OFFERING MEMORANDUM 1 Retail Strip Center
EXCLUSIVELY LISTED Kevin Branch Investment Advisor RE/MAX Premier CRE Division Tel: 352.282.8051 BranchRemax@gmail.com 2
PROPERTY OVERVIEW 3
INVESTMENT DESCRIPTION RE/MAX Premier Realty CRE Division is pleased to exclusively offer the opportunity to acquire Pepper Tree Plaza (also referred to as subject property ), consisting 16,500 square feet of leasable space. Currently 12 of the 13 units are leased, the remaining unit is pending. The subject property is located within The Villages metropolitan service area and directly in front of a 300-unit apartment complex. Forbes Magazine named The Villages as one of the Top Places to Retire in 2017 and 55Places has ranked The Villages as the Number One spot of the most popular active adult community for the fifth year in a row. With a consistently growing population of over 120,000 within a 5-mile radius, is the prime location for retailers, restaurants and service companies to support the current population with an average household income of over $92,000. The University of Florida s Bureau of Economic and Business Research states The Villages MSA (three-county population) is expected to rise from 788,020 to 1,042,803 by 2030. boosts guaranteed NOI within the next 6 years with current tenants in place. However, as the population reaches in excess of a million within the next decade, with an increased traffic count, new ownership could significantly increase ROI between years five and ten. INVESTMENT HIGHLIGHTS Year Built 2016 Located within The Villages MSA Population of over 120,000 within a 5-mile radius 61,000 households within a 5-mile radius Median Home Value of over $273,000 within a 5-mile radius Traffic count of 27,347 OFFERING SUMMARY Reduced Listing Price $3,979,000 Square Feet: 17,700 Leasable Square Feet: 16,500 Acreage: 4.55 Zoning: Commercial Number of Units: 13 Current Vacancy: 7.7% Current CAP Rate: 8% Pro Forma CAP Rate (Y3): 9.06% *Source: CoStar, 2018, Sumter County Counts, LandVision 4
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Future Medical Center NOT INCLUDED IN SALE PRICE 6
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PRICING & FINANCIAL ANALYSIS 10
CURRENT & HISTORICAL OPERATION ANALYSIS Current Revenue by Suite(s) offers new ownership the opportunity to acquire one of the area s top rate retail centers with the potential guarantee returns within year 3 and another jump in year 6. (See chart on page 12) 18.4% 10.02% 10.22% 6.68% 18.22% Currently has only a 7.6% vacancy, however, there is a lease pending as of August 1, 2018. When the lease is executed Pepper Tree will be at full capacity. Revenue will increase by 65.94% by 2021 with another substantial revenue increase in 2024. 18.77% 18.4% offers new ownership a guaranteed return on investment day one. Current Expenses Breakdown 17.01% 4.40% 10.70% 4.71% 25.27% 29.04% 7.87% 0.71% 0.28% 11
TENANT SYNOPISIS Revenue by Suite 18.04% 10.02% 10.22% 6.68% 18.22% 18.77% 18.4% *Rents in Blue indicate a pending lease ** Rents in red indicate potential lease rates Tenant Overview 4.40% 10.70% 17.01% Tenants in Suites 100/200, 300/400/500, 600, 800/900, 1100, 1200/1300 are locked into their leases through 2024. Should they opt 4.71% to renew their leases with, the guarantee lease amount is indicated in black above. Tenant in Suite 1000 has a lease that is set to expire in 2020, with a option to renew at 103%. Tenant in Suite 800/900 has a lease is renewable in 2021. Currently Suite 700 is pending at $20 per square foot. 25.27% 29.04% 7.87% 12
EXECUTIVE SUMMARY Price: $3,797,000 CAP Rate Current: 8% CAP Rate Pro Forma (Y3): 9.06% Cash-on-Cash (Y3): 17.09% CAP Rate Pro Forma (Y6): 10.77% Cash-on-Cash (Y6): 20.31% ANALYIZED OPERATING DATA INCOME CURRENT YEAR 3 YEAR 6 Scheduled Base Rental Income $297,804 $411,396 $488,460 Total Reimbursement Income 11.88% $ 35,384 15.5% $ 63,807 14.6% $ 71,528 Potential Gross Revenue $333,188 $475,203 $599,988 Less Operating Expenses 21.18% ($70,566) 16.2% ($77,007) 15.5% ($86,709) Net Operating Income $262,622 $398,196 $473,279 OPERATING EXPENSES CURRENT YEAR 3 YEAR 6 CAM $35,182 $38,700 $44,505 Insurance $ 5,552 $ 6,107 $ 7,023 Real Estate Taxes $17,832 $19,000 $20,000 Management Fee $12,000 $13,200 $15,180 Total Expenses $70,566 $77,007 $86,709 13
COMPETITIVE SURVEY 14
Price: $3,979,000 Act. CAP Rate: 8% Sq. Ft.: 17,700 Units: 8 Type: 4-Star Traffic: 16,000 LOCATION Interstate 75@SR 48 Bushnell, FL SALE PRICE ACTUAL CAP RATE $4,175,000 6.75% 3950 Wedgewood Lane The Villages, FL $5,760,000 6.25% 1673 W. Hwy 38 Bushnell, FL $3,784,124 N/A 3529 E Silver Springs Bl Ocala, FL $3,711,000 5.8% SALE DATE April 2018 December 2016 August 2017 November 2017 SQ. FT. 27,910 sq. ft 11,606 sq. ft. 19,097 sq. ft. 15,525 sq. ft. UNITS 10 1 1 1 YEAR BUILT 2009 2007 2017 1995 TYPE 4-Star 3-Star 3-Star 3-Star TRAFFIC 39,000 11,787 35,900 13,700 15
PROPERTY DEMOGRAPHICS 16
POPULATION 250 200 150 120 Population 1 Mile 3 Miles 5 Miles 2018 Total Population: 4,135 56,086 123,998 2023 Population: 5,026 67,602 148,545 Pop Growth 2018 2023: 21.55% 20.53% 19.80% Average Age: 51.10 64.50 63.60 100 90 80 70 60 50 40 30 20 10 Thousands Households 1 Mile 3 Miles 5 Miles 2018 Total Households: 2,263 30,556 62,701 HH Growth 2018-2023: 22.45% 21.11% 18.76% Median Household Inc: $63,466 $58,982 $54,743 Avg. Household Size: 2.50 2.00 2.00 2018 Avg. HH Vehicles: 1.00 1.00 1.00 Housing 1 Mile 3 Miles 5 Miles Median Home Value: $214,000 $270,321 $289,862 Median Year Built: 2004 2006 2006 2000 Census 2010 Census 2018 Estimate 2023 Projected *Source: CoStar, 2018, Sumter County Counts, LandVision 17
ANNUAL CONSUMER SPENDING 2018 2023 Total Consumer Spending Entertainment, Hobbies, Pets 1 Miles 3 Miles 5 Miles 1 Mile 3 Miles 5 Miles $56,030 $720,485 $1,425,466 $74,646 $951,602 $1,866,487 $4,801 $62,111 $122,977 $6,042 $77,415 $151,736 Food and Alcohol $14,918 $193,746 $388,595 $19,870 $255,836 $508,894 Household $9,947 $125,200 $238,190 $12,638 $157,896 $296,944 Transportation / Maintenance $9,940 $129,012 $266,779 $14,291 $183,378 $376,594 Healthcare $4921 $64,038 $121,035 $6,652 $85,56 $159,769 Education / Daycare $3,394 $41,556 $78,726 $4,609 $55,872 $105,375 Apparel $2,503 $32,544 $68,806 $3,259 $42,050 $88,191 *Source: CoStar, 2018, Sumter County Counts, LandVision 18
TRAFFIC Collection Street Cross Street Cross Street Dist/Dir Volume Count Year Dist. From Subject Type US Hwy 301 Co. Rd. 110 0.38N 27,347 2017 0.69 MPSI *Source: CoStar, 2018, Sumter County Counts, LandVision 19
EXCLUSIVELY LISTED Kevin Branch Investment Advisor RE/MAX Premier CRE Division Tel: 352.282.8051 BranchRemax@gmail.com 20