Burger King, Taco Bell, ridley's grocery - Three ground leases invesTmenT offering
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Investment Offering
Burger King, Taco Bell,
Ridley’s Grocery
Three ground leases
and one vacant pad site
SWC State Street & Center Street
Orem, Utah
August, 2011
Exclusively Marketed by
Kip Paul
801-303-5555
kpaul@comre.com
Investment Offering | Table of Contents
1. Limiting Con d itions &
Confi d enti al it y Agreement
2. E xecu t i ve Sum m ary
3. Propert y Description
Ae r i a l Ma ps
4. F i nan ci al Sum m ary
5. Rent Ro ll
6. M arket an d Are a Data
Additional Information
Click Links Below to View or Download
Comparable Sales
Available Comparable Properties
Title Report - CC&R’s (3.7 MB zipped file)
Albertson’s/Ridley’s Lease
Burger King Lease
Taco Bell Lease
Sales Reports - Burger King
Environmental Report
Survey
RealQuest - County Tax Data
Aerial Maps
Additional Property Photos
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
2
Limiting Conditions & Confidentiality Agreement
CONFIDENTIALITY AGREEMENT
Buyer has requested information from Commerce Real Estate Solutions for the purpose of evaluating a
possible acquisition regarding the property located at SWC State Street & Center Street, Orem, Utah
84057, property known as Temple Square Hospitality Excess Property (the “Property”). Much of the
information to be provided is non-public, highly confidential and/or proprietary in nature (“Information”)
and is being delivered only pursuant to the terms of this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1. Property Information. Commerce will provide Prospective Buyer confidential Information
relating to the Property.
2. Confidentiality. Prospective Buyer agrees that the Information shall be held in confidence,
and that Prospective Buyer shall not disclose, permit the disclosure of, release or transfer the
Information to any third party, except for the purpose of evaluating a possible purchase of
the Property, and that any part of the Information so transmitted shall remain confidential
with that third party. Prospective Buyer agrees not to contact the owner of the Property
or to circumvent Commerce in any way. Any transaction shall be negotiated and closed
through Commerce as a licensed real estate brokerage in the State of Utah.
3. Communications. It is further understood that all (a) communications regarding a possible
transaction, (b) requests for additional information, (c) requests for tours of the Property
or management meetings, and (d) discussion or questions regarding the Property will
submitted or directed to Commerce c/o Kip Paul at Commerce Real Estate Solutions,
170 South Main Street, Suite 1600, Salt Lake City, UT 84101, (801-303-5555). The
Information shall be used for the sole purpose of evaluating the potential purchase of the
Property and for no other purpose. Prospective Buyer shall not contact directly any persons
concerning the Property, including, without limitation, Owner’s employees, suppliers,
tenants, or lenders.
4. Information accuracy. Although Owner and Commerce is providing the Information to
the Prospective Buyer for the purpose of its evaluation of the Property, Prospective Buyer
understands that Owner and Commerce do not make any representation or warranty as to
the accuracy or completeness of the Information. This Agreement applies to all Information
about the Property received from Owner or Commerce, now or in the future, which is not
readily available to the general public.
5. Binding Effect. The persons signing on behalf of the Prospective Buyer represent that
they have the authority to bind the party for whom they sign. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their successors, assigns and
other legal representatives, and shall further binding upon the contractors and employees
of Prospective Buyer.
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
3
6. Return of Documents. Upon review of the Information provided, if Buyer no longer has
an interest in the potential acquisition of the Property, Buyer agrees to return in a timely
manner all Information provided to Commerce Real Estate Solutions.
7. Other. This Agreement represents the entire agreement between and among the parties
concerning the confidentiality and non-disclosure of the Information. This Agreement
shall not be modified except by written agreement signed by all the parties. This Agreement
shall in all respects be construed in accordance with the laws of the State of Utah. In the
Prospective Buyer breaches its obligations, the prevailing party in any lawsuit shall be
entitled to reasonable attorney’s fees and costs in addition to all remedies available to it.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound have executed this
Agreement as of the day and year first above written.
PROSPECTIVE BUYER:
Dated:
Signature
Please print clearly the following:
Name: Phone:
Company:
Title: Fax:
E-mail:
Address:
City: State ZIP
PLEASE SIGN THIS DOCUMENT AND RETURN TO Commerce Real Estate Solutions.
Fax Number (801) 322-2040 ATTN: Kip Paul kpaul@comre.com
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
4
EXECUTIVE SUMMARY | OVERVIEW
This Offering provides an Investor the opportunity to acquire four parcels
of ground, three of which are leased to Burger King, Taco Bell and Ridley’s
Family Markets. The project is located on the corner of State Street and
Center Street in Orem, Utah and is located in front of the Ridley’s Family
Market, which was formerly an Albertsons. The Taco Bell lease is executed
by Taco Bell Corporation and the Burger King lease is executed by Titus
Foods, a strong regional franchisee and includes a personal guarantee.
