PROPERTY OVERVIEW 1380 ENTERPRISE DRIVE WEST CHESTER PENNSYLVANIA 19380
EXECUTIVE PROPERTY OVERVIEW SUMMARY
PROPERTY DESCRIPTION Year Built: 1987; Renovated 2005 Total Building Size: Available Space: Land Size: Loading Capabilities: ±38,225 SF Unit 1: 16,290 SF Unit 2: 13,912 SF Unit 3: Fresenius Medical Care - 8,023 SF 30,202 Sq Ft - Divisible Unit 1: 16,290 SF Unit 2: 13,912 SF 4.0 AC Three (3) 8 x 8 loading dock doors One (1) 8 x 8 drive-in door Ceiling Height: 18 Column Spacing: 30 x 30 Parking (Lined Spaces): Power: Life Safety: Municipality: Water/Sewer: Zoning: 155 free Surface Spaces are available; Ratio of 4/1,000 SF Over 1,600 amp power at 208 volt Wet System East Goshen Township, Chester County Public - East Goshen Township BP - Business Park Parcel Number: 53-004-0176.0000 2017 Property Tax: $66,389.47 ($1.72/SF) Other Features: 300KVA Generator Existing data center serviced by two 20 ton HVAC units 4 2017 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.
PROPERTY PHOTOS 1380 ENTERPRISE DRIVE Property Overview 5
PROPERTY PHOTOS UNIT 1 UNIT 2 UNIT 3 6
PROPERTY PHOTOS 1380 ENTERPRISE DRIVE Property Overview 7
8 PROPERTY PHOTOS
EXECUTIVE MAPS & AERIALS SUMMARY
1380 ENTERPRISE DRIVE Malvern, PA - 5 miles Wilmington, DE - 21 miles Center City Philadelphia, PA - 34 miles New York City, NY - 119 miles Exton, PA - 6 miles King of Prussia, PA - 17 miles Plymouth Meeting, PA - 24 miles Pottstown, PA - 25 miles Allentown, PA - 66 miles Princeton, NJ - 69 miles *Mileages are approximate 10 Maps & Aerials 11
1380 ENTERPRISE DRIVE 12 Maps & Aerials 13
14 *Property outline is approximate
EXECUTIVE BUILDING PLANS SUMMARY
FLOOR PLAN 1380 ENTERPRISE DRIVE UNIT 1 16,290 SF UNIT 2 13,912 SF RedGo DEVELOPMENT 16 Building Plans 17
EXECUTIVE MARKETVIEWSUMMARY
1380 ENTERPRISE DRIVE Metro Philadelphia Industrial, Q3 2017 Economic growth driving tighter market conditions Net Absorption 1.8 Million sq. ft. Vacancy Rate 5.4% Asking Lease Rate (NNN) $4.35 Development 2.2 Million sq. ft. Figure 1: Philadelphia MSA Real GMP (lagged 4 quarters) and Industrial Occupancy (Billions, 2009$) $350 *Arrows indicate change from previous quarter (%) 96 $340 $330 $320 Industrial Occupancy Rate Real Gross Metro Product 94 92 90 $310 88 $300 86 Source: CBRE Research, Moody s Analytics, Q3 2017 Vacancy moved sideways from the previous quarter s historic low level. A lack of new supply against the backdrop of sustained demand, especially in Southern NJ, points toward sustained high occupancy levels in the short term. Asking rents persisted higher as landlords clearly retained leverage during negotiations. Warehouse/distribution product in Southern NJ and flex product in the PA portion of the market enjoyed some of the largest year-over-year gains in rents as a result of limited supply. The fist speculative project in New Castle County during recent history broke ground. Measuring 100,000 sq. ft., the building will add supply to an immediate area where available space is nearly non-existent. In Southern NJ, a 650,000-sq.-ft., built-to-suit project broke ground and is slated for e- commerce use. Investment sales activity settle toward recent historic averages as investors remained interested in the metro s tight, active market. Although the region s burgeoning I-78/I-81 logistics corridor, stretching from Scranton past Harrisburg, draws most of the attention, the Philadelphia metropolitan industrial market is experiencing a boom of its own. Occupancy in industrial properties in the Philadelphia area are at their highest levels ever, according to our records, and rents are surging higher. Continued favorable economic conditions and rapidly changing supply chain logistics are driving market conditions much tighter. The vacancy rate in Southeastern PA dropped 200 basis points (bps) over the last year to a nearcyclical low of 5.5%. In Northern Delaware, the vacancy rate plummeted 860 bps since one year ago to a very tight 3.3%. Rents are surging higher across submarkets. The average asking rent in Metro Philadelphia rose 4.1% over the last year. Q3 2017 CBRE Research 2017, CBRE, Inc. 1 MarketView 19
