Discussion Guide: Real Estate Advisory Services prepared for

Transcription

1 Discussion Guide: Real Estate Advisory Services prepared for

2 WHAT WE VE LEARNED CURRENT SITUATION OVERVIEW > Create best in class 4G LTE network with access to over 90% of the customer base > Focus on Smartphone 4G LTE offerings for Andriod, Apple and Windows devices > These were 69 % of devices sold in fourth quarter 2013 > Expanding distribution through Sam s Club and Amazon > Divested PCS license spectrum in multiple markets in 2013 > Done to refocus resources to the smartphone market initiative and 4G LTE infrastructure > Paid special cash dividend of $482 million to all common shareholders in June 2013 > Repositioning of company lowered operating income by 9.8 million in 2013 versus

3 WHAT WE VE LEARNED CURRENT SITUATION OVERVIEW (CONTINUED) > Migration customers to a new Billing and Operational Support System in third quarter of 2013 > Had some challenges with that migration but appear to be through those now > Customer base of 4.8 million in 23 states with 15% penetration rate in markets served > Penetration up from 12.6% and 12.3% in 2011 and 2012 respectively > Shareholder equity stands at $3.4 bb > 2014 first quarter results net income of $19.5 million or $.23 per share compared to $4.9 million or $.06 per share in the same period one year ago > Margins in this business are thin so managing expenses is key > The trajectory of Company appears to be trending in the right direction > What s possible with the Real Estate Strategy with this as backdrop 2

4 WHAT WE VE LEARNED CURRENT SITUATION 3

5 WHAT WE VE LEARNED CURRENT SITUATION > USC has 361,122 SF located at four sites in the O Hare/NW Corridor > Leases expire for all but 30,433 SF in Schaumburg, in 2017/ W. Bryn Mawr,, IL, 212,428 SF LEX 10/31/ Tower Lane, Bensenville, IL, 86,087 SF LEX 12/31/17 One Pierce Place, Itasca, IL, 32,174 SF LEX 3/31/18 50 E. Commerce Drive, Schaumburg, IL, 30,433 SF LEX 1/31/20 > Schaumburg expires in early 2020; it is the most up to date facility in the portfolio > Site houses NOC and is proximate to the operating Data Center that will remain active > Four sites can seat 2,000 + employees for average of 180 SF/seat > The largest number (1,193) are at the 8410 Bryn Mawr location 178 SF/seat 4

6 WHAT WE VE LEARNED CURRENT SITUATION > Leadership desires to study its options to house these operations > Occupancy Scenarios to be considered include but are not limited to: Renew in place at current sites and update/restack as needed Consolidate certain operations at the Bryn Mawr location (available 120Ksf) Relocate all or portions of the operations to existing building(s) nearby Relocate all or portions of operations to a to be built new site near by Relocate all or portions of operations outside of Illinois, new or existing Relocate all or portions of operations to downtown, new or existing > Creating innovative work place solutions to enhance culture is of value and doing so in a costeffective manner is critical > Leadership has no pre-conceived notions as to what will work best > Looking to its selected advisors to help them orchestrate a highly focused process > Want to create a real estate business solution that generates profits for the company 5

7 WHAT WE VE LEARNED CHALLENGES > Workplace environments not ideal as currently configured in most locations > Schaumburg is considered the most up to date facility and houses the 24/7 NOC > 8410 Bryn Mawr is an older asset with a number of inherent challenges including: Windows, HVAC Systems, Elevators, Floor plates and Amenities > Ceilings, Lighting and Mechanical Systems at HG are challenged, should be updated > Workstations are 6 x 8 generally, would like to migrate to 6 x 6, might consider some benching concepts in the future > The small floor plate causes company to be stacked virtacally with limited amenity and service space on each floor > It is suggested that upwards of 7,000 SF per floor would be very helpful for planning > This suggests a 28,000 to 30,000 SF floor would be appropriate > After hours HVAC is costing north of $7,000 per month, caused by sun and equipment loads > Blinds are kept down thus blocking out natural light. > If USC were to significantly increase density at Bryn Mawr, the HVAC systems may not be able to accommodate that demand 6

8 WHO WE ARE AT A GLANCE $2.1B IN ANNUAL REVENUE $1.46B COMMERICAL SQUARE FEET UNDER MANAGEMENT 15,800 PROFESSIONALS OFFICES COUNTRIES >$75.0B IN TRANSACTION VOLUME Our services include: > Brokerage Sales And Leasing Landlord Representation Tenant Representation > Corporate Solution > Investment Services > Project Management > Real Estate Management Services > Valuation And Advisory Services 7

9 WHO WE ARE COLLIERS/US CELLULAR NATIONAL COVERAGE 8

10 WHO WE ARE PROJECT TEAM DISCIPLINES > Corporate Services > Transaction Management > Lease Auditing Bob Chodos, SIOR PRINCIPAL Steve Levitas PRINCIPAL Mike Adams SENIOR VICE PRESIDENT > Lease Restructure > Lease Negotiations > Subleasing/Dispositions > Construction/Project Management > Strategic Planning > Benchmarking AREAS OF PRACTICE Randy Bowles SENIOR ASSOCIATE Michelle Tenuta VICE PRESIDENT Julie Grauer BROKER ASSISTANT > Legal > Financial Services > Advertising/Marketing > Education > Healthcare > Science & Technology > Not-for Profit > Manufacturing > Insurance 9

11 WHO WE ARE EXPERIENCE 227 W. Monroe Street, IL Current Location 444 W. Lake Street, IL Future Location 444 W. Lake Street, IL Plaza Rendering SCOPE OF PROJECT > 225,000 SF anchor tenant lease in s first new development since the 2008 financial crisis RESULTS > 12% reduction equates to $41.5 million savings over new lease term > Design allowed them to standardize offices to two sizes > Negotiated $32 million in Landlord funded concessions to offset construction and relocation costs 10

12 WHO WE ARE EXPERIENCE 901 E. Cary Street Richmond, VA Current Location Gateway Plaza Under Construction March 2014 Gateway Plaza Richmond, VA Future Location SCOPE OF PROJECT > 218,000 SF anchor tenant lease in new downtown build-to-suit RESULTS > 11% space reduction equates to $17.8 million savings over new lease term > Design allowed them to standardize offices to single size > $14 million TIF proceeds reduced overall project costs and portion of TI cost 11

13 WHO WE ARE EXPERIENCE SCOPE OF PROJECT > 411,000 SF anchor tenant lease in new downtown build-to-suit 353 N. Clark St., IL Current Location RESULTS > Tenant Driven Design Build for a 1.1 million RSF 45 story new tower > Joined with Mesirow Financial for 761,000 SF Total Anchor Tenancy > Jenner s NER ($12.79) was $2.65/SF less than that of its competitor, Kirkland & Ellis at similar new development 2 blocks from Jenner s building > Current Managing Partner commented that new space has re-invigorated the firm and the attorneys are energized working in the new environment 12

14 WHO WE ARE EXPERIENCE 333 W. Wacker Drive, IL SCOPE OF PROJECT > 167,000 SF lease restructuring at its corporate headquarters RESULTS > Restructured three years early and reduced existing rent by 40%, a $8.4 million savings > $8.3 million in additional Landlord funded concessions > Obtained signage rights for top of building and both lobby entries 13

15 WHAT WE LL DO THE NEW WORKPLACE: THE 80/20 APPROACH Real Estate 7.0% Information Technology 8.0% Operations 5.0% Revenue Engine 80.0% In addition to cost this project is about: People Technology > Productivity > Knowledge-sharing > Recruiting/Retention > Generational shift > Demographics Brand > The Blink factor > Real estate as brand icon > Corporate Messaging/Culture > Work anytime, anywhere > Cloud WiFi Mobile > Social Media Risk > Now vs Future > Business cycles change often > Real estate not agile or flexible 14

16 WHAT WE LL DO THE NEW WORKPLACE : CRITICAL TRENDS 75% OF APPS WILL BE IN THE CLOUD (2015) 5 CRITICAL TRENDS SHAPING CRE & WORKPLACE 100b+ GLOBAL MOBILE DEVICES 50% WORKFORCE Y MILLENIALS ( ) 80% WORK HIGHLY COLLABORATIVE (2015) 40% OF WORKSPACE IS OCCUPIED (today) SPACE REDUCTION 15

