section 1 · 2020. 2. 25. · 14 investment overview current pro forma price $12,995,000...

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PROPERTY INFORMATION 3

LOCATION INFORMATION 9

FINANCIAL ANALYSIS 13

DEMOGRAPHICS 23

ContentsConfidentiality & DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictlyconfidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichapand should not be made available to any other person or entity without the written consent ofMarcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverifiedinformation to prospective purchasers, and to establish only a preliminary level of interest in thesubject property. The information contained herein is not a substitute for a thorough duediligence investigation. Marcus & Millichap has not made any investigation, and makes nowarranty or representation, with respect to the income or expenses for the subject property, thefuture projected financial performance of the property, the size and square footage of theproperty and improvements, the presence or absence of contaminating substances, PCB's orasbestos, the compliance with State and Federal regulations, the physical condition of theimprovements thereon, or the financial condition or business prospects of any tenant, or anytenant’s plans or intentions to continue its occupancy of the subject property. The informationcontained in this Marketing Brochure has been obtained from sources we believe to be reliable;however, Marcus & Millichap has not verified, and will not verify, any of the information containedherein, nor has Marcus & Millichap conducted any investigation regarding these matters andmakes no warranty or representation whatsoever regarding the accuracy or completeness of theinformation provided. All potential buyers must take appropriate measures to verify all of theinformation set forth herein.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant orlessee identified in this marketing package. The presence of any corporation’s logo or name is notintended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporationof Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commerciallisting of Marcus & Millichap, and is solely included for the purpose of providing tenant lesseeinformation about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS

Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301

TABLE OF CONTENTS

Section 1 PROPERTY INFORMATION

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PROPERTY OVERVIEWZecca Plaza Shopping Center is a 110,593-square foot, multi-tenant regional grocery-anchored retail center in Gallup, NewMexico. Anchored by a high-volume Albertsons grocery store that has been in the center for over 46 years, the center has astrong tenant base with a complementary mix of national and local credit tenants. The subject property benefits from closeproximity to three of the largest Native American Reservations in the country with a cumulative population exceeding370,000 residents.

MAJOR TENANTS• Albertsons

• Goodwill Industries

• O'Reilly Auto Parts

• Aaron's

• H&R Block

OFFERING SUMMARY

Sale Price: $12,995,000

Building Size: 110,593 SF

Lot Size: 6.453 Acres

Price / SF: $117.50

Cap Rate: 8.46%

NOI: $1,099,969

Pro Forma Cap Rate: 9.59%

Pro Forma NOI: $1,246,119

Year Built: 1974

County: McKinley

Ownership Type: Fee Simple


PROPERTY INFORMATION | EXECUTIVE SUMMARY

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PROPERTY DESCRIPTIONZecca Plaza Shopping Center is a 110,593-square foot multi-tenant regional retail center in Gallup, New Mexico. Anchored by Albertsons grocery store, the center has a strong tenant basewith a complementary mix of national and local credit tenants, including O’Reilly Auto Parts, Goodwill Industries, Aaron’s, H&R Block, Oasis Laundromat, Metro PCS, Domino’s Pizza, SunLoan, TBK Bank, and others. Albertsons reports strong sales and pays percentage rent in addition to base rent. The center is currently 93 percent occupied with the majority of the tenantshaving triple-net leases. Albertsons and Sun Loan reimburse for taxes only. Originally constructed in 1974, the building is situated on 6.45 acres.

LOCATION DESCRIPTIONThe subject property is located on East Historic U.S. Highway 66, one of the major east/west thoroughfares running parallel to Interstate 40. The center has excellent exposure and access,with ingress and egress points from Highway 66, Verdi Street, East Aztec, and Mollica Drive. Cumulative traffic counts exceed 19,300 vehicles per day. Walgreens pharmacy is adjacent tothe property, and other neighboring retailers include Pro Cuts, Dairy Queen, Long John Silver’s, Pizza Hut, U-Haul, Pinnacle Bank, Subway, McDonald’s, Sonic Drive-In, Wendy’s, DollarGeneral, The UPS Store, and more. The one-mile average household income is $69,754, and the five-mile population is over 22,600.

