Offering Memorandum HISTORIC MELBOURNE INTERCOASTAL STOREFRONT W. Eau Gallie Blvd. Melbourne, FL 32935

Transcription

1 Offering Memorandum HISTORIC MELBOURNE INTERCOASTAL STOREFRONT W. Eau Gallie Blvd. Melbourne, FL S. New York Avenue Suite 200 Winter Park, FL Ph: Fx:

2 CONTENTS I. Investment Overview Executive Summary 5 Listing Details 6 Aerials 7 Location Map 10 Photographs 11 II. Financial Analysis Tenant Summary 14 Operating Statement 15 Pricing Detail 16 III. Market Information Melbourne Overview 18 Brevard County Overview 20 Area Demographics 23 Sale Comparables 25 This summary has been prepared by Hold-Thyssen, Inc. for use by a limited number of parties and does not purport to provide a necessarily accurate summary of the Property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information which prospective investors may need or desire. All projections have been developed by Seller, Hold-Thyssen, and designated sources and are based upon assumptions relating to the general economy, competition and other factors beyond the control of Seller, and therefore are subject to variation. No representation is made by Seller or Hold-Thyssen as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of the Property. Although the information contained herein is believed to be correct, Seller, Hold-Thyssen and its employees, disclaim any responsibility for inaccuracies, and expect prospective purchasers to exercise independent due diligence in verifying all such information. The bearer of this property summary agrees that neither Hold-Thyssen, Inc. nor the Seller shall have any liability for any reason to any Potential Purchaser or Related Parties resulting from the use of this property summary. 2

3 CONFIDENTIALITY AND LIMITING CONDITIONS The information contained in this offering material ( Offering Memorandum ) is proprietary, confidential, and furnished solely for the purpose of a review by a prospective purchaser of the Historic Melbourne Intercoastal Storefront (the Property ) and is not to be used for any other purpose or made available to any other person or entity without the express written authorization of Hold Thyssen, Inc. ( H-T ). This Offering Memorandum has been provided subject to the terms of a Confidentiality Agreement and has been prepared to provide summary, unverified information to prospective purchasers, and to establish a preliminary level of interest in the Property. The information contained in this Offering Memorandum has been obtained from sources believed to be reliable, however, H-T has not verified and will not verify, any of the information contained herein; nor has H-T conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. Potential buyers must take appropriate measures to verify all of the information set forth herein. The information contained in this Offering Memorandum is not a substitute for a thorough due diligence investigation. H-T has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances such as PCB's or asbestos, the property s compliance or otherwise with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. Owner and H-T expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or to terminate discussions with any party at any time with or without notice, or to reprice the offering or withdraw the property from the market for any reason. Owner shall have no legal commitment or obligation to any purchaser reviewing this Offering Memorandum or making an offer to purchase the Property unless a written agreement for the purchase of the Property has been fully executed, delivered and approved by the Owner and any conditions to Owner s obligations thereunder have been satisfied or waived. H-T is not authorized to make any representations or agreements on behalf of Owner. This Offering Memorandum is the property of H-T and may be used only be parties approved by H-T and Owner. The Property is privately offered and, by accepting this Offering Memorandum, the party in possession hereof agrees (i) to return it to H-T immediately upon request of H-T or Owner and (ii) that this Offering Memorandum and its contents are of a confidential nature and will be held and treated in the strictest confidence. No portion of this Offering Memorandum may be copied or otherwise reproduced or stored in any physical or digital storage device. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY AND UNDER NO CIRCUMSTANCES MAY ANY TENANT BE DISTURBED. PLEASE CONSULT THE LISTING AGENT FOR AN APPOINTMENT OR FOR MORE DETAILS. 3

