16100 jacqueline court - loopnet

OFFERING MEMORANDUMAbsolute* NNN Leased Investment - Highly Improved Office/Manufacturing BuildingFor Sale: $21,000,000

OFFERING MEMORANDUMAbsolute* NNN Leased Investment - Highly Improved Office/Manufacturing BuildingFor Sale: $21,000,000

16100 Jacqueline Court | Morgan Hill | California±103,191 Square Feet on ±4.55 Acres±2.18 Acre Expansion Parcel


03 INVESTMENT HIGHLIGHTS

04 LEASE HIGHLIGHTS

05 PROPERTY HIGHLIGHTS

06 TENANT HIGHLIGHTS

07 LOCATION HIGHLIGHTS

08 EXECUTIVE SUMMARY

09-12 PROPERTY PHOTOS

13-15 MAPS Aerial View Area Amenities Parcel Map

16-17 FLOOR PLANS

18-20 FINANCIAL INFORMATION Proforma Cash Flow/Return Capitalization Rate Calculations Loan Quote Terms

21-22 CONTACT & DISCLAIMER

PAGE:

TABLE OF CONTENTS

Please Contact Exclusive Agent:

BRIAN COSTELLO, Vice President+1 [email protected] License No. 01914680

3 | 16100 JACQUELINE COURT

INVESTMENTHIGHLIGHTS

• Capitalization Rate: 5.46%

• Capitalization Rate Over Lease Term: 6.23%

• Average Cash Flow Over Lease Term: 6.83% (35% Down Payment) ** • Average Annual Return Including Amortization:** 11.7%

• Annual Absolute* NNN Income: $1,213,059

* Lessor Maintains Roof (New Roof in 2015/2016)** See Attached Bridge Bank Loan Quote and Attached Proforma Calculation Estimate

LEASEHIGHLIGHTS



• Single Tenant: Mission Bell Manufacturing Company (USA Millwork)

• Monthly NNN Rent: $97,989 Including the Building and the Expansion Land Parcel • Lease Breaks Out Rent: Expansion Land Parcel: $ 5,117 / Per Month, NNN Building: $92,872 / Per Month, NNN Total: $97,989 / Per Month, NNN

• Annual Rent Increase: ±5% (See Rent Schedule Below)

• Lease Expiration Date: December 31, 2027

• Options: Two (2) Options to Renew for Five (5) Years Each at Market Rate

• NNN: Absolute NNN Lease (except Lessor Maintains Roof Only)

• Rent Schedule BUILDING LAND PARCEL TOTAL January 1 to December 31, 2021: $ 92,872 $5,117 $ 97,989 January 1 to December 31, 2022: $ 98,031 $5,270 $103,302 January 1 to December 31, 2023: $103,191 $5,429 $108,620 January 1 to December 31, 2024: $108,351 $5,591 $113,942 January 1 to December 31, 2025: $113,510 $5,759 $119,269 January 1 to December 31, 2026: $118,670 $5,932 $124,602 January 1 to December 31, 2027: $123,829 $6,110 $129,939

PROPERTY HIGHLIGHTS

Highlights:• ±103,191 Square Foot Highly Improved Office/Manufacturing Building on ±4.55 Acres• ±2.18 Acre Expansion Parcel • ±38% High End Office• Heavy Power: 2,400 AMPS, 480 Volt• Solar Panels Allowing for Lower Utility Rates• New Extensive Lobby Upgrades in 2019• New Roof in 2015/2016• HVAC Energy Efficient Wireless Control Thermostat Upgrades in 2018• Large Cafeteria with Hood and Grease trap• Additional ±15,000 Square Feet of Covered Parking/Overhang Storage Area• Fenced Yard Space• Starline Industrial Electrical Bus Track (480 Volt, 3 phase)• 6 Dock High Doors, 2 Grade Level Doors • Load Levelers• 30’ Ceiling Height• Column Spacing: 26’x32’• Fully Fire Sprinklered• 5 Restroom Cores• 245 Parking Stalls On Site• Zoning: IG (General/Heavy Industrial)• APNs: Building: 817-32-046 Expansion Land Parcel: 817-32-058• Construction: Concrete Tilt-Up• Partial Two-Story• Year Built: 1987



TENANTHIGHLIGHTS


h�p://missionbell.com/

Mission Bell Manufacturing Company manufactures,

delivers, and installs custom millwork and casework

for commercial projects in the San Francisco Bay

Area, a region brimming with top tech companies,

world-renowned hospitals, and leading universities.

Originally called Morgan Hill Millwork, the company

was founded by Leonard and Margorie Scianna, along

with the two business partners in 1959. In 1963, the

Scianna’s brought out the two business partners and

became Mission Bell Manufacturing Company.

The Scianna family continued to own and operate the business, including over the recent years

on the shoulders of three Scianna brothers. With strong ties to the local community, the Scianna

brothers converted the company to an ESOP in 2002 until merginng with USA Millwork in 2019

and becoming Mission Bell, a USA Millwork Company. The company has called Morgan Hill, or

immediate surrounding areas, its home since the founding in 1959 and has continued to grow

into larger facilities, including moving into the subject property in 2008. Mission Bell also began

sourcing Reclaimed Wood in 2014 allowing their work to be accompanied by unique history.

