4400 CUTLER AVE ALBUQUERQUE, NM OFFERING MEMORANDUM

Transcription

1 4400 CUTLER AVE ALBUQUERQUE, NM OFFERING MEMORANDUM

2 AFFILIATED BUSINESS DISCLOSURE CBRE, Inc. operates within a global family of companies with many subsidiaries and 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, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the Property ), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s). CONFIDENTIALITY AGREEMENT Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property ( Owner ) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc. DISCLAIMER This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented as is without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. Any projections, opinions, or estimates are subject to uncertainty. The information may not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk. 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. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. PMStudio_June CBRE, INC. ALL RIGHTS RESERVED

3 TABLE OF CONTENTS 01INVESTMENT SUMMARY 02PROPERTY DESCRIPTION 03TENANT OVERVIEW 04MARKET OVERVIEW EXCLUSIVELY REPRESENTED BY: JIM DOUNTAS First Vice President LIA ARMSTRONG, CCIM Vice President NANCY MCCLURE First Vice President

4 01INVESTMENT SUMMARY

5 THE OFFERING CBRE, Inc. has been retained as the exclusive advisor for the disposition of the fee simple interest in Pima Medical Institute ( the Property ) located at 4400 Cutler Ave NE, Albuquerque, NM Pima Medical Institute is comprised of one building totaling approximately ±45,426 rentable square feet on ±4.28 acres. Pima Medical Institute is the premier medical and dental services educator in the State of New Mexico. They are nationally recognized and have operated successfully in the Albuquerque market for over 32 years. This opportunity affords qualified investors the ability to acquire a well positioned single-tenant building with a long-term lease in place providing a stable and predictable income stream. PROPERTY FACTS PROPERTY ADDRESS 4400 Culter Ave Albuquerque, NM YEAR BUILT 1996 TOTAL BUILDING AREA LAND AREA 45,426± SF 4.28± Acres (186,267± SF) OFFERING PRICE $13,136,000 OCCUPANCY 100% CAP RATE 7.25% Pima Medical Institute 5

6 AERIAL SUPERSTITION SPRINGS CENTER MENAUL BLVD STARBUCKS COFFEE 4400 CULTER AVE NE CUTLER AVE 188,800 VPD I-40

7 CORONADO CENTER SAN MATEO BLVD I-40 WALMART NEIGHBORHOOD MARKET WASHINGTON ST INDIAN SCHOOL RD N

8 INVESTMENT HIGHLIGHTS 100% Leased to a Strong Credit Tenant 100% leased to Pima Medical Institute (PMI) with a new ±10 year triple net lease in place. The lease term allows for annual rent increases. Pima has operated in this location since 2010 and has operated in the Albuquerque market since PMI s Albuquerque location has a 97% 5-year average job placement rate which is the best rating among all PMI locations nationwide. Institutional Offering Pima Medical Institute has been privately owned and maintained since its inception. Builidng ownership has continued to maintain the building to institutional standards. Outstanding Location Pima Medical Institute is situated along Interstate 40 with 188,800 vehicles traveling past the property per day. The property is in an excellent office and retail center which offers unmatched visibility and access. The site is located near one of Albuquerque s most desirable and active trade areas, Uptown, and is within walking distance to various dining and retail amenities as well as large residential communities. Ideal 1031 Exchange property Property is ideal for a 1031 Exchange buyer looking for an investment in an infill trade area with minimal landlord responsibilities. Unencumbered by Debt The Property is being offered unencumbered by debt, allowing potential investors to take advantage of the low interest rates currently available. 8 Pima Medical Institute

9 Local Market Opportunities Pima Medical Institutes s location along Interstate 40 in NE Heights Submarket the allows for quick and easy access to all quadrants of the City via Interstate 40 major East/West arterial (±4 minutes; ±1.0 miles north), Interstate 25 major North/South arterial (±3 minutes; ±1.5 miles west). The property also sits directly west of San Mateo Blvd which is a major thoroughfare in the Albuquerque Metropolitan Area, allowing for easy access to a large and diverse labor market. Companies in the area also have the benefit of drawing from the deep pool of talent located less than 9 minutes (±2.7 miles) away at the largest nonprofit, public university in the state, University of New Mexico, with more than ±36,000 students. Albuquerque International Airport (Sunport) is approximately 11 minutes (±7.8 miles) away from the Property. The Albuquerque International Airport is the largest commercial airport in the state and serves over 4.7 million passengers a year. Healthcare is a major economic driver in Albuquerque. Presbyterian Healthcare Services is New Mexico s only private, non-profit statewide healthcare system; one of the top 10 integrated healthcare delivery networks in the U. S. Presbyterian employs 7,310 people. University of New Mexico Health Sciences Center is the largest academic health complex in the state. UNM Hospital is New Mexico s only level 1 Trauma Center and provides 13 pediatric subspecialties. UNM currently has a hospital on the UNM campus that employs 6,021 people as well as the new Sandoval County Regional Medical Center in Rio Rancho. Pima Medical Institute 9

10 02 PROPERTY DESCRIPTION

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12 Washington St PROPERTY DESCRIPTION LOCATION 4400 Cutler Ave, Albuquerque, NM LAND AREA 4.28± Acres (186,267± SF) PARCEL NUMBER SITE BUILDING AREA The subject is located in the Pavillions Shopping Center at the SEC of Cutler Ave. and Washington St. NE 45,426± SF YEAR BUILT 1996 PARKING 244 Surface Parking Stalls; 5.42/1,000 parking ratio ACCESS Access points include four (4) full access entrances off of Cutler Ave. 188,800 VPD on Interstate 40 TRAFFIC COUNTS ZONING 35,100 VPD on San Mateo Blvd 13,300 VPD on Culter Ave C-3 (City of Albuquerque) PLAT MAP Cutler Ave I-40 N Not to scale. 12 Pima Medical Institute

13 FLOOR PLAN N Not to scale. Floorplan should be field verified. Pima Medical Institute 13

14 03 TENANT OVERVIEW

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16 TENANT OVERVIEW Tenant: Vocational Training Institutes, Inc, DBA: Pima Medical Institute Pima Medical Institute ( PMI ) is a leading provider of proprietary post-secondary allied health education with an impressive 45-year history of positive student outcomes. PMI serves approximately 10,000 students through a network of 16 campuses in Arizona, New Mexico, Colorado, Washington, Nevada, California, Texas and Montana. Additionally, the Online Campus serves students in 40+ states. The company is headquartered in Tucson, Arizona. PMI maintains a strong commitment to providing the best value in medical career education through 30 programs nationally accredited by The Accrediting Bureau of Health Education Schools ( ABHES ). PMI received a maximum accreditation renewal of six years in The college provides Bachelor and Associate degrees as well as Certificates in numerous highly-specialized and indemand medical careers. In 2017, PMI expects revenues of $150 million and profit margins of approximately 25%. PMI enjoys a strong balance sheet and equally strong cash reserves. PMI enjoys industry leading compliance metrics: 3 year co-hort default rate of 9% Composite ratio score of 3.0 Placement rates exceeding 70% Graduation rates exceeding 70% Pima Medical Institute has a strong leadership team with over 125 years of industry experience. The college s established brand name, strategically located campuses, broad allied health program offering, veteran management team, and national reputation positions it for strong growth into the future. 16 Pima Medical Institute

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18 04 MARKET OVERVIEW

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20 ALBUQUERQUE CLIMATE 57 AVERAGE ANNUAL TEMPERATURE 310 YEARLY DAYS OF SUNSHINE ALBUQUERQUE METROPOLITAN AREA As the most dynamic city and largest urban area in New Mexico, Albuquerque is the state s major commercial center, serving as a hub for business, trade, finance, industry and government. With a substantial labor force, the Albuquerque metro area accounts for nearly 45% of the state s total employment. With a young population and the presence of the University of New Mexico, the Albuquerque metro area will continue to provide employers with an abundant, diverse and well-educated work force. GOVERNMENT BASED ECONOMY: As a heavily government centered economy, Albuquerque continues its slow and steady growth. This provides a stable employment base which is a hedge against swings in the private sector base. 20 Pima Medical Institute COST OF LIVING: Albuquerque also continues to enjoy the benefits of low costs of living and doing business, 96% and 88%, respectively on a national scale of 100%. These cost benefits, along with an exceptional quality of life, continue to provide the Albuquerque market with significant, long-term competitive advantages. PROFESSIONAL SPORTS: Phoenix is one

21 ECONOMIC DRIVERS: Among the largest Albuquerque employers are Kirtland Air Force Base, the University of New Mexico (UNM), Sandia National Laboratories, Albuquerque Public Schools, Presbyterian Healthcare Services, the UNM Hospital and Intel Corporation. In addition, public sector employment has also historically played a stabilizing role in Albuquerque s employment and economy. Twenty percent of Albuquerque direct employment is public sector-related, with as much as another 10% indirectly derived from public sector activity. KIRTLAND AIR FORCE BASE: Kirtland Air Force Base (KAFB) is the city s largest employer and is home to a wide range of Department of Defence, Department of Energy, and United States Air Force organizations. Flying operations at KAFB share the flight line, runways and airspace with commercial aviation at the Albuquerque Sunport, making it a joint civilmilitary airport. Covering 51,558 acres, the base is the third-largest installation in Air Force Material Command. In total, over 110 organizations are located at Kirtland, which employs 10,125 civilians and 4,860 military personnel. SANDIA NATIONAL LABS: Sandia National Laboratories employs approximately 8,400 people and manages roughly $2.3B of work annually. It is primarily funded by the Department of Energy with other major funding from the Department of Homeland Security and Department of Defence. Sandia Corporation, a Lockheed Martin Company, manages Sandia National Laboratories for the Department of Energy s National Nuclear Security Administration. ABQ LARGEST EMPLOYERS: Albuquerque Public Schools (14,810 employees Kirtland Air force Base (10,125 employees) Sandia National Labs (8,400 employees) Presbyterian Healthcare (7,310 employees) City of Albuquerque (6,940 employees) UNM Hospital (6,021 employees) State of New Mexico (4,950 employees) University of New Mexico (4,210 employees) Lovelace Hospital (4,000 employees Bernalillo County (2,648 employees) Rio Rancho Public Schools (2,000 employees) Pima Medical Institute 21

22 ABQ 43% OF NEW MEXICO S POPULATION IS IN ABQ ABQ MSA Population 915,897 (2016) 0.43% ABQ Growth Rate MILLION Average of 6.2 million visitors per year GOVERNMENT SPENDING $2.63 of Federal Government dollars spent in NM for every dollar collected in taxes in NM (2012 estimates) GOVERNMENT EMPLOYMENT More than a quarter of the state s jobs are government related 25TH Largest metro with most college grads 30.7% of ABQ residents have a Bachelors Degree or higher 36,200+ Students at the states largest higher education institution: UNM $49, MEDIAN HOUSEHOLD INCOME $57, AVERAGE HOUSEHOLD INCOME HOTTEST RETAIL TRADE AREAS NORTH I-25 CORRIDOR, UPTOWN, AND COTTONWOOD ABQ MSA Schools that made the Top 25 Public Schools in the State of New Mexico list. - Niche.com 15 Elementary Schools in Top Middle Schools in Top High Schools in Top Pima Medical Institute Source: US Bureau of the Census

23 ABQ IN THE NEWS For a better look at everything Albuquerque has to offer, below are two links to videos produced by VisitABQ and Albuquerque Economic Development that sum up the essence of the landscape and the opportunity just waiting to be discovered. Change Your Perspective in Albuquerque Source: VisitABQ.org Innovative Albuquerque Source: Albuquerque Economic Development 2016 ALBUQUERQUE RANKINGS 10 Cities with Cleanest Air in America - Thrillist Top Cities to Retire - Forbes Top 50 Places to Live - US News and World Report Top 10 Cities for Summer Travel - One of America s Favorite Places - Travel + Leisure survey Top 10 Best Places to Live and Work as a Moviemaker - Moviemaker Magazine Most Creative Mid-Sized City in the U.S. - Thrillist Pima Medical Institute 23

24 EMPLOYMENT As companies continue to pursue space efficiencies, correlations between the number of office-using jobs and demand for space will likely become somewhat out of synch. However, the chart below reveals that some correlations can still be observed in the Albuquerque office market. The chart below shows that the number of office-using jobs declined by 3,000 jobs or 1.2% between December 2016 and February However, year-over year, 1,500 more net office-using jobs were created, with the education and healthcare service sector adding 1,000 jobs. Net Absorp vs. Y-o-Y Changes in # of Office-using Jobs Office Net Absorption (SF, 000 s) (100) (200) (300) (400) (500) Office Net Absorption The Number of Office-using Jobs 2014 The Number of Office-using Jobs ( 000 s) Feb Source: CBRE Research, Q1 2017, Bureau of Labor Statistics, March Office Net Absorption: from 2007 to 2016 based on year-end net absorption, 2017 based on Q net absorption Office-using Jobs: from 2007 to 2016 based on December data, 2017 based on February 2017 data. 24 Pima Medical Institute

