NNN Darien Business Center, LLC

Available for §1031 exchange w  llc investment

Offering Purchase Price: $36,240,000

Offering Price Per SF: $205.95

  • Purchase Date: 3rd Quarter 2007
  • Offering LTV: 63.58%
  • Offering Price Cap Rate: 6.61%
  • 1st Year Cash Flow: 6.59%

Darien Business Center consists of four office buildings and a 1.7-acre undeveloped parcel of land in the Chicago suburb of Darien, Illinois. Totaling nearly 176,000 square feet, the property is situated approximately 22 miles from downtown Chicago and offers convenient access to major freeways, including Interstates 355 and 55.

Available for §1031 exchange w llc investment

Built between 1981 and 1990, Darien Business Center is less than one mile north of the world-renowned Argonne National Laboratory, making it an ideal location for high-technology businesses relating to biomedical, environmental, and physics research.

Property Summary

Darien Business Center consists of four office buildings and a 1.7-acre undeveloped parcel of land in the Chicago suburb of Darien, Illinois. Totaling nearly 176,000 square feet, the property is situated approximately 22 miles from downtown Chicago and offers convenient access to major freeways, including Interstates 355 and 55. The business park is within close proximity to numerous restaurants and hotels, as well as the 28,782-square-foot Darien Plaza Shopping Center. Built between 1981 and 1990, Darien Business Center is less than one mile north of the world-renowned Argonne National Laboratory, making it an ideal location for high-technology businesses relating to biomedical, environmental, and physics research. The property is 97 percent occupied by numerous tenants with staggered lease expirations, including The University of Chicago Hospitals, Viskase Companies, Inc., Insure.com, Inc. and Eichrom Technologies, Inc.

TIC Offering

  • Offering Size: $13,200,000
  • Price Per 1% Ownership: $132,000equity: $230,400  and assumed debt
  • Minimum Investment per SPE: 3.00% =$396,000 equity and $691,200 assumed debt for a total purchase price of $1,087,200
  • Suitability: Accredited Investors Only

LLC Offering

  • Offering Size: $660,000
  • Price Per Unit: $5,000
  • Minimum Investment: $25,000
  • Suitability: Accredited investors only
NNN Darien Business Center offerings
NNN Darien Business Center

Business Plan

NNN Darien Business Center
  • Preserve the capital investment.
  • Realize income through the acquisition, operation and sale of the
    property.
  • Make monthly distributions, which may be partially tax-deferred as a result of depreciation and amortization expenses.
  • Within approximately five years, profitably sell the property based on the value added through effective management and operation of the property.
  • There is no guarantee that the business plan will be successfully executed, that the property’s value will be enhanced, or that the property will be sold within the planned time period.
  • The property is largely dependent on a single tenant. The University of Chicago Hospitals (the “University”) occupies 62,399 square feet or approximately 35 percent of the property.
  • The property’s major tenant is dependent on the healthcare industry. An adverse change in the healthcare industry could negatively affect such tenant’s ability to make lease payments and the cash flow generated by the property.
  • Unless extended by the tenants, the leases representing approximately 70 percent of the property will expire within the next four calendar years. In addition, leases representing approximately 27 percent of the property contain early termination options.
  • Slowing absorption within the East-West Tollway submarket could adversely affect the fair market value of the property.

Major Tenants (16 Total Tenants)

The University of Chicago Hospitals

www.uchospitals.edu

Square Feet: 62,399 Lease Expiration: 06/2011

The University of Chicago Hospitals and Health System (“UCHHS”) is the primary affiliate of the University of Chicago Pritzker School of Medicine, one of the nation’s premier medical schools.

Founded in 1927, the University of Chicago Medical Center (“UCMC”) offers a full range of specialty and primary care services for adults and children in the areas of cancer, endoctrinology, gastroenterology, geriactrics, heart disease, kidney disease, neurosciences, orthopaedics, respiratory disease, surgery, transplanation and women’s services. UCHHS established its office at the Darien Business Center as part of its long term strategy to manage healthcare information and costs. Revenues for patient care at UCMC in 2006 were more than $869 million.

In addition, UCMC is one of the largest providers of uncompensated care in Illinois and provides millions of dollars in unreimbursed care every year.

Viskase Companies, Inc.

www.viskase.com

Square Feet: 21,050 or  the property
Lease Expiration:04/2016

Viskase manufactures such food packaging products as cellulosic casings, heat shrinkable plastic bags and specialty films which are used in packaging of processed meat and meat products around the world.

Cellulosic casings are used in the production of processed meat and poultry products such as hot dogs, salami and other products Viskase has operated for more than 80 years as one of the meat industry’s top choices for products, meat formulation, processing and packaging solutions and has more than 1,300 employees. Viskase recently relocated its corporate headquarters to the property.

Option to terminate on or before the last day of the 48th full calendar month (April 2010) with an effective date of April 30, 2011 with payment of a $682,769 termination penalty.

Location Information

Founded in 1833 at the site of portage between the Great Lakes and the Mississippi watershed, Chicago is the most populous city in the state of Illinois. The third largest city in the United States and the heart of a metropolitan area of more than nine million people, it is the commercial, financial, industrial, and cultural center for a vast region and boasts the second largest central business district in the United States. The city is home to 29 Fortune 500 companies and four major financial and futures exchanges, including the Chicago Stock Exchange, the Chicago Board of Trade (CBOT), the Chicago Board Options Exchange (CBOE), and the Chicago Mercantile Exchange (“Merc”). The median household income of the metropolitan region is $117,500, which exceeds the averages for the top metros in the country and the top metros in the region.

Office Market

  • Asking rates have escalated by $0.50 to $1.50 per square foot as compared to 2006, the result of tightening supply and increased demand. Rent growth should last through the remainder of 2007 and sustain itself into 2008.
  • The overall second quarter vacancy rate stands at 16.9 percent versus 17.3 percent in the first quarter of 2007. This is an improvement of 140 basis points compared to the second quarter of 2006, mainly driven by the strong performance of the downtown office market.
Economic Trends
  • Unemployment rates in Illinois nudged downward to 4.6 percent with the unemployment rate in Chicago declining further to 4.6 percent from the 5.1 percent reported in January 2007 as well as the 5.2 percent reported in February 2006.
  • Over the year, healthcare added 363,000 jobs. Within professional and business services, job gains continued over the month in computer systems design (+8,000) and in architectural and engineering services (+7,000). In financial activities, employment rose in securities, commodity contracts, and investments (+6,000) and in commercial banking (+4,000) in May.

ABOUT Triple Net Properties, LLC

Triple Net Properties, LLC has time-tested experience in real estate syndications, acquisitions, development, construction, leasing and property management. Triple Net currently manages a growing portfolio of more than 37 million square feet of property in 28 states valued at more than $5.1 billion. Although past performance is no guarantee of future results, Triple Net Properties, LLC has an unparalleled track record and has acquired 277 properties to date. Triple Net and affiliates have sold 100 properties for over $2.3 billion since 2000.

Triple Net Properties, LLC is a wholly-owned subsidiary of NNN Realty Advisors, Inc., a nationwide commercial real estate asset management and services firm.

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