LOCATIONHIGHLIGHTS



Morgan Hill is located in South Silicon Valley, only 10

miles south of San Jose, 30 minutes from Mineta San

Jose International Airport, and within minutes of Apple,

Google, and hundreds of other technology leading

companies.

Over the past recent years, a large part of the workforce

including industry executives, have sought out Morgan

Hill to relocate their families and businesses.

The Morgan Hill Economic Development Department states Morgan Hill has had a steady 2%

growth in workforce housing, and now contains 85,000 skilled workers within 30 minutes of

Morgan Hill.

Consequently, Morgan Hill’s downtown has recently been revamped, including now 30 plus

restaurants, and continues to attract families from all over the Bay Area.

The subject property is located just 1 mile from downtown Morgan Hill, and 1.5 miles from the

Morgan Hill Caltrain Station.

h�ps://www.choosemorganhill.com/why-morgan-hill

Norman Y. Mineta San Jose International Airport

EXECUTIVESUMMARY


Ritchie Commercial is pleased to present this single tenant

absolute Triple Net Leased Investment located in South

Silicon Valley. This investment presents a buyer the

opportunity to receive a high average cash flow return

over the lease term while obtaining a highly improved

office/manufacturing building with extra land for future

upside.

The property boasts an approximate 103,191 square foot

high image office/manufacturing building with extensive

recent upgrades including solar panels, covered parking, a

new roof in 2015/2016, increased heavy power, energy

efficient HVAC upgrades, and more. There is also a

separate expansion parcel consisting of approximately

2.18 acres that allows for future upside. The expansion

parcel is located to the north of the main parcel, and is a

part of the lease.

The lease breaks down the rent as follows; $92,872 per

month NNN rent on the building, and $5,117 per month

NNN rent on the expansion land parcel for a current

monthly total of $97,989 per month NNN rent.

The value of the expansion land parcel based on the

$5,117 NNN monthly rent and the 5.46% capitalization

rate referenced in this package, is $1,096,925, or $11.55

per square foot.

Yet, current market value for industrial land in Morgan Hill

is in the $13 to $15 per square foot range (market

information available upon request). Therefore, a buyer

can capitalize on the difference since the capitalized value

is less than the market value.

For sale at $21 million and evaluating the land per above

at $1,096,925, the building is evaluated at $19.9 million, or

$193 per square foot, strategically evaluated to be in line

with market values.

According to CoStar Analytics, the average sale price for

comparable buildings in the last two years in Morgan Hill,

South San Jose, and Gilroy is $200 per square foot.

The current rent for the building is $0.90 per square foot,

NNN. According to CoStar Analytics, the average monthly

rent for comparable buildings in the last three years in

Morgan Hill, South San Jose, and Gilroy is $0.88 per

square foot, NNN. Market information available upon

request.

Mission Bell Manufacturing is currently in their fourth year

of a ten-year lease, and has two (2) options to renew the

lease for five (5) years each. The lease is a modified AIR

lease, and contains an average of above market annual

increases at approximately five (5%) percent.

The investment allows for a 5.46% Capitalization Rate (6.23% over the lease term), and a 6.83% average cash

flow over the lease term with a 35% down payment

(11.7% average annual return including amortization).

See proforma calculations enclosed.


PROPERTYPHOTOS


PROPERTY PHOTOS


16100 JACQUELINE COURT

13 | 16100 JACQUELINE COURTR A I L R O A D AV E N U E

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T E N N A N T A V E N U E

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AERIAL VIEW

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FLOOR PLANS

MEZZANINE

DOWNSTAIRS SHOP GROUND FLOOR



PARCEL

FLOOR PLANS 16100 Jacqueline Court | Morgan Hill | California±103,191 Square Feet on ±4.55 Acres±2.18 Acre Expansion Parcel

CAFETERIA

PATIO

DOWNSTAIRS OFFICE

UPSTAIRS OFFICE


INVESTMENTINFORMATION

Proforma - Estimated Cash Flow/Return Excludingand Including Amortization

PREMISE AND ASSUMPTIONS

Close of Escrow: July 31, 2021 (77 Month Lease Term)Purchase Price: 21,000,000$

Cash at COE: 7,350,000$ * Plus Loan & Closing Cost: 100,000$ ***TOTAL: 7,450,000$

Loan Amount: 13,650,000$ *Interest Rate: 4% Per Annum, Fixed Rate for 10 Years*Amortization: (25 Years)*Monthly Payment: 72,469$ *Average Monthly Absolute** NNN Rent Over Lease Term From July 31, 2021: 115,396$

Notes:*See Attached Bridge Bank Quote (subject to change)

** Absolute NNN Lease except Landlord Maintains Roof - Estimate: $6,000/Year (New Roof in 2015/2016) No Property Management Fee Since Absolute NNN Lease Except Roof Maintenance*** Subject to Final Bank and Title Company Cost, Initial Estimate Only

(1) CASH FLOW EXCLUDING AMORTIZATION

$115,396 Monthly Average Rent Over Term (x 12 Months): 1,384,754$ Annual Roof Maintenance Estate (Less): < 6,000$ >Monthly Loan Payment ($72,469 x 12 Months) (Less): < 869,628$ >CASH FLOW ESTIMATED: 509,126$

$509,126 Divided by Estimated Cash at Close of Escrow: 7,450,000$

6.83% Average Cash Flow Return Over Lease Term (Excluding Amortization) (2) RETURN INCLUDING AVERAGE ANNUAL AMORTIZATION OVER 77 MONTHS (LEASE TERM)

$2,326,296 Amortization Over Term (divided by 77 Months) =$30,211 Per Month (x 12 Months): 362,532$ Average Annual Amortization over 77 MonthsPlus $509,126 Cash Flow Excluding Amortization from Above = 509,126$

871,665$ Total Return

$871,665 Return Divided by $7,450,000 Cash at Close = 11.7% Average Annual Return (Cash Flow + Amortization)


INVESTMENTINFORMATION

Capitalization Rates Based On First Year Rent*And Average Rent Over The Lease Term

*Based on Close of Escrow of July 31, 2021 ** Absolute NNN Lease Except Landord Maintains Roof - Estimate $6,000 / Year (New Roof in Year 2015/2016) No Property Management Fee Since Absolute NNN Lease Except Roof Maintenance

(1) CAPITALIZATION RATE BASED ON FIRST YEAR RENT No Property Management Fee** First Year Absolute ** NNN Rent: 1,213,059$ 5% Vacancy (Less): < 60,652$ > Roof Maintenance (Less): < 6,000$ > Annual: 1,146,407$

1,146,407$ 21,000,000$ 5.46% Capitalization Rate

(2) CAPITALIZATION RATE BASED ON AVERAGE RENT OVER 77 MONTH LEASE TERM No Property Management Fee** Average Absolute ** NNN Rent: 1,384,752$ 5% Vacancy (Less): < 69,237$ > Roof Maintenance** (Less): < 6,000$ > Annual: 1,309,515$

1,309,515$ 21,000,000$ 6.23% Capitalization Rate



• Purchase Price: $21,000,000

• Loan Amount: $13,650,000 (65% LTV)

• Rate: 10 Year T + 2.58% (4% Presently), Fixed for Ten (10) Years Floor of 4.00%

• Term: Ten (10) Years

• Amortization: Twenty-Five (25) years

• Fee: 0.50% Bank Fee. Appraisal, Environmental, Escrow, Title Insurance (as required)

• Repayment: $72,469 Monthly

• Repayment Penalty: Five (5) Years 5% of the Outstanding Principal Balance in Year One, 4% in Year Two, 3%, 2%, 1%. Up to 10% of the outstanding principal balance may be prepaid in any year without penalty.

• DSCR Requirement: 1.30 x Minimum

• Recourse: Yes, Full Personal or Corporate Guaranty of Any Individual or Entity Owning 20% or more of the Subject Real Estate

• Collateral: 1st Deed of Trust and Assignment of Lease on Subject Property located at 16100 Jacqueline Court, Morgan Hill, California

• Disclaimer Please note that this quote is not a commitment or an offer to lend. Any proposal the bank makes to lend will be subject to all necessary due diligence

Ken Mannina SVP Bridge Bank, a division of Western Alliance Bank MEMBER FDIC Direct 408.556.8336 | Cell 408.529.1618 55 Almaden Blvd Suite 100 San Jose CA 95113 [email protected] www.bridgebank.com

Loan Quote & TermsINVESTMENTINFORMATION


BRIAN COSTELLOVice President+1 [email protected] License No. 01914680

Please Contact Exclusive Agent:

34 WEST SANTA CLARA STREET, SAN JOSE, CA. 95113408.971.2700 fax: 408.971.1600DRE #01209214 | www.ritchiecommercial.com

San Francisco | San Jose | Walnut Creek

INVESTMENT CONTACT

All information herein distributed by Ritchie Commercial is intended to be viewed only by the parties specifically targeted by Ritchie Commercial.

The Investment Offering is prepared to provide a summary of 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 thorough due diligence investigation. Ritchie Commercial 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 improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal

regulations, the physical condition of improvements thereon, nor 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 investment offering has been obtained from sources

Ritchie Commercial deems reliable, however, Ritchie Commercial has not verified and will not verify any of the information contained herein. Ritchie

Commercial has not conducted any investigations regarding these matters and makes no warranty or representation whatsoever regarding the

accuracy of completeness of the information provided. All potential buyers must take the appropriate measures to verify all of the information which

is stated herein.

DISCLAIMER16100 Jacqueline Court | Morgan Hill | California±103,191 Square Feet on ±4.55 Acres±2.18 Acre Expansion Parcel

16100 jacqueline court - loopnet

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