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A&P BUILDING55 S State Ave • Indianapolis, IN 46201
Market Positioning and Pricing Analysis
A&P BUILDING
Indianapolis, IN
ACT ID Z0260176
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
Non-EndorsementsMarcus & 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.
DisclaimerTHIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has
been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References
to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus &
Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.
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P R E S E N T E D B Y
Joseph DiSalvo
First Vice President Investments
Director - National Office and Industrial
Properties Group
Indianapolis Office
Tel: (317) 218-5334
Fax: (317) 218-5310
License: IN RB14051407
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TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01Offering Summary
Regional Map
Local Map
Aerial Photo
FINANCIAL ANALYSIS 02
Tenant Summary
Lease Expiration Summary
Operating Statement
Notes
Pricing Detail
Acquisition Financing
MARKET OVERVIEW 03
Market Analysis
Demographic Analysis
A&P BUILDING
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A&P BUILDING
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INVESTMENT
OVERVIEW
A&P BUILDING
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OFFERING SUMMARY
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EXECUTIVE SUMMARY
VITAL DATA
CURRENT
Price $2,834,000 CAP Rate 9.67%
Down Payment 30% / $850,200 Net Operating Income $273,916
Loan Type Financed Pre Tax Cash Flow 11.95% / $101,635
Interest Rate / Amortization 5.15% / 25 Years Total Return Before Taxes 16.26% / $138,244
Price/SF $18.27
THE OFFERING
Property A&P Building
Property Address 55 S State Ave, Indianapolis, IN
Assessors Parcel Number
49-10-07-181-004.000-101
Zoning CBD-Special
SITE DESCRIPTION
Number of Floors Three (3)
Year Built/Renovated
1935/2015
Rentable Square Feet
155,137
Ownership Fee Simple
Lot Size 9.42 Acres
Topography Flat
Parking 150 + Outdoor Storage Lot
CONSTRUCTION
Foundation Concrete Slab
FramingSteel Framing w/ Load Bearing CMU
Walls
Exterior Masonry
Parking Surface Asphalt
RoofFlat Roof Clad w/ Ballasted EPDM, Mechanically Fastened EPDM and
BUR Systems
Docks Fifty-Four (54)
Ceiling Height 18’
MECHANICAL
HVACElectric and Gas Furnace (split system) &
Condenser (split system)
Power4,000-Amp, 277/480-Volt, Three-Phase,
Four-Wire Reported
EXTERIOR PROPERTY PHOTOS
A&P BUILDING
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A&P BUILDING
OFFERING SUMMARY
▪ Three Story 155,137 Square Foot, Multi-Tenant Warehouse/Office Building
▪ Over 90 Percent Occupied by a Large Number of Diverse Tenants at Very Low
Rents
▪ Under $19 per Square Foot
▪ Located Just East of Downtown Indianapolis just off East Washington Street
▪ Within Immediate Proximity of Interstate 70 and Interstate 65
INVESTMENT HIGHLIGHTS
Marcus & Millichap is pleased to present the A&P Building, a three-story, 155,137 square foot multi-tenant industrial / office / cold storage facility located at 55 South
State Street on the east side of downtown Indianapolis just south of East Washington Street. The A&P Building is situated on over 9.42 acres and features executive
offices on the third floor, larger office and storage areas on the second floor, dry warehouse and cold storage on the first floor, and additional land for development or
outdoor storage. The Property is located along South State Street between East Washington Street and East Southeastern Avenue and less than one mile east of the
Interstate-70 and Interstate 65 connecting downtown Indianapolis to the rest of the city and state.
The A&P Building is unique opportunity that is comprised of office, warehouse, cold storage, some self-storage units, and outdoor storage on three levels of an incredibly
well built and well maintained, 155,137 square foot building situated on over nine acres in the downtown area of Indianapolis. The building was originally built in 1935 as a
hub for a local grocery chain and has been renovated and repurposed as a business incubator on the east side of downtown. The property has historically been over 90
percent occupied by smaller tenants on shorter term leases at low rental rates, hence the asking price of under $19 per square foot while still providing a CAP rate north of
9 percent. The Subject Property is a very rare opportunity to own an asset that has stable cash flow paid by a large number of diverse tenants at very low rents.
Established and successful property management is in place and would remain post-closing, providing a Buyer with additional stability and passivity in the investment.
With a large number of diverse tenants, upside potential in the below-market rents, incredibly low price per square foot, and an excellent location just east of the Central
Business District of Indianapolis, the A&P Building should prove to be a very lucrative investment for the sophisticate investor.
INVESTMENT OVERVIEW
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INTERIOR PROPERTY PHOTOS
A&P BUILDING
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AERIAL PHOTO
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AERIAL PHOTO
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LOCAL MAP
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REGIONAL MAP
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A&P BUILDING
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FINANCIAL
ANALYSIS
FINANCIAL ANALYSIS
A&P BUILDING
OPERATING STATEMENT
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FINANCIAL ANALYSIS
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TENANT SUMMARY
FINANCIAL ANALYSIS
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TENANT SUMMARY
FINANCIAL ANALYSIS
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TENANT SUMMARY
FINANCIAL ANALYSIS
A&P BUILDING
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TENANT SUMMARY
FINANCIAL ANALYSIS
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TENANT SUMMARY
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MARKET
OVERVIEW
MARKET OVERVIEW
INDIANAPOLISOVERVIEW
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The Indianapolis metro houses the state capitol and is a growing tech
hub. Situated in central Indiana, the market consists of 11 counties:
Marion, Johnson, Hamilton, Boone, Hendricks, Morgan, Hancock,
Shelby, Brown, Putnam and Madison. The metro lacks formidable
development barriers, except for the several rivers and creeks that
traverse the region. Marion County is home to Indianapolis, which
contains a population of approximately 859,200 people. Carmel in
Hamilton County is the second most populous with more than 91,000
residents. A large portion of the surrounding counties are rural,
offering builders ample land for residential and commercial
development. Population growth is primarily concentrated to the
northern suburbs and west of the city.
MARKET OVERVIEW
METRO HIGHLIGHTS
PREMIER DISTRIBUTION HUB
Around 50 percent of the U.S. population lies within
a one-day drive of Indianapolis, making it a center
for the transportation of goods.
MAJOR HEALTH SCIENCES CENTER
Eli Lilly & Co., Roche Diagnostics Corp. and
Covance Inc. maintain operations in the region,
among other major health-related employers.
LOW COST OF DOING BUSINESS
Indianapolis’ costs are far below national averages,
attracting businesses and residents to the area.
A&P BUILDING
MARKET OVERVIEW
ECONOMY▪ Indianapolis’ economy has diversified from manufacturing into a variety of other industries,
including a growing tech sector underpinned by Salesforce.com.
▪ The metro is one of the key health-sciences centers in the nation, anchored by several
pharmaceutical and life-sciences companies including Ely Lilly and Roche Diagnostics.
▪ The metro is accessible to a large portion of the nation in one day by ground or air, making
the region a burgeoning logistics and distribution hub.
▪ Annual GMP growth rate tops the national level, a trend that is set to persist next year.
SHARE OF 2017 TOTAL EMPLOYMENT
MAJOR AREA EMPLOYERS
Eli Lilly & Co.
Indiana University Health
Rolls-Royce Corp.
Community Health
Cummins
Kroger
IUPUI
FedEx
Roche Diagnostics
Finish Line* Forecast
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MANUFACTURING
9%GOVERNMENT
HEALTH SERVICES
EDUCATION AND
+OTHER SERVICES
4%
LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES
21%
AND UTILITIES
TRADE, TRANSPORTATION CONSTRUCTION
PROFESSIONAL AND
BUSINESS SERVICES
1%INFORMATION
15%
5%
12% 10% 7%
15%
A&P BUILDING
MARKET OVERVIEW
DEMOGRAPHICS
SPORTS
EDUCATION
ARTS & ENTERTAINMENT
▪ The metro is expected to add nearly 118,100 people through 2022, which will result
in the formation of nearly 52,000 households, generating demand for housing.
▪ A median home price below the national level has produced a homeownership rate
of 65 percent, which is slightly above the national rate of 64 percent.
▪ Roughly 31 percent of people age 25 and older hold bachelor’s degrees; among
those residents, 11 percent also have earned a graduate or professional degree.
Indianapolis offers residents many big-city amenities in an affordable, small-town
atmosphere. The city is home to several high-profile auto races, including the Indianapolis
500 and Brickyard 400. Races are hosted at the Indianapolis Motor Speedway and the
Lucas Oil Raceway at Indianapolis. The metro has two major league sports teams: the
Indianapolis Colts (NFL) and the Indiana Pacers (NBA). The area also has a vibrant cultural
and arts scene, with more than 200 art galleries and dealers, the Indianapolis Symphony
Orchestra and a variety museums, including the Eiteljorg Museum of American Indians and
Western Art. Additionally, the Children’s Museum of Indianapolis is one of the largest
children’s museums in the world.
QUALITY OF LIFE
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2017 Population by Age
0-4 YEARS
7%5-19 YEARS
21%20-24 YEARS
6%25-44 YEARS
28%45-64 YEARS
26%65+ YEARS
13%
* Forecast
Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s
Analytics; U.S. Census Bureau
A&P BUILDING
36.4
2017MEDIAN AGE:
U.S. Median:
37.8
$55,600
2017 MEDIAN HOUSEHOLD INCOME:
U.S. Median:
$56,300
2M
2017POPULATION:
Growth2017-2022*:
5.8%
779K
2017HOUSEHOLDS:
6.7%
Growth2017-2022*:
MARKET OVERVIEW
A&P BUILDING
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INDIANAPOLIS METRO AREA
Speculative Development Draws
Yield-Driven Investors to Southwestern Suburbs
Expanding workforce contributes to elevated completions. With lower industrial rents than the majority
of Upper Midwest metros, Indianapolis remains an attractive option for companies seeking space in a major
Midwestern city. The market’s status as a strong regional distribution hub, along with this year’s robust
household growth, makes the industrial sector enticing as businesses attempt to bring their product closer
to the region’s most populated centers. Favorable trends encourage developers to record another year of
heightened deliveries, half of which will be speculative space. Submarkets adjacent to Indianapolis
International Airport gain the most inventory as half of this year’s completion total is located in this area,
including the metro’s largest project slated for delivery. The 708,000-square-foot facility, which is part of
bulk distribution park AllPoints Midwest, provides access to air freight and rail service. The suburb of
Whitestown also registers notable construction activity, headlined by a 410,000-square-foot expansion at
Fishback Creek Business Park. As development remains intensified, the metro posts a vacancy uptick for
the second straight year while attempting to adjust to the influx of supply.
Assets close to urban core provide local buyers options. Favorable yields and near-cycle-high rents
draw investors searching for value-add investments to central Indiana. Class C warehouses near the city
center, particularly those located along Southeastern Avenue, garner interest from buyers seeking space in
the $1 million to $5 million price tranche. These properties can net cap rates in the low-8 percent realm and
offer investors renovation opportunities to become more competitive with upgraded space in neighboring
submarkets. Institutional investors look to deploy capital in newer assets near Indianapolis International
Airport where initial yields sit in the high-5 to low-6 percent span.
* Forecast
Sources: CoStar Group, Inc.; Real Capital Analytics
MARKET OVERVIEW
A&P BUILDING
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INDIANAPOLIS METRO AREA
2018 Market Forecast
Rising vacancy and tempered rent growth contribute to Indianapolis’ six-slot
dive.
Employers will generate 25,500 new positions this year, following last year’s
sum of 17,500 jobs.
Although the pace of development slows this year, Indianapolis has reported
the completion of at least 3.5 million square feet each year since 2013. In
2017, the metro delivered 6.3 million square feet.
This year vacancy will rise to 6.5 percent. Last year, vacancy ascended 140
basis points.
The average asking rent will increase in 2018 following a year of rent
depreciation. This year’s price climbs to $3.87 per square foot.
Investors will continue to focus capital into value-add opportunities located
near downtown and in inner-ring suburbs. Northern, outer-ring suburbs also
receive buyer interest as population growth and commercial development
intensify in these parts.
* Forecast
Sources: CoStar Group, Inc.; Real Capital Analytics
NIPI Rank
23, down 6 places
Employment
up 2.4%
Construction
4.1 million sq. ft.
Vacancy
up 40 bps
Rent
up 1.3%
Investment
PROPERTY NAME
MARKETING TEAM
A&P BUILDING
DEMOGRAPHICS
Source: © 2017 Experian
Created on April 2018
POPULATION 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Population 16,165 109,544 247,000
▪ 2017 Estimate
Total Population 17,191 112,778 253,021
▪ 2010 Census
Total Population 16,490 107,037 241,182
▪ 2000 Census
Total Population 20,043 120,978 269,594
▪ Daytime Population
2017 Estimate 19,856 184,316 389,425
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Households 5,415 46,516 102,444
▪ 2017 Estimate
Total Households 5,699 46,691 102,819
Average (Mean) Household Size 2.68 2.29 2.36
▪ 2010 Census
Total Households 5,575 44,078 98,077
▪ 2000 Census
Total Households 7,040 48,472 108,332
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
▪ 2017 Estimate
$200,000 or More 1.00% 1.65% 1.22%
$150,000 - $199,000 1.03% 1.97% 1.68%
$100,000 - $149,000 4.14% 5.11% 5.25%
$75,000 - $99,999 5.72% 7.40% 7.56%
$50,000 - $74,999 13.65% 14.78% 15.17%
$35,000 - $49,999 12.58% 14.12% 15.18%
$25,000 - $34,999 15.89% 12.95% 13.85%
$15,000 - $24,999 15.67% 15.46% 15.86%
Under $15,000 30.33% 26.57% 24.21%
Average Household Income $40,248 $46,757 $45,691
Median Household Income $27,408 $30,943 $31,917
Per Capita Income $13,749 $19,900 $18,970
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
▪ Population By Age
2017 Estimate Total Population 17,191 112,778 253,021
Under 20 25.80% 23.79% 25.89%
20 to 34 Years 26.90% 27.56% 24.99%
35 to 39 Years 7.82% 7.16% 6.50%
40 to 49 Years 13.46% 13.02% 12.47%
50 to 64 Years 18.08% 18.80% 18.93%
Age 65+ 7.96% 9.66% 11.24%
Median Age 33.40 34.14 34.39
▪ Population 25+ by Education Level
2017 Estimate Population Age 25+ 11,417 76,656 167,162
Elementary (0-8) 6.55% 4.57% 4.71%
Some High School (9-11) 23.30% 18.09% 17.11%
High School Graduate (12) 30.89% 31.59% 33.94%
Some College (13-15) 14.76% 17.73% 19.01%
Associate Degree Only 5.09% 5.71% 6.06%
Bachelors Degree Only 10.82% 12.44% 11.27%
Graduate Degree 6.63% 8.37% 6.52%
▪ Time Travel to Work
Average Travel Time in Minutes 24 24 24
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Income
In 2017, the median household income for your selected geography is
$31,917, compare this to the US average which is currently $56,286.
The median household income for your area has changed by 7.86%
since 2000. It is estimated that the median household income in your
area will be $36,188 five years from now, which represents a change
of 13.38% from the current year.
The current year per capita income in your area is $18,970, compare
this to the US average, which is $30,982. The current year average
household income in your area is $45,691, compare this to the US
average which is $81,217.
Population
In 2017, the population in your selected geography is 253,021. The
population has changed by -6.15% since 2000. It is estimated that
the population in your area will be 247,000.00 five years from now,
which represents a change of -2.38% from the current year. The
current population is 49.67% male and 50.33% female. The median
age of the population in your area is 34.39, compare this to the US
average which is 37.83. The population density in your area is
3,216.95 people per square mile.
Households
There are currently 102,819 households in your selected geography.
The number of households has changed by -5.09% since 2000. It is
estimated that the number of households in your area will be 102,444
five years from now, which represents a change of -0.36% from the
current year. The average household size in your area is 2.36 persons.
Employment
In 2017, there are 257,067 employees in your selected area, this is
also known as the daytime population. The 2000 Census revealed
that 49.39% of employees are employed in white-collar occupations
in this geography, and 50.58% are employed in blue-collar
occupations. In 2017, unemployment in this area is 7.33%. In 2000,
the average time traveled to work was 24.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
55.03% White, 33.66% Black, 0.04% Native American and 1.54%
Asian/Pacific Islander. Compare these to US averages which are:
70.42% White, 12.85% Black, 0.19% Native American and 5.53%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 10.09% of the current year
population in your selected area. Compare this to the US average of
17.88%.
PROPERTY NAME
MARKETING TEAM
A&P BUILDING
Housing
The median housing value in your area was $81,947 in 2017, compare
this to the US average of $193,953. In 2000, there were 57,130 owner
occupied housing units in your area and there were 51,202 renter
occupied housing units in your area. The median rent at the time was
$416.
Source: © 2017 Experian
DEMOGRAPHICS
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A&P BUILDING
DEMOGRAPHICS
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www.MarcusMillichap.com
Joseph DiSalvo
First Vice President Investments
Director - National Office and Industrial
Properties Group
Indianapolis Office
Tel: (317) 218-5334
Fax: (317) 218-5310
License: IN RB14051407
P R E S E N T E D B Y
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