Elman Investors Acquires Alabama Office Building

BIRMINGHAM, AL-Elman Investors of New York City has added to its portfolio of government-leased buildings with the acquisition of a 53,000-sf building here for $9.2 million ($8.4 million plus closing costs).

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.