unique grocery anchor investment opportunity · unique grocery anchor investment opportunity. the...

KIDDER.COM OFFERING MEMORANDUM | 1516 E VALLEY PARKWAY | ESCONDIDO, CA

UNIQUE GROCERY ANCHOR INVESTMENT

OPPORTUNITY

http://www.kidder.com/


The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews.

This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Kidder Mathews has not made any 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 Marketing Brochure has been obtained from sources we believe to be reliable; however, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews 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.

This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

01INVESTMENT SUMMARY

02PROPERTY OVERVIEW

03AREA OVERVIEW

04FINANCIALS

KIDDER.COM

EXCLUSIVELY LISTED BY

JACK QASHAT

Associate T: 858.369.3021 C: 619.354.5225 [email protected] N° 01914468

SAM HANNA

Senior Vice President T: 858.369.3022 C: [email protected] N° 01242719

TABLE OF CONTENTS


http://www.kidder.com

3OFFERING MEMORANDUM KIDDER MATHEWS

Kidder Mathews is pleased to present 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 OFFERING

The tenant, Grocery Outlet Inc., has approximately 3 years remaining on its initial 10-year lease term with 4 (5-year) options to extend. The lease features a 12% 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

INVESTMENT SUMMARY

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.

PROPERTY OVERVIEW

Address 1516 E. Valley Parkway Escondido, CA 92027

Rentable Area 16,033 SF + Additional Build-ing Contact Agent for Details

Land Area ±1.49 AC

Year Built 1990

Parcel Number 230-141-19-00

Ownership Fee Simple (Land and Building)

OFFERING SUMMARY

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


UNIQUE INVESTMENT OPPORTUNITY: GROCERY OUTLET AND A FREE STANDING RETAIL BUILDING

GROCERY OUTLET corporate guaranteed lease with 3 years remaining and 4 (5-year) option periods

12% 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

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

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 )

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INVESTMENT HIGHLIGHTS

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

[email protected] | 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

[email protected] | CA License No. 01242719

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Responsible Broker: Garrett Colburn, SRS Real Estate Partners CA License No. 01416734

ACCESS E Valley Parkway; 2 access points

TRAFFIC COUNTS E Valley Parkway; 27,400 Cars Per Day

N Ash Street/Hwy 78; 20,400 Cars Per Day

IMPROVEMENTS The building consists of approximately 16,033 SF.

PARKING 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.

YEAR BUILT 1990PARCEL NUMBER 230-141-19-00ACRES 1.49SQUARE FEET 64,904 SFZONING C-G: General Commercial

PROPERTY OVERVIEW

OFFERING MEMORANDUM KIDDER MATHEWS 5

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SUBJECT PROPERTY



Escondido 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.

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.

AREA OVERVIEWESCONDIDO, CALIFORNIA




DEMOGRAPHICS

1 Mile 3 Miles 5 Miles

2020 Estimated Population 40,915 138,019 192,355

2025 Estimated Population 41,885 140,998 196,611

2010 Census Population 37,724 138,019 179,014

Projected Annual Growth 2020 to 2025 2.37% 2.16% 2.21%

2020 Estimated Households 11,385 42,575 62,175

2025 Projected Households 11,670 43,543 63,636

2010 Census Households 10,421 39,523 57,462

Projected Annual Growth 2020 to 2025 2.50% 2.27% 2.35%

2020 Estimated Average Household Income $64,897 $79,961 $91,077

2020 Estimated Median Household Income $49,541 $62,150 $70,299

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 PRICING SUMMARY

PROPERTY SPECIFICATIONS

Tenant Name Grocery Outlet Corporate Guaranty

Square Feet 16,033

Lease Start 7/5/2013

Lease End 7/31/2023

Begin Current

Rental Revenue $286,668

Reimbursement Revenue $69,767

Gross Potential Revenue $356,435

Less Expenses ($85,571)

Net Operating Income $270,864

Taxes $51,327

Special Assessment $66

Insurance $7,804

CAM $26,374

Total $85,571

Price $4,450,000

Net Operating Income 270,864

CAP Rate 6.09%

Lease Type NN

Year Built 1999

Rentable Area 16,033 SF + Additional Building (Contact Agent for Details)

Land Area 1.49 AC

Address 1516 E Valley Parkway, Escondido, CA 92027

FINANCIAL INFORMATION

OPERATING CASH FLOW

OPERATING EXPENSES

NOTES

LEASE TERM

1. 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.

RENTAL RATES

Monthly $23,889

PSF $1.49

Annually $286,668

PSF $17.88

Recovery Type NN

Options 4-5 year12% increase at beginning of each option


Grocery 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.



16 | BRAND PROFILE | SRS NATIONAL NET LEASE GROUP .

BRAND PROFILE

ACTUAL SITE

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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

BRAND PROFILE

GROCERY OUTLET

Company Type Private

Locations 300+

Website www.groceryoutlet.com

KIDDER.COM

EXCLUSIVELY REPRESENTED BY

JACK QASHAT

Associate T: 858.369.3021 C: 619.354.5225 [email protected] N° 01914468

SAM HANNA

Senior Vice President T: 858.369.3022 C: [email protected] N° 01242719



unique grocery anchor investment opportunity · unique grocery anchor investment opportunity. the...

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