cemex reno msa - loopnet...cemex was established 110 years ago and is a global building materials...

OFFERING MEMORANDUM

C E M E X1000 PERU DRIVEMcCARRAN, NV 89434

RENO MSA INDUSTRIAL

JOSEPH BLATNER / Senior Vice President (503) 200-2029 / [email protected]

CONFIDENTIALITY DISCLAIMER:

The information contained in this Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property.The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. The information contained in this Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.NEVADA BROKER OF RECORD: TODD MANNINGACTIVITY ID: Z0210479

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CEMEX | McCARRAN, NV

TABLE OF CONTENTS

04INVESTMENT SUMMARY

Executive SummaryRent Roll

ABOUT THE PROPERTY

15MARKET SUMMARY

Location OverviewDemographics

ABOUT THE MARKET

07PROPERTY OVERVIEW

Property OverviewLease AbstractTenant OverviewAerial MapsLocation Overview

3


EXECUTIVE SUMMARY01 4


EXECUTIVE SUMMARY

NET OPERATING INCOME $168,000 GUARANTOR CEMEX Construction Materials Pacific, LLC

LEASE TYPE NNN* INCREASES 3% Annual Increases

LEASE COMMENCEMENT 1/1/2018 OPTIONS (2) 10 Year Options

LEASE EXPIRATION DATE 12/37/2027 LAND SIZE 5 +/- Acres

*Landlord carries liability policy that is additional beyond tenant's requirement of the sameNOTE: Tenant has 30 Day Right of First Refusal

YEAR BUILT 2018

1000 PERU DRIVE | McCARRAN, NV 89434CEMEX

CAP RATE

6.00%

PRICE

$2,800,000


5

Peru Drive

RENT ROLL

CEMEX 5 +/- ACRES 1/1/2018 12/31/2027 $168,000

1/1/2019

1/1/2020

1/1/2021

$173,040

$178,231

$183,578

(2) 10 year options with 3% annual

rental increases

NNN*

TENANT INFO

NAME SQUARE FEET

LEASE TERMS

COMMENCEMENT EXPIRATION

CURRENT RENT

ANNUAL BASE RENT

RENT INCREASES

DATE OPTIONSANNUAL RENT TYPE

LEASE

*Landlord carries liability policy that is additional beyond tenant's requirement of the sameRIGHT OF FIRST REFUSAL: Tenant has 30 days to respond.

*Subject parcel outline is not exact

6


PROPERTY OVERVIEW02 7


PROPERTY OVERVIEW

OVERVIEW

HIGHLIGHTS

A new 10 year lease was executed in December 2017 by CEMEX in which the only landlord responsibility is to carry additional insurance already required of the tenant. The lease includes 3% annual rent increases throughout its original term and in its two, 10 year option periods.

The lease is backed by CEMEX Construction Materials Pacific, LLC, a subsidiary of CEMEX Corporate. CEMEX corporate's annual sales figures are at over $13 Billion. CEMEX was established 110 years ago and is a global building materials company.

The property is located within an industrial part of Reno housing a mix of warehousing and distribution centers for brands such as Tesla, Switch, Google, Ebay, Walmart, PetSmart, Zulily and more.

LEASE BACKED BY CEMEX CONSTRUCTION MATERIALS PACIFIC, LLC., A SUBSIDIARY OF CEMEX CORPORATE

CEMEX corporate's annual sales figures are at over $13.67 Billion. In the second quarter of 2018 CEMEX reached $3.8 billion in net sales, representing an increase of 7% compared with the second quarter of 2017.

10 YEAR LEASE; LIMITED LANDLORD RESPONSIBILITY

CEMEX is committed to a 10 year lease with 3% annual increases. The lease also provides for 3% increases in options.

PART OF THE TAHOE RENO INDUSTRIAL CENTER: THE LARGEST INDUSTRIAL CENTER IN THE WORLD

The property is located within a massive 107,000 acre industrial park that is nearly filled and expected to create approximately 5,000 new jobs.

INDUSTRIAL REGION

The property is located amidst a large industrial area which includes 150+ industrial tenants such as Tesla gigafactory, Switch, Google, Ebay, Chewy.com, Kalily, and PetSmart.

8


LEASE ABSTRACT

TENANT: CEMEX Construction Materials Pacific, LLC

ADDRESS: 1000 Peru Drive, McCarran, NV 89434 (Tahoe Reno Industrial Center)

DATE OF LEASE: 12/1/2017

RENT COMMENCEMENT: 1/1/2018

LEASE EXPIRATION: 12/31/2027

TYPE OF LEASE: NNN Lease

RENEWAL OPTIONS: Two, 10 year options

RENT/YEAR: $168,000 annually / $14,000 monthly

INCREASES: 3% annually

OPTION RENT: 3% annually

REAL ESTATE TAXES: Payment of any real property taxes shall be made by lessee to lessor within 30 days after lessee’s receipt of lessor’s written statement setting forth the amount due and computation thereof.

