The three-story, 506,836-sf building sits on 62 acres in Easton, a 1,300-acre master planned development adjacent to Interstate 270 and the 1.5-million-sf Easton Town Center. It was developed in two phases (1998 and 2001) for Chase Manhattan Mortgage. There are about 10 years left on the lease term. The building address is 3415 Vision Dr.
HFF senior managing directors Joe Morningstar and Glenn Whitmore, and managing director Andrew Scandalios, had the disposition assignment. John Hall of Columbus Commercial Realty was involved as the local broker in the transaction, which is required by Ohio state law.
Morningstar tells GlobeSt.com that Chase Manhattan Mortgage had a 60-day right of first refusal to acquire the property, but nobody actually expected them to exercise the option, given banks' recent tendency toward owning less real estate. "Low and behold, 50 days after being notified, they said 'we'll take it'," Morningstar says.
By the time Chase Manhattan Mortgage exercised its $90-million option, Morningstar says he had received many other offers for the property in the $95-million to $97-million range. Chase's offer is comparable because it included assumption of the existing $48 million in debt on the property, which was above market. The others wanted the seller to pre-pay the debt, which would have cost several million, Morningstar says.
In addition, Morningstar says Chase Manhattan as part of its lease agreement has control over the right to expand the property with another 250,000 sf of built space, whereas a third-party owner would have been restricted from expanding the property without the tenant's approval. As a result of its parent acquiring the property, Chase Manhattan now also has the option of selling the development rights to a third party, which a third-party owner could not have done until the existing lease with Chase Manhattan expired.
"If they determine they don't need it, they could sell it," Morningstar says. "That option alone was worth between $7 million and $9 million to Chase."
On a per-sf basis, the transaction is one of the highest in the Columbus area this year. Earlier this year another office property located adjacent to Easton Town Center, the 238,641-sf Bisys building, was acquired by Inland Real Estate Acquisitions, a private REIT, for $200 per sf ($47.8 million).
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