Trane | Single-Tenant Industrial Investment Offering Long-Term … · 2018-10-23 · Trane | Single-Tenant Industrial Investment Long-Term Lease Extension | Investment Grade Tenant

Trane | Single-Tenant Industrial InvestmentLong-Term Lease Extension | Investment Grade Tenant

Cole Flanagan, CPA, MBA cell 505 235 7585 [email protected]

6801 Jefferson St. NE, Suite 200 | Albuquerque NM 87109 office 1 505 878 0001 | www.IPArealty.com

5501 San Diego Ave. NE | Albuquerque, NM 87113

A division of NAI Maestas & Ward

Jake Mechenbier cell 505 917 5514 [email protected]

OfferingMemorandum

Offering Memorandum | 2A division of NAI Maestas & Ward

ConfidentialDisclaimer

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving from NAI Maestas & Ward and should not be made available to any other person or entity without the written consent of NAI Maestas & Ward. 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.

NAI Maestas & Ward 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, PCBs 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, NAI Maestas & Ward has not verified, and will not verify, any of the information contained herein, nor has NAI Maestas & Ward 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. Principal of property seller is a licensed New Mexico real estate broker.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT A NAI MAESTAS & WARD ADVISOR FOR MORE DETAILS.


InvestmentHighlights

Investment Property Advisors is pleased to offer for sale a net-leased industrial investment leased to Trane in Albuquerque, NM. This property was built to Trane’s specifications to fit the needs of the tenant as a build-to-suit in 2011. Trane has recently renewed their lease for an additional seven years which shows their strong commitment to this location. The asset is located at 5501 San Diego Ave NE which is in very close proximity to Interstate 25, with convenient access to the entire Albuquerque MSA. Neighboring tenants and projects to the subject property include the recently expanded Presbyterian offices, Sumco USA Corporation, Honeywell, Arizona Tile, and the recently developed Broadstone Northpoint Class A apartment complex.

The approximately 18,800 sq. ft. building is situated on about 1.6 acres. The property has a combination of office (12,200 SF) and warehouse (6,600 SF). Trane is an extremely strong, global tenant with revenues in the billions. Trane is a wholly owned subsidiary of Ingersoll-Rand. Ingersoll-Rand had revenues totaling $14.2 billion last year and HVAC accounted for 64% of the company’s total revenue.

This investment benefits from the long-term lease and predictability, credit tenancy, access to a main Interstate, and the passive nature of the lease. The recent lease extension and strong commitment to the location by the tenant make this property an opportunity on which an investor can capitalize for the foreseeable future.

Trane

Offering SummaryPurchase Price - Trane $3,688,000

Purchase Price - Solar* $177,470

Total Purchase Price $3,865,470

Price per Square Foot** $196.17

Net Operating Income** $239,700

Cap Rate** 6.50%

Lease Type NNN

� Long-term lease extension - About 7 years of lease term remaining through September 30, 2025

� Strong commitment to location from tenant - Built to Trane’s specifications as a build-to-suit in 2011 - Trane has had a long and successful operating history at the property

� Newer concrete tilt-up construction

� Building size: ±18,800 SF - Office: ±12,200 SF - Warehouse: ±6,600 SF

� Extremely strong, international tenant - Wholly owned subsidiary of Ingersoll-Rand - HVAC accounts for 64% of Ingersoll-Rand’s total revenue - $14.2 billion - total revenue in 2017

� Close proximity to Interstate 25

� Neighboring tenants include the recently expanded Presbyterian offices, Honeywell, Sumco USA Corporation, Arizona Tile, Daltile, The Overhead Door Company, and the newly developed Broadstone Northpoint (226-unit Class A multifamily project)

*Solar panels owned by Seller; see page 5 for solar value projection **Does not include solar income


Location5501 San Diego Ave NEAlbuquerque, NM 87113

Tenant Trane U.S. Inc.

Building Size±18,800 SF (±12,200 SF Office, ±6,600 SF Warehouse)

Land Size ±1.6 AcresRemaining Base Lease Term About 7 years through September 30, 2025Rental Increases 2.5% annuallyNet Operating Income $239,700Lease Type NNN

Lease Summary

Period Annual Rent

Years 8 (Current) $239,700

Year 9 $245,693

Year 10 $251,835

Year 11 $258,131

Year 12 $264,584

Year 13 $271,199

Year 14 $277,979

Rent Schedule

Lease Summary & Rent Schedule


NPV (8% Rate) = $177,469.73 Year Cash Flow Projection*

2019 $22,453.79

2020 $22,453.79

2021 $22,453.79

2022 $22,453.79

2023 $22,453.79

2024 $22,453.79

2025 $22,453.79

2026 $22,453.79

2027 $22,453.79

2028 $22,453.79

2029 $22,453.79

2030 $22,453.79

2031 $22,453.79

Solar Value Projection

*Based on actual production from full-year 2017


Trane Inc is a manufacturer of heating, ventilating, air conditioning systems, building management systems, and controls. The company was acquired by Ingersoll-Rand in 2008 and is a wholly owned subsidiary of Ingersoll-Rand. Trane was founded in 1905 in La Crosse, Wisconsin; its United States headquarters is now located in Davidson, NC. Its international headquarters is in Dublin, Ireland and the company is located in numerous countries across the world with tens of thousands of employees.

Ingersoll-Rand is a global industrial manufacturing company that was founded in 1905. The company has two business segments which consist of Climate and Industrial, both being strong brands with differentiated products within their respective markets. The Climate segment includes Trane, American Standard, and Thermo King. This segment had revenues of $11.2 billion in 2017 which accounted for roughly 79% of the total revenue ($14.2 billion) for Ingersoll Rand. Ingersoll-Rand’s commercial and residential HVAC business collectively represent 64% of the total revenue for the company. Net revenue for 2017 increased by over $688 million in comparison to the year 2016. The net income for 2017 was just over $1.3 billion.

Ingersoll-Rand is traded on the NYSE under the ticker symbol IR and has a credit rating of BBB+. The company employs approximately 46,000 people across the world. Both Trane and Ingersoll-Rand are continuing to grow and enhance their products within their respective markets.

TenantHighlights

Tenant ProfileTenant Trane U.S. Inc. (wholly owned

subsidiary of Ingersoll-Rand)Tenant’s Trade Name TraneYear Founded 1913Headquarters Swords, Dublin, IrelandU.S. Headquarters Davidson, NCWebsite www.trane.com

Parent CompanyParent Company Name Ingersoll-Rand PLCStock Ticker IR (NYSE)Credit Rating BBB+Revenue 2017 $14.2 billionYear Founded 1905Employees About 46,000Headquarters Swords, Dublin, Ireland

U.S. Headquarters Davidson, NC

Website www.ingersollrand.com


Albuquerque International

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Alameda Storage

E.G. RossElementary School

±498 Students

HOLLY PLAZA

La Cueva High School±1,897 Students

LA CUEVA TOWN CENTER

BarstowPark

WildflowerPark

Gravity Park

Woodworker’s Supply

Eagle RockConvience

CenterCrossfit

Abq

SupplyOne

Bycon Construction

NumotionEwing IrrigationTrans Core

Cintas Univorm

American Gypsum

Drywall Plant

Tuff Shed

Aloha RV

I-25 STUDIOS

Jeff

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Cafe

Orthoproof

Polar HealthFirst

KMS, LLC

North Domingo Baca Park &

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Broadstone Northpoint Apartments

S I TE

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Retail Trade Corridor

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SiteAerial

San Diego Ave NE

San

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I-25 Studios

Daltile Sales Service Center

Benchmark Wood Floors, Inc

Crowl Jewel Gourmet Popcorn

Santa Fe Granite Countertops

Modern Security Systems Corporation

Vectors

Patterson Dental

Oco Blomedical Dental Implant

Abba Technologies

Genesis Signs

Crown TV

Santa Fe Sterling

Encompass Asia

Loid’s Collision Center

25

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Broadstone Northpoint Apartments

Verano Business

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New Life City Church

Souder Miller & Associates

Site Aerial


Property Photos


AlbuquerqueMETRO AREATrade Area Analysis

Albuquerque | Why Here? Why Now?Located near the geographic center of New Mexico at the intersection of I-25 and I-40 and resting at the foot of the Sandia Mountains, Albuquerque is the state’s most populous city and one of the most livable in the U.S. The city serves as a major transportation and shipping hub for the Southwest, with BNSF Railway, air cargo from Albuquerque International Sunport airport, and a commuter train running from Belen to Santa Fe. Albuquerque is home to the International Balloon Fiesta, the world’s largest gathering of hot-air balloons. A talented workforce, a business-friendly environment, a community rooted in history and a high quality of life make Albuquerque hard to beat.

ALBUQUERQUE HEALTHCARE. Is the center of health care excellence in NM. University of NM is a nationally recognized Class 1 research institution. There are 1,943 licenced hospital beds in metro area

Top 8 Reasons to choose Albuqueque

Invest in Albuquerque � Low-Risk Location

� Skilled Workforce

� Business Incentives

� The Metro Area Communities

� Quality of Life

� Cost of Living

� Innovation Central

� On the cutting edge of Technology

UTAH

TEXAS

OKLAHOMA

COLORADO

ARIZONA40

25

Santa FeAlbuquerque

Las Cruces Albuquerque

Bernalillo

Albuquerque Metro

Rio Rancho

Los Lunas

Belen

40

40

25

Albuquerque City

Albuquerque

25

New Mexico

Albuquerque City by the numbers (ESRI 2017 Demographics)

653,761 City Population

$67,029 Average Household Income

261,158 Households

$40,404 Median Disposable Income

27,083 Total Businesses

368,764 Total Employees

922,914 Albuquerque

Meto Population

The Largest

City in the State

ALBUQUERQUE EDUCATION | SKILLED WORKFORCE Ranks top in nation for cities witht he most college graduates, 69,000 college students reside in metro area, has one of the largest # of PhDs per capita in the nation

COMPETITIVE BUSINESS CLIMATE Low energy costs, low property taxes, affordable real estate and cost of living, a qualified/productive workforce, aggressive incentives, efficient market access

Ranked 6th in America’s favorite cities list - Travel + Leisure

Ranks among America’s best cities for global trade - Global Trade Magazine

The 5th most cost-friendly city to do business in the U.S. - KPMGIn the news


Albuquerque

S I TE

25

4040

1 Mile 2 Mile 3 Mile

Demographic and Income Profile4001 Office Court Dr, Santa Fe, New Mexico, 87507 Prepared by EsriRing: 5 mile radius Latitude: 35.63314

Longitude: -106.01568

Summary Census 2010 2018 2023Population 78,059 83,150 87,263Households 32,336 34,297 35,986Families 18,516 19,103 19,849Average Household Size 2.37 2.39 2.39Owner Occupied Housing Units 20,362 22,058 23,500Renter Occupied Housing Units 11,974 12,240 12,486Median Age 38.4 40.1 40.5

Trends: 2018 - 2023 Annual Rate Area State NationalPopulation 0.97% 0.43% 0.83%Households 0.97% 0.37% 0.79%Families 0.77% 0.20% 0.71%Owner HHs 1.27% 0.46% 1.16%Median Household Income 1.85% 2.07% 2.50%

2018 2023 Households by Income Number Percent Number Percent

<$15,000 4,256 12.4% 3,506 9.7%$15,000 - $24,999 4,333 12.6% 3,956 11.0%$25,000 - $34,999 3,491 10.2% 3,366 9.4%$35,000 - $49,999 4,766 13.9% 4,921 13.7%$50,000 - $74,999 6,513 19.0% 7,279 20.2%$75,000 - $99,999 4,044 11.8% 4,903 13.6%$100,000 - $149,999 4,118 12.0% 4,872 13.5%$150,000 - $199,999 1,227 3.6% 1,331 3.7%$200,000+ 1,550 4.5% 1,853 5.1%

Median Household Income $50,766 $55,642Average Household Income $70,148 $79,497Per Capita Income $29,401 $33,246

Census 2010 2018 2023 Population by Age Number Percent Number Percent Number Percent

0 - 4 5,308 6.8% 5,118 6.2% 5,349 6.1%5 - 9 4,968 6.4% 4,913 5.9% 5,052 5.8%10 - 14 4,874 6.2% 4,897 5.9% 5,067 5.8%15 - 19 4,771 6.1% 4,758 5.7% 4,903 5.6%20 - 24 4,785 6.1% 5,361 6.4% 5,295 6.1%25 - 34 10,616 13.6% 11,193 13.5% 11,950 13.7%35 - 44 10,698 13.7% 10,382 12.5% 10,874 12.5%45 - 54 11,177 14.3% 10,432 12.5% 10,248 11.7%55 - 64 10,937 14.0% 11,647 14.0% 11,310 13.0%65 - 74 5,910 7.6% 9,042 10.9% 10,156 11.6%75 - 84 2,853 3.7% 3,920 4.7% 5,364 6.1%