METRO PHILADELPHIA INDUSTRIAL Figure 2: Industrial Market Statistics for All Properties Greater than 100,000 sq. ft. Submarket Inventory (SF) Total Vacancy Rate (%) Total Availability Rate (%) Completions (SF) Under Construction (SF) 2017 YTD Total Net Absorption (SF) Avg. Asking Lease Rate ($NNN/PSF/YR) Bucks County, PA 27,433,847 2.2 2.2 0 0 1,030,554 4.78 Chester County, PA 12,269,153 2.6 5.6 0 0-20,823 ---- Delaware County 10,605,300 9.3 10.9 0 0-73,245 4.23 Montgomery County, PA 30,624,046 6.0 9.2 0 0 262,471 4.98 Philadelphia County, PA 29,621,499 8.0 9.3 0 175,000 342,822 4.00 Southeastern PA Subtotal 110,553,845 5.5 7.3 0 175,000 1,541,779 4.39 Burlington County, NJ 27,514,657 4.2 6.8 1,060,148 192,402 2,832,712 4.81 Camden County, NJ 14,753,405 6.1 8.9 0 600,000 93,167 3.59 Gloucester County, NJ 17,886,666 7.9 8.7 1,318,520 1,130,480 1,663,766 4.16 Southern NJ Subtotal 60,154,728 5.8 7.9 2,378,668 1,922,882 4,589,645 4.16 New Castle County, DE 13,912,828 3.3 4.6 0 100,000 388,808 5.66 TOTAL 184,621,401 5.4 7.3 2,378,668 2,197,882 6,520,232 4.35 Source: CBRE Research, Q3 2017. Figure 3: Vacancy Rates by County. (%) 10 9 8 7 6 5 4 3 2 1 0 Delaware Philadelphia Gloucester Camden Montgomery Burlington New Castle Chester Bucks Q3 2017 CBRE Research 2017, CBRE, Inc. 2 20
1380 ENTERPRISE DRIVE METRO PHILADELPHIA INDUSTRIAL ABSORPTION Recent geographic and business-sector demand trends continued across the Philadelphia metro area during the third quarter. Southern NJ outperformed the other submarket while e- commerce or third-party logistics companies accounted for the business types driving positive absorption. Supply constraints in the PA portion of the market tempered activity as most of the desirable, modern space was occupied. In DE, companies such as DowDuPont and M Cubed helped take down larger blocks of space, helping drive the most active quarter, year-to-date, in New Castle County. Figure 4: Net Absorption Million sq. ft. 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Source: CBRE Research, Q3 2017. VACANCY Vacancy moved sideways this quarter as construction deliveries kept pace with demand. At 5.4%, there is little room for vacancy to move lower. Segments of the market, such as flex product in-and-around the King of Prussia area, have no supply available and face development constraints that will offer little-to-no new options in the near future. Where few barriers to development exist in areas of low vacancy and rising rents, construction pipelines remained active. Expect vacancy to persist at low levels with no significant supply slated to deliver to the market in the near term. Figure 5: Vacancy Rate (%) 10.0 9.0 8.0 7.0 6.0 5.0 4.0 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Source: CBRE Research, Q3 2017. DEVELOPMENT PIPELINE While the bulk of construction activity remained focused on the Southern NJ portion of the market, one speculative project kicked-off this quarter in New Castle County its first in several years. It measures 100,000 sq. ft. and is expected to deliver by mid-2018. Construction levels in Southern NJ dipped following the completion of 2.4 million sq. ft. of new supply, most of which delivered leased. Another 650,000-sq.-ft. building broke ground in Gloucester County, but as a built-to-suit project slated for e-commerce use. Million sq. ft. Figure 6: Completions 6.0 4.5 3.0 1.5 0.0 Source: CBRE Research, Q3 2017. Q3 2017 CBRE Research 2017, CBRE, Inc. 3 MarketView 21
