Starbucks Yakima, WA [ CONCEPTUAL SIGNAGE ] Yakima, WA New Construction Freestanding STARBUCKS WITH DRIVE-THRU 1312 S 1st St, Yakima, WA 98901 [ www.capitalpacific.com ]
STARBUCKS IS A NEW CONSTRUCTION TRIPLE-NET ASSET WITH A 10-YEAR TERM AT THE PREEMINENT SIGNALIZED INTERSECTION IN YAKIMA, WA. Investment Highlights The offering provides the opportunity to acquire a drive-thru Starbucks situated on the hard corner of South 1st St. and Nob Hill Blvd. Starbucks 10- year triple net lease features a 10% rent increase in year six. The on-site billboard leased on a 20-year term provides further rent growth via scheduled rent escalations. The Premises were built-to-suit for Starbucks in 2016 with a rent commencement date to follow on November 15, 2016. The Property is located on a prominent hard corner within a dynamic commercial corridor featuring a heavy national presence and several of Yakima s largest employers.the property benefits from strong daily traffic counts in excess of 45,000 VPD. The Subject sits within a dense surrounding residential base of 103,589 residents living within a fivemile radius. Starbucks Corp. has 22,519 stores globally and offers a Standard and Poor credit rating of A-. Moody recently upgraded Starbucks credit rating to A2 due to its stable outlook and operating performance. PRICE: $2,430,000 CAP: 5.00% LEASABLE SF...±2,200 SF LAND AREA...±36,000 SF LEASE TYPE............ NNN YEAR BUILT...2016 PARKING...±29 Spaces or 13.2/1,000 SF ADDRESS: 1312 S 1st St, Yakima, WA 98901 [ CONCEPTUAL SIGNAGE ] STARBUCKS - YAKIMA, WA 2
Core Characteristics NEW CONSTRUCTION NATIONAL CREDIT TENANT BUILT-TO-SUIT WITH 10-YEAR NNN TERM Starbucks brand new 10-year lease has 10% increases every five years throughout the initial term and option periods. The Premises were built-tosuit for Starbucks in 2016 with a rent commencement date of November 15, 2016. CREDIT-RATED NATIONAL TENANT Starbucks has a Standard & Poor s credit rating of A- and a Moody s upgraded rating of A2, reflective of its stable outlook and global brand strength. Starbucks Corp. has 22,519 locations globally with a reported $19.2 billion in net sales for 2015. MINIMAL LANDLORD RESPONSIBILITIES The Property operates within the terms of a triple net expense structure, limiting Landlord responsibilities to the repair and replacement of the roof, structure, and parking lot. Tenant is responsible for all remaining operating expenses. PREEMINENT HARD CORNER WITH DRIVE THRU The Property benefits from excellent visibility at the hard corner location on South 1st St. and Nob Hill, exposed to strong traffic counts of 45,000 VPD. The location is Yakima s busiest intersection, connecting the city s primary north-south commercial arterial with Nob Hill Blvd, its primary east-west connector. Warranted by the immense traffic, the Landlord has secured additional income by means of an on-site billboard on a 20-year lease with scheduled rent growth every five years. DENSE CUSTOMER BASE WITH DAILY AREA DRAW The area surrounding Starbucks is densely populated with more than 103,589 residents living within a five-mile radius of the Property. Starbucks is situated within a prominent retail corridor on South 1st St., just north of a Cabela s, Hobby Lobby, and the Valley Mall anchored by Macy s, Kohl s, and Sears. Starbucks is in close proximity to many of the county s largest employers, including Yakima Valley Farm Workers Clinic (employment: 1,006), Shields Bag & Printing (employment: 500), and Fiesta Foods (employment: 250), all of which are within a halfmile of the Property. [ CONCEPTUAL SIGNAGE ] STARBUCKS - YAKIMA, WA 3
Aerial RETAIL CORRIDOR 82 Albertsons Arby s AutoZone Best Buy Bi-Mart Burger King Costco Denny s Dollar Tree Fiesta Foods Grocery Outlet Home Depot Jiffy Lube Kmart Lowe s Mattress Firm MOD Pizza Office Depot Olive Garden O Reilly Auto Parts PetSmart Quiznos Rite Aid Safeway Shari s Restaurant Shopko Sonic Subway T.J. Maxx Taco Bell Taco Del Mar Target Walgreens Walmart Wendy s WinCo YAKIMA VALLEY COMMUNITY COLLEGE WASHINGTON STATE COLLEGE OF NURSING E NOB HILL BLVD STARBUCKS EMPLOYMENT: 500 s EMPLOYMENT: 1,006 43,000 DAILY EMPLOYMENT: 250 VALLEY MALL Gap Kohl s Macy s Michaels Old Navy Quiznos Rite Aid Ross Dress for Less Sears Shari s Restaurant Starbucks S 1 ST ST VALLEY MALL PLAZA Bed, Bath and Beyond Cabela s Carter s Famous Footwear Fancy Nails Game Stop Gap Factory Store JCPenney Michaels Old Navy Payless ShoeSource Pier 1 Imports Ross SleepNumber TJ Maxx Value Village
