1327 1329 1325 building: 5 executive summary jll, as exclusive advisor, is pleased to offer the...

1325, 1327 & 1329 South 800 East Orem, UT 84097

132713291325

OFFERING MEMORANDUM

David NixonT +1 801 456 9518M +1 801 244 [email protected]

Jim BaldersonT +1 801 456 9519M + 1 801 662 [email protected]

Rawley Nielsen – CBC AdvisorsT +1 801 441 5922M +1 415 407 [email protected]

CONTACTSPlease direct all inquiries to the following professionals:

111 Main Street, Suite 300 | Salt Lake City, UT 84111 | T +1 801 456 9510

Darren Nielsen – CBC AdvisorsT +1 801 448 [email protected]

TABLE OF CONTENTS04 Executive Summary

07 Property Description

12 Location Overview

16 Market Overview

20 Financial Analysis

25 Transaction Guidelines


EXECUTIVE SUMMARY

SQUIRE BUILDING: 5

EXECUTIVE SUMMARY

JLL, as exclusive advisor, is pleased to offer the opportunity to acquire Squire Business Park at 1329 S 800 E in Orem, Utah (the “Property”). This offering includes a 94% leased three-building office park at the heart of the most amenity-rich and quickly developing section of the Provo/Orem, Utah metro.

The Property sits on a prime corner on University Parkway, where it is the direct neighbor to University Mall, Vasa Fitness, a new Cinemark Theater, numerous quick-serve and formal restaurants, and endless retailers who choose this location because it is the exact center point between Brigham Young University and Utah Valley University (over 66,000 students in total).

As the #1 best-performing economy in the nation in 2017 (Milken Institute) and with the #1 fastest job growth nationally, the Provo/Orem market is a primary cause for the economic accolades Utah has been receiving for the last 5 years.

PROPERTY SUMMARY

Address 1325-1327-1329 South 800 EastOrem, UT 84097

Price $9,785,000

Proforma Cap Rate 7.01%

Buildings 3

Combined Size 52,362 SF

Total Land Area 2.79 AC

Parking 174 Stalls | 3.32 : 1,000

APN 533500001, 533500002, 533500007

Occupancy 94%

INVESTMENT HIGHLIGHTS

UPSIDE POTENTIAL: Squire Business Park is currently 94% leased and, with each of the near-term lease expirations at rates that are well below market, is well-positioned for growth with new leases. As shown by the recent tenant improvements in the Pro Look Sports space, these buildings have the potential for renovations that attract the tech users that are so abundant in this area.

NATION’S BEST-PERFORMING CITY: With criteria including job and wage growth, high-tech GDP growth, and the number of high-tech industries in the city, Provo/Orem is the #1 strongest city in the country (Milken Institute). Provo/Orem has been in the Top-3 every year for five years, thanks to the continuous job growth in the professional, scientific, and technical services sector.

DESIRABLE LOCATION: These buildings are on a prime corner location on University Parkway, and are located a few minutes walking distance to some of Utah’s best shopping (University Mall), dining, entertainment (Cinemark Theater), and fitness (Vasa Fitness) amenities in the market. Add to this that you are just minutes driving distance from endless outdoor recreation and the largest two universities in the state, and it is easy to see why this location is well-positioned for years of high demand from new and established companies alike.

PROXIMITY TO LARGEST UNIVERSITIES IN UTAH: Squire Business Park is centrally located on University Parkway just 5 minutes from the two largest universities in Utah, Brigham Young University and Utah Valley University. These two universities combined have a student population of over 66,000 students. BYU is a top five university in technology transfer, and is a primary driver for the scientific- and technology-based economic development propelling the state. In the last 5 years alone, BYU students have launched 676 companies that have secured a combined $1.3 billion in funding.

FAVORABLE MARKET OUTLOOK: Over the next 50 years, 37 percent of the state’s population growth is projected to be in Utah County. This means nearly four of every 10 new Utah residents will live in Utah County. For 2017, Provo/Orem was #1 in the country for job growth. High-tech industries have been a key driver, helping to create broad-based job growth that placed first in the Milken Institute report among large metros on both their one- and five-year metrics. Currently, office vacancy in the submarket sits at just under 10% and ongoing new construction of Class A office has caused a rising tide on office lease rates of other office in the area.


