RARE DOLLAR GENERAL PRIME COASTAL, AFFLUENT COMMUNITY

Transcription

1 Parks & Recreation and Police Department Wings Bennet Lane North Lake Park Boulevard - 15,600 Cars Per Day Wings PLAY VIDEO RARE DOLLAR GENERAL PRIME COASTAL, AFFLUENT COMMUNITY 1136 NORTH LAKE PARK BOULEVARD, CAROLINA BEACH, NC 28428

2 Confidentiality Agreement The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical 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. Marcus & Millichap 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, PCBs or asbestos, the compliance with local, 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 offering memorandum has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS. Net Leased Disclaimer Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newlyconstructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

3 PRESENTED BY Kevin Boeve Senior Vice President Investments ONTARIO OFFICE Tel: (909) CA License: Kyle Blatt Associate ONTARIO OFFICE Tel: (909) CA License: Raj Ravi Broker of Record NORTH CAROLINA OFFICE Tel: (704) NC License:

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5 TABLE OF CONTENTS EXECUTIVE SUMMARY Executive Overview...2 Tenant Overview....3 Dollar General in the News...5 FINANCIAL OVERVIEW Financial Overview....7 PROPERTY DESCRIPTION Parcel Overview...9 Aerial Maps MARKET OVERVIEW Carolina Beach, NC DEMOGRAPHICS Summary...16

6 executive summary

7 overview Marcus & Millichap is pleased to exclusively market for sale an upcoming Dollar General store located at 1136 North Lake Park Boulevard near the coast of Carolina Beach, NC. Brand new 15-year triple net lease includes 10 percent rent increases in each of the five, five-year renewal options. The lease is guaranteed by Dollar General Corporation, which is publicly traded on the New York Stock Exchange under the ticker DG and has a current BBB credit rating by Standard & Poors. The location benefits from having frontage along Lake Park Boulevard, or Highway 421, a major thoroughfare in North Carolina. Nearby national credit retailers include CVS Pharmacy, Food Lion, Walgreens, Subway, Domino s Pizza, McDonald s, and more. Carolina Beach is located 15 miles south of Wilmington, NC, on the northern end of Pleasure Island. Though arguably best known for its beaches, Carolina Beach is brimming with fantastic attractions ranging from the city s top ranking boardwalk to its remote island reserves. investment highlights 15-Year Triple Net Investment Opportunity With Zero Landlord Responsibilities Five, Five-Year Options With 10 Percent Rent Increases Frontage Along Lake Park Boulevard (Highway 421) Traffic Counts of Over 15,600 Cars Per Day Traffic Counts Double on Weekends and Holidays Carolina Beach is Arguably a Perfect Combination l Prime Tourist Destination plus Stable and Secure Upscale City Demographics l Perfect for a Trophy Real Estate Investor. Housing Values Have Increased 35 Percent Over Last Five Years l Carolina Beach is Quickly Becoming One of The Region s Primary Destinations to Relocate, Own Investment Real Estate, or a Vacation Home Dollar General is the Nation s Largest Small-Box Discount Retailer With Over 13,000 Locations in 40 States Standard & Poor s Investment Grade (S&P. BBB ) Tenant The Only Small-Box Retailer With Investment Grade Credit Dollar General Has $17.5 Billion in Sales Volume and is Ranked #139 in Fortune 500 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

