Located across from two major federal courthouses, the four-story building is leased to the US Attorney General for the next 8.5 years. Lee Elman tells GlobeSt.com he closed a 6.5-year, 75% acquisition loan that carries an interest rate of 5.78% and has a 24-year amortization schedule. Elman says the cash-on-cash return is 14% when the amortization of leasehold improvements is included. Without the amortization, the cash-on-cash is closer to 10.5%, he says.

Elman Investors puts its own money into the investments as well as that of high-net-worth individuals. The company's government-leased portfolio includes 2.6 million sf in 28 properties located 19 states and valued at $293 million. Elman says his requirement is 11% cash-on-cash return after debt service. His preferred deal size is $10 million to $25 million. The company's typical hold is three to five years.

Elman says government leases are standard, as in Form 1217, and you basically negotiate the rent and the escalations and the expiration date, which is typically 20 years. The rest is boilerplate. In May, Elman told GlobeSt.com he was eyeing some $80 million in additional buys before the end of 2003.