offering memorandum hansen park plaza · pura vida barre & yoga pura vida barre & yoga...

EXCLUSIVELY LISTED BY

Brian MayerNational Retail [email protected]

OFFERING MEMORANDUM

HANSEN PARK PLAZA

PAD DEVELOPMENT PROPERTIES

910 S COLUMBIA CENTER BLVD, KENNEWICK

Offering Memorandum | Silverdale Automotive Center 2

Marcus & Millichap has been selected to exclusively market for sale Hansen Park Plaza, a 18,424 square foot retail center in Kennewick, WA. Built in 2008, the property is currently 100% occupied by service-based retail and office tenants. Located on a hard corner at the signalized intersection of Columbia Center Blvd and W. 10th Ave, the property is exposed to traffic counts in excess of 26,000 VPD.

The property benefits from below-market rents with nearly 47% of the GLA achieving rents at or below $15.61/sf/yr + NNN. Additionally, the property is situated on approximately 4.84 acres and offers two pad sites along Columbia Center Blvd., which provides an opportunity to ground lease or build-to-suit, in-turn increasing the overall cash-flow of the investment. Upon lease-up of the pads and by increasing the Club 24 rent to market rate, an investor can experience a proforma cap rate of 8.30%.

PRICE Retail Building: $3,845,000 Pad Sites (x2): $327,500

CAP RATE In Place: 7.0%1 Pro-Forma: 8.3%2

OCCUPANCY 100%

LEASABLE SF 18,424

PRICE PER SF $208.703

PARCEL SIZE 4.84 Acres4

YEAR BUILT 2008

PARKING 196 Stalls

1. Cap rate based on Retail Building Price only. Pad Sites Price excluded in calculation2. Cap Rate Assumes Pad Site A + B are leased at $4,000/mo + NNN each3. Based on Retail Building Price and Leasable Area. Pad Sites Price excluded in calculation4. Currently parcel is 14.03 acres but will be subdivided via BLA prior to closing

INVESTMENT OVERVIEW

HARD CORNER/SIGNALIZED INTERSECTION

Corner location at the signalized intersection of two main arterials with combined traffic counts in excess of 26,000 VPD

FUTURE DEVELOPMENT UPSIDE

Features two retail pad sites providing ground-lease or build-to-suit opportunity, in turn creating substantial rental upside upon lease-up

INTERNET-RESISTANT TENANT MIX

Tenant mix consists of fitness, food service, healthy & beauty, pet grooming & service office uses

MULTIPLE DRIVE THRUS

Pad Sites create opportunity for an additional two drive thru spaces, bringing the total number of drive thrus to three

BELOW MARKET RENTS

Nearly 47% of the GLA is achieving rents at or below $15.61/sf/yr + NNN, providing for significant investor up-side

AFFLUENT & DENSELY POPULATED AREA

Within 5 miles, the average household income is nearly $90,000 and the population within the Kennewick-Richland MSA is nearly 300,000 residents

LIMITED POPULATION

Property serves as the community’s primary retail center with minimal competition in the immediate vicinity

MINIMAL LANDLORD RESPONSIBILITIES

88% of the GLA is subject to NNN leases, allowing pass-throughs for most building expenses, including taxes, insurance, CAM’s, and property management

ADJACENT VACANT LAND AVAILABLE FOR SALE

Sellers also own the parcel immediately to the north totaling approx. 9 acres. See Listing Broker for details on pricing and terms

INVESTMENT HIGHLIGHTS

Offering Memorandum | Hansen Park Plaza 3


INVESTMENT OVERVIEW


INVESTMENT OVERVIEW

S COLUMBIA CENTER BLVD

W 10TH AVE

19,700 VPD

5,884 VPD

PAD B

PAD A


INVESTMENT OVERVIEWRETAIL PAD SITES

PAD B

PAD A


CONCEPTUAL PAD SITE DEVELOPMENT PLANSCONCEPTUAL PLAN 1 CONCEPTUAL PLAN 2

RETAIL TRADE MAP

SEASON ON 4TH AVE APTS:

