1 7 0 1 E A S T P A U L D I N G R O A D F O R T W A Y N E, I N D I A N A 4 6 8 1 6 WALGREENS FORT WAYNE, INDIANA offering memorandum
INVESTMENT OVERVIEW Marcus & Millichap is pleased to present this 12,800-square foot Walgreens Pharmacy in Fort Wayne, the second largest city in Indiana. Walgreens is operating under a double-net (NN) lease, limiting landlord responsibility to the repair and replacement of the parking lot, roof, and structure. In May of 2016, a brand-new roof was installed with a 20-year warranty. The lease has six years remaining on an early 10-year extension option executed in 2010. There are three, five-year renewal options remaining. The lease is backed by a corporate guaranty from Walgreen Co, which was ranked number 17 on the Fortune 500 list as of June 2017. The company registered $117.3 billion across more than 8,200 locations in 2016. This asset is located on a large corner parcel, at the signalized intersection of East Paulding Road and South Anthony Boulevard, which sees more than 30,000 vehicles per day. This Walgreens boasts a healthy rent to sales ratio, which is less than 4 percent. Additionally, store sales rose 4.10 percent in 2016. This Walgreens is nearby three schools, totaling more than 1,500 students. These schools include: Levan R Scott Academy, Bishop Luers High School, and Towles Intermediate School. Saint Joseph Hospital is also nearby. This 191-bed facility is known for its quality emergency, inpatient and outpatient care; surgical services; rehabilitation; and diagnostic imaging. This asset also benefits from strong demographics. There are more than 127,000 residents within the five-mile radius, which represents a 3 percent increase from 2010. Additional retailers in the trade region include: CVS, O Reilly Auto Parts, Rally s, Kroger, Dollar Tree, Pizza Hut, KFC, Burger King, Chase Bank, Subway, and many more. 2 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap Activity ID: Y0331591
INVESTMENT HIGHLIGHTS Walgreens With Drive-Thru Pharmacy in Fort Wayne The Second Largest City in Indiana Low Price Point and Below Rent Drug Store Under $2 Million and Paying Less Than $11 Per Square Foot Has Six Years Remaining on 10- Year Extended Double-Net (NN) Limited Landlord Responsibilities Corporate Guaranty NASDAQ: WBA Number 17 on Fortune 500 (June 2017) Standard & Poor (S&P): BBB Demonstrates Commitment to Location 24-Year Operating History Executed Early 10-Year Extension in 2010 Attractive Unit Level Economics Rent to Sales Ratio is Less Than 4 Percent 4.10 Percent Increase in Sales from 2015 to 2016 Brand New Roof Installed in May of 2016 20-Year Warranty Signalized Hard Corner Intersection of East Paulding Road and South Anthony Boulevard More Than 30,000 Vehicles Per Day Multiple Points of Ingress/ Egress Strong Demographics More Than 127,900 Residents Within the Five-Mile Radius Saint Joseph Hospital Located Five Miles North 191-Bed Facility with Quality Emergency, Inpatient and Outpatient Care; Surgical Services; Rehabilitation; and Diagnostic Imaging More Than Two Schools Located Within One Mile Bishop Luers High School, Towles Intermediate School, Levan R Scott Academy Combined Enrollment is More Than 1,500 Students
FINANCIAL OVERVIEW 1701 EAST PAULDING ROAD FORT WAYNE, INDIANA 46816 PRICE $1,850,000 CAP RATE 7.37% NOI $136,283 PRICE PER SQUARE FOOT $144.53 RENT PER SQUARE FOOT $10.65 YEAR BUILT 1992 APPROXIMATE LOT SIZE 1.12 Acres GROSS LEASEABLE AREA 12,800 TYPE OF OWNERSHIP Fee Simple LEASE GUARANTOR Corporate Guaranty 4 LEASE TYPE ROOF AND STRUCTURE Double-Net (NN) Landlord Responsible 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap Activity ID: Y0331591
LEASE SUMMARY LEASE COMMENCEMENT DATE 7/10/1993 LEASE EXPIRATION DATE 7/31/2023 LEASE TERM 20 Years TERM REMAINING 6 Years INCREASES None OPTIONS TO RENEW 3, 5-Year FIRST RIGHT OF REFUSAL Yes 5 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap Activity ID: Y0331591
TENANT OVERVIEW Founded in 1901, Walgreens Boots Alliance, Incorporated is the nation s largest drugstore chain. Charles R. Walgreen built the chain from a single drugstore where he created his own drug products. By 1919 there were 20 stores, and in 1927 the Company went public. Three years later, the store count was well over 500. Today, Walgreen operates over 8,200 stores in all 50 states, DC, Puerto Rico and the United States Virgin Islands. More than 400 of its stores offer medical services through its Healthcare Clinics. Additionally, the Company operates digital businesses that include: Walgreens.com, drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com. In December 2014, Walgreen acquired the remaining 55 Percent of European retailer and wholesaler Alliance Boots, and reorganized under a holding company called Walgreens Boots Alliance, Incorporated; headquartered in Chicago. The Walgreen chain now constitutes the Retail Pharmacy United States of America Division of Walgreens Boots Alliance, Incorporated. In October 2015, Walgreens Boots Alliance announced an agreement to acquire all outstanding shares of Rite Aid for $9.00 per share in cash, for a total enterprise value of about $17.20 billion, including acquired net debt. After failure to obtain Federal Trade Commission approval, Walgreens announced in June 2017 to formally end the merger agreement, and will instead pay $5-Billion to purchase 2,186 Rite Aids. After the new transaction closes, the company will convert most of those Rite Aids to the Walgreens brand. Walgreens expects the new transaction to be modestly accretive to adjusted diluted net earnings per share in the first full year after the initial closing and expects to realize more than $400 million in cost savings within three to four years, primarily from procurement, cost savings and other operational issues. 6 TENANT PROFILE TENANT TRADE NAME Walgreens Boots Alliance, Incorporated TENANT Walgreens OWNERSHIP Public LEASE GUARANTOR Walgreen Co. NUMBER OF LOCATIONS 13,200+ HEADQUARTERED Deerfield, Illinois SALES VOLUME $117.3-Billion (2016) NET WORTH $30.2-Billion (2016) 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap Activity ID: Y0331591
ABOUT FORT WAYNE Fort Wayne, Indiana has a wide variety of activities and venues that make it an impressive place to live, work, and play. The city has gourmet chocolate, Broadway musicals, professional sports, unique shopping malls, tasty dining, and top-notch entertainment. The downtown area of Fort Wayne is known for its quality art venues, interactive museums, festivals, and dining. The area has many attractions, including a talking tree and the perfect steak. The city has a population of about 500,000 and is named after a military fort established in 1794 by General Mad Anthony Wayne. Fort Wayne-Allen County is the economic engine of the Northeast Indiana region, located between the Chicago, Detroit, and Indianapolis metro areas. Fort Wayne is building a nationally recognized economy with their globally-recognized brands, collaborative leadership, and undeniable downtown momentum. Companies based in Fort Wayne include: Do it Best, Franklin Electric, Frontier Communications Central Region, Genteq, Indiana Michigan Power, K&K Insurance, Lincoln Group, MedPro Group, North American Van Lines, Rea Magnet Wire, Steel Dynamics, Sweetwater Sound, and Vera Bradley. Steel Dynamics is a Fortune 500 company headquartered in the city. 7 There is also an eclectic mixture of cultural attractions to satisfy just about any resident or visitor. The Historic Embassy Theatre has national Broadway productions, music concerts, educational programs, and cinema. The Fort Wayne Museum of Art has a contemporary collection of traveling exhibitions, as well as 19th and 20th century art and classes for teenagers. The Fort Wayne Cinema Center showcases a variety of independent, foreign, classic, and documentary films. The Fort Wayne Philharmonic is an orchestra serving the entire Northwest Indiana region and performing regularly. Artlink is a visual art gallery with rotating exhibitions and drawings classes for adults and children. 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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap Activity ID: Y0331591
30 27 Arcola 69 930 930 469 24 14 14 69 Brierwood Hills 5 MILE RADIUS 3 MILE RADIUS Fort Wayne 27 1 MILE SITE 930 New Haven 469 30 e 24 69 Fort Wayne International Airport 27 Hessen Cassel 469 Maples 469 469 27 Bos Hoagland 69 Cor 1 Mile 3 Mile 5 Mile 1 Mile 3 Mile 5 Mile 1 Mile 3 Mile 5 Mile 1 2017 Average HH 2000 Population 11,179 63,323 182,748 2010 Households 10,031 48,458 75,471 $117,225 $115,349 $121,835 Income 2010 Population 11,408 62,729 180,471 2017 Households 10,404 50,915 73,608 2017 Population 11,565 63,418 184,761 2022 Households 10,760 52,781 75,418 2017 Median HH Income 2017 Per Capital Income $94,677 $88,710 $93,922 $47,982 $46,949 $46,110
MARCUS & MILLICHAP HEREBY ADVISES ALL PROSPECTIVE PURCHASERS OF NET LEASED PROPERTY AS FOLLOWS: The information contained in this ing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This ing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this ing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this ing Brochure you agree to release Marcus & Millichap Real Estate Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.
WALGREENS FORT WAYNE, INDIANA offering memorandum 1 7 0 1 E A S T P A U L D I N G R O A D F O R T W A Y N E, I N D I A N A 4 6 8 1 6 BROKER OF RECORD: AARON JOHNSON MARCUS & MILLICHAP KENTUCKY LICENSE: 60872