RED LOBSTER | OFFERING MEMORANDUM - 12580 JEFFERSON AVENUE, NEWPORT NEWS, VIRGINIA 23602 - LOOPNET
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Subject Property Red Lobster | Offering Memorandum 12580 Jefferson Avenue, Newport News, Virginia 23602
This Offering Memorandum is brought to you by:
SINGLE TENANT NET LEASE TEAM
Peter Snell
202.420.7761
psnell@klnb.com
Sophia Veale
202.780.1260
sveale@klnb.com
Ashley Katen
TABLE OF CONTENTS
202.420.7770
akaten@klnb.com
1 The Offering
BROKER OF RECORD
3 The Tenant
Kevin Goeller
703.268.2730
kgoeller@klnb.com
BOR - #0225038889 5 The Market
SUPPORT TEAM 8 The Site
Kelly Atkinson
202.420.7762
katkinson@klnb.com
William Ide
202.420.7769
wide@klnb.com
Offering Summary
MARKET CORPORATELY LONG TERM
HAMPTON ROADS MSA BACKED LEASE
21-YEARS
PRICE CAP RATE EXISTING NOI
$ %
$5,053,324 5.50% $277,932
CREDIT RATING ABSOLUTE NET RENTABLE
MOODY RATED COMPANY LEASE SQUARE FEET
B3 N N N 7,078 SF
1
Investment Overview
12580 Jefferson Avenue, Newport News, VA 23602
The offering consists of a Red Lobster with zero landlord responsibilities
LEASE ABSTRACT located in Newport News, Virginia. The largest seafood restaurant
chain in the world, this absolute net lease Red Lobster is situated along
the highly trafficked, retail corridor of Jefferson Avenue, benefiting
Tenant Red Lobster NOI $277,932 from daily vehicular traffic counts exceeding 57,000. Adjacent to the
offering is a Comfort Inn with over 100 rooms. Many national retailers
surrounding the area include Olive Garden, Panera Bread, LongHorn
Golden Gat
Lease Guarantor Increases 2% Annually Steakhouse, TJ Maxx, Trader Joe’s, Home Depot, ALDI, Kohl’s, Ross
Capital
Dress for Less, Lowe’s Home Improvement, Sam’s Club, and Walmart.
The Newport News/Williamsburg International Airport is less than a
Lease Type Absolute Net Options Four, Five-Year
mile from the offering and serves over 400,000 passengers annually.
The lease is guaranteed by Golden Gate Capital, a privately-owned
Tenant Building -
Roof & Structure 7,078 equity firm headquartered in San Francisco, California. Golden Gate Capital
Responsible Square Feet
also owns Express, Payless Shoe Source, Anne Taylor, and California
Pizza Kitchen, among others. With a long track record of investments
Commencement December 17, 2014 Land - Acres 1.67
in multi-unit restaurant and retail businesses, Golden Gate Capital has
over $15 billion in assets under management. Subject to a 25-year lease,
Option to the offering has 21-years remaining on the initial term in addition to
Lease Expiration July 31, 2039 No
Terminate four, five-year options. The rent is scheduled to increase by two percent
annually throughout the primary term and each option thereafter.
