OFFERING MEMORANDUM TIM HORTONS 19833 W. 7 MILE RD DETROIT, MI Daniel H. Kukes Scott J. Landers Principal Associate (248) 488-2620 (248) 488-2620 dkukes@landmarkcres.com slanders@landmarkcres.com
Investment Highlights 4 Prepared by: Daniel H. Kukes Principal (248) 488-2620 dkukes@landmarkcres.com Scott J. Landers Associate (248) 488-2620 slanders@landmarkcres.com 27995 Halsted, Suite 150 Farmington Hills, MI 48331 www.landmarkinvestmentsales.com Offering Summary 5 Tenant Profile 6 Property Condition 7 Survey 8 Aerial 9 Location Map 10 Market Overview 11 City of Detroit Overview 12 Top Employers 13 Demographic Report 14 Team Bios 15
This Confidential Memorandum has been prepared by Landmark Investment Sales d/b/a Landmark Commercial Real Estate Services, Inc. ( LANDMARK ) and is being furnished to you solely for the purpose of your review of the commercial property located at 19833 W. 7 Mile Rd in Detroit, Michigan, further described as a freestanding Tim Hortons building (the Property ). The material contained in this Offering Memorandum shall be used for the purposes of evaluating the Property for acquisition and shall not be used for any purpose or made available to any other person without the express written consent of Landmark Commercial Real Estate Services, Inc. ( Broker ). By accepting the Confidential Memorandum, you acknowledge and agree that: (1) all of the information contained herein and any other information you will be receiving in connection with this transaction, whether oral, written or in any other form (collectively, the Materials ), is confidential; (2) you will not reproduce the Confidential Memorandum in whole or in part; (3) if you do not wish to pursue this matter, you will return this Confidential Memorandum to LANDMARK as soon as practicable together with all other materials relating to the Property which you may have received from LANDMARK; and (4) any proposed actions by you which are inconsistent in any manner with the foregoing agreements will require the prior written consent of LANDMARK. This Confidential Memorandum has been prepared by LANDMARK, based upon certain information pertaining to the Property and any information obtained from LANDMARK to assist interested parties in making their own evaluation of the Property is offered on a no representation or warranty provision other than customary warranties of title and is sold on an as-is, where-is basis and with all faults. The material and transaction does not purport to be all inclusive. This Confidential Memorandum contains descriptive materials, financial information and other data compiled for the convenience of parties interested in the Property. The Materials are being delivered by LANDMARK to prospective investors with the understanding that it is not all inclusive and that it is qualified in its entirety by independent investigation by prospective investors of those matters which they deem appropriate in evaluating this offering without reliance upon LANDMARK, the Broker or any of their respective affiliates or any of the information set out in the Materials. Neither LANDMARK, the Broker, nor any of their respective affiliates have independently verified any of the information contained herein or in any of the Materials, and no representations or warranties as to the accuracy or completeness thereof or of any other kind whatsoever are made or intended and none should be inferred. LANDMARK, for itself and its affiliates of the Property, expressly disclaim any and all liability for statements or representations, express or implied, contained herein or for omissions from the Materials or for any other written, oral or other format of communication transmitted to a prospective investor in the course of its evaluation of the proposed transaction. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. The terms and conditions described herein are subject to change without notice. This Confidential Memorandum does not constitute an offer to accept any investment proposal but is merely a solicitation of interest with respect to the investment described herein. The Confidential Memorandum does not constitute an offer of security. The investment described herein may be financed or withdrawn from the market, without prior notice. By accepting this Confidential Memorandum you agree to release LANDMARK and hold it harmless from any kind of claim, expense, or liability arising out of your discovery or purchase of the Property. LANDMARK reserves the right to request the return of the Materials at any time. Ownership of the Property reserves the right to negotiate with one or more prospective investors at any time.
INVESTMENT HIGHLIGHTS Rent Bumps 10% rent bumps every five years Corporate Lease Lease is signed by Tim Donut U.S. Limited, the corporate entity for Tim Hortons in the United States. Dense Demographics Over 140,000 people within a 3 mile radius with average household incomes over $45,000. Quality Location Located at the hard lighted intersection of 7 Mile Rd and Evergreen Rd. Every day, over 23,000 cars andover29,000carsdrivebythislocationon7milerdand Evergreen Rd, respectively. Tenant Investment This site was previously a KFC that was renovated and updated. Tim Hortons funded 100% of the construction costs.