4 INVESTMENT OVERVIEW Executive Summary Listing Details Aerials Location Map Photographs

5 INVESTMENT OVERVIEW EXECUTIVE SUMMARY Hold Thyssen is proud to present Historic Melbourne Intercoastal Storefront, centrally located 1,000 feet East of US Hwy 1 along the westbound lane of Eau Gallie Boulevard in the heart of historic Downtown Eau Gallie, along with Starbucks, West Marine, Clevens Medical Center and various main street community businesses. Within the Eau Gallie Arts District (EGAD) Main Street, cultural features include the Foosaner Museum of Art, Museum School of Florida Institute of Technology, administrative offices of the Brevard Symphony Orchestra, Historic Rossetter House Museum and Gardens, Eau Gallie Public Library, Eau Gallie Civic Center, two public parks, a band shell and newly rebuilt fishing pier. Eau Gallie Boulevard is a major East-West artery and Interstate Interchange linking Melbourne to Interstate 95 and the beaches. US Hwy 1 travels the entire East Coast of the United States. Current tenancy include a Lush & Beauty Browtique, Blue Moon Tatoo, a number of art studios, and potential for an owner user. The retail building is ±7,550 square feet constructed of masonry, stucco, and thermal glass built in 1946 and has a wood truss roof with a BU-TG membrane. The land size is.20 acres with on-street parking on both Highland Avenue and Eau Gallie Boulevard. Property has City of Melbourne water and sewer. Property has City of Melbourne - C3 - Commercial zoning which allows the highest building height, the maximum density with no setbacks, and a wide range of uses including retail, office or residential. INVESTMENT HIGHLIGHTS TROPHY REAL ESTATE Historic Storefront Landmark - built in 1946 on the Melbourne Indian River Intercoastal right before the causeway ±7,550 square feet located on hard signalized corner of Eau Gallie Blvd and Highland Ave in the heart of Downtown Eau Gallie Within the Eau Gallie Arts District (EGAD) Main Street, cultural features include the Foosaner Museum of Art, Museum School of Florida Institute of Technology, administrative offices of the Brevard Symphony Orchestra, Historic Rossetter House Museum and Gardens, Eau Gallie Public Library, Eau Gallie Civic Center, two public parks, a band shell and newly rebuilt fishing pier STRATEGIC OWNERSHIP Five local tenants with brand new five-year NNN leases with rent increases 95% occupied building year 1 with potential for owner-user office or the value-addition of another local tenant (350 SF) City of Melbourne - C3 - Commercial zoning which allows the highest building height, the maximum density with no setbacks, and a wide range of uses including retail, office or residential 5

6 INVESTMENT OVERVIEW LISTING DETAILS Property Name: Property Address: Historic Melbourne Intercoastal Storefront 559 W Eau Gallie Blvd. Melbourne, FL APN/Parcel ID: Zoning: C-3 Commercial Zoning Occupancy Year 1: 95.27% Gross Leasable Area: Lot Size: 7,550 SF.20 AC Year Built: 1946 Parking: City Parking Net Operating Income: $109,981 Cap Rate: 7.58% Asking Price: $1,450,000 Price/SF: $ Major Tenants Tenant GLA Lease Expiration Lease Type Lush & Beauty Browtique 950 SF 12/31/2021 NNN Standard Collective 2,000 SF 8/31/2021 NNN Standard Collective Studio 1,000 SF 3/31/2021 NNN Blue Moon Tatoo 1,000 SF 8/31/2021 NNN Marcie Hascall Clark 2,250 SF 4/30/2021 NNN 6

