KFC & TACO BELL 2801 N BROADWAY, LOS ANGELES, CA 90031 OFFERING MEMORANDUM
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of KFC & Taco Bell located at 2801 N Broadway, Los Angeles, CA 90031 ( Property ). It has been prepared by Matthews Retail Advisors. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Retail Advisors. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum for the Property, you agree: 1. The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Matthews Retail Advisors expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Retail Advisors or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.
KFC & TACO BELL 2801 N BROADWAY, LOS ANGELES, CA 90031 TABLE OF CONTENTS 04. Executive Summary 06. Property Overview 12. Tenant Overview 14. Area Overview 16. Demographics Gary Chou VP & Director License No. 01911222 O 310.919.5827 M 714.928.8016 gary.chou@matthews.com Kevin Chang Associate License No. 01976724 O 310.919.5828 M 951.616.8918 kevin.chang@matthews.com
EXECUTIVE SUMMARY Property Investment Highlights BELOW MARKET RENT - Tenant is currently paying $20.83/SF with annual rents only $32,162 annually NO MORE OPTIONS - Excellent opportunity to increase rents to market levels RECENTLY RENOVATED STORE - Tenant recently made improvements to this store, showing strength and commitment to location DEPRECIATION BENEFITS - As a leased fee, building can be depreciated to shelter income Location HARD CORNER LOCATION - The property can be easily accessed by traffic from both North Broadway and Sichel St EXCELLENT DEMOGRAPHICS - Site benefits from dense Los Angeles demographics with over 36,000 people in a 1-mile radius; 359,000 people in a 3-mile radius; and 1,057,000 in a 5-mile radius STRONG TRAFFIC COUNTS - North Broadway supports over 29,000 VPD MINUTES AWAY FROM THE DODGER STADIUM - Dodger Stadium is less than 2 miles from this property Tenant HIGHLY SUCCESSFUL NATIONAL CONCEPTS - KFC and Taco Bell together account for over 24,000 units 4 KFC & Taco Bell
Executive Summary KFC & Taco Bell 2801 N Broadway, Los Angeles, CA 90031 List Price...$715,000 CAP Rate - Current...4.50% Gross Leasable Area...± 1,443 SF Lot Size...± 0.12 Acres (5,038 SF) Year Built...1968 Annualized Operating Data Monthly Rent Annual Rent Rent/SF CAP Rate Current - April 30, 2017 $2,680.19 $32,162 $20.83 4.50% June 1, 2017 - April 30, 2018 $2,814.20 $33,770 $21.87 4.72% June 1, 2018 - April 30, 2019 $2,954.91 $35,459 $22.97 4.96% June 1, 2019 - April 30, 2020 $3,102.66 $37,232 $24.11 5.21% June 1, 2020 - April 30, 2021 $3,257.79 $39,093 $25.32 5.47% June 1, 2021 - April 30, 2022 $3,420.68 $41,048 $26.59 5.74% Tenant Summary Tenant Trade Name KFC & Taco Bell Type of Ownership NNN Lease Guarantor Personal Lease Type Fee Simple Roof and Structure Tenant Responsible Original Lease Term 12 Years Lease Commencement 12/21/2009 Rent Commencement 6/1/2010 Lease Expiration 6/1/2022 Term Remaining 5.68 Years Increases 5% Annually Options None Matthews Retail Advisors 5
PROPERTY OVERVIEW 6 KFC & Taco Bell
Physical Description Property Name Property Address KFC & Taco Bell 2801 N Broadway, Los Angeles, CA 90031 Assesor s Parcel Number 5204-021-006 Zoning LAC4 Site Description Number of Stories One Year Built 1968 Gross Leasable Area (GLA) ± 1,443 SF Lot Size ± 0.12 Acres (5,038 SF) Type of Ownership Fee Simple Parking ± 8 Surface Spaces Parking Ratio ± 5.18 : 1,000 SF Landscaping Professional Topography Generally Level Construction Foundation Framing Exterior Parking Surface Roof Concrete Slab Wood Masonry Asphalt Flat Matthews Retail Advisors 7
Tenant Map 8 KFC & Taco Bell
Regional Map Matthews Retail Advisors 9
Aerial Map 10 KFC & Taco Bell Matthews Retail Advisors 10
Bird s Eye Sichel St N Broadway ± 29,000 ADT 11 KFC & Taco Bell Matthews Retail Advisors 11
TENANT OVERVIEW 12 KFC & Taco Bell
Concept KFC & Taco Bell Property Type Net Leased QSR Parent Company Trade Name Yum Brands, Inc. Ownership Public Credit Rating BBB Rating Agency Standard & Poor s Revenue $13.10 Billion Net Income $1.29 Million Stock Symbol YUM Board NYSE No. of Locations ± 42,000 No. of Employees (All) ± 505,000 Headquartered Louisville, KY Web Site www.yum.com Year Founded 1997 KFC, is a fast food restaurant chain that specializes in fried chicken. It is the world s second largest restaurant chain (as measured by sales) after McDonald s. Since the early 1990s, KFC has expanded its menu to offer other chicken products such as chicken fillet burgers, wraps, and salads along with common sides such as french fries and coleslaw, desserts, and soft drinks. Taco Bell is a fast food restaurant that specializes in Tex-Mex foods. Since 1952, they have come to become the number one Mexican food outlet (as measured in number of locations). Their menu contains items like tacos, burritos, quesadillas, nachos and other specialty items. Both are subsidiaries of YUM! Brands, Inc. which operates various quick service restaurants globally. Specifically, it operates in five segments: YUM China, YUM India, the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The company develops, operates, franchises, and licenses a system of restaurants, which prepare, package, and sell various food items. As of August 18, 2015, it operated approximately 41,000 restaurants in approximately 125 countries and territories primarily under the KFC, Pizza Hut, and Taco Bell brands, which specialize in chicken, pizza, and Mexican-style food. Matthews Retail Advisors 13
