Grocery Outlet Center

Transcription

1 Grocery Outlet Center Grocery-anchored Two-tenant center with recently extended leases 4333 South Sixth St., Klamath Falls, OR 97603

2 Grocery Outlet Center Grocery Outlet Center is a 100%-leased twotenant retail center anchored by Grocery Outlet since the Property s construction in Grocery Outlet executed a brand new 10-year extension, providing a 13-year remaining term. The Property is located on a primary arterial that connects directly to Highway 97 north of the Property, and is exposed to over 37,000 vehicles per day. PRICE: $3,710,000 CAP: 7.00% OCCUPANCY...100% ANCHOR TERM years LEASABLE SF...±27,042 SF PRICE PER SF...$137 LAND AREA...±69,696 SF AVERAGE RENT...$10.38/SF YEAR BUILT PARKING*...±213 Spaces or 7.8/1,000 SF *Tenants benefit from additional parking via a cross-easement parking agreement with neighboring parcels. ADDRESS: 4333 South Sixth St., Klamath Falls, OR GROCERY OUTLET CENTER - KLAMATH FALLS 2

3 Core Characteristics > 13-YEARS REMAINING PER BRAND NEW10-YEAR EXTENSION EXERCISED BY GROCERY OUTLET; RENEWAL EXECUTED THREE YEARS EARLY, DEMONSTRATING COMMITMENT TO THE SITE. > ANCHORED BY GROCERY OUTLET, A STRONG REGIONAL BRAND WITH 265+ LOCATIONS AND ANNUAL REVENUE OF $1.5 BILLION > FULLY-OCCUPIED TWO-TENANT RETAIL CENTER LEASED TO CORPORATE GROCERY OUTLET AND STATE-RUN EASTSIDE LIQUOR. > RECENT FIVE-YEAR RENEWAL EXECUTED BY EASTSIDE LIQUOR. > LANDLORD HAS MINIMAL RESPONSIBILITY THROUGH NNN LEASE STRUCTURES. > SELL-0FF POTENTIAL OF EITHER PARCEL IS PROVIDED. > NEARLY $60K RECENTLY INVESTED BY LANDLORD INTO PARKING LOT UPGRADES. > FRONTAGE ON MAIN ARTERIAL PROVIDES EXPOSURE TO OVER 37,400 VPD AND SUPERB ACCESS TO HIGHWAY 97. > GROCERY OUTLET PLAYS A COMPLEMENTARY ROLE IN THE SUBMARKET EAST OF CRATER LAKE PARKWAY WITH UNIQUE LOW-COST STRUCTURE. > CO-TENANCY WITH DYNAMIC MIX OF LOCAL AND NATIONAL TENANTS ALONG MAIN ARTERIAL. > CLOSE PROXIMITY TO KLAMATH COMMUNITY COLLEGE DIRECTLY EAST OF THE SUBJECT (ENROLLMENT: 1,620). GROCERY OUTLET CENTER - KLAMATH FALLS 3

4 About Grocery Outlet Grocery Outlet operates 265 locations in six states (Oregon, Washington, California, Pennsylvania, Idaho, and Nevada), with plans to expand to a total of 376 locations by Founded in 1946 and recognized as an extreme-value retailer, Grocery Outlet has grown strategically, and is recognized as the nation s leading value grocery chain. Grocery Outlet is a third-generation family-led company with a highly differentiated sourcing model that enables the company to offer significant savings to its customers by offering surplus items, seasonal closeouts, and discounted items sold at 40%-70% off regular price. Hellman and Friedman acquired Grocery Outlet in H&F is a leading private equity investment firm founded in 1984, with offices in San Francisco, California, and London. H&F has managed over $25 billion of committed capital over the course of the last 32 years with a focus on investing in superior business franchises and serving as a value-add partner to management in select industries FOUNDED TOTAL LOCATIONS ACROSS 6 STATES GROCERY OUTLET CENTER - KLAMATH FALLS 4

5 Klamath Falls Aerial KLAMATH TOWN CENTER Anytime Fitness Bealls Great Clips Michaels Pizza Hut Sherm s Thunderbird Sportsman s Warehouse Tan Republic SURROUNDING RETAILERS Albertsons Arby s Bi-Mart Big Lots! Burger King Coastal Farm & Ranch Dairy Queen Denny s Dollar Tree Dutch Bros. Coffee Fred Meyer Harbor Freight Tools Home Depot Human Bean Jo-Ann Fabrics KFC Les Schwab Tire Center Little Caesar s Pizza McDonald s O Reilly Auto Parts Petco Rite Aid Ross Dress for Less Staples Subway Taco Bell Walmart Supercenter 11,400 DAILY CRATER LAKE PKWY GROCERY OUTLET CENTER S 6TH STREET WASHBURN WAY 26,000 DAILY

6 Site Plan SITE PLAN KEY PARCEL OUTLINE: LEASABLE AREA: LAND AREA: ±27,042 SF ±69,696 SF SUBJECT: NOT A PART: INGRESS/EGRESS: EASTSIDE LIQUOR Site Plan not to scale ETNA ST Gary ST 11,400 DAILY Crater Lake PKWY TRUAX TOWNE PUMP MURPHY S MARKET Monument Sign S 6th St 26,000 DAILY Q: HAS THE PROPERTY HAD ANY ENVIRONMENTAL TESTING? A: Yes, a Phase I Environmental Site Assessment (ESA) was completed by AEI Consultants in September The assessment revealed there are no Recognized Environmental Conditions (RECs) at the Premises. GROCERY OUTLET CENTER - KLAMATH FALLS 6

7 CC&R PARCEL BREAKDOWN EASTSIDE LIQUOR Parcel: R Size: 1.17 Acres Parcel: R Size: 1.17 Acres Parcel: R Size: 1.54 Acres Parcel: R Size: 0.81 Acres TRUAX TOWNE PUMP MURPHY S MARKET Parcel: R Size: Acres CC&R The Declaration of Covenants, Conditions, and Restrictions (CC&Rs) permits ingress/egress and shared parking among parcels. The common areas shall at no time be less than 2.65 times that of the total building areas on their respective parcels and provide at least one parking space for each 225 square feet of interior floor space. AVAILABLE FOR SEPARATE PURCHASE - SEARS The adjacent Sears Hometown Store is available for purchase separate from the offering. Please contact Capital Pacific for more information. CROSS PARKING EASEMENT A parking agreement is in place between the Subject property and adjacent parcels, permitting Grocery Outlet and Eastside Liquor to use parking spaces on neighboring parcels. Parking: ±213 Spaces or 7.8/1,000 SF GROCERY OUTLET CENTER - KLAMATH FALLS 7

8 Financial Analysis Target Price Range PRICE $3,710,000 Capitalization Rate: 7.00% Price Per Foot: $137 NET OPERATING INCOME SUMMARY SCHEDULED INCOME Per SF Scheduled Rent: 11/1/2017 $10.38 $280,667 Plus: Expense Reimbursement $2.01 $54,431 Equals: Scheduled Gross Income $12.39 $335,098 Vacancy Factor 3% ($10,053) Equals: Effective Gross Income (EGI) $12.02 $325,045 Less: OPERATING EXPENSES Per SF CAMS $0.85 $22,985 Property Taxes $0.91 $24,482 Insurance $0.14 $3,684 Management Fee 3.5% of EGI $0.43 $11,614 Reserves $0.10 $2,704 Total Operating Expenses $2.42 ($65,469) Equals: NET OPERATING INCOME $9.60 $259,576 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. GROCERY OUTLET CENTER - KLAMATH FALLS 8

9 Rent Roll TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES Tenant Name Suite Size % of SF Occupancy Lease Monthly Base Date of Monthly Base Additional Rent/SF/YR Date Expiration Rent Increase Rent Annual Grocery Outlet , % 8/14/05 1/31/31 $19,544 $ /1/26 $21, Yr NNN 10% Increases 180 Day's Notice Eastside Liquor , % 4/1/11 3/31/21 $3,845 $8.38 NNN Comments: Lease is Personally Guaranteed and is controlled by the Oregon Liquor Control Commission (OLCC) by an appointed agent. Totals: 27, % $23,389 $10.38 OPTIONS LEASE TYPE This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. GROCERY OUTLET CENTER - KLAMATH FALLS 9