7 INVESTMENT OVERVIEW PROPERTY AERIAL 7

8 INVESTMENT OVERVIEW PROPERTY AERIAL 8

9 INVESTMENT OVERVIEW DRONE VIDEO PLAY 9

10 INVESTMENT OVERVIEW LOCATION INTERSTATE 95 10

11 INVESTMENT OVERVIEW PHOTOGRAPHS 11

12 INVESTMENT OVERVIEW PHOTOGRAPHS 12

13 FINANCIAL ANALYSIS Tenant Summary Operating Statement Pricing Detail

14 FINANCIAL ANALYSIS TENANT SUMMARY Tenant Name Lush & Beauty Browtique Downs Investment Properties Standard Collective (Anthony Soland) Traditional Cuts, Shaves and Brews Suite Square Feet % Bldg Share Lease Dates Comm. Exp. Annual Rent/SF Total Rent/Month Total Rent/Year Lease Type % 1/1/17 12/31/21 $10.74 $850 $10,200 NNN % M-T-M M-T-M $13.71 $400 $4,800 NNN 559 2, % 9/1/16 8/31/21 $16.06 $2,677 $32,127 NNN 563 1, % 3/1/17 3/31/21 $17.14 $1,429 $17,142 NNN Blue Moon Tatoo 567 1, % 9/1/16 8/31/21 $14.40 $1,200 $14,400 NNN Marcie Hascall Clark 569 2, % 5/1/16 4/30/21 $13.92 $2,609 $31, NNN Total 7,550 $14.57 $9,165 $109,981 Renewal Options and Option Year Rental Information 6% Yearly Increase Base Rent One-2 Year Option, 3% Yearly Rent Increase Three-1 Year Options 3% Yearly Rent Increase Notes: Suite 1428 will most likely be vacant year 1 since current owner uses suite as office space 14

15 FINANCIAL ANALYSIS OPERATING STATEMENT Income Current Year 1 Year 2 Per SF Scheduled Base Rental Income 109, , , Expense Reimbursement Income CAM 0 8,703 8, Insurance 15,313 13,284 13, Real estate Taxes 8,863 7,689 7, Total Reimbursement Income $29, % $29, % $29, % $3.93 Effective Gross Revenue $139,657 $139,657 $142,606 $18.89 Operating Expenses Current Year 1 Year 2 Per SF Insurance 15,313 15,313 15, Real Estate Taxes 8,863 8,863 8, Management Fee 5,500 5,500 5, Total Expenses $29,676 $29,676 $29,676 $3.93 Expenses as % of EGR 21.2% 21.2% 20.8% Net Operating Income $109,981 $109,981 $112,930 $

16 FINANCIAL ANALYSIS PRICING DETAIL Summary Price Down Payment Number of Suites Price Per SqFt Gross Leasable Area (GLA Lot Size (SqFt) Year Built/Renovated $1,450,000 $435,000 6 $ ,550 SF 7,550 SF % Returns Year 1 CAP Rate 7.58% Cash-on-Cash 9.08% Debt Coverage Ratio 1.56 Financing Loan Amount Loan Type Interest Rate Amortization Year Due Loan information is subject to change Year % 9.76% st Loan $1,015,000 New 4.90% 25 Years 2043 Operating Data Income Year 1 Year 2 Scheduled Base Rental Income $109,981 $112,930 Total Reimbursement Income 27.0% $29, % $29,676 Other Income $0 $0 Potential Gross Revenue $139,657 $142,606 Effective Gross Revenue $139,657 $142,606 Less: Operating Expenses 21.2% ($29,676) 20.8% ($29,676) Net Operating Income $109,981 $112,930 Tenant Improvements $0 $0 Leasing Commissions $0 $0 Capital Expenditures $0 $0 Cash Flow $109,981 $112,930 Debt Service ($70,495) ($70,495) Net Cash Flow After Debt Service 9.08% $39, % $42,435 Principal Reduction $21,233 $22,297 Total Return 13.96% $60, % $64,732 Operating Expenses Year 1 Year 2 CAM (Utilities & Op Ex - Combined) $0 $0 Insurance $15,313 $15,313 Real Estate Taxes $8,863 $8,863 Management Fee $5,500 $5,500 Total Expenses $29,676 $29,676 Expenses/Suite $4,946 $4,946 Expenses/SF $3.93 $

17 MARKET INFORMATION Melbourne Overview Brevard County Overview Demographics Sale Comparables Primary data sources utilized for this analysis include CoStar Property and national published data sources.

