offering memorandum petsmart & discount tire آ» just minutes fr om downtown san diego and the san...

Download OFFERING MEMORANDUM PETSMART & DISCOUNT TIRE آ» Just minutes fr om Downtown San Diego and the San Diego

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  • KIPP GSTETTENBAUER, CCIM Senior Vice President | 858.458.3345 kipp@voitco.com | Lic. #01405420

    RYAN T. KING, CCIM Vice President | 858.458.3322 rking@voitco.com | Lic. #01885401

    OFFERING MEMORANDUM

    PETSMART & DISCOUNT TIRE NEW 10-YEAR PETSMART NNN LEASE & NEW DISCOUNT TIRE 25-YEAR GROUND LEASE WITH BRAND NEW CONSTRUCTION

    H S TRE

    ET

    Traffic Count

    48,000 ADT

  • 2 |

    ANNUAL OPERATING DATA PRICING

    LIST PRICE: $11,193,000

    NET OPERATING INCOME: $559,650

    OPERATING EXPENSES

    ANNUAL RENT: $559,650

    TAXES: NNN

    INSURANCE: NNN

    CAM: NNN

    NET OPERATING INCOME: $559,650

    THE OPPORTUNITY We are pleased to offer to qualified investors a two (2) tenant opportunity in an exceptional location adjacent to Costco and brand new anchor Walmart that is scheduled to open in June 2017. PetSmart signed a 10-year lease triple net lease featuring a ten percent (10%) rental increase every five years throughout the initial term and four 5-year options. Discount Tire signed a 25-year ground lease featuring a ten percent (10%) rental increase every five years throughout the initial term and four 5-year options.

    OVERVIEW PRICE: $11,193,000 CURRENT OCCUPANCY: 100%

    NET SQUARE FOOTAGE: 24,786 SF

    YEAR BUILT (UNDER CONSTRUCTION):

    1993/Remodeled in 2016

    Brand New (2017)

    LOT SIZE: 116,740 SF

    NET OPERATING INCOME: $559,650

    CAP RATE: 5.0%

  • | 3

    LEASE TYPE: NNN Lease

    BUILDING SIZE: 17,386 SF

    LEASE COMMENCEMENT: December 2016

    LEASE EXPIRATION: December 2026

    GRAND OPENING: December 2016

    INITIAL TERM: 10 Years

    BASE RENT: $434,650 (Years 1-5)

    INCREASES: $478,115 (Years 6-10 with 10% Rental Bump)

    CREDIT RATING: B+ S&P Rating

    OPTIONS: (4) 5-Year Options (10% Increases Every 5 Years)

    LEASE TYPE: Absolute NNN Ground Lease

    BUILDING SIZE: 7,400 SF

    LEASE COMMENCEMENT: Estimated May 2018

    LEASE EXPIRATION: Estimated April 2043

    GRAND OPENING: Estimated May 2018 (or sooner)

    INITIAL TERM: 25 Years

    BASE RENT: $125,000 (Years 1-5*)

    INCREASES: 10% Rental Bump Every 5 Years

    CREDIT RATING: B+ S&P Rating

    OPTIONS: (4) 5-Year Options (10% Increases Every 5 Years)

    *Rent shall be prorated at the close of escrow leading up to May 2018

    TOTAL NOI $559,650

  • 4 |

    INVESTMENT HIGHLIGHTS Corporate Signature Strength

    » Discount Tire - 900 stores in the United States with an annual revenue of $3.9 billion dollars

    » PetSmart - 1,352 stores in the United States with an annual revenue of $8.7 billion dollars

    Location, Location, Location

    » Just minutes from Downtown San Diego and the San Diego Harbor, located in the highly desirable, wealthy community of Eastlake

    » Excellent Retail Anchor Location adjacent to very high producing Costco and Home Depot

    » High geographical barriers to entry due to Pacific Ocean & Mexico

    » Surrounded by dense residential and strong demographic fundamentals

    Excellent Access and Visibility

    » Located along East H Street a major thoroughfare in the South Bay with close proximity to Interstate 805

    » Within a 5-mile radius include the Sharp Chula Vista Medical Center, Southwestern College, Bonita Vista High School, and numerous schools

    » Excellent visibility at the forefront of the premier retail center in the South Bay

    Long Term Net Lease – Stable Income

    » Discount Tire Ground Lease for 25 years

    » PetSmart NNN Lease for 10 years

    » Premier Tenants in the commercial real estate investment world

  • | 5

    COMMUNITY OF EASTLAKE Between 1979 -1981 the H.G. Fenton Company hired Cadillac Fairview Homes West of Newport Beach to plan, zone, and develop 3,200 acres of land just south of San Diego in the City of Chula Vista.

    877 East H Street is located within the Rancho Del Rey Master Planned Community about one mile east from Interstate 805. H Street is the primary corridor and the gateway arterial connecting the upper-class Eastlake neighborhoods to coastal Chula Vista and the greater downtown San Diego neighborhoods. Rancho Del Rey is one of Chula Vista’s premier neighborhoods and is adjacent to Southwestern College and surrounding residential areas.

    EASTLAKE HAS BEEN VOTED SAN DIEGO’S BEST NEW HOME COMMUNITY IN THE SAN DIEGO UNION TRIBUNE READER’S POLL EVERY YEAR SINCE 1997.

