| 08/11/09: Q1 2009 financial reporting reveals nvery minor change in operating results or occupancy to the down side with a 1% decline in occupancy.06/04/09: The Versar Center consists of 2 four-story, Class B office buildings totaling 217,396 sf located in Springfield, VA, about 12 miles SW of downtown Washington, DC, and also includes a 4-level freestanding parking garage. The property was built in 1982/1987 and renovated in 2002.FYE 2008 NCF DSCR is 0.98x vs 1.20x at UW. It should be noted that UW DSCR of 1.20x is the level at which the sponsor guaranty by Bresler & Reiner, Inc. of $4,050,000 may be released, and not the actual DSCR for the Property. DSCR based on the full $28,000,000 loan amount and including amortization would have been 1.05x. Additionally, the borrower executed a Master Lease for $19/sf for any vacant space at necessary to result in an economic occupancy of 91%. Actual occupancy was 87.1% at FYE 2007 and 81.4% as of FYE 2008, with the decrease largely due to National Capital PPO (19,925 sf, 9.2% of GLA) vacating at the end of their lease term at the end of July 2008. Per discussion with the borrower, there has not been a lot of leasing activity lately, but there is potential for some government leases in 2009. The borrower stated that the property was well located and that they have tried to target larger tenants vs filling space with many smaller tenants, which can result in more volatility in occupancy. Expenses were also up somewhat from underwriting, though a direct comparison of the key drivers was not readily possible given UW did not separately break out items such as Janitorial and Payroll which comprise over $400,000 of actual expenses in 2008.
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