OFFERING MEMORANDUM 4 UNIT PORTFOLIO - MARYLAND & VIRGINIA - LoopNet
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PIZZA HUT
™
OFFERING MEMORANDUM
4 UNIT PORTFOLIO - MARYL AND & VIRGINIA
CONTENTS 03 EXECU T I V E S U MMA RY 04 FI NA N CI A L O V ERV I EW 14 T ENA N T O V ERV I EW 16 A R EA O V ERV I EW LISTED BY Gary Chou SVP & SENIOR Director GA RY.CHOU@MAT T HE WS.COM DIR 310.919.5827 MOB 714.928.80 16 LIC # 0 1911222 (CA) Kevi n Cha ng Associate K EV IN.CHANG@MAT T HE WS.COM DIR 310.919.5828 MOB 951.616.8918 LIC # 0 1976724 (CA) B RO K ER OF RECORD KYLE MATTHEWS BROKER OF RECORD LIC # 664913 (MD) LIC # 2260 2771 (VA)
EXECUTIVE
OVERVIEW
INVESTMENT HIGHLIGHTS
• Stabilized Lease Term – There are approximately 8 years remaining on original 20-year lease, with two (2) 5-year options to
extend
• Absolute NNN Investment – Tenant is responsible for insurance, taxes, maintenance, roof and structure
• Rare Annual Increases – There are 1.00% bumps scheduled every year in the primary term and options
• Portfolio Pricing – Portfolio is listed at a 7.50% cap rate enabling an excellent cash-on-cash return opportunity with financing
for buyers
• Top Ranked Multi-Concept Franchisee – NPC International is the 2nd largest restaurant operator in the country with over
$1,334,697,000 in sales according to Franchise Times (Aug. 2018) – They operate 1,144 Pizza Huts in 27 states and 384
Wendy’s units in 7 states, plus Washington D.C.
• World’s Largest Pizza Hut Operator – NPC International operates roughly 20% of all domestic Pizza Hut units
3
FINANCIAL
OVERVIEW
PORTFOLIO FINANCIALS
Year Monthly Rent Annual Rent Cap Rate
Current - 2/28/2019 $23,912 $286,941 7.50%
3/1/2019 - 2/28/2020 $24,151 $289,810 7.57%
3/1/2020 - 2/28/2021 $24,392 $292,709 7.65%
3/1/2021 - 2/28/2022 $24,636 $295,636 7.73%
3/1/2022 - 2/28/2023 $24,883 $298,592 7.80%
3/1/2023 - 2/28/2024 $25,131 $301,578 7.88%
3/1/2024 - 2/28/2025 $25,383 $304,594 7.96%
3/1/2025 - 2/28/2026 $25,637 $307,640 8.04%
3/1/2026 - 2/28/2027 $25,893 $310,716 8.12%
LIST PRICE CAP RAT E NOI
$ 3 , 82 5,900 7.50% $2 8 6 , 9 41
4
PROPERTY
LO C AT I O N
1
4
3 2
ADDRESS CITY STATE
1 1217 Mount Hermon Road Salisbury MD
2 1966 Pembroke Avenue Hampton VA
3 10744 Jefferson Avenue Newport News VA
4 13659 Warwick Boulevard Newport News VA
5
S A L I S B U R Y, M D
EXECUTIVE SUMMARY
Property Name Pizza Hut
Property Street 1217 Mount Hermon Road
City, State, Zip Salisbury, MD 21804
GLA ± 2,000 SF
Lot Size ±0.64 AC
ANNUAL OPERATING DATA
Monthly Rent Annual Rent RPSF Cap Rate
Current - 2/28/2019 $5,977 $71,729 $35.86 7.50%
3/1/2019 - 2/28/2020 $6,038 $72,453 $36.23 7.58%
TENANT SUMMARY 3/1/2020 - 2/28/2021 $6,098 $73,177 $36.59 7.65%
3/1/2021 - 2/28/2022 $6,159 $73,909 $36.95 7.73%
Tenant Trade Name Pizza Hut 3/1/2022 - 2/28/2023 $6,221 $74,648 $37.32 7.81%
