"The rents are significantly below market," says Larry Finger,senior vice president and chief financial officer for WRIT. Theaverage rent tenants are paying in the building is $21.83, but WRITbelieves the average rent demand in the area is $25.91--an 18.7%increase just in base rent alone, Finger says.
WRIT expects the investment to produce a first-year cash returnof 10.5%, and replace below-market leases on 31% of the buildingover the next two years. The building also lies across the streetfrom another building WRIT owns at 515 King St. "We are oftentimesable to move tenants round like that," he notes.
WRIT plans to spend about $750,000 renovating the common areas,roof, exterior, mechanical, security and safety systems. The sellerwas TrizecHahn of Toronto, which picked up the property earlier aspart of a portfolio.
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