atual property photo exclusively listed y: deno
TRANSCRIPT
Exclusively Listed By: Deno Bistolarides Managing Partner 248.702.0288 [email protected] Brandon Hanna Managing Partner 248.702.0290 [email protected]
Marketing Package
2502 North 30th Street - Escanaba, MI 49829
ACTUAL PROPERTY PHOTO
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Exclusively Listed By: Deno Bistolarides Managing Partner 248.702.0288 [email protected] Brandon Hanna Managing Partner 248.702.0290 [email protected]
MARKETING PACKAGE
FEDEX GROUND FACILITY | ESCANABA, MICHIGAN
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LEASE SUMMARY Lease Type Double Net
Roof/Structure Landlord Responsibility
Insurance/Utilities Tenant Responsibility
Term Remaining 9 Years
Commencement Date September 6, 2007
Current Term Expiration September 30, 2026
Rental Increases See Rent Schedule
Renewal Options (2) 5 Year Options
Renewal Increases See Rent Schedule
Tenant FedEx Ground Package System, Inc.
Company Website www.fedex.com
INVESTMENT SUMMARY
Price $5,681,263
Current NOI $377,804
Cap Rate 6.65%
Building Size 43,805 sq ft +/-
Acreage 6.51 +/-
Year Built 2008
INVESTMENT HIGHLIGHTS • 10-year lease extension shows strong commitment to the site
• Recent expansion and lease extension solidifies long term tenancy
• Double net lease - minimal landlord responsibilities
• 43,805 square feet located on 6.5 Acres of land with an option for additional land
• Parent company has an investment grade S&P credit rating of “BBB/Stable”
• FedEx Ground is the largest provider of small package ground delivery services
• Located in Michigan’s upper peninsula along Lake Michigan, property is 450 miles
from Detroit and only 60 miles from the Wisconsin border
• Escanaba is a port city in Delta County - The third-largest city in the upper peninsula
• Site was a built to suit for tenant in 2008
• Strong industry fundamentals - The rise of e-commerce lends well to the strength of a
distribution center
• Excellent 1031 exchange replacement property
Rent Schedule Terms Start Expiration Annual Per SF Increases
Years 1 to 8 Initial Term 6/1/2008 9/30/2016 $189,880 $6.59 N/A
Years 9 to 18 First Extension 10/1/2016 9/30/2026 $377,804 $8.62 N/A
Years 19 to 23 First Option 10/1/2026 9/30/2031 $415,584 $9.49 10.0%
Years 24 to 28 Second Option 10/1/2031 9/30/2036 $436,364 $9.96 5.0%
2502 North 30th Street - Escanaba, MI 49829
Click HERE for Google Maps
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MORE INVESTMENT HIGHLIGHTS
* Highly Competitive Pricing: The property is priced at $5,681,263 and offered at a 6.65 Cap Rate, which is at a rate higher than all
other FedEx Ground Facilities currently on the market with remaining lease terms of nine years or more. The Escanaba FedEx
Ground's 10-year current term--from 10/01/2016 to 09/30/2026--was negotiated to give the tenant a full 10 years at its recently
expanded--from 28,700 sq.ft. to 43,805 sq.ft.--facility with the expansion having been completed as of 09/30/2016.
* The Option: The acquisition price includes an option--previously paid for by Owner and running with the land--to acquire an adja-
cent five-acre parcel for a second expansion. Based on the FedEx Ground Escanaba's ever increasing absorption of market share
and the realities of the new economy that have seen the demise of brick and mortar stores while making Internet shopping the
norm, it is likely that, based on past performance and reasonable assumptions, FedEx Ground Package Systems, Inc., will want to
negotiate a second expansion well within the next nine years, just as several FedEx Ground facilities throughout the U.S. have been
expanded twice since their opening. The option to purchase the adjacent land may be exercised at any time during the next seven
years at nominal cost: $73,500 if the option trigger is pulled by September 30, 2018; thereafter going up by five percent (5%) per
annum each year up through and including September 30, 2024, after which the option expires. The option, once exercised, will
make it feasible to more than double the size and capacity of the existing building.
* Modified NNN Lease: Landlord is responsible for structure and exterior, including roof, drains, and down spouts. Tenant pays in-
surance, taxes, utilities, maintenance, and repairs.
* The BBB Rated Company with a net operating income of $2.292 billion for Fiscal Year ending in 2017.
* Parking: 99 autos, nine home delivery van spaces, two 53' long trailer spaces, nine 28' regular trailer spaces, six tractor spaces,
and 10 dolly spaces.
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TENANT OVERVIEW
FedEx Ground Package System, Inc. ("FedEx Ground") is the leading North American provider of small package ground delivery services and the largest of the four segments which comprise the world's largest commerce delivery provider, FedEx Corporation (NYSE: FDX). FedEx Ground provides day certain business-to-business delivery to businesses in the United States and Canada, as well as business to residential deliv-ery to 100% of U.S. residences through its home delivery service.
