ABSOLUTE NNN LA FITNESS (CHICAGO MSA) 506 JANES AVENUE BOLINGBROOK, IL 60440

Transcription

1 OFFERING MEMORANDUM ABSOLUTE NNN LA FITNESS (CHICAGO MSA) 506 JANES AVENUE BOLINGBROOK, IL Capital Markets Investment Properties

2 AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an Affiliate ) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the Property ) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum. This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the Owner ), to be allinclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property. The Owner expressly reserved 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 entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited.

3 LA FITNESS CONTACT US MICHAEL KAIDER NNN Specialist First Vice President DEBT & STRUCTURED FINANCE: Geoffrey Harris TABLE OF CONTENTS 04 EXECUTIVE SUMMARY 06 FINANCIAL SUMMARY 09 TENANT OVERVIEW 10 MARKET OVERVIEW

4 THE OFFERING CBRE is pleased to exclusively present for sale the fee interest in this NNN LA Fitness located in Bolingbrook, a southwest suburb of Chicago, Illinois. The original 15 year corporate guaranteed lease has over 7 years of term remaining and zero landlord responsibilities. The lease also includes three options to extend for five years each. The asset is located in an established and successful retail corridor with national retailers such as Meijer, Ikea, Walgreens, Bed Bath & Beyond, and Costco among many others in the immediate area. The Promenade Bolingbrook is an open air retail and entertainment shopping center located directly north of LA Fitness, creating significant draw to the area. The Promenade is anchored by Macy s, DSW, H&M, Barnes & Noble, and the area s only Bass Pro Shop. The Promenade includes over 60 stores, 12 restaurants, as well as ipic Theatres. LA Fitness is highly visible from Interstate 355, Chicago s major north-south artery, which enjoys over 113,000 vehicles per day. There is a full access interchange with Interstate 355 on Boughton Road, less than 1 mile from the subject property. LA Fitness is the largest non-franchised fitness club operator in the United States, with over 800 clubs aross the United States and Canada. The clubs offer a wide range of amenities, including state-of-the-art equipment and cardio area, over 20 different exercises classes, indoor heated lap pool with whirlpool spa and saunas, racquetball and basketball courts, and personal training sessions. 4

5 LA FITNESS INVESTMENT HIGHLIGHTS + + The opportunity to acquire fee interest in a NNN LA Fitness store located near the Boughton Road and Interstate 355 full access interchange in Bolingbrook, a southwest suburb of Chicago, Illinois. + + The original 15 year lease has just over 7 years of term remaining, a corporate guarantee, zero landlord responsibilities and three 5-year option periods. + + LA Fitness is located in an established and successful retail corridor. National retailers within the area include Meijer, Ikea, Starbucks, Walgreens, Jimmy Johns, Bed Bath & Beyond, Costco and Sally Beauty Supply, among many others. + + The asset has tremendous visibility from Chicagoland s major north-south artery, Interstate 355, which enjoys daily traffic counts of over 113,000 vehicles per day. The asset is also due north of Interstate 55, which sees traffic counts of over 103,000 vehicles per day. There is a full access interchange with Interstate 355 on Boughton Road less than 1 mile from the subject property. Representative Photo + + The Promenade Bolingbrook is an open air retail and entertainment shopping center located directly north of LA Fitness, creating a significant draw to the area. The Promenade offers shoppers more than 60 stores, 12 restaurants, and is anchored by Macy s, DSW, H&M, Barnes & Noble, and Bass Pro Shop. Other notable tenants include Victoria s Secret, Loft, Bath & Body Works, Charming Charlie, and GNC. + + LA Fitness serves an affluent primary trade area that includes over 68,000 residents with an average household income of $86,700. That annual income is 11% higher than the Illinois average and 17% higher than the national average. Representative Photo 5

6 FINANCIAL OVERVIEW Offering Price Cap Rate Rent Lease Structure Building Size Year Built Parcel Size Tenant Guarantee $15,030,000 Fitness International, LLC 7.25% is one of the nation s $1,089,702 NNN 43,367 SF acres +/Fitness International, LLC 15 years Term Remaining 7+ years Rent Commencement January 24, 2008 Lease Expiration January 31, 2023 Renewal Options 3 - Five year options Option Rental Increases Landlord Responsibilities locations in the United States and Canada. *See Below 10% every 5 years None *Rent shall be increased by three (3) times the increases in the CPI but in no event more than 10% or less than the previous Base Monthly Rent every 5 years. 6 health clubs with over 800 Corporate Guarantee Original Lease Term Base Term Rental Increases leading and fastest growing Representative Photo

7 LA FITNESS AERIAL VIEW Parcel outlines are approximate

8 AERIAL VIEW Parcel outlines are approximate 8 Flood Zone Disclosure: According to flood hazard maps published by the FEMA the site is within Zone X as indicated on Community Map Panel No C0058E dated September 6, 1995, an area determined to be outside the 500-year floodplain determined to be outside the 1% and 0.2% annual chance floodplain.