Timeline CONSTRUCTION TIMELINE LEASE SIGNING MARCH 2016 [ CONCEPTUAL SIGNAGE ] GROUND BREAKING EXPECTED DELIVERY OF PREMISES SEPTEMBER 14 TH 2016 EXPECTED GRAND OPENING 11/15/16 [ CONCEPTUAL SIGNAGE ] STARBUCKS - YAKIMA, WA 5
Financial Summary PRICE $2,430,000 Capitalization Rate: 5.00% Price Per Foot: 2,200 Square Feet $1,105 NET OPERATING INCOME SUMMARY SCHEDULED INCOME Per SF Scheduled Rent: 12/1/2016 $52.95 $116,490 Plus: Other Income* $2.27 $5,000 Equals: Effective Gross Income $55.22 $121,490 Less: OPERATING EXPENSES Per SF CAMS NNN Property Taxes NNN Insurance NNN Total Operating Expenses NNN - Equals: NET OPERATING INCOME $121,490 *Outfront Media leases an onsite billboard for a 20-year term with scheduled $500/yr increases in rent, every five years, set to expire 12/31/2037. This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. STARBUCKS - YAKIMA, WA 6
Rent Roll TENANT INFO TERM RENT SUMMARY Tenant Name Size Date Monthly Rent Percent Increase Annual Rent PSF Cap Rate STARBUCKS 2,200 11/15/2016 $9,708 $116,490 $52.95 5.00% Occupancy Date : 11/15/2016 Lease Expiration : 11/30/2026 12/1/2021 $10,678 10.0% $128,139 $58.25 5.27% Lease Notes Option 1 12/1/2026 $11,746 10.0% $140,953 $64.07 5.80% Option 2 12/1/2031 $12,921 10.0% $155,048 $70.48 6.38% Option 3 12/1/2036 $14,213 10.0% $170,553 $77.52 7.02% Option 4 12/1/2041 $15,634 10.0% $187,608 $85.28 7.72% Comments: Lease is based on a NNN expense structure. Tenant is responsible for 100% of Property Taxes, insurance, utilities, and all operating expenses, which cannot be increased by more than 5% each year thereafter. For the first lease year CAM many not exceed $5.00 per SF, insurance may not exceed $0.75 per SF, and Property Taxes may not exceed $4.87 per SF. Landlord responsibilities are limited to roof, structure, and parking lot replacement. Onsite billboard is leased to Outfront Media on a 20-year term with $500/year rent escalations every five years. Current Totals: 2,200 $9,708 $116,490 $52.95 5.00% This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. STARBUCKS - YAKIMA, WA 7
Site Plan SITE PLAN KEY PARCEL: LAND AREA: BUILDING AREA: DUMPSTER: INGRESS/EGRESS: ±36,000 SF ±2,200 SF S 1ST ST 21,120 DAILY PATIO DRIVE-THRU BILLBOARD E NOB HILL BLVD 24,690 DAILY Site Plan Not To Scale STARBUCKS - YAKIMA, WA 8
Area Intel & Demos ABOUT YAKIMA Yakima, Washington has been the cultural, business, educational, health services, and governmental focal point of the Central Washington region since it was founded more than 125 years ago. Originally built along the new Northern Pacific Railway company line, Yakima has grown from its agricultural roots to become a vibrant, diverse metropolitan city. With a rich history and a bright future, Yakima is the Heart of Central Washington. Yakima is the largest city in Yakima County with a population of about 92,000. That makes it the 9th largest city in Washington State. The Yakima community enjoys a rich mixture of people from many cultural and ethnic backgrounds. 1, 3, & 5 MILE RADIUS DEMOGRAPHICS POPULATION 1-Mile 3-Mile 5-Mile 2010 15,217 84,805 112,328 2015 15,094 86,308 114,972 2020 15,011 87,547 116,927 2015 HOUSEHOLD INCOMES 1-Mile 3-Mile 5-Mile Median $47,420 $36,961 $40,084 Average $59,878 $50,614 $55,321 SEATTLE 146 miles 2h 11min YAKIMA STARBUCKS 182 miles 3h 6min 5-Mile radius 3-Mile radius 1-Mile radius PORTLAND STARBUCKS - YAKIMA, WA 9
Yakima Area Intel YAKIMA ECONOMY Yakima s economy has always revolved around agriculture. A wide variety of crops are grown in the Yakima Valley. Yakima County is Washington State s leader in terms of the value of the fruits, vegetables, grains, and other agricultural products produced by the county s farmers. The region has long been known as one of the world s leading producers of apples. While Yakima still relies on agriculture to drive its economy, over 250 manufacturing firms are also located here producing a variety of products including aircraft parts, wood products, plastic products, recreational vehicles, and communications technology. Tourism is the fastest growing segment of the Yakima economy. More than 70 wineries are located in the Yakima Valley and regularly draw visitors to sample and buy the Valley s internationally-renowned varietals. Outdoor recreation, including water and snow skiing, fishing, boating, hiking, horseback riding, and white water rafting, also makes Yakima a favorite destination for people from throughout the Northwest and around the world. TOP EMPLOYERS IN YAKIMA VALLEY EMPLOYER # OF FULL-TIME EMPLOYEES Yakima Valley Memorial Hospital 2,500 Yakima School District, No. 7 1,756 Walmart 1,700 Zirkle Fruit +1,500 Washington Fruit +1,500 JOBS BY INDUSTRY 103,585 TOTAL JOBS Local Government - 12.4% Health Services - 12.4% Retail Trade - 9.8% Manufacturing - 7.9% Other than Top 5-31.4% Agriculture, Forestry & Fishing - 26.1% LABOR FORCE 124,360 UNEMPLOYMENT 8.1% AVERAGE WAGE $33,767 STARBUCKS - YAKIMA, WA 10
Lease Abstract TAXES Tenant is responsible for 100% reimbursement of property Taxes to Landlord. PREMISES/TERM TENANT: Starbucks BUILDING SF: ±2,200 SF LEASE TYPE: NNN RENT COMMENCEMENT: 11/15/2016 CURRENT EXPIRATION: 11/30/2026 BASE RENT 10% Increase every 5 years. Term Monthly Rent Annual Rent 11/15/2016 11/30/2021 $9,708 $116,490 12/1/2021 11/30/2026 $10,678 $128,139 OPTION PERIODS Term Monthly Rent Annual Rent 12/1/2026 11/30/2031 $11,746 $140,953 12/1/2031 11/30/2036 $12,921 $155,048 12/1/2036 11/30/2041 $14,213 $170,553 12/1/2041 11/30/2046 $15,634 $187,608 INSURANCE Tenant is responsible for maintaining a general liability and property insurance policies and reimbursing policy held by Landlord. UTILITIES Tenant is responsible for direct payment of all utilities. TENANT S OBLIGATIONS Tenant is responsible for maintaining all mechanical systems onsite, including plumbing, HVAC, electrical, and is responsible for all operating expenses of the Property, excluding those Landlord is responsible for. LANDLORD S OBLIGATIONS Landlord is responsible for the repair and replacement of the roof, building structure, and parking lot. CAM REIMBURSEMENTS Tenant s operating expenses cannot exceed previous year s operating expenses by more than 5%. First year CAM reimbursements may not exceed $5.00 per SF, insurance may not exceed $0.75 per SF, and Tenant s share of Taxes may not exceed $4.87 per SF. LEASE PROVISIONS EXCLUSIVE USE Tenant has an exclusive use for purposes of selling coffee beans and espressobased drinks at the Premises. PYLON SIGN Tenant has the right to install a pylon sign on corner of 1st & Nob Hill at Tenant s own expense. STARBUCKS - YAKIMA, WA 11
Lease Abstract Cont. ONSITE BILLBOARD TENANT: Outfront Media AREA LEASED: ±2,200 SF LEASE COMMENCEMENT: 1/1/2017 CURRENT EXPIRATION: 12/31/2037* *The lease shall automatically renew for 1-year periods unless either party delivers written notice to the other party. RENT/EXPENSES BASE RENT $500/year increases every 5 years paid to Landlord annually. Term Annual Rent 1/1/2017 12/31/2021 $5,000 1/1/2022 12/31/2026 $5,500 1/1/2027 12/31/2031 $6,000 1/1/2032 12/31/2037 $6,500 TENANT S OBLIGATIONS Tenant is responsible for all electrical power consumed by the sign s structure. LANDLORD S OBLIGATIONS Ensure sign structure is not obscured by any vegetation or construction on the Property, limiting visibility. RIGHT OF FIRST REFUSAL Tenant has the right for a period of one year following the termination of this lease to enter into another lease with Landlord upon the same terms and conditions, as offered to Landlord by any other entity to lease advertising space on the Premises. STARBUCKS - YAKIMA, WA 12
A unique HUMAN RESULTS-DRIVEN client experience THE CAPITAL PACIFIC EXPERIENCE - OUR DAILY COMMITMENT TO OUR CLIENTS [ www.capitalpacific.com ] [ CONCEPTUAL SIGNAGE ] SEAN TUFTS stufts@capitalpacific.com (206) 743-8468 SEAN MACK smack@capitalpacific.com (503) 675-8378 KEVIN ADATTO kadatto@capitalpacific.com (503) 675-7726 MICHAEL HORWITZ mhorwitz@capitalpacific.com (503) 675-8381 SCOTT FRANK sfrank@capitalpacific.com (503) 675-8383 PETER DUNN pdunn@capitalpacific.com (503) 607-0197 DAVID GELLNER dgellner@capitalpacific.com (206) 913-2842 [ Copyright 2016 Capital Pacific LLC ]