Burlington Coat Factory Investment Offering. Tucson, AZ

Transcription

1 Burlington Coat Factory Investment Offering Tucson, AZ

2 BURLINGTON COAT FACTORY

3 PHOTOS BURLINGTON COAT FACTORY [ 12 ] Property Overview

4 SITE PLAN PYLON SIGN S. 16th Avenue On Ramp W. Ajo Way Off Ramp SITE PLAN NOT TO SCALE On Ramp NORTH BURLINGTON COAT FACTORY [ 13 ] Property Overview

5 PRICING ANALYSIS

6 RENT ROLL Tenant Burlington Coat Factory of Arizona, LLC Size (SF) % of Total (SF) Current Monthly Rent Monthly Rent $/SF Current Annual Rent Increase Increase Rental Increases Monthly CAM Recovery Type Date Rent $/SF Rent 76, % $54,003 $0.71 $648,040 Nov-18 10% $59,404 $0.78 $712,848 Absolute 11/1/ /31/2023 NNN Monthly Annual Lease Start Lease Expires Lease Options 4 (5-Year) Options: Option 1: $65,376 / Mo Option 2: $71,856 / Mo Option 3: $79,099 / Mo Option 4: $86,977 / Mo Tenant agrees to deliver sales statement and pay 2% of the excesss of the breakpoint. TENANT SYNOPSIS BURLINGTON COAT FACTORY Burlington Stores, Inc. was founded in 1972 and is headquartered in Burlington, New Jersey operates as a retailer of branded apparel products in the United States. The company offers fashion-focused merchandise, including women s ready-to-wear apparel, menswear, youth apparel, baby products, footwear, accessories, home décor and gifts, and coats. As of January 31, 2015, it operated 542 stores, including an Internet store in 44 states and Puerto Rico. Company Type: Public (NYSE: BURL) 2015 Employees: 34, Net Income: $65.95 Million Fiscal Year End: January 2015 Revenue: $4.85 Billion 2015 Assets: $2.62 Billion S&P Ranking: B+ Website: BURLINGTON COAT FACTORY [ 15 ]

7 TRANSACTION SUMMARY Financial Information Price: Best Offer Property Specifications Rentable Area: 76,062 SF Land Area: Acres Year Built: 1983 Address: 3660 S. 16th Avenue Tucson, AZ APN: Tenant: Burlington Coat Factory of Arizona, LLC Estimated Operating Information In-Place Nov-18 Gross Potential Rent $648,040 $712,848 Plus Recapture NNN NNN Effective Gross Income $648,040 $712,848 Less Expenses (NNN) (NNN) Net Operating Income $648,040 $712,848 BURLINGTON COAT FACTORY [ 16 ]

8 AREA OVERVIEW

9 AREA OVERVIEW THE CITY OF TUCSON Tucson is the second-largest city in Arizona and the seat of Pima County. It is located in the southeast part of the state on the Santa Cruz River. It is located 100 miles southeast of Phoenix and 60 miles north of the U.S. - Mexico border. The City was incorporated on February 7, The City of Tucson is the 2nd largest city in Arizona with a population of 529,346 as of July 1, TOURISM Tucson is a popular vacation and health resort due to its sunny, mild, dry climate and unique desert location. Tourism is important to the city s economy. Tucson is the perfect destination for a getawayfor business or pleasure as it is surrounded by beautiful mountain ranges, colorful and lush Sonoran Desert landscape and of course the majestic saguaro cactus. It is a friendly and eclectic city with enough activities to keep everyone busy but still keep it on the edge of being laid back. Grassy parks, mountain hiking trails and bicyclefriendly urban and rural roads create recreational opportunities like nowhere on earth. Tucson was recently selected as one of the 13 Best Weekend Getaways by U.S. News Travel because of its great climate, friendly small-town atmosphere, beautiful scenery and abundance of activities and attractions. UNIVERSITY OF ARIZONA In addition to the economic benefits the region s natural surroundings offer, Tucson is home to the University of Arizona which is responsible for some of the most recognized optics, astronomy, and medical industries in the nation. The University of Arizona was the largest regional employer in 2012 with 11,604 full-time employees and has an economic impact of approximately $2.1 billion annual. In 2014, the annual Academic Ranking of World Universities placed the University of Arizona at No. 46 among U.S. schools and No. 86 worldwide. LOCAL ECONOMY Today, Tucson is a growing city of over a half million residents and the heart of a booming high-technology region with more than 1,200 companies employing more than 50,000 people. Among its industries are aerospace and missile production, computer hardware and software, optics, biotechnology and electronics. The city is committed to further growth, with technology at the core. Tucson s superb climate and delightful blend of American, Hispanic and Native American cultures make it one of America s favorite tourist destinations. Tucson has the highest concentration of startups of any U.S. city its size and is ranked as a top five city for entrepreneurs by Entrepreneur Magazine. The Tucson region is fast becoming one of the nation s most innovative business centers. Life sciences programs at the University of Arizona are international leaders in scientific research and education. With access to cutting edge research facilities and staff, collaboration between higher education and biotechnology businesses attracts companies from start-ups to multinationals, including most recently, Ventana Medical Systems (a division of Roche group), Sanofi US, and the Critical Path Institute. BURLINGTON COAT FACTORY [ 18 ]

