OFFERING MEMORANDUM 1597 TULLY ROAD | SAN JOSE, CA NET LEASED INVESTMENT
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PR
IC
ED
OFFERING MEMORANDUM RE
DU
1597 TULLY ROAD | SAN JOSE, CA CE
D
BY
NET LEASED INVESTMENT $7
38
,0
00
PRESENTED BY:
PRIME BAY AREA NNN LEASED INVESTMENT
Lloyd H. Bakan CORPORATE GUARANTEES
Principal
650.425.6418
lloyd.bakan@avisonyoung.
Wendy Leung
Vice President
650.425.6416
wendy.leung@avisonyoung.
INVESTMENT SUMMARY
Offering Price $5,688,000 $4,950,000 NNN LEASED INVESTMENT
• Dual tenant, NNN leases
Capitalization Rate 5.20%
• Mattress Firm: Landlord maintains roof and structure - Tenant
NOI $255,963.24 pays all other expenses
• H&R Block: Tenant pays everything including roof and structure
Lease Type Absolute NNN
CORPORATE GUARANTEES
Lease Expiration | Mattress Firm February 29, 2024
• Mattress Firm is a corporate guaranteed lease
Lease Expiration | H&R Block April 30, 2022
• H&R Block is a corporate guaranteed lease
Total Building Area ±6,382 sf
HIGH IDENTITY CORNER LOCATION
Total Land Area ± 26,136 sf • Surrounded by a wide variety of national and local retailers
• Supported by dense residential demographic with more than
Ownership Fee Simple (Land & Building)
615,940 population within a 5 mile radius of the property and an
INVESTMENT HIGHLIGHTS average household income of over $127,092 per year
MATTRESS FIRM - H&R BLOCK - BAY AREA PRIME LOCATION • Strategically located on the corner of Tully Road and Lanai
• 100% leased dual-tenant NNN fee simple offering providing an Avenue just a few hundred feet from the Bay Shore 101 Freeway
investor with a very secure investment on/off-ramp
• The base rent shall increase at the end of each option period • High-volume traffic count on Tully Road exceeding 60,000+ VPD
• Newer construction and highly maintained building • Tully Road is one of San Jose’s main traffic arteries
TENANT INFORMATION 1597 TULLY ROAD, SAN JOSE, 95122 MATTRESS FIRM FOUNDED 1986 LOCATIONS 3,500+ SQUARE FEET 4,942 LEASE START DATE OCTOBER 7, 1998 LEASE EXPIRATION DATE FEBRUARY 29, 2024 PUBLIC/PRIVATE MFRM | NASDAQ OPTIONS ONE (1) OPTION FOR 5 YEARS AT $227,628.48 PER YEAR GUARANTOR CORPORATE Mattress Firm Inc. is an American mattress store chain with more than 3,500 company-operated and franchised stores across 48 states. Mattress Firm has the largest geographic footprint in the country among multibrand mattress retailers. Based in Houston, Texas, Mattress Firm is a public company whose stock is traded on NASDAQ under the symbol MFRM. H&R BLOCK FOUNDED 1955 LOCATIONS 12,000+ SQUARE FEET 1,440 LEASE START DATE APRIL 26, 2013 LEASE EXPIRATION DATE APRIL 30, 2022 PUBLIC/PRIVATE HRB | NYSE OPTIONS NONE - LEASE RENEWAL AT MARKET RENT GUARANTOR H&R BLOCK CORPORATE GUARANTEE H&R Block is a global consumer tax services provider, having prepared more than 680 million tax returns since 1955. There are approximately 12,000 company-owned and franchise retail locations in all 50 states, Puerto Rico and other U.S. territories around the world. H&R Block has been operating in this location since 2013.
