ABSOLUTE NNN CHASE BANK GROUND LEASE 2030 Skokie Valley Road Highland Park, Illinois 60035

Transcription

1 CAPITAL MARKETS NET LEASE PROPERTY GROUP MIDWEST OFFERING MEMORANDUM ABSOLUTE NNN CHASE BANK GROUND LEASE 2030 Skokie Valley Road Highland Park, Illinois 60035

2 AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT AFFILIATED BUSINESS DISCLOSURE CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an Affiliate ) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the Property ) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum. CONFIDENTIALITY AGREEMENT This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the Owner ), to be allinclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property. The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc. DISCLAIMER 2017 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. ALL PARCEL LINES ON SITE PLAN AND AERIALS ARE APPROXIMATE. 2 CHASE BANK HIGHLAND PARK, IL

3 OFFERING MEMORANDUM PRIMARY CONTACTS MICHAEL KAIDER First Vice President/NNN Specialist CBRE 700 Commerce Drive Suite 450 Oak Brook, IL DEBT & STRUCTURED FINANCE GEOFFREY HARRIS Senior Vice President CBRE 2415 East Camelback Road Phoenix, AZ TABLE OF CONTENTS 04 EXECUTIVE SUMMARY 10 PROPERTY DESCRIPTION 14 MARKET OVERVIEW

4 1INVESTMENT SUMMARY

5 THE OFFERING CBRE s Net Lease Property Group is pleased to exclusively present the outstanding opportunity to acquire 100% fee interest in an absolute NNN Chase Bank ground lease. The asset is located in the affluent north shore community of Highland Park, approximately 28 miles north of Chicago s Central Business District. The long term lease has over 16 years of term remaining, zero landlord responsibilities, and strong rental increases throughout the base term and option periods. The offering provides a tremendous opportunity to acquire a high quality asset in an irreplaceable location serving one of Chicago s most affluent and desirable suburban trade areas. Highland Park, with the surrounding Northshore communities of Glencoe, Northbrook, Deerfield, and Winnetka, provide the finest combination of median incomes, home values, and density in all of metro Chicago. The area boasts a five mile population of over 110,000 people and the City of Highland Park has an average household income of $185,522 - more than double the national, state, and MSA averages. Home values in Highland Park are also exceptional averaging $660,564. Approximately 18% of homes in Highland Park are valued over $1 million. The asset is highly visible from Skokie Valley Road, a heavily trafficked thoroughfare serving the north shore communities. Chase Bank benefits from over 48,000 vehicles passing directly in front of the site daily on Skokie Valley Road. Chase is the U.S. consumer and commercial banking branch of JPMorgan Chase. Their consumer services include credit cards; home, auto and education finance; and insurance. Their commercial banking services include middle market, corporate, commercial real estate, and business credit. Parent company JPMorgan Chase (NYSE: JPM) is ranked #21 on the Fortune 500 list and has operations in over 60 countries. JPMorgan Chase currently has approximately $2.6 Trillion in assets. EXECUTIVE SUMMARY 5

6 FINANCIAL OVERVIEW Offering Price $5,176,500 Cap Rate 4.25% Annual Rent $220,000 Chase Bank Rent Schedule Lease Structure Building Size Absolute NNN Ground Lease 3,408 Square Feet Original Term Annual Rent Monthly Rent Years 1-5 $200,000 $16,667 Land Area ± Acres / ±29,536 Parking 25 Parking Spaces (7.3 per 1,000 SF) Tenant JPMorgan Chase Bank, N.A. Guarantee Corporate Original Lease Term 20 Years Lease Term Remaining 16 Years, 4 Months Lease Term Commencement June 20, 2012 Rent Commencement April 25, 2013 Lease Expiration December 31, 2033 Years 6-10 $220,000 $18,333 Years $242,000 $20,167 Years $266,200 $22,183 Renewal Term Annual Rent Monthly Rent Option 1: Years $292,820 $24,402 Option 2: Years $322,102 $26,842 Option 3: Years $354,312 $29,526 Renewal Options Rental Increases Landlord Responsibilities Four, 5 Year Options 10% every 5 years during the base term and 10% at the beginning of each renewal option. None Option 4: Years $389,743 $32,479 6 CHASE BANK HIGHLAND PARK, IL

7 INVESTMENT HIGHLIGHTS Long Term Corporate Opportunity: The opportunity to acquire 100% fee interest in a long term absolute NNN ground lease with Chase Bank. The 20 year corporate guaranteed lease has 16 years and 4 months of term remaining, zero landlord responsibilities, and 10% rental increases every five years during the base term and in each of the four 5-year option periods. Affluent Demographic Location: Highland Park and the adjoining communities comprise Chicago s most affluent suburbs. Within a three mile radius of the Property, the average household income is $183,369, with an average housing value of $660,225. Within the five mile extended trade area, the average household income is $193,440, with an average housing value of $683,568. The trade area s average household incomes as well as the housing values are more than twice the national, state, and Chicago MSA averages. Investment Grade Tenant: Rated A+/Stable by Standard & Poor s, Chase Bank is the U.S. consumer and commercial banking branch of JPMorgan Chase & Co. With about $2.6 trillion in assets, JPMorgan Chase & Co. is a leading global financial services firm with operations in over 60 countries. Irreplaceable North Shore Location: Rare opportunity to acquire an asset in an infill, north shore location. The area features significant barriers to entry, with few available developable parcels. Prime Location and Access: The asset has an excellent location along Skokie Valley Road, just north of Park Avenue. Skokie Valley Road is a primary thoroughfare serving the northern suburbs. Traffic counts at the signalized intersection of Skokie Valley Road and Park Avenue are exceptional, exceeding 57,000 vehicles per day. Chase Bank is also conveniently located near Interstate 94, a high traffic expressway where traffic counts are approximately 176,000 vehicles per day. Strong Surrounding Retail: Chase Bank is surrounded by strong national retailers which creates a tremendous draw to the area. Target, the second-largest discount retailer in the U.S. (behind Walmart), is located directly across from the asset. CVS Pharmacy, Verizon, and Starbucks are located immediately north and south of the site. Robust Chicago MSA: Chase Bank is located approximately 28 miles north of downtown Chicago. Chicago is well-known as one of the most dynamic markets in the nation with a population near 9.65 million. Chicago boasts an attractive retail market, with the third largest economy in the nation, and over $121.9 billion in annual retail sales (2016 metro Chicago sales; Melaniphy). EXECUTIVE SUMMARY 7

8 AERIAL VIEW LOOKING SOUTH 8 CHASE BANK HIGHLAND PARK, IL

9 REGIONAL MAP CHASE BANK EXECUTIVE SUMMARY 9

10 2 PROPERTY DESCRIPTION

11 TENANT PROFILE JPMorgan Chase Bank, N.A. JPMorgan Chase Bank ( Chase ) is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. Chase serves nearly half of America s households through more than 5,258 bank branches, 16,000 ATMs, mortgage offices, and online and mobile banking. Chase offers a broad range of financial services including personal banking, credit cards, mortgages, auto financing, investment advice, small business loans, and payment processing. About Parent Company JPMorgan Chase & Co. With about $2.6 trillion in assets, JPMorgan Chase & Co. is a leading global financial services firm with operations in over 60 countries. It is one of the oldest financial institutions in the United States with a history dating back over 200 years. Today, JPMorgan Chase & Co. serves millions of consumers, small businesses, and many of the world s most prominent corporate, institutional, and government clients. It also boasts formidable investment banking and asset management operations. The firm s subsidiaries include the prestigious JPMorgan Private Bank and institutional investment manager JPMorgan Asset Management. JPMorgan Chase & Co. had a 2016 revenue of more than $95.7 Billion Highlights & Accomplishments Consumer relationship with almost half of U.S. households #1 in primary bank relationships within its Chase footprint Consumer deposit volume has grown at more than twice the industry average since 2012 #1 most visited banking portal in the U.S. chase.com #1 rated mobile banking app #1 ATM network in the U.S. #1 credit card issuer in the U.S. #1 U.S. co-brand credit card issuer #1 in total U.S. credit and debit payments volume #2 merchant acquirer #2 mortgage originator and servicer #3 bank auto lender 5,258 Branches #21 on the Fortune 500 Stock Symbol NYSE: JPM Employees 243,000 #55 on the Fortune Global 500 S&P Rating A+ PROPERTY DESCRIPTION 11

12 SURVEY 12 CHASE BANK HIGHLAND PARK, IL

13 PROPERTY DESCRIPTION Location: General Description: Size: 2030 Skokie Valley Road Highland Park (Lake County), Illinois One-story, single tenant brick building 3,408 Square Feet Assessor s Parcel Number: Land Area: ± Acres / 29,536 Square Feet Number of Parking Spaces: Standard Parking Stalls Accessible Parking Stalls Total Parking Stalls Zoning: Frontage: Access: Flood Zone: Surrounding Uses: Traffic Counts: Zone I - Light Industry District ±150 linear feet of frontage on Skokie Valley Road The Property is accessible via two curb cuts along Skokie Valley Road. The Property can also be accessed through the retail south of the asset via one curb cut along Park Avenue. According to the flood hazard maps published by the FEMA, the site is within Zone X as indicated on Community Map Panel No C0279K dated September 18, Zone X, an area that is determined to be outside the 100-and 500-yearflood plains. Generally surrounding by single-family residential with commercial improvements located to the north and south on Skokie Valley Road. Skokie Valley Road Park Avenue Half Day Road Interstate 94 48,000 VPD 9,000 VPD 19,400 VPD 176,000 VPD PROPERTY DESCRIPTION 13

14 3 MARKET OVERVIEW

15 HIGHLAND PARK OVERVIEW Chase Bank is located in the affluent Chicago suburb of Highland Park, Illinois, approximately 28 miles north from downtown Chicago and 21 miles from O Hare International Airport. It is a lakefront community on the shores of Lake Michigan with many natural amenities as well as lovely homes with distinct architectural and historic character. Highland Park was founded in 1869 with a population of 500 and evolved from two settlements: St. John and Port Clinton. Today the city has a total of 29,693 residents. Highland Park is located in Lake County, which has a total population of 709,599. The main highway in Highland Park is U.S. 41, which connects Chicago to Milwaukee. Lake Cook Road, the border between Lake and Cook Counties, is just south of the subject Property, and is a primary east-west route. Highland Park s lively downtown is an upscale shopping destination and home to several boutiques, jewelry stores, home décor shops, and restaurants. Many professional services such as accountants, attorneys, doctors, dentists, and architects are also located in the downtown area. In total, Highland Park has 1,736 businesses, employing over 16,930 people. Also located near downtown Highland Park is the Highland Park Hospital, City Hall, the Highland Park Library, the Highland Park Art Center, and the North Shore Yacht Club. Highland Park is home to Ravinia Festival, the oldest outdoor music festival in the United States. Ravinia features a series of outdoor concerts and performances held every summer from June to September. It has been the summer home of the Chicago Symphony Orchestra since Neighboring communities include Deerfield, Northbrook, Glencoe, Highwood, Bannockburn, Highwood, and Lake Forest. Highland Park has the following characteristics: Average household income is $183,522; median household income is $125, % of homes have an average household income above $100,000 and 43% have an average household income above $150,000. Average housing value is $660,564 and median housing value is $592,791. Approximately 18% of housing is valued at more than $1 million. Highland Park residents are highly educated. 73% of residents age 25 and over have a Bachelor s degree or higher, as compared to the US average of 31%. 38% have a Graduate or Professional degree, as compared to the U.S. average of 12%. The primary trade area has the following characteristics: The area has an estimated 2017 population of 58,125 in 21,467 households. The area s average household income is $183,369 which is more than double the U.S. average household income of $80,675. Median household income is $125,318; nearly double the U.S. figure of $64,719. Approximately 60% of households have an average household income above $100,000 and 30% have an average household income above $200,000. Over 74% of the households are owner occupied. Average and median home values are $660,225 and $597,486, respectively. Residents are highly educated. 74% of residents age 25 and over have a Bachelor s degree or higher, and 35% have a Graduate or Professional degree. MARKET OVERVIEW 15

16 AERIAL VIEW LOOKING NORTH 16 CHASE BANK HIGHLAND PARK, IL

17 CHICAGO MSA OVERVIEW Chicago is one of the most attractive and dynamic markets in the nation. Chicago boasts an attractive retail market, with the third largest economy in the nation and over $121.9 billion in annual retail sales (2016 metro Chicago sales; Melaniphy). The market s vibrant business climate, central geographic location, diversified economy and available human resources have helped Chicago achieve a prominent position as a world-class city in finance, international trade, manufacturing, transportation, culture and the arts. One of Chicago s biggest commercial advantages is its diversified economy and deep labor pool. With no single emphasis on any one business sector or industry, Chicago s economy is like a wellbalanced portfolio and is better equipped than most cities to weather a slowdown in any particular industry. The Chicago MSA has a highly diversified economic base and is home to more than 400 major corporate headquarters, including 33 Fortune 500 headquarters. The Windy City, as it has been nicknamed, welcomes in nearly 40 million international and domestic visitors each year who come to see attractions including Chicago s numerous parks, art galleries, architectural wonders, professional sports teams, universities, and more. MARKET OVERVIEW 17

18 CHICAGO MSA OVERVIEW CHICAGO ACCOLADES Top 10 Most Competitive City for Business in the World The Economist Intelligence Unit Top 10 Best City for Building Wealth Bankrate.com, October 2015 #1 Top Metro in the U.S. for Corporate Investment Site Selection, March 2016 #1 North American city for foreign direct investment IBM, Global Location Trends #2 Top Metro in the United States for the Number of Fast Growing Small Businesses Inc List, CHASE BANK HIGHLAND PARK, IL

19 CHICAGO MSA OVERVIEW TOP EMPLOYERS COMPANY TOTAL EMPLOYEES Advocate Health Care System...18,308 University of Chicago...16,197 Northwestern Memorial Healthcare... 15,317 JPMorgan Chase & Co... 14,158 United Continental Holdings Inc...14,000 Walgreen Co...13,006 Health Care Service Corp...13,006 Presence Health...10,500 Abbott Laboratories...10,000 Northwestern University... 9,708 Jewel-Osco Stores... 9,660 Chicago Transit Authority... 9,510 University of Illinois... 9,212 American Airlines...8,900 Rush University Medical Center...8,273 AT&T... 8,000 Allstate Insurance Co...7,800 Wal-Mart Stores Inc... 7,700 Emloyco USA Inc... 7,409 Archdiocese of Chicago... 7,376 Source: Moody s Analytics, Precis U.S. Metro, Chicago MSA, February 2017 MARKET OVERVIEW 19

20 CHICAGO MSA OVERVIEW TRANSPORTATION Chicago is one of the primary transportation hubs in the United States. Chicago is home to O Hare International Airport, the 3rd busiest airport in the nation. According to the Chicago Department of Aviation, in 2016 the airport serviced nearly 78 million passengers to and from 208 destinations around the world via more than 48 passenger carriers. Chicago is also home to Midway International Airport, which serviced more than 22 million passengers via five passenger carriers to 75 destinations in the US, Mexico, Jamaica, the Dominican Republic and Canada. Several major interconnected expressways and interstate highways pass though the Chicago area. Interstates 80, 88 and 290 are the main east/west routes. Interstates 55 and 57 provide access to the south and southwestern suburban areas. Communities to the north and northwest are accessed via Interstates 90 and 94. North/south travel between the western suburbs is facilitated by Interstates 294 and 355. WHY CHICAGO? Chicago has a strong, globally diverse economy larger than that of many countries. Chicago s industry mix most closely matches that of the nation, with no single industry employing more than 20% of the workforce. Chicago is one of the most cost-effective cities in the world for doing business, ahead of New York and Los Angeles, according to KPMG. Chicago s affordable cost of living and world-class cultural and recreational opportunities make it an excellent value for the city s vibrant and diverse workforce. Chicago is a central transportation hub with direct flights between more than 200 cities worldwide, and direct connections to six major U.S. Interstates. Chicago is hub of international business activity, with more than 1,800 foreign-based companies and more than $100 billion in foreign direct investment. DEMOGRAPHICS The Chicago metropolitan statistical area is home to over 9.68 million residents, making it the third most populous MSA in the nation. The population is projected to grow 0.32% over the next five years to 9.83 million. Residents earn an average household income of $92,004; more than 8% higher than the state average of $84,983 and nearly 14% higher than the national average of $80, CHASE BANK HIGHLAND PARK, IL

21 CHICAGO MSA OVERVIEW FORTUNE 500 COMPANIES IN THE CHICAGO MSA RANK COMPANY SECTOR REVENUES ($M) FEB 2017 ESTIMATED EMPLOYED POPULATION BY OCCUPATION 8% 7% 10% 5% 4% 12% 3% 2% Professional & Business Services 18% 15% 16% Education & Health Services Retail & Wholesale Trade Government Leisure & Hospitality Manufacturing Finance, Insurance & Real Estate Transportation & Utilities Other Services Construction & Mining Information 19 Walgreens Boots Alliance Food and Drug Stores $103, Boeing Aerospace & Defense $96, Archer Daniels Midland Food Production $67, United Continental Holdings Airlines $37, Allstate Insurance: Property and Casualty (Stock) $35, Mondelez International Food Consumer Products $29, Exelon Utilities: Gas & Electric $29, McDonald s Food Services $25, Sears Holdings General Merchandisers $25, US Foods Holding Wholesalers: Food and Grocery $23, AbbVie Pharmaceuticals $22, Abbott Laboratories Medical Products and Equipment $20, Illinois Tool Works Industrial Machinery $13, CDW Information Technology $12, R.R. Donnelley & Sons Publishing, Printing $11, Navistar International Motor Vehicles & Parts $10, Discover Financial Services Commercial Banks $10, W.W. Grainger Wholesalers: Diversified $9, Baxter International Medical Products and Equipment $9, Univar Wholesalers $8, Tenneco Motor Vehicles & Parts $8, LKQ Wholesalers: Diversified $7, Dover Industrial Machinery $7, Anixter International Wholesalers: Diversified $6, Baxalta Pharmaceuticals $6, Jones Lang LaSalle Real Estate $5, Old Republic International Insurance: Property and Casualty (Stock) $5, Packaging Corp. of America Packaging, Containers $5, Motorola Solutions Network & Other Communications Equipment $5, Ingredion Food Production $5, Arthur J. Gallagher Diversified Financials $5, Essendant Wholesalers: Electronics and Office Equipment $5, Telephone & Data Systems Telecommunications $5,176 MARKET OVERVIEW 21

22 AERIAL VIEW LOOKING EAST 22 CHASE BANK HIGHLAND PARK, IL

23 AERIAL VIEW LOOKING WEST MARKET OVERVIEW 23

24 POPULATION CONCENTRATION MAP 2017 POPULATION 1 Mile 6,993 3 Mile 58,125 5 Mile 111,234 DAYTIME POPULATION 1 Mile 2,992 3 Mile 54,247 5 Mile 127,214 POPULATION PER SQUARE MILE Over 2,500 1,000 to 2, to 1, to 500 Less than CHASE BANK HIGHLAND PARK, IL

25 HOUSEHOLD INCOME MAP 2017 AVERAGE HOUSEHOLD INCOME 1 Mile $163,349 3 Mile $183,369 5 Mile $193,440 HOUSEHOLDS EARNING OVER $100,000 ANNUALLY 1 Mile 54.0% 3 Mile 60.1% 5 Mile 62.5% AVERAGE HOUSEHOLD INCOME Over $200,000 $150,000 to $200,000 $100,000 to $150,000 $75,000 to $100,000 Less than $75,000 MARKET OVERVIEW 25

26 PRIMARY CONTACTS DEBT & STRUCTURED FINANCE MICHAEL KAIDER First Vice President/NNN Specialist CBRE 700 Commerce Drive Suite 450 Oak Brook, IL GEOFFREY HARRIS Senior Vice President CBRE 2415 East Camelback Road Phoenix, AZ CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.