Watergate Tower IV is 100% leased. Oracle Corp., an application software company, leases 298,089 sf or approximately 87% of the building's rentable area, under a lease that expires in 2013 and provides an option to renew for one additional five-year term. Novartis AG, a pharmaceutical company, leases 46,344 sf or approximately 13% of the building's rentable area, under a lease that expires in 2013 and provides options to renew for two additional five-year terms.
The annual rental income from the property in 2006 is listed at $12.04 million, or $34.96 per sf per year. The rental income rises annually by approximately 1.9% annually, hitting $12.99 million or $37.72 per sf in 2010. While Oracle leases 87% of the building it is responsible for 92% of the total rental income, according to the filing, which means its 2006 lease rate was $37.16 per sf and Novartis' was $20.78 per sf.
Through the first nine months of 2006, operating expenses for the asset (property taxes, salaries and wages, cleaning services, repairs, maintenance, building management, insurance and utilities) were $3.14 million, which is more than $700,000 less than the comparable 2005 period. Nearly $300,000 of the savings was in utilities costs, according to the filing.
Built in 2001, Watergate Tower IV is the newest of a four-building, 1.2-million-sf development. Concurrent with Hines REIT's acquisition of Watergate Tower IV, National Office Partners Limited Partnership, Hines' joint venture with the California Public Employees' Retirement System, acquired Towers I, II, III, all of which were built in the 1970s.
The 149,703-sf property at 3400 Data Dr. in Rancho Cordova is 100% leased to Catholic Healthcare West, which operates a system of 41 hospitals and medical centers in California, Arizona and Nevada. The lease runs through mid-year 2013, not including two five-year extension options. The tenant paid an annual rent of $3.23 million in 2006, which translates to $21.60 per sf. The rent jumps to $3.28 million ($21.90 per sf) in 2008 and to $3.32 million ($22.20 per sf) in 2009.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
