The Forum Building, Wauwatosa, WI PDF - Siegel

Transcription

Offering Memorandum
THE FORUM BUILDING
3333 N. Mayfair Road
Wauwatosa, WI 53222
PRESENTED BY:
Patrick Gallagher, CCIM
D 414.270.4108
E [email protected]
T 414.225.9700 F 414.225.9785 W www.sg-re.com
Matson Holbrook, CCIM
D 414.225.4407
E [email protected]
THE FORUM BUILDING
3333 N. Mayfair Road, Wauwatosa, WI 53222
DISCLAIMER
The information contained in this Offering Memorandum (“Brochure”) is confidential and is provided for the sole
purpose of allowing persons to evaluate whether there is interest in proceeding with further discussions with
the Owner regarding a possible transaction with respect to the subject property (the “Property”). The
information contained herein shall not be photocopied or disclosed to any other party and shall not be used for
any other purpose. If the person receiving this Brochure does not elect to pursue such a transaction, same
person agrees that this material is to be returned to Siegel-Gallagher, Inc. (“Broker”).
Neither the Owner, nor Broker, nor any of their respective officers, directors, partners, employees, agents or
affiliates, assume any responsibility or make any representations or warranties, whether express or implied, by
operation of law or otherwise, with respect to the Property or this Brochure or any information or statements
(including financial statements and projections) contained herein or relating hereto, including but not limited to
the accuracy or completeness of such information or statements and the condition, quality or fitness of the
Property. Such information and statements have in many circumstances been obtained from outside sources,
have not been tested or verified and may be subject to errors or omissions. Projections, in particular, are
based upon various assumptions and subjective determinations as to which no guaranty or assurances can be
given. Without limiting the foregoing, in the event this Brochure contains information relating to asbestos or
any other hazardous, toxic or dangerous materials in relation to the Property, such information shall in no
manner be construed as creating warranties or representations, express or implied, by operation of law or
otherwise, by any party, as to the existence or non-existence or nature of such materials in, under, on or
around the Property. Potential investors must perform their own examination and investigation of the Property
and information relating to the Property and in its operations, and shall rely solely on such examination and
investigation and not on this Brochure or any information or materials contained herein or otherwise provided in
making their decisions on whether to proceed with a transaction. The Property is being sold “as is” by the
respective Owner, without representation or warranty as to condition or profitability.
The only party authorized to represent the Owner of the Property is Broker, and Owner shall not be obligated
to pay any fees or commissions to any other advisor, broker or representative. Any party entering into a
transaction with Owner shall be obligated to pay any fees or commissions due any advisor, brokers or
representatives, other than Broker, dealing with such a party.
This Brochure is provided subject to prior sale or lease, change of price or terms and other changes to the
materials, statements and information contained herein or relating to the Property, and is subject to withdrawal,
all without notice or liability. In no event shall the delivery or receipt of this Brochure be deemed to create any
legal obligation to enter into any transactions with respect to the Property, and only a definitive agreement
signed by all parties shall create a binding commitment to enter into a transaction.
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THE FORUM BUILDING
EXECUTIVE SUMMARY
The Offering
Siegel-Gallagher, Inc., on behalf of the owner of record, is offering for sale a 100% fee
simple interest in the Forum Building located at the north end of the Mayfair Corridor in
Wauwatosa, Wisconsin. This value-add office property provides an investor/developer an
excellent opportunity to reposition the asset and/or increase cash flow through
stabilization efforts in this rapidly strengthening submarket.
Property

The Forum Building, 3333 N. Mayfair Road, Wauwatosa, WI
Property Size

83,083 rentable square feet
Current Occupancy

50.9%
Offering Price

$3,600,000 ($43.61/RSF)
Investment Highlights


Value-add opportunity in the thriving Mayfair commercial corridor
Potential to attract larger tenant with over 24,000 SF of contiguous available
space on one floor
Near Mayfair Mall with numerous retailers, restaurants, hotels, and other
commercial developments including the new Mayfair Collection, a 270,000square-foot adaptive reuse retail development
Good visibility (16,700 VPD) and golf course views
Easy access to Hwy 45 north and south entrances
Building can be acquired for significantly less than replacement cost




Transaction Guidelines
Following the distribution of materials, Siegel-Gallagher will be available to assist prospective investors with on-site
inspections of the property and in the review of the information contained in the Offering Memorandum.
As-Is Sale
The property is being sold on an “As-Is, Where-Is” basis and the owner will make no representations or warranties as to
the condition of the property, the property’s systems, the serviceability or fitness for a particular use or any component of
the property, or the accuracy of the offering information provided.
