Walgreens Offering Memorandum - Stan Johnson Company
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DOWNTOWN MILWAUKEE
SE
Subject Property
Offering Memorandum
Walgreens
2826 North Doctor Martin Luther King Drive | Milwaukee, WI 53212
Best-in-Class Tenant Walgreen Co. (NASDAQ: WBA) | 17+ Years of Remaining Term
Absolute NNN Lease | Dense, Urban Infill Location Highly Accessible | Limited Competition
Confidentiality and Restricted Use Agreement
This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your Offered Exclusively by
consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM
may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without Brad Feller
prior written authorization and consent of SJC. Senior Director
bfeller@stanjohnsonco.com
This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This P: +1 312.240.0194
COM contains descriptive materials, financial information and other data compiled by SJC for the convenience WI #57176-90
of parties who may be interested in the Property. Such information is not all inclusive and is not represented to
include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has Isaiah Harf
not independently verified any of the information contained herein and makes no representations or warranties Director
of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation iharf@stanjohnsonco.com
and/or financial information contained herein are qualified in their entirety by reference to the actual documents P: +1 312.777.2437
and/or financial statements, which upon request may be made available. An interested party must conduct its
own independent investigation and verification of any information the party deems material to consideration of Andy Gatchell
the opportunity, or otherwise appropriate, without reliance upon SJC. Associate Director
agatchell@stanjohnsonco.com
The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right
P: +1 312.777.2439
to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s)
as is, where is, and with all faults, without representation or warranty of any kind except for any customary
Mark Lovering
warranties of title.
Associate
BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you
mlovering@stanjohnsonco.com
P: +1 312.777.2441
have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other
form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your
own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any Blaise Bennett, Esq.
time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) Associate
bbennett@stanjohnsonco.com
for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release
P: +1 312.777.2449
and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents
and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or
use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any Stan Johnson Company
of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, 303 East Wacker Drive | Suite 1111
conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and Chicago, IL 60601
(6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be P: +1 312.240.0127
entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection
with such a violation and shall not be required to post a bond when obtaining such relief. stanjohnsonco.com
Table of Contents
About the Investment
The Offering & Investment Highlights...............................................5
Pricing and Property Overview..............................................................6
Lease Abstract ................................................................................................7
Site Plan................................................................................................................8
Retail Maps...................................................................................................9-10
Tenant Information
Walgreens Boots Alliance Organizational Chart........................12
Walgreens Boots Alliance Overview..................................................13
Retail Pharmacy USA Overview............................................................14
Location Information
Location Overview.........................................................................................16
Property Photos........................................................................................17-18
Surrounding Retail Photos.......................................................................19
Demographics.................................................................................................20
S
Section I:
About the Investment DOWNTOWN
MILWAUKEE
RUFUS KING
INTERNATIONAL
MIDDLE SCHOOL
MLK HERITAGE
HEALTH
CENTER
FOUR SEASONS
EARLY LEARNING
CENTER
MARTIN
LUTHER KING
LIBRARY
ROSE PARK
SE
The Offering Investment Highlights
Stan Johnson Company is pleased to offer for sale to qualified Best-in-Class Tenant Walgreen Co.
investors, the opportunity to purchase a 100% fee-simple interest in Walgreen Co. is a subsidiary of Walgreens Boots Alliance, Inc. (NASDAQ:
the Walgreens property located at 2826 North Doctor Martin Luther WBA) and is currently rated BBB/Negative by Standard and Poor’s. WBA
King Drive in Milwaukee, Wisconsin (the “Property”). had FY2015 revenue of $103.44 billion and net income of $4.22 billion
The Property is located in dense, urban infill Milwaukee, 2.5 miles
17+ Year Base Lease Term Remaining
north of the city center and less than one-half mile from ramps to
and from Interstate 43 (North-South Freeway). The immediate area Walgreens base lease term runs through December 2034 and features
has seen substantial investment in recent years, highlighted by King fifty, one-year options, offering investors the opportunity for long-term
Drive Commons, a $25.3 million community project that brought 24 cash flow
apartments, 87 homes and 14,000 SF of retail space to the market
over the last 10 years. Further, the Property benefits from being the Absolute NNN Lease Structure
only pharmacy within the area confined by Interstate 43, Wisconsin
Lease features zero Landlord responsibilities for maintenance or repair of
Highway 57/190 and the Milwaukee River, major boundaries in
the Property throughout the term and option periods
this section of the Milwaukee market. The location serves a large
population base of over 208,000 within 3 miles.
