Fedex Ground Distribution Facility Evansville, Indiana

OFFERING MEMORANDUM FEDEX GROUND DISTRIBUTION FACILITY EVANSVILLE, INDIANA

• Low price and rent per square foot for a FedEx Ground distribution building

• 7.0% to 8.5% cash on cash available, depending upon financing

NET LEASE GROUP CAPITAL MARKETS GROUP

Cushman & Wakefield / FedEx Ground Evansville / A OFFERING MEMORANDUM FEDEX GROUND DISTRIBUTION FACILITY EVANSVILLE, INDIANA

1 Investment Offering & Highlights 12 Evansville, Indiana 2 Property Description, Lease Summary & Returns Diversified Economy 3 Cash Flow Analysis Higher Education 5 Site Plan / Floor Plan Transportation & Demographics 8 FedEx Ground Package System, Inc. 16 Confidentiality & Disclaimer 9 Location / Aerial / Area Maps

DOUGLAS LONGYEAR JEFF CASTELL, SIOR, CCIM CHRISTINA CAMPANELLA CHRISTOPHER SHELDON +1 415 677 0458 +1 317 639 0436 +1 415 677 0456 +1 415 677 0441 [email protected] [email protected] [email protected] [email protected] CA Lic #00829911 IN Lic #RB14017444 NY Lic #10401243503 CA Lic #01806345

Cushman & Wakefield / FedEx Ground Evansville / B Investment Offering & Highlights

The Offering • A new 253,956 ± sq. ft. FEDEX GROUND distribution building situated on 36.15± acres located in Evansville, Indiana to be completed for rent commencement October 1, 2016. • Price: $22,653,300 – 6.25% Return • Cash on cash return available between 7.0% and 8.5%, depending upon financing. • Low price and rent per square foot for a FedEx Ground building - $89 and $5.58, respectively.

Tenant / Lease • E-Commerce: FedEx Ground is a leading ground shipper of small packages. • Credit: FedEx Ground’s parent, FedEx Corporation has an S&P BBB bond rating. • Commitment: New 10 year net lease.

Real Estate • New construction designed to accommodate future growth. • FedEx will initially utilize 62% of the building’s interior operating capacity. FedEx will be able to grow its operations significantly. • High parking capacity for cars, trucks and trailers. High ratio of dock high truck doors to the building square footage, 24’ (eave) -28’ (peak) clear height and ESFR fire protection. • Convenient access to I-64 and new I-69 extension, designed to ultimately connect from Canada through the U.S. to the Mexican border.

Evansville Economy • Diversified economy with different manufacturers including Toyota and SABIC. • Multiple highways, railroads and ports indicate Evansville is a strategic logistics location. • The University of Southern Indiana (10,800 students) is the fastest growing public university in Indiana. • Central location (30 miles south of the median center of U.S. population) serving three state (IN, KY, IL) trade area.

Representative Photograph Cushman & Wakefield / FedEx Ground Evansville / 1 Property Description, Lease Summary & Returns

PROPERTY DESCRIPTION LEASE SUMMARY

Address Norm Wagner Drive Premises Site & Building Evansville, Indiana Tenant FedEx Ground Package System, Inc. Lot Size 36.15± acres Term 10 Years Building Commencement Completion (Scheduled to be October 1, 2016) Completion Scheduled to be completed for rent commencement on October 1, 2016 Expiration September 30, 2026

Size 253,956± square feet Rent Commencement Completion (Scheduled to be October 1, 2016) Building Site Coverage 16.13% Annual Rent $1,415,833

Construction Metal Expenses NN*

Office Area 7,644± square feet Renewal Options Two Five-Year Terms with the following rents: 1st Renewal - $1,557,416 Clear Height 24’ (eave) - 28’ (peak) 2nd Renewal - $1,635,287 Dock High Doors 64 * The tenant is responsible for all property real estate taxes, property insurance, tenant’s liability insurance, and maintenance of the yard, parking, drive and hard Drive-In Doors 7 surfaced areas. The landlord is responsible for maintenance of the structural Parking Stalls portions of the building including the foundation, roof, exterior walls and floor slabs. Long Trailers 179

