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LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In association with: Blake Anderson 972-692-1739 [email protected] TX Lic #469316 Douglas Longyear 415-677-0458 [email protected] Lic #00829911 Andrew Bogardus 415-677-0421 [email protected] Lic #00913825 Under construction, to be completed in May 2014 Christopher Sheldon 415-677-0441 [email protected] Lic #01806345 Call for offers: Wednesday, April 23 rd

LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

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Page 1: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

LKQ Corporation Distribution BuildingBurleson, Texas (Dallas / Fort Worth Metroplex)

EXECUTIVE SUMMARY

In association with:

Blake [email protected] Lic #469316

Douglas Longyear [email protected] #00829911

Andrew [email protected] #00913825

Under construction, to be completed in May 2014

Christopher [email protected] #01806345

Call for offers:Wednesday, April 23rd

Page 2: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

The Offering• Under construction, a new 94,000 +/- sq. ft. distribution building situated

on a 72 +/- acre site leased to LKQ Best Automotive Corp for 15 years and guaranteed by the parent, LKQ Corporaton (NASDAQ: LKQ). Completion is scheduled for late May 2014.

• Price – $12,300,000

• Rent & Rent Increases - To be proposed by Purchaser and subject to acceptance by Seller

Lease / Tenant• New 15-year triple net lease with LKQ Best Automotive Corp.

• The lessee’s obligations guaranteed by LKQ Corporation

• LKQ Corporation is the industry leading company for distributing after market and recycled auto parts

• LKQ is an environmental benefactor

• LKQ Corporation bonds have an S&P BB+ bond rating

• LKQ Corporation’s revenues and profits have increased every year since 2000

Strategic Interstate 35 Location• I-35W links to the highway network serving the DFW Metroplex

• I-35W connects Dallas/Fort Worth with Austin, San Antonio and Laredo

• Houston may be accessed via I-35W, H-84 and I-45.

Metro Area Strengths• The Dallas Fort Worth Arlington metro area has the largest population in the

Southwest, and the 4th largest in the U.S.

• Since 2000, the population has grown from 5,000,000 to 6,750,000

• Low unemployment rate – 5.4%

• Highly ranked nationally by Moody’s and Kiplinger for future job growth

Metro Area Economy• No state corporate or personal income taxes

• Diversified economy with energy, communications, food processing, aerospace, logistics and more

• Central U.S. location and low cost of doing business attracts corporate relocations

Metro Area’s Fortune 500 HQ’s• ExxonMobil – Oil & Gas

• AT&T – Telecommuncations

• Flour – Construction

• American Airlines – Airline

• Kimberley Clark – Consumer Products

• HollyFrontier – Oil & Gas

• Energy Transfer Equity – Energy

• Southwest Airlines – Airlines

• J.C. Penney – Retail

• Dean Foods – Food Processing

• Texas Instrument – Semiconductors

• Tenet Healthcare – Healthcare

• GameStop – Retail

• Commercial Metals – Steel & Metal

• Celanese – High Tech Materials

• Dr. Pepper Snapple – Beverage

• Energy Future Holdings – Utility

Offering & Investment Highlights

SKF USA, Inc. 2LKQ Corporation 1

Page 3: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

Investment Overview

Location 2955 South I-35W, Burleson, Texas (situated on the frontage road for Interstate 35W)

Lot Size Approximately 72 +/- acres — 3,136,320 +/- square feet

Site Uses Parcel 1 (68 +/- acres) will contain the subject building and LKQ’s outdoor storage area. The 94,000 +/- sq. ft. building will be used primarily for the storage and distribution of aftermarket and recycled auto parts. Approximately 18,527 sq. ft. of the building will be used for dismantling cars to recycle selected parts. The outdoor area with be used to store automobiles for additional parts removal and recycling. Cars in the outdoor storage areas are sold to scrap metal companies after three to eight months in the yard. Parcel 2 (4 +/- acres) is used by County Road 711 L.P. for extracting natural gas.

Building Improvements Under construction, a new 94,000 +/- sq. ft. distribution building which is scheduled to be completed in late May 2014. The building will have metal sides, a metal roof, 11 dock high truck doors with levelers, 17 drive in truck doors and 6,781+/- sq. ft. of ground floor office and 6,781 +/- sq. ft. of mezzanine office space. The mezzanine space is not included in the building’s total sq. ft. The clear height in the warehouse area will be 30’. The office space will be air conditioned. The warehouse area will have heating, fans and side wall louvers for air circulation. The building will have an ESFR sprinkler system. Parking spaces will be available for 12 delivery vans and approximately 104 cars.

Site Improvements The 68 +/- acre Parcel 1 site will contain the following uses: 94,000 +/- sq. ft. for the building foot print; 3.9 +/- acres of concrete paving for truck circulation and vehicle parking; 5.5 +/- acres for landscape and green belt areas; 46 +/- acres of 8” thick crushed concrete for outdoor inventory storage; and 5.8 +/- acres for storm water detention ponds. The site will be surrounded by an 8’ high, hardy plank wall.

Price $12,300,000. Seller shall have the option to increase the price by up to $200,000 or decrease it by as much as $200,000 prior to closing with reasonable notice to Purchaser.

Lease Lessee LKQ Best Automotive Corp.Lease Term 15 years commencing at the closingRenewal Options Four 5-year renewal optionsLessee Obligations Triple Net – real estate taxes, insurance, and maintenance including roof and structureLease Guarantor LKQ Corporation (NASDAQ: LKQ) (S&P BB+ bond rating)

Annual Base Rent To be proposed by Purchaser and subject to acceptance by Seller

Rent Increases To be proposed by Purchaser and subject to acceptance by Seller

LKQ Corporation 2

Page 4: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

121

114

114

360

121

61

287

287

77

77

67

75

635

30

30

45

45

30

35W

35W

35W

820820

20

20

20

35E

35E

67

67

67

174

FLOWERMOUND

GRAPEVINE

BEDFORD

FORT WORTH

BURLESON

ARLINGTON

LKQHIGHPOINTBUSINESS PARK

CLEBURNE

MANSFIELD

WAXAHACHIE

ENNIS

GRANDPRAIRIE

DALLAS

IRVINGUNIVERSITY

PARK

NORTH DALLAS

RICHARDSONFARMERSBRANCH

CARROLLTON

PLANO

GARLAND

MESQUITE

Dallas/Fort WorthInternational Airport

LKQ Corporation 3

Location / Regional MapThe property is located at 2955 South I-35W, Burleson, Texas. South Burleson Road is a frontage road on the east side of Interstate 35W.

The property’s location along I-35W offers LKQ significant strategic value. The Burleson facility will distribute parts to auto repair businesses located throughout the Metroplex. I-35W facilitates this distribution by linking to the highway network serving the entire Metroplex. The Burleson facility exchanges parts with the Houston facility every night. Houston may be accessed via I-35W, H-84 and I-45. The Burleson facility will receive parts that are manufactured in Mexico. I-35W passes through Austin and San Antonio on its way to Laredo which is the border transit point for approximately 60% of the import/export trade volume between Mexico and the U.S.

Page 5: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

INTE

RS

TATE 3

5 W

TREE PRESERVATION AREA

LOA

DIN

G

DO

CK

OFFICE

STO

RA

GE

FIRE

LAN

E

FIRE LANE

LOADING DOCK

GAS PAD

OUTSIDE STORAGE AREA

DETENTION POND

PARCEL 1

WALLS

PARCEL 2

Site PlanParcel 1 – 68 +/- acres

Parcel 1 will contain the LKQ building and LKQ’s outside storage yard.

Parcel 2 – 4 +/- acres

Parcel 2 is used by County Road 711 L.P. to extract natural gas.

LKQ Corporation 4

Page 6: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

LKQ Corporation

• LKQ has the largest market share of any company operating in its sector.

• LKQ’s Revenues and Profits increased each year during the last recession.

• LKQ’s Revenues and Income from Continuing operations have increased at compounded annual rates of 21.5% and 26.0%, respectively since 2008.

• LKQ’s long term debt has an S&P bond rating of BB+.

LKQ Corporation was founded in 1998 and is headquartered in Chicago, Illinois. LKQ distributes a variety of products to collision and mechanical repair shops, including aftermarket collision and mechanical products, recycled collision and mechanical products, refurbished collision replacement products such as wheels, bumper covers and lights, and remanufactured engines. Collectively, LKQ refers to its products as alternative parts. LKQ reports to be the nation’s largest provider of alternative vehicle collision replacement products and a leading provider of alternative vehicle mechanical replacement products, with its sales, processing, and distribution facilities reaching most major markets in the United States. LKQ’s wholesale operations also reach most major markets in Canada. LKQ has a total of 404 facilities in the U.S. and Canada. LKQ reports to be a leading provider of alternative vehicle mechanical replacement products in the United Kingdom, the Netherlands, Belgium and France.

Insurance Companies Drive Business to LKQInsurance companies, which ultimately pay for the majority of collision repairs of insured vehicles, help drive demand for LKQ’s products. Insurance companies tend to exert significant influence in the vehicle repair decision. Because of their importance to the process, LKQ has formed relationships with certain insurance companies in North America for which LKQ is designated a preferred products supplier. LKQ provides customers with a value proposition that includes high quality products at lower cost than new OEM products, extensive product availability due to its broad distribution network, responsive service and quick delivery. The breadth of LKQ’s alternative parts offerings allows it to serve as a “one-stop” solution for customers looking for the most cost effective way to provide quality repairs.

Financial InformationLKQ’s Total Revenue for FY 2013 was $5.06 billion, 22.7% higher than in 2012. Its Net Income for FY 2013 was $311 million, 19.2% higher than in 2012. LKQ’s Total Assets and Shareholders’ Equity at the end of 2013 was $4.51 billion and $2.35 billion, respectively.

