151 Merrimac St Om

Conf idential O ffer i n g M em o ra n d um

151 MerriMAC street
B OS TO N , MA S S AC HUS E T TS

1 5 1 M ERRI M AC STREET
BOSTON, MASSACHUSETTS

O F F E R I N G M E M O R A N D U M

Tab l e of Contents

Executive Summary 5

property details 8

market overview 11
Boston Market Overview
Competitive Property Set
Aerial View

tenant information 17
Stacking Chart
Rent Roll
Floor Plans
Tenant Profiles

financial analysis 24

Cash Flow Assumptions
Historical Operating Expenses

Exclusive ADVISORS

Karyn Mcfarland Anthony W. Biette
Senior Vice President Vice President, Capital Markets
(617) 772-7231 (617) 772-7205
karyn.mcfarland@grubb-ellis.com anthony.biette@grubb-ellis.com

Phil giunta
Executive Vice President
(617) 772-7280
phil.giunta@grubb-ellis.com

Ex ecut i v e
Su mmary
3
151 merrick street

Ex ecut i v e
S ummary

E X E C U T I V E S U M M A R Y
4

151 Merrimac street 5

Executive SUMMARY

Ex ecut i v e
Su
As exclusive agent, Grubb Ellis’ Capital Market Group is pleased to offer for sale the fee simple interest in the Lockhart Build-
ing at 151 Merrimac Street, a 43,495 square foot office building with first floor retail space located within the Bulfinch Triangle

mmary
in Boston, Massachusetts. Originally constructed in 1887, the building was renovated in 1989 and features a layout that
provides image conscious tenants a chance to obtain coveted full floor identity. This is a tremendous opportunity to purchase
quality real estate in an established district of Boston. The dismantling of the elevated MBTA and the conversion of the Central
Artery combined with the development of the Rose Kennedy Greenway has enhanced what is already a vibrant Boston location.
The area surrounding 151 Merrimac Street is amidst a transformation into a multi-use district allowing its residents and patrons
to experience 24-hour business, retail and entertainment options. Multifamily development plans for the Delaware North site
and the North Station Garage continue to move forward, which will further enhance the 24-hour character of the neighbor-
hood.

The Bulfinch Triangle District
Central to the history as well as the future of Boston, the Bulfinch Triangle neighborhood in Boston’s new downtown has expe-
rienced a rebirth following the completion of Boston’s Big Dig project. This neighborhood has emerged as a neo-industrial hot
spot in Boston. A popular entertainment destination for Boston’s hip, young cosmopolitans, the Bulfinch Triangle is home to
numerous sports bars, gourmet restaurants and swank cocktail lounges. The neighborhood is also ideally located within walk-
ing distance to some of Boston’s most popular attractions. The TD Garden, home to the Boston Celtics and Boston Bruins, as
well as host to premier concert and entertainment events, anchors the Bulfinch Triangle. Boasting new upscale condo develop-
ments and two of Boston’s newest hotels, The Bulfinch Hotel and Kimpton’s Onyx Hotel, the Bulfinch Triangle is an ideal place
to live, work and play. North Station’s role as a cultural hotspot is home to Massachusetts General Hospital, Edward S. Brooke
Courthouse and the Thomas O’Neil Federal Building.

Also within steps from the Bulfinch Triangle are North Station, the North End, Beacon Hill, the Financial District, Faneuil Hall,
and the Boston Waterfront. North Station terminal, enjoying a 2007 facelift and expansion, is one of two major transporta-
tion hubs in Boston and is the primary rail service for commuters traveling to and from areas north of Boston, including Maine
and New Hampshire. This is also the site of the newly rebuilt MBTA Superstation, a $111 million project uniting the Green and
Orange lines under Causeway Street, a vast improvement for commuter travel. The newly rebuilt Merrimac Street now allows
cars to travel both east and west and immediately connects you to Storrow Drive. Interstate 93 offers easy access from 151
Merrimac to Logan International Airport, the Mass Pike and the suburbs. Workers, visitors and residents enjoy the convenience
and accessibility of the numerous service lots and parking garages in the area.

The Bulfinch Triangle District is the site of some of Boston’s most significant new development initiatives and is one of Boston’s
most vibrant historic neighborhoods. The historic district extends from Merrimac Street down Causeway Street to North Wash-
ington Street and is nestled between the prestigious Beacon Hill and famous North End. No other neighborhood in Boston can
boast of its unparalleled community diversity.

