Waterville Rite Aid 210 Main St., Waterville, ME 04901 John Gendron, CCIM 2079398500 johnrgendron@gmail.com
TABLE OF CONTENTS Waterville Rite Aid Real Estate Investment Details... 3 Biography... 4 Property Description... 5 Executive Summary... 6 Financial Indicators... 7 Cash Flow Analysis... 9 Annual Property Operating Data... 11 Loan Analysis... 13
REAL ESTATE INVESTMENT DETAILS Waterville Rite Aid Analysis Analysis Date October 2016 Property Property Property Address Year Built 2008 Waterville Rite Aid 210 Main St. Waterville, ME 04901 Purchase Information Property Type Retail Purchase Price $12,500,000 Fair Market Value $12,500,000 Tenants 2 Total Rentable Sq. Ft. 14,673 Resale Valuation 2.0% (annual appreciation) Resale Expenses 4.0% Financial Information Down Payment $2,500,000 Closing Costs $25,000 LT Capital Gain 34.00% Federal Tax Rate 34.0% State Tax Rate 8.5% Discount Rate 6.00% Loans Type Debt Term Amortization Rate Payment LO Costs Fixed $10,000,000 25 years 25 years 3.8% $51,686 Income & Expenses Gross Operating Income $718,391 Monthly GOI $59,866 Total Annual Expenses $0 Contact Information John Gendron, CCIM 2079398500 johnrgendron@gmail.com page - 3
BIOGRAPHY Waterville Rite Aid Professional Bio John R. Gendron is a commercial real estate broker specializing in the selling, leasing and development of all types of commercial properties. He earned the designation of CCIM (Certified Commercial Investment Member) and holds several real estate broker licenses including Maine, New Hampshire, New York, Massachusetts, Florida and Connecticut. He is a past President, Vice President and Treasurer of the York County Board of Realtors, past President of Maine Homebuilders Association, past Director of the State of Maine Realtors Association, past Director of Portland Chamber of Commerce, past Director of Greater Portland Landmarks; past Member of Mercy Hospital Board of Trustees, and past Director of McAuley Residence. page - 4
PROPERTY DESCRIPTION Waterville Rite Aid Rite Aid store comprising of 14,673 +/- SF on 2.23 AC with a drive thru and the Wellness Plus design. Located on a signalized intersection of 3 roads with 3 points of egress/ingress. This large store experiences excellent sales and performance. This absolute NNN lease has over 13 years remaining on the primary term and has a Rite Aid Corporate guarantee. Located across from Elmwood Primary Care and MGMC Express Care Facilities along the main street of Waterville. Approximately 50 minutes SE of Bangor, ME and a little over an hour north of Portland, ME, just off I-95. 20 Year initial lease with (6) 5-year options to extend. Years 1-10= $653,083 (7/1/2009-6/30/2019) **Seller will provide a pledge account to increase NNN rent to equal Year 11 rental rate. Pledge account would provide increased rent of $65,308/annually with 3 years remaining, ending 07/01/2019. Years 11-20= $718,391.30 (7/1/2019-6/30/2029) Option 1= $790,230.43 (7/1/2029-6/30/2034) Option 2= $790,230.43 (7/1/2034-6/30/2039) Option 3= $869,253.47 (7/1/2039-6/30/2044) Option 4= $869,253.47 (7/1/2044-60/30/3049) Option 5= TBD Option 6= TBD page - 5
EXECUTIVE SUMMARY Waterville Rite Aid ACQUISITION COSTS Purchase Price, Points and Closing Costs $12,525,000 Investment - Cash $2,525,000 First Loan $10,000,000 INVESTMENT INFORMATION Purchase Price $12,500,000 Price per Tenant $6,250,000 Price per Sq. Ft. $851.90 INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $718,391 Total Vacancy and Credits $0 Operating Expenses $0 Net Operating Income $718,391 Debt Service ($620,228) Cash Flow Before Taxes $98,163 Total Interest (Debt Service) ($375,772) Depreciation and Amortization ($307,739) Taxable Income (Loss) $34,880 Tax Savings (Costs) ($14,824) Cash Flow After Taxes $83,339 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 3.89% Optimal Internal Rate of Return (yr 5) 11.92% Debt Coverage Ratio 1.16 Capitalization Rate 5.75% Gross Income / Square Feet $48.96 page - 6
FINANCIAL INDICATORS Waterville Rite Aid Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Rent Multiplier 17.75 18.10 18.47 18.83 19.21 19.60 19.99 20.39 20.79 21.21 Capitalization Rate 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% 5.75% Cash On Cash Return b/t 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% Cash On Cash Return a/t 3.30% 3.37% 3.20% 3.03% 2.85% 2.67% 2.47% 2.27% 2.07% 1.85% Debt Coverage Ratio 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 Gross Income per Sq. Ft. $48.96 $48.96 $48.96 $48.96 $48.96 $48.96 $48.96 $48.96 $48.96 $48.96 Expenses per Sq. Ft. $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Net Income Multiplier 17.75 18.10 18.47 18.83 19.21 19.60 19.99 20.39 20.79 21.21 Operating Expense Ratio 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Loan To Value Ratio 76.51% 73.06% 69.64% 66.25% 62.89% 59.56% 56.25% 52.97% 49.72% 46.48% Footnotes: b/t = before taxes; a/t = after taxes page - 7
FINANCIAL INDICATORS Waterville Rite Aid Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Gross Rent Multiplier 21.63 22.07 21.96 20.87 21.29 21.71 22.15 22.59 23.04 23.50 Capitalization Rate 5.75% 5.75% 5.89% 6.32% 6.32% 6.32% 6.32% 6.32% 6.32% 6.32% Cash On Cash Return b/t 3.89% 3.89% 4.60% 6.73% 6.73% 6.73% 6.73% 6.73% 6.73% 6.73% Cash On Cash Return a/t 1.63% 1.40% 1.56% 2.54% 2.28% 2.01% 1.73% 1.43% 1.13% 0.59% Debt Coverage Ratio 1.16 1.16 1.19 1.27 1.27 1.27 1.27 1.27 1.27 1.27 Gross Income per Sq. Ft. $48.96 $48.96 $50.18 $53.86 $53.86 $53.86 $53.86 $53.86 $53.86 $53.86 Expenses per Sq. Ft. $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Net Income Multiplier 21.63 22.07 21.96 20.87 21.29 21.71 22.15 22.59 23.04 23.50 Operating Expense Ratio 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Loan To Value Ratio 43.27% 40.09% 36.92% 33.77% 30.63% 27.51% 24.41% 21.32% 18.25% 15.18% Footnotes: b/t = before taxes; a/t = after taxes page - 8
CASH FLOW ANALYSIS Waterville Rite Aid Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 Total Operating Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 NET OPERATING INCOME $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 Loan Payment ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) NET CASH FLOW (b/t) $98,163 $98,163 $98,163 $98,163 $98,163 $98,163 $98,163 $98,163 $98,163 $98,163 Cash On Cash Return b/t 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% 3.89% NET OPERATING INCOME $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 Depreciation ($307,739) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) Loan Interest ($375,772) ($366,319) ($356,500) ($346,302) ($335,710) ($324,708) ($313,280) ($301,411) ($289,083) ($276,278) TAXABLE INCOME (LOSS) $34,880 $30,931 $40,750 $50,948 $61,540 $72,542 $83,970 $95,839 $108,167 $120,972 Income Taxes ($14,824) ($13,146) ($17,319) ($21,653) ($26,155) ($30,830) ($35,687) ($40,732) ($45,971) ($51,413) CASH FLOW (a/t) $83,339 $85,017 $80,845 $76,510 $72,009 $67,333 $62,476 $57,432 $52,192 $46,750 Cash On Cash Return a/t 3.30% 3.37% 3.20% 3.03% 2.85% 2.67% 2.47% 2.27% 2.07% 1.85% Footnotes: b/t = before taxes;a/t = after taxes page - 9
CASH FLOW ANALYSIS Waterville Rite Aid Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 GROSS SCHEDULED INCOME $718,391 $718,391 $736,351 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 Total Operating Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 NET OPERATING INCOME $718,391 $718,391 $736,351 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 Loan Payment ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) ($620,228) NET CASH FLOW (b/t) $98,163 $98,163 $116,123 $170,002 $170,002 $170,002 $170,002 $170,002 $170,002 $170,002 Cash On Cash Return b/t 3.89% 3.89% 4.60% 6.73% 6.73% 6.73% 6.73% 6.73% 6.73% 6.73% NET OPERATING INCOME $718,391 $718,391 $736,351 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 Depreciation ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($321,141) ($307,766) Loan Interest ($262,978) ($249,163) ($234,815) ($219,911) ($204,431) ($188,353) ($171,653) ($154,307) ($136,290) ($117,577) TAXABLE INCOME (LOSS) $134,272 $148,087 $180,395 $249,178 $264,658 $280,736 $297,436 $314,782 $332,799 $364,887 Income Taxes ($57,066) ($62,937) ($76,668) ($105,901) ($112,480) ($119,313) ($126,410) ($133,782) ($141,439) ($155,077) CASH FLOW (a/t) $41,097 $35,226 $39,455 $64,102 $57,523 $50,689 $43,592 $36,220 $28,563 $14,925 Cash On Cash Return a/t 1.63% 1.40% 1.56% 2.54% 2.28% 2.01% 1.73% 1.43% 1.13% 0.59% Footnotes: b/t = before taxes;a/t = after taxes page - 10
ANNUAL PROPERTY OPERATING DATA Waterville Rite Aid Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 GROSS SCHEDULED INCOME $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 GROSS OPERATING INCOME $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 Expenses TOTAL OPERATING EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 NET OPERATING INCOME $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 $718,391 page - 11
ANNUAL PROPERTY OPERATING DATA Waterville Rite Aid Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Rental Income $718,391 $718,391 $736,351 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 GROSS SCHEDULED INCOME $718,391 $718,391 $736,351 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 GROSS OPERATING INCOME $718,391 $718,391 $736,351 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 Expenses TOTAL OPERATING EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 NET OPERATING INCOME $718,391 $718,391 $736,351 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 $790,230 page - 12
LOAN ANALYSIS Waterville Rite Aid Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 LOAN 1 Debt Service Analysis Principal Payments $244,456 $253,909 $263,728 $273,926 $284,518 $295,520 $306,947 $318,817 $331,145 $343,950 Interest Payments $375,772 $366,319 $356,500 $346,302 $335,710 $324,708 $313,280 $301,411 $289,083 $276,278 Total Debt Service $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 Principal Balance Analysis Beginning Principal Balance $10,000,000 $9,755,544 $9,501,635 $9,237,907 $8,963,981 $8,679,463 $8,383,943 $8,076,996 $7,758,179 $7,427,034 Principal Reductions $244,456 $253,909 $263,728 $273,926 $284,518 $295,520 $306,947 $318,817 $331,145 $343,950 Ending Principal Balance $9,755,544 $9,501,635 $9,237,907 $8,963,981 $8,679,463 $8,383,943 $8,076,996 $7,758,179 $7,427,034 $7,083,084 page - 13
LOAN ANALYSIS Waterville Rite Aid Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 LOAN 1 Debt Service Analysis Principal Payments $357,250 $371,065 $385,413 $400,317 $415,797 $431,875 $448,575 $465,921 $483,938 $502,651 Interest Payments $262,978 $249,163 $234,815 $219,911 $204,431 $188,353 $171,653 $154,307 $136,290 $117,577 Total Debt Service $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 $620,228 Principal Balance Analysis Beginning Principal Balance $7,083,084 $6,725,834 $6,354,769 $5,969,356 $5,569,039 $5,153,243 $4,721,368 $4,272,793 $3,806,872 $3,322,934 Principal Reductions $357,250 $371,065 $385,413 $400,317 $415,797 $431,875 $448,575 $465,921 $483,938 $502,651 Ending Principal Balance $6,725,834 $6,354,769 $5,969,356 $5,569,039 $5,153,243 $4,721,368 $4,272,793 $3,806,872 $3,322,934 $2,820,283 page - 14