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FedEx Ground Distribution FacilityTallahassee, Florida
OFFERING MEMORANDUM
Net Lease Investments
Andrew Bogardus+1 415 677 0421
CA LIC #00913825
Douglas Longyear +1 415 677 0458
CA LIC #00829911
Christina Campanella+1 415 677 0456
NY LIC #10401243503
Paul Carr+1 813 498 6835
FL LIC #SL3123881
Christopher Sheldon+1 415 677 0441
CA LIC #01806345
Net Lease Investments
Disclaimer
The information contained in this marketing brochure (“Materials”) is proprietary
and confi dential. It is intended to be reviewed only by the person or entity receiving
the Materials from DTZ (“Agent”). The Materials are intended to be used for
the sole purpose of preliminary evaluation of the subject property/properties
(“Property”) for potential purchase.
The Materials have been prepared to provide unverifi ed summary fi nancial,
property, and market information to a prospective purchaser to enable it to
establish a preliminary level of interest in potential purchase of the Property. The
Materials are not to be considered fact. The information contained in the Materials
is not a substitute for thorough investigation of the fi nancial, physical, and market
conditions relating to the Property.
The information contained in the Materials has been obtained by Agent from
sources believed to be reliable; however, no representation or warranty is made
regarding the accuracy or completeness of the Materials. Agent makes no
representation or warranty regarding the Property, including but not limited to
income, expenses, or fi nancial performance (past, present, or future); size, square
footage, condition, or quality of the land and improvements; presence or absence
of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws
and regulations (local, state, and federal); or, fi nancial condition or business
prospects of any tenant (tenants’ intentions regarding continued occupancy,
payment of rent, etc). A prospective purchaser must independently investigate
and verify all of the information set forth in the Materials. A prospective purchaser
is solely responsible for any and all costs and expenses incurred in reviewing the
Materials and/or investigating and evaluating the Property.
By receiving the Materials you are agreeing to the Confi dentiality and Disclaimer
set forth herein.
FedEx Ground i
Net Lease Investments
SUMMIT EAST SUMMIT EAST TECHNOLOGY TECHNOLOGY
PARKPARK
SUM
MIT
LA
KE D
RSU
MM
IT L
AKE
DR
APE
X DR
APE
X DR
10
10
SUMMIT LAKE DRSUMMIT LAKE DR
90
Net Lease Investments
The Off ering
• A new concrete tilt-up 124,600± sq. ft. distribution building located in Tallahassee, Florida and
leased to FedEx Ground Package System, Inc.
• Price: $15,289,400 – Cap Rate: 6.20%
Lease / Tenant
• New 10 year lease
• FedEx Ground is FedEx Corporation’s most profi table division
• FedEx Corporation’s S&P bond rating is “BBB”
• FedEx Corporation’s bonds trade at yields that are lower than are available for some other
companies’ AA and A rated bonds
Real Estate
• Strategic location at the juncture of Interstate 10 and U.S. Highway 90
• The property is situated in the up-scale Summit East Technology Offi ce Park
• Based upon previous build outs, it is estimated that FedEx will have spent over $8 million on its
internal package handling conveyor system
Area Strengths
• Tallahassee is the State Capital of Florida
• Florida State University and Florida A&M University are located in Tallahassee
• Tallahassee is the home for the National High Magnetic Field Laboratory
Investment Off ering & Highlights
SKF USA, Inc. 2FedEx Ground iFedEx Ground iii
Disclaimer i
Aerial ii
Investment Off ering & Highlights iii
Investment Overview 1
Possible Financing 2
FedEx Ground 3
Site Plan 4 Interior 5
Location / Aerial / Area Maps 7
Summit East Technology Park 11
Tallahassee 12
Demographics 14
FedEx Ground
Distribution Facility
Table of Contents
Andrew Bogardus+1 415 677 0421
CA LIC #00913825
Douglas Longyear +1 415 677 0458
CA LIC #00829911
Christina Campanella+1 415 677 0456
NY LIC #10401243503
Paul Carr+1 813 498 6835
FL LIC #SL3123881
Christopher Sheldon+1 415 677 0441
CA LIC #01806345
Net Lease Investments
Location 2058 Summit Lake Drive, Tallahassee, Florida
Lot Size Approximately 16.00 acres – 696,960± square feet
Improvements To be completed April 2015, a new 124,600± square feet FEDEX GROUND
distribution building. The construction type is steel frame with a metal
standing seam roof and tilt-up concrete exterior. The building has multiple
dock-high and van drive-in truck doors. The building is fully sprinklered.
