REP SITE FEDEX GROUND - LoopNet...6 FEDEX GROUND: FORT STOCKTON, TEXAS NKF CAPITAL MARKETS NET LEASE PRACTICE GROUP INVESTMENT HIGHLIGHTS RECENTLY CONSTRUCTED The subject property

FEDEX GROUNDOFFERING MEMORANDUM | 601 MARTIN ADAMS STREET | FORT STOCKTON, TX

R E P S IT E

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2 FEDEX GROUND: FORT STOCKTON, TEXAS NKF CAPITAL MARKETS NET LEASE PRACTICE GROUP

CONFIDENTIALITY AGREEMENT

This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation (DATE) of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser.Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agent each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.

OFFERED EXCLUSIVELY BYNET LEASE PRACTICE GROUP

JERRY HOPKINSSenior Managing Director918.878.9536 [email protected]

KEN HEDRICKExecutive Managing Director918.878.9540 [email protected]

D. ANDREW RAGSDALE J.D.Senior Managing Director918.878.9535 [email protected]

DEBT & EQUITY

NICK SCRIBANIManaging [email protected]

MANDY POPELocal [email protected] Real Estate License 537005

http://www.ngkf.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


THE INVESTMENT5 THE OFFERING6 INVESTMENT HIGHLIGHTS

THE TENANT8 TENANT/CREDIT OVERVIEW9 LEASE ABSTRACT

RENT SCHEDULE10 LOCATION MAP11 AERIAL MAP12 PHOTOGRAPHS15 SITE PLAN16 FLOOR PLAN

FORT STOCKTON, TEXAS18 LOCATION OVERVIEW19 DEMOGRAPHICS20 INDUSTRIAL MARKET


THE INVESTMENT


THE OFFERINGNKF Capital Markets Net Lease Practice Group (the “Agent”) has been engaged as the exclusive sales representative for the sale of the FedEx Ground-leased property located in Fort Stockton, Texas (the ”Property”).

The opportunity is to acquire the fee-simple interest ownership in the recently constructed commercial property located at 601 Martin Adams Street (the “Property”). The property consist of a 29,504 square foot building situated on a 7.29 acre parcel of land with room to expand.

The facility is leased to FedEx Ground under a 10 year lease with a June 2018 rent commencement. FedEx Ground is operating under a NN lease with landlord responsibilities limited to maintaining and replacing the roof and structure as well as parking lot maintenance for the first two years. The lease features two (2), five (5) year options periods with 10% and 5% rent escalations, respectively.

The property is centrally located within close proximity to Interstate I-10, US-285 and US-385.

FedEx Ground Package System, Inc. is the rapidly expanding small parcel shipping arm of the $63.798 billion multi-national logistics company FedEx (FDX). In 2017, FedEx generated over $60BB in revenues. FedEx owns an investment grade credit rating of BBB by Standard & Poor’s. FedEx Corporation is headquartered in Memphis, Tennessee.

PURCHASE PRICE $6,600,000CAP RATE 6.25%

Property Summary

Price $6,600,000

Cap Rate 6.25%

NOI $412,586

FedEx Ground | Fort Stockton, Texas

Location 601 Martin Adams St, Fort Stockton, TXYear built 2018Construction Pre-engineered steel (metal)Rent per square foot $13.98Acreage 7.29 acresClear Height 18-21 feet

Dock Doors 5 Dock doors10 Drive-in doors

Parking Asphalt61 spaces


INVESTMENT HIGHLIGHTSRECENTLY CONSTRUCTED

The subject property was built in 2018 and consists of a 29,504 square feet building, with room to expand, on a 7.29 acre parcel of land. This was a built to suit project developed specifically for the tenant who uses the facility as sorting and distribution facility for the I-10 logistics corridor.

STRONG, INVESTMENT-GRADE TENANT

FedEx Ground Package System, Inc. is rapidly expanding, $18BB, small parcel shipping arm of the $63 billion multi-national logistics company FedEx (FDX) Corporation. FedEx owns an investment grade credit rating of BBB by Standard & Poor’s rating agency. FedEx Corporation is headquartered in Memphis, Tennessee, while FedEx Ground is headquartered in Moon Township (Pittsburgh), Pennsylvania.

LONG TERM, 10-YEAR LEASE

FedEx Ground Package System, Inc. signed a 10 year lease with a rent commencement date of June 1, 2018 (Lease expiration date of June 1, 2028). The lease features limited landlord responsibilities (roof and structure), with parking lot for the first two years only.

STRONG LOGISTICS LOCATION

The Property is centrally located within close proximity to the I-10 corridor, US - 385 and US – 285. The FedEx Ground services a trade area consisting of approximately 100,000 people and is located in the Permian Basin Oil & Gas Region.

ATTRACTIVE RENT ESCALATIONS

The FedEx Ground Package System, Inc. Lease also includes a10% rent escalation during the first five (5) year option period and a 5% rent increase rent escalation during the second five (5) year option.

INVESTMENT-GRADE TENANT

S&P BBB | NYSE: FDX$63 billion

10 YEAR LEASE TERM

INCOME TAX-FREE STATE

BRAND NEW CONSTRUCTIONBUILT TO SUIT

INDUSTRIAL DISTRIBUTION

JUST OFF I-106,483 VPD

INTERSTATE

10


THE TENANT


FedEx GroundFedEx Ground Package System, Inc., the

Property’s tenant, is the most profitable

subsidiary of FedEx and is currently the

fastest growing subsidiary. FedEx Ground is

the leading provider of business-to-business and business-to-consumer

ground small-package distribution service. Throughout the US and

Canada, FedEx ground has more than 575 distribution hubs.

FedEx 2017 annual report (May 31, 2017 year-end) indicates that the

FedEx Ground subsidiary had revenues of $18.075 billion, and an operating

income of $2.292 billion, and an operating margin of 12.70%.

FedEx CorporationFedEx Corporation (NYSE: FDX), the tenants

parent, is a leader of providing customers

and businesses with logistics, transportation

and e-commerce solutions. According to the 2017 annual report (may

31, 2017 year-end) FedEx Corp. earned $60.319 billion in revenues, an

operating revenue of $5.037 billion, and an operating margin of 8.4%.

FedEx holds a credit rating of BBB, investment grade, from S&P.

CREDIT OVERVIEW

May 2017 May 2016 May 2015

Revenue (in Millions)

$18,075 $16,574 $12,984

Margin 12.70% 13.70% 16.70%Operating Income (in Millions)

$2,292 $2,276 $2,172

May 2017 May 2016 May 2015


$27,358 $26,451 $27,239


$2,762 $2,519 $1,584

May 2017 May 2016 May 2015


$6,443 $6,200 $6,191


$397 $426 $484


LEASE ABSTRACTRent Commencement Date June 1, 2018

Current Annual Rent $412,586/YearExpiration Date June 1, 2028Tenant/Guarantor Fedex Ground Package System, IncRent Increases Flat in the initial termOptions 2 (Two), 5 (Five) year options

Expenses NN - Roof and Structure (Parking first 2 years only)

Taxes Landlord pays and is reimbursed by Tenant within 30 daysInsurance Tenant to pay directUtilities Tenant to pay directRight of First Refusal NoEstoppel Within 30 days of landlord’s request

