Page 1

MICHAEL LINDER, SIOR 614.410.5628 michael.linder@colliers.com

CONTACT US:

JEFF DEVINE 847.698.8264 jeff.devine@colliers.com

STEVE DISSE 847.698.8263 steve.disse@colliers.com

Grove City, Ohio 43123

3500 Southwest Boulevard


8 15 22

Property

Financial Information

Market

www.Colliers.com

6250 N. River Road Ste 11100 Rosemont, IL 60018 847.698.8444

Two Miranova Place Suite 900 Columbus, OH 43215 614.436.9800

STEVE DISSE 847.698.8263 steve.disse@colliers.com

JEFF DEVINE 847.698.8264 jeff.devine@colliers.com

MICHAEL LINDER, SIOR 614.410.5628 michael.linder@colliers.com

CONTACTS:

3

TABLE OF CONTENTS: Executive Summary

3500 SOUTHWEST BOULEVARD GROVE CITY, OHIO 43123

THIS PROPERTY IS BEING SOLD AS AN “AS IS, WHERE IS” SALE.

THIS CONFIDENTIAL MEMORANDUM SHALL NOT BE DEEMED A PREPRESENTATION OF THE STATE OF AFFAIRS OF THIS PROPERTY OR CONSTITUTE AN INDICATION THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS OR AFFAIRS OF THE PROPERTY SINCE THE DATE OF PREPARATION OF THIS MEMORANDUM.

If you do not wish to pursue negotiations leading to this acquisition, or if in the future you discontinue such negotiation, you agree to return this confidential memorandum to Colliers.

THE SELLER EXPRESSLY RESERVES THE RIGHT AT ITS SOLE DESCRETION TO REJECT ANY OR ALL PROPOSALS OR EXPRESSIONS OF INTEREST IN THE PROPERTY AND TO TERMINATE DISCUSSIONS WITH ANY PARTY AT ANY TIME WITH OR WITHOUT NOTICE.

By receipt of this confidential memorandum, you agree that the memorandum and its contents are confidential, that you will hold and treat it in the strictest of confidence, that you will not, directly or indirectly, disclose or permit anyone else to disclose this memorandum or its contents to any other person, firm or entity without prior written authorization of Seller and that you will not use or permit to be used this memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Photocopying or other duplication is strictly prohibited.

This confidential memorandum, which contains brief, selected information pertaining to the business and affairs of the Property, has been prepared by Colliers International (“Colliers). This confidential memorandum does not purport to be all-inclusive or to contain all the information which a prospective purchaser may desire. Neither Seller nor Colliers nor any of their officers, employees or agents make any representation or warranty, expressed or implied, as to the accuracy or completeness of this confidential memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto.

THIS IS A CONFIDENTIAL MEMORANDUM intended solely for your own limited use in considering whether to pursue negotiations to acquire 3500 Southwest Boulevard (the “Property”) located in Grove City, Ohio and is not intended to be an offer for the sale of the Property.


EXECUTIVE SUMMARY


BUILDING HIGHLIGHTS > Class-A bulk warehouse > 100% occupied > Stabalized asset > Tenant has occupied the building since it was built

Built in 1992, this fully occupied Class-A facility is home to Pier 1 Imports (U.S.), Inc. Pier 1 Imports (U.S.), Inc. a wholly owned subsidiary of Pier 1 Imports, Inc., guarantor of the lease.

EXECUTIVE SUMMARY On behalf of Sun Life Insurance of Canada (“Seller”), Colliers International, as exclusive broker, is pleased to offer for sale 3500 Southwest Boulevard. This offering consists of one bulk distribution building totaling 527,127 square feet. The Property is located west of Broadway on Southwest Boulevard in Grove City, Ohio less than two and a half miles from the Interstate 270/SR 62 interchange. The southwest industrial submarket is located only ten minutes south of Interstate 70 which serves as a major trans-America distribution avenue connecting the east coast with the west coast.

• • • • • • • • •

Single load design 180’ deep truck court ESFR fire protection system 28’6”-31’8”z clear height 521’ building depth 5” thick reinforced concrete slab Typical 51’ W x 40’ D column spacing 2.9% office finish Trailer parking

LEASE RATE $3.15 PSF (annually), NNN

LEASE EXPIRATION Lease renewal with new expiration date of December 31, 2017

TERM 20-year and two day term with a commencement date of December 30, 1994

CURRENT CASH FLOW STABILITY 100% leased to Pier 1 Imports (U.S.) Inc. with lease guaranteed by Pier 1 Imports Inc.