AREA OVERVIEW The Southland As the second largest metropolitan area in the United States, the Los Angeles Metropolitan Statistical Area, or the Southland, consists of both Los Angeles and Orange Counties. These two counties also make up the inner core of the Greater Los Angeles urbanized region. Los Angeles County, one of California s original 27 counties, is one of the nation s largest counties both in land area and population. With nearly 10 million residents, the Los Angeles population accounts for approximately 27 percent of California s population. The area continues to grow, especially given the vigorous residential development in downtown LA. Famously known for a heavily entertainment industry based economy, the Los Angeles metropolitan area attracts many visitors. Consequently, leisure and hospitality is also a leading industry and has experienced recent growth in employment. It is now the sixth largest hotel market in the United Sates. The Los Angeles-Orange County metro area alone has an enormous economy with an estimate $866 billion GMP. Together with Ventura, Riverside and San Bernardino Counties, Orange and Los Angeles county make up the Greater Los Angeles Area, a combined statistical area that is the third largest economic center in the world after the Greater Tokyo and New York metropolitan areas. 14 KFC & Taco Bell
Los Angeles, California Hip and historic, the city of Los Angeles is a global city with a diverse economy that is driven by international trade, entertainment, aerospace, technology, petroleum, fashion, apparel and tourism. It is the focal point of the larger Los Angeles metropolitan area and the Greater Los Angeles Area region. Los Angeles is the largest manufacturing center in the western United States due to its geographic location. The contiguous ports of Los Angeles and Long Beach together comprise the fifth-busiest port in the world and the most significant port in the Western Hemisphere: It is vital to trade within the Pacific Rim. Home to the Fortune 500 companies Occidental Petroleum, Health Net, Reliance Steel & Aluminum, AECOM, and CBRE, Los Angeles is teeming with career opportunities. The city is on the leading edge of several growth industries and is emerging as a leader in the expanding tech industry. Downtown LA s re-emergence has been stimulated by an influx of new residents, restaurants and major league sports. Crowds flock to the sports and entertainment combination of the Staples center, home to both the Lakers (NBA) and the Kings (NHL), and LA LIVE, which has become a local hotspot. The now Los Angeles Rams (NFL) play a few miles down the road at the Los Angeles Memorial Coliseum, just across the street from the University of Southern California campus. Dodger Stadium on the other hand is farther up north towards Echo Park and is home to the Los Angeles Dodgers (MLB). Hollywood, Beverly Hills and Santa Monica have all influenced Los Angeles claim to fame. Visitors explore the TCL Chinese Theatre and the Hollywood Walk of Fame with the hope of encountering their favorite celebrities stars. Beverly Hills boasts the famous Rodeo Drive full of high-end shopping and world-class restaurants. The Santa Monica Pier and beach draw vacationers from all over the world year-round, and especially during the summer months. The county coastline offers 75-miles of some of the world s greatest beaches. Each seaside town is unique, offering charm and sophistication. From its near perfect weather to some of the world s most iconic landmarks and attractions, Los Angeles holds many distinctions. It is one of the few cities in the world where it s possible to ski in the morning and surf in the afternoon. Matthews Retail Advisors 15
Demographics Population 1-Mile 3-Mile 5-Mile 2021 Projection 36,176 359,118 1,057,350 2016 Estimate 34,571 343,912 1,017,276 2010 Census 32,824 327,051 976,481 2000 Census 31,965 324,455 989,226 Growth 2016-2021 4.64% 4.42% 3.94% Growth 2010-2016 5.32% 5.16% 4.18% Growth 2000-2010 2.69% 0.80% -1.29% Households 2021 Projection 10,155 113,674 354,651 2016 Estimate 9,638 107,595 338,508 2010 Census 9,046 100,526 320,775 2000 Census 8,412 90,620 304,002 Growth 2016-2021 5.37% 5.65% 4.77% Growth 2010-2016 6.54% 7.03% 5.53% Growth 2000-2010 7.53% 10.93% 5.52% Income $0 - $15,000 17.49% 20.67% 18.07% $15,000 - $24,999 20.69% 15.57% 15.14% $25,000 - $34,999 13.15% 11.04% 11.55% $35,000 - $49,999 14.56% 13.36% 13.86% $501,000 - $74,999 16.35% 15.04% 15.37% $75,000 - $99,999 8.34% 9.11% 9.22% $100,000 - $124,999 4.64% 5.75% 5.85% $125,000 - $149,999 2.30% 3.35% 3.51% $1501,000 - $199,999 1.63% 3.26% 3.60% $200,000 - $249,999 0.55% 1.28% 1.51% $2501,000 - $499,999 0.25% 1.21% 1.70% $5010,000+ 0.05% 0.36% 0.62% 2016 Est. Average Household Income $46,542 $56,552 $61,305 2016 Est. Median Household Income $33,985 $38,060 $40,672 16 KFC & Taco Bell
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Gary Chou VP & Director License No. 01911222 O 310.919.5827 M 714.928.8016 gary.chou@matthews.com Kevin Chang Associate License No. 01976724 O 310.919.5828 M 951.616.8918 kevin.chang@matthews.com