ARTESIA & PRAIRIE CENTER

Transcription

1 ARTESIA & PRAIRIE CENTER ARTESIA BLVD // TORRANCE, CA ARTESIA BLVD PRAIRIE AVE OFFERING MEMORANDUM // CAPITAL MARKETS // INVESTMENT PROPERTIES

2 ARTESIA & PRAIRIE CENTER ARTESIA BLVD // TORRANCE, CA INVESTMENT ADVISORS ALEX KOZAKOV First Vice President Lic PATRICK WADE First Vice President Lic ERIC ROY Associate Lic CBRE, INC. 400 South Hope Street 25th Floor Los Angeles, CA CBRE, INC. // CAPITAL MARKETS // INVESTMENT PROPERTIES

3 TABLE OF CONTENTS INVESTMENT SUMMARY...5 FINANCIAL OVERVIEW...11 TENANT OVERVIEW...19 AREA OVERVIEW ARTESIA BLVD // TORRANCE, CA

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5 Investment Summary 01 5

6 6 CBRE, INC. // CAPITAL MARKETS // INVESTMENT PROPERTIES

7 Investment Summary Property Overview Artesia & Prairie Center Artesia Blvd., Torrance, CA Offering Price $8,300,000 Occupancy 100% Year 1 NOI $439,164 Cap Rate 5.29% Year 2 NOI $446,916 Year 2 Cap Rate 5.38% Total GLA Total Land SF 13,384 Sq. Ft. 51,646 Sq. Ft. APN & -009 Major Tenants Parking Starbucks, Carl s Jr., Yum Yum Donuts 58 Spaces Investment Highlights»» 100% Leased Retail Strip Center with NNN Leases: Limited Management Responsibilities»» Corporate Guarantees from Starbucks and Carl s Jr.»» Carl s Jr. Operating Below Market Rents on a Separate Parcel - Ability to Sell Separately»» Situated at Signalized Corner Intersection of Artesia Blvd. and Prairie Ave.: Over 56,800 cars/day»» 2 Blocks from the South Bay Galleria: the South Bay s Major Retail Destination with Anchors Target, Macy s, Kohl s, Sprouts, Total Wine, Nordstrom Rack, and more»» Staggered Lease Expirations on Existing Rent Roll»» 405 Freeway Off-Ramp Location: Northbound Artesia Blvd. Off- Ramp Traffic Must Pass Property»» Ideal Retail Strip Center Demographics: Almost 300,000 People with an Average Household Income Exceeding $86,000 in 3-Mile Radius»» Prime South Bay Location West of the 405 Freeway Near Beach Communities of Redondo Beach and Hermosa Beach Traffic Counts Ownership intersection Fee Simple ARTESIA BLVD // TORRANCE, CA

8 8 CBRE, INC. // CAPITAL MARKETS // INVESTMENT PROPERTIES

9 Site Plan ARTESIA BLVD // TORRANCE, CA

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11 FINANCIAL OVERVIEW 02 11

12 TORRANCE ALONDRA PARK 243,000 VPD 25,350 VPD PRAIRIE AVE ARTESIA BLVD 31,370 VPD

13 Rent Roll Artesia & Prairie Shopping Center SUITE TENANT SF Yum Yum Donuts PRO- RATA LEASE TERM BEGIN END ANNUALLY PSF/YR POLE SIGN FEE INCREASES OPTIONS RECOVERY TYPE PROFORMA ANNUAL PSF PROFORMA PROFORMA ANNUAL RENT 1, % 2/1/09 1/31/22 $59,904 $54.46 $0 Annual CPI 1 x 4 Yr NNN $56.09 $61,701 A Starbucks 1, % 3/21/03 3/31/18 $44,280 $29.88 $0 B Lara Insurance Option 1 x 5 yr NNN $29.88 $44, % 12/19/06 6/30/17 $20,942 $29.92 $900 None None NNN $29.92 $20,942 C Neno s Pizza % 12/1/09 11/30/19 $31,344 $35.82 $0 3% Annually 1 x 5 yr NNN $36.90 $32,284 D Eyebrow Threading 1, % 4/23/15 4/30/18 $22,246 $20.66 $0 3% Annually 1 x 5 FMV NNN $21.27 $22,913 E Dentist 1, % 6/1/03 5/31/18 $33,355 $33.35 $900 3% Annually 1 x 5 Yr NNN $34.36 $34,355 F Sportsman Lounge 1, % 3/1/03 2/28/18 $47,448 $33.89 $0 2.5% Annually G The Polish Bar 1, % 9/18/15 9/17/20 $34,512 $24.65 $0 3% Annually H Health Spa % 8/15/15 8/31/18 $24,300 $32.40 $0 3% year 3 I Liquor Store 1, % 10/1/12 2/28/18 $32,640 $20.40 $900 3% Annually None NNN $34.74 $48,634 1 x 5 FMV 1 x 3 FMV 2 x 5 FMV NNN $25.39 $35,547 NNN $33.37 $25,029 NNN $21.01 $33,619 Storage The Polish Bar - - 4/1/16 3/15/17 $1,200 - $0 - - NNN - $1,200 Pad Carl s Jr. (Ground Lease) TOTALS/ AVERAGES 2, % 3/10/03 3/10/23 $101,606 $50.80 $900 12% Every 5 3 x 5 yr NNN $50.80 $101,606 13, % $453,777 $38.14 $3,600 $0 $34.53 $462,112 *Starbucks reimb. Admin cost of 15% of CAMs in liue of management fee reimb. *Carl s Jr. reimb. admin cost of 10% of CAMs in liue of management fee reimb. All other tenants reimb. For management and 10% admin cost on CAMs % of GLA reimb. Management ARTESIA BLVD // TORRANCE, CA