28’ Trailers 149

Tractors 20 Price: $22,653,300 - 6.25% Return

Dollies 21

Vans 34 ANNUAL RENT

Cars 513 (2.02 car stalls / 1,000 sq. ft. of bldg. area) Investment Years Annual Rent Return 1 - 10 $1,415,833 6.25% Other Features • Secured Fence 11 - 15 (Option 1) $1,557,416 6.88% • Tenant’s package handling system (±$10 Million investment by tenant) 16 - 20 (Option 2) $1,635,287 7.22%

Cushman & Wakefield / FedEx Ground Evansville / 2 Cash Flow Analysis

10 Year Loan Term; 50% LTV Loan; 3.60% Interest Rate; 30 Year Amortization; Bank or Life Company Interest 3.60% Price 22,653,300 Rent 1,415,833 Amortization (Yrs) 30 Loan 50% (11,326,650) Debt Service (617,953) Loan Constant 5.46% Equity 11,326,650 Cash Flow 797,880

Cash on Cash Return 7.04%

10 Year Loan Term; 50% LTV Loan; 4.00% Interest Rate; Interest Only Payments; Conduit Interest 4.00% Price 22,653,300 Rent 1,415,833 Amortization (Yrs) I/O Loan 50% (11,326,650) Debt Service (453,066) Loan Constant 4.00% Equity 11,326,650 Cash Flow 962,767

Cash on Cash Return 8.50%

10 Year Loan Term; 65% LTV Loan; 3.75% Interest Rate; 25 Year Amortization; Life Company Interest 3.75% Price 22,653,300 Rent 1,415,833 Amortization (Yrs) 25 Loan 65% (14,724,645) Debt Service (908,448) Loan Constant 6.17% Equity 7,928,655 Cash Flow 507,385

Cash on Cash Return 6.40%

Cushman & Wakefield / FedEx Ground Evansville / 3 Cash Flow Analysis (cont)

10 Year Loan Term; 65% LTV Loan; 4.00% Interest Rate; 30 Year Amortization; Conduit Interest 4.00% Price 22,653,300 Rent 1,415,833 Amortization (Yrs) 30 Loan 65% (14,724,645) Debt Service (843,572) Loan Constant 5.73% Equity 7,928,655 Cash Flow 572,261

Cash on Cash Return 7.22%

10 Year Loan Term; 70% LTV Loan; 4.00% Interest Rate; 30 Year Amortization; Conduit Interest 4.00% Price 22,653,300 Rent 1,415,833 Amortization (Yrs) 30 Loan 70% (15,857,310) Debt Service (908,463) Loan Constant 5.73% Equity 6,795,990 Cash Flow 507,370

Cash on Cash Return 7.47%

5 Year Loan Term; 70% LTV Loan; 3.10% Interest Rate; 25 Year Amortization; Bank Interest 3.10% Price 22,653,300 Rent 1,415,833 Amortization (Yrs) 25 Loan 70% (15,857,310) Debt Service (912,294) Loan Constant 5.75% Equity 6,795,990 Cash Flow 503,539

Cash on Cash Return 7.41%

Cushman & Wakefield / FedEx Ground Evansville / 4 OH-E

OH-E OH-E

OH-E N OH-E

OH-E Site Plan OH-E

T NOT TO SCALE OH-E

OH-E STORMWATER

DETENTION AREA FM U.S. HIGHWAY 41 HIGHWAY U.S.

SECURUITY

BUILDING

OH-E OH-E

BILL M. HADLOCK, P.E. IN - REGISTRATION #10000133 ADMIN OFFICE EXP. DATE 07/31/2016

NORM WAGNER DRIVE

OH-E OH-E

FM 41

OH-E

OH-E OH-E 44 DOCK DOORS T SHEET INDEX T ±253,956 SQ. FT. NO. TITLE TOPSOIL BERM

CSX TRANSPORTATION RAILROAD TRANSPORTATION CSX C-101 OVERALL SITE PLAN 7 DRIVE-IN DOORS C-102 EXISTING CONDITIONS & DEMOLITION PLAN

FM SITE PLAN (NORTH) C-103 SITE PLAN (SOUTH) C-104 C-105 FIRE ACCESS PLAN

OH-E UTILITY PLAN (NORTH) C-106 OH-E UTILITY PLAN (SOUTH) C-107 GRADING PLAN (NORTH) CSX TRANSPORTATION RAILROAD (FORMER L. & N. RAILROAD) N. & L. (FORMER RAILROAD TRANSPORTATION CSX C-108 GRADING PLAN (SOUTH) C-109

FM C-110 SESC PLAN C-501 SITE DETAILS C-502 SITE DETAILS OH-E 41 DETENTION POND PROFILES OH-E C-503 C-504 SWALE PROFILES D-1 FEDEX DETAILS

LANDSCAPE PLAN (NORTH) FM L-101 LANDSCAPE PLAN (SOUTH) L-102

20 DOCK DOORS

OH-E OH-E

NORM WAGNER DRIVE (PUBLIC) DRIVE WAGNER NORM

OH-E OH-E

STORMWATER DETENTION AREA FM

Cushman & Wakefield / FedEx Ground Evansville / 5 OH-E

OH-E OH-E

OVERALL SITE PLAN

200' 0 100' Floor Plan

OFFICE

253,956± SQ. FT.

FUTURE OPERATIONS EXPANSION USAGE

LEGEND = PACKAGE HANDLING SYSTEM = DELIVERY TRUCK = DELIVERY VAN

Cushman & Wakefield / FedEx Ground Evansville / 6 FedEx Ground pays for the package sorting and handling conveyor system.

RepresentativeRepresentativeCushmanRepresentative & PhotographPhotographWakefield Photograph / FedEx Ground Evansville / 7 Cushman & Wakefield / FedEx Ground Evansville / 7 FedEx Ground Package System, Inc. yy FedEx Ground is one of North America’s two largest small-package Operating Subsidiary Business Revenues* ground delivery services for E-Commerce. Profit* FedEx Express Overnight air delivery $26,451 $2,519 yy FedEx Ground is the most profitable of FedEx Corporation’s four subsidiaries. FedEx Ground Small package ground $16,574 $2,276 delivery yy FedEx Ground and its subsidiary FedEx SmartPost shipped an average of FedEx Freight LTL, large items, intermodal, $6,200 $426 7,526,000 packages per day in fiscal year 2016. & custom critical FedEx Services Retail package drop off $1,593 Not FEDEX GROUND PACKAGE SYSTEMS, INC., the Property’s tenant, is one of stores reported North America’s leading providers of business-to-business and business-to- consumer ground small-package delivery service FedEx Ground is FedEx * (in millions) Corporation’s most profitable division. FedEx Ground has a network of more For the fiscal year ended May 31, 2016, FedEx reported record revenues of than 575 distribution hubs and local pickup-and-delivery terminals located $50.365 billion and net income of $1.820 billion. throughout the United States and Canada. On May 25, 2016, FedEx acquired TNT Express for approximately $4.9 billion. The FedEx 2016 annual report (May 31, 2016 yearend) indicates that the The acquisition combines the strengths of the companies – the world’s FedEx Ground segment had revenues of $16.574 billion, which was 27.6% largest air express network and an unparalleled European road network, above the 2015 level, and operating income of $2.276 billion, which reflected which will expand the existing FedEx portfolio and reshape the global a 4.8% year over year increase. transportation and logistics industry.