Type of Ownership Fee Simple 3/1/2023 - 2/28/2024 $6,283 $75,394 $37.70 7.88%
Lease Guarantor Franchisee 3/1/2024 - 2/28/2025 $6,346 $76,148 $38.07 7.96%
Lease Type NNN 3/1/2025 - 2/28/2026 $6,409 $76,910 $38.45 8.04%
Roof & Structure Tenant Responsible 3/1/2026 - 2/28/2027 $6,473 $77,679 $38.84 8.12%
Original Lease Term 20 Years
Rent Commencement Date 3/1/2007
Lease Expiration Date 2/28/2027
Term Remaining ±8 years
Increases 1% Annually
Options Two, 5-Year Options
6
PROPERTY HIGHLIGHTS
• Next to Wicomico High School, Wicomico Middle School, and
Evening High School
• Newly remodeled BK and new Walgreens development on
street
• PNC Bank across the street from the site has $97,812,000 in
deposits – 16.94% of market share and third largest bank in
this zip code
• 0.64 acre parcel
DEMOGRAPHICS
1-Mile 3-Mile 5-Mile
2018 Estimate 8,147 48,771 72,902
Projected Growth 2018-2023 2.43% 2.71% 2.56%
Household Income $53,339 $53,769 $62,952
7
H A M P TO N , VA
EXECUTIVE SUMMARY
Property Name Pizza Hut
Property Street 1966 E Pembroke Avenue
City, State, Zip Hampton, VA 23663
GLA ± 2,000 SF
Lot Size ±1.06 AC
ANNUAL OPERATING DATA
Monthly Rent Annual Rent RPSF Cap Rate
Current - 2/28/2019 $5,977 $71,729 $35.86 7.50%
3/1/2019 - 2/28/2020 $6,038 $72,453 $36.23 7.58%
TENANT SUMMARY 3/1/2020 - 2/28/2021 $6,098 $73,177 $36.59 7.65%
3/1/2021 - 2/28/2022 $6,159 $73,909 $36.95 7.73%
Tenant Trade Name Pizza Hut
3/1/2022 - 2/28/2023 $6,221 $74,648 $37.32 7.81%
Type of Ownership Fee Simple 3/1/2023 - 2/28/2024 $6,283 $75,394 $37.70 7.88%
Lease Guarantor Franchisee 3/1/2024 - 2/28/2025 $6,346 $76,148 $38.07 7.96%
Lease Type NNN 3/1/2025 - 2/28/2026 $6,409 $76,910 $38.45 8.04%
Roof & Structure Tenant Responsible 3/1/2026 - 2/28/2027 $6,473 $77,679 $38.84 8.12%
Original Lease Term 20 Years
Rent Commencement Date 3/1/2007
Lease Expiration Date 2/28/2027
Term Remaining ±8 years
Increases 1% Annually
Options Two, 5-Year Options
8
PROPERTY HIGHLIGHTS
• Closest Pizza Hut from Hampton University
• Close proximity to Phoebus High School and Bryan
Elementary School
• Newly remodeled Taco Bell & KFC location down the street
• 1.06 acre parcel
DEMOGRAPHICS
1-Mile 3-Mile 5-Mile
2018 Estimate 13,647 56,649 87,269
Household Income $59,083 $67,408 $64,564
9
N E W P O RT N E W S , VA
EXECUTIVE SUMMARY
Property Name Pizza Hut
Property Street 10744 Jefferson Avenue
City, State, Zip Newport News, VA 23601
GLA ± 2,000 SF
Lot Size ±0.37 AC
ANNUAL OPERATING DATA
Monthly Rent Annual Rent RPSF Cap Rate
Current - 2/28/2019 $5,977 $71,729 $35.86 7.50%
3/1/2019 - 2/28/2020 $6,038 $72,453 $36.23 7.58%
TENANT SUMMARY 3/1/2020 - 2/28/2021 $6,098 $73,177 $36.59 7.65%
3/1/2021 - 2/28/2022 $6,159 $73,909 $36.95 7.73%
Tenant Trade Name Pizza Hut
3/1/2022 - 2/28/2023 $6,221 $74,648 $37.32 7.81%
Type of Ownership Fee Simple
3/1/2023 - 2/28/2024 $6,283 $75,394 $37.70 7.88%
