STARBUCKS ANCHORED RETAIL - 8131 & 8137 BROOK ROAD RICHMOND, VIRGINIA Confidential
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
STARBUCKS ANCHORED RETAIL
8131 & 8137 BROOK ROAD
RICHMOND, VIRGINIA
Confidential
Offering Memorandum
Table of Contents
Investment Highlights ………………………… 2
Attractions & Local Sites …………………… 4
Location & Market Overview …………… 6
Regional Map …………………………………………… 8
Neighboorhood Map …………………………… 9
Property Map ………………………………………… 10
Demographics ……………………………………… 11
Tenant Overview ………………………………… 12
Financial Information ……………………… 20
© 2013 Greysteel Company LLC. All rights reserved.
TRANSACTION TEAM Gil Neuman Managing Director Peter Snell Vice President Rich Sillery Investment Associate Aaron Loeb Investment Associate Lance Ahmadian Investment Associate P. 202.280.2722 7735 Old Georgetown Road Suite 301 Bethesda, MD 20814 www.greysteel.com
2 STARBUCKS ANCHORED RETAIL
Investment
Highlights
Starbucks Anchored Retail. Located on the north side of Richmond, Virginia, the property consists
of a freestanding Starbucks with a drive-through and a two tenant strip occupied by GameStop and
Sunshine Nails. Collectively, the building area equals 5,600 square feet with Starbucks occupying
1,850 square feet, GameStop 1,777 square feet, and Sunshine Nails 1,973 square feet. Both buildings
were constructed in 2007. The tenants are responsible for their pro rata share of operating expenses,
insurance, and real estate taxes. There are minimal landlord responsibilities.
Tremendous Tenants. Starbucks (NASDAQ: SBUX) is rated investment grade A- credit with a stable
outlook by Standard & Poor’s. Starbucks’ lease expires July 31, 2017 with four five-year options and
10% rent increases every five years. GameStop (NYSE: GME) is the world’s largest video game retailer;
its lease expires January 31, 2015. Sunshine Nails continues to benefit from the $7.3 billion spent on
nail related services in 2012; its lease expires December 31, 2015 with two five-year options and 3%
rent increases annually.
Premier Retail Drivers. The subject property benefits from strong demographic factors within a five
mile radius including a population of 157,582 people and 66,579 households with an average income
of $67,044. The property is strategically located just east of Interstate I-95 and west of Brooks Road;
with traffic counts of 89,000 and 39,984, respectively.
Strategic Location. The property sits directly in the middle of a retail hotspot, is shadow anchored by
Wal-Mart and is surrounded by other national retailers including Lowe’s, Restaurant Depot, Big Lots,
Family Dollar, Burger King, Dairy Queen, Firehouse Subs, Wells Fargo, Exxon and Shell. Additionally,
the property is adjacent to a Clarion Hotel and less than a mile away from one of Bank of America’s
operation centers that employs roughly 600 individuals.
© 2013 Greysteel Company LLC. All rights reserved.
4 STARBUCKS ANCHORED RETAIL
Attractions & Local Sites
Nearby Surrounding Area
• Richmond International Raceway • Virginia Commonwealth University and the University of
• Lewis Ginter Botanical Garden Richmond
• Spring Lake Golf and Country Club • The Diamond Baseball Stadium – home of the Richmond
• Lakeside Country Club Flying Squirrels and VCU baseball teams
• The Crossings Golf Course • Country Club of Virginia
• Belmont Golf Course • Virginia Museum of Fine Arts
• Virginia Center Commons • The Black History Museum and Cultural Center of Virginia
• Joseph Bryan Park • Virginia State Capitol Building
• Three Lakes Park • Edgar Allen Poe Museum
• Kings Dominion • The Museum of Confederacy
© 2013 Greysteel Company LLC. All rights reserved.
INVESTMENT HIGHLIGHTS 5
© 2013 Greysteel Company LLC. All rights reserved.
6 STARBUCKS ANCHORED RETAIL
Location &
Market Overview
Location. The Starbucks Anchored Retail is located approximately 10 minutes north of downtown Richmond, Virginia, at 8131
and 8137 Brook Road, Richmond, VA 23227.
The property benefits from nearby centers including Hungarybrook Shopping Center and Virginia Center Commons. Adjacent to
the property, Hungarybrook is a Food Lion anchored center with surrounding retailers including Dollar Tree, Subway, Wendy’s,
KFC, McDonald’s and BB&T. The property is less than three miles south of Virginia Center Commons, a Simon Property Group mall
which hosts Macy’s, JC Penney, Sears, Burlington Coat Factory and over 90 specialty stores.
Situated in the North Side quad of the city, the property is bordered by Interstate I-95 and Route 1/Brook Road. The comprehensive
surrounding road network provides easy access to the property as Route 1/Brook Road borders the property to the west and runs
from North Carolina, directly through Richmond and up to the District of Columbia. Interstate I-95 borders the property to the east
and runs through virtually every major city on the east coast.
Richmond. As home to the state capital and six Fortune 500 Companies, Richmond enjoys the advantages of a vibrant business,
government and cultural hub. The City of Richmond lies in the center of the Richmond Metropolitan Statistical Area; which,
as of 2010 was the nation’s 43rd largest metropolitan area and the third largest in the state. As a result of its close proximity to
Washington, D.C., Charlotte, VA, and Williamsburg, VA, the city also benefits from a vibrant tourist trade and a growing international
community.
The city’s economy is primarily driven by law, finance, and government, with federal, state, and local governmental agencies, as
well as notable legal and banking firms, located in the downtown area. Richmond’s top private employers include Capital One
Financial Corp, VCU Health System and HCA Inc; collectively, employing over 25,000 individuals. The city is home to both the
United States Court of Appeals for the Fourth Circuit, one of 13 United States courts of appeals, and the Federal Reserve Bank of
Richmond, one of 12 Federal Reserve Banks.
© 2013 Greysteel Company LLC. All rights reserved.
LOCATION & MARKET OVERVIEW 7
The city offers a variety of museums, performing arts, and historic attractions, including the Richmond National Battlefield Park and the American
Civil War Center at Historic Tredegar, which are both housed in the former buildings of the Tredegar Iron Works, where much of the ordnance
for the war was produced. This is complimented by the oldest municipal park system in the country, which is comprised of more than 40 parks
totaling more than 1,500 acres.
Richmond is home to two nationally recognized colleges, Virginia Commonwealth University (VCU) and the University of Richmond, which are
situated just a few miles west of the city and are a driving force in the city’s social life. Ranked a top 100 public university, VCU offers an array of
academic and athletic opportunities to more than 27,000 undergraduate and graduate students; nationally in 2012. The University of Richmond,
ranked 27th among liberal arts colleges nationwide, is a private college offering undergraduate and graduate degrees.
© 2013 Greysteel Company LLC. All rights reserved.
Starbucks Anchored Retail
4
1
Starbucks Anchored Retail
2
1 Hungary Brook Shopping Center
Food Lion, Dollar Tree, Subway, Liberty Tax Service
3 95
2 Villa Park Ops Center Building
3 Lewis Ginter Botanical Garden
4 Best PlazaVerizon
Exxon
Family Dollar Shell E Parham Rd
Firehouse Subs Clarion Hotel
Dairy
Big Lots
Queen
Starbucks Anchored Retail
Wells Fargo Bank
Burger King
Walmart
Restaurant Depot
Brook Rd
Lowe’s Home
ImprovementLOCATION & MARKET OVERVIEW 11
Demographic and Income Profile Report
DEMOGRAPHICS 1 MILE 3 MILES 5 MILES
Total Employees 2,772 26,191 76,891
Total Residential Population 4,918 54,102 157,582
Households 2,243 23,839 66,579
Families 1,255 13,500 38,711
Average Household Size 2.16 2.24 2.32
Owner Occupied Housing Units 1,505 13,986 40,094
Renter Occupied Housing Units 739 9,853 26,485
Median Age 41.6 38.4 38.5
INCOME 1 MILE 3 MILES 5 MILES
Median Household Income $45,443 $48,899 $51,507
Average Household Income $56,060 $62,263 $67,044
Per Capita Income $26,099 $27,740 $28,921
AVERAGE DAILY TRAFFIC CARS
Brook Rd. and E Parham Rd. 39,984
I-95 and Scott Rd. 89,000
Data Note: Income is expressed in current dollars.
