Strong Corporate Guarantee from One of the Largest Equipment Rentals Companies in North America
– H&E Equipment Services (NASDAQ: HEES) is one of the largest integrated equipment services companies in the United States with nearly 160 branch locations nationwide and is ranked #5 in the Top 100 Equipment Rental Companies in the United States by RER.
– The company achieved over $1.5 billion in total revenue in 2023, which represented an increase of 18.1% from 2022.
– Through their branch expansion program and strategic acquisitions H&E Equipment Services added a record 17 branch locations in 2023, or a 14% increase to their branch network.
– On February 18, 2025, Herc Holdings Inc. (NYSE: HRI) announced that it has executed a binding acquisition and merger agreement with H&E Equipment Services. This merger will solidify Herc as the 3rd largest rental company in North America.
– The combined company will have more than 600 locations with a fleet original cost of approximately $10 billion at the time of closing.
Rare Long-Term Absolute Triple Net Lease with Strong Rental Increases
– An investor will enjoy a completely passive ownership structure as the lease features zero landlord responsibilities while the tenant is solely responsible for taxes, insurance, and all maintenance, repairs and replacements related to the subject property.
– H&E Equipment Services signed a new 11 Year lease agreement in May 2024 displaying their long-term commitment to this branch location.
– The Lease offers a strong hedge against inflation with scheduled annual rent increases of 3% throughout the base term and option periods.
Strategically Located for Total Coverage of the Texas Coast
– The subject property is located directly off Hwy 77 with quick access to Highways 59 and 87, and I-69E.
– The addition of the Victoria branch gives H&E total coverage of the Texas Coast, and especially the growing market of Port Lavaca.
– The subject property also fills a gap in coverage for Herc Rentals, which has no existing locations in this growing service areas of Port Lavaca, the Eagle Ford Shale play, and other related industries along the Texas Coast.
Extremely Low Vacancy Rate for Industrial Outdoor Storage (IOS)
– The subject property is ideally positioned for Industrial Outdoor Storage featuring a 9,350 square foot facility on 2.508 Acres. The property features a fully fenced yard area, offices, and a wash bay/repair shop and carries a variety of construction and general industrial equipment.
– Limited supply and increased demand have caused IOS vacancy to drop below 3% as of mid-2022, which is well below the historical average.
