offering memorandum - loopnet...the region a burgeoning logistics and distribution hub. annual gmp...

8802 MADISON AVEIndianapolis, IN 46227

Offering Memorandum

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

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and

should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified

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 a thorough due

diligence investigation. Marcus & Millichap 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 performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or

asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or 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 Marketing Brochure has been obtained from sources we believe to be

reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these

matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to

verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & 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.

8802 MADISON AVE

Indianapolis, IN

ACT ID Z0260312

2

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

[email protected]

License: IN RB14051407

Forest Bender

Senior Associate

Member - National Office and Industrial

Properties Group

Indianapolis Office

Tel: (317) 218-5346

Fax: (317) 218-5310

[email protected]


3

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01

Property Overview

Regional Map

Local Map

Aerial Photo

FINANCIAL ANALYSIS 02

Tenant Summary

Operating Statement

Proposal Price

MARKET OVERVIEW 03

Market Analysis

Demographic Analysis

8802 MADISON AVE

8802 MADISON AVE

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INVESTMENT

OVERVIEW

8802 MADISON AVE

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OFFERING SUMMARY

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EXECUTIVE SUMMARY

VITAL DATA

CURRENT PRO FORMA

Price $1,140,000 CAP Rate 8.87% 12.03%

Down Payment 25% / $285,000 Net Operating Income $101,170 $137,163

Loan Amount $855,000 Net Cash Flow After Debt Service 11.14% / $31,747 23.77% / $67,740

Loan Type Financed Total Return 19.07% / $54,341 33.56% / $95,656

Interest Rate / Amortization 5.30% / 20 Years

Rentable SF 11,514

Price/SF $99.01

Year Built 1988

Lot Size 1.38 acre(s)

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2017 Estimate Pop 15,712 81,356 197,044

2010 Census Pop 15,229 78,024 186,804

2017 Estimate HH 6,880 34,265 78,025

2010 Census HH 6,658 32,773 74,006

Median HH Income $36,326 $49,226 $55,376

Per Capita Income $20,384 $26,559 $28,107

Average HH Income $46,043 $62,745 $70,742

THE OFFERING

Price $1,140,000

Property Address 8802 Madison Ave, Indianapolis, IN

Assessors Parcel Number

5031953

Zoning C-3

SITE DESCRIPTION

Number of Floors One (1)

Year Built/Renovated 1988

Rentable Square Feet 11,514

Ownership Fee Simple

Lot Size 1.38 Acres

Parking 55 Free Surface Spaces

Parking Ratio 4.43/1,000 SF

Topography Flat

Highway Access US-31

CONSTRUCTION

Foundation Concrete Slab

Exterior Masonry

Parking Surface Asphalt

Roof Pitched Shingle

PROPERTY OVERVIEW

8802 MADISON AVE

PROPERTY OVERVIEW

8802 South Madison Avenue is an 11,514 square foot, multi-tenant office building located on the Southside of Indianapolis. The property which was built in 1988, sits just

north of the Greenwood Park Mall, along Madison Avenue and County Line Road. Perpendicular to this site is US -31 South, one of the largest North/South thoroughfares on

the Southside. Madison Avenue see’s traffic counts in excess of 21,000 vehicles per day and County Line Road sees nearly 30,000 VPD. 8802 S Madison Avenue is currently

81% occupied and is the home to a variety of medical and professional office users. There is roughly 2,921 square feet of vacancy in the property, providing a good amount

of upside to new ownership.

The subject property is a one story, brick construction office building that requires minimal landlord maintenance. A new roof was put on the property in 2014 and four of the

HVAC units have recently been replaced as well. The three miles radius surrounding this property features an office vacancy rate of just 4.8% and average gross rents of $20

per square foot, per a CoStar report. With a low submarket vacancy rate and no new construction coming online, office vacancy rates will continue to shrink and rents will

continue to rise in this area.

The Southside of Indianapolis is quickly becoming one of the preferred locations to lease office space in the city due to its respectively low rental rates and its proximity to the

major highway systems. The Southside also has one of the fastest growing populations in the Indianapolis MSA, likely due to the low cost of living, and affordable housing

options. With a growing population and a booming local economy, this property should provide an investor with stable cash flow for years to come.

PROPERTY OVERVIEW

▪ Convenient Location with easy Highway Access to US 31, Interstate 465, and I-65

▪ Just 20 Minutes to Downtown Indianapolis

▪ 19% Vacancy Upside for New Ownership

▪ Located just North of the Greenwood Park Mall, One of the Largest Malls in the

State

▪ 11,500 Square Foot Medical/ Professional Office Building

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PROPERTY PHOTO

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TShirley

Rectangle

PROPERTY PHOTO

8802 MADISON AVE

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PROPERTY PHOTO

8802 MADISON AVE

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AERIAL PHOTO

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11

LOCAL MAP

8802 MADISON AVE

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REGIONAL MAP

8802 MADISON AVE

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8802 MADISON AVE

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FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS

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OPERATING STATEMENT

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.

8802 MADISON AVE

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%

8802 MADISON AVE

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

8802 MADISON AVE

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

8802 MADISON AVE

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INDIANAPOLIS METRO AREA

Inflow of New Companies, Strong Employment

Growth Forge Demand for Downtown Space

Restrained construction supports vacancy dip. Amid a rapidly expanding tech sector, Indianapolis

registers considerable employment growth in 2018 compared with the rest of the nation. IT consulting, cloud

computing and biotechnology companies are a few of the specialties setting up shop in Indianapolis,

particularly downtown. Vacancy in the central business district slides below the 9 percent mark this year,

adding to the 250-basis-point drop since 2012. In contrast, suburban office vacancy posted a 50-basis-

point decrease over the last five years. While office completions have been limited, the majority of space

additions have occurred outside the city center, a trend that persists through 2018 and keeps suburban

office vacancy relatively in line with last year’s measure of 13 percent. In 2018, Indianapolis will recognize a

sharp drop in construction as the total is roughly one-third of last year’s sum. Carmel and Fishers receive

three-fourths of this development in the next 12 months, with the largest project being a 125,000-square-

foot building near the U.S. 31 and Keystone Parkway intersection.

Northern submarkets provide shoppers with high-yield options. As demand for office space continues

to strengthen, the metro’s rent growth outpaces the national rate in 2018. Investors flock to Indianapolis

seeking properties with potentially high revenue growth. Local buyers, as well as a handful from the East

Coast, place emphasis on properties in the Meridian Street corridor and east through Uptown Indianapolis.

Here, first-year yields average in the low-8 to low-10 percent range. Institutional investors remain focused

on Class A assets in northern Marion County, near Meridian Hills and into Hamilton County where a large

amount of commercial development is taking place. Buyers of this class also scour downtown Indianapolis

for properties approaching the $15 million range. These spaces offer initial returns around the 7 percent

mark.

* Forecast

Sources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.

MARKET OVERVIEW

8802 MADISON AVE

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INDIANAPOLIS METRO AREA

2018 Market Forecast

Stout employment growth propels Indianapolis up two positions in the

Index.

Employment growth in Indianapolis exceeds the national rate of 1.2

percent. Last year, the metro’s workforce expanded by 1.7 percent.

Indianapolis posts a notable reduction in deliveries in 2018 compared with

last year’s total of 680,000 square feet. Completions are on track to reach

the lowest level since 2011.

Robust demand in the urban core drops the metro rate to 10.4 percent

following 130-basis-point slide last year.

The pace of growth eases in 2018 compared with 2017’s clip of 5.4 percent.

This year, the average asking rent inches past the $20 mark.

Class B/C space will continue to be the focal point of many investors

coming to Indianapolis in 2018. Older office space near uptown provides

buyers with many potential redevelopment options.

* Forecast

Sources: Marcus & Millichap Research Services; CoStar Group, Inc.;

Real Capital Analytics

NOPI Rank

34, up 2 places

Employment

up 2.7%

Construction

230,000 sq. ft.

Vacancy

down 60 bps

Rent

up 5.1%

Investment

PROPERTY NAME

MARKETING TEAM

8802 MADISON AVE

DEMOGRAPHICS

Source: © 2017 Experian

Created on July 2018

POPULATION 1 Miles 3 Miles 5 Miles

▪ 2022 Projection

Total Population 16,457 83,490 213,012

▪ 2017 Estimate


▪ 2010 Census


▪ 2000 Census


▪ Current Daytime Population

2017 Estimate 13,841 79,813 151,753

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

▪ 2022 Projection

Total Households 7,273 35,627 85,220

▪ 2017 Estimate


Average (Mean) Household Size 2.29 2.33 2.50

▪ 2010 Census


▪ 2000 Census


HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

▪ 2017 Estimate

$200,000 or More 0.60% 1.75% 2.56%

$150,000 - $199,999 1.19% 2.85% 3.49%

$100,000 - $149,000 5.73% 11.67% 13.91%

$75,000 - $99,999 7.66% 12.03% 14.29%

$50,000 - $74,999 18.69% 20.91% 20.82%

$35,000 - $49,999 17.54% 16.09% 15.16%

$25,000 - $34,999 14.98% 12.12% 10.97%

$15,000 - $24,999 17.74% 11.58% 9.74%

Under $15,000 14.91% 12.58% 11.70%

Average Household Income $46,043 $62,745 $70,742

Median Household Income $36,326 $49,226 $55,376

Per Capita Income $20,384 $26,559 $28,107

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

▪ Population By Age

2017 Estimate Total Population 15,712 81,356 197,044

Under 20 27.58% 24.94% 27.57%

20 to 34 Years 27.50% 23.05% 22.03%

35 to 39 Years 6.57% 6.28% 6.70%

40 to 49 Years 10.28% 11.59% 12.33%

50 to 64 Years 14.28% 18.54% 18.17%

Age 65+ 13.80% 15.60% 13.20%

Median Age 31.88 36.53 35.28

▪ Population 25+ by Education Level

2017 Estimate Population Age 25+ 10,057 55,334 129,621

Elementary (0-8) 4.72% 2.99% 2.69%

Some High School (9-11) 9.36% 6.75% 6.50%

High School Graduate (12) 35.48% 31.77% 31.11%

Some College (13-15) 22.53% 21.46% 21.26%

Associate Degree Only 7.62% 7.34% 7.84%

Bachelors Degree Only 12.43% 19.26% 20.70%

Graduate Degree 5.85% 8.70% 8.91%

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PROPERTY NAME

MARKETING TEAM

8802 MADISON AVE

DEMOGRAPHICS


Created on July 2018

POPULATION BY

TRANSPORTATION TO WORK1 Miles 3 Miles 5 Miles

▪ 2017 Estimate Total Population

Bicycle 0.26% 0.20% 0.16%

Bus or Trolley Bus 0.64% 0.51% 0.35%

Carpooled 10.84% 8.57% 8.11%

Drove Alone 83.44% 86.12% 87.15%

Ferryboat 0.00% 0.00% 0.00%

Motorcycle 0.25% 0.16% 0.12%

Other Means 0.01% 0.53% 0.50%

Railroad 0.00% 0.00% 0.00%

Streetcar or Trolley Car 0.00% 0.00% 0.01%

Subway or Elevated 0.00% 0.00% 0.00%

Taxicab 0.00% 0.00% 0.02%

Walked 1.85% 0.90% 0.80%

Worked at Home 2.70% 3.01% 2.78%

POPULATION BY TRAVEL TIME TO

WORK1 Miles 3 Miles 5 Miles

▪ 2017 Estimate Total Population

Under 15 Minutes 25.95% 23.49% 21.27%

15 - 29 Minutes 39.79% 39.68% 42.24%

30 - 59 Minutes 27.06% 27.17% 26.74%

60 - 89 Minutes 3.79% 2.91% 2.85%

90 or More Minutes 0.89% 1.30% 1.11%

Worked at Home 2.70% 3.01% 2.78%

Average Travel Time in Minutes 25 26 26

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Income

In 2017, the median household income for your selected geography is

$55,376, compare this to the US average which is currently $56,286.

The median household income for your area has changed by 12.02%

since 2000. It is estimated that the median household income in your

area will be $62,361 five years from now, which represents a change

of 12.61% from the current year.

The current year per capita income in your area is $28,107, compare

this to the US average, which is $30,982. The current year average

household income in your area is $70,742, compare this to the US

average which is $81,217.

Population

In 2017, the population in your selected geography is 197,044. The

population has changed by 31.86% since 2000. It is estimated that

the population in your area will be 213,012.00 five years from now,

which represents a change of 8.10% from the current year. The

current population is 48.55% male and 51.45% female. The median

age of the population in your area is 35.28, compare this to the US

average which is 37.83. The population density in your area is

2,505.33 people per square mile.

Households

There are currently 78,025 households in your selected geography.

The number of households has changed by 30.16% since 2000. It is

estimated that the number of households in your area will be 85,220

five years from now, which represents a change of 9.22% from the

current year. The average household size in your area is 2.50 persons.

Employment

In 2017, there are 65,215 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

65.04% of employees are employed in white-collar occupations in

this geography, and 35.04% are employed in blue-collar occupations.

In 2017, unemployment in this area is 3.14%. In 2000, the average

time traveled to work was 26.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

85.34% White, 3.24% Black, 0.04% Native American and 5.78%

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 5.89% of the current year

population in your selected area. Compare this to the US average of

17.88%.

PROPERTY NAME

MARKETING TEAM

8802 MADISON AVE

Housing

The median housing value in your area was $140,585 in 2017,

compare this to the US average of $193,953. In 2000, there were

40,489 owner occupied housing units in your area and there were

19,457 renter occupied housing units in your area. The median rent at

the time was $519.


DEMOGRAPHICS

25

8

8802 MADISON AVE

DEMOGRAPHICS

26

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

[email protected]


Forest Bender

Senior Associate

Member - National Office and Industrial

Properties Group

Indianapolis Office

Tel: (317) 218-5346

Fax: (317) 218-5310

[email protected]


P R E S E N T E D B Y

27

offering memorandum - loopnet...the region a burgeoning logistics and distribution hub. annual gmp...

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