Eastgate shopping Center

Transcription

1 Eastgate shopping Center New 10-Year Lease Exercised 1st Option 7-Year Lease Extension CREATIVE IMAGE On Site Since 1989 kansas city msa 100% leased PRiced at $64/sf new parking lot & roof Strong Tenant lineup 50,000 cars per day One of fastest growing cities in the country 1205 E Santa Fe St, Olathe, KS [ ]

2 PROperty Summary Eastgate shopping center is a seasoned 100% leased, four-tenant shopping center anchored by Sherwin-Williams and Harbor Freight. The remaining two tenants have both recently exercised options and lease extensions. the center is located in a dense retail area within the Kansas City MSA. Olathe unemployment is just 3.2%. The center is located in a dominant retail corridor in the very high growth city of Olathe, KS. Sherwin-Williams and Harbor Freight Tools, combined with Salvation Army, provide Eastgate Shopping Center with a national tenant lineup that occupies approximately 88% of the total space. The remaining tenant recently signed a 7-year lease extension. The asset also provides a unique opportunity for an investor to acquire a long-term investment with a potential add-value component. With the exception of Sherwin-Williams, these are gross leases with the longer-term potential over time to convert to conventional NNN retail leases. The four tenant parcel is for sale, 100% leased, described herein. There are seven other users within Eastgate, which is, in total, also 100% occupied. The asset will be delivered with a brand new parking lot. Listing Team Contact Info RICK SANNER rsanner@capitalpacific.com (415) CA BRE# bob SANNER bsanner@capitalpacific.com (415) CA BRE# Aaron Susman asusman@capitalpacific.com (415) CA BRE# In Conjunction with KS Licensed Broker: Phil Bundy bundydevelopment@cox.net Capital Pacific collaborates. Click Here to meet the rest of our San Francisco team. PRICE: $4,241,750 CAP: 8.25% Rentable SF...65,975 SF (all on one parcel) Price per SF...$64/SF land area AC ($18/SF) Current Rent...$7.06/SF year built Eastgate shopping Center 2

3 core characteristics national tenants National tenants comprise approximately 88% of Eastgate Shopping Center s gross leasable area. The property exhibits minimal near-term lease rollover, with only 14% of the GLA scheduled to expire at the end of The tenant has been at this location for over 25 years. The center is shadow anchored by a regional, Mexican-themed grocery store. high traffic Location Eastgate Shopping Center is ideally situated on the key commuter artery, E Santa Fe St., which connects residents to Interstate 35. The subject property is located at the hard corner of the signalized intersection of E Santa Fe St. and Ridgeview Rd, which are both high-traffic streets. Ridgeview Rd has traffic counts of 18,350 VPD and E Santa Fe St. has traffic counts of 32,735 VPD, combined there are over 50,000 vehicles driving by the site daily. The site benefits from multiple ingress and egress points from both of these roads. The property also has excellent accessibility to and from I-35 located 1/4 mile from the property. I-35 connects Olathe to Kansas City, which is 20 miles north. Surrounded by High Income, High Density Residential Developments In addition to possessing dense commuter traffic, the site boasts excellent population density and incomes. Within a 3-mile radius there are approximately 95,000 residents with average household incomes in excess of $87,000. Within a 5-miles radius there approximately 161,000 residents with average household incomes exceeding $102, ,000 Residents within a 5-mile radius unemployment of only 3.2% Explosive Population Growth with Low Unemployment Olathe is one of the fastest growing cities in the country. From 2000 to 2016, Olathe experienced an astounding 44% growth in its population, making it the fourth largest city in Kansas. Despite a boom in population, Olathe has maintained one of the lowest unemployment rates in the state at just 3.2% in March This is well below the U.S. average of 4.9%. (homefacts. com) excellent tenant synergy Eastgate Shopping Center has a drive-thru Taco Bell, Check Smart, Asian Garden, Sakura Japanese, K-machos Mexican Restaurant and Bonito Michoacán. Bonito Michoacán is a Latino grocery store with several locations in Kansas and Texas. The Kansas City Star says that Bonito Michoacán has become a destination for Central and South American food in Johnson County. Some shoppers drive from [ten miles away] to stock up. These retailers provide added stability to the subject center (learn more about Bonito Michoacán). [ other tenants in the center] Eastgate shopping Center 3

4 aerial located on e santa fe street, benefitting from traffic counts in excess of 32,735 Northview 7 35 OLATHE LANDING Fairview Regency Place Olathe North High School 32,735 DAILY e Santa Fe Street E Santa Fe Street E Santa Fe Street Kansas School for the Deaf ALDEN CENTER 44,765 DAILY US HWY I-35 EASTGATE SHOPPING CENTER Frontier Trail Jr. High School 7 CREATIVE IMAGE Black Bob Heritage Indian Trail MIddle School Olathe South High School S Black Bob Road S Parker Street BLACKBOB MARKETPLACE Westview Green Springs Liberty View W 151st Street Scarborough 35 KANSAS CITY Eastgate shopping Center 4

5 income & expense Current Price: $4,241,750 Proposed New Loan Amount $2,698,123 Capitalization Rate: 8.25% Loan to Value 65% Price Per Square Foot: $64.29 Down Payment $1,543,627 Total Leased (SF): % 65,975 Interest Rate 4.50% Total Vacant (SF): 0.00% 0 Amortization 25 Year Total Rentable Area (SF): % 65,975 Term 10 Year INCOME Per Square Foot Net Operating Income $342,454 Scheduled Rent $7.06 $465,610 Debt Service ($179,964) Tenant Reimbursements Est $13,313 Pre-Tax Cash Flow $162,490 EFFECTIVE GROSS INCOME $478,923 Debt Coverage Ratio 1.90 Vacancy Factor (5%) ($23,946) ESTIMATED 2016 EXPENSES Pre-Tax Leveraged Cash-on-cash Return 10.53% CapEx Reserves* ($0.10) ($6,598) Principal Pay down (Year 1 of Ownership) $59,772 CAM Expenses ($0.31) ($20,209) Total Return $222,261 Insurance ($0.10) ($6,748) Yield 14.40% Property Taxes** ($0.99) ($65,000) Non-recapture Management Fee (3.0%) ($13,968) TOTAL OPERATING EXPENSES ($1.71) ($112,523) Proposed Loan/Cash Flow NET OPERATING INCOME $342,454 *A new roof overlay was installed on the HFT and Salvation Army portion of the building totaling 48,000 sqft. in 2015 ** Estimated property taxes for 2016 are estimated based on the projected sales price show above should the asset be reassessed. The tax bill for 2015 totaled $27,604. Until the property is reassessed an investor will have additional cash flow. 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. Eastgate shopping Center 5

6 rent roll TENANT INFO LEASE TERMS RENT SUMMARY COMMENTS Tenant Sq. Ft. Percent of GLA Term Monthly Rent Annual Rent Rent/FT Comments Harbor Freight Tools* 26, % 04/23/15 04/30/25 $13,250 $159,000 $6.00 This is a gross lease. Starting the first day of Option 1 05/01/25 04/30/30 $14,575 $174,900 $6.60 the fourth (4th) full calendar year the tenant is responsible for its pro-rata share of real estate taxes and Insurance above the Base Year Option 2 05/01/30 04/30/35 $16,033 $192,390 $7.26 expenses. Option 3 05/01/35 04/30/40 $17,645 $211,735 $7.99 Creative Image School of Cosmetology 8, % 01/01/15 0/2/28/15 $0 $0 $0.00 This is a gross lease. 03/01/15 02/29/16 $7, $86,000 $10.75 Recent 7 year Extension Current Rent 03/01/16 12/31/23 $7, $88,000 $11.00 Option 1 01/01/24 12/31/26 $7, $92,400 $11.55 Option 2 01/01/27 12/31/29 $8, $97,020 $12.13 Salvation Army** 22, % 10/15/13 12/15/16 $10,083 $121,000 $5.50 This is a gross lease. Options are CPI-based Current/Option 1 12/16/16 12/15/21 $10,322 $123,860 $5.63 Option 2 12/16/21 12/15/26 $10,633 $127,600 $5.80 Sherwin Williams*** 9, % 05/15/89 11/30/19 $7,896 $94,750 $10.00 Tenant pays prorata share of taxes, insurance Option 1 12/01/19 11/30/24 $8,685 $104,225 $11.00 and CAM Current Totals: 65, % $38,801 $465,610 $7.06 Occupied 65, % Vacant % * Tenant Early Termination Right -Tenant has a one time right to terminate the lease at the expiration of the 5th lease year with a one time $110,000 termination fee. Tenant must give 6 months notice. **Option rents are based on estimated small CPI increases ***Tenat has been at this location since 1989 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. Eastgate shopping Center 6

7 site plan 32,735 DAILY ASIAN GARDEN NOT A PART SAKURA JAPANESE NOT A PART NOT A PART E Santa Fe Street NOT A PART Site Plan Key Parcel outline: lot size: 5.30 AC NAP Building Area: 65,975 sf Ingress/Egress: S Ridgeview Road 18,350 DAILY NAP NAP CREATIVE IMAGE E Park Street 35 KANSAS CITY This site plan is a rendering that has been created based on sources we believe to be reliable, however we make no representations or warranties, expressed or implied, as to the accuracy of the rendering. Buyer must verify the information and bears all risk for any inaccuracies. Eastgate shopping Center 7

8 tenants Sherwin-Williams (NYSE: SHW) is a Fortune 500 company (#266) in the general building materials industry. Headquartered in Cleveland, Sherwin-Williams primarily engages in the manufacturing, distribution, and sale of paints, coatings and other products related to professional, industrial, commercial and retail customers primarily in North and South America and Europe. The company is most well-known for its Sherwin- Williams Paints line. SHW is rated A by Standard & Poors. Sherwin-Williams Paint Stores are the exclusive outlets for Sherwin-Williams branded paints, stains, supplies, equipment and floor covering in the U.S., Canada and the Caribbean. The Paint Stores Group serves architectural and industrial painting contractors, residential and commercial builders and re-modelers, property owners and managers, OEM product finishers and do-it-yourself homeowners. As of early 2016, the company operated more than 4,100 individual paint stores. Harbor Freight Tools is a privately held discount tool and equipment retailer that operates a chain of 500 stores in 47 states that offer 7,000 tools and related products that are in-house store brands sourced directly from manufacturers. The company employs over 11,000 people in the U.S. The Salvation Army Family Stores are thrift shops that raise money for the Adult Rehabilitation Center through selling donated items such as clothing, housewares and toys. The international organization has over 1.5 million members, and can be found in 126 countries. The tenant at this location is the Chicago regional entity covering much of the Midwest. Creative Image School of Cosmetology is a family-owned school with a mission is to help students take their first step toward a career in the beauty and wellness industry. They provide their students with professionally trained instructors, hands-on training in a real salon environment and extensive preparation for the state licensing exam. The school also allows their students to practice their services daily on customers for a discounted rate. This is the sole location. Eastgate shopping Center 8

9 tenant mix Lease Expiration: 4/30/25 Three 5-year options 40% of GLA Lease Expiration: 12/15/21 Recently signed lease 33% of GLA Lease Expiration: 12/31/23 Recently Extended Lease 12% of GLA Lease Expiration: 11/30/19 Been at location since % of GLA s ridgeview rd Santa fe street Eastgate shopping Center 9

10 aerial photos EASTGATE SHOPPING CENTER eastgate shopping center is located at the hard corner of the signalized intersection of W 135th St. and Ridgeview Rd - both high-traffic streets 32,735 DAILY EASTGATE SHOPPING CENTER excellent accessibility to and from I-35 located 1/4 mile from the property. I-35 connects Olathe to Kansas City, 20 miles north EASTGATE SHOPPING CENTER EASTGATE SHOPPING CENTER Eastgate shopping Center 10

11 surrounding retail National tenants comprise approximately 88% of Eastgate Shopping Center s gross leasable area dominant destination grocer Eastgate shopping Center 11

12 photos 100% LEASED SHOPPING CENTER co-anchored BY SHERWIN-WILLIAMS & HARBOR FREIGHT CREATIVE IMAGE adjacent taco bell Eastgate shopping Center 12

13 regional map Located in a dominant retail corridor in the very high growth city of Olathe, KS EASTGATE SHOPPING CENTER 44,765 DAILY US HWY I-35 kansas CITY 29 min 22 miles [ kansas city, mo ] OLATHE Eastgate shopping Center 13

14 location & Demos [ kansas city, mo ] Olathe, ks Overview Olathe, the seat of Johnson County, is located in northeastern Kansas, about 20 miles southwest of downtown Kansas City, Missouri. Olathe is the fourth most populous city in Kansas with a 2010 population of over 125,000. Olathe s commercial and industrial parks are home to many major companies, including Honeywell and Farmers Insurance Group. The Federal Aviation Administration also administers and maintains an Air Route Traffic Control Center in Olathe. kansas city, mo Overview Kansas City has a metro population of about 2.3 million. Kansas City, MO, has a city population of about 464,000, and the adjacent city of Kansas City, KS has a city population of about 147,000. Kansas City is one of the ten regional office cities for the U.S. Government, which is the largest employer in the metropolitan area with more than 146 federal agencies. Kansas City International ( MCI ), has non-stop flights to many destinations across the county. Population 1-Mile 3-Mile 5-Mile ,040 92, , ,968 95, , ,199 99, , Household incomes 1-Mile 3-Mile 5-Mile Average $56,879 $87,606 $102,548 Median $44,200 $73,354 $81,921 Top Employers in Olathe, ks Olathe District Schools Olathe Medical Center Farmer s Insurance Group Garmin International Honeywell Eastgate shopping Center 14

15 CREATIVE IMAGE A unique HUMAN RESULTS-DRIVEN client experience The capital pacific experience - our daily commitment to our clients [ ] Rick Sanner rsanner@capitalpacific.com (415) CA BRE# Aaron Susman asusman@capitalpacific.com (415) CA BRE# Bob Sanner bsanner@capitalpacific.com (415) CA BRE# In Conjunction with KS Licensed Broker: Phil Bundy, Citrus Development bundydevelopment@cox.net Capital Pacific collaborates. Click here to meet the rest of our San Francisco team. chris kostanecki zeb ripple John Andreini Dave lucas zandy smith joe caccamo Gregg Steele Jack Navarra Karla Zens [ Copyright 2016 Capital Pacific ]