METRO PHILADELPHIA INDUSTRIAL LEASE RATES A dearth of speculative development against a backdrop of persistent demand pushed rents higher, on average, throughout the region. This trend is most notable in Southern NJ and Northern DE. In the Philadelphia market, a lack of available space dampened rent growth, somewhat, as the most desirable space was already leased. But, in certain markets, comparable lease data continues to show strong rent growth and will most likely give developers reason to risk speculative development in the Montgomery and Chester Counties within the PA portion of the market. Per Sq. ft. Per Year ($, NNN) Figure 7: Industrial Lease Rates 4.40 4.35 4.30 4.25 4.20 4.15 4.10 4.05 4.00 3.95 CAPITAL MARKETS Source: CBRE Research, Q3 2017. Industrial investment sales volume trended lower from its recent peak tallied in 2015 and 2016. Buyer composition, year-to-date, trended toward private capital and institutional capital as REITs comprised a smaller portion of buyer activity. To note, the largest acquisition during the third quarter was SSH s purchase of a fivebuilding portfolio from a joint venture between Endurance Real Estate and Thackray Crane. The portfolio consisted mainly of fully occupied flex product in Marcus Hook, PA. As last-mile requirements grow in number, expect investors to eye stabilized warehouse and flex product proximate to condense urban populations. ($, Millions) Figure 8: Industrial Sales Transactions 1,400 1,200 1,000 800 600 400 200 0 Q3 2009 Q3 2010 Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017 MANUFACTURING OUTLOOK Source: Real Capital Analytics (4-Qtr. Aggregate). Manufacturing activity persisted to grow after showing slight signs of stalling during late 2015 to early 2016. But, while manufacturing activity grew relatively consistently since 2012, manufacturing employment only decelerated its decline as a result. Since then, overall manufacturing employment flattened out, showing no consistent signs of gains, hinting toward increased productivity as the driver of manufacturing growth. But, in the most recent Philadelphia Federal Reserve manufacturing survey, 30.6% of respondents expected increases in production to be accomplished through hiring compared to 25% who would accomplish through increased productivity, pointing toward potential jobs gains. Figure 9: Philadelphia Metropolitan Business Outlook Survey (index>0 implies manufacturing growth) 80 60 40 20 0-20 Q3 2011 Q3 2012 Q3 2013 Current Activity Q3 2014 Source: Federal Reserve Bank of Philadelphia Q3 2015 Q3 2016 Future Activity Q3 2017 Q3 2017 CBRE Research 2017 CBRE, Inc. 5 22
1380 ENTERPRISE DRIVE METRO PHILADELPHIA INDUSTRIAL CONTACTS Ian Anderson Director of Research and Analysis +1 215 561 8997 ian.anderson2@cbre.com LOCAL OFFICES Center City Philadelphia Two Liberty Place +1 215 561 8900 Allentown, PA +1 610 398 6900 Harrisburg, PA +1 717 540 2700 Joseph Gibson Research Operations Manager +1 610 727 5922 joseph.gibson@cbre.com Lisa DeNight Senior Research Analyst +1 215 561 8932 lisa.denight@cbre.com Andrew Landolfi Researcher +1 610 727 5929 andrew.landolfi@cbre.com Cira Center Mt. Laurel, NJ +1 215 921 7400 +1 856 359 9500 Wayne, PA Wilmington, DE +1 610 251 0820 +1 302 661 6700 Conshohocken, PA +1 610 834 8000 To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at www.cbre.com/researchgateway. Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. MarketView 23
CONTACT US PAUL TOUHEY Senior Vice President +1 610 251 5126 paul.touhey@cbre.com Licensed: PA Licensed Salesperson: NJ ANDREW GREEN Senior Associate +1 610 251 5183 andrew.green@cbre.com Licensed: PA Licensed Salesperson: NJ CBRE, INC. 1200 Liberty Ridge Drive, Suite 320 Wayne, PA 19087 T +1 610 251 0820 F +1 610 889 9168 www.cbre.com/philadelphiasub Licensed Real Estate Broker 2017 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk. CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited.