OFFERING MEMORANDUM - JOANN FABRICS & CRAFTS - Landmark Investment Sales
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
OFFERING MEMORANDUM
JOANN FABRICS & CRAFTS
600 Brown Road, Auburn Hills, MI 48326
CONTACT US
DANIEL H. KUKES KEVIN J. BAKER JASON M. GREENSPAN 30500 Northwestern Hwy, Suite 200
Farmington Hills, MI 48334
Principal Principal Associate
dkukes@landmarkcres.com kbaker@landmarkcres.com jgreenspan@landmarkcres.com
Phone: (248) 488-2620
(248) 488-2620 (248) 488-2620 (248) 488-2620
landmarkinvestmentsales.com
CONFIDENTIALITY DISCLAIMER
Landmark Commercial Real Estate Services, Inc. d/b/a Landmark Investment Sales (“BROKER”) has been retained by the Owner to sell the 100% fee simple
title of this asset. The Broker is the exclusive agent for the sale of this asset. The Broker has prepared the Property Information with information provided
by the Owner, from sources deemed to be reliable. The Potential Purchaser will conduct its own due diligence of The Property, independently and without
reliance upon BROKER of the Owner. Information furnished herein, the Offering Memorandum (the “OM”) is intended solely for the Potential Purchaser
and its affiliates (“Recipients”) for its review of the acquisition of the freestanding JOANN Fabric and Crafts located at 600 Brown Rd, Auburn Hills, MI
(“Property”).
All information in the OM (“Confidential Information”) shall be deemed confidential. Confidential Information shall not include any information which is
generally available to the public or which becomes available to the Recipients on a non-confidential basis from a source that is or was under no obligation
not to disclose such information.
In consideration of Broker and disclosure of the confidential information, the recipient shall not at any time, attempt in any manner to deal directly in any
manner or circumvent Broker.
Unless otherwise agreed in writing or required by law, the Recipients will not use, disclose, or reveal any Confidential Information for any purpose other
than in connection with the proposed transaction to any persons or entities other than those employees, officers, directors, bankers, advisors,
representatives, or agents (collectively, “Representatives”) who clearly need such access to perform their employment, fiduciary or contractual duties to the
Recipient and to actively and directly participate in the evaluation of the Confidential Information. Additionally, Recipients shall not directly contact anyone
directly associated with the Property without the express written consent of the Owner or Broker.
Recipients agree not to contact or initiate contact with the Tenants, at any time, either directly or indirectly. Unless such approval is specifically granted in
written from the Owner or Broker.
This agreement shall be governed by the laws of the Michigan, and in any action brought to enforce the terms hereof, Recipients hereby irrevocably
consents to jurisdiction and venue in the Circuit Court for the County of Oakland, State of Michigan, or the United States District Court, whichever the
Owner may elect. The invalidity or unenforceability of any provision of this agreement as applied to a particular occurrence or circumstance shall not affect
the validity of or enforceability of any of the other provisions of this agreement or the applicability of such provisions as the case may be. This agreement
shall inure to the benefit of and may be enforced by the Owner and its successors and assigns and shall be binding on the Recipients, its officers, directors,
partners, agents, members, representatives and successors in interest. If any portion of this agreement becomes the subject of litigation or arbitration, the
prevailing party in such suit or proceeding shall be entitled to reimbursement for its reasonable costs, expenses and attorney’s fees incurred, including
those incurred in connection with any appeals. A copy of this agreement delivered by facsimile transmission shall be binder on both parties.
JOANN Fabric and Crafts • Auburn Hills, MI 2
TABLE OF CONTENTS
Executive Summary 5
Offering Summary 7
Tenant Profile 8
Market Narrative 10
Market Aerial 11
DANIEL H. KUKES KEVIN J. BAKER Strong Surrounding Development 12
Principal Principal
dkukes@landmarkcres.com kbaker@landmarkcres.com
(248) 488-2620 (248) 488-2620 Oakland County’s Top Employers 13
Location 14
JASON M. GREENSPAN
Associate Demographics 15
maxlippitt@landmarkcres.com
(248) 488-2620
Our Team 16
JOANN Fabric and Crafts • Auburn Hills, MI 3
VIEW SOUTHEAST
JOANN Fabric and Crafts • Auburn Hills, MI 4
EXECUTIVE SUMMARY
PROPERTY DETAILS INVESTMENT HIGHLIGHTS
Address: 600 Brown Rd, Auburn Hills, MI 48026
STRONG RETAIL LOCATION
Lot Size: 8.81 AC
• The subject property sits adjacent to a well-performing Target and
Tenant: Jo-Ann Stores, Inc. across from a Meijer.
• Other big box retailers anchor the corridor including Costco, Sam’s
PRICING Club, Best Buy, and Home Depot
• JOANN sits across from Great Lakes Crossing Outlet Mall-one of
Price: $7,550,261 Michigan’s best performing regional malls.
Cap Rate: 6.50%
ESTABLISHED LOCATION WITH RENT INCREASES
NOI: $490,767 • JOANN has been at this location since 2000, and has maintained
strong sales.
• Over seven years of term remain on this lease with attractive lease
bumps running through both option terms.
HIGH TENANT DEMAND
• Several big box users have expressed interest in this coveted retail
corridor creating high demand for this location in the future.
EASY ACCESS OFF OF I-75
• Subject property has easy access to I-75 (93,800 cars per day)
through Brown and Joselyn Roads.
• I-75 remains one of Metro-Detroit’s busiest highways.
JOANN Fabric and Crafts • Auburn Hills, MI 5
VIEW WEST
JOANN Fabric and Crafts • Auburn Hills, MI 6
OFFERING SUMMARY
PROPERTY DETAILS LEASE DETAILS
Address: 600 Brown Rd, Auburn Hills, MI 48026 Original Lease Term: 15 Years
Year Built: 2000 Remaining Lease Term: 7 Years, 6 Months
Land Area: 8.81 AC Lease Type: NN
Rentable Square Feet: 44,015 SF Tenant: Jo-Ann Stores, Inc.
Ownership: Fee Simple
Taxes: Tenant Responsible PRICING
Insurance: Tenant Responsible
Price: $7,550,261
CAM: Tenant Responsible
Cap Rate: 6.50%
Repair and replacement of roof and
Landlord Responsibilities: NOI: $490,767
structure, parking lot
RENT SCHEDULE
Years Monthly Rent Annual Rent PSF Minimum Basis of Sales
Current – 1/31/2019 $40,897 $490,767 $11.15 $12,269,181
2/1/2019 – 1/31/2021 $41,264 $495,169 $11.50 $12,379,219
2/1/2021 - 1/31/2024 $44,015 $528,180 $12.00 $13,204,500
2/1/-2024 - 1/31/2026 $45,849 $550,188 $12.50 $13,754,688
Option Periods
2/1/2026 - 1/31/2031 $48,050 $576,597 $13.10 $14,414,913
2/1/2031 - 1/31/2036 $51,718 $620,612 $14.10 $15,515,288
Percentage Rent
Tenant to pay four percent (4%) of gross sales in excess of "Minimum Basis of Sales"
JOANN Fabric and Crafts • Auburn Hills, MI 7
TENANT PROFILE
JOANN is the nation's largest specialty retailer of fabrics and crafts, offering an unmatched, under-one-roof selection of products for
quilting, apparel, craft and home décor sewing along with a full array of components, tools and kits for crafters of all ages. Some JOANN
stores offer classes for customers. Subjects taught include knitting, crochet, quilting, sewing, scrapbooking, painting, jewelry-making, floral
design, and foodcrafting.
JOANN operates over 850 stores in 49 states. Its three distribution centers are located in Hudson, Ohio; Visalia, California; and Opelika,
Alabama.
JOANN is headquartered in Hudson, Ohio
On December 23, 2010, JOANN announced plans to sell out to private equity firm Leonard Green for $1.6 billion.
JOANN Fabric and Crafts • Auburn Hills, MI 8
SUBJECT PROPERTY
JOANN Fabric and Crafts • Auburn Hills, MI 9
MARKET NARRATIVE
DENSE INFILL AND STRONG DEMOGRAPHICS
Within a 5 mile radius there is an estimated population of over 131,487
residents; 4,825 businesses; and an average household income of $89,895.
STRONG RETAIL CORRIDOR
JOANN sits adjacent to a well performing Target and across from a Meijer
on Brown Road.
Other retailers in the area include: Costco, Best Buy, Staples, Sam’s Club,
The Home Depot, Michaels, HomeGoods, Kohl’s, Nordstrom Rack, DSW
and Great Lakes Crossing Outlet Mall-one of the strongest performing
malls in the state.
The entire Auburn Mile corridor sits along I-75 (83,800 cars per day)
LOW UNEMPLOYMENT AND HIGH JOB GROWTH
Oakland County is Michigan’s wealthiest county by per capita income. Fiat Chrysler Automobiles (FCA) U.S. headquarters in Auburn Hills, MI
The county has a low unemployment rate of 3.4% compared to the State
of Michigan’s unemployment rate of 4.6%.
GROWING LOCAL ECONOMY
Fiat Chrysler (FCA) is globally headquartered 6.3 miles from the subject
property (13,099 employees). Several other expanding automotive
companies are based in the area.
Employment in Oakland County comprises over 32% of the total
employment in southeast Michigan.
Oakland County's more than 53,000 business produce a combined annual
payroll of $26.6 billion, which is a GDP greater than 19 states.
According to Moody’s Investors Service and S&P Global Ratings, Oakland
County continues to attain the highest credit score a government can
attain because of the county’s growing tax base, strong economy, and
healthy fiscal practices.
Oakland University (20,012 students); 6 miles from subject property
JOANN Fabric and Crafts • Auburn Hills, MI 10MARKET AERIAL
JOANN Fabric and Crafts • Auburn Hills, MI 11STRONG SURROUNDING RESIDENTIAL AND
COMMERCIAL DEVELOPMENT
NEW HOUSING
• The Reserves of Auburn Hills:
• 55 and over living; sixty two condominium units to be built near the I-75,
• M59 interchange.
• Stonegate:
• New construction, 111 single family houses located in Lake Orion, MI;
Situated close to the I-75 and M-59 intersection.
AUBURN HILLS - NEW DEVELOPMENT
• Topgolf:
• Michigan’s first Topgolf location 65,432 square-foot hospitality
entertainment complex, $12.5M.
• FEV North America: Stonegate – Auburn Hills, MI
• 25,600 SF vehicle test center with powertrain lab facilities, research &
development, and office space; $27M.
• Hutchinson North American Headquarters:
• 60,502 square-foot corporate office building for the automotive, aerospace
and defense company; 300 employees, $8M.
Hutchinson North America Topgolf Representative Photo
JOANN Fabric and Crafts • Auburn Hills, MI 12OAKLAND COUNTY’S TOP EMPLOYERS
# OF
COMPANY
EMPLOYEES
Beaumont Hospitals 17,896
FCA US 12,564
General Motors 9,242
Ascension 4,408
US Postal Service 4,195
Oakland County 3,432
Henry Ford Health System 3,405
Trinity Health 3,098
Magna International of America 2,199
Comerica Bank 2,163
JOANN Fabric and Crafts • Auburn Hills, MI 13LOCATION
LAPEER
FLINT
RICHMOND
AUBURN HILLS
TROY
BRIGHTON
WARREN
NOVI
LIVONIA
DETROIT
TRAVERSE CITY ANN ARBOR
CADILLAC
GRAND
RAPIDS LANSING
AUBURN HILLS JOANN Fabric and Crafts
ANN ARBOR DETROIT
KALAMAZOO
JACKSON 600 Brown Rd, Auburn Hills, MI
JOANN Fabric and Crafts • Auburn Hills, MI 14DEMOGRAPHICS
DESCRIPTION 1 MILE 3 MILE 5 MILE
2018 Estimated Population 1,206 37,579 131,487
POPULATION
2023 Projected Population 1,233 38,614 136,396
2010 Census Population 1,155 35,842 124,988
2000 Census Population 908 34,360 124,338
Projected Annual Growth 2018 to 2023 0.4% 0.6% 0.7%
Historical Annual Growth 2000 to 2018 1.8% 0.5% 0.3%
2018 Estimated Households 444 15,117 50,694
HOUSEHOLDS
2023 Projected Households 463 15,819 53,578
2010 Census Households 416 14,052 46,939
2000 Census Households 339 13,547 45,613
Projected Annual Growth 2018 to 2023 0.8% 0.9% 1.1%
Historical Annual Growth 2000 to 2018 1.7% 0.6% 0.6%
2018 Est. White 84.6% 67.7% 67.3%
2018 Est. Black 6.6% 19.6% 20.4%
RACE
2018 Est. Asian or Pacific Islander 4.2% 3.3% 4.6%
2018 Est. American Indian or Alaska Native 0.6% 0.5% 0.4%
2018 Est. Other Races 4.1% 8.9% 7.3%
BUSIN INCOME
2018 Est. Average Household Income $100,662 $80,582 $89,895
2018 Est. Median Household Income $79,062 $65,556 $72,566
2018 Est. Per Capita Income $37,442 $32,474 $35,098
2018 Est. Total Businesses 294 1,450 4,825
ESS
2018 Est. Total Employees 5,177 33,648 93,901
JOANN Fabric and Crafts • Auburn Hills, MI 15OUR TEAM
KEVIN J. BAKER
PRINCIPAL | kbaker@landmarkcres.com
Kevin Baker is a Principal and Co-Founder of Landmark Investment Sales. Kevin specializes in the sale of retail shopping centers and single tenant net lease investment
properties across all property types. He currently represents some of the nation’s largest institutional funds, private equity funds, and high net worth investors in listing
investment properties all over the country. Since 2010, Kevin has closed deals totaling over 6,500,000 SF valued at over $750,000,000. Prior to 2010, Kevin worked
extensively at Landmark as a broker specializing in tenant representation and landlord representation completing in excess of 100 lease & sale transactions. Kevin
joined Landmark in 2005 as a Sales Associate. Prior to Landmark, Kevin attended Michigan State University and University of Michigan-Dearborn where he studied
finance. Kevin began his real estate career in 2001 when he founded Baker Real Estate Holdings, specializing in acquisition and management of a student housing
portfolio at Michigan State University.
DANIEL H. KUKES
PRINCIPAL | dkukes@landmarkcres.com
Daniel Kukes is a Principal and Co-Founder of Landmark Investment Sales. Daniel specializes in the sale of retail shopping centers, medical office, and single tenant net
lease investment properties across all property types. He currently represents some of the nation’s largest institutional real estate funds, private equity group, and high
net worth investors in acquiring and listing investment properties all over the country. Since 2010, Daniel has closed deals totaling over 6,500,000 SF valued at over
$750,000,000. Daniel joined Landmark in 2009 as an Associate Broker. He began his real estate career at NAI Farbman where he focused on shopping center leasing
and retail tenant representation. After five years at NAI Farbman, Daniel joined DAP Investments as a partner responsible for retail development, acquisitions and
leasing. While there, he developed several single tenant and shopping center projects in Michigan and Illinois. Daniel is a graduate of Michigan State University with a
Bachelor of Arts degree in Pre-Law & Society.
JASON M. GREENSPAN
ASSOCIATE | jgreenspan@landmarkcres.com
Jason Greenspan graduated from the University of Michigan in 2012 with a Bachelor of Arts degree in Political Science and Sociology. Jason also received a Juris Doctor
in 2015 from Michigan State University College of Law where he concentrated in business and corporations. He passed the Michigan Bar Examination in July 2015.
Starting in 2011, and while in law school, Jason interned at Landmark Investment Sales identifying, sourcing, and underwriting investment grade properties. With law
school behind him and six years of experience in real estate investment sales, Jason has participated in the closing of over $100,000,000 and continues to source
investment opportunities across the country. Jason specializes in the representation of buyers and sellers of institutional grade single tenant properties, high profile
unanchored retail centers, grocery anchored centers, and power centers.
JOANN Fabric and Crafts • Auburn Hills, MI 16You can also read