8 tenant overview DOLLAR GENERAL IS THE COUNTRY S LARGEST SMALL-BOX DISCOUNT RETAILER Dollar General (NYSE: DG) is a chain of more than 13,000 discount stores in 43 states, primarily in the South, East, Midwest, and Southwest, offering basic household items, such as cleaning supplies, health, and beauty aids, apparel, and food. The target is low, middle, and fixed-income shoppers. The company has grown into the country s largest small-box discount retailer. Stores are often located in small towns off the radar of giant discounters. One of Dollar General s main advantages is that it offers prices as low or lower than Walmart but in more convenient locations. Dollar General has more stores than other retailers and is easily the largest dollar store chain. The company ranks 139th on the Fortune 500 list. Fiscal 2016 revenues exceed $20.3 billion with a net income of $1.17 billion, and net worth of $5.3 billion. In July 2015, Family Dollar was acquired by Dollar Tree and ceased to be a public company. Dollar Tree took on billions of dollars of debt to acquire Family Dollar, and that negatively impacted the credit rating of both companies. Moreover, Family Dollar, as a subsidiary of Dollar Tree, no longer issues separate financial statements. The best-known rating agency, Standard & Poor s, downgraded Family Dollar in July, alongside Dollar Tree having already been downgraded. The combined Dollar Tree-Family Dollar entity will have approximately the same amount of revenue as Dollar General, but more debt, hence the lower credit rating. Dollar General is now the only dollar store chain with an investment grade rating. Dollar General has been credit-upgraded five times since going public in 2009, most recently in October It is now BBB. Company Type: PUBLIC (NYSE: DG) Fiscal 2015 Sales $20.4 BILLION S&P 500 Credit Rating BBB 2015 Fortune 500 #139 Number of Stores 13,000+ The Three Largest Discount Store Chains, Ranked by 2015 Revenue Are: Ranking Store Chain Revenue # 0f Stores 1 Dollar General $20.3 Billion 13, Family Dollar $10.5 Billion 8, Dollar Tree $8.6 Billion 13, 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future 4 performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

9 Actual dollar Carolina Beach general Oceanfront in the news 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

10 dollar general in the news Dollar General is Starting to Look a Lot Like Wal-Mart Doling Out Pay Increases to Managers It s no longer enough for retailers to compete on price alone. To improve the cleanliness and availability of products in its stores, Dollar General will take a 16 cents per share hit to boost compensation for its managers and ramp up their training. In the stores where it s already rolled out these changes, Dollar General has seen lower turnover among managers and hourly employees, CEO Todd Vasos said on the company s earnings call. It s also seen higher sales in those locations. This decision follows Wal-Mart s $2.7 billion investment into better training and pay for its employees, which it has credited for higher customer service scores. Investing in Lower Prices There s an all-out price war happening across retail. That includes both Dollar General and Wal-Mart. Shortly after Wal- Mart said it would move faster to lower prices, Dollar General rolled out price cuts on hundreds of items across 17 percent of its stores. These locations have performed better than the chain average ever since, Vasos said. While the company will continue monitoring prices, it doesn t anticipate further price cuts at this time, the CEO said. Bringing in Fresh Produce Dollar General s food offering has traditionally skewed toward packaged goods. But as its customers ask for healthier options, the retailer sees more opportunity in perishable items. The company is already testing fresh produce in some of its stores, including the 41 locations it purchased from Wal-Mart last year after it shuttered the Express format. Dollar General will now expand that pilot to some of its smaller shops. Wal-Mart has made fresh produce a key piece of its turnaround plan, as it drives more frequent visits from shoppers. While Vasos acknowledged there s stiff competition in fresh food, he said the company s massive fleet and small shops give it a competitive advantage. Going Smaller Dollar stores are already a fraction the size of a Wal-Mart Supercenter. But as Dollar General peppers the U.S. with new shops, it s making those locations smaller. The company plans to open an additional 160 small shops this year. At 6,000-square feet, these locations cater to central metropolitan and rural areas. That will bring the total number of these shops to 250. Meanwhile, Dollar General is testing an even smaller 3,600-square-foot store that serves millennials living in urban areas. The expansion of these stores comes as Wal-Mart grows its Neighborhood Market footprint. Making a Bigger Bet on Digital Dollar General lags much of the retail industry when it comes to digital commerce, but the chain is putting a bigger emphasis on technology. Though Vasos was mum on specifics, the decision comes as more low-income consumers purchase mobile devices, the CEO said. Becoming more digitally savvy should also help Dollar General attract millennial shoppers, whom Vasos says are playing a bigger role in its sales. Wal-Mart has also been rolling out upgrades to its website and mobile technologies, including the ability for shoppers to pay directly from its app. 5 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

11 Rendering of Actual Building financial overview

12 financial overview offering summary Property Name Dollar General Property Address 1136 North Lake Park Boulevard Carolina Beach, NC Price $2,957,636 Price/SF $ Cap Rate 5.15% Rentable Square Feet 10,566 Square Feet Year Built December 2017 Lot Size 1.98 Acres tenant overview Tenant Trade Name Dollar General Ownership Public Tenant Corporate Store Lease Guarantor Corporate Guarantee Lease Type Absolute Net Roof and Structure Tenant Responsible Lease Term 15 Years Lease Commencement Date 11/16/2016 Rent Commencement Date 1/30/2018 Lease Expiration Date 11/16/2031 Term Remaining on Lease 15 Years Increases 10% Increase For Each Option Options Five, Five-Year Options annualized operating data Lease Years Annual Rent Monthly Rent Increases Years 1-15 $152, $12, Years (Option 1) $167, $13, % Years (Option 2) $184, $15, % Years (Option 3) $202, $16, % Years (Option 4) $223,009.2 $18, % Years (Option 5) $123,818 $20, % Net Operating Income $152, vita data Net Operating Income - Current $152, Ownership Fee Simple (Land & Improvements) Proposed Financing New First Trust Deed financing options Multiple financing options are available based on buyer requirements. Please contact listing agents to discuss options in detail. 3-Year Fixed 3.70% 5-Year Fixed 4.0% 7-Year Fixed 4.25% 10-Year Fixed 4.6% 7 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

13 property description

14 parcel overview location 1136 North Lake Park Boulevard Carolina Beach, NC site The subject property has frontage on North Lake Park Boulevard with traffic counts of 15,600 cars per day. size The building square footage is 10,566-square feet and the lot size is +/ acres. access Access is from North Lake Park Boulevard. year built The property was built in North Lake Park Boulevard - 15,600 CPD 9 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future 4 performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

15 North Lake Park Boulevard is the Main Thoroughfare In and Out of Carolina Beach 45,000 Cars Per Day During Weekends and Holidays. North Lake Park Boulevard - 15,600 CPD 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

16 Rendering of Actual Building

17 demographics within a 10-mile radius: MICHAEL S $72,107 AVG HOUSEHOLD INCOME Kupboard Grocery 207,424 RESIDENTS Parks & Recreation and Police Department WINNER GULF STREAM FISHING Elementary School Traffic Counts Frequenty Triple During Weekends & Holidays Taking Them Above 45,000 Cars Per Day 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

18 Actual Carolina Beach Oceanfront market overview

19 area overview Carolina Beach, NC Carolina Beach is a town in New Hanover County, North Carolina. It is part of the Wilmington metropolitan area. There s a reason why the Carolina Beach area is historically known as Pleasure Island. A favorite destination for generations of vacationers, this coastal town is more than meets the eye, thanks to the array of activities and things to do that are sure to appeal to everyone in the vacationing party. Carolina Beach s old-fashioned seaside fun is centered on the vintage boardwalk dotted with pizza, doughnut, and ice cream stands. Named one of the Top 10 Boardwalks in the country by Food & Wine magazine, the Carolina Beach Boardwalk is the pinnacle of classic beachside fun and is one of the few beach boardwalks in existence along the Carolina coastline. Nearby, amusements include miniature golf, batting cages, rides, and an arcade; Enjoy live music venues, tiki bars, and fresh seafood served with views of the Atlantic Ocean. You can surf or paddleboard, hike the white sand trails of Carolina Beach State Park or just take in the sea, sun, and sights. Distance To From Property Fayetteville, NC 2 Hour Drive Wilmington, NC 25 Min Drive Jacksonville, NC 1 Hour, 30 Min Drive 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

20 demographics

21 demographics 3 Miles 5 Miles 10 Miles 2016 Population 45,178 83, , Population 48,360 89, , Households 19,393 35,991 89, Average Household Size Daytime Population 3,744 5,676 18, Owner Occupied Housing Units 13,227 22,283 52, Renter Occupied Housing Units 6,167 13,709 36, Average Household Income $80,794 $75,156 $72,107 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap ACT ID Y

22 PRESENTED BY Kevin Boeve Senior Vice President Investments ONTARIO OFFICE Tel: (909) CA License: Kyle Blatt Associate ONTARIO OFFICE Tel: (909) CA License: Raj Ravi Broker of Record NORTH CAROLINA OFFICE Tel: (704) NC License: