Rite Aid Long term Absolute NNN Drug Store with assumable debt 1201 Warwick Avenue, Warwick, RI Capital Pacific collaborates. Click here to meet the rest of our San Francisco team. For more info on this opportunity please contact: ZEB RIPPLE zripple@capitalpacific.com (415) 274-2702 CA BRE# 01242540 CHRIS PETERS cpeters@capitalpacific.com (415) 274-2703 CA BRE# 01339983 CHRIS KOSTANECKI ck@capitalpacific.com (415) 274-2701 CA BRE# 01002010 JACK NAVARRA jnavarra@capitalpacific.com (415) 274-2705 CA BRE# 01909630 In conjunction with RI Licensed Broker: Leeds Mitchell IV, MG Commercial (401) 751-3200 leeds@mgcommercial.com
RARE LONG TERM ABSOLUTE NNN CORPORATE PHARMACY WITH RENT ESCALATIONS Investment Highlights The subject property is a freestanding Rite Aid Pharmarcy located in Warwick, RI, the second largest city in the state. This offering represents the rare opportunity to acquire an absolute NNN 20-year corporate Rite Aid with 14 years remaining, and rent escalations throughout the primary term and options. The site benefits from excellent visibility along Warwick Avenue (20,000 ADT). PRICE: $3,180,000 CAP: 6.75% RENTABLE SF.... 11,322 SF PRICE PER SF.... $280.87 LAND AREA.... 1.00 AC YEAR RENOVATED... 1993 TRAFFIC COUNTS EXCEED 20,000 CARS PER DAY INVESTMENT HIGHLIGHTS Rare low price point for a long term corporate drug store asset. Strong national tenant with recent revenue growth; $25.5 billion in sales last year. Attractive in place financing that must be assumed (see page 4 for details). LEASE HIGHLIGHTS Corporate guaranty from Rite Aid Corporation Absolute NNN with no landlord responsibilities 14 years remaining with eight 5-year options Attractive 10% rental escalations every 10 years in the primary term and options. Upcoming 10% rental escalation in August 2018. RITE AID 2
Aerial d Elmwoo Aldrich Jr. High School Avenue 95 Norwood Elementary 1 117 1A Holliman Elementary PROVIDENCE Fair fax 1 Driv Pilgrim High School e 117 Warwick Avenue Francis Elementary 1 117 Airport Road T.F. GREEN AIRPORT Holden Elementary 117A RITE AID 3
Income & Expense PRICE $3,180,000 Loan Assumption/Cash Flow Price Per Square Foot: $280.87 Principal Balance as of 11/01/14 $1,499,763 Capitalization Rate: 6.75% Interest Rate 5.50% Down Payment 53% $1,680,237 Amortization 25 Loan Amount 47% $1,499,763 Term* 25 Total Rentable Area (SF): 11,322 Maturity Date 10/1/2036 Lot Size (AC): 1.00 Lender Stancorp STABILIZED INCOME Per Square Foot Loan Assumption (paid by Purchaser) 1% plus costs Scheduled Rent $18.95 $214,600 Prepayment Yield Maintenance Effective Gross Income $18.95 $214,600 Net Operating Income $214,600 LESS Per Square Foot Debt Service ($117,905) Taxes NNN $0.00 Pre-Tax Cash Flow $96,695 Insurance NNN $0.00 Debt Coverage Ratio 1.82 Total Operating Expenses NNN $0.00 EQUALS NET OPERATING INCOME $214,600 Pre-Tax Leveraged Cash-on-cash Return 5.75% Principal Paydown (Year 1 of Ownership) $36,159 Total Return $132,854 Yield 7.91% * Interest rate to reset every 5 years. If the owner elects to not accept the new rate, the loan may be prepaid in full with no prepayment penalty. The first rate adjusment will be in October 2016 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. RITE AID 4
Rent Roll TENANT INFO LEASE TERMS RENT SUMMARY Tenant Name Sq. Ft. Term Current Rent Monthly Rent Yearly Rent Monthly Rent/FT Yearly Rent/FT Rite Aid 11,322 07/22/08 07/31/18 $214,600 $17,883 $214,600 $1.58 $18.95 08/01/18 07/31/28 $19,672 $236,060 $1.74 $20.85 Option 1 08/01/28 07/31/33 $21,639 $259,666 $1.91 $22.93 Option 2 08/01/33 07/31/38 $21,639 $259,666 $1.91 $22.93 Option 3 08/01/38 07/31/43 $23,803 $285,633 $2.10 $25.23 Option 4 08/01/43 07/31/48 $23,803 $285,633 $2.10 $25.23 Option 5 08/01/48 07/31/53 Fair Market Value Option 6 08/01/53 07/31/58 Same as Option 5 rent Option 7 08/01/58 07/31/63 Fair Market Value Option 8 08/01/63 07/31/68 Same as Option 7 rent Totals: 11,322 $214,600 $17,883 $214,600 $1.58 $18.95 * Tenant has a 20 day right of first refusal to purchase the property. This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. RITE AID 5
Rite Aid Representative Photo ABOUT RITE AID Rite Aid Corporation is one of the nation s leading drugstore chains, with over 4,600 stores in 31 states and the District of Columbia, with a strong presence on both the East and West coasts, and 89,000 associates. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company is publicly traded on the New York Stock Exchange under the ticker RAD. Throughout its history Rite Aid has been able to remain competitive with its rivals within the pharmacy market through aggressive acquisitions and strategic alliances. In January 1999, Rite Aid formed a strategic partnership with General Nutrition Companies, Inc. (GNC, the largest specialty retailer of vitamins, mineral supplements, sports nutrition, and herbal products. This partnership created GNC stores within stores in Rite Aid drugstores throughout the country. In terms of acquisitions, in June of 2007, Rite Aid completed its acquisition of Brooks and Eckerd drugstore locations, creating the largest drugstore chain on the East Coast and significantly strengthening its position as the third largest national drugstore chain. Throughout 2010, Rite Aid worked extremely hard on improving its financial standing as the economy s downturn had the company s future in question and successfully completed a refinancing of $1.9 billion of debt maturities. Additionally, the company has been a rising star over late 2013 and early 2014, gaining 14.1% so far in 2014. Earlier in the month of January, 2014, the company reported same-store sales increased 2.9% in December. Pharmacy sales rose 4.1% which helped the overall total. The company s strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, solid stock price performance and significantly reducing operating costs by increasing corporate efficiency. NUMBER OF EMPLOYEES 89,000 REVENUE $25.5 BILLION NUMBER OF LOCATIONS 4,600+ PUBLIC NYSE: RAD S&P RATING B (Outlook: Stable) 4,600+ STORES IN 31 STATES RITE AID 6
Regional Map Providence MSA Location SUBJECT PROPERTY Providence drive time 30 min warwick New bedford RITE AID 7
Location & Demos WARWICK, RI OVERVIEW Warwick is a city in Kent County, Rhode Island. With a stable population of 82,672 people, Warwick is unique tapestry of more than 30 different villages. It is the second largest city in Rhode Island and among the largest in New England. Located approximately 12 miles south of downtown Providence, and 63 miles southwest of Boston, Warwick is home to Rhode Island s main airport, T. F. Green Airport, which serves the greater Providence area and also functions as a reliever for Logan International Airport in Boston. POPULATION 1-Mile 3-Mile 5-Mile 2010 11,245 78,563 226,480 2013 11,155 77,951 224,777 2018 11,009 77,408 224,067 2013 HOUSEHOLD INCOMES 1-Mile 3-Mile 5-Mile Average $67,573 $67,476 $65,257 Median $54,537 $54,740 $50,300 Warwick s central location provides access to over 300,000 metro area residents within a 10-mile radius. In fact, two thirds of New England s total population of 8.7 million is within a 75-mile radius. That includes 65 percent of the region s manufacturers of plastics, chemicals, communications equipment and electrical machinery. Warwick is proud to be a progressive community that is willing to work with developers and business leaders to foster a business-friendly environment. An indication of that commitment is the fact that Warwick maintains a bond rating that is one of the highest of any community in Rhode Island. TOP EMPLOYERS IN WARWICK Employer Kent Hospital Met Life Insurance UPS Kenney Manufacturing *Approximate RITE AID 8