200 Pleasant Street, Berlin, NH John Gendron, CCIM 207-939-8500 johngendron@me.com
Table of Contents Investment Details... 3 Professional Bio... 4 Property Description... 5 Property Photos... 6 Executive Summary... 7 Cash Flow Analysis... 8 Financial Indicators... 10 Annual Property Operating... 12 Rite Aid Extension Letter... 14 Walgreens Letter... 16
INVESTMENT DETAILS Analysis Analysis Date November 2017 Scenario Parking Lot Included Property Property Property Address 200 Pleasant Street Berlin, NH Purchase Information Property Type Retail Purchase Price $1,350,000 Fair Market Value $1,350,000 Tenants 3 Total Rentable Sq. Ft. 7,520 Resale Valuation 2.5% (annual appreciation) Resale Expenses 4.0% Financial Information Down Payment $337,500 Closing Costs $50,000 LT Capital Gain 28.00% Federal Tax Rate 35.0% Discount Rate 6.00% Loans Type Debt Term Amortization Rate Payment LO Costs Fixed $1,012,500 25 years 25 years 4.0% $5,344 Income & Expenses Gross Operating Income $106,800 Monthly GOI $8,900 Total Annual Expenses ($9,109) Monthly Expenses ($759) Contact Information John Gendron, CCIM 207-939-8500 johngendron@me.com page - 3
PROFESSIONAL BIO John R. Gendron is a commercial real estate broker specializing in the selling, leasing and development of all types of commercial properties. He earned the designation of CCIM (Certified Commercial Investment Member) and holds several real estate broker licenses including Maine, New Hampshire, New York, Massachusetts, Florida and Connecticut. He is a past President, Vice President and Treasurer of the York County Board of Realtors, past President of Maine Homebuilders Association, past Director of the State of Maine Realtors Association, past Director of Portland Chamber of Commerce, past Director of Greater Portland Landmarks; past Member of Mercy Hospital Board of Trustees, and past Director of McAuley Residence. John Gendron has represented CVS & Rite Aid as a preferred Broker and preferred developer during the 90s and 2000s. John represented CVS and Rite Aid (at different time periods), primarily in Maine and New Hampshire for several years. John has also represented numerous national companies over the years (I.E. Gannet Corp, Home Depot and many more)! page - 4
PROPERTY DESCRIPTION Rite Aid for Sale set to become Walgreens!! The subject property is comprised of two parcels in Berlin NH. One parcel is a corner lot located at the corner of Mason Street and Pleasant St with an address of 200 Pleasant Street in Berlin, NH. the second parcel is a parking lot used for additional parking. Current Tenant is Rite Aid. 7,520 +/- SF building and sits on.38 Acres of land. Approximately 18+/- parking spots. Current Lease extension period expires 1/31/19. Rite Aid just elected to renew the lease for an additional 5 years, showing their commitment to this site extending the lease until 1/31/2024. Additionally, this store is set to be assumed by Walgreens!! Rite Aid has (1) additional 5-year option period remaining. ***Property is being valued based on the renewal rent of $106,800. The sellers are pledging the difference in the current rent from now-1/31/2019, when the renewal rent is set to begin. Rite Aid Rent Schedule: Current- 2/1/2014-1/31/2019 $84,000/Annually 3rd Option **EXERCISED- 2/1/2019-1/31/2024 $96,600/Annually 4th Option- 2/1/2024-1/31/2029 $111,090/Annually The second lot is located next to the Rite Aid parcel on Pleasant St. It is a vacant lot used for additional parking. This is a 0.13 AC lot which runs until 1/31/19 has been extended to 1/31/2024. There are 2 remaining options to extended this lease agreement for 5 year periods pushing this lease out until 2034, should all renewals be used. Parking Lot Rent Schedule: Current (2nd Option)- 2/1/2014-1/31/2019 3rd Option- 2/1/2019-1/31/2024 4th Option- 2/1/2024-1/31/2029 5th Option- 2/1/2029-1/31/2034 $9,000/Annually $10,200/Annually $11,300/Annually $12,400/ Annually Total Lot Size between two parcel: 0.51 AC 218 FT of Frontage on Pleasant Street 130 FT of Frontage on Mason Street Book/Page: 661/212 Approximately 5,800 +/- cars a day! page - 5