The City of Gallup is the county seat of McKinley County, which serves a population nearing 75,000 residents. Gallup is the most populous city between Flagstaff and Albuquerque along thehistoric U.S. Route 66 and serves as the primary commercial and tourist hub for a wide area of northwestern New Mexico. Gallup has the only enclosed mall (Rio West Mall) within a125-mile radius, serving 3.6 million customers per year. The city swells from a population of 22,000 Monday through Thursday to 150,000 on the weekends. Serving over a 15,000-squaremile territory, the large geographical trade area makes Gallup a uniquely strong retail market for its size.

Gallup is in close proximity to Navajo Nation, Hopi Reservation, and Zuni Indian Reservation, all of which are subsidiaries of The Bureau of Indian Affairs. The Bureau of Indian Affairs is anagency of the federal government responsible for the administration and management of over 55 million acres of land with the purpose of enhancing quality of life, promoting economicopportunity, and protecting the trust assets of the American Indians. Collectively, the reservations are home to more than 370,000 residents.


PROPERTY INFORMATION | PROPERTY DESCRIPTION

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BUILDING INFORMATION

Occupancy % 93%

Tenancy Multiple

Year Built 1974

County McKinley

PROPERTY HIGHLIGHTS


PROPERTY INFORMATION | COMPLETE HIGHLIGHTS

• 110,593-Square Foot, Grocery-Anchored Retail Center

• 93% Occupied | Upside Potential in Leasing Vacant Space

• Anchored by Albertsons Grocery Store | Tenant in the Center for 46 Years | Tenant Reports Strong Sales and Pays Percentage Rent | Lease has a Cap on Percentage Rent, and Store Revenue Well Exceeds the Cap | Rent is Below Market, and the Rent-to-Sales Ratio is 1.38% | Tenant has One Renewal Option Remaining

• Complementary Mix of Tenants | 68% of the Gross Leasable Area has Credit Tenants

• Proposed Partial Recourse Life Insurance Financing with Attractive Terms | 3.5% Interest Rate on 25-Year Amortization Schedule | Cash on Cash Return is Over 13% | Total Return is over 17.50%

• Majority of the Leases are Triple-Net

• Situated on a Large 6.45-Acre Lot with Ample Paved Parking

• Recent Improvements Include Parking Lot Striping and Repairs and a New Roof on O’Reilly Auto Parts

• Priced at Approximately $117 per Square Foot

• Adjacent to Walgreens Pharmacy

• Located on East Historic U.S. Highway 66 | Major East/West Thoroughfare | Runs Parallel to Interstate 40

• Multiple Ingress and Egress Points from all Surrounding Streets | Cumulative Traffic Counts Exceed 19,300 Vehicles per Day

• Gallup Serves as a Regional Shopping Hub | The City's Population Swells from 22,000 During Week Days to 150,000 on the Weekends

• Primary Commercial Hub to Navajo Nation, Hopi, and Zuni Indian Reservations with a Cumulative Population Exceeding 370,000

• Subject Property Provides an Established Grocery-Anchored Retail Center that Services a Growing and Stable Population Base

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LOCATION INFORMATION | RESERVATION MAP


PROPERTY INFORMATION | ADDITIONAL PHOTOS

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Section 2 LOCATION INFORMATION

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Zecca Plaza Shopping Center


LOCATION INFORMATION | REGIONAL MAP

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LOCATION INFORMATION | AERIAL MAP

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LOCATION INFORMATION | AERIAL MAPS

Section 3 FINANCIAL ANALYSIS

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INVESTMENT OVERVIEW CURRENT PRO FORMA

Price $12,995,000 $12,995,000

Price per SF $117.50 $117.50

CAP Rate 8.46 % 9.59 %

Total Return (yr 1) $1,099,969 $1,246,119

OPERATING DATA CURRENT PRO FORMA

Gross Income $1,298,293 $1,450,043

Operating Expenses $198,324 $203,924

Net Operating Income $1,099,969 $1,246,119


FINANCIAL ANALYSIS | FINANCIAL SUMMARY

PRICING WITH PROPOSED FINANCING LIST PRICE

Price $12,995,000

Down Payment 35% / $4,548,250

First Trust Deed/Mortgage $8,446,750

Interest Rate/Amortization 3.5% / 25 Yrs.