NET LEASE STRUCTURE Tenant reimburses pro rata share of CAM, taxes, insurance and management fees

QUALITY TENANCY Pier 1 Imports Inc. is North America’s largest specialty retailer of unique fashion-forward, decorative home furnishings and gifts directly imported from many countries around the world - displayed in over 1,000 Pier 1 Imports stores.

CLASS-A BUILDING DESIGN


$ 1,758,443 $ 1,758,441 $ 1,758,250 $ 1,758,053 $

Projected NOI January 2014-December 2014 January 2015-December 2015 January 2016-December 2016 January 2017-December 2017

3 Year Average

Property Tours Market tours are available on appointment. Please contact Michael Linder to coordinate a tour.

OFFERING SUMMARY

Terms The property is being sold on an “as-is, where is� basis, without structural, economic or environmental representations or warranties.

Offer Format The building is being offered free and clear of any mortgage financing

Offer Due Date To be determined

1,976,3


PROPERTY


3500 Southwest Blvd. is in the heart of Columbus’ Southwest submarket. This submarket is one of central Ohio’s most coveted importing and exporting arena given its quick access to Interstate 71.


PROPERTY

3500 Southwest Blvd.

Ohio, United States, North America


3500 Southwest Blvd.

Grove City, Ohio, United States


S

Rd

Southwest Blvd.

g

Bi

n Ru

h

t ou I-270

isb Ha rr

KEY DISTANCES I-270: 1.5 miles I-71: 4.0 miles I-70: 5.5 miles

ike urg P


53 truck spaces

PROPERTY

51 truck spaces

528,300 SF 527,127 SF 30.411 Acres

Lewis Center Way

19 truck spaces

Southwest Blvd.


Trailer Parking 140 trailer spots Truck Courts 180’ truck court Dock Loading Forty-five (45) dock doors Drive-In Loading One (1) drive-in door Zoning “IND-2” (Heavy Industrial) in the City of Grove City

Year Completed 1992

Ceiling Height 28’6”-31’8” clear

Sprinkler System ESFR

Column Spacing Typical 51’W x 40’D

Building Depth 521’

527,127

Total

Auto Parking 121 auto parking spaces

SF 505,867 15,260 6,000

Type of Space Warehouse Office Axillary

Building Construction Pre-cast concrete

GENERAL INFORMATION

PROPERTY

30.411 Acres

Acres

Tenancy Tenant has occupied the building since it was built

Vacancy 100% occupied

Building Type Class-A bulk warehouse, single load design

Site size ±30.411 acres

Office 2.9% office finish

100%

% Occupied 96.0% 2.9% 1.1%


Charging Station

Warehouse

Office

Charging Station

Dock Area

Warehouse office

Docks

Outside Eating Area

Warehouse


Warehouse Heating • Four (4) Titon direct gas fired air rotations producing 50,000 cfm 92 1/4” external static pressure each and produce a maximum of 3,850,000 BTUH of heating ventilation air.

Warehouse Lighting Combination of 400-watt and 1,000-watt high pressure sodium lighting installed in high-bay fixtures with acrylic reinforcement producing 26-33 foot candles on average

Warehouse Floor • 5” thick, reinforced concrete floor slab

Fire Protection System • ESFR with 150 hp, 1,500 gpm electric fire pump rated at 12.5 psi with backup generator

Roof Structure • Single-ply EPDM membrane roof (Ballasted) over 2” R-12.5 3rd insulation

Exterior Walls • 8” insulated pre-cast concrete panels

Dock Doors and Equipment • Forty-five (45) dock doors (9’2” x 10’) with full vertical, foam insulation and vision lights • 40,000 lb. hydraulic levelers. Dock seals on every door • One (1) 12’ x 14’ drive-in door with motor operator

Pavement Specifications • Car Area: 3” asphalt pavement over 8” stone base • Truck Area: 6” concrete reinforced

Utilities • 2” domestic water line, 8” fire line, 6” sanitary sewer, 2” gas line • Electric - Three (3) 3-phase, 2,000 amp 277/480 volt panels

Warehouse Exhaust • Eleven (11) mounted exhaust fans with interlocked powered levelers • 114 (48” x 96”) skylights

CONSTRUCTION OVERVIEW


FINANCIAL INFORMATION


COLLIERS INTERNATIONAL

3.00%

Credit/Vacancy Reserve:

P. 16

$0.00 PSF

2.5% of Gross Rental Revenue

3.00%

PSF $0.05 $0.12 $0.18 $0.06 $0.41

320,657 320,657 0 100%

8/1/12

2010 Capital Reserve:

Management Fee:

