OFFERING MEMORANDUM - images2.loopnet.comimages2.loopnet.com/d2/YawfO0f9rEEdTM0MmKHRvCQMjMJ... ·...

CUMMINS, INC.10088 S 136th St • Omaha, NE 68138

OFFERING MEMORANDUM

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â© 2017 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

CUMMINS, INC.Omaha, NEACT ID Y0670540

2

N E T L E A S E D D I S C L A I M E R

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

3

CUMMINS, INC.

OFFERING SUMMARY

§ Cummins, Incorporated Truck Depot with Corporate Guaranty

§ Brand New 7.5-Year Lease with Two Percent Annual Rent Bumps

§ $17.51 Billion in Revenue (2016) | Moody's 'A2' Credit Rating

§ Absolute NNN Lease | No Landlord Responsibilities

§ 58,546 Total Rentable Square Feet with Two-Story Office Area

§ Eight-Acre Parcel with Large, Fully Fenced Outside Storage Area

INVESTMENT HIGHLIGHTS

Marcus & Millichap is pleased to present the Cummins, Incorporated build-to-suit located in Omaha, Nebraska. The facility was built in 2007 and has a total rentable area

of 58,546 square feet. The truck depot currently has 21 bay doors for vehicle maintenance. One of the bays has been modified to service natural gas engines which was a

tenant expense. Cummins has plans to convert additional bays to service electric engines, which Cummins is at the forefront of the industry in developing. The tenant also

has plans to implement a large generator also at their own expense. The lot totals over eight acres and is almost completely utilized as outside storage area. There are

currently a total of 103 parking spaces not including parking stalls for vehicles waiting for maintenance. The property is conveniently located off Interstate 80.

Home to mega-conglomerate Berkshire Hathaway, headed by local investor Warren Buffett, Omaha is the largest city in Nebraska. According to the 2010 census, nearly

1.3 million people reside within the greater Omaha area, comprising a 50-mile (80 km) radius of downtown Omaha. Omaha is the home to the headquarters of four Fortune

500 companies: Berkshire Hathaway, Kiewit Corporation; insurance and financial firm Mutual of Omaha; and the United States' largest railroad operator, Union Pacific

Corporation. Omaha is also the home to five Fortune 1000 headquarters: Green Plains Renewable Energy, TD Ameritrade, Valmont Industries, Werner Enterprises, and

West Corporation. Also headquartered in Omaha are First National Bank of Omaha, the largest privately held bank in the United States; three of the nation's largest 10

architecture/engineering firms: DLR Group, HDR, Incorporated, and Leo A Daly.

INVESTMENT OVERVIEW

4

CUMMINS, INC.

TENANT SUMMARY

Founded in 1919, Cummins Incorporated (NYSE: CMI) is an American Fortune 500 company that designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products. Headquartered in Columbus, Indiana, United States, Cummins employs 55,400 people worldwide and sells in approximately 190 countries and territories through a network of more than 600 company owned and independent distributors and approximately 6,000 dealers. Cummins reported sales of $17.5 billion and a net income of $1.39 billion in 2016. Currently, Cummins is ranked 148 on the Fortune 500 list.

Cummins, Incorporated operates through four segments: engine, distribution, components, and power generation. The engine segment designs and manufactures state-of-the-art diesel and natural gas powered engines for on-highway and off-highway use. The business also offers new parts and remanufactured parts and engines. The components segment consists of four businesses with key technologies for delivering integrated solutions: Cummins Filtration, Cummins Turbo Technologies, Cummins Emission Solutions and Cummins Electronics and Fuel Systems . The power systems segment is a global provider of high-speed high-horsepower engines and power generation equipment, including standby and prime power generator sets, alternators, switchgear and other components. Power systems offers engines, power generation systems, components and services, and alternative-fuel electrical generators for use in residential standby, commercial industrial, mining, marine, oil and gas, defense, data centers, telecom, healthcare applications /industries and more.

5

CUMMINS, INC.

TENANT SUMMARY

AUG 29, 2017 @ 01:56 PM

Cummins Beats Tesla To The Punch, Unveiling Heavy Duty Electric Truck

6

Joann Muller , FORBES STAFF A demonstration cab for Cummins' new 140 kWh electric powertrain for commercial truck fleets.Cummins, a leading maker of diesel and natural gas engines for commercial trucks, unveiled a Class 7 heavy-duty truck cab Tuesday featuring an advanced 140 kWh battery pack that it will sell to bus operators and commercial truck fleets starting in 2019.

The 18,000-pound tractor cab, dubbed AEOS after one of the four-winged horses driving the chariot of the Sun God, Helios, across the sky in Greek mythology, is just a demonstration model. But the Class 7 urban hauler tractor is fully operational and capable of hauling a 22-ton trailer. With a 100-mile range, the Cummins electric power train is being targeted at urban delivery vehicles (like a beer truck or food delivery truck) as well as for short haul trips in and around ports and other terminals. It can be recharged in about an hour at a 140 kWh charging station, and Cummins' goal is to get that down to 20 minutes by 2020, reducing down time for its business customers. Production begins in 2019.