25 ALBUQUERQUE REAL ESTATE MARKET OVERVIEW Retail The Albuquerque MSA contains over 26 million square feet of retail space, of which 4 million is neighborhood center space and 8 million is freestanding. The outlook for the Albuquerque Retail Market is strong both in the long and short-term. In coming quarters, some national value-add retailers will expand, backfilling large blocks of vacated space. Technological advances continue to transform the retail market, resulting in significant e-commerce growth. Even with these advances physical space will not disappear at least not in the near future. There are currently occupiers in the market that can fill space as large as 50,000 sq. ft., though they may not be traditional retailers with conventional retail models. Users such as schools, healthcare and experience retailers are reshaping the tenant mix in shopping centers with large blocks of vacant space. OFFICE The Albuquerque office market began 2017 with strong activity. Several large tenants entered the market and existing tenants expanded. Rio Rancho was the winner with two new large occupiers entering that submarket. In addition, United Healthcare and Molina Healthcare call centers are both expanding at their current locations in the North I-25 and Downtown submarkets, respectively. Net absorption for the market amounted to 126,962 sq. ft., the highest positive quarter since Q The overall vacancy rate declined for the second consecutive quarter, down 93 basis points (bps) from Q to Q and down 87 bps from Q to 22.0% Q This is the largest consecutive quarterover-quarter decline in market history. In addition, the 49-bps year-over-year decline in vacancy rate was the largest since Q Demand for Class A buildings remains strong and vacancy among Class A buildings is expected to become even tighter in Demand for Class B buildings, specifically among Class B+ buildings, also remained strong especially as the Class A vacancy rate continued to decline. Four out of the top five largest transactions for the quarter took place in Class B+ buildings. Pima Medical Institute 25

26 EXCLUSIVELY REPRESENTED BY: JIM DOUNTAS First Vice President LIA ARMSTRONG, CCIM Vice President NANCY MCCLURE First Vice President CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. Any projections, opinions, or estimates are subject to uncertainty. The information may not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk. 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. 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. PMStudio_June2017

27 PIMA MEDICAL GROUP 4400 CUTLER AVE NE, ALBUQUERQUE, NM CONFIDENTIALITY AGREEMENT We understand that your organization (the "Company") is interested in pursuing the acquisition of the above referenced property (the "Acquisition") involving Owner (collectively the "Owner"). To assist you in your evaluation of a potential acquisition of that certain property currently managed or controlled by Owner, we will provide you with certain information concerning the acquisition. As a condition to furnishing you with such information, Company agrees to treat confidentially such information and any other information (collectively the "Evaluation Material") which Owner, its affiliates, partners, lenders, employees, agents, attorneys, accountants, advisors or references (collectively the "Representatives") furnish to your Company. The term Evaluation Material will also include any analysis, compilations, studies or other documents prepared by Company or Company's Representatives containing, or based in whole or in part on, any information furnished by Owner. Company agrees that the Evaluation Material will be kept confidential by it and its Representatives and shall not, except as hereinafter provided, without the prior written consent of Owner, be disclosed by it or its Representatives other than for the purpose of evaluating the Acquisition. Moreover, Company further agrees to transmit Evaluation Material only to those of its Representatives who need such information for the purpose of evaluating the Acquisition and who shall (i) be advised by Company of this letter agreement (the "Agreement") and (ii) agree with Company to be bound by the provisions hereof. Company shall be responsible for any breach of this Agreement by its Representatives. In the event that the acquisition is not effected after Company has been furnished with Evaluation Material, Company will promptly deliver to Owner the Evaluation Material and all copies thereof, except for the portion of compilations, studies or other documents prepared by Company or its Representatives, without retaining any copy thereof. That portion of the Evaluation Material which consists of analysis, compilations, studies or other documents prepared by Company or its Representatives will be held by it and kept confidential and subject to the terms of this agreement, or destroyed at the request of Owner. Such destruction will be confirmed by Owner. The term Evaluation Material does not include information which (i) becomes generally available to the public other than as a result of disclosure by Company or its Representatives, (ii) was available to Company on a non-confidential basis prior to its disclosure to Company by Owner or its Representatives, or (iii) becomes available to Company on a non-confidential basis from a source other than Owner or its Representatives; provided, however, that such source is not bound by a confidentiality agreement with Owner or its Representative. Although Company understands that Owner has endeavored to include in the Evaluation Material information known to it which it believes to be relevant for the purposes of Company's investigation, Company further understands that except as may otherwise be agreed in writing, Owner does not make any representation or warranty as to the accuracy or completeness of the Evaluation Material. Company agrees that neither Owner nor its Representatives shall have any liability to Company or any of its Representatives under this agreement for any cause whatsoever. The Company confirms the understanding that any agreements between the Company and Owner concerning the Acquisition will exist only when such agreement is in writing and duly executed by the parties thereto. AGREED TO AND ACCEPTED BY: (Please Print Clearly) COMPANY: Address: City, ST, Zip: Phone: Fax: By: Title: Date: Signature: Please provide to receive important updates about this offering. Buyer s Broker of Record (If applicable) BROKER: Address: City, ST, Zip: Phone: Fax: By: Title: Date: Signature: Please provide to receive important updates about this offering. PLEASE EXECUTE AND RETURN TO ANGIE SMITH angie.smith@cbre.com Fax This agreement shall be governed and construed in accordance with the laws of the State of New Mexico, may not be changed, waived or terminated orally and shall be binding upon the parties and their successors or assigns.