offering memorandum fedex ground...fedex ground. the lease commenced october 2008 and features rent...

Offering Memorandum

FedEx Ground

750 Daniel A Belmonte Dr | Emporia, Virginia

Subject Property

Offered ExclusivelyConfidentiality and Restricted Use Agreement

This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC.

This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.

The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title.

BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief.

Jim GibsonRegional [email protected]

Todd Moore Director [email protected]

Marshall [email protected]

Marc PeelerAssociate [email protected]

Neal [email protected]

Jaime PattesonResearch [email protected]

In Association with:Zachary HarrisVA #0225216133

Stan Johnson Company10333 Richmond Avenue | Suite 740Houston, Texas 77042 P: 832.476.3440

stanjohnsonco.com

Table of Contents

Section 1: About the Investment

The Offering & Investment Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section 2: Tenant & Property Overview

Lease Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Total Industrial Submarket Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Credit Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Site Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Floor Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Section 3: Location Overview & PhotosLocation Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Aerial Photos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Subject Property Photos

Section One

About the Investment

FedEx Ground Package System, Inc. • Emporia, VA 5

The OfferingStan Johnson Company is pleased to offer for sale to qualified

investors a single tenant industrial facility located in Emporia,

Virginia.

The Property is a 50,678 SF distribution warehouse, built-to-suit for

FedEx Ground. The lease commenced October 2008 and features

rent increases both in the primary term and renewal options. The

Landlord has minimal obligations, mainly capital repairs to building

envelope.

FedEx Ground is a subsidiary of FedEx Corp., the world’s largest

commerce provider. With a net worth of almost $14 Billion, FedEx

Corp. is rated ‘BBB’ by S&P and ‘Baa2’ by Moody’s. The successful

investor will acquire a recently-built warehouse facility, strategically

located in a consistently performing Virginia market, leased long-

term to an investment grade tenant and leader of their industry

sector.

Investment HighlightsInvestment-Grade TenantFedEx Corporation (NYSE: FDX) is the world's largest commerce provider,

generating over $50.3 Billion in revenue in FY 2016. With a net worth of almost

$14 Billion, FedEx maintains an investment grade rating both from Standard

& Poor’s (BBB) and Moody's (Baa2). FedEx Ground (the tenant) is the most

profitable segment of FedEx Corporation, accounting for over $16 Billion in

FY 2016 revenues, and more than half of the Company’s operating income.

Well positioned for e-commerce, the FedEx Ground system is the largest road

connected network of distribution warehouses in the country.

Long-Term Tenancy Tenant has a successful 9-year operating history at the Property and long-term

commitment demonstrated by the recent expansion and early lease extension.

Tenant Investment FedEx has made significant investment in the facility, including its extensive

addition of over 30,000 square feet in 2015 to help the flow of operations and

additional orders.

Attractive Lease with Rare Rent Increases The Property features a NN lease with eight (8) years remaining and a rare three

percent (3%) rent increase in 2018. The Property also has two five-year renewal

options; the first with a 10% rental increase and the second with a 5% rental

increase.

Strategic Location The Property is situated near the border of Virginia and North Carolina in an

industrial corridor with easy access to Interstate 95, Interstate 85 and Interstate

64, major thoroughfares on the East Coast. The position of the Property allows

the tenant to deliver to major metropolitan areas with ease including, but not

limited to, Richmond, Norfolk, Raleigh, Durham and Chapel Hill, among others.

Purchase Price: $8,413,513 Cap Rate: 7.40%

Property Summary

Address:750 Daniel A Belmonte DriveEmporia, Virginia 23847

Land Area (Acres): +/- 7.20 Acres

Building Size (SF): +/- 50,678 SF

Ownership Interest: Fee Simple

Encumbrances: None, Delivered Free & Clear

NOI: $622,600

Section Two

Tenant & Property Overview


Lease Abstract

Lease Overview

Location: 750 Daniel A Belmonte DriveEmporia, Virginia 23847

Trade Name: FedEx Ground

Tenant: FedEx Ground Package System, Inc,

Guarantor: FedEx Corporation

Building Size (SF)

Office Space SF:

Warehouse Space SF:

SF Total:

+/- 2,193 SF

+/- 48,485 SF

+/- 50,678 SF

Land Area (Acres): +/- 7.20 Acres

Year Built: 2008 (Expansion 2015)

Lease Term Remaining: Eight (8) Years

Rent Commencement: October 1, 2008

Rent Expiration: September 30, 2025

Renewal Options: Two (2), Five (5) year options

Rent Increases:3% in 2018, 10% in the first option and 5% in the second option

NOI: $622,600

Expenses:NN – Landlord is responsible for foundation, roof, exterior or load bearing walls and floor slabs.

