Lantana Land Site. For Sale Development Opportunity 3% CAP RATE STATE ROAD 7 (441) LANTANA ROAD LANTANA ROAD LAKE WORTH, FL PRESENTED BY:

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1 Lantana Land Site For Sale Development Opportunity STATE ROAD 7 (441) 3% CAP RATE LANTANA ROAD LAKE WORTH, FL LANTANA ROAD PRESENTED BY: Kevin McCarthy Senior Vice President South Florida DIRECT kevin.mccarthy@colliers.com Bastian Laggerbauer Associate LANTANA LAND SITE OFFERING MEMORANDUM DIRECT bastian.laggerbauer@colliers.com COLLIERS INTERNATIONAL P. 1 Commercial Real Estate Services

2 CONFIDENTIALITY & DISCLAIMER STATEMENT THIS IS A CONFIDENTIAL MEMORANDUM intended solely for your own limited use to determine whether you wish to express any further interest in the Site. This confidential memorandum contains brief, selected information pertaining to the business and affairs of the Site and has been prepared by Colliers International South Florida, LLC, primarily from information supplied by the Owner. Although this confidential memorandum has been reviewed by representatives of the Owner, it does not propose to be all-inclusive, nor does it contain all the information which a prospective purchaser may require or desire. Neither the Owner, nor any of its officers, directors, employees or agents, nor Colliers International South Florida, LLC, makes any representation or warranty, expressed or implied, as to the accuracy or completeness of this confidential memorandum or any of its contents, and no legal liability is assumed or is to be implied by any of the aforementioned with respect thereto. Prospective offerors are advised to verify the information independently. The Owner reserves the right to change the price or any information in this Memorandum, or to withdraw the Site from the market at any time, without notice. This confidential memorandum shall not be deemed an indication of the state of affairs of the Site or the Owner, nor shall it constitute an indication that there has been no change in the business or affairs of the Site or the Owner since the date of preparation of this memorandum. By your receipt of this confidential memorandum, you agree that the information contained herein is of a confidential nature and you will not disclose this memorandum or any part of the contents to any other person, firm or entity without prior authorization from Colliers International South Florida, LLC. OFFERING PROCEDURE Offers should be submitted in the form of a non-binding Letter of Intent and must specify the following: Price Length of Inspection Period Length of Closing Period Amount of earnest money deposit at execution of a Purchase and Sale Contract Amount of additional deposit upon expiration of Inspection Period FOR FURTHER INFORMATION PLEASE CONTACT: Kevin McCarthy Senior Vice President South Florida kevin.mccarthy@colliers.com Bastian Laggerbauer Associate bastian.laggerbauer@colliers.com

3 DEVELOPMENT OPPORTUNITY SUMMARY The Offering The site is located at Lantana Road, just west of State Road 7 and south of Lake Worth Road. The parcel is situated on approximately 7.3 acres and generates income from various short-term leases and an in-place cellphone tower. The income is a great opportunity for a developer to receive revenue during entitlement periords. There is a cap rate of 3% on in-place land leases. The property is zoned IL for light industrial and located within the city of Lake Worth, a fast growing secondary market. Drawdy Construction, a company active in the construction of dams, waterways, bridges, docks, and more, currently occupies the mostly unpaved parcel. > LAND AREA acres > PROPERTY ADDRESS Lantana Road Lake Worth, FL > NO. OF BUILDINGS Two - Poised for redevelopment > TOTAL SF OF BUILDING ±2,602 SF - Not Applicable (redevelopment opportunity) > YEAR BUILT 1989 > ZONING IL- Light Industrial - Palm Beach County > TENANCY Cell phone tower and various shortterm leases > IN-PLACE CAP RATE 3% > PROPOSED USES Industrial manufacturing or contractor storage yard > MUNICIPALITY Unincorporated > FUTURE PROJECTED INCOME Leased by American Tower, a cellphone tower was constructed on the site. The lease was signed 6/17/1999 with an initial 15 year term (which expired 6/17/2014) with 3 consecutive, 5 year auto-renewals. The base rent increases annually by 3% and for 2016, it is up to about $31,735 annually. > COMBINED ANNUAL NOI $131,610 or 3.3% CAP rate of asking price > ASKING PRICE $4,000,000 NORTH LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 3