FedEx Corporation provides a broad portfolio of transportation, e-commerce, and business services through companies competing collec-tively, operating independently, and managed collaboratively under the FedEx brand. Its primary companies are: Federal Express Corporation, the world's largest express transportation company; TNT Express, an in-ternational express, small package ground delivery and freight transpor-tation company; FedEx Ground, as described above; and FedEx Freight, a leading U.S. provider of less-than-truckload freight services.
The FedEx Ground segment revenues increased 9% in Fiscal Year ending in 2017 due to yield and volume growth with revenues of $18,075 mil-lion and operating income of $2,292 million, constituting a healthy 12.7% margin. Average revenue per package (yield) for the past three years has increased as follows: $7.16 (Fiscal Year ending in 2015), $7.80 (Fiscal Year ending in 2016), and $8.18 (Fiscal Year ending in 2017). Fed-Ex Corporation anticipates additional facility expansion in Fiscal Year 2018 together with additional capital investments (see "FedEx Ground Segment Outlook" in the FedEx Annual report 2017.
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LOCATION OVERVIEW
Escanaba is a city in Delta County, Michigan, located in the banana belt on the state's Upper Peninsula. The population was 12,616 at the 2010 census, making it the third-largest city in the Upper Peninsula after Mar-quette and Sault Ste. Marie. It is the seat of government of Delta Coun-ty.
The biggest retailer in Escanaba is Walmart. The city also has a mall called the Delta Plaza Mall and other major retailers in the town are Menards, K-mart, Walgreens, and Tractor Supply Company.
Delta County is located at the crossroads of US Highway 2, US Highway 41, and Michigan State Highway 35; the main north-south and east-west.
Delta County is on the northern shores of Lake Michigan in Escanaba, Delta County's growth is made up of a combination of forestry, manu-facturing and tourism.
Delta County maintains four beautiful and pristine parks to accommo-date endless recreational opportunities: Pioneer Trail Park and Campground, Fuller Campground, Rapid River Falls Park and Sac Bay Park. The Escanaba River, named by the Chippewa Indians for the flat rocks it flows over provides many opportunities for canoeists and fisher-men. The river is known for its walleye fishing and provides a location for small boats when the waters on the Bay are rough. The river con-tains an abundant quantity of brook, brown, and rainbow trout.
Click Here for More Information: http://www.deltacountyparks.com/
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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PROPERTY PHOTOS
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MEMORANDUM OPTION
The acquisition price includes an option--previously paid for by Owner and running with the land--to acquire
an adjacent five-acre parcel for a second expansion. (See Plat of Survey at Page 13 of this Offering Memoran-
dum, which depicts the 6.5-acre existing FedEx Parcel with the 5.0-acre Option Parcel directly underneath, and
the Plat of Survey on the previous page, which is specific to the existing FedEx Parcel only and depicts the ex-
isting 43,805 sq.ft. building in relationship to the 6.5-acre parcel on which it was constructed.) Although obvi-
ously not guaranteed, it is nevertheless highly likely that the aforesaid option will be exercised based on the
FedEx Ground Escanaba's ever increasing absorption of market share and the realities of the new economy
that have seen the demise of brick and mortar stores. To pick only two recent examples, the Escanaba J.C.
Penny's and the Escanaba K-Mart have both closed their doors thanks to Internet shopping now being the
norm. It is, thus, likely that, based on past performance and reasonable assumptions, that FedEx Ground Pack-
age Systems, Inc., will want to renegotiate a second expansion well within the next nine years, just as several
FedEx Ground facilities throughout the United States have been expanded twice since their opening.
The Escanaba FedEx Ground facility services three quarters of the Upper Peninsula ("the U.P.") and parts of
Wisconsin and includes both business to business and home delivery. The option to purchase the adjacent
land may be exercised at any time during the next seven years at nominal cost: $73,500 if the option trigger is
pulled by September 30, 2018; thereafter going up by five percent (5%) per annum each year up through and
including September 30, 2024, after which the option expires. The option, once exercised, will make it feasible
to more than double the size and capacity of the existing building.
