BURGER KING st Street - MOORHEAD, MINNESOTA OFFERING MEMORANDUM

Transcription

1 BURGER KING OFFERING MEMORANDUM Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y

2 Financial Overview OFFERING SUMMARY PRICE $1,960,615 CAP RATE 5.85% NOI $114,696* PRICE PER SQUARE FOOT $ RENT PER SQUARE FOOT $28.67 YEAR BUILT 1986 APPROXIMATE LOT SIZE 1.04 Acres GROSS LEASEABLE AREA 4,000 TYPE OF OWNERSHIP Fee Simple LEASE GUARANTOR Corporate Guaranty LEASE TYPE Absolute Net ROOF AND STRUCTURE Tenant Responsible LEASE SUMMARY LEASE COMMENCEMENT DATE 10/31/2014 LEASE EXPIRATION DATE 10/31/2034 LEASE TERM 20 Years TERM REMAINING 17+ Years INCREASES 1.25 Percent Annually OPTIONS TO RENEW Four, Five-Year Options OPTIONS TO TERMINATE None OPTIONS TO PURCHASE None FIRST RIGHT OF REFUSAL None *NOI is based off 11/1/2017 Rent Increase ANNUALIZED OPERATING DATA Base Rent Annual Rent Monthly Rent Current 10/31/2017 $113,280 $9,440 11/1/ /31/2018 $114,696 $9, % 11/1/ /31/2019 $116,129 $9, % 11/1/ /31/2020 $117,581 $9, % 11/1/ /31/2021 $119,051 $9, % 11/1/ /31/2022 $120,539 $10, % 11/1/ /31/2023 $122,046 $10, % 11/1/ /31/2024 $123,571 $10, % 11/1/ /31/2025 $125,116 $10, % 11/1/ /31/2026 $126,680 $10, % 11/1/ /31/2027 $128,263 $10, % 11/1/ /31/2028 $129,867 $10, % 11/1/ /31/2029 $131,490 $10, % 11/1/ /31/2030 $133,134 $11, % 11/1/ /31/2031 $134,798 $11, % 11/1/ /31/2032 $136,483 $11, % 11/1/ /31/2033 $138,189 $11, % 11/1/ /31/2034 $139,916 $11, % Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y

3 Investment Overview Marcus & Millichap is pleased to present this Burger King in Moorhead, Minnesota; which is two and a half miles from Fargo, North Dakota. Fargo is the largest city in North Dakota, and the second fastest growing Midwestern Metro, according to Census Bureau Data (2016). There are 17 years remaining on Burger King s absolute net lease, where the tenant is responsible for all expenses associated with the asset. The lease features 1.25 percent annual rent increases over the base term and in the four, five-year renewal options. The lease is corporately guaranteed by Meridian Restaurant Unlimited, Limited Company, as well as a strong, fullterm, personal guaranty from its principals. Meridian Restaurant Unlimited, Limited Company is a 100-unit franchisee restaurant operator across multiple concepts. The subject property underwent Burger King s 20/20 remodel early, with renovations completed in This Burger King is located at the signalized intersection of Center Avenue and 21st Street North, which sees more than 29,000 vehicles per day (VPD). This asset benefits from being in a college town, and is located less than four miles from North Dakota State, Minnesota State University Moorhead, and Concordia College. Combined enrollment exceeds more than 24,000 students. The North Dakota State Bison are one of the nation s premier Division I Football Championship Subdivision (FCS) teams, and play in the FargoDome. This arena holds 19,000 fans, and is utilized for sporting events, large concerts, and trade shows. Additional tenants in the immediate vicinity include: Buffalo Wild Wings, O Reilly Auto Parts, Domino s Pizza, U.S. Bank Branch, Wells Fargo, McDonald s, KFC, Taco Bell, UPS, Pizza Hut, Subway, Walgreens, Casey s General Store, Target, Starbucks, Arby s, OfficeMax, Walmart Supercenter, Sam s Club and many more. Burger King in Moorhead, Minnesota Two and a Half Miles from Fargo, North Dakota The Largest City in North Dakota Fargo Was Ranked The Second Fastest Growing Midwestern Metro According to Census Bureau Data (2016) Asset Received Burger King 20/20 Remodel Early Renovations Were Completed In 2012 Absolute Net Lease with Zero Landlord Responsibilities 17 Years Remaining in the Base Term Strong Inflation Hedge 1.25 Percent Annual Rent Increases Over the Base Term and in Four, Five-Year Renewal Options Lease is Corporately Guaranteed by Meridian Restaurant Unlimited, Limited Company Plus a Full Term Personal Guaranty from Both Principals 100- Unit Franchisee Restaurant Operators Across Multiple Concepts Located at Signalized Intersection of Center Avenue and 21st Street North Sees More Than 29,000 Vehicles Per Day (VPD) Strong Demographics More Than 214,000 Residents with an Average Household Income Greater Than $74,000 in the Five Mile Radius Located Less Than Four Miles From North Dakota State, Minnesota State University Moorhead, Concordia College, and Moorhead High School More Than 24,000 Students FargoDome is Four Miles Northwest 19,000-Seat Arena Growing Submarket $5 Million Mixed-Use Development One Mile West 12-Unit Multi- Residential, 10,000 Square Feet of Retail and Office Space Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y

4 Tenant Overview - Burger King Every day, more than 11-million guests visit Burger King restaurants around the world. And they do so because Burger King restaurants are known for serving high-quality, great-tasting, and affordable food. Founded in 1954, Burger King is the second largest fast food hamburger chain in the world. The original Home of the Whopper, Burger King s commitment to premium ingredients, signature recipes, and family-friendly dining experiences is what has defined their brand for more than 50 successful years. In 2010, 3G Capital, a global multi-million-dollar investment firm focused on long term value creation, purchased Burger King Corporation, making it a privately-held company. In 2014, Burger King purchased Tim Hortons, and after the deal closed, Burger King was renamed Restaurant Brands International, Incorporated. As of June 2017, 3G capital owns more than 96 percent of Restaurant Brands International. Meridian Restaurants was founded in 2002 with 14 restaurants, and in 2016 they attained a long-term goal of 100 restaurants consisting of three top-tier brands across eight mid-western states: Burger King, El Pollo Loco, and Chili s. The tenant; NDM Restaurants, Limited Company; is a wholly owned subsidiary of Meridian Restaurants Unlimited, Limited Company. The lease is corporately guaranteed by Meridian Restaurants Unlimited, Limited Company; as well as a full-term personal guaranty from the entity s principals: David A. Harper and Stephan L. Ralston. Harper is a Senior Restaurant Operations Executive with more than 25 years of experience in multi-unit management, financial accountability, strategic planning, and project management in both franchisee and company operations. As of March 2016, Harper was an operating partner in more than 70 Burger Kings registering more than $68-Million in annual sales. TENANT PROFILE TENANT TRADE NAME Burger King OWNERSHIP Private TENANT NDM Restaurants, Limited Company Meridian Restaurants Unlimited, LEASE GUARANTOR Limited Company + Full-Term Personal Guaranty NUMBER OF LOCATIONS 100 Units HEADQUARTERED South Ogden, Utah WEB SITE Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y

5 A er i al O verview s t S t r ee t - MO ORH EAD, MINNE SOTA Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y

6 Area Overview & Demographics 1-Mile 3-Mile 5-Mile Population 2000 Population 9,543 62, , Population 9,920 66, , Population 10,458 71, , Population 11,057 77, ,729 1-Mile 3-Mile 5-Mile Households 2000 Households 3,396 25,474 45, Households 3,564 27,480 49, Households 3,819 29,770 53, Households 4,058 32,475 59,381 1-Mile 3-Mile 5-Mile Household (HH) Incomes 2017 Average HH Income $59,269 $62,251 $65, Median HH Income $49,255 $47,420 $47, Per Capita Income $21,644 $25,921 $27,758 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y

7 Market Overview - Moorehead, Minnesota Moorhead is a city in Clay County, and the largest city in northwest Minnesota. Agriculture remains prominent in the area, but Moorhead is also home to notable corporate, manufacturing and distribution industries, including American Crystal Sugar, Busch Agricultural Resources and Pactiv. The unemployment rate is consistently below the national average and property values are stable. The Rourke Art Gallery and the Rourke Art Museum are native Moorhead cultural institutions hosting the annual Midwestern Invitational Exhibition. Executive Director James O Rourke displays an important art collection from local, regional and national artists. The Rourke Gallery operates from the historic 1875 Martinson House, and the Rourke Museum is housed in the historic Moorhead Post Office building. The city is also home to the Bluestem Center for the Arts, a 3,000-seat outdoor amphitheater and Trollwood Performing Arts School, a renowned Summer arts and theater program. Bluestem opened in 2009 with a partnership between the Fargo School District, City of Moorhead, and an arts grant from the Minnesota. Jade Presents also presents a summer concert series which has drawn many famous bands including: O.A.R., Goo Goo Dolls, The Beach Boys, and Weezer. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y

8 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 newly-constructed 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.

9 BURGER KING Broker of Record Craig Patterson Marcus & Millichap 8300 Norman Center Drive, Suite 810 Bloomington, MN Tel: (952) Fax: (952) License: