The five properties are One Kaiser Plaza (530,000 sf; 28 stories; known as Ordway), 1901 Harrison Street (272,000 sf; 16 stories), 1333 Broadway (238,000 sf; 10 stories; above BART station), 2101 Webster Street (475,000 sf; 20 stories) and 2100 Franklin Street (215,000 sf; nine stories; LEED-Gold). The first four properties have a combined occupancy of 89.3% while the fifth property is a $78.5-million ground-up development that was completed this time last year but remains vacant. An affiliate of Brandywine will manage and lease the five properties for an initial one-year period following the closing.
The purchase price included CIM's assumption of existing mortgage loans on three of the leased properties totaling $95.3 million, and a $40-million, interest-free loan secured by the first mortgage on 2100 Franklin and 2101 Webster that comes due Aug. 2, 2010. In addition, CIM Group was granted a 15-year option to purchase a land parcel adjacent to One Kaiser Plaza slated for the 650,000-sf Two Kaiser Plaza office building, and has committed to lease to CIM 150 parking spaces on that same parcel for tenants of the building.
Brandywine says it will use the $269.4 million of cash proceeds from the sale to pay down revolving credit indebtedness and to provide cash balances for general corporate purposes. As a result, the company says that as of the end of this week it will have no funds drawn on its $620-million of existing, revolving credit facilities and approximately $145 million of cash on hand for future needs.
Brandywine continues to own three office properties in Northern California totaling 554,000 sf as well as two land parcels. It also has third party property management contracts in the market. Lazard Frères & Co. acted as financial advisor to Brandywine for the sale, and CB Richard Ellis assisted in the marketing efforts.
For CIM, the buildings further its Oakland investment program, which was launched in June 2007 with the $66-million acquisition of the 484-room Oakland City Center Marriott and the 162-room Courtyard Oakland Downtown. The two assets are located adjacent to each other three blocks from the heart of Downtown Oakland.
CIM Group principal John Given says the attributes that attracted CIM Group to downtown Oakland include the existing, diversified tenant base such as professional firms, healthcare, engineering and geotechnical services along with government and transportation. With regard to the relocation from 2 Embarcadero in San Francisco next year, the company isn't providing any details. Presumably, it will be occupying space in one of its newly acquired office buildings.
The loans CIM will be assuming are secured by 1333 Broadway, One Kaiser Plaza and 1901 Harrison, according to SEC filings. The loan on 1333 Broadway totals $23.88 million and matures in May 2010; the effective interest rate is 5.54%. The One Kaiser Plaza loan totals $45.32 million and matures in August 2010; the effective interest rate is 5.29%. The loan on 1901 Harrison totals ap
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