168+ UnitsBuilt 2006

HANSEN PARK HOMES:400+ Units

Built 2004-2008

PARKVIEW ESTATES149,800 SF Senior Living Facility

Built 2007

COLUMBIA CENER HOMES60+ UnitsBuilt 2017

LA SERENA AT HANSEN PARK

212 UnitsBuilt 2003

COLUMBIA CENTER MALL

McDONALD’S

S CO

LUMBIA

CENTER B

LVD

W CLEARWATER AVE

HANSEN PARK PLAZA


REGIONAL AERIAL

SEATTLE

KENNEWICK

SPOKANE

DRIVE TIMES

126 MINUTES TO SPOKANE

200 MINUTES TO SEATTLE

140

mile

s

213 miles


SITE PLAN

S C

olu

mb

ia C

en

ter

Blv

d

W 10th Ave


ADJACENT 9-ACRE COMMERCIAL PARCEL AVALABLE FOR SALE



RENT ROLL

Lease Dates AnnualTenant Name Suite SF % Bldg

ShareComm. Exp. Rent/

SFTotal

Rent/Mo.Lease Type

Renewal Options

Rent Increases

Yogurt Beach A 1,801 9.8% 1/1/16 6/30/21 $15.61 $2,342 NNN 2 x 5 Years 2% Annual

Club K9 B 1,522 8.3% 10/26/10 11/30/20 $18.08 $2,293 NNN 1 x 5 Years3% Annual in Option Only

Pura Vida Barra Yoga C 1,520 8.3% 10/27/17 1/31/20 $17.00 $2,153 NNN 1 x 1 Year Flat

Salon d'Lor D 2,095 11.4% 5/9/11 5/31/22 $18.00 $3,143 NNN 2 x 3 Years Options at FMV

Club 24 E 6,935 37.6% 8/1/18 7/31/20 $13.00 $7,513 NNN None N/A

U.S Air Force F 2,192 11.9% 12/10/12 11/30/22 $27.50 $5,024 Gross Gross Flat

Zest Medical Spa G 2,359 12.8% 8/1/16 9/30/21 $20.00 $3,932 NNN 2 x 5 Years 10% in Options

Available Pad Site A 0.0%

Available Pad Site B 0.0%

Total 18,424 $17.19 $26,400

5-Year lease renewal pending at $15/sf/yr + NNN with 1 x 5 year option

TENANT PROFILES

U.S. AIRFORCE

The U.S. Air Force Recruiting Office provides a physical space to learn about the opportunities for enlisted airmen, officers, health care professionals, and other careers within the United States Air Force. This recruiting offices services the entire Tri-Cites market.

ZEST MEDICAL SPA

Zest Medical Spa is a dermatology specialized medical clinic, which provides full range of services including laser skin treatments, non-surgical body shaping, and wrinkle treatments. Zest also sells medical grade skin products to its customers.

PURA VIDA BARRE & YOGA

Pura Vida Barre & Yoga offers barre, yoga, reiki healing, massage, yoga retreats and nutritional counselling. A wide range of classes are offered from entry level to advanced as well as children and adult classes.

CLUB 24

Club 24 Fitness is a premiere fitness center in the Pacific Northwest, which operates 11 locations throughout Washington and Oregon. The company originated in Kennewick, Washington and has a strong following throughout the region. Club 24 is open 34/7, 365 days a year.


TENANT PROFILES

D’LOR SALON & SPA

D’Lor is a full-service hair salon and spa offering haircuts, styling, and colorings for men and women, as well as spa services such as manicures, pedicures, and skin care services.

CLUB K9

Club K9 provides pet spa and grooming services to the Tri-Cities for nearly a decade. Club K9 caters to dogs and cats and has a stellar reputation with the Tri-Cities region.

YOGURT BEACH

Yogurt Beach offers high-quality frozen yogurt and custard with a wide variety of flavors and toppings. In 2018, the locally owned and operated business was voted “Best Frozen Yogurt & Ice Cream” by the Tri-Cities Herald.


