Keurig Dr Pepper Distribution Center
1635 NE 53rd Ave Des Moines, IA 50313
Price: $7,000,000
Status: Sold
Cap Rate: 5.92%
Year Built: 1992; Ren 1999, 2002, 2009, 2012
NOI: $414,411
Lot Size: 6.46 acres
Price Per Foot: $77
Lease Type: Bond Absolute Triple-Net (NNN)
Remaining Term: 10 Years
GLA: 6.46 acres
Property Intro
Lee & Associates is pleased to exclusively offer for sale, the fee simple interest (land & building) in an industrial warehouse/ distribution facility located in Des Moines, IA (the “Property”). Built in 1992 as a build to suit for the tenant, the Property consists of a 90,838-square-foot (85,200 square foot NRA) industrial building that sits on an approximately 6.46-acre parcel.
The building is leased to Keurig Dr Pepper (NYSE: KDP), the 3rd largest coffee and beverage company in North America with dual headquarters in Burlington, MA and Plano, TX, with annual revenue in excess of $11 billion. The Company employs more than 25,000 employees and operates more than 120 offices, manufacturing plants, warehouses and distribution centers across North America.
investment highlights
- COFFEE & BEVERAGE COMPANY IN NORTH AMERICA • ANNUAL REVENUE IN EXCESS OF $11 BILLION
- The building is leased to Keurig Dr Pepper (NYSE: KDP), the 3rd largest coffee and beverage company in North America with dual headquarters in Burlington, MA and Plano, TX, with annual revenue in excess of $11 billion. The Company employs more than 25,000 employees and operates more than 120 offices, manufacturing plants, warehouses and distribution centers across North America.
- Keurig Green Mountain and Dr. Pepper merged in July 2018 creating the 7th largest company in the U.S. food and beverage sector. Keurig Dr Pepper carries an investment grade credit rating of BBB (Outlook) with Standard & Poor’s.
- 28 YEARS OF TENANCY AT THIS LOCATION (MULTIPLE LEASE EXTENSIONS) • NEW 10 YEAR LEASE EXTENSION • MITIGATED FUTURE VACANCY RISK • BUILD TO SUIT
- The Tenant has occupied 100 percent of the facility since completion of the build-to-suit construction in 1992. They have since executed four amendments, the most recent executed in December 2019, extending their term another ten (10) years and agreeing to annual increases in rent. The combination of the newly executed 10-year lease extension, sub 3% vacancy rate in the market and historical long-term tenancy of the tenant provides an investor with mitigated future vacancy risk and a high probability of future lease renewals.
- BOND ABSOLUTE TRIPLE-NET (NNN) LEASE • NO LANDLORD RESPONSIBILITIES
- The bond triple-net (NNN) lease requires the tenant pay for taxes, insurance, and 100% of the maintenance of the building, foundation, and driveways/parking lot. The landlord has zero maintenance responsibilities on the asset, providing an investor with a true passive investment grade credit income stream.
- CORPORATE HEADQUARTERS FOR PLAINS REGION • IMPORTANT DISTRIBUTION CENTER FOR MAJOR RETAILERS WALMART, TARGET, HY-VEE
- This facility distributes 17 routes daily with around 20 stops per route, dropping off goods at convenience stores, grocery stores and big box retailers, such as Wal-Mart, Target, Hy-Vee, Casey’s and Kum & Go. Notably, Hy-Vee, Casey’s and Kum & Go all have headquarters in the greater Des Moines area. Additionally, this site is the Corporate Headquarters for the Plains Region, one of 5 specified regions for KDP.
- STRATEGIC LOCATION • 2 MILES FROM LARGEST INTERCHANGE IN DES MOINES • DESIRABLE NORTHEAST DES MOINES INDUSTRIAL SUBMARKET • 2.94% VACANCY RATE
- This facility is ideally located just off Highway 69 and less than one mile from the Interstate 80 interchange. In addition, the Subject Property is roughly two miles from the largest interchange in Des Moines, where Interstate 80, Interstate 235, and Interstate 35 conjoin.
- The location in the highly desirable Northeast Des Moines submarket was strategically selected by the tenant for their logistics operations and distribution network. The Northeast Des Moines submarket is well known for its industrial presence and experiences a high demand from the largest industrial tenants in the metro area. Co-Star reported a 2.94% Vacancy rate in the Des Moines metro market for Q4-2019 which, is expected to dip even lower in 2020.
- DRIVE-AROUND TRUCK ACCESS • AMPLE PARKING & LOADING • PROXIMITY TO INTERSTATES FOR EASE OF DISTRIBUTION
- The Tenant’s distribution process benefits from the approximately 135 foot truck court and a securely gated full-circulation design, which provides trucks access to both NE 16th Street to the west and NE 53rd Avenue to the north. Additionally, the subject property is located less than a mile from the on/off ramp to Interstate 35/80, at the interchange with Highway 69, providing excellent access to distribution arteries throughout the state.
- LOCATED IN DES MOINES • MOST POPULATED CITY IN IOWA • MAJOR CENTER OF U.S. INSURANCE INDUSTRY
- The subject property is located in Des Moines, the capital and most populous city in Iowa. With a population of nearly 217,000 residents (2018), the City of Des Moines is the core of one of the fastest growing metro areas (DSM USA) in the Midwest and is a financially strong city with exceptional city services, fostering an involved community in a customer friendly atmosphere.
- Des Moines is a major center of the U.S. insurance industry, and has a sizable financial services and publishing business base. The city was credited as the “number one spot for U.S. insurance companies” in a Business Wire article and named the third-largest “insurance capital” of the world. The city is the headquarters for the Principal Financial Group, the Meredith Corporation, Ruan Transportation, EMC Insurance Companies, and Wellmark Blue Cross Blue Shield. Other major corporations such as Wells Fargo, Voya Financial, Nationwide Mutual Insurance Company, ACE Limited, Marsh, Monsanto, and DuPont Pioneer have large operations in or near the metropolitan area. In recent years, Microsoft, Hewlett Packard, and Facebook have built data-processing and logistical facilities in the Des Moines area. Forbes ranked Des Moines as the “Best Place for Business” in both 2010 and 2013, based on factors such as the cost of doing business, cost of living, educational attainment, and crime rate. In 2017, Kemin Industries opened a state-of-the-art worldwide headquarters building in Des Moines.
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