PROPERTY INFORMATION
PROPERTY INFORMATION
BUILDING INFORMATION
OCCUPANCY 100%
BUILDING SIZE ±6,382 SQUARE FEET
LAND SIZE ±26,136 SQUARE FEET
ZONING C2
YEAR BUILT 1998
COUNTY SANTA CLARA
OWNERSHIP TYPE FEE SIMPLE
PROPERTY HIGHLIGHTS
• 100% occupied by national tenants - both leases are triple-net
• Mattress Firm has a corporate guarantee and is a publically
traded company (MFRM | NASDAQ)
• H&R Block has a corporate guarantee and is a publically traded
company (HRB | NYSE)
• Mattress Firm has one remaining option to renew their lease for
$227,628.48 per year
• Current average rents for both Mattress Firm and H&R Block are
$3.33 which are comparable to today’s market rents
• Situated on Tully Road with traffic counts exceeding 60,000+ VPD
• Located just off the 101 Freeway
• The property is surrounded by many national retailers including
Best Western, Denny’s, Jack in the Box, Carl’s Jr., KFC, Shell Oil,
Starbucks, Macy’s, JCPenny’s, Big-5 Sporting Goods, and more
• Serving a dense residential population of more than 615,940
residents within a 5 mile radius
• 33 on-site parking stalls and a parking ratio of 5.0/1000
1597 TULLY ROAD SAN JOSE, CA
RENT ROLL
RENT ROLL
ANNUALLY MONTHLY ANNUALLY MONTHLY
APRIL 1, 2019 - FEBRUARY 29, 2024 $197,933.04 $16,494.42 MAY 1, 2019 - APRIL 30, 2022 $58,030.20 $4,835.85
FINAL 5 YEAR OPTION $227,628.48 $18,969.04 NO OPTION TO RENEW
LANDLORD LANDLORD
Landlord is responsible for roof and structure None
RESPONSIBILITIES RESPONSIBILITIES
Tenant shall maintain their premises including Tenant shall maintain their premises including
TENANT TENANT
HVAC, electrical, and plumbing serving their roof, structure, HVAC, electrical, and plumbing
RESPONSIBILITIES RESPONSIBILITIES
portion of the property serving their portion of the property
COMMON AREA COMMON AREA
Pro Rata Share - 100% reimbursable Pro Rata Share - 100% reimbursable
MAINTENANCE MAINTENANCE
TAXES & INSURANCE Pro Rata Share - 100% reimbursable TAXES & INSURANCE Pro Rata Share - 100% reimbursable
3% cap on controllable expenses - Admin up to
CAP ON NNN’S None CAP ON NNN’S
10% of CAM charges
1597 TULLY ROAD SAN JOSE, CA
AERIAL VIEW
AD 1597 TULLY ROAD
RO
SAN JOSE, CA
LY
UL
TNEARBY LEASE COMPARABLES WITHIN 1 MILE FROM 1597 TULLY ROAD
ADDRESS: 1648 TULLY ROAD
RENTAL RATE: $3.75 NNN/SF
SIZE AVAILABLE: 3,570 SQUARE FEET
ADDRESS: 1960 TULLY ROAD
RENTAL RATE: $3.30-$3.50 NNN/SF
1648 TULLY ROAD 1960 TULLY ROAD
SIZE AVAILABLE: 1,300 SQUARE FEET
ADDRESS: 1941 TULLY ROAD
RENTAL RATE: $3.25 NNN/SF
SIZE AVAILABLE: 1,154 - 1,268 SQUARE FEET
1941 TULLY ROAD 2960 ABORN SQUARE ROAD
ADDRESS: 2960 ABORN SQUARE ROAD
RENTAL RATE: $3.50 NNN/SF
SIZE AVAILABLE: 1,379 - 3,025 SQUARE FEET
ADDRESS: 2507 S. KING ROAD
RENTAL RATE: $3.75 NNN/SF
SIZE AVAILABLE: 930 SQUARE FEET 2507 S. KING ROADDEMOGRAPHICS
1 Mile 3 Mile 5 Mile
2025 Projection 43,374 292,660 622,922
2020 Population 43,100 290,782 615,940
Population
2010 Census 41,515 279,941 576,060
Growth 2020-2025 0.1% 0.1% 0.2%
Growth 2010-2020 0.4% 0.4% 0.7%
2025 Projection 9,964 73,454 184,173
2020 Population 9,897 72,949 181,885
Households
2010 Census 9,506 70,047 168,887
Growth 2020-2025 0.1% 0.1% 0.3%
Growth 2010-2020 0.4% 0.4% 0.7%
Owner Occupied 5,269 39,831 101,425
Renter Occupied 4,628 33,118 80,460
2020 Average Household Income $103,309 $107,846 $127,092
2020 Median Household Income $80,082 $81,122 $96,624
2020 Households by HH Income
IncomeCONFIDENTIALITY & DISCLAIMER
This Confidential Offering Memorandum (the “Memorandum”) has been statements and estimates. Further, nothing contained in this Memorandum
prepared and presented to the recipient (the “Recipient”) by Avison Young should be construed as representation or warranty about any aspect of
- Northern California (“Avison Young”) as part of Avison Young’ efforts the Property, including, without limitation, the Property’s (1) past, current
to market for sale the property located at 1597 Tully Road in San Jose, or future performance, income, uses or occupancy, (2) past, current or
California (the “Property”). Avison Young is the exclusive agent and broker prospective tenants, (3) physical condition, (4) compliance or non-compliance
for the owner(s) of the Property (the “Owner”). Avison Young is providing this with any permit, license, law, regulation, rule, guideline or ordinance, or (5)
Memorandum and the material contained in it to the Recipient solely to assist appropriateness for any particular purpose, investment, use or occupancy.
the Recipient in determining whether the Recipient is interested in potentially Again, the Recipient is urged not to rely on this Memorandum and the
purchasing all or part of the Property. Avison Young also is providing this statements and estimates in it and to make an independent investigation
Memorandum and the material in it to the Recipient with the understanding regarding the Property and the statements and estimates contained herein.
that the Recipient will independently investigate those matters that it deems
necessary and appropriate to evaluate the Property and that the Recipient This Memorandum may include statements regarding, references to, or
will rely only on its own investigation, and not on Avison Young, the Owner summaries of, the nature, scope or content of contracts and/or other documents
or this Memorandum, in determining whether to purchase the Property. relating to the Property. Those statements, references or summaries may
or may not be accurate, correct or complete. Additionally, Avison Young
Please Note the Following: may not have referenced or included summaries of each and every contract
Avison Young, the Owner and their respective agents, employees, and/or other document that the Recipient might determine is relevant to its
representatives, property managers, officers, directors, shareholders, evaluation of the Property. Nothing contained in this Memorandum should
members, managers, partners, joint venturers, corporate parents or be construed as a representation or warranty about the accuracy, correctness
controlling entities, subsidiaries, affiliates, assigns and predecessors and or completeness of such statements, representations or summaries. On
successors-in-interest make no representations or warranties about the request and as available, and subject to the Owner’s consent, Avison Young
accuracy, correctness or completeness of the information contained in this will provide the Recipient with copies of all referenced contracts and other
Memorandum. The Recipient is urged not to rely on the information contained documents. Avison Young assumes no obligation to supplement or modify
in this Memorandum and to make an independent investigation of all matters the information contained in this Memorandum to reflect events or conditions
relating to the Property. occurring on or after the date of its preparation of this Memorandum. More
detailed information regarding the anticipated terms, conditions and timing
This Memorandum includes statements and estimates provided by or to of any offering by the Owner relating to the Property will be provided in due
Avison Young and/or the Owner regarding the Property. Those statements course by separate communication. Avison Young and/or the Owner reserve
and estimates may or may not be accurate, correct or complete. Nothing the right to engage at any time in discussions or negotiations with one or
contained in this Memorandum should be construed as a representation more recipients of this Memorandum and/or other prospective purchasers of
or warranty about the accuracy, correctness or completeness of such the Property without notice or other obligation to the Recipient.
EXCLUSIVE ADVISORS
LLOYD H. BAKAN WENDY LEUNG
PRINCIPAL VICE PRESIDENT
lloyd.bakan@avisonyoung.com wendy.leung@avisonyoung.com
D: 650.425.6418 D: 650.425.6416
Lic# 00914232 Lic# 01407609
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