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Preliminary Analysis: Question: Analyze the county's ability to achieve 100% occupancy of 30,000 sf of class A office space in Courthouse Square and 25,000 sf of class B space in the Franklin Bldg. by July 1999. The Market: The greater Salem CBD has 515,000 of class C space. The vacancy rate in Jan. 1997 ~vas 1.05% and the average rent was $1.39/ month. Class B space has a vacancy of 2.54% and an average rent of $1.07/ month. The only new Class A space coming on the market in the CBD is the First Store at the comer of Commercial and Ferry. It will contain 40,000 sf with a rental rate averaeing $1.50/ month. The rent inc]udes parking in an open lot located diagonally across the street. TI improvements are offered at $20/ sf. An additiona127,000 sf is under development outside of CBD on Commercial St., a few blocks south of Mission St. The building is 50% preleased with a rental rate of $1.50/ month. Parking is included in the rent at 4/1000. Conclusions: Demand for class A is escellent. Courthouse Sq. will add 5.4% of space to the market. Class B space, like that in the Franklin Bldg., will be more difficult to lease. Waiting 28-24 months for building completion may increase risks. We can expect releasing of the Franklin to take 12-24 months. Some building upgrades and tenant Ti's may also be required. Courthouse Sq. has an excellent chance of achieving ful] occupancy, 30,000 sf., based on the following assumptions: l. On-site parking is available at a ratio of 2/1000, and off-site at 2/1000. 2. Parking is in addition to rent, some inducement may be required. 3. Asking rents are within market levels. 4. Leasing is handled by competent leasing agent. 5. Ti's are offered at $20-25 per sf. 6. Annual rent escalation is limited to 4%. 7. Response time between inquiry and consummated lease is minimal. 8. Construction quality is consistent with class A standards 9. Tenant confidentiality is not breached by public ownership 10. Economic conditions remain stable. 1 L No significant new class A space emerges in CBD. Additional Data: Robertson Bldg. on State Street, rents are cunently $1.-- with no ownership position in future.