Multi-Tenant Retail Investment. NEC Signal Butte Rd & Southern Ave Mesa, AZ

Transcription

1 Multi-Tenant Retail Investment NEC Signal Butte Rd & Southern Ave Mesa, AZ

2 INVESTMENT ADVISORS Danny Gardiner Investment Associate (602) Chad Tiedeman Senior Investment Advisor (602) All property showings are by appointment only.

3 Table of Contents INVESTMENT SUMMARY 4 Aerial Overview Investment Highlights PROPERTY OVERVIEW 6 Site Plan Property Description Rent Roll (Actual) Rent Roll (Proforma) Income & Expenses Analysis Prospective Financing & Analysis TENANT PROFILES 12 AREA OVERVIEW 13 Exterior Photos Property Aerials Demographics CONTACT 18

4 Signal Butte Rd (PLANNED) ±18,100 VPD Southern Ave Future Development Mountain Vista Marketplace ±68,500 VPD Potential Anchor Tenant ±22,300 VPD ±13,400 VPD ±70,000 VPD

5 Investment Summary Investment Highlights 5 INVESTMENT PROPERTY Phoenix Commercial Advisors is pleased to have been selected as the exclusive advisors for the sale of the shops on Signal Butte, located on the northeast corner of Signal Butte Road and Southern Avenue in Mesa, Arizona. This investment opportunity includes a retail strip center that is 83% leased to an excellent mix of national, regional and local tenants as well as a PAD for future development. The shopping center is located less than 1-mile from Mountain Vista Medical Center (178-bed hospital), The District at Mountain Vista (luxury apartment community) and Skyline High School (±1,900 students). This offering presents an investor with an excellent opportunity to acquire an 83% leased retail strip center and Pad with future upside through lease-up and an excellent tenant mix. INVESTMENT OVERVIEW Property Address 1113 S Signal Butte Rd Mesa, AZ Total Offering Price $4,100,000 Cap Rate 7.17% (actual) Occupancy 83% Total GLA Land Area ±16,675 SF ±2.57 Acres Year Built 2005 Net Operating Income (Actual) ±$267,564 Shops Price (7.17% Cap) $3,730,000 PAD Price (37,000 SF at $10 PSF) $370,000 STRONG FUNDAMENTALS Strong Annual Rent Increases Strong annual rent increases offer a hedge against inflation Long-Term Stable Tenants Gentle Dental, Barro s Pizza, Cleaners and Nail Spa have been tenants since 2006 Potential Upside The shops are 83% leased, providing future upside through lease-up in the vacancies and an additional PAD for future development Quality Construction This shopping represents newer quality construction Excellent Tenant Mix Excellent tenant mix with national, regional and local tenants LOCATION HIGHLIGHTS Strong Traffic Pull - Regional power center just south of the US 60 with tenants such as Walmart, Kohl s and Best Buy provides a strong regional draw to the area Mountain Vista Marketplace A 1.3 million square foot mixed-use development anchored by Target planned on the southwest corner The District at Mountain Vista A 384 unit luxury apartment community located just west of the southwest corner Mountain Vista Medical Center Located less than 1-mile west is Mountain Vista Medical Center, a 178-bed hospital Skyline High School The shops are located near Skyline High School with ±1,900 students Excellent Access and Visibility The shops have excellent access and visibility from Signal Butte Road

6 Property Overview Site Plan Signal Butte Rd 106 Invincible Nails Suite Tenant Gentle Dental ±4,530 SF 105 Careful Cleaners ±1,378 SF 106 Barro s Pizza ±3,026 SF Yogurt Kingdom PAD A FUTURE DEVELOPMENT SF ±1,543 SF 109 Available ±1,250 SF 110 American Family ±1,150 SF 111 Edward Jones ±1,000 SF 112 Invincible Nails ±1,200 SF 113 Available ±1,598 SF Site Plan Not Drawn To Scale N

7 Property Overview Property Description 7 LOCATION The retail strip center and PAD is located on the northeast corner of Signal Butte Road and Southern Avenue in Mesa, Arizona. BUILDING AREA The property contains ±16,675 SF square feet of rentable space. PARKING There are approximately 75 parking spaces for the retail strip center and approximately 25 for the future PAD development. PARCELS This property consists of one (1) parcel containing approximately 2.57 acres of land. Signal Butte Rd T PAD A FUTURE DEVELOPMENT APN No. Square Feet Acres T ±112,156 ±2.57 Total ±112,156 ±2.57 Southern Ave COUNTY PARCEL ZONING The property is zoned LC by the city of Mesa. STREET FRONTAGE & ACCESS The center is easily accessible with three (3) access points on Signal Butte Road and two (2) access points on Southern Avenue. TRAFFIC COUNTS Signal Butte Road Southern Avenue US 60 Total ±18,100 VPD ±13,400 VPD ±70,000 VPD ±101,500 VPD

