Advanced-Tech-Caterpillar-Peoria-IL-OM

NET LEASE INVESTMENT OFFERING Advanced Technology Services & Caterpillar 8201 N University Street Peoria, Illinois TABLE OF CONTENTS TABLE OF CONTENTS I Executive Profile II Location Overview III Market & Tenant Overview Executive Summary Investment Highlights Property Overview Proforma Analysis Property Description Rent Comparables NET LEASE INVESTMENT OFFERING Photographs Aerial Site Plan Map Demographic Report Market Overview Tenant Overview DISCLAIMER STATEMENT 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 has The Boulder Group 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 NET LEASE INVESTMENT OFFERING EXECUTIVE SUMMARY EXECUTIVE SUMMARY: The Boulder Group and Joseph & Camper Commercial are pleased to exclusively market for sale a fully leased Advanced Technology Services (ATS) & Caterpillar property located in Peoria, Illinois Both tenants have long operating histories for more than 20 years and this building serves as the headquarters for ATS Caterpillar has a market capitalization of $69.47 billion ATS is currently undergoing a significant improvement process, which will total approximately of $1.3 million Additionally, current ownership has invested $450,000 into the property in the past year ATS’ lease has approximately nine years remaining and Caterpillar has six Both leases feature annual rental escalations Currently, ATS $9.84 PSF and Caterpillar is paying $3.47 PSF ATS’ portion of the property is 47% office space and the remainder is lab/warehouse The office portion of the property serves as the corporate headquarters for ATS Caterpillar utilizes 95% of its space for warehouse and distribution The Peoria industrial market contains nearly 30 million square feet of inventory While the logistics market here primarily serves the local economy, Peoria is the largest city on the Illinois River, a principal tributary of the Mississippi River, and goods are transported as far as the Gulf of Mexico Vacancies remain healthy due to the lack of construction across the metro Rent growth remains strong, posting cumulative growth over 2% from 2015-2018 The 418,147 SF square foot property is located just off of Allen Road (19,400 VPD) and Pioneer Parkway (18,800 VPD) in the Pioneer Industrial Park The property is near numerous other industrial and office properties as well as retailers including Menards, Walmart Supercenter, Kroger, ALDI and Sherwin-Williams There are over 85,000 people living within five miles of the property with an average household income of $91,628 Caterpillar Inc is an American Fortune 100 corporation which designs, develops, engineers, manufactures, markets and sells machinery, engines, financial products and insurance to customers via a worldwide dealer network It is the world’s largest construction equipment manufacturer In 2018, Caterpillar was ranked #65 on the Fortune 500 list and #238 on the Global Fortune 500 list Caterpillar stock is a component of the Dow Jones Industrial Average Advanced Technology Services, Inc provides industrial maintenance and MRO services It offers a range of onsite factory maintenance solutions, including plant safety, standards and best practices, skilled workforce, smart technologies, MRO asset management, reliability-centered maintenance, and factory maintenance It serves aerospace, automotive, building products, heavy equipment, consumer packaged goods, paper and pulp, and tire and rubber industries The company was founded in 1985 and is headquartered in Peoria, Illinois with regional offices in Schaumburg, Illinois; Livonia, Michigan; Greenville, South Carolina; Kettering, United Kingdom; and Monterrey, Mexico Advanced Technology Services, Inc is a former subsidiary of Caterpillar Inc NET LEASE INVESTMENT OFFERING INVESTMENT HIGHLIGHTS INVESTMENT HIGHLIGHTS: NET LEASE INVESTMENT OFFERING • Caterpillar is investment grade rated by S&P: A • Long operating histories at the location for more than 20 years • Headquarter location for ATS • ATS is currently undergoing a renovation in excess of $1.3 million • Submarket vacancy is under 5% • Annual rental escalations • Vacancies in Peoria remain healthy due to the lack of construction across the metro and rent growth has been strong, posting cumulative growth over 2% from 2015-2018 • Located just off of Allen Road (19,400 VPD) and Pioneer Parkway (18,800 VPD) in the Pioneer Industrial Park • Near numerous other industrial and offices properties as well as tenants including Menards, Walmart Supercenter, Kroger, ALDI and Sherwin-Williams Over 85,000 people living within five miles of the property with an average household income of $91,628 • ATS has revenue in excess of $300 million PROPERTY OVERVIEW PROPERTY OVERVIEW: Price: $22,552,089 Cap Rate: 9.00% Rent Rent Schedule: Advanced Technology Services $1,196,642 $1,225,829 $1,255,015 $1,284,202 $1,313,388 $1,342,574 $1,371,761 $1,400,947 $1,430,134 Caterpillar $1,028,983 $1,049,741 $1,070,499 $1,091,256 $1,112,014 $1,135,737 Escalation Date August 1, 2019 August 1, 2020 August 1, 2021 August 1, 2022 August 1, 2023 August 1, 2024 August 1, 2025 August 1, 2025 August 1, 2027 August 1, 2019 August 1, 2020 August 1, 2021 August 1, 2022 August 1, 2023 August 1, 2024 Lease Expiration: Advanced Technology Services – July 31, 2028 Caterpillar – July 31, 2025* Year Built: 1959/1982/1992 Lease Type: NN Building Size: Advanced Technology Services – 121,610 SF Caterpillar – 296,537 SF Total – 418,147 SF Land Size: 17.06 AC At closing, Seller will escrow the total rent for the final two years of Caterpillars lease term In the event that Caterpillar elects to terminate their lease, escrow will release these funds to the Buyer This way the Buyer will be made whole with rent for the full lease term of Caterpillar in the event of an early termination In the event that Caterpillar does not exercise their early termination right, the funds will revert back to Seller PROFORMA ANALYSIS PROFORMA ANALYSIS: Income Rental Income Base Rent CAM Insurance Real Estate Taxes Management Fee Total Reimbursements Total Rental Income $2,196,492 63,347 48,762 184,710 26,172 $322,991 $2,519,483 (2019 rents - including 8/1/19 increases) (see footnote #1) (ATS/CAT pay pro rate shares) (ATS reimburses 43.43% & CAT 50%) (29.08% of $90,000 fee) Expenses CAM Insurance Real Estate Taxes Management Fee Total Expense $(153,326) (48,762) (197,707) (90,000) $(489,795) (see footnote #1) (based on Owner estimate) (2018 actual cost payable in 2019) ($7,500/mth cost) Net Operating Income $2,029,688 Footnote #1: ATS reimburses pro rate share of 29.08% of CAM costs including storm water utility and amortization of CapEx work Caterpillar does not reimburse any additional monies for CAM expenses with the possible exception of storm water utility cost The reimbursement above is a rough estimate 2018 reconciliation has not been prepared yet ATS Share at 29.08% Security Electrical Repairs Repairs & Maintenance (incl snow) Administrative Utilities (Fire Service) Utilities (Stormwater) Landscaping $7,084 6,500 95,540 300 2,400 26,452 15,050 $153,326 $2,060 1,890 27,783 87 698 7,692 4,377 $44,587 Possible CAT Reimbursement Estimated CAM Reimbursement $18,760 $18,760 $63,347 PROPERTY DESCRIPTION PROPERTY DESCRIPTION: Current Zoning: I-1 Clear Height: 22-24 feet* Dock High Doors: 18 Ground Level Doors: Foundation: Concrete slab-on-grade with perimeter and interior footings under load bearing structures Superstructure: Steel-framed with perimeter and interior steel columns supporting steel beams and open web roof joists Faỗade: Painted Exterior Insulation Finishing System (EIFS) and painted concrete masonry unit (CMU) walls Roof: Low-slope, combination of mechanically-fastened, single-ply thermoplastic membrane and built-up roofing with granular-surfaced modified bitumen cap sheet HVAC: A combination of hot water loop with boilers and variable air volume (VAV) units, rooftop-mounted packaged units, split system units, and gas-fired warehouse space heaters Fire Protection: Central system *Buyer to verify NET LEASE INVESTMENT OFFERING MARKET REPORT MARKET REPORT: The Peoria industrial market contains nearly 30 million SF of inventory While the logistics market here primarily serves the local economy, Peoria is the largest city on the Illinois River, a principal tributary of the Mississippi River, and goods are transported as far as the Gulf of Mexico Despite jumping a bit in 2017, vacancies remain healthy here due to the lack of construction across the metro Rent growth has been strong, posting cumulative growth over 2% from 2013-2018 Industrial Market Statistics (Q1 2019) Peoria MSA Existing Inventory: 29,900,000 SF Vacancy: 4.4% NET LEASE INVESTMENT OFFERING Rental Rate (Gross): $4.61 Under Construction: RENT COMPARABLES RENT COMPARABLES: Address City State Building Size (SF) Year Built Rent PSF 5703 Smithville Rd Bartonville IL 195,783 2000 $3.75 801 SW Jefferson Peoria IL 184,867 1981 $3.50 399 Truckhaven East Peoria IL 46,868 1990 $3.40 600 W Camp Street East Peoria IL 302,435 1967 $3.00 2551 W College Ave Normal IL 73,600 1990 $4.50 NET LEASE INVESTMENT OFFERING PHOTOGRAPHS NET LEASE INVESTMENT OFFERING PHOTOGRAPHS NET LEASE INVESTMENT OFFERING PHOTOGRAPHS TENANT IMPROVEMENT PHOTOGRAPHS: NET LEASE INVESTMENT OFFERING PHOTOGRAPHS NET LEASE INVESTMENT OFFERING PHOTOGRAPHS NET LEASE INVESTMENT OFFERING AERIAL NET LEASE INVESTMENT OFFERING SITE PLAN NET LEASE INVESTMENT OFFERING MAP NET LEASE INVESTMENT OFFERING DEMOGRAPHIC REPORT DEMOGRAPHIC REPORT: Population 3-Mile 5-Mile 10-Mile Total Population 39,095 85,165 190,445 Total Households 16,698 37,227 77,761 Income 3-Mile 5-Mile 10-Mile $107,908 $91,628 $78,420 Average Household Income NET LEASE INVESTMENT OFFERING MARKET OVERVIEW MARKET OVERVIEW: Peoria, Illinois Peoria is the county seat of Peoria County, Illinois, and the largest city on the Illinois River Established in 1691 by the French explorer Henri de Tonti, Peoria is the oldest European settlement in Illinois, and is named after the Peoria tribe As of the 2010 census, the city was the seventh-most populated in Illinois (and the third largest outside the Chicago metropolitan area), with a population of 115,007 The Peoria Metropolitan Statistical Area had a population of 373,590 in 2011 Caterpillar employs over 125,000 people worldwide, 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) The Embassy Suites and Riverfront Conference Center, caters to the Caterpillar offices, Bradley University, and Peoria Civic Center The Embassy Suites and Riverfront Conference Center is ideal for East Peoria meetings and events and boasts a 50,000 square foot conference center NET LEASE INVESTMENT OFFERING TENANT OVERVIEW TENANT OVERVIEW: Advanced Technology Services Inc Advanced Technology Services, Inc provides industrial maintenance and MRO services It offers a range of onsite factory maintenance solutions, including plant safety, standards and best practices, skilled workforce, smart technologies, MRO asset management, reliability-centered maintenance, and factory maintenance The company’s MRO asset management solutions include storeroom management, inventory management, repairable parts management, and supply chain and procurement It serves aerospace, automotive, building products, heavy equipment, consumer packaged goods, paper and pulp, and tire and rubber industries The company was founded in 1985 and is headquartered in Peoria, Illinois with regional offices in Schaumburg, Illinois; Livonia, Michigan; Greenville, South Carolina; Kettering, United Kingdom; and Monterrey, Mexico Advanced Technology Services, Inc is a former subsidiary of Caterpillar Inc Website: www.advancedtech.com Locations: USA, Mexico, United Kingdom Number of Employees: 3,000 Headquarters: Peoria, Illinois TENANT OVERVIEW TENANT OVERVIEW: Caterpillar Inc Caterpillar Inc is an American Fortune 100 corporation which designs, develops, engineers, manufactures, markets and sells machinery, engines, financial products and insurance to customers via a worldwide dealer network It is the world’s largest construction equipment manufacturer In 2018, Caterpillar was ranked #65 on the Fortune 500 list and #238 on the Global Fortune 500 list Caterpillar stock is a component of the Dow Jones Industrial Average Caterpillar, Inc engages in the manufacture of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives It operates through the following segments: Construction Industries, Resource Industries, Energy and Transportation, Financial Products, and All Other The Construction Industries segment supports customers using machinery in infrastructure and building construction applications The Resource Industries segment is responsible for supporting customers using machinery in mining and quarrying applications and it includes business strategy, product design, product management and development, manufacturing, marketing and sales and product support The Energy and Transportation segment supports customers in oil and gas, power generation, marine, rail, and industrial applications The Financial Products segment offers a range of financing alternatives to customers and dealers for Caterpillar machinery and engines, solar gas turbines, as well as other equipment and marine vessels The All Other segments include activities such as; the business strategy, product management and development, and manufacturing of filters and fluids, undercarriage, tires and rims, engaging tools, and fluid transfers Website: www.caterpillar.com Credit Rating: A (S&P) Stock Symbol: CAT (NYSE) Market Capitalization: $80B Founded: 1925 Headquarters: Peoria, Illinois John Feeney Senior Vice President 847.562.9280 john@bouldergroup.com 3520 Lake Avenue, Suite 203 Wilmette, IL 60091 www.bouldergroup.com Brad Joseph Managing Broker 309.692.1135 bradjoseph@djoseph.com Tom Camper Broker 309.256.1020 tomcamper@josephcamper.com 5001 N University Street Peoria, IL 61614 www.hosephcamper.com