DOLLAR GENERAL JOHNSON CITY, TENNESSEE SINGLE TENANT ABSOLUTE NNN INVESTMENT OPPORTUNITY Actual Site
EXCLUSIVELY MARKETED BY JIM SCHUCHERT SENIOR ASSOCIATE SRS NATIONAL NET LEASE GROUP 610 Newport Center Drive, Suite 1500 Newport Beach, CA 92660 DL: 949.270.8204 M: 310.971.3892 Jim.Schuchert@srsre.com CA License No. 01969414 JOE SCHUCHERT SENIOR ASSOCIATE SRS NATIONAL NET LEASE GROUP 610 Newport Center Drive, Suite 1500 Newport Beach, CA 92660 DL: 949.629.4540 M: 310.971.3116 Joe.Schuchert@srsre.com CA License No. 01973172 This Offering Memorandum has been prepared by SRS National Net Lease Group (SRS) and has been approved for distribution by the owner. Although effort has been made to provide accurate information, neither the owner nor SRS can warrant or represent accuracy or completeness of the materials presented herein or in any other written or oral communications transmitted or made available to the purchaser. Many documents have been referred to in summary form and these summaries do not purport to represent or constitute a legal analysis of the contents of the applicable documents. Neither owner nor SRS represents that this offering summary is all inclusive or contains all of the information a purchaser may require. All of the financial projections and/or conclusions presented herein are provided strictly for reference purposes and have been developed based upon assumptions and conditions in effect at the time the evaluations were undertaken. They do not purport to reflect changes in the economic performance of the property or the business activities of the owner since the date of preparation of this Offering Memorandum. The projected economic performance of the property, competitive submarket conditions, and selected economic and demographic statistics may have changed subsequent to the preparation of the package. Qualified purchasers are urged to inspect the property and undertake their own independent evaluation of the property, the market and the surrounding competitive environment. Broker of Record: Kyle Stonis - TN License No. 317867 Actual Site
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5 7 13 15 INVESTMENT SUMMARY INVESTMENT HIGHLIGHTS PROPERTY OVERVIEW PARCEL MAP AERIALS SITE PLAN LOCATION MAP AREA OVERVIEW CITY OVERVIEW DEMOGRAPHICS FINANCIALS RENT ROLL PRICING SUMMARY TENANT PROFILE Actual Site
INVESTMENT SUMMARY SRS National Net Lease Group is pleased to present the opportunity to acquire the fee simple interest (land and building ownership) in a new construction Dollar General property located in Johnson City, TN. Built in 2014, the lease has approximately 12 years remaining in the initial term with 5 (5-year) options at 10% rental increases; providing investors with a hedge against inflation. The lease is absolute NNN in nature with zero landlord responsibilities, ideal for a passive investor. The lease is guaranteed by Dollar General Corp (NYSE: DG) with an investment grade credit rating of BBB from Standard & Poor s. The subject property is strategically located in the heart of Johnson City. Johnson City is an economic hub largely fueled by East Tennessee State University and the medical Med-Tech corridor, anchored by the Johnson City Medical Center, Franklin Woods Community Hospital and affiliated facilities. In addition, the subject property is located directly across the street from the Johnson City Housing Authority Keystone Community. The Keystone Community has over 226 apartment units and currently houses 548 occupants. The 5-mile trade area is supported by a population of 72,350 with an average household income of $57,822. OFFERING PRICING: $1,443,370 NET OPERATING INCOME: $91,654 CAP RATE: 6.35% GUARANTY: Corporate CREDIT RATING: S&P: BBB LEASE TYPE: Abs. NNN LANDLORD RESPONSIBILITIES: None PROPERTY SPECIFICATIONS RENTABLE AREA: LAND AREA: 9,026 SF 1 Acre PROPERTY ADDRESS: 411 S. Broadway Street, Johnson City, TN 37601 YEAR BUILT: 2014 PARCEL NUMBER: 090047I F 00802 OWNERSHIP: Fee Simple (Land and Building) 5 / DOLLAR GENERAL / JOHNSON CITY, TENNESSEE INVESTMENT SUMMARY / SRS NATIONAL NET LEASE GROUP Actual Site
INVESTMENT HIGHLIGHTS LONG TERM CORPORATE GUARANTEED LEASE: Dollar General Corporate Guaranteed Lease Approximately 12 Years Remaining in the Initial Term Five (5) Five (5) Year Option Periods with 10% Rental Increases ABSOLUTE NNN LEASE: Zero Landlord Responsibilities Tenant Pays for CAM, Insurance, Taxes, and Maintains All Aspects of the Building Ideal, Management-Free Investment for an Out-of-State, Passive Investor TN GOVERNOR BILL HASLAM SIGNS HALL INCOME TAX CUT, REPEAL INTO LAW 5/20/2016: Beginning January 1, 2017, House Bill 534/Senate Bill 1221 reduces the Hall Income Tax Rate by 1% Each Year -3% for Tax Years Beginning January 1, 2018, and Prior to January 1, 2019-2% for Tax Years Beginning January 1, 2019, and Prior to January 1, 2020-1% for Tax Years Beginning January 1, 2020, and Prior to January 1, 2021 The Hall Income Tax is Fully Repealed for Tax Years Beginning January 1, 2021 JOHNSON CITY ECONOMY: Ranked the #5 in Kiplinger s list of The 10 Lease-Expensive Cities for Living in the U.S.A. Stating the Low Cost of Living is Attributed to Affordable Homes and Below-Average Utility, Transportation and Health-Care Costs. Ranked the #63 Best Small Place for Business and Careers in the USA by Forbes JOHNSON CITY MEDICAL CENTER (JCMC): Located Less than 3.5 Miles from the Subject Property Serves as the Flagship Facility for the Mountain States Health Alliance 445-Bed Facility One of Six Level 1 Trauma Centers in the State The Leading Cancer Center in the Region, Enjoying Relationships with Harvard, Duke, and Vanderbilt Universities PROXIMITY TO KEYSTONE COMMUNITY OF JOHNSON CITY HOUSING AUTHORITY: The Subject Property is Directly Across the Street from the Keystone Community The Keystone Community Has Over 225 Units and Currently Houses Over 548 Occupants MEMORIAL PARK COMMUNITY CENTER: Located Less Than 0.5 Miles from the Subject Property $67,000-Square-Foot Recreation Center Built in 2012 at a Cost of $15 Million Equipped with a 75-Foot-Long Lap Pool, Outdoor Amphitheater, and Tennis Courts EAST TENNESSEE STATE UNIVERSITY 4TH LARGEST UNIVERSITY IN THE STATE: Located Less than 2.5 Miles from the Subject Property Student Population Exceeds 14,300 Listed by the Princeton Review as One of America s Best Value Colleges STRONG DEMOGRAPHICS IN THE 5-MILE TRADE AREA: Johnson City is the Ninth-Largest City in the State of Tennessee Over 72,350 Residents and 56,900 Employees Support the Trade Area $57,822 Average Household Income STRONG TENANT LARGEST DISCOUNT RETAILER Strong Investment Grade Credit Tenant Dollar General is a Fortune 200 Company with a Market Cap of $22.41 Billion S&P Credit Rating (BBB) Only Dollar Store Retailer with an Investment Grade Credit Rating Long Term History of Same-Store Sales Growth 2016 Marked the Company s 27th Consecutive Year 6 / DOLLAR GENERAL / JOHNSON CITY, TENNESSEE INVESTMENT HIGHLIGHTS / SRS NATIONAL NET LEASE GROUP Actual Site
PROPERTY OVERVIEW ACCESS There is one (1) access point along S. Broadway Street. PARCEL Parcel Number: 090047I F 00802 Acres: 1.00 Square Feet: 43,560 TRAFFIC COUNTS E. Main Street/ State Highway 91:...9,800 ZONING Commercial IMPROVEMENTS There is approximately 9,026 SF of existing building area. PARKING There are approximately 36 parking spaces on the owned parcel. The parking ratio is approximately 3.99 stalls per 1,000 SF of leasable area. YEAR BUILT 2014 PARCEL MAP 7 / DOLLAR GENERAL / JOHNSON CITY, TENNESSEE PROPERTY OVERVIEW / SRS NATIONAL NET LEASE GROUP Actual Site
N 9,800 CARS PER DAY
N 9,800 CARS PER DAY
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E. MAIN ST. S. BROADWAY ST. PYLON SIGN N
KNOXVILLE JOHNSON CITY 2017 ESTIMATED POPULATION 1 Mile... 5,601 3 Mile... 40,732 5 Mile... 72,350 2017 AVERAGE HOUSEHOLD INCOME 1 Mile...$38,340 3 Mile...$51,213 5 Mile...$57,822 2017 ESTIMATED TOTAL EMPLOYEES 1 Mile... 3,079 3 Mile... 33,514 5 Mile... 56,900 CHARLOTTE N
AREA OVERVIEW OF JOHNSON CITY, TENNESSEE Johnson City, TN is located in Carter County, TN; Sullivan County, TN; and Washington County, TN with a population of 64,978. Johnson City is a goal-oriented, high-energy, family-centered city with diverse economic components. Johnson City has a diverse economy led by healthcare, education and an entrepreneurial spirit that lives on from the City s founder, Henry Johnson. Johnson City, along with Kingsport and Bristol, Tennessee and Virginia, make up the Tri-Cities area of Northeastern Tennessee. The Combined Statistical Area has a population of 507,768. Business and industry in Johnson City are diverse and include retail, utilities, manufacturing, financial and medical services, as well as other services. The City s economic base is still firmly rooted in institutional services. The three largest employers are Mountain States Health Alliance, East Tennessee State University and the Veteran s Administration Medical Center. Johnson City prides itself on a school system striving for excellence and many higher education opportunities. The Johnson City School System is comprised of 11 schools and 522 certified teachers serving more than 7,000 students. East Tennessee State University is home to approximately 12,000 students. It offers 112 undergraduate and 75 master s programs, including one of the country s select few fully accredited graduate programs in storytelling. Boone Lake is available for water skiing and hiking. Buffalo Mountain Park offers scenic hiking trails and places for mountain biking and bird watching. Roan Mountain Sate Park features beautiful views of the Appalachian Mountains and superb hiking areas. Tourists follow the Quilt Trail which showcases the tradition of quilting in the region. The trail features quilts situated on the walls of historic barns. Visitors walking along the trail also have opportunities to see historic sites and visit shops, galleries and other interesting locations. Excellent opportunities for trout fishing are located in the region. Strategically located at the economic center of the Tri-Cities region, Washington County is a hub for new development. Home to the region s largest city, Johnson City, it has led Northeast Tennessee in population growth, retail sales, and employment over the past decade. Washington County is a strategic location for doing business in that it features an extensively connected infrastructure network and is centrally located in the eastern portion of the United States. Conveniently located at the intersection of two major interstates, I-26 and I-81, Washington County serves as the economic center of the Tri-Cities TN/VA region. Access to two major rail lines CSX and Norfolk Southern, Foreign Trade Zone #204, and a regional airport with connections to Atlanta, Chicago, Orlando and Tampa give Washington County the advantage for businesses looking to grow and expand. 13 / DOLLAR GENERAL / JOHNSON CITY, TENNESSEE AREA OVERVIEW / SRS NATIONAL NET LEASE GROUP
AREA OVERVIEW (CONTINUED) DEMOGRAPHICS 1 MILE 3 MILES 5 MILES 2017 Estimated Population 5,601 40,732 72,350 2022 Projected Population 5,719 41,592 74,172 2010 Census Population 5,475 40,211 70,435 Projected Annual Growth 2016 to 2021 0.42% 0.42% 0.50% Historical Annual Growth 2010 to 2016 0.31% 0.18% 0.37% 2017 Estimated Households 2,371 17,401 31,649 2022 Projected Households 2,421 17,829 32,538 2010 Census Households 2,321 16,842 30,394 Projected Annual Growth 2016 to 2021 0.42% 0.49% 0.56% Historical Annual Growth 2010 to 2015 0.29% 0.45% 0.56% 2017 Estimated White 75.40% 83.60% 86.40% 2017 Estimated Black or African American 16.40% 9.20% 6.80% 2017 Estimated Asian or Pacific Islander 0.70% 1.50% 1.70% 2017 Estimated American Indian or Native Alaskan 0.40% 0.40% 0.30% 2017 Estimated Other Races 2.40% 2.20% 2.10% 2017 Estimated Hispanic 5.70% 5.00% 4.60% 2017 Estimated Average Household Income $38,340 $51,213 $57,822 2017 Estimated Median Household Income $25,319 $33,360 $38,708 2017 Estimated Per Capita Income $16,698 $22,992 $26,029 2017 Estimated Total Businesses 177 1,845 3,294 2017 Estimated Total Employees 3,079 33,514 56,900 14 / DOLLAR GENERAL / JOHNSON CITY, TENNESSEE AREA OVERVIEW / SRS NATIONAL NET LEASE GROUP
RENT ROLL LEASE TERM RENTAL RATES TENANT NAME SQUARE FEET LEASE START LEASE END BEGIN INCREASE MONTHLY PSF ANNUALLY PSF RECOVERY TYPE OPTIONS Dollar General 9,026 9/1/2014 9/30/2029 Current - $7,638 $ 0.85 $91,654 $10.15 Absolute NNN 5 (5-Year) Corporate Guaranty Option 1: $100,819 Option 2: $110,901 Option 3: $121,991 Option 4: $134,191 Option 5: $147,610 FINANCIAL INFORMATION Price:...$1,443,370 Net Operating Income:...$91,654 Cap Rate:... 6.35% Lease Type:...Abs. NNN PROPERTY SPECIFICATIONS Year Built:... 2014 Rentable Area:...9,026 SF Land Area:... 1.00 Acres Address:... 411 S. Broadway Street, Johnson City, TN 37601 TENANT PROFILE DOLLAR GENERAL Dollar General Corporation is an American chain of variety stores headquartered in Goodlettsville, Tennessee. As of August 19, 2017, it operated 14,000 stores located in 44 states. It competes in the dollar store format with national chains Family Dollar and Dollar Tree, regional chains such as Fred s in the Southeast, and numerous independently owned stores. In addition to high quality private brands, Dollar General sells products from America s most-trusted manufacturers such as Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle, Kimberly-Clark, Kellogg s, General Mills, and PepsiCo. Dollar General Corporation was founded in 1939. Company Type:... Public (NYSE: DG) 2017 Employees:... 121,000 2017 Revenue:...$21.99 Billion 2017 Net Income:... $1.25 Billion 2017 Assets:...$11.67 Billion 2017 Equity:... $5.41 Billion Ranking:... #128 in FORTUNE 500 (June 2017) 15 / DOLLAR GENERAL / JOHNSON CITY, TENNESSEE RENT ROLL / SRS NATIONAL NET LEASE GROUP Actual Site
SRS GLOBAL STATS 800+ PROPERTIES CURRENTLY REPRESENTED 600+ CLIENTS REPRESENTED IN 2016 $2.6B* TRANSACTION VALUE 20+ OFFICES 250+ BROKERS, PROFESSIONALS, AND STAFF #1 LARGEST REAL ESTATE FIRM EXCLUSIVELY DEDICATED TO RETAIL SERVICES IN NORTH AMERICA *STATISTICS ARE FOR 2016. Actual Site