ONE PARKWAY NORTH Deerfield, Illinois
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ONE PARKWAY NORTH Deerfield, Illinois Holliday Fenoglio Fowler, L.P. (“HFF”) Executive Summary is an Illinois licensed real estate broker Executive Summary ONE PARKWAY NORTH KEY INVESTMENT HIGHLIGHTS Anchor Tenant and Guaranteed Income Stability - Anchor tenant, Fortune 500 company Essendant, Inc. (formerly known as United Stationers) with revenues of $5.3 billion in 2015, leases 198,730 RSF KEY PROPERTY STATISTICS (77.4% of the gross building area) and recently renewed their lease for an additional 11 year term BUILDING ADDRESS One Parkway North Blvd, Deerfield, IL through October 2027. Long term cash flow is guaranteed as the weighted average lease term is RENTABLE AREA 256,743 RSF an astoundingly high 10.1 years. LAND SITE 11.22 acres (488,743 SF) Institutionally Maintained through Extensive Capital Improvement - In addition to several building upgrades PERCENT LEASED 91.3% performed in the last year, current ownership is currently installing a fitness center and renovating STORIES 5 the building atrium and on-site food service. The total cost of capital improvements performed within the past year will be equal to $3.4 million. DATE COMPLETED/RENOVATED 1988 / 2016 TYPICAL FLOOR PLATE 51,000 RSF Upside with Competitive Basis at Substantial Discount to Replacement Cost - Built to the highest standard PARKING 781 Spaces of Class A office developments, One Parkway’s replacement cost today would be in excess of $350 per rentable square foot requiring gross rents of $29.00 per rentable square foot (40% above the WEIGHTED AVERAGE LEASE TERM 10.1 Years CONTRACT RENT % BELOW current market rent for the Property). Investors will have the upside opportunity for rent growth -5.14% especially in a market with no foreseeable speculative construction. MARKET AT EXPIRATION One-of-a-Kind Location - One Parkway North is adjacent to the Tri-State Tollway in Deerfield and 155,000 vehicles pass by the Property on a daily basis providing tremendous signage opportunities. In addition to having direct access to the Tri-State and Edens Expressway, the Property is also proximate to two (2) Metra stations, connecting One Parkway to the surrounding suburbs, the Chicago CBD, O’Hare International Airport, and two other regional airports. North Suburban Submarket and Lake County Address - The North Suburban submarket routinely outperforms the surrounding areas in occupancy rate, net rents and leasing velocity due to the area’s reputation as Chicago’s premier office market and the destination for corporate headquarters and biotech companies. The Lake County address is of further appeal because of the lower tax rates compared to Cook County. Immediate Access to Class A Amenities - One Parkway North benefits from an on-site food service, heated executive parking, a newly renovated atrium, and brand new in-building fitness center. Within a 5 to 10 minute drive of the Property, there are over 50 restaurants, 8 hotels, 11 banks, 9 retail/shopping centers (including Northbrook Court), a Whole Foods and 2 Metra Stations. This vibrant atmosphere leads to strong tenant retention in Deerfield. Skilled Labor Pool and North Shore Location - Another advantage of the Property’s North Shore location is its access to the deep labor pool in the surrounding areas. Within one mile of One Parkway, 75.2% of residents have obtained a Bachelor’s degree or higher, the average annual household income is $209,522 and the median housing value is $574,526. Many decision makers and executives live in the surrounding areas and are another reason why corporate businesses want to be in this submarket. Parkway North Center: Best-in-Class Office Park - One Parkway North is part of the master-planned, TOBY award-winning office campus known as Parkway North Center. The campus features a Marriott Suites hotel, Bright Horizons daycare center, state-of-the-art LifeStart fitness center, three Pace bus stops, three on-site dining options, Starbucks kiosk, and an adjacent luxury apartment community. The desirability of the office campus is evidenced by the tenant roster which includes the headquarters of the Fortune 500 company Mondelez, CF Industries’ headquarters, Walgreens, GCG Financial, Aerotek, Meridian Group and many others. 2 ONE PARKWAY NORTH Executive Summary 3 Executive Summary ONE PARKWAY NORTH INVESTMENT OVERVIEW Holliday Fenoglio Fowler, L.P. (“HFF”) is pleased to present One Parkway North (the “Property” or “One Parkway”), a rare opportunity for investors to acquire a core asset in Chicago’s prestigious North Shore. One Parkway North is a 256,743 rentable square foot (“RSF”), five-story Class A building that is the cornerstone of the Parkway North Center office campus, one of Chicago’s premier office campuses. The Property serves as the global headquarters for Essendant (NASDAQ: ESND, 77% of the GLA), a Fortune 500 company. Essendant recently recommitted to the Property by extending their lease through October 2027, over 11 years remaining, while bringing the overall weighted average remaining lease term for the Property to 