SONIC DRIVE-IN. Offering Memorandum. Actual Location

Transcription

1 Offering Memorandum Actual Location SONIC DRIVE-IN 6645 Highway 41 Ringgold, GA Chattanooga, TN MSA Successful Sonic Location Since 2003 #12 Most Successful Fast Food Chains in America (QSR Magazine 2017) 1.4% Annual Rent Escalations Absolute NNN Lease :: No LL Responsibilities Recent Improvements (±$250,000) Population Growth of 24% Since 2000 Favorable Demographics (5-Mile Radius) ±37,055 People & ±$73,000 AHHI Upside with Additional Income from Billboard

2 SONIC DRIVE-IN OFFERING SUMMARY FUNDAMENTAL REAL ESTATE VALUE The subject property is situated on a versatile ±1.05 acre parcel that is strategically located less than a mile from Interstate 75. Sonic Drive-In maintains phenomenal visibility along US-41, a 3-lane surface road with a center turning lane that was recently widened. US-41 has strong traffic counts of ±17,000 vehicles per day. The site also benefits from ingress and egress along US-41 and Chapman Road. FAVORABLE LEASE STRUCTURE Sonic has successfully operated at this location since 2003, and in 2006 signed a 15 year lease. There are currently just under 3.5 years remaining on the initial term, and the tenant has two (2), 5 year renewal options. This investment opportunity is accompanied by an absolute triple-net (NNN) lease with zero landlord responsibilities. The current rent is $97, which escalates annually by 1.4 percent during the initial term and each renewal option. STRONG BRAND AWARENESS Established in 1953, Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 company drive-thrus and 3,212 franchise drive-thrus. The operator at this location, MACH III Enterprises, Inc., is a 31-unit Sonic franchisee with locations throughout North Georgia and Tennessee. CHATTANOOGA, TN MSA The subject property is located in Ringgold, GA, the county seat of Catoosa County. Ringgold is less than 18 miles south of Chattanooga, TN and part of the Chattanooga MSA. With a total population over 500,000, the Chattanooga MSA has a highly diverse economy with major industry sectors in automotive production, advanced manufacturing, transportation and logistics, food production and insurance services. Some of the top employers include Shaw Industries, BlueCross BlueShield of Tennessee, Amazon.com, Erlanger Health System, and Memorial Health Care System. VIBRANT TRADE AREA The immediate trade area benefits from a strong population count and household incomes. There are ±16,800 and ±37,055 people within a 3- and 5-mile radius, respectively. Since 2000, the population within a 5-mile radius has grown by 24% and is expected to grow by an additional 7% over the next five years. The average household incomes are ±$70,000 and ±$72,500 within a 3- and 5-mile radius, respectively. Some of the nearby traffic generators include Ingles, Food Lion, Advance Auto Parts, Auto Zone, First Bank of Tennessee, Walgreens, McDonald s, Hardee s, Taco Bell, Wendy s, etc. 2

3 SONIC DRIVE-IN AERIAL PHOTO 3

4 SONIC DRIVE-IN AERIAL PHOTO 4

5 PROPERTY SONIC DRIVE-IN NAME PRICING REGIONAL AND LOCATION VALUATION TENANT AND LOCAL SUMMARY OVERVIEW MATRIX MAP 5#

6 PROPERTY SONIC DRIVE-IN NAME Ringgold, GA & Chattanooga, TN-GA MSA OVERVIEW Ringgold is located in NW Georgia and serves as the county seat for Catoosa County. It s nestled near the Tennessee border only ±16 miles away from Chattanooga, TN, making it a part of the Chattanooga, TN-GA MSA. Ringgold was founded in 1846 and incorporated as a city in It was named after Samuel Ringgold, a hero of the Battle of Palo Alto in the Mexican American War. Multiple Civil War battles were fought in and around Ringgold, including the Great Locomotive Chase. A visit to the historic Ringgold Depot will take you back in time and immerse you in the history of this storied town. Chattanooga, the fourth-largest city in Tennessee, is tucked between the mountains of Southeast Tennessee along the beautiful Tennessee River, making it one of America's most breathtaking cities. In fact, the New York Times named Chattanooga one of the "Top 45 Places to go" in the World. Chattanooga's economy includes a diversified and growing mix of manufacturing and service industries. Tourism has increased significantly creating $1 Billion in economic impact for Hamilton County and bringing in 3.5 million overnight visitors in Other economic drivers for the area include the University of Tennessee at Chattanooga, with a student population of nearly 12,000, and its three major hospital systems: Erlanger Health System, Parkridge Hospital System, and Memorial Hospital System. Erlanger is the seventh largest public healthcare system in the United States with more than 500,000 patient visits per year. PRICING AND LOCATION VALUATION TENANT MARKETING SUMMARY OVERVIEW MATRIX TEAM POPULATION 1 Miles 3 Miles 5 Miles 2021 Projection 3,642 17,719 39, Estimate 3,392 16,782 37, Census 3,205 16,092 35, Census 2,645 12,571 29,939 INCOME Average $60,504 $69,634 $72,579 Median $48,638 $57,595 $59,660 Per Capita $24,503 $26,411 $26,995 HOUSEHOLDS 2021 Projection 1,463 6,732 14, Estimate 1,357 6,327 13, Census 1,280 6,087 13, Census 1,022 4,665 11,105 HOUSING 2016 $149,088 $157,645 $162,038 EMPLOYMENT 2016 Daytime Population 5,555 14,501 25, Unemployment 3.27% 4.11% 4.02% 2016 Median Time Traveled RACE & ETHNICITY White 90.13% 93.30% 92.93% Native American 0.02% 0.07% 0.05% African American 5.37% 2.64% 2.69% Asian/Pacific Islander 1.01% 0.93% 1.31% Source: 2015 Experian 6#

7 DRIVE-IN PROPERTY SONIC NAME LOCATION TENANT SUMMARY OVERVIEW PRICING AND VALUATION MATRIX SUBJECT PROPERTY PHOTOS PRICING AND VALUATION MATRIX Billboard included in sale as upside for additional income. Currently leased to Lamar Advertising Company. 7#

8 PROPERTY SONIC DRIVE-IN NAME PRICING AND TRAFFFIC LOCATION VALUATION TENANT GENERATORS SUMMARY OVERVIEW MATRIX 8#

9 SONIC DRIVE-IN TENANT SUMMARY Sonic Drive-In, more commonly known as Sonic, is a franchised/corporate drive-in chain of fast food restaurants that operates across the United States with more than 3,557 locations in 45 states. SONIC, America's Drive-In is the nation's largest drive-in restaurant chain serving approximately 3 million customers every day. Nearly 94 percent of SONIC's 3,500 drive-in locations are owned and operated by local business men and women. For 64 years, SONIC has delighted guests with signature menu items, 1.3 million drink combinations and friendly service by iconic Carhops. Since the 2009 launch of SONIC's Limeades for Learning philanthropic campaign in partnership with DonorsChoose.org, SONIC has donated $8.5 million to public school teachers nationwide to fund essential learning materials and innovative teaching resources to inspire creativity and learning in today's youth. In 2016, Sonic ranked 13 on The QSR 50 of the top 50 limited-service restaurant brands. Sonic has operated since the 1950s but was incorporated in Delaware in The company is headquartered in Oklahoma City, OK. Sonic s menu consists of hamburgers and French fries, as well as onion rings, corn dogs, chili dogs and breakfast toaster sandwiches. Drink options include soft drinks, slushes, and milkshakes. Customers can combine various drinks and flavors to create thousands of possible drink combinations. At a standard Sonic Drive-In, a customer drives into a covered drive-in stall, orders through an intercom speaker system, and has the food delivered by a carhop. Known for its use of carhops on roller skates, the company annually hosts a competition to determine the top skating carhop in its system. Most drive-ins also have patio seating, and many have drive-thru lanes. 9

10 SONIC DRIVE-IN OFFERING SUMMARY RENT SCHEDULE LEASE YEAR ANNUAL MONTHLY RENT RENT RETURN INCREASE Current $97,449 $8, % 13 $98,813 $8, % 1.40% 14 $100,196 $8, % 1.40% 15 $101,599 $8, % 1.40% Option 1 16 $103,021 $8, % 1.40% 17 $104,464 $8, % 1.40% 18 $105,926 $8, % 1.40% 19 $107,409 $8, % 1.40% 20 $108,913 $9, % 1.40% Option 2 21 $110,438 $9, % 1.40% 22 $111,984 $9, % 1.40% 23 $113,552 $9, % 1.40% 24 $115,141 $9, % 1.40% 25 $116,753 $9, % 1.40% RETURN GROWTH CHART 9.00% 9.13% 9.25% 9.38% 9.51% 9.65% 9.78% 9.92% 10.06% 10.20% 10.34% 10.49% 10.63% 10.78% Current Option Option Lease Year 10

11 SONIC DRIVE-IN OFFERING SUMMARY THE OFFERING Property Sonic Drive-In Property Address 6645 Highway 41 Ringgold, GA Price $1,082,762 Capitalization Rate 9.00% Price/SF $ PROPERTY DESCRIPTION Year Built / Renovated 2003 Gross Leasable Area 1,500 SF Type of Ownership Fee Simple Lot Size 1.05 Acres LEASE SUMMARY Property Subtype Net Leased Restaurant Sonic Drive In of Ringgold, GA, LLC Rent Increases 1.4% Per Year Guarantor Franchisee Lease Type NNN Lease Commencement 4/7/2006 Lease Expiration 4/5/2021 Lease Term 15 Years Remaining ±3 Renewal Options Two (2), 5 Year Landlord Responsibility None Right of First Refusal/Offer No LEASE RESPONSIBILITY Taxes Utilities Roof & Structure Landscaping HVAC Parking Lot Insurance ANNUALIZED OPERATING INFORMATION INCOME Net Operating Income $97,448.55* LEASE ABSTRACT RESPONSIBLE PARTY *Upside with additional income from billboard. Please contact Listing Agent and reference page 6 for more details. 11 #

12 NON- ENDORSEMENT AND DISCLAIMER NOTICE Confidentiality and 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 from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. 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. 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, 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, 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â 2017 Marcus & Millichap. All rights reserved. Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. SONIC Ringgold, GA ACT ID Y