single tenant net lease investment portfolio

Single Tenant Net Lease Investment Portfolio

OFFERING MEMORANDUM

PUYALLUP FAIRBANKSLYNNWOOD

Table of Contents

Contact Information

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews.

This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Kidder Mathews has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, current or past tax payments, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

Erik [email protected]

Mike [email protected]

Pamela [email protected]

kiddermathews.com

Executive SummaryThe Opportunity

Investment Highlights

Investment Summary

Property Overview

Aerials

Financial AnalysisRent Roll

Lease Options

Proposed Financing

Tenant Profile

Location OverviewSite Overview

Demographics

01

02

03

04

Executive Summary

01

The Opportunity


Investment Summary

Property Overview

Aerials

KIDDER MATHEWS | OFFERING MEMORANDUM 4Value Village Portfolio

THE OPPORTUNITY


Internet Resistant Retail Value Village is a strong, global thrift store chain offering secondhand clothing, footwear, furniture, books & household items.

Proven Retail Location The tenant has successfully operated these stores for an average of 21 years and has always exercised their renewal options.

Strong Corporate Tenant Value Village owns over 330 thrift stores in the U.S. and Canada.

Passive Investment All expenses are paid directly by the tenant. Landlord is responsible for the roof and structure.

No State Income Tax The assets are located in Alaska and Washington which are 2 of 8 income tax free states.

Investment Summary

Kidder Mathews is pleased to offer for sale a portfolio of well-located Value Village stores in Washington and Alaska. The properties are offered free and clear of debt.

PUYALLUP LYNNWOODFAIRBANKS

$9,660,000OFFERING PRICE

6.25%CAP RATE

$603,786NET OPERATING INCOME

$143PRICE / SF

VALUE VILLAGE FAIRBANKS


PROPERTY OVERVIEW | FAIRBANKS

3023 Airport Way Fairbanks, Alaska 99701

BUILDING

Type Commercial

Year Built 1992

Gross Leasable Area (GLA) ±20,750 SF

Stories 1

Construction Concrete block

Parking 94 spaces

Parking Ratio 4.5 per 1,000 SF

SITE

Land Acres ±1.83

Parcel (APN) 93696

Municipality City of Fairbanks

County Fairbanks North Star, AK

2017 Property Tax Amount $35,721

Assessed Value $2,186,850

Puyallup

W Stewart Ave

W Pioneer AveW

oo

dla

nd A

ve E

7th Ave SW

11th

St

NW

N M

erid

ian

N M

erid

ian

Valley Ave NW

Chrisella Rd NE

VALUE VILLAGE PUYALLUP


PROPERTY OVERVIEW | PUYALLUP

1124 River RoadPuyallup, WA 98371

BUILDING

Type Commercial

Year Built 1986


Stories 1

Construction Masonry

Parking 65 spaces


SITE

Land Acres ±1.64

Parcel (APN) 492020-0888, 492020-0889

Municipality City of Puyallup

County Pierce, WA

2017 Property Tax Amount $27,693.55


Lynnwood


PROPERTY OVERVIEW | LYNNWOOD

17216 WA-99Lynnwood, WA 98037

BUILDING

Type Commercial

Year Built 1992


Stories 1

Construction Reinforced Concrete

Parking 134 spaces


SITE

Land Acres ±2.30

Parcel (APN) 005138-000-102-02

Municipality City of Lynnwood

County Snohomish, WA

2017 Property Tax Amount $34,362.48


176th St SW

168th St SW

164th St SW

188th St SW

76th

Ave

W

44th

Ave

W

36th

Ave

W

64th

Ave

W

52nd

Ave

W

VALUE VILLAGE LYNNWOOD


±23,125 COMBINED VPD Airport Way

Geraghty Ave

Rewak Drive

VALUE VILLAGE FAIRBANKS

N


VALUE VILLAGE PUYALLUP River Rd

±31,512 COMBINED VPD

N


N


Pacific Hwy

±36,819 COMBINED VPD

Financial Analysis

02

Rent Roll

Lease Options

Proposed Financing


TENANTSQUARE

FEETPERCENT

FEETMONTHLY

RENTANNUAL

RENTANNUAL PER SF

LEASE TYPE

LEASE COMMENCEMENT

CURRENT TERM END OPTIONS

Value Village - Lynnwood, WA 22,854 33.78% $24,282.38 $291,389 $12.75 NNN 04/01/92 12/31/23No Remaining Options