The Bulfinch Triangle by day is a thriving community for the business, medical and legal professionals as well as a government
employee base. Mayor Thomas Menino and the City of Boston have launched a comprehensive planning program defining the
“new” downtown Boston through what is referred to as the “Crossroads Initiative.” This project includes six miles of key urban
streets – twelve in all – to act as “connectors” to its surrounding ethnic neighborhoods and important destinations along the
Greenway.

6

Live, Work, Play
Ex ecut i v e

The TD Bank Garden anchors the Bulfinch Triangle and draws crowds to the neighborhoods numerous sports bars and restaurants
S ummary

on game nights and for concerts and other special events. The Bulfinch Triangle draws young professionals, Boston residents and
tourists alike. Boasting new developments with pan-
oramic views of the Boston Waterfront and the new
Leonard P. Zakim Bridge, Boston’s Bulfinch Triangle of-
fers upscale condo and apartment-style living options
for people who wish to live in the heart of Boston’s
new downtown.

New/Planned Developments
Suffolk University - 20 Somerset Street
Project Address 20 Somerset Street
Neighborhood Beacon Hill/West End
Uses Institutional, Education, Cultural
Building Size 156,000 SF
Applicant Suffolk University
Project Description Suffolk proposes the removal of the existing building at the 20 Somerset Street site
and the construction of a new academic building not to exceed 156,000 SF. This
project is undergoing Large Project Review and was listed in the approved Institutional
Master Plan. Suffolk University will move ahead with a new $68 million academic
building at the former MDC headquarters at 20 Somerset Street. The building is expected
to open January 2013. In addition, Suffolk will renovate nearby Romer Plaza, creating
an upgraded public space, at a cost of $2.5 million.

MGH Museum and History Center
Project Address 37 N Grove Street
Uses Institutional, Education, Cultural
Applicant Massachusetts General Hospital
Project Description A new two-story museum and history center with a rooftop garden, totaling 8,000 SF on
the MGH campus.

151 merriMAC street 7

Building for the Third Century - MGH IMP 2006

Ex ecut i v e
Su
Project Address 255 Charles Street

mmary
Uses Institutional, Medical Clinical
Applicant Massachusetts General Hospital
Project Description 150 new acute and critical care beds, an expansion of the Emergency Department and
Radiation Oncology, relocation and expansion of the sterile processing department, and
a platform for procedural services and a new dock/receiving area.

Simpson Parcel 1
Project Address Causeway/Beverly/Haverhill/Valenti Way
Neighborhood Bulfinch Triangle District
Uses Retail, Residential
Project Description 286 apartments; 142 parking spaces; 17,000 SF of retail
Status Under construction with a mid-2013 expected delivery.

Parcel 1B
Project Address Causeway/Beverly/Haverhill/Valenti Way
Uses Hotel, Residential, Retail
Project Description Marriott Courtyard Hotel, 220 rooms; 240 apartments; 25,000 SF of retail

Parcel 2A
Project Address One Canal
Uses Residential, Grocery, Retail
Project Description 320 luxury apartments; 22,000 SF grocery store; 159 parking spaces

8

151 MERRIMAC street / Boston, ma

PROPERTY OVERVIEW

Address 151 Merrimac Street - Lockhart Building, Boston, MA 02114

Property Type Class A Office

Lot Size 6,853 sq. ft.
prop ert y
d etai l s

Building Size 45,000 sq. ft.

Rentable Area 43,495 sq. ft.

Total Occupied 33,850 sq. ft.

Total Vacant 9,645 sq. ft.

Stories 6

Year Built 1887 - Renovated 1989

Current Tenants Rankin Sultan, General Hospital Corporation, Dr. John Niles, Tufts University, Dr. Leslie S.T. Fang M.D. P.H.D.

