east hills plaza · executive vice president retail capital markets lic. 01890271 mobile +1 858 752...

O F F E R I N G M E M O R A N D U M

Bakersf ie ld , CA 93306

EAST HILLS PLAZA2611-2673 FASHION PLAZA

NOT INCLUDED

Executive Vice President Retail Capital MarketsLic. 01890271Mobile +1 858 752 3078Direct +1 949 724 5690 [email protected]

Senior Vice President Retail Capital MarketsLic. 01302079Mobile +1 949 275 8807Direct +1 949 724 [email protected]

Associate Vice President Retail Capital MarketsLic. 01987844Mobile +1 760 685 6873Direct +1 949 724 [email protected]


Associate Vice President Retail Capital MarketsLic. 10401244229 NYMobile +1 917 515 9975Direct +1 949 724 [email protected]

El Warner Charley Simpson Caitlin Zirpolo Jordan Gomez David Maloy

Bakersfield OverviewRetail Market Overview

Area Overview12

Offering SummaryInvestment Highlights

Executive Summary2Local Area Map Site Plan Physical Description

Property Description6

Rent RollInvestment Summary

Financial Overview16

Table of Contents

Exclusively Listed By

2611-2673 Fash ion P laza | Bakersf ie ld , CA 1Col l iers In ternat iona l

2 Co l l iers In ternat iona l

EXECUTIVEsummary

Colliers Retail Capital Market Team is pleased to present the sale of East Hills Plaza, a 37,160 square foot neighborhood retail center centrally located in Bakersfield, California just southeast of the 178 Freeway and the Mt. Vernon Avenue exit.

The shopping center is shadow anchored by a Walmart Supercenter and is 100% occupied by 11 quality tenants including Big Lots, Sally Beauty, Metro PCS and Baskin Robbins.

East Hills Plaza is an exceptional opportunity to acquire a stable cash flow with attractive growth in the revenue from fixed annual increases and below market rent. Combine this with historically low interest rates and double digit leveraged return are achievable.

Asking Price $8,000,000

Total GLA 37,160 SF

Occupancy 100%

Number of Tenants 11

Price PSF $215 PSF

In-Place Cap-Rate 7.14%

Leveraged Return 12.97%

Total Land Area 4.01 Acres (1 Parcel)

Financing No Existing Debt – Loan Quotes Available

Offering Summary


Investment Highlights

New financing projected to provide a return of 12.97%.

Desirable demographic profile with over 120,000 people living within a three-mile radius with an average household income of $51,049 annually.

Strategically located within one of the dominant retail corridors in Bakersfield that includes Walmart, Target, Home Depot, Lowes Home Improvement, Albertsons and FoodsCo.

Attractive projected NOI growth rate of 3.7% annually over the next 10 years.

Conveniently located in northeast Bakersfield just south of the 178 freeway at the Mt. Vernon Avenue exit.

Adjacent to the former East Hills Mall, a future mixed-use redevelopment that will transform the submarket.

37,160 SF retail center that is 100% leased to a synergistic mix of national, regional and local tenants including Big Lots, Sally Beauty, GameStop, Metro PCS, Maggie’s Coffee Shop and Baskin Robbins.

Shadow Anchored by a Walmart Supercenter since 1992. Walmart expanded to 125,000 SF in 2010 to include a grocery department within the store.

Anchored by an 18,660 SF Big Lots! store that is only paying $0.75 PSF/Month in rent. Significant upside exists in leasing this space at a market rent.


Impressive historical occupancy with seven of the eleven tenants occupying their space for over 10 years including Big Lots (27 years), Sally Beauty (18 years) and Baskin Robbins (21 years).

+10YEARS

Multiple buildings provides the future owner with the flexibility to separately parcel each building and sell off portions of the Property in order to lower basis and increase returns.

Anchored by Big Lots, a publicly traded company (symbol “BIG” Nasdaq) with over 1,400 stores in 47 states, $5 billion in revenue and an S&P debt rating of B2.

DOWNTOWNBAKERSFIELD

PARK SORRENTO APTS258 UNITS

EAST BAKERSFIELDHIGH SCHOOL

BERNARD STREET

MALL VIEW ROAD

NEW MARKET WAY

NOT INCLUDED



PROPERTYdescr ip t i on


Local Area Map

DOWNTOWNBAKERSFIELD

BAKERSFIELD COLLEGE

BAKERSFIELD MEMORIAL HOSPITAL

BAKERFIELD MUNICIPAL AIRPORT

KERN MEDICAL CENTER

KERN RIVER

EAST BAKERSFIELD HIGH SCHOOL

Site Plan

65,231 SF

2673

2665

2661

2657

2653

2647

2641

2631-C

2631-B

2631-A


SUITE TENANT SF

2621 Big Lots, Inc. - Store 18,660

2631-A Dr. Sae kyu Oh 3,136

2631-B Star Beauty Sales Inc. 1,170

2631-C Vatos Tacos Grill 2,194

2641 Sacramento Auto Insurance Center 2,000

2647 Sally Beauty Company 1,500

2653 Metro PCS 1,480

2657 GameStop Inc. 1,500

2661 Nails Spa 1,500

2665 Maggie's Coffee Shop 2,220

2673 Baskin Robbins 1,800

NEW MARKET WAY

BERNARD STREET


NOT INCLUDED

Physical DescriptionTotal GLA 37,160 SF

Year Built 1992

Address 2611–2673 Fashion Plaza, Bakersfield, CA 93306

County Kern County

Number of Buildings Three (One single tenant, two multi-tenant)

Total Land Area 4.01 Acres (174,675 sq. ft.)

