unique grocery anchor investment opportunity · 2019. 8. 21. · retail sales are among the highest...
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UNIQUE GROCERY ANCHOR INVESTMENT OPPORTUNITY1 5 1 6 E V A L L E Y PA R K W AY, E S C O N D I D O , C A L I F O R N I A 9 2 0 2 7 ( S A N D I E G O M S A )
ACTUAL SITE
®
EXCLUSIVELY MARKETED BY
JACK QASHAT | ASSOCIATESRS NATIONAL NET LEASE GROUP
3131 Camino Del Rio N, Suite 310 | San Diego, California 92108DL: 619.489.9002 | M: 619.354.5225
Jack.Qashat@srsre.com | CA License No. 01914468
SAM HANNA | SENIOR VICE PRESIDENTSRS NATIONAL NET LEASE GROUP
3131 Camino Del Rio N, Suite 310 | San Diego, California 92108 DL: 619.489.9003
Sam.Hanna@srsre.com | CA License No. 01242719
ACTUAL SITE
®
Responsible Broker: Garrett Colburn, SRS Real Estate Partners CA License No. 01416734
TABLE OF CONTENTS
4INVESTMENT SUMMARY
OFFERING SUMMARY | INVESTMENT HIGHLIGHTS
7PROPERTY OVERVIEW
AERIALS | SITE PLAN | LOCATION MAP
12AREA OVERVIEW
DEMOGRAPHICS
14FINANCIALS
RENT ROLL | BRAND PROFILE
ACTUAL SITE
SRS National Net Lease Group is pleased to offer the opportunity to acquire the leased fee interest (land ownership) in a NN leased, corporate guaranteed, Grocery Outlet, investment property located in Escondido, CA (San Diego MSA). The tenant, Grocery Outlet Inc., has approximately 4 years remaining on its initial 10-year lease term with 4 (5-year) options to extend. The lease features a 10% rental increase at the beginning of the sixth year of the lease term and at the beginning of each option period, steadily growing NOI and hedging against inflation. The lease is corporate guaranteed and is NN with limited landlord responsibilities. This offering also includes a freestanding building behind Grocery Outlet - contact agent for more details.
The subject property is located near the signalized hard corner intersection of E. Valley Parkway and N. Rose St., averaging a combined 39,300 vehicles passing by each day. The site has a large monument sign, providing for excellent visibility and street frontage on E. Valley Parkway. Moreover, it is located a half-mile away from State Highway 78 (20,400 VPD) and about 3 miles away from Interstate 15, the major north/south thoroughfare going through Escondido, averaging 238,000 vehicles passing each day. Grocery Outlet is in the heart of a dense retail corridor, with nearby national/credit tenants including Walmart, Walmart Neighborhood Market, The Home Depot, Dollar Tree, CVS Pharmacy, Bank of America, Joann’s, and more, increasing consumer draw to the trade area and promoting crossover shopping to the site.
Escondido is a bedroom community of San Diego, one of the most populated cities in the state of California, second only to Los Angeles. The subject property is about 15 minutes from the San Diego Zoo Safari Park, which reports over 1.2 million visitors annually. The site is also located about 15 minutes away from California State University of San Marcos, which currently has more than 13,000 undergraduate students enrolled. More locally, the 5-mile trade area is supported by nearly 192,000 residents with an affluent average annual household income of $86,662.
4 | INVESTMENT SUMMARY | SRS NATIONAL NET LEASE GROUP .
INVESTMENT SUMMARY
ACTUAL SITE
5 | OFFERING HIGHLIGHTS | SRS NATIONAL NET LEASE GROUP .
ACTUAL SITE
OFFERING SUMMARY
RENTABLE AREA: 16,033 SF + Additional BuildingContact Agent for Details
LAND AREA: 1.49 Acres
PROPERTY ADDRESS: 1516 E. Valley Parkway, Escondido, CA 92027
YEAR BUILT / REMODELED: 1990
PARCEL NUMBER: 230-141-19-00
OWNERSHIP: Fee Simple (Land and Building)
PROPERTY SPECIFICATIONS
PRICING: $4,450,000
NET OPERATING INCOME: $270,864
CAP RATE: 6.09%
GUARANTY: Corporate
TENANT: Grocery Outlet Inc.
