single tenant - rsc euipment rental - dubuque ia

8/14/2019 Single Tenant - RSC Euipment Rental - Dubuque IA

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DUBUQUE, IA

OFFERING MEMORANDUM

RSC EQUIPMENT RENTAL -DUBUQUE, IA



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 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 fromsources 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.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP

AGENT FOR MORE DETAILS.

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressedorimplied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify theinformation and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus& Millichap Real Estate Investment Services of Des Moines © 2008 Marcus & Millichap

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SECTION ONE

...........................INVESTMENT OVERVIEW & F INANCIAL ANALYSIS

SECTION TWO

........................................................TENANT OVERVIEW

SECTION THREE

...............................DUBUQUE MARKET OVERVIEW

SECTION FOUR

...................................SALES COMPARABLES

SECTION FIVE

...............................RENT COMPARABLES

SECTION SIX

...................ADDITIONAL INFORMATION


TABLE O

F C O NTE NT S



RSC EQUIPMENT RENTAL -

DUBUQUE, IADUBUQUE, IA

I N VE ST M

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This opportunity is for a triple-net leased asset, with a strong national

tenant, being offered at $1,250,000 on a cap rate of 8.35%. The tenant,

RSC Equipment Rental, has 4.5 years remaining on its initial lease and apenalty of over $58k for not exercising its first option in June of 2013.

The lease calls for annual rent escalations of 2% through both the initial

term and the three, five year renewal options.

The property is a new construction, 7,360 sf building with a large

asphalt parking lot and security fence on approximately 2 acres. It’s

located less than 1 mile from the market’s main retail corridor and is

ideally situated in the path of growth.

RSC Equipment Rental is the second largest equipment rentalcompany in North America with 468 locations and over $1.8 billion in

annual revenue. The firm is publicly traded on the NYSE and holds a

B- credit rating from S&P. Nearly 95% of RSC’s revenue comes from

the non-residential construction industries.

Dubuque is a growing tertiary market in Iowa with strong economic

drivers and solid real estate fundamentals. The low cost of doing

business and five new 4 lane highways have attracted both national and

international companies resulting in strong job growth and low

vacancies.


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INVESTMENT

HIGHLIGHTSGuarantee from S&P B- credit rating

8.35% Cap

9.62% Cash-on-Cash Return

~15% Total Return

NNN Lease | 2% annual escalations

4.5 years remaining on initial term

Tenant agreed to pay $58k T.I.reimbursement if they don’t exercisetheir first 5-year option

2008 construction

Dubuque accounted for 17% of Iowa’s job growth in 2007 while onlyrepresenting 3% of its total population

Executive Summary



Base Rent ($14.01/SF)$103,140

Lamar Advertising$1,200

Net Operating Income$104,340

Debt Service74,213

Net Cash Flow After Debt Service9.64% $30,127

Principal Reduction16,074

Total Return14.78% $46,202

Rental IncreasesAnnual RentMonthly Rent June 1, 2008$103,140.00$8,595.00 June 1, 2009$105,202.80$8,766.90 June 1, 2010$107,306.86$8,942.24 June 1, 2011$109,452.99$9,121.08 June 1, 2012$111,642.05$9,303.50 June 1, 2013$113,874.84$9,489.57 June 1, 2014$116,152.39$9,679.37 June 1, 2015$118,475.44$9,872.95 June 1, 2016$120,844.95$10,070.41 June 1, 2017$123,261.85$10,271.82 June 1, 2018$125,727.08$10,477.26 June 1, 2019$128,241.72$10,686.81 June 1, 2020$130,806.55$10,900.55 June 1, 2021$133,422.69$11,118.56 June 1, 2022$136,091.14$11,340.93 June 1, 2023$138,812.96$11,567.75 June 1, 2024$141,589.32$11,799.11 June 1, 2025$144,421.11$12,035.09 June 1, 2026$147,309.53$12,275.79 June 1, 2027$150,255.72$12,521.31

Tenant Trade Name RSC Equipment Rental

Ownership Public

Tenant Corporate Store

Lease Guarantor

Lease Type Triple Net (NNN)

Roof and Structure Landlord ResponsibleLease Term 5 years

Lease Commencement Date 5/9/2008

Rent Commencement Date 5/9/2008

Lease Expiration Date 5/31/2013

Term Remaining on Lease 4.5 years

Increases 2% annually

Options 3, 5 year options

ANNUALIZED OPERATING DATA

LOCATION

TENANT SUMMARY

FINANCING

FIRSTLoan$937,500LoanProposed NewInterest6.25%Amortization25 Years

1025Dubuque,IA52003

Price$1,250,000DownPayment

25%$312,500

RentableSquareFeet

7,360Price/SF$169.84CAPRate

8.35%YearBuilt

2008LotSize

2acres

TypeofOwnership

FeeSimple


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Financial Overview - Investment Lifecycle