Value Village - Puyallup, WA 24,055 35.55% $13,029.79 $156,357 $6.50 NNN 08/01/98 12/31/232 - 5 Year Options at Fair Market Value

Value Village - Fairbanks, AK 20,750 30.67% $13,003.33 $156,040 $7.52 NNN 08/01/98 07/31/232 - 5 Year Options at Fair Market Value

TOTAL 67,659 $50,315.50 $603,786

2018 2019 2020 2021 2022 2023

Net Operating Income $586,645 $603,786 $603,786 $603,786 $603,786 $603,786

RENT ROLL

Note: Value Village Lynnwood’s contracted rent bump occurs 01/01/2019. The cap rate and offering net operating income is based on this rent bump. Seller will credit buyer $17,141 at closing to increase the 2018 NOI to $603,786. The net operating income in 2023 assumes a lease renewal in July 2023 at the Fairbanks location.


TENANTMONTHLY

RENTANNUAL

RENTANNUAL

RENT / SFSF START END COMMENTS

Value Village - Fairbanks, AK $13,003.33 $156,040 $7.52 20,750 08/01/13 07/31/23 Current Term

08/01/24 07/31/28 First Option at Fair Market Value

08/01/29 07/31/33 Second Option at Fair Market Value

LEASE SUMMARY

Tenant Value Village

Guarantor TVI, Inc. dba Value Village and Savers

Lease Type NNN

Security Deposit N/A

Renewal Options 2 - 5 Year Options at Fair Market Value Remaining

EXPENSES

Utilities Tenant Responsibility - Tenant Pays Direct

Taxes Tenant Responsibility - Tenant Pays Direct

Insurance Tenant Responsibility - Tenant Pays Direct

Cams Tenant Responsibility - Tenant Pays Direct

MAINTENANCE OBLIGATIONS

Landlord Roof & Structure

Tenant All Maintenance Except Roof & Structure

TERMS

Exclusives N/A

Estoppels Tenant will provide within 14 days

Right of First Offer No

Option to Purchase No

Lease Abstract

LEASE OPTIONS | FAIRBANKS

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to review the original lease to verify all information contained herein.


TENANTMONTHLY

RENTANNUAL

RENTANNUAL


Value Village - Lynnwood, WA $24,282.38 $291,389 $12.75 22,854 01/01/19 12/31/23 Current Term

Lease Abstract

LEASE OPTIONS | LYNNWOOD

LEASE SUMMARY



Lease Type NNN


Renewal Options No Remaining Options

EXPENSES








TERMS

Exclusives N/A





Note: Value Village Lynnwood’s contracted rent bump occurs 01/01/2019. The cap rate and offering net operating income is based on this rent bump. Seller will credit buyer $17,141 at closing to increase the 2018 NOI to $603,786.


TENANTMONTHLY

RENTANNUAL

RENTANNUAL


Value Village - Puyallup, WA $13,029.79 $156,357 $6.50 24,055 01/01/18 12/31/23 Current Term

01/01/24 12/31/28 First Option at Fair Market Value

01/01/29 12/31/33 Second Option at Fair Market Value

LEASE SUMMARY



Lease Type NNN


Renewal Options 2 - 5 Year Options at Fair Market Value Remaining

EXPENSES








TERMS

Exclusives N/A




Lease Abstract

LEASE OPTIONS | PUYALLUP



$9,660,000

$603,786

6.25%

$143

PRICING SNAPSHOT

Offering Price

Net Operating Income

CAP Rate

Building Price/SF

POTENTIAL LOAN TERMS

BANK LIFE INS CO

Loan to Value 70% LTV 65% LTV

Amortization 15-30 Years 25 Years

Term 5-10 Years 7-10 Years

Rate Range 4.75% - 5.50% 4.75% - 5.25%

Recourse Full Full to Partial

Holdbacks Leasing Fees None

PROPOSED FINANCING

Price $9,660,000

Down Payment $3,381,000

Loan To Value (LTV) 65%

New Loan Amount $6,279,000

Interest Rate 4.60%

Amortization 25

Debt Coverage Ratio 1.43

Current Net Operating Income $603,786

Annual Debt Service ($423,097)

