INVESTMENT OPPORTUNITY

Transcription

1 INVESTMENT OPPORTUNITY 4561 E. MCDOWELL ROAD, PHOENIX, AZ MCDOWELL RD. 143 MCDOWELL RD. 143 MCDOWELL RD.

2 Table of Contents Table of Contents: Executive Summary... 3 Property Overview Location Summary Sales Comps...11 Recent Lease Comps...13 Tenant Overview...15 Income & Expense Summary...16 MCDOWELL RD. Lease Abstracts...17 Disclaimer...18 sfarrell@leearizona.com 2

3 Executive Summary The 4561 E. McDowell property is a single-tenant back office property situated with the heart of the Phoenix freeway network. This 40,946 square foot two-story building offers a stable income with string upside rent potential from an international credit tenant. Aztec Engineering has occupied the property since 2005, with the most recent lease renewal in AZTEC is a multi-discipline engineering and environmental consulting firm that works with private and public entities to design, construct and maintain critical infrastructure projects in the United States. With an in place rental rate that is 30-40% below market, the investment offers tremendous upside in rent or potential exit to an owner-user, given the highway visible landmark location. Financial Highlights Offering Price: $5,750,000 Price Per SF: $ Year 1 NOI: $397,608 Cap Rate: 6.91% Lease Summary Tenant: Aztec Engineering Size: 40,946 SF Term: 10/2015-9/2016: $30,800/Mo ($0.752/ SF NNN) 10/2016-9/2017: $31,967/Mo ($0781/SF NNN) 10/2017-9/2018: $33,134/Mo ($0.809/SF NNN) 10/2018-9/2019: $34,301/Mo ($0.837/SF NNN) 10/2019-9/2020: $35,468/Mo ($0.866/SF NNN) *Tenant may consider early termination with a 9-12 month advance notice, if buyer desires earlier access. sfarrell@leearizona.com 3

4 Property Overview PROPERTY: SIZE: BUILDING CONSTRUCTION: ZONING: LOT SIZE: PROPERTY TAXES: PARCEL NUMBER: COMMENTS: 4561 E. McDowell Road Phoenix, AZ ,946 SF Masonry Block Industrial Park, City of Phoenix 4.02 Acres (175,155 SF) $34,838.28; $15, (2 Parcels) M; K» Two-story office buildout with small storage warehouse component (±5,500 SF)» Excellent freeway access to SR143» Highly visible landmark location» Great parking ratio 3.7:1000 overall 4.2:1000 on office area only» ±1 acre undeveloped land allows for parking expansion RECENT IMPROVEMENTS: 105 ton roof top A/C unit ($500,000) (2017) $100,000 in tenant improvements (2015) 4

5 Property Overview 5

6 RURAL RD. PRIEST DR E. McDowell Rd. Property Overview Location Summary THOMAS RD. McDowell Road frontage 40TH ST. 44TH ST. 48TH ST. 52ND ST. Direct access to Hohokam Expressway Landmark location with strong identity Abundant area amenities MCDOWELL RD. DEER VALLEY RD. Agua Fria Fwy. Pima Fwy. 101 UNION HILLS DR. LL RD. BELL RD. BELL RD. 202 SUN CITY PEORIA 101 THUNDERBIRD RD. Grand Ave. GLENDALE GLENDALE AVE. CAMELBACK RD. 83RD AVE. TOLLESON PEORIA AVE. 59TH AVE. 51ST AVE MCDOWELL RD. 43RD AVE. Papago Fwy. Black Canyon Fwy. VAN BUREN ST. BUCKEYE RD. CENTRAL AVE. 16TH ST. PHOENIX Maricopa Fwy. 51 Squaw Peak Pkwy 24TH ST. LINCOLN DR. Sky Harbor Int'l Airport SHEA BLVD. PARADISE VALLEY 44TH ST. SCOTTSDALE RD. HAYDEN RD. MCDONALD DR. SCOTTSDALE SUBJECT MCDOWELL RD Pima Fwy. DOBSON RD. BEELINE HWY. 87 Red Mountain Fwy. MESA FOU H MCD VAN BUREN ST. WASHINGTON ST. 143 River Salt River NORTH BASELINE RD. South Mountain Fwy. 32ND ST. AHWATUKEE Superstition Fwy. Price Fwy. CHANDLER ARIZONA AVE. McQUEEN RD. COOPER RD. Santan Fwy. MAIN ST.. BROADWA TEMPE 202 MILL AVE. UNIVERSITY DR. 60 GUADALUPE RD. ELLIOT RD. WARNER Rd. RAY RD. VAL VISTA DR. CHANDLER BLVD. GIL GERMANN RD. Chandler Municipal Airport sfarrell@leearizona.com 6

