8683 E VIA DE NEGOCIO

Transcription

1 8683 E VIA DE NEGOCIO Scottsdale, Arizona OFFERING MEMORANDUM EXCLUSIVE INVESTMENT ADVISORS Jerry Jacobs Exec. Managing Director Jeffrey Rosenbloom Associate jejacobs@ngkf.com jeffrey.rosenbloom@ngkf.com 2398 E. Camelback Road Suite 950 Phoenix, Arizona Main Fax

2 CONFIDENTIALITY AGREEMENT & DISCLAIMER This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. 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 Newmark Grubb Knight Frank and it should not be made available to any other person or entity without the written consent of Newmark Grubb Knight Frank. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Newmark Grubb Knight Frank. This offering memorandum has been prepared to provide summary, unverified financial and physical 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. Newmark Grubb Knight Frank 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 local, 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 offering memorandum has been obtained from sources we believe to be reliable; however, Newmark Grubb Knight Frank has not verified, and will not verify, any of the information contained herein, nor has Newmark Grubb Knight Frank 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

3 EXCLUSIVE INVESTMENT ADVISORS Jerry Jacobs Exec. Managing Director Jeffrey Rosenbloom Associate PROPERTY DESCRIPTION 4 Offering Overview 4 Property Description 5 Floorplans 6 Aerials, Maps & Site Plan 8 MARKET OVERVIEW 12 Overview 12 Office Report 14 Comparables - Lease/Sold 16 FINANCIAL ANALYSIS 21 Property Summary 21 Rent Roll 22 Cashflow Anaylsis 23 3

4 OFFERING OVERVIEW NEWMARK GRUBB KNIGHT FRANK IS PLEASED TO PRESENT TO QUALIFIED INVESTORS, THE OPPORTUNITY TO PURCHASE 8683 E VIA DE NEGOCIO, AN 8,444 SQUARE FOOT MULTI-TENANT OFFICE BUILDING LOCATED IN PHOENIX, ARIZONA. Investment Summary 8683 E Via De Negocio is well located in Scottsdale, Arizona. It is located within minutes of the Loop 101 freeway and surrounded by retail amenities. Class A Improvements Covered Parking Timeless Split-Face Block Construction 8683 E Via De Negocio consists of a two-story, block constructed multi-tenant office building with flexible suite sizes. The property attracts professional tenants who typically live and work in Scottsdale or Paradise Valley. ASKING PRICE: $1,795,000 ($212/SF) ADDRESS: 8683 E Via De Negocio, Scottsdale, AZ BUILDING SIZE: LAND AREA: 8,444 SF 25,617 SF YEAR BUILT: 1984 Remodeled 2015 PARKING: 33 total / 14 covered OCCUPANCY: 100% PROFORMA N.O.I.: $138,897

5 PROPERTY DESCRIPTION DESCRIPTION: 8,444 Rentable Square Foot, Two Story Multi-tenant Office Building, Located in Scottsdale, Arizona A two-story, split-face block construction located in Scottsdale, Arizona. [ PROPERTY DESCRIPTION ] ADDRESS: 8683 E Via De Negocio, Scottsdale, AZ BUILDING SIZE: 8,444 SF OFFERING PRICE: $1,795,000 ($212/SF) CONSTRUCTION: Brick, Masonry YEAR BUILT: 1984 Remodeled 2015 LAND AREA: 25,617 SF PARCEL NUMBERS: ZONING: C-O City of Scottsdale PARKING: 4/1,000 SF (33 free surface, 14 covered) HVAC: 12 package units on the roof (programmable thermostats) 5

6 PROPERTY DESCRIPTION

7 PROPERTY DESCRIPTION [ PROPERTY DESCRIPTION ] 7

8 LOCATION MAP 101 McDowell Mountain Park SURPRISE SUN CITY EL MIRAGE PEORIA 60 SCOTTSDALE FOUNTAIN HILLS GOODYEAR GLENDALE PARADISE 101 P H O E N I X VALLEY Tonto National Forest 10 AVONDALE TOLLESON TEMPE 202 MESA Estrella Mountain Park Phoenix South Mountain Park GILBERT CHANDLER QUEEN CREEK

9 AERIAL MAP [ PROPERTY DESCRIPTION ] N PIMA ROAD N HAYDEN ROAD E VIA DE VENTURA E V I A D E N E G O C I O SITE E VIA DE COMMERCIO 9

10 SITE MAP E VIA DE VENTURA E VIA DE NEGOCIO E VIA DE COMMERCIO SUBJECT PROPERTY

11 [ PROPERTY DESCRIPTION ] 11

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13 SCOTTSDALE POINTS OF INTEREST Spring Training Spring Training baseball under the warm Arizona sun has been a tradition for devoted fans since Scottsdale is home to the San Francisco Giants, Colorado Rockies and Arizona Diamondbacks. The San Francisco Giants play in the heart of downtown Scottsdale at Scottsdale Stadium. A short drive north, the Colorado Rockies and Arizona Diamondbacks play at the Salt River Fields at Talking Stick. along Scottsdale s border with the Salt River Pima-Maricopa Indian Community. Talking Stick Resort & Casino Located conveniently off Loop 101 and Talking Stick Way, Talking Stick is a top cultural and entertainment destination for both Arizona residents and tourists. A Talking Stick Resort, a 4-diamond hotel, offers luxurious guest rooms and hotel suites embodying the unique flavor of Scottsdale. Home to the best casino experience in Scottsdale, Talking Stick Casino is home to the Arizona State Poker Championship, featuring a prize pool of over $1,000 every August. The Casino also offers numerous headliner concerts throughout the year. Topgolf Topgolf offers a unique, unforgetable experience with competitive golf games for all ages. With climate-controlled bays that mirror a bowling lane, you experience golf like never before including an impressive food and drink menu, private spaces for groups of any size, HDTVs and a complete music selection for any taste. Waste Management Open Dubbed The Greatest Show on Grass, the Phoenix Open (known as the Waste Management Phoenix Open) is a top PGA tour golf tournament held in Late january/early February at the TPC of Scottsdale. The tournament hosts many of the top names in professional golf and includes the one-of-a-kind 16th Hole experience, where fans can cheer on their favorite golfer in a fun, relaxed, party-like atmosphere. The Thunderbirds host this tournament each year with proceeds funding many charities, including the Special Olympics activities in Phoenix. The 4-day attendance is normally around a half million and is the best-attended event in golf. In 2016, it set PGA Tour and Phoenix Open single day attendance record with 201,003 fans in attendance on Saturday and a tournament week attendance record of 618,365 fans. Kierland Commons Kierland Commons is a mixed-use destination and was the first lifestyle center in Arizona. The 600,000 squaer foot Main-Streetstyle development includes shopping, dining, entertainment, office space and upscale loft condominiums. Included in the development is the Westin Kierland Resort and Spa, the 27-hole Kierland Golf Club, aprpoximately 75 stores and restaurants - including many of the top brands in the retail market. Scottsdale Airpark Scottsdale Airpark is in the heart of one of gthe Phoenix area s major hubs for urban growth with increasing numbers of businesses and employees moving to this 5 square mile area of North Scottsdale. More than 55,000 employees work for approximately 3,000 companies within the Scottsdale Airpark area. In 2016, Scottsdale Airpark added nearly 1,200 jobs. Scottsdale Fashion Square Scottsdale is home to some of the best shopping in the State of Arizona, including Scottsdale Fashion Square - a premier upscale mall. Scottsdale Fashion Square features Arizona s largest assortment of luxury brands, upscale amenities, exclusive sales and events and is a central location in the heart of Scottsdale. Oldtown/Downtown Scottsdale A premier destinatino for visitors and residents alike, Oldtown/ Downtown Scottsdale is home to unique art galleries, specialty retail, southwest cultural activities, dining ventures from casual to upsscale and an extraordinary nightlife. [ MARKET OVERVIEW ] 13

14 SCOTTSDALE OFFICE REPORT Strong Finish to End the Year The metro Phoenix office market finished 2016 strong with 668,184 square feet of positive net absorption in the fourth quarter, the biggest quarterly gain of the year. This gain helped push the annual net absorption total to 1.95 million square feet, a slight drop from 2015, but still a healthy figure with a two-year run topping more than 4.0 million square feet in net occupancy gains. The market s overall vacancy rate declined further during the fourth quarter to 19.6%, a 110-basis-point improvement from a year ago and the first time the rate has fallen below 20% since Demand for Class A office space remains red hot, with the lowest vacancy in the Tempe and Scottsdale submarkets. Large blocks of available space (above 40,000 square feet) continue to diminish in these submarkets. The Tempe South/Chandler submarket led all others with 143,381 square feet in quarterly net absorption, as Northern Trust occupied the remaining 75,000 square feet of its build-to-suit property at Discovery Business Campus. The Scottsdale North/Airpark submarket tallied 137,969 square feet of net absorption this quarter, with Hartford Insurance moving into 101,420 square feet at Raintree Corporate Center. MARKET SUMMARY Year to Date Total Inventory 4,734,584 Vacancy Rate 13.7% Quarterly Net Absorption 42,601 Average Asking Rent $25.57 Rent Growth Average rental rate increases continued across the region, finishing the first quarter at $23.03/SF. This represents a year-over-year rate increase of 7.3%, marking the highest annualized growth rate since Rates are projected to continue to increase throughout the year, as tenant demand and absorption levels remain strong. Rate increases were highest at the top-level Class A buildings, some up by more than the $2.00/SF to $3.00/SF over the past year. The Class A rate reached $26.47/SF, with the highest rates in the Camelback Corridor and North Scottsdale submarkets. Rising rents in the traditionally strong Class A markets have spurred demand in Class B product in neighboring submarkets. Employment Tops Two Million The metro Phoenix labor market reached its highest level ever in November, topping 2.0 million nonfarm jobs. Despite this record total, the job growth rate slowed to 1.1% compared with the same month last year, adding 21,500 jobs. The educational and health services continued to add the most over the past year with 8,300 jobs. Financial activities led all office-using employment growth with 5,500 new jobs, marking a 3.2% job growth rate. The region s robust employment growth continued to drive the unemployment rate down to 4.1% in November, well below both the state and national rates of 5.0% and 4.6%, respectively. The recent voter-approved Proposition 206, which raises the state s minimum wage to $10.00 an hour in January 2017 and to $12.00 an hour in 2020, will have an impact on the region s employment in the coming years. Under Construction 271,000

15 Asking Rent and Vacancy Submarket Statistics Under Total Qtr YTD Class A Class B Total Inventory Construction Vacancy Absorption Absorption Asking Rent Asking Rent Asking Rent (SF) (SF) Rate (SF) (SF) (Price/SF) (Price/SF) (Price/SF) Downtown North/Midtown 8,920, % -39,467-39,467 $24.84 $20.77 $ % $25 $20 25% $15 20% $10 15% $5 10% $0 5% 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 Average Asking Rent (Price/SF) Vacancy (%) Downtown South 6,929,954 26, % 62,248 62,248 $30.85 $27.90 $29.49 CBD Total 15,850,903 26, % 22,781 22,781 $27.65 $22.33 $ th Street Corridor 3,183, % 6,908 6,908 $25.32 $23.60 $24.58 Airport Area 6,864, , % 57,385 57,385 $24.92 $22.61 $23.10 Camelback Corridor 6,860, , % 21,937 21,937 $34.15 $24.91 $31.06 Central/East Phoenix 1,062, % 10,266 10,266 - $18.37 $15.26 Chandler/Gilbert 4,858, % -21,390-21,390 $25.02 $22.10 $23.89 Deer Valley/Airport 5,186, % 183, ,363 $25.26 $19.17 $22.44 Glendale 825, % -28,589-28,589 $22.13 $15.22 $20.53 Mesa Downtown 256, % 4,847 4,847 - $17.34 $16.30 Mesa East 637, % 1,405 1,405 $26.52 $15.70 $24.54 N Phoenix/Desert Ridge 2,223, % 6,961 6,961 $27.37 $21.23 $25.09 Northwest Phoenix 4,433, % -17,533-17,533 $21.91 $18.79 $18.97 Piestewa Peak 2,072, % -10,702-10,702 $25.42 $19.54 $21.38 Scottsdale Central 4,734, , % 42,601 42,601 $28.14 $23.25 $25.57 Scottsdale North/Airpark 7,972, % 77,080 77,080 $29.68 $24.01 $28.64 Net Absorption Square Feet, Millions Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 Source: U.S. Bureau of Labor Statistics Employment By Industry [ MARKET OVERVIEW ] Scottsdale South 3,603, % -34,102-34,102 $34.23 $30.28 $33.24 Sun City 709, % 1,279 1,279 - $21.77 $21.77 Superstition Corridor 2,497, % -4,249-4,249 $23.11 $16.77 $19.11 Tempe 7,303, % 595, ,468 $32.48 $22.86 $27.38 Tempe South/Chandler 5,102, % -7,650-7,650 $23.62 $22.32 $22.45 West Phoenix 847, % 11,156 11,156 $25.78 $18.82 $20.53 Suburban Total 71,235, , % 896, ,441 $28.11 $21.59 $24.63 Totals 87,086, , % 919, ,222 $28.03 $21.75 $24.58 Phoenix-Mesa-Glendale, AZ, January % 3.1% 1.8% 0.2% 6.1% 9.1% 11.1% 11.9% 19.5% 15.0% 17.1% Trade, Transportation, and Utilities Professional & Business Services Educational & Health Services Government Leisure and Hospitality Financial Activities Manufacturing Construction Source: U.S. Bureau of Labor Statistics 15

