single tenant office investment · 2019-04-10 · 2727 east imperial highway | 3 property summary...

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Holliday GP Corp. (“HFF”), California Department of Real Estate License #01385740. SINGLE TENANT OFFICE INVESTMENT

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Page 1: SINGLE TENANT OFFICE INVESTMENT · 2019-04-10 · 2727 east imperial highway | 3 property summary address 2727 east imperial hwy brea, ca building size ±104,662 sf year built/renovated

Holliday GP Corp. (“HFF”), California Department of Real Estate License #01385740.

SINGLE TENANT OFFICE INVESTMENT

Page 2: SINGLE TENANT OFFICE INVESTMENT · 2019-04-10 · 2727 east imperial highway | 3 property summary address 2727 east imperial hwy brea, ca building size ±104,662 sf year built/renovated

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OFFERING SUMMARYHFF is pleased to present the opportunity to acquire 2727 Imperial Hwy. (“The Property” or “The Project”), ±104,662 SF office building located in Brea, CA. The Property is 100% occupied by Collins Aerospace, a subsidiary of United Technologies Corporation (S&P: BBB+), a multinational conglomerate with a market capitalization of over $100 billion. The single tenant net lease asset features a highly specialized buildout for Collins Aerospace, with significant tenant investment since the tenant’s commencement in June 2012. With 3.5 years of remaining lease term (with 3% annual rent increases), the Property offers a tremendous value creation opportunity for potential investors. Located on Imperial Hwy. in Brea, 2727 will continue to benefit from the growth of one of the top performing markets in all of Orange County.

Page 3: SINGLE TENANT OFFICE INVESTMENT · 2019-04-10 · 2727 east imperial highway | 3 property summary address 2727 east imperial hwy brea, ca building size ±104,662 sf year built/renovated

2727 EAST IMPERIAL HIGHWAY | 3

PROPERTY SUMMARY

ADDRESS2727 East Imperial Hwy Brea, CA

BUILDING SIZE ±104,662 SF

YEAR BUILT/RENOVATED 1984 / 2000

STORIES 2

OCCUPANCY 100%

SITE AREA 5.5 AC

PARKING RATIO 3.6/1,000 SF

TENANT UTC Aerospace Systems

LEASE TYPE NNN*

CREDIT RATING S&P: BBB+

LEASE EXPIRATION 6/10/2022

MONTHLY RENT/SF $1.20

ANNUAL RENTAL REVENUE $1,548,455

CONTRACTUAL RENT INCREASES 3.00% Annually

*LL is responsible for capital repair and replacement of structural foundation and roof.

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QUALITY TENANCYCollins Aerospace is one of the world’s largest suppliers of technologically advanced aerospace and defense products. They design, manufacture, and service systems that provide integrated solutions for commercial, regional, business, and military aircraft. Additionally, Collins Aerospace is a major supplier to international space programs.

Collins Aerospace is part of United Technologies Corporation (NYSE:UTX; S&P: BBB+), a diversified company that provides a broad range of high-technology products and services to the global aerospace and building systems industries. United Technologies is an S&P 100 Component, with approximate annual revenue of $66.5 billion. Collins Aerospace employs approximately 70,000 people globally with approximate annual sales of $23 billion.

SIGNIFICANT TENANT INVESTMENT• Mission Critical location for UTC for Goodrich brand equipment• Security clearance needed to access building• Over 200 employees and location purposely sought out for location and amenities• Significant tenant improvements invested into asset by tenant for specific use• Highly built out testing/service space used for the assembly, testing, and repair/

recertification of aircraft equipment

VALUE CREATION With less than 4 years remaining on the current lease, 2727 Imperial Hwy. offers investors the opportunity to navigate the future of The Project. This impending lease expiration offers attractive future upside and residual value in both a tenant renewal or releasing scenario.

With current in-place rents 58.0% below market, there is a tremendous mark-to-market opportunity for an investor to create substantial value in the short term.

INVESTMENT HIGHLIGHTS

Page 5: SINGLE TENANT OFFICE INVESTMENT · 2019-04-10 · 2727 east imperial highway | 3 property summary address 2727 east imperial hwy brea, ca building size ±104,662 sf year built/renovated

2727 EAST IMPERIAL HIGHWAY | 5

VALENCIA AVENUE

BREA UNION PLAZA

BIRC

H ST

REET

VILLAGE AT LA FLORESTA

BIRCH HILLS GOLF COURSE

BREA MALL

IMPERIAL EAST SHOPPING CENTER

IMPERIAL HWY (±42,500 VPD)

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Page 7: SINGLE TENANT OFFICE INVESTMENT · 2019-04-10 · 2727 east imperial highway | 3 property summary address 2727 east imperial hwy brea, ca building size ±104,662 sf year built/renovated

2727 EAST IMPERIAL HIGHWAY | 7

STRONG MARKET FUNDAMENTALSBrea stands as one of the top performing markets in all of Orange County, with terrific recent market growth and rental rate appreciation.

Brea benefits from its direct accessibility to major cities while simultaneously enjoying its quaint, suburban community. Home to over 5,000 businesses, Brea features one of the largest concentrations of corporate tenants in Orange County. Despite the recent surge in rental rates of 13.4% over the last 3 years, rates are still more than 8% below prior cycle peak levels.

RICH AMENITIES & IMPRESSIVE DEMOGRAPHICSSituated along Imperial Highway, The Property lies adjacent to a plethora of retail options for tenants and draws from an impressive population base. Average household income of $128,000 within 3 miles is well above the state and country averages, and an average age of 40 indicates an area that is young and poised for more growth.

• Next door (0.2 miles away) is Imperial East Shopping Center, featuring anchor retailers such as Walmart, Nordstrom Rack, Trader Joe’s, and Home Depot, with quick-serve lunch options including Nekter, Coffee Bean, and Olive Pit Grill.

• Within 0.5 miles lies the Village at La Floresta, featuring Mendocino Farms, Whole Foods, Urban Plates, and Starbucks.• Just 1.3 miles west of The Property is Brea Plaza Shopping Center, a 15.5 acre hub of retailers featuring such as Total Wine & More, Brea Plaza 5

Cinemas, and Mother’s Market.• 1.3 miles away lies Brea Mall — one of the top grossing malls in county with over 175 shops and 1.3 million square feet. Tenants include Nordstrom,

Macy’s, JCPenney and Apple Store.

INVESTMENT HIGHLIGHTS

178,000 SF NET ABSORPTION IN THE LAST 12 MONTHS

5.0% VACANCY AT AN ALL-TIME LOW

13.4%RENTAL RATE INCREASE(2 OVER THE LAST 3 YEARS)

Page 8: SINGLE TENANT OFFICE INVESTMENT · 2019-04-10 · 2727 east imperial highway | 3 property summary address 2727 east imperial hwy brea, ca building size ±104,662 sf year built/renovated

©2019 Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.

HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

JOHN CHUNSenior [email protected] Lic# 01904323

hfflp.com

ANDREW HARPERManaging [email protected] Lic# 01319640

NICK [email protected] Lic# 01831851

MARK [email protected] Lic# 02026853

FINANCING ADVISOR:INVESTMENT SALES ADVISORS: FOR UNDERWRITING

MATT [email protected] Lic# 02012875

TANNER [email protected] Lic# 02060611