Source: U.S. Bureau of the Census, 2000 Census of Population and Housing. ESRI forecasts for 2011.
© 2013 Greysteel Company LLC. All rights reserved.12 STARBUCKS ANCHORED RETAIL
Tenant
Overview
Rent Roll
LEASE LEASE MONTHLY
TENANT GLA %OF GLA PRICE/SF ANNUAL RENT INCREASES OPTIONS
COMMENCEMENT EXPIRATION RENT
Starbucks 1,850 33.04% 8/1/07 7/31/17 $39.60 $6,105 $73,260 10% Every Five Years Four Five-Year
GameStop 1,777 31.73% 10/8/07 1/31/15 $25.00 $3,702 $44,425 None None
Sunshine Nails 1,973 35.23% 1/1/11 12/31/15 $19.34 $3,180 $38,155 3% Annually Two Five-Year
© 2013 Greysteel Company LLC. All rights reserved.Sunshine
Nails14 STARBUCKS ANCHORED RETAIL
Starbucks
8137 Brook Road
Richmond, VA 23236
Starbucks Corporation (NASDAQ: SBUX) founded in 1971 and headquartered
in Seattle, Washington, is the world’s largest coffeehouse company operating
nearly 18,000 stores in 60 countries. The Company offers a variety of hot and cold
beverages, whole-bean coffee, microground instant coffee, full-leaf teas, pastries,
a variety of food items, and mugs and tumblers.
Starbucks went public in 1992 with common stock being traded on the NASDAQ
National Market under the trading symbol SBUX. In fiscal 2012, the Company’s
net revenues increased 14% to $13.3 billion, EPS increased 10% to $1.79, cash
flow from operations was 1.8 billion compared to $1.6 billion in fiscal 2011 and the
Company increased its net worth 17% to $5.1 billion.
© 2013 Greysteel Company LLC. All rights reserved.TENANT OVERVIEW 15
Lease Abstract Tenant Expense Reimbursement
SUMMARY TENANTS PRO RATA SHARE
Tenant Starbucks Landscaping $2,180
GLA 1,850 SF Repair & Maintenance $82
% of Total GLA 33.04% Snow $209
Lease Guarantor Corporate Guarantee Other - Lighting $348
Lease Commencement Date August 1, 2007 Management Fee1 $282
Rent Commencement Date August 1, 2007 Insurance $1,110
Lease Expiration Date July 31, 2017 Real Estate Tax $4,415
Options Four Five-Year Total Reimbursement $8,625
Increases 10% Every Five Years
Rental Breakdown
Taxes Pro Rata
Insurance Pro Rata YEAR PRICE/SF MONTHLY RENT ANNUAL RENT
CAM Pro Rata 6 to 10 $39.60 $6,105 $73,260
OPTIONS
1
Management Fee is 10% of tenants pro rata share of CAM (Landscaping,
Repair & Maintenance, Snow, Other-Lighting)
11 to 15 $43.56 $6,716 $80,586
16 to 20 $47.92 $7,388 $88,652
21 to 25 $52.71 $8,126 $97,514
26 to 30 $57.98 $8,939 $107,263
© 2013 Greysteel Company LLC. All rights reserved.16 STARBUCKS ANCHORED RETAIL
GameStop
8131-A Brook Road
Richmond, VA 23236
GameStop (NYSE: GME) founded in 1994 and headquartered in Grapevine,
Texas, is the world’s largest video game retailer with over 6,650 stores in 15
countries worldwide and online. The Company sells new and used video
game hardware, physical and digital video game software and accessories,
as well as PC entertainment software and other merchandise.
In fiscal 2011 GameStop’s net revenues increased to $9.5 billion, compared
to $9.4 billion in fiscal 2010. The Company had $459 million in free cash flow
in 2011 and averages slightly over $400 million annually in the previous five
years.
© 2013 Greysteel Company LLC. All rights reserved.TENANT OVERVIEW 17
Lease Abstract Tenant Expense Reimbursement
SUMMARY TENANTS PRO RATA SHARE
Tenant GameStop Landscaping $2,094
GLA 1,777 SF Repair & Maintenance $79
% of Total GLA 31.73% Water - Irrigation $272
Lease Guarantor Corporate Guarantee Snow $201
Lease Commencement Date October 8, 2007 Other - Lighting $333
Rent Commencement Date October 8, 2007 Management Fee 2
$1,333
Lease Expiration Date January 31, 2015 Insurance 1
$526
Options None Real Estate Tax $4,240
Increases None Total Reimbursement $9,076
Taxes Pro Rata
Insurance 1
Pro Rata
Rental Breakdown
CAM Pro Rata YEAR PRICE/SF MONTHLY RENT ANNUAL RENT
2/1/13 - 1/31/15 $25.00 $3,702 $44,425
1
Insurance is billed for the Parcel 8131A&B; therefore, GameStop’s share of the
parcel insurance is 47.37%
2
Management Fee is 3% of tenants annual rent
© 2013 Greysteel Company LLC. All rights reserved.18 STARBUCKS ANCHORED RETAIL
Sunshine Nails
8131-B Brook Road
Richmond, VA 23236
Sunshine Nails has been in business at this location since 2011, offering
pedicures and manicures. According to Nails Magizine consumers spent
$7.3 billion on nail related services in 2012 and over 50% of the markets
clientele spends over $100 per month on nail supplies. In 2011 there were
over 51,000 nail care salons with 1,400 in Virginia alone.
© 2013 Greysteel Company LLC. All rights reserved.TENANT OVERVIEW 19
Lease Abstract Tenant Expense Reimbursement
SUMMARY TENANTS PRO RATA SHARE
Tenant Sunshine Nails Landscaping $2,325
GLA 1,973 SF Repair & Maintenance $87
% of Total GLA 35.23% Water - Irrigation $302
Lease Guarantor Personal Guarantee Snow $223
Lease Commencement Date January 1, 2011 Other - Lighting $370
Rent Commencement Date January 1, 2011 Management Fee $1,202
Lease Expiration Date December 31, 2015 Insurance 1
$584
Options Two Five-Year Real Estate Tax $4,708
Increases 3% Annually Total Reimbursement $9,800
Taxes Pro Rata
Rental Breakdown
Insurance1 Pro Rata
CAM Pro Rata
YEAR PRICE/SF MONTHLY RENT ANNUAL RENT
3 $19.34 $3,180 $38,155
1 4 $19.92 $3,275 $39,300
Insurance is billed for the Parcel 8131A&B; therefore, SunShine Nails share of the
parcel insurance is 52.63% 5 $20.52 $3,373 $40,479
OPTION 1
6 $21.13 $3,474 $41,693
7 $21.77 $3,579 $42,948
8 $22.42 $3,686 $44,232
9 $23.09 $3,797 $45,559
10 $23.78 $3,911 $46,926
OPTION 2
11 $24.50 $4,028 $48,334
12 $25.23 $4,149 $49,784
13 $25.99 $4,273 $51,278
14 $26.77 $4,401 $52,816
15 $27.57 $4,533 $54,400
© 2013 Greysteel Company LLC. All rights reserved.20 Starbucks Anchored Retail
Financial
Information
© 2013 Greysteel Company LLC. All rights reserved.22 STARBUCKS ANCHORED RETAIL
FINANCIAL ANALYSIS THE OFFERING
INCOME Price $2,187,701
Total Gross Potential Rent $155,841 Cap Rate 7.00%
EXPENSE REIMBURSEMENTS Total Gross Leasable Area (GLA) 5,600 SF
Landscaping $6,599 Price/SF $390.66
Repair & Maintenance $247 Year Built 2007
Water - Irrigation $573 Lot Size 1.304 AC
Snow $632 Type of Ownership Fee Simple
Other - Lighting $1,051
FINANCIAL INDICATORS
Insurance $2,220
PROPOSED LOAN
Real Estate Taxes $13,362
Loan to Value 70%
Management Fee $2,817
Loan Amount $1,531,391
Total Expense Reimbursements $27,502
Interest Rate 4.25%
EFFECTIVE GROSS INCOME $183,342
Term 5 Years
EXPENSES
Amortization 25 Years
Landscaping $6,599
Personal Recourse No
Repair & Maintenance $247
VALUE INDICATORS
Water - Irrigation1 $856
Down Payment (30%) $656,310
Snow $632
NOI $153,139
Other - Lighting $1,051
Debt Service $99,554
Insurance $2,220
Debt Coverage Ratio 1.54
Real Estate Taxes $13,362
Net Cash Flow After Debt Service $53,586
Management Fee (3%)2 $4,675
Cash-on-Cash Return % 8.16%
Reserves/Replacements ($.10/SF) $560
Principal Reduction $32,162
Total Expenses $30,203
Total Return $85,748
NET OPERATING INCOME $153,139
Total Return % 13.07%
1
Starbucks does not reimburse for Water-Irrigation
2
Management Fee is 3% of gross potential rent
© 2013 Greysteel Company LLC. All rights reserved.FINANCIAL INFORMATION 23
© 2013 Greysteel Company LLC. All rights reserved.24
Offers
Offer Submission: Offers should be submitted in the form of a non-binding Letter of Intent to Peter Snell. Terms and conditions of Purchasers’ offer
should at the minimum include:
• Offer price
• Earnest money deposit
• Due diligence and closing period
• Description of the debt/equity structure and Purchaser qualifications
For further information please contact Peter Snell at 202.499.4079 or ps@greysteel.com.
© 2013 Greysteel Company LLC. All rights reserved.25
Legal Disclaimer
This Confidential Offering Memorandum (“Memorandum”) is solely for the use of prospective purchasers in determining a threshold level of
interest in the subject property. While the information contained in this Memorandum has been compiled from sources we believe to be reliable,
neither Greysteel nor its representatives make any representations or warranties as to the accuracy or completeness of the information contained
in this Memorandum. All financial information and projections are provided for reference only and are based on assumptions relating to the
general economy, market conditions and other factors beyond our control. All references to acreage, square footage and other measurements
are approximations and must be independently verified. Prospective purchasers are encouraged to conduct an independent due diligence
investigation, prepare independent financial projections, and consult with their legal, tax and other professional advisors before making an
investment decision. Greysteel does not have authority to legally bind the seller and no contract or agreement providing for any transaction shall
be deemed to exist unless and until a final definitive contract of sale has been executed and delivered to you by the seller. This offering is subject
to prior placement, withdrawal, cancellation or modification without notice.
© 2013 Greysteel Company LLC. All rights reserved.7735 Old Georgetown Road, Suite 301
Bethesda, MD 20814
P. 202-280-2722
info@greysteel.com
www.greysteel.com
VA: 0226023703
CONTACT:
Peter Snell Rich Sillery
Vice President Investment Associate
ps@greysteel.com rsillery@greysteel.com
P. 202.499.4079 P.202.800.2410
TRANSACTION TEAM:
Gil Neuman Peter Snell Rich Sillery Aaron Loeb Lance Ahmadian
Managing Director Vice President Investment Associate Investment Associate Investment Associate
© 2013 Greysteel Company LLC. All rights reserved.You can also read
