STEIN J. KOSS, [email protected]
TOM B. LOUER, [email protected]
OFFERING MEMORANDUM
CORPORATE HEADQUARTERS545 WEST JUANITA AVE. Mesa, Arizona 85210
KOSS LOUER TEAM
TABLE OF CONTENTS
03 EXECUTIVE SUMMARY
09 MARKET OVERVIEW
STEIN J. KOSS, [email protected]
LEE & ASSOCIATES ARIZONA
TOM B. LOUER, [email protected]
2 545 W. JUANITA AVE.
EXECUTIVE SUMMARY
3OFFERING MEMORANDUM
Lee & Associates have been retained as the exclusive representative to offer qualified investors the opportunity to purchase a single Tenant office building located in Mesa, Arizona. Located one quarter mile South of US 60 and Country Club Drive 545 W. Juanita Avenue was built for MDS Communications in 2002.
MDS provides a complete array of telephone fundraising services for non-profit and political organizations. Outstanding results, unparalleled quality, reasonable prices and attentive customer service have led many of the nation’s largest and most respected non-profit and political organizations to partner with MDS Communications.
MDS Communications is one of the nation’s largest telephone fundraising providers. In fact, based upon state regulatory reporting websites, MDS has more registered non-profit clients than any other company in the country.
MDS was founded in 1992 by Jay Mount in Phoenix, Arizona. In 2010 MDS purchased the building it had been renting since 2002. MDS has over 400 employees. MDS utilizes state of the art technology in the services we provide our clients and is PCI compliant. We serve over 100 national and regional non-profit organizations, the vast majority of which have been with us for many years.
MDS’s specialty is telephone fundraising for non-profit and political organizations, both outbound and inbound. In fact that is our SOLE focus. We do not work in for-profit commercial sales for the simple fact that we want to be the best at what we do!
THE OFFERING
4 545 W. JUANITA AVE.
Address: 545 West Juanita Ave. Mesa, Arizona 85210
Property Type: Office Building
Total Size: + 17,920 SF
Site Acreage: + 2.5 acres (108,800 SF)
Parking: 6/1,000 SF - + 107 spaces
Year Built: June 2002
Occupancy: 545 West Juanita Ave. is 100% leased to a single tenant - MDS Communications Corp.
Lease Start Date: May 1, 2010
Lease End Date: April 30, 2020
Rent Schedule: 5/1/16 - 4/30/17 $20,537.70 Triple Net 5/1/17 - 4/30/18 $21,153.83 Triple Net 5/1/18 - 4/30/19 $22,788.44 Triple Net 5/1/19- 4/30/20 $22,442.09 Triple Net
NOI - As of May 2016: $246,452.40
Security Deposit: None
Tenant Responsibilities: 100% NNN Lease. Tenant responsible for all maintenance and repairs for life of the lease, including roof and structure. Options to Renew: Two (2) five (5) year options at Fair Market Value. Comments: Owner will consider extending lease term.
PROPERTY DESCRIPTION & LEASE ABSTRACT
5EXECUTIVE SUMMARY
• Building was built in 2002 for MDS Communications
• Seller will agree to extend lease to give buyer a five (5) year term
• 100%, Net Leased to Single Tenant
• Two (2) five (5) year renewal options at Fair Market Value
• Excellent East Valley Location One 1/4 mile south of Country Club and US60
INVESTMENT HIGHLIGHTS
6 545 W. JUANITA AVE.
FLOOR PLAN
STREET MAP
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545 W. JUANITA AVE.
7EXECUTIVE SUMMARY
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CITY OF MESA PARK & RIDE
CITY OF MESA PARK
8 545 W. JUANITA AVE.
AERIAL MAP
MARKET OVERVIEWAs one of the fastest growing regions in the nation for the last several decades, Phoenix now stands as the nation’s fifth largest city and fourteenth largest metropolitan area. Phoenix has received tremendous press attention and numerous accolades over the last few years due to its growth, low cost of living and appealing business environment.
Mesa Offers:
• A diverse and sustainable economy that features a balance of base industries that creates high-quality jobs.
• An educated workforce.
• A partnership of government and industry that considers next generation technologies and products as economic opportunities.
• Business people who see Mesa as their home and the world as their marketplace.
