sale leaseback investment offering€¦ · sc2 supply chain services and solutions. 2314 east...
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SC2 Supply Chain Services and Solutions2314 East Wilkins DriveMossville, IL 61552 (Peoria MSA)
SALE LEASEBACK INVESTMENT OFFERING
NET LEASE INVESTMENT OFFERING
TABLE OF CONTENTS
I. Executive Summary
Executive SummaryInvestment HighlightsProperty OverviewMarket Statistics
II. Location Overview
Site PlanAerialMapPhotos
III. Market & Tenant Overview
Tenant ProfileLocation OverviewDemographics
NET LEASE INVESTMENT OFFERING
DISCLAIMER STATEMENT
The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group.
This Offering Memorandum 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. The Boulder Group has not made any investigation, and makes no warranty or representation.
The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable;however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor hasThe Boulder Group conducted any investigation regarding these matters and makes no warranty or representationwhatsoever regarding the accuracy or completeness of the information provided. All potential buyers must takeappropriate measures to verify all of the information set forth herein.
DISCLAIMER STATEMENT:
NET LEASE INVESTMENT OFFERING
EXECUTIVE SUMMARY
The Boulder Group is pleased to exclusively market for sale a single tenant SC2 Supply Chain Services and Solutions (SC2) sale leaseback opportunity located in the Peoria MSA. The property is strategically positioned in the immediate vicinity to numerous large Caterpillar manufacturing plants. The SC2 property is utilized for contract packaging and cross dock services for Caterpillar. The SC2 lease will have an initial primary term of seven years remaining upon close of escrow. This absolute triple net lease will feature 2% annual rental escalations.
The SC2 property is located on 39.78 acres and features four steel office-warehouse light industrial buildings of different sizes totaling 478,400 square feet. The surrounding area is affluent with average annual household incomes within a five mile radius in excess of $104,000. There are over 45,000 people living within a seven mile radius of the property. Mossville is a town located just north of Peoria and is part of the Peoria MSA. The Peoria MSA has a population of approximately 375,000 people, making it the third largest metropolitan area in the state of Illinois.
In addition to being utilized for contract packaging and cross dock services for Caterpillar, top coat industrial finishing is also performed on a small array of service parts received at this location prior to packaging. The contract packaging business services post production service parts throughout Caterpillar’s dealer network. Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Caterpillar is a publicly traded company on the New York Stock Exchange (CAT) with a market capitalization in excess of $90 billion.
In addition to the Caterpillar plants, the immediate area will soon benefit from a recently announced partnership between Caterpillar and SunSelect. In the partnership, SunSelect would buy land that Caterpillar owns next to its energy generation facility to build a hydroponic greenhouse. The greenhouse would use excess thermal energy and carbon dioxide from Caterpillar’s facility, boosting healthy plant production. While plans aren’t finalized yet, the empty land could soon be filled with up to 60 acres of greenhouses and bring 300 jobs to the area. The SunSelect company launched in British Columbia in 1985, now operates more than 70 acres of greenhouses in Canada and California, serving as one of the largest producers of bell peppers in North America.
SC2 currently offers air filtration products & service, steel fabrication, kitting, assembly, industrial blasting & painting, inventory management, warehousing, and in-house maintenance across 11 locations in three states (Illinois, Wisconsin & Texas). Currently, SC2 is the largest down-state Illinois contract packager for Caterpillar.
EXECUTIVE SUMMARY:
NET LEASE INVESTMENT OFFERING
INVESTMENT HIGHLIGHTS
• Low rent PSF of $2.25
• New lease with 2% annual rental escalations
• Absolute triple net lease with no landlord responsibilities
• Since 2009, the tenant has invested $2.9 million into the property
• Strategic location adjacent to numerous large Caterpillar plants
• Affluent area with average annual household incomes within a five mile radius in excess of $104,000
• Tenant has successfully been in business for over 30 years
• Tenant is the largest down-state Illinois contract packager for a Caterpillar
• Strategic Midwest location with over 56 million people living within a 350 mile radius of the property
• Located in the Peoria MSA which is home to the corporate headquarters of Caterpillar and the third largest metropolitan area in the state of Illinois
INVESTMENT HIGHLIGHTS:
NET LEASE INVESTMENT OFFERING
PROPERTY OVERVIEW
Price: $10,500,000
Cap Rate: 10.25%
Net Operating Income: $1,076,400
Lease Commencement Date: Sale Leaseback – Close of Escrow
Lease Term: 7 Years
Rental Escalations: 2% Annual
Renewal Options: Three 5-Year
Tenant/Guarantor: SC2, Supply Chain Services & Solutions Services
Year Built: 1977/1997
Lease Type: NNN – No Landlord Responsibilities
Building Sizes: A: 147,400 SF
B: 40,000 SF
C: 156,000 SF
D: 135,000 SF
Total: 478,400 SF
Land Size: 39.78 Acres
PROPERTY OVERVIEW:
The Peoria Industrial market ended the four quarter 2017 with a vacancy rate of 3.9%. The vacancy rate is down overthe previous quarter, with net absorption totaling negative 48,300 square feet in the fourth quarter. Vacant sublease spaceremained unchanged in the quarter, ending at 0 square feet. Rental rates ended the fourth quarter at $4.54, an increaseover the previous quarter. There were no properties under construction at the end of the quarter.