Property Summary

Property Type: Industrial

Construction Type: Steel frame with a metal seam roof and metal exterior

Doors: 2 -drive-in doors (14’ x 16’)

11 dock-high doors (8’ x 9’)

18 back-in doors (can handle two trucks each) (18’ x 16’).

Safety:Building is fully equipped with sprinkler system

Rent Schedule

Years Annual Rent Rent Increase

Current –9/30/2018 $622,600 -

10/1/2018 -9/30/2025 $640,815 3%

10/1/2025 -9/30/2030 (Option 1) $704,897 10%

10/1/2030 -9/30/2035 (Option 2) $740,142 5%

Actual Location

N

Actual Location


Total Industrial Submarket Statistics

MarketExisting Inventory Vacancy YTD Net

Absorption YTD Deliveries Under Const SF Quoted Rates# Bids Total RBA Direct SF Total SF Vac %

Airport Ind 261 19,604,404 455,007 455,007 2.3% 388,583 216,000 160,480 $4.77

Amelia County Ind 13 284,162 152,000 152,000 53.5% 6,528 0 0 $2.25

Charles City County Ind 21 309,641 0 0 0.0% 51,800 0 0 $4.50

Dinwiddie County Ind 16 2,463,142 95,683 95,683 3.9% 0 0 0 $3.50

Downtown Ind 39 491,711 10,860 10,860 2.2% 7,055 0 0 $6.00

Goochland Ind 60 777,278 109,050 109,050 14.0% (62,680) 0 0 $7.48

I-95 N/Mechanicsville Ind 319 8,219,000 256,161 256,161 3.1% (21,122) 18,000 0 $7.37

I-95 North/Ashland Ind 192 7,167,721 299,494 311,716 4.3% 206,156 0 320,853 $5.55

I-95 S/I-295 S/Rt 10 Ind 148 14,243,790 423,944 423,944 3.0% 187,393 60,000 95,000 $4.43

Jeff Davis Corridor Ind 545 28,647,825 2,864,254 2,864,254 10.0% 60,691 0 0 $3.15

King and Queen County Ind 6 105,950 45,305 45,305 42.8% 0 0 0 $2.25

King William County Ind 14 191,862 9,100 9,100 4.7% (2,850) 0 0 $6.71

Laburnum/Rte 360 Ind 186 5,531,040 160,160 194,660 3.5% 94,540 0 0 $4.63

Louisa County Ind 17 454,807 0 0 0.0% 1,200 0 0 $10.00

Midlothian Corridor Ind 248 4,547,954 108,097 108,097 2.4% (21,451) 0 0 $7.94

New Kent County Ind 18 228,216 9,576 9,576 4.2% 9,500 0 0 $5.85

Powhatan Ind 23 276,976 16,410 63,930 23.1% 11,510 0 0 $7.49

Prince George Ind 53 4,568,189 384,945 384,945 8.4% (44,407) 0 0 $4.32

Rt 288 Corridor Ind 186 3,674,013 158,827 158,827 4.3% 8,771 0 0 $7.35

Scotts Add/West End Ind 478 11,135,104 235,002 235,002 2.1% 37,855 0 0 $7.59

Staples Mill/Parham Ind 258 6,372,574 515,196 515,196 8.1% 17,780 0 0 $6.11

Sussex County Ind 10 207,355 5,446 5,446 2.6% (5,446) 0 0 $2.60

TriCities Ind 159 5,559,555 286,428 286,428 5.2% 54,188 0 0 $2.17

Totals 3,270 125,062,269 6,600,945 6,695,187 5.4% 985,594 294,000 576,333 $4.58

The Property is located in the Richmond, Virginia Industrial Market and the Sussex County Submarket. The table below depicts second quarter 2017 market

statistics.

