It has been a while since we have sent an update, but we have been hard at work on our project. We have successfully completed both the Cal Lutheran (approx. 18,000 sq. ft.) and VS Media (approx. 10,000 sq. ft.) suites, and both tenants have moved in. Cal Lutheran begins paying rent 12/1/14, and VS Media 11/1/14. We also signed a 6,300 sq. ft. lease with a company called FaceFirst, which has cutting-edge facial recognition hardware and software that it sells to a variety of security-conscious customers, primarily airports. We expect their suite will be complete in early July; they have three months of free rent so their rent ($2.15 psf MG) should start in early October. Finally, we signed a lease with an existing tenant, Heywood Friedman for 1,860 sq. ft. of renovated space at $2.25 psf MG which will start July 1st with no free rent. We have only one 4,300 sq. ft. suite remaining, which we have decided to renovate so it is ready for immediate occupancy. We expect it will be available by the end of August and expect it to lease quickly.
We have also completed our Phase II renovation of the property, and will post completed photos shortly. We have only one outstanding item: construction of the monument sign at the front of the project. Designed by Kamus + Keller, it will give the project enhanced visibility and identity. Cal Lutheran will have its own monument sign by the east driveway, which was recently approved by the City of Westlake Village (a rare concession, and evidence of the City's excitement of having CLU located there).
Although our loan with Opus Bank runs until next March, we want to take advantage of the continued low interest rates and lock them in for 10 years. We are signing a term sheet this week with a division of Cantor Fitzgerald for a CMBS 10-year loan which will have an interest rate hopefully below 4.75%, interest only for 5 years, 30 year amortization thereafter. There are hefty reserves, legal fees and reporting requirements, but we believe the lower interest rate is a major compensating factor. We expect to close the loan by the end of August.
Because of a loan hold-back until the Cal Lutheran rent starts on December 1st, we likely will not start distributions until mid-December. Remember, we are accumulating the 8.5% preferred return since January 1, 2014, and the Members will receive those funds first, before any distributions are made to the Manager.
