FEDEX GROUND DISTRIBUTION FACILITY

Transcription

1 OFFERING MEMORANDUM FEDEX GROUND DISTRIBUTION FACILITY EVANSVILLE, INDIANA Low price and rent per square foot for a FedEx Ground distribution building 7.0% to 8.5% cash on cash available, depending upon financing Cushman & Wakefield / FedEx Ground Evansville / A NET LEASE GROUP CAPITAL MARKETS GROUP

2 OFFERING MEMORANDUM FEDEX GROUND DISTRIBUTION FACILITY EVANSVILLE, INDIANA 1 Investment Offering & Highlights 2 Property Description, Lease Summary & Returns 3 Cash Flow Analysis 5 Site Plan / Floor Plan 8 FedEx Ground Package System, Inc. 12 Evansville, Indiana Diversified Economy Higher Education Transportation & Demographics 16 Confidentiality & Disclaimer 9 Location / Aerial / Area Maps DOUGLAS LONGYEAR doug.longyear@cushwake.com CA Lic # JEFF CASTELL, SIOR, CCIM jeff.castell@cushwake.com IN Lic #RB CHRISTINA CAMPANELLA christina.campanella@cushwake.com NY Lic # CHRISTOPHER SHELDON chris.sheldon@cushwake.com CA Lic # Cushman & Wakefield / FedEx Ground Evansville / B

3 Investment Offering & Highlights The Offering A new 253,956 ± sq. ft. FEDEX GROUND distribution building situated on 36.15± acres located in Evansville, Indiana to be completed for rent commencement October 1, Price: $22,653, % Return Cash on cash return available between 7.0% and 8.5%, depending upon financing. Low price and rent per square foot for a FedEx Ground building - $89 and $5.58, respectively. Tenant / Lease E-Commerce: FedEx Ground is a leading ground shipper of small packages. Credit: FedEx Ground s parent, FedEx Corporation has an S&P BBB bond rating. Commitment: New 10 year net lease. Real Estate New construction designed to accommodate future growth. FedEx will initially utilize 62% of the building s interior operating capacity. FedEx will be able to grow its operations significantly. High parking capacity for cars, trucks and trailers. High ratio of dock high truck doors to the building square footage, 24 (eave) -28 (peak) clear height and ESFR fire protection. Convenient access to I-64 and new I-69 extension, designed to ultimately connect from Canada through the U.S. to the Mexican border. Evansville Economy Diversified economy with different manufacturers including Toyota and SABIC. Multiple highways, railroads and ports indicate Evansville is a strategic logistics location. The University of Southern Indiana (10,800 students) is the fastest growing public university in Indiana. Central location (30 miles south of the median center of U.S. population) serving three state (IN, KY, IL) trade area. Representative Photograph Cushman & Wakefield / FedEx Ground Evansville / 1

4 Property Description, Lease Summary & Returns PROPERTY DESCRIPTION Address Lot Size Building Completion Size Norm Wagner Drive Evansville, Indiana 36.15± acres Building Site Coverage 16.13% Scheduled to be completed for rent commencement on October 1, ,956± square feet LEASE SUMMARY Premises Site & Building Tenant FedEx Ground Package System, Inc. Term 10 Years Commencement Completion (Scheduled to be October 1, 2016) Expiration September 30, 2026 Rent Commencement Completion (Scheduled to be October 1, 2016) Annual Rent $1,5,833 Construction Metal Expenses NN* Office Area Clear Height Dock High Doors 64 Drive-In Doors 7 Parking Stalls Long Trailers Trailers 149 Tractors 20 Dollies 21 Vans 34 Cars 7,644± square feet 24 (eave) - 28 (peak) 513 (2.02 car stalls / 1,000 sq. ft. of bldg. area) Other Features Secured Fence Tenant s package handling system (±$10 Million investment by tenant) Renewal Options Two Five-Year Terms with the following rents: 1st Renewal - $1,557,6 2nd Renewal - $1,635,287 * The tenant is responsible for all property real estate taxes, property insurance, tenant s liability insurance, and maintenance of the yard, parking, drive and hard surfaced areas. The landlord is responsible for maintenance of the structural portions of the building including the foundation, roof, exterior walls and floor slabs. Price: $22,653, % Return ANNUAL RENT Investment Years Annual Rent Return 1-10 $1,5, % (Option 1) $1,557,6 6.88% (Option 2) $1,635, % Cushman & Wakefield / FedEx Ground Evansville / 2

