Troy Distribution Center

1260 Brukner Drive, Troy, OH, 45373, US

Asset Description

Jones Lang LaSalle (“JLL”), as exclusive advisor to ownership, has been retained to market for sale the fee-simple interest in the Troy Distribution Center, a fully occupied, 211,925 square foot industrial facility located in the affluent suburb of Troy, OH (the “Offering”, the “Property”, or the “Asset”). Built in 1996 and situated less than a half-mile from Interstate 75 and less than 15 miles from the Dayton International Airport, the Property represents the opportunity to acquire a well located and highly functional distribution center strategically located in the Upper Valley submarket of Dayton.

This two-tenant facility is 100% leased with just over half of the Property occupied by an investment grade tenant with more than a decade of tenure (Hobart is a wholly owned subsidiary of Illinois Tool Works (ITW), ITW currently has an A1 long-term rating from Moody’s and an A+ S&P rating). The Troy Distribution Center is a well-positioned, cross-dock asset being offered to investors at a basis below replacement cost in a historically low-vacancy market with strong rent growth. The Asset has in-place WALT of 2.8 years or 7.4 years with all options exercised; 47% of GLA is assumed to roll to a market rate renewal option in year 3 of the analysis, creating income growth during the hold period while avoiding significant leasing costs.

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Attributes

Building area net

211,925 sf

Occupancy

100%

Tenants

WALT

2.8 years

Media

Investment Highlights

IDEALLY LOCATED CROSS-DOCKED LOGISTICS FACILITY

• The Troy Distribution Center offers immediate access to the four-way Interstate-75 Interchange through West Market Street (State Road 55), creating an easy connection to Interstate-70 to the south

• Asset is set 10 to 15 minutes north of Dayton International Airport and downtown Dayton is reachable in less than 20 minutes

• All major Midwest markets are reachable from the Property within a one-day truck drive, as well as New York City, Toronto, and a large portion of the southeast United States

MISSION CRITICAL FACILITY FOR LONG-STANDING INVESTMENT GRADE TENANT

• Hobart, a wholly-owned subsidiary of Illinois Tool Works (NYSE: ITW, Moody’s: A1, S&P: A+), operates within 53% of the Property

• Troy has been Hobart’s main home since the company’s founding in the early 1900’s, the Hobart corporate headquarters is located just 3 miles from the Offering

• The warehouse space utilized by Hobart within the Troy Distribution Center is vital to the company’s storage and shipping operations, allowing investors confidence of assured and consistent cash flows

• With an 11+ year tenure at the Troy Distribution Center and current term through May 2029, Hobart has displayed significant commitment to the Asset and has long been a notable piece of the Troy industrial market

ABILITY TO CREATE SIGNIFICANT CASH FLOW GROWTH BY MARKING IN-PLACE RENTS TO MARKET

• JLL estimates in-place rents to be roughly 15%below current market rates

• In-place rent roll is made up by a long-tenured, investment grade tenant with nearly 10 years of term if both remaining options are exercised, as well as a newer tenant whose rent can potentially be marked up upon the February 2027 onset of their remaining FMV option

• Strong user demand in the overall Dayton industrial market has led average asking rates up into the $5.00 - $5.25 PSF range, representing 7%average annual rent increases between 2021 and 2024

BLUE-COLLAR BASED LOCAL ECOMONY WITH IMPRESSIVE INCOME LEVELS

• More than 58% of the overall workforce that live within 10-miles of the Troy Distribution Center are blue-collar employees

• The average household income in this 10-mile radius ($86k per year) is nearly 30% above the U.S. average, as you move in within 3-miles of the Asset, the average household income increases to more than $98k per year