NET LEASE INVESTMENT OFFERING
MARKET STATISTICS
INDUSTRIAL MARKET STATISTICS (Q4 2017)
Peoria MSA
Existing Inventory: 28,700,000 SF
Net Absorption (YTD): (48,300) SF
Vacancy: 3.9%
Rental Rate (Gross): $4.54
Under Construction: 0 SF
Source: CoStar
MARKET STATISTICS:
NET LEASE INVESTMENT OFFERING
SITE PLAN
Mai
nten
ance
B
uild
ing
N
WILKENS DRIVE
SITE
AERIAL
NET LEASE INVESTMENT OFFERING
N
East Cedar Hills Drive
(16,00
0 VPD)
North O
ld Galena R
oad
29
UPPER PEORIA LAKE
MOSSVILLE ELEMENTARY SCHOOL
NET LEASE INVESTMENT OFFERING
MAP
N
NET LEASE INVESTMENT OFFERING
EXTERIOR PHOTOS
NET LEASE INVESTMENT OFFERING
INTERIOR PHOTOS
NET LEASE INVESTMENT OFFERING
TENANT PROFILE
SC2 Supply Chain Services and Solutions began in Tremont, Illinois in 1983 as Superior Blasting & Painting Inc. The business grew over the following 5 years becoming a supplier to a local fortune 500 company. In 1988, the employees purchased the company through an ESOP (Employee Stock Ownership Plan). Since then, the company rebranded and renamed itself to better align its identity with its diverse offering of services and solutions to a variety of customers in the agriculture, mining & automotive industries.
SC2 currently offers air filtration products & service, steel fabrication, kitting, assembly, industrial blasting & painting, inventory management, warehousing, and in-house maintenance across locations in two states (Illinois & Texas). Currently, SC2 is the largest down-state Illinois contract packager for a Fortune 500 company and an Automotive Manufacturer.
Within the last ten years, SC2 has continued to grow in both size and services. In 2004, SC2 acquired NuAir Filter Corporation located in Bloomington/Normal, IL. The addition of NuAir provided many new service offerings such as air filtration, fabrication, kitting, sequencing and in-house maintenance. In the last six years, they have added Logistics facilities in Mossville and Bartonville, IL as well as Waco, TX.
Website: www.sc2services.com
Headquarters: Peoria, IL
TENANT PROFILE:
NET LEASE INVESTMENT OFFERING
LOCATION OVERVIEW
Mossville is an unincorporated community between Peoria and Chillicothe in Peoria County. Mossville is part of the Peoria, Illinois Metropolitan Statistical Area and resides closely to the northern part of Peoria. Centered on the Illinois River valley and the end of Illinois Route 6 at Illinois Route 29, Mossville informally encompasses a number of different neighborhoods along the valley: Renchville, Brookview, a cluster of houses along the Illinois River referred to as “The Lanes”, and Cedar Hills Estates, as well as the unincorporated village of 900 that can be considered Mossville proper. The Lake of the Woods subdivision, as well as Colony Point, both on the west bluff of the Illinois River valley overlooking Mossville, can also be considered to be part of the greater Mossville area. Caterpillar Inc. located its Technical Research Center (Tech Center) in Mossville in the 1960s, and subsequently put production facilities (the Mossville plant) there as well. A co-operated Ameren/Caterpillar generation plant and a small industrial park also sits near the factories.
Peoria is the largest city on the Illinois River and the county seat of Peoria County, Illinois. As of the 2010 census, the city was the seventh-most populated in Illinois, with a population of 115,007. The Peoria MSA had a population of 373,590 in 2011, making it the third largest metropolitan area in the state after the Chicago metropolitan area and the Metro-East portion of the St. Louis metropolitan area.
Peoria is the world headquarters for Caterpillar Inc., one of the 30 companies composing the Dow Jones Industrial Average. Caterpillar employs over 125,000 people world-wide, of which 15,000+ are located in Peoria. Other significant employers in the area include the Methodist Medical Center, OSF Saint Francis Medical Center, and the Peoria School District. Peoria is also home to Bradley University (6,000 students) and Illinois Central College (12,000 students).
LOCATION OVERVIEW:
NET LEASE INVESTMENT OFFERING
DEMOGRAPHICS
DEMOGRAPHIC REPORT: Population 5 Miles 7 Miles 10 Miles
Total Population 23,090 45,608 113,772
Total Households 9,048 18,706 48,122
Income 5 Miles 7 Miles 10 Miles
Median Household Income $77,440 $72,801 $62,953
Average Household Income $104,049 $97,919 $84,114
Randy [email protected]
John FeeneyVice President 847.562.9280 [email protected]
666 Dundee Road, Suite 1801Northbrook, IL 60062
www.bouldergroup.com
5001 N. University StreetPeoria, IL 61614
www.josephcamper.com