$8,255,000 5.50% CAP Rate Walgreens Pharmacy #13159 Mobile, Alabama 21+ years of $454,000 NNN rent guaranteed Across the street from the highest grossing CVS in the Mobile, AL market All growth is moving west toward this location High traffic intersection with 31,406 vehicles per day Walgreens corporate guarantees the rent Investment grade credit True NNN lease with no management responsibilities
Investment Summary Price $8,255,000 CAP Rate 5.50% Annual Income 454,000 Years Guaranteed ~21.5 years 1 Mile 3 Mile 5 Mile Population 931 14,191 33,941 Avg. HH Income $56,651 $58,436 $57,240 This Walgreens store was completed and opened for business approximately three years ago. This is one of the few deals available in the market today with more than 20 years of guaranteed income. Across the street is the highest grossing CVS/pharmacy in Mobile, Alabama. All the growth is moving west toward Semmes which has recently been incorporated into Mobile. Mobile cannot expand to the east due to the bay. This is a high traffic intersection with 31,406 vehicles per day.
Property Details and Lease Summary Address 9195 Moffett Road, Semmes, AL 36575 Year Built 2012 Building Size 14,550 Square Feet Lot Size 1.39 acres Tenant Walgreens (NASDAQ:WBA) Rent Start Date July 2012 Lease End Date June 2087 Options to Terminate Tenant may terminate every five (5) years, with 12 months notice, after the 300th month. Regional Map
Walgreens Pharmacy #13159 Store Photos
Site Plan
About Walgreens Boots Alliance Walgreens Boots Alliance is the first global pharmacy-led, health and wellbeing enterprise in the world. Our purpose is to help people across the world lead healthier and happier lives. Walgreens Boots Alliance was created through the combination of Walgreens and Alliance Boots in December 2014. This transaction brought together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted healthcare services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years. The Company, with a presence in more than 25 countries, employs over 370,000 people and is the largest retail pharmacy, health and daily living destination in the USA and Europe. The Company s size, scale, and expertise will help us to expand the supply, and address the rising cost of, prescription drugs in the USA and worldwide. By leveraging these advantages and opportunities, as well as the full benefit of our best practices and expertise, Walgreens Boots Alliance will be positioned to create substantial incremental efficiency, synergy and growth opportunities. The creation of Walgreens Boots Alliance provides an opportunity to further accelerate the development of a fully integrated, global platform for the future to provide innovative ways to address health and wellness challenges. Our Company is well positioned to expand customer offerings in existing markets and become the health and wellbeing partner of choice in emerging markets.
Walgreens Boots Alliance -- Segment Structure Walgreens Boots Alliance Segment Structure A leading drugstore chain in the USA The largest retail pharmacy chain in Europe A leading global pharmaceutical wholesaler and distributor The first global pharmacy-led, health and wellbeing enterprise in the world 8
Walgreens Boots Alliance -- Retail Pharmacy USA Division The Retail Pharmacy USA Division s principal retail pharmacy brands are Walgreens and Duane Reade. Together, they form the largest drugstore chain in the USA. This Division operates 8,240 drugstores in 50 states, the District of Columbia, Puerto Rico and the US Virgin Islands. As of August 2014, approximately 76% of the population of the USA lives within five miles of a Walgreens. The company sells prescription and non-prescription drugs, as well as general merchandise, including household items, convenience and fresh foods, personal care, beauty care, photofinishing and candy. They provide customers with convenient, omni-channel access to consumer goods and services, pharmacy, and health and wellness services in communities across America. The company s websites, which include Walgreens.com and drugstore.com, receive an average of approximately 60 million visits per month. Integrated with an e-commerce platform, the Walgreens mobile application allows customers to refill prescriptions through scan technology, receive text messages alerting when a refill is due and other front-end functionality, such as photo and shopping features. Prescription drugs account for 64 percent of sales, while retail products are 36 percent. Overall, WBA filled approximately 699 million prescriptions in 2014. 