Urban Trophy Leased Asset

Transcription

1 Urban Trophy Leased Asset [ CONCEPTUAL SIGNAGE ] Portland, or URBAN TROPHY ASSET WITH PARKING LEASED TO CORPORATE MATTRESS FIRM 2275 West Burnside Street, Portland, OR

2 Mattress FIRM PRICE: $5,170,000 CAP: 4.25% The offering provides an opportunity to acquire a single tenant corporate Mattress Firm in an urban trophy location at the corner of NW 23rd Ave and W Burnside St in Portland, OR. The location within the highly sought after 23rd Ave retail district showcases excellent walkability and visibility from high traffic counts and an urban population that is in the midst of substantial growth. The dense infill location has recently recognized new construction of more than 2,700 multi-family units within close proximity to the Property. Mattress Firm benefits from a fully remodeled building and a brand new 10-year NNN lease term with 12.5% increases every five years and 23 parking spaces, which is very rare. This opportunity provides stable cash flow with longterm future redevelopment options. PARKING...±23 Spaces or 3.5/1,000 SF LEASABLE SF...±6,652 SF LAND AREA...±13,939 SF INVESTMENT GRADE TENANT...Moody s Baa3 Rating LEASE TYPE Corporate NNN LEASE TERM...10-Year Initial Term YEAR BUILT ; Remodeled 1991 (added 2nd floor), 2017 CURRENT RENT...$33.00/SF COMBINED TRAFFIC COUNTS...38,491 VPD ADDRESS: 2275 West Burnside Street, Portland, OR [ CONCEPTUAL SIGNAGE ] MATTRESS FIRM - PORTLAND 2

3 Investment Highlights > TROPHY LOCATION AT THE CORNER OF NW 23RD AND W BURNSIDE. > NEW 10-YEAR NNN LEASE TERM WITH INVESTMENT GRADE CREDIT TENANT MATTRESS FIRM, INC. (MOODY S CREDIT RATING: Baa3 WITH A STABLE OUTLOOK). > SURROUNDING AREA OF URBAN PORTLAND BOOMING WITH MULTI-FAMILY DEVELOPMENT. > EXTENSIVELY REMODELED INTERIOR AND EXTERIOR TO MATTRESS FIRM SPECIFICATIONS with new 20-year roof and HVAC UNITS. > A number of rents on NW 23rd are substantially higher providing STABILITY AND LONG TERM UPSIDE POTENTIAL. > 23 STALLS CREATE RARE PARKING ADVANTAGE AMONG NEIGHBORING RETAIL PROPERTIES. > SIZEABLE SCHEDULED RENT INCREASES OF 12.5% IN YEAR SIX AND BOTH OPTION PERIODS. > EXCELLENT VISIBILITY AND SIGNAGE ON MAJOR INTERSECTION AT THE ENTRANCE TO THE NW 23RD RETAIL DISTRICT. > NEAR PERFECT WALK AND BIKE SCORES OF 97 ADDS TO ALREADY HIGH COMBINED TRAFFIC COUNTS ON 23RD AND BURNSIDE OF 45,000 VEHICLES PER DAY. > NEARBY RESIDENTS EXHIBIT STRONG PURCHASING POWER WITH AVERAGE HOUSEHOLD INCOMES NEARING $90,000 PER YEAR. > Westside neighborhoods of Arlington Heights and Hillside recognized household incomes of $167,000-$207,000 per year. > DENSE urban LOCATION WITH 384,000 RESIDENTS WITHIN A FIVE-MILE RADIUS and more than 27,000 close-in total households. MATTRESS FIRM - PORTLAND 3

4 About The Tenant With more than 3,500 companyoperated and franchised stores across 49 states, Mattress Firm Holding Corp. (MFRM) has the largest geographic footprint in the United States among multi-brand mattress retailers. Founded in 1986, Houston-based MFRM is the nation's leading specialty bedding retailer with over $3.5 billion in sales over the past 12 months. MFRM, through its family of brands, including Mattress Firm and Sleep Train, offers a broad selection of both traditional and specialty mattresses, bedding accessories and other related products from leading manufacturers, including Sealy, Tempur-Pedic, Serta, Simmons, Stearns & Foster, and Hampton & Rhodes. Mattress Firm acquired the leading mattress specialty retailer on the West Coast, Sleep Train, in 2014 in a $425 million purchase. Sleep Train is the third-largest mattress retailer in the U.S. and added roughly 310 stores to the Mattress Firm portfolio, located in California, Oregon, Washington, Idaho, Nevada, and Hawaii. Mattress Firm acquired Sleepy s in February 2016 for $780M, a privately-owned company with over 1,050 retail locations in 17 states. Together, this created the nation's first border-toborder, coast-to-coast specialty bedding retailer. The company operates approximately 3,500 stores and has combined pro forma sales of over $3.5 billion over the last 12 months. Steinhoff International Holdings announced their intention to purchase Mattress Firm Inc. on August 7, 2016 and acquired the chain on September 16, 2016 for roughly $3.8 billion. Steinhoff is a $22 billion furniture conglomerate based out of South Africa with an investment grade credit rating of Baa3. Steinhoff is now the world s largest bedding giant. Steinhoff has announced they will be purchasing the U.K. discount chain Poundland Group PLC for an estimated $794M that will add an additional 900 mattress stores to their portfolio and create enhanced product diversification. 5,240+ MATTRESS FIRM INC. & STEINHOFF SUBSIDIARIES LOCATED ACROSS FOUR CONTINENTS 23 MATTRESS AND FURNITURE SUBSIDIARIES OPERATING THROUGHOUT 4 CONTINENTS Baa3 MOODY'S INVESTORS SERVICE RATING UPGRADED IN % INCREASE IN REVENUE OVER LAST 12 MONTHS MATTRESS FIRM - PORTLAND 4

5 Neighborhood Demographics Hillside 2016 Population: 2,320 Total Households: 1,115 Average HH Income: $208,542 Arlington Heights 2016 Population: 721 Total Households: 278 Average HH Income: $167,014 Goose Hollow 2016 Population: 5,992 Total Households: 3,989 Average HH Income: $64,964 Downtown Portland 2016 Population: 18,221 Total Households: 10,099 Average HH Income: $52,678 Pearl District 2016 Population: 7,060 Total Households: 4,888 Average HH Income: $92,189 Nob Hill 2016 Population: 10,616 Total Households: 7,117 Average HH Income: $70,632 Located at a marquee intersection in downtown Portland, the Property is surrounded by several affluent neighborhoods. Most notably, the neighborhoods immediately west recognize average household incomes nearly three times the Portland MSA median income. 27,486 TOTAL HOUSEHOLDS WITHIN A 1.5 MILE RADIUS Hillside Arlington Heights MATTRESS FIRM Nob Hill Goose Hollow Pearl 5 Downtown Portland 5 405

6 Aerial Ace Hardware August Moon Bar Mingo Beau Thai Ben & Jerry s B Street Coffee House Caffe Mingo Chipotle Mexican Grill Chown Hardware Cinema 21 City Market Dick s Kitchen Dollar Tree European Wax Center Fat Head s Brewery Ferguson Fred Meyer Goodwill Greenleaf Juicing Company Jimmy John s Kells Brew Pub Les Schwab Tires Le Happy Levi s Mazatlan Mexican McDonald s Miller Paint Company Moda Center Mud Bay New Seasons Market North 45 Pub Oba OfficeMax Oregon Convention Center Patagonia Pottery Barn Powell s Books Providence Park REI Restoration Hardware RingSide Steakhouse Safeway Serratto Silver Dollar Pizza Smokehouse 21 Starbucks Taco Bell Target Trader Joe s Urban Grind Urban Outfitters Walgreens Williams-Sonoma World Cup Coffee World Foods 24 Hour Fitness Many additional retailers and restaurants not listed 143,300 DAILY N 23RD AVE 12,453 DAILY MATTRESS FIRM W BURNSIDE ST 26,038 DAILY 33,294 DAILY 5

7 Retail NW EVERETT ST 12,453 DAILY N 23RD AVE 26,038 DAILY W BURNSIDE ST MATTRESS FIRM MATTRESS FIRM - PORTLAND 7

8 Neighborhoods & Amenities Walk Score Transit Score Bike Score 96 Walker s Paradise 73 Excellent Transit 75 Very Bikeable *Scores out of 100 PEARL DISTRICT OLD TOWN CHINATOWN DOWNTOWN PORTLAND SLABTOWN NW DISTRICT NEIGHBORHOOD MATTRESS FIRM GOOSE HOLLOW NEIGHBORHOOD MATTRESS FIRM - PORTLAND 8

9 Site Plan SITE PLAN KEY PARCEL OUTLINE: LAND AREA: BUILDING AREA: INGRESS/EGRESS: ±13,939 SF ±6,652 SF NW 23rd Ave ENTRANCE TO UNDERGROUND PARKING WITH EIGHT (8) STALLS 12,455 DAILY WHAT IMPROVEMENTS HAVE RECENTLY BEEN DONE TO THE PROPERTY? FIVE (5) COVERED PARKING STALLS LOCATED UNDERNEATH BUILDING OVERHANG A: The building has undergone extensive remodeling in 2017 to improve it to Mattress Firm specifications. Upgrades include an entirely new interior including ceilings, flooring, lighting, restrooms, offices and sprinkler system. Additionally, there have been ADA improvements and structural floor upgrades. The exterior has recently been repainted and the roof and four HVAC units were replaced in The new roof comes with a 20-year warranty dated 2/9/15. W Burnside St 33,294 DAILY MATTRESS FIRM - PORTLAND 9

10 NW 23rd Neighborhood ADJACENT RETAIL [ CONCEPTUAL SIGNAGE ] MATTRESS FIRM - PORTLAND 10

11 Parcel & Zoning PARCEL R SIZE 13,939 SF; 0.32 ACRES PARKING 23 SPACES OR 3.5 PER 1,000/SF ZONING - CX (CENTRAL COMMERCIAL) ZONE PURPOSE The Central Commercial (CX) zone is intended to provide for commercial development within Portland s most urban and intense areas. A broad range of uses is allowed to reflect Portland s role as a commercial, cultural and governmental center. Development is intended to be very intense with high building coverage, large buildings, and buildings placed close together. Development is intended to be pedestrian-oriented with a strong emphasis on a safe and attractive streetscape. PERMITTED USES Retail, Office, Multi-Family, Entertainment Venue, Parks, Education Facilities, Medical Centers, and Religious Facilities. MAXIMUM DENSITY & HEIGHT RESTRICTION - Floor Area Ratio of 4:1 - Bonus Floor Area Ratio of 6:1 if it meets percentage of the affordable housing requirements. - Height Restriction: 75 Feet SETBACKS Zero required setbacks. BUILDING COVERAGE RESTRICTION/MINIMUM LANDSCAPED AREA No limit, building can cover 100% of the parcel. LOCATION The Portland location allows for a wide variety of commercial uses and an urban level of density which could hold future office or multi-family redevelopment potential if a change of use was determined to be the highest and best. [ CONCEPTUAL SIGNAGE ] MATTRESS FIRM - PORTLAND 11

12 Area Developments NW 23RD/SLABTOWN OTHER AREAS PEARL DISTRICT 1 SAVIER FLATS (179 UNITS) 2270 NW Savier St 1 TESS O BRIEN APARTMENTS (123 UNITS) 1953 NW Overton St 1 NV APARTMENTS (275 UNITS) 1261 NW Overton St 2 SLABTOWN BLOCK 294E (385 UNITS) Western side of NW 21st between Thurman & NW Raleigh 2 THE MUSE APARTMENTS (58 UNITS) 1313 NW 19th Ave 2 THE COSMOPOLITAN CONDOS (150 UNITS) 1075 NW Northrup St 3 LL HAWKINS (113 APARTMENTS) 1515 NW 21st Ave 3 PRESS BLOCKS (337 UNITS) 817 SW 17th Ave 3 THE PARKER APARTMENTS (177 UNITS) 1447 NW 12th Ave 4 SLABTOWN BLOCK 295 (160 UNITS) 1717 NW 21st St * Also includes 150,000 SF Office Tower and four-story office building with ground floor retail MODERA PEARL (290 UNITS) NW 13th Ave & NW Quimby St COUCH 9 (135 UNITS) 115 NW 9th Ave MODERA DAVIS (204 UNITS) 229 NW 10th Ave THE BENEVENTO (24 UNITS) 1606 NW 23rd Ave FRANKLIN IDE (92 UNITS) 2240 NW Lovejoy St SAWYER S ROW (40 UNITS) 1958 NW Raleigh St Within close proximity to NW 23rd Avenue high density residential growth has been booming over the last few years. More than 2,700 multi-family units have been developed within a one-mile radius of Mattress Firm. The amount of recent residential development has increased the number of close-in housing units by more than 10% as residents continue to be attracted to urban housing developments MATTRESS FIRM 3 MATTRESS FIRM - PORTLAND 12