18 MARKET INFORMATION MELBOURNE OVERVIEW Melbourne is located on Florida s Space Coast in southern Brevard County and is the principal city of the Palm Bay-Titusville, Florida Metropolitan Statistical Area (MSA). Forbes has ranked the Melbourne area 18th out of 100 MSAs and first out of eight metros in Florida for affordable housing and short commute times, among others. The Melbourne area has true Florida appeal. The Melbourne Coast consists of 33 miles of unspoiled beaches, which are among the most beautiful in the world and make the area the ideal destination for outdoor recreational activities such as golf, fishing, boating, swimming, surfing, camping and more. Along with the tranquil beaches and breathtaking scenery, numerous annual events attract hundreds of thousands of visitors to the area each year. Melbourne has two downtown business districts: Downtown Eau Gallie Arts District and Historic Downtown Melbourne, which is known for its hundreds of retail outlets and restaurants. Other local major attractions include Kennedy Space Center Visitor Complex featuring the Space Shuttle Atlantis, the highly acclaimed Brevard Zoo and Space Coast Stadium, which is home to the minor league baseball team, the Brevard County Manatees, and where the Major League Baseball team, the Washington Nationals, hold their spring training. The current population of Brevard County is more than 560,000 with the median age of 46. Brevard County s median household income is $46,554, and the average household net worth is $386,237. RECENT/PLANNED ACTIVITY Embraer executive jet assembly and sales facility, representing $43 million in new investment and 200 new jobs was completed in 2011 Florida Institute of Technology and Melbourne International Airport commenced development of a 78 acre FIT Research Park Sonata at Melbourne 170,000 sf of residential assisted living facility represents $25 million in new investment completed in 2011 The NASA Boulevard and Ellis Road Realignment representing over$10 million in transportation improvements was completed in 2011 The Babcock Street Realignment Project was completed in 2011, providing for $900,000 in transportation capacity improvements AAR Airlift Group located flight operations facilities at Melbourne International Airport in 2011, the location and investment in these facilities brought 80 high wage jobs Midair USA began temporary operations at Melbourne International Airport in 2011, and are currently constructing a 200,00 sf permanent aircraft renovation and hanger facility representing$25 million in new capital investment Grant Street Water Reclamation Facility represents $5.2 million of upgraded re-use water system improvements was completed in

19 MARKET INFORMATION MELBOURNE OVERVIEW HIGH-TECH, INNOVATION AND ENTREPRENEURIALISM Brevard county s share of STEM employment was ranked 1st in Florida by the Brookings Institution Milken Institute ranked Brevard County ranks 1st in Florida with most concentrated high-tech economy and 6th in the US According to the Brookings Institution Brevard county ranks 1st in Florida with 11 patents for every 10,000 workers, and 53rd in the US. According to the Tech America Foundation, Brevard county has the 5th most concentrated high-tech workforce in the US Brevard county ranked 7th highest advanced industry share of total employment in the US by the Brookings Institution Palm Bay, Florida ranks 11th on Forbes first-ever ranking of America s Most Innovative Cities Palm Bay-Melbourne-Titusville is among the top 3 (of 360) metropolitan areas in the United States for concentration of Electrical Engineers and Technicians Florida ranks 4th in the nation in terms of high-tech employment and 3rd for its number of high-tech business locations Florida ranks in 8th place on the Kauffman Index of Entrepreneurial Activity Florida ranked 5th on the Small Business & Entrepreneurship Council s Small Business Policy Index 2013: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship BUSINESS STRUCTURE AND TAXES The Palm Bay-Melbourne-Titusville MSA took the 18th spot on Forbes Magazine s Best-Bang-For-The-Buck Cities annual list in 2009 Florida ranks 2nd best on Chief Executive s annual survey of best and worst states for business Florida ranks 5th best business tax climate in the United States, better than any state in the entire Northeast and Southeast according to the Tax Foundation s 2013 State Business Tax Climate Index CNBC ranked Florida 3rd in the nation for it s Workforce in the annual America s Top States for Business rankings The U.S. Chamber of Commerce and the National Chamber Foundation have ranked Florida 1st for infrastructure and 2nd for workforce development & training 19