Lease Guarantor Franchisee 3/1/2024 - 2/28/2025 $6,346 $76,148 $38.07 7.96%
Lease Type NNN 3/1/2025 -
$6,409 $76,910 $38.45 8.04%
Roof & Structure Tenant Responsible 2/28/2026
Original Lease Term 20 Years 3/1/2026 - 2/28/2027 $6,473 $77,679 $38.84 8.12%
Rent Commencement Date 3/1/2007
Lease Expiration Date 2/28/2027
Term Remaining ±8 years
Increases 1% Annually
Options Two, 5-Year Options
10
10PROPERTY HIGHLIGHTS
• Newly renovated Taco Bell and newly built Walmart
Neighborhood Market in close proximity to site
• 12,450 people in a 1-mile radius, 75,243 people in a 3-mile
radius and 164,497 people in a 5-mile radius
• Over 39,000 VPD off Jefferson Ave
DEMOGRAPHICS
1-Mile 3-Mile 5-Mile
2018 Estimate 12,427 75,969 164,292
Projected Growth 2018-2023 0.19% (0.96%) 0.12%
Household Income $66,528 $71,514 $74,563
11
11N E W P O RT N E W S , VA
EXECUTIVE SUMMARY
Property Name Pizza Hut
Property Street 13659 Warwick Blvd
City, State, Zip Newport News, VA 23602
GLA ± 2,000 SF
Lot Size ±0.34 AC
ANNUAL OPERATING DATA
Monthly Rent Annual Rent RPSF Cap Rate
Current - 2/28/2019 $5,977 $71,729 $35.86 7.50%
3/1/2019 - 2/28/2020 $6,038 $72,453 $36.23 7.58%
TENANT SUMMARY
3/1/2020 - 2/28/2021 $6,098 $73,177 $36.59 7.65%
3/1/2021 - 2/28/2022 $6,159 $73,909 $36.95 7.73%
Tenant Trade Name Pizza Hut
3/1/2022 - 2/28/2023 $6,221 $74,648 $37.32 7.81%
Type of Ownership Fee Simple
3/1/2023 - 2/28/2024 $6,283 $75,394 $37.70 7.88%
Lease Guarantor Franchisee
3/1/2024 - 2/28/2025 $6,346 $76,148 $38.07 7.96%
Lease Type NNN
3/1/2025 - 2/28/2026 $6,409 $76,910 $38.45 8.04%
Roof & Structure Tenant Responsible
3/1/2026 - 2/28/2027 $6,473 $77,679 $38.84 8.12%
Original Lease Term 20 Years
Rent Commencement Date 3/1/2007
Lease Expiration Date 2/28/2027
Term Remaining ±8 years
Increases 1% Annually
Options Two, 5-Year Options
12PROPERTY HIGHLIGHTS
• 15,012 people in a 1-mile radius, 75,104 people in a 3-mile
radius and 148,444 people in a 5-mile radius
• Over 41,000 VPD off Warwick Blvd
DEMOGRAPHICS
1-Mile 3-Mile 5-Mile
2018 Estimate 14,955 75,090 147,397
Projected Growth 2018-2023 0.38% 0.02% 0.71%
Household Income $59,505 $75,912 $78,822
13TENANT
OVERVIEW
1217 Mount Hermon Road, Salisbury, MD 1966 Pembroke Avenue, Hampton, VA
14 10744 Jefferson Avenue, Newport News, VA 13659 Warwick Boulevard, Newport News, VAPIZZA HUT
Pizza Hut, Inc. operates a chain of pizza restaurants in the United States COMPANY NAME
and internationally. Pizza Hut offers pizzas, pastas, wings, and drinks, as
PIZZA HUT
well as sides and desserts, such as stuffed pizza rollers, breadsticks, cheese
sticks, baked desserts, and cinnamon sticks. The company also offers
catering services. In addition, Pizza Hut franchises its restaurants. Further, it
provides online ordering. The Company was founded in 1979 and is based OWNERSHIP
in Plano, Texas. Pizza Hut, Inc. operates as a subsidiary of Yum! Brands, PUBLIC
Inc. Pizza Hut is split into several different restaurant formats; the original
family-style dine-in locations; storefront delivery and carryout locations; and
hybrid locations that offer carry-out, delivery, and dine-in options. Many full-
size Pizza Hut locations offer a lunch buffet, with “all-you-can-eat” pizza, YEAR FOUNDED
salad, breadsticks, and pasta. Additionally, Pizza Hut has a number of other 1979
business concepts that are different from the store type; Pizza Hut “Bistro”
locations are “Red Roofs” which offer an expanded menu and slightly more
upscale options.
INDUSTRY
NPC INTERNATIONAL RESTAURANTS
NPC International is an institutional consolidator and developer of great
time-tested restaurant brands. Pizza Hut has a more than 60-year history,
beginning in 1958 in Wichita, Kansas. NPC opened its first Pizza Hut
restaurant shortly after in 1962. Today, Pizza Hut is an iconic global brand HEADQUARTERS
that delivers more pizza, pasta and wings than any other restaurant in the PLANO, TX
world. NPC currently operates more than 1,213 Pizza Hut units in 27 states
and more than 386 Wendy’s units in 7 states, plus Washington D.C.
NO. OF EMPLOYEES
• NPC is the largest Pizza Hut franchisee in the world, operating ±300,000
approximately 20% of the domestic Pizza Hut system
• 5th Largest Restaurant Unit Operator in the United States (based on
unit count)
• 36,500 Employees
• Operates more than 1,213 Pizza Huts in 27 states and more than 386
Wendy’s in 8 states
15AREA
OVERVIEW
HAMPTON ROADS
Hampton Roads is the name of both a body of water that serves contribute to the diversity and stability of the region’s economy.
as a wide channel for the James, Nansemond and Elizabeth Hampton Roads is comprised of seven cities: Norfolk, Virginia
rivers between Old Point Comfort and Sewell’s Point where the Beach, Chesapeake, Portsmouth, Newport News, Hampton and
Chesapeake Bay flows into the Atlantic Ocean and the surrounding Suffolk. These municipalities are in relatively close proximity, but
metropolitan region located in the Southeastern Virginia and are distinctly different.
Northeastern North Carolina portions of the Tidewater region.
The area is home to hundreds of historical sites and attractions.
Comprising the Virginia Beach–Norfolk–Newport News, VA–NC The harbor was the key to Hampton Roads’ growth, both on land
metropolitan area and an extended Combined Statistical Area that and in water-related activities and events. While the harbor and its
includes the Elizabeth City, NC Micropolitan Statistical Area and tributaries were (and still are) important transportation conduits, at
Kill Devil Hills, NC Micropolitan Statistical Area, Hampton Roads is the same time they presented obstacles to land-based commerce
known for its large military presence, ice-free harbor, shipyards, coal and travel.
piers, and miles of waterfront property and beaches, all of which
16Ha m p t o n , VA
Hampton is an independent city in Virginia located on the mouth of the Chesapeake Bay with a population of about 137,000. As one of the seven major cities that
compose the Hampton Roads metropolitan area, Hampton is graced with miles of shoreline and breathtaking water views. The city is located in the heart of the
Hampton Roads region and the center of the East Coast. Located on the Hampton Roads Beltway, it hosts the Hampton Roads Bridge-Tunnel (HRBT) on Interstate
64. First opened in 1957, it was the world’s first bridge tunnel, crossing the mouth of the Hampton Roads harbor, which serves as the gateway to the Chesapeake
Bay and the Atlantic Ocean from the eastern United States’ largest ice-free harbor and its tributary rivers. Expanded in the 1970s, the HRBT remains Virginia’s
busiest and deepest such facility.
Ne w p o r t Ne w s , VA
Newport News is the fifth-most populous city in Virginia. It sits on a prime vantage point where the James River meets the Chesapeake Bay. The city runs
approximately 23 miles along the James River and the Hampton Roads Harbor. Steeped in history, Newport News is a community of diverse trades including
shipbuilding, technological research and international commerce.
17Salisbury, MD Salisbury is a city in and the county seat of Wicomico County, Maryland, and the largest city in the state’s Eastern Shore region. Salisbury is the principal city of the Salisbury, Maryland-Delaware Metropolitan Statistical Area. The city is the commercial hub of the Delmarva Peninsula, which was long devoted to agriculture and had a southern culture. It calls itself “The Comfortable Side of Coastal”. Salisbury is the #1 fastest growing city in Maryland and the economic capital of the Eastern Shore. 91.1% of all business revenue in Wicomico County is received in the City of Salisbury and 83% of all employment in Wicomico County is within the City of Salisbury. The job market continues to shine, and in 2015 the city was ranked the 42nd fastest growing job market in America. In 2016, Salisbury was the 7th fastest growing job market in America. Median advertised wage for the more than 2,000 jobs available in Salisbury has risen to $46,307 in March 2017 – an indicator of good things to come. To accommodate these jobs and people, the construction industry is heating up. Assessments of property continue to climb and the pace of both construction and employment indicates that Salisbury’s future is bright. 18
CONFIDENTIALITY & DISCLAIMER STATEMENT
This Of f e r ing Me m o r a n du m co n t a i n s s e l e ct i nform ati on pertai ni ng to the busi ness and affai rs of this Pizza Hut Portfolio located at 4 Different Property Sites
(“Pro p er t y” ). I t ha s be e n p r e p a r e d by M a t t h ews Real E state Investm ent Servi c es. Thi s O fferi ng Me moran d u m may n ot b e all-in clu s ive or con t ain all
o f th e inf o r ma t io n a p r o s p e ct i v e p u r ch a s e r m ay desi re. The i nform ati on c ontai ned i n thi s O fferi ng M emoran d u m is con fid en t ial an d fu rn is h ed s olely
f o r t he p ur p o se o f a r e v i e w by a p r o s p e ct i v e purc haser of the Property. It i s not to be used for an y ot h er pu rpos e or mad e availab le t o an y ot h er
p ers o n w it ho ut t h e w r i t t e n co n s e n t o f S e l l e r or Matthews Real E state Investm ent Servi c es. The m at erial is b as ed in part u pon in format ion s u pplied
b y the S elle r a nd i n p a r t u p o n f i n a n ci a l i n f o r m ati on obtai ned from sourc es i t deem s rel i abl e. O wner, n or t h eir officers , employees , or agen t s makes
any r ep r e s ent a t ion o r w a r r a n t y, e x p r e s s o r i mpl i ed, as to the ac c urac y or c om pl eteness of thi s O fferin g M emoran d u m or an y of it s con t en t s an d n o
leg a l lia b ilit y is a s s u m e d o r s h a l l be i m p l i e d wi th respec t thereto. Prospec ti ve purc hasers shoul d make t h eir own project ion s an d form t h eir own
con c lusio ns w it hou t r e l i a n ce u p o n t h e m a t e ri al c ontai ned herei n and c onduc t thei r own due di l i ge n ce.
By a c kno w le d g ing y o u r r e ce i p t o f t h i s O f f e r ing Mem orandum for the Property, you agree:
1. T he Of f er in g M e m o r a n du m a n d i t s co ntents are c onfi denti al ;
2. Yo u w ill hol d i t a n d t r e a t i t i n t h e s t r i c test of c onfi denc e; and
3. Yo u w ill no t , di r e ct l y o r i n di r e ct l y, di sc l ose or perm i t anyone el se to di sc l ose thi s O fferi n g M emoran d u m or it s con t en t s in an y fas h ion or
ma nner d e t r i m e n t a l t o t h e i n t e r e s t o f the Sel l er.
Owne r a nd Ma t t h e w s Re a l Es t a t e In v e s t m e nt Servi c es expressl y reserve the ri ght, at thei r sol e d is cret ion , t o reject an y an d all expres s ion s of
inter est o r o f f e r s t o p u r ch a s e t h e P r o p e r t y a n d to term i nate di sc ussi ons wi th any person or enti ty reviewin g t h is Offerin g M emoran d u m or makin g an
o f f er t o p ur c ha s e t h e P r o p e r t y u n l e s s a n d u n ti l a wri tten agreem ent for the purc hase and sal e of the Propert y h as b een fu lly execu t ed an d d elivered .
If y ou w ish no t t o p u r s u e n e g o t i a t i o n s l e a di n g to the ac qui si ti on of the Property or i n the future you d is con t in u e s u ch n egot iat ion s , t h en you agree
to p ur g e a ll ma t e r i a l s r e l a t i n g t o t h i s P r o p e rty i nc l udi ng thi s O fferi ng Mem orandum .
A p r o s p ec t iv e p ur ch a s e r ’s s o l e a n d e xcl u s i v e ri ghts wi th respec t to thi s prospec ti ve transac ti on, th e Propert y, or in format ion provid ed h erein or in
con ne c t io n w it h th e s a l e o f t h e P r o p e r t y s h al l be l i m i ted to those expressl y provi ded i n an exec u t ed Pu rch as e Agreemen t an d s h all b e s u b ject t o
th e t e r ms t her e o f. In n o e v e n t s h a l l a p r o s p ec ti ve purc haser have any other c l ai m s agai nst Sel l er or M at t h ews Real Es t at e I n ves t men t Services or
any o f t heir a f f ilia t e s o r a n y o f t h e i r r e s p e ct ive offi c ers, Di rec tors, sharehol ders, owners, em pl oyee s , or agen t s for an y d amages , liab ilit y, or cau s es
o f act io n r ela t ing t o t h i s s o l i ci t a t i o n p r o ce s s or the m arketi ng or sal e of the Property.
This Of f e r ing Me m o r a n du m s h a l l n o t be de e m ed to represent the state of affai rs of the Property or con s t it u t e an in d icat ion t h at t h ere h as b een n o
ch ang e in t he s t a t e o f a f f a i r s o f t h e P r o p e r t y si nc e the date thi s O fferi ng Mem orandum .
19EXCLU SIV E LY LI STE D BY ™ Ga r y C h ou SVP & SENIOR Director GA RY.CHOU@MAT THEWS.COM DI R 310.919.582 7 M OB 7 14.92 8.8016 LI C # 019112 2 2 (CA) Kevi n C h a n g Associate KE VIN.CHANG@MATTHEWS.COM DI R 310.919.582 8 M OB 951.616.8918 LI C # 0197 67 2 4 (CA) BROKE R OF RECO RD KYLE MATTHEWS BROKER OF RECORD LI C # 664913 (MD) LI C # 2 2 602 7 7 1 (VA) PIZZA HUT 4 UNIT PORTFOLIO - MARYL AND & VIRGINIA
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