For Sale
Emcore Corporation
2700 Systron Road, Concord, CA 94518
$17,900,000
There is no property location added.
There is no property location added.
2700 Systron Road, Concord, CA 94518
There is no property location added.
There is no property location added.
The Property consists of two centrally connected buildings totaling 103,026 square feet. These well-maintained, mission-critical R&D and Advanced Manufacturing facilities are located in Concord, CA, strategically situated to attract the Bay Area talent necessary to design, develop, and deliver the tenants' portfolio of navigation products. In addition to the 9-year initial lease term with 3.00% annual increases, the Property will be secured by a full corporate guaranty by the Tenant. The Tenant's best-in-class capabilities enable them to produce a variety of high-quality products for a diverse customer base.
The Property is approximately 103,026 square feet and sits on 8.25 acres and is used for general administration, research and development, and assembly and manufacturing of high-performance
Quartz MEMS sensors for the Aerospace and Defense industries. The improvements consist of the:
Exceptional Long-term Tenancy to Mixed-signal Optics and Sensor Manufacturer
EMCORE Corporation is a leading cable infrastructure component provider evolving into a leader in sensors for the Aerospace and Defense industries. EMCORE pioneered linear fiber optic transmission technology and remains a leader in optical components and systems for high speed broadband networks.
Optimal 12-year Lease Structure
The Property will be absolute net leased to the Company. There are no landlord responsibilities; Tenant will pay all costs and expenses associated with each property, including roof and structure. The initial leaseback term of 12 years provides an investor with the security of long-term cash flow and will feature three percent (3.00%) annual rental rate escalations. The first renewal period for these assets will also feature a rent escalated from the prior year and will incorporate annual increases as well.
Mission Critical Facilities in Strategic Markets
EMCORE’s facility is strategically located in Concord, CA, within a mile of Bay Area Rapid Transit (BART) public transportation, providing access to an extremely large and talented pool of engineers which will be an essential asset to the Company’s future growth.
Free & Clear of Financing
The EMCORE industrial/office Sale Leaseback will be transferred free and clear of debt. Investors will be able to capitalize on today’s attractive debt markets and secure highly aggressive and favorable financing. Investors are encouraged to reach out to CBRE’s Debt and Structured Finance group regarding financing opportunities
EMCORE Corporation (“Company” or “EMCORE”) is a leading supplier of advanced mixed-signal optics products that provide the foundation for today’s leading-edge aerospace and defense (A&D) systems and high-speed communications network infrastructure. EMCORE pioneered linear fiber optic transmission technology, and today remains a leader in optical components and systems for high-speed broadband networks. The Company was established in 1984 as a New Jersey corporation and in 1997 began trading on the NASDAQ under the ticker EMKR. The Company’s current headquarters is in Alhambra, California. The Company employs approximately 461 employees across three Office R&D and manufacturing facilities in Alhambra and Concord, California and Beijing, China.
Reportable Segments
The Company has two main reportable segments: aerospace and defense (“A&D”) and broadband.
A&D is the company’s largest and fastest growing business and includes three product lines:
Broadband covers the following product lines:
Shift to Aerospace & Defense
Broadband, and more specifically, Cable TV, has long been the core technology for EMCORE and an area where the Company carries well over 50% market share due to its strength in small signal processing, innovative packaging technologies, and chip fabrication capabilities. The mixed-signal optics technology at the heart of EMCORE’s broadband products is shared with EMCORE’s Defense Optoelectronics (formerly Satcom) products and EMCORE’s newer fiber optic gyroscope (FOG) -based sensors which we believe will transform the multi-billion dollar navigation subsector of the Aerospace and Defense market.
The acquisition of Systron Donner Inertial (SDI), a leader in the inertial sensor industry, in June of 2019 provided instant scale to this growing business along with a slew of channel and expense synergies. A&D is now EMCORE’s largest segment, and over time, the A&D business should continue to grow as a percentage of revenue compared to the more mature Broadband business.
Significant Barriers to Entry
Commitment to R&D
EMCORE operates in a climate of rapid technological advancements, and its commitment to R&D spending allows it to remain competitive amongst its peers. R&D spending was $15 million in 2018, an increase of 23% over 2017. This increase resulted in a contraction in margins for 2018 but is expected to pay dividends long-term as the Company continues its push into the navigation sector of the aerospace and defense industry
Despite a tough fiscal 2018 that saw revenues contract from the prior fiscal year due to softness in the cable TV components industry as well as the ongoing trade dispute with China that has had a material impact on the Company, the corporate outlook for EMCORE is optimistic. EMCORE acquired Systron Donner Inertial Inc (“SDI”) in June 2019 as part of its expansion in an effort to become the number one provider of the aforementioned high performance A&D sensors.
With the addition of SDI’s business, EMCORE now leads 461 employees across three sites with a business running at an annualized rate of over $100M in revenue per year. The Company currently supplies over 120 different customers, covering marquee names in the communications and aerospace and defense worlds, including Commscope (formerlly Arris), Cisco, Raytheon, Rockwell Collins, L-3, BAE, and Northrop Grumman. The aerospace and defense markets are now the Company’s largest revenue source and provide the most opportunity for continued growth due to complementary product offerings. EMCORE expects the SDI acquisition to create material operating synergies in manufacturing, engineering and sales, some of which can be realized immediately.
IRE has over 30 years of diverse experience in the commercial real estate industry specializing in the sales of multi-family, office, hotels, and industrial properties.
