Government Leased

SSA Anaheim: $6,848,000
Dexia closed a $6,848,000 construction loan secured by a build-to-suit office building located in Anaheim, California. The subject consists of a 17,880 sf office property, 100% leased to the GSA, on a 15-year lease with 12 years firm term, for a new Social Security Administration facility. The property is going to be built for the SSA and will be constructed to their specialized, high security requirements. The loan was underwritten at 80% LTV, 2 years Interest Only with a one-year extension option. The project is expected to break ground in late second quarter 2008 with completion in the first quarter 2009. This is Dexia’s third SSA construction transaction during the past year in California.

 

Point Plaza East: $19,500,000
Dexia provided a $19,500,000 floating rate loan to refinance the existing debt on Point Plaza East in Tumwater, Washington. The subject property consists of three Class A buildings completed in 2002, which comprise 149,800 square feet of office space with surface parking. The property is part of an 11-building office park exclusively devoted to Washington State tenants and is 100% occupied by 4 different agencies of the State of Washington. Tumwater is forty miles south of Seattle, offering easy access to Olympia, the capital city of Washington State and the home of many state agencies. The loan was underwritten to a 56% LTV, with an actual DSCR of 1.45x and was structured on a 24-month interest only term with two 6-month extension options. The sponsor provided 50% recourse on this transaction increasing to 100% recourse during the extension periods. In 2003, Dexia provided the 5-year, $20,700,000 CMBS debt that currently encumbers the property and the borrower sought to refinance the $19,200,000 unpaid principal balance.

 

FBI and DEA: $9,975,000
Dexia provided fixed-rate financing for the acquisition of two GSA leased office buildings in Anchorage, Alaska. The single-tenant properties are occupied by the by the Federal Bureau of Investigation (FBI) and the Drug Enforcement Agency (DEA). The FBI building, which was completed in 1994, comprises 38,350 net rentable sf, or 76,700 gross sf, including the 112-space, ground-level heated parking garage. This $6,950,000 loan was underwritten at a 74% loan to purchase price, structured on a 10-year basis with 1.33x DSCR based on a 30-year amortization schedule. The second loan, for $3,025,000, is secured by a 13,900 sf built-to-suit DEA facility built in 2000. The subject collateral consists of a 36-space heated parking garage on the first floor and office space on the second floor. The property was under contract to the borrower for $4.2MM equating to a 72% loan to purchase price. The loan was structured with a 10-year term and a 1.48x DSCR based on a 30-year amortization schedule. Both properties enjoy an excellent location in downtown/midtown Anchorage, where the submarkets are particularly strong, with an average office vacancy rate of 1.0-2.5%.

 

Natural Resource Center: $17,887,500
Dexia funded this $17,887,500 loan secured by two office buildings containing a total of 131,453sf located in Boise, Idaho. The buildings are fully leased to the USA Federal Government with the following agencies in occupancy: the Bureau of Land Management, the Department of Fish and Wildlife, the National Forest Service, and the Social Security Administration. Reserves were established for taxes and capital expenditures. Additionally, a letter of credit/cash flow sweep reserve is in place until the borrower provides evidence of satisfactory lease extensions. Finally, a hard lockbox/cash management agreement was established for the life of the loan so that lease payments are made directly to the lender, eliminating any risk of cash flow interruption. The loan was structured with a six-year term based on a 30-year amortization period and a hyperamortization feature in the event the borrower does not refinance the loan at maturity. The loan was underwritten to a 1.54 DSCR and a 75% LTV.

 

FBI Headquarters: $18,000,000
Dexia funded this $18,000,000 loan secured by an office building containing a total of 96,607sf net rentable area located in Richmond, Virginia. The building is fully leased to the GSA with a government tenant, the Federal Bureau of Investigation in occupancy, without early termination options. Reserves were established for taxes and capital expenditures. The loan was structured with a six-year term based on a 30-year amortization period and a hyperamortization feature in the event the borrower does not refinance the loan at maturity. The loan was underwritten to a 1.51 DSCR and a 75% LTV.

 

Robert Duncan Plaza: $41,500,000
Dexia funded this $41,500,000 loan secured by a Class A, 10-story office building located in the CBD of Portland, Oregon. The building contains 332,608sf of net rentable area, 97% of which is occupied by the United States Government (GSA) with three agencies in occupancy. The building serves as the regional headquarters for the BLM, Corps of Engineers and Forest Service. Some minor retail tenants bring the occupancy rate to a strong 98.4%. Reserves were established for insurance, taxes, and capital expenditures. The loan was structured with a 10-year term based on a 30-year amortization period, with the first five years of the loan on an interest-only basis. The loan was underwritten to a 1.64 DSCR and a 59% LTV.