FEDEX CORPORATION (NYSE: FDX), the tenant’s parent, provides TNT Express is one of the world’s largest express delivery companies. On a customers and businesses worldwide with the broadest portfolio of daily basis, TNT Express delivers close to one million consignments ranging transportation, logistics and e-commerce services. FedEx corporation’s four from documents and parcels to palletised freight. The company offers road subsidiaries are listed below. and air delivery services in Europe, the Middle East and Africa, Asia-Pacific and the Americas. TNT Express made ±$7.6 billion in revenue in 2015.

As of this offering’s publication, FedEx Corporation had an investment grade S&P bond rating of “BBB.”

FedEx Corporation does not guarantee the tenant’s lease obligations.

Website: www.fedex.com

RepresentativeCushman & PhotographWakefield / FedEx Ground Evansville / 8 Cushman & Wakefield / FedEx Ground Evansville / 8 Closest FedEx Ground Facilities

INDIANOPLIS 70 SPRINGFIELD

TERRE HAUTE

57 71 70 74 MISSOURI 55 BLOOMINGTON CINCINNATI

INDIANA 65 70 ST. LOUIS 69 57 71 75

64 MT. VERNON

64 64 LOUISVILLE

64 55 EVANSVILLE LEXINGTON

75 KENTUCKY

57 65 69 BOWLING GREEN

LEGEND 75

SUBJECT FEDEX GROUND TENNESSEE FEDEX GROUND LOCATIONS ARKANSAS NASHVILLE Cushman & Wakefield / FedEx Ground Evansville / 9 Cushman & Wakefield / FedEx Ground Evansville / 9 69 HAUBSTADT LYNNVILLE

64 68 64 City Map 68 CYNTHIANA 68

POSEYVILLE 64 69 64 ELBERFELD

68 41

65 161 69 66 WADESVILLE

DARMSTADT

57 69

41 BOONVILLE

CHANDLER 66 62

261

EVANSVILLE

66 41 NEWBURGH RICHLAND 62 69 161

HATFIELD

Cushman & Wakefield / FedEx Ground Evansville / 10 Cushman & Wakefield / FedEx Ground Evansville / 10 41 60

64 E WARRENTON ROAD Local Area Map 64 64

SCHROEDER ROAD

E E T

41 CAMBRIDGE A

T 69 GOLF S

CLUB D

L O

HILLTOP TOAD VOLKMAN ROAD SEVEN HILLS ROAD

A O R

O T

C AD N

I O

D DRAMSTADT ROAD DRAMSTADT

RLL

O K

41 ROAD BARTON BASELIN E ROAD BASEL INE ROAD

D A O D R E A T O TA S R

LD O G 57

R MCCUTCHAN ROAD MCCUTCHAN

E T PE N

INGLEFIELD ROAD SCHLENSKER ROAD

Cushman & Wakefield / FedEx Ground Evansville / 11 Cushman & Wakefield / FedEx Ground Evansville / 11

Site Location BASDEN’S AMERICAN RV CENTER The Property is located on Norm Wagner Drive just off of U.S. Highway 41. E BASELINE ROAD E BASELINE ROAD

AZTECA 41 MILLING LP NORM WAGNER ROAD

NORTH HIGH SCHOOL

CITADEL PLASTICS

PITTSBURGH GLASS WORKS

Cushman & Wakefield / FedEx Ground Evansville / 12 Cushman & Wakefield / FedEx Ground Evansville / 12 Evansville, Indiana

