MovementMortgage_OM_Sept 5
HEADQUARTERS | CHARLOTTE MSA
CON F I D E N T I A L O F F E R I N G M E MO R A N D UM
CUSHMAN & WAKEFIELD
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CONFIDENTIALITY AGREEMENT
EXCLUSIVELY OFFERED BY:
THIS IS A CONFIDENTIAL MEMORANDUM intended solely for your limited use to determine whether you wish to express an interest in the Movement Mortgage Headquarters, located at 8024 Calvin Hall Road and 9726 Old Bailes Road in Fort Mill, SC , as more particularly described herein (“Property”). This confidential memorandum contains brief, selected information pertaining to the business affairs of the Property’s owner (“Owner”) and has been prepared by Cushman & Wakefield, (“C&W”), the Owner’s exclusive agent, primarily from information supplied by the Owner. Although representatives of the Owner have reviewed this confidential memorandum, it does not purport to be all-inclusive or contain all of the information that a potential investor may desire. Neither the Owner, nor any of its members, officers, directors, employees or agents, nor C&W make any representation or warranty, expressed or implied, as to the accuracy or completeness of any of the information contained herein. Each of the Owner and C&W disclaims any liability which may be based on such information, errors therein, or omissions therefrom. All financial data contained herein is unaudited. The projections and proforma information contained herein represent estimates based on assumptions considered reasonable under the circumstances. No representations or warranties, expressed or implied, are made that the actual results will conform to such projections. There is no representation as to environmental conditions of the Property, or as to any other aspect of the Property. By your receipt of this confidential memorandum, you agree that this memorandum and the information contained herein, as well as any information C&W may subsequently provide you in connection with the development of the Property, are of a confidential nature and that you will hold and treat them in the strictest of confidence, and that you will not, directly or indirectly, disclose or permit anyone else to disclose this memorandum or any part of the contents in any fashion or manner detrimental to the interests of the Owner. Notwithstanding, in preparing responses to this Offering Memorandum, the recipient may disclose information contained herein to investors, advisors, consultants and industry professionals retained by the recipient to the extent necessary to secure their services, upon the condition that the recipient requires such parties to maintain the confidentiality of this information. Upon request, the recipient will promptly return this confidential memorandum and any other material received from the Owner or C&W without retaining any copies thereof. This confidential memorandum shall not be deemed an indication of the state of affairs of the Owner or constitute an indication that there has been no change in the business or affairs of the Owner since the date of preparation of this memorandum. Neither the Owner nor C&W undertakes any obligation to provide additional information or to correct or update any of the information contained in this confidential memorandum.
ROB COCHRAN Managing Director +1 704 335 4444 rob.cochran@cushwake.com INVESTMENT ADVISORS
JARED LONDRY Director +1 704 887 3032 jared.londry@cushwake.com
NOLAN ASHTON Senior Associate + 1 704 335 4447 nolan.ashton@cushwake.com UNDERWRITING SUPPORT
JAMES KYGER Senior Financial Analyst +1 704 335 4445 james.kyger@cushwake.com
DREW BOND Financial Analyst +1 704 804 5065 drew.bond@cushwake.com
DEBT & EQUITY
BRIAN LINNIHAN Executive Director +1 404 853 5286 brian.linnihan@cushwake.com
RICHARD HENRY Senior Director +1 404 853 5243 richard.henry@cushwake.com
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WHAT’S INSIDE
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Executive Summary
18
Tenant Information
24
Property Information
Location Overview
34
Market Overview
40
Financial Analysis
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MOVEMENT MORTGAGE HEADQUARTERS / CHARLOTTE MSA
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EXECUTIVE SUMMARY
Cushman & Wakefield’s Capital Markets Group is pleased to offer for sale the Movement Mortgage Headquarters located at 8024 Calvin Hall Road and 9726 Old Bailes Road in Fort Mill, SC. The 205,430 RSF offering consists of two Class A buildings constructed in 2016 and 2018 situated in the Charlotte MSA at the intersection of SC 160 and US 521, just south of the North Carolina state line, Ballantyne Corporate Park, and I-485. Both buildings offer a modern and efficient design with large floor plates featuring a collaborative, open plan, sweeping glass lines, and exposed ceilings. The Movement Mortgage Headquarters contains large, creative common spaces for employees that promote community, creativity, and ingenuity, such as, employee lounges and common areas, outdoor eating areas, an on-site gym, and quiet rooms. The buildings are situated on 23.53 acres, boast abundant parking of 7.1/1,000 RSF, and are 100% leased to Movement Mortgage through 2031. The Movement Mortgage Headquarters is located in the booming Fort Mill/Northern Lancaster County submarket. The area has experienced dramatic growth as employers like Red Ventures, CompuCom, Continental Tire, Lash Group, LPL Financial, Honeywell, Keer, and others continue to expand and locate in the area. Along with corporate users in the area, employees find a wide variety of housing options from high end, gated communities to attractive multi-family developments to moderately priced neighborhoods. The recent delivery of RedStone, a 310,000 SF regional retail center located just minutes from Movement Mortgage, supports and complements the corporate and residential uses of the area. The Movement Mortgage Headquarters is easily accessible from all parts of the Charlotte MSA via I-485, SC 160, and US 521.