Type of Ownership Fee Simple

Parcels One Parcel (130-161-85-009)

Zoning C-2; General Commercial

Cross Streets Bernard Street - 12,799 VPDMt. Vernon Ave. - 26,331 VPDOswell Street - 33,355 VPDState Route 178 - 36,027 VPD

North The former 350,000-square-foot East Hills Mall is located north of the Subject Property. Owned by the Save Mart Cos. Inc., discussions are actively ongoing regarding the highest and best use for this prominent re-development site.

South The Subject is bordered to the South by multi-family apartment communities and single-family residential subdivisions.

East Additional retail including Target, Big 5 Sporting Goods and PetSmart are all located east of the Subject Property. Oswell Street, a primary north/south arterial that connects with the 178 freeway is just east of the Subject Property.

West Additional retail including Home Depot, Office Max, Albertsons, Lowes Home Improvement and Rite -Aid are all located west of the Subject Property. Mt. Vernon Avenue, a primary north/south arterial that connects with the 178 freeway is just west of the Subject Property.

The Subject is located just south of State Route 178 between the Mt. Vernon and Oswell Street freeway exits in northeast Bakersfield, California.

2611-2673 Fash ion P laza | Bakersf ie ld , CA 1 0Col l iers In ternat iona l


AREAoverv iew

Bakersfield OverviewSituated within Kern County, Bakersfield cover

about 151-square-miles of land and is one of the

Central Valley’s largest metros, with more than

380,000 residents. Nestled between the southern

end of the San Joaquin Valley and the Central

Valley region, Bakersfield is known as a hub for

both agriculture and energy production.

Employment is growing at around 2.3% year-over-

year and has marginally outperformed the national

benchmark over the past two years. Moreover,

income growth, after steadily falling in conjunction

with oil prices, rose to almost 3% in 2018. Median

household income is roughly $57,000 per year.

Bakersfield transportation is easily accessible and

includes two of California’s main logistics routes,

Interstate 5 and Highway 99. The community

has proximity to the state’s biggest ports in Los

Angeles and Oakland, as well as more than 40

million consumers within a four-hour drive.

POPULATION

2019 Estimate 18,817 120,332 386,009

2024 Projection 19,037 123,446 404,082

Growth 2019-2024 1.17% 2.59% 4.68%

HOUSEHOLDS

2019 Estimate 5,929 35,431 121,504

2019 Average Household Income $56,843 $51,049 $79,444

2019 Household Size 3.09 3.34 3.16

Hispanic or Latino 69% 73% 52%

Daytime Employees 6,759 40,810 158,055


1

MILE

3

MILES BAKERFIELD

The retail vacancy rate dropped -0.1% to 9.1% in the second quarter of 2019

and has fluctuated in the 8.5% to 10.0% range over the last five years.

Retail asking rates have steadily increased over 11% in the last five years

from $16.20 PSF in the second quarter of 2014 to $18.00 PSF as of

Q2-2019.

The Subject Property is located just south of the former 350,000 SF

East Hills Mall. Owned by the Save Mart Cos. Inc., discussions are actively

ongoing regarding the highest and best use for this prominent

re-development site.


Retail Market Overview

Submarket

Bakersfield, CA

Total Retail Inventory

11,200,000 SF

Vacancy Rate

9.1% as of Q2-2019

Average Asking Rate

$18.00 PSF/Yr. as of Q2-2019


FUTURE REDEVELOPMENTOF THE FORMER

EAST HILLS MALL178

178

COLUMBUS STREET

VERN

ON A

VENU

E

OSW

ELL

STRE

ET

FASHION PLAZA

MALL VIEW ROAD

BERNARD STREET

MARKET WAY

NOT INCLUDED

STATE ROUTE 178


FINANCIALoverv iew

Unit # Tenant Square Feet Contract Rental Term # of Years

ExpensesTotal % GLA PSF/Mo $/Year PSF/Yr $/Year Increases From To Tenant

2621 Big Lots, Inc. - Store 18,660 50.2% $0.75 $14,071 $9.05 $168,852 Opt. 1: $9.54 10/01/92 01/31/23 27 Years NNN

Comments Tenant has one 5-year option remaining. Tenant currently pays $1,000 per month for two containers parked in the back of their store ($500 each) and is assumed to continue paying that amount until their lease expires.

2631-A Dr. Sae kyu Oh 3,136 8.4% $1.64 $5,143 $19.68 $61,716 None 05/01/04 04/30/22 15 Years NNN

Comments Tenant has one 5-year option remaining. Tenant is assumed to vacate at the end of their lease.