10 AREA OVERVIEW (CONT.) AEROSPACE & DEFENSE The aerospace and defense sector is a major contributor to the region s economy. Tucson is ranked as one of the top 5 areas in the U.S. for these industries. The aerospace industry includes defense and space-related manufacturing, research and development, industrial technology, assembly, distribution, and warehousing. It also includes firms that maintain and rehabilitate the nation s commercial aircraft fleet. The neighboring State of Sonora is quickly becoming one of Mexico s biggest and most important aerospace clusters as well, making Tucson the closest major U.S. city to companies manufacturing there. OPTICS Tucson s optics industry is world-renowned and composed of companies ranging from large aerospace corporations to research facilities and entrepreneurial start-ups. Much of Tucson s optics industry growth stems from the city s status as a center of worldclass astronomy and The University of Arizona s pre-eminence in the field of optical sciences. The Optical Sciences Center (OSC) is at the heart of optics-based research and instruction on the University of Arizona campus. OSC is considered a national asset for technical leadership in developing new technologies and application for optics in the fields of data storage, medicine, manufacturing, telecommunications, and military guidance systems. RENEWABLE ENERGY Recognized globally as a location of choice for solar energy activities, Tucson s emerging solar industry promises a bright future. The region has valuable resources for technology development, manufacturing and solar power generation. While Tucson is already well known for its abundant sunshine, the region is also becoming known for its abundant human capital, state of the art research and development, ample supply chain opportunities and competitive operating costs. MAJOR EMPLOYERS # OF EMPLOYEES 1. U.S.Army Intelligence Center & Fort Huachuca 13, University of Arizona 10, Raytheon Missile Systems 10, State of Arizona 9, Davis-Monthan Air Force Base 8, Tucson Unified School District No.1 7, City of Tucson 5, Wal-Mart Stores, Inc. 4, Phelps Dodge Mining Co. 4, Carondelet Health Network 3,751 TRANSPORTATION Tucson is a vital transportation and distribution hub. Tucson s unique location near Mexico and their deep-water ports, as well as its substantial transportation infrastructure, means excellent access for trade, connecting people and products in today s competitive global marketplace. I-10 is one of only three coast-to-coast highways in the country, and I-19 connects directly with Mexico s Federal Highway 15 through Nogales, Sonora, Mexico Tucson has long recognized the importance of air access, and Tucson International Airport (TIA) continues to meet the aviation demands of both business travelers and freight, and it is a cornerstone of the region s tourism and economic development. TIA s worldclass facilities have a $3.2 billion economic impact and support approximately 35,000 jobs. THE COUNTY OF PIMA Covering an area of approximately 9,200 square miles, Pima County is one of the oldest continuously inhabited areas of the United States. It is situated in the southern part of Arizona with a portion of its southern boundary bordering Mexico. Created in 1864, Pima County includes a large portion of southern Arizona acquired from Mexico by the Gadsden Purchase of The County s population has grown from 395 in 1820 to an estimated population of 1,022,079 in 2015, according to the Arizona Department of Administration, Office of Employment and Population Statistics. The County has a vibrant multicultural diversity. A major commercial and academic hub, Pima County is home to Tucson, the second largest city in Arizona. Although the County has five incorporated cities and towns, more than a third of the population lives outside of any incorporated cities or towns. LOCAL ECONOMY Pima County s major employers are the University of Arizona, Raytheon Missile Systems, State of Arizona, and Davis-Monthan Air Force Base. Major manufacturers include Ventana Medical Systems, IBM and several aerospace and aircraft companies including Raytheon Missile Systems, Bombardier Aerospace, and Honeywell Aerospace. Employment by industry is led by government; educational and health services; trade, transportation and utilities; professional and business services; and leisure and hospitality. MAJOR EMPLOYERS # OF EMPLOYEES 1. University of Arizona 11, Raytheon 9, State of Arizona 8, Davis-Monthan AFB 8, Tucson Unified School District 7, Pima County Government 7, UA Healthcare Network 6, US Border Patrol 6, Freeport-McMoran Copper 5, Wal-Mart Stores, Inc. 5,400 BURLINGTON COAT FACTORY [ 19 ]