14 14 CBRE, INC. // CAPITAL MARKETS // INVESTMENT PROPERTIES

15 In-Place and Projected NOI Summary Income & Expenses CURRENT "IN-PLACE" PER SF PROFORMA PER SF Gross Revenue In-Place Rental Revenue $454,977 $33.99 $465,712 $34.80 Signage Income % $3,600 $3,600 Reimb. CAMs, Insurance, Taxes 73.98% $124,753 $124,753 Reimb. Management $13,464 $13,464 Total Gross Revenue $596,794 $44.59 $607,529 $45.39 Credit Loss / Vacancy Reserve* Estimated 3.00% $13,527 $13,849 Effective Gross Revenue $583,266 $43.58 $593,680 $44.36 Expenses Total CAMS Actual $57,684 $57,684 Management Fee Estimated 4.0% $18,199 $18,628 Insurance Actual $2,289 $2,289 Property Taxes* Estimated % $64,780 $64,780 Total Operating Expenses $142,952 $10.68 $143,381 $10.71 Net Operating Income $440,315 $32.90 $450,298 $33.64 *Property Taxes estimated for shops parcel only. Carl s Jr. on separate parcel pays property taxes separately (assumed to be valued at $2,500,000) *Vacancy reserve: 3% of gross rents, excluding Starbucks & Carl s Junior ARTESIA BLVD // TORRANCE, CA

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19 TENANT OVERVIEW 03 19

20 Tenant Profiles Starbucks Coffee Starbucks Corporation, known as Starbucks Coffee, is an American global coffee company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, ahead of UK rival Costa Coffee, with 21,536 stores in 64 countries and territories, including 12, 218 in the United States, 1,716 in China, 1,330 in Canada, 1,079 in Japan and 808 in the United Kingdom. Starbucks serves hot and cold beverages, whole-bean coffee, microground instant coffee, full-leaf teas, pastries and snacks. From Starbucks founding in 1971 as a Seattle coffee bean roaster and retailer, the company has expanded rapidly. Between 1987 and 2007, Starbucks opened an average of two new stores every day. The first Starbucks was opened in Seattle, Washington, in March 1971 by three partners who met while they were students at the University of San Francisco. Originally, the company was to be called Pequod, after a whaling ship from Moby Dick, but this name was rejected by some of the co-founders. The company was instead named after the chief mate on the Pequod, Starbuck. STARBUCKS COMPANY TYPE Public HEADQUARTERS Seattle, WA WEBSITE LOCATIONS 23,768 At the time of its initial public offering (IPO) on the stock market in June 1992, Starbucks had grown to 140 outlets, with a revenue of US $73.5 million, up from US $1.3 million in In July 2013, over 10% of the in-store purchases were made on customers mobile devices using the Starbucks app. The company once again utilized the mobile platform when it launched the Tweet-a-Coffee promotion in October In September 2014, it was revealed that Starbucks would acquire the remaining 60.5 percent stake in Starbuck Coffee Japan that it does not already own, at a price of $913.5 million 20 CBRE, INC. // CAPITAL MARKETS // INVESTMENT PROPERTIES

