confidential grey rock plaza offering ......co., walgreens, rite aid, and food city. the town of...

GREY ROCK PLAZAMARION, VIRGINIA

CONFIDENTIAL OFFERING MEMORANDUM

The material is based in part upon information obtained from the Seller and in part upon information obtained by Cushman & Wakefield from sources it deems to be reliable. Summaries

contained herein of any legal documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of some of the principal provisions

contained herein. Prospective purchasers should make their own investigations, projections, and conclusions. It is expected that prospective investors will conduct their own independent due

diligence concerning the Property, including such engineering inspections as they deem necessary to determine the condition of the Property and the existence or absence of any potentially

hazardous material used inor the property owner.

Cushman & Wakefield

550 S. Tryon Street | Suite 3400

Charlotte, NC 28202

+ 1 704 375 7771 | cushmanwakefield.com

CONFIDENTIALITY AGREEMENT The material contained in this Offering Memorandum is

confidential, furnished solely for the purpose of considering the acquisition of 945 North

Main Street, Marion, VA and is not to be used for any other purpose or made available to

any other person without the express written consent of Cushman & Wakefield.

3

INVESTMENT HIGHLIGHTSINVESTMENT SUMMARY

Property Address 945 North Main Street - Marion, VA

Square Feet 50,275

Land Area 4.46 Acres

Occupancy 89%

Year Built/Renovated

1985

Property TypeRetail Neighborhood Grocery Center

Asking Price $2,300,000

In-Place NOI $222,091

Asking Cap Rate 9.67%

Year 5 Cap Rate 16.4%

Additional Value-Add Components

Through Leasing of Vacant Space Three vacant spaces directly between

Food Lion and the new Fresenius location

are immediately available for lease

Huge Upside Opportunity With The

Anchor Space Food Lion is currently paying $1/SF for

rent, which is well below the market

average and gives the landlord a strong

position upon lease expiration

Credit Tenancy With Long Term,

Guaranteed Cash Flow 89% Occupied to Three (3) Credit

Tenants | Food Lion (Delhaize, S&P:

BBB Credit), CVS Pharmacy (S&P: BBB+

Credit), Fresenius Medical Care (S&P:

BBB- Credit)

Busy Location Directly on

Main Street Main St has over 23,000 VPD and

12,000 people in a 5-mile radius

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EXECUTIVE SUMMARYCushman & Wakefield is pleased to present for sale, a 50,275 square foot grocery-anchored shopping center in Marion, Virginia. The subject property

was built in 1985 and sits on 4.461 acres. The property is 89% leased to credit tenants including Food Lion (Delhaize, S&P: BBB Credit), CVS Pharmacy

(S&P: BBB+ Credit), Fresenius Medical Care (S&P: BBB- Credit). Grey Rock Plaza has two major opportunities for upside within a 5-year holding

period. First, the Food Lion anchor is paying $1.00/SF in annual rent, which is well below market and can be negotiated upon lease expiration in

2021. Second, there are three vacant units between Fresenius and Food Lion that are smaller boxes and have more immediately avaialable tenants.

PROPERTY SITE PLAN

5

N Main Stre

et (23,0

00 VPD)

Groseclose St

6

SUITE SIZE TENANT1 6,338 SF Fresenius Dialysis

2 1,259 SF AVAILABLE



5 29,000 SF Food Lion

6 9,375 SF CVS Pharmacy

12 3

4 5

Occupied

Available

Not a part

6

LOCATION DEMOGRAPHICSDemographics

Radius 1 Mile 3 Mile 5 Mile

Population:

2022 Projection 2,629 8,379 11,567

2017 Estimate 2,647 8,469 11,701

2010 Census 2,611 8,507 11,805

2017 Population Hispanic Origin 68 192 235

2017 Population by Race:

White 2,478 7,817 10,856

Black 108 447 587

Am. Indian & Alaskan 5 19 29

Asian 19 50 64

Hawaiian & Pacific Island 0 1 2

Other 38 134 163

U.S. Armed Forces: 0 0 0

Households:

2022 Projection 1,097 3,493 4,769

2017 Estimate 1,106 3,536 4,831

2010 Census 1,098 3,585 4,914

Owner Occupied 726 2,146 3,094

Renter Occupied 379 1,390 1,737

2017 Avg Household Income $74,499 $57,711 $57,104

2017 Med Household Income $45,745 $33,634 $35,252

2017 Households by Household Inc:

<$25,000 303 1,259 1,657

$25,000 - $50,000 290 990 1,327

$50,000 - $75,000 200 503 756

$75,000 - $100,000 78 294 464

$100,000 - $125,000 66 159 214

$125,000 - $150,000 6 42 62

$150,000 - $200,000 76 135 175

$200,000+ 87 154 178

Grey Rock Plaza

LOCATION AERIAL

7

100,000 WORLDWIDE EMPLOYEES375+ EMPLOYEES AT THE LOCATION

MARION ELEMENTARY, MIDDLE & HIGHSCHOOLS

81

GREY ROCK PLAZA

Grey Rock Plaza is on North Main Street,

one mile east of downtown Marion.