Net Operating Income $1,099,969

CASH FLOW ANALYSIS

Debt Service ($507,437)

Debt Coverage Ratio 2.17

Net Cash Flow After Debt Service $592,532

Cash-on-Cash Return % 13.03%

Principal Reduction $215,232

Total Return $807,764

Total Return % 17.76%

VALUE INDICATORS

CAP Rate 8.46%

Price/SF $117.50

PROPOSED FINANCING

Lender Life Company

Loan to Value 65%

Interest Rate 3.50%

Amortization Period 25 Years

Loan Term 25 Years

Origination Fee 1%

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FINANCIAL ANALYSIS | PROPOSED FINANCING

INCOME SUMMARY CURRENT PER SF PRO FORMA PER SF

Base Rent $997,835 $9.72 $997,835 $9.72

Vacant Space at Market Rents $0 $0.00 $103,580 $13.03

Percentage Rent (Albertsons) $144,704 $1.31 $144,704 $1.31

Real Estate Taxes Reimbursements $51,429 $0.47 $55,980 $0.51

Insurance Reimbursements $10,452 $0.09 $17,244 $0.16

CAM Reimbursements $76,660 $0.69 $96,700 $0.87

Management Fee Reimbursement $17,213 $0.16 $34,000 $0.31

Gross Income $1,298,293 $11.74 $1,450,043 $13.11

EXPENSE SUMMARY CURRENT PER SF PRO FORMA PER SF

Real Estate Taxes $55,980 $0.51 $55,980 $0.51

Insurance $17,244 $0.16 $17,244 $0.16

Utilities $18,600 $0.17 $18,600 $0.17

Power Sweeping/Power Washing $20,400 $0.18 $20,400 $0.18

Sidewalk Cleaning $7,100 $0.06 $7,100 $0.06

Snow Removal $2,000 $0.02 $2,000 $0.02

Parking Lot Striping $3,500 $0.03 $3,500 $0.03

Common Area/Lighting Repairs $9,800 $0.09 $9,800 $0.09

Supplies $4,100 $0.04 $4,100 $0.04

Security Guard Service $31,200 $0.28 $31,200 $0.28

Management Fee $28,400 $0.26 $34,000 $0.31

Gross Expenses $198,324 $1.79 $203,924 $1.84

Net Operating Income $1,099,969 $9.95 $1,246,119 $11.27

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FINANCIAL ANALYSIS | INCOME & EXPENSES

*Total Annual Rent of $997,835 includes future base rent for Goodwill Industries and O'Reilly Auto Parts as of 7/01/2021. Seller shall credit Buyer the monthly rent differential on a pro rata basis, at closing.

SUITE TENANT NAME

UNIT SIZE (SF)