Lease Leased to FEDEX GROUND PACKAGE SYSTEMS, INC., for 10 years from
May 1, 2015 until April 30, 2025 at the annual net rent of $947,943. FedEx
Ground is a subsidiary of FEDEX CORPORATION (NYSE: FDX), which does
not guarantee the lease. The tenant is responsible for all property real estate
taxes, property insurance, tenant’s liability insurance, and maintenance of
the yard, parking, drive and hard surfaced areas. The landlord is responsible
for maintenance of the structural portions of the building including the
foundation, roof, exterior walls and fl oor slabs. There are two fi ve-year
renewal options; the fi rst with a 10% rental increase and the second with a
5% rental increase.
Annual Rent
Price: $15,289,400 – 6.20% Cap Rate
Price Per Square Foot $125
Investment Years Annual Rent Return
1 – 10 $ 947,943 6.20%
11 – 15 (Option 1) $1,042,737 6.82%
16 – 20 (Option 2) $1,094,874 7.16%
Investment Overview
FedEx Ground 1
Net Lease Investments
Possible Financing
10 Year Loan - 50% LTVLOAN TERMS CAPITALIZATION CASH FLOW Amortization (Yrs) 30 Price $15,289,400 Rent $947,943
LTV 50% Loan <7,644,700> Debt Service <432,691>
Interest 3.90% Equity $7,644,700 Cash Flow $515,252
Constant 5.66%
Cash on Cash 6.74%
10 Year Loan - 60% LTVLOAN TERMS CAPITALIZATION CASH FLOW Amortization (Yrs) 25 Price $15,289,400 Rent $947,943
LTV 60% Loan <9,173,640> Debt Service <581,062>
Interest 4.00% Equity $6,115,760 Cash Flow $366,881
Constant 6.33%
Cash on Cash 6.00%
10 Year Loan - 75% LTVLOAN TERMS CAPITALIZATION CASH FLOW Amortization (Yrs) 30 Price $15,289,400 Rent $947,943
LTV 75% Loan <11,467,050> Debt Service <693,140>
Interest 4.45% Equity $3,822,350 Cash Flow $254,803
Constant 6.04%
Cash on Cash 6.67%
FedEx Ground 2
Net Lease Investments
FedEx Ground
• FedEx Ground and its subsidiary FedEx SmartPost shipped an average of
6,774,000 packages per day in fi scal year 2014.
FEDEX GROUND PACKAGE SYSTEM, INC., the Property’s tenant, is one of
North America’s two largest providers of business-to-business and business-to-
consumer ground small-package delivery service and FedEx Corporation’s second-
largest business segment. FedEx Ground is FedEx Corporation’s most profi table
division. FedEx Ground has a network of more than 500 distribution hubs and local
pickup-and-delivery terminals located throughout the United States and Canada.
The FedEx 2014 annual report (May 31, 2014 yearend) indicates that the FedEx
Ground segment had revenues of $11.617 billion, which was 9.8% above the 2013
level, and operating income of $1.955 billion, which refl ected a 9.3% year over year
increase.
FEDEX CORPORATION (NYSE: FDX), the tenant’s parent, provides customers
and businesses worldwide with the broadest portfolio of transportation, logistics
and e-commerce services. FedEx Corporation does not guarantee the tenant’s
lease obligations.
For the fi scal year ended May 31, 2014, FedEx reported record revenue of $45.567
billion, net income of $2.097 billion and total stockholder’s equity of $15.277
billion.
As of this off ering’s publication, FedEx Corporation had an investment grade S&P
bond rating of “BBB.”
Website: www.fedex.com
FedEx Ground 3
Net Lease Investments
SUMMIT LAKE DRIV
E
INTERSTATE 10
AD
MIN
OFFIC
E
ACCESS R
OA
D
±124,600 SF
DETENTION
POND
HERITAGE
OAK
DECORATIVE
SECURITY FENCE
SOUND WALL
Site Plan
FedEx Ground 4
Net Lease Investments
LEGEND
= PACKAGE HANDLING SYSTEM
= DELIVERY VAN
±124,600 SF
Floor Plan
FedEx Ground pays for the package sorting and handling conveyor system.
Net Lease Investments
95
95
10
10
10
75
75
75
4
Panama City
St. Petersburg
Tampa
Orlando
JacksonvilleTallahassee
Location
FedEx Ground 7
Net Lease Investments
38
379
27
90
90
61
20
2020
63 61
261263
Tallahassee
TallahasseeRegional Airport
State
Capitol
Location
FedEx Ground 8
Net Lease Investments
FedEx Ground 9
10
10
90
90
DOWNTOWN TALLAHASSEEDOWNTOWN TALLAHASSEE
SUMMIT EAST SUMMIT EAST TECHNOLOGY TECHNOLOGY
PARKPARK
SUMMIT LAKE DRSUMMIT LAKE DR
APEX DRAPEX DR
SUM
MIT
LAKE D
R
SUM
MIT
LAKE D
R
SUMMIT
LA
KE D
R
SUMMIT
LA
KE D
R
Net Lease Investments
90
90
10
10
8
8
Mahan Drive
Mahan Drive
Su
mm
it L
ake
Dr
Su
mm
it L
ake
Dr
Summit East
Technology Park
Ap
ex
Dr
Location
The subject property is located on 16± acres of land in the Summit East
Technology Park, a 117-acre commercial development, in the eastern
quadrant of Interstate 10 and U.S. State Highway 90.
TransportationTallahassee is located along Interstate 10, which is the southernmost
interstate in the U.S. I-10 connects Jacksonville, FL with Los Angeles, CA
and passes through Pensacola, FL, Mobile, AL, New Orleans, LA, Baton
Rouge, LA, Beaumont, TX, Houston, TX, San Antonio, TX and Phoenix
AZ. I-10 bisects Interstate 75, 120 miles east of Tallahassee and connects
with Interstate 95 in Jacksonville, 165 miles east of Tallahassee.
FedEx Ground 10
Net Lease Investments
Summit East Technology Park
Summit East Technology ParkSummit East Technology Park, a 117-acre commercial development, is a
technology and amenity driven offi ce park. In addition to cutting edge
technology, Summit East off ers amenities such as an onsite hotel as well
as green space, a nature trail, and a beautiful lake.
Located directly off I-10 at Mahan Drive, Summit East off ers immediate
access to I-10 and is 8½ miles to downtown and only 5 minutes the I-10 /
Thomasville Road interchange.
Companies at Summit East include First American Title, IBM, Cisco,
URS, ACS-Xerox, and Auto-Owners Insurance.
FedEx Ground 11Northview Building
Net Lease Investments
Tallahassee
FedEx Ground 7
Tallahassee is the State Capital of Florida and is the 128th largest city in the United States.
Tallahassee has a population of 186,971. The population for the Tallahassee metropolitan area
is 375,371.
Tallahassee is the home for two large universities - Florida State (40,000 students) and
Florida A&M University (11,000).
Tallahassee is a center for trade and agriculture in the Florida Panhandle and is served by
Tallahassee Regional Airport. With one of the fastest growing manufacturing and high tech
economies in Florida, its major private employers include a General Dynamics Land Systems
manufacturing facility (military and combat applications), the Municipal Code Corporation,
which specializes in the publication of municipal and county legal references; and a number of
national law fi rms, lobbying organizations, trade associations and professional associations,
including the Florida Bar and the Florida Chamber of Commerce. It is recognized as a regional
center for scientifi c research, and is home to the National High Magnetic Field Laboratory, the
largest and highest-powered magnet research laboratory in the world.
Florida State University (FSU)Florida State University is one of the nation’s elite research universities as determined by
the Carnegie Foundation’s highest designation, Doctoral/Research University Extensive.
Florida State University’s 16 colleges off er more than 275 undergraduate, graduate, doctoral,
professional and specialist degree programs, including medicine and law, covering a broad
array of disciplines critical to society today. Each year the University awards over 2,000
graduate and professional degrees.
Florida State is home to Florida’s only National Laboratory – the National High Magnetic Field
Laboratory and is the birthplace of the commercially viable anti-cancer drug Taxol. Florida
State University also operates The John & Mable Ringling Museum of Art, the State Art
Museum of Florida and one of the largest museum/university complexes in the nation. Florida
State University is accredited by the Southern Association of Colleges and Schools as a Level
VI public institution.
Florida State University is home to nationally ranked programs in many academic areas,
including the sciences, engineering, social policy, fi lm, music, theater, dance, visual art,
business, political science, psychology, social work, medicine, and law. The university is also
known for its undergraduate study abroad options: according to Uni in the USA, “the large
numbers of students that study abroad nicely compliment the students that study here from
abroad.”
