Real Estate Services for the Transportation Industry

www.burrtemkin.com

Gabe Temkin/Jim Kemmerer(800) 778-2303gabe@burrtemkin.comkemmerer@burrtemkin.com

2612 Kersten Court, Kalamazoo, MI 49048FedEx GroundOffering Memorandum

David Lane(312) 263-2722lane@burrtemkin.com

Offering Memorandum2612 Kersten Court, Kalamazoo, MI 49048

FedEx Ground

The following statements are based upon information we believe to be correct and are obtained from sources we regard as reliable, but we assume no liability for errors or omissions therein.

Offering SummaryBurr & Temkin is pleased to offer for sale the FedEx Ground distribution center in Kalamazoo Michigan. The property is fully leased to FedEx Ground Package System, Inc., a wholly owned operating subsidiary of FedEx Corporation (Fortune 100 company posting over $50 billion in revenue in 2016). FedEx has demonstrated a strong commitment to this facility which has been in operation since 2001. In 2015, FedEx constructed a 20,353 square-foot expansion at its expense. This is the only FedEx Ground facility located in Southwest Michigan, with the three closest distribution centers being in Lansing (65 miles northeast), Grand Rapids (66 miles north), and Anarbor (100 miles east).

Originally constructed as a build-to-suit for FedEx in 2001, the building totals 120,828 square feet (included the expansion) and sits on 16.46 acres. The pre-engineered steel building also features 5,858 square feet of improved office space. The improvements are all in above average condition. The property’s strategic location offers excellent access to I-94 and SR-131.

FedEx extended their lease in 2015, after the completion of the tenant funded expansion. The current lease expires August 31, 2020 however FedEx possesses two 3-year renewal options. The NN lease structure requires minimal landlord maintenance responsibilities (roof and structure only).

This property is being offered for sale at $8,950,000. Offers will be reviewed and responded to as they are received.

Tenant: Fedex Ground Package System, Inc.

Lease Type: NN (Landlord resposible for roof and structure)

Lease Commencement: August 9, 2001

Lease Expiration: August 31,2020

Current Base Rent: $57,900

Renewal Options: Two, 3-year options

Price: $8,950,000

NOI: $694,800

CAP Rate: 7.75%

Price Per Square Foot: $74.07

Lease Summary

Monthly Rent Annual Rent Annual Rent / SFCurrent- 8/31/2020 $57,900 $694,800 $5.759/1/2020-8/31/2023 $59,500 $714,000 $5.909/1/2023-8/31/2026 $61,300 $735,600 $6.09

Annualized Operating Data

Executive Summary

Location

Site

Location Summary:The subject property is located in southwestern Michigan, in the city of Kalamazoo. The location offers good access to I-94 via the recently renovated Sprinkle Road interchange. The property is located at the end of a dead-end road. Neighbors include Air Flow Equipment, Allied Mechanical, Interkal, and Kaiser Aluminum.

Kalamazoo is located approximately 140 miles west of Detroit, 145 miles east of Chicago, and 60 miles south of Grand Rapids. It is the county seat for Kalamazoo County and has a population of approximately 335,000 (Kalamazoo-Portage MSA). The local economy is strong, with an unemployment of rate of 3.5%, well below the national average. The economy is anchored by education, health care, research development, and three local breweries. Kalamazoo is also home to Western Michigan University (±25,000 enrolled students).

Site

Site

Property HighlightsGross Leasable Area: 120,858 SF

Acres: 16.46Office: 5,858 sfYear Built: 2001 (expanded in 2015)Construction: Pre-engineered steel with metal framingDock Doors: 48Grade Doors: 12

Clear Height: 26’Employee Parking Stalls: 202

Zoning: LD (Restricted Industrial)APN: 07-30-430-027

Burr & Temkin (“Broker”) has been exclusively retained by Owner as listing agent for the sale of the property located in this Offering Memorandum. By accepting this Offering Memorandum, you hereby acknowledge and agree that certain confidential material and information regarding the property that has been or may be in the future disclosed is intended solely for your own limited use in considering whether to pursue negotiations to acquire the property. The Owner and Broker reserve the right to make any change, to add, delete, or modify the information, change the price or withdraw the property from the market at any time, without notice. Neither Owner nor Broker shall be under any obligation to update the information.

Neither Owner nor Broker nor any of their officers, employees or agents make representation or warranty, express or implied, as to the accuracy or completeness of the information and no legal liability is assumed or shall be implied with respect thereto. The information provided has been or will be gathered from sources that are deemed reliable but neither Owner nor Broker warrant or represent that the information is true or correct. Recipient is advised to verify the information independently.

Recipient agrees that the information provided is confidential, that Recipient will hold and treat it in the strictest of confidence, that Recipient will not, directly or indirectly, disclose or permit anyone else to disclose the information to any other person, firm, or entity without prior written authorization of Owner, and that Recipient will not use or permit to be used the information in any fashion or manner detrimental to the interests of the Owner. Photocopying or other duplication of the information is strictly prohibited.

Recipient shall not enter or conduct any investigations upon the property without the prior authorization of Owner or Broker.

The delivery of the information is not to be construed as an offer, an expression of intent an obligation, or as part of any contract or commitment, to sell the property. While Owner, Broker and Recipient may discuss the purchase and sale of the Property with Recipient. Owner in its sole and absolute discretion may terminate discussions at any time and for any reason. The discussions may be lengthy and complex, and notwithstanding that we may reach one or more understandings or agreements on one or more issues, Owner shall not be bound by any oral agreement, proposal or letter of intent of any kind and no rights, claims, obligations or liabilities of any kind, either express or implied, shall arise, exist or be binding upon Owner, except to the extent expressly set out in a written purchase agreement signed by both Owner and Recipient.

Confidentiality