Aerospace Industry Transaction Overview

Date of Investment	July 2001
Transaction Size	$7.3 Million
Remediation, Insurance and Redevelopment Costs	$1.8 Million
Type of Assets	Industrial
Gross Rentable Area	831,568 square feet
Location	Southington, CT

Transaction Background

In July 2001, our client acquired a former Pratt and Whitney manufacturing facility in Southington, Connecticut, plus the assumption of environmental liability from United Technologies Corporation for $7.3 million. The site is comprised of six industrial buildings situated on 52-acres of land. The plan with respect to this site is to remediate the property, perform necessary building improvements and deferred maintenance, implement a leasing marketing plan, execute leases with the credit tenants and sell the property at a market capitalization rate.

Environmental

The primary environmental issues at the site include contaminated soil and groundwater resulting from the prior manufacturing activities of Pratt & Whitney. A remedial action plan was submitted to the closure under an industrial standard. We expect that following a brief review by the CTDEP, a clean closure request will be approved and we can begin the necessary remediation of the site, which is not expected to be significant. Concurrently with the closing of this transaction, purchased remediation stop loss and property transfer liability insurance to cap environmental costs.

Transaction Highlights

The property is attractively located in the south sub-market of Hartford, Connecticut, one-quarter mile from Interstate 84, an area that has experienced declining industrial vacancy rates during the past year.

As a direct result of acquiring the property at a substantial discount to market value, following remediation and modes building improvements, the property will be offered at lease rates meaningfully lower than the prevailing market.

This is an important transaction in that the primary concern of United Technologies, a large U.S. conglomerate, was the ability to find an experienced buyer capable of dealing with the various environmental problems associated with the property, including the transfer of risk away from the seller.