natural grocers 25 year lease - matthews · • longest primary lease term for a net leased organic...

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R E T A I L A D V I S O R SOffering MeMOranduM

natural grOcers 25 Year lease 4900 Kipling street, Wheat ridge, cO 80033

Matthews retail advisors

cOnfidentialitY & disclaiMer stateMent

this Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Natural Grocers by Vitamin Cottage located at 4900 Kipling Street, Wheat Ridge, CO 80033 (“Property”) . i t has been prepared by Matthews retai l advisors . this Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. the informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the property. i t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of sel ler or Matthews retai l advisors . the mater ia l is based in part upon informat ion suppl ied by the sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the property, you agree:

1 . the Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the sel ler.

Owner and Matthews retai l advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the property unless and unt i l a wr i t ten agreement for the purchase and sale of the property has been ful ly executed and del ivered.

i f you wish not to pursue negot iat ions leading to the acquis i t ion of the property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is property including this Offer ing Memorandum.

a prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the property, or informat ion provided herein or in connect ion with the sale of the property shal l be l imited to those expressly provided in an executed purchase agreement and shal l be subject to the terms thereof. in no event shal l a prospect ive purchaser have any other c la ims against sel ler or Matthews retai l advisors or any of their af f i l iates or any of their respect ive of f icers , directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the property.

this Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the property s ince the date this Offer ing Memorandum.

pete gonzalezBroker of record license no. fa100003923

aron clinepartner direct +1.310.919.5816 MOBile +1.818.632.0233 [email protected] license no. 01904371

pricing & financial analYsisinvestments highlights.................................................................. 2executive summary.........................................................................3company Overview.....................................................................4-5

prOpertY descriptiOnphysical description .......................................................................7Birds eye Map ................................................................................. 8site plan.............................................................................................9regional Map ..................................................................................10specialty grocer Map....................................................................11tenant Map......................................................................................12

deMOgraphicscounty Overview | Jefferson county ...................................... .15denver Metropolitan area............................................................16economic Overview........................................................................17demographics report .................................................................. 18

Table of Contents

EXCLUSIVELY LISTED BY:

Matthews retail advisors

Pricing & Financial Analysis

™

OFFERING MEMORANDUM | Natural Grocersp. 2 Matthews retail advisors

inVestMent highlights

high QualitY - Brand neW cOnstructiOn Organic grOcer

• newly constructed natural grocers with a rare 25 year corporate lease

• natural grocers operates over 108 stores throughout 18 states and has signed leases for 21 additional stores which are planned to open in 2016 in texas, arizona, arkansas, colorado, idaho, iowa, Missouri, Oregon, utah, & Washington amongst others.

• excellent visibility & location – subject property is located at a signalized corner just off i-70 along Kipling st which has ±46,000 Vpd. - subject property is located along the main retail corridor across the street from a super target anchored center which is a strong traffic generator for the immediate trade area. (i-70 traffic 122,000 Vpd)

• an investor will recapture over 135% of their inital investment by the end of the primary term of the lease. approximately $10,079,000

• tenant has 4 ten (10) year options to renew which are rare providing better financing or refinancing scenarios. fixed rental increases in options.

lOcated in a dense denVer suBMarKet With affluent deMOgraphics

• Over 11,877 people within a 1-mile radius, with average household income of $62.068

• Over 99,815 people within a 3-mile radius, with average household income of $73,475

• Over 966,918 people within a 5-mile radius, with average household income of $75,025

• Other dominant tenants in this trade area include: super target, starbucks, 7-eleven, Burger King, Big 5 sporting goods, Jack in the Box, Verizon Wireless, Qdoba, Quiznos, denny’s, circle K, taco Bell, anytime fitness, subway, costco, lowe’s, home depot, sams club, King soopers, Kmart, Mcdonald’s, panda express; amongst others.

• subject property is located approximately 10 miles from downtown denver and approximately 7.7 miles from sports authority field at Mile high the denver Broncos professional football team’s stadium.

• subject property has a huge sign giving the property visibility from the freeway. current owner spent approximately $175,000 on the signage

ideal 1031 eXchange prOpertY

• longest primary lease term for a net leased organic grocery store on the market - 25 year primary lease

• safe and secure net leased investment opportunity with minimal landlord responsibilities

• natural grocers is rapidly expanding and has experienced year over year growth in net profit. in 2009 company sales were approximately $206MM whereas in 2014 company sales were approximately$520MM. in 2015 sales increased 20% to $624MM.

