SINGLE TENANT ABSOLUTE NNN INVESTMENT OPPORTUNITY RAPID CITY, SOUTH DAKOTA
MATTHEW MOUSAVI MANAGING PRINCIPAL SRS NATIONAL NET LEASE GROUP 610 Newport Center Drive, Suite 400 Newport Beach, CA 92660 DL: 949.698.1116 M: 714.404.8849 Matthew.Mousavi@srsre.com CA License No. 01732226 EXCLUSIVELY MARKETED BY PATRICK R. LUTHER, CCIM MANAGING PRINCIPAL SRS NATIONAL NET LEASE GROUP 610 Newport Center Drive, Suite 400 Newport Beach, CA 92660 DL: 949.698.1115 M: 480.221.4221 Patrick.Luther@srsre.com CA License No. 01209944 DALE ROBBINS SENIOR ASSOCIATE SRS NATIONAL NET LEASE GROUP 610 Newport Center Drive, Suite 400 Newport Beach, CA 92660 DL: 949.270.8200 M: 213.905.0843 Dale.Robbins@srsre.com CA License No. 01956197 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: Reggie Kiupers - SD License No. 13791
4 7 12 14 EXECUTIVE SUMMARY INVESTMENT HIGHLIGHTS PROPERTY OVERVIEW PARCEL MAP SITE PLAN LOCATION MAP AREA OVERVIEW CITY OVERVIEW DEMOGRAPHICS FINANCIALS RENT ROLL PRICING SUMMARY TENANT OVERVIEW
INVESTMENT SUMMARY SRS National Net Lease Group is pleased to present the rare opportunity to acquire Popeyes, an absolute NNN leased, investment property located in Rapid City, SD. The tenant, Platinum Restaurant Group, Inc., has 18 years remaining on the initial term, and has one (5-year) option to extend. The lease features rare 1.5% annual rental increases throughout the initial term and options. The lease is franchisee guaranteed and is absolute NNN with zero landlord responsibilities. The subject site is located along E. North Street (25,200 VPD), a prominent thoroughfare traveling in and out of Rapid City. The subject site has excellent visibility, access and frontage. The asset is less than 1 mile from Rushmore Crossing strip center, which features national/credit tenants such as Target, TJ Maxx, Michael s, Boot Barn, PetCo, Gordmans, Bed Bath & Beyond and more. In addition, Popeyes is near Northgate Shopping Center anchored by Kmart and Family Dollar. The subject site is poised to benefit from the strong tenant synergy and dense consumer traffic in the immediate area. The 5-mile trade area is supported by a population of approximately 76,000 with an average household income of $58,400. Furthermore, there are approximately 60,000 employees who service the area. OFFERING PRICING: $2,565,000 NET OPERATING INCOME: $173,078 CAP RATE: 6.75% GUARANTY: Franchisee TENANT: Platinum Restaurant Group, Inc LEASE TYPE: Abs. NNN LANDLORD RESPONSIBILITIES: None PROPERTY SPECIFICATIONS RENTABLE AREA: LAND AREA: 2,700 SF 1.50 Acres PROPERTY ADDRESS: 1323 E. North Street, Rapid City, SD 57701 YEAR BUILT: 2014 PARCEL NUMBER: 0063527 OWNERSHIP: Fee Simple (Land and Building) 5 / POPEYES / RAPID CITY, SOUTH DAKOTA INVESTMENT SUMMARY / SRS NATIONAL NET LEASE GROUP
INVESTMENT HIGHLIGHTS 18-YEARS REMAINING ON LEASE EXPERIENCED FRANCHISEE OPERATOR RARE RENTAL INCREASES Franchisee guaranteed by Platinum Restaurant Group, LLC 18 years remaining on initial term with 1 (5-year) option to extend Rare 1.5% annual rental increases throughout initial term and options ABSOLUTE NNN LEASE FEE SIMPLE OWNERSHIP NO 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 No landlord responsibilities RECENTLY CONSTRUCTED DRIVE-THRU EQUIPPED This Popeyes location was built recently in 2014 Modern architecture with state of the art materials Drive-thru feature provides ease and convenience for customers On average, stores with drive-thrus generate higher sales than those without ALONG PROMINENT THOROUGHFARE NEARBY NATIONAL/CREDIT