3Q15 Financial Performance Retail Pharmacy U 3Q15 Financial Performance Retail Pharmacy USA GAAP $ million Total Sales $20,425 Gross Profit $5,527 SG&A $4,494 Operating Income $1,033 Operating Margin 5.1% Non-GAAP* $ million Adjusted Gross Profit $5,596 Adjusted SG&A $4,268 Adjusted Operating Income $1,328 Adjusted Operating Margin 6.5%
Item 1B. Unresolved Staff Comments There are no unresolved written comments that were received from the SEC Staff 180 days or more before the end of our fiscal year relating to our periodic or current reports under the Securities Exchange Act of 1934. Walgreens Properties Nationwide Item 2. Properties The Company s locations, including drugstores, infusion and respiratory service facilities, specialty pharmacies and mail service facilities at August 31, 2014 and 2013 are listed below. 2014 2013 2014 2013 2014 2013 Alabama 115 113 Louisiana 154 152 Oklahoma 117 121 Alaska 8 7 Maine 15 15 Oregon 77 80 Arizona 250 258 Maryland 89 80 Pennsylvania 131 138 Arkansas 83 78 Massachusetts 168 185 Rhode Island 26 29 California 646 663 Michigan 232 232 South Carolina 110 119 Colorado 160 172 Minnesota 154 164 South Dakota 14 14 Connecticut 95 125 Mississippi 78 79 Tennessee 254 271 Delaware 65 66 Missouri 219 221 Texas 712 729 District of Columbia 6 5 Montana 14 14 Utah 48 45 Florida 861 881 Nebraska 60 62 Vermont 3 4 Georgia 204 208 Nevada 84 92 Virginia 141 149 Hawaii 19 17 New Hampshire 32 36 Washington 139 140 Idaho 40 42 New Jersey 191 215 West Virginia 17 23 Illinois 610 620 New Mexico 69 68 Wisconsin 228 234 Indiana 201 218 New York 486 527 Wyoming 11 11 Iowa 70 72 North Carolina 263 221 Guam 0 1 Kansas 70 72 North Dakota 1 1 Puerto Rico 120 118 Kentucky 98 103 Ohio 250 272 U.S. Virgin Islands 1 0 TOTAL 8,309 8,582 The Company owned approximately 20% of its retail drugstore locations and leased the remaining locations at August 31, 2014. The leases are for various terms and periods. See Note 3 to the Company s Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Net retail selling space remained consistent at 89 million square feet at August 31, 2014 and 2013. Approximately 20% of Company stores have been opened or remodeled during the past five years, including our Well Experience store format in over 700 locations, including a market-wide transformation in the Indianapolis area and new flagship stores in select markets including Boston, Chicago, Los Angeles, New York City, San Francisco, Washington, D.C., Las Vegas and Puerto Rico. As of August 31, 2014: The Company s retail store operations were supported by 19 major distribution centers with a total of approximately 11 million square feet of space, of which 13 locations are owned. The remaining space is leased. All distribution centers are served by modern systems for order processing control and rapid merchandise delivery to stores. In addition, the Company uses public warehouses and third party wholesalers to handle certain distribution needs. As of August 31, 2014, AmerisourceBergen distributed substantially all of the Company s branded and generic pharmaceutical products. The Company operated 34 principal office facilities containing approximately three million square feet, of which 13 locations were owned. The Company operated two mail service facilities containing approximately 237 thousand square feet, one of which was owned. The Company owned 16 strip shopping malls containing approximately 500 thousand square feet.