Matthews retail advisors p. 3Natural Grocers | OFFERING MEMORANDUM

PRICING ANALYSISeXecutiVe suMMarY

natural grOcers4900 Kipling street Wheat ridge, cO 80033

list price ...........................................................................................$7,455,000cap rate - current ..................................................................................5.50 %*gross leasable area ..................................................................... ±15,000sflot size* ................................................................. ±2.37 acres (103,657 sf)Year Built ....................................................................................................... 2015

*allows for additional expansion of ±5,000sf

annualized Operating dataMonthly rent annual rent increases cap rate

current- 08/31/2040 $34,166.67 $410,000 flat 5.50%

Option 1 - 08/31/2045 $37,500.00 $450,000 9.76% 6.03%

09/01/2045- 08/31/2050 $38,750.00 $465,000 3.33% 6.23%

Option 2 - 08/31/2055 $40,000.00 $480,000 3.22% 6.43%

09/01/2055- 08/31/2060 $41,250.00 $495,000 3.12% 6.63%

Option 3 - 08/31/2065 $42,500.00 $510,000 3.03% 6.84%

09/01/2065- 08/31/2070 $43,750.00 $525,000 2.94% 7.04%

Option 4 - 08/31/2075 $45,000.00 $540,000 2.85% 7.24%

09/01/2075- 08/31/2080 $46,250.00 $555,000 2.77% 7.44%

tenant summary

tenant trade name natural grocers by Vitamin cottage, inc.

type of Ownership fee simple

lease guarantor corporate

lease type retail nnn

lanlord responsibility structure

Original lease term 25 years

lease commencement date May 15, 2014

rent commencement date May 17,2015

lease expiration date august 31, 2040

term remaining on lease 24.6 years

increases flat during primary term; fixed increases in options

Options 4 ten(10) year options


cOMpanY OVerVieW

natural grocers By Vitamin cottage inc. (natural grocers) is a spe-cialty retailer of natural and organic groceries and dietary supple-ments. the company sells natural and organic groceries and di-etary supplements. the company’s grocery products include: bulk food and private label products, dry, frozen and canned groceries, meats and seafood, dairy products and dairy substitutes, prepared foods, bread and baked goods, and beverages. natural grocers’ other products include body care, pet care, household and general merchandise, and books and handouts. the company’s 107,000 square foot bulk food repackaging facility and distribution center is in golden, colorado (located less than 4.8 miles from the sub-ject property). the company stock approximately 400 titles in its book department. titles cover various approaches to diet, lifestyle and health. the company’s subsidiaries include Vitamin cottage natural food Markets, inc. and Vitamin cottage two ltd. liability company and natural systems, llc. the company was founded by Margaret isely and henry philip isely in 1955 and is headquartered in lakewood, cO.

property name natural grocers

gross leasable area ± 15,000

property type grocery stores

parent company trade name natural grocers by Vitamin cottage

Ownership public

revenue $624.68M

net income $16.2M

stock symbol ngVc

Board nYse

no. of locations ±103

no. of employees ± 2,447 full time , ± 383 part time

headquartered lakewood, cO

Web site www.naturalgrocers.com

Year founded 1955


PRICING ANALYSIScOMpanY OVerVieW

• natural grocers is a rapidly expanding specialty retailer of natural and organic groceries and dietary supplements

•Providinghigh-qualityproductsataffordable prices, exceptional customer service, nutrition education and community outreach •Notapprovingforsalegroceryproductsthat are known to contain artificial colors, flavors, pre servatives, sweeteners or partially hydrogenated or hydrogenated oils and selling only usda certi fied organic produce •Enhancingcustomers’shoppingexperience by providing free science-based nutrition educa tion to help customers make well-informed health and nutrition choices• currently operates 103 stores in 16 states, and has signed

leases for eight additional stores planned to open in fiscal 2015 in arizona, colorado, Kansas, Minnesota, north da-kota and Oklahoma

• ten new stores opened in each of fiscal 2011 and 2012, 13 opened in fiscal 2013, 15 stores opened in fiscal 2014, 16 stores opened in fiscal 2015 and plans to open 23 stores in fiscal 2016

• the entire u.s. market can support at least 1,100 natural grocers stores, including approximately 230 additional stores in the current 19 states in which it operates, based on research by the Buxton company

• portable store model with scalable operations infrastruc-ture

• strong new store economics with an approximate payback period of four years and 30% cash-on-cash return by end of fifth year with total upfront capital investment of approxi-mately $2.2 Million

• stores range from 5,000 to 16,000 selling square feet and average approximately 10,000 selling sf.

