FedEx
Overview
Grossing over thirty eight billion dollars in revenue per annum, FedEx is a true giant in the world of international transportation companies. Employing more than 290k employees they are pioneers in their field, utilizing state of the art delivery systems to ensure a maximum on-time distribution service. Combined with FedEx’s ability to move physical packages anywhere in record times, they also utilize superior package tracking capabilities. This lends customers peace of mind knowing where their packages will be every step of the way. As FedEx continues their expansion outwards to new distribution hubs, they are always in the process of upgrading. With an average transit volume hovering around three and a half million in FY10, they have successfully moved five hundred different properties in recent years. This had the effect of improving delivery times even more. Approximately fifty percent of all packages are now delivered in under 2 days, and if adding another day, they’re able to move eighty percent of all packages in less than just 3 days. For net lease investors, they would be involved with Credit Tenant Leases whenever dealing with a FedEx property lease. These usually consist of long term signings, often considered investment grade given their strategic real estate placements near vital ground and air locations.
Lowest Cap Rate
5.40%%
Lowest cap rate over past 24 months
Average Cap Rate
6.0%%
12 mo avg with 5+ yr lease term
Average Property & Lease
Average Sale Price | $500,000 - $40M |
Average NOI | $40,000 - $2M |
Building SF | 1,800 - 300,000 |
Lease Term | 5 - 15 Years Years |
Escalations | 5 - 10% per Option |
Stock Symbol | NYSE: FDX |
CREDIT RATING
Tenant Description
FedEx is a globally known brand made synonymous with the word ‘trust’ when it comes to physical transportation services. In fact they are a collective of sorts, with operations managed in-house under the FedEx name.
They were made even more famous by the movie ‘Castaway’ in 2000 with actor Tom Hanks cast as an employee. Featuring a wide range of delivery, e-com, and professional distribution services, they constantly rank worldwide as one of the best companies to work for in the twenty-first century.
While remaining competitive, the subject of fuel price fluctuations may come as a concern with respect to the volatility found in the petroleum industry. Regardless, they continue to experience positive growth, and the company projects the same into the future.
They also base their projections on the ever-increasing service demands. Being an international transport company, they recognize the need for optimizing logistical operations at each facility, and upgrading the equipment used with the latest in technological advances.
PROS
- Creditworthy tenants
- Solid real estate principles in selecting hubs
- Company management model has been tested
- Expansion of global network and improving processing times
CONS
- Fuel liabilities affect cash flow with rise and falling prices
- Landlord accountability to building maintenance in most cases
- Repurposing real estate may be difficult due to unique usage and function
COMPANY QUICK STATS
Founded | 1971 |
Headquarters | Memphis, Tennessee |
Number of Locations | 1,950 |
Revenue | $93.512 B |
Company Website | https://www.FedEx.com |
Key Principal | Raj Subramaniam |