MAINTENANCE & REPAIRS: Tenant shall directly handle all repair.

TENANT ASSIGNMENT & SUBLETTING: Requires Landlord consent.

RIGHT OF FIRST REFUSAL: Yes, 30 days for tenant to respond.

ESTOPPEL CERTIFICATE: Tenant has 15 business days to return an estoppel certificate upon landlord’s request.

INSURANCE:

Landlord will maintain the following insurance for the premises:

Lessor shall maintain liability insurance protecting lessor and lessee as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of Lessee’s use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Single limit coverage in an amount not less than $2M per occurrence with an annual aggregate of not less than $5M.

The insuring party shall obtain and keep in force a policy with loss payable to lessor and to any lender notified to the insured party, insuring loss or damage to the premises. The amount of such insurance shall be equal to the full insurable replacement cost of the premises.

Tenant will maintain the following insurance for the premises:

Lessee shall obtain and keep in force a commercial general liability policy of insurance protecting lessee and lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of Lessee’s use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Single limit coverage in an amount not less than $2M per occurrence with an annual aggregate of not less than $5M.

The insuring party shall obtain and keep in force a policy with loss payable to lessor and to any lender notified to the insured party, insuring loss or damage to the premises. The amount of such insurance shall be equal to the full insurable replacement cost of the premises.

Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, trade fixtures, and lessee owed alterations and utility installations. Such insurance shall be full replacement cost coverage.

9


CEMEX was established 110 years ago and is a global building materials company that provides high-quality products and reliable service to customers and communities in more than 50 countries throughout the world and maintains trade relationships in 100 nations.

They are a Mexican multinational building materials company that is headquartered in San Pedro, near Monterrey, Mexico with its U.S. operations headquartered in Memorial City, Houston, Texas. The company manufactures and distributes cement, ready-mix concrete and aggregates. It is the second largest building materials company worldwide, only after LafargeHolcim. About one-third of the company’s sales come from its Mexico operations, a quarter from its plants in the U.S., 15% from Spain, and smaller percentages from its plants around the world.

CEMEX currently operates on four continents, with 66 cement plants, 2,000 ready-mix-concrete facilities, 400 quarries, 260 distribution centers and 80 marine terminals. The subject property is guaranteed by CEMEX Construction Materials Pacific, LLC., a subsidiary of CEMEX corporate.

We are focused on creating sustainable value by providing industry-leading products and solutions to satisfy the construction needs of our customers around the world.

• Annual sales of US $13.67 billion

• $2.75 billion in operating annual EBITDA

• One of the leading cement manufacturers in the world, producing up to 93 million tons of cement per year

• World’s leading supplier of ready-mix concrete, and one of the world’s largest suppliers of aggregates

• One of the world’s top traders of cement and clinker

• Close to 41,000 employees worldwide

• More than 12,000 green buildings utilizing their products

TENANT OVERVIEW

source: www.cemex.com/investors/key-company-data/worldwide 10


AERIAL VIEW

Storey County Office

N


11

N E V A D A

C A L I F O R N I A

SAN FRANCISCO

SACRAMENTO

LAS VEGAS

CEMEX

RENO

PART OF THE TAHOE RENO INDUSTRIAL CENTER

THE WORLD’S LARGEST INDUSTRIAL PARKThe property is located within a massive 107,000 acre industrial park that is nearly filled and expected to create approximately 5,000 new jobs.

AREA MAPS

12


TAHOE RENO INDUSTRIAL CENTER

The Tahoe Reno Industrial Center is a remarkable, massive 107,000-acre park that encompasses a developable 30,000 acre industrial complex. It is located directly on the 1-80 freeway. The center is a 15-minute drive from the Reno Tahoe International Airport.

TRI Center currently has approximately 15,000 acres in Phase I, Phase II and Phase III zoned for industrial use, with plans of future expansion. This vast park is intended to be a mixed-use, nonresidential development, consisting of a wide range of industrial, office and commercial businesses. There is approximately 11 million SF of industrial space now in use by almost 130 companies.

TRI Center is a Greenfield project with minimal exposure to the typical man-caused environmental issues faced by most industrial centers. An existing Phase I Environmental study was conducted on the project that recommends, “no further assessment is necessary regarding environmental matters associated with the property.”

