Regal Cinemas. Offering Memorandum E Arapahoe Road Englewood (Denver), CO 80112

Transcription

1 Cinebarre concept coming soon Subject Property Offering Memorandum Regal Cinemas 8141 E Arapahoe Road Englewood (Denver), CO Brand-New $3+ Million Renovation to High-End Cinebarre Concept New 15-Year Absolute NNN Lease Regal Cinemas, Inc. Lease Guaranty Outstanding Denver MSA Location with HH Income Above $120k

2 Confidentiality and Restricted Use Agreement Offered Exclusively by This Confidential Offering Memorandum ( COM ) is provided by Stan Johnson Company ( SJC ), solely for your consideration of the opportunity to acquire the commercial property described herein (the Property ). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC. This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC. Toby Scrivner Senior Director marketing@stanjohnsonco.com Colorado License #ER The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title. BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the Information ), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief. Stan Johnson Company 6120 S Yale Ave Suite 300 Tulsa, OK

3 Table of Contents Section One: About the Investment The Offering... 5 Investment Highlights... 6 Lease Abstract & Rent Schedule... 7 Site Map... 8 Surrounding Retail Map... 9 Section Three: Location Overview Area Map...13 Location Overview...14 Subject Property Photos...15 Demographics...16 Section Two: Tenant Information Regal Cinemas Overview...11 Subject Property

4 Section One About the Investment E Subject Property

5 The Offering Stan Johnson Company, on behalf of Ownership, as its exclusive advisor, is pleased to offer the opportunity to acquire fee simple interest in the Regal Cinemas property located at 8141 E Arapahoe Road in Englewood, Colorado (the Property ). The Property is comprised of a 49,032 SF, 12-screen movie theater which sits upon a 6-acre parcel of land. The Property is currently undergoing a full, $3+ million renovation, upgrading the facility to Regal s Cinebarre concept, Regal s most high-end concept providing guests with the latest amenities. The grand opening is scheduled for November 15th to capitalize on Thanksgiving and Christmas blockbusters. This significant renovation demonstrates Regal s confidence in the location, which has been in operation since Concurrently with the renovation, Regal is entering into a brand-new 15-year absolute NNN lease. The lease features rental escalations of the lesser of 7.50% or 1.25*CPI increase every five (5) years, providing investors a hedge against inflation and a boost to long-term cash flow. The Property is located just ten (10) miles southwest of downtown Denver and features excellent demographics with a population of 230,870 earning an average household income of $120,424 within five (5) and three (3) miles of the Property, respectively. The Property benefits from its location adjacent to the Arapahoe Marketplace Shopping Center, a 187,000 SF shopping center anchored by Sprouts Farmers Market. Other national tenants nearby include Chase Bank, 7-Eleven, Chipotle, Arby s, McDonald s, Lowe s, The Home Depot, Chick-fil-A, and Target. Additionally, the Property is less than one (1) mile from the Denver Tech Center, approximately six (6) miles from the University of Denver (11,614 students), and is located adjacent to Fiddler s Green Amphitheatre, the largest outdoor amphitheater in the Denver metropolitan area with a capacity of 18,000. The Property is leased to United Artists Theatre Circuit, Inc., operating as Regal Cinemas Cinebarre concept, and is guaranteed by Regal Cinemas, Inc. ( RCI ). RCI is a wholly-owned subsidiary of Regal Entertainment Group (NYSE: RGC). RCI s assets and income represent over 95% of the parent RGC s assets and income, making the entities extremely similar in financial composition. Regal Entertainment Group operates one of the largest and most geographically diverse theater circuits in the United States. As of December 31, 2016, RGC operated 7,367 screens in 574 theaters in 42 states, along with Guam, Saipan, American Samoa, and the District of Columbia. During FY 2016 RGC reported over 211 million attendees. Property Summary Address 8141 E Arapahoe Road Englewood, CO Building Size Lot Size Number of Screens 12 49,032 SF 6.00 Acres Year Built/Renovated 1992/2017 Property Parcel ID & Encumbrances Parking Offering Summary Offering Price $11,851,852 Offering Cap Rate 6.75% Net Operating Income $800,000 Tenant Doing Business As Guarantor Property Type Price: $ 11,851,852 United Artists Theatre Circuit, Inc. Regal Cinemas Regal Cinemas, Inc. Movie Theater None; Delivered Free & Clear +/- 460 Spaces Demographics Cap Rate: 6.75% 0-1 mi. 0-3 mi. 0-5 mi Population 10,781 84, , Total Households 4,774 36,554 96, Average HHI $110,453 $120,424 $113,931 Regal Cinemas Englewood, CO 5