10 Operating Expenses PROJECTED OPERATING EXPENSES REIMBURSEMENTS Total /SF Notes CAMs $22,985 $ $22,985 Property Taxes $24,482 $ $24,482 Insurance $3,684 $ $3,684 Management $11,614 $ $3,280 Reserves $2,704 $ Total Expenses $65,469 $2.42 $54,431 Notes: 1) Based on 2017 Operating Budget. 2) Based on Property Tax Statements. 3) Based on 2016 amount with assumed 3% increase. 4) Based on 3.5% of EGI. Reimbursements include Admin Fees. 5) Methodology: $0.10/SF. This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. GROCERY OUTLET CENTER - KLAMATH FALLS 10

11 Reimbursements Property Tenant Name Pro Rata % CAMs Taxes Insurance Management Admin Fee Expense Total $22,985 $24,482 $3,684 $11,614 Admin Collected Notes Tenant Totals Grocery Outlet 79.64% $18,305 $19,497 $2,934 $0 5% $915 1 $41,652 Eastside Liquor 20.36% $4,680 $4,985 $750 $2,365 0% $12,780 TOTAL % $22,985 $24,482 $3,684 $2,365 $915 $54,431 Notes: 1) Tenant pays Admin Fee equal to 5% of CAMs. Controllable CAMs are capped at a 5% increase year-over-year (excludes snow removal). This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. GROCERY OUTLET CENTER - KLAMATH FALLS 11

12 Lease Abstract - Grocery Outlet PREMISES/TERM TENANT Grocery Outlet, Inc. dba Grocery Outlet SQUARE FEET 21,536 SF LEASE TYPE NNN LEASE COMMENCEMENT August 14, 2005 LEASE EXPIRATION* January 31, 2031 OPTIONS Two, five-year Option; 180 Day s Notice BASE RENT Date Range Monthly Annually 2/1/2016-1/31/2026 $19,544 $234,527 2/1/2026-1/31/2031 $21,498 $257,980 OPTION PERIOD Date Range TAXES Monthly 2/1/2031-1/31/2036 $23,648 $283,778 2/1/2036-1/31/2041 $26,013 $312,155 Tenant is responsible for reimbursing their prorata share of property taxes to Landlord. INSURANCE Tenant is responsible for maintaining a general liability, plate glass, and worker s compensation policies, and for reimbursing their prorata share of Landlord s commercial general liability policy. UTILITIES All utilities shall be paid directly by Tenant to billing authority. TENANT S OBLIGATIONS Tenant is responsible for maintaining an HVAC maintenance contract, and all interior maintenance and repair. LANDLORD S OBLIGATIONS Landlord is responsible to keep, maintain and replace as necessary the following at no reimbursement from Tenant: the foundation, plumbing system, utility lines and connections up to the Premises, sprinkler mains, (if any), and building structure including, without limitation, the roof, roof covering (including interior ceiling if damaged by leakage), load-bearing walls, floor slabs and masonry walls. COMMON AREA MAINTENANCE Tenant to reimburse their prorata share of common area costs. Controllable CAM costs to be capped at a 5% increase year-over-year. Controllable CAMs exclude, taxes, insurance, and snow removal. Tenant to pay an Admin fee based on 5% of CAM. LEASE PROVISIONS EXCLUSIVE USE Tenant has the exclusive right to sell grocery items, beer and wine in the shopping center and within one mile at any property owned, managed, or controlled by Landlord or any Landlord affiliate. Tenant accepts Eastside Liquor as an exception and acknowledges they may elect to carry wine and beer should the OLCC change their current regulations. GO DARK CLAUSE Tenant shall have the right, at any time, to cease business operations and go dark. In the event Tenant elects to Go Dark, Tenant shall provide written notice to Landlord, and Landlord may elect to terminate the lease with 180 day s prior notice. GROCERY OUTLET CENTER - KLAMATH FALLS 12

13 Lease Abstract - Eastside Liquor PREMISES/TERM TENANT Quick Spirits, Inc. dba Eastside Liquor SQUARE FEET 5,506 SF LEASE TYPE NNN LEASE COMMENCEMENT April 1, 2011 LEASE EXPIRATION March 31, 2021 BASE RENT Date Range Monthly Annually 4/1/2016-3/31/2021 $3,845 $46,140 OLCC APPOINTEE The lessee is an appointee of the Oregon Liquor Control Commission (OLCC) and the lease is assumable, and transferable to a new OLCC appointment in the event of resignation of the current appointment..by the lessee. TAXES Tenant is responsible for reimbursing their prorata share of property taxes to Landlord. INSURANCE Tenant is responsible for maintaining liability and all-risk policies, and for reimbursing their prorata share of Landlord s insurance premiums. UTILITIES All utilities shall be paid directly by Tenant to billing authority. TENANT S OBLIGATIONS Tenant is responsible for all interior maintenance and repair, including HVAC, storefront, wiring and plumbing from the point of entry, and all broken glass. LANDLORD S OBLIGATIONS Landlord is responsible for repairs to the roof, gutters, exterior walls and foundation of the Leased Premises, including repair and maintenance of exterior water, sewer, gas and electrical services up to the point of entry to the Premises. COMMON AREA MAINTENANCE Tenant to reimburse their prorata share of common area costs. GROCERY OUTLET CENTER - KLAMATH FALLS 13

14 Featured Photos GROCERY OUTLET CENTER - KLAMATH FALLS 14

15 Area intel & Demos GEOGRAPHY Klamath Falls sits on the Oregon-California border off Highway 97, the main northsouth arterial cutting through central Oregon. Spanning 6,135 square miles, Klamath County is the fifth largest county in Oregon per square feet and known as the City of Sunshine, receiving 300-plus days of sunshine each year. Klamath Falls is the economic hub of Klamath County and contiguous areas to the east and south, offering higher numbers of employment, housing, retail, medical, and higher education opportunities for the county extending into northern California. ECONOMY The local economy has historically been driven by timber and agriculture, yet has become more diverse over the last 20 years to include healthcare and education with the growth of Sky Lakes Medical Center and the development of the Oregon Institute of Technology (OIT). Sky Lake is an affiliate of the Portland-based Oregon Health & Sciences University (OHSU) and is the area s largest employer with a staff of 1,400. OIT is the only public polytechnic university in the Northwestern United States (enrollment: 4,730) and was recently ranked third by U.S. News in their Regional Colleges West 2017 Rankings. TOURISM Crater Lake, Lava Beds National monument, and a wide variety of outdoor activities make Klamath County a destination for 750,000+ tourists each year. GROCERY OUTLET CENTER 2016 HOUSEHOLD INCOMES POPULATION Radius Demographics 1-Mile 3-Miles 5-Miles AVERAGE $45,444 $51,310 $54,120 MEDIAN $36,611 $38,191 $39,370 1-Mile 3-Miles 5-Miles ,166 32,589 44, ,049 32,716 45, ,911 32,487 44,797 1-MILE 3-MILES 5-MILES 2016 HOUSEHOLD INCOMES POPULATION Drive-Time Demographics 5-Mins 10-Mins 15-Mins AVERAGE $50,573 $52,503 $53,957 MEDIAN $38,420 $38,558 $39,241 5-Mins 10-Mins 15-Mins ,290 38,162 44, ,204 38,348 44, ,957 38,095 44,716 GROCERY OUTLET CENTER - KLAMATH FALLS 15

16 Construction Details ROOF Flat, built-up membrane. FOUNDATION Concrete slab on grade. DOORS Swinging glass aluminum doors. WINDOWS Fixed dual pane glass windows with aluminum frames. BUILDING EXTERIOR Tan, synthetic stucco with split-face CMU at base near main entrance. HVAC 7 roof-mounted units. LANDSCAPING Low maintenance trees throughout parking lot. GROCERY OUTLET CENTER - KLAMATH FALLS 16

17 Contact Information WE SELL COMMERCIAL REAL ESTATE BUT WE VALUE PEOPLE FOR MORE INFORMATION ON GROCERY OUTLET CENTER PLEASE CONTACT: KEVIN ADATTO (503) MICHAEL HORWITZ (503) SCOTT FRANK (503) PETER DUNN (503) DAVID GELLNER (206) SEAN MACK (503) SEAN TUFTS (206) Capital Pacific is a Commercial Real Estate Brokerage Firm specializing in Retail Investment Sales in the Pacific Northwest as well as Nationally. Our goal is to deliver results for our clients while providing a level of service that will earn repeat business. We have a very human approach that we call the Capital Pacific Experience - CPx. Our team works together on every single assignment, which ultimately benefits our clients. Today Capital Pacific has offices in Seattle, Portland & San Francisco. [ ]

18 [ Copyright 2017 Capital Pacific LLC ] The information contained in this document has been obtained from sources Capital Pacific believes to be reliable. Capital Pacific makes no representation or warranty in respect to its accuracy. It is your responsibility to confirm its accuracy and completeness.