PROPERTY PHOTOS Front View Rear View Inside Inside Citizens Across Street page - 6
EXECUTIVE SUMMARY Acquisition Costs Purchase Price, Points and Closing Costs $1,400,000 Investment - Cash $389,000 First Loan $1,012,500 Investment Information Purchase Price $1,350,000 Price per Tenant $450,000 Price per Sq. Ft. $179.52 Income, Expenses & Cash Flow Gross Scheduled Income $106,800 Total Vacancy and Credits $0 Operating Expenses ($9,109) Net Operating Income $97,692 Debt Service ($64,132) Cash Flow Before Taxes $33,559 (After Tax Results) Total Interest (Debt Service) ($40,062) Depreciation and Amortization ($34,398) Taxable Income (Loss) $23,232 Tax Savings (Costs) ($8,131) Cash Flow After Taxes $25,428 Financial Indicators Cash on Cash Return Before Taxes 8.63% Optimal Internal Rate of Return (yr 9) 12.71% Debt Coverage Ratio 1.52 Capitalization Rate 7.24% Gross Income / Square Feet $14.20 Gross Expenses / Square Feet ($1.21) Operating Expense Ratio 8.53% page - 7
CASH FLOW ANALYSIS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $106,800 $106,800 $106,800 $106,800 $106,800 $106,800 $118,493 $122,390 $122,390 $122,390 Total Operating Expenses ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) NET OPERATING INCOME $97,692 $97,692 $97,692 $97,692 $97,692 $97,692 $109,384 $113,282 $113,282 $113,282 Loan Payment ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) NET CASH FLOW (b/t) $33,559 $33,559 $33,559 $33,559 $33,559 $33,559 $45,252 $49,149 $49,149 $49,149 Cash On Cash Return b/t 8.63% 8.63% 8.63% 8.63% 8.63% 8.63% 11.63% 12.63% 12.63% 12.63% NET OPERATING INCOME $97,692 $97,692 $97,692 $97,692 $97,692 $97,692 $109,384 $113,282 $113,282 $113,282 Depreciation ($34,398) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) Loan Interest ($40,062) ($39,081) ($38,061) ($36,998) ($35,893) ($34,742) ($33,545) ($32,299) ($31,002) ($29,652) TAXABLE INCOME (LOSS) $23,232 $22,714 $23,735 $24,797 $25,903 $27,053 $39,943 $45,087 $46,384 $47,733 Income Taxes ($8,131) ($7,950) ($8,307) ($8,679) ($9,066) ($9,469) ($13,980) ($15,780) ($16,234) ($16,707) CASH FLOW (a/t) $25,428 $25,609 $25,252 $24,880 $24,493 $24,091 $31,272 $33,369 $32,915 $32,443 Cash On Cash Return a/t 6.54% 6.58% 6.49% 6.40% 6.30% 6.19% 8.04% 8.58% 8.46% 8.34% * b/t = before taxes;a/t = after taxes page - 8
CASH FLOW ANALYSIS Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 GROSS SCHEDULED INCOME $122,390 $131,547 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 Total Operating Expenses ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) NET OPERATING INCOME $113,282 $122,438 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 Loan Payment ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) ($64,132) NET CASH FLOW (b/t) $49,149 $58,306 $61,358 $61,358 $61,358 $61,358 $61,358 $61,358 $61,358 $61,358 Cash On Cash Return b/t 12.63% 14.99% 15.77% 15.77% 15.77% 15.77% 15.77% 15.77% 15.77% 15.77% NET OPERATING INCOME $113,282 $122,438 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 Depreciation ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($35,896) ($34,452) Loan Interest ($28,247) ($26,785) ($25,264) ($23,680) ($22,032) ($20,317) ($18,532) ($16,674) ($14,741) ($12,728) TAXABLE INCOME (LOSS) $49,138 $59,757 $64,331 $65,914 $67,562 $69,277 $71,063 $72,920 $74,854 $78,311 Income Taxes ($17,198) ($20,915) ($22,516) ($23,070) ($23,647) ($24,247) ($24,872) ($25,522) ($26,199) ($27,409) CASH FLOW (a/t) $31,951 $37,391 $38,843 $38,288 $37,712 $37,111 $36,486 $35,836 $35,159 $33,950 Cash On Cash Return a/t 8.21% 9.61% 9.99% 9.84% 9.69% 9.54% 9.38% 9.21% 9.04% 8.73% * b/t = before taxes;a/t = after taxes page - 9
FINANCIAL INDICATORS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Rent Multiplier 12.96 13.28 13.61 13.95 14.30 14.66 13.54 13.44 13.78 14.12 Capitalization Rate 7.24% 7.24% 7.24% 7.24% 7.24% 7.24% 8.10% 8.39% 8.39% 8.39% Cash On Cash Return b/t 8.63% 8.63% 8.63% 8.63% 8.63% 8.63% 11.63% 12.63% 12.63% 12.63% Cash On Cash Return a/t 6.54% 6.58% 6.49% 6.40% 6.30% 6.19% 8.04% 8.58% 8.46% 8.34% Debt Coverage Ratio 1.52 1.52 1.52 1.52 1.52 1.52 1.71 1.77 1.77 1.77 Gross Income per Sq. Ft. $14.20 $14.20 $14.20 $14.20 $14.20 $14.20 $15.76 $16.28 $16.28 $16.28 Expenses per Sq. Ft. ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) Net Income Multiplier 14.16 14.52 14.88 15.25 15.63 16.03 14.67 14.52 14.88 15.26 Operating Expense Ratio 8.53% 8.53% 8.53% 8.53% 8.53% 8.53% 7.69% 7.44% 7.44% 7.44% Loan To Value Ratio 71.43% 67.92% 64.47% 61.08% 57.74% 54.46% 51.22% 48.04% 44.90% 41.81% * b/t = before taxes; a/t = after taxes page - 10