21 Tenant Profiles Carl s Jr. During the last 65 years Carl s Jr. has built a reputation as America s premier burger chain. Today, there are more than 1,100 Carl s Jr. restaurants worldwide, with more than 300 dual-branded Carl s Jr. /Green Burrito restaurants. Carl s Jr. is looking for exceptional new franchise candidates in select markets in the U.S. and around the world. Carl s Jr. is a wholly-owned subsidiary of CKE Restaurants, Inc., a publicly traded company listed on the New York Stock Exchange (ticker symbol: CKR). Through its subsidiaries, CKE franchises and operates Carl s Jr. and Hardee s quick-service restaurants. The CKE system includes more than 3,100 locations in 42 states and 13 countries. CARL S JR. COMPANY TYPE Private HEADQUARTERS Carpinteria, CA WEBSITE LOCATIONS 3, ARTESIA BLVD // TORRANCE, CA

22 Tenant Profiles YUM YUM DONUTS In 1971, Philip C. Holland started Yum Yum Donut Shops, Inc. The first shop was a former Orange Julius in Highland Park, California. This shop is still in operation and is one of the highest volume shops in the chain. Phil had become familiar with the donut business through a friend who owned a shop. He had also spent time in North Carolina working with Vernon Rudolph, the founder of Krispy Kreme Donuts. By 1973, Phil had three Yum Yum donut shops and was anxious to expand. Frank Watase joined as an equal partner. YUM YUM DONUTS COMPANY TYPE Private HEADQUARTERS City of Industry, CA WEBSITE LOCATIONS CBRE, INC. // CAPITAL MARKETS // INVESTMENT PROPERTIES

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25 Area Overview 04 25

26 Area Overview Torrance, CA The city of Torrance is located in the southwest region of Los Angeles County. Torrance is the eight largest city by population in the county and is home to over 150,000 residents. Spanning 21 square miles, the city was initially founded in 1912 with earlier settler attracted to its positioning along the pacific coastline. Torrance would later go onto become an integral part of the South Bay regional area. This residential and light high-tech industries city has over 90,000 street trees and 30 city parks. Known for its low crime rates, Torrance is consistently ranked among the safest cities in Los Angeles County and has become the home of the second highest percentage of Japanese in North America. Additionally, Torrance is the birthplace of the American Youth Soccer Organization (AYSO). Since its incorporation in 1921, Torrance has grown rapidly. City growth exploded after World War II as wartime industries transformed into Post-war Aerospace manufacturers and related technology industries which that region is greatly known for. Large housing developments began construction in the 1950s and 1960s to accommodate the new population and were quickly occupied by residents attracted to the city s prime positioning in the county. Torrance strongly survived the deindustrialization, regional economic slowdowns and national recessions in the 1970s to 2000s. The city has continued to be a thriving community and its large-scale Asian immigration in the past couple of decades has transformed Torrance into a diverse and multicultural city. 26 CBRE, INC. // CAPITAL MARKETS // INVESTMENT PROPERTIES

27 Demographics ONE-MILE RADIUS THREE-MILE RADIUS FIVE-MILE RADIUS 2016 Estimated Population 32, , , Projected Population 34, , ,798 POPULATION 2010 Census Population 31, , , Census Population 30, , ,836 Growth % 3.56% 3.39% Growth % 3.70% 3.58% 2016 Estimated Median Age Estimated Average Age Estimated Households 11, , ,450 HOUSEHOLDS 2021 Projected Households 11, , , Census Households 10, , , Census Households 10,493 99, ,901 Growth % 3.46% 3.42% Growth % 3.72% 3.70% 2016 Est. Average Household Size INCOME 2016 Est. Average Household Income $79,434 $91,944 $94, Prj. Average Household Income $86,361 $99,752 $102, Est. Median Household Income $26,717 $32,985 $33,020 White 41.92% 44.34% 43.18% African American 6.10% 11.01% 13.65% Race & Origin Asian 23.70% 21.36% 18.09% Native Hawaiian/Pacific Islander 0.95% 0.69% 0.70% American Indian/Alaska Native 0.60% 0.55% 0.55% Some Other Race 19.70% 15.98% 18.35% 2 or More Races 7.03% 6.06% 5.47% ARTESIA BLVD // TORRANCE, CA

28 AFFILIATED BUSINESS DISCLOSURE 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 Trammel 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. CONFIDENTIALITY AGREEMENT 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 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.

29 DISCLAIMER 2016 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. 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. Artesia &PrairieCenter, ArtesiaBlvd,Torrance,CA

30 ARTESIA & PRAIRIE CENTER ARTESIA BLVD // TORRANCE, CA INVESTMENT ADVISORS ALEX KOZAKOV First Vice President Lic PATRICK WADE First Vice President Lic ERIC ROY Associate Lic CBRE, INC. 400 South Hope Street 25th Floor Los Angeles, CA OFFERING MEMORANDUM // CAPITAL MARKETS // INVESTMENT PROPERTIES