OFFERING MEMORANDUM HOME DEPOT 3001 Plainfield Rd Joliet, IL 60435 ™ OFFERING MEMORANDUM HOME DEPOT 3001 Plainfield Rd Joliet, IL 60435 EXCLUSIVELY LISTED BY BEN SNYDER SVP & Senior Director Direct +1 216 503 3607 Mobile +1 614 975 8822 [email protected] License No. 2018002569 (OH) BROKER OF RECORD KYLE MATTHEWS License No. 471.019766 (IL) 2 SECTION I EXECUTIVE OVERVIEW 3 EXECUTIVE SUMMARY THE OFFERING Matthews is pleased to present the very rare opportunity to acquire the 100% fee simple interest an absolute triple net lease Home Depot located in Joliet, Illinois TENANT (the “Property”). The lease, which originally commenced in 1993, was recently Home Depot extended through July 2023, and the lease includes nine additional five-year options to extend. LEASE TYPE Absolute NNN The 107,400 square foot Home Depot is located at 3001 Plainfield Road in Joliet, Illinois. Joliet is the seat of Will County and is approximately 30 miles southwest of downtown Chicago. The Property’s primary trade area boasts an impressive GLA demographic profile, with over 69,000 residents earning an average household ±108,600 income of $88,858 within a three-mile radius. The Property was originally constructed in 1992 for Builders Square Inc. and was remodeled and rebranded after Home Depot acquired the lease in 2000. MSA Chicago, Illinois Home Depot is the world’s largest home improvement specialty retailer, with 2,286 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2017, The Home INDUSTRY Depot had sales of $100.9 billion and earnings of $8.6 billion. Home Depot’s Home Improvement stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor’s 500 index. 4 OFFERING PRICE CAP RATE ANNUAL RENT $10,943,538 6.50% $711,330 INVESTMENT HIGHLIGHTS » Absolute Net Lease: This absolute NNN lease has no landlord responsibilities. » Convenient Access & Visibility: The Property is situated on Plainfield Rd, a primary Home Depot is responsible for all taxes, insurance, and maintenance of the arterial road running through Joliet with traffic counts of 34,000 vehicles per day. Property, including the roof and structure. There are four points of ingress/egress, providing customers with convenient access to the Property. » Investment Grade Credit: Home Depot’s credit is currently rated “A” by Standard & Poor’s, “A2” by Moody’s, and “A” by Fitch. These ratings are investment grade, » Strong Demographics: The Property serves a trade area featuring one of the indicating the company has a strong capacity to meet financial commitments. Chicago MSA’s strongest demographic profiles. Joliet is the third largest city in the state of Illinois. Within a three-mile radius, there are over 69,000 residents with an » Secure Tenancy: Home Depot is the largest home improvement retailer in the average household income of $88,858. world with more than 2,200 stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, and Mexico. In fiscal 2017, » Established Retail Corridor: The Property is located in an established retail corridor. the company had sales of $100.9 billion and earnings of $8.6 billion. Home Depot’s National retailers within the immediate area include Target, Dick’s Sporting Goods, stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the PetSmart, Ross Dress for Less, Barnes & Noble, Old Navy, Jo-Ann, Party City, Dow Jones industrial average and Standard & Poor’s 500 index. Fresh Thyme, Michael’s, Bed Bath & Beyond, Planet Fitness, Bob’s Discount Furniture, The Room Place, Kirkland’s, Shoe Carnival, and The Great Escape. The » Long Term Commitment: Home Depot has been a tenant at this location since Property is also directly across Plainfield Road from Louis Joliet Mall, a 980,000 2000 after acquiring the lease from Kmart and recently extended the lease through square foot super-regional mall anchored by Macy’s, JC Penney, Sears, and a July 2023, showing their strong commitment to the site. The lease includes nine Cinemark 14-screen theater. This critical mass of retailers generates substantial additional five-year options to extend. traffic along Plainfield Road, enabling Home Depot to draw customers from several » Dunkin’ Donuts Sublease: Home Depot subleases a portion of their premises, of the surrounding communities. approximately 1.14 acres, to Third Dunkin’ Donuts Realty, Inc (the “Subtenant”). » Unencumbered Offering: Offered free and clear of any existing financing, a new The Subtenant pays Home Depot $85,000 annually in base rent, which subsidizes investor can take advantage of historically low interest rates and ample availability Home Depot’s rent. So effectively, Home Depot is only paying $626,330, or $5.77 in the capital markets to significantly enhance returns through aggressive per square foot, in annual rent. The sublease expires on July 31, 2023, and the capitalization structures. Subtenant has one additional 5-year option. The Subtenant’s base rent will increase to $96,000 annually in their last option period. 5 FINANCIAL OVERVIEW TENANT SUMMARY Offering Price $10,943,538 Tenant Trade Name Home Depot U.S.A., Inc. Cap Rate 6.50% Lease Expiration July 31, 2023 Current Annual Rent $711,330 Lease Term Remaining ±5 Years Lease Structure Absolute NNN Renewal Options Nine, 5-Year Options Gross Leasable Area ± 108,600 SF Rent Increases None Site Size ± 14.27 AC Landlord Responsibilities None 6 REGIONAL MAP SUBJECT PROPERTY 7 SECTION II PROPERTY OVERVIEW 8 TENANT OVERVIEW TENANT OVERVIEW Home Depot is an American home improvement supplies retailing company that sells tools, construction products, and services. The company is headquartered at the Atlanta Store Support Center in unincorporated Cobb County, Georgia. The Home Depot is the largest home improvement retailer in the United States, ahead of rival Lowe’s. The company was co-founded by Bernard Marcus, Arthur Blank, Ron Brill, and Pat Farrah in 1978. The Home Depot’s proposition was to build home-improvement superstores, larger than any of their competitors’ facilities. STRATEGY To differentiate itself, the Home Depot exclusively carries several major brands, including: Chem- Dry (carpet cleaning, upholstery cleaning, tile and grout services), Behr paints, Homelite (outdoor Parent Company Trade Name The Home Depot, Inc. and power tools), Martha Stewart Living Omnimedia (outdoor furniture, indoor organization), Ryobi and Ridgid (power tools), American Woodmark cabinetry, Thomasville Furniture Industries Revenue $100.9B cabinetry. Additionally, the retailer has its own house brands: Husky (tools), Workforce (tools, shelving, storage cabinets, extension cords, work lights, tarps, paintbrushes), HDX, Glacier Bay Net Income $8.63B (kitchen sinks, faucets, etc.), Commercial Electric, Home Decorators Collection No. of Employees 400,000+ GEOGRAPHIC REACH Home Depot operates many big-box format stores across the United States (including all 50 Headquartered Atlanta, GA states, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam), all 10 provinces of Founded 1978 Canada, and the country of Mexico. The company has over 90 distribution centers throughout the United States to serve over 2,000 Home Depot stores. The MRO company Interline Brands Website www.homedepot.com is also owned by The Home Depot with 70 distribution centers across the United States. 9 PROPERTY DESCRIPTION PARCEL MAP PROPERTY NAME ADDRESS Home Depot 3001 Plainfield Rd Interstate 55 ±75,000 ADT GLA LOCATION ±108,600 SF Joliet, IL 60435 Plainfield Rd ±34,000 ADT LAND AREA BUILT/RENOVATED 14.266 Acres 1992/2001 2 PARKING FRONTAGE/VISIBILITY 1 608 Spaces ± 590 feet along Plainfield Rd ACCESS PARCELS The Property is accessible via 1 06-03-25-101-032-0000 three points of ingress/egress along Plainfield Rd and one 06-03-25-101-031-0000 point of ingress/egress 2 10 SURROUNDING AREA JoJoliet Commons Interstate 55 ±75,000 ADT Plainfield Rd ±34,000 ADT Louis Joliet Mall Louis Joliet Pointe ShoppingShopp Center 11 SECTION III AREA OVERVIEW 12 JOLIET, ILLINOIS DEMOGRAPHICS Sitting just southwest of the Windy City, Joliet is an affluent suburb of Chicago. Joliet is POPULATION 1-MILE 3-MILE 5-MILE the seat of Will County, the 3rd largest city in the state of Illinois, and the 2nd largest 2010 Census 8,375 67,325 189,683 municipality in the state by land area. 2018 Estimate 8,630 69,677 196,107 2023 Projection 8,788 70,924 199,692 Conveniently surrounded by Interstates 55, 80, and 355, Joliet has easy access to Chicago and many other large cities in the area. Known as the “Crossroads of Mid- Growth: 2010-2018 68.14% 47.37% 51.47% America,” Joliet is home to approximately 150,000 people as of 2018 estimates. HOUSEHOLDS 1-MILE 3-MILE 5-MILE 2010 Census 2,861 23,508 64,228 The city of Joliet is known for its diversity, outdoor activities, and family-friendliness. Crime rates in Joliet are well below the national average, making it a safe place to live 2018 Estimate 2,855 23,988 65,175 and work. The city is also home to The University of St. Francis and Joliet Junior College. 2023 Projection 2,882 24,348 65,964 Growth: 2010-2018 64.99% 49.21% 43.12% ECONOMY INCOME 1-MILE 3-MILE 5-MILE With a median household income and median home values well above state and national 2018 Average $89,352 $88,858 $88,657 averages, Joliet has a strong economy bolstered by Manufacturing and Construction, Household Income Healthcare, and the presence of multiple casinos. Construction of a series of million- started in 2017 and will undoubtedly bring a great deal of new sqaure-foot developments LARGEST EMPLOYERS companies to the city.