6 Unique Property Attributes Investment Highlights $3+ Million Concept Renovation Underway Complete Renovation Underway The Property is currently undergoing a full, $3+ million renovation, upgrading the facility to Regal s Cinebarre concept, Regal s most high-end concept providing guests with the latest amenities. The grand opening is scheduled for November 15th to capitalize on Thanksgiving and Christmas blockbusters. This significant renovation demonstrates Regal s confidence in the location, which has been in operation since NEW NNN LEASE with 15 YEARS Remaining New Absolute NNN Lease New 15-year absolute NNN lease is estimated to commence November 1, There are rental increases of the lesser of 7.50% or 1.25*CPI increase every five (5) years throughout the base lease term and at the beginning of each of the two (2), five (5) year renewal options. 230,870 Population within 5 miles $120,424 Average Household Income within 3 miles Regal Cinemas Inc. Lease Guaranty Premier Denver MSA Location w/ Excellent Demographics The Property lies approximately ten (10) miles southwest of downtown Denver and benefits from a population of 230,870 earning an average household income of $120,424 within five (5) and three (3) miles, respectively. Proximity to the Denver Tech Center, University of Denver & Fiddler s Green Amphitheatre The Property is less than one (1) mile from the Denver Tech Center, approximately six (6) miles from the University of Denver (11,614 students), and is located adjacent to Fiddler s Green Amphitheatre, the largest outdoor amphitheater in the Denver metropolitan area with a capacity of 18,000. Full Guaranty from Regal Cinemas, Inc. Lease is guaranteed by Regal Cinemas, Inc., a wholly-owned subsidiary of Regal Entertainment Group (NYSE: RGC) who reported over 211 million attendees, total revenue of $3.197 billion, and $170.4 million in net income for FY RGC currently holds an S&P credit rating of B+/Stable. Adjacent to Arapahoe Marketplace Shopping Center The Property is adjacent to Arapahoe Marketplace Shopping Center, a 187,000 SF center anchored by Sprouts Farmers Market. Other nearby tenants include Chase Bank, 7-Eleven, Chipotle, Arby s, McDonald s, Lowe s, The Home Depot, Chick-fil-A, and Target. RENTAL ESCALATIONS Every 5 Years Highly Visible Location The Property is located on Arapahoe Road (90,849 VPD) and just off I-25 (214,150 VPD). Regal Cinemas Englewood, CO 6

7 Lease Abstract Tenant DBA Guarantor United Artists Theatre Circuit, Inc. Regal Cinemas - Cinebarre Regal Cinemas, Inc. Address 8141 E Arapahoe Road Englewood, CO Screens 12 Building Size (Including Mezzanine) Lot Size 49,032 SF 6.00 Acres Year Built/Renovated 1992/2017 Rent Commencement November 1, 2017 Lease/Rent Expiration October 31, 2032 Lease Term Remaining 15 Years NOI $800,000 Rental Escalations Renewal Options Renewal Notice Renewal Escalations Lease Type Landlord Responsibilities Insurance Taxes CAM Utilities Parking Lesser of 7.50% or 1.25*CPI every 5 years 2, 5-Year Options 365 Days Lesser of 7.50% or 1.25*CPI every 5 years Absolute NNN None Tenant maintains i) General Liability Insurance ($1mm per occurrence, $5mm aggregate); ii)property Insurance covering Tenant's property (full replacment cost); iii) Property Insurance covering the Premises (full replacement cost); and iv) Workers' Compensation Insurance (per statutory limits) Tenant pays directly Tenant operates, maintains, repairs, and replaces common areas Tenant pays directly +/- 460 spaces; Tenant maintains, repairs, and replaces Property ID & Ownership Interest Encumbrances Fee Simple None; Delivered Free & Clear Rent Schedule Years Annual Rent Monthly Rent Rent PSF Increase 1-5 $800,000 $66,667 $ $860,000 $71,667 $ % $924,500 $77,042 $ % (Option 1) (Option 2) $993,838 $82,820 $ % $1,068,375 $89,031 $ % *Assuming 7.50% escalations every 5 years, actual escalations equal lesser of 7.50% or 1.25*CPI increase Representative Cinebarre Concept - Property Currently Under Renovation Subject Property Regal Cinemas Englewood, CO 7

8 Site Map E Peakview Ave 360 Degrees Urban Luxury Apartments Bright Horizons Montesorri at Fiddler s Green Greenwood Plaza Blvd N E Arapahoe Rd (90,849 VPD) Regal Cinemas Englewood, CO 8

9 Surrounding Retail Fiddler's Green Amphitheatre McDonald's Representative Photo Jumpstreet Recreation Center Bright Horizons Montessori School Dunkin' Donuts E Arapahoe Rd (90,849 VPD) Arapahoe Marketplace Shopping Center Columbia College Webster University Walnut Hills Park I-25 (214,150 VPD) N Hunters Hill Park Regal Cinemas Englewood, CO 9

10 Section Two Tenant Information NW Regal Cinemas Englewood, CO 10 Subject Property

11 Regal Cinemas Overview The Property is leased to United Artists Theatre Circuit, Inc., operating as Regal Cinemas Cinebarre concept, and is guaranteed by Regal Cinemas, Inc. ( RCI ). RCI is a wholly-owned subsidiary of Regal Entertainment Group (NYSE: RGC; RGC or Regal ), the publicly traded entity. RCI s assets and income represent over 95% of the parent RGC s assets and income, making the entities extremely similar in financial composition. Regal Entertainment Group operates one of the largest and most geographically diverse theater circuits in the United States. As of December 31, 2016, RGC operated 7,367 screens in 574 theaters in 42 states, along with Guam, Saipan, American Samoa, and the District of Columbia. For the fiscal year ended December 31, 2016 (FY 2016), RGC reported over 211 million attendees. Currently, RGC s geographically diverse portfolio includes theaters in 46 of the top 50 U.S. designated market areas. Their theaters are primarily in midsized markets and suburban growth areas of larger metropolitan markets through the United States. Regal theaters are multiscreen, and as of FY 2016, RGC reported an average of 13 screens per location, well above the North American motion picture exhibition industry average. Regal operates theaters under three primary brands Regal Cinemas, Edwards Theatres, and United Artists Theatres. These chains retain their exterior signage, but most indoor branding (popcorn bags, policy trailers, etc.) use the Regal Entertainment Group name and logo. Within the last ten (10) years, Regal has also acquired several smaller chains, all being rebranded as Regal Cinemas. These acquisitions include Eastern Federal, Signature Theatres, Hoyts Cinemas, Consolidated Theatres and Hollywood Theatres. Regal Cinemas, Inc. Financial & Earnings Information (Through 2011) Type Operating Subsidiary of Regal Entertainment Group Revenue $2.678 billion (2011) Income from Operations $219.3 million (2011) Net Income $68.1 million (2011) Total Assets $2.284 billion (As of Dec 29, 2011) Regal Entertainment Group Tenant Industry Business Type Stock Symbol Credit Rating Locations Basic Information Retail Development, Acquisition & Operation of Multi-Screen Movie Theaters Public Founded 1989 Headquarters NYSE: RGC S&P: B+/Stable 7,367 screens in 574 theaters Knoxville, TN Employees 25,359 (Dec 31, 2016) Primary Brands Website Type Traded Regal Cinemas; Edwards Theatres; United Artists Theatres FY 2016 Financial & Earnings Information Credit Rating Revenue Income from Operations Net Income Total Assets Public company NYSE: RGC S&P: B+/Stable $3.197 billion $339.4 million $170.4 million $2.646 billion Regal Cinemas Englewood, CO 11

12 Section Three Location Overview NW Subject Property

13 Area Map Denver Regal Cinemas Englewood, CO 13

14 Location Overview Broncos Training Facility, Englewood Englewood is a city in Arapahoe County, five (5) miles south of downtown Denver, where residents and businesses benefit from major transportation corridors and a central location. The city is known for its small-town charm and proximity to a major metropolitan area. As of 2016 estimates, the population of Englewood was 34,050, representing a 12.5% increase from The city is located in the South Platte River Valley east of the Front Range and immediately south of central Denver. Downtown is located immediately east of the confluence of Little Dry Creek and the South Platte River, between Santa Fe Drive and Broadway. Englewood is an affluent city, with an average household income of $120,424 within three (3) miles of the subject Property. Major employers within Englewood city limits include Columbia Swedish Medical Center (2,075 employees), Craig Hospital (760 employees), and the Englewood School District (490 employees). Additionally, many Englewood residents commute into Denver, taking advantage of Englewood s location abutting both I-25 and Highway 85, each of which offer direct access into Denver. Denver, Colorado In 2004 Englewood opened the Pirates Cove water park as part of a multi-million-dollar improvement package for the city parks system. In addition to Pirates Cove, many improvements were made to the South Platte River trail system and to the Englewood Recreation Center, originally constructed in Englewood is a full-service city with its own independent park, library, and public works systems. Englewood provides snowplow service to neighboring municipalities and water to a large portion of the metro area. Swedish Medical Center - Englewood Regal Cinemas Englewood, CO 14

15 E NW Subject Property Photos Regal Cinemas Englewood, CO 15

16 Demographics Population 1 mile 3 miles 5 miles 2016 Population 10,781 84, , Population 11,490 91, , Annual Rate -0.25% 0.81% 1.06% Annual Rate 0.84% 1.18% 1.28% Annual Rate 1.28% 1.43% 1.45% 2016 Median Age Households 1 mile 3 miles 5 miles 2016 Total Households 4,774 36,554 96, Total Households 5,074 39, , Annual Rate 0.23% 1.84% 1.65% Annual Rate 0.75% 1.25% 1.25% Annual Rate 1.23% 1.48% 1.48% Household Income 1 mile 3 miles 5 miles N 2016 Average Household Income $110,453 $120,424 $113,931 Regal Cinemas Englewood, CO 16

17 Toby Scrivner Senior Director CO Lic# ER going beyond Stan Johnson Company 6120 Yale Ave Suite 300 Tulsa, OK The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.