MATTRESS FIRM VITAMIN SHOPPE OFFERING MEMORANDUM ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0331971 1
Financial Overview OFFERING SUMMARY Base Rent $290,708 PRICE: $3,972,000 CAP RATE: 7.35% NOI: $291,962 PRICE PER SQUARE FOOT: $399.52 RENT PER SQUARE FOOT: $29.24 YEAR BUILT: 2013 Expense Reimbursements Real Estate Taxes $49,387 CAM & Insurance $20,816 Admin Fee $2,913 Total Expense Reimbursements $73,116 Effective Gross Income $363,824 Expenses Real Estate Taxes $49,387 CAM Property Insurance $4,601 Property Maintenance $3,876 APPROXIMATE LOT SIZE: GROSS LEASEABLE AREA: TYPE OF OWNERSHIP: 1.57 Acres 9,942 Fee Simple Snow Removal $7,777 Utilities $2,493 Trash Removal $2,070 Total CAM $20,816 Nonreimbursable Expenses Repairs & Maintenance $251 CAM Expenses in Excess $1,408 Total Nonreimbursable $1,659 Total Expenses $71,862 Net Operating Income $291,962 ACTUAL PROPERTY TENANT SUMMARY Tenant Guarantor GLA % of GLA Lease Commence Lease Expire Term Remaining Annual Rent Rent- (PSF) Increases Lease Type Renewal Options MATTRESS FIRM Mattress Firm Holding Corp 6,866 69.06% 6/3/2014 6/30/2024 7 Years $183,048 $26.66 10% Every 5 NN 2, 5-Year VITAMIN SHOPPE Vitamin Shoppe Industries, Incorporated 3,076 30.94% 8/22/2015 5/31/2023 8 Years $107,660 $35.00 10% Every 5 NN 2, 5-Year Total: 9,942 100.00% $290,708 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0331971 2
Investment Overview Marcus & Millichap is pleased to present two-tenant asset featuring Mattress Firm and Vitamin Shoppe in Lansing, Michigan; the fifth largest city in the state, and also the state capital. Both tenants are operating under net leases reimbursing for their pro rata share of real estate taxes, insurance, and common area maintenance, plus a 10 percent admin fee. Both tenants signed 10-year leases with 10 percent rent increases every five years. Mattress Firm has seven years remaining and Vitamin Shoppe has eight years remaining. Both leases are backed by corporate guarantees. Mattress Firm Holding Corp operates more than 3,400 corporate stores nationwide and is a wholly owned subsidiary of Steinhoff International Holdings, Naamloze Vennootschap (NV). Vitamin Shoppe Industries, Incorporated operates 775 corporate retail locations across the country. The subject property is a pad site to the Lansing Mall. This 890,000-square foot mall is anchored by a 12-screen Regal Cinemas, which also features an IMAX theatre. Other major tenants in the mall include: TJ Maxx and JC Penney. This asset is highly visible along Saginaw Highway; with more than 130 feet of frontage, more than 38,000 vehicles pass by daily. This dense corridor has more than three million square feet of retail space anchored by strong national tenants such as Target, Walmart, Kroger, ALDI, Lowes Home Improvement, and Hobby Lobby. Less than one mile east is a proposed $10 Million Retail Redevelopment Project. Additional tenants in the immediate vicinity include: Kohl s, Menards, PetSmart, Dunkin Donuts, Steak n Shake, Buffalo Wild Wings, PNC Bank, Walgreens, FedEx, UPS, Planet Fitness, Bed Bath & Beyond, Burlington Coat Factory, Bank of America, Chase Bank, Harbor Freight Tools, Chickfil-A, Meijer, Panera, Best Buy and many more. ACTUAL PROPERTY Mattress Firm and Vitamin Shoppe in Lansing Michigan s Capital and The Fifth Largest City in the State Tenants Operating Under Net Leases Reimbursing for Real Estate Taxes, Insurance, and Common Area Maintenance Plus an Admin Fee Inflation Hedge 10 Percent Rent Increases Every Five Years Backed 100 Percent by Corporate Tenants Mattress Firm Holding Corp (3,400 Units) Vitamin Shoppe Industries, Incorporated (775 Units) Pad Site to 890,000-Square Foot Lansing Mall Anchored by Regal Cinemas (12 Screens + IMAX), TJ Maxx, and JC Penney Highly Visible Along Saginaw Highway More Than 38,000 Vehicles Per Day (VPD) Dense Regional Retail Trade Area More Than Three Million Square Feet of Retail Anchored by Strong National Credit Target, Walmart, Kroger, ALDI, Hobby Lobby, Lowes Less Than One Mile from Proposed $10 Million Redevelopment Project on the Former Jackie s Diner Site Strong Demographics More Than 104,500 Residents with an Average Household Income Greater Than $59,000 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0331971 3