An extended range version, which uses an efficient diesel engine as an on-board generator, will be available a year later, offering up to 300 miles between charges and 50 percent fuel savings compared to today’s diesel hybrids with zero emissions. Because of the limits of today's battery technology, Cummins' Chief Executive Thomas Linebarger said the Class 7 truck cab represents the "stretch application" for a heavy-duty electric truck. An electric powertrain does not yet make sense for a Class 8 semi tractor-trailer, also known as an 18-wheeler, because of the larger loads they carry and the longer distances they travel, he said. Cummins will not build trucks, but will instead supply a fully integrated battery electronics system and will buy the cells from an unnamed provider. Tesla famously makes its own battery cells at a massive "gigafactory" in Nevada .

Cummins' announcement comes a few weeks ahead of Tesla's planned reveal of an electric "semi" truck. The maker of premium plug-in cars hasn't provided any details of its project, including the truck classification, but last week Reuters reported that Tesla will apparently target the regional hauling market with an electric big-rig with a working range of 200 to 300 miles.By getting a jump on Tesla's announcement, Cummins is getting across loud and clear that it intends to remain a major player in the commercial truck business, even if that market shifts away from its core diesel engine business.

"There are more technologies coming into economic relevance than we've seen in my career, ever," Linebarger said in an interview. "This is what we do. We feel we do better when technologies are shifting."Indeed, the 98-year-old company has stayed successful through innovation, especially when regulations and customer preferences are changing. Over the years, it's been at the forefront of environmental shifts, embracing stricter clean air standards, for example, when other manufacturers resisted. It led the shift from 2-stroke to 4-stroke diesel engines, for example, and was a leader in developing aftertreatment systems for NOx particulates. Cummins has been working on electrified powertrains and fuel cells for about a decade, and feels confident it is well-positioned to remain a leader, despite competition from new players like Tesla, Proterra and Nikola Motor Company. "All those competitors we take very seriously," Linebarger said. "They're innovative, well-funded and have a technology mindset, much like Cummins." Where Cummins has an edge, he said, is in understanding its customers needs.

"We know that we cannot have one solution for everybody," he said, which is why Cummins will continue to provide a variety of power technologies -- including electric, diesel, natural gas and future alternative fuels -- for different applications. "We need to make sure we have the right technology for the right application," he said. "Even if the electrified power train replaces the internal combustion engine completely, that's still a 20- to 25-year transition period customers have to manage through. If we have good technology, they'll want to buy it from us." Follow me on Twitter @JoannMuller See full article: http://bit.ly/2yCcCnu

OFFERING SUMMARY

Price $9,750,000

Net Operating Income $658,257

Capitalization Rate – Current 6.75%

Price / SF $166.54

Rent / SF $11.24

Lease Type Absolute Net

Gross Leasable Area 58,546 SF

Year Built / Renovated 2007

Lot Size 8.02 acre(s)

#

EXECUTIVE SUMMARY

OFFERING SUMMARY

#

FINANCING

Loan Amount $6,825,000

Loan Type Financed - New Loan

Loan to Value 70.00%

Down Payment 30% / $2,925,000

Interest Rate / Amortization 4.25% / 25 Years

Annual Loan Payment $443,684

Net Cash Flow After Debt Service 7.34% / $214,573

Cash on Cash Return 7.34%

CUMMINS, INC.

7

CUMMINS, INC.

7

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

Drivers Management LLC 9,500

Signal 88 Security 2,099

Werner Enterprises Inc 1,170

Tyson 900

Omaha Steaks International Inc 850

South West Precinct 800

County of Sarpy 763

Sears Park and Repair 750

Hyatt Hotel 650

Omaha Steaks Inc 600

Mosaic 578

Midlands Hospital 535

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 1,061 30,863 127,892

2016 Census Pop 1,017 28,771 118,339

2016 Estimate HH 418 11,577 48,341

2016 Census HH 397 10,790 44,757

Median HH Income $62,450 $73,496 $71,927

Per Capita Income $30,795 $32,933 $33,779

Average HH Income $78,162 $87,784 $89,234

* # of Employees based on 5 mile radius

#

PROPERTY SUMMARY

OFFERING SUMMARY

#

NOTES

CUMMINS, INC.

8

OFFERING SUMMARY

#

10088 S 136th St, Omaha, NE 68138

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMECUMMINS, INC.

PRICING AND VALUATION MATRIX

PROPERTY NAME

CUMMINS, INC.

9

REGIONAL AND LOCAL MAP

Marcus & Millichap closes

more transactions than any

other brokerage firm.

12

CUMMINS, INC.

10

PROPERTY PHOTO

PROPERTY PHOTO

CUMMINS, INC.

11

12

PROPERTY NAME

CUMMINS, INC.

SALES COMPARABLES

Cummins,Inc.

CumminsTruck Depot

FedExFreight

FedExFreight-2

FedExGround

WasteManagement

HERCRentals

AdvancedDisposal

Truck Depot

0.0

0.8

1.6

2.4

3.2

4.0

4.8

5.6

6.4

7.2

8.0

Avg. 6.85%

Average Cap Rate

Cummins,Inc.

CumminsTruck Depot

FedExFreight

FedExFreight-2

FedExGround

WasteManagement

HERCRentals

AdvancedDisposal

Truck Depot

$0.00

$30.00

$60.00

$90.00

$120.00

$150.00

$180.00

$210.00

$240.00

$270.00

$300.00

Avg. $148.19

Average Price Per Square Foot

SALES COMPARABLES

SALES COMPS AVG

PROPERTY NAME

MARKETING TEAM

CUMMINS, INC.

SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


13

SALES COMPARABLES

SUBJECT PROPERTY

Asking Price $9,750,000

Price/SF $166.54

CAP Rate 6.75%

GLA 58,546 SF


Year Built 2007

Lease Term Remaining 7.5 Years

CUMMINS, INC.10088 S 136th St, Omaha, NE, 68138

1

NOTESThis was also a Cummins build-to-suit with three years of lease term in place at the time of the sale.

Close Of Escrow 6/25/2015

Sales Price $2,200,000

Price/SF $137.50

CAP Rate 7.00%

GLA 16,000 SF

Year Built 1979

Lease Term Remaining 3 Years

CUMMINS TRUCK DEPOT150 Glendale Avenue, Sparks, NV, 89431

2



Price/SF $164.94

CAP Rate 6.50%

GLA 23,510 SF

Year Built 1999


FEDEX FREIGHT3502 South 11th Street, Council Bluffs, IA, 51501

PROPERTY NAME

MARKETING TEAM

CUMMINS, INC.

SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


14

SALES COMPARABLES

3



Price/SF $210.68

CAP Rate 6.28%

GLA 111,969 SF

Year Built 2012


FEDEX FREIGHT3516 Union Street, Chili, NY, 14514

4

NOTES

Double-net lease with flat rental rate for the first 10 years.



Price/SF $109.06

CAP Rate 7.10%

GLA 248,626 SF


Year Built 2017


FEDEX GROUND8652 Byers Road, Miamisburg, OH, 45342

5

NOTES

Absolute NNN lease with CPI increases annually.



Price/SF $116.33

CAP Rate 6.71%

GLA 15,000 SF


Year Built 2006


WASTE MANAGEMENT 6303 Da Lisa Road, Milton, FL, 32583

PROPERTY NAME

MARKETING TEAM

CUMMINS, INC.

SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


15

SALES COMPARABLES

6

NOTES

One 18 percent rent bump year five.



Price/SF $178.75

CAP Rate 6.99%

GLA 12,000 SF


Year Built 1978


HERC RENTALS302 East Frontage Road, Greer, SC, 29651

7

NOTESDouble-net lease with five percent annual rent bumps and over four years of lease term remaining.



Price/SF $120.05

CAP Rate 7.36%

GLA 10,995 SF


Year Built 1997


ADVANCED DISPOSAL TRUCK DEPOT508 South Hicks Road, Palatine, IL, 60067

MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

#

CREATED ON SEPTEMBER 25, 2017

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMECUMMINS, INC.

PRICING AND VALUATION MATRIX

PROPERTY NAME

CUMMINS, INC.

16

DEMOGRAPHICS

1 Miles 3 Miles 5 Miles

POPULATION2021 Projection 1,047 33,706 139,621

2016 Estimate 1,061 30,863 127,892

2010 Census 1,017 28,771 118,339

2000 Census 1,189 22,239 90,552

INCOME

Average $78,162 $87,784 $89,234

Median $62,450 $73,496 $71,927

Per Capita $30,795 $32,933 $33,779

HOUSEHOLDS

2021 Projection 419 12,883 53,099

2016 Estimate 418 11,577 48,341

2010 Census 397 10,790 44,757

2000 Census 426 7,635 33,103

HOUSING

2016 $127,544 $155,449 $170,664

EMPLOYMENT

2016 Daytime Population 2,731 30,376 117,675

2016 Unemployment 1.65% 2.95% 2.52%2016 Median Time Traveled 20 22 21

RACE & ETHNICITY

White 93.33% 91.13% 89.46%

Native American 0.05% 0.04% 0.07%

African American 0.44% 2.02% 2.40%

Asian/Pacific Islander 0.46% 2.01% 2.99%

Capital Markets Recent Marcus & Millichap Transactions

§ The U.S. economy grew nominally in the first quarter as respectable consumer

trends were partly offset by softness in manufacturing, exports and business

investment. The lull in economic activity in the first three months of 2016, and

volatility in the stock and debt markets, will likely delay any action on monetary

policy by the Federal Reserve until midyear at the earliest. Against this broader

economic backdrop, retail properties continued to gain traction behind growing

space demand and limited construction. This year, retailers will absorb an

additional 61 million square feet of space to cut the U.S. vacancy rate 30 basis

points to 5.9 percent.

§ CMBS issuance declined in the first quarter from the corresponding period one

year ago, offering the latest evidence of disruption in the securitized market.

Although spreads on the highest-rated bonds in a securitized pool compressed

slightly during this year’s opening quarter, they remain wider than one year ago,

meaning borrowers face slightly higher costs. Bond investors also require higher

returns on loans perceived as being aggressively underwritten with higher LTVs and

on loans issued to lower-rated borrowers, putting a squeeze on securitized lenders

that could potentially limit lending capacity.

§ Bank lenders remain positioned and capitalized to compete for market share,

perhaps gaining business that CMBS cannot fill. The Federal Reserve’s

accommodative monetary stance continues to support a low cost of capital to

these lenders. National, regional and local banks offer leverage on retail property

loans that averages in the 65 percent range and loan terms vary from five, seven

and 10 years. Spreads vary depending on asset location and quality but generally

start in the low- to mid-200-basis-point range above corresponding swap rates.

Bridge financing spread over short-term benchmarks is also available for properties

in transition.

17

Property Name City, State Sales Price Price perSq. Ft. Cap Rate

Wal-Mart Neighborhood Market

Murfreesboro, TN $14,858,956 $345 5.2%

Walgreens Sauk Rapids, MN $11,517,857 $795 5.6%

Red Lobster Atlanta, GA $8,278,252 $1,122 6.2%

CVS Lago Vista, TX $6,355,160 $451 6.0%

McDonald’s Tacoma, WA $4,933,000 $1,083 3.8%

Advance Auto Parts Ft. Lauderdale, FL $3,404,261 $486 5.8%

Panera Bread New Berlin, WI $3,100,000 $715 4.8%

Jack in the Box Granada Hills, CA $3,000,000 $1,429 4.8%

Popeyes Lakewood, WA $3,000,000 $1,391 5.0%

Taco Bell Las Vegas, NV $2,598,500 $1,071 5.0%

Applebee’s Delray Beach, FL $2,525,000 $531 5.5%

Starbucks Sugar Land, TX $2,360,000 $1,276 5.0%

Dollar General Medford, OR $2,250,000 $250 6.0%

Buffalo Wild Wings Olive Branch, MS $2,166,000 $393 7.5%

Wendy’s Jenison, MI $2,163,200 $640 6.0%

Family Dollar Arabi, LA $1,892,677 $206 6.5%

Pep Boys Harrisburg, NC $1,740,000 $314 6.0%

Denny’s Warwick, RI $1,710,000 $428 6.2%

Burger King Crystal Lake, IL $1,650,000 $420 5.9%

Pizza Hut Coraopolis, PA $1,400,000 $389 6.5%

Jimmy John’s Austin, TX $1,175,000 $592 5.4%

NATIONAL NET-LEASED RETAIL REPORT

17

SECOND QUARTER 2016

MARCUS & MILLICHAP CAPITAL CORPORATION CAPABILITIESMMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms.

We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options.

Our dedicated, knowledgeable experts understand the challenges of financingand work tirelessly to resolve all potential issues to the benefit of our clients.

National platform operating

within the firm’s brokerage offices

$5.1 billion total national

volume in 2016

Access to more capital sources than any other firm in the industry

Optimum financing solutions to enhance value

Our ability to enhance buyer pool by expanding finance options

Our ability to enhance seller control

• Through buyer qualification support

• Our ability to manage buyers finance expectations

• Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings

• By relying on a world class set of debt/equity sources and presenting a tightly underwritten credit file

WHY MMCC?

Closed 1,651 debt and equity

financings in 2016

ACQUISITION FINANCING

CUMMINS, INC.

18

www.MarcusMillichap.com

Dan Goaley

Broker

Tel: (402) 505-7736Fax: (901) 620-3610License: NE 20061147

P R E S E N T E D B Y

OFFERING MEMORANDUM - images2.loopnet.comimages2.loopnet.com/d2/YawfO0f9rEEdTM0MmKHRvCQMjMJ... ·...

Documents

Transcript of OFFERING MEMORANDUM - images2.loopnet.comimages2.loopnet.com/d2/YawfO0f9rEEdTM0MmKHRvCQMjMJ... ·...