OPERATING STATEMENTIncome Year 1 Per SF Year 2 Per SF Notes

Scheduled Base Rental Income 317,174 17.22 413,744 22.46

Expense Reimbursement Income

CAM 48,771 2.65 49,748 2.70 [1]

Insurance 2,146 0.12 2,190 0.12

Real Estate Taxes 36,801 2.00 37,537 2.04

Management Fees 12,246 0.66 14,977 0.81

Total Reimbursement Income $99,964 78.7% $5.43 $104,452 79.1% $5.67

Potential Gross Revenue 417,138 22.64 518,196 28.13

General Vacancy (20,857) 5.0% (1.13) (25,910) 5.0% (1.41)

Effective Gross Revenue $396,281 $21.51 $492,286 $26.72

Operating Expenses Year 1 Per SF Year 2 Per SF Notes

Common Area Maintenance (CAM)

Expenses 14,298 0.78 14,584 0.79 [1]

Utilities 26,953 1.46 27,492 1.49 [1]

Landscaping 6,263 0.34 6,388 0.35 [1]

Grounds 4,404 0.24 4,492 0.24 [1]

Snow Removal 3,440 0.19 3,509 0.19 [1]

Insurance 2,437 0.13 2,486 0.13 [1]

Real Estate Taxes 41,771 2.27 42,606 2.31 [2]

Management Fee 13,900 3.5% 0.75 17,000 3.5% 0.92 [3]

Other Expenses - Non Reimbursable 13,531 0.73 13,531 0.73 [4]

Total Expenses $126,996 $6.89 $132,088 $7.17

Expenses as % of EGR 32.0% 26.8%

Net Operating Income $269,285 $14.62 $360,198 $19.55

1. Based on 2019 Budget2. Taxes increased to 80% Purchase Price x Levy Rate3. Based on 3.5% Effective Gross Income4. Includes Reserves of $0.10/SF + Recruiters Expenses (R&M + Utilities)


LOCATION OVERVIEW

TRI-CITIES, WASHINGTON

Located in the south-central portion of Washington State, the Tri-Cities of Kennewick, Pasco and Richland are within 225 miles of Seattle and Portland via interstate 82. The metro is composed of Benton and Franklin counties. The Department of Energy is a driver of the economy, providing high-skill jobs that have contributed to boosting population growth and incomes well above the U.S. level. The Columbia, Yakima and Snake rivers provide an array of recreational activities, while the area’s favorable weather and cultural amenities add to the quality of life.

ECONOMY

» Hanford clean-up-$2.4 billion budget (current fiscal year) approved by federal government will fuel the Tri-Cities economy for years to come.

» The DOE, along with partners and contractors including Battelle, Bechtel National, Washington River Protection Solutions, Mission Support Alliance and CH2M, provide more than 13,000 area jobs.

» Kadlec Regional Medical Center, Trios Health, Lourdes Medical Center and Prosser Memorial contribute to the vital healthcare sector, employing thousands of workers.

» Plenty of sun and three rivers lure outdoor enthusiasts to a wide variety of water sports as well as golfing, hunting, and fishing. Miles of trails attract joggers and bicyclists, while the region’s vineyards and microbreweries draw tourists.


LOCATION OVERVIEW

Department of Energy

The DOE’s vast Hanford Site, Pacific Northwest National Laboratory, and other affiliated programs attract highly skilled engineers, scientists and researchers.

Large Agricultural Sector

Crops including wheat, potatoes, apples, cherries and grapes thrive in the conducive weather. Major employers include Lamb Weston, Tyson Foods and Broetje Orchards.

Institutions of Higher Learning

Washington State University Tri-Cities, Columbia Basin College, Tri-Tech Skills Center and Charter College help provide an educated workforce.

