CHIPOTLE & BLAZE PIZZA

Transcription

1 FOR SALE CHIPOTLE & BLAZE PIZZA 1601 EAST COLLEGE AVENUE NORMAL, ILLINOIS (ILLINOIS STATE UNIVERSITY) Capital Markets National Retail Partners Midwest

2 AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT CBRE, Inc. operates within a global family of companies with many subsidiaries and/ or related entities (each an Affiliate ) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the Property ) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum. This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the Owner ), to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property. The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.

3 Property Name PRIMARY CONTACT Michael Kaider First Vice President/NNN Specialist CBRE 700 Commerce Drive Suite 550 Oak Brook, Illinois FINANCING CONTACT Geoffrey Harris Senior Vice President TABLE OF CONTENTS 04 Investment Overview 07 Financial Overview 10 Property Description 14 Market Overview Capital Markets National Retail Partners Midwest

4 THE OFFERING CBRE s National Retail Partners, as the exclusive advisor to the seller, is pleased to present the opportunity to acquire 100% fee interest in a 5,311-square foot two-tenant property located at the premier corner of Veterans Parkway and College Avenue in Bloomington-Normal, Illinois. Chipotle and Blaze Pizza are located just over two miles east of Illinois State University, which had a estimated enrollment near 21,000 students. The 100% leased Property is occupied by Chipotle and Blaze Pizza, both 10-year leases. The Property is ideally located on an outlot to Shoppes at College Hills, an open-air lifestyle center anchored by Von Maur, Hobby Lobby, and Target. This opportunity is being offered to qualified investors seeking a stabilized asset in an unmatched retail location. PROPERTY DESCRIPTION Offering Price $3,379,000 Cap Rate 6.00% In-Place NOI $202,716 (See page 8 & 9) Leasable Area Occupancy 100% Year Redeveloped 2016 Average Traffic Count 5,311 Square Feet College Avenue: 18,900 VPD Veterans Parkway: 44,700 VPD 4 CHIPOTLE & BLAZE PIZZA

5 INVESTMENT HIGHLIGHTS + Outstanding Opportunity: The opportunity to acquire fee interest in a two-tenant property strategically located in the heart of the Bloomington-Normal, Illinois retail corridor. Bloomington-Normal is a vibrant community located less than three hours from Chicago, St. Louis, and Indianapolis and is easily accessible via Interstate 39, 55, and Secure Tenancy: The Property was completely redeveloped in 2016 and is 100% leased to Chipotle and Blaze Pizza. Both leases have 10 years of base term and strong rent increases after five years of term. Chipotle has four 5-year options to extend and Blaze pizza has three 5-year options. + Excellent Visibility & Traffic Counts: The Property is highly visible at the southwest corner of Veterans Parkway and College Avenue. Daily traffic counts at the signalized intersection are exceptional, exceeding over 63,600 vehicles per day. + Prime Retail Location: The Property is located on an outlot to Shoppes at College Hills, an open-air lifestyle center anchored by Von Maur, Hobby Lobby, and Target. Other prominent retailers within the area include Menards, Walmart Supercenter, Kroger, Meijer, Best Buy, Petco, Pier 1 Imports, Tuesday Morning, Hobby Lobby, Bed Bath & Beyond, T.J. Maxx, and Lowe s among others. The destination retail base creates a significant draw to the area for Bloomington-Normal residents and Illinois State University students. + Excellent Trade Area Demographics: The surrounding area has a strong demographic profile with a stable customer base. Within three-miles of the site is a population of 96,230 residents with an average household income of $78,580. Strengthening the demographics further is the Property s proximity to Illinois State University, which is located just over two miles west of the site. Illinois State University had a estimated enrollment near 21,000 students. + Robust Economy: Bloomington-Normal is a desirable market with a diversified economy. There are several major employers that provide industry diversification, including State Farm Corporate Headquarters (14,282 employees), Illinois State University (3,320 employees), Country Financial (1,910 employees), Advocate BroMenn Healthcare (1,402 employees), and OSF St. Joseph Medical Center (1,364 employees). Bloomington-Normal has a low cost of living, and an average household income of $76,910, which is in-line with the national average. EXECUTIVE SUMMARY 5

6 IMMEDIATE AREA RETAILERS 6 CHIPOTLE & BLAZE PIZZA

7 FINANCIAL ANALYSIS FINANCIAL ANALYSIS 7

8 RENT ROLL % OF RENT LEASE BASE RENT TENANT SIZE BUILDING COMMENCEMENT EXPIRATION MONTHLY ANNUAL PSF Chipotle 2, % Initial Term 05/18/16 05/31/21 $7, $93, $ /01/21 05/31/26 $8, $103, $42.90 Option 1 06/01/26 05/31/31 $8, $104, $43.56 Option 2 06/01/31 05/31/36 $9, $115, $47.92 Option 3 06/01/36 05/31/41 $10, $126, $52.71 Option 4 06/01/41 05/31/46 $11, $139, $57.98 Lease Notes: Four 5-year renewal options, Net lease with 10% management (admin) max fee on CAM, 105% annual increase cap on controllable expenses. Blaze Pizza 2, % Initial Term 05/23/16 05/31/21 $9, $110, $ /01/21 05/31/26 $10, $126, $43.70 Option 1 06/01/26 05/31/31 FMV but not less than 3% annual increases Option 2 06/01/31 05/31/36 FMV but not less than 3% annual increases Option 3 06/01/36 05/31/41 FMV but not less than 3% annual increases Lease Notes: Three 5-year renewal options, Net lease with 4% max management fee, 105% annual increase cap on controllable expenses. TOTAL/CURRENT: 5,311 $17, $204, $ CHIPOTLE & BLAZE PIZZA

9 INVESTMENT SUMMARY REVENUES $/SF Base Rent $204, $38.45 Recovery Income $38, $7.25 Admin/Management Fee $3, $0.64 Schedules Operating Income $246, $46.35 EXPENSES/NET OPERATING INCOME Estimated Expenses: $/SF Real Estate Taxes $22, $4.25 CAM & Insurance $15, $3.00 Property Management Fee 2.00% $4, $0.93 Total Expenses $43, $8.18 Net Operating Income $202, $38.17 OFFERING PRICE Cap Rate 6.00% Offering Price $3,379,000 FINANCIAL ANALYSIS 9

10 PROPERTY DESCRIPTION 10 CHIPOTLE & BLAZE PIZZA

11 IMMEDIATE AREA RETAILERS CLOSE UP PROPERTY DESCRIPTION 11

12 SITE PLAN N Tenant Square Feet Flood Zone Disclosure: According to flood hazard maps published by FEMA, the site is within Zone X as indicated on the Community Map Panel No C0314E dated July 16, Zone X is an area outside the 0.2 percent-annual-chance flood plain. 12 CHIPOTLE & BLAZE PIZZA Chipotle 2,408 Blaze Pizza 2,903 TOTAL 5,311

13 TENANT PROFILES Chipotle Mexican Grill operates more than 2,250 fast-casual Mexican eateries in retail areas across the United States, Canada, the UK, and France. Chipotle uses high-quality ingredients and offers customers a variety of toppings to build a burrito, taco, or salad. Toppings include chicken, steak, barbecue or free range pork, as well as beans, rice, guacamole and various other veggies and salsas. They also serve chips and salsa, beer, and margaritas. The chain is ranked #14 on QSR Magazine s Top 50 quick serve restaurants list (by sales). Chipotle (NYSE: CMG), founded in 1993, had 2016 sales of $3.9 billion. Blaze Pizza LLC is a Pasadena, California-based chain specializing in made-toorder Fast Fire d pizzas made in an 800-degree open-flame oven. Blaze Pizza offers nine signature pizza options or customers can build their own pizza with a variety of toppings available. Additional menu items include salads, drinks and desserts. The company was founded in 2011 and has quickly grown to over 180 locations within the last six years. In December 2015, the company opened its 100th location in Indianapolis and by August 2016, the 150th location was opened. During the first half of 2016, a new Blaze Pizza location was opened approximately every five days. GLA 2,408 Square Feet GLA 2,903 Square Feet PRORATA SHARE 45.34% PRORATA SHARE 54.66% TERM 10 Year Lease TERM 10 Year Lease RENEWAL OPTION Four 5-Year Options RENEWAL OPTION Three 5-Year Options CURRENT RENT $39.00 PSF CURRENT RENT $38.00 PSF LEASE STRUCTURE Net LEASE STRUCTURE Net LEASE EXPIRATION DATE 5/31/2026 LEASE EXPIRATION DATE 5/31/2026 GUARANTEE Corporate GUARANTEE Personal guarantee by high net worth individuals WEBSITE WEBSITE PROPERTY DESCRIPTION 13

14 MARKET OVERVIEW 14 CHIPOTLE & BLAZE PIZZA ILLINOIS STATE UNIVERSITY

15 MARKET OVERVIEW The twin cities of Bloomington-Normal are located in the heart of central Illinois, halfway between Chicago and St. Louis. Converging at the community are Interstates 39, 55 and 74. Bloomington-Normal is within a three-hour drive of Chicago, St. Louis, and Indianapolis. The Bloomington-Normal Metropolitan Statistical Area (MSA) encompasses all of McLean County and includes several rural communities in addition to the twin cities. The MSA has a population of 194,400 with residents earning an average household income of $76,910. EMPLOYMENT/EDUCATION Bloomington-Normal is best known as the home of State Farm Insurance and Illinois State University. State Farm s corporate headquarters is located in Bloomington, three miles south of the Property. State Farm and Illinois State University are the top two employers in the MSA, collectively employing nearly 17,602 people, or 13% of the total employed population. State Farm also has a corporate south campus, a research and training facility, a centralized shipping and services center, a 99-acre park and the original headquarters building in downtown Bloomington. Illinois State University s campus is located in Normal, just over two miles west of Chipotle and Blaze Pizza. Illinois State made U.S. News & World Report s 2017 Top 100 Public University list which is based on academic quality and excellence. Illinois State University s enrollment was 20,807. In addition to Illinois State University, Bloomington/ Normal is home to three other colleges including Illinois Wesleyan (1,842 students), Lincoln College (1,100 students) and Heartland Community College (5,286). OCT 2016 ESTIMATED EMPLOYED POPULATION BY OCCUPATION 1% 5% 4% 3% 3% 21% Financial Activities Government Retail & Wholesale Trade Leisure & Hospitality 10% Education & Health Services 11% 17% Professional & Business Services Manufacturing Other Services Transportation & Utilities Construction & Mining 12% 13% Information BLOOMINGTON CITY HALL TRANSPORTATION MARKET OVERVIEW 15

16 MARKET OVERVIEW Bloomington-Normal is a major transportation hub within the state of Illinois. Interstates 39, 55 and 74 intersect at Bloomington, providing easy access to the nation s interstate system. US Highways 51 and 150 and Illinois State Route 9 also run through the MSA. Bloomington-Normal is home to the Uptown Station multi-modal transportation center creating a centralized transportation hub, connecting the community s aviation, rail, bus, automobile and pedestrian facilities. The Uptown station is the second busiest in Illinois (after Chicago) and is served by the Lincoln route, which runs daily between Chicago and St. Louis. More than 254,317 passengers in Central Illinois Regional Airport (CIRA) offers flights to Atlanta, Chicago, Dallas-Fort Worth, St. Pete-Clearwater, Minneapolis-St. Paul, and Orlando-Sanford via three carriers. CIRA served more than 381,100 passengers in BLOOMINGTON-NORMAL RETAIL CORRIDOR Bloomington-Normal is also a major retail destination in central Illinois. Veterans Parkway (I-55 Business Route) is the primary retail corridor in the Bloomington-Normal MSA with approximately four million square feet of retail GLA. The corridor is anchored by Eastland Mall; a 760,915-square-foot regional mall owned by CBL and anchored by Bergner s, Macy s, JCPenney, Sears, and Kohl s. Veterans Parkway is a major arterial that runs around the eastern side of Bloomington-Normal, from the convergence of I-55 and I-74 on the southwest side of Bloomington to I-55 on the northeast side of Normal. Traffic counts along Veterans Parkway at College Avenue are 44,700. College Avenue is a primary east/west arterial through Bloomington with traffic counts of 18,900 vehicles per day in front of the Property. The Property is located in Normal, less than four miles northeast of the Central Business District, and in the center of the primary retail corridor along Veterans Parkway. The site is an outlot to Shoppes at College Hills, one of the newest and most unique retail centers with the corridor. The Shoppes at College Hills is an open-air lifestyle center anchored by Von Maur, Gordman s, Hobby Lobby, and Target. The center features numerous retailers and restaurants including Chico s, The Children s Place, Francesca s, Loft, White House Black Market, Massage Envy Spa, Bath & Body Works, and Tuesday Morning. Other prominent retailers within the area include Menards, Walmart Supercenter, Kroger, Meijer, Best Buy, Bed Bath & Beyond, T.J. Maxx, and Lowe s among others. BLOOMINGTON NORMAL MSA TOP EMPLOYERS COMPANY TOTAL EMPLOYEES State Farm Mutual Insurance Co. 14,282 Illinois State University 3,320 Country Financial 1,910 Advocate BroMenn Healthcare 1,402 OSF St. Joseph Medical Center 1,364 Mitsubishi Motor Manufacturing 1,280 TEK Systems 1,131 Afni Inc. 765 Heritage Enterprises 596 McDonald s Restaurants 570 Illinois Wesleyan University 499 GROWMARK Inc. 479 Nestle USA 420 Wildwood Industries/Studley Products Inc. 415 Verizon Communications 400 Bridgestone/Firestone Off-Road Tire Co. 392 Nussbaum Transportation Services Inc. 369 Snyder Corp. 300 Heartland Community College 294 The Baby Fold 277 Source: Moody s Analytics, Precis U.S. Metro, Bloomington-Normal MSA, October CHIPOTLE & BLAZE PIZZA

17 BLOOMINGTON-NORMAL RETAIL CORRIDOR MARKET OVERVIEW 17

18 PRIMARY TRADE AREA Chipotle and Blaze Pizza will draw the majority of its customer base from what we have identified as the Property s primary trade area, defined as a three-mile radius from the site. The boundaries of this trade area are defined primarily by the surrounding population concentrations and major thoroughfares, most notably Ziebarth Road to the north, Lincoln Street to the south, County Road 1900 to the east, and Cottage Avenue to the west. The trade area encompasses portions of Bloomington and Normal. Within the three-mile primary trade area is an estimated population of 96,230, which is projected to increase to 99,690 by Within the five-mile extended trade area, the population exceeds 132,340. The primary and extended trade area populations exclude the seasonal Illinois State University student population of 20,807. The primary trade area s residents are well educated, with 40.4% having at least an Associate s or Bachelor s Degree and 18.5% having a Graduate or Professional. National averages are 27% and 11.6%, respectively. Residents within three miles of the center are affluent with an average household income of $78,580, which is slightly higher than the national average of $77,000. The average home value within the three-mile trade area is $187,527, median home value is $165,620. Both figures are above the Bloomington-Normal MSA and McLean County figures. 18 CHIPOTLE & BLAZE PIZZA

19 POPULATION CONCENTRATION MAP 2016 POPULATION 1 Mile 9,425 3 Mile 96,227 5 Mile 132,343 DAYTIME POPULATION 1 Mile 12,950 3 Mile 99,227 5 Mile 117,169 POPULATION PER SQUARE MILE 2016 Over 2,500 1,000 to 2, to 1, to 500 Less than 250 MARKET OVERVIEW 19

20 HOUSEHOLD INCOME MAP 2016 AVERAGE HOUSEHOLD INCOME 1 Mile $78,649 3 Mile $78,583 5 Mile $75,451 HOUSEHOLDS EARNING OVER $75,000 ANNUALLY 1 Mile 1,693 3 Mile 12,461 5 Mile 19,390 AVERAGE HOUSEHOLD INCOME 2016 Over $100,000 $80,000 to $100,000 $60,000 to $80,000 $40,000 to $60,000 Less than $40, CHIPOTLE & BLAZE PIZZA

21 POPULATION GROWTH MAP PROJECTED POPULATION GROWTH (%) 1 Mile 0.30% 3 Mile 0.77% 5 Mile 0.73% HISTORICAL POPULATION GROWTH (%) 1 Mile 0.60% 3 Mile 0.71% 5 Mile 0.71% POPULATION GROWTH Over 15% 10% to 15% 5% to 10% Up to 5% Loss or No Growth MARKET OVERVIEW 21

22 FOR SALE CHIPOTLE & BLAZE PIZZA 1601 EAST COLLEGE AVENUE NORMAL, ILLINOIS PRIMARY CONTACT FINANCING CONTACT Michael Kaider First Vice President/NNN Specialist CBRE 700 Commerce Drive Suite 550 Oak Brook, Illinois Geoffrey Harris Senior Vice President CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. CBRE and the CBRE logo are service marks of CBRE, Inc. and/ or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. Capital Markets National Retail Partners Midwest