March 2012). It is a shopping and entertainment sub district anchored by Target and a 16 screen Century Theater, Dick s, Men s Wearhouse, ULTA. Anchor store GLA as a percent of Total 80.96%. Reasonably good credit. From , leases for 25% of the center GLA expire is the largest. California property. Projected taxes were reasonably close to actual. Asset Summary Property Type Size (Sq. Ft.) Power/Lifestyle Center 811,693 Total 378,095 Owned Buildings 16 Year Built Occup. 97.7% (47 tenants) Rentable Area Summary (Owned) Anchors 91,395 Majors 140,082 In Line 119,400 Outparcels 19,218 Total 378,095

9 Pacific Commons Fremont, CA Transaction Highlights 10 year holding period Rent growth 0.0%/4.0%/5.0%/4.0%/3.5%/3.0% thereafter Assumed all anchors would exercise their renewal options. No planned capital expenditures. Concessions no TI s upon renewal and no free rent in the market. Following Acquisition All tenants with expirations in 2014 renewed. Did not know if they would renew upon purchase. Staples (20,000 SF) went dark. The lease goes through December of Now looking at deals to replace them. A new tenant would be the same size. Cost is unknown. A few prospects. Will realize cost savings from acquisition expense projections. Transaction Summary Date of Sale December 2013 Purchase Price $202.0 million Buyer Heitman Seller Catellus Development Financial Summary Date of Sale December 2013 Purchase Price $202.0 million $/SF $ NOI/Sq. Ft. $26.71 IRR 6.50% Resid. Cap Rate 6.00% OAR 5.00%