PROPERTY DESCRIPTION

SQUIRE BUILDING: 8

PROPERTY SUMMARY

Address 1325 South 800 EastOrem, UT 84097

Parcel 533500009

Rentable Area 19,310 SF

Land Size 1.049 AC

Year Built 1983

Current Tenancy Type Multi

Occupancy 85%

Stories 3

Roof Membrane

Other New elevator, fully remodeled common areas

1325 SOUTH 800 EAST

SQUIRE BUILDING: 9

PROPERTY SUMMARY


Parcel 533500002


Land Size 0.391 AC

Year Built 1984

Current Tenancy Type Single

Occupancy 100%

Stories 2

Roof Membrane

OtherRemodeled 5 years ago; previously multi-tenant; includes Verizon cell tower

1327 SOUTH 800 EAST

SQUIRE BUILDING: 10

PROPERTY SUMMARY


Parcel 533500007


Land Size 1.348 AC

Year Built 1985 & 2006

Current Tenancy Type Single

Occupancy 100%

Stories 3

Roof Membrane

OtherSquire and Company Headquarters; second section added in 2006

1329 SOUTH 800 EAST

SQUIRE BUILDING: 11

University Place


LOCATION OVERVIEW

SQUIRE BUILDING: 13

Black Bear DinerIn-N-Out

Sprouts Farmers Market

Vasa Fitness

University Place

State Street

800 EastCinemark University Mall

Costco

Carrabbas StarbucksTucanos

Five Guys

P.F. Chang’s

Costa Vida

Texas Roadhouse

Panda ExpressOutback SteakhouseUniversity Pkwy

1325, 1327 & 1329 South 800 East

LOCATION AMENITIES

SQUIRE BUILDING: 14

LOCATION AMENITIES

Squire Business Park has the unique benefit of being located at the core of Utah County’s business and retail corridor. As a result, tenancy at the business park includes a mix of amenities that is completely unmatched in any suburban location in the state.

Employees who work at Squire Business Park can exercise at one of the largest fitness centers in the state, grab a coffee, eat or entertain clients with any type of food they would want, stop by the bank, shop at retailers like H&M and Macy’s, do their grocery shopping at Costco or Sprouts Farmers Market, go to a movie, and much more all without getting in a car. The opportunity to access these amenities without walking more than five minutes, combined with the nation-leading economic fundamentals of the city, have the potential to make Squire Business Park a competitive destination for years to come.

UNIVERSITY PLACE:

University Place is a 112-acre mixed-use redevelopment of the University Mall property. The site is strategically positioned at the busiest intersection in Utah County. Over 125,000 cars pass this site each day and more than a million people visit the mall, theater, and restaurants each year. It has been designed to create a town center for the area, and is the core of Utah County’s business and retail corridor. Its close proximity to Brigham Young University and Utah Valley University provide access to world class research and over 70,000 students.

University Place is designed to be “one stop” efficiency, allowing customers to run errands or hold business lunches without leaving the campus. Financial institutions, daycare, shipping & supplies, barber, dry cleaners, optical, phone centers, sundries, specialty gifts, hair salon, office catering, clothing, furniture, electronics are a few examples of the amenities existing on site. In addition, another 60 commercial businesses are within a five minute drive.

At the heart of the development is University Mall, with 1.3 million square feet, offering 140 specialty retail shops and a collection of eateries that include seven sit-down restaurants, ten food court options and five quick casual eateries. A 12-screen Cinemark Theatre and Costco are located on site as well.

VASA FITNESS:

With 26 locations, Vasa Fitness is Utah’s largest and most popular chain of fitness centers. The Orem facility is one of the company’s largest, with: Aerobics / Group Exercise and Spin Classes, Basketball Courts, Cardio Machines with Individual Video Screens, Free Weight Area, Free Wi-Fi for Members, Indoor Pool, Jacuzzi, KidCare Facilities, Personal Training, Pro-Shop, Racquetball Courts, Steam Room & Sauna, and a Women’s Only Area.

SQUIRE BUILDING: 15

LOCATION

State Street

800 EastUniversity Pkwy

University Ave

1325, 1327 & 1329 South 800 East


MARKET OVERVIEW

SQUIRE BUILDING: 17

MARKET VIEW

In the ranking of the Top 25 Best-Performing Large Cities in the United States (Milken Institute), Utah had two cities in the Top 10—Salt Lake City and Provo-Orem. While Salt Lake City placed a very strong #10, it was Provo-Orem that placed #1 by a wide margin.

The region is home to Brigham Young University, a top technology transfer institution that has helped create a vibrant high-tech economy. The Provo-Orem region has only placed outside the Top 25 in the annual Milken Institute report once since 2008. In the last five editions, the region has numbered among the Top 3 in the nation.

Its consistently strong performance has attracted new residents and created broad-based economic growth. High-tech industries have led the explosive job growth, causing the city to place first among large metros on Milken’s one- and five-year metrics.

Technology has been a major driver of economic growth in the Provo-Orem metro. The region ranked third among large metros for high-tech growth, and the professional, scientific, and technical services sector—the industry category that includes many high-tech jobs—added 5,500 positions between 2011 and 2016.

BYU is a major source of employment in the region, contributing significantly to the 24,000 jobs in educational services overall. The university also contributes to the vibrancy of the region by attracting students, who support consumer spending and have the opportunity to join the skilled local workforce upon graduation. Rising levels of enrollment have bolstered the importance of the university to the regional economy.

BYU ranked fourth on the Milken Institute’s 2017 index of the best universities for technology transfer, in part due to its success creating startup firms. The university fosters an entrepreneurial culture, offering attractive incentives for faculty to commercialize research, and supporting student ventures through the Rollins Center for Entrepreneurship and Technology. Entrata, which originally won a student business plan competition at BYU, is now based in Lehi and provides a platform for apartment landlords to better manage their properties and allow tenants to pay their rent online. Notably, the firm has grown without significant venture capital investment.

Top 10 Utah County EmployersRank Firm Employees

1 Brigham Young University 15,000-21,998

2 Utah Valley University 4,000-5,998

3 Utah Valley Hospital 3,000-3,999

4 Vivint, Inc 2,000-2,999

5 Adobe Systems, Inc 1,000-1,999

6 DoTerra International 1,000-1,999

7 IM Flash Technologies 1,000-1,999

8 Nestle Prepared Foods Company 1,000-1,999

9 Nexeo Staffing 1,000-1,999

10 Vivint Solar 1,000-1,998

Source: The Daily Herald

SQUIRE BUILDING: 18

MARKET VIEW

Another BYU-related firm is Qualtrics, an enterprise software firm focused on automating statistical data analysis. The influx of $180 million in venture capital announced in the second quarter of 2017 took its valuation to $2.5 billion. The firm, founded 15 years ago by a BYU professor and his son, now has 1,300 employees worldwide and is the most highly-valued private technology firm headquartered in Utah.

The expanding high-tech sector and broader growth in the region have affected the local labor and real estate markets. Unemployment remains low, and the tighter labor market is putting upward pressure on wages as competition for skilled workers increases. Average weekly wages in the Provo-Orem region have increased by $100 (up 14 percent) between 2011 and 2016. Household incomes are also rising. While locating near the BYU campus is attractive for firms spun out of the university or looking to hire its graduates, a lack of large pad-ready spaces and available office buildings within the City of Provo has propelled growing firms into other communities in the Utah Valley.

Squire Business Park offers the increasingly-rare opportunity for companies with close ties to BYU, or looking to hire highly-qualified graduates, to be located within minutes of the university.

This population growth and economic activity has helped create demand in the construction sector, where the count of specialty trade contractors has almost doubled in the five years since 2011. A large number of mixed-use developments, including University Place in Orem, have been under construction in recent years. Phase 1 of the project, a redevelopment of the former University Mall site, was completed in late 2017, with more housing and offices planned as part of Phase 2. Population growth and rising wages have also bolstered consumer spending driven establishments, including restaurants and bars, where employment has grown by 4,100 in the last five years.

Another prospering industry category is non-store retailers, which covers online vendors. Companies in this sector added 4,000 jobs in the five years ending in 2016, more

than tripling total headcount over that period. Small firms like Taft Clothing, that designs and sells high-end shoes manufactured in Spain, contributed to this total.

As it grows, the region is investing in infrastructure that can help it successfully support a larger population base. The Utah Transit Authority is currently building a bus rapid transit (BRT) line that will link Orem and Provo, and connect Utah Valley University and Brigham Young University.

Provo-Orem 2017 Economic Indicator National Rankings

#1 One-Year Job Growth

#1 Five-Year Job Growth

#3 Wage Growth

#3 Five-Year High-Tech GDP Growth

#1 Utah Population Growth (2016)

SQUIRE BUILDING: 19

MARKET VIEW

Vacancy rates in the Utah County office market inched upward from 6.40% in the third quarter of 2016 to 8.89% currently. Notably, the Class A vacancy rates have increased over the last three years due to record amounts of new office space coming online.

With this additional available space in the central quadrant, the overall weighted average asking lease rate decreased slightly from $21.33 to $20.91 currently.

Landlords and new developers continue to see Utah County as a promising location for economic strength and continued business growth. Over 1,260,000 square feet of new office space is currently under construction mostly in the Lehi area — and slated for completion by midyear 2018.

The Utah County market continues to experience record amounts of job growth: 5.7% in August 2017 compared to 2.8% statewide Unemployment and 1.5% nationally. Utah County’s ongoing economic strength make it an ideal environment for growth.

2017 Provo-Orem Office Market OverviewClass Inventory (SF) Vacancy Rate Net Abs (SF) Lease Rate (FS)A 2,785,381 10.92% 97,551 $20.76

B 3,928,308 7.05% 0 $17.65

C 494,251 4.49% 18,403 $13.96

Total 7,207,940 8.37% 115,954 $18.86

2017 North UT County Office Market OverviewClass Inventory (SF) Vacancy Rate Net Abs (SF) Lease Rate (FS)A 4,849,927 9.92% 130,092 $27.62

B 2,037,308 5.49% 62,455 $22.91

C 115,828 7.42% 13,900 $17.65

Total 7,003,713 8.59% 206,447 $22.56

UTAH COUNTY OFFICE MARKET


FINANCIAL ANALYSIS

SQUIRE BUILDING: 21

FINANCIALS - RENT ROLL

1325 South 800 East

TENANT Suite SF Rate Monthly Annual Lease Type Base Year

Annual CAM

Proportionate Share

Lease Start Date

Lease End Date

Rental Increases Notes

Griffiths & Turner 200 2,887 $13.50 $3,247.88 $38,974.56 FS 14.95% 7/1/2015 6/30/2018 2% Annually

Professional Physical Therapy and Sports Medicine

215 3,533 $14.49 $4,266.00 $51,192.00 MG (Base Year) 2011 $857.00 18.30% 3/1/2012 2/28/2022 3% Annually

Shipping Partners LLC 110 3,535 $12.00 $3,535.00 $42,420.00 FS 18.31% 4/1/2014 5/31/2018 3% Annually Negotiating Renewal

Pro Look Sports 300 6,468 $15.77 $8,500.00 $102,000.00 MG (Base Year) 2016 $260.00 33.50% 3/1/2017 2/28/2024 1-5 no bump,

6-7 2% bump

Vacant - Future Tenant 100 2,887 $12.00 $2,887.00 $34,644.00 14.95%

TOTALS 19,310 $22,436 $269,231 $1,117.00

1327 South 800 East


Annual CAM

Proportionate Share

Lease Start Date

Lease End Date


Keeler Thomas 5,592 $17.00 $7,922.00 $95,064.00 MG (Base Year) 2010 $0.00 92.42% 10/1/2011 9/30/18 3% Annually Negotiating

Renewal

TOTALS 5,592 $7,922 $95,064 $0.00

ADDITIONAL RENT

Verizon $1,842.50 $22,110.00 8/1/2017 7/30/2022 10% increase every 5 years

Four 5-year options

1329 South 800 East


Annual CAM

Proportionate Share

Lease Start Date

Lease End Date


Squire (Proposed Leaseback) 27,460 $16.50 $37,757.50 $453,090.00 NNN 100.00% COE 10 Years from

COE 3% annually

TOTALS 27,460 $37,758 $453,090 $-

SQUIRE BUILDING: 22

INVESTMENT SUMMARY

1325 South 800 East 1327 South 800 East (Keeler)

1329 South 800 East (Squire) Total

Gross Potential Rent 100% $269,231 $95,064 $453,090 $817,385 Vacancy 10% ($26,923.06) 10% ($9,506) 0% $0 ($36,429)

Additional Income (Verizon) $22,110 $22,110 CAM Reimbursement Revenue $1,117 $0 $0 $1,117

Effective Gross Revenue $243,425 $107,668 $453,090 $804,182

Expenses Utilities ($28,313) ($8,509) - ($36,822)

Maintenance ($7,463) ($4,392) - ($11,855)

Janitorial ($6,858) ($2,013) - ($8,871)

Common Area/Landscaping/Snow Removal ($9,812) ($2,930) - ($12,742)

Insurance $0.20/ft ($3,862) $0.20/ft ($1,118) $0.20/ft - ($4,980)

Taxes (2017 actuals) ($18,835) ($6,216) - ($25,051)

Management 4.0% ($9,737) 4.0% ($4,307) 4.0% - ($14,044)

Capital Reserves $0.15/ft ($2,897) $0.15/ft ($839) $0.15/ft - ($3,735)

Total Expenses 14% ($87,776) ($30,324) $0 ($118,100)

Net Operating Income 84% $155,648 $77,344 $453,090 $686,082

SQUIRE BUILDING: 23

INVESTMENT SUMMARY

Purchase Price $9,785,000

Total Sq. Ft. 52,362Price per SF $186.87Proforma Cap Rate (Yr 1) 7.01%

Proposed FinancingLoan Amount $6,849,500

Down Payment $2,935,500

Loan To Value 70%

Interest Rate 4.75%

Loan Summary

Annual Payment (P&I) ($428,763)

Monthly Payment (P&I) ($35,730)

Net Cash Flow $257,319

Cash-on-Cash Return 9%


TRANSACTION GUIDELINES

SQUIRE BUILDING: 25

TRANSACTION GUIDELINES

The offering of 1329 S 800 E, located in Orem, Utah (the “Property”) is being conducted exclusively by Jones Lang LaSalle (“JLL”). All questions and inquiries should be directed to JLL representatives listed below. Prospective investors are strongly discouraged from directly contacting Seller without the express written consent of JLL. Seller and JLL reserve the right to alter the Transaction Guidelines at their sole discretion.

JLL will be available to assist prospective investors with their review of the offering. On-site inspections of the Property and tours of the Orem/Provo market can be arranged with JLL. Once marketing has commenced, JLL will notify all prospective investors of the definitive date for offers to be submitted. The purchaser will be selected by the Seller in its sole and absolute discretion based on a variety of factors including, but not limited to:

• Offer price;• Transaction structure;• Ability to perform and to close expeditiously;• Absence of contingencies; and• Level of due diligence completed/

All offers must be presented in writing through JLL and include:

• The source of purchaser’s equity and debt capital;• The amount of proposed earnest money deposit;• Proposed due diligence period and subsequent closing period;• A description of major assumptions reflected in the price being offered; and• A list of any committee approvals required to close the transaction.

Jones Lang LaSalle will assist prospective purchasers to arrange property inspections and will respond to questions related to information contained in this Offering Memorandum or in the Data Room.

SQUIRE BUILDING: 26

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2017, JLL had revenue of $7.9 billion and fee revenue of $6.7 billion; managed 4.6 billion square feet, or 423 million square meters; and completed investment sales, acquisitions and finance transactions of approximately $170 billion. At the end of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of 82,000. As of December 31, 2017, LaSalle had $58.1 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.

©2018 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to Jones Lang LaSalle and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of Jones Lang LaSalle and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of Jones Lang LaSalle. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

CONTACTSPlease direct all inquiries to the following professionals:

111 Main Street, Suite 300 | Salt Lake City, UT 84111 | T +1 801 456 9510

David NixonT +1 801 456 9518M +1 801 244 [email protected]

Jim BaldersonT +1 801 456 9519M + 1 801 662 [email protected]

Rawley Nielsen – CBC AdvisorsT +1 801 441 5922M +1 415 407 [email protected]

Darren Nielsen – CBC AdvisorsT +1 801 448 [email protected]

1327 1329 1325 building: 5 executive summary jll, as exclusive advisor, is pleased to offer the...

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