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TIC Buys Single-Tenant Office Building

STRONGSVILLE, OH-Evergreen Development LLC pays $25.6 million for a 125,000-sf office building here that serves as headquarters for a life insurance subsidiary of Ceres Group Inc.

By Brian K. Miller | Updated on November 02, 2004

STRONGSVILLE, OH-A 125,000-sf office building here that serves as headquarters for a life insurance subsidiary of Ceres Group Inc. has changed hands for $25.6 million. The new owner, Pasadena, CA-based Evergreen Development LLC says the transaction was completed as a 1031 Exchange private placement of securities providing a tax-deferred purchase for tenants-in-common investors. The three-story building was built in 1989. It sits on 21.5 acres at 17800 Royalton Road in Strongsville, approximately 20 miles southwest of Cleveland. The property is leveraged with a $16.5-million note with a fixed interest rate of 5.5% per annum. The seven-year loan has a 360-month amortization.The tenant is Central Reserve Life Insurance Company. The company’s NNN lease extends to October 2007 with a series of renewal options. Evergreen chief executive Luke McCarthy says the transaction is the company’s second single-tenant acquisition in 2004 utilizing the tenant-in-common structure. The company says it has and additional $100-million worth of 1031 deals in its pipeline.Evergreen Development seeks acquisitions primarily between $15 million and $50 million in the West, Southwest and Midwest. The types of assets it looks for include class A apartments, mid-rise office buildings, single-tenant industrial complexes and mini-storage properties. An Evergreen Development affiliate is also the sponsor of a $55-million private Real Estate Investment Trust called Evergreen Realty REIT Inc. The REIT focuses on the acquisition of Class “B” apartments with some single-tenant office and industrial properties that can be positioned to become class A properties with focused property management and new capital.

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