8 Property Overview Rent Roll (Actual) 8 TENANT SQ. FT. TERM ANNUAL BASE RENT Invincible Nails Personal Corporate Personal Personal * Corporate Corporate Personal ACTUAL RENT ROLL ANNUAL NNN CHARGES RENT PER SQ. FT. 4,530 May 2006 to Dec 2021 $109, $30, $24.16 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 INCREASES $24.77 $25.39 $26.02 $26.67 $27.34 $28.02 $28.72 OPTION One (1) Five (5) Year Market 1,378 Sept 2006 to Feb 2014 $16, $9, $12.00 Call Broker For Details 3,026 Jun 2006 to Aug 2016 $83, $20, $27.53 Aug 2014 Aug 2015 $28.36 $29.21 Two (2) Five (5) Year 3% Annual 1,543 Jan 2011 to Dec 2015 $23, $10, $15.00 Jan 2015 $16.00 One (1) Five (5) Year 5% Annual 1,150 Dec 2011 to Nov 2016 $23, $20.50 Dec 2014 Dec ,000 Nov 2008 to Oct 2018 $19, $6, $19.28 Nov 2014 Nov 2015 Nov 2016 Nov 2017 $21.00 $21.50 $19.86 $20.46 $21.07 $21.70 One (1) Five (5) Year Market 1,200 Apr 2011 to Mar 2014 $19, $8, $16.00 Call Broker For Details Available (Vanilla Shell) 1,250 Available (Gray Shell) 1,598 TOTALS 16,675 $294, $85, Occupancy 83% *Early termination clause after Oct 31, 2014 Vacant Land (PAD) - Investor Pricing Gross Rental Income $294, Land Size (SF) 37,000 Expenses Reimbursement $85, Price Per SF $10.00 Total Income $380, Land Price $370, Less Vacancy Factor Actual Investor Pricing + PAD Site Less Total Expenses $112, Shops Price (7.17% Cap) $3,730, Pad Price $370, NOI $267, TOTAL PRICE $4,100, Estimated Expense Breakdown (16,675 SF) Taxes $30, $1.82/SF Insurance $4, $0.25/SF CAM $62, $3.75/SF Management $15, $0.92/SF Total $112, $6.75/SF

9 Property Overview Rent Roll (Proforma) 9 TENANT SQ. FT. TERM ANNUAL BASE RENT Invincible Nails Personal Corporate Personal Personal * Corporate Corporate Personal PROFORMA RENT ROLL ANNUAL NNN CHARGES RENT PER SQ. FT. 4,530 May 2006 to Dec 2021 $109, $30, $24.16 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 INCREASES $24.77 $25.39 $26.02 $26.67 $27.34 $28.02 $28.72 OPTION One (1) Five (5) Year Market 1,378 Sept 2006 to Feb 2014 $16, $9, $12.00 Call Broker For Details 3,026 Jun 2006 to Aug 2016 $83, $20, $27.53 Aug 2014 Aug 2015 $28.36 $29.21 Two (2) Five (5) Year 3% Annual 1,543 Jan 2011 to Dec 2015 $23, $10, $15.00 Jan 2015 $16.00 One (1) Five (5) Year 5% Annual 1,150 Dec 2011 to Nov 2016 $23, $20.50 Dec 2014 Dec ,000 Nov 2008 to Oct 2018 $19, $6, $19.28 Nov 2014 Nov 2015 Nov 2016 Nov 2017 $21.00 $21.50 $19.86 $20.46 $21.07 $21.70 One (1) Five (5) Year Market 1,200 Apr 2011 to Mar 2014 $19, $8, $16.00 Call Broker For Details Projected Lease-Up 1,250 New Lease $20, $8, $16.00 Projected Lease-Up 1,598 New Lease $25, $10, $16.00 TOTALS 16,675 $340, $104, Occupancy 100% *Early termination clause after Oct 31, 2014 Gross Rental Income $340, Expenses Reimbursement $104, Total Income $444, Less Vacancy Factor $22, Less Total Expenses $112, NOI $310,112.76