NUMBER OF LOCATIONS: 300+
LEASE TYPE: NN
LANDLORD RESPONSIBILITIES: Roof, Structure, HVAC, Parking Lot beg. Year 8
OFFERING
INVESTMENT HIGHLIGHTSUNIQUE INVESTMENT OPPORTUNITY: GROCERY OUTLET AND A FREE STANDING RETAIL BUILDING
• Grocery Outlet corporate guaranteed lease with 4 years remaining and 4 (5-year) option periods
• 10% rental increases every 5 years• Contact agent for details regarding second building
NN LEASE | FEE SIMPLE OWNERSHIP | LIMITED LANDLORD RESPONSIBILITIES• Tenant pays for CAM, taxes, insurance• Landlord responsibilities limited to Roof, Structure, and HVAC• Landlord is responsible for Parking Lot at the start of year 8 of the term• Ideal, low management investment for an out-of-state, passive investor
NEARBY SIGNALIZED, HARD CORNER INTERSECTION | STATE HIGHWAY 78 | INTERSTATE 15
• Situated near the signalized, hard corner intersection of E Valley Parkway and N. Rose St., averaging a combined 39,300 vehicles passing by daily
• Less than a half mile away from State Highway 78 with 20,400 VPD• About 3 miles from Interstate 15, the major north/south thoroughfare going through
Escondido, averaging over 238,000 VPD• Located in a high-traffic trade area with a large monument sign, providing excellent
visibility
DENSE RETAIL CORRIDOR | NEARBY NATIONAL/CREDIT TENANTS• Nearby national/credit tenants including Walmart, Walmart Neighborhood Market,
The Home Depot, Dollar Tree, CVS Pharmacy, Bank of America, Joann’s, and more• Increases consumer draw to the trade area and promotes crossover shopping
CALIFORNIA STATE UNIVERSITY SAN MARCOS | PALOMAR COLLEGE• Site is located about 15 minutes from California State University of San Marcos
(13,000 students)• Site is located a half-mile from a Palomar College satellite campus• Provides a direct consumer base to draw from
BEDROOM COMMUNITY OF SAN DIEGO | SAN DIEGO ZOO SAFARI PARK• Escondido is a bedroom community of San Diego, one of the most populated cities
in California, second only to Los Angeles• Subject property is located 15 minutes away from the San Diego Zoo Safari Park,
which reports over 1.2 million visitors each year
STRONG DEMOGRAPHICS IN 5-MILE TRADE AREA • Nearly 192,000 residents and more than 72,000 employees• Affluent average annual household income of $86,662
6 | INVESTMENT HIGHLIGHTS | SRS NATIONAL NET LEASE GROUP .
ACTUAL SITE
7 | PROPERTY OVERVIEW | SRS NATIONAL NET LEASE GROUP .
PARCEL MAP
PROPERTY OVERVIEW
ACTUAL SITE
ACCESS
TRAFFIC COUNTS
IMPROVEMENTS
PARKING
YEAR BUILT
PARCEL
ZONING
E. Valley Parkway: .............................................................................2 Access Points
E. Valley Parkway: .....................................................................27,400 Cars Per DayN. Ash Street / State Highway 78: .............................................20,400 Cars Per Day
There is approximately 16,033 SF of existing building area.
There are approximately 71 parking spaces on the owned parcel. The parking ratio is approximately 4.43 stalls per 1,000 SF of leasable area.
1990
Parcel Number: 230-141-19-00 Acres: 1.49 Square Feet: 64,904 SF
C-G: General Commercial
E. Valley Pkwy.
27,400CARS PER DAY®
Pioneer Elementary
School
Rose Elementary School
Escondido Charter High School
Palomar College
Orange Glen High School PTSO
Hidden Valley Middle School
Oak Hill Elementary School
20,400CARS PER DAY
11,900CARS PER DAY
27,400CARS PER DAY
E. Valley Pkwy.
N. Rose St.
State Highway 78
®
VALLEY PKWY. - 27,400 VPD
MONUMENT SIGN
VALLEY ROSE SELF STORAGE
TORTILLERIA SANTACRUZ
NEIGHBORHOOD HEALTHCARE
®
SAN DIEGO
®
35 Minutes | 34 Miles To San Diego
ESCONDIDO
2018 ESTIMATED POPULATION1 Mile ......................................................... 41,6693 Mile ........................................................137,2495 Mile ........................................................191,809
2018 AVERAGE HOUSEHOLD INCOME1 Mile ........................................................$60,027 3 Mile ........................................................$74,1145 Mile ........................................................$86,662
2018 ESTIMATED TOTAL EMPLOYEES1 Mile ......................................................... 13,7393 Mile ......................................................... 50,0885 Mile ......................................................... 72,028
12 | AREA OVERVIEW | SRS NATIONAL NET LEASE GROUP .