16 COMPARABLES - LEASE MAP E Shea Blvd 4 E Mountainview Rd 2 3 N Hayden Rd E Via Linda E Doubletree Ranch Rd N Sc ottsdale Rd SUBJECT PROPERTY 7 N Pima Rd 1 E Via de Ventura N Dobson Rd Lease Comps 1. PIMA CENTER 8414 N 90TH ST 2. IRONWOOD SQUARE,PHASE I N 92ND ST - BLDG M N 95TH ST - BLDG E N HAYDEN RD - BLDG F E INDIAN BEND RD - BLDG H E INDIAN BEND RD 7. THE VILLAGE AT HAYDEN 8390 E VIA DE VENTURA 6 5 E Indian Bend Rd

17 COMPARABLES LEASE PIMA CENTER 8414 N 90th St Scottsdale, AZ N 95th St - Bldg E Scottsdale, AZ RENT: $25.50/SF Modified Gross RENT: $22.00/SF Full Service BUILDING SIZE: 16,663 SF BUILDING SIZE: 6,363 SF OCCUPANCY: 70.5% OCCUPANCY: 53.0% IRONWOOD SQUARE LEASING COMPANY: Levrose Real Estate LEASING COMPANY: The Plaza Companies [ MARKET OVERVIEW ] N 92nd St Scottsdale, AZ N Hayden Rd - Bldg F Scottsdale, AZ RENT: $27.00/SF Full Service RENT: $21.00/SF Full Service BUILDING SIZE: 5,798 SF BUILDING SIZE: 9,880 SF OCCUPANCY: 67.3% OCCUPANCY: 61.7% LEASING COMPANY: Menlo Group LEASING COMPANY: LevRose Real Estate 17

18 COMPARABLES LEASE 8151 E Indian Bend Rd - Bldg H Scottsdale, AZ E Indian Bend Rd Scottsdale, AZ RENT:$25.50/SF Full Service BUILDING SIZE: 18,265 SF RENT: $24.00/SF Full Service BUILDING SIZE: 10,110 SF OCCUPANCY: 57.0% OCCUPANCY: 55.9% LEASING COMPANY: Core Realty Partners LEASING COMPANY: Omni American THE VILLAGE AT HAYDEN 8390 E Via De Ventura - Bldg F Scottsdale, AZ RENT: $22.00/SF Full Service BUILDING SIZE: 19,420 SF OCCUPANCY: 85.7% LEASING COMPANY: CBRE

19 COMPARABLES MAP SOLD E Shea Blvd E Mountain View Rd E Via Linda N Sc ottsdale Rd Sale Comps 1. IRONWOOD OFFICE SQUARE N 92ND ST E Doubletree Ranch Rd N Via Linda N Hayden Rd SUBJECT PROPERTY N Pima Rd N 90th St E Via de Ventura N Dobson Rd [ MARKET OVERVIEW ] E INDIAN BEND RD 3. IRONWOOD OFFICE SUITES II 9431 E IRONWOOD SQUARE DR 4. IRONWOOD OFFICE SUITES II 9455 E IRONWOOD SQUARE DR 2 E Indian Bend Rd 19

20 COMPARABLES SOLD IRONWOOD OFFICE SQUARE N 92nd St Scottsdale, AZ E Ironwood Square Dr Scottsdale, AZ SOLD: 05/09/2016 PRICE: $5,650,000 SOLD: 06/16/2016 PRICE: $1,400,000 SF $/SF: $ $/SF: $ CAP: 7.40% CAP: N/A YEAR BUILT: 2003 YEAR BUILT: E Indian Bend Rd Scottsdale, AZ SOLD: 11/20/2015 PRICE: $1,500,000 $/SF: $ IRONWOOD OFFICE SUITES II 9455 E Ironwood Square Dr Scottsdale, AZ SOLD: 05/27/2016 PRICE: $1,230,000 $/SF: $ CAP: N/A CAP: N/A YEAR BUILT: 2004 YEAR BUILT: 2004

21 FINANCIAL INFORMATION PURCHASE PRICE: $1,795,.000 GROSS LEASABLE AREA: OWNERSHIP TYPE: 8,444 SF Fee Simple PRICE/SF: $ PROFORMA CURRENT NET OPERATING INCOME: $138,897 EXPENSES * AMOUNT AMOUNT/SF CURRENT OPERATING DATA RENT/LEASE INCOME: $176,664 PARKING INCOME: $420 EXPENSE REIMBURSEMENTS: $0.00 LESS VACANCY FACTOR: Actual* EFFECTIVE GROSS INCOME (EGI): $177,084 TOTAL EXPENSES: ($38,187) PROFORMA NET OPERATING INCOME (NOI): $138,897 END OF YEAR ONE CAP RATE: 7.74% REAL ESTATE TAXES: $15,333 $1.81 INSURANCE: $2,850 $0.34 OTHER EXPENSES: $3,600 $0.43 DUES: $756 $0.09 WATER & SEWER: $1,536 $0.18 ELECTRIC: $12,996 $1.54 TRASH: $1,116 $0.13 TOTAL EXPENSES: $38,187 $4.52 *Based on 2016 actuals. Tenants pay their janitorial directly to vendor. [ FINANCIAL ANALYSIS ] *No vacancy allowance was taken. Actual income was used since % of the center is occupied, effectively being a 20 percent vacancy. 21

22 RENT ROLL SUITE TENANT SQUARE FEET % PROJECT TERM RENT/SF MONTHLY RENT ANNUAL RENT DATE OF INCREASE LEASE ADJUSTMENT 100 NEW TENANT 4, % TBD TBD $21.35 $7, $94, TBD TBD 200 ADECCO 4, % $20.45 $6, $82, $0.50 annually TOTAL 8, % AVERAGE: TOTAL OCCUPIED 8, % TOTAL AVAILABLE 0 0% THE TENANTS Entegee Inc., a Subsidiary of Adecco Inc., leases the second floor with a corporate guarantee from Adecco Inc. The lease term expires 6/30/2021. Since 1958, ENTEGEE has responded to the staffing needs of hundreds of companies by providing experienced professionals in the engineeering and technical industries. ENTEGEE has over fifty years of experience in providing Fortune 500 and other companies with highly qualified technical personnel. All our offices combined currently employ over 2,500 contract engineering and programming specialists, and maintain an internal staff of over 300 successful recruiting and customer service personnel. The Adecco Group is the world s leading provider of HR solutions. With more than 32,000 FTE employees and around 5,100 branches, in over 60 countries and territories around the world, we offer a wide variety of services, connecting around 700,000 associates with our clients every day. The services we offer fall into the broad categories of temporary staffing, permanent placement, career transition and talent development, as well as outsourcing and consulting.

23 EXCLUSIVE INVESTMENT ADVISORS Jerry Jacobs Exec. Managing Director Jeffrey Rosenbloom Associate E. Camelback Road Suite 950 Phoenix, Arizona 85016