300 S. Highland Spring Ste 9, Banning, Ca Offering Memorandum R E T A I L A D V I S O R S

Transcription

1 Rite Aid 300 S. Highland Spring Ste 9, Banning, Ca Offering Memorandum R E T A I L A D V I S O R S

2 CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Rite Aid located at 300 S. Highland Spring Ste 9, Banning, Ca ( Property ). It has been prepared by Matthews Retail Advisors. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Retail Advisors. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum for the Property, you agree: 1. The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Matthews Retail Advisors expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Retail Advisors or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. Matthews Retail Advisors

3 Table of Contents Pricing & financial overview Investment Overview...2 Investments Highlights...2 Executive Summary...3 Lease Abstract...4 Company Overview...6 Property Description Physical Description...9 Birds Eye Regional Map Tenant Map demographics City Overview Banning, CA Demographics Report EXCLUSIVELY LISTED BY: Aron Cline Partner direct MOBILE License No Michael Moreno Associate direct MOBILE License No

4 Matthews Retail Advisors

5 PRICING & Pricing & Financial Analysis Property Description FINANCIAL ANALYSIS

6 Investment Overview STRONG VALUE ADD INVESTMENT OPPORTUNITY Price below replacement cost at $ per square feet 8.48% cap offers investor extremely high return on investment Excellent location - Subject property is located just off the 10 freeway along the main retail corridor which includes Albertson s, Hobby Lobby, Marshalls and Starbucks within shopping center Strong retail synergy among neighboring retailers - Walmart Supercenter, Home Depot, and Ross Prime California retail property - high inherent real estate value Walgreens is currently in negotiations to acquire Rite Aid STRONG INFILL LOCATION WITH AFFLUENT DEMOGRAPHICS 19.67% growth in the last 5 years within a 1-mile radius Over 11,920 people within a 1-mile radius, with Average Household Income of $63,626 Over 50,019 people within a 3-mile radius, with Average Household Income of $60,149 Over 80,536 people within a 5-mile radius, with Average Household Income of $61,206 Other dominant tenants in this trade area include: Walmart, Home Depot, Albertsons, Petco, Subway, Best Buy, Do It Center, Walgreens, Starbucks, Wing Stop, Anytime Fitness, Curves, Bed Bath & Beyond, Panda Express, Burger King, O Reilly s, Applebees, McDonalds, Chili s, AutoZone, and Jack in the Box Subject Property is located within steps of Sun Lakes Country Club and Golf Course San Gorgonio Memorial Hospital is located in the immediate viscinity of property (Across the 10 Freeway) P. 2 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

7 Executive Summary Rite Aid 300 S. Highland Spring Ste 9 Banning, Ca List Price... $4,800,000 CAP Rate - Current % Price Per SF...$ Gross Leasable Area... ±27,469 SF Lot Size...±2.52 Acres (±109,771 SF) Year Built Annualized Operating Data Monthly Rent Annual Rent Rent/SF CAP Rate Current - May 31, 2020 $33, $407, $ % Option 1 - May 31, 2030 $33, $407, $ % Tenant Summary Tenant Trade Name Rite Aid Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NNN Roof and Structure Tenant Responsible Original Lease Term 22 Years Lease Commencement Date May 21, 1998 Rent Commencement Date May 21, 1998 Lease Expiration Date May 31, 2020 Term Remaining on Lease 4.5 Years Increases None Options One (1) Ten (10) Year Option Rite Aid OFFERING MEMORANDUM Matthews Retail Advisors P. 3

8 Lease Abstract Tenant: Rite Aid Tenant Address: 210 W. Pennsylvania Ave., Suite 700 Towson MD Property Address: 300 Highland Springs Avenue Banning, CA Date Of Lease: May 11, 1998 Lease Commencement: May 21, 1998 Lease Expiration: May 31, 2020 Rent Increases: Renewal Options: None None Annual Rent: Current Term: $407,119 Real Estate Taxes: Insurance: Utilities: Repairs and Maintenance: Tenant is responsible Tenant is responsible Tenant is responsible Tenant shall at all times, including any Requisition period, put, keep and maintain the leased premises (including withtout limitation, the roof, landscaping, walls, footings, foundations and structural components of the Leased Premises) and the equipment in the same condition and order of repair as exists as of the date of the lease. Right of First Refusal: Tenant Restriction: If Landlord shall desire to sell or convey all or any portion or portions of the Leased Premises...landlord shall submit a written copy of the Offer to Tenant and shall give tenant twenty (20) days within which to elect to purchase the portion of the Leased Premises. No portion of the shopping center shall be used for a supermarket, bar, tavern, cocktail lounge, adult video store, warehouse, entertainment or recreational facility (theater, bowling alley, skating rink, gym, spa, studio, dance hall, pool hall, massage parlor, game parlor, video arcade), boat or motor vehicle retailer, or school. P. 4 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