2631-B Star Beauty Sales Inc. 1,170 3.1% $1.24 $1,449 $14.86 $17,388 9/20: 3% Annual 10/01/15 09/30/20 4 Years NNN

Comments Tenant has one 5-year option remaining.

2631-C Vatos Tacos Grill 2,194 5.9% $1.40 $3,080 $16.85 $36,96010/20: 3% Annual Opt. 1: 3% Annual Opt. 2: 3% Annual

10/01/19 09/30/24 New Tenant NNN

Comments Tenant has one remaining 5-year option.

2641 Sacramento Auto Insurance Center 2,000 5.4% $2.00 $4,000 $24.00 $48,000 Opt. 1: $25.50 06/01/10 06/30/22 9 Years NNN


2647 Sally Beauty Company 1,500 4.0% $1.83 $2,750 $22.00 $33,000 None 05/19/01 05/31/21 18 years NNN

Comments Tenant has no remaining options. Tenant is paying percentage rent of 4% over $700,000. 2018 sales were $1,024,302.

Rent Roll (as of 01/01/2020)


Unit # Tenant Square Feet Contract Rental Term # of Years

ExpensesTotal % GLA PSF/Mo $/Year PSF/Yr $/Year Increases From To Tenant

2653 Metro PCS 1,480 4.0% $1.76 $2,610 $21.16 $31,320 2/20: 3 Annual 03/08/10 01/31/22 9 Years NNN

Comments Tenant has no remaining options.

2657 GameStop Inc. 1,500 4.0% $1.86 $2,786 $22.29 $33,432 Opt. 1: $23.64 05/01/08 05/31/22 11 Years NNN

Comments Tenant has one 3-year option remaining.

2661 Nails Spa 1,500 4.0% $2.17 $3,252 $26.02 $39,024 6/20: 3% Annual 06/01/18 06/01/06 13 Years NNN

Comments Tenant has no remaining options.

2665 Maggie's Coffee Shop 2,220 6.0% $1.40 $3,108 $16.80 $37,2967/20: 3% Annual Opt. 1: 3% Annual Opt. 2: 3% Annual

06/01/19 06/30/24 New Tenant NNN

Comments Tenant has two remaining 5-year options.

2673 Baskin Robbins 1,800 4.8% $1.74 $3,131 $20.87 $37,572 11/20: 2.5% Annual Opt. 1: 2.5% Annual 10/22/98 10/31/23 21 Years NNN


Total GLA 37,160 $45,380 $544,560

Rent Roll (as of 01/01/2020)

As Of 01/01/2020 SF % of Area

Area Occupied 37,160 100.00%

Area Vacant 0 0.00%

Total GLA 37,160 100.00%


DEBT SUMMARY NEW LOAN

Loan Amount: $5,200,000

LTV (Initial DCF Valuation): 65.0%

Additional Funded Cap: $0

Interest Rate: 4.00%

Fixed or Floating: Fixed

Loan Term: 10 Yrs

Funding Month: Month 1

Amort Term: 360 Months

I/O Period: 48 Months

Loan Fee: 0.5%

PURCHASE SUMMARY

Purchase Price: $8,000,000

Purchase Price $/SF: $215.29

Net Rentable Area: 37,160

In Place NOI 571,044

In Place Cap Rate 7.14%

Cash on Cash 363,044

Cash on Cash Return 12.97%

Investment Summary


IN PLACE INCOME & EXPENSE SUMMARY

Income Total

Base Rental Revenue $544,560

Percentage Rent $15,504

Net Rental Income $560,064

Expense Reimbursements $283,980

Effective Gross Income $844,044

Expenses Total Total

Real Estate Taxes $2.58 $95,781

Property Insurance $0.20 $7,270

CAM/R&M/Utilities $3.69 $137,177

Management 3.88% $32,772

Operating Expenses $273,000

Net Operating Income $571,044

Asking Price $8,000,000

In Place Cap Rate 7.14%

New Debt $5,200,000

Required Equity $2,800,000

Debt Service $208,000

In Place Cash Flow 363,044

Cash on Cash Return 12.97%

178

BAKERSFIELD COUNTRY CLUB

FASHION PLACE

BERNARD STREETMALL VIEW ROAD

FUTURE REDEVELOPMENTOF THE FORMER

EAST HILLS MALL

NOT INCLUDED


Colliers International 3 Park Plaza | Suite 1200

Irvine, CA 92614 | United States colliers.com/greaterlosangeles

This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2019. All rights reserved.

Executive Vice President Retail Capital MarketsLic. 01890271Mobile +1 858 752 3078Direct +1 949 724 5690 [email protected]

Senior Vice President Retail Capital MarketsLic. 01302079Mobile +1 949 275 8807Direct +1 949 724 [email protected]



Associate Vice President Retail Capital MarketsLic. 10401244229 NYMobile +1 917 515 9975Direct +1 949 724 [email protected]

El Warner Charley Simpson Caitlin Zirpolo Jordan Gomez David Maloy

east hills plaza · executive vice president retail capital markets lic. 01890271 mobile +1 858 752...

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