All offers should include the following:
 The offer price;
 A description of the investor and its source of capital for the acquisition;
 The amount of earnest money deposit;
 An outline of the proposed schedule for due diligence and closing;
 Description of any contingencies or due diligence requirements; and
 A description of any physical or environmental assumptions affecting the price being offered.
Contacts
All Inquiries related to this Solicitation and Offers should be made directly to the following:
Patrick D. Gallagher, CCIM
Direct: 414-270-4108
[email protected]
Matson B. Holbrook, Jr., CCIM
Direct: 414-225-4407
[email protected]
T 414.225.9700 F 414.225.9785 W www.sg-re.com
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THE FORUM BUILDING
PROPERTY OVERVIEW
Description
Constructed in 1972, the Forum Building at 3333 N. Mayfair Road in Wauwatosa, Wisconsin, is an 83,083-square-foot
multi-tenant office building. The three-story structure is situated on a 3.71-acre parcel at the northern end of the thriving
Mayfair Corridor and contains ample parking with 292 parking spaces. Located 1.2 miles away from Mayfair Mall, the
property is near numerous retailers, restaurants, hotels, and other commercial spaces. Surrounding uses include Curry
Park Golf Course to the north and west, along with office to the south and residential to the east across Mayfair Road.
In close proximity to the subject property is the Mayfair Collection retail development, Phase I of which opened in April
2014. Tenants in Phase I include Nordstrom Rack, Saks Off Fifth, Dick’s Sporting Goods and Old Navy, among others. It
has recently been announced that Whole Foods will anchor Phase II of the project, as well as several Bartolotta
restaurants.
As of April 2014, the property was 50.9% occupied by 14 tenants, the largest of which is Kelly Services, Inc., occupying
6,354 square feet, or 7.7% of the building’s total rentable space. This value-add opportunity presents an investor with
substantial upside potential through stabilization of a quality asset in a rapidly improving submarket.
Location
3333 North Mayfair Road, Wauwatosa, WI 53222
Building Size
83,083 square feet
Number of Floors
Three floors
Year Built
1972
Construction Details
Foundation
Structural Frame
Exterior Walls
Roof
Interior Finishes:
Floors
Walls
Ceilings
Lighting
HVAC
Heating
Air Conditioning
Elevators
Sprinklers
Poured Concrete
Concrete framing with precast concrete and glass curtain walls
Masonry, concrete, and insulated glass
Flat, built-up with rubber membrane and stone ballasts
Carpet, vinyl and ceramic tile
Painted drywall and vinyl wall paper
Acoustic tile
Fluorescent
Central roof mounted system
Forced Air
Central air conditioning
One hydraulic elevator
100%
Utilities
Water
Sewer
Electricity
Natural Gas
Local Phone
Municipality
Municipality
WE Energies
WE Energies
AT&T; Time Warner; Comcast
T 414.225.9700 F 414.225.9785 W www.sg-re.com
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THE FORUM BUILDING
PROPERTY OVERVIEW
Site Size
3.71 acres (161,550 SF)
Parking Area
Surface parking lot with approximately 292 spaces
Zoning
C2, General Commercial
Tax Key
296-9999-01
2013 Assessed Value
Land
Improvements
Total
$2,746,300
$753,700
$3,500,000
2013 Net Property Tax
$83,016.00
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THE FORUM BUILDING
PROPERTY PHOTOS - INTERIOR
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THE FORUM BUILDING
PROPERTY PHOTOS - EXTERIOR
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THE FORUM BUILDING
AREA MAPS
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THE FORUM BUILDING
AERIAL PHOTOS
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THE FORUM BUILDING
AREA DEVELOPMENT – THE MAYFAIR COLLECTION
The Mayfair Collection is an exciting, new mixed-use retail, residential, restaurant and office development in Wauwatosa,
WI, in close proximity to the Forum Building. Located approximately four miles west of downtown Milwaukee, The Mayfair
Collection is centrally located within Metro Milwaukee and highly-accessible with direct access to US Highway 45 and
close proximity to Interstate 94.