Tenant Overview - Mattress Firm Vitamin Shoppe ACTUAL PROPERTY VITAMIN SHOPPE helps vitamin-takers meet their recommended daily requirements. The fast-growing company sells vitamins, supplements, and minerals, as well as herbal, homeopathic, and sports nutrition and wellness products at more than 750 company-operated stores located in some 45 states, the District of Columbia, Puerto Rico, and Canada. It also sells directly via catalog, and the websites VitaminShoppe.com and BodyTech.com. Stores offer about 20,000 items, including food and beverages and pet products, under more than 800 national and private-label brands. Vitamin Shoppe was founded in 1977. TENANT PROFILE TENANT TRADE NAME Vitamin Shoppe OWNERSHIP Public TENANT Vitamin Shoppes Industries, Incorporated (Inc) LEASE GUARANTOR Vitamin Shoppes Industries, Incorporated (Inc) NUMBER OF LOCATIONS 775 Units (12/31/2016) HEADQUARTERED Secaucus, New Jersey SALES VOLUME $1.29 Billion (2016) NET WORTH $440 Million (2016) STOCK SYMBOL VSI RANK #96 on Forbes America s Best Midsize Employers (2017) MATTRESS FIRM is an American retailing company and mattress store chain founded in 1986, when three friends pooled their resources to purchase a downtrodden spot in a Houston strip center. The chain has now grown into the top United States bedding retailer. The company headquarters are in Houston, Texas. In August 2016, Mattress Firm Holding Corp. was acquired by Steinhoff International Holdings, Naamloze Vennootschap (NV). Mattress Firm Holding Corp., through its direct and indirect subsidiaries, is engaged in the retail sale of mattresses and bedding-related products in the United States through over 3,600 companyoperated and franchisee-owned mattress specialty stores in 49 states that operate primarily under the brand names Mattress Firm, Sleepy s and Sleep Train, as well as through the Company s ecommerce sites and special events. TENANT PROFILE TENANT TRADE NAME Mattress Firm Wholly Owned Subsidiary of Steinhoff International OWNERSHIP Holdings, Naamloze Vennootschap (NV) TENANT Mattress Firm, Incorporated LEASE GUARANTOR Mattress Firm Holding Corporation NUMBER OF LOCATIONS 3,482 Units (As of August 2016) HEADQUARTERED Houston, Texas RANK #190 on Forbes America s Best Employers (2017) Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0331971 4
Aerial Overview Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0331971 5
Area Overview & Demographics 1-Mile 3-Mile 5-Mile Population 2000 Population 8,789 39,557 104,533 2010 Population 8,638 40,537 103,684 2017 Population 8,669 41,750 105,399 2022 Population 8,746 42,451 107,194 1-Mile 3-Mile 5-Mile Households 2000 Households 3,946 16,928 43,254 2010 Households 4,045 18,065 44,146 2017 Households 4,053 18,613 44,901 2022 Households 4,088 18,929 45,675 1-Mile 3-Mile 5-Mile Household (HH) Incomes 2017 Average HH Income $70,605 $70,302 $59,690 2017 Median HH Income $49,057 $55,174 $45,661 2017 Per Capita Income $33,010 $31,342 $25,429 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0331971 6
Market Overview - Lansing, Michigan The city of Lansing, situated on the banks of Michigan s Grand River, is the capital city of the state. Located about 90 miles west of Detroit, Lansing is often referred to as the Car Capital of North America and is the birthplace of Oldsmobile, which was founded in 1897. Most of Lansing is in Ingham County. The main thoroughfares servicing the Lansing area include Interstate-69, Interstate-96, and Interstate-496; United States Route 127; and Michigan State Highways 43 and 99. The neighboring city of East Lansing, only four miles away, is well known for being the home of Michigan State University (MSU). The Lansing Metropolitan Area, colloquially referred to as Mid-Michigan, is an important center for educational, cultural, governmental, commercial, and industrial functions. The area is home to two medical schools, one veterinary school, two nursing schools, two law schools including Western Michigan University and Michigan State University a Big Ten Conference university (Michigan State). The Lansing metropolitan area s major industries are government, education, insurance, healthcare, and automobile manufacturing. Being the state capital, many state government workers reside in the area. Michigan State University, Thomas M. Cooley Law School, and Lansing Community College are significant employers in the region. General Motors has offices and a hi-tech manufacturing facility in Lansing and several manufacturing facilities immediately outside the city, as well, in nearby Lansing and Delta townships. The Lansing area is headquarters to four major national insurance companies: Auto-Owners Insurance Company, Jackson National Life, the Accident Fund, and Michigan Millers Insurance Company. Other insurers based in Lansing include Farm Bureau Insurance of Michigan. Other major companies headquartered in Lansing include: Accident Fund, ACD. net, Biggby Coffee, Elderly Instruments, Fraser Trebilcock, Go Solutions Group, Inc., ICS Marketing Support Services, Lake Trust Credit Union, Liquid Web, and Quality Dairy Company. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0331971 7
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.
MATTRESS FIRM VITAMIN SHOPPE Broker of Record Steven Chaben Two Towne Square, Suite 450 Southfield, MI 48076 Tel: (248) 415-2600 Fax: (248) 352-3813 License: 6502387903