Oak City Market 400 W. North Street Suite 120 Raleigh, NC

Transcription

1 Oak City Market 400 W. North Street Suite 120 Raleigh, NC Purchase Price $775,000 Cap Rate 9.54% Confi dential Offering Memorandum presented by Jake Plotkin, CCIM Hunter Stewart NAI Carolantic Realty, Inc. NAI Carolantic Realty, Inc. tel cell tel cell

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3 Disclaimer NAI Carolantic Realty, Inc., ( Broker ) has been retained by the Seller in Garner, NC ( Property ) as the exclusive broker for this Investment opportunity. This Offering Memorandum has been prepared by Broker for use by the principal ( Principal ) to whom Broker has provided this Offering Memorandum. The use of this Offering Memorandum and the information provided herein is subject to the terms, provisions and limitations of the Confidentiality Agreement furnished by Broker and executed by Principal prior to delivery of this Offering Memorandum. Although the information contained herein is based upon sources believed to be reasonably reliable, Owner and Broker, on their own behalf, and on behalf of their respective officers, employees, shareholders, partners, directors, members and affiliates, disclaim any responsibility or liability for inaccuracies, representations and warranties (expressed or implied) contained in, or omitted from, the Offering Memorandum or any other written or oral communication or information transmitted or made available to the recipient of this Offering Memorandum. In amplification of and without limiting the foregoing, summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents but rather only outlines of some of the principal provisions contained therein, and no representations or warranties are made as to the completeness and/or accuracy of the projections contained herein. Prospective purchasers of the Property should make their own investigations and conclusions without reliance upon this Offering Memorandum, the information contained herein or any other written or oral communication or information transmitted or made available. Additional information and an opportunity to inspect the Property will be made available upon written request by interested and qualified prospective purchasers. Owner expressly reserves the right, exercisable in Owner s sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. Owner and Broker each expressly reserves the right, exercisable in their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time with or without notice. Broker is not authorized to make any representations or agreements on behalf of Owner. Owner shall not have any legal commitment or obligation to any entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed, delivered and approved by Owner and the other party thereto and any conditions to Owner s obligations hereunder have been satisfied or waived. If you have no interest in the Property at this time, return this Offering Memorandum immediately to: NAI Carolantic Realty, Inc. Suite Glenwood Avenue, NC tel fax

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5 Property Summary Overview Purchase Price $775,000 Cap Rate 9.54% (based on year 2 stabalized income) 9.83% (over initial 5-year term) NAI Carolantic Realty is pleased to offer for sale to qualifi ed investors an attractive retail condo leased to Oak City Market, LLC in the prominent Glenwood South submarket, Raleigh, NC. The property is 100% leased to Oak City Market, LLC with a 6-year initial lease term and attractive 2.5% annual rent increases. Investment Highlights Modern brew pub, bar and specialty grocer concept Tenant took space as is and has contributed signifi cant improvements at tenant s sole cost Below market rental rates Landlord is responsible for roof, foundation, and exterior walls Tenant is responsible for full interior, including HVAC New Construction built in

6 Property Summary Property Description Located in the prominent Glenwood South area in downtown Raleigh at the corner of North St. and West St., the WEST building is a 17-story building, which includes 170 luxury residential condos (100% sold), commercial space on the ground fl oor, and a roof top pool. Dramatic ceiling heights extend to nearly 20 feet. Glenwood South, Raleigh s premier dining and entertainment venue, features restaurants, coffee shops, clubs, art galleries, parks, salons and much more. Tandy s Pub, Hibernian Pub and Tobacco Road Sports Café just to name a few, anchor this area. Alexia s Bridal Boutique is a tenant in the building and they have quickly become one of the most popular bridal boutiques not only in Raleigh, but nationwide. Featured in the Walter Magazine, Inside Weddings Magazine, and The Knot; Alexia s provides national exposure for the West. Glenwood South is home to the famous 42nd Street Oyster Bar which is only 1 block away from the West. This is THE entertainment and dining district for downtown Raleigh. Mellow Mushroom, Sullivan s Steakhouse, Napper 6

