Hoffman Corners Retail Center II 1654-1658 COUNTY ROAD E EAST, VADNAIS HEIGHTS MINNESOTA Mike Brass Vice President Direct 952 837 3054 mike.brass@colliers.com
Offering Overview THE OFFERING Colliers International Minneapolis-St. Paul ( Broker ), on behalf of the Owner, is pleased to present the opportunity to acquire Hoffman Corners Retail Center II, a 4,800 rentable square foot multitenant retail building located in Vadnais Heights, MN. HOFFMAN CORNERS RETAIL CENTER II ADDRESS: 1654-1658 County Road E East Vadnais Heights, Minnesota 55110 GROSS BUILDING SF: 4,800 VACANT AREA: 0 PROPERTY TYPE: SITE SIZE: PARKING: OCCUPANCY: Multi-tenant retail 0.98 acres (42,689 SF) 45 surface spaces; 9.38 / 1,000 ratio 100% Occupied ASKING PRICE: $528,000 COLLIERS INTERNATIONAL 2
Property Overview Property Description BUILDING DETAILS BUILDING DETAILS ADDRESS PROPERTY TYPE 1654-1658 County Road E East Vadnais Heights, Minnesota 55110 Multi-tenant single story retail building ROOF TYPE/AGE Asphalt, 2003 WINDOWS New in 2006 RESTROOMS To code YEAR BUILT 1985 HVAC Roof top units GROSS BUILDING AREA 4,800 SF SIGNAGE Monument SITE SIZE SITE DETAILS 0.98 acres (42,689 SF) BUILDING OPTIONS Building can be expanded by approximately 2,400 square feet. Outside play area, space for a drive-through. INTERNET UTILITIES T1 & Comcast Included in operating expenses ZONING C-2A VACANT AREA 0 SF OPERATING EXPENSES $7.71 per RSF PID NUMBER 343022120021 2018 TAXABLE VALUE $646,600 2018 REAL ESTATE TAXES $21,256 PARKING CONSTRUCTION TYPE 45 surface spaces; 9.38/1,000 ratio Masonry EXTERIOR FINISH Brick - updated in 2006 BUILDING AMENITIES TRAFFIC COUNTS: 12 minutes to St. Paul & 20 minutes to Minneapolis Access to I-35E via Highway 96 13,800 vehicles per day (County Road E East) Population DEMOGRAPHICS: Population 5,760 62,445 157,194 Median HH Income $58,951 $66,956 $66,317 Average HH Income $77,472 $86,699 $89,418 *Source: ESRI 2017. Statistics are based on one mile, three mile and five mile radius figures. COLLIERS INTERNATIONAL 3
Property Overview Amenities Aerial AutoNation Ford Hofman Retail County Road E East Vadnais Sports Center Cafe Cravings Country Lounge White Bear Floral Shop County Road E East White Bear Acura COLLIERS INTERNATIONAL 4
Property Overview Property Tax Aerial COLLIERS INTERNATIONAL 5
Floor Plan Shared Restroom LEASED 2,400 RSF LEASED 1,200 RSF LEASED 1,200 RSF EXPANSION SPACE 2.400 SF Shared Entry COLLIERS INTERNATIONAL 6
Financial Overview Rent Schedule Tenant SF Lease Start Lease Exp. Net Rent PSF Tax/CAM PSF Gross Rent PSF Monthly Rent (Net) Gold Liquors 2,400 09/01/2017 08/31/2022 $10.02 $7.71 $17.73 $2,004.00 Get to the Point Tattoos 1,200 11/01/2016 10/31/2021 $8.25 $7.71 $15.96 $825.00 Mission Bungalow 1,200 01/01/2018 02/28/2021 $6.50 $7.71 $14.21 $650.00 Monthly Net Rent: $3,479.00 Pro Forma Tenant SF Lease Start Lease Exp. Net Rent PSF Tax/CAM PSF Gross Rent PSF Monthly Rent (Net) Tenant 1 2,400 $10.02 $7.87 $17.89 $2,004.00 Tenant 2 1,200 $10.00 $7.87 $17.71 $1,000.00 Tenant 3 1,200 $10.00 $7.87 $17.71 $1,000.00 Monthly Net Rent: $4,004.00 Rent Underwriting Assumptions Rents are adjusted to account for mark to market rents. Grown 2% thereafter. Vacancy Set to market standard of 5%. Real Estate Taxes 2017 Assessed $553,000 2018 Payable $21,256 Effective Rate 3.84% 2018 Assessed $528,000 2019 Payable $20,275 Financing Loan Type Commercial Interest Rate 4.75% Term 7 Amortization 20 Annual Debt Service $28,661 LEVERAGE ASSUMPTIONS Purchase Price $528,000 Loan to Value 70% Equity $158,400 Debt $369,600 Debt Coverage Ratio 1.68 Residual Cap Rate 8.29% COLLIERS INTERNATIONAL 7