10 Property Overview Income & Expenses Analysis 10 INCOME & EXPENSE ANALYSIS YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR Gross Rental Income $295, $350, $358, $367, $375, $383, $391, $403, $408, $413, Expense Reimbursement (3% growth) $85, $104, $119, $122, $126, $130, $134, $138, $142, $146, Total Income $381, $454, $478, $490, $502, $514, $525, $541, $550, $560, Less Vacancy Factor (5%) Actual $22, $23, $24, $25, $25, $26, $27, $27, $28, Less Total Expenses (3% growth) $112, $115, $119, $122, $126, $130, $134, $138, $142, $146, NOI $268, $316, $335, $343, $350, $358, $365, $376, $380, $385, INVESTMENT PROFORMA ANALYSIS Purchase Price of Shops (7.17% CAP) $3,730, Purchase Price of PAD ($10/SF) $370, TI's ($10/SF for 1,250 SF) $12, TI's ($35/SF for 1,598 SF) $55, Leasing Commissions ($6/SF) $11, Down Time (8 Months@$6.75/SF) $8, Total Investment $4,187, Sales Price of Shops in 2019 (7.25% CAP) - Year 7 Income $5,034, Sales Commission (3%) ($151,042.46) Proceeds from Sale of Shops $4,883, Sales Price of PAD ($18/SF) $666, Sales Commission (6%) ($39,960.00) Proceeds from Sale of Shops $626,040.00

11 Property Overview Prospective Financing & Analysis 11 DEBT SERVICE CALCULATION DETAILS PRICING Interest Rate % Loan Term 5 Year CAP Rate 7.17% Loan Amount $2,050, Amortization 30 Debt Service $121, Down Payment Amount $2,050, Offering Price $4,100, LTV 50% Land Price $370,000 Building Price $3,730,000 Offering Price $4,100,000 LEVERAGE TABLE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR NOI $268, $316, $335, $343, $350, $358, $365, $376, $380, $385, Debt Service $121, $121, $121, $121, $121, $121, $121, $121, $121, $121, Cash Flow After Debt Service $146, $194, $213, $221, $228, $236, $243, $254, $259, $263, Principal Paydown $34, $35, $37, $38, $40, $42, $44, $46, $48, $50, Total Leveraged Return $181, $230, $250, $260, $269, $278, $287, $300, $307, $313, Total Leveraged Yield 8.84% 11.24% 12.22% 12.70% 13.15% 13.60% 14.03% 14.68% 14.99% 15.31% Cash-On-Cash Return 7.17% 9.49% 10.40% 10.80% 11.17% 11.53% 11.87% 12.42% 12.64% 12.85% Purchase in April Year 1 Income (From May to Dec = $97,997) LEVERAGED IRR $2,039,837 Year 2 Income + PAD Sale - Commission $820,613 ~ (Down payment) + (Lease Up) + Income ($2,050,000) + ($87,834) + $97,997 ~ PAD Sale ($18/SF) - Commission (6%) Year 3 Income $213,282 Year 4 Income $221,442 Year 5 Income $228,948 Year 6 Sale in May 2019 $3,099,458 ~ Sale - Commission (3%) + Income - Remaining Principal Leveraged IRR 24.56% *Capping year 7 NOI at 7.25%

12 Tenant Profiles Tenant Profiles 12 Footage: ±1,000 Type of Business: Investing Corporate If you think Edward Jones is like every other large investment firm, think again. Our financial advisors take a personal approach that starts with a face-to-face meeting with you to discuss your investments and your financial goals. We believe that building long-term relationships with our nearly 7 million clients is key to serving their investment needs. Whether it s in the United States or our Canadian affiliate, our financial advisors are located in the communities where you live and work, because that s the best way to get to know you and to help you reach your investment goals. Locations: Over 10,000 Offices in all 50 States Square Footage: ±3,026 Type of Business: Quick Service Restaurant Corporate Barro s Pizza, the family owned and operated pizza restaurant with numerous locations across the Valley, is Arizona s award winning pizzeria for wings, salads, deli-style sandwiches, pasta and pizza. Your favorite lunch and dinner options are all available for dine-in, take-out and delivery at Barro s Pizza! The secret family pizza recipe has been passed down through multiple generations, bringing the original thick, yet fluffy crust and the tangy, sweet and spicy sauce straight from Italy to you. Locations: ±30 Locations in Arizona Footage: ±1,543 Type of Business: Yogurt Personal We are a unique, self serve Frozen Yogurt Shop with 21 great yogurt flavors, 80 luscious toppings, Hamburgers, Corn Dogs and Deli Sandwiches. Square Footage: ±1,150 Type of Business: Insurance Personal For more than 80 years, American Family Insurance has given its customers peace of mind by making their insurance experience easy and convenient. Our caring agents strive hard to meet customers unique needs by offering just the right mix of American Family s auto, home, life, umbrella, business, health, and farm & ranch insurance, as well as retirement products. Located throughout our 19 operating states, American Family s independent contractor agents serve as local, expert and trusted advisors to our customers. Locations: ±3,500 Agents in 19 States Square Footage: ±4,530 Type of Business: Dentist Corporate Gentle Dental Mesa East dentists will treat you like family, while providing a comfortable environment to help ease the nervousness of visiting your dentist. Gentle Dental Mesa East provides state-of-the-art facilities and our dental specialists are trusted for their quality service and wide range of dental specialties. Gentle Dental Mesa East dentists have been proudly caring for the dental needs of the Mesa, AZ community and are dedicated to providing you and your family a brighter and healthier smile. Locations: ±130 Locations in 8 States Square Footage: ±1,378 Type of Business: Dry Cleaning Personal Careful Cleaners has been in business for many years now and even in this tough economy, we re proud to say we re still here! We are a family business, owned and operated, we actually care about our customers and the quality of service we provide them. Locations: 3 East Valley Locations