7 ST MARYS CLAY BROOKLYN GASTON WOOD BOYLAN WILLS FOREST TILDEN CLEVELAND CLEVELAND W CAPITAL DOWNTOWN BUSINESS IMPROVEMENT DISTRICT March 13, 2009 HARP DELWAY MORDECA WAKE FOREST HOLDEN SASSER GASTON HINSDALE DEVEREUX GOVERNORS HILL MCCLURE BOYLAN CAPITAL BLVD TO W PEACE S CAPITAL W PEACE ST TO CAPITAL BLV SEMART SEABOARD PEACE SALISBURY FRANKLIN HALIFAX FRANKLIN HARP PACE PACE BOUNDARY JOHNSON PELL EUCLID PARK TUCKER GLENWOOD JOHNSON JOHNSON CALVIN CAPITAL POLK NORTH LANE NORTH OAKWOOD LANE WEST JONES ELM WILLARD BLOODWORTH EDENTON HILLSBOROUGH NEW BERN NEW BERN MORGAN MULLENS MORSON PARKHAM MOUNTFORD DUPONT HARGETT HARRINGTON COMMERCE DAWSON MCDOWELL SALISBURY EXCHANGE MARKET MARTIN WOLFE BLAKE PERSON EAST CHAVIS WOODSBOROUGH KINSEY FLORENCE COMMERCIAL ROSENGARTEN WEST HARRINGTON CABARRUS GALE FAYETTEVILLE ST REGAN DAVIE CABARRUS WATSON LENOIR FLORENCE SOUTH SOUTH DOROTHEA FOWLE ELLINGTON WESTERN WESTERN KINDLEY WILMINGTON WORTH WORTH MAP INFORMATION: MAP OF DOWNTOWN RALEIGH SHOWING BID AREA. UMSTEAD WESTERN BLVD TO S DAWSON JAMAICAWALNUT WEST MARTIN LUTHER KING JR BLV MARTIN LUTHER KING JR ELLINGTON Legend Municipal Service District Parcels inside BID Commercial CAPE LAKE WHEELER This Map: L:\LS\DTRalAllia\BIDmap_ mxd Created by LS Wake County GIS Department 337 S. Salisbury St, Raleigh NC (919) Printed at 02:04:24 PM on Mar 13, 2009 Information depicted hereon is for reference purposes only and is derived from best available sources. Wake County assumes no responsibility for errors arising from misuse of this map. HAMMELL SAUNDERS ROCKY BRANCH S MCDOWELL ST TO MARTIN L FAYETTEVILLE HOLMAN LEE WILMINGTON MARK BLOUNT BLEDSOE LEE BLOODWORTH Individually Owned Exempt GARNER State Assessed Life Estate Homeowner's Association ParcelsInBID_

8 Executive Summary Downtown Raleigh Downtown Raleigh: The WEST property is situated in just off the Glenwood South area in downtown Raleigh which is currently one of the most attractive offi ce and retail markets in the Triangle. It is the urban center of the region, offering a variety of living, work and play spaces. Over 5,000 downtown residents enjoy the convenience and excitement of an urban lifestyle. There are over 15,000 residents within a one mile radius and 105,000 residents within a three-mile radius of Downtown. Average household income is over $58,000 per year and over 70% hold a professional job. Nearly 40,000 employees work in Downtown Raleigh and there are approximately 2.9 million visitors to Downtown Raleigh annually. Raleigh itself is the second largest city in the Carolinas and also the fastest growing major city in the state adding more than 10,000 residents annually. The Raleigh metro area, with over 1.2 million residents has more than doubled its population since Vacancy Information: As we evaluate the current market position of the WEST building, is it important to understand vacancy information for general retail space in Downtown, which was 9% in the third quarter of Construction: Several large apartment projects for Downtown Raleigh are scheduled to be complete by 2014, adding approximately 1,500 additional units to our market. St. Mary s Square and 425 N. Boylan are under construction today and will add 133 and 250 units respectively. Three additional projects in the Glenwood South district are the West Apartments, The Gramercy and Link Apartments, formerly Powerhouse Square. These three projects will add 565 units alone. In the Moore Square area, the Edison Apartments will feature 220 units directly across from Red Hat Software Co. The SkyHouse Apartments are in the same block and will have 320 units available. The only new for sale product coming online will be the Peace Street Townes which will have roughly 18 townhouses. Over $ million in projects are either under construction or planned. This construction includes apartments, townhomes, mixed use, offi ce and restaurants. Right now there are 2,384,986 SF under construction and another 1,115,480 are in the planning stages. Charter Square alone will add 54,000 SF of class A offi ce. Retail Activity: Downtown Raleigh Alliance indicated there have been 29 street level openings thus far in These business types included soft goods, hair cutting, craft beer shops and several restaurants. 13 new street level business have been announced and are expected to open within the next 8 months. Since 2008, over 160 street level business have opened in downtown or Glenwood South. 8

9 Executive Summary Under Construction 9

10 Location Overview Downtown Districts 10

11 Property Summary 11

12 Construction Schedule Oak City Market ID Task Name Duration Start Finish 1 Preliminary 5 days? Mon 8/25/14 Fri 8/29/14 3rd Quarter 4th Quarter 1st Quarter Jul Aug Sep Oct Nov Dec Jan Feb Mar 2 Contract Change 1 day? Mon 8/25/14 Mon 8/25/14 3 Equipment Confirm Fri 8/29/ Construction 25 days Mon 9/1/14 Fri 10/3/14 Documents 6 Plan Changes 1 wk Mon 9/1/14 Fri 9/5/14 7 PME Engineering 3 wks Mon 9/8/14 Fri 9/26/14 8 Structural Engineering 2 wks Mon 9/22/14 Fri 10/3/ Building Permit 3 wks Mon 9/29/14 Fri 10/17/ Construction 4 mons Mon 10/20/14 Fri 2/6/ Opening 2 wks Mon 2/9/15 Fri 2/20/15 12

13 Interior Renderings Entrance View Mezzanine View Checkout View 13

14 Inspiration Photographs INSPIRATION LIGHTING/BAR/FURNITURE INSPIRATION MEZZANINE INSPIRATION LIGHTING FURNITURE/FINISHES INSPIRATION BAR/DISPLAY INSPIRATION WOOD PANEL/FURNITURE INSPIRATION MEZZANINE INSPIRATION CEILING INSPIRATION CEILING/SOFFIT DETAIL FROM DOWNTOWN D&D COLUMN DETAIL 14

15 Triangle Market Area Information The Research Triangle a 3,480 square-mile geographic region anchored by Raleigh, Durham and Chapel Hill has been consistently ranked among the nation s best places to live, work, raise a family, and earn a world-class education by renowned national publications such as Money, Forbes, FORTUNE, and Entrepreneur. A strong and diverse economic climate, high quality of life, skilled work force and highly acclaimed academic institutions are just a few of the reasons why. Business Climate Anchored by one of the nation s largest research parks and three nationally renowned research universities, the Research Triangle area consistently ranks among the nation s best economies year after year. Industry giants in pharmaceuticals, computer software, telecommunications, and biotechnology dot the landscape in spacious campus-like environments, helping to fuel thriving retail sales and entrepreneurial success. The metro area s economic success is most evident in the rising incomes of its residents. The region s per capital income has long outstripped the state s per capital income, and this strong economic performance is projected to continue to increase over the next 15 years. People and Cultures Approximately 103 new people per day make this area their homes positioning the Research Triangle region as the fastest-growing metro area in North Carolina since At the heart of the region s success lies a diverse and growing blend of people and cultures from every corner of the globe. The region s quality growth and ability to mix native traditions and newcomer infl uences has shaped a population full of vitality, diversity and prosperity. Workforce With a diversifi ed and prosperous business climate and an environment attractive to tomorrow s technology, the Triangle boasts one of the most highly educated and diverse work forces in the nation. With more than a third of its 25-or-older population holding a bachelor s degree or higher, it s no wonder the TheDailyBest.com magazine ranked Raleigh as the No. 1 Smartest City. The manufacturing sector in the Triangle area, employing more than 80,094 individuals, is also very diverse with no dependency on any single industry. Businesses in the area manufacture a vast array of products such as computers, medical devices, food products, communications and electrical equipment; precision fabricated metal products, and industrial machinery. The Triangle area has had consistently low unemployment rates accompanied by high rates of job growth. The area s unemployment rate is consistently below the statewide unemployment rate as well as the national rate. Quality of Life Centrally located between the majestic Blue Ridge Mountains to the west and the legendary Outer Banks and Atlantic coast to the east, the Triangle enjoys a favorable climate year-round. Tropical air in the summer and mild temperatures in the winter keep the mean annual temperature a comfortable 60 degrees. 15

