offering erickson medford airport facility memorandum...the information contained in the following...

Erickson Medford Airport Facility 4002 N Cirrus Drive, Medford, Oregon

OFFERING MEMORANDUM

Table of Contents

Contact Information

The 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 Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews.

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. Kidder Mathews 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, current or past tax payments, 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, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews 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.

This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

David HillSenior Vice [email protected]

Wendy HillVice [email protected]

kidder.com

Executive SummaryThe Offering

Investment Highlights

Property OverviewProperty Description

Floor Plans

Site Aerial

Financial Details

Tenant Profile

Area OverviewLocation and Demographics

Airport

ERICKSON MEDFORDAIRPORT FACILITY

01

02

03

04

05

Executive Summary

01

The Offering

Investment Highlights


Kidder Mathews | Offering Memorandum 4

The OfferingThis offering is for a single tenant NNN leased facility with approximately 11 years remaining on the lease. The tenant is Erickson Incorporated, a leading global provider of aviation services and the largest global provider of utility helicopter solutions. The Erickson Medford Airport Facility is a critical component of their worldwide operations, providing office, hangar, and manufacturing and maintenance, repair and overhaul (“MRO”) functions.

56,334 SF GBA

5.11 Acres

1981/2008/2014/2015

Single/100%

$5,400,000

Building Area

Site Area*

Year Built/Renovated

Number of Tenants/Occupancy

Sale Price

*Subject to long-term ground lease (expires 08/31/2064)

Investment Summary


Investment HighlightsLEASE HIGHLIGHTS

Remaining Lease Term (ends 7/31/30) 11 years

Annual Rent (as of August 1, 2019) $548,403

Annual Rent Increase Throughout Term 1.5%

Absolute Net Expense StructureTenant is responsible for all expenses except land lease

FINANCIAL SUMMARY

Annual Contract Rent $548,403

Base Annual Land Lease Payment ($62,434)

Net Operating Income $485,969

Sale Price $5,400,000

Capitalization Rate 9.0%

Property Highlights

Best-in-class corporate hangar and maintenance/R&D facility extensively

renovated in 2014 and 2015

Both street side and runway side corporate office entrances

Functional for corporate office, aviation manufacturing, repair and

maintenance, and general hangar storage

The Rogue Valley International – Medford Airport serves the Southern Oregon/

Northern California region; passenger service provided by United Airlines,

Alaska Airlines, Delta Airlines, and Allegiant Air

The Medford MSA is the 4th largest metropolitan area in Oregon

(216,527; 2016)

Tenant Highlights

Erickson is a leading global provider of aviation services specializing in

defense and national security, manufacturing and MRO, and commercial

services such as firefighting, powerline construction, timber harvesting, HVAC

& specialty, and oil and gas.

Founded in 1971, Erickson is headquartered in Portland, Oregon, with its

principal manufacturing, maintenance, and repair operations in Southern

Oregon, and facilities and operations in North America, and facilities in South

America, Europe, the Middle East, Africa, Asia Pacific, and Australia.

www.ericksoninc.com

Property Overview

02

Property Description Floor Plans Site Aerial



The Erickson Medford Airport Facility is a very good quality, corporate office,

hangar and maintenance facility located on 5.11 acres of leased land. The

property has both public street and airport runway frontage and access. The

majority of the facility was originally constructed in 1981, with an extensive

expansion and renovation occurring in 2008; additional renovation occurred

in 2014 and 2015.

The office space is constructed on two levels with two distinctive grand

entrance areas that could easily facilitate multiple tenants. The hangar and

manufacturing space is adjacent and demised into three distinct sections

that could also facilitate multiple occupancy and/or uses.

A summary of the improvements is presented along with basic floor plans.

Property Description

FACILITY SPACE BREAKDOWN

SPACE TYPE 1ST FLOOR 2ND FLOOR TOTAL

North Hangar 11,553 SF NA 11,553 SF

South Hangar 17,273 SF NA 17,273 SF

Shop 6,598 SF NA 6,598 SF

Finished Office 8,205 SF 12,705 SF 20,910 SF

Gross Building Area 43,629 SF 12,705 SF 56,334 SF

Nebula Way

Bid

dle R

oad

Cirr

us D

rive

Mill

igan

Way


Address 4002 Cirrus Drive, Medford, OR HVAC Office has central HVAC system; hangar has suspended gas heaters

Year Built/Renovated 1981/2008/2014/2015 Electrical Power High capacity to facilitate heavy manufacturing functions

Foundation Concrete Slab Hangar/Shop Improvements High quality lighting, compressed air supply lines, and utility trenching

Exterior Walls Primarily steel frame with metal clad exterior; the office has a stucco exterior

Office FinishHigh quality design and finishes, including grand entry/lobby areas on both west and east ends

RoofPrimarily steel frame, gabled roof with metal cover; West office area flat steel frame with single-ply membrane cover

Car Parking 109 spaces

Hangar Clear Height Ranges from 24 to 27 feet Number of Tenants Single but could facilitate multiple

Hangar Clear Span Open Site Area* 5.11 Acres

Hangar DoorsNorth: Sliding, 27’ H x 80’ W South: Vertical, 24’ H x 109’ W

*Subject to long-term ground lease (expires 08/31/2064)

Property Description


Floor PlansFIRST FLOOR SECOND FLOOR

North Hangar

Shop South Hangar Corporate Office

Corporate Office

Corporate Office


Site Aerial

FinancialDetails

03



Existing Land LeaseThe Erickson Medford Airport Property is a leasehold interest being sold subject to an existing land lease with Jackson County. The buyer of the property will be assigned this lease interest subject to approval by Jackson County. The original lease agreement was executed in and term, and has since been amended several times including increasing land area, with the most recent amendment being an Assignment, Assumption and Consent in July 2015. The basic current terms of the

lease are summarized below:

Financial Details

LAND LEASE HIGHLIGHTS

Lessor Jackson County

Lessee Greenwell/Medford LLC

Lease Expiration August 31, 2064 (45 years remaining)

Land Area 222,657 Square Feet (5.11 Acres)

Current Annual Rent $62,433.72 ($5,202.81 paid monthly)

Rent Increases CPI-U based increase each March 1

Expense Structure Lessee is responsible for all expenses

BASE LEASE TERMS

Tenant Erickson Incorporated

Lease Commencement August 31, 2015

Lease Expiration July 31, 2030

Lease Term 15 year; 11 years remaining

Expense StructureAbsolute Net (tenant is responsible for all expenses except land lease payment)

Initial Annual Base Rent $521,934 ($9.26/SF GBA*)

Rent Increases 1.5% annually

Annual Base Rent as of August 1, 2019

$548,403 ($9.73/SF)

Renewal Options Three (3), five (5) year options at Market Rate

*The original lease rate was based on $10.50/SF of finished building area (49,708 SF); additional office area has subsequently been finished, lowering the rental rate/SF of finished area.

$548,403

($62,434)

$0

$485,969

$5,400,000

9.0%

Annual Contract Rent

Annual Land Lease Payment

Landlord Operating Expense

Net Operating Income

Sale Price

Capitalization Rate

Financial Summary

*Assumes 2% CPI-U increase

Tenant Profile

04



Erickson is a leading global provider of aviation services specializing in defense and national security, manufacturing and MRO, and commercial services such as firefighting, powerline construction, timber harvesting, HVAC & specialty, and oil and gas. Erickson operates a fleet of approximately 69 rotary-wing (light, medium, and heavy) and fixed-wing aircraft, including 20

heavy-lift S-64 Aircranes.

Erickson was founded in 1971 and became a publicly traded corporation in 2012 (NASDAQ: EAC). In 2013, Erickson acquired McMinnville, Oregon-based Evergreen Helicopters and a Brazilian oil and gas company Air Amazonia, a subsidiary of HRT. Significant integration and

international reorganization of these three businesses occurred in 2015.

In late 2016, Erickson Incorporated filed for Chapter 11 bankruptcy reorganization and in 2017, new, private ownership began operating the company. During the reorganization process, the Erickson Medford Airport Facility was reaffirmed to be critical to business operations with no

lease payments missed and no changes to the lease requested.

Erickson is headquartered in Portland, Oregon, with its principal manufacturing facility based in the Medford, Oregon area and facilities and operations in North America, South America,

Europe, the Middle East, Africa and Asia-Pacific, and Australia.

www.ericksoninc.com

Tenant Profile

Area Overview

05

Location and Demographics

Airport



Location and DemographicsOverviewThe City of Medford is the principal city in the Medford Metropolitan

Statistical Area (MSA), which is the 4th largest MSA in Oregon. The

boundaries of the MSA are Jackson County, which is bisected by

Interstate 5, and is the economic center of southern Oregon. It is

located approximately 300 miles south and north of Portland, Oregon

and Sacramento, California, respectively.

EconomyIn the past, Medford’s economy was fueled by agriculture (pears,

peaches, viticulture grapes) and timber products. The largest direct

marketer of fruits and food gifts in the United States, Harry and David

Operations Corp., is based in Medford. It is the 3rd largest employer

in Southern Oregon, with 2,000 year-round and several thousand

seasonal employees in the Medford area.

Health care is a major driver of the economy today, including two

of the top five employers Asante (4,231) and Rogue Valley Medical

Center (1,638). As Medford is also a retirement destination, assisted

living and senior services have become an important part of the

economy. Lithia Motors, the 2nd largest employer in the area (3,000)

and 4th largest auto retailer in the U.S., has been headquartered in

the area since 1946.

MEDFORD OREGON TOP EMPLOYERS

EMPLOYERS NUMBER OF EMPLOYEES

Asante 4,231

Lithia Motors 3,000

Harry & David 2,000

MEDFORD OREGON AREA DEMOGRAPHICS

POPULATION MEDFORD MEDFORD MSA/ JACKSON COUNTY

2012 76,528 203,613

2016 81,636 216,527

2020 (projected)

100,981 223,458

MEDIAN HOUSEHOLD INCOME MEDFORD MEDFORD MSA/

JACKSON COUNTY

2016 $44,130 $48,813


AirportThe Rogue Valley International-Medford Airport is located in southwestern

Oregon on 855 acres adjacent to the city of Medford, Oregon’s central business

district. The Airport is located north of the I-5/Highway 62 interchange. It is

owned and operated by the Jackson County Airport Authority.

Passenger service is provided by five airlines, including United, Horizon/Alaska,

Delta, Allegiant, and American. American Airlines is the most recent addition,

having started flight service in June 2017. These carriers offer approximately 50

arriving and departing flights daily. Passenger flow has grown significantly over

the last decade, achieving a record of 1,010,920 in 2018, up just under 12%

from 2017 and over 60% since 2013. The airport has two fixed base operators,

Jet Center MFR and Million Air. Million Air is currently in the process of a $5

million hangar expansion to accommodate two clients’ Boeing business jets.

In response to rapid growth, in 2017 the County acquired 6 acres to expand

parking by close to 50%. It is also noted that S & P Global Ratings recently

raised Jackson County’s Series 2016 airport revenue refunding bonds rating from

A- to A, recognizing the strong operational and financial position of the airport.

PROPERTY

Biddle Rd

Tab

le R

ock

Rd

MEDFORD AIRPORT TERMINAL


David HillSenior Vice [email protected]

Wendy HillVice [email protected]

Kidder Mathews101 SW Main Street, Suite 1200Portland, OR 97204

kidder.com

offering erickson medford airport facility memorandum...the information contained in the following...

Documents