Income Statements Trailing 5 Years
Demographics - 1 Mile Radius Trends 2015-2020 Demographic and Income Profile WAG #13159 Prepared by Esri 9195 Moffett Rd,, 36575 Latitude: 30.77865 Ring: 1 mile radius Longitude: -88.25928 Annual Rate (in percent) 2.5 2 1.5 1 0.5 0 Population Households Families Owner HHs Median HH Income Area State USA Population by Age 12 10 Percent 8 6 4 2 2015 2020 0 0-4 5-9 10-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ 2015 Household Income $25K - $34K 8.7% $15K - $24K 11.2% 2015 Population by Race 80 $35K - $49K 14.6% <$15K 15.0% 70 60 $200K+ 0.6% $150K - $199K 2.2% Percent 50 40 30 $50K - $74K 23.1% $75K - $99K 14.0% $100K - $149K 10.6% 20 10 0 White Black Am. Ind. Asian Pacific Other Two+ 2015 Percent Hispanic Origin: 5.2% Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. November 30, 2015 2015 Esri Page 2 of 6
Demographics - 1 Mile Radius Demographic and Income Profile WAG #13159 Prepared by Esri 9195 Moffett Rd,, 36575 Latitude: 30.77865 Ring: 1 mile radius Longitude: -88.25928 Summary Census 2010 2015 2020 Population 841 931 982 Households 288 321 339 Families 222 244 256 Average Household Size 2.92 2.89 2.89 Owner Occupied Housing Units 229 250 263 Renter Occupied Housing Units 59 71 76 Median Age 36.4 38.0 39.5 Trends: 2015-2020 Annual Rate Area State National Population 1.07% 0.58% 0.75% Households 1.10% 0.61% 0.77% Families 0.96% 0.45% 0.69% Owner HHs 1.02% 0.61% 0.70% Median Household Income 1.24% 2.63% 2.66% 2015 2020 Households by Income Number Percent Number Percent <$15,000 48 15.0% 46 13.6% $15,000 - $24,999 36 11.2% 28 8.3% $25,000 - $34,999 28 8.7% 27 8.0% $35,000 - $49,999 47 14.6% 51 15.0% $50,000 - $74,999 74 23.1% 83 24.5% $75,000 - $99,999 45 14.0% 54 15.9% $100,000 - $149,999 34 10.6% 40 11.8% $150,000 - $199,999 7 2.2% 8 2.4% $200,000+ 2 0.6% 2 0.6% Median Household Income $50,310 $53,513 Average Household Income $56,651 $62,853 Per Capita Income $20,301 $22,525 Census 2010 2015 2020 Population by Age Number Percent Number Percent Number Percent 0-4 55 6.5% 59 6.3% 58 5.9% 5-9 62 7.4% 61 6.5% 63 6.4% 10-14 61 7.3% 66 7.1% 67 6.8% 15-19 64 7.6% 58 6.2% 65 6.6% 20-24 54 6.4% 60 6.4% 51 5.2% 25-34 107 12.7% 126 13.5% 127 13.0% 35-44 121 14.4% 127 13.6% 128 13.1% 45-54 122 14.5% 130 13.9% 136 13.9% 55-64 95 11.3% 120 12.9% 134 13.7% 65-74 61 7.3% 79 8.5% 94 9.6% 75-84 31 3.7% 36 3.9% 45 4.6% 85+ 8 1.0% 10 1.1% 12 1.2% Census 2010 2015 2020 Race and Ethnicity Number Percent Number Percent Number Percent White Alone 746 88.8% 812 87.2% 842 85.7% Black Alone 57 6.8% 71 7.6% 81 8.2% American Indian Alone 8 1.0% 10 1.1% 11 1.1% Asian Alone 3 0.4% 4 0.4% 4 0.4% Pacific Islander Alone 0 0.0% 0 0.0% 1 0.1% Some Other Race Alone 14 1.7% 17 1.8% 22 2.2% Two or More Races 12 1.4% 17 1.8% 21 2.1% Hispanic Origin (Any Race) 38 4.5% 48 5.2% 60 6.1% Data Note: Income is expressed in current dollars. Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. November 30, 2015 2015 Esri Page 1 of 6
Demographics - 3 Mile Radius Trends 2015-2020 Demographic and Income Profile WAG #13159 Prepared by Esri 9195 Moffett Rd,, 36575 Latitude: 30.77865 Ring: 3 mile radius Longitude: -88.25928 Annual Rate (in percent) 2.5 2 1.5 1 0.5 0 Population Households Families Owner HHs Median HH Income Area State USA Population by Age 14 12 10 Percent 8 6 4 2 2015 2020 0-4 5-9 10-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ 2015 Household Income $35K - $49K 14.8% $50K - $74K 21.2% $25K - $34K 10.6% $15K - $24K 11.6% $75K - $99K 14.2% <$15K 12.7% $200K+ 0.8% $150K - $199K 2.1% $100K - $149K 12.0% 2015 Population by Race Percent 80 70 60 50 40 30 20 10 0 White Black Am. Ind. Asian Pacific Other Two+ 2015 Percent Hispanic Origin: 3.7% Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. November 30, 2015 2015 Esri Page 4 of 6
Demographics - 3 Mile Radius Demographic and Income Profile WAG #13159 Prepared by Esri 9195 Moffett Rd,, 36575 Latitude: 30.77865 Ring: 3 mile radius Longitude: -88.25928 Summary Census 2010 2015 2020 Population 13,573 14,191 14,800 Households 4,904 5,182 5,417 Families 3,822 3,991 4,143 Average Household Size 2.76 2.74 2.73 Owner Occupied Housing Units 4,046 4,191 4,369 Renter Occupied Housing Units 858 991 1,048 Median Age 37.7 39.1 40.7 Trends: 2015-2020 Annual Rate Area State National Population 0.84% 0.58% 0.75% Households 0.89% 0.61% 0.77% Families 0.75% 0.45% 0.69% Owner HHs 0.84% 0.61% 0.70% Median Household Income 1.55% 2.63% 2.66% 2015 2020 Households by Income Number Percent Number Percent <$15,000 656 12.7% 623 11.5% $15,000 - $24,999 603 11.6% 456 8.4% $25,000 - $34,999 550 10.6% 516 9.5% $35,000 - $49,999 768 14.8% 820 15.1% $50,000 - $74,999 1,097 21.2% 1,213 22.4% $75,000 - $99,999 738 14.2% 917 16.9% $100,000 - $149,999 620 12.0% 678 12.5% $150,000 - $199,999 107 2.1% 141 2.6% $200,000+ 42 0.8% 53 1.0% Median Household Income $50,193 $54,196 Average Household Income $58,436 $64,999 Per Capita Income $21,252 $23,694 Census 2010 2015 2020 Population by Age Number Percent Number Percent Number Percent 0-4 871 6.4% 869 6.1% 848 5.7% 5-9 933 6.9% 921 6.5% 922 6.2% 10-14 976 7.2% 951 6.7% 1,016 6.9% 15-19 1,022 7.5% 867 6.1% 934 6.3% 20-24 796 5.9% 888 6.3% 721 4.9% 25-34 1,676 12.3% 1,853 13.1% 1,848 12.5% 35-44 1,935 14.3% 1,907 13.4% 1,936 13.1% 45-54 2,082 15.3% 2,048 14.4% 2,051 13.9% 55-64 1,603 11.8% 1,877 13.2% 2,129 14.4% 65-74 1,047 7.7% 1,288 9.1% 1,478 10.0% 75-84 514 3.8% 569 4.0% 727 4.9% 85+ 118 0.9% 152 1.1% 190 1.3% Census 2010 2015 2020 Race and Ethnicity Number Percent Number Percent Number Percent White Alone 11,608 85.5% 11,911 83.9% 12,198 82.4% Black Alone 1,449 10.7% 1,660 11.7% 1,849 12.5% American Indian Alone 116 0.9% 129 0.9% 146 1.0% Asian Alone 60 0.4% 68 0.5% 80 0.5% Pacific Islander Alone 5 0.0% 6 0.0% 8 0.1% Some Other Race Alone 151 1.1% 180 1.3% 225 1.5% Two or More Races 183 1.3% 236 1.7% 294 2.0% Hispanic Origin (Any Race) 421 3.1% 518 3.7% 650 4.4% Data Note: Income is expressed in current dollars. Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. November 30, 2015 2015 Esri Page 3 of 6
Demographics - 5 Mile Radius Trends 2015-2020 Demographic and Income Profile WAG #13159 Prepared by Esri 9195 Moffett Rd,, 36575 Latitude: 30.77865 Ring: 5 mile radius Longitude: -88.25928 Annual Rate (in percent) 2.5 2 1.5 1 0.5 0 Population Households Families Owner HHs Median HH Income Area State USA Population by Age 14 12 10 Percent 8 6 4 2 2015 2020 0 0-4 5-9 10-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ 2015 Household Income $25K - $34K 11.2% $15K - $24K 12.2% 2015 Population by Race 80 70 $35K - $49K 15.6% $50K - $74K 20.4% $75K - $99K 14.0% <$15K 12.6% $200K+ 0.8% $150K - $199K 1.8% $100K - $149K 11.4% Percent 60 50 40 30 20 10 0 White Black Am. Ind. Asian Pacific Other Two+ 2015 Percent Hispanic Origin: 3.2% Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. November 30, 2015 2015 Esri Page 6 of 6
Demographics - 5 Mile Radius Demographic and Income Profile WAG #13159 Prepared by Esri 9195 Moffett Rd,, 36575 Latitude: 30.77865 Ring: 5 mile radius Longitude: -88.25928 Summary Census 2010 2015 2020 Population 32,428 33,941 35,094 Households 11,649 12,322 12,774 Families 9,065 9,479 9,759 Average Household Size 2.78 2.75 2.75 Owner Occupied Housing Units 9,598 9,962 10,303 Renter Occupied Housing Units 2,051 2,360 2,471 Median Age 37.0 38.4 39.9 Trends: 2015-2020 Annual Rate Area State National Population 0.67% 0.58% 0.75% Households 0.72% 0.61% 0.77% Families 0.58% 0.45% 0.69% Owner HHs 0.68% 0.61% 0.70% Median Household Income 1.96% 2.63% 2.66% 2015 2020 Households by Income Number Percent Number Percent <$15,000 1,550 12.6% 1,468 11.5% $15,000 - $24,999 1,507 12.2% 1,138 8.9% $25,000 - $34,999 1,386 11.2% 1,292 10.1% $35,000 - $49,999 1,920 15.6% 2,031 15.9% $50,000 - $74,999 2,509 20.4% 2,762 21.6% $75,000 - $99,999 1,728 14.0% 2,155 16.9% $100,000 - $149,999 1,403 11.4% 1,510 11.8% $150,000 - $199,999 218 1.8% 291 2.3% $200,000+ 102 0.8% 128 1.0% Median Household Income $47,921 $52,796 Average Household Income $57,240 $63,779 Per Capita Income $20,818 $23,253 Census 2010 2015 2020 Population by Age Number Percent Number Percent Number Percent 0-4 2,164 6.7% 2,149 6.3% 2,095 6.0% 5-9 2,303 7.1% 2,269 6.7% 2,241 6.4% 10-14 2,356 7.3% 2,329 6.9% 2,456 7.0% 15-19 2,410 7.4% 2,089 6.2% 2,254 6.4% 20-24 1,928 5.9% 2,121 6.2% 1,740 5.0% 25-34 4,132 12.7% 4,506 13.3% 4,450 12.7% 35-44 4,556 14.0% 4,586 13.5% 4,652 13.3% 45-54 4,991 15.4% 4,853 14.3% 4,724 13.5% 55-64 3,802 11.7% 4,460 13.1% 4,990 14.2% 65-74 2,392 7.4% 2,958 8.7% 3,445 9.8% 75-84 1,138 3.5% 1,285 3.8% 1,635 4.7% 85+ 257 0.8% 333 1.0% 412 1.2% Census 2010 2015 2020 Race and Ethnicity Number Percent Number Percent Number Percent White Alone 26,828 82.7% 27,536 81.1% 27,935 79.6% Black Alone 4,376 13.5% 4,935 14.5% 5,388 15.4% American Indian Alone 269 0.8% 298 0.9% 334 1.0% Asian Alone 142 0.4% 165 0.5% 190 0.5% Pacific Islander Alone 11 0.0% 12 0.0% 16 0.0% Some Other Race Alone 361 1.1% 429 1.3% 532 1.5% Two or More Races 440 1.4% 565 1.7% 698 2.0% Hispanic Origin (Any Race) 897 2.8% 1,100 3.2% 1,368 3.9% Data Note: Income is expressed in current dollars. Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2015 and 2020. November 30, 2015 2015 Esri Page 5 of 6