16 Triangle Market Area Information While the Triangle is closely associated with a thriving economy or NCAA national championship basketball teams, Raleigh, Durham, Cary, and Chapel Hill boast full and diverse menus of art, music, and other cultural treasurers. Theatrical performances grace a number of stages throughout the area, and a number of performing arts groups showcase their talents in outdoor venues and amphitheaters. The area is also brimming with some of the fi nest museums in the Southeast. With two of the nation s top medical teaching and research hospitals and a host of high quality community hospitals, the region is also home to world-class medical care. Research Triangle Park Research Triangle Park is a planned research development, created in 1959 by leaders from business, government, and academia to attract companies doing world-class research and development in growing scientifi c and technological disciplines. RTP is centrally located between the three major Triangle research universities: North Carolina State University in Raleigh, Duke University in Durham, and the University of North Carolina in Chapel Hill. Close ties between university departments and RTP fi rms and access to university facilities are strong advantages for area businesses. Also located in RTP is the NC Biotechnology Center, a state supported initiative that provides grants and creative services to support biotech companies. The partially state funded MCNC offers advanced resources in micro fabrication and telecommunications and houses the NC Supercomputing Center. Other strong drawing cards are the Research Triangle Institute (the nation s fourth largest nonprofi t contract research organization), educated and talented students, a high quality labor supply, and opportunities for interactive research. Raleigh-Durham International Airport is only fi ve miles from RTP. 16

17 Downtown Raleigh Submarket Area Information Like many central business districts across the U.S., Downtown Raleigh has experienced a resurgence in recent years thanks to bold leadership and billions of dollars in public and private investment. Business and government leaders, along with pioneering entrepreneurs, have been working together to turn downtown Raleigh back into a thriving, 24-hour neighborhood since the late 1990 s. Momentum surged in 2006 with the completion of a new state-of-the-art, 500,000-square foot Convention Center and adjoining Marriott hotel, along with the reopening of the historic Fayetteville Street to vehicular traffic. The commitment of public investment spurred private development in the form of residential condominiums, redevelopment projects and the city s first new high rises in more than 20 years. Raleigh s central business district is fortunate to have its own champion in the Downtown Raleigh Alliance. Under the organization s leadership, many successful programs have been implemented that have contributed significantly to the success of revitalization efforts. They include the Clean and Safe Ambassador program, the new Farmers Market, family-oriented activities such as Winterfest, free WiFi service, the free R-Line hybrid bus circulator service, and a new downtown plan: The Downtown Raleigh Alliance has partnered with the City of Raleigh s Economic Development officials, property and business owners, and visitors. Also of significance is the recent implementation of the organization s Retail Market Analysis and Positioning Strategy, which focuses on strengthening retail in the Downtown core. Downtown Raleigh emerged from the recent recession with 450,000 SF Charter Square and over 1,800 multi-family units under construction, 250 of which are across the street from the subject property. The submarket s office sector has been 10% vacant since 2000, and remained healthy since the recession. The multi-modal transit center located in the Warehouse District is a joint initiative of the North Carolina Department of Transportation Rail Division and the City of Raleigh. The center will connect the Capital Area Transit bus service, the Triangle Transit s regional bus service, Greyhound bus service, Amtrak rail service, The Carolinian and The Piedmont rail services along with future regional high-speed rail services. MultimodalTransit Given Raleigh s long-term demographic trends, combined with the careful planning and ardent support of local leaders, Downtown Raleigh is well positioned for continued growth. Located in the fastest growing region of North Carolina, the Research Triangle, Raleigh is home to nearly 431,746 people. According to the city s 2030 Comprehensive plan, Raleigh s population has increased by 94 percent since 1990, making it one of the 50 largest cities in the U.S. The population is expected to approach 600,000 by With a thriving Central Business District paramount to the long-term success of any major city, Downtown Raleigh will become an increasingly attractive destination for businesses, residents and investors well into the future. 17

18 Area Information Wake County Accolades #1 Metro City with Highest Concentration of Engineering and Engineering Technology Degrees New Geography August 2013 #1 Fastest Growing City in the U.S. Business Facilities August 2013 #8 Largest Increase in Jobs from 2011to 2012 US Bureau of Labor Statistics May 2013 #3 American Boomtown Bloomberg April 2013 #5 City People Are Moving To The Fiscal Times April 2013 #7 Fastest Growing City in America in 2012 U-Haul April 2013 #10 City for Business Growth in 2012 MarketWatch/The Wall Street Journal April 2013 #8 Mid-Sized American City of the Future for 2013/14 Economic Potential fdi Intelligence April 2013 #2 Mid-Sized American City of the Future for 2013/14 Human Resources fdi Intelligence April 2013 #8 Small American City of the Future 2013/14 Economic Potential (Cary, NC) fdi Intelligence April 2013 #10 Small American City of the Future 2013/14 Human Resources (Cary, NC) fdi Intelligence April 2013 #2 Safest Major Metro in the U.S. Gallup April 2013 #8 Business-Friendly Metro in U.S. (Raleigh-Durham, NC) Governing.com April 2013 #10 Best Place for Young Adults Bizjournals.com March 2013 #1 Healthiest County in NC (Wake County, NC) CountyHealthRankings.org March 2013 #2 Medium Sized City for Young Entrepreneurs under30ceo.com March 2013 Best Cities for New College Grads in 2013 Rent.com March 2013 #3 Fastest Growing Large Metro The Atlantic Cities March 2013 #13 Fastest Growing Metro U.S. Census Bureau March 2013 #4 City for Life Science Companies (Raleigh-Durham, NC) Area Development Magazine March 2013 #6 U.S. Destination for a Value Vacation Hotwire March 2013 #1 Least Congested Major Metro in the U.S. (Raleigh-Durham, NC) Texas A&M Transportation Institute February 2013 #8 City for Women Entrepreneurs Nerd Wallet February 2013 #9 Best City to Call Home Improvement Center February 2013 #2 Place to Start a Business in 2013 National Federation of Independent Business February 2013 #4 Life Sciences Cluster Metro in U.S. (Raleigh-Durham, NC) Jones Lang LaSalle February 2013 #4 City Winning the Battle for the Fastest Growing High-wage Sector In U.S. New Geography February 2013 #4 Best City for Small Business The Business Journals February 2013 #4 City Winning the Battle for America s Biggest Growth Sector Forbes February 2013 #6 Best Value in Public Education (North Carolina State University) Princeton Review/USA Today February 2013 #11 Best Patenting Rate Brookings Metropolitan Policy Program February 2013 #1 Best Public College Value (University of North Carolina at Chapel Hill) Kiplinger s Personal Finance January 2013 #11 Healthiest City for Women Women s Health January 2013 #1 City for Biggest Gains in Home Sales in 2012 (Raleigh-Durham NC) RE/MAX January 2013 #1 Metro for Housing Construction Permits in 2012 U.S. Census Bureau/Trulia January 2013 #9 Hot City for IT Jobs in 2013 Modis January 2013 #10 Best City to Find an IT Job CIO.com January 2013 #7 Best Run City in America 24/7 Wall Street January 2013 #1 Family Friendly City in U.S. Human Life Project January 2013 #4 Fastest Growing City in America Forbes January 2013 #1 Metro with the Largest Share of College Grads in the Center City (Raleigh-Durham-Chapel Hill, NC) Atlantic Cities January 2013 #2 in Population Growth from Federal Deposit Insurance Corp January 2013 #3 Best-Performing City for Creating & Sustaining Jobs & Economic Growth Milken Institute January 2013 #8 Metro with the Largest Share of College Grads in Suburbs (Raleigh-Durham-Chapel Hill, NC) Atlantic Cities January