AREA OVERVIEWEscondido, CaliforniaEscondido is settled in a long valley in the coastal mountains of Southern California, Escondido provides a thriving urban environment in the midst of gentle rolling hills and avocado and citrus groves. Escondido lies about 18 miles inland, 100 miles south of Los Angeles, and 30 miles northeast of San Diego. The City of Escondido is a vibrant and diverse community with a population of 155,233 as of July 1, 2018.
Escondido’s economy is one of the most diversified in North San Diego County. Industries such as healthcare, specialty food and beverage manufacturing, agriculture, professional services and precision manufacturing all call Escondido home. Retail sales are among the highest in San Diego County due to the presence of the Escondido Auto Park and Westfield North County. Palomar Medical Center, which opened its doors in the Escondido Research and Technology Center in 2012, is the centerpiece of the region’s health care system and is recognized as one of the most technologically advanced hospitals in the world. Escondido is home to dozens of innovative companies and entrepreneurs, with one of the highest numbers of recorded patents per capita in the nation.
Inland North San Diego County, of which Escondido is at the core, is emerging as a regional economic leader in the forefront of job development and new industries. Escondido is a wonderful place to visit, live, work, play, or do business, and provides a business-friendly environment.
According to the City’s 2017 Comprehensive Annual Financial Report, the top employers in the city are Palomar Medical Center, Escondido Union School District, City of Escondido, Escondido Union High School District, Bergelectric, Home Depot, Nordstrom Inc., Toyota of Escondido, Vons Grocery Stores, California Center for the Arts, North County Transit District and SDG&E.
Escondido, California provides easy access to all of the many cultural, arts and entertainment offerings of nearby San Diego. In addition, some of Escondido’s more notable attractions include The California Center for the Arts, The Deer Park Winery and Auto Museum, The Escondido Children’s Museum, The Mingei International Museum, The Patio Playhouse, The San Pasqual Battlefield State Park, Theatrx, The Lawrence Welk Museum and The Welk Resort Theatre.
Escondido is served by the Escondido Union School District, the Escondido Union High School District, and the San Pasqual Union School District. The city has 19 elementary, five middle, and seven high schools.
13 | AREA DEMOGRAPHICS | SRS NATIONAL NET LEASE GROUP .
AREA DEMOGRAPHICSDEMOGRAPHICS 1 MILE 3 MILES 5 MILES
2018 Estimated Population 41,669 137,249 191,8092023 Projected Population 43,330 143,271 200,2332010 Census Population 38,818 127,226 177,342Projected Annual Growth 2018 to 2023 0.78% 0.86% 0.86%Historical Annual Growth 2010 to 2018 0.86% 0.92% 0.96%
2018 Estimated Households 11,361 41,520 61,1892023 Projected Households 11,752 43,184 63,6742010 Census Households 10,782 38,968 57,110Projected Annual Growth 2018 to 2023 0.68% 0.79% 0.80%Historical Annual Growth 2010 to 2018 0.64% 0.77% 0.84%
2018 Estimated White 50.8% 55.4% 60.4%2018 Estimated Black or African American 2.6% 2.5% 2.3%2018 Estimated Asian or Pacific Islander 4.4% 6.2% 6.8%2018 Estimated American Indian or Native Alaskan 1.3% 1.1% 0.9%2018 Estimated Other Races 36.3% 30.0% 24.7%2018 Estimated Hispanic 68.8% 56.7% 47.8%
2018 Estimated Average Household Income $60,027 $74,114 $86,6622018 Estimated Median Household Income $45,755 $52,966 $60,0802018 Estimated Per Capita Income $17,300 $23,083 $28,142
2018 Estimated Total Businesses 818 4,198 6,2152018 Estimated Total Employees 13,739 50,088 72,028
RENT ROLL
14 | RENT ROLL | SRS NATIONAL NET LEASE GROUP .
ACTUAL SITE
For financing options and loan quotes, please contact our SRS Debt & Equity team at debtequity-npb@srsre.com.
LEASE TERM RENTAL RATES
TENANT NAME SQUARE FEET LEASE START LEASE END BEGIN INCREASE MONTHLY PSF ANNUALLY PSF RECOVERY TYPE OPTIONSGrocery Outlet 16,033 7/5/2013 7/31/2023 Current - $23,889 $1.49 $286,668 $17.88 NN 4 (5-year)
(Corporate Guaranty) 12% incr. at beg.
of each option
FINANCIAL INFORMATION PROPERTY SPECIFICATIONS
Price: ..................................................................................................................................$4,450,000Net Operating Income: ..........................................................................................................$270,864Cap Rate: ....................................................................................................................................6.09%Lease Type:..................................................................................................................................... NN
Year Built: .....................................................................................................................................1999Rentable Area: ........................................... 16,033 SF + Additional Building (Contact Agent for Details)Land Area: ........................................................................................................................... 1.49 AcresAddress: ........................................................................ 1516 E. Valley Parkway, Escondido, CA 92027
PRICING SUMMARY
15 | RENT ROLL | SRS NATIONAL NET LEASE GROUP .
ACTUAL SITE
OPERATING CASH FLOW IN-PLACERental Revenue: $286,668
Reimbursement Revenue: 1 , 5 $69,767
Gross Potential Revenue: $356,435
Less Expenses: ($85,571)
Net Operating Income: $270,864
OPERATING EXPENSES IN PLACETaxes: 2 $51,327
Special Assessments: 2 $66
Insurance: 3 $7,804
CAM: 1 , 4 $26,374
Total: $85,571
NOTES1) Grocery Outlet had a CAM cap of $1.25/SF for the first 5 years of the term, which cannot increase by more than 8% each year moving forward from Oct. 2018.
2) Taxes and Special Assessments are adjusted for increase upon sale.
3) Insurance expenses are per the seller.
4) CAM expenses are per the seller.
5) Reimbursements are per the seller.
6) Contact agent for details regarding second building.
16 | BRAND PROFILE | SRS NATIONAL NET LEASE GROUP .
BRAND PROFILE
ACTUAL SITE
®
GROCERY OUTLETGrocery Outlet is a third-generation family run business, recognized as the nation’s largest grocery extreme-value retailer. Founded in the 1940s, Grocery Outlet currently operates over 300+ independently operated stores in California, Idaho, Nevada, Oregon, Pennsylvania, and Washington. Grocery Outlet offers products ranging from groceries, frozen foods, deli selections, refrigerated goods, produce, fresh meat (selected stores), seasonal products, housewares, toys, health & beauty, gifts and a wide variety of beer and wine.
Company Type: ............................................................................... Private Locations: .......................................................................................... 300+Website: ................................................................www.groceryoutlet.com
1000+PROPERTIES CURRENTLY
REPRESENTED
$2.6B*TRANSACTION VALUE
600+CLIENTS REPRESENTED
IN 2016
250+BROKERS,
PROFESSIONALS,AND STAFF
#1LARGEST REAL ESTATE FIRM
EXCLUSIVELY DEDICATED TO RETAIL SERVICES IN NORTH AMERICA
20+OFFICES
*STATISTICS ARE FOR 2017.
SRS GLOBAL STATS
This Offering Memorandum has been prepared by SRS National Net Lease Group (SRS) and has been approved for distribution by the owner. Although effort has been made to provide accurate information, neither the owner nor SRS can warrant or represent accuracy or completeness of the materials presented herein or in any other written or oral communications transmitted or made available to the purchaser. Many documents have been referred to in summary form and these summaries do not purport to represent or constitute a legal analysis of the contents of the applicable documents. Neither owner nor SRS represents that this offering summary is all inclusive or contains all of the information a purchaser may require. All of the financial projections and/or conclusions presented herein are provided strictly for reference purposes and have been developed based upon assumptions and conditions in effect at the time the evaluations were undertaken. They do not purport to reflect changes in the economic performance of the property or the business activities of the owner since the date of preparation of this Offering Memorandum. The projected economic performance of the property, competitive submarket conditions, and selected economic and demographic statistics may have changed subsequent to the preparation of the package. Qualified purchasers are urged to inspect the property and undertake their own independent evaluation of the property, the market and the surrounding competitive environment.
ACTUAL SITE
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