13 Rent Comps 1 BROOKLYN INDUSTRIES Location: 735 NW 23rd Ave Size: 5,018 SF 1 Rent: $53.20/SF w/3% Annual Increases 2 PIZZICATO PIZZA Location: 505 NW 23rd Ave 3 Size: 2,330 SF Rent: $37.58/SF BLUSH BEAUTY BAR Location: 513 NW 23rd Ave Size: 2,717 SF 4 Rent: $39.07/SF LUCKY BRAND 5 Location: 521 NW 23rd Ave Size: 1,790 SF Rent: $40.00/SF 6 5 WILLIAMS SONOMA Location: 338 NW 23rd Ave Size: 23,000 SF MATTRESS FIRM Rent: $39.82/SF 6 BEDMART Location: 206 NW 23rd Ave Size: 5,018 SF Rent: $36.05/SF With 3% Annual Increases MATTRESS FIRM - PORTLAND 13

14 Financial Summary PRICE $5,170,000 Capitalization Rate: 4.25% NET OPERATING INCOME SUMMARY SCHEDULED INCOME Per SF Scheduled Rent: 4/1/2018 $33.00 $219,516 Equals: Effective Gross Income $33.00 $219,516 Less: OPERATING EXPENSES Per SF CAMS NNN Property Taxes NNN Insurance NNN Total Operating Expenses NNN - Equals: NET OPERATING INCOME $219,516 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. MATTRESS FIRM - PORTLAND 14

15 Rent Roll TENANT INFO TERM RENT SUMMARY Tenant Name Size Date Monthly Rent Percent Increase Annual Rent PSF Mattress Firm 6,652 4/1/2018 $18,293 $219,516 $ /1/2023 $20, % $246,989 $37.13 Occupancy Date : 4/11/2017 Lease Expiration : 3/31/2028 Lease Notes Option 1 4/1/2028 $23, % $277,854 $41.77 Option 2 4/1/2033 $26, % $312,577 $46.99 Comments: Mattress Firm operates on a NNN lease structure with Landlord responsibilities limited to the roof/building structure, and guaranteed by publicly-traded (NASDAQ:MFRM) Mattress Firm Inc. The Premises were turned over to Tenant on 4/11/2017 with an estimated Rent Commencement of 4/1/2018 based on 150 days following 10/31/2017 (assumed date Tenant will have all necessary permits by). Note, Tenant to receive 174 days of free rent as a result of late delivery by the Landlord, not reflected in Analysis. Current Totals: 6,652 $18,293 $219,516 $33.00 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. MATTRESS FIRM - PORTLAND 15

16 Lease Abstract - Mattress Firm PREMISES/TERM TENANT The Sleep Train, Inc. SQUARE FEET 6,652 SF LEASE TYPE NNN TURNOVER DATE April 11, 2017 RENT COMMENCEMENT DATE April 1, 2018 (Estimated) RENT ABATEMENT 174 Days of free rent EXPIRATION August 31, 2028 (10 Years following rent commencement) OPTIONS Two, five-year Options; 180 day s prior written notice GUARANTEE Corporate guarantee by Mattress Firm, Inc. BASE RENT Term Monthly Annually 4/1/2018-3/31/2023 $18,293 $219,516 4/1/2023-3/31/2028 $20,582 $246,989 OPTIONS Term Monthly Annually #1 4/1/2028-3/31/2033 $23,155 $277,854 #2 4/1/2033-3/31/2038 $26,048 $312,577 TAXES Tenant is responsible for reimbursing 100% of property taxes to Landlord. INSURANCE Tenant is responsible for maintaining an all-risk, commercial general liability, and worker s compensation insurance policies, and for reimbursing 100% of Landlord s insurance costs. UTILITIES Tenant shall pay for all of its consumption of utilities at the Premises, including, but not limited to, gas, water, electricity, sewer and HVAC. TENANT S OBLIGATIONS Tenant is responsible for all maintenance and repair to the non-structural elements of the premises and the parking lot and landscaped areas. LANDLORD S OBLIGATIONS [ CONCEPTUAL SIGNAGE ] Landlord, at its sole cost and expense, shall maintain and repair the roof (including structure and supporting elements), gutters, downspouts, and all structural portions of the building (including foundation, exterior walls, columns, store front and slab). MATTRESS FIRM - PORTLAND 16

