Investment Overview

Marcus & Millichap is pleased to present ContiTech Headquarters located in Fairlawn, Ohio. The subject property is a 97,845 square-feet Class-A office building situated in an affluent region of the Cleveland/ Akron-CSA – home to over 3.6 million people. The property was originally constructed in 2007/2008 and is situated on 4.24 acres of prime real estate – offering some of the only Class-A office space in the region. There are currently 2 suites in the building (spanning 4 floors), both leased to top-tier tenants. The majority of space (85.25% of GLA) is leased to ContiTech as their Global Headquarters. ContiTech is wholly owned by Continental AG, one of the largest corporations in the world with annual revenue exceeding $44.3B. Continental AG is publicly traded under ticker symbol: CON, employs over 230,000 people, and is ranked #362 on Forbes Global Ranking. Continental is Structured into Six Divisions: Chassis and Safety, Powertrain, Interior, Tires, ContiTech, and Advanced Driver Assistance Systems. The ContiTech division specializes in development + manufacturing of system and intelligent components made of rubber, plastic, metal and fabric. They are used in machine and plant engineering, mining, agriculture, the automotive industry, as well as other important sectors of the future. ContiTech’s operations have been at this site for over 16.5-years (previously under Veyance branding until merger in 2015), and always designated as U.S. HQ. ContiTech recently announced the roll-up of abroad HQs into this location – showing commitment and success at the site. In addition to the centralization of locations, ContiTech has undergone heavy site renovations and updates to meet the high-end/Class-A needs of a global HQ site. ContiTech occupies 4 floors, spanning mission critical lab-space, to executive/C-suite offices. Upon completion of the high-end building back in 2007/2008, the brand signed a long-term 20-year lease, which runs through May 2027. They are currently paying a very reasonable $18/SF NNN and has two 5-year options remaining with 10% rental bumps. The remaining space is leased to Lyondellbassell, who occupies 14.75% of GLA. Lyondellbassell is also one of the largest corporations in the world with annual revenue exceeding $46.18B, 191,000 employees, and publicly traded under ticker symbol: LYB. Lyondellbassell acquired the previous tenant A. Schulman in 2018, and prior to the acquisition – this was A. Schulman’s HQ. Upon the acquisition, Lyondellbassell ceased operations at this location upon acquiring the former brand, and the space is currently DARK. Despite the space being dark, Lyondellbassell is required to pay rent through their current term of May 2027. This space has the ability to be subleased, and ample time for ownership to work through retenanting. Both tenants are encumbered by landlord favorable NNN lease structures which fully reimburse all operating expenses – including Tax, CAM, Insurance and 3rd Party Management Fees – leaving virtually no landlord expenses. In addition to the strong tenant fundamentals, the site also has a Non-Recourse Assumable Loan available for prospective purchasers. The current interest rate is 4.95%, which is significantly lower than what is attainable in today’s market, a 30-year amortization schedule, and has just shy of 4-years remaining until maturity. With a well below market interest rate, and a very reasonable estimated LTV of 68.69%, prospective purchasers have the ability to step into a high-yield, high-credit – NNN investment – which will boast immense projected returns of 11.89% Cash-on-Cash, and 16% Total Return with Principal Paydown. Ask Broker for Further Details. The subject property is strategically located at the hard corner directly off Route-77 and is exposed to over 93,412 vehicles per day. Route-77 and Cleveland-Massillon Rd are two major throughways which easily connect regions on the CSA, and provide direct access to the dense surrounding residential, as well a myriad of retail, food and industrial uses – which creates a near perfect office location. The Fairlawn region as a whole has become a hotbed for affluent demographics seeking a quite suburban landscape but with easy access to numerous major cities. Demographics are stable and mature in the region, with population counts of 31,700 within 2-miles, 76,328 within 5-miles, and an average household income exceeding $130k. As a growing residential hub, the area also boasts a strong, but not overbuilt office market. Office vacancy in the region sites around 5.7%, which is significantly lower than the national average of 13.9%. It is estimated nearly 400k SF of office space was leased over the last 12-months in the region, while new construction remains down at only 0.04% YoY growth. Fairlawn is Part of Cleveland-Akron CSA with Population Count Over 3.6m, and only 25-Min From Downtown Cleveland + 20-Min From Downtown Akron.