Commerce Park is a 76,509 square foot mixed-use project comprised of 6 buildings on a site of approximately 8.5 acres with parking for approximately 350 cars. The property was purchased in June of 2010 for $13,000,000. Total project cost is budgeted at $14,000,000. Estimated value at stabilization is $21,200,000.

.Market Opportunity
One building is long-term net leased to Wells Fargo Bank. The other 5 buildings are substantially fully leased to medical and medical related tenants. Most tenants have long histories at the property and many of the current leases are significantly below market. The property is easily accessible from several major highways and is less than a mile from Milford Hospital. Milford Hospital is a modern, well-run community hospital and is considered the best facility between Norwalk and New Haven. As such, there is significant demand for medical space in a supply-constrained market. Commerce Park is a dominant property in the market.  As a result of market dislocation, CCGL could purchase the property at an attractive price and could achieve its target returns with extremely low risk by maintaining occupancy and rolling leases to market as they expired.

.Acquisition
The property was brought to CCGL off market by one of CCGL’s network of referral sources. CCGL greatly favors both off market transactions and medical office properties, with which it has significant experience. The purchase represented a 7.8% going-in capitalization rate on in-place income, including the many below market leases. CCGL financed the acquisition with the new mortgage from a lender which knew the property well and was enthusiastic about financing it. To modestly increase leverage and drive returns, CCGL convinced the seller to take back a $300,000 standing purchase money mortgage. The property produced immediate distributable cash flow.

.Results
CCGL is working to improve several problematic management issues and complete deferred maintenance. It is also renewing several tenants whose leases roll in 2011.  CCGL plans to maintain Commerce Park’s historically high occupancy through aggressive, “hands on” management and to roll leases to market as they expire. Although it is too early in the Fourth Fund’s ownership to determine returns to investors, CCGL is confident Commerce Park will be a highly profitable investment.