Two-Tenant NNN Industrial
We are being given a short window to bring a buyer prior to the owner listing with a larger brokerage firm.
75% the building is leased to a division of an international company.
The company is public with a BB+ credit.
They are one of the largest manufacturers of heavy machinery in the world and are responsible for running most of the port operations in the United States.
Their operation uses the space for manufacturing of wiring harnesses and distribution of parts.
They have another facility, one block away, that re-manufacturers and repairs bridge machinery for the company; it is only one of two facilities of its type in the world. They have another one in China.
It is an absolute net lease; the roof is the owner’s responsibility while it is under warranty. The lease runs for another eight years. The regional office would like to occupy the entire building and eventually wants to consolidate the repair facility in the same building.
The international company has major operations throughout the United States, the largest concentration of facilities is in Southeast Wisconsin. Approximately two years ago, they purchased the operations of another Corporation.
The other tenant is UPS, they have an 18-month lease. UPS is trying to determine if they want a long-term arrangement or if they should build a freestanding facility in the area. They will be using the facility for loading and sorting.
The building is a modern 150,000 ft.² structure, 32-foot clear.
It is a steel building and is an excellent repair. It is believed that the roof has a 20-year warranty. The roof is a Carlisle EPDM, ballasted roof.
The building located within a half-mile of a majjor state Highway which is the main North – South highway.
The leases are set up with a full gross up; if UPS vacates, the major tenant is responsible for 100% of all utilities, Cam and taxes.
The owner is expects it to trade in the low $8 million range which would be the equivalent of an 8% cap rate adjusted for a 5% vacancy. As stated earlier, the facility is 100% leased.
The building was built approximately eight years ago for another Corporation who sold the company and the firm shut down the majority of their statewide operations.
The economy is quite robust, industrial vacancies are low and the state unemployment rate is in the low 3% range.
We am working with the majority partner- owner. His longtime partner recently turned 90 and it is probably best that they unwind some of their holdings.
If this is of interest to you, please contact me. The cap rate pricing quoted above is what the owner expects it to trade for. If/when they bring it to market, it will be priced higher, with a lower cap rate.
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