Strong Location Within Submarket
Walgreen Co. is operating under a seventy-five (75) year base lease Property is located in dense, urban infill Milwaukee within an area that
term with the option to terminate at the conclusion of the last day of has seen substantial investment in recent years, highlighted by King Drive
the 300th month (Year 25), and each month thereafter with twelve Commons, a $25.3 million community project that brought 24 apartments,
(12) months’ notice. The rental rate of $368,000 annually is flat 87 homes and 14,000 SF of retail space to the market over the last 10
throughout the term. Walgreens’ lease is Absolute NNN and features years. It benefits from a population base of 208,908 and average HH
no landlord responsibility throughout the term. income of $53k+ within 3 miles
Walgreen Co., a subsidiary of Walgreens Boots Alliance, Inc.,
Superior Visibility & Traffic Counts
(NASDAQ: WBA), had FY2015 (ended August 31, 2015) revenue of
$103.44 billion and net income of $4.22 billion. As of August 31, 2015, Property is positioned on the NE corner of the hard, four-way intersection
the company had a net worth of $30.86 billion. Currently, Walgreen of N Dr Martin Luther King Jr. Dr (11,900 VPD) and W Hadley St (10,486
Co. holds a BBB/Negative rating by Standard and Poor’s and had a VPD), in northwest Milwaukee, approximately 2.5 miles from downtown. It
market capitalization of $90.11 billion as of September 9, 2016. benefits from access to and from I-43 (145,220 VPD) within .5 mile
Drive-Thru Pharmacy
Property features drive-thru pharmacy directly accessible from W Hadley Street
Section One • Walgreens • MIlwaukee, WI • 5
Pricing Overview
Walgreens | Milwaukee, WI
Offering Price: $6,460,000
Offering Cap Rate: 5.70%
Current Annual Rent: $368,000
Tenant: Walgreen Co.
Property Overview
2826 N Dr. Martin Luther King Drive | Milwaukee, WI 53212
Building Size: +/- 15,341 SF
Land Area: +/- 1.23 Acres
Parcel ID: 313-0312-100-8 & 313-1370-000-6
Encumbrances: None, Free & Clear
N
*This Walgreens lease has a lease term of 75 years, with the Tenant to
retain the option to terminate at the conclusion of the last day of the
300th month (Year 25), and each month thereafter with 12 months’
notice. Years 1-25 is referred to as the “Base Lease Term” and each of the
years thereafter as the “Effective Option Periods.”
Section One • Walgreens • MIlwaukee, WI • 6
Lease Abstract
Tenant: Walgreen Co. (S&P Rated: BBB/Stable)
Guarantor: Walgreen Co.
Property Address: 2826 N. Doctor M.L.K. Dr | Milwaukee, WI 53212
Building Size (SF): 15,341 SF
Lot Size (Acres): 1.23 Acres
Year Built: 2008
Lease/Rent Commencement: 1/1/2009
Lease/Rent Expiration*: 12/31/2034
Base Lease Term*: Twenty-five (25) Years
Base Lease Term Remaining: Seventeen (17) Years
Current Annual Rent*: $368,000
Annual Rent PSF: $23.98
Renewal Notice: Twelve (12) Months
Rental Increases: None
Lease Type: Absolute NNN
LL Responsibility: None
Ownership Interest: Fee Simple
Tenant has 30 Days to respond after Bona Fide
Right of First Refusal:
Offer is presented
2.0% of Gross Sales excluding sale of food items and
Percentage Rent: prescription items, and 0.5% of Gross Sales of food
items and prescription items (refer to lease for details)
Drive-Thru: Yes
Parking: 50 parking spaces
Property ID: 313-0312-100-8 & 313-1370-000-6
Encumbrances: None, Delivered Free & Clear
*This Walgreens lease has a lease term of 75 years, with the Tenant to retain the option
to terminate at the conclusion of the last day of the 300th month (Year 25), and each
month thereafter with 12 months’ notice. Years 1-25 is referred to as the “Base Lease
Term” and each of the years thereafter as the “Effective Option Periods.”
Subject Property Photos
Section One • Walgreens • MIlwaukee, WI • 7
Site Plan
N DR. MARTIN LUTHER KING JR DR (11,900 VPD)
W. HADLEY ST (10,486 VPD)
W . LOCUST ST (22,697 VPD)
W
Section One • Walgreens • MIlwaukee, WI • 8
MILWAUKEE BAY
COLUMBIA SAINT
MARYS HOSPITAL
UNIVERSITY OF
WISCONSIN-MILWAUKEE
DOWNTOWN
MILWAUKEE
)
0 VPD
JR DR (11,90
R KING
RTIN LUTHE
MA
N DR. MILWAUKEE
COLLEGE PREP
NORTH DIVISION SCHOOOL
HIGH SCHOOOL
HEALTH REACH
PD)
5,00 V
REHABILITATION SERVICES
& WHEATON FRANCISCAN I-43 (14
HEALTHCARE
W CA
SEE NEXT PAGE FOR DETAIL
PITO
L DR
COLUMBIA
COLLEGE OF
NURSING
(45,7
RUFUS KING
HIGH SCHOOL
47 V
PD)
E
Section One • Walgreens • MIlwaukee, WI • 9
MARTIN LUTHER KING
LIBRARY
W LOCUST ST (22,697 VPD)
FAST & FRIENDLY
GROCERY
N DR. MARTIN LUTHER KING JR DR (11,900 VPD)
M&I BANK
I-43 (145,00 VPD)
PIERCE
STELLA’S HOMESTYLE ELEMENTARY
RESTAURANT SCHOOOL
W CENTER ST (9,835 VPD)
NORTH GROWING
DIVISION HIGH POWER’S DELI &
SCHOOOL FOOD MARKET
TAMARACK
WALDORF SCHOOL
CLARA MOHAMMAED
SCHOOL
A&J LIQUOR MART; TINY’S LOUNGE;
BEST FOOD & MEAT MARKET;
J&J FISH & CHICKEN
JA’STACY RESTAURANT
HEALTH
CENTER KILBOURN
W NORTH AVENUE (20,548 VPD) PARK
N
BECKUM LITTLE
STAPLETON PARK
Section One • Walgreens • MIlwaukee, WI • 10Section Two: Tenant Information
Walgreens Boots Alliance Organizational Chart
Retail Pharmacy Pharmaceutical
USA Wholesale
Retail Pharmacy
International
Duane
Walgreens
Reade Alliance Healthcare
(50 States)
(New York)
Benavides (Mexico) Ahumada (Chile) Boots (Europe)
Section Two • Walgreens • MIlwaukee, WI • 12Walgreens Overview
Walgreens Boots Alliance (NASDAQ: WBA) is the to provide innovative ways to address health and Walgreens is the largest drugstore chain in the
first global pharmacy-led, health and wellbeing wellness challenges. The company is well positioned US. The company had fiscal 2016 sales of more
enterprise in the world. The company was to expand customer offerings in existing markets than $117.35 billion. Founded with a single store
created through the combination of Walgreens and become the health and wellbeing partner of in Chicago in 1901, Walgreens is today continuing
and Alliance Boots in December 2014, bringing choice in emerging markets. to build a seamless customer experience through
together two leading companies with iconic its 8,175 drugstores and its digital businesses that
brands, complementary geographic footprints, include Walgreens.com, drugstore.com, Beauty.
shared values and a heritage of trusted health care com, SkinStore.com and VisionDirect.com.
services through pharmaceutical wholesaling and
community pharmacy care, dating back more than Company Profile
100 years.
Company Walgreens Boots Alliance 6.2 Million Customers Visit
The company employs over 400,000 people and
Walgreens Stores Daily
has a presence in more than 25 countries; it is the No. of Retail
largest retail pharmacy, health and daily living 13,200 (as of 8/31/2016)
Locations
destination in the USA and Europe. Including its
equity method investments, Walgreens Boots Credit Rating S&P: BBB
Alliance is the global leader in pharmacy-led, health
and wellbeing retail with over 13,200 stores in 11
countries. The company includes the largest global Stock Symbol WBA (NASDAQ)
Tenant Profile
pharmaceutical wholesale and distribution network
with over 390 distribution centers delivering to
Employees 400,000+
more than 230,000 pharmacies, doctors, health Company Walgreens
centers and hospitals each year in 20 countries. In No. of Retail
addition, Walgreens Boots Alliance is the world’s Website www.walgreensbootsalliance.com 8,175 (as of 8/31/2016)
Locations
largest purchaser of prescription drugs and many
other health and wellbeing products. Credit Rating S&P: BBB
Total Revenue $117.35 Billion (as of 8/31/2016)
Its portfolio of retail and business brands includes
Walgreens, Duane Reade, Boots and Alliance
Fortune Magazine: Top 5 World’s Most Net Worth $29.88 Billion (as of 8/31/2016)
Healthcare, as well as increasingly global health and
beauty product brands, such as No7, Botanics and Admired Companies (March 2015)
Year Founded 1901
Soap & Glory.
Forbes: 165th out of 2000 Largest Headquarters Deerfield, Illinois
The creation of Walgreens Boots Alliance provides an Global Public Companies (May 2015)
opportunity to further accelerate the development Website www.walgreens.com
of a fully integrated, global platform for the future
Section Two • Walgreens • MIlwaukee, WI • 13Retail Pharmacy USA Overview
The Retail Pharmacy USA Division’s principal The division has more than 74,000 healthcare August 31, 2015, compared to 8,309 locations (8,207
retail pharmacy brands are Walgreens and Duane service providers, including pharmacists, drugstores) a year earlier. Prior year’s locations
Reade. Together, they form the largest drugstore pharmacy technicians, nurse practitioners and included 91 infusion and respiratory services facilities
chain in the USA. As of August 31, 2015, the division other health related professionals. Through them, in which a majority interest was sold in fiscal 2015.
operated 8,173 drugstores across all 50 states, the they expect to continue to play a growing role
District of Columbia, Puerto Rico and the US Virgin in government and employer efforts to control Pharmacy sales increased by 8.2% in fiscal 2015
Islands. As of August 2015, approximately 76% of escalating healthcare costs. and represented 66.1% of the division’s total sales.
the population of the USA lives within five miles of Comparable pharmacy sales increased 9.3% in
a Walgreens. fiscal 2015. The effect of generic drugs, which
have a lower retail price, replacing brand name
The division sells prescription and non-prescription drugs reduced prescription sales by 1.8% and
The Retail Pharmacy USA Division’s
drugs, as well as general merchandise, beauty care reduced division total sales by 1.0%. Adjusted
strategy is designed to further
and photofinishing. They provide customers with to 30-day equivalents, the division filled 894
convenient, omni-channel access to consumer
transform the traditional drugstore million prescriptions in 2015. Third party sales,
goods and services, pharmacy, and health and by offering ultimate convenience, where reimbursement is received from managed
wellness services in communities across America. driving the best customer loyalty, and care organizations, government and private
They also offer products and services through delivering extraordinary customer insurance, were 96.8% of prescription sales.
mail, telephone and online, and provide specialty and patient care. They seek to expand
pharmacy and respiratory services, as well as retail Retail sales increased 1.9% in fiscal 2015 and were
product and service offerings across
clinics. 33.9% of the division’s total sales. Comparable retail
new channels and markets where, sales increased 1.5%. The increase in comparable
in addition to stores, customers and retail sales in fiscal 2015 as compared to fiscal 2014
Percentage of patients can utilize health system was primarily attributed to an increase in basket
Product Class
Sales (at 8/31/14) pharmacies, Walgreens.com, mobile size partially offset by lower customer traffic.
applications and social media sites.
Pharmacy 66%
Retail 34%
Retail Pharmacy USA 2015 Financial Highlights
Total 100%
The Retail Pharmacy USA division, whose principal
retail pharmacy brands are Walgreens and Duane
Reade, had fiscal 2015 sales of $81.0 billion, an
Prescription drugs are the largest product
increase of 6.0% over fiscal 2014. Total sales
class, followed by general merchandise and
increased primarily due to higher comparable store
nonprescription drugs.
sales, which were up 6.4% in fiscal 2015. The division
operated 8,182 locations (8,173 drugstores) as of
Section Two • Walgreens • MIlwaukee, WI • 14Section Three:
Location Overview
SLocation Overview
Milwaukee is the largest city in Wisconsin and both the 31st-most populous city and the 39th-most
populous region in the United States. It is the county seat of Milwaukee County and is located on
the southwestern shore of Lake Michigan, at the confluence of three rivers: the Menomonee, the
Kinnickinnic, and the Milwaukee. As of the 2010 census, the population of Milwaukee was 594,833
and the population of the Milwaukee-Racine-Waukesha MSA was 2,040,498.
Milwaukee Convention Center, Milwaukee, WI
Milwaukee became synonymous with Germans and beer in its infancy and was once home to four of
the world’s largest beer breweries. Today, beer halls and taverns are abundant in the city, and Miller
Brewing Company remains a key employer by providing the city with over 2,200 jobs.
Beyond the brewing industry, Milwaukee’s economy is supported by a number of other industries.
In fact, Milwaukee ranks fifth in the country in terms of the number of Fortune 500 company
headquarters with six: Johnson Controls, Northwestern Mutual, Manpower, Rockwell Automation,
Harley-Davidson and Joy Global. Other companies based in Milwaukee include Briggs & Stratton,
Marshall & Ilsley, Hal Leonard, Wisconsin Energy, A.O. Smith, Master Lock, American Signal
Corporation and GE Healthcare Diagnostic Imaging and Clinical Systems.
Tourism is another key part of the Milwaukee economy. With major attractions such as the
Milwaukee Riverwalk, the Wisconsin Center, the Milwaukee Art Museum and Pier Wisconsin, as well
as numerous other museums, performing arts centers and major professional sports franchises, the
Harley-Davidson Corporate Headquarters, Milwaukee, WI
city attracts millions of visitors annually. In 2013, total tourism business sales grew 4.0% to over $3
billion and total tourism employment accounted for over 30,000 full-time positions with more than
$1 billion in labor income.
Between 2000 and 2009, Milwaukee experienced the first population increase in the last 50 years.
Although there was never a period of steep decline, population remained steady over time. However,
this new growth has spurred new investment in and around downtown. New skyscrapers, as well as
new condos, lofts and apartments have been constructed in neighborhoods on and near the lake
front and riverbanks. New microbreweries are opening, capitalizing on the city’s roots. The city’s
infrastructure is improving throughout, building a solid foundation for the future.
Downtown Milwaukee, WI
Section Three • Walgreens • MIlwaukee, WI 16E
N
Section Three • Walgreens • MIlwaukee, WI 17
Subject Property PhotosSection Three • Walgreens • MIlwaukee, WI 18 Subject Property Photos
Section Three • Walgreens • MIlwaukee, WI 19 Surrounding Retail Photos
Demographics
2826 N Doctor M.L.K. Drive | Milwaukee, WI 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.
Population
2016 Population 31,126 208,908 418,765
2021 Population 31,098 209,988 419,929
2010-2016 Annual Rate -0.23% 0.08% -0.01%
2016-2021 Annual Rate -0.02% 0.10% 0.06%
2016 Median Age 29.0 28.8 30.1
Households
2016 Total Households 11,521 85,613 161,569
2021 Total Households 11,482 85,982 161,762
2010-2016 Annual Rate -0.25% 0.12% -0.02%
2016-2021 Annual Rate -0.07% 0.09% 0.02%
2016 Average Household Income $36,298 $53,835 $53,695
N
Section Three • Walgreens • MIlwaukee, WI 20Offered Exclusively by
Brad Feller
Senior Director
Isaiah Harf
Director going beyond
bfeller@stanjohnsonco.com iharf@stanjohnsonco.com
P: +1 312.240.0194 P: +1 312.777.2437
WI #57176-90
Andy Gatchell Blaise Bennett, Esq.
Associate Director Associate
agatchell@stanjohnsonco.com bbennett@stanjohnsonco.com
P: +1 312.777.2439 P: +1 312.777.2449
Mark Lovering
Associate
mlovering@stanjohnsonco.com
P: +1 312.777.2441
Stan Johnson Company
303 East Wacker Drive | Suite 1111
Chicago, IL 60601
P: +1 312.240.0127 | F: +1 312.240.0158
stanjohnsonco.com
The information contained herein was obtained from sources believed reliable, however,
Stan Johnson Company makes no guaranties, warranties or representations as to the
completeness thereof. The presentation of this property for sale, rent or exchange is
submitted subject to errors, omissions, change of price or conditions, or withdrawal
without notices.You can also read
