GSA-SSA/ODAR 4319 Brady Street | Davenport, IA 52806 Confidentiality and Restricted Use Agreement
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Subject Property Offering Memorandum GSA-SSA/ODAR 4319 Brady Street | Davenport, IA 52806 Confidentiality and Restricted Use Agreement This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC. Offered Exclusively by This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties Brian Corriston of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation Associate Director and/or financial information contained herein are qualified in their entirety by reference to the actual documents [email protected] and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC. In Association With: The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the Carol Adams right to negotiate with any number of interested parties at any time. The Property is offered and sold by its IA #B65112000 owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title. BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request Stan Johnson Company by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the 10333 Richmond Avenue | Suite 740 Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, Houston, TX 77042 you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, P: +1 832.476.3440 representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not stanjohnsonco.com provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief. Section One Executive Summary The Offering Offering Price: Cap Rate: $2,450,000 8.50% Stan Johnson Company is pleased to offer for sale to qualified investors the rare opportunity to acquire the Social Security Investment Highlights Administration (SSA) building located in desirable Davenport, IA. The property Investment Grade Credit | Property is secured by a fifteen (15) year primary lease term and is 100% is governed by the General Services guaranteed by the United States Federal Government (S&P rating of AA+) and occupied by the Social Security Administration (GSA). Administration. Office of Disability Adjudication and Review (ODAR) | An additional indication of SSA’s commitment to this This is a new 15-year lease with 10 years site is ODAR, which occupies +/-1,000 SF of the property for video conferencing and disability claims review. firm and commenced on March 1, 2012. The Social Security Administration’s (SSA) administrative appeals operation is one of the largest administrative The property is leased through February judicial systems in the world. SSA issues more than half a million hearing and appeal dispositions each year. Under 28, 2027 to the United States Government the Office of Hearings Operations (OHO), administrative law judges (ALJ) conduct hearings and issue decisions. and is occupied by the United States Social Security Administration (SSA). The tenant District Office | Along with the closing of a nearby SSA, the strategic importance of this location is also indicated by utilizing this office as a District Office, which oversees several other SSA offices in the region. has the option to cancel the lease at any time after February 28, 2022 by giving High Probability of Renewal | Strategic location was remodeled/expanded in 2012. According to GSA Rollover 90 days’ notice to Landlord. There are no data, the GSA has a renewal probability of 96.6% and an average length of tenancy of 32.3 years. renewal options. Landlord is responsible for all maintenance and repairs on this Value-Add Potential | The offering consists of 3.67 acres. The zoning allows for an additional 18,000 square feet modified gross lease. Tenant pays additional of office to be developed. GSA is currently seeking an additional site in Davenport. Adding an additional facility rent each year for increases to operating on the vacant land would be ideal, as GSA is already shouldering the cost of the entire site and could amortize expenses by CPI over the base year amount. those costs over the additional buildings. Tenant also pays taxes in excess of the base Development Opportunity | This investment opportunity provides the investor with multiple options to develop year tax amount. additional land to the GSA or non-GSA tenant, increasing the yield and value of initial investment. Major Regional Hub | Davenport, IA is the state’s 3rd largest city and a regional economic hub for employment, education, health care services and shopping. It’s the largest city within the Quad Cities, which is also comprised of Bettendorf, IA, Moline, IL, and Rock Island, IL with a population of 381,342. Property Summary Primary Commercial Corridor | The property features excellent visibility along Brady Street, the region’s primary commercial corridor, anchored by a 1 million SF regional mall. Brady Street stretches from I-80 extending south 4319 Brady Street Address: to the Mississippi River in downtown Davenport. Davenport, IA 52806 Strong Daytime Population | 152,878 people within 5 miles. Rock Island Arsenal (8,757 employees), Deere & +/- 11,877 SF Gross Company (7,200 employees), and Genesis Health System (5,115 employees) are all within a 5-mile radius of the Building Size (SF): +/- 10,827 SF (ANSI/ site. BOMA) Low Cost of Living & Business | Located along the Mississippi River with convenient access to a regional Ownership Interest: Fee Simple interstate system including I-80, I-88, and I-74 makes the cost of doing business and cost of living among the lowest in the nation. NOI: $208,041 GSA-SSA • Davenport, IA 4 Section Two Property Overview Lease Abstract Tenant: GSA Paid by Landlord and reimbursed by Tenant through the Operating Cost Base. If heating or Agency: Social Security Administration Utilities: cooling is required on an overtime basis, such Credit: S&P AA+ services shall be provided at the hourly rate established in the contract. Address: 4319 Brady Street, Davenport, IA 52806 Landlord pays taxes each year out of gross rent. The estimated baseline year tax amount Interest: Fee Simple Taxes: is $46,000. Tenant pays any increase over the +/- 11,877 SF Gross Building Size: baseline amount. +/- 10,827 SF (ANSI/BOMA) Landlord pays insurance which is included in the Land: 3.67 Acres Insurance: gross rent. Tenant does not reimburse Landlord Commencement: March 1, 2012 for any insurance cost increases Expiration: February 28, 2027 Landlord is responsible for the maintenance and Remaining Term: 9 Years Modified Gross Lease: repair of the leased premises and parking areas. Remaining Firm Term: 4 Years Annual Gross Rent: $330,093 Parking: There are 65 on-site parking spaces. Annual Expenses: $127,052 Net Operating Income: $208,041 The lease extends through February 28, 2027. There are no renewal options. However, GSA has Renewal Options: a renewal rate of 96.6% with an average tenancy of 32.3 years. Landlord is responsible for all Operating Expenses. The Operating Costs Base (OCB) is $47,000 per year. Rent is adjusted each year by the percentage change in CPI over the OCB amount. Operating Costs include cleaning Operating Costs: services, supplies, materials, maintenance, trash removal, landscaping, water, sewer charges, heating, electricity, and administrative expenses. Management fees, insurance, and taxes are not included. Subject Property GSA-SSA • Davenport, IA 6 Rental