The Forum
Located just west of the Subject Property, the
Mayfair collection will continue to build on the
merits of one of the strongest retail corridors in the
Milwaukee PMSA. Some highlights include:
 Phase 1: approximately 270,000 sq. ft. of
retail with signed leases including;
Nordstrom Rack, Dick’s Sporting Goods,
th
Saks Off 5 , Ulta Beauty and Old Navy
 Phase 2: Mixed-use development to
include Office, various Restaurants,
anchored by a Whole Foods Market
 Meijer: 157,000-square-foot grocery store
to be built on 14.6 acres, across from
Mayfair Collection
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THE FORUM BUILDING
PARCEL MAP
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THE FORUM BUILDING
SITE PLAN
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THE FORUM BUILDING
FLOOR PLAN – 1ST FLOOR
Suite 113
1,831 SF
Suite 110
6,578 SF
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THE FORUM BUILDING
FLOOR PLAN – 2ND FLOOR
Suite 214
1,159 SF
Suite 208
734 SF
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THE FORUM BUILDING
FLOOR PLAN – 3RD FLOOR
Suite 301
16,832 SF
(divisible)
Suite 313
1,024 SF
Suite 314
2,006 SF
Suite 311
7,430 SF
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THE FORUM BUILDING
ASSESSMENT & TAX DETAILS
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THE FORUM BUILDING
FINANCIAL ANALYSIS - OVERVIEW
Financial Overview
The following pages contain financial investment highlights including a rent roll, market leasing assumptions, five-year
cash flow projection, as well as actual operating history for the most recent period that records are available. The Argus
cash flow assumes new ownership will take over as of September 1, 2014. The returns provided by the Argus model, as
well as debt assumptions and the reversion assumptions, are summarized below.
Return Overview
Net operating income for the Forum Building is expected to stabilize in Year 3 of the Argus cash flow model at around
$533,000 and approach $550,000 by Year 5 of the analysis. Since occupancy is currently around 50%, it is expected that
cash flows after capital items will be negative during the first two or three years of the holding period, taking into
consideration tenant improvements, leasing commissions and other capital items an investor would outlay to stabilize the
property. As such, the investor returns have been modeled so that the first three years of capital expenditures are
grouped into the total initial investment, and the investor’s initial equity is 30% of this amount. The resulting stabilized
cash-on-cash return in Year 3 is 22.89% with a 16.9% leveraged IRR over the five-year holding period.
Projected Investor Returns - Five-Year Hold
Year
Purchase Price
Leasing & Capital Costs
Total Investment (3 years)
Loan Summary:
LTV
Interest Rate (I/O)
Loan Balance
0
$3,600,000
Investment Returns:
Equity Ratio
Equity Amount
Return on Equity
Cash Flow
IRR
2
$377,115
$510,348
$2,897,115
$3,407,463
3
$545,475
4
$61,408
5
6
$64,115
$5,032,938
70.0%
5.50%
$2,520,000
Cash Flow:
Net Operating Income
Debt Service
Cash Flow After Debt Service
Reversion:
Capitalization Rate
Resale Amount
Less: Loan Balance
Closing Costs
Net Resale Proceeds
1
$64,114
($138,600)
($74,486)
$339,554
($159,341)
$180,213
$3,952,938 $3,952,938 $3,952,938
$533,073
($187,410)
$345,663
$535,733
($217,412)
$318,321
$549,597 $556,159
($217,412)
$332,185
9.0%
$6,179,544
$3,952,938
$185,386
$2,041,220
3.0%
30.0%
$1,509,881
($1,509,881)
-4.93%
($74,486)
11.94%
$180,213
22.89%
$345,663
21.08%
22.00%
$318,321 $2,309,291
16.9%
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THE FORUM BUILDING
FINANCIAL ANALYSIS – RENT ROLL
Rent Roll
As of September 1, 2014
Suite
Lease
% GLA Expiration Rent/SF
Tenant
GLA
101
AmeriCU Mortgage Company
4,958
6.0%
102
Break Room
1,694
2.0%
103
ALS Storage Unit
104
Maxim Healthcare Services
3,475
4.2%
106
R.R. Donnelly & Sons
3,411
107
Juvenile Diabetes Research
2,565
112
Hackbarth Insurance
114
$54,538
$4,545
Annual Rent Bumps
(PSF)
Lease Type
Market Leasing
Assumption
-
Gross
$15/$15/5/70%
-
N/A
N/A
5/1/2015 - $9.00
Gross
ALS Storage MLA
-
Gross
$15/$15/5/70%
$8.74
$2,386
$199
$61,612
$5,134
4.1% 7/31/2015
$15.45
$52,700 $4,391.66
8/1/2014 - $15.87
Gross
$15/$15/5/70%
3.1% 1/31/2017
$12.82
$32,883 $2,740.28
2/1/2015 - $13.14
2/1/2016 - $13.47
Gross
$15/$15/5/70%
1,093
1.3% 5/31/2017
$13.53
$14,784
$1,232
2/1/2015 - $13.93
2/1/2016 - $14.35
2/1/2017 - $14.78
Gross
$12/$12/3/70%
Juvenile Diabetes Research
1,196
1.4% 1/31/2017
$12.82
$15,333 $1,277.73
2/1/2015 - $13.14
2/1/2016 - $13.47
Gross
$12/$12/3/70%
201
Zenith American Solutions
4,003
4.8% 5/31/2019
$14.75
$59,044
$4,920
2/1/2015 - $15.25
2/1/2016 - $15.75
2/1/2017 - $16.25
2/1/2018 - $16.75
Gross
$15/$15/5/70%
203
Lullof & Taylor, LLC
3,632
4.4% 8/31/2016
$14.79
$53,717
$4,476
3/1/2015 - $15.08
3/1/2016 - $15.39
Gross
$15/$15/5/70%
204
IC Group LP
2,765
3.3% 1/31/2018
$13.80
$38,157
$3,180
2/1/2015 - $14.07
2/1/2016 - $14.25
2/1/2017 - $14.54
Gross
$15/$15/5/70%
207
Kelly Services, Inc.
