Office Building Transaction Overview

Date of Transaction	January 2000
Transaction Size	$16.4 Million
Estimated Remediation and Insurance Costs	$0.2 Million
Type of Assets	Office Building
Gross Rentable Area	154,000 square feet
Location	Clayton, MO

Transaction Background

An acquisition of two four-story, class B office buildings in Clayton, Missouri, an affluent sub-market of St. Louis. The buildings were owned by Equitable Life Assurance Company and have total leasable area of 154,000 square feet. One entire building (91,000 square feet) is leased to UP Technologies, a Union Pacific subsidiary, on a new ten year lease.

Environmental

Two environmental conditions existed at the site. The first was the presence of petroleum hydrocarbon contamination in the soil at the northwest corner of the site, which was below actionable levels. The second was an underground storage tank that had no indications of leakage but about which little was known. It had not contaminated the property. Our client obtained a "no further action letter" from the State of Missouri in February 2001. No additional testing is required at the site. Although the property did not require significant remediation, concurrently with the acquisition of the property, our client purchased property transfer liability environmental insurance to enhance its marketability at such time it decided to exit its investment.

Transaction Highlights

• Due to well-characterized environmental issues not requiring remediation and a strong tenant base, our client was able to leverage its investment at the time of acquisition.

Developments after Acquisition

• The buildings are currently 100% leased and occupied.