19 Financials Lease Abstract Address: 400 West North Street, Suite 120, Raleigh, NC Cap Rate: 9.54% Price: $775,000 Tenant: Oak City Market, LLC Rental Increase: 2.5% Annually during initial term 3.0% Annually during option period Ownership/Expenses: LL responsibilities - roof, foundation and exterior walls Security Deposit: $6, Guarantor/Credit: Private Condo Size: 4,808 SF Original Lease Commencement: November 1, 2013 Rent Commencement: November 1, 2014 Initial Lease Term: 6 years Lease Termination Date: October 31, 2019 Lease Options: One (1), Five (5) year option with 3% annual bumps Annual Rent/NOI: $73, (Landlord to pay difference for year 1 subsidized rent and amount shown above) 19

20 Financials Rent Roll Time Period 11/1/ /31/ /01/ /30/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/2019 Annual Base Rental PSF Annual Base Rental Monthly Base Rental $0.00* $0.00* $0.00 $7.50* N/A $3,005.00* $11.25* N/A $4,507.50* $15.38 $ $6, $15.76 $75, $6, $16.15 $77, $6, $16.56 $79, $6, * As a concession to Tenant during the initial Term, Landlord shall grant Tenant a monthly Base Rental abatement period, during the fi rst twelve (12) months of which Tenant shall have no obligation to pay monthly Base Rental installments and Base Rcnlal shall be reduced as shown above for the subsequent twelve ( 12) months. However, during said monthly Base Rental abatement and reduction period, Tenant shall pay Assessments, Common Area Expenses and Additional Rent in accordance with this Lease. Such monthly Base Rental abatement and reduction period shall commence on November 1, 2013, and terminate on October 31, 2015, and thereafter Tenant shall have no further monthly Base Rental abatements or reductions. In the event that Tenant shall be in default under this Lease, following the expiration of any applicable grace, notice or cure periods, as are applicable, the monthly Base Rental abatement and reduction shall be rendered null and void, and monthly Base Rental for such twenty-four (24) months shall become immediately due at the rate of $15.00 per square foot ($6, per month) less the amount of reduced Base Rental actually paid by Tenant for such periods, if any. At closing, Seller will credit Buyer the difference between the subsidized rent and the stabalized NOI: $73,

21 Demographics 400 W. North Street, Raleigh, NC Population 1-Mile Radius % 3-Mile Radius % 5-Mile Radius % 2018 Projection 15, , , ,915 93, , ,434 90, , ,275 85, , Annual Rate 1.61% 1.59% 1.81% Households 2018 Projection 7,508 37,923 88, ,821 34,492 80, ,531 32,858 76, ,694 32,006 66, Annual Rate 1.94% 1.91% 1.97% Est. Population by Single Classification Race 13,914 93, ,963 White Alone 66.1% 55.0% 54.0% Black 28.1% 33.4% 32.0% American Indian Alone 0.6% 0.5% 0.6% Asian Alone 1.3% 3.7% 3.7% Pacific Islander Alone 0.0% 0.0% 0.1% Some Other Race Alone 1.8% 5.1% 7.3% Two or More Races 5.1% 9.7% 13.5% 2013 Est. Average Household Income $60,687 $63,337 $63, Est. Median Household Income $37,741 $36,913 $40,805 21

22 3605 Glenwood Avenue, Suite 100 Raleigh, NC naicarolantic.com 22