5 Cash Flow Analysis 10 Year Loan Term; 50% LTV Loan; 3.60% Interest Rate; 30 Year Amortization; Bank or Life Company Interest 3.60% Price 22,653,300 Rent 1,5,833 Amortization (Yrs) 30 Loan 50% (11,326,650) Debt Service (617,953) Loan Constant 5.46% Equity 11,326,650 Cash Flow 797,880 Cash on Cash Return 7.04% 10 Year Loan Term; 50% LTV Loan; 4.00% Interest Rate; Interest Only Payments; Conduit Interest 4.00% Price 22,653,300 Rent 1,5,833 Amortization (Yrs) I/O Loan 50% (11,326,650) Debt Service (453,066) Loan Constant 4.00% Equity 11,326,650 Cash Flow 962,767 Cash on Cash Return 8.50% 10 Year Loan Term; 65% LTV Loan; 3.75% Interest Rate; 25 Year Amortization; Life Company Interest 3.75% Price 22,653,300 Rent 1,5,833 Amortization (Yrs) 25 Loan 65% (14,724,645) Debt Service (908,448) Loan Constant 6.17% Equity 7,928,655 Cash Flow 507,385 Cash on Cash Return 6.40% Cushman & Wakefield / FedEx Ground Evansville / 3

6 Cash Flow Analysis (cont) 10 Year Loan Term; 65% LTV Loan; 4.00% Interest Rate; 30 Year Amortization; Conduit Interest 4.00% Price 22,653,300 Rent 1,5,833 Amortization (Yrs) 30 Loan 65% (14,724,645) Debt Service (843,572) Loan Constant 5.73% Equity 7,928,655 Cash Flow 572,261 Cash on Cash Return 7.22% 10 Year Loan Term; 70% LTV Loan; 4.00% Interest Rate; 30 Year Amortization; Conduit Interest 4.00% Price 22,653,300 Rent 1,5,833 Amortization (Yrs) 30 Loan 70% (15,857,310) Debt Service (908,463) Loan Constant 5.73% Equity 6,795,990 Cash Flow 507,370 Cash on Cash Return 7.47% 5 Year Loan Term; 70% LTV Loan; 3.10% Interest Rate; 25 Year Amortization; Bank Interest 3.10% Price 22,653,300 Rent 1,5,833 Amortization (Yrs) 25 Loan 70% (15,857,310) Debt Service (912,294) Loan Constant 5.75% Equity 6,795,990 Cash Flow 503,539 Cash on Cash Return 7.% Cushman & Wakefield / FedEx Ground Evansville / 4

7 Site Plan STORMWATER DETENTION AREA U.S. HIGHWAY T SECURUITY BUILDING SHE OH-E STORMWATER DETENTION AREA OH-E 20 DOCK DOORS NORM WAGNER DRIVE (PUBLIC) 7 DRIVE-IN DOORS NORM WAGNER DRIVE T TOPSOIL BERM 44 DOCK DOORS ±253,956 SQ. FT. ADMIN OFFICE Cushman & Wakefield / FedEx Ground Evansville / 5 NO. C-101 C-102 C-103 C-104 C-105 C-106 C-107 C-108 C-109 C-110 C-501 C-502 C-503 C-504 D-1 L-101 L-102

8 Floor Plan OFFICE 253,956± SQ. FT. FUTURE OPERATIONS EXPANSION USAGE LEGEND = PACKAGE HANDLING SYSTEM = DELIVERY TRUCK = DELIVERY VAN Cushman & Wakefield / FedEx Ground Evansville / 6

9 FedEx Ground pays for the package sorting and handling conveyor system. Representative Representative Cushman & Photograph Photograph Wakefield / FedEx Ground Evansville / 7 Cushman & Wakefield / FedEx Ground Evansville / 7

