confidential offering memorandum verizon wireless...cellular sales of knoxville d/b/a verizon...
TRANSCRIPT
C
Confidential Offering
Memorandum
600+ Unit Guaranty | 2017 New Build | Dense & Affluent Retail Corridor
Colorado Springs, CO
Verizon Wireless
Owned and Operated By:
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Executive Summary
Proprietary and confidential
The Offering
Jones Lang LaSalle (“JLL”) is pleased to offer for sale the fee-simple interest in a single-tenant, retail property (the “Property” or “Asset”) occupied by Cellular Sales ofColorado d/b/a/ Verizon Wireless (the “Tenant” or “Company”). Built in 2017, the Asset features excellent thoroughfare visibility, over six years of remaining contractual term,
and minimal landlord obligations. Located proximate to one of Colorado Springs’ main intersections, Austin Bluffs Parkway and Academy Boulevard, the Property is well-
positioned with over 33,000 vehicles passing by daily. The highly accessible site is further supported by nearby residential density and traffic sources, including regional high
schools and recreational facilities. This offering represents the opportunity to acquire a well-located retail Property in an affluent area of Colorado Springs with favorable in-place lease economics.
Outparcel to a Major Retail Center
Outstanding Long-Term Demographic Outlook
Exceptional Verizon Franchise Guaranty (600+ Units)
Dense Retail Submarket with Development Activity
The entity guaranteeing the Asset’s lease term, Cellular Sales of Knoxville, Inc. is one of
the largest Verizon Wireless authorized retailers and franchisors in the United States.
Cellular Sales operates more than 600 retail stores across the U.S. with annual revenue
exceeding $1 billion. With 19 years of consecutive growth, the Company is listed as one
of the fastest growing retailers by Inc. Magazine.
Within a five-mile radius of the Asset, the population is nearly 300,000 people.
Moreover, the annual population growth rate of 1.02 percent within the same area
provides outstanding market stability, outpacing the national average by over 15 basis
points.
The Property is located within one of Colorado Springs’ most populated retail corridors,
hosting 25 national retailers including King Soopers (Kroger), Walmart, Walgreens, 24-
Hour Fitness, Ace Hardware, McDonald’s, Wendy’s, Starbucks, and Chase Bank. The
corridor has also featured national tenant development activity, with constructions and
deliveries such as the subject Property, Starbucks, and a Dutch Bros. Coffee location all
occurring in 2017.
The Asset is positioned as a freestanding site within the Market Center, anchored by
Planet Fitness, Dollar Tree, and Discovery Church (1,800 attendees per Sunday service).
The center also hosts national retailers including Starbucks, Marco’s Pizza, and Big O
Tires. The presence of these retailers and others within the power center generates
considerable consumer traffic, resulting in over 33,000 vehicles passing daily.
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Executive Summary
Proprietary and confidential
Dense and Affluent Population Property & Lease Overview
Address: 4302 Austin Bluffs Parkway
Colorado Springs, CO 80918
Purchase Price / PSF: $1,654,000 / $295
Cap Rate: 5.75%
NOI / PSF: $95,081 / $17
Tenant: Cellular Sales of Colorado d/b/a Verizon Wireless
Guarantor: Cellular Sales of Knoxville, Inc.
Guarantor Strength: 600+ Units
Lease Type: NN
Landlord Responsibilities:Roof, Structure, Excess Useful Life of HVAC
Capital Expenditure, and Maintenance via REA*
Property Type: Freestanding Retail Pad within Center
Site Size (Acres): 0.68 Acres
Parking: Non-Exclusive (Common Cross-Parking)
Building Size (SF): 5,593 SF
Lease Commencement: 3/1/2017
Lease Expiration: 2/29/2024
Remaining Lease Term**: 6.3 Years
Rental Increases: 10% Rental Increase at Year 5 (3/1/2022)
Renewal Options: Two (2): 1 x 3-Years; 1 x 5-Years
Renewal Increases: None in Option 1; 10% Increase in Option 2
Financial Reporting:Tenant to Provide Guarantor’s Prepared Financial
Statements within 15 Days’ Notice
* Defined in Section 12 (A). of Lease
**As of 10/1/2017
Proximity to Multiple Higher Education Institutions
Economic Stimulation from Public Sector Investment
Within a five-mile radius of the Asset, households boast average incomes of over
$81,000, creating a large supply of disposable income.
The Property is located proximate to The United States Air Force Academy,
Colorado College, and the University of Colorado – Colorado Springs, which are
home to a combined 17,000 students. The universities’ student populations and
large faculties create a stable consumer base in the area, providing ongoing
economic stimulation to the city of Colorado Springs.
Colorado Springs and its neighboring townships have long been home to integral
military installations including Fort Carson, The United States Air Force
Academy, Schriever Air Force Base, and Cheyenne Mountain. In total, these
operations employ approximately 60,000 people and contribute nearly $6 billion
to the economy.
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Colorado Springs Retail Trade Area
Proprietary and confidential
Over 25 national retailers in the immediate area including Walmart, Ace Hardware, Walgreens, Dollar Tree and others.
Over 33,000 vehicles passing daily by the subject Property.
Adjacent to the Asset is the Marketplace at Austin Bluffs, a retail power center hosting national tenants including Starbucks, King Soopers, Jack in the Box, and others.
The highly accessible site is further supported by nearby schools and amenities, including Dougherty High School, Sand Creek High School and multiple golf and
recreational facilities.
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Market Center Retail Map
Proprietary and confidential
6
Aerial Photography
Proprietary and confidential
Marco’s Pizza Available as
On-Market Property –
Contact JLL for More
Information
Tenant & Company Overview
Proprietary and confidential 7
Cellular Sales of Knoxville d/b/a Verizon Wireless (“Verizon”) is the
largest Verizon Wireless Authorized Retailer in the United States.
Cellular Sales operates more than 600 retail stores across the U.S. with
annual revenue exceeding $1 billion.
The franchise possesses 19 years of consecutive growth and is listed as
one of the fastest growing retailers by Inc. Magazine.
Verizon Communications, Inc. carries investment grade credit ratings of
“BBB+” and “Baa1” from S&P and Moody’s, respectively, which reflect
Verizon’s strong financial position and ability to easily access capital.
Verizon Communications, Inc. is an integrated telecommunications
company that provides wire line voice and data services, wireless
services, Internet services, equipment sales, and directory information to
consumers, businesses, and government customers across the United
States.
The parent company is the largest U.S. telecom services provider and
through its core mobile business, Verizon Wireless. The parent company
provides the largest 4G LTE network in the U.S. serving 98 percent of the
population in more than 500 markets. It was the network performance
leader in the rankings of wireless providers in the U.S. in the first Root
Metrics National RootScore Report, issued in March 2015. Verizon was
the leader in the state rankings with wins or ties for first place for overall
performance in 45 states.
Verizon Overview
Company: Verizon Wireless
Parent / Holding Company: Verizon Communications, Inc.
Parent Year Founded: 1983
Ownership Type: Public
Ticker (NYSE): VZ
Share Price (As of 7/13/17): $43.49
Credit Rating (S&P): BBB+ / Stable
Market Capitalization (As of 7/13/17): $178.78B
2016 Revenues: $125.98B
2016 Net Income: $13.13B
Company Headquarters: New York, NY
Employees: 175,000+
Website: www.Verizon.com
Ver i zon Overv i ew
Cel lu lar Sa les Overv i ew
Verizon Wireless is the largest and most profitable U.S. wireless company,
with 114.2 million retail connections and 108.8 million retail postpaid
connections as of Q4 2016.
The Company has high customer loyalty as represented by a customer
turnover ratio of only 1.26 percent and retail postpaid connections churn
rate of 1.01 percent as of Q4 2016. From the years 2011 – 2016, LAGR was
6.2 percent.
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Colorado Springs Overview
Proprietary and confidential
Colorado Springs Overview
Located 70 miles south of Denver, Colorado Springs is the state’s second largest city and home
to over 435,0000 people. The city was named a top five place to live in the United States by
U.S. News and World Report, a testament to the city’s growth and quality of life standard. The
city is also well-supported by strength in higher education, being home to respected institutions
such as Colorado College and The United States Air Force Academy.
Colorado Springs has historically possessed a healthy labor market, as its employment
infrastructure is driven by federal defense spending and is thus provided with long-term
stability.
In the public sector, the area has long been home to large military installations including Fort
Carson, The United States Air Force Academy, Schriever Air Force Base, and Cheyenne
Mountain. In total, these operations employ approximately 60,000 people and contribute nearly
$6 billion to the state’s economy.
Location Highlights
Demographics1-MILE
RADIUS
3-MILE
RADIUS
5-MILE
RADIUS
POPULATION2022 Projection 18,798 132,455 310,914
2017 Estimate 18,341 127,537 295,556
2017 Number of Households 7,835 50,514 117,085
2017 - 2022 Projected Growth 0.5% 0.8% 1.0%
Age 0 - 14 20.0% 19.4% 20.1%
Age 15 - 24 14.5% 13.1% 13.3%
Age 25 - 44 30.0% 28.1% 28.5%
Age 45 - 64 22.1% 25.0% 24.7%
Age 65+ 13.3% 14.4% 13.1%
ESTIMATED HH INCOMELess than $35,000 31.4% 21.3% 25.0%
$35,000 - $49,999 16.5% 13.5% 14.1%
$50,000 - $74,999 20.4% 22.6% 20.5%
$75,000 - $99,999 12.9% 15.4% 14.0%
More than $100,000 18.9% 27.3% 26.3%
Average Estimated HH Income $66,419 $81,112 $78,426
Median HH Income $51,739 $64,480 $60,716
Favorable Socioeconomic Location – Within a three-mile radius of the Property, Colorado
Springs’ affluent neighborhoods possess an average household income of over $81,000,
suggesting long-term consumer activity for Verizon.
Strong Property Visibility – The Asset benefits from substantial traffic counts at a main and
main location, with over 33,000 vehicles passing daily.
Dense Retail Submarket with Development Activity – The Property is located within one of
Colorado Springs’ most populated retail corridors, hosting 25 national retailers including King
Soopers (Kroger), Walmart, Walgreens, 24-Hour Fitness, Ace Hardware, McDonald’s,
Wendy’s Starbucks, and Chase Bank. The corridor has also featured national tenant
development activity, with deliveries such as the subject Property occurring in 2017.
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Additional Photography
Proprietary and confidential
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such
documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not
to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the
accuracy thereof.
www.jllproperty.us/net-lease
JLL Contacts
Matthew Berres
National Platform:
+1 424 901 8202
Adam Friedlander
National Platform:
+1 424 901 8201
Investment Sales Contacts:
Jason Schmidt
Colorado:
+ 1 303 217 7953
Scott Bailey
National Platform:
+ 1 424 901 8204