11 DEMOGRAPHICS DESCRIPTION ( 1 MILE 3 MILE 5 MILE 10 MILE BUSINESS INCOME RACE AND ETHNICITY HOUSEHOLDS POPULATION 2015 Estimated Population 2020 Projected Population 2010 Census Population 2000 Census Population Projected Annual Growth 2015 to 2020 Historical Annual Growth 2000 to Median Age 2015 Estimated Households 2020 Projected Households 2010 Census Households 2000 Census Households Projected Annual Growth 2015 to 2020 Historical Annual Growth 2000 to Estimated White 2015 Estimated Black or African American 2015 Estimated Asian or Pacific Islander 2015 Estimated American Indian or Native Alaskan 2015 Estimated Other Races 2015 Estimated Hispanic 2015 Estimated Average Household Income 2015 Estimated Median Household Income 2015 Estimated Per Capita Income 2015 Estimated Total Businesses 2015 Estimated Total Employees 2015 Estimated Employee Population per Business 2015 Estimated Residential Population per Business 14, , , ,039 15, , , ,737 13,692 98, , ,614 13,381 91, , , % 1.7% 1.6% 1.6% 0.4% 0.7% 0.8% 0.9% ,763 33,148 79, ,750 5,069 35,095 84, ,965 4,504 31,300 75, ,944 4,232 29,221 69, , % 1.2% 1.1% 1.1% 0.8% 0.9% 1.0% 0.9% 58.5% 54.2% 58.2% 65.6% 1.6% 4.2% 4.2% 5.0% 0.7% 1.1% 2.5% 3.3% 4.8% 4.6% 4.0% 3.1% 34.5% 36.0% 31.2% 23.0% 85.8% 79.8% 67.8% 48.0% $38,702 $40,271 $44,569 $50,292 $28,290 $32,803 $34,059 $39,440 $13,088 $13,543 $15,739 $20, ,695 9,346 25,612 4,161 57, , , BURLINGTON COAT FACTORY [ 20 ]

12 LEASE ABSTRACT Tenant and Landlord Information Lease Type (Ground/Lease): Tenant (signing entity): Burlington Coat Factory of Arizona, LLC Lease, pg 1, sec 1.1 Doing Business As (Business Name): Burlington Coat Factory Guarantor: Burlington Coat Factory Warehouse Corporation Lease, pg 51, sec 48.1 Address/Suite #: 3660 S 16th Avenue, Tucson, AZ Lease, pg 1, sec 2.1 Lease Dates, Term and Premises Lease Execution Date: 6/13/2013 Lease, pg 1, sec 2.1 Lease Commencement Date: Day that later of Landlord or Tenant receives a fully executed copy of this lease Lease, pg 2, sec 3.1 Rent Commencement Date: Earlier of date tenant shall "Grand Open" or 9/1/2013 (if Landlord delivers possession by 6/13/2013) Lease, pg 3, sec 5.2 Term: 10 Years Lease, pg 3, sec 5.1 Expiration Date: Period ending on the last day of the 12th month of expiration Lease, pg 2, sec 3.1 Pro Rata Share: Charges multiplied by a fraction, the numerator which is 76,240 (demised premises) and the denominator Lease, pg 26 sec 35.3 which is the aggregate floor area of all buildings on the Landlord's land. Rent and Additional Rent Current Rent and Escalations: Base Rent: Years 1-5: $648,040.00/yr (current rent) Lease, pg 3, sec 5.1 pg 4, sec 5A.2 Years 6-10: $712,844.00/yr Rent Abatements: None N/A Options and Terms: Four 5-Year option periods Years 11-15: $784,509.60/yr Years 16-20: $862,274.40/yr Years 21-25: $949,188.00/yr Years 26-30: $1,043,725.60/yr Section Lease, pg 3, sec 5.1 pg 4, sec 5A.2 Tenant Improvement Allowance: $35.07 per square foot of the Demised premises Lease, pg 29, sec 28.7 Security Deposit: None N/A Percentage Rent: Tenant agrees to pay a sum equivalent to 2% of the total sales amount in excess of the percentage rent breakpoint (outlined below). Lease, pg 4, sec 5A.2 Gross Sales (reporting): Years 1-5: $32,402,000.00/yr Years 6-10: $35,642,200.00/yr Years 11-15: $39,225,480.00/yr Years 16-20: $43,113,720.00/yr Years 21-25: $47,459,400.00/yr Years 26-30: $52,186,280.00/yr On or before the 90th day following each Lease year, Tenant agrees to deliver a statement showing the sales made by Tenant during the preceding lease year Lease, pg 6, sec 5A.4 BURLINGTON COAT FACTORY [ 21 ]

13 LEASE ABSTRACT (CONT.) Expense Recovery/Non-Recovery and Responsibilities Property Taxes: Tenant shall pay to Landlord Tenant's pro-rata share of taxes Lease, pg 36, sec 35.3 Property Tax Cap: None N/A Insurance: Tenant shall pay pro rata share of the cost of premiums for Landlord's liability and casualty insurance. Tenant will procure a policy of commercial general liability and fire and extended coverage insurance Lease, pg 40, sec pg 17, sec 17.5 Utilities: Tenant agrees to pay directly for all utilities Lease, pg 10, sec 14.1 CAM: Tenant shall pay to Landlord tenant's pro-rata share of CAM charges, including paving, landscaping, parking Lease, pg 37, sec 36.5 lot lighting, trash removal and other costs in operating and maintaining the common facilities Management Fees/ Admin Fees: 2.5% of all rent paid, excluding cost of insurance, security and utility charges Lease, pg 41, sec Expense Caps: CAM shall not exceed $1.42 psf for the first year of the lease term. Thereafter tenant shall pay CAM without Lease, pg 40, sec any so-called "Cap" on any such charges Tenant Maintenance Responsibilities: Tenant agrees to make and pay for all nonstructural repairs to the interior of both the demised premises and Lease, pg 14, sec loading docks and signage, including the HVAC and utility systems Landlord Maintenance Responsibilities: Landlord at its sole cost and expense shall make and pay for all repairs structural (including roof) or otherwise to the exterior of the building, and including all repairs to the interior which are of a structural nature Lease, pg 13, sec 16.1 Miscellaneous Co-Tenancy: None N/A Exclusive Use: None N/A Termination Right: None N/A First Right of Refusal/Right of First Offer: None N/A Relocation Rights: None N/A Sublease/Assignments: Tenant may not assign or sublet wthiout first obtaining written consent of landlord. Tenant may license Lease, pg 11, sec 15.2 departments in its store not to exceed 40% of floor area. Tenant shall not subdivide the premises into more than (5) subleased spaces. Estoppel: Tenant and landlord agree to deliver upon request in writing, a statement certifying this lease is in full force Lease, pg 50, sec 44.1 and effect Parking Requirements: As required by applical Legal Requirements and that in no event shall be less than as required under the REA Lease, pg 32, sec 30.1 BURLINGTON COAT FACTORY [ 22 ]