FedEx Ground 12Doak Campbell Stadium
Net Lease Investments
Tallahassee (Continued)
National High Magnetic Field Laboratory at FSUThe National High Magnetic Field Laboratory (NHMFL) is the world’s highest powered
magnet laboratory, located in Tallahassee, Florida. It is property of Florida State University, with
branches in University of Florida and at Los Alamos National Laboratory. NHMFL develops
and researches magnetic fi elds for research in physics, biology, bioengineering, chemistry,
geochemistry, biochemistry. The largest magnet laboratory in the world, it is the only facility
of its kind in the United States, among nine worldwide. The lab is supported by the National
Science Foundation and the state of Florida, and works in collaboration with private industry.
Florida Agriculture and Mechanical University (FAMU)Florida A&M University (FAMU) is part of the State University System of Florida and is
accredited by the Southern Association of Colleges and Schools Commission on Colleges.
FAMU’s main campus comprises 156 buildings spread over 422 acres atop the highest of
Tallahassee’s seven hills. The university also has several satellite campuses including a site in
Orlando where the College of Law is located and sites in Miami, Jacksonville and Tampa for
its pharmacy program.
Florida A&M University enrolls nearly 11,000 students from the United States and more than
70 countries such as India, Egypt, Trinidad, Netherlands, China, Bahamas, Jamaica, and Brazil.
Florida A&M University off ers 54 bachelor’s degrees, 28 master’s degrees, three professional
degrees and 12 doctoral degrees. The three professional degrees include the JD, PharmD, and
the Doctor of Physical Therapy. The 12 doctoral degree programs include 11 Ph.D. degrees
and one Doctor of Public Health (DrPH). The Ph.D. degrees include the following: biomedical
engineering, chemical engineering, civil engineering, electrical engineering, mechanical
engineering, industrial engineering, pharmaceutical sciences, physics, educational leadership,
environmental science and entomology, engineering, chemical engineering, civil engineering,
electrical engineering, mechanical engineering, industrial engineering, pharmaceutical
sciences, physics, educational leadership, environmental science and entomology.
FedEx Ground 13
National High Magnetic Field Laboratory FSU National High Magnetic Field Laboratory FSU
Headquarters Spans 330,000 SFHeadquarters Spans 330,000 SF
Net Lease Investments
Demographics
Census 2010 Summary 10 miles 20 miles 30 miles
Population 183,783 305,083 400,884
Households 73,827 121,551 157,774
Families 42,146 68,227 93,415
Average Household Size 2.31 2.36 2.41
Owner Occupied Housing Units 42,721 68,717 93,496
Renter Occupied Housing Units 31,106 52,834 64,278
Median Age 32.3 31.0 32.7
2012 Summary
Population 186,718 309,576 406,623
Households 74,994 123,336 159,929
Families 42,431 68,554 93,811
Average Household Size 2.31 2.36 2.40
Owner Occupied Housing Units 42,052 67,411 92,055
Renter Occupied Housing Units 32,942 55,924 67,873
Median Age 32.6 31.3 32.9
Median Household Income $50,297 $42,558 $40,475
Average Household Income $67,332 $59,386 $56,364
2017 Summary
Population 193,974 320,802 420,318
Households 78,055 128,178 165,947
Families 44,219 71,262 97,337
Average Household Size 2.31 2.36 2.40
Owner Occupied Housing Units 44,465 71,034 96,755
Renter Occupied Housing Units 33,590 57,144 69,193
Median Age 33.5 32.1 33.7
Median Household Income $56,559 $50,978 $48,733
Average Household Income $74,955 $66,242 $62,792
Trends: 2012-2017 Annual Rate
Population 0.77% 0.71% 0.66%
Households 0.80% 0.77% 0.74%
Families 0.83% 0.78% 0.74%
Owner Households 1.12% 1.05% 1.00%
Median Household Income 2.37% 3.68% 3.78%
Unconquered Statue at Doak
Campbell Stadium FedEx Ground 14
www.thinknnn.com
DTZ
Net Leased Investment Services
Andrew Bogardus+1 415 677 0421
CA LIC #00913825
Douglas Longyear +1 415 677 0458
CA LIC #00829911
Christina Campanella+1 415 677 0456
NY LIC #10401243503
Paul Carr+1 813 498 6835
FL LIC #SL3123881
Christopher Sheldon+1 415 677 0441
CA LIC #01806345
