| 1E - DSCR < 1.10, 1F - U/W DSCR, 4A - Occ drop, & 4B - EGI drop. The loan is secured by a 188,232 sf office property in San Diego, CA. The property was inspected on 09/03/08; rated in Good condition. The FYE ending 06/09 NCF DSCR is .76 with an occ of 61.83%; FY 2008 ending 06/08 NCF DSCR was 1.07 with an occ of 92%. The decline in NCF is due to the property not being stabilized as of FYE 06/09 & a decline in Occ. U/W base rents were based on stabilized rents in place & noted that current rents were below mkt. FYE June 2009 EGI shows a 17% decline from FY June 2008 & 37% from U/W. The decline is due to base rents & exp reimb are still not at U/W proj levels, & parking inc decline. The occ decline of 32% has also contribued to base rent decline. Occ declined during 02/09 when Heller Ehrman, who occ. 55,565 sf, vacated at lease exp. Vacant sf as of the 06/09 rent roll is 73,844 sf. Per Bwr, Avera Pharm. signed a 3 month lease for 5079 sf at $2.77 PSF, & Resources Connection signed a 5 year lease for 6393 sf at $6.30 RSF. For the former Heller Ehrman space, Bwr stated they are a shortlist candidate with a large multi-natl law firm for 1/2 of the former Heller space. Per Bwr as of July 09, Prospect has prelim identified a competing prop as their top choice; however, Bwr is exploring every avenue to retain the prospect. Bwr is also anticipating to propose to another large natl law firm shortly for the former Heller space. Current asking rates are $3.70, however, Bwr did indicate that the start rate for potential new leasing will likely be in the $3.30 - $3.50 range pending term & imp. Bwr also noted that they are locking down lease renewals with Correira & Associates, PacVentures, & Fidelity at the property. It should be further noted that OPER EXP are on the decline. Ann 2009 OPER EXP show a 30% decline from U/W but a 8% increase from FYE ending 06/30/08. Bank of America will continue to monitor the loan.
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