Twelve miles of I-80 forms the northern border of Tahoe Reno Industrial Center with US 50 under 5 miles from the southern border. Its landmass equates to 65% of Storey county. Within a 50-mile radius, based on a 2017 population estimate, there are roughly 687,000 people. It is just nine miles from Reno-Sparks with local access to the Reno Tahoe International Airport just 15 miles away. Approximately 5,000 new jobs are estimated to be created between 2016-2018 as predicted by the Economic Development Authority of Western Nevada.

TESLA:Tesla broke ground on their 5.5 million square foot Gigafactory in June 2014 outside Sparks, Nevada. The name Gigafactory comes from the word “Giga,” the unit of measurement representing “billions.” The factory’s planned annual battery production capacity is 35 gigawatt-hours (GWh), with one GWh being the equivalent of generating (or consuming) 1 billion watts for one hour. This is nearly as much as the entire world’s current battery production combined.The Gigafactory is being built in phases so that Tesla can begin manufacturing immediately inside the finished sections and continue to expand thereafter. Already, the current structure has a footprint of more than 1.9 million square

LOCATION OVERVIEW

13


feet, which houses more than 4.9 million square feet of operational space across several floors. Still, the Gigafactory is less than 30 percent done. Once complete, Tesla expects the Gigafactory to be the biggest building in the world – and entirely powered by renewable energy sources, with the goal of achieving net zero energy.

With the Gigafactory ramping up production, Tesla’s cost of battery cells will significantly decline through economies of scale, innovative manufacturing, reduction of waste, and the simple optimization of locating most manufacturing processes under one roof. By reducing the cost of batteries, Tesla can make products available to more and more people, allowing them to make the biggest possible impact on transitioning the world to sustainable energy.

SWITCH:Switch, a globally recognized leader in future-proof data center design, superscale cloud, unparalleled telecom gateways and energy sustainability, is opening, at a cost of approximately $1 billion, the largest, most advanced data center campus in the world – also known as The Citadel Campus. It is designed for up to 7.2 million square feet of data center space and up to 650 megawatts (MW) of power.

The 2,000 acre campus, located in the Tahoe Reno Industrial Center next to the Tesla Gigafactory, is powered by 100-percent renewable energy, cementing Switch’s deep commitment to industry-leading green energy.

It is the single largest collocation data center facility on the planet, encompassing up to 1.3 million square feet and up to 130 MW of power capacity. Like all Switch data centers, TAHOE RENO 1 is designed to accommodate future-proof, high-density deployments, high-performance workloads and always-on applications across a wide spectrum of industries and technical requirements.

GOOGLE:Google/Alphabet has acquired 1,210 acres of land near Reno and a few miles south from Tesla’s gargantuan Gigafactory. Google will use the land for an upcoming data center.

EBAY: Ebay expanded their investment in the area by $230 million.

NEW DEVELOPMENT:

The Tahoe-Reno Industrial Center sold roughly 171.5 acres of land in a deal with Emerald City Empire, LLC. The project from Encore Commercial, Inc is dubbed Emerald City Business Center and is to be a "master planned retail and destination park center." Outside of that center a new Studio 6 Hotel has just opened, along with the Recharge Bar & Grill, to accommodate housing and retail needs in the growing area.

Part of that large purchase includes more than 64,000 acres to a California software company, Blockchains LLC. Blockchains reportedly plans to relocate its operations to TRIC as soon as possible. The company "conceptualizes and incubates blockchain-powered ideas, ventures, and businesses," according to its website. It is "developing means of offering traditional financial services in this new age of digital assets."

Among the smaller purchases included in the recent sale, Reno Land Development is purchasing 800 acres at the industrial park to develop what will be known as the Tahoe Reno Tech Center

Approximately 130 other tenants are currently at the center including, in addition to those noted above, Jet.com, PetSmart, Walmart, Zullily, 1800Flowers and more.

TAHOE RENO INDUSTRIAL CENTER CONT.

LOCATION OVERVIEW

14


MARKET SUMMARY03 15


LOCATION OVERVIEW

Known as “The Biggest Little City in the World”, Reno is famous for its hotels and casinos and as the birthplace of Harrah’s Entertainment (now known as Caesars Entertainment Corporation). It is the county seat of Washoe County, in the northwestern part of the state. Reno is the most populous Nevada city outside the Las Vegas Valley, with an estimated population of 245,255 in 2016. Reno is part of the Reno–Sparks metropolitan area, which consists of all of both Washoe and Storey counties and had an estimated 2016 population of 457,667.

Property values in Reno are increasing, the population is growing, and the city has recently been named one of the ten most livable mid-sized cities in the United States. While Reno’s economy for most of the 20th century was primarily centered on gaming and entertainment, it is now diversifying into a much broader base which spans healthcare, entrepreneurial startups, and technology-based industries. Recently, Reno has seen an influx of technology companies entering the area after the state placed an increased focus on economic development after the recession. Today, Reno is pioneering an economic future as one of the United States’ clean energy, technology, and entrepreneurial leaders.