SITE SPECIFICATIONS

Zoning Bulfinch Triangle District
Dimension Regulations
▪ Maximum Height: 80’
▪ Maximum Floor Area Ratio: 6.0
Dimension Regulations Via Special Permit/Appeal
▪ Maximum Height: 100’
▪ Maximum Floor Area Ratio: 7.0 / 8.0

Utilities Electric: NStar
Water Sewer: Boston Water Sewer
Gas: National Grid


PROPERTY SPECIFICATIONS

Structure Steel Frame Concrete

Foundation Granite Concrete

Roof Rubber roof with stone ballast

Exterior Façade Brick

p rop ert y
d etai l s
Windows 1988; Dual Pane

Elevators Two; Otis Elevator

Tenant Finishes Typical First Class Office Finish

Ceilings Acoustical Tile

Floors Tile Carpet

Lobby Granite Floor / Marble Cherry Walls

Lighting Energy efficient lighting installed in 2011 in all common areas plus many tenant areas. Decorative exterior
lighting to highlight architectural details.

BUILDING SYSTEMS

Electrical Sytems 2 x 1600 amp redundant service. One is servicing Causeway Street; the second is servicing Merrimac Street
▪ One service provides power to the common area and roof top HVAC units; the second provides
power to the tenanted areas.

HVAC System HVAC system located on roof; gas fuel
HVAC distribution system deploys
▪ VAV Boxes
▪ FPB with reheat on perimeter

Plumbing System Two restrooms on each floor; Two ejection pumps in basement

Fire/Life Safety Fully Sprinklered

Energy Management 2010 - Energy management system - Johnson Controls

Security System Timed Building Entry

ma r ket
overvi ew

M A R K E T O V E R V I E W
10


Market Snapshot – Third Quarter 2011
OFFICE MARKET Downtown Boston
OVERVIEW

MARKET SIZE (numbers in thousands, except dollar amounts)
MARKET SIZE (numbers in thousands, except dollar amounts)
thousands Absorption Asking rent
Submarket Total SF Vacancy % Absorption YTD
Q3 Class a Asking Rent
class b

Submarket District (Tower)
Financial Tot SF 22,778 Vacancy 15.8%
% Q3 45 107
YTD $48.09 A
Class $33.00
Class B
Financial District (Low Rise) 9,409 12.1% 23 206 $49.26 $31.46
Financial District (Tower) 22,778 15.8% 45 107 $48.09 $33.00
Government Center 1,796 13.8% 0 24 $40.00 $29.37
Financial District (Low Rise)
Midtown 9,409 3,027 12.1% 9.1% 23 12 206
(44) $49.26
$35.00 $26.81$31.46
North Station
Government Center 1,796 3,053 13.8% 8.1% 0 16 (50)
24 $35.51
$40.00 $26.83$29.37
Seaport District 7,791 12.8% 110 32 $56.44 $26.83
Midtown 3,027 9.1% 12 (44) $35.00 $26.81
South Station 3,163 10.9% 16 30 NA $31.00
North Station 3,053 8.1% 16 (50) $35.51 $26.83
Total 51,017 13.4% 221 305 $48.01 $29.56
Seaport District 7,791 12.8% 110 32 $56.44 $26.83
South Station 3,163 10.9% 16 30 NA $31.00
MARKET HIGHLIGHTS MARKET forecast

overvi ew
Total 51,017 13.4% 221 305 $48.01 $29.56
• Notable third quarter transactions include the 60,000 square- • Looking to 2012, while Boston weathered the storm better

