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| S&P Affirms CSC Associates 'AAA' Collateral Notes Rating |
NEW YORK, March 27 /PRNewswire/ -- Standard & Poor's today affirmed its
triple-'A' rating on CSC Associates L.P.'s collateral notes.
The rating affirmation reflects the strong operating performance of the
property, Bank of America Plaza. The property currently has a 3.64 times DSC
and 27% loan to value.
The notes are secured by a first mortgage on an office building known as
Bank of America Plaza, in Atlanta, Ga. Bank of America Plaza is a 55-story,
class A office building containing 1,260,000 square feet (sq. ft.) constructed
in 1992 and located on 3.7 acres, including two acres of landscaped, public
park. Building amenities include a dining facility, a retail bank, a health
club, and underground parking for 1,250 cars. The property also contains a
14,000 sq. ft. conference center, with state-of-the-art equipment in an
auditorium, and provides catering services and conference arrangements.
The property is leased to 11 major tenants and is 100% occupied. The
average annual base rent for the property is $21.81 per sq. ft. Substantially
all of the leases contain provisions requiring the tenants to pay their pro
rata share of operating expenses and real estate taxes in addition to the
annual base rent. Bank of America is the largest tenant, occupying about 45%
of the building, with its lease expiring in 2012.
The property is owned by CSC Associates, which was formed in 1989 between
Cousins Properties Inc. and a wholly owned subsidiary of Bank of America
Corp., each 50% partners. Cousins Properties is an Atlanta-based, fully
integrated REIT and has been a public company since 1962. The company owns
retail and office developments, concentrated in the southeast U.S., primarily
in the Atlanta area. Management is provided by Cousins Properties, an
affiliate of the owner.
The Atlanta office market is stable, with office expansion and absorption
in line with Atlanta's historical data. According to REIS market research,
year-end vacancy rates of 9.3% in 2000 are expected to rise to 10.9% in 2001.
Rental growth in the Atlanta market has been positive since 1994, with average
annual asking price and effective rent growing nearly 4% to the current levels
of $21.01 per sq. ft. and $18.88 per sq. ft., respectively. As reported by
CoStar Group Inc., vacancy rates in the Atlanta central business district
(CBD), where Bank of America Plaza is located, were lower, at 4.4% for
year-end 2000. Although there is presently no office space under construction
in the Atlanta CBD, construction starts in the suburban market totaled
12.2 million sq. ft. at the end of 2000. The market currently has more than
200 million sq. ft. of space.
The outstanding balance of the notes totals $68,109,707 and requires
monthly principal and interest payments, which are scheduled to fully amortize
the outstanding balance by the 2011 maturity, Standard & Poor's said. --
CreditWire
SOURCE Standard & Poor's
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CONTACT:
Carol Cumberbatch, 212-438-2436, or James
Palmisano, 212-438-2569, both of Standard & Poor's