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INVESTMENT SUMMARY
8024 Calvin Hall Road, Fort Mill, SC 29707
Address
9726 Old Bailes Road, Fort Mill, SC 29707
Site Area
23.53 Acres 205,430 SF
Rentable Building Area
Floors
Two (2) & Three (3)
Parking
1,461 Spaces (7.1/1,000 SF)
Year Built
2016 & 2018
Lease Expiration
January 31, 2031
Lease Term
12 Years
Current Rent (1/2020-12/2020)
$16.39 PSF (Blended) NNN
Annual Escalations
2% each February 1 st
Year 1 NOI
$3,366,352 $3,724,017
11-Year Straight Line NOI
9726 Old Bailes Road (Movement Mortgage II)
8024 Calvin Hall Road (Movement Mortgage I)
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TENANT OVERV I EW
Movement Mortgage, LLC
Tenant
Tenant Website
movement.com
Employees
4,000
650+ across 47 states
Locations
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SINGLE TENANT, CORE ASSET OFFERING
• Two single tenant, Class A office buildings completed in 2016 & 2018 featuring high quality construction with flexible 25,500 SF offset floorplates in Movement Mortgage I and 34,000 SF floorplates in Movement Mortgage II that can easily be configured for single tenant or multi-tenant use • Modern, tilt-wall concrete buildings boasting expansive window lines and premium interior finishes • Limited future capital expenditures given both buildings are newly constructed to Class A standards • Located on 23.53 acres, the buildings offer a 7.1/1,000 SF parking ratio that accommodates today’s high density parking demands and exceeds the parking ratio of the majority of buildings in the market • Movement Mortgage is and will receive up to a $53 million tax incentive package contingent upon job creation from South Carolina thus ensuring extremely cost efficient occupancy
We’re in this for the long-term. This new
building is another stake in the ground that cements our vision to keep gaining market share, to keep innovating and to keep serving borrowers with love and integrity. Casey Crawford, Movement Mortgage CEO on construction of Movement’s expansion building
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• Movement Mortgage I was completed in 2016 and Movement Mortgage signed a NNN lease through January 2031 • Movement Mortgage II was completed in 2018 to accommodate the company’s rapidly growing employee base. The lease is coterminous with Movement Mortgage I • Unique opportunity to acquire a large, single tenant asset with a NNN lease in place creating a stable investment with minimal to no capital requirements • Annual rent escalations of 2% each February 1 st producing an 11 year straight-line NOI of $3,724,017 • Landlord is only responsible for roof and building structure. Each roof is covered by a 15 year warranty 12 YEAR TRIPLE NET LEASE WITH LIMITED CAPITAL EXPOSURE
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WORLD HEADQUARTERS FOR A WORLD-CLASS TENANT
• Movement Mortgage was formed in Charlotte, NC in 2008 • Over the past 2 years, the relocation to the Movement Mortgage Headquarters brought more than 800 jobs to Lancaster County • According to the Movement Mortgage CEO Casey Crawford, the location was selected due to its location in the Charlotte market, the 2nd largest employment hub for the company, as well as the region’s strong pool of financial services talent from which the company can make hires • Movement Mortgage has grown from a team of 4 employees in 2008 to over 4,000 employees in more than 650 locations today • Ranked by Inc. Magazine as the fastest-growing mortgage bank in the country. Movement Mortgage has a vision to continue this accelerated path of growth and serve 1 out of every 10 homebuyers in the country by 2025
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Movement Mortgage has been an incredible partner to our state since its doors opened in Lancaster County
two years ago. This $18M investment, and the 700 jobs it means for Lancaster County, shows that Movement Mortgage is committed to our state and its people, and we couldn’t be more excited to see this fantastic company continue to grow and thrive for a very long time.
Former Gov. Nikki Haley on Movement Mortgage’s relocation to Lancaster County
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BRAND NEW CONSTRUCTION
• Movement Mortgage I, a Class A building totaling 102,714 RSF delivered in 2016 • Movement Mortgage II, a Class A building totaling 102,716 RSF delivered in 2018 • New construction with high-end Class A finishes will require virtually no capital during a new owner’s hold period
MODERN & EFFICIENT
• Unique modern construction featuring large 25,500 RSF offset floorplates in Movement Mortgage I and 34,000 RSF in Movement Mortgage II that are easily subdivided, feature sweeping glass lines, exposed ceilings, and an open office that promotes a collaborative, dynamic environment • Currently single tenant, the buildings can easily be configured for multi-tenant use • Each building is backed up by a 1,000 KW diesel generator
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PREMIUM TENANT UPFITS
The interior reflects a Class A headquarters finish with an industrial design that is highly desired by companies and employees. Both buildings have open floor plans and break out rooms that encourage a collaborative environment. Centrally located large cafeterias are not only used for dining but also as impromptu meeting areas. Movement Mortgage II has an on-site dentist office and a state-of the art CrossFit gym. The exterior courtyard with its ample variety of outdoor seating connects the two buildings. Movement Bank (owned by Movement Mortgage) has constructed a small branch on the ground floor of Movement Mortgage II with a dedicated entrance for retail customers
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MOVEMENT MORTGAGE SUMMARY
Founded in 2008 in Charlotte, NC, Movement Mortgage provides real estate mortgage services that are realtor-centric. The company started with just 4 employees and has since grown to over 4,000 employees with more than 650 locations across 47 states. The immense growth is largely driven by the company’s implementation of technology into the mortgage industry, unrivaled customer service, and their expeditious application process goal: 6 hour upfront underwriting, 7 day processing, and 1 day closing. Their vision is to serve 1 out of 10 homebuyers in the country by 2025 and have 70% of loans processed in just 7 business days. Movement Mortgage is committed to making the borrowing experience simple and enjoyable from beginning to end, thus ensuring the home buying process is as stress-free as possible. Movement Mortgage has made a tremendous name for itself outside of the mortgage industry through its Movement of Change platform geared to have a long-term impact on the lives of those involved in their communities. This platform led to the inception of the Movement Foundation which has invested nearly $40 million into various ventures and causes intended to spark change. The company boasts prestigious accolades by: • Inc Magazine: Fastest growing mortgage bank in the county • Mortgage Technology: Top Tech-Savvy Lender • American Banker: Loan officers close 4 to 6 loans a month with social media alone
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MOVEMENT MORTGAGE , LLC
Rentable Building Size
205,430 RSF
Lease Expiration
January 31, 2031
Tenant Website
movement.com
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MOVEMENT MORTGAGE CORPORATE HISTORY
The Movement Foundation is created to reinvest in local communities. The Love Works Fund is developed as a source of support for employees in times of crisis. The program shows individuals and their families they are loved and valued by meeting unexpected dilemmas and encouraging them when they need it most. The company also establishes its first mortgage operations center in Charlotte.