7 Property Overview 1ST FLOOR PAPAGO I LOOS OPEN LDOB BOB W. L010 DENIS C. MARK G. MARK C. L012 L014 L016 OPEN L018 OPEN L020 OPEN L022 MARV S. CHRIS W. RON S. L024 L026 L028 OPEN L030 ROB L. L032 CONFERENCE PAPAGO II LD04 OPEN L011 ROBERT L. L013 Ii: L015 ffi 0.. L017 JEFF C. KARTHIK R. OPEN DAVID R. KEVIN R. NANCY L025 L027 L029 L031 L033 L035 SHELLEE w. L046 D RICK A. LUKE D. OPEN OPEN L048 LOSO L052 L054 D SCOTT M. L034 CAMELBACK I CONFERENCE L002 PROJECT FILES L019 LUCIANO OPEN EVERm B OPEN KLAS K. BRUCE L. s. APRIL R. L041 L043 L045 L047 L049 L051 L053 CURT S. L036 LEE M. OPEN BEN W. ABE A. OPEN L056 LOSS L060 L062 L064 DEREK L066 OPEN L068 J D D [ LOBBY LD01 PIESTEWA CONFERENCE L070 CAMELBACK II CONFERENCE L072 G. RICHARD ALAN L. ENNIS S HENRY N DAVID L057 u\1 L061 L063 L JOHN C. OPEN ANDY R. KEVIN 0. L074 L076 L078 LOBO L067 PRINTER / PLOTTER CD01 CD02 CD12 FIAT FILES OPEN L124 BOB R. BILL M. L104 L106 SPARE L108 JOE D. L110 ROB D. L112 OPEN DAVE B. MARIE J. L114 L116 L118 SURVEY L120 EQUIP. OPEN L126 SUE CREW L101 L103 SURVEY CREWS L105 DAN W. L109 CHAD L111 MEETING ROOM L113 SURVEY LAYOUT L115 FIAT FILES L121 BUILDING COMPASS BLOG MAINT. SUPUES PROJECTS COMPASS L140 BUILDING MAINTANCE JANITORIAL SURVEY SUE sfarrell@leearizona.com 7

8 Property Overview 2ND FLOOR 8

9 Property Overview SURVEY 9

10 Location Summary LOCATION SUMMARY 32ND ST. 36TH ST. THOMAS RD. 40TH ST. 44TH ST. 48TH ST. 52ND ST. Offering frontage on McDowell Road and supplemented with direct access to SR 143 (Hohokam Expressway), the McDowell location is central to the Valley freeway network. Loop 202: 1 mile I-10: 3.5 miles 44th Street Corridor: 1 mile MCDOWELL RD. Camelback Corridor: Loop 101: 3 miles 5 miles Downtown Tempe: 5 miles Light Rail: 1.5 miles VAN BUREN ST. WASHINGTON ST Further enhanced by proximity to Phoenix Sky Harbor International Airport just 1.5 miles south, Arizona State University just 5 miles east, the surrounding submarket is home to corporate neighbors, many of which are noted in the accompanying aerial. sfarrell@leearizona.com 10

11 Recent Sales Comps NO. PHOTO PARCEL/ PROPERTY ADDRESS E. Cotton Gin Loop Phoenix, AZ N. 22 nd Avenue Phoenix, AZ TOTAL SIZE (ACRES) YEAR BUILT SALE PRICE PRICE/SF SALE DATE COMMENTS 42, $7,500,000 $ Oct % cap rate Small bay multi-tenant Cotton Center location Superior image Varying short-term leases 38, $3,825,000 $ Sept % cap rate Dept. of Economic Security (tenant) Renovated in N. 24 th Street Phoenix, AZ 44, $7,075,000 $ Feb % cap rate 67% occupied at sale Multi-tenant W. Bell Road Surprise, AZ 29, $4,600,000 $ June % cap rate Multi-tenant office 86% occupied at sale E. Bethany Home Phoenix, AZ 28, $4,700,000 $ Dec % cap rate Multi-tenant Varying short-term leases N. 7 th Street Phoenix, AZ 63, $9,500,000 $ Oct % cap rate Multi-tenant product W. Elliot Tempe, AZ 37, $5,498,012 $ Dec Multi-tenant 7.5% cap rate 87.5% occupied S. Hardy Tempe, AZ 62, $8,323,088 $ Jan % cap rate Multi-tenant Leased through 2020 TOTALS/AVERAGE 346,639 $51,021,100 $ sfarrell@leearizona.com 11

