Kay Jewelers - Stan Johnson Company
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Shenango Valley Mall
507K+ SF Shopping Center
40 Stores & Luxury Retailers
SUBJECT PROPERTY
N H er
m it a g
e Ro a
d
NE
Shenango Valley Cinema
12 Screens
Subject Property
Kay Jewelers Confidential Offering Memorandum
115 N Hermitage Road | Hermitage, PA
Relocation Store from 12-Year Historical Location | Directly Located Across from
507,000 SF Regional Mall | Long-Term NNN Lease with 10% Rental Escalations
Offered
Exclusively by Table of Contents
The Offering..……………………………………………..……..4 Lease Abstract.............................................................11
Tom Georges Investment Highlights…..….…….…………………….....5 Rent Roll & Cash Flow Projection….....….................12
Associate Director
Surrounding Retail Map.……................….…………6 Tenant Overview….….….......……………………...…………...13
marketing@stanjohnsonco.com
Property Photographs.…....................…………..….…7 Location Overview..………........….……………………………15
Pennsylvania Broker #ABR002166
Property Aerials….…….….................…….……………..8 Regional Map..…..………..........…………………….……………16
Property Description…....................…………..….….9 Demographics.................................................……17
Site Plan. .....................…......................…….…..….…10
Confidentiality and Restricted Use Agreement
This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration
of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated
herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC.
This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains
descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested
in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an
evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein
and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. All summaries and
discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual
documents and/or financial statements, which upon request may be made available. An interested party must conduct its own
independent investigation and verification of any information the party deems material to consideration of the opportunity, or
otherwise appropriate, without reliance upon SJC.
The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with
any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults,
without representation or warranty of any kind except for any customary warranties of title.
BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or
may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”),
is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this
Stan Johnson Company COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies
of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals,
180 Madison Avenue, Suite 1500 you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents
and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM
New York City, NY 10016
and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other
P: +1 646.778.5560
party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth
herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a
stanjohnsonco.com violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific
performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief.
Subject Property
Section One
Investment Summary
Actual Property
The Offering
Stan Johnson Company, on behalf of Ownership as its exclusive advisor, is pleased to
offer for sale the opportunity to acquire the 100% fee simple interest in the commercial Price: $2,033,433 Cap Rate: 6.70%
property located at 115 N Hermitage Rd, Hermitage, PA 16148 (the “Property”). The
Property is a freestanding building that was constructed in 2015. Kay Jewelers signed Investment Summary
a brand new 11-year NNN lease with the option to extend for two (2) additional five Location 115 N Hermitage Road; Hermitage, PA 16148
(5) year periods. The initial lease term extends through 12/31/2025 with a 10% rental County & Parcel ID Mercer County: 11-145-256-002
increase on 1/1/2021. Each option period also calls for a 10% rental increase. The only
Property Type Retail, Freestanding Jewelry Store
Landlord responsibility is roof and structure. The roof carries a new 15-year warranty.
The lease is guaranteed by Sterling Jewelers Inc., which most recently reported annual Building Size ± 2,600 SF
sales of $3.99 billion & is a wholly owned subsidiary of Signet Jewelers, the largest Land Area ± 0.87 acres
diamond jewelry retailer in the world with annual sales of $6.55 billion. Year Built 2015
Tenant Sterling, Inc. d/b/a Kay Jewelers
New 2015 relocation store for Kay Jewelers on 11- Guarantor Sterling Jewelers, Inc.*
year NNN lease with 10% rental increases every 5 Lease Type NNN (Landlord Responsible Only for Roof & Structure)
years & in the options. Base Term 11 years
Remaining Term 8 Years, 9 Months remaining
Rental Increases 10% every 5 years & renewal options
#
1 Specialty Retail Jeweler in the U.S. Tenant Financial Reporting
*See P.13 for more information
Yes, see P.11 for more information
NEW Long-Term Offering Summary
2015
build-to-suit
NNN Lease Price
Cap Rate
$2,033,433
6.70%
Annual Rent $136,240
Relocation Store Dense Retail Corridor
Directly Accross From Ownership Interest Fee Simple Absolute in Land & Improvements
Attractive 507K+ SF Encumbrances None, Delivered Free & Clear
Rental Increases shopping center Traffic Counts
Hermitage Road 18,790 VPD
STRONG Investment Grade Corporate Parent
E State Street 17,649 VPD
Guaranty Shenango Valley Freeway
I-80
15,869 VPD
27,862 VPD
from Wholly-Owned Subsidiary with
Total VPD 80,170 VPD
$3.99B Annual Sales | 1,540 Locations $6.55 Billion Annual Sales
Kay Jewelers • Hermitage, PA • 4
Investment Highlights
Rare Relocation Store
Kay Jewelers recently relocated to this site after 12 years of SIG
listed
operating successfully in the adjacent Shenango Valley Mall
(507,000+ SF shopping center). This offering is a rare opportunity
NYSE
acquire a brand-new freestanding Kay Jewelers with historically (NYSE: SIG | S&P: BBB-)
strong sales. Ask listing broker for additional information on unit- World’s Largest Diamond Jewelry Retailer
level financials. $6.55B Annual Sales | 3,625 Locations
Guaranty from Leading Retailer Jeweler in the U.S. with
Increasing Revenues
The lease is guaranteed by Sterling Jewelers, Inc., which reported
$3.99B in annual sales and is the largest operating segment (61%
by revenue) of corporate parent Signet Jewelers Limited (NYSE:
SIG | S&P: BBB-). Signet Jewelers is the largest diamond jewelry Zales, Total Zale Jewelry, Piercing
Pagoda, Peoples & Regional Brands (Guarantor)
retailer in the world with annual sales of $6.55 billion.