Tesla’s Gigafactory is currently under construction at the Tahoe Reno Industrial Center, and when finished, will be the largest building in the world. The Gigafactory will purportedly cover 5.8 million square feet. The arrival of several data centers at the Tahoe Reno Industrial Center is further diversifying a region that used to be

primarily known for distribution and logistics outside of gaming and tourism. Switch‘s new SuperNAP campus at the Tahoe Reno Industrial Center is shaping up to be the largest data center in the world once completed. Apple is expanding its data center at the adjacent Reno Technology Park and is scheduled to build a warehouse on land in downtown Reno. Rackspace is also building a $422 million data center next to Apple. Additionally, the greater Reno area hosts distribution facilities for Amazon, Walmart, Petsmart and Zulily.

The University of Nevada Reno, with an enrollment of just over 20,000 students in 2018, enhances the economic development of northern Nevada and the state of Nevada in a variety of ways. Over the past five years, record numbers of graduates have been produced by the University. Recently, the University produced in excess of 3,700 graduates in one year. The university currently has six ongoing or planned construction projects to be completed over the next five years which are anticipated to total more than $167 million in project costs between planning, design and implementation. They will have a significant economic impact in the community and will create hundreds of construction jobs.

Reno and the surrounding area provide unlimited indoor and outdoor recreational activities. Spectacular Lake Tahoe and the largest concentration of ski facilities in the world are all within a fifty-mile radius. Biking, camping, hunting, fishing and mountain climbing are all activities Reno residents and visitors enjoy.

RENO, NV

16


DEMOGRAPHICS

2010

2017

2022

POPULATION

1,774 145,221 373,147

2,005 157,337 401,536

2,340 174,551 434,889

10 Miles 15 Miles 20 Miles

$78,785 $74,334 $71,553

$68,151 $58,732 $51,336

AVERAGE

MEDIAN

HOUSEHOLD INCOMES 201710 Miles 15 Miles 20 Miles

10 MILES

15 MILES

20 MILES

CEMEX

EMPLOYER EMPLOYEESDISTANCE TO

PROPERTYANNUAL

SALES VOL

MAJOR EMPLOYERS

U-Haul Co of Maine Inc $84,461,461 15.45 3,527Veterans Health Administration undisclosed 16.45 3,000Peppermill Casinos Inc undisclosed 16.80 2,200Monarch Casino & Resort Inc $217,032,000 16.54 2,100Cc-Reno LLC $20,079,379 17.19 2,000Saint Marys Health Care Corp $141,191,117 17.32 1,800MEI-Gsr Holdings LLC $48,895,907 15.36 1,500Scolaris Warehouse Markets Inc $71,843,411 13.81 1,400Prime Hlthcare Svcs - Reno LLC $271,052,865 17.32 1,370Sierra Development Company $50,285,122 17.03 1,300County of Washoe undisclosed 16.33 1,000Golden Road Motor Inn Inc $84,156,762 16.54 1,000Caesars Entrtnment Oprting Inc undisclosed 17.04 1,000United States Postal Service undisclosed 15.66 900Employers Holdings Inc $779,800,000 16.37 716Nevada Office of Military undisclosed 15.53 710United Parcel Service Inc undisclosed 11.25 700Zante LLC $15,564,313 17.38 670Monarch Growth Inc $1,254,622 16.54 656Western Village Inn & Casino $15,428,351 12.84 600West Corporation undisclosed 13.95 600Q and D Construction Inc $158,525,122 14.81 550Quad/Graphics Inc undisclosed 16.23 509Grand Sierra Resort Corp $117,465,372 15.36 501Northern Nevada Medical Ctr LP $89,679,124 10.83 500Baldinis LLC $8,618,977 14.67 500CMS - International $9,330,831 15.45 500Sun Technical Services Inc $37,501,220 15.64 500Wal-Mart Stores Inc undisclosed 1.42 477City of Reno undisclosed 16.71 476Nevada System Higher Education undisclosed 16.39 450Nevada System Higher Education undisclosed 16.15 442Baldinis Sport Casino LLC $13,200,683 14.67 437Hycroft Mining Corporation $310,425,000 16.19 428Wal-Mart Stores Inc undisclosed 13.56 400Recycling Circus of Reno $5,505,022 15.67 400Nevada Bell Telephone Company $16,000,000,000 16.24 400Walmart Stores Inc undisclosed 16.61 400

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1000 PERU DRIVE | McCARRAN, NEVADA

*Subject parcel outline is not exact

JOSEPH BLATNER / Senior Vice President (503) 200-2029 / [email protected]

cemex reno msa - loopnet...cemex was established 110 years ago and is a global building materials...

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