6,354
7.6% 11/30/2016 $11.00
$69,894
$5,825
209
Pediatric Rehabilitation
2,279
2.7% 12/31/2018 $14.09
$32,111 $2,675.93
210
John Juren
573
0.7% 5/31/2014
$15.00
212
Titania Whitten/Judit DuSull
1,093
1.3% 7/31/2016
$14.70
$16,067 $1,338.93
213
ALS Association, Inc.
1,295
1.6% 5/31/2016
$14.20
$18,389 $1,532.42
214
ALS Association, Inc.
501
0.6% 5/31/2016
$14.20
$7,114
$592.85
1,093
1.3% 9/30/2014
83,083 100.0%
$16.00
$17,488
$1,457
Rodney Cubbie, Atty at Law
Current:
Total Occupied
Total Vacant
42,253
40,830
0.3% 5/31/2016
$11.00
Monthly
Rent
$17.73
312
Total
273
MTM
Annual
Rent
MTM
$8,595
$716
-
Gross
$15/$15/5/70%
1/1/2015 - $14.45
1/1/2016 - $14.81
1/1/2017 - $15.18
1/1/2018 - $15.56
Gross
$15/$15/5/70%
-
Gross
$12/$12/3/70%
8/1/2015 - $15.14
Gross
$12/$12/3/70%
5/1/2015 - $14.63
Gross
$12/$12/3/70%
5/1/2015 - $14.63
Gross
$12/$12/3/70%
-
Gross
$12/$12/3/70%
50.9%
49.1%
*All leases are gross with base year expense stops.
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THE FORUM BUILDING
FINANCIAL ANALYSIS – MARKET LEASING ASSUMPTIONS
Leasing Assumptions
To establish a base year net operating income, it is assumed that no new leasing takes place in Year 1 of the five-year
Argus cash flow projection. The current vacant suites are then scheduled to lease up between Month 13 of the analysis
and Month 28 of the analysis, with existing tenants assigned a 70% renewal probability at the market leasing assumptions
summarized below. Suites that have exterior views are scheduled to achieve a $15/SF market rent, while those suites
with atrium views are scheduled to achieve $12/SF to $13/SF market rents. A suite-by-suite space absorption schedule is
included on the following page.
Market Leasing Assumption Results
In Inflated Dollars for the Fiscal Year Beginning 9/01/14
MLA Category Name
ALS Storage
$15/$15/5/7
$12/$12/3/7
$13/$13/3/7
___________ ___________ ___________ ___________
Renewal Probability
Market Rent
50.00%
70.00%
70.00%
70.00%
$/SqFt/Yr
$/SqFt/Yr
$/SqFt/Yr
$/SqFt/Yr
New:
Renewal:
8.00
8.00
15.00
15.00
12.00
12.00
13.00
13.00
New:
Renewal:
9.00
0
9.00
0
9.00
0
9.00
0
$/SqFt
$/SqFt
$/SqFt
$/SqFt
0.00
0.00
20.00
5.00
7.00
0.00
7.00
0.00
Percent
Percent
Percent
Percent
New:
Renewal:
4.00%
2.00%
4.00%
2.00%
4.00%
2.00%
4.00%
2.00%
Rent Abatements
New:
Renewal:
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Rent Changes
Annual %
0.00%
2.00%
2.00%
2.00%
None
Base Yr
Base Yr
Base Yr
5
3
3
Months Vacant
Tenant Improvements
New:
Renewal:
Leasing Commissions
Reimbursements
Term Lengths (Years)
3
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THE FORUM BUILDING
FINANCIAL ANALYSIS – SPACE ABSORPTION
Tenant Name
Type & Suite Number
Lease Dates & Term
Presentation Rent Roll & Current Term Tenant Summary
As of Sep-2014 for 83,083 Square Feet
Floor
Rate & Amount
Description of
Imprvmnts Commssns
SqFt
per Year
Changes Changes Operating Expense
Rate
Rate
Bldg Share
per Month
on
to
Reimbursements
Amount
Amount
S1 Suite 110
Office, Suite: Mo 13
Sep-2015 to Aug-2022
84 Months
6,578
7.92%
$15.00
$98,670
$1.25
$8,223
Sep-2016
Sep-2017
Sep-2018
Sep-2019
Sep-2020
Sep-2021
$15.30
$15.61
$15.92
$16.24
$16.56
$16.89
Gross: Pays the
increases over a
base year ending
Dec-2015: $5.33.