85+ 1,164 1.5% 1,488 1.8% 1,694 1.9%Census 2010 2018 2023

Race and Ethnicity Number Percent Number Percent Number PercentWhite Alone 57,639 73.8% 60,244 72.5% 62,801 72.0%Black Alone 773 1.0% 987 1.2% 1,184 1.4%American Indian Alone 1,916 2.5% 2,258 2.7% 2,546 2.9%Asian Alone 1,020 1.3% 1,343 1.6% 1,627 1.9%Pacific Islander Alone 67 0.1% 89 0.1% 107 0.1%Some Other Race Alone 13,640 17.5% 14,850 17.9% 15,401 17.6%Two or More Races 3,004 3.8% 3,378 4.1% 3,598 4.1%

Hispanic Origin (Any Race) 47,410 60.7% 51,335 61.7% 54,324 62.3%Data Note: Income is expressed in current dollars.

Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2018 and 2023.

August 06, 2018

©2018 Esri Page 5 of 6

Demographic and Income Profile5501 San Diego Ave NE, Albuquerque, New Mexico, 87113 Prepared by EsriRing: 1 mile radius Latitude: 35.19317


Summary Census 2010 2018 2023Population 1,927 1,947 2,326Households 801 800 961Families 492 476 562Average Household Size 2.37 2.40 2.39Owner Occupied Housing Units 529 534 536Renter Occupied Housing Units 272 266 425Median Age 35.4 36.6 37.1



<$15,000 106 13.2% 107 11.1%$15,000 - $24,999 109 13.6% 120 12.5%$25,000 - $34,999 59 7.4% 67 7.0%$35,000 - $49,999 139 17.4% 170 17.7%$50,000 - $74,999 103 12.9% 136 14.2%$75,000 - $99,999 81 10.1% 116 12.1%$100,000 - $149,999 115 14.4% 134 13.9%$150,000 - $199,999 42 5.2% 49 5.1%$200,000+ 45 5.6% 62 6.5%



0 - 4 132 6.8% 124 6.4% 153 6.6%5 - 9 143 7.4% 130 6.7% 158 6.8%10 - 14 139 7.2% 134 6.9% 156 6.7%15 - 19 137 7.1% 118 6.1% 141 6.1%20 - 24 125 6.5% 112 5.8% 112 4.8%25 - 34 277 14.4% 307 15.8% 360 15.5%35 - 44 280 14.5% 287 14.7% 372 16.0%45 - 54 284 14.7% 258 13.3% 288 12.4%55 - 64 203 10.5% 239 12.3% 267 11.5%65 - 74 96 5.0% 153 7.9% 207 8.9%75 - 84 56 2.9% 49 2.5% 81 3.5%

85+ 56 2.9% 36 1.8% 33 1.4%Census 2010 2018 2023

Race and Ethnicity Number Percent Number Percent Number PercentWhite Alone 1,358 70.5% 1,323 68.0% 1,542 66.3%Black Alone 37 1.9% 37 1.9% 46 2.0%American Indian Alone 92 4.8% 101 5.2% 131 5.6%Asian Alone 107 5.6% 122 6.3% 151 6.5%Pacific Islander Alone 1 0.1% 1 0.1% 1 0.0%Some Other Race Alone 251 13.0% 276 14.2% 348 15.0%Two or More Races 80 4.2% 87 4.5% 107 4.6%

Hispanic Origin (Any Race) 762 39.5% 832 42.7% 1,054 45.3%Data Note: Income is expressed in current dollars.


