151 Merrimac St Om

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151 Merrimac St Om

  1. 1. Conf idential O ffer i n g M em o ra n d um151 MerriMAC streetB OS TO N , MA S S AC HUS E T TS
  2. 2. 1 5 1 M ERRI M AC STREET BOSTON, MASSACHUSETTS O F F E R I N G M E M O R A N D U M Tab l e of ContentsExecutive Summary 5property details 8market overview 11 Boston Market Overview Competitive Property Set Aerial Viewtenant information 17 Stacking Chart Rent Roll Floor Plans Tenant Profilesfinancial analysis 24 Cash Flow Assumptions Historical Operating ExpensesExclusive ADVISORSKaryn Mcfarland Anthony W. BietteSenior Vice President Vice President, Capital Markets(617) 772-7231 (617) 772-7205karyn.mcfarland@grubb-ellis.com anthony.biette@grubb-ellis.comPhil giuntaExecutive Vice President(617) 772-7280phil.giunta@grubb-ellis.com
  3. 3. Ex ecut i v e Su mmary3151 merrick street
  4. 4. Ex ecut i v e S ummaryE X E C U T I V E S U M M A R Y 4
  5. 5. 151 Merrimac street 5Executive SUMMARY Ex ecut i v e SuAs exclusive agent, Grubb Ellis’ Capital Market Group is pleased to offer for sale the fee simple interest in the Lockhart Build-ing at 151 Merrimac Street, a 43,495 square foot office building with first floor retail space located within the Bulfinch Triangle mmaryin Boston, Massachusetts. Originally constructed in 1887, the building was renovated in 1989 and features a layout thatprovides image conscious tenants a chance to obtain coveted full floor identity. This is a tremendous opportunity to purchasequality real estate in an established district of Boston. The dismantling of the elevated MBTA and the conversion of the CentralArtery combined with the development of the Rose Kennedy Greenway has enhanced what is already a vibrant Boston location.The area surrounding 151 Merrimac Street is amidst a transformation into a multi-use district allowing its residents and patronsto experience 24-hour business, retail and entertainment options. Multifamily development plans for the Delaware North siteand the North Station Garage continue to move forward, which will further enhance the 24-hour character of the neighbor-hood.The Bulfinch Triangle DistrictCentral to the history as well as the future of Boston, the Bulfinch Triangle neighborhood in Boston’s new downtown has expe-rienced a rebirth following the completion of Boston’s Big Dig project. This neighborhood has emerged as a neo-industrial hotspot in Boston. A popular entertainment destination for Boston’s hip, young cosmopolitans, the Bulfinch Triangle is home tonumerous sports bars, gourmet restaurants and swank cocktail lounges. The neighborhood is also ideally located within walk-ing distance to some of Boston’s most popular attractions. The TD Garden, home to the Boston Celtics and Boston Bruins, aswell as host to premier concert and entertainment events, anchors the Bulfinch Triangle. Boasting new upscale condo develop-ments and two of Boston’s newest hotels, The Bulfinch Hotel and Kimpton’s Onyx Hotel, the Bulfinch Triangle is an ideal placeto live, work and play. North Station’s role as a cultural hotspot is home to Massachusetts General Hospital, Edward S. BrookeCourthouse and the Thomas O’Neil Federal Building.Also within steps from the Bulfinch Triangle are North Station, the North End, Beacon Hill, the Financial District, Faneuil Hall,and the Boston Waterfront. North Station terminal, enjoying a 2007 facelift and expansion, is one of two major transporta-tion hubs in Boston and is the primary rail service for commuters traveling to and from areas north of Boston, including Maineand New Hampshire. This is also the site of the newly rebuilt MBTA Superstation, a $111 million project uniting the Green andOrange lines under Causeway Street, a vast improvement for commuter travel. The newly rebuilt Merrimac Street now allowscars to travel both east and west and immediately connects you to Storrow Drive. Interstate 93 offers easy access from 151Merrimac to Logan International Airport, the Mass Pike and the suburbs. Workers, visitors and residents enjoy the convenienceand accessibility of the numerous service lots and parking garages in the area.The Bulfinch Triangle District is the site of some of Boston’s most significant new development initiatives and is one of Boston’smost vibrant historic neighborhoods. The historic district extends from Merrimac Street down Causeway Street to North Wash-ington Street and is nestled between the prestigious Beacon Hill and famous North End. No other neighborhood in Boston canboast of its unparalleled community diversity.The Bulfinch Triangle by day is a thriving community for the business, medical and legal professionals as well as a governmentemployee base. Mayor Thomas Menino and the City of Boston have launched a comprehensive planning program defining the“new” downtown Boston through what is referred to as the “Crossroads Initiative.” This project includes six miles of key urbanstreets – twelve in all – to act as “connectors” to its surrounding ethnic neighborhoods and important destinations along theGreenway.