The Richmond Industrial Market as a whole ended the second quarter 2017 with a vacancy rate of 5.4%. The vacancy rate was down over the previous

quarter, with net absorption totaling positive 698,159 square feet in the second quarter. Average quoted rental rates ended the second quarter at $4.58 per

square foot per year, an increase from the previous quarter. A total of one building was delivered to the market in the quarter totaling 18,000 square feet,

with 576,333 square feet still under construction.

Mid-Year 2017

FedEx Ground Package System, Inc. • Fresno, CA 9FedEx Ground Package System, Inc. • Fresno, CA 9

FedEx Ground Fiscal 2016 2015 2014

Revenue (in millions)

$16,574 $12,984 $11,617

Margin 13.7% 16.7% 17.4%

Operating Income (in millions)

$2,276 $2,172 $2,021

Average Daily Volume

7,526 6,911 6,774

FedEx Express Fiscal 2016 2015 2014


$21,068 $21,633 $21,505

Margin 9.5% 5.8% 5.3%


$2,519 $1,584 $1,428

Average Daily Freight Volume

4,176 4,122 3,970

FedEx Freight Fiscal 2016 2015 2014


$6,200 $6,191 $5,757

Margin 6.9% 7.8% 6.1%


$426 $484 $351

Average Daily LTL Shipments

98.8 95.5 90.6

Credit Overview

FedEx Corporation (NYSE: FDX), the world’s largest commerce provider, is comprised of three major service lines. The original core business, FedEx Express, was founded in Little Rock, Arkansas in 1971 and now provides next day air service within the United States and time-definite worldwide service. FedEx Express operates one of the largest civil aircraft fleets in the world and carries more freight than any other airline; offering supply chain solutions including critical inventory logistics, transportation management, temperature-controlled transportation services, and international trade advisory services.

The FedEx Freight segment offers less-than-truckload and freight-shipping services. Offering Priority services for when speed is critical and Economy services for when time can be exchanged for savings, the increased use of rail for shipments for the latter has lowered costs while increasing reliability for customers. Operated in conjunction, this segment utilizes 20,000 vehicles and trailers from a network of 370 service centers.

FedEx Ground provides low-cost, day-certain service to every business address in the United States and Canada, as well as residential delivery to nearly 100% of U.S. residences through its FedEx Home Delivery service. FedEx Ground operates a multiple hub-and-spoke sorting and distribution system consisting of 547 facilities, including 33 hubs, in the United States and Canada that service over 50,000 company-owned trucks. With average daily package volume above 7.5 million, FedEx Ground is the highest yielding of the three FedEx Corp. service lines, accounting for over $16.5 billion in fiscal 2016 revenues. Despite the operating margins of the other lines of business steadily increasing year-over-year, FedEx Ground continues to lead the pack with a superior 13.7% margin. FedEx Ground also enjoyed the highest year-over-year revenue growth of nearly 28%. A 9% increase in average daily volume led largely by the growth of e-commerce helped push revenue up by over $3.5 billion through fiscal 2016.

The consolidated company, FedEx Corporation, offers a broad range of services and solutions which link 99% of the world’s GDP. Through fiscal 2016, FedEx Corporation generated $50.3 billion in revenues-up 6% year-over-year and over 10% since 2014- and has a net worth of approximately $13.7 billion. FedEx Corporation currently holds investment grade ratings with both Standard & Poor’s and Moody’s Investor Service issuing stable outlooks with BBB and Baa2 ratings, respectively.

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Quarterly Operating Income

FedEx Express FedEx Freight FedEx Ground


Site Plan

50,678± SQ. FT

Admin

Office

DA

NIE

L A

. BE

LM

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T D

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Floor Plan

N

Section Three

Location Overview & Photos

Location OverviewEMPORIA, VIRGINIA

Perched on the fall line of the Coastal Plain, the City of Emporia has historically been a commercial hub in Southside Virginia. The City of Emporia (pop. 5,700) is the southern gateway to Virginia. Just 8 miles from the North Carolina line, it is the first municipality on I-95 heading into Virginia. Emporia is an hour’s drive (65 miles) from the Capital City of Richmond, three hours’ drive (180 miles) from the Nation’s Capital, Washington, D.C., and is strategically “mid-way between the Big Apple and Disney World.” As a result, Emporia is ranked 3rd in the country in per capital retail sales. Emporia is well located for distribution purposes. Over half of the country’s population can be reached within one day's drive of Emporia. With six major interstate highways, Virginia has the third largest state-maintained transportation network in the country, providing quick access to the Northeast, Southeast and Midwest.

