4021 pike lane - loopnet...newmark cornish & carey is pleased to offer the exclusive opportunity...

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1/17CAPITAL MARKETS MARKET LEASING EXPERT

EXCLUSIVE AGENTS

TYLER EPTING Managing Director 925.974.0238 [email protected] RE License #01317533

FORREST GHERLONE Sr. Managing Director925.974.0237 | [email protected] RE License #01376723

MIKE ZYLSTRA Sr. Managing Director925.974.0106 | [email protected] RE License #01310041

CONCORD, CA4021 PIKE LANE100% Leased to Benchmark Electronics

CONFIDENTIAL OFFERING MEMORANDUM

CONCORD, CA4021 PIKE LANE

2 MIKE ZYLSTRA TYLER EPTINGFORREST GHERLONEExclusive AgentsOMOFFERING MEMORANDUM

TABLE OF CONTENTSThe Offering 3 Executive Summary 4 Aerial 5 Property Information 6 Highlights 7

Rent Roll & Tenant Profiles 8

Market Overview 11 East Bay & Concord Industrial 12 Historical Monthly Asking Rent vs. Vacancy Rate 13

Location Overview 14 Location Map 15 Naval Weapons Station Re-use Map 16

Financial Analysis 17 10 Year ARGUS Pro-Forma Cash Flow Assumptions 18 10 Year Pro-Forma Cash Flow 19



THE OFFERING

Newmark Cornish & Carey is pleased to offer the exclusive opportunity to acquire a single tenant free standing industrial building located at 4021 Pike Lane (the “Property”) in Concord, California within the San Francisco Bay Area. Completed in 1982 of concrete tilt-up construction, the approximately 38,400 square foot building on a 2.14 acre parcel is one hundred percent leased on a triple net basis to Benchmark Electronics (NYSE: BHE).

PROPERTY SUMMARY

OFFERING TERMS

Price $6,200,000Net Operating Income $384,445Occupancy 100%

Cap Rate 6.2%

BUILDING SIZE (RSF) ACRES TENANT EXPIRATION

4021 Pike Ln 38,400 2.14 Benchmark Electronics 2/28/2021

The Property benefits from an outstanding central location with easy access to High-ways 4/242 and Interstate 680 connecting it to Benicia and Walnut Creek – each just 8 miles away. Multiple major oil refineries (Valero, Shell / Equilon, Tesoro) nearby create tenant demand from ancillary businesses, and the area is poised to benefit significantly from the forthcoming redevelopment of the 5,000 acre Concord Naval Weapons station. Already supply constrained, Central Contra Costa industrial market is thriving with a vacancy rate of just 2.35% and should become even tighter once the massive project begins.

With a stable long term tenant on a triple net lease at below current market levels, the Property offers dependable cash flow with minimal management, and annual rent increases.

TYLER EPTING Managing Director925.974.0238 [email protected] RE License #01317533


MIKE ZYLSTRA Sr. Managing Director925.974.0106 | [email protected] RE License #01310041

EXCLUSIVE AGENTS

The Property is being offered free and clear of existing debt

THE OFFERING | Executive Summary

CONCORD, CA

4 MIKE ZYLSTRA TYLER EPTINGFORREST GHERLONEExclusive Agents

4021 PIKE LANE

OMOFFERING MEMORANDUM

N

Port Chicago Hwy

Port Chicago Hwy

Nelson Ave

Nelson Ave

Imho� Dr

Imho� Dr

Commercial Circle

Commercial CircleBates Ave

Bates Ave

Dean Lesher Dr

Dean Lesher Dr

← Richmond 19Mi

← Richmond 19Mi

Antioch 12 Mi →

Antioch 12 Mi →

Mason CirMason Cir

Tesoro RefineryTesoro Refinery

MALLARD RESERVOIRMALLARD RESERVOIR

CONCORD NAVAL WEAPONS STATIONCONCORD NAVAL

WEAPONS STATION5,028 Acres of

Future Development5,028 Acres of

Future Development

DIABLO CREEK GOLF COURSEDIABLO CREEK GOLF COURSE

Arnold Industrial Way


← San Francisco 30 Mi

← San Francisco 30 MiSacramento 66 Mi →Sacramento 66 Mi →

Industrial Way

Industrial Way

Pike LnPike Ln

40214021Forni DrForni Dr

THE OFFERING | Aerial

CONCORD, CA


4021 PIKE LANE


PIKE LANE - CONCORD, CA Doors

Address # APNSize

(RSF)Acres Built Office % Construction

Clear Height

Dock GradeParking Stalls

ZoningRoof

Replaced4021 Pike Lane 159-382-012-7 38,400 2.14 1982 17% Tilt-Up 20' 2 2 65 OBP 2006

THE OFFERING | Property Information

CONCORD, CA


4021 PIKE LANE


LOW MANAGEMENT INVESTMENT

One hundred percent occupied by Benchmark Electronics, the Property represents a safe, passive investment with relatively little management required. The lease is triple net and provides for fixed annual rental escalations.