ma r ket
foot renewal and expansion by Acadian Asset Management than most markets during the 2007 to 2009 and beyond down-
MARKET HIGHLIGHTS Lois Paul Partners relocating from MARKET FORECAST transcend into a less vigorous recovery.
at 260 Franklin Street and turn, a softer dip may
Woburn third 17,751 square feet at One Beacon Street.
Notable into quarter transactions include the 60,000-square- Looking to 2012, while Boston weathered the the intrinsic driver for office
Economists predict employment - storm better than
foot renewal and expansion by Acadian Asset Management most markets during the 2007 to 2009 and beyond downturn, a
• There are currently 436 tenants with active requirements in the softer dip may transcend-into a less vigorous recovery. Economists year
at 260 Franklin Street and Lois Paul Partners relocating space demand will grow an average of one percent per
CBD totaling 5.9 million square feet at One Beacon Street.
from Woburn into 17,751 square feet of demand. The median predict employment – the intrinsic driverrestoffice space demand – 2017.
in Massachusetts, lagging the for of the nation through
will grow an average of one percent a year in Massachusetts;
tenant requirement is 5,000 squareactivewhile the average ten- lagging the employment modestly improves and demand for office
There are currently 436 tenants with feet requirements in • As rest of the nation through 2017.
the requirement5is 13,253 square feet of demand The
ant CBD totaling 5.9 million square feet. demand.
9 space rises, expect asking rental rates and vacancy to continue
median tenant requirement is 5,000 square feet while the As employment modestly improves and demand for office space
• With 10-year treasury yields at historical lows, expect the Class rises, expect asking rental rates Withvacancy to continue improvingin the
average tenant requirement is 13,253 square feet. improving into 2012. and limited large block options
B and Class C investment sales market to heat up as investors into 2012. With limited firms block options in theseeking to attract a tal-
Back Bay, and large from the suburbs Back Bay, and
With 10-year treasury yields at historical lows, expect the firms from the suburbs seeking to attract a talented labor pool in
grow B and Class C investment sales market to heat up as
Class a bigger appetite for risk. the city, ented laborlook to the Financial District and other CBD Financial
tenants will pool in the city, tenants will look to the
• investorsthe October unemployment rate in Greater Boston
At 6.0%, grow a bigger appetite for risk. submarkets for their space needs. Moreover, with their space needs. More-
District and other CBD submarkets for vacancy at 13.8
respectively, marked improvements may take a substantial amount
stands 300 basis points lower thanrate in Greaterunemploy-
At 6.0%, the October unemployment the national Boston of time. over, with vacancy at 13.8% respectively, marked improve-
stands 300of 9.0%.
ment rate basis points lower than the national ments may take a substantial amount of time.
unemployment rate of 9.0%.

THE STATE OF THE DOWNTOWN MARKET
THE STATE OF THE DOWNTOWN MARKET

Vacancy Absorption (in thousands) Asking Rents
Class A Class B
16% 750 $70
500 $60
14%
250
$50
12% 0
$40
-250
10% $30
-500
$20
©2011 Grubb Ellis Company

8% -750
C

During the third quarter, vacancy …while absorption was positive …and Class A average asking
decreased to 13.5%... 111,393 SF… rates decreased to $47.75/SF.

Grubb Ellis / 470 Atlantic Avenue, 11th Floor / Boston, MA 02210 / www.grubb-ellis.com

Market Snapshot Third Quarter 2011
Market Snapshot – – Third Quarter 2011
12

Downtown Boston
Downtown Boston

MARKET Activity opportunities
MARKET ACTIVITY OPPORTUNITIES
MARKET ACTIVITY OPPORTUNITIES
Recent Lease Transactions
Tenant SF Building Business
Business Sign Date Term Effective Rental Rate Rate
Effective Rental
Tenant SF Building Business
Service Sign Date Term ($/SF/Yr.) Rental Rate
Effective
Tenant SF Building Service
Service Sign Date ($/SF/Yr.) gross gross
Term ($/SF/Yr.) gross
Success Factors 13,077 77 North Washington Street Software Sep 2011 3 years $26.39
Success Factors 13,077 77 North Washington Street Software September 2011
(renewal)
3 Years $26.39
Success Factors 13,077 77 North Washington Street Software September 2011 3 Years $26.39
Bryant Associates 6,870 90 Canal Street Engineering Mar 2011 6 years $24.08
Bryant Associates 6,870 90 Canal Street Engineering March 2011 6 Years $24.08
Bryant Associates 6,870 90 Canal Street Engineering March 2011 6 Years $24.08
Where, Inc. 6,330 77 North Washington Street Mobile Mar 2011 2 years
Mobile (sublease) 2011
March 2 Years $24.28 $24.28
Where, Inc. 6,330 77 North Washington Street Mobile
Techonolgy 2 Years
1 month1 Month
Where, Inc. 6,330 77 North Washington Street Technology March 2011 1 Month $24.28
Technology
Klein Kavanagh
Klein Kavanagh 2,302 85 Merrimac Street Law Oct 2011 3 years $23.67
Costello Kavanagh
Klein 2,302 85 Merrimac Street Law October 2011 3 Years $23.67
Costello 2,302 85 Merrimac Street Law October 2011 3 Years $23.67
Costello
General Hospital Corp. 2,900 151 Merrimac Street Medical LOI 6 years $34.50

Properties with Contiguous Availabilities – ByBy Size
Properties with Contiguous Availabilities - Size
Properties with Contiguous Availabilities – By Size Number of ofTenants in theMarket byby SF Required
Number of Tenants In the Market SF Required
Number Tenants In the Market by SF Required
250 Size in thousands of square feet
Size in thousands of square feet
overvi ew