For more information on Mesa click here
With more than 4.0 million people, Phoenix is the 6th largest city in the United States and the financial, commercial, cultural, entertainment and government center of Arizona. More than 550 square miles in size, one of the city’s many strengths is its 13 major employment centers, which each employ a workforce of between 400,000 to 1.1 million within a 25-minute commute.
Since 2008, Phoenix has seen growth in industries such as healthcare, software/technology and financial services. The Phoenix MSA has a GDP of $215 billion, and the top five industries are real estate (16%), financial services (11%), manufacturing (9%), health care (8%), and retail (8%). The Phoenix unemployment rate is 4.5% as of March 2016, down 120 bps over December 2014 and below the US unemployment rate of 5.0%. The 8,400-person, year-over-year drop in the jobless count in 2015 occurred despite a massive surge of individuals entering the labor force (up 48,000
over the past year). According to Witten Research, Phoenix’s employment growth over through 2018 is expected to exceed the US:
545 W. Juanita Ave is located in the Falcon Field/Apache Junction submarket, which is in the southeast portion of metropolitan Phoenix. Some of the benefits of the submarket are noted below.
DYNAMIC GROWTH
Within a five-mile radius of the Property, population grew by 5.2% between 2010 and 2015 and is expected to grow another 5.2% between 2015 and 2020. This consistent, steady growth is nearly 50% greater than that of the nation and portends a strong future business climate for the area. Generally strong growth dictates further construction, more potential customers for existing businesses and a larger employee pool from which to hire.
WITHIN MINUTES OF PHOENIX’S EXTENSIVE TRANSPORTATION NETWORK
545 W. Juanita Ave is located within minutes of Phoenix’s US 60 and Country Club Road which provides easy, direct access to the rest of the metropolitan area. Also, the Property is within a short commute of Sky Harbor International Airport, Falcon Field and Phoenix-Mesa Gateway Airport. Sky Harbor International Airport serves as a focal point for businesses in the area and is one of the busiest airports in the nation for passenger traffic, generating $79 million daily economic impact for the area. Phoenix-Mesa Gateway Airport serves as a reliever airport for Sky Harbor and serves more than 35 cities, contributing $1.3 billion annually to Arizona’s economy. Falcon Field also serves as a reliever for Sky Harbor International Airport.
NO NEW COMPETITIVE OFFICE PRODUCT UNDER CONSTRUCTION
Currently no new projects are under construction in the submarket where 545 W. Juanita Ave is located. The lack of new construction indicates that all future positive net absorption will serve to decrease vacancies which will lead to upward pressure on rental rates.
9MARKET OVERVIEW
OFFICE LEASE COMPARABLESTENANT NAME SIZE TERM RATE DATE COMMENTSADDRESS (SF)
Squaretwo Financial Services7420 South Kyrene RoadTempe, Arizona
20,000 SF
80 Mos.
Mos. 1-5 $0.00Mos. 6-12: $14.00 NNN$0.50 annual increases
3/2015
$15.00 retrofit TI6:1,000 parking
Avention (formerly OneSource)1146 N. Alma School Road Bldg 6, Phase IMesa, Arizona
22,000 SF
65 Mos.
Mos. 1-5: $0.00Mos. 6-12:$18.00 SF $0.50 annual increases
9/2014
Minimal TI’sSublease of Mitel space $7.00 Expense Stop
Flagship Credit Acceptance4425 South WendlerTempe, Arizona
23,740 SF
78 Mos.
Mos. 1-6: $0.00Mos. 7-12: $21.42 MG Mos. 13-24: $21.92 MG Mos. 13-24: $21.92 MGMos. 25-36: $21.42 MGMos. 37-48: $21.92 MGMos. 49-60: $21.42 MGMos. 61-72: $23.92 MGMos. 73-78: $24.42 MG
10/2015
$46.00/SF TIA7:1,000 parking
AZ Priority Care585 N. Juniper DriveChandler, Arizona
24,896 SF
46 Mos.
Mos. 1-12:$19.00 FS$0.50 annual increases
10/2014
1st 12 mos. paying on 8,661 RSF Then paying on entire SF for remaining term. 5:1,000 parking
10 545 W. JUANITA AVE.
* 545 West Juanita Ave. is currently occupied by MDS Communications with a flat lease rate currently above comparable properties.
OFFICE LEASE COMPARABLES
TENANT NAME SIZE TERM RATE DATE COMMENTSADDRESS (SF)
* 545 West Juanita Ave. is currently occupied by MDS Communications Corporation with a flat lease rate currently above comparable
Impact Suicide Precention Ctr914 South 52nd StreetTempe, Arizona
25,350 SF
84 Mos.
Mos. 1-4: $0.00Mos. 5-24: $12.00 NNN $0.50 annual increases
4/2016
$20.00/SF TI
International Rectifier1333 S. Spectrum Blvd. Chandler, Arizona
25,941SF
38 Mos.
3/2015
$15.00 retrofit TI
6:1,000 parking
Arvato Digital Services, LLC145 South 79th StreetChandler, Arizona
33,048 SF
72 Mos.
Mos. 1-6: $0.00Mos. 7-18: $1.04 SF $0.50 annual increases
12/2015
$5.00/SF TIA on 4,900 SF of the premises and $40.00/SF on the remaining 28,148 SF.
Lease commencement 6/1/2015
Hot Chalk1721 E. Rio Salado ParkwayTempe, Arizona
40,000 SF
84 Mos.
Mos. 1-4: $13.40 MGMos. 5-16: $26.80 MG Mos. 17-28: $27.30 MG Mos. 29-38: $27.80 MG
12/2015
$10.00/SF retrofit TI
6.5:1,000 parking
Mos. 1-5: $0.00Mos. 6-17: $15.00 NNN $0.50 annual increases
11MARKET OVERVIEW
BASELINE RD.
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LEASE COMPARABLES
12 545 W. JUANITA AVE.
SALE COMPARABLES
2
3
1
4
2345 S. Alma School Rd.
1755 S. Val Vista Drive
4700 - 4702 E. Southern Ave.
1845 S. Dobson Rd.
Greg Ziverberg
Lewis Kennedy
2003
19,705 SF
1/28/2016
$2,632,000
$132.90
Single Story, 4 (Tenants)
Jaclyn E. & Jeffrey S. Knoll
HEC Engineering, LLC
19,820 SF
06/25/2015
$3,470,000
$175
Two Story
Mark Fowler
Mercury Trading Company
1983
21,936 SF
08/31/2015
$2,225,000
$101.43
Two Story, 18 (Tenants)
BUYER
SELLER
YEAR BUILT
BLDG SF
SALE DATE
SALE PRICE
PSF
COMMENTS
BUYER
SELLER
YEAR BUILT
BLDG SF
SALE DATE
SALE PRICE
PSF
COMMENTS
Dennis Paquette
Buy the Sun Group Inc.
1987
21,710 SF
02/26/2016
$2,400,000
$110
Two Story, 18 (Tenants)
13MARKET OVERVIEW
SALE COMPARABLES
6
7
5
8
9280 South Kyrene Rd.
4700 S. McClintock Dr.
875 North Greenfield Rd.
7254 E. Southern Ave.
Cornel & Maria Isfan
Speros Enterprises Inc.
1987
23,055 SF
2/1/2016
$2,800,000
$121.45
Single Story, 6 (Tenants)
Vereit
Howard Simon
2001
28,489 SF
10/7/2015
$7,000,000
$245.71
Single Story, 8 (Tenants)
Mark Fowler
Sunridge Properties
2000
15,249 SF
8/31/2015
$2,020,000
$132.47
Single Story, 7 (Tenants)
BUYER
SELLER
YEAR BUILT
BLDG SF
SALE DATE
SALE PRICE
PSF
COMMENTS
BUYER
SELLER
YEAR BUILT
BLDG SF
SALE DATE
SALE PRICE
PSF
COMMENTS
Ryan Sandell
OakPoint Real Estate
1998
31,962 SF
2/20/2015
$3,330,000
$104.18
Single Story, 4 (Tenants)
14 545 W. JUANITA AVE.
BASELINE RD.
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SALE COMPARABLES
15MARKET OVERVIEW
STEIN J. KOSS, [email protected]
TOM B. LOUER, [email protected] KOSS LOUER TEAM
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