Distribution Center - Investment Opportunity Center - Jackson MS v_2.pdf · Distribution Center ......

This information has been obtained from sources deemed reliable, however Kimco does not guarantee, warranty or represent its accuracy. It is the Purchaser’s responsibility to independently confirm the accuracy and completeness of the information contained herein.

For more information, contact:Robert James, Director of Real Estate

280 Park Avenue, 11th Floor, New York, NY 10017 [email protected]

Phone 212-972-7457 Fax 212-972-7496www.kimcoexchangeplace.com

Distribution Center - Investment Opportunity

Kimco Exchange Place is a subsidiary of Kimco Realty Corporation.

Executive Summary: Kimco Exchange Place, as exclusive listing agent, offers the I-220 Business Center for sale. The property is 50% leased (189,168 sf) to Office Depot (S&P: BBB-) for a period of 5 years (with a termination option in year 4).The balance of the property (188,764 sf) will be leased (with a rent escrow) by the Seller for 5 years and will cover year 5 rent for Office Depot in the event of termination. Seller will escrow $3,000,000 rent in the form of cash at closing for the lease onany potential vacancy. Office Depot is expanding in the trade area and has a right of first refusal to take more space within the property. Seller is of the opinion that Office Depot will expand during the lease term. Office Depot has commenced its lease. Rent increases are approximately 3% annually. There is a shortage of large, well located warehouse/ distribution space in the local market. Construction costs are increasing. The property MAI appraised for $16,000,000 in December, 2006 and has a total replacement value of $24,000,000.

Price and Cap: We are offering this property at $16,000,000 ($42.33 psf) which is a 7.58% cap rate on average NOI of $1,212,464. The NOI includes a cash escrow of $3,000,000 by the current owner for any potential vacancy.

Tenant: Office Depot, Inc. sells an assortment of merchandise, including brand name and private brand office supplies, business machines and computers, computer software, office furniture, and other business-related products and services through its chain of office supply stores. It also offers printing, reproduction, mailing, shipping, and other services through the copy and print centers operated in its stores. In addition, Office Depot resells other manufacturers branded items, such as ink,toner, paper, and technology products. The company sells its products and services to customers in 33 countries through office supply stores, catalogs and call centers, Internet sites, direct mail catalogs, contract sales forces, and retail stores, as well as international joint venture and licensing agreements. As of July 1, 2006, it had 1,071 retail stores in North America, and another 322 company-owned, licensed, or franchised stores in other parts of the world. Office Depot was founded in 1986 and is headquartered in Delray Beach, Florida. Office Depot has accelerated the pace of its new store openings in the fourth quarterand the full year in 2006. For the year, Office Depot opened 115 new stores and remodeled 176, ending the year with 1,158 stores throughout the US and Canada.

Executive Summary: Kimco Exchange Place, as exclusive listing agent, offers the I-220 Business Center for sale. The property is 50% leased (189,168 sf) to Office Depot (S&P: BBB-) for a period of 5 years (with a termination option in year 4).The balance of the property (188,764 sf) will be leased (with a rent escrow) by the Seller for 5 years and will cover year 5 rent for Office Depot in the event of termination. Seller will escrow $3,000,000 rent in the form of cash at closing for the lease onany potential vacancy. Office Depot is expanding in the trade area and has a right of first refusal to take more space within the property. Seller is of the opinion that Office Depot will expand during the lease term. Office Depot has commenced its lease. Rent increases are approximately 3% annually. There is a shortage of large, well located warehouse/ distribution space in the local market. Construction costs are increasing. The property MAI appraised for $16,000,000 in December, 2006 and has a total replacement value of $24,000,000.

Price and Cap: We are offering this property at $16,000,000 ($42.33 psf) which is a 7.58% cap rate on average NOI of $1,212,464. The NOI includes a cash escrow of $3,000,000 by the current owner for any potential vacancy.

Tenant: Office Depot, Inc. sells an assortment of merchandise, including brand name and private brand office supplies, business machines and computers, computer software, office furniture, and other business-related products and services through its chain of office supply stores. It also offers printing, reproduction, mailing, shipping, and other services through the copy and print centers operated in its stores. In addition, Office Depot resells other manufacturers branded items, such as ink,toner, paper, and technology products. The company sells its products and services to customers in 33 countries through office supply stores, catalogs and call centers, Internet sites, direct mail catalogs, contract sales forces, and retail stores, as well as international joint venture and licensing agreements. As of July 1, 2006, it had 1,071 retail stores in North America, and another 322 company-owned, licensed, or franchised stores in other parts of the world. Office Depot was founded in 1986 and is headquartered in Delray Beach, Florida. Office Depot has accelerated the pace of its new store openings in the fourth quarterand the full year in 2006. For the year, Office Depot opened 115 new stores and remodeled 176, ending the year with 1,158 stores throughout the US and Canada.

Office Depot Regional Distribution CenterWith 3% Annual Escalations

I-220 Business Center - 840 Boling Street, Jackson, Mississippi

*Note that one half of the rent is paid by Office Depot and one half is paid though rent escrow in the form of cash and/or additional leasing income (Office Depot, other tenants, etc.).

Lease MonthSquare

FootageTriple Net Rent /

Square Foot per YearBase Rent per

MonthTotal Base Rent

per year1 - 12 377,950 $3.02 $47,633 $1,141,409 13 - 24 377,950 $3.11 $49,062 $1,175,425 25 - 36 377,950 $3.21 $50,534 $1,213,220 37 - 48 377,950 $3.30 $52,050 $1,247,235 49 - 60 377,950 $3.40 $53,612 $1,285,030

Average 5 yr. NOI $1,212,464Cap Rate * 7.58%Price $16,000,000Lease Commencement 3/1/2007Lease Expiration 2/29/2012Landlord Responsibility None - NNN







Property:I-220 Business Center is strategically located in the Hawkins Field Industrial Park. The building contains ceiling heights of up to 48 feet clear, immediate access at I-220 (new exit at Industrial Drive), and forty-five (45) docks doors. The building and was renovated in 2005 & 2007. There is 350 feet of rail siding to the building with two 8x10 rail doors and 150 feet of covered rail dock on the north side of the building. There is parking for 134 cars and the building was constructed in phases in 1963, 1987 & 1992. The property is zoned light industrial (I-1) and was previously owned by Jitney Jungle and operated as a grocery distribution warehouse. The building consists of 6” reinforced concrete floors, pre-engineered painted corrugated metal walls with insulation and pre-engineered, painted, pitched corrugated metal roof insulated by 3 1/2” vinyl backed fiberglass batt type insulation. There is 15,260 sf of office space consisting of 15 private offices, open offices, conference rooms, lobby, and vending type break room accommodating 50 employees. All 15,260 sf has been renovated. The warehouse is 100% sprinklered and the rail dock is served by a dry sprinkler system.

This property is ideally suited to benefit from a tightening warehouse / distribution market which is being enhanced by the nearby 4.0 million sf Nissan Automotive Manufacturing Facility which is the largest automotive facility in North America. The 377,950 square foot building on 15.288 acres is located in Jackson, Mississippi, a regional distribution hub of the Southern United States, and State Capital. The property has excellent proximity to I-220, I-20 and I-55. Major tenants have included ProMax, the State of Mississippi and First Choice Medical Supply. The I-220 Business Center has been renovated over the past twenty-four (24) months. Renovations include dock levelers, shelters and upgrades to central warehouse office space. Roof enhancements include new Duro-Last roof with a 15 year warranty on the original building section and roof renovation on the balance of the premises and skylights.

South Central Gulf Industrial Market:Jackson is a growing distribution market benefiting from the mega-trend of locating distribution centers away from the coast and south of Memphis. This trend, combined with new automotive manufacturing, should create a continued, sustainable demand for distribution center space in Jackson. In 2005 the market vacancy for Jackson, MS industrial space was 5.75% vs8.49% for the entire South Central Gulf Industrial Market. The I-220 Business Center is an excellent Class “A” building within The South Central Gulf Industrial Market, which includes the MSA’s of Jackson, MS; Hattiesburg, MS; Birmingham, AL; New Orleans, LA; and Baton Rouge, LA.

Merchants Co. Food ServiceCold Storage

US Food Service

Subject Property

Industrial Drive

Boling Street







Floor Plan

Office Depot







Ceiling Heights







Sales Comparables

Rent Comparables

Market Status Date Address City, State Price $/Sq. Ft. Sq. Ft. Year Built Comments

Jackson Closed Q4 2005 330 Legett Drive Ridgeland, MS $4,245,825 $76 55,957 N/A

Jackson Closed 3/3/2005 3330 Woodrow Wilson Jackson, MS $3,124,320 $44 71,325 1968, 1987

Distribution warehouse, 100% leased by Pilgram's Pride Corp., 10 year lease @ $3.54/SF NNN

Jackson Closed 8/24/2005 1018 Mendell Davis Dr. Jackson, MS $5,398,000 $31 174,278 N/ADistribution warehouse. Purchased vacant by Belk, Inc.

Bay St. Louis Closed 1/23/2007 13118 Webre Road Bay St. Louis, MS $6,769,078 $56 120,000 2006 50 year ground lease, 16 year building lease

Distribution center with brick exterior (2,000 sf office) 100% leased by FedEx Ground with 9 years remaining on lease @ $6.07/SF NNN

Tenant Total SF $PSF Total Monthly Rent

Total Yearly Rent % Occupied

MEMA 9/14/2005 To 3/1/2006 317,870 $3.84 $101,718 $1,220,621 84.10%

First Choice 11/7/2005 To 1/31/2007 60,080 $4.00 $20,027 $240,320 15.90%100.00%

I-220 Business Center 2005-2007 Historical Rents

Date Occupied







Upgrades and repairs performed to roof.







US Food Service

Merchants Co.

Frito Lay SYSCO Corp.Louis Dreyfus

Pilgrims Pride







Subject Property







Leasing Comps

Property Size Rent PSF Lease Type

Tower Automotive 200,000 $4.75 NNN440 Church StMadison, MS

Pilgrims Pride Corp. 71,325 $3.57 NNN3330 Woodrow Wilson BlvdJackson, MS

Pro-Max 200,000 $3.85 NNN195 Industrial DriveMadison, MS







Property Size Rent PSF Lease TypeLeavitt Tube 253,200 $3.50 NNN211 Industrial Drive NMadison, MS

Owens & Minor 55,000 $4.10 NNN326 U.S. Hwy 49 SRichland, MS

Phoenix Eco, Inc. 475,000 $3.46 NNN110 LE Barry Rd.Natchez, MS

FedEx Ground Support 55,957 $6.07 NNN330 Leggett DriveJackson, MS







Location The geography of Metro Jackson helps put businesses located in the area in an excellent logisticalposition. Known as the “Crossroads of the South,” Metro Jackson is strategically located near the center of Mississippi and within 500 miles of approximately 76 major metropolitan areas and over one-third of the nation’s population. The area is 157 miles from the Gulf of Mexico and its deep water ports and 45 miles from the Mississippi River and the inland waterway Port of Vicksburg. In addition, Metro Jackson is within twenty five (25) minutes of Nissan North America. Highways Two major thoroughfares, Interstates 20 and 55, intersect in Jackson. Interstate 20 extends from South Carolina in the east to Texas in the west where it connects with Interstate 10 to California. Interstate 55 starts at Chicago, Illinois, goes through Memphis, Tennessee and ends at New Orleans, Louisiana. A third artery, Interstate 220, connects Interstate 20 west of Jackson and Interstate 55 north of Jackson. United States Highways 49, 51, and 80, fanning out in all directions, also intersect in Jackson and connect the metro area with the contiguous states of Alabama, Arkansas, Louisiana, and with the Gulf of Mexico.

Vacancy rates have steadily declined during the last six (6) years in the Jackson submarket. Jackson accounts for 13% of the total market inventory, but was responsible for 22% of the total net absorption during the last six (6) years. Much of this success can be attributed to the flurry of auto suppliers that followed Nissan North America to Jackson with its 3,500,000 SF; $1.4 Billion facility which produces 400,000 vehicles annually. This plant, opened in May, 2003, has generated 31,683 total jobs, $903 million in salaries and $680 million in county and state taxes. The Jackson Industrial Market should also benefit from the new 1.2 billion SF Hyundai plant in central Alabama. Still, the industrial base in Jackson is extremely diverse, and the economy does not rely too heavily on the automotive industry. National companies in the market include:

• Nissan • General Motors • Mitsui + Co. Ltd • U.S. Foodservice • Pepsi • Coca Cola • SYSCO Corporation • Siemens • Weyerhauser • Kohler Co. • Owens-Illinois • Johnson Controls • Ryder

• Johns Manville • Keystone Automotive • Milwaukee Electric

Tool • NCI Building Systems • Levi Strauss & Co. • Cardinal Health • Federal Express • Kraft Foods • Wausau Paper • Penske • SCS Transportation







The South Central Gulf Industrial Market

Submarket Inventory

Year End

2005

Jackson, MS 22,550,000 5.75% New Orleans, LA 55,145, 074 7.80% Baton Rouge, LA 20,223,050 9.32% Hattiesburg, MS 2,646,143 8.47% Birmingham, AL 77,907,098 9.53% TOTAL 178,197,303 8.49%

Numerous intrastate and interstate motor carriers are located in Metro Jackson, giving the area the means to transport freight overnight to destinations within 500 miles. These destinations include major United State growth markets of the southern Sunbelt region and traditional markets of the industrial Midwest. Business Metro Jackson is increasingly becoming the address of choice for businesses and industries for a number of reasons – available quality labor, excellent transportation network, and a centralized national and statewide location. Leaders and lawmakers in metro Jackson recognize the necessity and importance of a good business climate and attempt to provide an atmosphere conducive to existing and new business growth.

A current statistical summary of the Jackson submarket is as follows:Park Inventory (SF) Vacant Sq. Ft. Vacancy Rate Canton Commercial 3,625,900 0

0.00%

Central Mississippi Industrial

2,455,000

255,000

10.39%

Clinton Commercial

358,000

0

0.00%

Commerce Industrial

653,572

0

0.00% East Metro

479,413

0

0.00%

Ergon

406,254

0

0.00%

Flowood

372,094

60,487

16.26%

Greater Jackson

964,539

114,278

11.85%

Hawkins Field

2,927,454

330,117

12.20%

Northwest

444,844

40,000

8.99% West Rankin

335,250 0

0.00%

TOTAL 13,072,320 826,882 6.35%







NEW I-220 INTERCHANGE AT INDUSTRIAL DR.

Jackson Skyline







7 Hour Drive Time

Jackson, Mississippi is considered the “Crossroads of the South” because it connects Dallas and Atlanta to thewest and east and Memphis and New Orleans to the north and south. The Jackson industrial market is benefiting from the mega-trend of locating warehouse/distribution facilities away from the Gulf Coast and south of Memphis. The industrial market in Jackson is also growing as a result of transportation companies like Nissan, who built a new 4 million square foot facility, moving into the area.







Memphis, TN

New Orleans, LA

Distribution Center - Investment Opportunity Center - Jackson MS v_2.pdf · Distribution Center ......

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