Case Study: Brake Parts, Inc., McHenry, IL
Guaranteed absolute net lease
Avg. annual net cash return
Property: 288,000 s.f. distribution center and headquarters under a long-term sale/leaseback with Brake Parts, Inc. (BPI). Guaranteed 8 year absolute net lease with a 10 year renewal term. BPI occupies 600,000 s.f. in adjoining buildings.
Tenant: BPI is a global brake system manufacturer and supplier to the transportation industry, with a wide range of products including the famous Raybestos brand, used by premier NASCAR motorsports teams.
Market: Located in McHenry County, IL, one of the top northern Chicago industrial sub-markets with 30M s.f. of space, well-known for manufacturing. Projected to outperform the entire Chicago metro area market in occupancy and rental rates across coming years.
Economics: Purchased at a 9.9% capitalization rate. Investors are receiving an average annual net cash-on-cash return of 11% over the lease term.