105 SE 22nd Street, Bentonville, AR 72712 www.colliers.com/arkansas
Table of Contents Executive Summary... 4 > Property Overview > Portfolio Overview > Physical Description > Notable Tenants > Property Photographs > Aerials Financial Overview... 9 > Financial Summary > Rent Roll MSA & Office Market Overview... 12 > Demographics > Regional Map EXCLUSIVELY LISTED BY: Butch Gurganus Wade Smith Principal Arkansas Brokerage Arkansas MOB: 479.644.7266 MOB: 214.924.1605 butch.gurganus@colliers.com wade.smith@colliers.com 4204 S. Pinnacle Hills Pkwy Suite 102 Rogers, AR 72758 www.colliers.com/arkansas
105 SE 22nd Street, Bentonville, AR 72712 EXECUTIVE SUMMARY
Property Overview PROPERTY DETAILS PROPERTY PROPERTY ADDRESS TAX PARCELS ZONING YEAR BUILT RENTABLE SQUARE FEET LAND AREA South Walton Plaza Office Building 01-09599-000 C-3 2003 17,200 SF 59,677 SF / 1.37 Acres Investment Summary Colliers International is pleased to exclusively offer to qualified investors the opportunity to purchase an office building located off South Walton Boulevard in Bentonville, Arkansas. The property consists of a single-story Class B office building totaling 17,200 square feet. The building is fully leased to five tenants and is stratigically located off South Walton approxiamtely 1.25 miles from the Wal-Mart home office. This is an excellent opportunity for an investor to take advantage of the upscale rent potential and excellent locatioin of the asset. The property offers an investor stable cash flow with a strong tenant base and varying lease terms. Investment Highlights Stabilized Occupancy: The South Walton office building offers an investor a mixture of long-term stability with warying lease terms. The properties in-place cash flow with contractual increases as well as below market rents offer significant increases in cash flow over the near and long-term. The quality portfolio is well-positioned to benefit from the continued improvement in the real estate market, as well as the continuation of Bentonville s healthy growth. Well-Diversified, High Quality Tenancy: The diverse mix of stable, high-quality tenancy includes Electronic Arts, Inc. and Ready Pac Foods, Inc., which occupy over 61 percent of the overall building square footage. Desirable Location: South Walton is one of the metroplex s premier locations fro Class B office properties due to the proximity of the Wal-Mart s corporate locations and the abundance of day-time supporting amenities, including various restaurants, retail services, and hotels. 4
Location 5
Physical Description The office building was constructed in 2003 and is improved with spacious office suites equipped with modern amenities. The 100% leased office building is trategically located in the South Walton Plaza office park just east of South Walton Blvd. > TOTAL BUILDING AREA 17,200 Square Feet > YEAR BUILT 2003 > NO. OF FLOORS One-story > ZONING C-3 > BUILDING EXTERIOR Concrete slab foundation with masonry brick exterior > TENANCY Five (5) tenants > OCCUPANCY 100% > HVAC SYSTEMS Forced Air / Individual Air Conditioning TENANTS 6
Property Photos 7
Property Aerial 8
SOUTH WALTON PLAZA OFFICE PORTFOLIO 105 SE 22nd Street, Bentonville, AR 72712 FINANCIAL SUMMARY
Pricing Overview SALE PRICE NOI 185,024 GROSS SF 16,755 CAP RATE 8.00% USEABLE SF 16,755 SALE PRICE PER RENTABLE SF $138.04 RENTABLE SF 16,755 SALE PRICE 2,312,797 EFFICIENCY 100% ANNUAL RENTAL INCOME RSF RATE GROSS RENT ELECTRONIC ARTS 6,064 $15.81 $95,872 READY PAC FOODS 4,076 $14.00 $57,064 HLN MARKETING 2,000 $15.00 $30,000 MUTINY FX 2,706 $14.10 $38,155 YOTRIO 1,909 $15.19 $28,998 NET RENTAL INCOME 16,755 $14.93 $250,088 ANNUAL OPERATING EXPENSES PER RSF EXPENSE RE TAXES $1.30 $21,698 UTILITIES $1.64 $27,426 INSURANCE $0.15 $2,583 REPAIR & MAINT. $0.05 853 MANAGEMENT $0.75 $12,504 TOTAL OPERATING EXPENSES $3.88 $65,064 NET OPERATING INCOME $11.04 $185,024 10
Rent Roll 105 SE 22nd Street Gross 17,200 Rentable 16,755 TENANT Suite Square Feet Original Comm. Current Comm. Expires Rate PSF Annual Rent Monthly Rent Yotrio 1 1,909 08/01/17 08/01/2017 07/31/2018 $14.75 $28,158 $2,346 08/01/2018 07/31/2019 $15.19 $28,998 $2,416 08/01/2019 07/31/2020 $15.65 $29,876 $2,490 Electronic Arts 3/5 6,064 04/01/2017 04/01/2016 03/31/2017 $14.90 $90,354 $7,529 04/01/2017 03/31/2018 $15.35 $93,082 $7,757 04/01/2018 03/31/2019 $15.81 $95,872 $7,989 04/01/2019 03/31/2020 $16.28 $98,722 $8,227 04/01/2020 03/31/2021 $16.77 $101,693 $8,474 Ready Pac Foods, Inc. 7/9 4,076 06/01/2015 06/01/2015 05/30/2016 $12.50 $50,950 $4,246 06/01/2016 05/30/2017 $13.00 $52,988 $4,416 06/01/2017 05/30/2018 $13.50 $55,026 $4,586 06/01/2018 05/30/2019 $14.00 $57,064 $4,755 06/01/2019 05/30/2020 $14.50 $59,102 $4,925 HLN Marketing, LLC 11 2,000 07/15/2017 04/01/2017 07/31/2018 $14.63 $29,560 $2,438 08/01/2018 07/31/2019 $15.00 $30,000 $2,500 08/01/2019 07/31/2020 $15.39 $30,780 $2,565 08/01/2020 07/31/2021 $15.79 $31,580 $2,632 08/01/2021 07/31/2022 $16.20 $32,400 $2,700 Mutiny FX, LLC 13 2,706 08/1/2015 02/01/2018 07/31/2018 $13.72 37,120 $3,093 08/01/2018 07/31/2019 $14.10 $38,153 $3,179 08/01/2019 07/31/2020 $14.49 $39,218 $3,268 Totals 16,755 $16.21 $52,892 $4,406 Vacant Total - Occupied Total 16,755 11
105 SE 22nd Street, Bentonville, AR 72712 MSA & OFFICE MARKET OVERVIEW
NORTHWEST Arkansas The Fayetteville-Springdale-Rogers Metropolitan Statistical Area is a four-county area including three Arkansas counties and one Missouri County. It is anchored by the Arkansas cities of: Bentonville, Rogers, Fayetteville, and Springdale, and more commonly known as Northwest Arkansas. The MSA is one of the fastest growing MSAs in the nation, and is estimated to have reached a population of 500,000 as of May 28, 2014. Constituent counties of the MSA include: Benton County, Madison County, Washington County and McDonald County, Missouri. NWA is projected to grow at 4.2% annually between 2013 and 2020, making it the third fastest growing metropolitan area in the nation behind Austin, Texas and Raleigh, North Carolina. There are four major cities in the MSA. The most recent 2014 estimate predicts Bentonville has 41,613 residents, Rogers has 61,464 residents, Springdale has 76,565 residents, and Fayetteville has 80,621 residents. Fueled by an amazing entrepreneurial spirit, Northwest Arkansas emerged from humble beginnings to become one of the nation s most thriving economic regions with a unique mix of business and education power the area. Industry leaders such as Walmart, Tyson Foods and J.B. Hunt started here, and their presence continues to drive growth. National RECOGNITION ARKANSAS > Best State in the Country to Start a Business by thumbtack.com and the Kauffman Foundation > CNBC s Top States for Business 2013 ranked Arkansas s cost of doing business as the 4th lowest in the nation NORTHWEST AR > #10 on Business Insider list of Hottest American Cities of the Future (2012) > #21 on Best Cities for Job Growth (Forbes, 2012) > #57 Best-Performing Cities (Milken Institute, 2013) > #2 in Short Term Job Growth (Milken Institute, 2013) > #10 on New Geography list of Best Cities for Job Growth for medium-sized cities (2014) > Top 9 U.S. cities great for tech startups (Entrepreneur Magazine, 2012) > #37 on Forbes list of Best Places for Business and Careers in 2014 > Bella Vista is Money Magazine s #1 best retirement community to keep costs low
MSA Overview Demographic 1 Mile 3 Miles 5 Miles Total Population 2016 3,763 43,728 96,719 Projected Population 2021 3,970 49,358 109,069 Projected Population Growth Percent 1.08% 2.45% 2.43% Estimated Households 2016 1,466 16,888 35,512 Projected Households 2021 1,545 18,967 39,886 Average Household Income 2016 $51,401 $79,983 $84,119 BENTONVILLE > #2-28 Best Trips of 2016 by Outside Magazine > Yahoo! Travel in June 2015 identified Bentonville as one of the 10 Newest Hipster Neighborhoods > Top 10 Best Cities for Families by Livability.com > American City and County named Bentonville in its list of 50 Best Small Cities and Towns in America of Best Places for Business and Careers 14
Office Market Overview At the end of the second quarter 2017, office inventory in the Bentonville market consisted of 3,765,910 square feet in 149 buildings. The overall Northwest Arkansas Class B office sector had a total size of 5,771,230 square feet in 216 buildings, while the Class A buildings represent 3,956,551 square feet in 83 buidlings. Overall net absorption during the 2nd quarter 2017 in the Bentonville market totaled 33,172 square feet. Overall vacancy was 10.7% for the Bentonville office market. Class B vacancy for the Northwest Arkansas office market was 9.0% with a negative quarterly absorption of (19,709) square feet. The vacancy rate across all classes of office product in the overall Northwest Arkansas market was 8.8% as of the 2nd quarter 2017. The Class B office inventory in the Bentonville market as of the second quarter 2017 was 2,672,910 square feet in 111 buildings. The vacancy rate was 11.3% which is a slight increase from the first quarter 2017 vacancy rate of 10.8%. Average asking lease rates during the second quarter was $15.90 per square foot which is an increase over the first quarter 2017 asking lease rate of $15.62 per square foot. Market Statistics Number of Buildings 111 Bentonville Class B Office SF 2,672,910 Average Asking Lease Rate $15.90/SF Vacancy 11.3% 15
105 SE 22nd Street, Bentonville, AR 72712 EXCLUSIVELY LISTED BY: Butch Gurganus Wade Smith Principal Arkansas Brokerage Arkansas MOB: 479.644.7266 MOB: 214.924.1605 butch.gurganus@colliers.com wade.smith@colliers.com 4204 S. Pinnacle Hills Pkwy Suite 102 Rogers, AR 72758 www.colliers.com/arkansas This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). 2016. All rights reserved.