RENT SCHEDULE

Year Base Rent Rent Escalations

Years 1-10 $412,586 Flat

Option 1 $453,845 10%

Option 2 $476,537 5%


LOCATION MAP

3 hours 37 minutes west northwest to

El Paso

1 hour 20 minutes north northeast to Odessa-Midland

4 hours 19 minutes via I-10 to

San Antonio

SITE LOCATION

SITE LOCATION


PERMIAN BASIN REGION

SITE LOCATION


FEDEX GROUND SERVICE MAP


AERIAL MAP

FORT STOCKTON -

PECOS COUNTY AIRPORT

12,10

0 VPD

HIGH

WAY 3

85

WEST DICKINSON AVE. RETAIL

6,483 VP

D INTERSTATE 10 + TRAFFIC COUNTS


SUBJECT PROPERTYEXTERIOR PHOTOS

A CT U A L S IT E

A CT U A L S IT EA CT U A L S IT E

A CT U A L S IT E

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SITE PLAN

ROO

M T

O

EXPA

ND

40

% —

50%

EMPLOYEE PARKING

Acreage 7.29Building (SF Area) Distrib. Area/ P&D 26,727 General Office 2,777 Total 29,504

Parking (Spaces) Automobile Total 61 Standard 56 Handicap 5 28' Trailer 18 Long Trailer 2 Tractor 1 Dolly Storage 3

CONCEPTUAL REPRESENTATION


FLOOR PLAN

Drive-In Doors 10Dock Doors 5

Dock High Door 1

Dock High Door 2

Dock High Door 3

Dock High Door 4

Dock High Door 5

Driv

e-in

Do

or 3

Driv

e-in

Do

or 4

Driv

e-in

Do

or 5

Driv

e-in

Do

or 6

Driv

e-in

Do

or 7

Driv

e-in

Do

or 8

Driv

e-in

Do

or 9

Driv

e-in

Do

or 1

0


FORT STOCKTON, TEXAS


FORT STOCKTON, TEXASFort Stockton is a historic city in West Texas 330 miles northwest of San Antonio,

240 miles east of El Paso and 100 miles southwest of Midland along the edge of the

Permian Basin Region. Fort Stockton is the county seat for Pecos County and is the

hub for 10 additional surround counties with a trade area of 100,000 people. The

Pecos County Economy is primarily driven by oil and gas (top 10 producer) as well

as ranching and most recently wind farms. As of the 2010 census, the population

was 8,535 which has been consistently been the size of the community since the

1970’s.

The city is located along I-10 at the crossroads of Highways 67, 285, 385 and the

Santa Fe Railroad. Interstate 10 (I-10) is the southernmost cross-country interstate

highway in the American Interstate Highway System. It stretches from the Pacific

Ocean at State Route 1 (SR 1) (Pacific Coast Highway) in Santa Monica, California,

to I-95 in Jacksonville, Florida. The populous cities that I-10 connects to includes

(from west to east) Los Angeles, Phoenix, Tucson, El Paso, San Antonio, Houston,

Baton Rouge, New Orleans, and Jacksonville. This freeway is part of the originally

planned Interstate Highway network that was laid out in 1956, and its last section

was completed in 1990. I-10 is the fourth-longest Interstate Highway in the United

States, following I-90, I-80, and I-40. About one-third of its length is within the state

of Texas, where the freeway spans the state at its widest breadth.

The city of Fort Stockton has an airport, a technical college as well as the Pecos

Memorial Hospital which services the 10 county trade area. Fort Stockton is also a

regional center for government with a notable presence including The Texas A&M

Cooperative, Texas Department of Public Safety, The United States Department

of Agriculture, The Texas Workforce Commission and the United States Forestry

Service. The city is also a retail hub for national credit retailers including Walmart,

Tractor Supply, Love’s Travel Stops, Stripes, AutoZone, Flying J, Advance Auto,

O’Reilly’s, Taco Bell, McDonalds, Sonic and Hampton Inn to name a few.

