CVS (ZERO CASH FLOW) 106 MILAN AVE, NORWALK, OH 44857 OFFERING MEMORANDUM
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of CVS located at 106 Milan Ave, Norwalk, OH 44857 ( 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.
CVS 106 MILAN AVE, NORWALK, OH 44857 TABLE OF CONTENTS 04. Executive Summary 06. Property Overview 08. Lease Abstract 12. Tenant Overview 14. Area Overview 16. Demographics Bill Pedersen National Drug Store Specialist License No. 01975700 O 949.432.4501 M 831.246.0646 bill.pedersen@matthews.com Kyle B. Matthews, CCIM Chairman & CEO Laurence Bergman Broker of Record License No. 348029
EXECUTIVE SUMMARY Investment Highlights Zero cash flow CVS Just over six (6) years remaining on the lease and the note No balloon payment and no rent holiday Absolute NNN lease with zero Landlord responsibilities Only CVS in a 12-mile radius Prototype CVS store format with a drive-thru Located at an intersection that sees over 23,000 cars per day Great location in a small Midwestern town that is just an hour s drive from both Toledo and Cleveland 10,000 people living in a one-mile radius with an average household income of $55,000 4 I Matthews Retail Advisors
Executive Summary CVS 106 Milan Ave Norwalk, OH 44857 List Price...$2,252,000 Gross Leasable Area... ± 10,122 SF Lot Size...± 1.06 Acres Year Built...1999 CVS Store Number... #6173 Pricing Overview Purchase Equity / % $807,084.39 / 56% Price $2,252,000.00 Initial Loan Balance $2,258,831.99 Balloon Payment None (self-amortizing) Rent Holiday None Loan Maturity Date 1/10/2023 Loan Balance (12/10/2016) $1,444,915.61 Tenant Summary Tenant Trade Name CVS Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NNN Roof and Structure Tenant Responsibility Original Lease Term 23.85 Years Lease Commencement Date 7/1/1999 Rent Commencement Date 7/29/1999 Lease Expiration Date 1/31/2023 Term Remaining on Lease ± 6.33 Years Increases None Options Ten (10), Five (5) Year Options Matthews Retail Advisors 5
PROPERTY OVERVIEW 6 I CVS
Physical Description Property Name Property Address CVS 106 Milan Ave Norwalk, OH 44857 Assessor s Parcel Number 33-0290-03-016-0000 Zoning TBD Site Description Number of Stories One Year Built 1999 Gross Leasable Area (GLA) ± 10,112 SF Lot Size ± 1.06 Acres Type of Ownership Fee Simple Parking ± 38 Surface Spaces Parking Ratio 4.22 : 1,000 SF Landscaping Professional Topography Generally Level Construction Foundation Framing Exterior Parking Surface Roof Concrete Slab Metal Brick Asphalt Flat Matthews Retail Advisors 7
Lease Abstract Tenant: Guarantor: Hook-SupeRx, LLC CVS Corporation Address: 106 Milan Ave, Norwalk, OH 44857 Size: Original Lease Term: 10,112 SF 23.85 Years Lease Commencement Date: 7/1/1999 Store Open Date: 10/31/1999 Rent Commencement Date: 7/29/1999 Lease Expiration Date: 1/31/2023 Renewal Options: Ten (10), Five (5) Year Options Current Rent: $195,537.97 Rent Increases: Fixed rent in initial term and options Fixed rent option periods: $186,046.07 Net Lease: Real Estate Taxes: Insurance: Utilities: Tenant Assignment and Subletting: Tenant responsible for all repairs & maintenance; Landlord has zero responsibilities Tenant pays direct Tenant pays for and carries own insurance Tenant pays directly Tenant shall have the right to assign or sublet the premises at anytime during the term Loan Abstract Initial Loan Balance: $2,258,831.99 Balloon Payment: Rent Holiday: Amortization Period: None (self-amortizing) None 281 Months Monthly Payments: $16,319.83 Annual Payment: $195,837.96 Loan Maturity Date: 1/10/2023 Loan Balance: $1,444,915.61 (as of 12/10/2016) 8 CVS
Regional Map Matthews Retail Advisors 9
Tenant Map 10 CVS
Bird s Eye E League St Milan Ave St Mary s St Matthews Retail Advisors 11
TENANT OVERVIEW 12 CVS
Property Name CVS Property Type Net Leased Drug Store Company Trade Name CVS Health Corporation (NYSE: CVS) Ownership Public Credit Rating (S&P) BBB+ No. of Locations ± 9,700 No. of Employees ± 243,000 Headquartered Woonsocket, Rhode Island Web Site www.cvs.com Year Founded 1963 TENANT OVERVIEW CVS Health Corporation, together with its subsidiaries, provides integrated pharmacy health care services. It operates through Pharmacy Services and Retail/LTC segments. The Pharmacy Services segment offers pharmacy benefit management solutions, such as plan design and administration, formulary management, Medicare Part D services, mail order and specialty pharmacy services, retail pharmacy network management services, prescription management systems, clinical services, disease management programs, and medical pharmacy management services. The Retail/LTC segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, personal care products, convenience foods, seasonal merchandise, and greeting cards, as well as provides photo finishing services. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. Hook-SupeRx, LLC operates as a subsidiary of CVS Health Corporation and retails drugs in the United States. It is based in Indianapolis, Indiana and does business as CVS Pharmacy. GEOGRAPHIC REACH CVS drugstores span across 49 U.S. states, the District of Columbia, Brazil and Puerto Rico. The company also operates Longs Drugs banner in California, Hawaii, Nevada and Arizona. Around 1,000 store locations throughout 31 states and in Washington D.C. also have Minute Clinics. STRATEGY CVS continues to evolve from being a general pharmacy store, expanding into more specialty fields of the fast-growing healthcare market. The company s Retail Pharmacy Store Development plan, which focuses on entering new markets, adding stores in existing markets, and relocating stores to more convenient sites, has been essential for business growth and in keeping up with Walgreens. CVS has been successful in its ventures for its store count has increased from 7,388 stores at the end of 2011 to nearly 9,700 stores today. In addition to opening new stores, CVS has made efforts to increase sales at existing ones. Prescription drugs account for more than two-thirds of its sales, and the retailer is attempting to grow revenues from over-the-counter medications and general merchandise through its growing private-label product offering. Matthews Retail Advisors 13
AREA OVERVIEW Norwalk, Ohio Known as the Maple City for its urban forest, Norwalk is strategically located in north central Ohio 20 minutes south of Lake Erie. The city offers all the benefits of small-town living with a progressive and diverse business environment while being within an hour s drive of both Toledo and Cleveland. Aided by its central location at the core of Ohio s industrial corridor, Norwalk has a longstanding history of excellence in the manufacturing, agriculture and construction industries. Workers from around the region are drawn to the area due to the quality of life and easy access to regional resources. In the Norwalk area, there is tremendous support for Workforce Development and assistance is provided through a variety of partners and programs. We are also open to the opportunity to create and develop new opportunities as needed by our private sector partners and the community. Norwalk s infrastructure continues to evolve to answer the demands of an expanding economy. Improving utilities, roadways and telecommunications reach two established industrial parks, with a planned connecting corridor and flexible zoning promising room to grow. Top Employers # Employer 1 Fisher-Titus Medical Center 2 Huron County Government 3 Janesville Acoustics 4 Berry s Plastics 5 Norwalk Public Schools 6 Walmart 7 R&L Carriers 8 City of Norwalk 9 New Horizons Baking Co. 10 Oglesby Construction, Inc 14 CVS Matthews Retail Advisors 14
Cleveland, Ohio Cleveland is based on the southern shore of Lake Erie near the mouth of the Cuyahoga River. It is 90 miles west of the Pennsylvania border and the county seat of Cuyahoga County. Considered part of the Great Lakes Region, Cleveland has access to major waterways, namely the Ohio and Erie Canals. The city s geographic location has been instrumental to its growth and establishment as an important business center. Consequently, the steel and manufacturing industries emerged as leading sectors of Cleveland s economy. Through the promotion of the technology sector, city leaders have propagated the diversification of the economy. The new economic powerhouses include health care and academics, with major hospital systems, universities and related businesses. Cleveland s largest employer is the Cleveland Clinic, which carries the distinction of being among America s best hospitals. Combining its strengths in technology and health care, Cleveland is also growing its biotech and medical research industries. The Greater Cleveland area, Cleveland s metropolitan area, had a GDP of $134.4 billion in 2011, which ranked it 57th among countries. Nearly 2.1 million people inhabit Greater Cleveland. Many people are drawn to the area for work, the relatively low cost of living and the quality of life. More than 37% of Fortune 500 companies have a presence in Northeast Ohio. Additionally, the region is currently boasting more than $17 billion in capital developments, some of which is tourism related. Matthews Retail Advisors 15
Demographics Population 1-Mile 3-Mile 5-Mile 2021 Projection 9,883 20,524 25,929 2016 Estimate 9,952 20,703 26,098 2010 Census 10,071 21,054 26,454 2000 Census 9,762 20,406 25,799 Households 1-Mile 3-Mile 5-Mile 2021 Projection 3,922 8,166 10,270 2016 Estimate 3,927 8,207 10,287 2010 Census 3,940 8,300 10,339 2000 Census 3,811 7,932 9,877 Income 1-Mile 3-Mile 5-Mile Income < $15,000 12.41% 11.40% 10.57% Income $15,000 - $24,999 15.41% 13.47% 12.82% Income $25,000 - $34,999 13.94% 12.43% 11.69% Income $35,000 - $49,999 14.30% 15.38% 15.64% Income $50,000 - $74,999 18.77% 17.72% 18.96% Income $75,000 - $99,999 13.87% 14.45% 14.77% Income $100,000 - $124,999 6.25% 7.65% 7.81% Income $125,000 - $149,999 2.19% 3.25% 3.34% Income $150,000 - $199,999 2.04% 2.80% 2.82% Income $200,000 - $249,999 0.52% 0.89% 0.89% Income $250,000 - $499,999 0.25% 0.46% 0.57% Income $500,000+ 0.07% 0.08% 0.10% 2016 Est. Average Household Income $54,005 $59,514 $61,068 2016 Est. Median Household Income $43,655 $47,382 $49,307 16 CVS
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Bill Pedersen National Drug Store Specialist License No. 01975700 O 949.432.4501 M 831.246.0646 bill.pedersen@matthews.com Kyle B. Matthews, CCIM Chairman & CEO Laurence Bergman Broker of Record License No. 348029