Average daily traffic counts in front of the

property are more than 15,700 vehicles

per day. All three levels of Marion’s public

schools are within 0.7 miles of the subject

property with Marion Senior High School

within walking distance. Also within a one-

mile radius is Marion Correctional Center,

General Dynamics, Walmart, Tractor Supply

Co., Walgreens, Rite Aid, and Food City.

The town of Marion is the county seat

of Smyth County, Virginia. Since 1995,

Marion has been designated as a Certified

Virginia Main Street Community and a

National Main Street Community. Smyth

County is located in southwestern Virginia

with major interstates including Interstate

81 and Interstate 77. Major employers in

Smyth County include General Dynamics,

Utility Trailer, Royal Mouldings, TRW,

Southwestern Virginia Mental Health

Institute, Marion Mold and Tool, and Marion

Correctional Treatment Center. Of these

top employers, five are based in Marion.

MARKET OVERVIEW

8

Marion, Virgina

FINANCIAL OVERVIEW

9

Grey Rock PlazaMarion, VA

IN-PLACE RENT ROLL & ANNUAL INCOME

Fiscal Year Ending - July 31

Square % of Suite Lease Lease Base Rent Recoveries Recovery Gross Rent Gross RenewalTenant Feet Total Number Commencement Expiration PSF PSF Base Rent Method Estimate PSF Date Rent/SF Options

Food Lion 29,000 58% 1 3/85 8/21 $1.00 $0.41 $29,000 NNN $1.41 9/21 $8.00 (3) 5-YearCVS 9,375 19% 2 2/86 2/21 $7.00 $0.90 $65,625 NNN $7.90 - - -CVS 3-Yr Average Percentage Rent (1) 2/86 2/21 $0.00 $0.00 $26,646 - -Fresenius Dialysis 6,338 13% 3 8/16 8/31 $22.08 $0.95 $139,943 NNN $23.03 9/21 $23.01 (3) 5-Year

Total Occupied 44,713 89% $5.84 $0.59 $261,214 $26,262 $287,476 $6.43

Vacant Suites ExpensesVacant Suite 4 1,525 3% Operating Expenses ($23,000) -$0.46Vacant Suite 5 2,778 6% Utilities ($3,405) -$0.07Vacant Suite 6 1,259 3% Real Estate Taxes ($15,492) -$0.31Total Vacancy 5,562 11% Insurance ($8,489) -$0.17

($11,499) -$0.23Total Square Footage 50,275 100% ($3,500) -$0.07

Total Expenses ($65,385) -$1.30In-Place Net Operating Income $222,091 $4.42

Footnotes:(1) CVS Percentage Rent is the 3-Year Average [$22,444.81 (2014), $25,516.63 (2015), $31,055.63 (2016)]

Comments:

Management Fee (4.00%)G&A

Next Rent Bump

This page is part of a package and is subject to the disclaimer on the Executive Summary.1:08 PM 3/26/2018


PROPERTY ASSUMPTIONS MARKET LEASING ASSUMPTIONS

Analysis Period Total Vacant as of March 26, 2018 5,562 SFCommencement Date August 1, 2018End Date July 31, 2028 Absorption Period Start Date January 1, 2019Term 10 Years

Absorption Period 12 Month(s)Area Measures

Building Square Footage (RSF) 50,275 SF Category: Anchor Jr. Anchor In-Line ShopsCheck SF vs. Expiration SF Range: >20,000 SF >5,000 SF <5,000 SF

Vacancy Loss 10.00%2018 Annual Market Rent $4.00 PSF $10.00 PSF $8.00 PSF

General Growth Rate 3.00% Annual Rent Adjustment 0.00% 3.00% 3.00%

REVENUES Lease Term 10 Years 5 Years 5 Years

Market Rent Growth Expense Recovery Type NNN NNN NNN2019 - 3.00% 2024 - 3.00%2020 - 3.00% 2025 - 3.00% 2018 Tenant Improvements2021 - 3.00% 2026 - 3.00% New $10.00 PSF $10.00 PSF $5.00 PSF2022 - 3.00% 2027 - 3.00% Renewal $0.00 PSF $0.00 PSF $0.00 PSF2023 - 3.00% 2028 - 3.00% Weighted Average $2.50 PSF $2.50 PSF $1.25 PSF