Evansville is located at the southwest tip of Indiana, 172 miles southwest COMPANY INDUSTRY EMPL of Indianapolis, 123 miles west of Louisville, 153 miles north of Nashville, and 166 miles east of St. Louis. Evansville has a population of Berry Plastics Injection-molded plastics 2,699 approximately 121,000 people and is the county seat of Vanderburgh County. Evansville is the largest city in the Evansville Indiana-Kentucky SKANSKA | Industrial Contractors Construction 2,425 MSA. This MSA covers Gibson, Posey, Vanderburgh and Warrick Counties in Indiana and Henderson and Webster Counties in Kentucky. The MSA’s T.J. Maxx Distribution center 1,500 population is approximately 314,000 people. Industrial & auto parts Koch Enterprises, Inc. 1,409 Manuf. DIVERSIFIED ECONOMY Vectren Corporation Utility - gas & electric 1,200 The Evansville Indiana-Kentucky MSA has a diversified economy. The largest companies are listed below. Springleaf Financial Services Financial services 1,160

Banking & financial Toyota - Toyota Motor Manufacturing Indiana (TMMI) is the largest Old National Bankcorp 1,022 employer. This is a plant located in Gibson County that manufactures services Toyota’s popular Highlander SUV, Sequoia SUV and Sienna minivan. This Mead Johnson Pediatric Nutrition 925 plant was built in 1996. The company’s investment in the plant is $40 billion. It has a capacity to manufacture 365,000 vehicles per year. The Tropicana Evansville Gaming & entertainment 860 plant employs 5,500 people. AT&T Wireless communications 800 Alcoa - Alcoa has a plant in Warrick County. The Warrick Operation is one of the largest aluminum fabricating facilities in the world. Alcoa’s AmeriQual Group LLC Meals ready-to-eat 550 packaging division is located here, where aluminum sheet for beverage PGW Pittsburgh Glass Automotive glass 515 and food can ends and tabs are made along with other flat-rolled Automotive injection- aluminum products, including metal used to make lithographic printing Guardian Automotive Group 510 plates. molding Color & Chrome Plastics SRG Global 500 SABIC - SABIC ranks among the world’s top petrochemical companies. Manuf. The company is among the world’s market leaders in the production of Sand, gravel, & crushed polyethylene, polypropylene and other advanced thermoplastics, glycols, Mulzer Crushed Stone 465 stone methanol and fertilizers. SABIC’s largest plastic manufacturing plant is located in Posey County. Flanders Electric Motor Service Inc. Motor manuf. & repair 436 Corporate & household Here is a list of more companies with headquarters or major operations in Atlas World Group 389 movers the Evansville MSA:

Cushman & Wakefield / FedEx Ground Evansville / 13 Evansville, Indiana (cont)

HIGHER EDUCATION DIVERSIFIED ECONOMY (CONT) Evansville has the following universities and colleges. COMPANY INDUSTRY EMPL The University of Southern Indiana (USI) is a public university located just Lewis Bakeries Bread & buns 350 outside Evansville city limits. Founded in 1965, the school has an enrollment Coatings for automotive of over 10,800 students and is among the fastest growing comprehensive Red Spot Paint & Varnish 345 plastics state universities in Indiana Banking & financial Fifth Third Bank 296 The Indiana University School of Medicine - Evansville is currently housed services on USI’s campus, but there are plans to locate a new interdisciplinary Tents, canopies, & canvas Anchor Industries 291 academic health science education and research campus downtown. accessories The University of Evansville (UE) is a small, private, Methodist affiliated Evansville Courier & Press Newspaper Service 235 university with approximately 3,050 students. Founded in 1854, UE features Injection molded Wabash Plastics, Inc. 234 liberal arts and science degrees along with a nationally renowned theatre components department. Financial Services / SS&C Technologies 215 hedge funds Reinforced plastics DSM Engineering Plastics 140 compounds

University of Evansville, Ford Center Cushman & Wakefield / FedEx Ground Evansville / 14 Evansville, Indiana (cont)

TRANSPORTATION Evansville Regional Airport Evansville Regional Airport (EVV) is located three miles north of Evansville has an excellent road, rail, water, and air transportation Evansville. The airport has nearly 40 daily flights to and from Atlanta, system. Charlotte, Chicago, Dallas/Fort Worth, and Detroit. Carriers offering Highways service include Allegiant, American, Delta, and United.

