The property, net-leased to Blue Cross Blue Shield of South Carolina, was acquired by the joint venture in 1999 for $42.5 million or $121.98 per sf, according to Lexington's prepared statement. The building is 100 miles south of Downtown Charlotte.
The two-story expansion is expected to be completed by October. According to the REIT's prepared statement, the building will be leased to the tenant for eight years with initial annual net rent expected to equal 16.95% of the $10.5 million construction cost, or about $1.78 million per year at $39 per sf.
The rent increases to 19.5% of the construction cost in year four for an estimated aggregate rent of $15 million over the eight-year lease.
During the construction period, Lexington's joint venture will earn interest on amounts advanced at 9% per year. Lexington's unidentified partner will contribute 60% of the construction cost. Cash flow will generally be allocated 40% to Lexington and 60% to the joint venture partner.
Lexington Corporate Properties Trust owns and manages office, industrial and retail properties net-leased to major corporations.
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