20 MARKET INFORMATION BREVARD COUNTY OVERVIEW INDUSTRY Business Xpansion Journal and BizMiner have ranked Florida 3rd in the nation for both Medical Devices Startups and New Branches. Florida also ranks 7th for Medical Devices Employment Florida ranks 1st for aerospace start-ups and new branches and 8th for aerospace employment according to BizMiner in the August issue of Business Xpansion Journal According to the U.S. Department of Labor, Bureau of Labor Statistics, just under one- third of all aerospace employees in Florida work in Brevard County Brevard County ranks 2nd highest concentration of high-tech manufacturing jobs in the U.S. according to the Brookings Institution Brookings Institution ranks Brevard County 10th highest average manufacturing wage in the US Brevard ranked 2nd top Industry Clusters, in Computer Equipment Manufacturing in Angelou Economics Industry Hotspots Report Brevard ranked 5th top Industry Clusters, in Communication Equipment Manufacturing in Angelou Economics Industry Hotspots Report EDUCATION Brevard Public schools ranked 1st in best school quality of all large public school districts in the US, according to the Brookings Institution According to Newsweek, Florida schools account for 1 out of every 12 of the best high schools in the nation Florida public schools ranked 8th overall in Education Week magazine s annual QualityCounts Brevard Public Schools ranked third in the state with 98% of schools receiving a grade of A or B 20

21 MARKET INFORMATION BREVARD COUNTY OVERVIEW TOP REASONS WHY YOU SHOULD CHOOSE FLORIDA S SPACE COAST FOR YOUR RELOCATION AND/OR EXPANSION PROJECT: Hard-Wired for Technology - Florida s Space Coast is the birthplace of space exploration and has grown to be the home of several rapidly expanding industries. Our economy features cuttingedge communications, electronics, aerospace and aviation, homeland security and defense, emerging technologies, high-tech manufacturing and more. Applied High-Tech Ready Workforce - Florida s Space Coast boasts 48 engineers per 1,000 workers, more than any other Florida metro, or indeed any of the 25 most populated metros in the country. World s Only Quintamodal Transportation Hub ROAD RAIL AIR SEA SPACE - With our unique aerospace history, we have a special appreciation for transporting people and goods in the most efficient, cost-effective and innovative ways. Our central location on the Atlantic seaboard of Florida situates us in the middle of major space, air, sea, highway and rail corridors. In addition, many of our transportation hubs are part of Foreign Trade Zone 136, which enables qualified businesses to defer or eliminate U.S. Customs duties on imported goods Innovators Properly Positioned - Our high-tech workforce fuels innovation, attracting 13 patents for every 10,000 workers more than double the national average of 6.4 patents per 10,000 workers. Milken Institute named Brevard County s economy the No. 1 most concentrated high-tech economy in all of Florida in 2013, while the Brookings Institute found in 2013 that we boast the largest share of STEM-related jobs in the state. Good Company - Just to name a few, Florida s Space Coast is home to Bertram Yacht, Boeing, DRS, Embraer Executive Jets, General Electric, Knight Armaments, L3, Lockheed Martin, Northrop Grumman, Raytheon, Rockwell Collins and the world headquarters of Harris Corporation. Attractive Tax and Wage Climate - Florida s attractive tax code includes: No state personal income tax, no state level property tax, no business inventory tax, no corporate income tax on Limited Partnerships and S-Corporations. Florida was ranked 5th best state in the nation in the 2014 State Business Tax Climate Index. 21

22 MARKET INFORMATION BREVARD COUNTY OVERVIEW Business-Friendly Government - The EDC acts as a liaison between legislators, key business sector associations and companies developing incentives and policies to strengthen Brevard County s business environment. This, coupled with our work uniting local and state government entities to create Performance- Based Incentive Packages, offers a competitive environment in which our businesses can thrive. Education Leader - Brevard Public Schools is a model of innovation and excellence and is one of Florida s finest districts. Ranked third in the state with 98% of Brevard schools receiving a grade of A or B and recipient of a district-wide overall A-rating for 10 straight years, the district prepares young people for success. Brevard County is also home to several colleges and universities, including the renowned Florida Institute of Technology. Our universities are joined by such technical institutions as Embry-Riddle Aeronautical University and satellite campuses of the burgeoning University of Central Florida. Top Quality of Life - Drawing more than 2.5 million tourists annually and boasting 72 miles of pristine beaches and an average temperature of 73 degrees, Florida s Space Coast is a place to work and play. Offering symphonies, one of the nation s top-rated zoos, museums and art galleries and a thriving retail and restaurant scene, you will find plenty to do away from the office. Transportation - Melbourne is located on Central Florida s East Coast in Brevard County. Truly quadramodal, the area benefits from the extensive transportation network that has sprung up around NASA s Kennedy Space Center. Connecting the city to the rest of Florida and beyond is a modern, uncongested system of road and rail connections. Interstate 95, US 1, US 192 and the Florida East Coast Railway are all excellent methods for land transportation in the immediate area. Commercial air transportation is provided by Melbourne International Airport home also to a 1,200 acre industrial park. General aviation facilities are available at Space Coast Regional Airport, located just five minutes from Kennedy Space Center. On the Atlantic Ocean sits Port Canaveral, a major deepwater port serving cargo, tanker and cruise markets. Port Canaveral has shown tremendous growth of late, registering 4.5 million short tons of cargo and 3.1 million total cruise passengers in FY Port Canaveral, Melbourne International Airport and Space Coast Regional Airport all lie within Foreign Trade Zone 136, enabling qualified businesses to defer or eliminate U.S. Customs duties on imported goods. 22

23 MARKET INFORMATION AREA DEMOGRAPHICS 23

24 MARKET INFORMATION AREA DEMOGRAPHICS POPULATION In 2016, the population in your selected geography is 4,409. The population has changed by -0.59% since It is estimated that the population in your area will be 4, five years from now, which represents a change of 0.88% from the current year. The current population is 50.76% male and 49.24% female. The median age of the population in your area is 44.00, compare this to the US average which is The population density in your area is 1, people per square mile. HOUSEHOLDS There are currently 2,038 households in your selected geography. The number of households has changed by -4.90% since It is estimated that the number of households in your area will be 2,041 five years from now, which represents a change of 0.15% from the current year. The average household size in your area is 2.21 persons. INCOME In 2016, the median household income for your selected geography is $33,571, compare this to the US average which is currently $54,505. The median household income for your area has changed by 1.65% since It is estimated that the median household income in your area will be $38,733 five years from now, which represents a change of 15.38% from the current year. The current year per capita income in your area is $23,454, compare this to the US average, which is $29,962. The current year average household income in your area is $50,734, compare this to the US average which is $78,425. RACE AND ETHNICITY The current year racial makeup of your selected area is as follows: 79.07% White, 11.27% Black, 0.17% Native American and 1.83% Asian/Pacific Islander. Compare these to US averages which are: 70.77% White, 12.80% Black, 0.19% Native American and 5.36% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 10.21% of the current year population in your selected area. Compare this to the US average of 17.65%. HOUSING The median housing value in your area was $120,707 in 2016, compare this to the US average of $187,181. In 2000, there were 1,296 owner occupied housing units in your area and there were 847 renter occupied housing units in your area. The median rent at the time was $427. EMPLOYMENT In 2016, there are 3,196 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 54.50% of employees are employed in white-collar occupations in this geography, and 44.77% are employed in blue-collar occupations. In 2016, unemployment in this area is 5.43%. In 2000, the average time traveled to work was minutes. 24

25 MARKET INFORMATION SALE COMPARABLES Historic Melbourne Intercoastal Storefront W. Eau Gallie Blvd., Melbourne, FL Asking Price: $1,450,000 Price/SF: $ Cap Rate: 7.58% Year Built: 1946 NNN Tenants: Lush & Beauty Browtique Standard Collective Standard Collective Studio Blue Moon Tatoo Marcie Hascall Clark 25

26 MARKET INFORMATION SALE COMPARABLES 1 Former Lazy Dog Saloon W. Eau Gallie Blvd., Melbourne, FL Sale Date: 08/02/2016 Sale Price: $963,284 Price/SF: $ Year Built: Auto Dealership Building N. Harbor City Blvd., Melbourne, FL Sale Date: 08/04/2016 Sale Price: $130,900 Price/SF: $ Year Built: Auto Repair Building N. Harbor City Blvd., Melbourne, FL Sale Date: 01/05/2017 Sale Price: $399,000 Price/SF: $ Year Built: Eau Gallie River Crab House N. Harbor City Blvd., Melbourne, FL Sale Date: 06/06/2016 Sale Price: $825,000 Price/SF: $ Year Built: