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Carl Zeiss Building

Single-Property Fund #6

This property, located in Dublin, California, just east of San Francisco, was purchased at a total price of $37.3 million, including all closing costs and reserves. The property was occupied by Carl Zeiss, Inc. under an original 20-year lease that was guaranteed by the Carl Zeiss Stiftung of Germany. There were 17 years remaining on that lease at the time of purchase of the property. A first mortgage of $25.3 million, equal to 70% of the purchase price, was obtained from Credit Suisse First Boston on an interest-only basis for seven years. Foreign investors came into this transaction through a portfolio loan that paid 10.35%. Other investors structured their investments as equity and earned a 10.1% income return. 

In keeping with the original investment strategy for this property, the Zeiss Building was to have been sold after having been held for seven years. However, because of the depressed state of the real estate market at the time of the proposed sale, Falcon elected to continue to hold the property and subsequently sold the property after the market had improved at a price of $38.5 million. The equity investors earned an IRR of 10.1% entirely from their income return.


Single-Property Funds

Carl Zeiss Building