RETURNSYear 1 Year 2 Year 3 Year 4 Year 5

Cap Rate 8.35% 8.51% 8.68% 8.85% 9.03%

Cash-on-Cash 9.62% 10.28% 10.96% 11.66% 12.37%

Total Return 14.76% 15.76% 16.79% 17.86% 18.97%

INCOME STATEMENT

Year 1 Year 2 Year 3 Year 4 Year 5

RSC Equipment Rental $104,171 $106,255 $108,380 $109,453 $112,758

Lamar Companies * $1,200 $1,200 $1,200 $1,200 $1,200

Effective Gross Income $105,371 $107,455 $109,580 $110,653 $113,958

Reserves ($.15/sf) $1,104 $1,104 $1,104 $1,104 $1,104

Net Operating Income $104,267 $106,351 $107,476 $109,549 $112,854

Debt Service $74,213 $74,213 $74,213 $74,213 $74,213

Before Tax Cash Flow $30,054 $32,138 $34,263 $36,431 $38,641

Principal reduction $16,074 $17,108 $18,209 $19,380 $20,626

Total Return $46,128 $49,246 $52,472 $55,811 $59,267

FINANCING

Price $1,250,000

Down Payment $312,500 (25%)

Principle $937,500 (75%)

Interest Rate 6.25%

Amortization 25 years

Monthly Payment $6,184

Annual Payment $74,213

ACQUISITION

Purchase Price $1,250,000

Acquisition Cap Rate 8.35%

DISPOSITIONSale Price ** $1,381,465Sale Cap Rate 8.25%

Sale Date January 2014

Capital Gain *** $153,790

* Lamar Companies has a 10 year lease for the billboard on the Northwest corner of the property.The rate is $1,200 annually and the lease ends in October of 2013

** Assumes tenant exercises first option

*** Capital Gain = Sale Price - Loan Balance - Original Investment - Cost of Sale




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Financing

PROPOSED FINANCING

FIRST TRUST DEED

Loan Type Proposed New

Down Payment $312,500 (25%)Loan Amount $937,500

Interest Rate 6.25%

Amortization 25 Years

AVAILABLE LENDERS

Liberty Bank

Loan Officer Scott Frost

Phone Number (563) 687-9000

Email [email protected] www.libertybankiowa.com

Bank Location Dubuque, IA

Marcus & Millichap Capital Corporation

Loan Officer Jim Sotos

Phone Number (773) 867-1444

Email [email protected]

Website www.mmcapcorp.com

Bank Location Chicago, IL



PR OPER

TYDE S CRI PTI O N


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THE OFFERING

Property RSC Equipment Rental - Dubuque, IA

Property Address 1025 Cedar Crossing Road

Dubuque, IA 52003

SITE DESCRIPTION

Number of Stories 1

Year Built 2008

Rentable Square Feet 7,360

Lot Size 2 acres

Type of Ownership Fee Simple

Landscaping Minimal

Topography Flat

CONSTRUCTION

Foundation Concrete

Framing Stick

Exterior Brick / Metal

Parking Surface Asphalt

Roof Pitched Metal

Property Summary




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Property Photos




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Property Photos

Billboard:

Located in the Northwest corner of the property the

billboard is leased by Lamar Communications for $1,200

annually.

Southwest Corner:

Theentirewestsideofthepropertyisdedicatedtolarge

equipmentstorageandtransportationequipment.



Aerial MAP

REGIONAL MAP


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Area Maps





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RSC Equipment Rental History & Facts

COMPANY SUMMARY

RSC Equipment Rental, Inc. is one of the largest equipment rental providers in North America servicingconstruction and industrial markets with an original equipment fleet cost of $2.7 billion. RSC offers superior

levels of equipment availability, reliability and service to customers through an integrated network of morethan 465 rental locations across 39 states in the United States and four Canadian provinces. With more than5,400 employees committed to continuous safety and 24x7 customer care, RSC delivers the loyal customersupport needed to build the future.

BASIC INFO FINANCIAL INFO

Founded in 1933 Revenue $1.8 billion

Tenant Trade Name RSC Equipment Rental EBITDA $828 million

Headquarters Scottsdale, AZ Profit Margin 46%

Website www.rscrental.com Market Size $38 billion

Location 468 Market Share 4%

Employees 5,000+ Total Market Share(Among top 4 firms)

< 25%

Industry Rental equipment to the construction, manufacturing,industrial, and petrochemical industries

RSC Market Share Growth(Among top 4 firms)

22%

Publicly Traded Yes

Exchange / Ticker NYSE / RRR

Credit Rating S&P B-




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Lease Abstract

Tenant RSC Equipment Rental

Guarantor RSC Equipment Rental, Inc.

