NNN 8555 University Place, LLC

Available for §1031 exchange w llc investment

Offering Purchase Price: $65,450,000

Offering Price Per SF: $207.78

  • Purchase Date: 2nd Quarter, 2007
  • Offering LTV: 68.75%
  • Offering Price Cap Rate: 6.39%
  • 1st Year Cash Flow: 7.00%

8555 University Place is a three-story, 315,000-square-foot, single-tenant office building currently under construction in St. Louis, Missouri that serves as the corporate headquarters for Express Scripts, one of the nation’s leading managers of pharmacy benefit plans.

Available for §1031 exchange w llc investment

The newly constructed Class A property is located on approximately 13 acres of land on the campus of the University of Missouri – St. Louis. A 1,011-space, three-level parking structure is located adjacent to the building

Property Summary

8555 University Place is a three-story, 315,000-square-foot, single-tenant office building currently under construction in St. Louis, Missouri that serves as the corporate headquarters for Express Scripts, one of the nation’s leading managers of pharmacy benefit plans. The newly constructed Class A property is located on approximately 13 acres of land on the campus of the University of Missouri – St. Louis. A 1,011-space, three-level parking structure is located adjacent to the building, which also features 481 surface parking spaces, providing a healthy ratio of 4.7 spaces per 1,000 square feet. 8555 University Place is being specifically built for Express Scripts, which will employ 1,100 employees at the facility, and will be the highest-ranking Fortune 500 company with its corporate headquarters on a university campus. The facility enjoys ready access to Interstates 70 and 170, as well as nearby Lambert-St. Louis International Airport.

Property Information

  • Address: 8555 University Place St. Louis, Missouri 63121
  • Building Type: Office
  • Year Built: 2007
  • Total SF: 315,000
  • % Leased: 100%

TIC Offering

  • Offering Size: $20,450,000
  • Price Per 1% Ownership: $204,500 equity and $450,000 assumed debt
  • Minimum Investment per SPE: 3.00% = $613,500 equity and $1,350,000 assumed debt for a total purchase price of $1,963,500
  • Suitability: Accredited Investors Only

LLC Offering

  • Offering Size: $1,022,500
  • Price Per Unit: $5,000
  • Minimum Investment: $25,000
  • Suitability: Accredited investors only

Business Plan

  • Preserve the capital investment.
  • Make monthly distributions, which may be partially tax deferred as a result of depreciation and amortization expenses.
  • Make monthly distributions, which may be partially tax-deferred as a result of depreciation and amortization expenses.
  • Within approximately eight 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.
  • Complete dependence on one tenant, Express Scripts, currently leases 100% of the property.

Major Tenant (One Total Tenant)

Express Scripts

Sq. Ft.: 315,000 Lease Exp.: 11/2017*

Express Scripts, Inc. (“Express Scripts”) was founded in 1986 and has been a public reporting company since 1992. Express Scripts provides a range of pharmacy benefit management services throughout North America. Its main client groups include health maintenance organizations (HMOs), health insurers, third-party administrators, employers, union-sponsored benefit plans and government health programs. Express Scripts coordinates the distribution of outpatient pharmaceuticals through a combination of benefit management services, including retail drug card programs, home delivery services, formulary management programs and other clinical management programs. In addition, Express Scripts provides pharma business solutions services consisting of distribution of pharmaceuticals to low-income patients through pharmaceutical manufacturer-sponsored and company-sponsored generic patient assistance programs; distribution of pharmaceuticals requiring special handling or packaging; and distribution of sample units to physicians and verification of practitioner licensure. It offers its services primarily to health maintenance organizations, health insurers, third-party administrators, employers, union-sponsored benefit plans, and government health programs.

Location Information

Located along the Mississippi River below its confluence with the Missouri River, St. Louis was founded as a French trading post before joining the United States as a part of the Louisiana Purchase. With a population of 348,189, St. Louis is the second largest city in the state of Missouri, and has long been a major industrial and transportation hub, as well as a wholesale, banking and financial center. It is a leading rail and trucking center, and its airport and river port are among the country’s busiest. The graceful Gateway Arch, a 630-foot high stainless steel arch, symbolizes the city’s historic heritage as the “gateway to the West,” and is its most notable landmark.

Office Market

  • REIS forecasts a solid block of approximately one million square foot net absorption for years 2007 to 2010.
  • During fourth quarter of 2006, the office market saw an increase in terms of overall occupancy for the Greater St. Louis area. The fourth quarter 2006 vacancy rate decreased from 13.93% in the third quarter to 13.66% in the fourth quarter.
Economic Trends
  • According to the U.S. Commerce Department, the National December Employment Report showed that 167,000 jobs were created in December – the 40th straight month of job growth. In 2006, nearly two million new jobs were created.
  • The Greater St. Louis area is the headquarters for eighteen Fortune 1000 companies of which seven are included in the Fortune 500. Major publicly-held companies located in the St. Louis area include Emerson Electric, Anheuser-Bush Companies, A.G. Edwards, Charter Communications, and Express Scripts.

ABOUT Grubb & Ellis

Grubb & Ellis Realty Investors, LLC is the real estate investment and asset management subsidiary of Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm. Grubb & Ellis Realty Investors and affiliates manage a growing portfolio of assets valued in excess of $6.1 billion located throughout 30 states. One of the nation’s most active buyers and sellers of commercial real estate, Grubb & Ellis Realty Investors has completed acquisition and disposition volume totaling approximately $10.4 billion on behalf of program investors since its founding in 1998; more than 70 percent of this volume has been transacted since January 1, 2005.