WASHINGTON, Aug. 3 /PRNewswire-FirstCall/ -- CarrAmerica Realty
Corporation (NYSE: CRE) announced today the purchase of 313 and 323 Fairchild
Drive, a 131,561 square foot, two-building, Class A office campus in Mountain
View, California. CarrAmerica paid $53.6 million for the property, which is
100% occupied by Nokia (NYSE: NOK) through June 2009. 313 and 323 Fairchild
Drive are expected to provide a year one GAAP return of 6.7%. Rental rates on
in-place leases are significantly above current market rental rates. As a
result, current GAAP returns, which reflect the mark to market of rents, are
significantly less than year one cash yields, which are expected to be
approximately 9.3%.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990820/CRELOGO )
CarrAmerica Managing Director for Northern California, Christopher
Peatross, commented, "The purchase of 313 and 323 Fairchild Drive demonstrates
our continued focus on Class A assets in the San Francisco Bay Area. Nokia's
buildings are arguably situated in one of the most impressive campus settings
in Silicon Valley, and the buildings won the 2000/2001 American Institute of
Architects (AIA) Honor Award for Interior Design." Mr. Peatross added, "Class
A Silicon Valley buildings are exhibiting good leasing momentum and some of
the highest rents and lowest vacancies in the market. Additionally, the
Mountain View submarket, while accounting for less than 10% of the office
space in Silicon Valley, accounts for nearly 70% of the net absorption over
the last 18 months."
Completed in 1999, 313 and 323 Fairchild Drive, are located less than two
blocks from Silicon Valley's heavily-traveled Highway 101 and within half a
mile of the Highway 101/Highway 237 interchange. Situated along Highway 101,
the buildings have high visibility, providing a strong-identity business
address in an attractive campus setting.
The listing broker in this transaction was Michael Zietsman of Zietsman
Realty Partners.
In Northern California, CarrAmerica now owns, directly or through joint
ventures, interests in 87 office and R&D buildings containing over 6.4 million
square feet.
Cash yields are an important measure in understanding the contribution of
an acquisition to the Company's operating cash flow. A reconciliation of year
one GAAP yield to year one cash yield is as follows:
Year one GAAP yield 6.7%
Straight line rent adjustments (0.3)%
SFAS 141 adjustments to reduce revenue
on acquired above market leases to market rates 2.9%
Year one cash yield 9.3%
CarrAmerica owns, develops and operates office properties in 12 markets
throughout the United States. The company has become one of America's leading
office workplace companies by meeting the rapidly changing needs of its
customers with superior service, a large portfolio of quality office
properties and extraordinary development capabilities. Currently, CarrAmerica
and its affiliates own, directly or through joint ventures, interests in a
portfolio of 290 operating office properties, totaling approximately 27
million square feet. CarrAmerica's markets include Austin, Chicago, Dallas,
Denver, Los Angeles, Orange County, Portland, Salt Lake City, San Diego, San
Francisco Bay Area, Seattle and metropolitan Washington, D.C. For additional
information on CarrAmerica, including space availability, visit our web site
at http://www.carramerica.com.
Estimates of Diluted FFO and earnings per share and certain other
statements in this release, including management's expectations about, among
other things, operating performance and financial conditions, may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance, dividends, achievements or
transactions of the company and its affiliates or industry results to be
materially different from any future results, performance, achievements or
transactions expressed or implied by such forward-looking statements. Such
factors include, among others, the following: national and local economic,
business and real estate conditions that will, among other things, affect
demand for office space, the extent, strength and duration of any economic
recovery, including the effect on demand for office space and the creation of
new office development, availability and creditworthiness of tenants, the
level of lease rents, and the availability of financing for both tenants and
us; adverse changes in real estate markets, including, among other things, the
extent of tenant bankruptcies, financial difficulties and defaults, the extent
of future demand for office space in our core markets and barriers to entry
into markets which we may seek to enter in the future, the extent of the
decreases in rental rates, our ability to identify and consummate attractive
acquisitions on favorable terms, our ability to consummate any planned
dispositions in a timely manner on acceptable terms, and changes in operating
costs, including real estate taxes, utilities, insurance and security costs;
actions, strategies and performance of affiliates that we may not control or
companies in which we have made investments; ability to obtain insurance at a
reasonable cost; ability to maintain our status as a REIT for federal and
state income tax purposes; ability to raise capital; effect of any terrorist
activity or other heightened geopolitical crisis; governmental actions and
initiatives; and environmental/safety requirements. For a further discussion
of these and other factors that could impact the company's future results,
performance, achievements or transactions, see the documents filed by the
company from time to time with the Securities and Exchange Commission, and in
particular the section titled, "The Company - Risk Factors" in the company's
Annual Report or Form 10-K.
SOURCE CarrAmerica Realty Corporation
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