250 219
219
ma r ket

50-100 100+
Number of Properties

200 50-100 100+
20 9
Number of Properties

200 25-50 20 9
25-50
24
150 124 24
150 124
5
100 81 5
81 201
100 201
39 10-25
50 39 10-25
50 21 79
21 9 79
9
0
0
5 5-10 10-25 25-50 50-100 100+
5 5-10 10-25 25-50 50-100 100+
Size in thousands of square feet
Size in thousands of square feet 5-10
5-10
103
103

CENTRAL BUSINESS DISTRICT (cbd) territories map
central business district (CBD) TERRITORIES MAP
CENTRAL BUSINESS DISTRICT (CBD) TERRITORIES MAP
LEGEND
LEGEND
LEGEND
Tan
Tan
North Station
Tan
North Station
North Station
Purple
Purple
Purple
Government Center
Government Center
Government Center
Red
Red
Red
Financial District
Financial District
Financial District
Green
Green
Green
Midtown
Midtown
Midtown
Yellow
Yellow
Yellow
©2011 Grubb Ellis Company

South Station
South Station
South Station
Orange
Orange
OrangeBay
C

Back B
B k Bay
Back
B kB
Back Bay
Blue
Blue
Seaport District
Blue
Seaport District
Seaport District


Competitive Property Set

Building Size Available SF Asking starting
Rent PSF*

225 FRIEND STREET 59,763 SF 14,927 SF $26

226 CAUSEWAY STREET 193,000 SF 80,008 SF $35

overvi ew
ma r ket
100-124 N WASHINGTON ST. 52,945 SF 18,238 SF $28

90 Canal street 78,462 sf 3,280 sf $28

200 portland street 100,868 sf 7,370 sf $28

25 new chardon 112,854 sf 14,889 sf $32

14

93 T
overvi ew

TD Garden North Station MBTA Stop
ma r ket

Haymarket MBTA Stop T
et e
Str
ay
sew
u

Thomas P. O’Neill
Ca

Federal Courthouse
151 Merrimac Street

Bowdoin Square MBTA Stop T
Sta
nifo
rd
Str
e et

et
tre
g eS
id
br
m
Ca


Rose Kennedy
Greenway

overvi ew
ma r ket
Boston
City Hall

Massachusetts
State House

Tena nt
i nfo rmati o n

T E N A N T P R O F I L E S
16


Stacking Chart

Current rentable space - 43,495 Square Feet
Vacant space - 9,645 Square Feet ( 22% )

Tufts University MGH
6 Sept. 2017 May 2018

MGH
5 May 2018

MGH
4 May 2018

Leslie Fang Dr. John Niles MGH
3 Mar. 2014 Feb. 2014 May 2018

MGH Rankin Sultan
2 May 2018 Oct. 2015

i nfo r mati o n
Tena nt
1 Vacant Vacant

Basement
Vacant Vacant

Lease Expiration Legend

Vacant 2014 2015 2016 2017 2018 2019 +

18

Rent Roll

Suite tenant name size ( SF ) pro rata share 1 start date expiration date Annual Rent $psf /Total

100 Vacant 1 - (Merrimac R + B) 5,310 12.21% Sept 2012 - -

101 Vacant 2 - (Causeway R + B) 4,335 9.97% Sept 2012 - -

200 Rankin Sultan 4,886 11.23% Dec 2008 Oct 2015 $26.35 / $128,746

General Hospital (2nd Floor)
201 2,045 4.70% Sept 2008 May 2018 $28.50 / $58,283
MGH

300 Dr. John Niles 925 2.13% Feb 2008 Feb 2014 $36.05 / $33,346

301 Dr. Leslie S.T. Fang M.D. P.H.D. 3,629 8.34% Apr 2004 Mar 2014 $27.50 / $99,798
i nfo rmati o n
Tena nt

General Hospital Corporation
400 12,852 29.55% Jun 2008 May 2018 $32.00 / $411,264
(3rd, 4th, 5th Floor)

500 General Hospital Corporation 2,900 6.67% Nov 2009 May 2018 $32.00 / $92,800

600 Tufts University 5,181 11.91% Oct 2008 Sept 2017 $29.25 / $151,544

601 General Hospital Corporation 1,432 3.29% Nov 2009 May 2018 $29.50 / $42,244

$30,992.88
Roof(Signage) Omni Point Holdings, Inc. 0 0.00% Dec 2008 Jul 2015

Total Occupied 33,850 SF 77.83% MGH Occupied (SF) 19,229
Total Vacant 9,645 SF 22.17% MGH Occupied (%) 53.13%
Total Current RSF 43,495 RSF 100.00%


Rent change date annual rent $psf operating expenses real estate taxes Base Year

- - - - -

- - - - -
Dec 2008 $24.35
Nov 2009 $25.35
Nov 2011 $26.35
12.40% 12.40% 2005 / 2006
Nov 2012 $27.35
Nov 2013 $28.35
Nov 2014 $29.35
Dec 2010 $28.50
June 2012 $29.50
5.65% 5.65% 2010 / 2011
June 2014 $30.50
June 2016 $31.50
Feb 2008 $32.99
Mar 2009 $33.98
Mar 2010 $35.00
2.53% 2.53% 2007 / 2008
Mar 2011 $36.05
Mar 2012 $37.13
Mar 2013 $38.24

Jan 2009 $26.00
10.02% 10.02% 2006
Mar 2009 $27.50

Dec 2008 $30.00
Feb 2009 $30.00

i nfo r mati o n
Feb 2010 $31.00
Feb 2011 $32.00

Tena nt
Apr 2011 $31.00
35.51% 35.51% 2008
May 2011 $32.00
Jun 2011 $32.00
Jun 2013 $34.00
Jun 2015 $35.00
Jun 2016 $36.00
Mar 2012 $32.00
Feb 2014 $34.00
8.01% 8.01% 2012
Feb 2016 $35.00
Feb 2017 $36.00
Oct 2008 $26.50
Oct 2009 $28.00
Oct 2010 $28.25
Oct 2011 $29.25
Oct 2012 $30.25 14.61% 14.61% 2007 / 2008
Oct 2013 $31.25
Oct 2014 $32.25
Oct 2015 $33.25
Oct 2016 $34.25
Nov 2009 $28.50
Nov 2011 $29.50
Nov 2013 $30.50 3.96% 3.96% 2009
Nov 2016 $31.50
Nov 2018 $32.50

$28,362.84 Dec 2008 3% Inc Yearly
$29,213.76 Jan 2009 3% Inc Yearly
$30,090.12 Jan 2010 3% Inc Yearly
0.00% 0.00% -
$30,992.88 Jan 2011 3% Inc Yearly
$31,992.64 Jan 2012 3% Inc Yearly
$32,880.36 Jan 2013 3% Inc Yearly

20

Floor Plans

Level 1
i nfo rmati o n
Tena nt

Upper Floors (Approximate)


Tenant Profiles

Rankin Sultan
Charlie Rankin and Jamie Sultan founded the firm on June 1, 1986. They had graduated from Harvard Law School in the same class (1980)
and worked together as associates at the small criminal and constitutional litigation firm of Silverglate Gertner (now Silverglate Good).
After each subsequently enjoyed a successful tour in private solo practice, the two reunited to join forces as Rankin Sultan.
Rankin Sultan quickly developed a reputation for providing painstakingly diligent, thoroughly sophisticated, and extremely effective legal
counsel. Both Charlie and Jamie have been listed in The Best Lawyers in America since 1991, and the firm is one of very few Boston criminal
firms listed in the Martindale-Hubbell Bar Register of Pre-eminent Lawyers which “lists only the most distinguished law practices—those
that have achieved the…highest levels of legal ability…[and] adherence to professional standards of conduct, ethics, reliability, and dili-
gence. ” Today, Rankin Sultan is at the forefront of the legal field, having forged some of the most significant advances in criminal justice
in Massachusetts over the past two decades. Charlie and Jamie are routinely called upon to speak, teach, and counsel others, from law
students to accomplished practitioners.

