Starbucks. Roswell, NM. Offering Memorandum. Rich Diller tel cell

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1 Offering Memorandum Starbucks Roswell, NM A division of NAI Maestas and Ward Rich Diller tel cell richd@iparealty.com Cole Flanagan tel cell cole@iparealty.com

2 Confidential Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it form NAI Maestas & Ward and should not be made available to any other person or entity without the written consent of NAI Maestas & Ward. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. NAI Maestas & Ward has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, NAI Maestas & Ward has not verified, and will not verify, any of the information contained herein, nor has NAI Maestas & Ward conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT A NAI MAESTAS & WARD ADVISOR FOR MORE DETAILS. Offering Memorandum 2

3 Investment Highlights Investment Property Advisors is pleased to offer for sale the Starbucks corporate lease in Roswell, New Mexico. Starbucks is strategically located in the heart of Roswell, across the street from the New Mexico Military Institute and surrounded by many hotels and national retailers. This busy trade area encompasses substantial daily traffic counts, while also servicing a dense residential, tourist and employment population. Starbucks occupies an approximately 1,900 square foot building on a parcel of approximately 22,746 square feet. This is a well-established location for Starbucks, where they have been operating for over 7 years of an initial 10 year NNN lease with 4, 5 year renewal options, and rental increases of 10% every 5 years running throughout the base term and option periods. The lease is NNN with minimal landlord responsibilities. The location benefits from visibility to high traffic counts and direct access on the major north/ south roadway of North Main Street running through the middle of Roswell, NM. Neighboring businesses include Walgreens, McDonald s, Days Inn, Best Western, Burger King, Big O Tires, etc. NNN lease with minimal landlord responsibilities 10 year base lease term (almost 3 years remaining), with 4-5 year renewal options Rental increases of 10% every 5 years in initial term and options Strategically located in the heart of Roswell, NM, across the street from the New Mexico Military Institute directly on Main Street Free-Standing, Well-Established location with Drive-thru Main Street is the highest traveled north/south thoroughfare throughout Roswell Offering Summary Purchase Price $1,243,000 Net Operating Income $83,930 Cap Rate 6.75% Lease Type NNN Offering Memorandum 3

4 Lease Summary Location NEQ of N Main St. & E. 13th St. Roswell, NM Tenant Starbucks Corporation Leased Premises +/- 22,746 SF Rent Commencement July 23, 2007 Base Lease Term Ten (10) Years Renewal Options Four (4), Five (5) Year Options Rental Increases 10% every Five (5) Years Annual Rent $83,930 Expenses NNN Minimal Landlord Responsibilities Rent Schedule Years Annual Base Rent 1-5 $79, $87, (Option 1) $96, (Option 2) $106, (Option 3) $117, (Option 4) $128,820 Net Operating Income 2013 Amount Base Rent $87,989 Expense Reimbursement $14,044 Gross Income $102,033 Building Insurance $1,432 CAM $2,876 Property Taxes $8,659 Management $5,136 Operating Expenses $18,103 Net Operating Expenses $83,930 Offering Memorandum 4

5 Tenant Highlights Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 62 countries. Formed in 1985, Starbucks Corporation s common stock trades on the NASDAQ Global Select Market ( NASDAQ ) under the symbol SBUX. Starbucks purchases and roasts highquality coffees that they sell, along with handcrafted coffee, tea and other beverages and a variety of fresh food items, through company-operated stores. Starbucks also sells a variety of coffee and tea products and license their trademarks through other channels such as licensed stores, grocery and national food service accounts. In addition to their flagship Starbucks brand, their portfolio also includes goods and services offered under these brands: Teavana, Tazo, Seattle s Best Coffee, Starbucks VIA, Starbucks Refreshers, Evolution Fresh, La Boulange and Verismo. Starbucks has four reportable operating segments: 1) Americas, inclusive of the US, Canada, and Latin America; 2) Europe, Middle East, and Africa ( EMEA ); 3) China / Asia Pacific ( CAP ) and 4) Channel Development. Segment revenues as a percentage of total net revenues for fiscal year 2013 were as follows: Americas (74%), EMEA (8%), CAP (6%), Channel Development (9%), and all other segments (3%). TENANT PROFILE Company Starbucks Corp Stock Symbol SBUX (NYSE) Credit Rating S&P A- Total Revenue $14.89 Billion Market Capitalization $ Billion EBITDA $ 4.22 Billion Net Worth $ 4.48 Billion Founded 1971 Number of Locations 23,187 Headquarters Seattle, WA Website Offering Memorandum 5

6 Roswell Overview Located in Chaves County, Roswell is a growing city that is home to a thriving population of almost 50,000 residents. Roswell is well known not only for aliens, but for their hospitality in welcoming new businesses (while supporting existing ones) and visitors alike. When it comes to history, few New Mexico cities have the rich heritage of Roswell. The first non-indigenous settlers of the area around Roswell were a group of pioneers from Missouri, who attempted to start a settlement 15 miles southwest of what is now Roswell in 1865 but were forced to abandon the site because of a lack of water. Van C. Smith, a businessman from Omaha, Nebraska, and his partner, Aaron Wilburn, constructed two adobe buildings in 1869 that began what is now Roswell. Van C. Smith was the son of Roswell Smith, a prominent lawyer in Lafayette, Indiana, and Annie Ellsworth, daughter of U.S. Patent Commissioner Henry Leavitt Ellsworth. He called the town Roswell, after his father s first name. The two buildings became the settlement s general store, post office, and sleeping quarters for paying guests. Capt. Joseph C. Lea first platted Roswell in 1885 and brought stability to the area after the trials of the Lincoln County War. In 1890, a vast artesian water supply was discovered beneath Roswell and ditches were dug to divert the water into vegetable fields. In 1891, the town of Roswell was incorporated. Roswell has been the home to New Mexico Military Institute (NMMI) since This four year high school and two year junior college has been the breeding ground for many talented young men and women in our city, our state, and our nation. Among its most notable graduates are Conrad Hilton, Roger Staubach, and Sam Donaldson. Will Rogers, who once said that Roswell was the prettiest little town west of the Pecos, had a son who also went to NMMI. This school contributed to New Mexico becoming a state in It also holds a long history of appointing its graduates to West Point and other military academies, as well as important appointments in our nation s illustrious military forces. The All-America City, Roswell s objective is to continue to provide its citizens with the best quality of life achievable. The city of Roswell s goal to provide quality, cost-effective services to the corporate and residential citizens of Roswell. Offering Memorandum 6

7 Property Location Military Heights Elementary School NM Military Institute Golf Course 19th St. Budget Inn Roswell Self Storage Goddard High School NM Military Institute 17,248 Dodson Wholesale Lumber Spring River Golf Course College Blvd. Union Ave. 8,546 Washington Ave. Credit Union 13th St. 11th St. 8th St. Museum & Art Center Visitors Center N. Main St. Burrito Express SITE Roswell Ford Lincoln Dealership Museum of Contemporary Art Garden Ave. Atkinson Ave. Offering Memorandum 7

8 Aerial NM Military Institute College Blvd. 8,546 17,248 Truck Rental Richardson Ave. Amigos Mexican Restaurant N. Main St. Farleys Restaurant SITE Power Block Gym Offering Memorandum 8

9 Summary Population Households Families Average Household Size Owner Occupied Housing Units Renter Occupied Housing Units Median Age Trends: Annual Rate Population Households Families Owner HHs Median Household Income Households by Income <$15,000 $15,000 - $24,999 $25,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 - $199,999 $200,000+ Median Household Income Average Household Income Per Capita Income Population by Age Mile Demographics 1 mile radius 3 mile radius 5 mile radius 7,419 2,747 1, ,666 1, State 0.53% 0.59% 0.47% 0.62% 2.85% % % % % % % % % % 42,026 15,872 10, ,526 5, State 0.53% 0.59% 0.47% 0.62% 2.85% 3, % 2, % 2, % 2, % 2, % 1, % 1, % % % 50,272 18,835 12, ,789 6, State 0.53% 0.59% 0.47% 0.62% 2.85% 3, % 3, % 2, % 2, % 2, % 2, % 1, % % % $27,152 $41,285 $15, % % % % % % % % % % % % $34,419 $50,532 $19,054 3, % 3, % 3, % 3, % 2, % 5, % 4, % 4, % 4, % 3, % 2, % 1, % $35,316 $50,901 $19,110 3, % 3, % 3, % 3, % 3, % 6, % 5, % 5, % 6, % 4, % 2, % 1, % Offering Memorandum 9