TENANTS The subject site is located along E. North Street (25,200 VPD), a prominent thoroughfare traveling in and out of Rapid City The asset is 1 mile from Rushmore Crossing strip center which features anchor tenants such as Target, TJ Maxx, Michael s, Boot Barn, PetCo, Gordmans, Bed Bath & Beyond and more Increases consumer draw and crossover traffic in the area HEALTHY DEMOGRAPHICS IN 5-MILE AREA Over 76,000 residents and 60,000 employees support the trade area $58,400 average household income 6 / POPEYES / RAPID CITY, SOUTH DAKOTA INVESTMENT HIGHLIGHTS / SRS NATIONAL NET LEASE GROUP
PROPERTY OVERVIEW ACCESS There is one (1) access point along E. North Street. PARCEL Parcel Number: 0063527 Acres: 1.50 Square Feet: 65,469 TRAFFIC COUNTS E. North Street:...25,200 N. Cambell Street:...24,100 ZONING Commercial IMPROVEMENTS There is approximately 2,700 SF of existing building area. PARKING There are approximately 33 parking spaces on the owned parcel. The parking ratio is approximately 12.22 stalls per 1,000 SF of leasable area. YEAR BUILT 2014 PARCEL MAP 7 / POPEYES / RAPID CITY, SOUTH DAKOTA PROPERTY OVERVIEW / SRS NATIONAL NET LEASE GROUP
25,200 CARS PER DAY 24,100 CARS PER DAY N
E. NORTH ST. - 25,200 VPD Pylon Sign N
RAPID CITY 2016 ESTIMATED POPULATION 1 Mile... 4,281 3 Mile... 43,407 5 Mile... 76,201 2016 AVERAGE HOUSEHOLD INCOME 1 Mile...$40,611 3 Mile...$51,831 5 Mile...$58,385 2016 ESTIMATED TOTAL EMPLOYEES 1 Mile... 4,984 3 Mile... 41,267 5 Mile... 60,270 N
AREA OVERVIEW OF RAPID CITY Rapid City Swift Water City ) is the second-largest city in South Dakota (after Sioux Falls) and the county seat of Pennington County. Named after Rapid Creek, on which the city is established, it is set against the eastern slope of the Black Hills mountain range. The population was 67,956 as of the 2010 Census. Known as the Gateway to the Black Hills and the City of Presidents, it is split by a low mountain ridge that divides the western and eastern parts of the city. Ellsworth Air Force Base is located on the outskirts of the city. Camp Rapid, a part of the South Dakota Army National Guard, is located in the western part of the city. The historic Old West town of Deadwood is nearby. In the neighboring Black Hills are the popular tourist attractions of Mount Rushmore, the Crazy Horse Memorial, Custer State Park, and Wind Cave National Park. Rapid City s economy is diverse. Heavy and medium industrial activities include a Portland cement plant (constructed and owned for 84 years by the State of South Dakota and sold in 2003 to GCC, a Mexican-based conglomerate), Black Hills Ammunition an ammunition and reloading supplies manufacturing company, several custom sawmills, a lime plant, a computer peripheral component manufacturing plant, and several farm and ranch equipment manufacturers. Of particular note, Rapid City is the center for the manufacture of Black Hills gold jewelry, a popular product with tourists and Westerners in general. Rapid City is also the location of the only manufacturer of stamping machines used for the labeling of plywood and chipboard products. Other economic sectors include financial services and investment companies such as Waddell and Reed, Citibank, WaMu, Merrill Lynch, and Northwestern Mutual. Rapid City is the headquarters for Assurant Insurance s pre-need division and Rapid City has a strong medical services sector, and institutions of higher education. Rapid City is also the major market town for much of five states, drawing commerce from more than half of South Dakota, and large portions of North Dakota, Montana, Wyoming, and the Nebraska Panhandle. Rapid City is a major transportation hub for the Northern Plains. Rapid City Regional Airport provides flights to the airline hub cities of Denver, Minneapolis, Salt Lake City, Dallas-Fort Worth, Las Vegas, Phoenix/Mesa, Houston, Atlanta and Chicago. The airport also has extensive General Aviation operations, including wildfire fighting activities and medical flight support to Rapid City medical facilities and Indian Health Service operations in the Dakotas. Western Dakota Technical Institute, the National American University and the Black Hills Indian Bible College-Assemblies of God are the local institutions of higher education. 11 / POPEYES /RAPID CITY, SOUTH DAKOTA AREA OVERVIEW / SRS NATIONAL NET LEASE GROUP
AREA OVERVIEW (CONTINUED) DEMOGRAPHICS 1 MILE 3 MILES 5 MILES 2016 Estimated Population 4,281 43,407 76,201 2021 Projected Population 4,607 46,873 82,440 2010 Census Population 3,918 39,586 69,530 Projected Annual Growth 2016 to 2021 1.48% 1.55% 1.59% Historical Annual Growth 2010 to 2016 1.43% 1.49% 1.48% 2016 Estimated Households 1,894 17,783 31,375 2021 Projected Households 2,039 19,243 33,985 2010 Census Households 1,734 16,189 28,605 Projected Annual Growth 2016 to 2021 1.49% 1.59% 1.61% Historical Annual Growth 2010 to 2015 1.42% 1.51% 1.49% 2016 Estimated White 62.60% 73.30% 78.20% 2016 Estimated Black or African American 2.50% 2.30% 2.20% 2016 Estimated Asian or Pacific Islander 1.70% 1.70% 1.50% 2016 Estimated American Indian or Native Alaskan 26.20% 16.20% 12.20% 2016 Estimated Other Races 1.50% 1.10% 1.00% 2016 Estimated Hispanic 8.40% 6.60% 5.70% 2016 Estimated Average Household Income $40,611 $51,831 $58,385 2016 Estimated Median Household Income $32,349 $39,425 $43,898 2016 Estimated Per Capita Income $18,186 $22,366 $24,846 2016 Estimated Total Businesses 405 2,882 4,468 2016 Estimated Total Employees 4,984 41,267 60,270 12 / POPEYES / RAPID CITY, SOUTH DAKOTA 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 Popeyes 2,700 10/27/2014 9/30/2034 Current - $14,423 $5 $173,078 $64 Absolute NNN 1 (5-Year) Franchisee Guaranty Oct 2017 1.5% $14,639 $5 $175,674 $65 1.5% Annual Inc. Oct 2018 1.5% $14,859 $6 $178,309 $66 Oct 2019 1.5% $15,082 $6 $180,984 $67 Oct 2020 1.5% $15,308 $6 $183,698 $68 1.5% Annual Increases Thereafter FINANCIAL INFORMATION Price:...$2,565,000 Net Operating Income:... $173,078 Cap Rate:... 6.75% Lease Type:...Abs. NNN PROPERTY SPECIFICATIONS Address:...1323 E. North Street, Rapid City, SD 57701 Rentable Area:...2,700 Year Built:...2014 Land Area:...1.50 Acres TENANT PROFILE POPEYES Popeyes Louisiana Kitchen operates as a fast food restaurant. The Company provides Louisiana style fried chicken and other southern menu items at locations around the United States which offer catering services. The Company operates and franchises over 2,000 Popeyes restaurants worldwide. Popeyes is a highly differentiated QSR brand with a passion for its Louisiana heritage and flavorful authentic food. Company Type:...Public (NASDAQ: PLKI) 2015 Revenue:...$259 Million 2015 Net Income:...$44 Million 2015 Assets:...$266 Million 2015 Equity:...$59 Million 13 / POPEYES / RAPID CITY, SOUTH DAKOTA RENT ROLL / SRS NATIONAL NET LEASE GROUP
SRS GLOBAL STATS 500+ PROPERTIES CURRENTLY REPRESENTED $180M+ HOW MUCH CLIENTS SAVED IN 2014 600+ CLIENTS REPRESENTED IN 2014 *STATISTICS ARE FOR 2015. $1.8B* TRANSACTION VALUE 20+ OFFICES 280+ BROKERS, PROFESSIONALS, AND STAFF