  6. 6. 6 Live, Work, PlayEx ecut i v e The TD Bank Garden anchors the Bulfinch Triangle and draws crowds to the neighborhoods numerous sports bars and restaurantsS ummary on game nights and for concerts and other special events. The Bulfinch Triangle draws young professionals, Boston residents and tourists alike. Boasting new developments with pan- oramic views of the Boston Waterfront and the new Leonard P. Zakim Bridge, Boston’s Bulfinch Triangle of- fers upscale condo and apartment-style living options for people who wish to live in the heart of Boston’s new downtown. New/Planned Developments Suffolk University - 20 Somerset Street Project Address 20 Somerset Street Neighborhood Beacon Hill/West End Uses Institutional, Education, Cultural Building Size 156,000 SF Applicant Suffolk University Project Description Suffolk proposes the removal of the existing building at the 20 Somerset Street site and the construction of a new academic building not to exceed 156,000 SF. This project is undergoing Large Project Review and was listed in the approved Institutional Master Plan. Suffolk University will move ahead with a new $68 million academic building at the former MDC headquarters at 20 Somerset Street. The building is expected to open January 2013. In addition, Suffolk will renovate nearby Romer Plaza, creating an upgraded public space, at a cost of $2.5 million. MGH Museum and History Center Project Address 37 N Grove Street Neighborhood Beacon Hill/West End Uses Institutional, Education, Cultural Building Size 8,000 SF Applicant Massachusetts General Hospital Project Description A new two-story museum and history center with a rooftop garden, totaling 8,000 SF on the MGH campus.
  7. 7. 151 merriMAC street 7Building for the Third Century - MGH IMP 2006 Ex ecut i v e Su Project Address 255 Charles Street Neighborhood Beacon Hill/West End mmary Uses Institutional, Medical Clinical Building Size 530,000 SF Applicant Massachusetts General Hospital Project Description 150 new acute and critical care beds, an expansion of the Emergency Department and Radiation Oncology, relocation and expansion of the sterile processing department, and a platform for procedural services and a new dock/receiving area.Simpson Parcel 1 Project Address Causeway/Beverly/Haverhill/Valenti Way Neighborhood Bulfinch Triangle District Uses Retail, Residential Building Size 365,000 SF Project Description 286 apartments; 142 parking spaces; 17,000 SF of retail Status Under construction with a mid-2013 expected delivery.Parcel 1B Project Address Causeway/Beverly/Haverhill/Valenti Way Neighborhood Bulfinch Triangle District Uses Hotel, Residential, Retail Building Size 215,000 SF Project Description Marriott Courtyard Hotel, 220 rooms; 240 apartments; 25,000 SF of retailParcel 2A Project Address One Canal Neighborhood Bulfinch Triangle District Uses Residential, Grocery, Retail Building Size 438,000 SF Project Description 320 luxury apartments; 22,000 SF grocery store; 159 parking spaces
  8. 8. 8 151 MERRIMAC street / Boston, ma PROPERTY OVERVIEW Address 151 Merrimac Street - Lockhart Building, Boston, MA 02114 Property Type Class A Office Lot Size 6,853 sq. ft.prop ert y d etai l s Building Size 45,000 sq. ft. Rentable Area 43,495 sq. ft. Total Occupied 33,850 sq. ft. Total Vacant 9,645 sq. ft. Stories 6 Year Built 1887 - Renovated 1989 Current Tenants Rankin Sultan, General Hospital Corporation, Dr. John Niles, Tufts University, Dr. Leslie S.T. Fang M.D. P.H.D. SITE SPECIFICATIONS Zoning Bulfinch Triangle District Dimension Regulations ▪ Maximum Height: 80’ ▪ Maximum Floor Area Ratio: 6.0 Dimension Regulations Via Special Permit/Appeal ▪ Maximum Height: 100’ ▪ Maximum Floor Area Ratio: 7.0 / 8.0 Utilities Electric: NStar Water Sewer: Boston Water Sewer Gas: National Grid
  9. 9. 151 merriMAC street 9PROPERTY SPECIFICATIONSStructure Steel Frame ConcreteFoundation Granite ConcreteRoof Rubber roof with stone ballastExterior Façade Brick p rop ert y d etai l sWindows 1988; Dual Pane Elevators Two; Otis ElevatorTenant Finishes Typical First Class Office Finish Ceilings Acoustical TileFloors Tile CarpetLobby Granite Floor / Marble Cherry WallsLighting Energy efficient lighting installed in 2011 in all common areas plus many tenant areas. Decorative exterior lighting to highlight architectural details.BUILDING SYSTEMSElectrical Sytems 2 x 1600 amp redundant service. One is servicing Causeway Street; the second is servicing Merrimac Street ▪ One service provides power to the common area and roof top HVAC units; the second provides power to the tenanted areas.HVAC System HVAC system located on roof; gas fuel HVAC distribution system deploys ▪ VAV Boxes ▪ FPB with reheat on perimeterPlumbing System Two restrooms on each floor; Two ejection pumps in basementFire/Life Safety Fully SprinkleredEnergy Management 2010 - Energy management system - Johnson Controls Security System Timed Building Entry
  10. 10. ma r ket overvi ewM A R K E T O V E R V I E W 10
  11. 11. 151 merriMAC street 11 Market Snapshot – Third Quarter 2011 OFFICE MARKET Downtown Boston OVERVIEW MARKET SIZE (numbers in thousands, except dollar amounts)MARKET SIZE (numbers in thousands, except dollar amounts) thousands Absorption Asking rent Submarket Total SF Vacancy % Absorption YTD Q3 Class a Asking Rent class bSubmarket District (Tower) Financial Tot SF 22,778 Vacancy 15.8% % Q3 45 107 YTD $48.09 A Class $33.00 Class B Financial District (Low Rise) 9,409 12.1% 23 206 $49.26 $31.46Financial District (Tower) 22,778 15.8% 45 107 $48.09 $33.00 Government Center 1,796 13.8% 0 24 $40.00 $29.37Financial District (Low Rise) Midtown 9,409 3,027 12.1% 9.1% 23 12 206 (44) $49.26 $35.00 $26.81$31.46 North StationGovernment Center 1,796 3,053 13.8% 8.1% 0 16 (50) 24 $35.51 $40.00 $26.83$29.37 Seaport District 7,791 12.8% 110 32 $56.44 $26.83Midtown 3,027 9.1% 12 (44) $35.00 $26.81 South Station 3,163 10.9% 16 30 NA $31.00North Station 3,053 8.1% 16 (50) $35.51 $26.83 Total 51,017 13.4% 221 305 $48.01 $29.56Seaport District 7,791 12.8% 110 32 $56.44 $26.83South Station 3,163 10.9% 16 30 NA $31.00 MARKET HIGHLIGHTS MARKET forecast overvi ewTotal 51,017 13.4% 221 305 $48.01 $29.56 • Notable third quarter transactions include the 60,000 square- • Looking to 2012, while Boston weathered the storm better ma r ket foot renewal and expansion by Acadian Asset Management than most markets during the 2007 to 2009 and beyond down-MARKET HIGHLIGHTS Lois Paul Partners relocating from MARKET FORECAST transcend into a less vigorous recovery. at 260 Franklin Street and turn, a softer dip may Woburn third 17,751 square feet at One Beacon Street. Notable into quarter transactions include the 60,000-square- Looking to 2012, while Boston weathered the the intrinsic driver for office Economists predict employment - storm better than foot renewal and expansion by Acadian Asset Management most markets during the 2007 to 2009 and beyond downturn, a • There are currently 436 tenants with active requirements in the softer dip may transcend-into a less vigorous recovery. Economists year at 260 Franklin Street and Lois Paul Partners relocating space demand will grow an average of one percent per CBD totaling 5.9 million square feet at One Beacon Street. from Woburn into 17,751 square feet of demand. The median predict employment – the intrinsic driverrestoffice space demand – 2017. in Massachusetts, lagging the for of the nation through will grow an average of one percent a year in Massachusetts; tenant requirement is 5,000 squareactivewhile the average ten- lagging the employment modestly improves and demand for office There are currently 436 tenants with feet requirements in • As rest of the nation through 2017. the requirement5is 13,253 square feet of demand The ant CBD totaling 5.9 million square feet. demand. 9 space rises, expect asking rental rates and vacancy to continue median tenant requirement is 5,000 square feet while the As employment modestly improves and demand for office space • With 10-year treasury yields at historical lows, expect the Class rises, expect asking rental rates Withvacancy to continue improvingin the average tenant requirement is 13,253 square feet. improving into 2012. and limited large block options B and Class C investment sales market to heat up as investors into 2012. With limited firms block options in theseeking to attract a tal- Back Bay, and large from the suburbs Back Bay, and With 10-year treasury yields at historical lows, expect the firms from the suburbs seeking to attract a talented labor pool in grow B and Class C investment sales market to heat up as Class a bigger appetite for risk. the city, ented laborlook to the Financial District and other CBD Financial tenants will pool in the city, tenants will look to the • investorsthe October unemployment rate in Greater Boston At 6.0%, grow a bigger appetite for risk. submarkets for their space needs. Moreover, with their space needs. More- District and other CBD submarkets for vacancy at 13.8 respectively, marked improvements may take a substantial amount stands 300 basis points lower thanrate in Greaterunemploy- At 6.0%, the October unemployment the national Boston of time. over, with vacancy at 13.8% respectively, marked improve- stands 300of 9.0%. ment rate basis points lower than the national ments may take a substantial amount of time. unemployment rate of 9.0%.THE STATE OF THE DOWNTOWN MARKETTHE STATE OF THE DOWNTOWN MARKET Vacancy Absorption (in thousands) Asking Rents Class A Class B16% 750 $70 500 $6014% 250 $5012% 0 $40 -25010% $30 -500 $20 ©2011 Grubb Ellis Company 8% -750 C During the third quarter, vacancy …while absorption was positive …and Class A average asking decreased to 13.5%... 111,393 SF… rates decreased to $47.75/SF.Grubb Ellis / 470 Atlantic Avenue, 11th Floor / Boston, MA 02210 / www.grubb-ellis.com
  12. 12. Market Snapshot Third Quarter 2011 Market Snapshot – – Third Quarter 2011 12 Downtown Boston Downtown Boston MARKET Activity opportunities MARKET ACTIVITY OPPORTUNITIES MARKET ACTIVITY OPPORTUNITIES Recent Lease Transactions Recent Lease Transactions Recent Lease Transactions Tenant SF Building Business Business Sign Date Term Effective Rental Rate Rate Effective Rental Tenant SF Building Business Service Sign Date Term ($/SF/Yr.) Rental Rate Effective Tenant SF Building Service Service Sign Date ($/SF/Yr.) gross gross Term ($/SF/Yr.) gross Success Factors 13,077 77 North Washington Street Software Sep 2011 3 years $26.39 Success Factors 13,077 77 North Washington Street Software September 2011 (renewal) 3 Years $26.39 Success Factors 13,077 77 North Washington Street Software September 2011 3 Years $26.39 Bryant Associates 6,870 90 Canal Street Engineering Mar 2011 6 years $24.08 Bryant Associates 6,870 90 Canal Street Engineering March 2011 6 Years $24.08 Bryant Associates 6,870 90 Canal Street Engineering March 