METRO HIGHLIGHTS


NEARBY DEVELOPMENT: VISTA FIELDVista Field is 103-acre former general aviation airfield located at the commercial core of Tri-Cities, Washington, near the Columbia Center Mall, and adjacent to the City of Kennewick’s Vista Entertainment District. The Port closed the airfield at the end of 2013. Following the airfield’s closure, the Port of Kennewick began a multi-year effort to involve the public in the planning for the future of this very unique asset. The port and City of Kennewick were honored with the 2018 Governor’s Smart Partnerships Award for their efforts to create the Vista Field Redevelopment Master Plan.

A community-driven plan has been created for a vibrant, pedestrian-focused, regional town center, featuring mixed-use neighborhoods and urban lifestyle amenities. Citizens advocated for Vista Field to consist of mall-scale city blocks with pedestrian-friendly neighborhoods, a mix of work and open spaces, restaurants, and shops. These features and amenities will foster visitation, entrepreneurial ventures, and

a city-center lifestyle, as well as create new jobs, new living options, and develop civic amenities that everyone can enjoy.

The Vista Field development plan calls for public open spaces ranging from small hidden-gem areas to a 2.5-acre central plaza; nearly 1,100 residential units ranging from single family homes on urban sized lots to condominium and apartments; and approximately 750,000 square feet of retail, office, service and entertainment uses all tied together by a network of small-scale streets focusing on walkability and inclusion of all modes of transportation.

At the completion of the entire 103-acre Vista Field site, economic projections indicate redevelopment could mean over 1,000 residential units, 3,380 jobs, $460 million in private sector investment, $51 million in new infrastructure, and $408 million in new (taxable) buildings. The project is broken into eight phases with Phase 1 set to be completed in early 2020.


3,380 New Jobs

1,100 Residential Units

750K SF of Retail & Office


DEMOGRAPHICS3 Miles 5 Miles 10 Miles

Population

2023 Projection 58,214 128,570 261,334

2018 Estimate 53,518 117,760 241,331

2010 Census 47,057 105,505 215,030

2000 Census 34,154 74,453 158,034

Current Daytime Population 52,108 103,431 236,573

Households

2023 Projection 23,589 49,307 95,415

2018 Estimate 21,221 44,200 86,451

2010 Census 18,427 39,136 76,397

2000 Census 13,290 27,849 57,158

2023 Occupied Units 23,589 49,307 95,415

2018 Occupied Units 21,746 44,961 87,972

Households by Income (2018 Est.)

$150,000 or More 12.11% 12.38% 10.22%

100,000 - $149,000 16.56% 17.10% 16.09%

$75,000 - $99,999 13.63% 14.02% 14.32%

$50,000 - $74,999 18.52% 18.47% 19.25%

Under $35,000 26.68% 26.04% 27.51%

Average HH Income $86,841 $89,965 $82,859

Median HH Income $64,148 $65,913 $62,267

Per Capita Income $34,674 $33,924 $29,817

10 MILES

5 MILES

3 MILES


INVESTMENT OVERVIEW


CONFIDENTIALITY & DISCLAIMERThe information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Offering Memorandum has been prepared to provide summary, unverified informationto prospective purchasers, and to establish only a preliminary level of interestin the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not madeany investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

NON-ENDORSEMENT NOTICE

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose ofproviding tenant lessee information about this listing to prospective customers.

NET-LEASED DISCLAIMER

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently

confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property.

The value of a net leased property to you depends on factors that should beevaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independentinvestigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review alllegal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an impor-tant consideration, it is not a guarantee of future success.

Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s pro-jectedsales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guaran-tors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and thevalue of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Offering Memorandum you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

ACTIVITY ID: Z0110725

EXCLUSIVELY LISTED BY

Brian MayerNational Retail [email protected]

OFFERING MEMORANDUM

HANSEN PARK PLAZA

PAD DEVELOPMENT PROPERTIES

910 S COLUMBIA CENTER BLVD, KENNEWICK

offering memorandum hansen park plaza · pura vida barre & yoga pura vida barre & yoga...

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