S2 Suite 113
Office, Suite: Mo 2
Oct-2014 to Sep-2017
36 Months
1,831
2.20%
$12.00
$21,972
$1.00
$1,831
Oct-2015
Oct-2016
$12.24
$12.48
Gross: Pays the
increases over a
base year ending
Dec-2014: $4.96.
S3 Suite 208
Mar-2016 to Feb-2019
36 Months
743
0.89%
$12.00
$8,916
$1.00
$743
Mar-2017
Mar-2018
S4 Suite 211
Jun-2016 to May-2021
60 Months
3,728
4.49%
$15.00
$55,920
$1.25
$4,660
Jun-2017
Jun-2018
Jun-2019
Jun-2020
$15.30
$15.61
$15.92
$16.24
Gross: Pays the
increases over a
base year ending
Dec-2016: $5.84.
S5 Suite 216
Mar-2016 to Feb-2019
36 Months
658
0.79%
$12.00
$7,896
$1.00
$658
Mar-2017
Mar-2018
$12.24
$12.48
Gross: Pays the
increases over a
base year ending
Dec-2016: $5.84.
S6 Suite 301
84 Months
16,832
20.26%
$15.00
$252,480
$1.25
$21,040
Sep-2017
Sep-2018
Sep-2019
Sep-2020
Sep-2021
Sep-2022
$15.30
$15.61
$15.92
$16.24
$16.56
$16.89
Gross: Pays the
increases over a
base year ending
Dec-2016: $5.84.
S7 Suite 311
Dec-2015 to Nov-2020
60 Months
7,430
8.94%
$15.00
$111,450
$1.25
$9,288
Dec-2016
Dec-2017
Dec-2018
Dec-2019
$15.30
$15.61
$15.92
$16.24
Gross: Pays the
increases over a
base year ending
Dec-2015: $5.33.
S8 Suite 313
Dec-2016 to Nov-2019
36 Months
1,024
1.23%
$12.00
$12,288
$1.00
$1,024
Dec-2017
Dec-2018
$12.24
$12.48
Gross: Pays the
increases over a
base year ending
Dec-2016: $5.84.
S9 Suite 314
36 Months
2,006
2.41%
$13.00
$26,078
$1.08
$2,173
Sep-2016
Sep-2017
$12.24
$12.48
$13.26
$13.53
Gross: Pays the
increases over a
base year ending
Dec-2016: $5.84.
Gross: Pays the
increases over a
base year ending
Dec-2015: $5.33.
$20.00
$131,560
$7.00
$12,817
$7.00
$5,201
$20.00
$74,560
$7.00
$4,606
$20.00
$336,640
$20.00
$148,600
$7.00
$7,168
$7.00
$14,042
Assumption about
subsequent terms
for this tenant
$4.46
4.00%
$29,342
Market
See assumption:
$15/$15/5/70%
$1.47
4.00%
$2,690
Market
See assumption:
$12/$12/3/70%
$1.47
4.00%
$1,091
Market
See assumption:
$12/$12/3/70%
$3.12
4.00%
$11,640
Market
See assumption:
$15/$15/5/70%
$1.47
4.00%
$967
Market
See assumption:
$12/$12/3/70%
$4.46
4.00%
$75,080
Market
See assumption:
$15/$15/5/70%
$3.12
4.00%
$23,200
Market
See assumption:
$15/$15/5/70%
$1.47
4.00%
$1,504
Market
See assumption:
$12/$12/3/70%
$1.59
4.00%
$3,192
Market
See assumption:
$13/$13/3/70%
*It is assumed that AmeriCU Mortgage will downsize from their current Suite 101 and relocate to Suite 113 (noted above).