Expense Annual Growth Rate:

Total $16,476 $37,740 $57,222 $18,637 $130,075

Total SF Occupied SF Vacant SF Percent Occupied

2012 Estimated Operating Expenses Insurance Real Estate Taxes CAM Management Fees Total Expenses

Size and Occupancy:

Effective Date of Analysis:

INITIAL OPERATING ASSUMPTIONS

FINANCIAL INFORMATION

2012 Commission Structure: CASHOUT New Effective Commission 8.0%

2012 2nd Generation TI Allowance: New $2.00/sf

Renewal 3.0%

Renewal $0.50/sf

General Inflation Inflation Method: Fiscal Method: Fiscal Inflation Rate: 3.00% Market Rent Growth Rate: 3%, 4%, 4%, 3% thereafter 2012 Market Rates $2.25 PSF Base Rent Escalation (within term): 2.50% Renewal Probability: 75% Downtime on Turnover: 9 Months Term: 5 Years Expense Recoveries: Pro rata share of CAM, Taxes, Insurance, and Management Fees

MARKET LEASING ASSUMPTIONS


500,771

Taxes

1,758,443

NET OPERATING INCOME

CASH FLOW

1,732,087

26,356

TOTAL LEASING & CAPITAL COSTS

0 26,356

Leasing Commissions

Capital Reserves

0

Tenant Improvements

LEASING & CAPITAL COSTS

662,029

TOTAL OPERATING EXPENSES

31,628

105,425

CAM

Ins

24,205

Mgmt

OPERATING EXPENSES

$3.29

$0.05

$0.05

$0.00

$0.00

$3.34

$1.26

$0.06

$0.95

$0.20

$0.05

$4.59

$1.21

637,824

Expense Reimbursement Revenue

2,420,472

$3.38

Scheduled Base Rental Revenue

TOTAL EFFECTIVE GROSS REVENUE

$0.00

1,782,648

Absorption & Turnover Vacancy

$3.38

1,732,085

26,356

26,356

0

0

1,758,441

662,029

31,628

500,771

105,425

24,205

2,420,470

637,824

1,782,646

0

1,782,646

Feb-2015

@ 3-1-14 $ / SF

Base Rental Revenue

EFFECTIVE GROSS REVENUE

Year 1

Year 1

In Place

1,731,103

27,147

27,147

0

0

1,758,250

681,354

32,576

515,794

108,588

24,396

2,439,604

656,958

1,782,646

0

1,782,646

Feb-2016

Year 2

FINANCIAL INFORMATION

1,730,092

27,961

27,961

0

0

1,758,053

701,261

33,554

531,268

111,846

24,593

2,459,314

676,668

1,782,646

0

1,782,646

Feb-2017

Year 3

1,319,914

28,800

28,800

0

0

1,348,714

717,630

34,560

547,206

115,201

20,663

2,066,344

580,806

1,485,538

(312,003)

1,797,541

Feb-2018

Year 4

1,056,179

871,998

29,664

582,771

259,563

1,928,177

744,604

35,597

563,622

118,657

26,728

2,672,781

744,601

1,928,180

0

1,928,180

Feb-2019

Year 5

1,945,828

30,554

30,554

0

0

1,976,382

766,844

36,665

580,530

122,217

27,432

2,743,226

766,842

1,976,384

0

1,976,384

Feb-2020

Year 6

1,994,321

31,471

31,471

0

0

2,025,792

789,749

37,765

597,946

125,883

28,155

2,815,541

789,747

2,025,794

0

2,025,794

Feb-2021

Year 7

2,044,021

32,415

32,415

0

0

2,076,436

813,341

38,898

615,885

129,660

28,898

2,889,777

813,338

2,076,439

0

2,076,439

Feb-2022

Year 8

2,094,960

33,387

33,387

0

0

2,128,347

837,636

40,065

634,361

133,550

29,660

2,965,983

837,633

2,128,350

0

2,128,350

Feb-2023

Year 9

708,857

1,010,884

34,389

675,591

300,904

1,719,741

857,992

41,267

653,392

137,556

25,777

2,577,733

714,992

1,862,741

(372,548)

2,235,289

Feb-2024

Year 10

2,246,433

35,421

35,421

0

0

2,281,854

888,889

42,505

672,994

141,683

31,707

3,170,743

888,886

2,281,857

0

2,281,857

Feb-2025

Year 11


Insurance Lessee will maintain insurance on the Premises of the following character: Insurance against risks of direct physical loss, including loss by fire, lightning and other risks which at the time are included under “Special Form” coverage, in amounts sufficient to prevent Lessor and Lessee from becoming a coinsurer of any loss but in any event in amounts not less than 100% of the actual replacement value of the Improvements, exclusive of foundations and excavations.

Rental Schedule Period Amount/Mo. $/SF/Yr. 1/1/14 - 12/31/17 $ $

Lease Term 20 years and two days, expiring December 31, 2014 Lease renewed with expiration date of December 31, 2017

Lease Commencement Date December 30, 1994

527,127 SF 100%

Total Leased Premises: Percentage Occupancy:

Tenant Address 3500 Southwest Boulevard Grove City, Ohio

Taxes Lessee shall pay, prior to delinquency, all taxes, assessments, excises, levies, fees, water and sewer rents and charges, and all other governmental charges, general and special, ordinary and extraordinary, foreseen and unforeseen, which are, at any time prior to or during the Primary Term or any Extended Term hereof, imposed or levied upon or assessed against or which arise with respect to the Premises or Lessor’s ownership or interest therein, any Basic Rent, additional rent or other sums payable hereunder, the operation, possession or use of the Premises, or this Lease or the leasehold estate created hereby; all gross receipts or similar taxes (i.e., taxes based upon gross income which fail to take into account deductions with respect to depreciation, interest, taxes or ordinary and necessary business expenses, in each case relating to the Premises) imposed or levied upon, assessed against or measured by any Basic Rent, additional rent or other sums payable hereunder (“Gross Receipts Taxes”); all sales, value added, ad valorem, use and similar taxes at any time levied, assessed or payable on account of the acquisition, ownership, leasing, operation, possession or use of the Premises; all charges of utilities, communications and similar services serving the Premises; and all In-Lieu Taxes.

Guarantor - Pier 1 Imports, Inc. The Guarantor does absolutely, irrevocably and unconditionally guaranty, as primary obligor and not merely as surety, without offset of deduction of any kind whatsoever, to and for the benefit of Lessor, the payment in full by the Lessee of all its payment obligations under the Lease when due (whether on the stated date of payment, on demand, by acceleration or otherwise), whether such obligations now exist or arise hereafter, strictly in accordance with the terms of the Lease and the punctual performance and observance by the Lessee of all other terms, conditions, covenants and agreements under the Lease to be performed or observed by the Lessee, strictly in accordance with the terms therein provided for. The Guarantor agrees that if for any reason whatsoever the Lessee shall fail to punctually make any such payments or to punctually perform or observe any such term, condition, covenant or agreement, the Guarantor shall duly and punctually pay, perform and/or observe the same.

Tenant Pier 1 Imports (U.S.), Inc.

LEASE SUMMARY

FINANCIAL INFORMATION


TENANT PROFILE

Security Deposit None

Lessee may, on or before the close of business on the tenth (1Oth) business day following delivery of the Negotiation Notice, deliver to Lessor an irrevocable offer (“Lessee’s Offer”) to purchase the Premises upon the same terms and conditions set forth in the Negotiation Notice. If Lessee so elects, the parties shall enter into a contract for the sale of the Premises upon such terms and conditions, which contract shall provide for a closing within 30 days after

Prior to entering into a binding contract to sell the Premises, Lessor shall send a notice to Lessee (“Negotiation Notice”) which shall set forth in reasonable detail the price and other material economic terms which Lessor is desirous of obtaining in a sale of the Premises.

Limitation on Sale Right Lessor shall not be free to sell or transfer its interest in the Premises during the Lease Term unless the purchaser or transferee is, in Lessee’s reasonable judgment, of satisfactory business character and reputation and Lessor has complied with the following procedures:

Revenue increased 11.2% from $1,533.6 million in fiscal year 2012 to $1,704.9 million in fiscal year 2013.

Store occupancy costs during fiscal 2012 were $265.9 million or 17.3% of sales, compared to $262.4 million, or 18.8% of sales during fiscal 2011. Rent, property taxes, utilities and repair and maintenance expenses were all lower as a percentage of sales.

Based in Fort Worth, TX, Pier 1’s Gross profit, which is calculated by deducting store occupancy costs from merchandise margin dollars, was 42.5% expressed as a percentage of sales in fiscal 2012, compared to 39.8% a year ago. Merchandise margins were 59.8% as a percentage of sales, an increase of 120 basis points over 58.6% in fiscal 2011. This improvement was the result of strong input margins, the right balance of regular and promotional pricing, and well-managed inventory levels.

Pier 1 Imports (U.S.), Inc. Pier 1 Imports, Inc. www.pier1.com NYSE: PIR

Following a sale of the Premises by Lessor, the purchaser, and each successive party which acquires the Premises thereafter, shall be bound by and subject to the limitations on sale of the Premises set forth in this Section.

Landlord’s Responsibility Lessor shall not be required to maintain, repair or rebuild all or any part of the Premises under any circumstances.

Options to Extend Extension notice was not given by Tenant and therefore Tenant has no right to extend the lease term.

If and only if Lessee fails to deliver a Lessee’s Offer within the time provided in subparagraph, Lessor shall be free to enter into a contract to sell the Premises during the period ending with the close of business on the one hundred eightieth (180th) day following delivery of the Negotiation Notice provided that the purchase price under such contract shall be not less than ninety-two and one-half percent (92.5%) of the purchase price set forth in the Negotiation Notice.

delivery of Lessee’s Offer.

Tenant’s Responsibility Lessee, at its own expense, will maintain all parts of the Premises in good safe repair and condition and will take all action and will make all structural and nonstructural, foreseen and unforeseen and ordinary and extra ordinary changes and repairs which may be required to keep all parts of the Premises in good safe repair and condition (including, but not limited to, all painting, glass, utilities, conduits, fixtures and equipment, foundation, roof, exterior walls, heating and air conditioning systems, wiring, plumbing, sprinkler systems and other utilities, and all paving, sidewalks, roads, parking areas, curbs and gutters, awnings and fences).

FINANCIAL INFORMATION


MARKET


Rickenbacker Intermodal Terminal • Provides direct access to and from industrial parks to multiple transportation options, reducing overall transportation costs fordomestic and international shippers • More than 300,000 container transfers a year • Provides many advantages, including reduced shipper costs, less environmental emissions, improved safety, and regional competitiveness • In conjunction with the Heartland Corridor Project, provides direct double-stack, next-day rail service to and from the port of Norfolk, Virginia Rickenbacker Foreign-Trade Zone • Includes the General Purpose Zone at Rickenbacker International Airport in Franklin and Pickaway counties • Provides many benefits to companies engaged in international sourcing and distribution through potential deferral, reduction and elimination of customs duties

Summary of Current Conditions - Columbus, Ohio The Columbus Industrial market consists of approximately 213.5 million square feet of industrial space spread throughout 12 individual submarkets. Within this tracked set, the Columbus Industrial market registered a 6.4 percent vacancy rate at the end of the third quarter, 2013, which represented a 40 basis point decrease from the second quarter’s 6.8 percent rate. Net lease rates continue to increase as the warehouse/distribution rates ranged from $2.46 psf to $4.00 psf. Net absorption totaled 1.73 million square feet

The Southwest Industrial submarket is located along the southwestern edge of Franklin County. Largely industrial and containing an estimated 17.5 million square feet, the Southwest Industrial submarket can easily be seen as one of central Ohio’s most coveted importing and exporting arena given its quick access to Interstate 71. An immense mix of employers such as Wal-Mart Distribution, FedEx, Gap Direct and Pier 1 help to maintain this area’s superior growth of labor and large distribution centers.

MARKET OVERVIEW

EXECUTIVE SUMMARY WHY COLUMBUS? including

four

multi-modal

Extensive transportation network, coupled with aggressive tax incentives and foreign trade zones, has made Columbus a prime location for warehouse and distribution facilities - over 90% of Columbus’ 213.5 million SF industrial market is bulk/distribution

Fortune 500 and 15 Fortune 1000 companies are headquartered in Columbus

5

Columbus has been ranked the most favorable business location with accessibility to the American market. Columbus is within 500 miles of 48 percent of the U.S. population, more than any other metro.

Second fastest growing major metropolitan area in the Midwest and the 15th largest city in the country (2 million residents, 1.3%

Over 22 percent growth is projected (2006-2016) for the transportation and warehousing sector

Southern).

mainline rail (CSX and Norfolk

intermodal facilities served by

infrastructure

world-class

The Columbus Region features


www.colliers.com

Colliers International Two Miranova Place Suite 900 Columbus, OH 43215

Steve Disse 847.698.8263

Jeff Devine 847.698.8264

Michael Linder, SIOR 614.410.5628

CONTACT DETAILS

The information contained herein was obtained from sources believed reliable; however, Colliers International makes no guarantees, warranties, or representations as to the completeness or accuracy thereof. The presentation of this property is submitted subject to errors, omissions, change of price or conditions prior to sale or lease, or withdrawal without notice.

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