4 Location NORTH LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 4

5 Site Survey PROPERTY DETAILS Address Lantana Road, Lake Worth, FL Parcel Number Municipality Unincorporated Acres Use Code Zoning Office One Story IL - Light Industrial (Palm Beach County) LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 5

6 Summary of In-Place Income Monthly Renters Wellingon Hay & Grain $3, Can be terminated quickly Beck Concrete $ Month-to-Month Concrete Services $1, Month-to-Month DBK Construction $ Month-to-Month American Tower #1 $2, First renewal American Tower #2 $ First renewal Drawdy Construction $3, Starting November 2016 Total $10, LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 6

7 Cellphone Tower FUTURE PROJECTED INCOME Leased by American Tower, a cellphone tower was constructed on the site. The lease was signed 6/17/1999 with an initial 15 year term (which expired 6/17/2014) with 3 consecutive, 5 year auto-renewals. The base rent increases annually by 3% and for 2016, it is up to about $31,735 annually. Plus, a revenue share is in place yielding an extra $250 per month/ per unit, for every additional unit on the tower (other than the anchor tenant) and right now results in about $750 - $1,000 extra per month. For the below calculations, we assumed an average revenue share of $900/month. The following tables illustrate the above-mentioned assumptions: CELLPHONE TOWER SCHEDULED INCOME Annual Income $31,735 $32,687 $33,668 $34,678 $35,718 $36,790 $37,893 Revenue Share $10,800 $10,800 $10,800 $10,800 $10,800 $10,800 $10,800 Total $42,535 $43,487 $44,468 $45,478 $46,518 $47,590 $48, Annual Income $39,030 $40,201 $41,407 $42,649 $43,929 $45,247 $46,604 Revenue Share $10,800 $10,800 $10,800 $10,800 $10,800 $10,800 $10,800 Total $49,830 $51,001 $52,207 $53,449 $54,729 $56,047 $57,404 Valuation and LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 7

8 Cellphone Tower Survey LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 8

9 Comparable Sales Approach LAND SALES - SOLD The comparable sales approach is determined by comparing the subject property to vacant land parcels, which have traded since 01/01/2014 and are of comparable size and within close proximity (3-mile radius) of the Subject Property. We have hand selected the below transactions because they most closely reflect the range of pricing that we believe is applicable to the site. NORTH Property Address Zoning Land SF Date of Sale Sale Price Price Per SF Value Adjustment S State Road 7 MPUD 283,140 Pending $2,900,000 $10.24 Down - Location 2 Hypoluxo Rd PUD 958,320 3/10/2015 $10,000,000 $10.43 No Change Lake Worth Rd RT 833,303 6/11/2015 $4,750,000 $5.70 Up - Size Lake Worth Rd AR 461,736 2/21/2014 $3,550,000 $7.69 Excluded - Date Weighted Average Adjusted Price Per SF $ Lantana Road 6 LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 9

10 Comparable Sales Approach LAND SALES - FOR SALE The comparable sales approach is determined by comparing the subject property to vacant land parcels, which are currently on the market and are of comparable size and within close proximity (3-mile radius) to the Subject Property. We have hand selected these properties currently on the market because they most closely reflect the range of pricing that we believe is applicable to this asset. 5 3 NORTH Property Address Zoning Land SF Days on Market For Sale Price Price Per SF Value Adjustment S State Road 7 CG 240, $2,500,000 $10.38 No Change Lantana Rd CG 257,440 1,134 $4,000,000 $15.54 Down - Location Palomino Dr AGR 402, $3,950,000 $9.81 No Change 4 S State Road 7 RTS 402,059 1,288 $3,200,000 $7.96 No Change 5 Lake Worth Rd & SR 7 MUPD 148, $2,500,000 $16.88 Down - Size 6 S State Road 7 PUD 215,186 1,437 $2,500,000 $11.62 No Change Weighted Average Adjusted Price Per SF $ Lantana Road 7 LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 10