HIGH QUALITY/FUNCTIONAL BUILDINGS:

4021 Pike Lane is currently configured with approximately 17% office buildout and infrastructure, although the lease has a restoration clause. The property is well maintained, offers ample parking, and provides multiple grade level and dock high loading doors.

STRONG LEASING FUNDAMENTALS:

With a current vacancy rate of just 2.35%, the Concord industrial market is thriving, and quality space is in high demand both for sale or lease. Robust tenant activity is resulting in higher rates and Landlords’ ability to lease space with minimal concessions.

CONCORD NAVAL WEAPONS BASE:

The nearby 5,028 acre Concord Naval Weapons station is planned for a massive redevelopment with capacity for up to 12,272 housing units and 6.1 million square feet of commercial space. With the full buildout expected to take at least 20 years, industrial space in Concord and the surrounding areas should prove to be in very high demand for construction-related industries.

STRATEGIC LOCATION:

• Easy Access to Highway 4/242 and Interstate 680

• 8 Miles to Walnut Creek & Benicia

• 35 Miles to San Francisco & San Rafael

• 60-65 Miles to Sacramento & San Jose

• Heavy industry base of oil refineries, chemicals and steel nearby

DESIRABLE SUBMARKET:

The Property sits within Concord Diablo Business Park, the largest, most prestigious business park in Concord and home to tenants including Apria Healthcare, Bay Alarm Co. (coming soon), Fresenius, Conco Cement Co., Media News Group, Grainger Industrial Supply, John Muir Home Health and Sutter Health.

THE OFFERING | Highlights

CONCORD, CA


4021 PIKE LANE




RENT ROLL & TENANT PROFILE

RENT ROLL / TENANT PROFILES

Established in 1979, Benchmark Electronics (“Benchmark”) is an international electronics manufacturing and design company headquartered in Angleton, Texas.

Together with its subsidiaries, Benchmark provides integrated electronic manufacturing services from its eighteen locations in the Americas, Asia, and Europe. The company offers engineering solutions, including new product design, prototype, testing, and related engineering solutions, including assembly, configuration, and testing of industrial control equipment, telecommunication equipment, computers, and related products. Benchmark serves original equipment manufacturers of industrial control equipment, telecommunication equipment, computers and related products for business enterprises, medical devices, and testing and instrumentation products. It sells its products direct through its sales force, as well as through independent marketing representatives.

Benchmark has approximately 10,500 full time employees, a market cap of approximately $1.69B, and 2016 revenue of $2.3B.

www.bench.comNYSE: BHE

Rent Roll as of June 1, 2017 Future Rent IncreasesTenant Start Expires Rsf Rent/Mo. Rent/SF/Mo. Type Date IncreasesBenchmark 3/1/2016 2/28/2021 38,400 $31,641.60 $0.824 NNN 3/1/2018 3% annual

CONCORD, CA


4021 PIKE LANE


RENT ROLL / TENANT PROFILES

4021 PIKE LANE 38,400 SF

2.14 ACRES

±96,500 ADT

CONCORD, CA


4021 PIKE LANE




MARKET OVERVIEW

MARKET OVERVIEW | East Bay and Concord Industrial

EAST BAY INDUSTRIAL MARKET OVERVIEW

The East Bay provides some of the nation’s most commuter- and logistics-friendly locations in the San Francisco Bay Area. It offers the best access to the Bay Area’s Interstate freeway network and heavy rail commuter and freight transport system (BNSF, UP, BART and Amtrak), while the Oakland International Airport offers many air transportation options for national and international businesses. The Port of Oakland, a world-class international cargo transportation and distribution hub, loads and discharges 99% of all containerized goods moving through Northern California. The Port is the 5th largest in the nation and moves over 2.1 million containers in and out of its harbor channel ever year. In addition, the East Bay Area is the only region in the U.S. with three national laboratories; Lawrence Berkeley National Laboratory, Lawrence Livermore Laboratory, Sandia Laboratory and the soon to be developed Berkeley Campus at Richmond Bay.

Key Attributes:

• Vacancy hovering around 2% in core markets (Newark through Richmond on the 880/580 corridor)

• Limited opportunity for future development in all markets

• Lack of modern, quality product

• Rents are skyrocketing due to lack of product

• A few notable users, driven by lack of inventory, are exploring eastward to markets such as Solano County, Livermore and even Stockton/Tracy.

• Under 500,000 square feet of space currently under construction.

CONCORD INDUSTRIAL MARKET OVERVIEW

Consisting of approximately 8.7 million square feet, the Concord industrial market is centrally located with easy access to Interstate 680, Highway 4, and Highway 242. Just 29 miles northeast of San Francisco and 65 miles from Sacramento, Concord is a perfect market to serve a majority of Northern California.

The Concord area is home to three major oil refineries, Valero, Shell/Equilon, and Tesoro, all of which drive tenant demand from petroleum related users.

Key Attributes:

• 2.35% vacancy rate after 1st Quarter, 2017.

• Minimal new construction planned; currently no projects under construction.

• Extremely supply constrained land market. One family controls the balance of the vacant, undeveloped land.

• For a relatively small market (±8.7 Million SF), Concord has a massive incubator base with over 1,600 tenants.

• Concord’s responsive, pro-business government has proven effective in luring significant users from other markets.

• Landlords aggressively pushed rents in 2016, with no end in sight in 2017. Average asking NNN rents are $0.90/SF for general industrial and $0.72/SF for warehouse product.

• Concord is experiencing a strong push in leasing activity from even more supply constrained markets such as Oakland/Emeryville, Richmond, Livermore, and Hayward/San Leandro.

CONCORD, CA


4021 PIKE LANE


MARKET OVERVIEW | Historical Monthly Asking Rent vs. Vacancy Rate

Concord Industrial PropertiesHistorical Monthly Asking Rent (NNN) vs. Vacancy Rate

1999 – Q1 2017

$0.92

2.35%

0%

5%

10%

15%

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

Vacancy Rate (%

)A

skin

g R

ent /

SF

/ MO

(NN

N)

Rents Vacancy Rate

CONCORD, CA


4021 PIKE LANE




LOCATION OVERVIEW

BuchananField

Port Chicago H

wy.

Port

Chi

cago

Hwy

.

Olivera Rd.

Bates Ave.


Forn

i D

r.

Pike Lane

MallardResevoir

Solano Way

Nelson Ave.

Industrial Way

4021PIKE LANE

24 MILES TO NAPA

24 MILES TO SAN FRANCISCO

18 MILES TO OAKLAND

LOCATION OVERVIEW | Location Map

CONCORD, CA


4021 PIKE LANE


LOCATION OVERVIEW | Naval Weapons Station Re-use Map

CONCORD, CA


4021 PIKE LANE


SITE



FINANCIAL ANALYSIS

FINANCIAL ANALYSIS | 10 Year ARGUS Pro-Forma Cash Flow Assumptions

The 10 year cash flow projection on the following page has been developed using Argus DCF-15 software. The analysis uses weighted projections based on the probability of tenant renewals upon expiration, and assumed growth of rent and expense rates to generate estimated future cash flows.

GENERAL ASSUMPTIONS

Cash Flow Projection Start Date: August 1, 2017 Analysis Period: 10 Years Net Rentable Square Footage: 38,400 RSF

Cost of Living Growth per Annum: 3.0% General Expense Growth per Annum: 3.0% Real Estate Tax Growth per Annum: 2.0% General Vacancy: 5.0% Rent Growth: 5.0%, 5.0%, 3.0% thereafter Reserves: $0.10/SF Annually

MARKET LEASING ASSUMPTIONS

Address: 4021 Pike Lane Lease Term: 60 Months Lease Rate: $0.85 PSF/Mo. Reimbursements: NNN Rate Escalations: 3.0% annually Tenant Improvements (New/Renewal): $4 PSF / $0 PSF Commissions (New/Renewal): 6.0% / 0.0%Leasing Downtime (New/Renewal): 6 mo. / 0 mo

Notes:1) Property taxes are based on 2016/2017 tax bills. Investors should be prepared to reassess taxes based on final sale price, an ad-valorem

tax rate of 1.0996%.2) Property management is 3.0% of Effective Gross Revenue

Disclaimer: The pro forma is delivered only as an accommodation and neither Owner (seller), Newmark Cornish & Carey, nor any of their respective affiliates, agents, representatives, employees, parents, subsidiaries, members, managers, partners, shareholders, directors, or officers, makes any representation or warranty regarding such pro forma. Purchaser must make its own investigation of the Property and any existing or available financing, and must independently confirm the accuracy of the projections contained in the pro forma.

CONCORD, CA


4021 PIKE LANE


FINANCIAL ANALYSIS | 10 Year Pro-Forma Cash Flow

Year 1 2 3 4 5 6 7 8 9 10Years Ending July 31 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Potential Gross Revenue

Base Rental Revenue $384,445 $395,979 $407,858 $416,454 $421,758 $434,411 $447,443 $460,866 $474,692 $486,507

Absorption & Turnover Vacancy $(69,770) $(80,882)

Scheduled Base Rental Revenue $384,445 $395,979 $407,858 $346,684 $421,758 $434,411 $447,443 $460,866 $393,810 $486,507

Expense Reimbursement Revenue $128,829 $131,950 $135,150 $135,491 $141,423 $144,895 $148,421 $152,037 $152,489 $159,442

Total Potential Gross Revenue $513,274 $527,929 $543,008 $482,175 $563,181 $579,306 $595,864 $612,903 $546,299 $645,949

Effective Gross Revenue $513,274 $527,929 $543,008 $482,175 $563,181 $579,306 $595,864 $612,903 $546,299 $645,949

Operating Expenses

Property Tax $72,130 $73,573 $75,044 $76,545 $78,076 $79,638 $81,230 $82,855 $84,512 $86,203

Insurance $9,000 $9,270 $9,548 $9,835 $10,130 $10,433 $10,746 $11,069 $11,401 $11,743

Utilities $7,800 $8,034 $8,275 $8,523 $8,779 $9,042 $9,314 $9,593 $9,881 $10,177

Repairs and Maintenance $21,000 $21,630 $22,279 $22,947 $23,636 $24,345 $25,075 $25,827 $26,602 $27,400

Security/Fire $3,500 $3,605 $3,713 $3,825 $3,939 $4,057 $4,179 $4,305 $4,434 $4,567

Property Management $15,399 $15,838 $16,291 $13,816 $16,863 $17,380 $17,877 $18,388 $15,659 $19,352

Total Operating Expenses $128,829 $131,950 $135,150 $135,491 $141,423 $144,895 $148,421 $152,037 $152,489 $159,442

Net Operating Income $384,445 $395,979 $407,858 $346,684 $421,758 $434,411 $447,443 $460,866 $393,810 $486,507

CONCORD, CA


4021 PIKE LANE


TYLER EPTING Managing Director 925.974.0238 [email protected] RE License #01317533


MIKE ZYLSTRA Sr. Managing Director925.974.0106 | [email protected] RE License #01310041 16

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CONFIDENTIAL OFFERING MEMORANDUM


TYLER EPTING

DISCLAIMERThis is a confidential memorandum intended solely for your own limited use to determine whether you wish to express interest in the purchase of the subject property. This memorandum contains selected information

pertaining to the described property and has been prepared primarily from information supplied by the “Seller” and Newmark Cornish & Carey, agent for the Seller. This memorandum does not purport to be all-inclusive, nor to contain all of the information which a prospective investor may desire. Neither the Seller nor any of its employees, or agents, including Newmark Cornish & Carey 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 to be implied by any of the aforementioned with respect thereto. By your receipt of this memorandum, you agree that the information contained herein is of a confidential nature, that you will not, directly or in directly, disclose or permit anyone else to disclose this memorandum or any part of the contents

to any other person, firm or entity without prior written authorization of Seller or Newmark Cornish & Carey, nor will you use or permit to be used this memorandum or any part of the contents in any fashion or manner detrimental to the interests of the Seller.

The Seller expressly reserves the right, at its sole discretion, to reject any or all proposals or expressions of interest in the subject property and to terminate discussions with any party at any time with or without notice.

4021 pike lane - loopnet...newmark cornish & carey is pleased to offer the exclusive opportunity...

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