• approximately one quarter of a stores’ selling square footage is dedicated to dietary supplements

• approximately 20,700 sKu’s of natural and o r g a n i c products per store, including approximly 6,500 sKu’s of di-etary supplements

• positive comparable store sales growth for over 54 con-secutive quarters

• sales have increased at a compound annual growth rate of 20.4% and new stores of 19.6% from fiscal 2013 to fiscal 2015

• experienced and committed management team with prov-en track record

• focused on improved operating margins: •Costdisciplinefocusonstorelaborlevels,im proving supply chain and company wide focus on performance metrics •Leverageinvestmentsininfrastructure •ImplementedSAPEnterpriseResource planning system in 2010 •OpenedNewbulkfoodrepackagingfacility and distribution center in fiscal 2012 to support growth for 5+ years •HomeOfficesupportteaminplace •Efficienciesofscaleasstorebasegrowsand purchasing leverage

Property Description

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phYsical descriptiOn

THE OFFERING

property name .............................................................................natural grocers

property address .................................................................4900 Kipling street

Wheat ridge, cO 80033

assessor’s parcel number ...................................................................... 464568

SITE DESCRIPTION

number of stories .............................................................................................One

Year Built .............................................................................................................2015

gross leasable area (gla) ...............................................................± 15,000 sf

lot size........................................................................... 2.38 acres (103,657 sf)

type of Ownership ...............................................................................fee simple

parking ...................................................................................±89 surface spaces

parking ratio................................................................................... 5.93: 1,000 sf

landscaping ........................................................................................professional

topography ................................................................................... generally level

cOnstructiOn

foundation .......................................................................................concrete slab

framing ....................................................................................................Metal stud

exterior ............................................................................................ painted stucco

parking surface ............................................................................................asphalt

roof ........................................................................................................................flat


Birds eYe

49th ave. Vpd: 6,000

Kip

ling

st.

Vpd

: 46

,00

0

highway 70 Vpd: 122,000


PROPERTY DESCRIPTIONsite plan

15,000 sf expa

nsio

n a

rea

± 5

,00

0 s

f


PROPERTY DESCRIPTIONregiOnal Map


PROPERTY DESCRIPTIONspecialtY grOcer Map


tenant Map


PROPERTY DESCRIPTION

Demographics

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DEMOGRAPHIC ANALYSIScOuntY OVerVieW | JeffersOn cOuntY

Jefferson county is a place where the great plains meet the rocky Mountains with some of the most magnificent scenery in the country. Once an agricultural and mining area, Jefferson county, colorado is a thriving suburban, business, industrial, recreational and residential community. the county, formally organized in 1861 by the colorado territorial legislature, takes the name of thomas Jefferson, the third president of the united states. Jefferson county is the fourth-largest county in colorado. its citizens make their homes on mountain tops as well as in suburban communities. a plentiful mix of mom-and-pop shops and fortune 500 companies are headquartered here.

Jefferson county is made up of arvada, Wheat ridge, edgewater, golden, lakeside, lake-wood, littleton, Morrison, Mountainview, superior, Westminster, & Bow Mar.

the city of Wheat ridge is located in Jefferson county, colorado, and is a western suburb of denver. it is approximately 5 miles away from the state capitol, with a population of over 30,000 people.

arvada, colorado is a beautiful first-ring suburb of denver, the Mile high city. arvada re-tains a small-town feel even with its estimated population of 111,559. established in 1870, arvada enjoys a rich history, quiet tree-lined neighborhoods and a robust mix of business. Our strong civic leadership balances quality of life with an understanding and support of business and economic development.

arvada’s land encompasses nearly 40 square miles. three proximate interstate highways provide easy access to the larger metropolitan region and denver international airport. an extraordinary trail system links with denver trails on the east and the foothills of the rocky Mountains to the west, punctuated with thousands of acres of parks and open spaces.

residents and businesses have easy access to world-class research institutions including the university of colorado and colorado school of Mines; in addition, the arvada campus of red rocks community college provides training assistance to meet employer needs.

arvada’s diverse economic base, highly educated workforce, low crime rate and superb quality of life have helped shape our community into one of the most attractive and com-petitive cities in the centennial state.


DEMOGRAPHIC ANALYSISdenVer MetrOpOlitan area

as one of the best places to work and raise a family, the denver area creates an enviable quality of life for its residents. not only is the economy booming and full of opportunity, but denver resi-dents also happen to be some of the healthiest of the nation.

situated on the high plains beneath the rocky Mountains, denver enjoys a pretty ideal climate with moderate temperatures. While offering a plethora of activities the mountains also protects den-ver from severe winter weather giving them an average of 300 sunny days a year.