September 21, 2018







<$15,000 606 8.7% 541 7.2%$15,000 - $24,999 665 9.6% 639 8.5%$25,000 - $34,999 623 9.0% 623 8.3%$35,000 - $49,999 771 11.1% 859 11.4%$50,000 - $74,999 983 14.1% 1,090 14.5%$75,000 - $99,999 897 12.9% 1,051 14.0%$100,000 - $149,999 1,328 19.1% 1,476 19.6%$150,000 - $199,999 508 7.3% 546 7.3%$200,000+ 569 8.2% 705 9.4%



0 - 4 1,027 6.1% 991 5.6% 1,098 5.7%5 - 9 1,232 7.3% 1,069 6.0% 1,144 5.9%10 - 14 1,232 7.3% 1,171 6.6% 1,184 6.1%15 - 19 1,182 7.0% 1,097 6.2% 1,128 5.9%20 - 24 899 5.3% 961 5.4% 861 4.5%25 - 34 2,045 12.1% 2,446 13.8% 2,688 13.9%35 - 44 2,417 14.3% 2,300 13.0% 2,773 14.4%45 - 54 2,814 16.6% 2,447 13.8% 2,379 12.3%55 - 64 1,989 11.7% 2,523 14.2% 2,571 13.3%65 - 74 1,134 6.7% 1,656 9.3% 2,073 10.8%75 - 84 668 3.9% 750 4.2% 998 5.2%

85+ 307 1.8% 335 1.9% 375 1.9%Census 2010 2018 2023

Race and Ethnicity Number Percent Number Percent Number PercentWhite Alone 12,430 73.4% 12,649 71.3% 13,447 69.8%Black Alone 251 1.5% 262 1.5% 291 1.5%American Indian Alone 500 3.0% 562 3.2% 664 3.4%Asian Alone 1,010 6.0% 1,188 6.7% 1,391 7.2%Pacific Islander Alone 14 0.1% 14 0.1% 13 0.1%Some Other Race Alone 2,086 12.3% 2,332 13.1% 2,623 13.6%Two or More Races 655 3.9% 741 4.2% 842 4.4%



September 21, 2018







<$15,000 1,712 9.1% 1,451 7.4%$15,000 - $24,999 1,655 8.8% 1,535 7.8%$25,000 - $34,999 1,655 8.8% 1,609 8.2%$35,000 - $49,999 2,127 11.3% 2,214 11.3%$50,000 - $74,999 2,960 15.7% 3,187 16.2%$75,000 - $99,999 2,537 13.4% 2,901 14.8%$100,000 - $149,999 3,455 18.3% 3,719 18.9%$150,000 - $199,999 1,356 7.2% 1,375 7.0%$200,000+ 1,449 7.7% 1,668 8.5%



0 - 4 2,615 5.8% 2,432 5.2% 2,546 5.3%5 - 9 2,913 6.5% 2,677 5.8% 2,703 5.6%10 - 14 2,968 6.6% 2,910 6.3% 2,898 6.0%15 - 19 2,876 6.4% 2,644 5.7% 2,710 5.6%20 - 24 2,328 5.2% 2,297 5.0% 2,076 4.3%25 - 34 5,341 11.9% 5,693 12.3% 5,676 11.7%35 - 44 5,904 13.2% 5,918 12.8% 6,664 13.8%45 - 54 7,372 16.4% 6,218 13.4% 6,119 12.6%55 - 64 6,144 13.7% 7,033 15.2% 6,814 14.1%65 - 74 3,482 7.8% 5,106 11.0% 5,987 12.4%75 - 84 2,042 4.6% 2,374 5.1% 3,084 6.4%

85+ 865 1.9% 1,039 2.2% 1,129 2.3%Census 2010 2018 2023

Race and Ethnicity Number Percent Number Percent Number PercentWhite Alone 34,396 76.7% 34,650 74.8% 35,480 73.3%Black Alone 727 1.6% 748 1.6% 792 1.6%American Indian Alone 1,335 3.0% 1,479 3.2% 1,662 3.4%Asian Alone 2,147 4.8% 2,495 5.4% 2,831 5.8%Pacific Islander Alone 31 0.1% 31 0.1% 30 0.1%Some Other Race Alone 4,537 10.1% 5,058 10.9% 5,540 11.4%Two or More Races 1,676 3.7% 1,880 4.1% 2,069 4.3%



September 21, 2018


Demographics1, 2 & 3 Miles

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Trane | Single-Tenant Industrial Investment Offering Long-Term … · 2018-10-23 · Trane | Single-Tenant Industrial Investment Long-Term Lease Extension | Investment Grade Tenant

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