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THE FORUM BUILDING
FINANCIAL ANALYSIS – FIVE YEAR CASH FLOW
Schedule Of Prospective Cash Flow
In Inflated Dollars for the Fiscal Year Beginning 9/1/2014
For the Years Ending
Potential Gross Revenue
Base Rental Revenue
Absorption & Turnover Vacancy
Scheduled Base Rental Revenue
Expense Reim bursem ent Revenue
Janitorial
Other Janitorial
HVAC
Repairs & Maintenance
Utilities
General and Administrative
Management Fee
Insurance
Real Estate Taxes
Total Reim bursem ent Revenue
Total Potential Gross Revenue
General Vacancy
Collection Loss
Effective Gross Revenue
Operating Expenses
Janitorial
Other Janitorial
HVAC
Utilities
General and Administrative
Management Fee
Insurance
Real Estate Taxes
Total Operating Expenses
Net Operating Incom e
Leasing & Capital Costs
Tenant Improvements
Leasing Commissions
Initial Capital Expenditures
Capital Reserves
Total Leasing & Capital Costs
Cash Flow Before Debt Service
& Taxes
Year 1
Aug-2015
___________
Year 2
Aug-2016
___________
Year 3
Aug-2017
___________
Year 4
Aug-2018
___________
Year 5
Aug-2019
___________
Year 6
Aug-2020
___________
$1,164,685
(676,384)
___________
488,301
$1,164,005
(361,811)
___________
802,194
$1,174,416
(54,790)
___________
1,119,626
$1,197,533
(16,258)
___________
1,181,275
$1,219,565
(41,267)
___________
1,178,298
$1,241,364
(60,717)
___________
1,180,647
972
177
436
1,469
2,328
88
795
266
1,641
___________
8,172
___________
496,473
3,772
625
1,586
5,506
8,338
311
2,745
887
6,029
___________
29,799
___________
831,993
___________
496,473
___________
(24,960)
___________
807,033
___________
6,508
1,024
2,641
9,325
13,755
509
4,634
1,315
10,714
___________
50,425
___________
1,170,051
(85,616)
(35,102)
___________
1,049,333
___________
8,361
1,294
3,357
11,922
17,454
645
5,971
1,616
14,143
___________
64,763
___________
1,246,038
(133,267)
(37,381)
___________
1,075,390
___________
8,606
1,335
3,463
12,281
18,002
665
6,071
1,666
14,736
___________
66,825
___________
1,245,123
(108,148)
(37,354)
___________
1,099,621
___________
7,965
1,248
3,226
11,403
16,792
621
5,526
1,556
13,802
___________
62,139
___________
1,242,786
(88,417)
(37,284)
___________
1,117,085
___________
50,635
9,447
23,127
77,168
123,812
4,699
42,000
14,171
87,300
___________
432,359
___________
58,715
9,946
25,068
86,370
132,214
4,947
43,050
14,919
92,250
___________
467,479
___________
66,912
10,453
27,040
95,711
140,760
5,199
46,802
13,067
110,316
___________
516,260
___________
69,611
10,754
27,922
99,199
145,079
5,349
49,842
13,443
118,458
___________
539,657
___________
70,767
11,000
28,503
101,056
148,251
5,472
49,805
13,751
121,419
___________
550,024
___________
71,989
11,254
29,106
102,998
151,531
5,598
49,927
14,068
124,455
___________
560,926
___________
64,114
___________
339,554
___________
533,073
___________
535,733
___________
549,597
___________
556,159
___________
181,477
29,021
150,000
16,617
___________
377,115
___________
($313,001)
===========
415,370
77,946
17,032
___________
510,348
___________
($170,794)
===========
428,691
99,326
17,458
___________
545,475
___________
($12,402)
===========
34,900
8,614
17,894
___________
61,408
___________
$474,325
===========
35,657
10,116
18,342
___________
64,115
___________
$485,482
===========
70,262
20,749
18,800
___________
109,811
___________
$446,348
===========
T 414.225.9700 F 414.225.9785 W www.sg-re.com
21
THE FORUM BUILDING
FINANCIAL ANALYSIS – CURRENT OPERATING STATEMENT
Operating Statement
4/2013-2/2014
Actual
$/SF
Income
Base Rent
$476,850
Expense Reimbursement
Total Potential Rent
Vacancy/Credit Allowance
Total Income
$0
$0.00
$476,850
$5.74
($10,920) ($0.13)
$465,930
$5.61
Operating Expenses
Janitorial
Other Janitorial
HVAC
Utilities
General & Administrative
Management Fee
Insurance
Real Estate Taxes
Total Operating Expenses
$47,487
$9,813
$23,151
$77,545
$123,920
$4,974
$44,970
$0
$157,299
$489,159
$0.57
$0.12
$0.28
$0.93
$1.49
$0.06
$0.54
$0.00
$1.89
$5.89
$0
$1,051
$0
$1,051
$0.00
$0.01
$0.00
$0.01
Non-Escalatable Expenses
Advertising & Marketing
Space Planning
Legal Fees
Total Non-Escalatable Expenses
Net Operating Income
$5.74
($24,280) ($0.29)
*The above income statement is for a partial year from April 2013 through February 2014.