2011 6 Years $24.08 Where, Inc. 6,330 77 North Washington Street Mobile Mar 2011 2 years Mobile (sublease) 2011 March 2 Years $24.28 $24.28 Where, Inc. 6,330 77 North Washington Street Mobile Techonolgy 2 Years 1 month1 Month Where, Inc. 6,330 77 North Washington Street Technology March 2011 1 Month $24.28 Technology Klein Kavanagh Klein Kavanagh 2,302 85 Merrimac Street Law Oct 2011 3 years $23.67 Costello Kavanagh Klein 2,302 85 Merrimac Street Law October 2011 3 Years $23.67 Costello 2,302 85 Merrimac Street Law October 2011 3 Years $23.67 Costello General Hospital Corp. 2,900 151 Merrimac Street Medical LOI 6 years $34.50 Properties with Contiguous Availabilities – ByBy Size Properties with Contiguous Availabilities - Size Properties with Contiguous Availabilities – By Size Number of ofTenants in theMarket byby SF Required Number of Tenants In the Market SF Required Number Tenants In the Market by SF Required 250 Size in thousands of square feet Size in thousands of square feetovervi ew 250 219 219 ma r ket 50-100 100+ Number of Properties 200 50-100 100+ 20 9 Number of Properties 200 25-50 20 9 25-50 24 150 124 24 150 124 5 100 81 5 81 201 100 201 39 10-25 50 39 10-25 50 21 79 21 9 79 9 0 0 5 5-10 10-25 25-50 50-100 100+ 5 5-10 10-25 25-50 50-100 100+ Size in thousands of square feet Size in thousands of square feet 5-10 5-10 103 103 CENTRAL BUSINESS DISTRICT (cbd) territories map central business district (CBD) TERRITORIES MAP CENTRAL BUSINESS DISTRICT (CBD) TERRITORIES MAP LEGEND LEGEND LEGEND Tan Tan North Station Tan North Station North Station Purple Purple Purple Government Center Government Center Government Center Red Red Red Financial District Financial District Financial District Green Green Green Midtown Midtown Midtown Yellow Yellow Yellow ©2011 Grubb Ellis Company South Station South Station South Station Orange Orange OrangeBay C Back B B k Bay Back B kB Back Bay Blue Blue Seaport District Blue Seaport District Seaport District
  13. 13. 151 merriMAC street 13Competitive Property Set Building Size Available SF Asking starting Rent PSF* 225 FRIEND STREET 59,763 SF 14,927 SF $26 226 CAUSEWAY STREET 193,000 SF 80,008 SF $35 overvi ew ma r ket 100-124 N WASHINGTON ST. 52,945 SF 18,238 SF $28 90 Canal street 78,462 sf 3,280 sf $28 200 portland street 100,868 sf 7,370 sf $28 25 new chardon 112,854 sf 14,889 sf $32
  14. 14. 14 93 Tovervi ew TD Garden North Station MBTA Stop ma r ket Haymarket MBTA Stop T et e Str ay sew u Thomas P. O’Neill Ca Federal Courthouse 151 Merrimac Street Bowdoin Square MBTA Stop T Sta nifo rd Str e et et tre g eS id br m Ca
  15. 15. 151 merriMAC street 15 Rose Kennedy Greenway overvi ew ma r ket Boston City HallMassachusetts State House
  16. 16. Tena nt i nfo rmati o nT E N A N T P R O F I L E S 16
  17. 17. 151 merriMAC street 17 Stacking Chart Current rentable space - 43,495 Square Feet Vacant space - 9,645 Square Feet ( 22% ) Tufts University MGH 6 Sept. 2017 May 2018 MGH 5 May 2018 MGH 4 May 2018 Leslie Fang Dr. John Niles MGH 3 Mar. 2014 Feb. 2014 May 2018 MGH Rankin Sultan 2 May 2018 Oct. 2015 i nfo r mati o n Tena nt 1 Vacant VacantBasement Vacant Vacant Lease Expiration Legend Vacant 2014 2015 2016 2017 2018 2019 +
  18. 18. 18 Rent Roll Suite tenant name size ( SF ) pro rata share 1 start date expiration date Annual Rent $psf /Total 100 Vacant 1 - (Merrimac R + B) 5,310 12.21% Sept 2012 - - 101 Vacant 2 - (Causeway R + B) 4,335 9.97% Sept 2012 - - 200 Rankin Sultan 4,886 11.23% Dec 2008 Oct 2015 $26.35 / $128,746 General Hospital (2nd Floor) 201 2,045 4.70% Sept 2008 May 2018 $28.50 / $58,283 MGH 300 Dr. John Niles 925 2.13% Feb 2008 Feb 2014 $36.05 / $33,346 301 Dr. Leslie S.T. Fang M.D. P.H.D. 3,629 8.34% Apr 2004 Mar 2014 $27.50 / $99,798i nfo rmati o n Tena nt General Hospital Corporation 400 12,852 29.55% Jun 2008 May 2018 $32.00 / $411,264 (3rd, 4th, 5th Floor) 500 General Hospital Corporation 2,900 6.67% Nov 2009 May 2018 $32.00 / $92,800 600 Tufts University 5,181 11.91% Oct 2008 Sept 2017 $29.25 / $151,544 601 General Hospital Corporation 1,432 3.29% Nov 2009 May 2018 $29.50 / $42,244 $30,992.88 Roof(Signage) Omni Point Holdings, Inc. 0 0.00% Dec 2008 Jul 2015 Total Occupied 33,850 SF 77.83% MGH Occupied (SF) 19,229 Total Vacant 9,645 SF 22.17% MGH Occupied (%) 53.13% Total Current RSF 43,495 RSF 100.00%
  19. 19. 151 merriMAC street 19 Rent change date annual rent $psf operating expenses real estate taxes Base Year - - - - - - - - - - Dec 2008 $24.35 Nov 2009 $25.35 Nov 2011 $26.35 12.40% 12.40% 2005 / 2006 Nov 2012 $27.35 Nov 2013 $28.35 Nov 2014 $29.35 Dec 2010 $28.50 June 2012 $29.50 5.65% 5.65% 2010 / 2011 June 2014 $30.50 June 2016 $31.50 Feb 2008 $32.99 Mar 2009 $33.98 Mar 2010 $35.00 2.53% 2.53% 2007 / 2008 Mar 2011 $36.05 Mar 2012 $37.13 Mar 2013 $38.24 Jan 2009 $26.00 10.02% 10.02% 2006 Mar 2009 $27.50 Dec 2008 $30.00 Feb 2009 $30.00 i nfo r mati o n Feb 2010 $31.00 Feb 2011 $32.00 Tena nt Apr 2011 $31.00 35.51% 35.51% 2008 May 2011 $32.00 Jun 2011 $32.00 Jun 2013 $34.00 Jun 2015 $35.00 Jun 2016 $36.00 Mar 2012 $32.00 Feb 2014 $34.00 8.01% 8.01% 2012 Feb 2016 $35.00 Feb 2017 $36.00 Oct 2008 $26.50 Oct 2009 $28.00 Oct 2010 $28.25 Oct 2011 $29.25 Oct 2012 $30.25 14.61% 14.61% 2007 / 2008 Oct 2013 $31.25 Oct 2014 $32.25 Oct 2015 $33.25 Oct 2016 $34.25 Nov 2009 $28.50 Nov 2011 $29.50 Nov 2013 $30.50 3.96% 3.96% 2009 Nov 2016 $31.50 Nov 2018 $32.50$28,362.84 Dec 2008 3% Inc Yearly$29,213.76 Jan 2009 3% Inc Yearly$30,090.12 Jan 2010 3% Inc Yearly 0.00% 0.00% -$30,992.88 Jan 2011 3% Inc Yearly$31,992.64 Jan 2012 3% Inc Yearly$32,880.36 Jan 2013 3% Inc Yearly
  20. 20. 20 Floor Plans Level 1i nfo rmati o n Tena nt Upper Floors (Approximate)
  21. 21. 151 merriMAC street 21Tenant ProfilesRankin SultanCharlie Rankin and Jamie Sultan founded the firm on June 1, 1986. They had graduated from Harvard Law School in the same class (1980)and worked together as associates at the small criminal and constitutional litigation firm of Silverglate Gertner (now Silverglate Good).After each subsequently enjoyed a successful tour in private solo practice, the two reunited to join forces as Rankin Sultan.Rankin Sultan quickly developed a reputation for providing painstakingly diligent, thoroughly sophisticated, and extremely effective legalcounsel. Both Charlie and Jamie have been listed in The Best Lawyers in America since 1991, and the firm is one of very few Boston criminalfirms listed in the Martindale-Hubbell Bar Register of Pre-eminent Lawyers which “lists only the most distinguished law practices—thosethat have achieved the…highest levels of legal ability…[and] adherence to professional standards of conduct, ethics, reliability, and dili-gence. ” Today, Rankin Sultan is at the forefront of the legal field, having forged some of the most significant advances in criminal justicein Massachusetts over the past two decades. Charlie and Jamie are routinely called upon to speak, teach, and counsel others, from lawstudents to accomplished practitioners.Company Description: Criminal defense firm representing individuals and companies in investigations, prosecutions, and appeals instate and federal courtsDr. John NilesJohn L Niles, MD is a Nephrologist in Boston, MA. A Nephrologist is a physician who provides kidney transplants, dialysis therapy and treat-ment for kidney disease. i nfo r mati o n Tena ntTufts University2011 FINANCIAL REPORTFiscal year 2011 produced solid financial results with an increase in net assets of $262 million. Operating performance produced an increasein net assets of $29 million, resulting from a 4% increase in revenues combined with a 2% increase in expenses. Investment returns ac-counted for the largest portion of the increase in net assets. The total return pool, which comprises the majority of the University’s invest-ments, returned 18.3% for the year. The University remained focused on meeting the financial aid need of their students and enhancing theacademic program, while also avoiding reductions in staffing.NET ASSETSTufts’ net assets grew 14.6% to $2 billion in fiscal year 2011. A strong donor base delivered $51 million in capital contributions, and unre-stricted operating activities added $29 million. As stated above, investment returns and other net asset changes, resulted in a $262 millionincrease. Over the last five years, net asset values rose by nearly $409 million and posted a compound annual growth of 4.5%.Massachusetts General HospitalMassachusetts General Hospital (Mass General) is hardly general. The 200-year-old acute care hospital is Harvard Medical School’s originaland largest teaching hospital. With some 900 beds, Mass General has its main campus in Boston and operates several health centers in sur-rounding communities. Its specialized medical departments include cancer, cardiology and heart surgery, neurology and neurosurgery, anddiabetes and endocrinology. As a leading research facility, Mass General hosts a gaggle of clinical trials and has an annual research budgetapproaching $700 million. The hospital is a founding member of the Partners HealthCare System (along with Brigham and Women’s).
  22. 22. 22 Cash Flow Assumptions Current Rentable Area (SF) 43,495 Vacant Space (as of 12/2011) 9,645 SF (22.17%) General Inflation 2.5% Growth Rate - Market Rent 2.5% General Vacancy Rate 2% of all Gross Potential Revenue Credit/Collection Loss 3% of Gross Potential Revenue Credit/Collection Loss - (Mass General) 0% Capital Reserve $0.05 PSF Market Leasing Assumptions MERRIMAC MERRIMAC CAUSEWAY CAUSEWAY Office Retail BASEMENT Retail BASEMENT Downtime Between Leases 6 Months Market Rent $PSF/Yr $31.00 $35.00 $20.00 $50.00 $10.00 Annual Increases $1.00 PSF $1.00 PSF $1.00 PSF $1.00 PSF $0.50 PSF Renewal Probability (Months) 75% 75% 75% 75% 75% Months Vacant 6 6 6 6 6 Term Lengths ( Years ) 5 10 10 10 10fin anc i a l a nalysi s Reimbursements Base Stop Base Stop Base Stop NNN NNN Leasing Commissions $PSF/YR $PSF/YR $PSF/YR %/YR %/YR New $2.25 $2.25 $2.25 9.0% 9.0% Renewal $1.00 $1.00 $1.00 4.5% 4.5% TENANT improvements $PSF/YR $PSF/YR $PSF/YR $PSF/YR $PSF/YR New $25.00 $20.00 $20.00 $20.00 As-Is Renewal $10.00 $10.00 $10.00 $10.00 As-Is Absorption Merrimac Retail / Basement Causeway Retail / Basement Vacant Space 5,310 4,335 Date Sep 2012 Sept 2012
  23. 23. 151 merriMAC street 23Historical Operating Expenses 2009 2010 2011 2012 Operating Expenses Actual Actual Actual1 Budget Real Estate Taxes $162,179 $152,409 $148,280 $152,409 Utility Expenses 74,568 68,756 72,770 54,400 Contract Services 93,165 108,304 114,035 116,624 Repairs, Maintenance Supplies 129,713 84,724 55,248 48,680 Total Administrative 59,431 66,012 62,901 66,444 Total Operating Expenses $519,056 $480,205 $453,234 $438,557 1. Actual Numbers through November 30, 2011 fi na ncia l a na lysis
