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The Home Depot THE HOME DEPOT SOUTH ELGIN, IL (CHICAGO MSA) Affiliated Business Disclosure benefit in determining whether you desire to Memorandum describes certain documents, CBRE, Inc. operates within a global family of express further interest in the acquisition of the including leases and other materials, in summary companies with many subsidiaries and related Property, (ii) you will hold it in the strictest form. These summaries may not be complete nor entities (each an “Affiliate”) engaging in a broad confidence, (iii) you will not disclose it or its accurate descriptions of the full agreements range of commercial real estate businesses contents to any third party without the prior written referenced. Additional information and an including, but not limited to, brokerage services, authorization of the owner of the Property opportunity to inspect the Property may be made property and facilities management, valuation, (“Owner”) or CBRE, Inc., and (iv) you will not use available to qualified prospective purchasers. You investment fund management and development. any part of this Memorandum in any manner are advised to independently verify the accuracy At times different Affiliates, including CBRE Global detrimental to the Owner or CBRE, Inc. and completeness of all summaries and Investors, Inc. or Trammell Crow Company, may information contained herein, to consult with have or represent clients who have competing If after reviewing this Memorandum, you have no independent legal and financial advisors,and interests in the same transaction. For example, further interest in purchasing the Property, kindly carefully investigate the economics of this Affiliates or their clients may have or express an return it to CBRE, Inc. transaction and Property’s suitability for your interest in the property described in this needs. ANY RELIANCE ON THE CONTENT OF Memorandum (the “Property”), and may be the Disclaimer THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK. successful bidder for the Property. Your receipt of This Memorandum contains select information this Memorandum constitutes your pertaining to the Property and the Owner, and The Owner expressly reserves the right, at its sole acknowledgement of that possibility and your does not purport to be all-inclusive or contain all discretion, to reject any or all expressions of agreement that neither CBRE, Inc. nor any Affiliate or part of the information which prospective interest or offers to purchase the Property, and/or has an obligation to disclose to you such Affiliates’ investors may require to evaluate a purchase of to terminate discussions at any time with or without interest or involvement in the sale or purchase of the Property. The information contained in this notice to you. All offers, counteroffers, and the Property. In all instances, however, CBRE, Inc. Memorandum has been obtained from sources negotiations shall be non-binding and neither and its Affiliates will act in the best interest of their believed to be reliable, but has not been verified CBRE, Inc. nor the Owner shall have any legal respective client(s), at arms’ length, not in concert, for accuracy, completeness, or fitness for any commitment or obligation except as set forth in a or in a manner detrimental to any third party. particular purpose. All information is presented fully executed, definitive purchase and sale CBRE, Inc. and its Affiliates will conduct their “as is” without representation or warranty of any agreement delivered by the Owner. respective businesses in a manner consistent with kind. Such information includes estimates based the law and all fiduciary duties owed to their on forward-looking assumptions relating to the © 2017 CBRE, Inc. All Rights Reserved. respective client(s). general economy, market conditions, competition and other factors which are subject to uncertainty ALL PARCEL LINES ON SITE PLAN AND AERIALS ARE Confidentiality Agreement and may not represent the current or future APPROXIMATE. Your receipt of this Memorandum constitutes your performance of the Property. All references to acknowledgment that (i) it is a confidential acreages, square footages, and other Memorandum solely for your limited use and measurements are approximations. This PRIMARY TABLE OF contact contents Michael Kaider Jennifer Sampson CBRE NNN Specialist Director 700 Commerce Drive Executive Summary +1 630 573 7015 +1 630 573 1276 Suite 450 1 page 4 [email protected] [email protected] Oak Brook, IL 60523 DEBT & EQUITY FINANCE Property Description contact 2 page 10 Geoffrey Harris CBRE Senior Vice President 2575 East Camelback Road +1 602 735 5615 Suite 500 Market Overview [email protected] Phoenix, AZ 85016 3 page 14 THE HOME DEPOT EXECUTIVE SUMMARY SOUTH ELGIN, IL 1 THE OFFERING CBRE’s Net Lease Property Group is pleased to exclusively present the The asset was constructed in 2007 and anchors South Elgin Crossing, very rare opportunity to acquire an absolute NNN Home Depot a dominant 232,078 square foot community center. Tenants within ground lease with just under 30 years of term remaining. The the center include Best Buy, PetSmart, Stables, and La-Z-Boy. The lease has a corporate guaranty and includes strong rental increases, center sits in the heart of a strong retail corridor that is 98% occupied. four 5-year renewal options, and zero landlord responsibilities. National retailers located within the corridor include Target, Walmart Supercenter, Sam’s Club, Meijer, TJ Maxx, Kohl’s, Ross, Toys “R” Us, The 105,621 square foot Home Depot is located at the intersection LA Fitness, Jewel-Osco, and Walgreens. This critical mass of retailers of Randall Road and Stearns Road in South Elgin, Illinois. South generates substantial vehicular traffic along Randall Road, enabling Elgin is located in Kane County, approximately 35 miles northwest South Elgin Crossing to draw patrons from several of the surrounding of downtown Chicago. The asset’s primary trade area boasts an communities. impressive demographic profile, with area residents earning an average household income of $111,255. EXECUTIVE SUMMARY 5 FINANCIAL OVERVIEW Offering Price: $9,318,000 Lease Term: 40 Years Cap Rate: 4.25% Lease Term Remaining: 29 Years, 10 Months Rent: $396,000 Lease Commencement: November 15, 2007 Lease Structure: Absolute NNN Ground Lease Lease Expiration: January 31, 2048 Lot Size: ±11.575 Acres Renewal Options: Four, 5-Year Options Building Size: 105,621 Square Feet 10% increase in year 11, 21 and Rental Increases: 31 of the base term and 5% in each Tenant: Home Depot U.S.A., Inc. option period. Guaranty: Corporate Landlord Responsibilities: None RENT SCHEDULE Monthly Annual Lease Year Lease Dates Rent Rent 1 - 10 11/15/2007 to 1/31/2018 $30,000.00 $360,000.00 11 - 20 2/1/2018 to 1/31/2028 $33,000.00 $396,000.00 21 - 30 2/1/2028 to 1/31/2038 $36,300.00 $435,600.00 31 - 40 2/1/2038 to 1/31/2048 $39,930.00 $479,160.00 Option 1: 41 - 45 2/1/2048 to 1/31/2053 $41,926.50 $503,118.00 Option 2: 46 - 50 2/1/2053 to 1/31/2058 $44,022.83 $528,274.00 Option 3: 51 - 55 2/1/2058 to 1/31/2063 $46,224.00 $554,688.00 Option 4: 56 - 60 2/1/2063 to 1/31/2068 $48,535.17 $582,422.00 6 THE HOME DEPOT — SOUTH ELGIN, IL INVESTMENT HIGHLIGHTS OUTSTANDING OPPORTUNITY: The Home Depot has been a tenant at this location since 2007 and has over 29 years of term remaining, showing a strong commitment to the site and desirability of the location. The lease includes strong rental increases and four, 5-year renewal options. CORPORATE GUARANTY: The absolute NNN ground lease has no landlord responsibilities and a full corporate guaranty. The Home Depot has a credit rating of A/Stable by Standard & Poor’s. SECURE TENANCY: The Home Depot is the largest home improvement specialty retailer in the world with more than 2,283 stores in all 50 states, the District of Columbia, Puerto Rico, US Virgin Islands, Guam, 10 Canadian provinces, and Mexico. The company just reported strong 3rd quarter earnings and had fiscal year ending January 2017 sales of $99.2 Billion. ROBUST COMMUNITY CENTER: The Home Depot anchors South Elgin Crossing, a dominant 232,078 square foot community center. The center includes 196,961 square feet of anchor and junior anchor spaces leased to Home Depot, Best Buy, PetSmart, Staples, and La-Z-Boy. Additional space includes four multi-tenant outlot buildings with 35,117 square feet of rentable space leased to a complementary mix of restaurant and service oriented tenants. DYNAMIC RETAIL CORRIDOR: The Home Depot is located in the heart of a dynamic 2.6 million square foot retail corridor. The corridor is 98% occupied providing existing and new retailers seeking to enter the trade area limited alternatives. Surrounding leading national retailers include Target, Walmart Supercenter, Sam’s Club, Meijer, TJ Maxx, Kohl’s, Ross, Toys “R” Us, LA Fitness, Jewel-Osco, and Walgreens. This critical mass of retailers generates substantial vehicular traffic along Randall Road, enabling The Home Depot to draw patrons from several of the surrounding communities. DESIRABLE LOCATION: The Home Depot is located at the southwest corner of Randall Road and Stearns Road, both primary arteries serving South Elgin and the neighboring communities. The intersection has a combined traffic count of 41,700 vehicles. The asset is located in Kane County, which benefits from comparatively low real estate tax rates to nearby Cook County. OUTSTANDING DEMOGRAPHIC PROFILE: The center serves a three-mile primary trade area that has experienced explosive growth with residents who have an average household income of $115,752, approximately 44% higher than the national average. The area’s current population of 50,342 has grown 46% since the 2000 census and is expected to grow another 3% by 2021.
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