14 MAMARONECK AVENUE is a 21,800 square foot Class B office building with ground floor retail located at the intersection of Mamaroneck Avenue and Main Street in downtown White Plains.  It was purchased for $1.17 million in May 1997.  Total project cost was $1.9 million.  It was sold in May 2004 for $4.0 million.

.Market Opportunity
The property was purchased from two older investors who had owned it for many years.  Given its prime location, the property had historically remained full.  However, as the market softened in the mid 1990s, occupancy declined.  When Macy’s relocated from its original store across Mamaroneck Avenue from the property to the Galleria Mall several blocks away, the property’s location became viewed as less desirable and the owners, who were then retired, became discouraged and motivated to sell.

.Acquisition
CCGL’s predecessor company perceived the opportunity to purchase a building in a temporarily out of favor location at an attractive price ($55.00/square foot) and on attractive terms.  It believed the building could be renovated and released and the former Macy’s store eventually would be redeveloped.  The former owners provided purchase money financing for 70% of the acquisition and CCGL’s predecessor company provided equity for the remainder.

.Results
CCGL’s predecessor company renovated the building and leased the vacant space, then refinanced the building with a long-term, fixed-rate mortgage, which generated significant excess proceeds.  When the building’s largest tenant outgrew the building, CCGL’s predecessor company began releasing the newly vacated space.

In the interim, the environment in White Plains had changed dramatically.  The vacant former Macy’s store was redeveloped into City Center at White Plains, a mixed-use project containing 450,000 square feet of retail space and 600 high-rise apartments.  A nearby site was developed into a Ritz Carlton hotel and high-rise condominiums.  Thus, the location again became viewed as prime and the one vacant floor became a selling point.  The building was sold to a user in May 2004 for $4.0 million.

The building was owned by 14 Mamaroneck Avenue, LLC, a single property entity.  The effective annual internal rate of return to the investors was well in excess of 20%, net after all fees and carried interest to CCGL and its affiliates. 

The majority of the investors decided to engage in a tax-deferred exchange into a 37.5% tenant in common interest in 1375 Kings Highway East and 777 Commerce Drive in Fairfield, Connecticut.  Those buildings were sold at a profit in December 2007 and approximately 75% of the investors again elected to engage in a tax-deferred exchange into another property.  However, as the market was then deteriorating, CCGL elected not to complete a tax-deferred reinvestment, as it could not secure a replacement property meeting its stringent acquisition criteria.  Proceeds of the sale were distributed in mid-2008.  Much of those proceeds have been informally committed to CREF IV.