Corporate Guarantee Yes

Lease Term 5 Years

Lease Commencement 5/9/2008

Lease Expiration 5/31/2013

Initial Rent $103,140 (Annual)

Escalations 2% annually for initial term & all option periods

Renewal Options (3) 5 year options

Penalty for NOT Renewing Tenant will owe a penalty of $58,813 if they do not exercise

their first option to renew.Renewal Notice 180 days

Maintenance & Repairs

- Cleaning & Maintenance Tenant

- Taxes Tenant

- Insurance Tenant

- Parking Lot Tenant

- Roof & Structure Landlord

- HVAC Maintenance Tenant

- HVAC Replacement Landlord

Holdover 1.25x last month's rent

Early Termination None

Assignment & Subletting Only with Landlord consent

Right of First Refusal None




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Equipment Rental Market Overview

Competition

The four largest equipment rental companies in the US consist of both public and private entities. Although they

currently represent only 10% of the total market they have consistently been picking up market share over the last

five years. The four largest companies, in order from one to four, are listed below:

United Rentals2007 Rental Revenue $2,625,000,000

2007 EBITDA $1,171,000,000

Locations 665Geographic Focus US & Canada

RSC Equipment Rental, Inc2007 Rental Revenue $1,541,000,000

2007 EBITDA $821,000,000

Locations 468Geographic Focus US & Canada

Hertz Equipment Rental Corp2007 Rental Revenue $1,537,000,000

2007 EBITDA $834,000,000Locations 290

Geographic Focus US & Canada

Sunbelt Rentals2007 Rental Revenue $1,411,000,000

2007 EBITDA $591,000,000

Locations 430Geographic Focus US Only

Market Overview:

The U.S. equipment rental industry is composed of more than 10,000 companies and generates revenues of more than

$30 billion annually. The industry is highly fragmented, with the 10 largest companies accounting for less than 25

percent of industry revenues in 2007. The four largest companies (ranked by 2007 rental revenues) are United

Rentals, RSC Equipment Rental, Hertz Equipment Rental (HERC), and Sunbelt Rentals. The industry saw strong

revenue growth between 1990 and 2007 at a compound annual growth rate (CAGR) of 10.2 percent. The industry is

expected to continued to grow at an 8.6 percent CAGR between 2009-2012. Growth is attributed to two main factors:

the long-term trend towards increased rental industry penetration (5 percent in 1993, 40 percent in 2007, and

forecasted to reach 50 percent by 2010) and the resiliency of the non-residential construction industry.





SALE S C

O MPARABLE S



0.00

40.00

80.00

120.00

160.00

200.00

240.00

280.00

320.00

360.00

400.00

S ubj ec t RSCSan

Benito

MaxEquipment

Rental

UnitedRentals

RSCHammond

RSCVictoria

RSCGalveston

RSCPort

Arthur

RSCBillings

RSCOdessa

RSCMarble

Falls

Avg $293.23

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Subject RSCSan

Benito

MaxEquipment

Rental

UnitedRentals

RSCHammond

RSCVictoria

RSCGalveston

RSCPort

Arthur

RSCBillings

RSCOdessa

RSCMarble

Falls

Avg 7.78%

COMMENTS

To provide a comprehensive survey of the changing market we have included closed transactions, deals in escrow, and listedproperties among the sales comparables.

The subject is being offered at an 8.35% Cap, resulting in a return almost 10% higher than the average.

AVERAGE PRICE/SF

COMMENTS

At list price the subject's price per square foot is over 40% below the average sales comparable.


SALE S C

O MPARABLE S

AVERAGE CAP RATE

CAP Rate & Price/SF



1

2

RSC EQUIPMENT RENTAL - DUBUQUE, IA

1025 Cedar Crossing RoadDubuque, IA 52003

RSC SAN BENITO

1720 West US 77

San Benito, TX 78586

MAX EQUIPMENT RENTAL

5760 Kearny Villa Rd

San Diego, CA 92123

COMMENTS

Max Equipment Rental is a regional provider located primarily in the Southwest United States and Mexico.

