Jones Lang LaSalle Americas, Inc. (“JLL”) is pleased to offer the exclusive opportunity to purchase 6601 Sterling Drive South in Sterling Heights, Michigan (the “Property”). The Property is a 39,502 square foot industrial facility located at in infill location within the Macomb industrial submarket that currently has a 2.1% vacancy rate and experienced annual rent growth of 9.9% in 2021.
The Property will be sold by Iron Mountain subject to a leaseback for 100% of the rentable area thru 12/31/2028 with up to 3% rental escalations, providing an investor with 6.5 years of durable and growing cash flow. Iron Mountain (“IRM”) is an industry dominating tenant in the storage and information services sector that serves 95% of the Fortune 1000 and is 10x larger than their closest competitor.
As part of its business strategy, IRM intends to revisit lease economics upon the expiration of the stated leaseback term. Given that IRM does not intend to structure extension options within its proposed lease terms, investors will have the opportunity to capture significant mark-to-market upside in a high growth Detroit industrial market.
BELOW MARKET RENT IN TOP PERFORMING DETROIT INDUSTRIAL MARKET
The Property is located approximately 25 miles north of downtown Detroit and 10 miles east of Troy, Michigan within the Macomb industrial submarket. Over the last ten years, the submarket has experienced average annual rent growth of 5.6% with this trend expected to continue for the foreseeable future due to extremely low vacancy, supply constraints, and massive tenant demand.
INDUSTRY-LEADING TENANCY WITH ASSET REPOSITIONING STRATEGY
IRM’s records management business is 10x larger than their closest competitor and operates at a 36.4% EBITDA margin, offering a secure and high yielding investment for over 6.5 years with best-in-class tenancy.
NET LEASE STRUCTURE WITH ZERO LANDLORD RESPONSIBILITIES
The property will be 100% leased on an absolute NNN basis for an approximate leaseback term of 6.5 years with up to 3% annual rent increases.