Offering Memorandum. McDonald s Restaurant Ground Lease W 95th Street Overland Park (Kansas City), KS Atlanta Chicago New York Houston

Transcription

1 Subject Property Offering Memorandum McDonald s Restaurant Ground Lease W 95th Street Overland Park (Kansas City), KS New 20 Year Ground Lease with Years Remaining Dominant Trade Area in Kansas City MSA Strong 15% Rent Increases Every 5 Years Corporate Guaranty HH Income $78k in 3 Miles Atlanta Chicago New York Houston Phoenix Los Angeles San Francisco Tulsa

2 Confidential Disclaimer This Confidential Memorandum has been prepared by Stan Johnson Company ( SJC ) and is being furnished to you solely for the purpose of your review of the commercial property located at W 95th Street, Overland Park, KS (the Property ). The material contained in this Offering Memorandum shall be used for the purposes of evaluating the Property for acquisition and shall not be used for any purpose or made available to any other person without the express written consent of Stan Johnson Company ( Broker ). By accepting the Confidential Memorandum, you acknowledge and agree that: (1) all of the information contained herein and any other information you will be receiving in connection with this transaction, whether oral, written or in any other form (collectively, the Materials ), is confidential; (2) you will not reproduce the Confidential Memorandum in whole or in part; (3) if you do not wish to pursue this matter, you will return this Confidential Memorandum to SJC as soon as practicable together with all other materials relating to the Property which you may have received from SJC; and (4) any proposed actions by you which are inconsistent in any manner with the foregoing agreements will require the prior written consent of SJC. This Confidential Memorandum has been prepared by SJC, based upon certain information pertaining to the Property and any information obtained from SJC to assist interested parties in making their own evaluation of the Property is offered on a no representation or warranty provision other than customary warranties of title and is sold on an as-is, where-is basis and with all faults. The material and transaction does not purport to be all inclusive. This Confidential Memorandum contains descriptive materials, financial information and other data compiled for the convenience of parties interested in the Property. The Materials are being delivered by SJC to prospective investors with the understanding that it is not all inclusive and that it is qualified in its entirety by independent investigation by prospective investors of those matters which they deem appropriate in evaluating this offering without reliance upon SJC, the Broker or any of their respective affiliates or any of the information set out in the Materials. Neither SJC, the Broker, nor any of their respective affiliates have independently verified any of the information contained herein or in any of the Materials, and no representations or warranties as to the accuracy or completeness thereof or of any other kind whatsoever are made or intended and none should be inferred. SJC, for itself and its affiliates of the Property, expressly disclaim any and all liability for statements or representations, express or implied, contained herein or for omissions from the Materials or for any other written, oral or other format of communication transmitted to a prospective investor in the course of its evaluation of the proposed transaction. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. The terms and conditions described herein are subject to change without notice. This Confidential Memorandum does not constitute an offer to accept any investment proposal but is merely a solicitation of interest with respect to the investment described herein. The Confidential Memorandum does not constitute an offer of security. The investment described herein may be financed or withdrawn from the market, without prior notice. By accepting this Confidential Memorandum you agree to release SJC and hold it harmless from any kind of claim, expense, or liability arising out of your discovery or purchase of the Property. SJC reserves the right to request the return of the Materials at any time. Ownership of the Property reserves the right to negotiate with one or more prospective investors at any time. Offered Exclusively By Andy Gatchell Associate Director agatchell@stanjohnsonco.com Mark Lovering Associate mlovering@stanjohnsonco.com In Association With: Chad Byerly KS Lic. #BR Stan Johnson Company 303 East Wacker Drive Suite 1111 Chicago, Illinois P: F: Page 2

3 Table of Contents About the Investment Investment Summary & Highlights 5 Lease Abstract & Rent Schedule 6 Tenant Information Tenant Overview 8 Location Overview Location Overview 10 Oak Park Mall Map 11 Aerial Map 12 Oak Park Mall Shopping Corridor 13 Oak Park Commons East Site Plan 14 Subject Property Site Plan 15 Subject Property Photos 16 Surrounding Retail Photos 17 Oak Park Mall Retailers 18 Demographics 19 Page 3