Movement expands from market to market and opens its first offices on the west coast in Seattle, WA and San Diego, CA. Movement Insurance is launched. The company establishes a 7-day loan process, with a goal of at least 70% of all loans being completed in 7 business days from start to finish.
Movement Mortgage is launched by CEO Casey Crawford and Toby Harris to be a Movement of Change in the mortgage industry, corporate cultures, and communities. Movement begins operations in Charlotte, NC with four employees. It closes its first loan on June 4th.
1 in every 100 homes purchased in the United States are now financed through Movement. The company becomes licensed in 40 states. The first Movement Center opens in Charlotte to give multiple nonprofits a low-cost facility in which to operate.
2008
2010
2012
2014
2009
2011
2013
2015
The company creates its first large portfolio by assisting homebuyers of Keller Williams Realty in Virginia Beach, VA. Movement creates an award-winning social media presence.
Movement funds one billion dollars in loans. It creates its own video department to add value to agent partnerships, diversify the brand, and tell the Movement Mortgage story in a fresh, modern way.
Movement opens its second operations center in Phoenix, AZ. The company celebrates its 1,000th employee.
Movement breaks ground on its new headquarters and National Sales Support Center in Fort Mill, SC. It partners with the state of South Carolina to bring more than 700 new jobs to the state. Movement hires its 3,000th employee.
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Movement celebrates its 10- year anniversary as it continues to expand and serve more families. It doubles the size of its headquarters campus by breaking ground on a new home for loan officers, sales support team, Movement Insurance, Movement Bank, and Rise Up Gym. Movement’s total investment in the nonprofit Movement Foundation surpasses $40 million to support schools, community grants, and global outreach.
CURRENT STATISTICS
The company celebrates the opening of its new headquarters building and its first one billion dollar month of loans. The EasyApp is created to give homebuyers a fast, convenient way to apply online.
RETAIL MORTGAGE LENDER
MOVEMENT ACHIEVED A COMPANY RECORD AMOUNT OF LOANS FUNDED
2016
2018
2017
2019
NATIONAL SUPPORT SALES CENTERS (FORT MILL, NORFOLK, PHOENIX)
550 Virginia Beach employees relocate to the new 93,000 square foot, state-of-the- art campus in Norfolk, VA. Movement School opens. Movement CEO, Casey Crawford, expands into banking, becoming the majority owner and chairman of Movement Bank. The public charter school in west Charlotte, NC kicks off with 305 students in grades K-2. Movement Mortgage celebrates its fifth appearance on the Inc. 5000 list of America’s fastest growing companies.
After ten years, Movement Mortgage has funded over $55 billion in mortgages and helped more than 265,000 families realize the dream of home ownership. The company significantly expands its Pacific Northwest and Mountain West market share by acquiring Eagle Home Mortgage from Lennar Corp. Movement adds an additional presence in Alabama by acquiring Platinum Mortgage.