GREENSVILLE COUNTY

Located in southern Virginia, Greensville County is a 300-square-mile area just north of the North Carolina border. Greensville County is directly connected to the entire eastern seaboard by interstate highway and rail service. This positions the County along the valued I-95 corridor within easy access of large metropolitan areas like Raleigh, Richmond, and Norfolk.

Greensville County’s central East Coast location means that nearly 50 percent of the nation’s economic activity lies within a 500-mile radius of the community. Manufacturing continues to be one of Greensville County’s largest economic sectors.

THE PORT OF VIRGINIA

Located 80 miles from Emporia, the Port of Virginia is the third largest U.S. East Coast port, and due to natural harbor depth and Suez-class cranes, it is the only East Coast location capable of handling post-Panamax vessels (12,500+ TEU) as first and last port of call. The Port of Virginia has over 30 miles of on-dock rail and a channel depth of 50 feet and is the only East Coast port with Congressional authorization to dredge to 55 feet. The Port of Virginia is a hub port; an important distinction for the shipping public. Nearly 30 international shipping lines offer direct, dedicated service to and from Virginia, with connections to 200+ countries around the world. In an average week, more than 40 international container, breakbulk and roll-on / roll-off vessels are serviced at its marine terminals.

The Port of VirginiaDowntown Emporia

Highway I-95 Virginia

Richmond, Virginia- 65 miles from Emporia

Emporia is well located for distribution purposes


Demographics 180 Daniel A. Belmonte Dr | Emporia, VA 0 - 5 mi. 0 - 10 mi. 0 - 15 mi.

Population

2017 Population 9,856 18,162 32,289

2022 Population 9,566 17,800 31,502

2010-2017 Annual Rate -0.31% -0.29% -0.33%

2017-2022 Annual Rate -0.60% -0.40% -0.49%

Households

2017 Total Households 3,909 5,905 11,644

2022 Total Households 3,790 5,755 11,323

2010-2017 Annual Rate -0.33% -0.28% -0.33%

2017-2022 Annual Rate -0.62% -0.51% -0.56%

2017 Median Household Income $36,191 $38,321 $37,454

2017 Average Household Income $49,071 $50,198 $49,561

2017 Per Capita Income $19,841 $16,862 $18,182


Richmond

Raleigh

Charlotte

Virginia Beach

Washington D.C

Population 452,745

Population 681,170

Population 220,289

Population 485,880

Population 842,051

40,000 VPD

95,000 VPD

53,000 VPD

42,152 VPD

35,122 VPD

Traffic Counts

Distance from Subject Property

Richmond 65 miles

Virginia Beach 97 miles

Raleigh 116 miles

Washington DC 169 miles

Charlotte 259 miles

Surrounding Area

EmporiaPopulation 5,700

53,000 VPD

42,152 VPD

35,122 VPD

95,000 VPD

40,000 VPD

FedEx Ground Package System, Inc. • Fresno, CA 16FedEx Ground Package System, Inc. • Fresno, CA 16

Aerial Photos

Actual Location Photos

FedEx Ground Package System, Inc. • Fresno, CA 17FedEx Ground Package System, Inc. • Fresno, CA 17FedEx Ground • Brainerd, Minnesota 17

going beyond

The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.

Stan Johnson Company10333 Richmond Avenue | Suite 740Houston, Texas 77042P: +1 832.476.3440 | F: +1 832.476.3449

stanjohnsonco.com

In Association With:Zachary HarrisVA #0225216133

Jim GibsonRegional [email protected]

Todd [email protected]

Marshall [email protected]

Marc PeelerAssociate [email protected]

Neal [email protected]

Jaime PattesonResearch [email protected]

offering memorandum fedex ground...fedex ground. the lease commenced october 2008 and features rent...

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