44

63

97

127

167

210

261

312

$0

$50

$100

$150

$200

$250

$300

$350

2006 2007 2008 2009 2010 2011 2012 2013

Millions Income from Operations(in Millions)

0.789

1.127

1.908 2.047

2.470

3.270

4.123

5.063

$0

$1

$2

$3

$4

$5

$6

2006 2007 2008 2009 2010 2011 2012 2013

BillionsRevenue (in Billions)

LKQ Corporation 5

Page 7: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

Burleson is a suburb of the Dallas Fort Worth metro area (commonly referred to as the Metroplex) located south of Fort Worth on Interstate 35W. The city straddles both Johnson and Tarrant counties. The city’s population grew approximately 75% between 2000 and 2013. The current population is estimated to be 36,690. While this figure may not be large, it masks the fact that Burleson is part of the larger Metroplex which has a population of 6.7 million people. Burleson is transitioning from a bedroom community to a mix of residential and commercial/industrial development. The catalysts for the new commercial and industrial development are the LKQ project and the HighPoint Business Park.

HighPoint Business ParkHighPoint Business Park is a 159 acre master planned business park located directly across I-35W from the LKQ site. HighPoint is being developed by the city of Burleson. All utilities are now available to the site. The city is offering 5 to 45 acres sites and state and local economic incentives to attract companies. One year ago there was no evident activity. Now, two main roads are in, utilities have been brought to the park, some sites are being graded and the park has won a 90,000 sq. ft. climate controlled building requirement for Chicken E Food Service. This company will use the facility to house its corporate headquarters and store refrigerated food for distribution.

Two other recent developments include a new 136,000 sq. ft. Sam’s Club located near the intersection of I-35 and Highway 174 and a 5,000 sq. ft. building for Axogen, a medical devices company.

In addition to its new commercial and industrial development, Burleson is a well-regarded residential community. Burleson was recognized in September 2010 as one of the “100 Best Communities for Young People” by the America’s Promise Alliance, the nation’s largest partnership organization dedicated to youth and children. The city has exceptional school districts which consistently bring in student SAT and ACT scores that are higher than the state and national averages.

A review of the Dallas/Fort Worth Metroplex is useful to grasping the value of the surrounding area to the subject property and its use.

Burleson

FedEx Ground 8

Dallas, Texas SkylineLKQ Corporation 6

Page 8: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

Demographics

FedEx Ground 15

Census 2010 Summary 10 miles 20 miles 30 miles

Population 151,850 1,055,178 2,456,231

Households 52,152 373,103 873,594

Families 41,026 265,145 616,990

Average Household Size 2.89 2.78 2.78

Owner Occupied Housing Units 40,910 245,599 546,659

Renter Occupied Housing Units 11,242 127,504 326,936

Median Age 35.0 33.5 33.2

2012 Summary

Population 157,959 1,079,797 2,512,216

Households 54,206 383,084 896,105

Families 42,172 268,360 623,731

Average Household Size 2.89 2.78 2.77

Owner Occupied Housing Units 41,938 248,035 551,409

Renter Occupied Housing Units 12,269 135,049 344,696

Median Age 35.1 33.6 33.4

Median Household Income $54,046 $52,731 $51,223

Average Household Income $68,037 $69,484 $67,045

2017 Summary

Population 170,714 1,153,856 2,682,735

Households 58,309 406,969 951,744

Families 45,700 287,879 669,197

Average Household Size 2.91 2.79 2.79

Owner Occupied Housing Units 45,590 267,775 595,668

Renter Occupied Housing Units 12,719 139,194 356,076

Median Age 35.4 34.1 33.8

Median Household Income $61,010 $59,701 $57,924

Average Household Income $75,291 $77,568 $74,761

Trends: 2012-2017 Annual Rate

Population 1.57% 1.34% 1.32%

Households 1.47% 1.22% 1.21%

Families 1.62% 1.41% 1.42%

Owner Households 1.68% 1.54% 1.56%

Median Household Income 2.45% 2.51% 2.49%LKQ Corporation 7

Fort Worth, Texas

Page 9: LKQ Corporation Distribution Building EXECUTIVE SUMMARY · 2014-04-07 · LKQ Corporation Distribution Building Burleson, Texas (Dallas / Fort Worth Metroplex) EXECUTIVE SUMMARY In

Disclaimer

The information contained in this marketing brochure (“Materials”) is proprietary and confidential. It is intended to be reviewed only by the person or entity receiving the Materials from Cassidy Turley Northern California (“Agent”). The Materials are intended to be used for the sole purpose of preliminary evaluation of the subject property/properties (“Property”) for potential purchase.

The Materials have been prepared to provide unverified summary financial, property, and market information to a prospective purchaser to enable it to establish a preliminary level of interest in potential purchase of the Property. The Materials are not to be considered fact. The information contained in the Materials is not a substitute for thorough investigation of the financial, physical, and market conditions relating to the Property.

The information contained in the Materials has been obtained by Agent from sources believed to be reliable; however, no representation or warranty is made regarding the accuracy or completeness of the Materials. Agent makes no representation or warranty regarding the Property, including but not limited to income, expenses, or financial performance (past, present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws and regulations (local, state, and federal); or, financial condition or business prospects of any tenant (tenants’ intentions regarding continued occupancy, payment of rent, etc). A prospective purchaser must independently investigate and verify all of the information set forth in the Materials. A prospective purchaser is solely responsible for any 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.

LKQ Corporation 8