THE OPPORTUNITY
The Burger King ground lease provides a steady income stream with the
current term running through 6/2015 and includes two 5 year options
which escalate at 50% of the CPI rate. The low attractive lease rate most
likely ensures the extension of those options. The Taco Bell lease runs
through 8/2013 and calls for one 5 year option. The option lease rate is to
be “at market”. With the low in place lease rate, it is anticipated the option
lease rate “at market” will produce a sizeable increase in income. The
Ridley’s Family Market lease expires in 10/2013. Ridley’s has indicated
they do not plan to exercise any renewal options. This pad, as currently
configured, is not large enough to accommodate a new building being
constructed. Pad 3, although owned fee simple, is restricted from having
any buildings constructed on the parcel as per the CC&R’s. While these
two pads will presently not accommodate any new construction, future
negotiations with the shopping center owner and tenants could result in
the ability to derive value from these parcels.
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
5
Executive Summary
Property & Financial Summary
Name: Temple Square Hospitality Excess Property
Lot 1 - 97 West Center Street, Orem, Utah
Lot 2 - 77 West Center Street, Orem, Utah
Address:
Lot 3 - 51 West Center Street, Orem, Utah
Lot 4 - Plat A, Orem, Utah
Burger King - 3,805 sq. ft.
Building Size:
Taco Bell - 1,960 sq. ft.
Lot 1 - 34-205-0001: 0.76 acres
Lot 2 - 34-205-0002: 0.25 acres
Site Size: Lot 3 - 34-089-0003: 0.73 acres
Lot 4 - 34-089-0009: 0.54 acres
Total: 2.28 acres
Zoning: C
Burger King - 1987
Age:
Taco Bell - 1994
Sales Price: $1,205,000
Price Per Square Foot: Buildings: $208.15 psf, Land: $12.08 psf
CAP Rate: 6.75%
Additional Property Information
Click Below to View or Download
Property Photos Aerial Maps RealQuest - County Tax Data
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
6
Property Description | Aerial maps
Additional Property
Information
Click Below to View or Download
Aerial Maps
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
7
Financial Summary
Operating Statement History
Income As-Is
Burger King $ 44,749
Taco Bell $ 35,136
Sub Total $ 79,885
Value @ 6.75% CAP Rate $ 1,183,481
Ridley’s
Present Value of Income Stream on
remaining term (25 monthly payments $ 21,672
of $931.70/mo. - 6.75%) Discount Rate
Total $ 1,205,153
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
8
Rent Roll
Base
Building Land Month Annual Building Lease Lease Security Initial
Suite # TENANT SQ FT SQ FT Rent rent Rent psf Start Date Expiration Deposit Term Comments
Two (2) Five (5) year
Ground Titus Foods Inc. options at 50% of CPI:
3,805 23,522 $3,729 $44,748 $1176 07/01/1985 06/30/2015 $5,000.00
Lease (Burger King) Percentage rent: 3% of gross
receipts less minimum rent
Ground One (1) Five (5) yr. - rate to be
Taco Bell Corp. 1,960 33,105 $2,928 $35,136 $1793 08/20/1993 08/20/2013 20 yrs.
Lease at market
Ground
Albertson's/Ridley's NA 10,890 $ 932 $11,180 NA 10/09/1993 10/19/2013 20 yrs. No Options
Lease
Land None - CC&R Restricted NA 31,798 $ 0 $ 0 NA
TOTALS 5,765 99,316 $7,589 $91,064
(2.28 acres)
Additional Tenant Information
Click Below to View or Download
Albertson’s/Ridley’s Lease Burger King Lease Taco Bell Lease
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah 9
Market and Area Data | Year-End 2010 utah County Market Review
Re tai l M arke t
n Throughout most of the recession, the Utah County n Occupancy rates from mid-year were relatively flat,
retail sector has been the best performing of all the with vacancies increasing about half of a point to
commercial real estate markets. The bubble finally burst 11.05 percent amidst 10.4 million square feet of total
this past year, and retail ended 2010 on a weak note. inventory. Anchorless strip center vacancy was highest
at 24.74 percent, while neighborhood center vacancies
were just 5.08 percent. Mall vacancy rates were down
from last year at 5.48 percent.
Overall Retail Vacancy Retail market overview - Fourth quarter 2010
- Five Year History
Sector Total SF Available SF Vacancy
12%
Orem 4,270,396 517,926 12.13%
10%
8% Provo 2,181,244 199,387 9.14%
6% Utah County North 3,000,162 318,700 10.62%
4% Utah County South 940,019 112,681 11.99%
2%
Total 10,391,821 1,148,694 11.05%
0%
2006 2007 2008 2009 2010
Type Total SF Available SF Vacancy
2006 2007 2008 2009 2010 Anchorless Strip 2,357,750 583,303 24.74%
Overall 6.32% 3.33% 4.62% 10.51% 11.05% Neighborhood Center 1,950,214 99,096 5.08%
Community Center 3,981,843 351,030 8.82%
Mall Space 2,102,014 115,265 5.48%
Total 10,391,821 1,148,694 11.05%
Retail Vacancy by Sector – Five Year History
15%
12%
9%
6%
3%
0%
2006 2007 2008 2009 2010
2006 2007 2008 2009 2010
Orem 7.77% 4.00% 2.32% 8.39% 12.13%
Provo 4.95% 3.99% 3.75% 12.85% 9.14%
Utah County North 4.84% 1.94% 8.33% 13.10% 10.62%
Utah County South 7.74% 3.09% 6.71% 6.91% 11.99%
INVESTMENT OFFERING
Burger King, Taco Bell, Ridley’s Grocery
SWC State St. & Center St. • Orem, Utah
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