Company Description: Criminal defense firm representing individuals and companies in investigations, prosecutions, and appeals in
state and federal courts

Dr. John Niles
John L Niles, MD is a Nephrologist in Boston, MA. A Nephrologist is a physician who provides kidney transplants, dialysis therapy and treat-
ment for kidney disease.

i nfo r mati o n
Tena nt
Tufts University
2011 FINANCIAL REPORT
Fiscal year 2011 produced solid financial results with an increase in net assets of $262 million. Operating performance produced an increase
in net assets of $29 million, resulting from a 4% increase in revenues combined with a 2% increase in expenses. Investment returns ac-
counted for the largest portion of the increase in net assets. The total return pool, which comprises the majority of the University’s invest-
ments, returned 18.3% for the year. The University remained focused on meeting the financial aid need of their students and enhancing the
academic program, while also avoiding reductions in staffing.

NET ASSETS
Tufts’ net assets grew 14.6% to $2 billion in fiscal year 2011. A strong donor base delivered $51 million in capital contributions, and unre-
stricted operating activities added $29 million. As stated above, investment returns and other net asset changes, resulted in a $262 million
increase. Over the last five years, net asset values rose by nearly $409 million and posted a compound annual growth of 4.5%.

Massachusetts General Hospital
Massachusetts General Hospital (Mass General) is hardly general. The 200-year-old acute care hospital is Harvard Medical School’s original
and largest teaching hospital. With some 900 beds, Mass General has its main campus in Boston and operates several health centers in sur-
rounding communities. Its specialized medical departments include cancer, cardiology and heart surgery, neurology and neurosurgery, and
diabetes and endocrinology. As a leading research facility, Mass General hosts a gaggle of clinical trials and has an annual research budget
approaching $700 million. The hospital is a founding member of the Partners HealthCare System (along with Brigham and Women’s).

22

Cash Flow Assumptions

Current Rentable Area (SF) 43,495
Vacant Space (as of 12/2011) 9,645 SF (22.17%)
General Inflation 2.5%
Growth Rate - Market Rent 2.5%

General Vacancy Rate 2% of all Gross Potential Revenue
Credit/Collection Loss 3% of Gross Potential Revenue
Credit/Collection Loss - (Mass General) 0%
Capital Reserve $0.05 PSF

Market Leasing Assumptions

MERRIMAC MERRIMAC CAUSEWAY CAUSEWAY
Office
Retail BASEMENT Retail BASEMENT

Downtime Between Leases 6 Months

Market Rent $PSF/Yr $31.00 $35.00 $20.00 $50.00 $10.00

Annual Increases $1.00 PSF $1.00 PSF $1.00 PSF $1.00 PSF $0.50 PSF

Renewal Probability (Months) 75% 75% 75% 75% 75%

Months Vacant 6 6 6 6 6

Term Lengths ( Years ) 5 10 10 10 10
fin anc i a l
a nalysi s

Reimbursements Base Stop Base Stop Base Stop NNN NNN

Leasing Commissions $PSF/YR $PSF/YR $PSF/YR %/YR %/YR
New $2.25 $2.25 $2.25 9.0% 9.0%
Renewal $1.00 $1.00 $1.00 4.5% 4.5%

TENANT improvements $PSF/YR $PSF/YR $PSF/YR $PSF/YR $PSF/YR

New $25.00 $20.00 $20.00 $20.00 As-Is
Renewal $10.00 $10.00 $10.00 $10.00 As-Is

Absorption

Merrimac Retail / Basement Causeway Retail / Basement
Vacant Space 5,310 4,335
Date Sep 2012 Sept 2012


Historical Operating Expenses

2009 2010 2011 2012
Operating Expenses
Actual Actual Actual1 Budget

Real Estate Taxes $162,179 $152,409 $148,280 $152,409
Utility Expenses 74,568 68,756 72,770 54,400
Contract Services 93,165 108,304 114,035 116,624
Repairs, Maintenance Supplies 129,713 84,724 55,248 48,680
Total Administrative 59,431 66,012 62,901 66,444

Total Operating Expenses $519,056 $480,205 $453,234 $438,557

1. Actual Numbers through November 30, 2011

fi na ncia l
a na lysis

24

Cash Flow Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

For the Years Ending $ PSF Dec-2012 Dec-2013 Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Dec-2019

Potential Gross Revenue
Base Rental Revenue $29.87 $1,299,242 $1,345,099 $1,392,821 $1,427,560 $1,479,830 $1,504,728 $1,526,386 $1,553,855
Absorption Turnover Vacancy ($4.48) ($195,034) - ($24,720) ($27,185) - ($30,286) ($115,215) ($27,969)
Scheduled Base Rental Revenue $25.39 $1,104,208 $1,345,099 $1,368,101 $1,400,375 $1,479,830 $1,474,442 $1,411,171 $1,525,886
Base Rental Step Revenue $0.00 - - $2,734 $7,288 $16,728 $26,600 $49,233 $68,655

Expense Reimbursement Revenue
Utility Expense $0.06 $2,.411 $6,557 $6,489 $7,047 $7,705 $8,925 $9,284 $9,598
Contract Services $0.12 $5,168 $14,056 $13,907 $15,107 $16,517 $19,132 $19,904 $20,579
Repairs Maintenance Supplies $0.05 $2,157 $5,866 $5,805 $6,305 $6,894 $7,987 $8,309 $8,591
Administrative $0.07 $2,944 $8,007 $7,922 $8,607 $9,410 $10,901 $11,340 $11,723
Real Estate Taxes $0.43 $18,596 $32,848 $34,318 $37,025 $37,403 $41,419 $32,597 $26,895
Total Reimbursement Revenue $0.72 $31,276 $67,334 $68,441 $74,091 $77,929 $88,364 $81,434 $77,386

Omni Point Holdings, Inc. $0.72 $31,523 $32,468 $33,442 $34,447 $35,481 $36,546 $37,640 $38,765

Total potential gross Revenue $26.83 $1,167,007 $1,444,901 $1,472,718 $1,516,201 $1,609,968 $1,625,952 $1,579,478 $1,710,692

General Vacancy $0.00 - ($16,256) - - ($18,470) - ($19,771) -
Collection Loss ($0.39) ($17,055) ($24,385) ($24,605) ($25,548) ($27,705) ($27,720) ($29,657) ($29,596)

effective gross Revenue $26.44 $1,149,952 $1,404,260 $1,448,113 $1,490,653 $1,563,793 $1,598,232 $1,530,050 $1,681,096

Operating Expenses
Utility Expense $1.25 $54,400 $55,760 $57,154 $58,583 $60,047 $61,549 $63,087 $64,665
fin anc i a l
a nalysi s

Contract Services $2.68 $116,624 $119,540 $122,528 $125,591 $128,731 $131,949 $135,248 $138,629
Repairs Maintenance Supplies $1.12 $48,680 $49,897 $51,144 $52,423 $53,734 $55,077 $56,454 $57,865
Administrative $1.53 $66,444 $68,105 $69,808 $71,553 $73,342 $75,175 $77,055 $78,981
Real Estate Taxes $3.50 $152,409 $156,219 $160,125 $164,128 $168,231 $172,437 $176,748 $181,166

Total Operating Expenses $10.08 $438,557 $449,521 $460,759 $472,278 $484,085 $496,187 $508,592 $521,306
Per Square Foot $10.08 $10.34 $10.59 $10.86 $11.13 $11.41 $11.69 $11.99

NET OPERATING INCOME $16.36 $711,395 $954,739 $987,354 $1,018,375 $1,079,708 $1,102,045 $1,021,458 $1,159,790
Per Square Foot $16.36 $21.95 $22.70 $23.41 $24.82 $25.34 $23.48 $26.66

Tenant Improvements
Tenant Improvements $192,900 - $65,788 - $74,157 $80,600 $306,621
Leasing Commissions $136,244 - $6,280 - $7,097 $7,694 $29,269
Capital Reserves $2,175 $2,229 $2,285 $2,342 $2,401 $2,461 $2,522

Total Leasing Capital Costs $331,319 $2,229 $74,353 $2,342 $83,637 $90,755 $338,412
OPERATING CASH FLOW $380,076 $952,510 $913,001 $1,016,033 $996,071 $1,011,290 $683,046

fi na ncia l
a na lysis
25
151 merriMAC street

Cambridge

Exclusive ADVISORS

Karyn McFarland Anthony W. Biette Phil giunta
Senior Vice President Vice President, Capital Markets Executive Vice President
(617) 772-7231 (617) 772-7205 (617) 772-7280
karyn.mcfarland@grubb-ellis.com anthony.biette@grubb-ellis.com phil.giunta@grubb-ellis.com

The information contained herein was obtained from sources believed reliable; however, Grubb Ellis Company makes no guarantees, warranties or representations as to the
completeness or accuracy thereof. The presentation of these properties is subject to errors, omissions, change of price and or conditions prior to sale or withdrawal without notice.

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151 Merrimac St Om

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