13 Area Overview Exterior Photos 13

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17 Area Overview Demographics CENSUS, 2013 ESTIMATES WITH 2018 PROJECTIONS Calculated using Proportional Block Groups January Mile 3 Mile 5 Mile Population Estimated Population (2013) 8,866 84, ,295 Projected Population (2018) 9,587 92, ,542 Census Population (2010) 8,578 82, ,600 Census Population (2000) 4,126 52, ,798 Projected Annual Growth (2013 to 2018) 721 7,265 14,248 Historical Annual Growth (2010 to 2013) 288 2,905 5,695 Households Estimated Households (2013) 3,015 33,646 66,249 Projected Households (2018) 3,247 36,485 71,847 Census Households (2010) 2,917 32,480 63,948 Census Households (2000) 1,389 21,323 44,659 Estimated Households with Children (2013) 1,359 10,180 19,603 Estimated Average Household Size (2013) Average Household Income Estimated Average Household Income (2013) $68,922 $56,381 $57,663 Projected Average Household Income (2018) $71,672 $58,625 $59,959 Estimated Average Family Income (2013) $74,941 $65,230 $66,853 Median Household Income Estimated Median Household Income (2013) $67,390 $51,167 $51,359 Projected Median Household Income (2018) $71,792 $54,675 $54,613 Estimated Median Family Income (2013) $74,204 $60,259 $61,239 Daytime Demos (2013) Total Businesses 200 1,553 3,000 Total Employees 1,904 12,709 27,269 Lat/Lon: / SIGNAL BUTTE RD & SOUTHERN AVE MESA, AZ 2014, Sites USA, Chandler, Arizona, Demographic Source: Applied Geographic Solutions 04/2013, TIGER Geography. This report was produced using data from private and government sources deemed to be reliable. The information herein is provided without representation or warranty.

18 Multi-Tenant Retail Investment NEC Signal Butte Rd & Southern Ave Mesa, AZ Confidentiality Statement This Confidential Offering Memorandum has been prepared by Phoenix Commercial Advisors (PCA) for use by a limited number of parties whose sole purpose is to evaluate the possible purchase of the subject property. This Memorandum 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. The information contained in this Memorandum has been obtained from sources we believe to be reliable. While we do not doubt its accuracy, we have not verified it and make 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 taxes 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. All potential buyers must take appropriate measures to verify all of the information set forth herein. Both Phoenix Commercial Advisors (PCA) and the Owner disclaim any responsibility for inaccuracies and expect prospective purchasers to exercise independent due diligence in verifying all such information. The contained information is subject to change at any time and without notice. The recipient of the Memorandum shall not look to the Owner or Phoenix Commercial Advisors (PCA) for the accuracy or completeness of this Memorandum. A prospective purchaser must make its own independent investigations, projections, and conclusions regarding the acquisition of the property without reliance on this Memorandum or any other Confidential Information, written or verbal, from the Broker or the Seller. The Owner expressly reserves the right, at its sole discretion, to reject any offer to purchase the property or to terminate any negotiations with any party, at any time, with or without written notice. Only a fully-executed Real Estate Purchase Agreement, approved by Seller, shall bind the property. Each prospective purchaser and/or broker proceeds at its own risk. FOR MORE INFORMATION, CONTACT: Danny Gardiner Investment Associate (602) dannygardiner@pca .com Chad Tiedeman Senior Investment Advisor (602) ctiedeman@pca .com All property showings are by appointment only East Camelback Road, Suite 215 Phoenix, Arizona P F