  24. 24. 24 Cash Flow Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 For the Years Ending $ PSF Dec-2012 Dec-2013 Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Dec-2019 Potential Gross Revenue Base Rental Revenue $29.87 $1,299,242 $1,345,099 $1,392,821 $1,427,560 $1,479,830 $1,504,728 $1,526,386 $1,553,855 Absorption Turnover Vacancy ($4.48) ($195,034) - ($24,720) ($27,185) - ($30,286) ($115,215) ($27,969) Scheduled Base Rental Revenue $25.39 $1,104,208 $1,345,099 $1,368,101 $1,400,375 $1,479,830 $1,474,442 $1,411,171 $1,525,886 Base Rental Step Revenue $0.00 - - $2,734 $7,288 $16,728 $26,600 $49,233 $68,655 Expense Reimbursement Revenue Utility Expense $0.06 $2,.411 $6,557 $6,489 $7,047 $7,705 $8,925 $9,284 $9,598 Contract Services $0.12 $5,168 $14,056 $13,907 $15,107 $16,517 $19,132 $19,904 $20,579 Repairs Maintenance Supplies $0.05 $2,157 $5,866 $5,805 $6,305 $6,894 $7,987 $8,309 $8,591 Administrative $0.07 $2,944 $8,007 $7,922 $8,607 $9,410 $10,901 $11,340 $11,723 Real Estate Taxes $0.43 $18,596 $32,848 $34,318 $37,025 $37,403 $41,419 $32,597 $26,895 Total Reimbursement Revenue $0.72 $31,276 $67,334 $68,441 $74,091 $77,929 $88,364 $81,434 $77,386 Omni Point Holdings, Inc. $0.72 $31,523 $32,468 $33,442 $34,447 $35,481 $36,546 $37,640 $38,765 Total potential gross Revenue $26.83 $1,167,007 $1,444,901 $1,472,718 $1,516,201 $1,609,968 $1,625,952 $1,579,478 $1,710,692 General Vacancy $0.00 - ($16,256) - - ($18,470) - ($19,771) - Collection Loss ($0.39) ($17,055) ($24,385) ($24,605) ($25,548) ($27,705) ($27,720) ($29,657) ($29,596) effective gross Revenue $26.44 $1,149,952 $1,404,260 $1,448,113 $1,490,653 $1,563,793 $1,598,232 $1,530,050 $1,681,096 Operating Expenses Utility Expense $1.25 $54,400 $55,760 $57,154 $58,583 $60,047 $61,549 $63,087 $64,665fin anc i a l a nalysi s Contract Services $2.68 $116,624 $119,540 $122,528 $125,591 $128,731 $131,949 $135,248 $138,629 Repairs Maintenance Supplies $1.12 $48,680 $49,897 $51,144 $52,423 $53,734 $55,077 $56,454 $57,865 Administrative $1.53 $66,444 $68,105 $69,808 $71,553 $73,342 $75,175 $77,055 $78,981 Real Estate Taxes $3.50 $152,409 $156,219 $160,125 $164,128 $168,231 $172,437 $176,748 $181,166 Total Operating Expenses $10.08 $438,557 $449,521 $460,759 $472,278 $484,085 $496,187 $508,592 $521,306 Per Square Foot $10.08 $10.34 $10.59 $10.86 $11.13 $11.41 $11.69 $11.99 NET OPERATING INCOME $16.36 $711,395 $954,739 $987,354 $1,018,375 $1,079,708 $1,102,045 $1,021,458 $1,159,790 Per Square Foot $16.36 $21.95 $22.70 $23.41 $24.82 $25.34 $23.48 $26.66 Tenant Improvements Tenant Improvements $192,900 - $65,788 - $74,157 $80,600 $306,621 Leasing Commissions $136,244 - $6,280 - $7,097 $7,694 $29,269 Capital Reserves $2,175 $2,229 $2,285 $2,342 $2,401 $2,461 $2,522 Total Leasing Capital Costs $331,319 $2,229 $74,353 $2,342 $83,637 $90,755 $338,412 OPERATING CASH FLOW $380,076 $952,510 $913,001 $1,016,033 $996,071 $1,011,290 $683,046
  25. 25. fi na ncia l a na lysis 25151 merriMAC street
  26. 26. CambridgeExclusive ADVISORSKaryn McFarland Anthony W. Biette Phil giuntaSenior Vice President Vice President, Capital Markets Executive Vice President(617) 772-7231 (617) 772-7205 (617) 772-7280karyn.mcfarland@grubb-ellis.com anthony.biette@grubb-ellis.com phil.giunta@grubb-ellis.comThe information contained herein was obtained from sources believed reliable; however, Grubb Ellis Company makes no guarantees, warranties or representations as to thecompleteness or accuracy thereof. The presentation of these properties is subject to errors, omissions, change of price and or conditions prior to sale or withdrawal without notice. Th is b ro c h u re can b e re c yc le d

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