4 Section 1: About the Investment Aerial View of Subject Property

5 Subject Property Photos Price $3,735, % Cap Rate Investment Highlights Stan Johnson Company is proud to offer for sale to qualified investors a rare opportunity to purchase a best-in-class, brand new McDonald s Ground Lease located at W 95th Street, Overland Park, KS. This property is a brand new building constructed at the end of This single tenant investment opportunity features a acre parcel of land 100% leased to McDonald s corporation on a 20 year ground lease with years remaining. The lease features rare 15% rental bumps every 5 years in the base term and in the option periods. The ground lease is absolute net requiring no landlord responsibilities. The property is located in a high barrier to entry market along a heavily trafficked retail corridor (W 95th Street: 33,609 VPD, Quivira Road: 30,471 VPD) making this asset a once in a lifetime investment opportunity. The property serves as an outparcel to Oak Park Commons East, a 222,553 SF power center with strong national tenants including Ross, ULTA, Hobby Lobby, and Shoe Carnival. It is located directly across 95th Street from Oak Park Mall, the largest mall in the state of Kansas. This is a corporate lease with McDonald s, and an opportunity to own one of the most secure investments in today s marketplace. McDonald s is a $13.6 billion company and rated BBB+ by S&P, which is the top line of investment grade credit. The company has over 1.8 million employees, serves 70 million customers daily, and has locations in over 100 countries across the world. Trophy Asset Rare opportunity to own a Best In Class asset, leased to a strong corporate credit tenant, located directly across from Kansas City s #1 mall in the premier retail trade area of affluent Johnson County Kansas. Johnson County s average household income ranks among the top 1% in the U.S. and its population base has steadily grown by an average of 10,000 people annually. Best-in-Class Corporate Guaranty McDonald s (NYSE: MCD) is the world s largest hamburger chain, serving approximately 70 million customers daily at 35,000 restaurants worldwide. McDonald s reports annual revenues of $28 billion, a net income of $5 billion and a net worth in excess of $13.6 billion. Long-Term Lease McDonald s has years remaining on a 20-year Ground Lease subject to an early termination option with payment of a termination fee, as described on Page 6. NNN Ground Lease Highly passive investment with tenant responsible for all operating expenses. Strong Rent Escalations Preferred 15% rental escalations every five (5) years through the base term and options. Irreplaceable Location The property is prominently located in a high barrier to entry retail trade area, directly across from the main entrance to the #1 mall in Kansas City, Oak Park Mall. Oak Park Mall is home to the area s only Nordstrom department store and sees over 15 million visitors annually. Outstanding Kansas City Suburb with Exceptional Demographics Over 229,072 people within a fivemile radius of the subject property with an average household income over $86,548. Page 5

6 Lease Abstract Tenant: Guarantor: Address: Ownership Interest: McDonald s McDonald s USA, LLC W 95th Street Overland Park, KS Ground Lease Building Size: ± 5,498 Land Area: Year Built: 2014 Lease Type: ± Acres Commencement Date: 10/16/2014 Expiration Date: 10/31/2034 Tenant reimburses Landlord for pro rata share of CAM & pays Real Estate Taxes directly Rent Schedule Dates Lease Years Annual Rent Monthly Rent Rent/SF 10/16/ /31/ $155,004 $12,917 $28.20 % Increase 11/1/ /31/ $178,248 $14,854 $ % 11/1/ /31/ $204,984 $17,082 $ % 11/1/ /31/ $235,740 $9,645 $ % 11/1/ /31/ (Option 1) $271,092 $22,591 $ % 11/1/ /31/ (Option 2) $311,760 $25,980 $ % 11/1/ /31/ (Option 3) $358,524 $29,877 $ % 11/1/ /31/ (Option 4) $412,308 $34,359 $ % 11/1/ /31/ (Option 5) $474,156 $39,513 $ % Remaining Lease Term: Years* 11/1/ /31/ (Option 6) $545,280 $45,440 $ % Annual Base Rent: $155,004 Rent Increases: Renewal Options: 15% every 5 years Six (6), Five (5) year renewal options *Tenant has the option to terminate the Lease by giving written notice at any time after the end of the 10th Lease Year, which termination notice shall be accompanied by a check from Tenant to Owner in the amount of the Lease Termination Fee. The Lease Termination Fee shall equal the sum of 12 months of the base rent then payable plus 12 months additional rent (CAM, Tax etc ). The Lease Termination Fee is in addition to, and not in lieu of, the rent due from Tenant until the termination date. If Tenant elects to terminate the Lease, the Lease shall terminate 6 months after the date of Owner s receipt of both such termination notice and the Lease Termination Fee. Therefore, the earliest physical termination date is 4/30/25 (6 months after the 10th Lease Year), but along with the Lease Termination Fee in the amount of 12 months gross rent, the economic termination date is 4/30/26, effectively leaving at least 10 years of firm economic term remaining on the Lease as of today. Subject Property Photos Page 6

7 Section 2: Tenant Information Aerial View of Subject Property

8 Tenant Overview McDonald s is the world s largest chain of hamburger fast food restaurants. The company has more than 1.8 million employees, serving approximately 70 million customers daily in over 100 countries across the world. The golden arches franchise began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald. In 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc later joined the company as a franchise agent in He subsequently purchased the chain and oversaw its worldwide growth. McDonald s primarily sells hamburgers, cheeseburgers, chicken, French fries, breakfast items, coffee, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruit. TENANT PROFILE Company: McDonald s Corporation Ownership: Public Stock Symbol: NYSE: MCD Total Revenue: $28 Billion Net Income: $5 Billion Net Worth: $13.6 Billion Credit Rating: S&P: BBB+ / Stable Locations: 35,000 Employees: 1.8 Million Years in Business: 75 McDonald s is the leading global food service retailer with more than 35,000 restaurants world wide. More than 80% of the chain s restaurants are owned and operated by independent local franchisees. A McDonald s restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation s revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated locations. This subject location is operated by Corporate. As of November 20, 2015, McDonald s Corporation (NYSE: MCD) had total revenues in excess of $28 billion, a net income of $5 billion and a net worth in excess of $13.6 billion. McDonald s holds an S&P rating of BBB+/Stable. Headquarters: Website: Oakbrook, IL Subject Property Photos Page 8

9 Section 3: Location Information Aerial View of Subject Property

10 Location Overview Overland Park is the second most populous city in the State of Kansas. Located in Johnson County, it is a suburb of Kansas City, Missouri and part of the Kansas City metropolitan area, a region spanning the Kansas-Missouri border. Downtown Kansas City Overland Park Arboretum The service sector constitutes most of the Overland Park economy. Health-care, retail, trade, professional and technical services, finance, insurance, and information technology are the city s largest industries. Downtown Overland Park, KS Kansas City skyline Oak Park Mall More than 40 companies are headquartered in Overland Park, including global telecommunications firm Sprint Worldwide, which occupies 240 acres of the city and employs approximately 8,000 people. Other companies that call Overland Park home include YRC Worldwide, Black & Veatch, Waddell & Reed, Ferrellgas, Ash Grove Cement Company and Compass Minerals. Kansas City is officially nicknamed the City of Fountains. With over 200 fountains, the city claims to have the second most in the world, just behind Rome. The fountains at Kauffman Stadium, commissioned by original Kansas City Royals owner Ewing Kauffman, are the largest privately funded fountains in the world. The city also has more boulevards than any other city except Paris and has been called Paris of the Plains. The overwhelming popularity of soccer in the city, both professionally and as a youth sport, as well as Sporting Park being a popular home stadium for the US Men s National Team has led to the city being known to many as The Soccer Capital of America. Residents are known as Kansas Citians. It is sometimes referred to colloquially as the Heart of America as it is near both the population center of the United States and the geographic center of the 48 contiguous states. Greater Kansas City is headquarters to several Fortune 500 companies (Sprint Nexel Corporation, H&R Clock, YRC Worldwide Inc., and International Assets Holding Corporation) and Fortune 1000 corporations Great Plains Energy, Aquila, AMC Theatres, Applebee s, DST Systems, Garmin International, Cerner, Seaboard Corporation, and Russell Stover Candies. Arrowhead Stadium JC Nichols Fountain - Kansas City Page 10

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12 W 87TH STREET (53,368 VPD) QUIVIRA ROAD (30,471 VPD) Subject Property WESTRIDGE MIDDLE SCHOOL W 95TH STREET (33,609 VPD) N INTERSTATE 35 (110,231 VPD) HIGHWAY 69 (93,474 VPD) Page 12

13 INTERSTATE 35 (110,231 VPD) QUIVIRA ROAD (30,471 VPD) SUBJECT W 95TH STREET (33,609 VPD) OAK PARK PLAZA furniture gallery WESTRIDGE MIDDLE SCHOOL Page 13

14 Oak Park Commons East - Site Plan 93RD ST N SUBJECT PROPERTY 95TH ST (33,609 VPD) Page 14

15 Subject Property - Site Plan DEMISED LAND TOTAL LAND AREA: 30,225 Square Feet Acres DUAL DRIVE-THRU LANES W 95th Street (33,609 VPD) N Page 15

16 Subject Property Photos Page 16

17 Surrounding Area Photos Page 17

18 Oak Park Mall Page 18

19 Demographics W 95th Street Overland Park, KS 0-1 mi. 0-3 mi. 0-5 mi. Population 2010 Population 10,700 96, , Population 10,756 97, , Population 11,028 99, , Annual Rate 0.10% 0.13% 0.36% Annual Rate 0.50% 0.52% 0.74% MCDONALD S Households 2015 Total Households 4,390 42,588 98, Total Households 4,513 43, , Annual Rate 0.55% 0.60% 0.82% 2015 Median Household Income $57,687 $58,255 $64, Average Household Income $74,696 $78,348 $86,548 N Page 19

20 Andy Gatchell Associate Director Mark Lovering Associate Listed in Association with: Chad Byerly KS Lic. #BR Stan Johnson Company 303 East Wacker Drive Suite 1111 Chicago, Illinois P: F: 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 notice.