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SRS National Net Lease Group is pleased to present the opportunity to acquire the fee simple interest in Sherwin Williams Distribution Center, an absolute NNN leased, zero cash flow investment property located in Effingham, IL. The tenant is an investment grade with a BBB credit rating from Standard & Poors. There are currently more than 9.5 years remaining in the initial lease term with 1 (5-year) option period to extend. The lease features a 9% rental increase in June 2024 and at the beginning of the option period. Sherwin Williams has occupied the site since 1985 (34 years) and has expanded the facility four times, demonstrating a long term operating history and a strong commitment to the site. Sherwin Williams has also recently invested $8.3 million into the property and is planned to invest an additional $11.6 million over the next 5 years. Sherwin-Williams Co (NYSE: SHW) most recently reported annual revenue of $17.5B in 2018.
The Sherwin Williams Distribution Center is strategically situated in central Illinois with convenient access to major surrounding MSA’s including Chicago (212 miles), Indianapolis (144 miles), and St. Louis (102 miles). The site is also within close proximity to the intersection of two cross-country Interstates (I-57 and I-70), which is how Effingham became known as the “Crossroads of Opportunity.” The subject property is one of the largest Sherwin Williams facilities distributing to approximately 1,000 stores and dealers including more than 300 Lowe’s Home Improvement stores and the entire Menard’s Midwest network. In addition, this facility distributes the coatings for the automotive industry nationwide and is the only facility that handles the coatings for the automotive industry, making this specific location very critical to Sherwin’s success. The 30-mile trade area is supported by nearly 113,000 residents and more than 56,000 employees. The 10-mile population boasts an average household income of over $69,600.
This offering features non-recourse, zero cash flow financing with paydown/re-advance features allowing for roughly $40 million (you can do a paydown of 99% of the outstanding balance) in trade proceeds, ideal for 1031/1033 exchange buyers or non-exchange buyers looking for passive losses to offset income from other real estate investments. The NOI is almost half the down payment (over 44%), giving an investor significant cash flow at maturity.
Investment Grade Tenant | Passive Ownership
Ideal 1031 Exchange | Long-Term Trust Planning
Highly Improved Asset | Significantly Below Replacement Cost
Long-Term Operating History at Site | Ideal Business Location | Near Intersection of Major Cross-Country Interstates
Extremely Productive Facility | Critical to Sherwin’s Success | 1 Billion Pounds Delivered in 2018 |
Broker of Record
License: IL 471006635