EMPLOYEES
BRANCHES IN
STATES
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MOVEMENT MORTGAGE IS COMMITTED TO CHARLOTTE
Movement Foundation / movementfoundation.org Movement Mortgage operates on the pillar of existing to love and value people by leading a Movement of Change in their industry, corporate culture, and communities. Through this mission, Movement Mortgage created the Movement Foundation, a heavily Christian based organization funded by Movement’s profits to reinvest in communities and empower individuals. The foundation was established in 2012. Since inception, the foundation has invested more than $40 million in causes and ventures intended to spark change in lives. Through the Movement Foundation, Movement Mortgage has engrained themselves into the Charlotte community by operating as both a company and a leading innovator of social change Movement Center The Movement Center is the Movement Foundation’s first real estate investment and is located in Charlotte. The $3 million center provides nonprofits with low or no-cost space to work, collaborate and effect change in the community. Currently housing eight nonprofits including a church, an organization that helps the homeless, and an after school program that develops the youth, the Movement Center will continue to leave a lasting mark on the Charlotte community Movement School / movementschool.com Movement Mortgage has invested $12 million to launch The Movement School; a tuition-free public charter in West Charlotte. The school aims to prepare the new generation of students for college, careers, and lifelong success. Opened in 2017 on Freedom Drive in West Charlotte, the Movement School serves kindergarten through 2nd grade. Movement Mortgage intends to add an additional grade level each year up to the 8th grade
MOVEMENT FOUNDATION
MOVEMENT CENTER
MOVEMENT SCHOOL
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SUBTENANT SUMMARY \ ServiceMac LLC
ServiceMac is a mortgage subservicing company that recently relocated their operations to Movement Mortgage II where they currently sublease the entire 2nd floor. With both Movement Mortgage and ServiceMac working in the mortgage industry, ServiceMac leasing space in Movement Mortgage II is an educated decision to create increased synergies between the two companies. The company announced plans to create more than 1,000 new jobs over the next five years ServiceMac was founded in 2018 and is honed in on providing superior technology, products, and services for the mortgage and real estate industries backed by highly personalized service and support
Led by industry veteran Bob Caruso, ServiceMac is
backed by some of the leading practitioners in the mortgage servicing industry. Committed to
providing a robust, scalable and digitally- driven subservicing process, the company features full lifecycle management, end-to- end compliance and tailored solutions to fit clients’ operations and priorities. ServiceMac aims to bring superior technology, products, and services to the mortgage industry, bolstered by personalized service and support with the utmost
focus on customer satisfaction. SC Department of Commerce
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RENTABLE SF STORIES COMPLETION
MM I MM II
102,714 102,716 205,430
2 3
2016 2018
PROPERTY INFORMATION
TOTAL
SURFACE PARKING SPACES: 1,461 Spaces (7.1/1,000) + 3 Motorcycle spaces + 25 handicap spaces
ROOF: Each roof is a 60 mil adhered reinforced white TPO roofing system sloped to perimeter roof drains. Roof drains provide the primary drainage system and perimeter emergency overflow scuppers provide the secondary. The roof membrane is adhered on one layer of ½” dens deck primed over two layers of 1.75” R-20 iso insulation. The roof system supports a structural steel frame with a drainable mechanical screen wall containing the main mechanical rooftop units. There is a 15-year warranty on each roof. ELECTRICAL POWER: Electric power is provided by Duke Energy. Each building is served by a 4,000-amp service. There are controllable breakers, allowing the breakers to be adjusted remotely. Each building is backed up by a 1000 KW diesel generator. HVAC AND AIR-CONDITIONING (MMI): The building air conditioning system utilizes four (4) direct expansion gas fired variable volume packaged rooftop units. Supply/return air mains from each unit are ducted through the roof to each floor respectively for connection to the overhead supply air medium pressure duct system. Terminal vav fans powered with electric heat are provided for building air conditioning. Freeze protection for the shell building is being supplied through the packaged rooftop units gas fired heat exchanger. Freeze protection for the sprinkler room and exit corridor is provided through wall mounted heaters. Electrical rooms are ventilated and restrooms / janitor rooms are exhausted.
CEILING HEIGHT: LVL 1:
11’6” (10’ 6” in lvl 1 open office areas)
LVL 2 & 3:
10’ in private offices and 10’6” in open office areas
BUILDING CORE FACTOR: Approximately 4%
EXTERIOR BUILDING FAÇADE: Each building’s facades consist of architectural load bearing tilt-up concrete panels, aluminum composite metal (ACM) panel accents and canopies, aluminum curtain wall and aluminum window wall glazing systems. Tilt-up concrete panels have a textured, painted finish. STRUCTURAL SYSTEM: T he building is load bearing tilt-up with structural steel interior frame. The floor structures are composite 6 ¼” metal decking and concrete systems. FLOOR LOADS: The floors are designed to hold a minimum of 100 pounds per sf live load and 61 pounds per sf dead load. ELEVATORS: Each building contains 2 Otis electric traction, machine roomless passenger elevators rated at 3,500 pound capacity.
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HVAC AND AIR-CONDITIONING (MMII): The building air conditioning system utilizes three (3) direct expansion gas fired variable volume packaged rooftop units. Supply/return air mains from each unit are ducted through the roof to each floor respectively for connection to the overhead supply air medium pressure duct system. Terminal vav fans powered with electric heat are provided for building air conditioning. Freeze protection for the shell building is being supplied through the packaged rooftop units gas fired heat exchanger. Freeze protection for the sprinkler room and exit corridor is provided through wall mounted heaters. Electrical rooms are ventilated and restrooms/janitor rooms are exhausted. The building two gym is serviced by four (4) ground mounted units. FIRE SENSING AND FIRE ALARM: The fire alarm consists of pull stations on each stair egress at each floor, smoke detectors in corridors, and return-air duct work, flashing lights, and horns. The audible devices are equipped for voice mass evacuation, with standard automated alerts and the ability to create emergency specific alerts. The fire alarm system is configured to monitor all smoke detectors and sprinkler flow. The alarm sequence shuts down air handlers and calls out the local emergency services. LIGHTING: MMI is a combination of fluorescent and led lighting. MMII is LED lighting throughout. INTERIOR FINISHES: The interior reflects a Class A headquarters finish with an industrial design that is highly desired by companies and employees. Both buildings have open floor plans and break out rooms that encourage a collaborative environment. Centrally located large cafeterias are not only used for dining but also as impromptu meeting areas. MMII has an on-site dentist office and a state-of the art crossfit gym. The exterior courtyard with its ample variety of outdoor seating connects the two buildings. Movement bank (owned by movement mortgage) has constructed a small branch on the ground floor of building two with a dedicated entrance for retail customers.
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SITE PLAN
MOVEMENT MORTGAGE II BUILDING SUMMARY
Parcel
0007-00-025.06
MOVEMENT MORTGAGE II
Acres
11.814
RSF
102,716
MOVEMENT MORTGAGE I
MOVEMENT MORTGAGE I BUILDING SUMMARY
Parcel
0007-00-025.05
Acres
11.717
RSF
102,714
N
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MMI/ FIRST FLOOR - 51,370 RSF MOVEMENT MORTGAGE I
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MMI/
SECOND FLOOR - 51,344 RSF
MOVEMENT MORTGAGE I
.