Option to
Lease Term 25-Years No
Purchase
$5,053,324 5.50%
Right of
Term Remaining 21-Years No
First Refusal
2
Rental Breakdown
RENT OPTIONS
Lease Year Rent/SF Annual Rent Increases Lease Year Rent/SF Annual Rent Increases
August 1, 2017 - July 31, 2018 $38.50 $272,483.19 2% August 1, 2039 - July 31, 2040 $59.52 $421,253.47 2%
August 1, 2018 - July 31, 2019 $39.27 $277,932.85 2% August 1, 2040 - July 31, 2041 $60.71 $429,678.54 2%
August 1, 2019 - July 31, 2020 $40.05 $283,491.51 2% August 1, 2041 - July 31, 2042 $61.92 $438,272.11 2%
August 1, 2020 - July 31, 2021 $40.85 $289,161.34 2% August 1, 2042 - July 31, 2043 $63.16 $447,037.55 2%
August 1, 2021 - July 31, 2022 $41.67 $294,944.57 2% August 1, 2043 - July 31, 2044 $64.42 $455,978.31 2%
August 1, 2022 - July 31, 2023 $42.50 $300,843.46 2% August 1, 2044 - July 31, 2045 $65.71 $465,097.87 2%
August 1, 2023 - July 31, 2024 $43.35 $306,860.33 2% August 1, 2045 - July 31, 2046 $67.02 $474,399.83 2%
August 1, 2024 - July 31, 2025 $44.22 $312,997.54 2% August 1, 2046 - July 31, 2047 $68.37 $483,887.83 2%
August 1, 2025 - July 31, 2026 $45.11 $319,257.49 2% August 1, 2047 - July 31, 2048 $69.73 $493,565.58 2%
August 1, 2026 - July 31, 2027 $46.01 $325,642.64 2% August 1, 2048 - July 31, 2049 $71.13 $503,436.89 2%
August 1, 2027 - July 31, 2028 $46.93 $332,155.49 2% August 1, 2049 - July 31, 2050 $72.55 $513,505.63 2%
August 1, 2028 - July 31, 2029 $47.87 $338,798.60 2% August 1, 2050 - July 31, 2051 $74.00 $523,775.74 2%
August 1, 2029 - July 31, 2030 $48.82 $345,574.57 2% August 1, 2051 - July 31, 2052 $75.48 $534,251.26 2%
August 1, 2030 - July 31, 2031 $49.80 $352,486.06 2% August 1, 2052 - July 31, 2053 $76.99 $544,936.28 2%
August 1, 2031 - July 31, 2032 $50.80 $359,535.78 2% August 1, 2053 - July 31, 2054 $78.53 $555,835.01 2%
August 1, 2032 - July 31, 2033 $51.81 $366,726.50 2% August 1, 2054 - July 31, 2055 $80.10 $566,951.71 2%
August 1, 2033 - July 31, 2034 $52.85 $374,061.03 2% August 1, 2055 - July 31, 2056 $81.70 $578,290.75 2%
August 1, 2034 - July 31, 2035 $53.91 $381,542.25 2% August 1, 2056 - July 31, 2057 $83.34 $589,856.56 2%
August 1, 2035 - July 31, 2036 $54.98 $389,173.09 2% August 1, 2057 - July 31, 2058 $85.00 $601,653.69 2%
August 1, 2036 - July 31, 2037 $56.08 $396,956.56 2% August 1, 2058 - July 31, 2059 $86.70 $613,686.77 2%
August 1, 2037 - July 31, 2038 $57.20 $404,895.69 2%
August 1, 2038 - July 31, 2039 $58.35 $412,993.60 2%
3
Tenant Summary
$2.5 B 58,000 753
NET SALES EMPLOYEES LOCATIONS
Founded in 1968, Red Lobster is the world’s largest seafood restaurant
concept and this year marks the 50th anniversary of the chain. As
of 2017, Red Lobster has over 700 locations, staffs over 58,000
employees and brought in $2.5 billion in net sales. From fresh food
to fresh thinking, Red Lobster is committed to providing the highest
quality seafood and service. Today, Red Lobster dominates the seafood
casual dining space, holding almost fifty percent of the market share.
In 2014, Golden Gate Capital (GGC) purchased Red Lobster from Darden
Restaurants for $2.1 billion. Based in San Francisco, California, GGC is a
private equity firm with a long track record of investments in multi- unit
restaurant and retail businesses with over $15 billion in assets under
management. Founded in 2000, GGC’s investment fund is structured as
an evergreen fund, meaning it does not need to sell an investment within
a five to ten-year time frame to fund another venture. Notable restaurant
and retail investments include Express, Payless Shoe Source, Anne
Taylor, California Pizza Kitchen, J. Jill, and Eddie Bauer, among others.
4
Market Overview
HAMPTON ROADS MSA The Hampton Roads Metropolitan Statistical
Area (MSA) comprises 16 counties and
POPULATION FACTS
independent cities in Virginia and North Carolina
with a population exceeding 1.77 million people.
Known for its large military presence, shipyards
1,772,840 1,829,535 and miles of waterfront, Hampton Roads MSA
2017 Population
0.63% 2022 Population has a rich history dating back over 400 years
2017-2022 Population
Growth Rate
with the first English colonists arriving in
1607. The confluence of the Elizabeth River,
HOUSING STATS Nansemond River and James River meeting
the Atlantic Ocean creates one of the world’s
largest natural harbors and the importance of
the region quickly came to be recognized by
$81,056 2.56 $325,811 colonists as an ideal location for commerce,
Average
Average Household
Income Household Size
Average Home
Value ship building and military installations.
