WASHINGTON, Dec. 6 /PRNewswire-FirstCall/ -- CarrAmerica Realty
Corporation (NYSE: CRE) today announced that it has acquired Mission Towers I
in Santa Clara, California. CarrAmerica purchased the 282,080 square foot,
12-story, Class A office tower for $129.7 million, of which approximately
$51.6 million is attributable to the value of above market rents in place over
the next seven years. In addition, CarrAmerica will assume management and
leasing of the building, which is located at 3975 Freedom Circle.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990820/CRELOGO )
CarrAmerica Managing Director for Northern California, Christopher
Peatross, commented, "CarrAmerica is very pleased to add this high-yield
property to our Northern California portfolio." Mr. Peatross added, "Mission
Towers I is one of the highest quality buildings with outstanding identity and
long-term, strong-tenancy leases in the Silicon Valley market."
Currently 100% leased to Sun Microsystems and PMC-Sierra through October
2011, the office tower is expected to provide a year one GAAP return of 6.8%.
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 11.1%. GAAP returns are expected to steadily rise to
approximately 10.0% in 2011 as the amount attributable to the value of above
market rents is amortized.
Completed in 2000, Mission Towers I is situated at the east corner of
Highway 101 and Great America in the center of Silicon Valley. The building
has immediate access to Highway 101 and is within several miles of I-280.
In the San Francisco Bay Area, CarrAmerica now owns, directly or through
joint ventures, interests in 88 office and R&D buildings containing
approximately 6.5 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 6.8 %
Straight line rent adjustments (1.3)%
SFAS 141 adjustments to reduce revenue on
acquired above market leases to market rates 5.6 %
Year one cash yield 11.1 %
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 294 operating office properties. 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 http://www.carramerica.com.
Certain statements in this release 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 properties, possible
charges or payments resulting from our guarantee of certain leases of HQ
Global Workplaces, Inc., the ability of the general economy to recover timely
from the current economic downturn, availability and creditworthiness of
tenants, the level of lease rents and the availability of financing for both
tenants and the Company, adverse changes in the real estate markets including,
among other things, competition with other companies, risks of real estate
acquisition and development (including the failure of pending acquisitions to
close and pending developments to be completed on time and within budget or
the failure of any property acquired or developed to perform as expected),
actions, strategies and performance of affiliates that the Company may not
control or companies in which the Company has made investments, our ability to
maintain our status as a REIT for federal income tax purposes, 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 on Form 10-K.
SOURCE CarrAmerica Realty Corporation
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Related links:
http://www.carramerica.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/19990820/CRELOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Maureen Wheeler of CarrAmerica Realty
Corporation, +1-202-729-1756, or maureen.wheeler@carramerica.com
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