12 Sales Comps Aerial 4 BELL RD. THUNDERBIRD RD. CACTUS RD. PEORIA AVE. OLIVE AVE. 2 NORTHERN AVE. GLENDALE AVE. 51ST AVE. 43RD AVE. 35TH AVE. 27TH AVE. 19TH AVE. 7TH AVE. CENTRAL AVE. 7TH ST. 16TH ST. 5 3 CAMELBACK RD INDIAN SCHOOL RD TH ST. 36TH ST. 44TH ST. THOMAS RD. McDOWELL RD. 202 LITCHFIELD RD. DYSART RD. AVONDALE BLVD. 107TH AVE. 99TH AVE. 91ST AVE. 83RD AVE. 75TH AVE. 67TH AVE. 59TH AVE. VAN BUREN ST. BUCKEYE RD. LOWER BUCKEYE RD. 143 PRIEST DR. MILL AVE. RURAL RD. BROADWAY RD. 1 SOUTHERN AVE. 60 BASELINE RD. 8 7 sfarrell@leearizona.com 12

13 Recent Lease Comps TENANT ADDRESS SQ. FT. TERM RATE DATE COMMENTS 1 CR Bard 2035 W. 4th Street Tempe 2 Mesa Airlines Phoenix Airport Center II 2617 S. 46th Street Phoenix 25, Mos. Mos. 1-6: Mos. 7-18: Mos : Mos : Mos : Mos : 23, Mos. Mos. 1-19: Mos : Mos : Mos : Mos : Mos : Mos : $0.00 $13.25 NNN $13.75 NNN $14.25 NNN $14.75 NNN $15.25 NNN $14.50 NNN $14.90 NNN $15.31 NNN $15.73 NNN $16.16 NNN $16.61 NNN $17.06 NNN 7/17 $20.00/SF TI Eff. Rate $ /17 $32.00/SF TI Eff. Rate $ :1000 parking 3 Walgreens Company 2225 S. Price Road Chandler 66, Mos. Mos. 1-8: Mos. 9-11: Mos : $0.00 $7.25 NNN $15.25 NNN 7/17 $19.00/SF TI 7/100 parking 4 Direct Energy Tempe Tech 1401 S. 52nd Street Tempe 55, Mos. Mos. 1-5: Mos. 6-12: $0.00 $12.50 NNN 2.5% annual increases 3/17 $5.00/SF retrofit TI 6/1000 parking 5 Konica Minolta Business Solutions USA, Inc E. Cotton Center Blvd. Phoenix 6 Circle K Stores, Inc. Warner Crossing 1120 W. Warner Tempe 23, Mos. Mos. 1-2: Mos. 3-14: Mos : 28, Mos. Mos. 1-6: Mos. 7-18: Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : $0.00 $18.39 MG $18.89 MG $0.00 $12.00 NNN $12.30 NNN $12.61 NNN $12.82 NNN $13.25 NNN $13.58 NNN $13.92 NNN $14.26 NNN $14.62 NNN $14.99 NNN 2/17 Lease starts 7/15/17 2/17 Year built /1000 parking sfarrell@leearizona.com 13

14 Recent Lease Comps TENANT ADDRESS SQ. FT. TERM RATE DATE COMMENTS 7 Enterprise Chandler Corporate Center IV 4100 W. Galveston Street Chandler 42, Mos. Mos. 1-10: Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : $0.00 $15.90 NNN $15.90 NNN $15.90 NNN $15.90 NNN $15.90 NNN $17.89 NNN $17.89 NNN $17.89 NNN $17.89 NNN $17.89 NNN 1/17 $45.00/SF TI 6/1000 parking Covered, reserved $20 (1.5/1000) New lease Shell space 8 IES Commercial, Inc. Greystone Business Park 2801 South Fair Lane Phoenix 34, Mos. Mos. 1-3: Mos. 4-12: Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : Mos : $0.00 $1.13 NNN $1.16 NNN $1.19 NNN $1.23 NNN $1.27 NNN $1.30 NNN $1.34 NNN $1.38 NNN $1.43 NNN $1.47 NNN $1.51 NNN 7/16 $40.00/SF TI 16 reserved parking spaces sfarrell@leearizona.com 14

15 Tenant Overview AZTEC is a multi-discipline engineering and environmental consulting firm structured to assist public and private clients. We plan, develop, design, construct, and maintain critical infrastructure projects. Headquartered in Phoenix, Arizona, we have satellite offices in California, Colorado, Indiana, Nevada and Texas to meet our clients needs. Established in 1992, AZTEC has grown from a two-person, Disadvantaged Business Enterprise firm into a corporation with offices throughout the US. In 2006, we became part of the TYPSA Group, an established international firm with five decades of consulting engineering services in more than 50 countries a testament to AZTEC s long-term, financial stability and reputation. Our fundamental business strategy id to build permanent client relationships by providing superior value. The combination of a steady client base and steady growth enables us to attract and retain the industry s top talent. The skills, talents and knowledge of our people are the real value in the service we provide. In 2006, TYPSA acquired AZTEC Engineering. Founded in 1966, TYPSA is a consulting engineering firm based in Spain that has a successfully executed major infrastructure projects worldwide to improve and sustain enhanced living conditions. In order to provide creative, effective and viable solutions to its clients on a worldwide scale, TYPSA has increased international presence through the creation of branch offices and the acquisition of firms with a solid experience in the markets they serve. With more than 2,600 professionals on staff and combined revenues exceeding $250 million, TYPSA is internationally recognized and consistently honored with top industry rankings and awards, most recently being named by Engineering News-Record (ENR) as a Top 225 International Design Firm (No 60 in 2015) and landing on ENR s TOP 150 Global Design Firms (No 113 in 2015). sfarrell@leearizona.com 15

16 Income and Expense Summary 4561 East McDowell, Phoenix, AZ Current Rent Roll Square Lease Monthly Monthly Annual Tenant Feet Increase Rate Rent (NNN) Rent (NNN) CAP Rate AZTEC Engineering 40, $ $ 33,134 $ 397, % $ $ 34,301 $ 411, % $ $ 35,468 $ 425, % sfarrell@leearizona.com 16

17 Lease Abstract LEASE HISTORY INITAL LEASE TERMS Original Lease 10/2007 4/2008: 5/2008 4/2009: 5/2009 4/2010: 5/2010 4/2011: 5/2011 4/2012: 5/2012 9/2012: 10/2012 9/2013: 10/2013 9/2014: 10/2014 9/2015: $43,709/Month $45,020/Month $46,370/Month $47,762/Month $49,194/Month $50,670/Month $50,670/Month $50,670/Month $50,670/Month - $1.23/SF NNN Renewal Lease Terms 10/2015 9/2016: $30,800/Month 10/2016 9/2017: $31,967/Month 10/2017 9/2018: $33,134/Month 10/2018 9/2019: $34,301/Month 10/2019 9/2020: $35,468/Month -$ $ $ $ $0.866 sfarrell@leearizona.com 17

18 4561 E. McDowell Rd. Disclaimer Lee & Associates Arizona ( Agent ) has been engaged as the exclusive agent for the sale of 4561 E. McDowell Road, located in Phoenix, Arizona (the Property ), by the owner of the Property ( Seller ). The Property is being offered for sale in an as-is, where-is condition and Seller and Agent make no representation or warranties as to the accuracy of the information contained in this Offering Memorandum. The enclosed materials include highly confidential information and are being furnished solely for the purpose of review by prospective purchasers of the interest described herein. Neither the enclosed materials nor any information contained herein is to be used for any other purpose or made available to any other person without the express written consent of the Seller. Each recipient, as a prerequisite to receiving the enclosed, should be registered with Lee & Associates as a Registered Potential Investor or as Buyer s Agent for an identified Registered Potential Investor. The use of this Offering Memorandum and the information provided herein is subject to the terms, provisions and limitations of the confidentiality agreement furnished by the Agent prior to delivery of this offering memorandum. The enclosed materials are being provided solely to facilitate the prospective investor s own due diligence for which it shall be fully and solely responsible. The material contained herein is based on information and sources deemed to be reliable but no representation or warranty, express or implied, is being made by Agent or Seller or any of their respective representatives, affiliates, officers, employees, shareholders, partners and directors, as to the accuracy or completeness of the information contained herein. Summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of some of the principal provisions contained therein. Neither the Agent nor the Seller shall have any liability whatsoever for the accuracy or completeness of the information contained herein or any other written or oral communication or information transmitted or make available or any action taken or decision made by the recipient with respect to the Property. Interested parties are to make their own investigations, projections and conclusions without reliance upon the material contained herein. Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. Seller and Agent each expressly reserves the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time, with or without notice. This offering is made subject to omissions, correction of errors, change of price or other terms, prior sale or withdrawal from the market without notice. Agent is not authorized to make any representations or agreements on behalf of Seller. Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing additional investigation and/or making an offer to purchase the Property unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered, and approved by Seller and any conditions to Seller s obligations hereunder have been satisfied or waived. sfarrell@leearizona.com 18