 

One Riverview Square: $30,000,000
Dexia funded this $30,000,000 loan secured by a 158,081sf Class A, 8-story office building and an adjoining 58,706sf, 127-car, 3-story garage located in Miami, Florida. The building includes 8,164sf of retail and restaurant space, which will not be part of the security for the loan. The remaining 147,917sf of office space will be occupied by several agencies of the federal government through a 15-year lease with the GSA. Specifically, individual suites will be occupied by the Equal Employment Opportunity Commission (EEOC), the Immigration and Naturalization Service (INS), and another government agency to be determined. Currently, 86% of the space is leased. Reserves were established for taxes, insurance, and capital expenditures. A debt service/leasing achievement reserve account is to be built up through a combination of holdback and cash flow sweeps, the funds to be released upon the leasing of the 8th floor. Additionally, Dexia established a holdback reserve in the amount of $1,850,000, to be released only when the city and county grant the expected tax abatements. The loan was structured with a 7-year term based on a 30-year amortization period, with the initial two years on an interest-only basis. The loan was underwritten to a 1.58 DSCR and an 80% LTV.

 

IRS Building - Fresno: $46,000,000
Dexia funded this $46,000,000 loan secured by a Class-A office building located in Fresno, California. The building is fully leased to the GSA for a term of 15 years with an option to terminate following the 10th year. The subject property benefits from its location in the central business district of Fresno and is surrounded by other government offices in addition to some retail and commercial office buildings. Reserves were established for taxes, insurance, and capital expenditures. The loan was structured on a 5-year term on an interest-only basis. The loan was underwritten to a 1.71 DSCR and a 74% LTV.

 

Town Center East Building #1: $17,910,000
Dexia funded this $17,910,000 loan secured by a new office building containing 99,621sf net rentable area located in Tumwater, Washington. The building is fully leased to the Department of Health of the State of Washington. Reserves were established for taxes, insurance, and capital expenditures. The loan term is seven years based on a 30-year amortization schedule. The loan was underwritten to a 1.45 DSCR and a 75% LTV.

 

1201 Lloyd Boulevard: $39,100,000
Dexia funded this $39,100,000 loan secured by an 11-story, Class-A office building with an attached 5-story parking garage. The subject is located in the Lloyd neighborhood –a lively and growing area– of the city of Portland, OR. The subject is currently 95% leased. Approximately 63% of the current revenues are generated by GSA tenants. A standard reserve was established for capital expenditures. Substantial reserves were held back to mitigate the free and/or reduced rent in place for the next 12 months. In addition, the loan was structured with a TI/LC reserve springing in place in years eight and nine of the loan term. The loan was structured with a 10-year term amortizing over 30 years. The loan payment will change in year eight to a custom schedule based upon a 25-year amortization.

 

FBI Field Office - Baltimore, MD: $41,900,000
Dexia funded this $41,900,000 loan secured by a new, Class “A” office building located in the Woodlawn submarket of Baltimore, Maryland. The subject property is fully leased to the GSA for a term of 10 years with two five-year renewal options. Reserves were established for taxes, insurance, and capital expenditures. The loan was structured with a nine-year term based on a 20-year amortization schedule in Year 1, a two-year IO period thereafter, and the remaining five years on a 30-year amortization period. The loan was underwritten to a 1.42 DSCR and a 75% LTV.

 

Town Center East #2: $24,500,000
Dexia funded this $24,500,000 loan secured by a recently constructed, five-story office-building to be occupied by the State of Washington, Department of Health. The subject building is part of a three-building complex which will also include a new parking structure. The property benefits from its location in Tumwater, Washington, near the state capital and within a “preferred leasing area” for the state of Washington. Reserves were established for taxes, insurance, and capital expenditures. The loan was structured with a seven-year term amortizing over 30 years, and a hyper-amortization feature to mitigate refinance risk. Additionally, a hard lockbox/cash management agreement is in place so that the tenants will pay rent directly to the lender. The loan was underwritten to a 1.35 DSCR and a 77% LTV. Total hard equity in the transaction amounts to 30%.

 

Cherry Street Plaza: $32,500,000
Dexia funded this $32,500,000 loan secured by an attractive Class-A office building located in Olympia, Washington, in close proximity to the State Capitol buildings and the Port of Olympia. The subject is a 5-story building containing 161,200 sf net rentable area and an attached parking garage. Construction was completed in March of 2006. The subject property will be fully occupied by the State of Washington (AA rated), Department of Health, on a long-term lease expiring five years beyond the loan term without any appropriation clauses. Reserves were established for taxes, capital expenditures, and insurance. The fact that the rent is 50% abated during the first lease year is mitigated through the posting of a letter of credit for the difference between year 1 and year 2 rent. The loan was underwritten to a 1.28 DSCR and a 79% LTV and features a 10-year term amortizing over 30 years.

 

GSA Portfolio: $389,000,000
Dexia provided $389,000,000 in permanent financing on a 14-building portfolio. The portfolio includes 13 office buildings and one industrial warehouse/distribution center, comprising more than 3,000,000 square feet with locations in 10 states and the District of Columbia. The portfolio is 98% leased to the GSA of the U.S. federal government, with more than 20 different federal agencies in occupancy. The capital structure included one $389mm first mortgage loan (80% LTC) as well as a $5 million mezzanine loan. The loan was structured on a 10-year term with 5 years interest-only, followed by a 30-year amortization schedule. Additionally, the loan was structured with minimal required reserves and numerous targeted reserves triggered by non-renewal of leases. Average remaining lease term is 6.5 years.