Fort Stockton

Sherbino Wind Farm


DEMOGRAPHICS

FORT STOCKTON TRADE AND SERVICE AREAMAJOR EMPLOYERS

Population 3 Mile 5 Mile 10 Mile

2017 Total Population: 11,069 14,009 14,646

2022 Population: 11,716 14,809 15,474

Population Growth 2017-2022: 5.85% 5.71% 5.65%

Average Age: 35.50 36.40 36.60

Households

2017 Total Households: 3,757 4,441 4,552

Household Growth 2017-2022: 6.52% 6.42% 6.39%

Median Household Inc: $51,336 $50,860 $50,763

Avg Household Size: 2.80 2.80 2.80

Housing

Median Home Value: $83,884 $80,997 $80,574

Median Year Built: 1969 1970 1970

INDUSTRIAL MARKET

True unemployment is below 3% (Fort

Stockton EDC)

Pecos County Memorial Hospital

employees 188 full-time employees

750+ construction jobs in the energy sector: wind, solar,

oil and gas

A 2019 project will open up thousands

of acres for solar farms

79 miles to Odessa-Midland “Petroplex”

University of Texas Permian Basin enrolls

5,937 students

6 hours 30 minutes to FedEx Ground hub in Dallas, TX

TXPF moves 658M tons of freight between

San Angelo and Presidio

12,100 vehicles per day on I-10 Business Loop

(Hwy 385)

Criminal Justice Prisons 426

Fort Stockton ISD Education 392

Trans Pecos Pipeline (Gas Plants) Construction 300

Pecos County Memorial Hospital Health Care 270

Pecos County County Services 205

Hotel/Motel Industry Guest Services 193

Walmart Retail 167

OCI Solar Farm Construction Solar Farm Construction 150

Recurrent Energy Consturction Solar Farm Construction 150

First Solar Construction Solar Farm Construction 150

POPULATION 100,000


l

NET LEASE PRACTICE GROUP

JERRY HOPKINSSenior Managing Director918.878.9536 [email protected]

KEN HEDRICKExecutive Managing Director918.878.9540 [email protected]

D. ANDREW RAGSDALE J.D.Senior Managing Director918.878.9535 [email protected]

DEBT & EQUITY

NICK SCRIBANIManaging [email protected]

MANDY POPELocal [email protected] Real Estate License 537005

FEDEX GROUND601 MARTIN ADAMS STREET | FORT STOCKTON, TX

http://www.ngkf.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


11-2-2015

TYPES OF REAL ESTATE LICENSE HOLDERS: A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker. A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.

A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): Put the interests of the client above all others, including the broker’s own interests; Inform the client of any material information about the property or transaction received by the broker; Answer the client’s questions and present any offer to or counter-offer from the client; and Treat all parties to a real estate transaction honestly and fairly.

A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:

AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent.

AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller’s agent.

AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary: Must treat all parties to the transaction impartially and fairly; May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and

buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction. Must not, unless specifically authorized in writing to do so by the party, disclose:

ᴑ that the owner will accept a price less than the written asking price;ᴑ that the buyer/tenant will pay a price greater than the price submitted in a written offer; andᴑ any confidential information or any other information that a party specifically instructs the broker in writing not to

disclose, unless required to do so by law.

AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.

TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH: The broker’s duties and responsibilities to you, and your obligations under the representation agreement. Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.

LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.

Information About Brokerage Services Texas law requires all real estate license holders to give the following information about

brokerage services to prospective buyers, tenants, sellers and landlords.

.

Designated Broker of Firm License No. Email Phone

Licensed Supervisor of Sales Agent/Associate

License No. Email Phone

Licensed Broker /Broker Firm Name or Primary Assumed Business Name

License No. Email Phone

Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov IABS 1-0

Date Buyer/Tenant/Seller/Landlord Initials

Sales Agent/Associate’s Name License No. Email Phone

Newmark Real Estate of Houston LLC 537005 713.626.8888

Arispah Hogan 342405 [email protected] 713.490.9994

Amanda Pope 673743 [email protected] 713.300.7908

Documents

REP SITE FEDEX GROUND - LoopNet...6 FEDEX GROUND: FORT STOCKTON, TEXAS NKF CAPITAL MARKETS NET LEASE PRACTICE GROUP INVESTMENT HIGHLIGHTS RECENTLY CONSTRUCTED The subject property