Market Overview Retail Market Overview VACANCY & ABSORPTION TRENDS The fourth quarter of 2017 ended with 160,000 square feet of absorption in the multi-tenant market, marking the highest absorption quarter in the last year and a half. The vacancy rate dropped to 6.08%, which is the lowest mark of the calendar year 2017. Year-to-date, the retail market ended with 93,000 square feet of absorption. The largest positive change in absorption this quarter was attributed to Xperience Fitness who occupied a former Gordman s vacancy in Roseville. Shops at Lyndale had 29,000 square feet of absorption, most of which was taken by Golf Galaxy. The closing of another Gander Mountain in Woodbury was the greatest negative absorption change. Year-to-date, the largest changes include closures of three Gander Mountain stores in the Minneapolis-St. Paul metro, JC Penny of Southdale and the two Gordman s stores as well. There has been significant leasing activity, JC Penny and Gordman s are already leased. The Minneapolis CBD was the best performing submarket of the fourth quarter, largely due to the superbowl excitement. Leading the positive market movement was restaurant leasing, where the City Center saw two new restaurants open and another expand. Empty retail space in City Center, IDS Crystal Court, Renaissance Square and the Dayton s project have all been filled with short term tenants. Total square footage of short term Minneapolis CBD retail leasing is nearly 100,000 square feet, bringing the vacancy rate close to zero. Sales volume is up on quarter four compared to the previous quarter but the annual total of $643 million is below previous years. There were less large retail transactions that occurred in 2017, however the total number of transactions is comparable to previous years. Market Statistics DIRECT DIRECT % DIRECT W/ SUBLEASE % VACANT ASKING RENTAL RATES AVERAGE YTD SUBMARKET # BLDGS BUILDING SF ABSORPTION AVAILABLE SF VACANT SF VACANT VACANT SF W/ SUB" LOW HIGH OPERATING ABSORPTION Totals: 10 960,984 100,540 93,053 9.68% 93,053 9.68% na na $13.31 41,341 75,473 Northeast Minneapolis CBD Community 22 4,667,511 175,466 165,302 3.54% 177,302 3.8% $9.75 $9.75 $8.10 51,889 178 Center Neighborhood 170 6,751,430 451,805 413,984 6.13% 443,484 6.57% $14.03 $14.97 $7.25 2,226-8,206 Center Regional Center 5 2,914,077 108,308 108,308 3.72% 108,308 3.72% na na na -1,963-12,325 Totals: 197 14,333,018 735,579 687,594 4.8% 729,094 5.09% $13.78 $14.66 $7.39 52,152-20,353 Northwest Total All Markets Minneapolis CBD 10 960,984 100,540 93,053 9.68% 93,053 9.68% na na $13.31 41,341 75,473 Community 133 20,171,194 961,587 901,822 4.47% 924,377 4.58% $17.50 $20.59 $8.08 83,782 118,988 Center Neighborhood 902 40,769,581 2,847,237 2,568,926 6.3% 2,612,693 6.41% $15.50 $16.40 $8.58-49,005-39,353 Center Outlet Mall 2 544,701 4,968 4,968 0.91% 4,968 0.91% na na na 0-4,968 Regional Center 43 17,994,072 531,051 753,153 4.19% 767,153 4.26% $23.65 $24.32 $11.30-1,975-183,574 Totals: 1,090 80,440,532 4,445,383 4,321,922 5.37% 4,402,244 5.47% $15.88 $16.95 $8.70 74,143-33,434 Absorption 600,000 400,000 200,000 0 (200,000) (400,000) (600,000) (800,000) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017 Vacancy 6.5% 6.0% 5.5% 5.0$ 4.5% 4.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017 Big-Box and Minneapolis CBD Growth Creates Optimistic Outlook for 2018. The above table is summarized data on multi-tenant office buildings greater than 20,000 square feet. COLLIERS INTERNATIONAL 8