% OF GLA LEASE START

LEASEEND ANNUAL RENT RENT/SF

CHANGES ON

CHANGES TO

EXPENSE REIMBURSEMENT OPTIONS

LEASETYPE

1 Gallup Quick Clinic 2,065 1.87% 6/01/2014 12/31/2024 $35,240.27 $17.07 $3,708.66 (2) 5-Yr NNN

2 Dragon Express 2,017 1.82% 6/16/2005 7/31/2022 $36,592.45 $18.14 7/01/2021 $18.60 $3,609.50 (2) 5-Yr NNN

3 Chili Factory 1,761 1.59% 12/01/2005 11/30/2021 $30,282.00 $17.20 Annual *CPI $3,153.35 (1) 5-Yr NNN

4 Goodwill Industries 13,214 11.95% 6/06/2005 5/31/2026 $129,026.50 $9.76 Annual *CPI $23,699.72 (1) 5-Yr NNN

5 Oasis Laundromat 7,530 6.81% 8/01/2009 MTM $82,800.00 $11.00 $13,505.86 (2) 5-Yr NNN

6 Aaron's Rents 8,400 7.60% 4/01/2006 3/31/2021 $97,565.64 $11.61 $15,072.62 NNN

7 Metro PCS 1,680 1.52% 5/01/2018 4/30/2021 $26,734.68 $15.91 $3,014.52 (2) 3-Yr NNN

8 Community Financial 1,560 1.41% 8/01/2002 7/31/2020 $35,570.82 $22.80 $2,796.37 (1) 3-Yr NNN

9 Nails & Spa 1,400 1.27% 5/01/2006 7/31/2021 $26,225.45 $18.73 Annual *CPI $2,518.71 NNN

10 NM Credit Corp 2,320 2.10% 3/01/2019 6/30/2022 $33,660.00 $14.51 3/01/2021 $14.80 $4,164.80 (3) 3-Yr NNN

11 - 13 Albertsons (1) 33,005 29.84% 1/30/1974 1/31/2024 $71,432.52 $2.16 $34,754.43 (1) 5-Yr MG

14A Vacant 5,067 4.58% $0.00

14B H&R Block 3,400 3.07% 9/01/2014 4/30/2020 $39,338.17 $11.57 $6,088.55 (1) 5-Yr NNN

14 O'Reilly Auto Parts 13,172 11.91% 6/20/2011 6/30/2026 $136,270.00 $10.35 $23,620.39 (4) 5-Yr NNN

15 - 16 Domino's Pizza 1,320 1.19% 3/01/1996 4/30/2021 $25,200.00 $19.09 $2,360.06 NNN

(1) Tenant shall pay percentage rent in the amount of 2% of Gross Sales in excess of $2,190,126; percentage rent shall not exceed $144,704 during the fifth option and $151,939 during the sixth option. Tenant pays its pro rata share of taxes and a fixed amount for CAM reimbursements.

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FINANCIAL ANALYSIS | RENT ROLL

SUITE TENANT NAME

UNIT SIZE (SF)

% OF GLA LEASE START

LEASEEND ANNUAL RENT RENT/SF

CHANGES ON

CHANGES TO

EXPENSE REIMBURSEMENT OPTIONS

LEASETYPE

17 Addus HomeCare 1,059 0.96% 1/15/2020 3/31/2023 $18,000.00 $17.00 $1,903.91 (1) 3-Yr NNN

18 - 19 Vacant 1,695 1.53% $0.00

20 Continental Loans 1,200 1.09% 8/01/2007 7/31/2022 $25,349.51 $21.12 Annual *CPI $2,161.73 NNN

21 Walgreens (Storage) 1,060 0.96% 9/15/2006 9/30/2024 $20,188.50 $19.05 (1) 5-Yr Gross

22 Vacant 1,185 1.07% $0.00

23 Sun Loan 1,571 1.42% 4/01/2001 3/31/2022 $36,720.00 $23.37 4/01/2021 $23.91 $794.92 MG

24 Midwest Finance 1,200 1.09% 6/15/2009 10/31/2023 $24,720.00 $20.60 11/01/2021 $21.22 $2,161.73 NNN

0.00% 11/01/2022 $21.85

25 Yogo Mojo 1,080 0.98% 6/01/2014 9/30/2019 $16,686.00 $15.45 $1,943.58 (2) 2-Yr NNN

Pad TBK Bank 2,632 2.38% 9/01/2013 3/31/2022 $43,032.00 $16.35 $4,720.11 (1) 5-Yr NNN

Kiosk CU Anytime LLC 11/01/2016 10/31/2021 $7,200.00 Gross

TOTAL VACANT 7,947 7.00%

TOTAL OCCUPIED 102,646 93.00%

TOTAL 110,593 100.00% $997,834.51 $155,753.52

*Total Annual Rent of $997,835 includes future base rent for Goodwill Industries and O'Reilly Auto Parts as of 7/01/2021. Seller shall credit Buyer the monthly rent differential on a pro rata basis, at closing.

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FINANCIAL ANALYSIS | RENT ROLL

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FINANCIAL ANALYSIS | SITE PLAN

Albertsons

Albertsons is an American grocery store founded and headquartered in Boise, Idaho. With morethan 2,260 stores, Albertsons is the second-largest supermarket chain in North America.Albertsons ranked 53rd in the 2018 Fortune 500 list of largest United States corporations by totalrevenue. This location has been in the center for more than 46-years and recently completed interiorremolding improvements. The rent-to-sales ratio is 1.38%.

FOUNDED 1939LOCATIONS 2,260+SQ. FT. 33,005OPTIONS (1) 5-Year

O'Reilly Auto Parts19575,200+

American auto parts retailer that provides automotive aftermarket parts, tools,supplies, equipment, and accessories. Based in Springfield, Missouri, O'Reilly AutoParts is a public company whose stock is traded on the NASDAQ under the symbolORLY.

FOUNDEDLOCATIONSSQ. FT.

OPTIONS

13,172

(4) 5-YearTENANT TRADE NAME ORLY (NASDAQ)

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FINANCIAL ANALYSIS | TENANT INFORMATION

Goodwill

Goodwill Industries is an American nonprofit 501(c)(3) organization that providesjob training, employment placement services, and other community-basedprograms for people who have barriers preventing them from otherwise obtaining ajob. Goodwill is funded by a massive network of retail thrift stores which operate asnonprofits as well.

FOUNDED 1902LOCATIONS 3,300+SQ. FT. 13,214OPTIONS (1) 5-Year

Metro PCS

MetroPCS is a prepaid wireless carrier brand owned by T-Mobile. Based inBellevue, Washington, T-Moblie is a public company whose stock is traded on theNASDAQ under the symbol TMUS.

FOUNDEDLOCATIONSSQ. FT. TENANT TRADE NAMEOPTIONS

H&R Block

H&R Block is an American tax-preparation company. As of 2018, H&R Blockoperates approximately 12,000 retail tax offices staffed by tax professionalsworldwide. Based in Kansas City, Missouri, H&R Block is a public company whosestock is traded on the New York Stock Exchange under the symbol HRB.

FOUNDED 1955LOCATIONS 12,000+SQ. FT. 3,400TENANT TRADE NAME HRB (NYSE)OPTIONS (1) 5-Year

199410,500+1,680TMUS (NASDAQ) | Parent Company(2) 3-Year

Aaron's

Aaron's Inc. is a lease-to-own retailer of furniture, electronics, appliances, andcomputers. Based in Atlanta, Georgia, Aaron's is a public company whose stock istraded on the New York Stock Exchange under the symbol AAN.

FOUNDED 1955LOCATIONS 1,800+SQ. FT. 8,400TENANT TRADE NAME AAN (NYSE)OPTIONS None

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Domino's Pizza

Domino's Pizza is a multinational pizza restaurant chain. Based in Ann Arbor,Michigan, Domino's Pizza is a public company whose stock is traded on the NewYork Stock Exchange under the symbol DPZ.

FOUNDED 1960LOCATIONS 16,000+SQ. FT. 1,320TENANT TRADE NAME DPZ (NYSE)OPTIONS None

Sun Loan

Sun Loan Company offers personal installment loans with manageable paymentplans.

FOUNDEDLOCATIONSSQ. FT. OPTIONS

19862801,571None

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Section 4 DEMOGRAPHICS

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POPULATION 1 MILE 3 MILES 5 MILES

Total Population 4,916 19,920 23,500

Median age 37.7 35.8 35.6

Median age (Male) 35.9 34.3 34.1

Median age (Female) 39.5 37.2 37

HOUSEHOLDS & INCOME 1 MILE 3 MILES 5 MILES

Total households 1,779 7,076 8,130

# of persons per HH 2.5 2.7 2.8

Average HH income $62,212 $59,635 $59,357

Average house value $182,304 $118,069 $100,650

ETHNICITY (%) 1 MILE 3 MILES 5 MILES

Hispanic 29.9% 34.1% 33.5%

RACE 1 MILE 3 MILES 5 MILES

% White 47.5% 41.3% 39.0%

% Black 1.4% 1.6% 1.5%

% Asian 3.2% 2.5% 2.3%

% Hawaiian 0.2% 0.1% 0.1%

% American Indian 44.0% 50.1% 52.9%

% Other 3.7% 4.3% 4.2%

* Demographic data derived from CoStar Realty Information Group


DEMOGRAPHICS | DEMOGRAPHICS MAP & REPORT

section 1 · 2020. 2. 25. · 14 investment overview current pro forma price $12,995,000...

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