NORTHSTAR RETAIL GROUP OFFERING MEMORANDUM REPRESENTATIVE PHOTO Presented By NORTHSTAR OF
INVESTMENT SUMMARY PRICE $1,800,000 5.68% CAP Rate ADDRESS 1811 Paul Bunyan Drive Bemidji, MN 56601 APN 80.03011.00 NET OPERATING INCOME $102,215 ($45.96/SF) BUILDING/LOT SIZE 2,224 SF / 0.72 Acres LEASE TYPE NNN YEAR BUILT 2017 TYPE OF OWNERSHIP Fee Simple Marcus and Millichap exclusively presents the opportunity to acquire a freestanding Starbuck s in Bemidji, Minnesota. Starbuck s signed a ten-year lease that commences upon completion of the building, estimated to be February 1, 2018. The lease structure includes a rental increase every five years, minimal landlord responsibilities, and no early termination option. Starbucks (NYSE: SBUX) has an investment grade credit rating of A by Standard and Poors. They currently have over 24,000 stores in 70 countries. The building is currently under construction. It is situated in the heart of the primary retail and medical corridor through Bemidji, surrounded by a mix of retailers including Walmart, Target, Menards, Home Depot, and the Paul Bunyan Mall. The building benefits from its location immediately adjacent to a 100 unit Super 8 Motel and one mile from the Sanford Hospital campus. The property also has direct signalized access to Paul Bunyan Drive, which is the primary thoroughfare into town with exposure to an estimated 16,000 vehicles per day. Bemidji is a city in Northern Minnesota and is considered to be the largest commercial center between Grand Forks, ND and Duluth, MN. It is also home to Bemidji State University which is a public university with an enrollment of over 6,000 students. Highlights: New 10-Year Corporate Lease Investment Grade Tenant - A Rating by S&P No Early Termination Option 2017 Construction with a Drive-Thru Adjacent to the Only Walmart & Target Within a 75 Mile Radius
INVESTMENT SUMMARY LEASE SUMMARY Tenant Guarantor Starbucks Corporation Corporate Guaranty Rent Commencement (Estimated) 2/15/2018 Lease Expiration (Estimated) 2/28/2028 Renewal Options Lease Type 3 ( 5 Year ) with 180 Days Notice NNN OPERATING SUMMARY CAM Property Insurance Real Estate Tax Utilities Management Fee HVAC Capital Expenses Landlord Responsible - Tenant Reimburses Landlord Responsible - Tenant Reimburses Landlord Responsible - Tenant Reimburses Tenant Responsible - Pays Direct Tenant Responsible - Not to exceed (i) 5%, (ii) $1.50/sf, or (iii) 15% of operating costs, whichever is less. Tenant Responsible for repair & maintenance Cost to be amortized over useful life and reimbursed by Tenant annually. RENT SCHEDULE Date Range Annual Rent Per SF Years 1-5 $102,215.04 $45.96 Years 6-10 $112,436.54 $50.55 Option 1 (5 Years) $123,680.20 $55.61 Option 2 (5 Years) $136,048.22 $61.17 Option 3 (5 Years) $149,653.04 $67.29
AERIAL PHOTO FACING EAST 16,500 VEHICLES
AERIAL PHOTO FACING WEST 10,200 VEHICLES 16,500 VEHICLES
AERIAL PHOTO FACING SOUTHWEST
AERIAL PHOTO FACING NORTH
TENANT SUMMARY TENANT SUMMARY Tenant Starbucks Coffee Ownership Public Stock Symbol SBUX Credit Rating A Revenue (2016) $21.3B Headquartered Seattle, WA Number of Employees 238,000 Website www.starbucks.com Founded in Seattle in 1971, today Starbucks is an internationally recognized coffee house brand with over 23,000 locations worldwide. Locations serve hot and cold drinks, baked goods, and a variety of other sundry items such as full- and loose-leaf teas, whole bean coffee, juices, and snacks. IN THE NEWS Lucy Helm will serve as Starbucks chief partner officer Starbucks reinvents flavored iced tea with Teavana shaken iced tea infusions What s new on draft at Starbucks Reserve coffee bars As of July 7th, 2016, Starbucks operates across 6 continents with a presence in 74 countries. The company also operates licensed locations within other stores, such as Barnes & Nobles, Targets, and Tom Thumbs.
SITE PLAN
AERIAL 9,600 VEHICLES PAUL BUNYAN MALL
MARKET SUMMARY As the largest commercial center between Grand Forks, North Dakota and Duluth, Minnesota, Bemidji is the central hub of business, shopping, education and healthcare for the entire region. With its location in close proximity to a network of lakes as well as several state forests (Chippewa, Itasca, and others), Bemidji is also a popular regional travel destination for tourists and fishermen year-round. The local economy is driven largely by the healthcare and education sectors. Together, they are the largest sources of employment, accounting for 35% of all workers in the area. Sanford Health is the largest health care provider in the region, employing over 1,500 staff members and over 130 physicians and advanced practice providers. The Medical Center also sees over 6,500 admissions and 262,000 outpatient visits annually. It is also home to Bemidji State University, with over 6,000 students and offering both undergraduate and postgraduate degrees.
DEMOGRAPHICS 1 Mile 3 Miles 5 Miles 2000 Population 2,997 11,716 18,945 2010 Population 3,364 13,216 21,581 2014 Population 3,460 13,525 22,119 2019 Population 3,642 14,078 23,195 2000 Households 1,321 4,460 7,092 2010 Households 1,619 5,209 8,321 2014 Households 1,675 5,349 8,556 2019 Households 1,799 5,667 9,086 2014 Daytime Population 3,648 11,343 14,160 2014 Owner Occupied Housing Units 37.83% 48.09% 58.87% 2014 Renter Occupied Housing Units 62.17% 51.91% 41.13% 2014 Vacant 4.05% 5.24% 6.00% 2019 Owner Occupied Housing Units 37.34% 47.88% 58.71% 2019 Renter Occupied Housing Units 62.66% 52.12% 41.29% 2019 Vacant 3.84% 5.20% 5.99% $0-$14,999 22.5% 21.7% 18.3% $15,000-$24,999 18.2% 16.1% 14.6% $25,000-$34,999 10.6% 10.8% 10.6% $35,000-$49,999 16.3% 15.4% 16.2% $50,000-$74,999 16.1% 16.4% 17.9% $75,000-$99,999 7.7% 9.3% 10.8% $100,000-$124,999 4.3% 5.4% 6.2% $125,000-$149,999 2.0% 2.4% 2.9% $150,000-$199,999 1.4% 1.1% 1.0% $200,000-$249,999 0.4% 0.7% 0.7% $250,000+ 0.7% 0.7% 0.8% 2014 Median Household Income $33,764 $36,292 $40,963 2014 Per Capita Income $23,595 $21,610 $21,993 2014 Average Household Income $47,229 $50,025 $53,728
PROPERTY SUMMARY LOCAL MAP CITY MAP
CONTACT Presented By SEAN DOYLE First Vice President Investments Sean.Doyle@MarcusMillichap.com (952) 852-9719 MATT HAZELTON First Vice President Investments Matt.Hazelton@MarcusMillichap.com (952) 852-9729 ADAM AJ PRINS First Vice President Investments Adam.Prins@MarcusMillichap.com (952) 852-9743 CORY VILLAUME Vice President Investments Cory.Villaume@MarcusMillichap.com (952) 852-9728 www.marcusmillichap.com www.northstarretailgroup.com NORTHSTAR