    VILLAGE WALK TOWER VIEW OF EASTLAKE OLYMPIC TRAINING CENTER

    BACHELORS DEGREE & UP

    20,098 MEDIAN AGE

    32.41

    POPULATION

    82,943 AVERAGE HH INCOME

    $105,389 AVERAGE HH SIZE

    3.46

    NO OF HOUSEHOLDS

    24,057

    SOURCE: HTTP://WWW.POINT2HOMES.COM

  • 6 |

    Bonita Vista High School Bonita Vista High School

    Southwestern College

    Southwestern College

    Sharp Chula Vista Medical Center

    Sharp Chula Vista Medical Center

    805

    Terra Nova Plaza

    Terra Nova Plaza

    STREET H

  • | 7

    (NAP)

    SITE PLAN

  • 8 |

    BASE RENT SCHEDULE LEASE TERMS YEARS 1-5: $125,000.00 PER ANNUM

    YEARS 6-10: $137,500.00 PER ANNUM

    YEARS 11-15: $151,250.00 PER ANNUM

    YEARS 16-20: $166,375.00 PER ANNUM

    YEARS 21-25: $183,012.50 PER ANNUM

    OPTIONS TO RENEW FOUR (4) CONSECUTIVE PERIODS OF FIVE (5) YEARS

    RENT SHALL INCREASE BY TEN PERCENT (10%) FOR EACH RENEWAL TERM THEREAFTER.

    LEASE TERMS FIRST RENEWAL TERM (YEARS 26-30): $201,313.75 PER ANNUM

    SECOND RENEWAL TERM (YEARS 31-35): $221,445.13 PER ANNUM

    THIRD RENEWAL TERM (YEARS 36-40): $243,589.64 PER ANNUM

    FOURTH RENEWAL TERM (YEARS 41-45): $267,948.60 PER ANNUM

  • | 9

    “ Building customer relationships has allowed Discount Tire to become a leader in the industry. Our continual growth not only provides opportunities for employee advancement, but allows more customers to remain confident when choosing us for all of their tire and wheel needs.”

    1960

    ABOUT DISCOUNT TIRE Discount Tire Company, owned by The Reinalt- Thomas Corporation is an American tire and wheel retailer chain operating in the United States.

    Discount Tire was founded in 1960, in Ann Arbor, Michigan, by Bruce T. Halle. After a couple of false starts in other businesses, Halle decided to go into business on his own. Discount Tire grew to over 200 stores by 1990, opened its 500th store in 2002, and grew to over 900 stores in 29 states by 2015.

    Discount Tire grew from a one-man operation into the largest independent tire and wheel retailer in the world. Its growth has been largely attributed to the company’s focus on reasonable prices, customer service, and its satisfaction guarantee. Halle understood that for a company to excel in a commodity market, product differentiation was a non-starter. However, improving the customer experience could greatly improve the brand’s value.

    Discount Tire has a revenue of $3.9 billion.

  • 10 |

    BASE RENT SCHEDULE LEASE TERMS YEARS 1-5: $434,650.00 PER ANNUM

    YEARS 6-10: $478,115.00 PER ANNUM

    OPTIONS TO RENEW FOUR (4) CONSECUTIVE PERIODS OF FIVE (5) YEARS

    RENT SHALL INCREASE BY TEN PERCENT (10%) FOR EACH RENEWAL TERM THEREAFTER.

    LEASE TERMS FIRST RENEWAL TERM (YEARS 11-15): $525,926.50 PER ANNUM

    SECOND RENEWAL TERM (YEARS 16-20): $578,519.15 PER ANNUM

    THIRD RENEWAL TERM (YEARS 21-25): $636,371.07 PER ANNUM

    FOURTH RENEWAL TERM (YEARS 26-30): $700,008.17 PER ANNUM

  • | 11

    “We love pets and we believe pets make us better people. PetSmart will be the trusted partner to pet parents and pets

    in every moment of their lives.”

    1987

    ABOUT PETSMART PetSmart, is a retail chain operating in the US, Canada, and Puerto Rico engaged in the sale of specialty pet supplies and services such as dog grooming and training, boarding facilities and daycare. PetSmart also offers a varied selection of animals for sale and adoption.

    PetSmart was founded in 1986 and opened its first two stores in August 1987 under the name PetFood Warehouse in the Phoenix area. In 1989, the name and logo changed from PetFood Warehouse to PetSmart. PetSmart continued to grow and in 1993 went public.

    In 1994, PetSmart formed PetSmart Charities, Inc., a nonprofit organization dedicated to ending euthanasia and finding homes for homeless pets. PetSmart.com made its debut in July 1995. In early 2000, PetSmart remodeled most of its stores in a plan they called “Eagle,” which changed many stores from a front-half storefront/ back-half warehouse feel to an all-over standard retail market. In August 2005, the company announced that it was re-branding its name from PetsMart to PetSmart. This move, which stressed “Smart” over “Mart,” was designed to announce its evolution from a pet store to a solutions-oriented company.

    As of October 2014, PetSmart operated approximately 1,352 stores and various locations with PetSmart’s PetsHotels, and Doggie Day Camps. Certain locations also share space with their corporate partner, Banfield Pet Hospital.

    In December 2014, PetSmart was fully acquired by BC Partners for a price of $8.7 billion.

  • 12 |

    PETSMART IS ACQUIRING CHEWY.COM F

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