$1.57B Annual Sales Largest Operating Segment $993M Annual Sales
24% of Signet’s Sales 15% of Signet’s Sales
1,582 Locations of Signet Jewelers 503 Locations
Strategically Positioned within a Heavily Trafficked Retail Corridor
$3.99B Annual Sales
Immediate trade area retailers include the 507,000+ SF regional 61% of Signet’s Sales
Shenango Valley Mall, which is anchored by JCPenney. Other 1,540 Locations
retailers in the immediate area include Home Depot, Lowe’s,
Shenango Valley Cinema, Giant Eagle, Aldi, Chipotle, and many
others. There are over 36,000 vehicles per day at the intersection
of Hermitage Rd & E State Street.
11-Year Lease with 10% Rental Increases Every 5 Years
The property is a brand new build-to-suit, freestanding Kay Regional
Jewelers location, constructed in 2015, and represents a newer Brands
prototype location. Tenant is responsible for interior non- $1.24B Annual Sales $205.5M Annual Sales
structural components and HVAC. Tenant directly administers the 19% of Signet’s Sales (Tenant) 3% of Signet’s Sales
270 Locations 141 Locations
operation, maintenance, repair, and replacement of the common #1 Specialty Retail Jeweler in U.S.
areas including direct payment of CAM’s and directly pays taxes.
Seller shall deliver a 15-year roof warranty at close of escrow. $2.55B Annual Sales
39% of Signet’s Sales
1,129 Locations
Kay Jewelers • Hermitage, PA • 5
Shenango Valley Mall
Hermitage Road (18,790 VPD)
E Sta te Stre et (17, 649 VPD)
Traffic Counts
Hermitage Road 18,790 VPD
E State Street 17,649 VPD
Shenango Valley Freeway 15,869 VPD
I-80 27,862 VPD
Total VPD 80,170 VPD
PD
, 8 69 V
Shena ngo Valley Fr e e w ay 15
N
3 MILES
SOUTH
Kay Jewelers • Hermitage, PA • 6
Property Photographs
Subject Property Subject Property
Subject Property Subject Property
Kay Jewelers • Hermitage, PA • 7
Property Photographs
NW N
NE E
Kay Jewelers • Hermitage, PA • 8
Property Description
LOCATION LAND AREA ACCESS & FRONTAGE
Property is located on the west side of the +/- 0.87 acres (+/- 37,897 SF) Property enjoys frontage on N Hermitage
Shenango Valley Mall, on N Hermitage Road, Rd. and is within a center that features three
in the city of Hermitage, Mercer County, IMPROVEMENTS points of ingress and egress.
Pennsylvania. Property is a newer 2015 build-to-suit
consisting of a 2,600 SF single story building. LANDSCAPING
PROPERTY TYPE Combination of grass, concrete hardscapes,
Primary: Retail, Freestanding, Single Tenant OWNERSHIP INTEREST & LEASE TYPE and curbed dividers with trees and shrubs.
Secondary: Jewelry Store Fee simple ownership w/ NNN lease.
Occupancy: 100% Landlord responsible for roof and structure. TENANT & LEASE GUARANTOR
Tenant: Sterling Inc. d/b/a Kay Jewelers
PROPERTY PARCEL ID PARKING Guarantor: Sterling Jewelers Inc.
Mercer County: 11-145-256-002 20 surface spaces
YEAR BUILT TRAFFIC SIGNAL
2015 The signalized intersection of Hermitage
Rd and E State St adjacent to site sees
approximately 36,439 vehicles per day.
Kay Jewelers • Hermitage, PA • 9
Site Plan
LOOP RD (PRIVATE)
5
3
6
6
N HERMITAGE RD (18,790 VPD)
N
Kay Jewelers • Hermitage, PA • 10Lease Abstract
Location 115 N Hermitage Road | Hermitage, PA 16148
Documentation Lease dated 2/6/2014
Tenant/Lessee Sterling Inc.