FINANCIAL INDICATORS Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Gross Rent Multiplier 14.47 13.80 13.83 14.17 14.53 14.89 15.26 15.64 16.03 16.43 Capitalization Rate 8.39% 9.07% 9.30% 9.30% 9.30% 9.30% 9.30% 9.30% 9.30% 9.30% Cash On Cash Return b/t 12.63% 14.99% 15.77% 15.77% 15.77% 15.77% 15.77% 15.77% 15.77% 15.77% Cash On Cash Return a/t 8.21% 9.61% 9.99% 9.84% 9.69% 9.54% 9.38% 9.21% 9.04% 8.73% Debt Coverage Ratio 1.77 1.91 1.96 1.96 1.96 1.96 1.96 1.96 1.96 1.96 Gross Income per Sq. Ft. $16.28 $17.49 $17.90 $17.90 $17.90 $17.90 $17.90 $17.90 $17.90 $17.90 Expenses per Sq. Ft. ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) ($1.21) Net Income Multiplier 15.64 14.83 14.83 15.20 15.58 15.97 16.37 16.78 17.20 17.63 Operating Expense Ratio 7.44% 6.92% 6.77% 6.77% 6.77% 6.77% 6.77% 6.77% 6.77% 6.77% Loan To Value Ratio 38.76% 35.76% 32.80% 29.88% 27.00% 24.15% 21.34% 18.57% 15.83% 13.12% * b/t = before taxes; a/t = after taxes page - 11
ANNUAL PROPERTY OPERATING DATA Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $106,800 $106,800 $106,800 $106,800 $106,800 $106,800 $118,493 $122,390 $122,390 $122,390 GROSS SCHEDULED INCOME $106,800 $106,800 $106,800 $106,800 $106,800 $106,800 $118,493 $122,390 $122,390 $122,390 GROSS OPERATING INCOME $106,800 $106,800 $106,800 $106,800 $106,800 $106,800 $118,493 $122,390 $122,390 $122,390 Expenses Replacement Reserves ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) Parking Lot Taxes ($335) ($335) ($335) ($335) ($335) ($335) ($335) ($335) ($335) ($335) Taxes - Real Estate ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) TOTAL OPERATING EXPENSES ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) NET OPERATING INCOME $97,692 $97,692 $97,692 $97,692 $97,692 $97,692 $109,384 $113,282 $113,282 $113,282 page - 12
ANNUAL PROPERTY OPERATING DATA Description Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Rental Income $122,390 $131,547 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 GROSS SCHEDULED INCOME $122,390 $131,547 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 GROSS OPERATING INCOME $122,390 $131,547 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 $134,599 Expenses Replacement Reserves ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) ($1,500) Parking Lot Taxes ($335) ($335) ($335) ($335) ($335) ($335) ($335) ($335) ($335) ($335) Taxes - Real Estate ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) ($7,274) TOTAL OPERATING EXPENSES ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) ($9,109) NET OPERATING INCOME $113,282 $122,438 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 $125,491 page - 13
RITE AID EXTENSION LETTER EgnooKs 2l LEGAL DEPARTMENT November 8, 2017 MAILING ADDRESS PO. Box 3165, Harrisburg, PA 17105 OFFICE 30 Hunter Lane, Camp Hill, PA 1701 1 volce 717.761.2633 cax 717.975.5952 Vfu Certificd MaiL Retarn Receiol Reouesled Berlin 200 Realty, LLC 12 Brook Street Wellesley, Massachusetts 02482 Re: LEASE RENEWAL OPTION FOR RITE AID #102E7 2OO PLEASAI{T STREET BERLIN, NEW HAMPSHIRE Ladies and Gentlemen: Please be advised that MAXI DRUG, INC. hereby elects to exercise its option to extend the temr of the Lease for the referenced premises for an additional five (5) years. Our new term will commence on February l, 2019 and will expire on January 31,2024. While your acknowledgment of receipt of this notice is not required for its validity, we request that you do so by signing and retuming the copy of this letter in the postage-paid envelope enclosed. JJN:llb Acknowledged: Very truly yours, MAXI DRUG, INC. ((t^------' Joseph J. Notarianni Vice President nv,-5.--l,l&-la".s f*a-*,y E or&. f'knpage - 14
WALGREENS LETTER page - 16
WALGREENS LETTER page - 17