EDUCATION Hundreds of historical sites and attractions can
be found throughout the region, including the
Historic Triangle which includes the colonial
9% communities of Jamestown, Williamsburg
No High 35% and Yorktown. Other attractions for residence
School
Diploma 24% Some
College
32% and visitors include the annual Ella Fitzgerald
Bachelor's/Grad/
High School
Graduate Prof Degree Music Festival, Norfolk NATO Festival, Norfolk
Harborfest, East Coast Surfing Championships
EMPLOYMENT and the 100 Miles of Lights. The harbor is key
to Hampton Roads‘ growth with both on land
64% and in water-related activities and events.
White Collar
4.9%
Sandy beaches and national parks surround
21%
Blue Collar
the region making Hampton Roads one of
16%
Unemployment
Rate
Virginia’s most attractive areas to live and work.
Services
5
Market Overview
DOWNTOWN NO R F O L K TOP AREA EMPLOYERS
Hampton Roads MSA is a vital asset to the US Department of
Defense. Established in 1917, Naval Station Norfolk, covering
approximately 3,400 acres, is not only the largest naval
base in the nation but the largest in the world. Military and
military contractors comprise much of region’s economy
with employment gear towards white collar workers.
The world’s largest shipyard is managed by Huntington Ingalls
Industries (HII) and located along the James River. HII is the PORT OF VIRGINIA
largest military shipbuilder and the sole designer, builder and
Vessel Calls: 2,568
refueler of nuclear-powered aircraft carriers in the United
Cargo Metric Tons: 56.7 Million
States. Due to the presence of the US Federal Government, Cargo Value: $73 Million
the economy of Hampton Roads MSA is insulated.
6
Metropolitan Area
7
Trade Area
I-64
- 12
SITE
3,00
0 AD
T
NEWPORT NEWS
INTERNATIONAL
JEFF
ERSO
AIRPORT
N AV
ENUE
- 54,
000
ADT
8+100 ROOMS
Bird’s Eye View
SITE
JEFFERSON A
VENUE - 57,00
0 ADT
9Site Demographics - 5 Mile Radius
KEY FACTS KEY FACTS EDUCATION EDUCATION
157,954 157,954
34.9 34.9
Population Population
7% 7%
Median Age Median Age
No High 36%
No High 36%
2.5 2.5
$61,995 $61,995 23%
School School
Some College Some College
Diploma Diploma
23%33% 33%
Average Median Household
Average Median HouseholdHigh School Bachelor's/Grad/Prof
High School Bachelor's/Grad/Prof
Household Size Household SizeIncome Income Graduate Degree
Graduate Degree
BUSINESS BUSINESS EMPLOYMENT EMPLOYMENT
63% 63%
White Collar White Collar
20% 4.2% 20% 4.2%
Blue Collar Blue Collar
4,924 4,924
73,898 73,898 Unemployment Unemployment
Total Businesses Total Employees
Total Businesses Total Employees
17% Rate 17% Rate
Services Services
INCOME INCOME Households By Income Households By Income
The largest group: $50,000 - $74,999 The
(20.7%)
largest group: $50,000 - $74,999 (20.7%)
The smallest group: $200,000+ (4.7%)The smallest group: $200,000+ (4.7%)
Indicator Value Indicator
Difference Value DifferenceCONFIDENTIALITY & CONDITIONS
Disclaimer: Information included or referred to herein is
furnished by third parties and is not guaranteed as to
its accuracy or completeness. You understand that all
information included or referred to herein is confidential
and furnished solely for the purpose of your review in
connection with a potential purchase of the subject loan(s)
or REO property(ies), as applicable. Independent estimates
of pro forma income and expenses should be developed by
you before any decision is made on whether to make any
purchase. Summaries of any documents are not intended
to be comprehensive or all-inclusive, but rather only outline
some of the provisions contained therein and are qualified
in their entirety by the actual documents to which they
relate. The asset owner(s), their services, representatives
and/or brokers, including but not limited to KLNB, LLC
and their respective agents, representatives, affiliates and
employees, (i) make no representations or warranties
of any kind, express or implied, as to any information or
projections relating to the subject asset(s), and hereby
disclaim any and all such warranties or representations,
and (ii) shall have no liability whatsoever arising from any
errors, omissions or discrepancies in the information. Any
solicitation for offers to purchase the subject asset(s) is
subject to prior placement and withdrawal, cancellation or
modification without notice.
Red Lobster| Offering Memorandum Peter Snell
202.420.7761
12580 Jefferson Avenue, Newport News, Virginia 23602 psnell@klnb.comYou can also read