Interstate 64 is eight miles north of the city and straddles the Gibson DEMOGRAPHICS - Vanderburgh County line. This interstate routes west to St. Louis and runs east to Louisville. 2016 Summary 10 miles 20 miles 30 miles

U.S. Highway 41 connects the city with Henderson to the south and, to Population 116,794 314,297 385,936 the north, the cities of Princeton, Vincennes, and Terre Haute. Households 47,695 127,129 155,860 Families 30,529 81,721 101,721 Interstate 69 is a new highway under construction between Canada Average Household Size 2.38 2.40 2.41 and Mexico, which is often referred to as the NAFTA highway. Evansville Owner Occupied Housing Units 33,074 84,982 106,427 is located along Interstate 69. Upon completion, it will pass through Renter Occupied Housing Units 14,621 42,147 49,432 Michigan, Indiana, Kentucky, Tennessee, Mississippi, Arkansas, Louisiana, and Texas. This interstate will utilize portions of other highways and is Median Age 40.1 39.4 40.0 being funded by the states. Median Household Income $49,880 $48,691 $48,065 Average Household Income $63,983 $64,185 $63,044 Rail Service

Evansville is a major center for railway traffic. The city is served by four 2021 Summary 10 miles 20 miles 30 miles major freight railroads, CSX (with a major yard in the Howell area), Population 119,445 321,509 393,199 Evansville Western Railway, the Indiana Southwestern Railway, and the Norfolk Southern Railway. Households 48,735 130,027 158,810 Families 31,044 83,185 103,136 The Howell Yard in Evansville sorts and makes up trains, and has Average Household Size 2.39 2.40 2.41 intermodal facilities to handle 3,000 cargo containers and piggyback Owner Occupied Housing Units 33,770 86,956 108,413 trailers per month. Renter Occupied Housing Units 14,966 43,071 50,397 Ports Median Age 40.7 40.2 40.8 Three public and several private port facilities receive year-round service Median Household Income $55,801 $55,086 $54,269 from five major barge lines operating on the Ohio River. The river Average Household Income $70,496 $71,018 $69,634 connects Evansville with all river markets in the central United States and on the Great Lakes and with international markets through the port of New Orleans. Evansville has been a U.S. Customs Port of Entry for more than 125 years. Because of this, it is possible to have international cargo shipped to Evansville in bond. The international cargo can then clear Customs in Evansville rather than a coastal port.

Cushman & Wakefield / FedEx Ground Evansville / 15 Confidentiality & Disclaimer The information contained in this marketing brochure (“Materials”) is The information contained in the Materials has been obtained by proprietary and confidential. It is intended to be reviewed only by the Agent from sources believed to be reliable; however, no representation person or entity receiving the Materials from Cushman & Wakefield or warranty is made regarding the accuracy or completeness of the (“Agent”). The Materials are intended to be used for the sole purpose of Materials. Agent makes no representation or warranty regarding the preliminary evaluation of the subject property/properties (“Property”) Property, including but not limited to income, expenses, or financial for potential purchase. performance (past present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence of The Materials have been prepared to provide unverified summary contaminating substances (PCB’s, asbestos, mold, etc.); compliance with financial, property, and market information to a prospective purchaser to laws and regulations (local, state, and federal); or, financial condition enable it to establish a preliminary level of interest in potential purchase or business prospects of any tenant (tenants’ intentions regarding of the Property. The Materials are not to be considered fact. The continued occupancy, payment of rent, etc). A prospective purchaser information contained in the Materials is not a substitute for thorough must independently investigate and verify all of the information set forth investigation of the financial, physical, and market conditions relating to in the Materials. A prospective purchaser is solely responsible for any the Property. and all costs and expenses incurred in reviewing the Materials and/or investigating and evaluating the Property.

By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set forth herein.

NET LEASE GROUP CAPITAL MARKETS GROUP

Cushman & Wakefield / FedEx Ground Evansville / 16