17 WHAT WE LL DO THE NEW WORKPLACE: DEMOGRAPHIC TRANSFORMATION BOOMER GENERATION X MILLENNIALS TRAIT Optimistic Skepticism Empowered LEADERSHIP STYLE Consensus Consensus Non-hierarchical CAREER Competitive, change agents Resourceful, self manage Cutting-edge vs experience VALUE Opportunity Freedom Diversity and social responsibility REWARDS Money, title and perks Transferable benefits, flexibility and balance High pay, interesting work and work/life balance The majority of Baby Boomers are expected to retire by Millennials will become a more dominant and influential workgroup during this transition. 16

18 WHAT WE LL DO 6 DRIVERS OF WORKPLACE CHANGE LESS IS MORE Thoughtful Space Reduction CHOICE & BALANCE Focus + Collaboration FUTURE PROOF Adaptable & Reconfigurable Design 15-40% 12% 60% Average space reduction while simultaneously increasing headcount Increase in employee satisfaction when employers offer choices Decrease in reconfiguring cost compared to traditional construction using modular building components, while minimizing disruption to business and rate of depreciation 17

19 WHAT WE LL DO 6 DRIVERS OF WORKPLACE CHANGE UBIQUITOUS TECHNOLOGY From Tethered to Portable CONNECT THE DOTS Face-to-Face & Virtual Engagement ONE SIZE DOES NOT FIT ALL Crafting a Strategy for Your Firm 61% 80% 100% Amount of IT traffic that will be generated by wireless devices in 2015 Business professionals believe that face-to-face communication builds stronger, more meaningful relationships Opt-In Change Management program employee participation from Day 1 18

20 WHAT WE LL DO SOME QUESTIONS What is driving CHANGE? What if your space supported HOW YOU WANT TO WORK? What if you could RECONFIGURE your space with ease? Globalization Mobility TECHNOLOGY Generational Shift Wellness Competition 19

21 WHAT WE VE DONE EXPERIENCE Lacey Road Downers Grove, IL Relocation from DT 400 S. Jefferson St., IL After Construction - Current > 1,500 employee HQ multi-state consolidation, downtown and suburbs, St. Louis, and Cincinnati > Managed architect/project team through design process to create performance driven design > Negotiated extensive lease flexibility > Secured signage both exterior and interior > Design facilitated consolidation and transformation > 600+ employee HQ consolidation from suburbs back to downtown > Conducted architectural design competition to select the right architect to achieve vision > Obtained $5.5 million in TIF subsidies from City of and extensive signage exterior and interior > Return on cost, structured lease transaction with developer on an open book basis 20

22 SARA LEE DOWNTOWN 70 W. MADISON STREET: 2005 SPACE

23 SARA LEE DOWNTOWN 70 W. MADISON STREET (2005 SPACE)

24 SARA LEE DOWNTOWN 70 W. MADISON STREET (2005 SPACE)

25 SARA LEE SUBURBAN 3500 LACEY ROAD, DOWNERS GROVE (NEW HQ)

26 SARA LEE SUBURBAN 3500 LACEY ROAD, DOWNERS GROVE (NEW HQ)

27 SARA LEE SUBURBAN 3500 LACEY ROAD, DOWNERS GROVE (NEW HQ)

28 SARA LEE SUBURBAN 3500 LACEY ROAD, DOWNERS GROVE (NEW HQ)

29 SARA LEE SUBURBAN 3500 LACEY ROAD, DOWNERS GROVE (NEW HQ)

30 HILLSHIRE BRANDS UNIQUE ARCHITECT RFP PROCESS - IDEA

31 HILLSHIRE BRANDS UNIQUE ARCHITECT RFP PROCESS - CONCEPT

32 HILLSHIRE BRANDS UNIQUE ARCHITECT RFP PROCESS - SCHEMATIC

33 HILLSHIRE BRANDS UNIQUE ARCHITECT RFP PROCESS REFINED SCHEMATIC

34 HILLSHIRE BRANDS ENERGY IN MOTION

35 HILLSHIRE BRANDS ENERGY IN MOTION

36 HILLSHIRE BRANDS ENERGY IN MOTION

37 HILLSHIRE BRANDS ENERGY IN MOTION

38 HILLSHIRE BRANDS ENERGY IN MOTION

39 HILLSHIRE BRANDS ENERGY IN MOTION

40 HILLSHIRE BRANDS 400 S. JEFFERSON STREET - PRECONSTRUCTION

41 HILLSHIRE BRANDS 400 S. JEFFERSON STREET

42 HILLSHIRE BRANDS 400 S. JEFFERSON STREET THE SOLUTION

43 HILLSHIRE BRANDS 400 S. JEFFERSON STREET - IMPLEMENTATION

44 HILLSHIRE BRANDS 400 S. JEFFERSON STREET - TODAY

45 HILLSHIRE BRANDS 400 S. JEFFERSON STREET CURRENT FLOOR PLATE

46 HILLSHIRE BRANDS 400 S. JEFFERSON STREET BIRDSEYE VIEW

47 HILLSHIRE BRANDS 400 S. JEFFERSON STREET PRIOR STATE LOBBY

48 HILLSHIRE BRANDS 400 S. JEFFERSON STREET (NEW HQ )

49 HILLSHIRE BRANDS 400 S. JEFFERSON STREET (NEW HQ )

50 HILLSHIRE BRANDS 400 S. JEFFERSON STREET (NEW HQ )

51 HILLSHIRE BRANDS 400 S. JEFFERSON STREET WORKPLACE

52 HILLSHIRE BRANDS 400 S. JEFFERSON STREET (NEW HQ )

53 HILLSHIRE BRANDS 400 S. JEFFERSON STREET ROOF DECK

54 HILLSHIRE BRANDS 400 S. JEFFERSON STREET ROOF DECK TODAY

55 INITIAL PROJECT INCENTIVE ANALYSIS* SAMPLE PROJECT INFORMATION/ASSUMPTIONS Company Information Investment Employment Facility Information Company Name: ABC Corp Real Property: $30,000,000 New: 2000 Own/Lease: Lease Project States: IL, GA,TX,OK Personal Property: $0 million (est.) Retained: 0 Existing Facility/ New Construction: Project City(s): Multiple Infrastructure Needs: TBD Average Annual Salary: $100,000 Facility Size (SF) 300,000 Project County(s): Multiple Utility Usage: TBD Training (y/n): Yes Facility Type: HQ/Shared Services TBD US LABOR WAGE STATISTICS U.S. Dallas Atlanta Tulsa Management $53.15 $55.95 $55.55 $44.76 $50.20 Office & Administrative $16.78 $17.04 $16.89 $15.75 $17.15 INCENTIVE ANALYSIS SUMMARY Project Incentive Range Overview Dallas, TX Approximately $20 million Texas Enterprise Fund, Texas Enterprise Zone Atlanta, GA $25 million - $30 million Tax Credits, Cash Grant Tulsa, OK $24 million to $100 million** Oklahoma Quality Jobs, Enterprise Zone Incentives $12 - $18 million in TIF subsidy IL EDGE credits available * This Initial Project Incentive Analysis represents ADP's opinion as to the availability of incentives based on the assumptions outlined above. Until further research & negotiation can be completed, we are at this time unable to provide a reliable estimate as to the value of available incentives for the proposed project. ** Total savings could approach $200 million ADP needs to discuss with prospect 54

56 PRELIMINARY PROJECT SCHEDULE STRATEGY DEVELOPMENT Define Project Objectives; Set assessment Strategy Establish Location Parameters and Site Selection Criteria Issue Project Guideline Plan Coordinate Team Selection Process, all Consultants Evaluate Existing Sites & Complete Programming Assess/Develop Work Place Strategies Create RE Scenario Plans and analyze against market Issue Draft of Strategic Plan with Recommendations Review with USC Leadership Revise & Adjust Issue Final Strategy Plan Report MARKET ASSESSMENT Explore Market Alternatives, Select Short List Sites Identify and Quantify State & Local Incentives Develop planning Scenarios For Short List Sites RFP Process and Analysis of Responses Budget Development/Refinement - Revise Analysis Issue Proposal Comparison Report, Review and Revise Select Target Site(s) and Negotiate LOI Negotiate Lease Contract Sign Lease at Selected Site PROJECT IMPLEMENTATION Design and Engineering For New Building Budgeting and Contract Award Construction: Base Building and Interior Commence Base Building Large DT Concept BB Construction, Shell & Core, DT Concept Commence Base Building Suburban Concept BB Construction Shell & Core Suburban Concept: Commence Interior Construction Interior Buildout Schedule Move-In TIME PERIOD 15 days 30 days 1 day 30 days 60 days 60 days 60 days 1 day 15 days 1 day TIME PERIOD 60 days 90 to 120 days 30 to 45 days 60 days 60 days 30 days 1 day 60 days 1 day TIME PERIOD 5 mos. 2 mos. 25 mos. 19 mos. 12 mos. 6 mos. 14 days J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O STRATEGY DEVELOPMENT > Project goals and objectives > Comprehensive space program with project growth requirements > Long-term space utilization strategy > Project schedule > Site selection criteria > Strategic plan issued MARKET ASSESSMENT > Market survey/tours > Building proposal responses > Space plans and construction budgets for each candidate site > Financial summary analysis > Shortlist of viable sites > Incentive packages quanitfied for each short-list site > Final financial summary analysis > Finalize schematic design > Final budget including construction, FF&E and relocation costs > Executed Letter of Intent/Purchase Agreement > Executed Lease or Development Agreement > Executed Incentive Agreement Business Days Milestones Deliverables 55

57 WHY WE RE DIFFERENT OUR KEY DIFFERENTIATORS CREATIVITY IS OUR MANTRA 80/20 focus will help US Cellular create its new canvas SUBSTANTIAL EXPERIENCE With large users for long periods of time REINVENTION PROJECTS OUR FOCUS Creating places where our clients generate higher profits RELENTLESS NEGOTIATORS No stone is left unturned we sweat the details PROVEN CAPABILITIES "We ve done this before RISK ADVERSE We will protect you from risk 56

58 NORTHWEST 250,000+ SF EXISTING PROPERTIES E Algonquin Rd Elk Grove Village & 2001 AT&T Center Dr Hoffman Estates & 1450 American Ln Schaumburg N Martingale Rd Schaumburg Golf Rd Rolling Meadows W Lake Cook Rd Deer Park

59 NORTHWEST 250,000+ SF EXISTING PROPERTIES E Algonquin Rd Elk Grove Village & 2001 AT&T Center Dr Hoffman Estates & 1450 American Ln Schaumburg N Martingale Rd Schaumburg Golf Rd Rolling Meadows W Lake Cook Rd Deer Park E Algonquin Rd Elk Grove Village and 2001 AT&T Center Dr Hoffman Estates 58

60 NORTHWEST 250,000+ SF EXISTING PROPERTIES E Algonquin Rd Elk Grove Village & 2001 AT&T Center Dr Hoffman Estates & 1450 American Ln Schaumburg N Martingale Rd Schaumburg Golf Rd Rolling Meadows W Lake Cook Rd Deer Park & 1450 American Ln Schaumburg N Martingale Rd Schaumburg 59

61 NORTHWEST 250,000+ SF EXISTING PROPERTIES E Algonquin Rd Elk Grove Village & 2001 AT&T Center Dr Hoffman Estates & 1450 American Ln Schaumburg N Martingale Rd Schaumburg Golf Rd Rolling Meadows W Lake Cook Rd Deer Park Golf Rd Rolling Meadows W Lake Cook Rd Deer Park 60

62 NORTHWEST 250,000+ SF DEVELOPMENT SITES Pierce Place Itasca 2 75 NW Point Blvd Elk Grove Village

63 NORTHWEST 250,000+ SF DEVELOPMENT SITES Pierce Place Itasca 2 75 NW Point Blvd Elk Grove Village Pierce Place Itasca NW Point Blvd Elk Grove Village DEVELOPER Hamilton Partners DEVELOPER United Airlines LEASING FIRM Hamilton Partners LEASING FIRM TBD TOTAL RBA 500,000 SF TOTAL RBA 500,000 SF FLOORS Build to Suit FLOORS Build to Suit 62

64 EAST-WEST 250,000+ SF EXISTING PROPERTIES Winfield Rd Warrenville Shuman Blvd Naperville Oakmont Ln Westmont

65 EAST-WEST 250,000+ SF EXISTING PROPERTIES Winfield Rd Warrenville Shuman Blvd Naperville Warrenville Rd Lisle Oakmont Ln Westmont Winfield Rd Warrenville Shuman Blvd Naperville 64

66 EAST-WEST 250,000+ SF EXISTING PROPERTIES Winfield Rd Warrenville Shuman Blvd Naperville Warrenville Rd Lisle Oakmont Ln Westmont Winfield Rd Lisle Oakmont Ln Westmont 65

67 NORTH 250,000+ SF EXISTING PROPERTIES N. US Hwy 45 Libertyville Lakeside Dr Bannockburn 3 1 Parkway Blvd Deerfield Milwaukee Ave Glenview

68 NORTH 250,000+ SF EXISTING PROPERTIES N. US Hwy 45 Libertyville Lakeside Dr Bannockburn 3 1 Parkway Blvd Deerfield Milwaukee Ave Glenview N. US Hwy 45 Libertyville Lakeside Dr Bannockburn 67

69 NORTH 250,000+ SF EXISTING PROPERTIES N. US Hwy 45 Libertyville Lakeside Dr Bannockburn 3 1 Parkway Blvd Deerfield Milwaukee Ave Glenview 3. 1 Parkway Blvd Deerfield Milwaukee Ave Glenview 68

70 O HARE 250,000+ SF PROPERTIES Existing Development Site O Hare Corporate Campus Rosemont 2 Point O Hare Rosemont Rosemont Balmoral Rosemont 4 Riverway Complex 6133 N. River Rd & 9399 W. Higgins Rd Rosemont

71 O HARE 250,000+ SF PROPERTIES Existing Proposed Site 1 O Hare Corporate Campus Rosemont 2 Point O Hare Rosemont 3 Rosemont Balmoral Rosemont 4 Riverway Complex 6133 N. River Rd & 9399 W. Higgins Rd Rosemont 1. O Hare Corporate Campus Rosemont DEVELOPER LEASING FIRM DRI DRI TOTAL RBA 700,000 FLOORS 5 office bldgs 2. Point O Hare Rosemont DEVELOPER LEASING FIRM Conor Commercial Orix TOTAL RBA 390,000 FLOORS 10 70

72 O HARE 250,000+ SF PROPERTIES Existing Proposed Site 1 O Hare Corporate Campus Rosemont 2 Point O Hare Rosemont 3 Rosemont Balmoral Rosemont 4 Riverway Complex 6133 N. River Rd & 9399 W. Higgins Rd Rosemont 3. Rosemont Balmoral Rosemont 4. Riverway Complex Rosemont DEVELOPER LEASING FIRM TOTAL RBA FLOORS Duke Realty Duke Realty 10.3 acres Build to Suit OWNER TOTAL RBA Blackstone Group 545,233 SF TOTAL AVAILABLE 260,000 SF* *125,000 SF at 9399 W. Higgins 135,000 SF at 6133 N. River Rd 71

73 DOWNTOWN CHICAGO CBD 250,000+ SF EXISTING PROPERTIES W. St N. State St N. LaSalle St E. Randolph St E. Randolph St W. Monroe St W. Monroe St The Franklin 227 W. Monroe St & 222 W. Adams St

74 DOWNTOWN CHICAGO CBD 250,000+ SF EXISTING PROPERTIES W. St N. State St N. LaSalle St E. Randolph St E. Randolph St W. Monroe St W. Monroe St 8 The Franklin 227 W. Monroe St & 222 W. Adams St W. St N. State St 73

75 DOWNTOWN CHICAGO CBD 250,000+ SF EXISTING PROPERTIES W. St N. State St N. LaSalle St E. Randolph St E. Randolph St W. Monroe St W. Monroe St 8 The Franklin 227 W. Monroe St & 222 W. Adams St N. LaSalle St E. Randolph St 74

76 DOWNTOWN CHICAGO CBD 250,000+ SF EXISTING PROPERTIES W. St N. State St N. LaSalle St E. Randolph St E. Randolph St W. Monroe St W. Monroe St 8 The Franklin 227 W. Monroe St & 222 W. Adams St E. Randolph St W. Monroe St 75

77 DOWNTOWN CHICAGO CBD 250,000+ SF EXISTING PROPERTIES W. St N. State St N. LaSalle St E. Randolph St E. Randolph St W. Monroe St W. Monroe St 8 The Franklin 227 W. Monroe St & 222 W. Adams St W. Monroe St 8. The Franklin 76