Guarantor Sterling Jewelers Inc. (wholly owned subsidiary of Signet Jewelers - NYSE: SIG)
Doing Business As (D/B/A) Kay Jewelers
Leased Premises Land Area = 0.87 acres (37,897 SF) Improvements = 2,600 SF
Rent Commencement Date 1/19/2015
Lease Expiration Date 12/31/2025
Primary Base Term 11 years
Primary Base Term Remaining 8 Years, 9 Months remaining
Annual Base Rent $136,240
Rental Escalations 10% every 5 years
Lease Type NNN (Landlord Responsible Only for Roof & Structure)
Operating Expenses
CAM Tenant responsible
Real Estate Taxes Tenant pays directly
Tenant shall carry Commercial General Liability ($2 mm per occurrence, $5 mm aggregate), Property Damage (replacement
Tenant's Insurance value), Workers Comp (as required by law), and Flood Insurance (replacement value). Tenant may self-insure for Property Damage
Insurance obligations provided Tenant has tangible Net Worth of at lease $50 mm
Landlord shall carry insurance against damage by fire, lightning, vandalism, and other such perils (replacement value), Commercial
Landlord's Insurance
General Liability ($2 mm per occurrence, $5 mm aggregate), Reimbursed by Tenant
Utilities Tenant pays directly
Capital Expenses
Parking Lot & Utility Lines Tenant repairs and replaces
HVAC Tenant repairs and replaces
Roof & Structure Landlord repairs and replaces
Renewal Options 2, 5-year options
Renewal Notice 270 days
Estoppel Period 15 days
Tenant Right of First Refusal (ROFR) None
Tenant Termination Option None
Within 30 days after receipt of LL’s request, but not more than once during the Lease Year, if TT (or its guarantor) is not then
Tenant/Guarantor Financial an entity whose ownership interests are publicly traded on national exchange, TT shall provide LL with a copy of the financial
Reporting statements for the most recent completed year end of TT and or guarantor. Financials must be sent at least 120 days after the end
of such fiscal year of TT.
Kay Jewelers • Hermitage, PA • 11Rent Roll & Cash Flow
Dates
Tenant Rentable Annual Monthly Renewal
% Share Lease Year Rent PSF % Increase Lease Type
(Guarantor) Area Rent Rent Options
Start End
Kay Jewelers 2,600 SF 100% 1-6 1/19/2015 12/31/2020 $136,240 $11,353 $52.40 -
7 - 11 1/1/2021 12/31/2025 $149,864 $12,489 $57.64 10.00%
(Sterling NNN 2 x 5 Year
Option 1 1/1/2026 12/31/2030 $164,840 $13,737 $63.40 10.00%
Jewelers, Inc.)
Option 2 1/1/2031 12/31/2035 $181,324 $15,110 $69.74 10.00%
Lease Years
Category Year 1* Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
Gross Revenue
Base Rental Revenue $136,240 $136,240 $136,240 $136,240 $136,240 $136,240 $149,864 $149,864 $149,864 $149,864 $149,864
Scheduled Base Rental Revenue $136,240 $136,240 $136,240 $136,240 $136,240 $136,240 $149,864 $149,864 $149,864 $149,864 $149,864
Effective Gross Revenue $136,240 $136,240 $136,240 $136,240 $136,240 $136,240 $149,864 $149,864 $149,864 $149,864 $149,864
Total Operating Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Operating Income $136,240 $136,240 $136,240 $136,240 $136,240 $136,240 $149,864 $149,864 $149,864 $149,864 $149,864
Leasing & Capital Cost
Tenant Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leasing Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash Flow Before Debt Service $136,240 $136,240 $136,240 $136,240 $136,240 $136,240 $149,864 $149,864 $149,864 $149,864 $149,864
*Partial Lease Year
Kay Jewelers • Hermitage, PA • 12Tenant Overview
Kay Jewelers (“Kay”), operates under Sterling Jewelers, Inc. (“Sterling”), a wholly owned subsidiary Corporate Profile
of Signet Jewelers Limited (“Signet”) (NYSE: SIG), the world’s largest retail jeweler. Signet Jewelers is
Corporate Parent Signet Jewelers, Ltd.
the largest specialty jewelry retailer in the US, UK and Canada. Signet operates approximately 3,600
stores primarily under the name brands of Kay Jewelers, Zales, Jared The Galleria Of Jewelry, H.Samuel, Ticker Symbol NYSE: SIG
Ernest Jones, Peoples and Piercing Pagoda. The company’s annual sales of $6.55 billion derive from the Credit Rating S&P: BBB-/Stable
retailing of jewelry, watches and associated services. Signet’s shares are listed on the New York Stock Sterling Jewelers, Inc. (61% of Sales)
Operating
Exchange (SIG) and it maintains a credit rating of BBB-/Stable from Standard & Poor’s. Zales Jewelry (24% of Sales)
Segments
U.K. (15% of Sales)
Since 2004, Kay has been the largest specialty retail jewelry store brand in the US based on sales Revenue* $6.55 Billion
and Kay’s $2.55B annual sales account for 39% of corporate parent Signet Jewelers’ total sales. Kay
Net Income* $468 Million
operates 1,129 stores in 50 states.
Total Assets* $6.5 Billion
Market Cap
SIG (9/26/2016)
$5.8 Billion
listed
NYSE # of Locations 3,625
Website www.signetjewelers.com
(NYSE: SIG | S&P: BBB-)
World’s Largest Diamond Jewelry Retailer
$6.55B Annual Sales | 3,625 Locations Guarantor Profile
Guarantor Sterling Jewelers, Inc.
Wholly Owned Subsidiary of Signet
Entity Type
Jewelers, Ltd.
Kay Jewlers (64% of Sales)
Primary Brands
Zales, Total Zale Jewelry, Piercing
Jared Galleria of Jewelry (31% of Sales)
Pagoda, Peoples & Regional Brands (Guarantor)
Revenue* $3.99 Billion
$1.57B Annual Sales Largest Operating Sement of $993M Annual Sales
24% of Signet’s Sales Signet Jewelers 15% of Signet’s Sales # of Locations 1,540
1,582 Locations 503 Locations Website www.sterlingjewelers.com
1,540 Locations
$3.99B Annual Sales | 61% of Signet’s Sales
Regional Tenant Profile
Brands Guarantor Kay Jewelers
$1.24B Annual Sales $205.5M Annual Sales Wholly Owned Subsidiary of Sterling
Entity Type
19% of Signet’s Sales 3% of Signet’s Sales Jewelers, Ltd.
270 Locations (Tenant) 141 Locations Revenue* $2.55 Billion
#1 Specialty Retail Jeweler in U.S.
# of Locations 1,129
1,129 Locations
Website www.kay.com
$2.55B Annual Sales | 39% of Signet’s Sales
*As of 1/30/2016Section Two
Location Overview
Kay Jewelers • Hermitage, PA • 14
Subject PropertyLocation Overview
Hermitage is a city in Mercer County, Pennsylvania
and is part of the Youngstown-Warren-Boardman, OH-
PA MSA. Located in western Pennsylvania midway
between Pittsburgh, Erie, Chicago, and New York City
at the junction of Interstates 79 and 80, offering unique
advantages for business development, Hermitage is a
great place to work and invest. Hermitage has a labor
force of 7,803 people with a job growth rate of 3.56%
since 2014. Staubaugh Auditorium | Youngstown, PA Youngstown State University
Hermitage boasts a total of 1,057 businesses with the
leading industries being wholesalers, retail, health care
and social services, accommodation and food service.
Hermitage Profile
Area: 29.6 sq mi
County: Mercer
State: Pennsylvania Avenue of 444 Flags Memorial | Hermitage, PA
MSA: Youngstown-Warren, OH-PA
MSA Population: 565,773
*Population figures based on 2010 U.S. Census
Kay Jewelers • Hermitage, PA • 15
Staubaugh Stadium - Youngstown State University | Youngstown, PAN Kay Jewelers • Hermitage, PA • 16
Demographics
115 N Hermitage Road
0 - 1 mi. 0 - 3 mi. 0 - 5 mi. 0 - 10mi
Hermitage, PA 16148
Population
2016 Population 3,864 34,294 50,200 86,734
2021 Population 3,868 34,070 49,688 85,227
2010-2016 Annual Rate 0.28% 0.01% -0.10% -0.34%
2016-2021 Annual Rate 0.02% -0.13% -0.20% -0.35%
Households
2015 Total Households 1,846 15,013 21,773 36,906
2021 Total Households 1,850 14,946 21,607 36,424
2010-2016 Annual Rate 0.37% 0.08% -0.03% -0.19%
2016-2021 Annual Rate 0.04% -0.09% -0.15% -0.26%
2016 Average Household Income $69,389 $59,819 $55,924 $56,969
N
Kay Jewelers • Hermitage, PA • 17Offered Exclusively by
going beyond
Tom Georges
Associate Director
tgeorges@stanjohnsonco.com
Pennsylvania Broker #ABR002166
Stan Johnson Company
180 Madison Avenue, Suite 1500
New York City, NY 10016
P: +1 646.778.5560
stanjohnsonco.com
The information contained herein was obtained from sources believed reliable, however,
Stan Johnson Company makes no guaranties, warranties or representations as to the
completeness thereof. The presentation of this property for sale, rent or exchange is
submitted subject to errors, omissions, change of price or conditions, or withdrawal
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