With such great weather, denver’s residents stay active exceeding the national average for nearly every measure of physical activity. this high rise in an active life style is partly due to the abundance of available public parks and recreational centers as well as the myriad of outdoor options such as hiking, skiing, rock climbing and more. counting such high levels of activity, there is no doubt that denver residents take health seriously.

denver’s relatively central location makes it the perfect distribu-tion hub for the american west. there are a number of growing industries such as technology, telecommunications, energy and cannabis distribution.

ranking in the top 10 of the country for quality of life by many studies, denver offers a number of comfortable qualities, such as incredibly affordable housing options, low mortgage and rental rates, an above average percentage of college graduates and low unemployment.

from beautiful sunny days and an adventurous healthy lifestyle to high employment and comfortable living situations, denver is a highly attractive place for anyone to live.

city of denver skyline

famous Outdoor red rocks amphitheater

invesco field the home of the denver Broncos


DEMOGRAPHIC ANALYSIS

Denver Metro Area’s Booming Economy

as of mid-2015 the metro denver area ranks first in economic job growth and are becoming economic front runners for the country. While the legalization of marijuana isn’t the only force driving the market, it has created countless new jobs even beyond the industry. new jobs stemming from the legalization range from security to hVac companies to electricians all stimulating major growth and economic boost. adding to the rush, denver and its surrounding areas have also become a popular spot for tech industries.

after the state legalized marijuana, home prices, raw land and industry prices sky rocketed. in March of 2015, the denver area experienced the second-largest rise in home prices just behind san francisco.

adding to the job and housing market boom, tourism is also on the rise. the legaliza-tion of marijuana has brought record numbers of visitation and spending to denver and colorado in the last couple years.

the nearby mineral-rich rocky Mountain range has encouraged a hand full of mining and energy companies to spring up, making the energy industry another staple of denver’s colorful economy.

Top Employers in Wheat Ridge, CO the three major industries employing the largest percentages of the working force in Wheat ridge are travel hospitality & tourism, retail and wholesale trade, and health care. the companies offering the most jobs in Wheat ridge are dish, petsmart and Vail resorts.

the occupational composition of the employed civilian labor force was 37.3% in man-agement, business, science, and arts; 26.2% in sales and office occupations; 18.5% in service occupations and 10.6% in production, transportation and material moving; 7.4% in natural resources, construction and maintenance.

ecOnOMic OVerVieW

denver Metropolitan area

resorts in Vail, colorado


deMOgraphic analYsis

population 1-Mile 3-Mile 5-Mile2020 projection 12,539 104,508 1,029,5662015 estimate 11,877 99,815 966,9182010 census 11,252 95,709 902,5672000 census 11,076 97,619 884,831growth 2000 - 2010 1.59% -1.96% 2.00%growth 2010 - 2015 5.56% 4.29% 7.13%growth 2015 - 2020 5.58% 4.70% 6.48%

households2020 projection 5,817 47,135 442,3252015 estimate 5,473 44,508 411,1412010 census 5,125 41,921 377,2132000 census 4,746 40,924 356,955growth 2000 - 2010 7.98% 2.44% 5.68%growth 2010 - 2015 6.80% 6.17% 8.99%growth 2015 - 2020 6.28% 5.90% 7.58%

incomeincome < $15,000 13.48% 10.77% 12.51%income $15,000 - $24,999 10.94% 10.18% 10.16%income $25,000 - $34,999 11.07% 9.52% 9.95%income $35,000 - $49,999 17.65% 15.26% 13.58%income $50,000 - $74,999 17.67% 17.20% 18.21%income $75,000 - $99,999 12.15% 13.71% 12.53%income $100,000 - $124,999 8.01% 9.18% 8.12%income $125,000 - $149,999 3.42% 5.25% 4.89%income $150,000 - $199,999 3.36% 4.88% 4.96%income $200,000 - $249,999 0.96% 1.67% 1.89%income $250,000 - $499,999 1.14% 1.88% 2.32%income $500,000+ 0.17% 0.50% 0.88%2015 est. average household income 62,068 73,475 75,0252015 est. Median household income 47,333 55,217 55,217

Matthews retail advisors | 841 apollo street, suite 150 | el segundo, ca 90245 | www.Matthews.com

NATURAL GROCERS4900 Kipling streetWheat ridge, cO 80033Offering MeMOranduM

pete gonzalezBroker of record license no. fa100003923

™

aron clinepartner direct +1.310.919.5816 MOBile +1.818.632.0233 [email protected] license no. 01904371

natural grocers 25 year lease - matthews · • longest primary lease term for a net leased organic...

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