.
.
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MMII/ FIRST FLOOR - 37,307 RSF MOVEMENT MORTGAGE II
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MMII/
SECOND FLOOR - 32,739 RSF
MOVEMENT MORTGAGE II
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MMII/ THIRD FLOOR - 32,670 RSF MOVEMENT MORTGAGE II
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WHY CHARLOTTE?
INVESTMENT DISTINCTIONS
LARGEST CITY POPULATION: 850,000 16 TH
SKILLED LABOR POOL
CHARLOTTE MSA POPULATION
CHARLOTTE IS HOME TO
# 1 GROWTH IN NUMBER OF BUSINESSES Source: WalletHub
COLLEGES & UNIVERSITIES WITH A TOTAL ENROLLMENT OF 225,000
UNEMPLOYMENT RATE
# 2 # 1
MOST UP & COMING CITY IN AMERICA Source: Yelp
OF THE US POPULATION IS WITHIN 2 HOURS BY AIR 60 % FORTUNE 500 COMPANIES 8 HQs FORTUNE 1000 COMPANIES 16 HQs
CITY FOR ATTRACTING MILLENNIALS Source: Smart Asset
IN US ECONOMIC GROWTH POTENTIAL Source: Business Facilities
MORE THAN OF MECKLENBURG COUNTY RESIDENTS HAVE BACHELOR’S DEGREE OR HIGHER
BEST STATE FOR BUSINESS Source: Fit Small Business
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DYNAMIC SOUTH CHARLOTTE LOCATION
CBD
CHARLOTTE DOUGLAS INTERNATIONAL AIRPORT
No longer “add-ons” to the Charlotte market, northern York and northern Lancaster County are deeply connected to all of the real estate activity in southern Mecklenburg County. The area is thriving with high-end, new commercial, residential, and mixed-use developments due to its convenient access to Charlotte, a broad range of executive and mid-range housing, a fantastic amenity base, a rapidly expanding employment base, and superb school districts
BALLANTYNE
29708 #11
28277 #10
29715 #19
MOVEMENT MORTGAGE
29707 #21
Northern Lancaster & Northern York Counties are an extension of Ballantyne and South Charlotte
Rank Zip County
Total Population Average Household Income Average Home Value Average Net Worth
28277
10
Mecklenburg, NC 67,206
$126,812
$368,927
$833,280
29708
11
York, SC
29,687
$113,728
$321,584
$879,118
29715
19
York, SC
30,048
$94,488
$259,593
$636,104
29707
21
Lancaster, SC 24,165
$75,568
$295,793
$769,564
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Of the 156 zip codes that make up the Charlotte MSA, 13 of the 25 wealthiest zip codes are located on the south side of Charlotte, and 3 of those 13 are located in northern York and northern Lancaster Counties.
BAXTER VILLAGE
BALLANTYNE HOTEL
REDSTONE
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NORTHERN LANCASTER AND NORTHERN YORK ARE THRIVING WITH NEW DEVELOPMENT
RED VENTURES HEADQUARTERS Red Ventures relocated its corporate headquarters to northern Lancaster County from Charlotte in 2009, and employs more than 2,000 people at its headquarters campus. The company continues to expand, and recently completed a new 600,000 SF, six-story tower that nearly doubles the size of its headquarters. Associated with Red Ventures Campus is the transformative RedStone retail center that is currently under construction, and will bring an additional 310,000 SF of retail amenities within one mile of the Movement Mortgage headquarters.
COMPUCOM HEADQUARTERS CompuCom relocated its corporate headquarters to Bailes Ridge in Northern Lancaster County from Plano, Texas. The relocation is projected to bring over 1,500 jobs to the area, the largest-ever job announcement in Lancaster County.
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LASH HEADQUARTERS Part of Kingsley, the 250,000 SF headquarters building was completed in 2016, and the 175,000 SF expansion building and parking deck were completed in 2018. KINGSLEY Master planned development currently under construction in northern York County. Currently features Lash’s corporate headquarters, LPL Finacial’s regional headquarters (Phase 1 is 450,000 SF), 144,000 SF of retail amenities, one hotel, 288 apartment units (Phase 1), and a live music amphitheater.
LPL FINANCIAL REGIONAL HEADQUARTERS Part of Kingsley, the 450,000 SF LPL Financial regional headquarters was delivered in 2016.
