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198 Varet Street 60 Broadway

Williamsburg Charter High School Building – For Sale


Property Information
Address: 192-208 Varet Street
Location: The subject property is located on the south side of Varet Street
between Bushwick Avenue and White Street.
Block/Lot: 3117 / 24
Lot Dimensions: 218.17' x 100'
Building Information
Building Dimensions: 218.17' x 100'
Gross Square Feet: 115,000 Approx.
Stories: 8
Zoning: M1-2
Manufacturing FAR: 2.00
Community Facility FAR: 4.80
Lot Size: 21,817 sq. ft. Approx.
Assessment (10/11) : $ 1,862,408
Taxes (10/11): $ 192,051.51
Description: This new construction facility, built to suit the Williamsburg Charter High School, was completed and opened in the fall of 2010. The tenant, in its first year of a 30 year lease,
claims hardship due to construction delays which shortened the admissions process resulting in a lower than expected first year student enrollment of around 850 students. However, the school
already has an overwhelming amount of preliminary applications and is confident to enroll a sufficient number of students for a profitable next year (1,100 students with a max charter capacity
of 1,200 students). The admissions lottery on April, 11 2011 will indicate the enrollment for the fall.
The Williamsburg Charter High School is a member of the Believe High School Network along with two other charter school located in Williamsburg. This school’s original charter began at a
nearby location in February 2004 and was renewed by the Department of Education in 2009.
Recent laws governing charter schools provide New York City with the opportunity to open up an additional 114 charter schools. There are currently 49 charter schools in Brooklyn with plans
to open four more for the 2011-2012 school year. Since 1998, when NYC began issuing charters, only four charter schools have closed.
198 Varet Street is located in East Williamsburg within a few blocks from the Morgan Avenue L train station. In addition, under the current lease, the responsibilities of the landlord extend only
to the exterior maintenance of the building. The school is outfitted with state of the art classrooms, laboratories and extracurricular amenities including a fitness center, a two story rock
climbing wall and an assembly area.

Asking Price : $30,000,000 ($260 psf or 7.5% CAP)


For Additional Information, Please Contact Exclusive Sales Agents:
Mark L. Lively ~ 718.307.6524 Brendan T. Maddigan ~ 718.307.6507 Douglas DiSesa ~ 718.307.6554
mlively@masseyknakal.com bmaddigan@masseyknakal.com ddisesa@masseyknakal.com
The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. All zoning, buildable footages and uses must be independently verified. Vacancy factors used herein are an arbitrary percentage used only as an example. It does not necessarily relate t
The value of this investment is dependent upon these estimates and assumptions made above, as well as the investment income, the tax bracket, and other factors which your tax advisor and/or legal counsel should evaluate. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME, AND ALL OTHER INFORMATION HEREIN.

205 Montague Street • Third Floor • Brooklyn, NY 11201 • 718.238-8999 • Fax 718.238.6091
www.masseyknakal.com
THE BRONX BROOKLYN MANHATTAN NASSAU NEW JERSEY QUEENS STATEN ISLAND WESTCHESTER
198 Varet Street 60 Broadway
Williamsburg Charter High School Building – For Sale
10 Year Discounted Cash Flow Analysis
Assumptions: Purchase Price $30,000,000 Loan Assumptions: Loan to Value 50%
Closing Costs $900,000 3% of Purchase Price Loan Interest 5.50%
Gross Acquisition $30,900,000 Loan Term: 10 yrs 25 Yr Amortization Schedule
Terminal Cap Rate: 6.00% 2020 Payments per year 12
Rent Escalations: 3% per year Equity $ 15,000,000
Maintenance & Repairs: 2% per year Loan $ 15,000,000
Brokerage Fee: 2.50% on disposition Annual & Monthly Loan Payment $ 1,105,357 $92,113.12
Mortgage Balance in year 10 $ 11,273,405
Income/Expense: Year Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20
Gross Rental Income $ 2,300,000 $ 2,300,000 $ 2,600,000 $ 2,600,000 $ 2,600,000 $ 2,678,000 $ 2,758,340 $ 2,841,090 $ 2,926,323 $ 3,014,113 $ 3,104,536
Maintenance & Repairs $ 46,000 $ 46,920 $ 47,858 $ 48,816 $ 49,792 $ 50,788 $ 51,803 $ 52,840 $ 53,896 $ 54,974 $ 56,074
NOI $ 2,254,000 $ 2,253,080 $ 2,552,142 $ 2,551,184 $ 2,550,208 $ 2,627,212 $ 2,706,537 $ 2,788,251 $ 2,872,427 $ 2,959,138 $ 3,048,462
Net Disposition $ 49,537,511.20
UNLEVERED CASH FLOW $30,900,000 $ 2,254,000 $ 2,253,080 $ 2,552,142 $ 2,551,184 $ 2,550,208 $ 2,627,212 $ 2,706,537 $ 2,788,251 $ 2,872,427 $ 2,959,138 $ 52,585,973
UNLEVERED RATE OF RETURN 7.29% 7.29% 8.26% 8.26% 8.25% 8.50% 8.76% 9.02% 9.30% 9.58% 9.87%
UNLEVERED IRR: 11.35% FIRST YEAR CAP RATE: 7.51% MEAN RATE OF RETURN: 8.58%

Loan Summary Year 0 1 2 3 4 5 6 7 8 9 10 11


Payment $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357
Mortgage Balance $15,000,000 $ 14,712,466 $ 14,408,713 $ 14,087,826 $ 13,748,838 $ 13,390,729 $ 13,012,419 $ 12,612,770 $ 12,190,578 $ 11,744,570 $ 11,273,405 $ 10,775,661
Interest $ 817,824 $ 801,604 $ 784,470 $ 766,370 $ 747,248 $ 727,048 $ 705,708 $ 683,165 $ 659,350 $ 634,192 $ 607,614
Principal $ 287,534 $ 303,753 $ 320,887 $ 338,988 $ 358,109 $ 378,309 $ 399,649 $ 422,192 $ 446,007 $ 471,166 $ 497,743
NOI $ 2,254,000 $ 2,253,080 $ 2,552,142 $ 2,551,184 $ 2,550,208 $ 2,627,212 $ 2,706,537 $ 2,788,251 $ 2,872,427 $ 2,959,138 $ 3,048,462
Debt Service $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357 $ 1,105,357
Cash Flow $ 1,148,643 $ 1,147,723 $ 1,446,784 $ 1,445,827 $ 1,444,851 $ 1,521,855 $ 1,601,179 $ 1,682,893 $ 1,767,069 $ 1,853,781 $ 1,943,105
Holding Period Return (HPR): 1 2 3 4 5 6 7 8 9 10 11
Cash Flow $15,000,000 $ 1,148,643 $ 1,147,723 $ 1,446,784 $ 1,445,827 $ 1,444,851 $ 1,521,855 $ 1,601,179 $ 1,682,893 $ 1,767,069 $ 1,853,781 $ 38,761,850
DSC Ratio 2.04 2.04 2.31 2.31 2.31 2.38 2.45 2.52 2.60 2.68 2.76
LEVERED CASH ON CASH RETURN 7.22% 7.22% 9.10% 9.09% 9.09% 9.57% 10.07% 10.58% 11.11% 11.66% 12.22%
IRR on Equity: 15.43% GOING IN CASH ON CASH RETURN: 7.22% MEAN CASH ON CASH RETURN: 9.72%
VALUE RANGE FIRST YEAR CAP RATE: 6.5% CORRESPONDING VALUE = $ 34,500,000
FIRST YEAR CAP RATE: 7.5% CORRESPONDING VALUE = $ 30,000,000
FIRST YEAR CAP RATE: 8.5% CORRESPONDING VALUE = $ 26,500,000

Asking Price : $30,000,000 ($260 psf or 7.5% CAP)


For Additional Information, Please Contact Exclusive Sales Agents:
Mark L. Lively ~ 718.307.6524 Brendan T. Maddigan ~ 718.307.6507 Douglas DiSesa ~ 718.307.6554
mlively@masseyknakal.com bmaddigan@masseyknakal.com ddisesa@masseyknakal.com
The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. All zoning, buildable footages and uses must be independently verified. Vacancy factors used herein are an arbitrary percentage used only as an example. It does not necessarily relate t
The value of this investment is dependent upon these estimates and assumptions made above, as well as the investment income, the tax bracket, and other factors which your tax advisor and/or legal counsel should evaluate. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME, AND ALL OTHER INFORMATION HEREIN.

205 Montague Street • Third Floor • Brooklyn, NY 11201 • 718.238-8999 • Fax 718.238.6091
www.masseyknakal.com
THE BRONX BROOKLYN MANHATTAN NASSAU NEW JERSEY QUEENS STATEN ISLAND WESTCHESTER
198 Varet Street 60 Broadway
Williamsburg Charter High School Building – For Sale
Lease Abstract for The Williamsburg Charter High School
Lease Commencement March 30, 2009
Lease Term 30 Years
Actual PPM $191,667
Annual Rent (Years 1-2) $2,300,000
Annual Rent (Years 3-5) $2,600,000
Escalations (Years 6-30) 3% per year
Security Deposit $1,500,000
Lease Guarantee $1,300,000
Expenses
Utilities Tenant's Expense
Water/Sewer Tenant's Expense
Interior Maintenance & Repair Tenant's Expense
R.E. Taxes Tenant's Expense
Exterior Maintenance Landlord's Expense

Notes: Landlord shall be responsible for the maintenance of the facade and roof. Tenant is to maintain
all mechanical systems and undertake all interior repairs. America's Charter School Finance Corporation
provides a guarentee on the lease up to $1,300,000 per year. More details about the lease and
guarentee are provided in the marketing book.

Asking Price : $30,000,000 ($260 psf or 7.5% CAP)


For Additional Information, Please Contact Exclusive Sales Agents:
Mark L. Lively ~ 718.307.6524 Brendan T. Maddigan ~ 718.307.6507 Douglas DiSesa ~ 718.307.6554
mlively@masseyknakal.com bmaddigan@masseyknakal.com ddisesa@masseyknakal.com
The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. All zoning, buildable footages and uses must be independently verified. Vacancy factors used herein are an arbitrary percentage used only as an example. It does not necessarily relate t
The value of this investment is dependent upon these estimates and assumptions made above, as well as the investment income, the tax bracket, and other factors which your tax advisor and/or legal counsel should evaluate. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME, AND ALL OTHER INFORMATION HEREIN.

205 Montague Street • Third Floor • Brooklyn, NY 11201 • 718.238-8999 • Fax 718.238.6091
www.masseyknakal.com
THE BRONX BROOKLYN MANHATTAN NASSAU NEW JERSEY QUEENS STATEN ISLAND WESTCHESTER
198 Varet Street 60 Broadway
Williamsburg Charter High School Building – For Sale
Confidentiality Agreement – Please sign and return for a copy of the following: Date:
Lease, lease guarantee summary, tenant hardship statement, tenant proforma, floor plans, independent audit of school’s financial condition, and other due diligence documents
Recipient Name: Address:
Title: Phone/Fax:
Company: Email:
In order to facilitate certain discussions involving a possible sale of 198 Varet Street, Brooklyn, NY 11206 (the “Property”) for the owner and/or certain of its affiliates, the above Recipient has requested
information concerning the Property from Massey Knakal Realty of Brooklyn, LLC (“Company”). As a condition to the Recipient's being furnished such information, the Recipient agrees to treat any proprietary
information (including, without limitation, any financial information, data, or other proprietary information) concerning the Property which is furnished to the Recipient (whether orally, in writing, visually,
photographically, electronically, or otherwise) together with any analyses, compilations, studies or other documents, records or data prepared which summarize or otherwise reflect or are generated from such information
(herein collectively referred to as the "Confidential Material") in accordance with the provisions of this Agreement and to take or abstain from taking certain other actions herein set forth. The term "Confidential
Material" does not include information which (i) is already in the Recipient's possession, or (ii) becomes generally available to the public or (iii) becomes available to Recipient on a non-confidential basis from a source
other than the Company, provided that, to the Recipient’s knowledge, such source is not known by the Recipient to be bound by a confidentiality agreement with or any other obligation of secrecy to the Company. The
Recipient shall be responsible for any breach of this Agreement by its Representatives and hereby assumes all liability for damages relating to or arising out of the unauthorized use or disclosure of the Confidential
Material by its Representatives.
In addition to the foregoing, neither party hereto will, without the prior written consent of the other, disclose to any person (i) the fact that discussions are taking place concerning a possible transaction
between the Company and the Recipient, or (ii) any of the terms, conditions or other facts with respect to any such possible Transaction, including the status thereof.
The Recipient understands and acknowledges that neither the Company nor any of its Representatives is making any representation or warranty, express or implied, as to the accuracy or completeness of the
Confidential Material, and neither the Company nor any of its Representatives will have any liability to Recipient or any other person resulting from the Recipient’s use of the Confidential Material. Communications
regarding the Transaction, requests for additional information and discussions or questions regarding the procedures, shall be submitted or directed only to Company.
If any term or provision of this Agreement, or the application thereof to any person or circumstances, shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application of such
terms to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term of this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
This Agreement contains the entire and only agreement between the Company and the Recipient concerning the subject matter hereof, and any oral statements or representations or prior written matter with
respect thereto not contained herein shall have no force and effect.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and this Agreement shall
become effective when there exist copies hereof which, when taken together, bear the authorized signatures of each of the parties hereto. Delivery of an executed counterpart signature page to this Agreement by fax or
email shall be as effective as delivery of a manually executed counterpart of this Agreement.
This Agreement shall be governed by and construed in accordance with the laws of New York. If you agree to the foregoing, please sign and return a copy of this letter, which will constitute our agreement
with respect to the subject matter of this letter.
Sincerely Yours,
Massey Knakal Realty of Brooklyn, LLC
Acknowledged and agreed to as of the date hereof:

By:______________________________
Please sign and return to either by fax or email: (Fax~718.238.6091)
Mark L. Lively ~ 718.307.6524 Brendan T. Maddigan ~ 718.307.6507 Douglas DiSesa ~ 718.307.6554
mlively@masseyknakal.com bmaddigan@masseyknakal.com ddisesa@masseyknakal.com
The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. All zoning, buildable footages and uses must be independently verified. Vacancy factors used herein are an arbitrary percentage used only as an example. It does not necessarily relate t
The value of this investment is dependent upon these estimates and assumptions made above, as well as the investment income, the tax bracket, and other factors which your tax advisor and/or legal counsel should evaluate. THE PROSPECTIVE BUYER SHOULD CAREFULLY VERIFY EACH ITEM OF INCOME, AND ALL OTHER INFORMATION HEREIN.

205 Montague Street • Third Floor • Brooklyn, NY 11201 • 718.238-8999


718.238.8999 • Fax 718.238.6091
www.masseyknakal.com
THE BRONX BROOKLYN MANHATTAN NASSAU NEW JERSEY QUEENS STATEN ISLAND WESTCHESTER