**Real Estate Taxes above include payments for the 2012 tax bill of $141,315; the 2013 property assesment was reduced resulting in a
lower annual tax bill of $83,141. Additionally, there are several one-off items related to deferred maintenance and new management
takeover in the operating statement above, totaling roughly $20,000, that would not typically be recurring operating expenses.
***While expense reimbursements have not been collected from tenants over the past 12 months, current management is
confirming Base Year expenses for 2009 and 2013 in order to capture the appropriate reimbursement revenue going
forward. All tenants have clauses in their leases requiring pro rata payment of expenses over base years as additional
rent.
T 414.225.9700 F 414.225.9785 W www.sg-re.com
22
THE FORUM BUILDING
LEASE ABSTRACTS
Tenant
Square Feet
Use
Current Term
Options
Rent
6/1/2012-11/30/2016
Taxes
CAM
Insurance
Utilities
Security Deposit
Comments
Tenant
Square Feet
Use
Current Term
Options
Rent
6/1/2014-1/31/2015
2/1/2015-1/31/2016
2/1/2016-1/31/2017
2/1/2017-1/31/2018
2/1/2018-5/31/2019
Taxes
CAM
Insurance
Utilities
Security Deposit
Comments
Kelly Services, Inc. (Suite 207)
6,354
General office purposes for Tenant’s staffing firm business
12/01/2009 – 11/30/2016
None
Annual
Monthly
per SF
$69,894.00
$5,824.50
$14.50
Landlord (Tenant pays pro rata share over Base Year expense stop)
Landlord (Tenant pays pro rata share over Base Year expense stop (95% gross up clause))
Landlord: Common areas, foundations, exterior building walls, roof, floors of building, HVAC,
electrical, plumbing and mechanical systems
Tenant: Interior of premises
Landlord
None
 Tenant’s pro rata share per the lease is 7.76%
 Original lease term began September 1, 2004
 Tenant has right to 25% of monument for signage
 2009 Base Year
Zenith American Solutions, Inc. (Suite 201)
4,003
General office purposes
1/9/2014 – 5/31/2019
Two, for five years each (at market rent)
Annual
Monthly
per SF
$59,044.25
$4,920.35
$14.75
$61,045.75
$5,087.15
$15.25
$63,047.25
$5,253.94
$15.75
$65,048.75
$5,420.73
$16.25
$67,050.25
$5,587.52
$16.75
Landlord
$4,920
 Landlord has right to relocate tenant within the building
 2014 Base Year
T 414.225.9700 F 414.225.9785 W www.sg-re.com
23
THE FORUM BUILDING
LEASE ABSTRACTS
Tenant
Square Feet
Use
Current Term
Options
Rent
2/1/2014-1/31/2015
2/1/2015-1/31/2016
2/1/2016-1/31/2017
Taxes
CAM
Insurance
Utilities
Security Deposit
Comments
Tenant
Square Feet
Use
Current Term
Options
Rent
3/1/2014-2/28/2015
3/1/2015-2/28/2016
3/1/2016-8/31/2016
Taxes
CAM
Insurance
Utilities
Security Deposit
Comments
Juvenile Diabetes Research Foundation International (Suite 107 and 110)
Suite 107: 2,565 SF; Suite 110: 1,196 SF; Total = 3,761 SF
General office purposes for Tenant’s foundation
1/15/2010 – 1/31/2017
None
Annual
Monthly
per SF
$48,214.82
$4,017.90
$12.82
$49,420.19
$4,118.35
$13.14
$50,655.70
$4,221.31
$13.47
Landlord
$3,640.02
 2010 Base Year (reset to 2013 Base Year)
Lulloff & Taylor, LLC (Suite 203)
3,632
General office purpose for Tenant’s Accounting Firm
3/1/2013 – 8/31/2016
One, for three-year term (2% annual increases in base rent)
Annual
Monthly
per SF
$53,717.28
$4,476.44
$14.50
$54,791.64
$4,565.97
$14.50
$55,887.48
$4,657.29
$14.50
Landlord (Tenant pays pro rata share over Base Year expense stop (3% ann. inc. cap) )
Landlord
$5,348.12
(tenant signed personal guaranty)
 Original lease term began December 1, 2005
 Tenant has right of first offer on vacant contiguous space
 2009 Base Year
T 414.225.9700 F 414.225.9785 W www.sg-re.com
24
THE FORUM BUILDING
LEASE ABSTRACTS
Tenant
Square Feet
Use
Current Term
Options
Rent
8/1/2013-7/31/2014
8/1/2014-7/31/2015
Taxes
CAM
Insurance
Utilities
Security Deposit
Comments
Tenant
Square Feet
Use
Current Term
Options
Rent
2/1/2014-1/31/2015
2/1/2015-1/31/2016
2/1/2016-1/31/2017
2/1/2017-1/31/2018
Taxes
CAM
Insurance
Utilities
Security Deposit
Comments