10.1 years. Located adjacent to the Tri-State Tollway, the Property enjoys excellent visibility and access to the surrounding North Shore as well as the CBD and greater Chicago metropolitan area. The asset's proximity to decision makers in the North Shore and easy access to Chicago’s vast labor pool in the North and West, coupled with Lake County’s low taxes, create the perfect environment for a corporate headquarters location. Of the 31 Fortune 500 companies that are headquartered in the Chicago area, 20 of them are located in the suburbs, and 14 are located in the North Suburban submarket, specifically Abbott Laboratories, Abbvie, Allstate, Anixter, Baxter, CDW, Discover Financial, Essendant, Illinois Tool Works, Mondelez International, Packaging Corp of America, Tenneco, W.W. Grainger and Walgreens. In addition, One Parkway North is located proximate to a number of other corporate headquarters such as AonHewitt, Astellas, Caremark, Hospira, and Takeda Pharmaceuticals. One Parkway North provides the opportunity for an investor to acquire a core Class A office asset with a highly secure income stream in a strategic corporate headquarter location in Chicago’s prestigious North Shore. 4 ONE PARKWAY NORTH Executive Summary Bobby’s Deereld 94 U.S. Bank La Chase ke Barnes & Noble Deereld Bank & Trust PF Chang’s M Walgreens Max’s Deli i DiPescara ch Whole Foods Starbucks Corner Bakery Binny’s ig ONE PARKWAY NORTH a Chipotle The Claim Company Guitar Center n AMC Theater LA Fitness Deerfield Rd 2 Way Apple Store Interchange Chase Bank Crate & Barrel Trax Tavern Grill Marriott Suites 43 First Midwest Bank Coach Residence Inn Louis Vuitton Wild Fish Marriott Wooil First American Bank ATM Carson’s Tiany & Co. Sushi Stir Crazy The Container Store Rosebud Waukegan Rd Ram Restaurant & Brewery Lord & Taylor McDonalds Trader Joe’s Macy’s Dunkin Donuts 94 Panera Bread Francesco’s Verizon Subway Neiman Marcus Next Door Bistro Nordstrom Rack RT Lounge Kate Spade Charlie Beinlich’s Petsmark Demetri’s Greek Restaurant 45 Cooper’s Hawk Winery McDonald’s TUMI Subway FedEx Office Eggshell Cafe Dunkin’ Parkway Bank Westin North Shore Hyatt Deereld Donuts & Trust Co Marriott Hotel Lake Cook Rd 4 Way Interchange Deerbrook Buca di Beppo J. Alexander’s TeddyFabz Shopping Center Northbrook Old Munich Inn Home Depot 41 94 Court Max and Future Site: Pete Miller’s Seafood Embassy 83 Tastes of Chicago Thai Thai Benny’s 45 & Prime Steak Suites Hotel NorthShore770 Ristorante Abruzzo Edens Spur (Toll Road) Starbucks Sachs Recreation Center y Mariano’s a Benihana w Panera Bread ll Prairie Grass Joe’s Pizzeria o Starbucks Ron of Japan Fuddruckers T 7-Eleven Simply Thai e Butterelds Blackie’s Taco Bell t Greek Feast Morton’s PNC a Pancake House BMO Harris Subway McDonald’s t Leonard's Noodles & Company 68 S - Josh’s Hot Dogs Noodles & Company Panda Express i 68 Dundee Rd Bakery Chipotle r Chase Bank 68 Jimmy John’s T Dairy Queen PNC Bank Sleepys Chase Bank Wingstop Rd Pfingsten Once Upon Sports Authority Hair Cuttery Pinhead’s Jerey Lanes a Deli Sanders Rd Chase Bank OceMax Walgreens Jake's Bed Bath & Beyond Starbucks Pizzeria Carter’s LEGEND Potbelly Rennaissance 294 Jewel Hotel & Resorts Restaurant Tuscany Wheeling Hotel Ruth’s Chris Golden Chef Walters Ave Shopping/Retail Steak House Grocery Landwehr Rd Landwehr Western Ave Western Bank CHICAGO EXECUTIVE AIRPORT 94 Lifetime Fitness 21 site Edens Expressway 43 5 1000 Skokie Blvd 83 Techny Rd Mariano’s Starbucks Chase Walgreens Willow Rd Executive Summary ONE PARKWAY NORTH Dedicated Anchor Tenant with CREDIT QUALITY Income Stability Essendant (NASDAQ: ESND), the Property’s anchor tenant, is a publicly-traded Fortune 500 company that recently memorialized their long term commitment to the Property with a lease extension through October 2027. Formerly known as United Stationers Supply Company, Essendant is a leading national wholesale distributor of workplace essentials, and has been headquartered at the building since 2005. Essendant currently leases 198,730 RSF (77.4% of the gross building area). The tenant has a ROFO on all remaining space in the building but does not have an option to terminate, creating the ideal environment for Essendant to increase their footprint within the Property. Essendant’s anchor tenancy will provide significant stabilized cash flow to an investor looking for a core income stream. Summary of Primary Tenants Leased SF % Share (1) Current Rent/SF Expires Remaining Term Credit Rating (2) ESSENDANT 198,730 77.4% $18.00 Oct-27 11.2 yrs NA FRIEDMAN CORPORATION 15,687 6.1% $17.76 Apr-20 3.7 yrs Fitch: BBB- AJILON PROFESSIONAL STAFFING 5,152 2.0% $18.04 Feb-17 0.5 yrs S&P: BBB+; Moody's: Baa1 RIGHT MANAGEMENT 4,458 1.7% $18.54 Sep-18 2.1 yrs S&P: BBB; Moody's: Baa1 ORTHONET SERVICES 3,238 1.3% $18.58 Aug-18 2.0 yrs NA BDM INVESTMENTS 1,578 0.6% $19.10 Oct-20 4.2 yrs NA TOTAL / WEIGHTED AVERAGE LEASE TERM 228,843 89.1% 10.1 yrs (1) % Share is based on future building RSF of 256,743 (2) Credit Ratings for Friedman and Right Management are reflective of their respective parent companies, Constellation Software and Manpower Group.