17 Area Intel & Demos 23RD AVE NEIGHBORHOOD With a walk score of 96, the Northwest 23rd Ave neighborhood is considered a Walker s Paradise. Northwest 23rd Ave was named One of America s Best Shopping Streets in 2012 by US News & World Report, with some of the best dining and shopping in the city. With Providence Park and I-405 located just a few blocks away, this neighborhood serves as a bustling destination in Portland HOUSEHOLD INCOMES 1-Mile 3-Mile 5-Mile Median $42,114 $53,000 $60,597 Average $77,341 $85,447 $88,699 POPULATION 1-Mile 3-Mile 5-Mile , , , , , , , , ,489 SEATTLE MATTRESS FIRM 170 Miles 1 Mile 3 Miles Portland 5 Miles 110 Miles Eugene MATTRESS FIRM - PORTLAND 17

18 Portland Metro URBAN GROWTH BOUNDARY (UGB) Portland constrains its development to a tight ring around Portland s center. This has led to the re-development of a large portion of downtown, a number of mid-rise and high-rise developments, and an overall increase in housing and business density. UGB s limitations on development have also led to increased property values over the years. HIGHLY DIVERSIFIED ECONOMY & SKILLED WORKFORCE Leading economic drivers are renewable energy, technology, health care, and professional services. High tech employment is responsible for the employment of 72,100 people (7.2% of labor force). 30% of workers have a bachelor s degree. Home of Intel, Nike, and Adidas America. LOW COST OF DOING BUSINESS CNBC ranked Oregon 19th for cost of doing business. IN-MIGRATION In a 2013 survey, United Van Lines ranked Oregon as the #1 state for in-migration. PORTLAND MSA TOP 20 EMPLOYERS COMPANY ± EMPLOYEES Intel 17,500 US Federal Government 17,500 Providence Health & Services 15,239 Oregon Health & Science 14,616 State of Oregon 14,200 Kaiser Permanent Northwest 11,881 Legacy Health System 10,436 Fred Meyer 10,237 City of Portland 8,558 Nike 8,000 Portland Public Schools 6,266 Multnomah County 5,616 Wells Fargo 4,617 Portland State University 4,353 US Bank 4,000 Beaverton School District 3,905 PeaceHealth Southwest 3,300 Portland Community College 3,255 Vancouver School District 3,200 Evergreen Public Schools 3,100 SOURCE: PORTLAND BUSINESS JOURNAL 2.31 million PORTLAND MSA POPULATION 23rd LARGEST METRO AREA IN THE US $79,377 AVERAGE HH INCOME MATTRESS FIRM - PORTLAND 18

19 Contact Information FOR MORE INFORMATION ON MATTRESS FIRM PLEASE CONTACT: KEVIN ADATTO (503) LISTED IN CONJUNCTION WITH: TODD VANDOMELEN Norris & Stevens (503) MICHAEL HORWITZ (503) SCOTT FRANK (503) SEAN TUFTS (206) SEAN MACK (503) PETER DUNN (503) WE SELL COMMERCIAL REAL ESTATE BUT WE VALUE PEOPLE Capital Pacific is a Commercial Real Estate Brokerage Firm specializing in Retail Investment Sales in the Pacific Northwest as well as Nationally. Our goal is to deliver results for our clients while providing a level of service that will earn repeat business. We have a very human approach that we call the Capital Pacific Experience - CPx. Our team works together on every single assignment, which ultimately benefits our clients. Today Capital Pacific has offices in Seattle, Portland & San Francisco. DAVID GELLNER dgellner@capitalpacific.com (206) [ ]

20 [ CONCEPTUAL SIGNAGE ] [ Copyright 2017 Capital Pacific LLC ] The information contained in this document has been obtained from sources Capital Pacific believes to be reliable. Capital Pacific makes no representation or warranty in respect to its accuracy. It is your responsibility to confirm its accuracy and completeness.