EXPENSES Commissions New 6.00% 6.00% 6.00%

Growth Rates Renewal 2.00% 2.00% 2.00%Operating Expenses 3.00% Weighted Average 3.00% 3.00% 3.00%Capital Reserves 3.00%Property Taxes 3.00% Retention Ratio (1) 75% 75% 75%Property Taxes Reassessed No

Downtime Operating Expense Source 2018 Budget New 12 Month(s) 12 Month(s) 12 Month(s)

Weighted Average 3.0 Month(s) 3.0 Month(s) 3.0 Month(s)Management Fee (% of EGR) 4.00%

NotesCapital Reserves $0.15 PSF

SUMMARY OF FINANCIAL ASSUMPTIONS



CASH FLOW PROJECTIONS

Fiscal Year Ending - July 31 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

FY 2019REVENUES $/SF/YR

Gross Potential Rent $5.55 $279,064 $279,286 $293,162 $408,525 $420,171 $423,527 $433,638 $439,476 $453,114 $458,579 $463,965Absorption & Turnover Vacancy (0.85) ($42,817) ($7,630) ($24,865) ($31,689) $0 ($1,946) ($6,851) ($19,217) ($9,897) $0 $0CVS Percentage Rent 0.53 $26,646 $27,445 $28,269 $29,117 $29,990 $30,890 $31,817 $32,771 $33,754 $34,767 $35,810Total Minimum Rent 5.23 262,893 299,101 296,566 405,953 450,161 452,471 458,604 453,030 476,971 493,346 499,775

Reimbursements Utilities 0.04 2,039 2,410 2,378 2,367 2,704 2,768 2,811 2,822 2,977 3,135 3,229 Repairs & Maint 0.14 7,008 8,285 8,171 8,134 9,291 9,512 9,659 9,698 10,230 10,770 11,094 Snow & Ice Removal 0.08 3,894 4,603 4,540 4,519 5,161 5,284 5,367 5,388 5,683 5,983 6,162 Landscaping 0.05 2,415 2,855 2,815 2,804 3,202 3,277 3,329 3,342 3,526 3,712 3,822 Insurance 0.06 2,773 3,774 3,771 4,055 4,297 4,542 4,735 4,855 5,330 5,819 6,152 G&A 0.01 299 354 349 348 397 407 413 415 437 460 474 Management Fee 0.07 3,647 5,087 4,928 6,777 7,715 7,705 7,778 7,466 7,986 8,540 8,609 RE Taxes 0.10 5,061 6,887 6,879 7,402 7,842 8,290 8,640 8,858 9,731 10,618 11,225Total Reimbursements 0.54 27,136 34,255 33,831 36,406 40,609 41,785 42,732 42,844 45,900 49,037 50,767

TOTAL GROSS INCOME 5.77 290,029 333,356 330,397 442,359 490,770 494,256 501,336 495,874 522,871 542,383 550,5420 (22,744) (6,871) (34,899) (35,500) (34,025) (30,245) (18,493) (29,503) (40,281) (41,014)

EFFECTIVE GROSS REVENUE 5.77 290,029 310,612 323,526 407,460 455,270 460,231 471,091 477,381 493,368 502,102 509,528EXPENSES

Utilities (0.07) (3,405) (3,507) (3,612) (3,721) (3,832) (3,947) (4,066) (4,188) (4,313) (4,443) (4,576) Repairs & Maint (0.23) (11,700) (12,051) (12,413) (12,785) (13,168) (13,564) (13,970) (14,390) (14,821) (15,266) (15,724) Snow & Ice Removal (0.13) (6,500) (6,695) (6,896) (7,103) (7,316) (7,535) (7,761) (7,994) (8,234) (8,481) (8,735) Landscaping (0.08) (4,032) (4,153) (4,278) (4,406) (4,538) (4,674) (4,814) (4,959) (5,108) (5,261) (5,419) Insurance (0.17) (8,489) (8,744) (9,006) (9,276) (9,554) (9,841) (10,136) (10,440) (10,754) (11,076) (11,409) G&A (0.01) (500) (515) (530) (546) (563) (580) (597) (615) (633) (652) (672) Management Fee (0.23) (11,601) (12,424) (12,941) (16,298) (18,211) (18,409) (18,844) (19,095) (19,735) (20,084) (20,381) RE Taxes (0.31) (15,492) (15,957) (16,435) (16,928) (17,436) (17,959) (18,498) (19,053) (19,625) (20,213) (20,820) G&A Maintenance (0.07) (3,500) (3,605) (3,713) (3,825) (3,939) (4,057) (4,179) (4,305) (4,434) (4,567) (4,704)

TOTAL EXPENSES (1.30) (65,219) (67,651) (69,824) (74,888) (78,557) (80,566) (82,865) (85,039) (87,657) (90,043) (92,440)NET OPERATING INCOME 4.47 224,810 242,961 253,702 332,572 376,713 379,665 388,226 392,342 405,711 412,059 417,088CAPITAL COSTS

Tenant Improvements (0.25) (12,590) (44,321) (24,865) (79,223) 0 0 (16,603) 0 (29,690) 0 0 Leasing Commissions (0.06) (3,022) (10,327) (15,841) (38,027) 0 0 (12,693) 0 (18,915) 0 0 CapEx (0.15) (7,541) (7,767) (8,001) (8,241) (8,488) (8,742) (9,005) (9,275) (9,553) (9,840) (10,135)

TOTAL CAPITAL COSTS (0.46) (23,153) (62,415) (48,707) (125,491) (8,488) (8,742) (38,301) (9,275) (58,158) (9,840) (10,135)OPERATING CASH FLOW 4.01 201,657 180,546 204,995 207,081 368,225 370,923 349,925 383,067 347,553 402,219 406,953

Vacancy Loss (10.00%)



EXISTING LEASE EXPIRATIONS

RentableCalendar Number Square Feet

Year of Suites Expiring Annual [1] Cumulative [1]

2018 0 0 0.00% 0.00%2019 0 0 0.00% 0.00%2020 0 0 0.00% 0.00%2021 2 38,375 76.33% 76.33%2022 0 0 0.00% 76.33%

Beyond 1 6,338 12.61% 88.94%

Subtotal 3 44,713 88.94% 88.94%Vacant 3 5,562 11.06% 100.00%

TOTAL 6 50,275 100.00% 100.00%

[1] Based on 50,275 Square Feet.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2018 2020 2022

Ren

tabl

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quar

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et


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LIMITING CONDITIONSCushman & Wakefield is the exclusive agent for the sale of this property and, as such, will act as the Seller’s Agent. Consequently, the prospective purchaser should not disclose any confidential information to Cushman & Wakefield.

This Offering Memorandum was prepared by Cushman & Wakefield, and has been reviewed by Seller. It contains selected information pertaining to the Property and does not purport to be all-inclusive or to contain all of the information that a prospective purchaser may desire. All financial projections are provided for general reference purposes only and are based on assumptions relating to the general economy, competition, and other factors that, therefore, are subject to material change or variation. An opportunity to inspect the Property will be made available to qualified prospective purchasers.

The subject property is being offered on a no representation or warranty “As-Is” basis.

In this Offering Memorandum, certain documents, including leases and other materials, are described in summary form and do not purport to be complete nor, necessarily, accurate descriptions of the full agreements involved, nor do they constitute a legal analysis of such documents. Interested parties are expected to independently review all documents.

This Offering Memorandum is subject to prior placement, errors, omissions, changes, or withdrawal without notice and does not constitute a recommendation, endorsement, or advice as to the value of the Property by Cushman & Wakefield, or the Seller. Each prospective purchaser is to rely upon its own investigation, evaluation, and judgment as to the advisability of purchasing the Property described herein.

Seller expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or to terminate discussions with any party at any time with or without notice. Seller shall have no legal commitment or obligation to any purchaser reviewing this Offering Memorandum or making an offer to purchase the Property unless a written agreement for the purchase of the Property has been fully executed, delivered, and approved by the Seller, and any conditions to Seller’s obligations thereunder have been satisfied or waived. Cushman & Wakefield is not authorized to make any representations or agreements on behalf of Seller.

This Offering Memorandum is the property of Cushman & Wakefield, and may be used only by parties approved by Cushman & Wakefield. The Property is privately offered, and by accepting this Offering Memorandum, the party in possession hereof agrees (i) to return it to Cushman & Wakefield, and (ii) that this Offering Memorandum and its contents are of a confidential nature and will be held and treated in the strictest confidence. No portion of this Offering Memorandum may be copied or otherwise reproduced or disclosed to anyone without the prior written authorization of Cushman & Wakefield and Seller. The terms and conditions set forth above apply to this Offering Memorandum in its entirety.

Cushman & Wakefield

550 S. Tryon Street | Suite 3400

Charlotte, NC 28202

+ 1 704 375 7771 | cushmanwakefield.com

550 South Tryon Street Suite 3400 | Charlotte, NC 28202 | +1 704 375 7771

EXPERIENCE A NEW LEADERIN COMMERCIAL REAL ESTATE SERVICES.

SAM YOUNGInvestment Advisor

+1 704 887 [email protected]

DAVID HOPPEInvestment Advisor+ 1 704 335 4446

[email protected]

CATHARINE SPANGLERVA License #0225196994

Senior Vice PresidentT +1 804 344 7140

[email protected]

confidential grey rock plaza offering ......co., walgreens, rite aid, and food city. the town of...

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