This lease was signed for $26 per foot, with 3% annual escalations and CAM reimbursements. Terminus Commercial helped secure the lease agreement. The addition of CAM reimbursements means that if common area costs in 2023 are above the costs of 2022, then the tenant will pay their prorated share of those increased costs.
With 100% occupancy our total projected rental revenue has grown to $676,000 for the year. This income represents an average rental rate of $21.08 per foot on the asset, which is exactly inline with our proforma goals to achieve $21 per foot. This rate will grow each year from escalations.
Average Lease Term is now 3.3 years
Next lease expiration is March of 2023
Debt is fixed at 2.95% through Sept 2025
Loan principal paydowns total $110k per year, which directly increases our equity in the deal.
With the stability that Parsons has, we are forecasted to make continued distributions each quarter. We are excited about fully leasing this asset to provide a stable long term cash flow investment opportunity. We are currently projecting about 4% cash payments, inline with proforma.
Our next steps are to perform the year end CAM reconciliation. During this process, we true up the paid CAM rates from tenants with actual costs. This year, our actual costs were higher, and we will receive these overages back from tenants according to their lease. Then this will adjust future CAM rates for 2023 and improve cash flow further.