Chico East Plaza Chico CA Offering Memorandum Exclusively Listed by: John DuBois 916. 274. 4424 jd@corecre.com CA BRE #00702547 Jon Gianulias 916. 274. 4422 jg@corecre.com CA BRE #01227233 Mark Denholm 916. 274. 4404 md@corecre.com CA BRE #01437366 2264 Fair Oaks Blvd, Suite 201 Sacramento, CA 95825 CA BRE #01904661
Offering Summary Price: $14,820,000 Projected NOI: $889,165 Future Home of Pacific Dental www.pacificdentalservices.com Cap Rate: 6.0% Price Per SF: $212.28 Occupancy: 100% Gross Leasable Area: Land Area: Parking ±69,812 SF ±7.26 Acres 424 Spaces Parking Ratio: Year Built: 1999 6.1 per 1,000 SF Pacific Dental Services owns and operates over four-hundred twenty-five retail dental practices across the country and is the dental operator of choice for both customers and landlords in the markets it serves. APN: 006-150-117 & 118 Address: 211 & 241 W East Ave Chico CA 95926 2
Investment Highlights Strong Grocery Anchor The center is anchored by a high-volume Raley s supermarket reporting sales of approximately $28 million and trending up. The interior of the store was remodeled within the last five years. Raley s is the dominant grocery chain in the region with over 120 stores, and is ranked the 138th largest private company by Forbes, with over $3.2 billion in annual revenue. Three Tenants With only three tenants, this investment offers relative ease of management. With strong sales and relatively low rent (base rent equates to less than 3% of sales) Raley s is almost certain to exercise its renewal options. Pacific Dental is a new tenant on a ten year lease. Togos/Baskin Robbins has been a tenant since the center was developed in 1999. Flexible Exit Strategy The offering consists of two parcels of land, with Raley s on one parcel and the two-tenant pad building on another parcel. The investor could eventually sell the parcels separately to maximize potential returns. Excellent Access & Visibility A fully-signalized intersection provides access directly into the shopping center from East Avenue. Additional access, with a monument sign, is provided directly off Esplanade. Offered Free & Clear The property is offered free & clear of existing debt, allowing the investor to take advantage of the current favorable financing environment. 3
Site Plan TENANTS SQ FT 1. Raley s 62,098 2. Pacific Dental 4,950 3. Togo s/baskin Robbins 2,764 ESPLANADE - 21,000 VPD NAP NAP NAP W EAST AVE - 24,000 VPD 4
Site Aerial W EAST AVE - 24,000 VPD ESPLANADE - 21,000 VPD 5
Parcel Map 6
Property Photos NAP 7
Retail Map CHICO EAST PLAZA 8
Proforma Operating Statement In-Place Year Ending June 2019 Gross Scheduled Rent 1 943,331 CAM Reimbursement Revenue 2 209,987 Gross Scheduled Income 1,153,318 Vacancy Allowance 3 (8,220) Effective Gross Income 1,145,098 Operating Expenses 4 255,933 Net Operating Income $889,165 Notes: 1. In-place estimates income based on current leases. Assumes Pacific Dental rent commences July 1, 2018. Lease is projected to commence August 2019. Seller will guarantee rent from close of escrow to actual lease commencement. 2. CAM reimbursement income was modeled using 2016 CAM reconciliations. 3. Vacancy allowance is 5% of EGI excluding Raley's. 4. Operating expenses are estimated using owner's 2017 budget, increased 3% per year. 9
Five Year Cash Flow Projection For the Years Ending: Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Potential Gross Revenue Base Rental Revenue $943,331 $945,858 $948,460 $951,140 $953,901 Reimbursement Revenue 209,987 216,287 222,771 229,456 236,341 Total Potential Gross Revenue 1,153,318 1,162,145 1,171,231 1,180,596 1,190,242 General Vacancy (8,220) (8,346) (8,477) (8,611) (8,749) Effective Gross Revenue 1,145,098 1,153,799 1,162,754 1,171,985 1,181,493 Operating Expenses Property Tax 101,783 104,836 107,982 111,221 114,558 Insurance Liability 8,378 8,629 8,888 9,155 9,430 Repairs & Maintenance 5,000 5,150 5,305 5,464 5,628 Property Services 22,570 23,247 23,945 24,663 25,403 Landscaping 28,300 29,149 30,023 30,924 31,852 Roof 2,700 2,781 2,864 2,950 3,039 Parking Lot 20,500 21,115 21,748 22,401 23,073 Utilities 13,500 13,905 14,322 14,752 15,194 Utilities Bldg Ext 2,100 2,163 2,228 2,295 2,364 Operating Payroll 8,757 9,020 9,290 9,569 9,856 Insurance Fire 3,892 4,009 4,129 4,253 4,380 Management Fee 34,353 34,614 34,883 35,160 35,445 Repairs & Maint Non-Reimbursed 4,100 4,223 4,350 4,480 4,615 Total Operating Expenses 255,933 262,841 269,957 277,287 284,837 10
Rent Roll Lease Term Monthly Monthly Annual Annual Rental Percentage Tenant Sq. Ft. Start End Rent Rate PSF Rent Rate PSF Increases Rent Raley's 62,098 2/10/99 6/29/24 $64,911 $1.05 $778,929 $12.54 N/A 1% Comments: Raley's has 3 remaining 5-year renewal options at the same rent. Tenant, at tenant's expense, shall keep the building in good order and repair. Tenant shall reimburse LL for maintaining and repairing the parking and common areas, plus a 10% admin fee (excluding insurance premiums and utilities fees & charges). LL responsible for the costs of major resurfacing (except reserves therefor provided such costs are set forth in a budget approved by tenant). Pacific Dental 4,950 7/1/18 6/30/29 $6,683 $1.35 $80,190 $16.20 10% every 5 N/A years Comments: This is a new lease. Tenant is expected to take possession 7/15/18. Rent shall commence the earlier of 8/1/19 or when tenant opens for business. Seller shall guarantee rent from close of escrow to the actual rent commencement date. Tenant shall reimburse LL for proportionate share of property taxes, insurance and common area maintenance plus an admin fee equal to 10% of CAM excluding taxes, insurance and utilities. Tenant shall maintain HVAC at Tenant's expense. Tenant shall have two 5-year renewal options. Togo's/Baskin Robbins 2,764 7/1/99 6/30/24 $6,813 $2.47 $81,759 $29.58 3% Annually N/A No further renewal options remain. Tenant responsible for maintaining an HVAC maintenance contract. Tenant shall reimburse LL for pro rata share of property taxes, insurance and common area maintenance costs plus a 15% admin fee. 11
Location Demographics OREGON Redding Red Bluff Chico is the cultural and commercial center between Sacramento and the Oregon border, and the most populous city within an 80-mile radius. The city sits on the valley floor, nestled against the foothills of the Sierra Nevada mountain range. Elevation: 205 ft. NEVADA Corning Orland Los Molinos Hamilton City Chico Paradise Willows Biggs Gridley Live Oak Oroville Reno (169 mi) Yuba City Marysville Sacramento (87 miles) San Francisco (176 miles) Oakland (171 miles) nd more maps in the Workforce San Jose (206 miles) Demographics 1Mile 2 Mile 3 Mile 12 Population 15,625 55,538 85,492 Average HH Income $75,796 $69,243 $67,221 Total 2017 Businesses estimated data 1,326 3,113 4,682 Total Employees 9,413 23,735 36,400
Chico, California Chico is the most populous city in Butte County, California, with a city population of 92,464 in 2016. The city is a cultural, economic, and educational center of the northern Sacramento Valley and home to California State University Chico and Bidwell Park, the 26th largest municipal park in the nation. The city of Chico was founded in 1860. VISIT WWW.CHICO-CA.US Area Overview Chico is a city in northern California. It is home to massive Bidwell Park, with woodland trails, a golf course and an observatory. The Chico metropolitan area is the 14th largest metropolitan statistical area in California. While Chico is best known as the home of Chico State University and the Sierra Nevada Brewery, it is also home to a growing number of innovative industries from food processing to information technology. Chico s university culture and natural setting attract creative individuals to an environment where you can live and work while enjoying unparalleled access to outdoor recreation. A number of companies were born out of their founders love for the outdoors, art, or a regional agricultural product Klean Kanteen, Orient & Flume art glass, and Maisie Jane s nut products, for example and others started with Chico State students who chose to remain in the area after graduation. Lower operating costs are a major draw for businesses locating satellite operations, headquarters, or retail stores in Chico, and development costs are a significant factor in those cost savings. 13
Exclusively Listed by: John DuBois 916. 274. 4424 jd@corecre.com CA BRE #00702547 Jon Gianulias 916. 274. 4422 jg@corecre.com CA BRE #01227233 Mark Denholm 916. 274. 4404 md@corecre.com CA BRE #01437366 COPYRIGHT 2018. ALL RIGHTS RESERVED. CORE Commercial ( Agent ), CA BRE Lic. 01904661, has presented this brief, selected information pertaining to the Property and shall not be considered allinclusive or unchanged since the date of preparation. No warranty as to the accuracy or completeness is expressed or implied. The information has been received from sources believed to be reliable but is not guaranteed. Prospective purchasers and tenants should independently verify each item of information and have the same reviewed by its tax advisor and/or legal counsel. The Property is being offered on an as-is, where-is and with all faults basis unless otherwise specified. Owner reserves the right to withdraw this offering at any time, without further notice, with or without cause. 14 www.corecre.com