10 FedEx Ground Package System, Inc. y FedEx Ground is one of North America s two largest small-package ground delivery services for E-Commerce. y FedEx Ground is the most profitable of FedEx Corporation s four subsidiaries. y FedEx Ground and its subsidiary FedEx SmartPost shipped an average of 7,526,000 packages per day in fiscal year FEDEX GROUND PACKAGE SYSTEMS, INC., the Property s tenant, is one of North America s leading providers of business-to-business and business-toconsumer ground small-package delivery service FedEx Ground is FedEx Corporation s most profitable division. FedEx Ground has a network of more than 575 distribution hubs and local pickup-and-delivery terminals located throughout the United States and Canada. The FedEx 2016 annual report (May 31, 2016 yearend) indicates that the FedEx Ground segment had revenues of $ billion, which was 27.6% above the 2015 level, and operating income of $2.276 billion, which reflected a 4.8% year over year increase. FEDEX CORPORATION (NYSE: FDX), the tenant s parent, provides customers and businesses worldwide with the broadest portfolio of transportation, logistics and e-commerce services. FedEx corporation s four subsidiaries are listed below. Subsidiary Business Revenues* Operating Profit* FedEx Express Overnight air delivery $26,451 $2,519 FedEx Ground Small package ground $16,574 $2,276 delivery FedEx Freight LTL, large items, intermodal, & custom critical $6,200 $426 FedEx Services * (in millions) Retail package drop off stores $1,593 Not reported For the fiscal year ended May 31, 2016, FedEx reported record revenues of $ billion and net income of $1.820 billion. On May 25, 2016, FedEx acquired TNT Express for approximately $4.9 billion. The acquisition combines the strengths of the companies the world s largest air express network and an unparalleled European road network, which will expand the existing FedEx portfolio and reshape the global transportation and logistics industry. TNT Express is one of the world s largest express delivery companies. On a daily basis, TNT Express delivers close to one million consignments ranging from documents and parcels to palletised freight. The company offers road and air delivery services in Europe, the Middle East and Africa, Asia-Pacific and the Americas. TNT Express made ±$7.6 billion in revenue in As of this offering s publication, FedEx Corporation had an investment grade S&P bond rating of BBB. FedEx Corporation does not guarantee the tenant s lease obligations. Website: Representative Cushman & Photograph Wakefield / FedEx Ground Evansville / 8 Cushman & Wakefield / FedEx Ground Evansville / 8

11 Closest FedEx Ground Facilities SPRINGFIELD INDIANOPLIS 70 TERRE HAUTE MISSOURI BLOOMINGTON CINCINNATI ST. LOUIS INDIANA MT. VERNON LOUISVILLE 55 EVANSVILLE 64 LEXINGTON 69 KENTUCKY BOWLING GREEN LEGEND 75 SUBJECT FEDEX GROUND FEDEX GROUND LOCATIONS Cushman & Wakefield / FedEx Ground Evansville / 9 NASHVILLE TENNESSEE Cushman & Wakefield / FedEx Ground Evansville / 9

12 H City Map 68 HAUBSTADT LYNNVILLE 68 CYNTHIANA POSEYVILLE ELBERFELD WADESVILLE DARMSTADT BOONVILLE CHANDLER 261 EVANSVILLE NEWBURGH N 60 Cushman & Wakefield / FedEx Ground Evansville / 10 Cushman & Wakefield / FedEx Ground Evansville / 10 60

13 KORLL ROAD OLD STATE ROAD BARTON ROAD Local Area Map E WARRENTON ROAD SCHROEDER ROAD CAMBRIDGE GOLF CLUB 69 HILLTOP TOAD VOLKMAN ROAD SEVEN HILLS ROAD DRAMSTADT ROAD OLD PRINCETON ROAD 57 BASELINE ROAD BASELINE ROAD MCCUTCHAN ROAD 69 INGLEFIELD ROAD OLD STATE ROAD SCHLENSKER ROAD PE TERSBURG ROAD 57 N Cushman & Wakefield / FedEx Ground Evansville / 11 Cushman & Wakefield / FedEx Ground Evansville / 11

14 Site Location The Property is located on Norm Wagner Drive just off of U.S. Highway. E BASELINE ROAD BASDEN S AMERICAN RV CENTER E BASELINE ROAD AZTECA MILLING LP NORM WAGNER ROAD NORTH HIGH SCHOOL CITADEL PLASTICS PITTSBURGH GLASS WORKS N Cushman & Wakefield / FedEx Ground Evansville / 12 Cushman & Wakefield / FedEx Ground Evansville / 12

15 Evansville, Indiana Evansville is located at the southwest tip of Indiana, 172 miles southwest of Indianapolis, 123 miles west of Louisville, 153 miles north of Nashville, and 166 miles east of St. Louis. Evansville has a population of approximately 121,000 people and is the county seat of Vanderburgh County. Evansville is the largest city in the Evansville Indiana-Kentucky MSA. This MSA covers Gibson, Posey, Vanderburgh and Warrick Counties in Indiana and Henderson and Webster Counties in Kentucky. The MSA s population is approximately 314,000 people. DIVERSIFIED ECONOMY The Evansville Indiana-Kentucky MSA has a diversified economy. The largest companies are listed below. Toyota - Toyota Motor Manufacturing Indiana (TMMI) is the largest employer. This is a plant located in Gibson County that manufactures Toyota s popular Highlander SUV, Sequoia SUV and Sienna minivan. This plant was built in The company s investment in the plant is $40 billion. It has a capacity to manufacture 365,000 vehicles per year. The plant employs 5,500 people. Alcoa - Alcoa has a plant in Warrick County. The Warrick Operation is one of the largest aluminum fabricating facilities in the world. Alcoa s packaging division is located here, where aluminum sheet for beverage and food can ends and tabs are made along with other flat-rolled aluminum products, including metal used to make lithographic printing plates. SABIC - SABIC ranks among the world s top petrochemical companies. The company is among the world s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers. SABIC s largest plastic manufacturing plant is located in Posey County. Here is a list of more companies with headquarters or major operations in the Evansville MSA: COMPANY INDUSTRY EMPL Berry Plastics Injection-molded plastics 2,699 SKANSKA Industrial Contractors Construction 2,425 T.J. Maxx Distribution center 1,500 Koch Enterprises, Inc. Industrial & auto parts Manuf. 1,409 Vectren Corporation Utility - gas & electric 1,200 Springleaf Financial Services Financial services 1,160 Old National Bankcorp Banking & financial services 1,022 Mead Johnson Pediatric Nutrition 925 Tropicana Evansville Gaming & entertainment 860 AT&T Wireless communications 800 AmeriQual Group LLC Meals ready-to-eat 550 PGW Pittsburgh Glass Automotive glass 515 Guardian Automotive Group SRG Global Mulzer Crushed Stone Automotive injectionmolding Color & Chrome Plastics Manuf. Sand, gravel, & crushed stone Flanders Electric Motor Service Inc. Motor manuf. & repair 436 Atlas World Group Corporate & household movers 389 Cushman & Wakefield / FedEx Ground Evansville / 13

16 Evansville, Indiana (cont) DIVERSIFIED ECONOMY (CONT) COMPANY INDUSTRY EMPL Lewis Bakeries Bread & buns 350 Red Spot Paint & Varnish Fifth Third Bank Anchor Industries Coatings for automotive plastics Banking & financial services Tents, canopies, & canvas accessories Evansville Courier & Press Newspaper Service 235 Wabash Plastics, Inc. SS&C Technologies DSM Engineering Plastics Injection molded components Financial Services / hedge funds Reinforced plastics compounds HIGHER EDUCATION Evansville has the following universities and colleges. The University of Southern Indiana (USI) is a public university located just outside Evansville city limits. Founded in 1965, the school has an enrollment of over 10,800 students and is among the fastest growing comprehensive state universities in Indiana The Indiana University School of Medicine - Evansville is currently housed on USI s campus, but there are plans to locate a new interdisciplinary academic health science education and research campus downtown. The University of Evansville (UE) is a small, private, Methodist affiliated university with approximately 3,050 students. Founded in 1854, UE features liberal arts and science degrees along with a nationally renowned theatre department. University of Evansville, Ford Center Cushman & Wakefield / FedEx Ground Evansville / 14

17 Evansville, Indiana (cont) TRANSPORTATION Evansville has an excellent road, rail, water, and air transportation system. Highways Interstate 64 is eight miles north of the city and straddles the Gibson - Vanderburgh County line. This interstate routes west to St. Louis and runs east to Louisville. U.S. Highway connects the city with Henderson to the south and, to the north, the cities of Princeton, Vincennes, and Terre Haute. Interstate 69 is a new highway under construction between Canada and Mexico, which is often referred to as the NAFTA highway. Evansville is located along Interstate 69. Upon completion, it will pass through Michigan, Indiana, Kentucky, Tennessee, Mississippi, Arkansas, Louisiana, and Texas. This interstate will utilize portions of other highways and is being funded by the states. Rail Service Evansville is a major center for railway traffic. The city is served by four major freight railroads, CSX (with a major yard in the Howell area), Evansville Western Railway, the Indiana Southwestern Railway, and the Norfolk Southern Railway. The Howell Yard in Evansville sorts and makes up trains, and has intermodal facilities to handle 3,000 cargo containers and piggyback trailers per month. Ports Three public and several private port facilities receive year-round service from five major barge lines operating on the Ohio River. The river connects Evansville with all river markets in the central United States and on the Great Lakes and with international markets through the port of New Orleans. Evansville has been a U.S. Customs Port of Entry for more than 125 years. Because of this, it is possible to have international cargo shipped to Evansville in bond. The international cargo can then clear Customs in Evansville rather than a coastal port. Evansville Regional Airport Evansville Regional Airport (EVV) is located three miles north of Evansville. The airport has nearly 40 daily flights to and from Atlanta, Charlotte, Chicago, Dallas/Fort Worth, and Detroit. Carriers offering service include Allegiant, American, Delta, and United. DEMOGRAPHICS 2016 Summary 10 miles 20 miles 30 miles Population 116, , ,936 Households 47, , ,860 Families 30,529 81, ,721 Average Household Size Owner Occupied Housing Units 33,074 84, ,427 Renter Occupied Housing Units 14,621 42,147 49,432 Median Age Median Household Income $49,880 $48,691 $48,065 Average Household Income $63,983 $64,185 $63, Summary 10 miles 20 miles 30 miles Population 119, , ,199 Households 48, , ,810 Families 31,044 83, ,136 Average Household Size Owner Occupied Housing Units 33,770 86, ,3 Renter Occupied Housing Units 14,966 43,071 50,397 Median Age Median Household Income $55,801 $55,086 $54,269 Average Household Income $70,496 $71,018 $69,634 Cushman & Wakefield / FedEx Ground Evansville / 15

18 Confidentiality & Disclaimer The information contained in this marketing brochure ( Materials ) is proprietary and confidential. It is intended to be reviewed only by the person or entity receiving the Materials from Cushman & Wakefield ( Agent ). The Materials are intended to be used for the sole purpose of preliminary evaluation of the subject property/properties ( Property ) for potential purchase. The Materials have been prepared to provide unverified summary financial, property, and market information to a prospective purchaser to enable it to establish a preliminary level of interest in potential purchase of the Property. The Materials are not to be considered fact. The information contained in the Materials is not a substitute for thorough investigation of the financial, physical, and market conditions relating to the Property. The information contained in the Materials has been obtained by Agent from sources believed to be reliable; however, no representation or warranty is made regarding the accuracy or completeness of the Materials. Agent makes no representation or warranty regarding the Property, including but not limited to income, expenses, or financial performance (past present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence of contaminating substances (PCB s, asbestos, mold, etc.); compliance with laws and regulations (local, state, and federal); or, financial condition or business prospects of any tenant (tenants intentions regarding continued occupancy, payment of rent, etc). A prospective purchaser must independently investigate and verify all of the information set forth in the Materials. A prospective purchaser is solely responsible for any and all costs and expenses incurred in reviewing the Materials and/or investigating and evaluating the Property. By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set forth herein. NET LEASE GROUP CAPITAL MARKETS GROUP DOUGLAS LONGYEAR doug.longyear@cushwake.com CA Lic # JEFF CASTELL, SIOR, CCIM jeff.castell@cushwake.com IN Lic #RB CHRISTINA CAMPANELLA christina.campanella@cushwake.com NY Lic # CHRISTOPHER SHELDON chris.sheldon@cushwake.com CA Lic # Cushman & Wakefield / FedEx Ground Evansville / 16