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MEMORANDUM OPTION
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MEMORANDUM OPTION
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MEMORANDUM OPTION
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AERIAL
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Population 1 Mile 3 Mile 5 Mile
2022 Projection 1,048 14,385 18,561
2017 Estimate 1,071 14,560 18,736
2010 Census 1,146 14,900 18,932
Growth 2017-2022 (2.15%) (1.20%) (0.93%)
Growth 2010-2017 (6.54%) (2.28%) (1.04%)
Households:
2022 Projection 473 6,262 8,007
2017 Estimate 484 6,341 8,085
2010 Census 518 6,498 8,181
Growth 2017 - 2022 (2.27%) (1.25%) (0.96%)
Growth 2010 - 2017 (6.56%) (2.42%) (1.17%)
Owner Occupied 356 4,252 5,802
Renter Occupied 128 2,088 2,284
2017 Avg Household Income $37,135 $47,341 $52,048
2017 Households by Household Inc:
<$25,000 201 2,476 2,841
$25,000 - $50,000 149 1,595 1,933
$50,000 - $75,000 105 977 1,401
$75,000 - $100,000 15 768 1,110
$100,000 - $125,000 5 214 313
$125,000 - $150,000 9 149 219
$150,000 - $200,000 0 111 161
$200,000+ 0 52 110
Population 1 Mile 3 Mile 5 Mile
2017 Total Population: 1,071 14,560 18,736
2022 Population: 1,048 14,385 18,561
Pop Growth 2017-2022: (2.15%) (1.20%) (0.93%)
Average Age: 41.00 41.90 42.40
Households
2017 Total Households: 484 6,341 8,085
HH Growth 2017-2022: (2.27%) (1.25%) (0.96%)
Median Household Inc: $30,833 $33,973 $38,819
Avg Household Size: 2.20 2.20 2.20
2017 Avg HH Vehicles: 2.00 2.00 2.00
Housing
Median Home Value: $60,135 $87,238 $96,699
Median Year Built: 1947 1950 1956
RELATIONSHIP DRIVEN • RESULTS ORIENTED Encore Real Estate Investment Services is dedicated to assisting clients in the acquisition and disposition of net leased and multi-tenant retail properties across the United States. We
provide advisory and brokerage expertise with the highest level of commitment and attention to detail, which ensures a higher assurance of closing and a faster turnaround time as
each client is assisted and advised on strategic exit and entrance strategies aimed at achieving their investment goals.
Led by Principals Brandon Hanna and Deno Bistolarides, our team of distinguished brokers has evaluated, listed, sold and marketed over $5 Billion dollars’ worth of investment real
estate nationally, totaling over 700 transactions. We have a combined track record of investment real estate sales experience spanning 50 years. Through this experience, we continue
to execute transactions on behalf of some of the most prominent developers, institutions, and private investors in the industry. As such, we continue to build long-term relationships
with the leaders in the investment community and grow our global database of investors and developers, which enables us to provide our clients with real estate investment services
that are unmatched in the industry. We are results oriented – our advisors all have a shared vision of excellence and a commitment to ensuring we are meeting our client’s needs above
all else.
The information contained herein is proprietary and strictly confidential It is intended to be reviewed only by the party receiving it from Encore Investment Real Estate Services, LLC and should not be made available to any other person or entity without the written consent of Encore Investment Real Estate Services, LLC . The information has been prepared to provide summary, unverified information, and to establish only a preliminary level of understanding of market conditions. The information contained herein is not a substitute for a thorough due diligence investigation. Encore Investment Real Estate Services, LLC has not made any investigation, and makes no warranty or representation, with respect to the information contained herein. This information has been obtained from sources we believe to be reliable; however, Encore Investment Real Estate Services, LLC has not verified, and will not verify, any of the information contained herein, nor has Encore Investment Real Estate Services, LLC conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. Individuals are strongly advised to take appropriate measures to verify all of the
information set forth herein.
www.encorereis.com
Sheren Zakaria Marketing Coordinator D: 248.702.0294
Tracey Sensing Operations Manager D: 248.702.0283
EXECUTIVE TEAM
Brandon Hanna Managing Partner D: 248.702.0290
C: 248.939.0717
Deno Bistolarides Managing Partner D: 248.702.0288
C: 734. 255.6820
Danny Samona Senior Advisor D: 248.702.0286
C: 734.945.5967
Matthew Weber Senior Advisor D: 248.702.0285
C: 734.320.6141
Michael Gaggo Senior Advisor D: 248.702.0287
C: 248.866.4977
Dante Hargis Senior Advisor D: 248.702.0946
C: 312.533.8899
Derek Kello Associate Advisor D: 248.702.0295
C: 248.860.2650
David Wilson Associate Advisor D: 248.702.0947
C: 248.330.0771
Brandon Kassab Senior Advisor D: 248.702.0292
C: 248.520.2321
Ryan Vinco Managing Partner D: 248.702.0299
C: 313.516.6873
Kaleb Rupp Associate Advisor D: 248.702.0297
C: 419.344.3989
James Roberts Associate Advisor D: 248.702.0948
C: 419.508.5307
Evan Lyons Senior Advisor D: 248.702.0298
C: 248.535.0354
Mark Meram Associate Advisor D: 248.702.0296
C: 248.227.2444
Brent Hanna Associate Advisor D: 248.702.0293
C: 248.762.0788
30500 Northwestern Hwy, Ste 400
Farmington Hills, MI 48334
Marlon Gaggo Associate Advisor D: 248.702.0291
C: 248.388.0591
John Przybyla President / COO D: 248.702.0946
C: 248.939.0717