Kraft Foods
$22M
Financed via TI Lease
as Landlord / Developer
10-yr
Fully amortizing TI Lease
Summary
Duke Realty Corporation (now Prologis) sought to secure Kraft Foods Global as a long-term tenant for its Rickenbacker Logistics Campus, a 936,000-square-foot industrial property in Groveport, Ohio. Kraft, as part of its national expansion efforts, was pursuing a 10-year lease for a state-of-the-art manufacturing and distribution center, requiring a $22 million tenant improvement allowance to customize the space to its operational standards.
However, constrained by tightening capital markets, Duke was unable to commit additional equity or debt to fund the improvements. To move the transaction forward, Duke’s mortgage broker introduced TI Solutions and its proprietary TI Lease financing structure.
Through TI Solutions’ involvement, Duke was able to preserve capital, secure a premier tenant, and complete a transaction that would have otherwise stalled due to market conditions.
Approach
Structured a non-recourse TI Lease financing package covering 97% of the tenant improvement costs, with Duke contributing only 3%.
Designed the financing to function seamlessly alongside the existing property mortgage, maintaining compliance and protecting Duke’s capital structure.
Coordinated with Duke Realty, Kraft Foods, and their respective advisors to align lease, construction, and financing terms.
Provided a turnkey solution combining TI capital, structured finance expertise, and full accounting, tax, and legal support.
Leveraged TIS’s national network of institutional investors to deliver efficient pricing and certainty of execution amid volatile credit markets.
Results
Enabled Duke Realty to secure Kraft Foods Global as a long-term tenant for the Rickenbacker Building.
Preserved Duke’s capital by eliminating the need for equity or debt investment in the $22 million build-out.
Delivered non-recourse financing that minimized ownership risk while maintaining flexibility and control of the asset.
Eliminated upfront occupancy costs for Kraft and preserved cash for operations.
Improved the property’s credit profile and tenancy strength.
Download the Case Study