9 LA FITNESS TENANT OVERVIEW LA Fitness is the largest non-franchised fitness club operator in the United States, with approximately 800 clubs throughout the United States and Canada. The clubs offer a wide range of amenities, including state-of-the-art equipment and cardio area, over 20 different exercises classes, indoor heated lap pool with whirlpool spa and saunas, racquetball and basketball courts, and personal training sessions. LA Fitness was established in 1984 in Southern California and is a privately owned company, with ownership interests held by private equity firms Madison Dearborn Partners, Seidler Equity Partners and CIVC Partners. LA Fitness Corporate Overview Tenant Name Fitness International, LLC Tenant Ownership Status Private Tenant Corporate Store Locations 800+ Corporate Headquarters Irvine, California 9

10 MARKET OVERVIEW Bolingbrook, Illinois The village of Bolingbrook is a southwest suburb of Chicago and benefits from Interstates 355 and 55 as well as Illinois Route 53, providing excellent access to the surrounding area. Bolingbrook is approximately 28 miles southwest of Chicago s Central Business District and home to more than 73,000 residents and 2,464 businesses that employ approximately 34,500 people. The average household income for the village of Bolingbrook is $90,967, which is 16% higher than the Illinois average and 23% higher than the national average. Bolingbrook is located within DuPage and Will County and the subject property is located within Will County. Will County is the fourth largest county in Illinois and one of the fastest growing counties in the United States, with a population base approaching 685,000. Will County has a highly skilled and well-educated workforce, employing over 328,400 people in 25,468 businesses. Major employers in Will County include Presence St. Joseph Medical Center, Silver Cross Hospital, Will County Government, Walmart Supercenter, and Valley View School District. Primary Trade Area Characteristics LA Fitness is located in a prominent retail corridor with The Promenade Bolingbrook located directly north of the asset, creating a significant draw to the area. The Promenade Bolingbrook is an open air shopping center anchored by Macy s, DSW, H&M, Barnes & Noble, and the area s only Bass Pro Shop. Other notable retailers in the area include Costco, Meijer, Ikea, Walgreens, Bed Bath & Beyond, Loft, and Victoria s Secret. LA Fitness s trade area has an attractive demographic profile with over 68,000 and 201,000 residents within a three and five mile radius, respectively. Within a three mile radius, there are 24,083 households with an average household income of nearly $87,000. Within a five mile radius, there are 73,567 households with an average household income over $101,000. The percentage of owner-occupied housing units is 74% and 78% within both a three and five mile radius, respectively. TRADE AREA DEMOGRAPHICS 1 MILE 3 MILES 5 MILES Population 2015 Population 11,560 68, , Population 11,444 67, , Population 11,720 68, , Population 10,693 68, ,022 Age 2015 Median Age Average Age Households 2015 Households 3,940 24,083 73, Households 3,917 24,244 74, Households 3,963 23,747 72, Households 3,501 23,254 67,394 Average Household Size Income 2015 Median Household Income $66,226 $69,486 $79, Average Household Income $82,493 $86,639 $101, Per Capita Income $28,117 $30,649 $37,027 Housing Units 2015 Housing Units 4,157 25,675 77,642 Occupied Units 3,940 24,083 73,567 Vacant Housing Units 217 1,592 4, Owner-Occupied Housing Units 2,831 17,883 57, Renter-Occupied Housing Units 1,109 6,200 16,407 Education 2015 Population Age 25 and Over 7,572 45, ,290 High School thru Associates 58.7% 56.4% 49.7% Bachelor's Degree 20.8% 21.9% 27.0% Graduate Degree 9.9% 11.7% 16.2% Place of Work Total Businesses 332 2,924 7,533 Daytime Employment (Total Employees) 6,717 43,822 92,980

11 MARKET OVERVIEW Chicago MSA Overview Chicago is one of the most attractive and dynamic markets in the nation. Chicago boasts an attractive retail market, with the third largest economy in the nation and more than $116 billion in annual retail sales (2014 metro Chicago sales; Melaniphy). The market s vibrant business climate, central geographic location, diversified economy and available human resources have helped Chicago achieve a prominent position as a world-class city in finance, international trade, manufacturing, transportation, culture and the arts. One of Chicago s biggest commercial advantages is its diversified economy and deep labor pool. With no single emphasis on any one business sector or industry, Chicago s economy is like a well-balanced portfolio and is better equipped than most cities to weather a slowdown in any particular industry. The Chicago MSA has a highly diversified economic base and is home to more than 400 major corporate headquarters, including 31 Fortune 500 headquarters. Demographics The Chicago metropolitan statistical area is home to over 9.5 million residents, making it the third most populous MSA in the nation. The population is projected to grow 1.2% over the next five years to nearly 9.7 million. Residents earn an average household income of $83,133; more than 6% higher than the state average of $78,306 and nearly 10% higher than the national average of $74,165. Transportation Chicago is one of the primary transportation hubs in the United States. Chicago is home to O Hare International Airport, the 3rd busiest airport in the nation. According to the Chicago Department of Aviation, in 2014 the airport serviced over 70 million passengers to and from 210 destinations around the world via more than 40 passenger carriers. Chicago is also home to Midway Airport, which serviced more than 21 million passengers via eight passenger carriers to 75 destinations in the US, Mexico, Jamaica, the Dominican Republic and Canada in Several major interconnected expressways and interstate highways pass though the Chicago area. Interstates 80, 88 and 290 are the main east/west routes. Interstates 55 and 57 provide access to the south and southwestern suburban areas. Communities to the north and northwest are accessed via Interstates 90 and 94. North/south travel between the western suburbs is facilitated by Interstates 294 and 355.

12 PROPERTY MAPS 12

13 CONTACT US MICHAEL KAIDER NNN Specialist First Vice President CBRE 700 Commerce Drive Suite 550 Oak Brook, IL DEBT & STRUCTURED FINANCE: Geoffrey Harris Capital Markets Investment Properties