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RAPIDLY TRANSFORMING NORTHERN LANCASTER COUNTY
Nearby Retailers
Northern Lancaster County lies directly south of Ballantyne with most of the area using a Fort Mill, South Carolina address. The area has become a mecca for headquarters relocations due to aggressive South Carolina incentive packages, a superior quality of life, attractive neighborhoods, convenience to Charlotte, and award winning schools. CompuCom, Red Ventures, and Movement Mortgage have relocated thousands of workers to their Fort Mill headquarters over the last few years, resulting in a rapid transformation of the area with new office buildings, retail centers, and housing
RED | STONE
RedStone Retailers
Opened February 2018 310,000 SF of Retail
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Ballantyne 8 Minutes
• The northern York County and northern Lancaster County office markets boast some of the most prominent single tenant office buildings in the Charlotte region and are home to the corporate headquarters of several highly regarded companies • Large users are attracted to Fort Mill’s accessibility to Charlotte’s urban core without the associated annoyances and congestion of the city • The state of South Carolina continues to attract new investments across the state line due to the pro-business policies and economic development incentives THE SOUTH CAROLINA STATE LINE DOMINATES THE SINGLE TENANT OFFICE MARKET
Red Ventures
Keer
Honeywell
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Red Stone
SharonView Credit Union
521
Edgewater Corporate Center
CompuCom
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VACANT SPACE
Vacancy continues to tighten across the Charlotte metro
CHARLOTTE MARKET OVERVIEW
10 15 20 25
Vacant
Occupied
• Halfway through 2019, Charlotte has won the headquarters of newly formed Truist Bank as well as large corporate office centers such as Lowe’s, Honeywell, and Lending Tree • Net absoprtion at the end of the second quarter was 2.6 msf, which is already the highest net absorption Charlotte has ever seen in a given year • New construction has been 60% preleased • The overall gross asking rate increased 5.2% year-over-year • Year-to-date, Charlotte’s suburban submarkets absorbed 1.3 msf and has delivered 1.8 msf with 2.9 msf of construction in the pipeline
MSF
0 5
NET ABSORPTION/ASKING RENT
4Q Trailing Average
0 100 200 300 400 500 600 700 800 2014 2015 2016 2017 2018 2019 Net Absorption, 000's SF Asking Rent, $ PSF
$18 $19 $20 $21 $22 $23 $24 $25 $26 $27 $28 $29
North / I-77
OVERALL VACANCY
Northwest
University
14%
Plaza Midwood/ Noda
12%
CBD
East Charlotte
Midtown
Airport
10%
Park Road
Cotswold
South Park
8.9% Historical Average
8%
Matthews
South Charlotte
6%
South 485
York County
4%
North Lancaster County
2014 2015 2016 2017 2018 2019
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TOTAL BLDG INVENTORY DIRECT
TOTAL VACANT SF
OVERALL VACANCY %
YTD NET ABSORPTION
YTD DELIVERIES
UNDER CONSTRUCTION
AVERAGE ASKING RENT
SUBMARKET
VACANT SF
Airport
348
13,731,889
1,404,608 1,465,863
10.7%
217,764
9,000
202,469
$23.95
CBD / Uptown
122
22,791,469
1,552,900
1,619,018
7.1%
1,284,473
876,776
1,260,915
$33.12
Cotswold
37
490,816
2,353
2,353
0.5%
900
0
0
$22.92
East Charlotte
327
3,285,257
210,021
210,751
6.4%
31,523
33,520
5,080
$16.14
Gaston County
722
4,241,915
177,197
182,981
4.3%
54,317
0
0
$14.06
Iredell County
472
5,799,115
352,640
353,240
6.1%
99,279
30,000
169,636
$21.36
Matthews
241
2,812,642
264,661
276,368
9.8%
9,343
0
0
$18.79
Midtown
662
10,561,021
705,045
733,426
6.9%
525,610
919,935
1,079,022
$32.80
Northeast/I-77
396
5,578,799
387,286
434,761
7.8%
20,580
5,080
0
$21.87
North Lancaster
27
1,393,238
4,069
37,538
2.7%
11,271
0
93,000
$21.00
Northwest Charlotte
197
1,558,616
23,460
23,460
1.5%
183,597
182,170
25,920
$26.29
Park Road
85
1,234,628
76,228
76,228
6.2%
4,662
0
0
$23.29
Plaza Midwood/NoDa
288
2,584,292
486,148
486,316
18.8%
(178,001)
245,351
637,322
$33.32
South Charlotte
173
2,692,532
89,524
91,325
3.4%
60,508
0
0
$25.26
South/485
182
7,182,671
792,204
827,622
11.5%
11,804
381,901
334,000
$32.81
SouthPark
100
5,650,260
389,955
506,739
9.0%
76,649
0
0
$31.92
Union County
410
2,559,663
105,498
105,498
4.1%
12,766
0
0
$18.66
University
156
8,650,047
716,983
823,320
9.5%
53,661
0
11,000
$24.21
York County
592
7,183,294
324,583
333,845
4.6%
76,291
35,520
365,247
$21.97
SUBURBAN MARKET TOTALS
5,415 87,190,695
6,512,463
6,971,634
8.0%
1,272,524
1,842,477
2,922,696
$25.89
CBD / UPTOWN MARKET TOTAL
122
22,791,469
1,552,900
1,619,018
7.1%
1,284,473
876,776
1,260,915
$33.12
CHARLOTTE METRO TOTAL
5,537 109,982,164 8,065,363 8,590,652 7.8%
2,556,997
2,710,253
4,183,611
$27.47
Office asking rents converted to Full Service
MOVEMENT MORTGAGE HEADQUARTERS / CHARLOTTE MSA
45
YORK COUNTY & LANCASTER COUNTY SUBMARKETS
• The recent headquarter relocations of CompuCom, Movement Mortgage, and Red Ventures in Lancaster County are expected to bring 4,800+ jobs to the market • York County’s vacancy rate is 4.6% and northern Lancaster’s vacancy rate is 2.7% as of Q2 2019 • The area has become the go-to destination for corporate relocations and build-to-suits as companies take advantage of South Carolina’s lucrative tax incentives and high quality of life. Sites for future construction are limited and are becoming more expensive as retail, hotel, and multi-family development accelerates and competes for land that has historically been used for office development • The success of the Class A office market in northern York and Lancaster County is attributable to lower business costs in South Carolina, demand for “small town” living, an award winning school system, and the quality of the residential development and associated retail amenities in the area. Direct access to I-77 and nearby I-485 are also critical factors in the success of the Class A York and Lancaster County office market.
MAP # BUILDING
# OF BUILDINGS SQUARE FEET VACANT SPACE % VACANT
SINGLE TENANT
Movmement Mortgage Wells Fargo Mortgage
Two Two One One Two Two Five One One One One One One One One
205,430 338,301 150,164 421,863 469,983 313,679 76,650 165,000 90,994 150,000 180,062 650,000 61,591
- - - - - - - - - - - - - - -
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 9.63% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Yes Yes Yes Yes Yes Yes No Yes Yes Yes Yes No Yes No No Yes
1
2 3 4 5 6 7 8 9
Daimler Sunbelt
Lash
LPL Financial Kingsley Park
30,203
Novant
Citi Financial Continental CompuCom Edgewater Red Ventures
10
11
12 13 14 15
Three
Pinckney Rutledge
34,037 34,037 50,388
Sharon FCU
CUSHMAN & WAKEFIELD
46
YORK COUNTY & LANCASTER COUNTY COMPETITIVE SET
N
1
CAR CAROLINA
OLINA
NORTH
SOUTH
BALLANTYNE
2
NORTH
SOUTH
CAROLINA
3
CAR
OLINA
4
5
6
7
8
13 14
15
12
MOVEMENT MORTGAGE HEADQUARTERS
10
11
9
MOVEMENT MORTGAGE HEADQUARTERS / CHARLOTTE MSA
47
SALES COMPARABLES
TENANT TERM
Wal-Mart 12 Years
Archon JV Mainstreet Capital Partners
SELLER
2118 Water Ridge Pkwy Charlotte, NC
ADDRESS
BUYER
Sentinel Real Estate
TOTAL SF
DATE
108,714
Jul-16
SALE PRICE
CAP RATE 6.10%
$35,000,000
PRICE/SF
CREDIT
$322
AA (S&P)
90 North & Childress Klein/ The Springs Company
TENANT TERM
The Lash Group 12 Years
SELLER
1799 & 1800 Innovation Point Fort Mill, SC
ADDRESS
BUYER
Sentinel Acquisitions
TOTAL SF
DATE
421,863
Nov-18
SALE PRICE
CAP RATE 5.72%
$136,750,000
PRICE/SF
CREDIT
$324
A- (S&P)
CUSHMAN & WAKEFIELD
48
Phoenix Property Company
TENANT TERM
Daimler Trucks North 11 Years 2477 Deerfield Drive Fort Mill, SC
SELLER
ADDRESS
BUYER
Cantor
TOTAL SF
DATE
150,164
Jan-18 5.91%
SALE PRICE
CAP RATE
$40,000,000
PRICE/SF
CREDIT
$266
Parent - A (S&P)
TENANT TERM
LPL Financial 19 yr
Suntrust Robinson Humphrey
SELLER
1040 & 1055 LPL Way Fort Mill, SC
ADDRESS
BUYER
Griffin Capital Company
TOTAL SF
DATE
469,983
Nov-17 6.03%
SALE PRICE
CAP RATE
$130,000,000
PRICE/SF
CREDIT
$277
Ba3 (Moody’s)
TENANT TERM
CompuCom 15 Years
SELLER
The Keith Corporation
8106 Calvin Hall Road Fort Mill, SC
Capital Square Acquisitions
ADDRESS
BUYER
TOTAL SF
DATE
150,000
Dec-2018
SALE PRICE $39,000,000
CAP RATE 6.88%
PRICE/SF
CREDIT
$260
-
MOVEMENT MORTGAGE HEADQUARTERS / CHARLOTTE MSA
49
FINANCIAL ANALYSIS
CUSHMAN & WAKEFIELD
50
CASH FLOW
Year 1
1
2
3
4
5
6
7
8
9
10
11
PSF
Dec 2020 Dec 2021
Dec 2022
Dec 2023 Dec 2024 Dec 2025 Dec 2026 Dec 2027 Dec 2028 Dec 2029
Dec 2030
For Fiscal Year Ending:
Base Rental Revenue Potential Base Rent
$16.39
$3,366,352 $3,433,679
$3,502,353
$3,572,400 $3,643,848 $3,716,725 $3,791,059
$3,866,880 $3,944,219 $4,023,103
$4,103,565
$16.39
$3,366,352 $3,433,679
$3,502,353
$3,572,400 $3,643,848 $3,716,725 $3,791,059 $3,866,880 $3,944,219 $4,023,103
$4,103,565
Total Base Rental Revenue
Per Square Foot
$16.39
$16.71
$17.05
$17.39
$17.74
$18.09
$18.45
$18.82
$19.20
$19.58
$19.98
Recoveries & Other Tenant Revenue Expense Recoveries Total Recoveries & Other Tenant Revenue
$1.95
$401,042
$492,204
$493,596
$495,022
$496,485
$497,984
$589,324
$590,899
$592,513
$761,278
$762,975
$1.95
$401,042
$492,204
$493,596
$495,022
$496,485
$497,984
$589,324
$590,899
$592,513
$761,278
$762,975
Per Square Foot
$1.95
$2.40
$2.40
$2.41
$2.42
$2.42
$2.87
$2.88
$2.88
$3.71
$3.71
Effective Gross Revenue
$18.34
$3,767,395 $3,925,883
$3,995,948
$4,067,423 $4,140,333 $4,214,709 $4,380,383 $4,457,779 $4,536,732 $4,784,381
$4,866,539
Per Square Foot
$18.34
$19.11
$19.45
$19.80
$20.15
$20.52
$21.32
$21.70
$22.08
$23.29
$23.69
Operating Expenses Association Dues
$0.04
$9,225
$9,456
$9,692
$9,934
$10,183
$10,437
$10,698
$10,966
$11,240
$11,521
$11,809
Insurance
$0.22
$45,100
$46,228
$47,383
$48,568
$49,782
$51,027
$52,302
$53,610
$54,950
$56,324
$57,732
Real Estate Taxes
$1.69
$346,717
$436,520
$436,520
$436,520
$436,520
$436,520
$526,324
$526,324
$526,324
$693,434
$693,434
$1.95
$401,042
$492,204
$493,596
$495,022
$496,485
$497,984
$589,324
$590,899
$592,513
$761,278
$762,975
Total Operating Expenses
Per Square Foot
$1.95
$2.40
$2.40
$2.41
$2.42
$2.42
$2.87
$2.88
$2.88
$3.71
$3.71
$16.39
$3,366,352 $3,433,679
$3,502,353
$3,572,400 $3,643,848 $3,716,725 $3,791,059 $3,866,880 $3,944,219 $4,023,103
$4,103,565
Net Operating Income
Per Square Foot
$16.39
$16.71
$17.05
$17.39
$17.74
$18.09
$18.45
$18.82
$19.20
$19.58
$19.98
$3,366,352 $3,433,679
$3,502,353
$3,572,400 $3,643,848 $3,716,725 $3,791,059 $3,866,880 $3,944,219 $4,023,103
$4,103,565
Net Cash Flow Before Debt Service $16.39
Per Square Foot
$16.39
$16.71
$17.05
$17.39
$17.74
$18.09
$18.45
$18.82
$19.20
$19.58
$19.98
MOVEMENT MORTGAGE HEADQUARTERS / CHARLOTTE MSA
51
NOTES TO CASH FLOW
GLOBAL ASSUMPTIONS
MARKET LEASE ASSUMPTIONS OFFICE
ANALYSIS PERIOD Commencement Date
Jan 1, 2020 Dec 31, 2030
RENEWAL PROBABILITY
90%
End Date
Analysis Length
11 years
FINANCIAL TERMS 2019 Market Rent
AREA MEASURE Building Square Feet
$16.00 PSF
205,430 SF
Annual Rent Escalations
2.00% 5 years
Occupancy (as of 1/2020)
100%
Lease Term
GROWTH RATES General Inflation Operating Expenses Real Estate Taxes
Expense Reimbursement
NNN
2.50% 2.50% 2.50%
LEASING COSTS TENANT IMPROVEMENTS
PSF
2021 2022 2023 2024
3.00% 3.00% 3.00% 3.00% 3.00%
New
$35.00 $10.00 $16.25
Renewal Weighted
Market Rent Growth
2025+
LEASING COMMISSIONS New
GENERAL VACANCY
N/A
6.00% 4.00% 4.50%
Renewal Weighted
DOWNTIME New
OPERATING EXPENSES
6 months 2 months
OPERATING EXPENSE SOURCE
Estimates
Weighted
CUSHMAN & WAKEFIELD
52
ESTIMATED FILOT CALCULATION
8024 CALVIN HALL ROAD (MOVEMENT MORTGAGE 1)
9726 OLD BAILES ROAD (MOVEMENT MORTGAGE 2)
As part of an incentive fee agreement between Lancaster County, South Carolina, and the owner, the owner pays an annual fee in lieu of property taxes. The fee in lieu agreement for Movement Mortgage runs for 30 years. The properties also qualify for Special Source Revenue Credit which should reduce the tax bill by 50% for ten (10) consecutive years, beginning not later than the fifth (5th) year. Analysis assumes the FILOT begins in 2019.
As part of an incentive fee agreement between Lancaster County, South Carolina, and the owner, the owner pays an annual fee in lieu of property taxes. The fee in lieu agreement for Movement Mortgage runs for 30 years. The properties also qualify for Special Source Revenue Credit which should reduce the tax bill by 50% for years 1 - 5 and 25% for years 6 - 10. Analysis assumes the FILOT begins in 2016.
Total Fee Value (Estimated) Assessment Ratio (Fixed) Assessed Value (Estimated)
Total Fee Value (Estimated) Assessment Ratio (Fixed) Assessed Value (Estimated)
$21,200,000
$18,500,000
6%
6%
$1,272,000
$1,110,000
Millage Rate (Fixed)
Millage Rate (Fixed)
282.4
301.1
Fee in Lieu of Taxes (Estimated)
Fee in Lieu of (Estimated) Special Source Revenue Credit
$359,213
$334,221
Yrs 1-5 Estimated 50% Yrs 6-10 Estimated 25% Yrs 1-5 Estimated $179,606 Yrs 6-10 Estimated $269,410
Yrs 1-10 Estimated 50%
Special Source Revenue Credit
Fee in Lieu of Taxes
Yrs 1-10 Estimated $167,111
Fee in Lieu of Taxes
NOTES
- Methodology: This cash flow projection has been developed on a tenant-by-tenant basis using the ARGUS Enterprise software 11.7 program - Market Rate and Operating Expense Growth: Market leasing assumptions escalate on a calendar year basis and operating expense reimbursements and inflation are calculated on a calendar year basis - Operating Expenses: Operating expenses utilized in the cash flow projection are based upon estimates provided by the seller
MOVEMENT MORTGAGE HEADQUARTERS / CHARLOTTE MSA
53
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