11 Possible Use of Property Colliers International has long-standing relationships with various land planners in the marketplace. To come up with the best use for the site, we consulted a third party land planner. In their findings, it was noted that there has been increased interest in a new concept for contracted storage yards, which can be subdivided and sold off individually. Due to the site s location, it s not likely that a commercial land use would be supported in addition to the Commission being critical of changes away from industrial future land use designations. In order to accomplish the contractor yard concept, the property would need to be rezoned to the Multiple Use Planned Development District (MUPD) zoning. The MUPD zoning provides the ability to subdivide the property without the need for complex easements and frontage for each individual parcel. The sample site plan below illustrates a property recently approved for the contracted storage yard concept. This plan included individual office/warehouse structures with secluded outdoor storage areas. It was determined that it would cost approximately $60 -$70k for entitlements over 12 months. Beyond this use, alternatives may include utilizing the site for standard repair and maintenance or self-storage. 10 LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 11

12 PALM BEACH INDUSTRIAL RESEARCH & FORECAST SNAPSHOT Q Expanding Residential Market Drives Industrial Market Growth in Palm Beach Industrial Vacancy Rates Reach Ten-Year Low Powered by the growing residential market, industrial vacancy rates reached a ten-year low of 5 percent. Construction of single family homes in Palm Beach is driving the demand for industrial space. The market has become saturated by housing-related tenants such as air conditioning and tile companies. As occupancy levels climb, landlords are pushing rental rates higher reaching $8.94 triple net. Given the scarcity of product, the number of industrial buildings under construction more than doubled in the second quarter. A record breaking twelve buildings or more than one million square feet of industrial space is under construction in Palm Beach County including; 520,000 square feet at Turnpike Business Center, 200,000 square feet at Liberty Airport Center and 267,000 square feet at Boutwell Business Center. Notable Deals: Two of the largest leases signed in the second quarter include a 53,000 square foot lease at Turnpike Business Center to RMB USAand a 32,000 lease at Vista Distribution Center to Pilot Air Freight Corp. The sale of 990 South Rogers Circle marked the largest transaction in the second quarter. This 123,005 square foot industrial building sold to David Kahn for $12.4 million and was 84 percent occupied. Thousands of SF NET ABSORPTION Market Indicators Relative to prior period Q Q Q Q3 2016* VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE 0 (100) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Note: Construction is the change in Under Construction. Survey encompasses the Palm Beach County area and includes Class A, B, and C properties, larger than 10,000 SF. Renta Rates are Triple Net. *Projected Source: Colliers International South Florida, LLC & CoStar Realty Information Inc. RENTAL RATE (ALL CLASSES) Summary Statistics Q Regional Office Markets Palm Beach Broward Miami-Dade Vacancy Rate 5.0% 5.6% 4.6% $9.00 Net Absorption (Thousand Square Feet) $8.50 $8.00 $7.50 $7.00 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Source: Colliers International South Florida, LLC & CoStar Realty Information Inc. New Construction (Thousand Square Feet) Under Construction (Thousand Square Feet) Asking Rents Per Square Foot Per Year (Triple Net) , ,397.1 Class A $8.01 $7.72 $7.30 Change From Q % +1.8% +1.25% LANTANA LAND SITE OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 12

13 CONTACT US: Kevin McCarthy Senior Vice President DIRECT Bastian Laggerbauer Associate DIRECT Colliers International South Florida, LLC 4500 PGA Boulevard, Suite 110 Palm Beach Gardens, FL Commercial Real Estate Services