9 Rite Aid OFFERING MEMORANDUM Matthews Retail Advisors P. 5

10 Company Overview Property Name Rite Aid Property Type Drug Store Parent Company Trade Name Rite Aid Corporation Ownership Public Credit Rating B Rating Agency Standard & Poor s Revenue $25.94 Billion Net Income $ Million Stock Symbol RAD Board NYSE No. of Locations 4,587 No. of Employees 49,840 Headquartered Camp Hill, PA Web Site Year Founded 1927 Rite Aid Corporation, through its subsidiaries, operates a chain of retail drugstores in the United States. The company sells prescription drugs and a range of other merchandise, including over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, foodand beverages, greeting cards, seasonal merchandise, and other everydayand convenience products. It also offers health coaching, shared decisionmaking tools, and health care analytics, including health coaching for medical decisions, chronic conditions, and wellness; population analytic solutions; and consulting services, as well as various photo processing services in its stores. The company offers its products to customers covered by third party payors, such as insurance companies, prescription benefit management companies, government agencies, private employers, and other managed care providers. It has a strategic alliance with GNC. As of March 1, 2014, the company operated 4,587 stores in 31 states across the United States and in the District of Columbia. Rite Aid Corporation founded in 1927 and is headquartered in Camp Hill, Pennsylvania. Source: Yahoo Finance: P. 6 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

11 PROPERTY Property Description DESCRIPTION

12 P. 8 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

13 Physical Description THE OFFERING Property Name... Rite Aid Property Address S. Highland Spring Ste 9 Banning, CA Assessor s Parcel Number SITE DESCRIPTION Number of Stories... One Year Built Gross Leasable Area (GLA)... ±27,469 SF Lot Size... ±2.52 Acres (±109,771 SF) Type of Ownership...Fee Simple Parking...±80 Surface Spaces Parking Ratio...3 : 1,000 SF Landscaping...Professional Topography... Generally Level CONSTRUCTION Foundation...Concrete Slab Framing...Wood Exterior...Painted Stucco Parking Surface... Asphalt Roof... Flat Rite Aid OFFERING MEMORANDUM Matthews Retail Advisors P. 9

14 Birds Eye P. 10 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

15 Regional Map Rite Aid OFFERING MEMORANDUM Matthews Retail Advisors P. 11

16 Tenant Map P. 12 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

17 DEMOGRAPHICS

18 Market Report Overall Picture The Inland Empire retail market did not experience much change in market conditions in the third quarter The vacancy rate went from 8.3% in the previous quarter to 8.3% in the current quarter. Net absorption was positive 304,203 square feet, and vacant sublease space decreased by (32,957) square feet. Quoted rental rates increased from second quarter 2015 levels, ending at $16.17 per square foot per year. A total of 9 retail buildings with 289,157 square feet of retail space were delivered to the market in the quarter, with 423,605 square feet still under construction at the end of the quarter. Net Absorption Retail net absorption was moderate in Inland Empire third quarter 2015, with positive 304,203 square feet absorbed in the quarter. In the second quarter 2015, net absorption was positive 366,704 square feet, while in first quarter 2015, absorption came in at negative (31,255) square feet. In fourth quarter 2014, positive 375,521 square feet was absorbed in the market. Rental Rates Average quoted asking rental rates in the Inland Empire retail market are up over previous quarter levels, and up from their levels four quarters ago. Quoted rents ended the third quarter 2015 at $16.17 per square foot per year. That compares to $16.08 per square foot in the second quarter 2015, and $15.97 per square foot at the end of the fourth quarter This represents a 0.6% increase in rental rates in the current quarter, and a 1.24% increase from four quarters ago. Inventory and Construction During the third quarter 2015, nine buildings totaling 289,157 square feet were completed in the Inland Empire retail market. Over the past four quarters, a total of 1,018,572 square feet of retail space has been built in Inland Empire. In addition to the current quarter, 10 buildings with 347,788 square feet were completed in second quarter 2015, seven buildings totaling 78,107 square feet completed in first quarter 2015, and 303,520 square feet in 22 buildings completed in fourth quarter P. 14 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

19 Market Report General Retail Properties The General Retail sector of the market, which includes all freestanding retail buildings, except those contained within a center, reported a vacancy rate of 4.8% at the end of third quarter There was a total of 2,826,308 square feet vacant at that time. The General Retail sector in Inland Empire currently has average rental rates of $13.47 per square foot per year. There are 166,035 square feet of space under construction in this sector, with 35,155 square feet having been completed in the third quarter. In all, there are a total of 9,509 buildings with 58,372,919 square feet of General Retail space in Inland Empire. Shopping Centers The Shopping Center market in Inland Empire currently consists of 1792 projects with 89,122,595 square feet of retail space in 5,323 buildings. In this report the Shopping Center market is comprised of all Community Center, Neighborhood Center, and Strip Centers. Over the past four quarters, the Shopping Center vacancy rate has gone from 10.8% at the end of the fourth quarter 2014, to 10.7% at the end of the first quarter 2015, to 10.6% at the end of the second quarter 2015, and finally to 10.6% at the end of the current quarter. Rite Aid OFFERING MEMORANDUM Matthews Retail Advisors P. 15

20 City Overview Banning, CA The City of Banning is strategically located astride Interstate 10 between the Inland Empire and the Coachella Valley in the San Gorgonio Pass. The City, incorporated in 1913, has a rich and colorful history. Initially Banning served as a stagecoach and railroad stop between the Arizona territories and Los Angeles. This history has contributed to the present day spirit of pioneer resourcefulness and can do attitude that is so prevalent in the community. Banning is a friendly and wholesome place to work and raise a family. Clean air, ample water supplies and the memorable and inspiring scenic vistas of both Mt. San Gorgonio and Mt. San Jacinto, the two tallest peaks in Southern California, are additional amenities which make the City of Banning a logical choice as a development opportunity in the Southern California area. P. 16 Matthews Retail Advisors OFFERING MEMORANDUM Rite Aid

21 Demographics Report Population 1-Mile 3-Mile 5-Mile 2020 Projection 11,920 50,019 80, Estimate 10,513 46,555 75, Census 8,785 42,658 69, Census ,777 40,929 Growth % 7.44% 6.95% Growth % 9.14% 8.24% Growth % 79.41% 69.98% Households 2020 Projection 4,782 17,732 27, Estimate 4,313 16,595 25, Census 3,870 15,541 24, Census 441 9,119 14,972 Growth % 6.85% 6.42% Growth % 6.78% 6.07% Growth % 70.42% 62.89% Income $0 - $15, % 11.58% 11.58% $15,000 - $24, % 12.40% 12.40% $25,000 - $34, % 11.64% 11.64% $35,000 - $49, % 17.11% 17.11% $50,000 - $74, % 18.90% 18.90% $75,000 - $99, % 12.68% 12.68% $100,000 - $124, % 7.27% 7.27% $125,000 - $149, % 3.63% 3.63% $150,000 - $199, % 3.31% 3.31% $200,000 - $249, % 0.81% 0.81% $250,000 - $499, % 0.60% 0.60% $500, % 0.08% 0.08% 2015 Est. Average Household Income $63,626 $60,149 $61, Est. Median Household Income $50,028 $47,616 $47,158 Rite Aid OFFERING MEMORANDUM Matthews Retail Advisors P. 17

22 Rite Aid 300 S. Highland Spring Ste 9 Banning, CA OFFERING MEMORANDUM Aron Cline Partner direct MOBILE aron.cline@matthews.com License No Michael Moreno Associate direct MOBILE michael.moreno@matthews.com License No Matthews Retail Advisors 841 Apollo Street, Suite 150 El Segundo, CA