Cash Flow After Debt Service $180,689

LEVERAGED CASH ON CASH RETURN 5.34%

Principal Reduction $137,130

Return with Principal Reduction $317,819

TOTAL RETURN ON EQUITY 9.40%

PROPOSED FINANCING

Loan quote provided by: Glenn Gioseffi Vice President Debt & Equity Finance [email protected]

Tenant Profile

03


Locations 330

Annual Revenue $1+ Billion

Tenant ProfileVALUE VILLAGE

Value Village, a Savers brand, is a for-profit, global thrift retailer offering great quality, gently used clothing, accessories and household goods. Their business model of purchasing, reselling and recycling gives communities a smart way to shop and keeps more than 700 million pounds of used goods from landfills each year. They also help more than 120 nonprofit organizations by paying them for donated goods, which supports their vital community programs and services. All in all, Value Village operates over 330 locations and have 20,000 employees in Canada, the United States, and Australia.

Location Overview

04

Site Overview

Demographics


SITE OVERVIEW | FAIRBANKS

SITE CHARACTERISTICS

• Large, level 1.83 acre parcel with frontage on Airport Way

• Easy access from a signalized intersection

• Site benefits from cross access and cross parking of adjacent retail properties

• Located just off Airport Way, a major east-west retail thoroughfare that leads from Fairbanks International Airport (PAFA) to Ladd Army Airfield (PAFB)


SITE OVERVIEW | LYNNWOOD


• Large, level 2.30 acre parcel with visibility from

Pacific Highway


• Site benefits from cross access and cross parking of adjacent Walmart

• Property includes large pylon sign with high visibility to Highway 99


SITE OVERVIEW | PUYALLUP


• Large, level 1.64 acre parcel with frontage on River Road


• Site benefits from cross access and cross parking of adjacent properties


DEMOGRAPHICS | FAIRBANKS

1 MILE 3 MILES 5 MILES

2017 2,220 12,355 18,359

2022 2,215 12,316 18,429

HOUSEHOLDS


2017 $70,688 $58,572 $63,488

2022 $78,982 $66,039 $72,924

AVERAGE HOUSEHOLD INCOME


2017 5,364 31,247 48,986

2022 5,355 31,244 49,297

POPULATION

$VALUE VILLAGE FAIRBANKS

5 MILES

3 MILES

1 MILE


Edmonds

104

DEMOGRAPHICS | LYNNWOOD

Lynnwood

PUGET SOUND

Martha Lake



2017 8,636 47,803 115,547

2022 9,239 51,220 123,847

HOUSEHOLDS


2017 $72,660 $84,839 $91,002

2022 $87,734 $104,986 $112,785



2017 21,781 125,453 293,890

2022 23,544 135,734 318,189

POPULATION

$

5 MILES

3 MILES

1 MILE


DEMOGRAPHICS | PUYALLUP

5 MILES

3 MILES

1 MILE

Puyallup

Edgewood

Sumner

Tacoma

VALUE VILLAGE PUYALLUP


2017 3,291 23,227 60,295

2022 3,496 24,644 63,915

HOUSEHOLDS


2017 $69,569 $83,500 $80,539

2022 $83,480 $102,543 $100,274



2017 7,843 56,714 155,273

2022 8,440 60,917 166,659

POPULATION

$

Contact Information

Erik [email protected]

Mike [email protected]

Pamela [email protected]

Kidder Mathews 601 Union Street, Suite 4720 Seattle, WA 98101

kiddermathews.com

single tenant net lease investment portfolio

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