SUBJECT PROPERTY

Close of Escrow: 8/27/2008 Sales Price: $1,743,367

Rentable SF: 6,450 Down Payment: N/A

Year Built: 2008 Cap Rate: 7.60%

Price/SF: $270.00


Rentable SF: 5,600 Down Payment: 700,000%

Year Built: 1980 Cap Rate: 7.65%

Price/SF: $339.29


SALE S C

O MPARABLE S

Rentable Square Feet: 7,360 Sales Price: $1,250,000Year Built: 2008 Down Payment: $312,500

CAP Rate: 8.35%

Price/SF: $169.84

Recent Sales



4

5

UNITED RENTALS

2514 SR 410 E

Bonney Lake, WA 98391

RSC HAMMOND

802 Westin Oaks Drive

Hammond, LA 70401

RSC VICTORIA

12104 North Navario

Victoria, TX 77904

3

COMMENTS

United Rentals is the largest provider of rental equipment in the United States.


Rentable SF: 9,500 Down Payment: 400,000%

Year Built: 1994 CAP Rate: 7.42%

Price/SF: $200.00


SALE S C

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Close of Escrow: In Escrow Sales Price: $2,309,806



Price/SF: $391.00




Price/SF: $267.00

Recent Sales



7

8

RSC GALVESTON

6311 Harborside Drive

Galveston, TX 77554

RSC PORT ARTHUR

905 West Jade Avenue

Port Arthur, TX 77643

RSC BILLINGS

2651 Gable Road

Billings, MT 59102

6



Year Built/Renovated: 1994/2006 CAP Rate: 8.75%

Price/SF: $291.00


SALE S C

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Price/SF: $275.00

Close of Escrow: On Market Sales Price: $1,589,832



Price/SF: $264.97

Recent Sales



10

RSC ODESSA

Parkway Business Park

Odessa, TX 79761

RSC MARBLE FALLS

1600 Ollie Lane

Marble Falls, TX 78654

9




Price/SF: $324.00




Price/SF: $310.00


SALE S C

O MPARABLE S

Recent Sales





RE NT C O MPARABLE S



COMMENTS

The subject has a per square foot rental rate 40% below the average of other surveyed RSC Equipment Rental locations.

The total annual rent for the subject is over 30% lower than the average of other surveyed RSC Equipment Rental locations.

After the subject, the next lowest rental rate is over $6.50 higher per square foot.

The subject's rental rate will increase by 2% annually over the course of both the initial term and all option periods.

In 4.5 years, at the end of the initial term, the subject's rental rate will still be 35% lower than RSC's average rental rate is today.

0.00

3.00

6.00

9.00

12.00

15.00

18.00

21.00

24.00

27.00

30.00

Subject RSCBillings

RSCFlorence

RSCOdessa

RSCMarble

Falls

RSCHammond

RSCVictoria

RSCGalveston

RSCPort

Arthur

RSCSan

Benito

Avg $23.54



Average Rent/SF



SUBJECT PROPERTY

2

RSC BILLINGS

2651 Gable Road

Billings, MT 59102

RSC FLORENCE

1341 North Cashua Drive

Florence, SC 29501

1

RSC EQUIPMENT RENTAL - DUBUQUE, IA

1025 Cedar Crossing Road

Dubuque, IA 52003

Date Surveyed: September 16, 2008Year Built: 2008

Rentable Square Feet: 7,360

Rent/SF: $14.01

Lease Type: Triple Net (NNN)



Year Built: 2008


Rent/SF: $20.54


Year Built: 2007


Rent/SF: $23.91


Rent Comparables



5

RSC ODESSA

Parkway Business Park

Odessa, TX 79761

RSC MARBLE FALLS

1600 Ollie Lane

Marble Falls, TX 78654

RSC HAMMOND

802 Westin Oaks Drive

Hammond, LA 70401

3

4

Year Built: 2008Rentable Square Feet: 6,450

Rent/SF: $24.81


Year Built: 2007


Rent/SF: $24.04


Year Built: 2008


Rent/SF: $30.34




Rent Comparables



8

RSC VICTORIA

12104 North Navarro

Victoria, TX 77904

RSC GALVESTON

6311 Harborside Drive


RSC PORT ARTHUR

905 West Jade Avenue


6

7


Rent/SF: $20.71


Year Built/Renovated: 1994/2006


Rent/SF: $25.46


Year Built: 2008


Rent/SF: $21.33




Rent Comparables



RSC SAN BENITO

1720 West US 77

San Benito, TX 78586

9


Rent/SF: $20.72




Rent Comparables





ADDI TI O

NALI NF OR MATI O N




ADDI TI O

NALI NF OR MATI O N

RSC Rental Equipment - 2008 Q2 Report




ADDI TI O

NALI NF OR MATI O N




OFFERING MEMORANDUM

DUBUQUE, IA

Offices Nationwide

www MarcusMillichap com

RSC EQUIPMENT RENTAL -DUBUQUE, IA

single tenant - rsc euipment rental - dubuque ia

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