Approve Lease
Resolution text
Resolved, That the Executive Committee of Executive Council gives approval to lease roughly one-half of the 7th floor (4,000 RSG) to H&D Physical Therapy for a ten year term with a five year renewal option. A copy of the proposal is attached.
Explanation
We propose to lease to H&D Physical Therapy, a well-qualified professional tenant, the balance of the vacant space on the 7th floor of 4,000 rentable square feet, for a 10 year term. Our financial analysis estimates the net revenue over the term of the lease will be $1,922,980, based on a base rent of $41 per rentable square foot in years 1 – 5, and $46 per rentable square foot in years 6 – 10, plus a 2.75% operating expense escalation, compounded annually . There is a five year renewal option within the lease. Security will be equal to the Tenant Improvement Allowance, or between $100,000 and $140,000, depending on the work to be done. This lease will be net of real estate taxes, and the tenant will be responsible for their proportionate share of the taxes, as has been our practice with the other taxable office space tenants.
It is worth noting our expected revenue for this space when we made the initial projections in November, 2017 was $1,671,387, or $38.87 per rentable square foot. This lease has been accomplished at an average rent of $45.79 per rentable square foot, or 118% of target.