R.R. Donnelley & Sons Company, a Delaware corporation (Suite 106)
3,411
12/1/2009 – 7/31/2015
Two, for three years each (at market rent)
Annual
Monthly
per SF
$52,699.92
$4,391.66
$15.45
$54132.60
$4,511.05
$15.87
Landlord
None
 2010 Base Year (reset to 2013 Base Year)
IC Group LP (Suite 204)
2,765
1/1/2014 – 1/31/2018
None
Annual
Monthly
per SF
$38,157.00
$3,179.75
$13.80
$38,903.52
$3,241.96
$14.07
$39,401.28
$3,283.44
$14.25
$40,203.12
$3,350.26
$14.54
Landlord
$3,179.75
 Tenant’s pro rata share per the lease is 2.2% (incorrectly calculated in lease)
 Original lease term began November 1, 2010
 2014 Base Year
T 414.225.9700 F 414.225.9785 W www.sg-re.com
25
THE FORUM BUILDING
COMMUNITY OVERVIEW
Charles Hart established the first permanent settlement in Wauwatosa Township
in 1835 when he built the first house on land situated opposite Root Common on
Harwood Avenue. He built a grist mill and a saw mill on the west side of the
Menomonee River at what is now Harwood Avenue. The area came to be known
as Hart’s Mills.
In 1837 the US government constructed the first bridge across the Menomonee
River at Hart’s Mills. A wagon road following an old trail passed through
Wauwatosa from Milwaukee to Watertown. Forty-five miles long, it had toll gates
every three miles and was known as the “Watertown Plank Road.” It was paved with 3/8” planks that were eight
feet long.
Known as the “city of homes,” Wauwatosa was the second city in the state to adopt a zoning ordinance in 1921.
The ordinance established a designated use for each lot plotted, and designated residential districts; stores and
manufacturing operations were limited to certain streets. By end of 1930, Wauwatosa became a city of third class,
with a population of more than 10,000.
The last significant annexation occurred on November 25, 1952 when the Common Council passed a charter
ordinance annexing an area 8 ½ square miles from the Town of Wauwatosa, creating a municipality of 13 square
miles.
Close to the site of Charles Hart’s first mill near the present 72nd and Chestnut Street, was the site of a park,
formerly known as Wauwatosa City Park. It was renamed Charles Hart Park in 1960 in recognition of the first
settler.
Wauwatosa became a city of the second class after the 1970 census, when it was shown to have more than 58,000
residents. Wauwatosa’s population today is just under 46,000 and is a thriving community that still maintains old
world charm!







Wauwatosa is home to the following companies:
Medical College of Wisconsin
WaterStone Bank
ManPower
American Transmission Company
United Healthcare
American Family Insurance
MinuteMan Press
T 414.225.9700 F 414.225.9785 W www.sg-re.com
26
THE FORUM BUILDING
OFFICE MARKET OVERVIEW
Class B office space in the Mayfair/Wauwatosa submarket had a vacancy rate for Q4 2013 of 32.8%; however, this
number has been negatively impacted by recent moves out of the submarket by Willis of Wisconsin (~26,000 SF) and
Wisconsin Evangelical Lutheran Synod (~68,000 SF).
The average direct lease rate for Class B space in the submarket was $17.22/SF as of Q4 2013, which is notably higher
than the market leasing assumptions ($12/SF to $15/SF) utilized in the five-year cash flow projection for the Forum
Building. These under-market projected lease-up rates will give an investor a competitive advantage in the marketplace
when stabilizing the property.
T 414.225.9700 F 414.225.9785 W www.sg-re.com
27
THE FORUM BUILDING
TRAFFIC – 5-, 10- & 15-MINUTE DRIVE TIMES
T 414.225.9700 F 414.225.9785 W www.sg-re.com
28
THE FORUM BUILDING
TRAFFIC COUNTS
T 414.225.9700 F 414.225.9785 W www.sg-re.com
29
THE FORUM BUILDING
BUSINESS SUMMARY – 1 MILE RADIUS
T 414.225.9700 F 414.225.9785 W www.sg-re.com
30
THE FORUM BUILDING
T 414.225.9700 F 414.225.9785 W www.sg-re.com
31
THE FORUM BUILDING
T 414.225.9700 F 414.225.9785 W www.sg-re.com
32

The Forum Building, Wauwatosa, WI PDF - Siegel

Transcription

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