RENT SCHEDULE Years Option Periods Annual Base Rent 1-5 $53,000.00 *(current) 6-10 $58,300.00 11-15 $64,130.00 16-20 $70,543.00 21-25 $77,597.00 26-30 $85,357.00 LEASE DETAILS Lease Term: Remaining Base Term: Lease Type: Landlord Responsibilities: 10 years 7+ years NNN Lessor s insurance Rent Commencement: 6/15/2012 Lease Expiration: 12/31/2022 Tenant: Tim Donut U.S. Limited, Inc. PROPERTY DETAILS Year Built: 1982 Rentable Square Feet: 2,799 SF Land Area: 0.49 acre Address: 19833 W. 7 Mile Rd Detroit, MI Ownership: Fee simple PRICING Price: $706,667 Cap Rate: 7.50% (based on current rent) Price Per SF: $252.47/SF
Tim Hortons was founded in 1964 in Hamilton, Ontario. The menu spans a broad range of categories including coffee, espressobased hot and cold beverages, soups, sandwiches, and freshly baked goods. The company has an iconic brand status in Canada and a strong and growing presence in select regional markets in the United States. As of June 2013, the chain has 3,468 locations in Canada and 807 locations in the United States. Tim Hortons merged with Burger King in December of 2014 in a transaction of roughly $11 billion dollars. On December 12 th, 2014 shared of Tim Hortons and Burger King worldwide had stopped trading on both the Toronto Stock Exchange and the New York Stock Exchange respectively. Restaurant Brand International, the holding company of both Tim Hortons and Burger King, commenced trading on both the Toronto Stock Exchange and the New York Stock Exchange under the symbol QSR on December 15 th, 2014. Restaurant Brands International is the third largest fast food company worldwide with a market value of roughly $18 billion dollars. The combined business is expected to generate about $22 billion dollars in sales and constitute more than 18,000 restaurants in 100 countries. The company is continuously innovating and improving it s concept. Most standard Tim Hortons locations are open 24 hours. There are a growing number of combo units housing both Tim Hortons and a Wendy s. Tim Hortons and Kahala Corp (owner of Cold Stone Creamery) starting cobranding in 2009. The We fit Anywhere model has led to a number of non-traditional locations in gas stations, convenience stores, universities, hospitals, office buildings, and airports. The chain s focus on top quality, always fresh product, value, great service and community leadership has allowed it to grow into the largest quick service chain in Canada. Tim Hortons is one of the largest publicly-traded quick service restaurant chains in North America based on market capitalization, and the largest in Canada.
Property Description: Freestanding Tim Hortons Address: 19833 W. 7 Mile Rd Detroit, MI Building Square Footage: 2,799 SF Occupancy: 100% Land Area: 0.49 acre Tax Parcel: 22016521-34 22016519-20 22095891-4 Year Built: 1982 Year Renovated: 2012 Zoning: Commercial Trade Area Statistics 1 MILE 3 MILE 5 MILE 2015 Population: 20,971 140,193 361,843 2015 Households: 8,202 57,535 148,746 2015 Avg. HH Income: $44,302 $47,757 $51,437 2015 Median HH Income: $35,443 $37,983 $41,557 2015 Total Businesses: 422 5,413 14,204 2015 Total Employees: 2,247 41,703 132,042 Traffic Counts: 7 Mile Rd = 23,550 CPD Evergreen Rd = 29,547 CPD
STERLING HEIGHTS MT. CLEMENS BLOOMFIELD HILLS TROY BIRMINGHAM MADISON HEIGHTS WARREN ROSEVILLE ST. CLAIR SHORES SOUTHFIELD ROYAL OAK DETROIT GROSSE POINTE
This freestanding Tim Hortons drive-thru is located at the lighted hard corner intersection of 7 Mile Rd and Evergreen Rd in Detroit, MI. These two major thoroughfares have combined traffic counts surpassing 50,000 CPD. Moreover, this neighborhood has a dense population base with over 140,000 people within a 3-mile radius. National and regional retailers in the immediate trade area are: Walgreens, Family Dollar, Apollo Market Grocery Store, Subway, Check n Go, Happy s Pizza, Metro PCS, Foot Locker, PNC Bank, and many others. The corridor is home to many local businesses such as independent restaurants, grocery stores, clothing boutiques, banks and financial lenders, wireless stores, auto body repair shops, hair salons, day care facilities, and laundry services. The Evergreen Road corridor serves a key function to connect the dense neighborhoods and provide public services. Evergreen Road is comprised of apartment complexes, churches, public schools and bus routes. On Evergreen Rd between 7 Mile Rd and 8 Mile Rd there are four churches, a high school, an elementary school, a large apartment complex, and dense residential housing; all are potential traffic generators for Tim Hortons. A bus route travels up and down Evergreen Rd allowing for easy and convenient transportation that connects the community. Together, 7 Mile Rd and Evergreen Rd serve important roles to the community. These are the areas families come to drop their kids off at school, go to church, and take care of their everyday shopping. The subject Tim Hortons property is ideally located to take advantage of all traffic travelling on these two important corridors.
The City of Detroit is in the midst of a revival period full of artists, young entrepreneurs, and a rapidly rising restaurant scene. The millennial generation is creating a new version of Detroit, a self-sustaining version that is not reliant on the manufacturing titans. The restaurant and bar scene has been at the forefront of the Detroit Revival. Over 77 new bars and restaurants have opened since 2013. New restaurants such as Selden Standard have 2 3 hour wait times every day of the week. Wright & Co. is located on the second floor of an office and condominium building with no signage, yet the business is booming. Punch Bowl Social, a new concept, opened a 10,000 square foot restaurant, bar, and bowling alley. Suburban residents that would travel to Detroit a few times a year for food and entertainment are now making ventures into Detroit almost every weekend to check out the new restaurants and attractions.
Business Name Number of Employees Detroit Medical Center 12,398 City of Detroit 10,920 Henry Ford Health System 9,014 Detroit Public Schools 7,839 U.S. Government 6,454 Quicken Loans/Rock Financial 5,984 Wayne State University 5,924 Blue Cross Blue Shield of Michigan 5,172 State of Michigan 4,555 Chrysler Group LLC 4,042 13
DESCRIPTION 1 MILE 3 MILE 5 MILE POPULATION HOUSEHOLDS RACE 2015 Estimated Population 20,971 140,193 361,843 2020 Projected Population 21,375 141,436 366,360 2010 Census Population 20,527 137,605 355,558 2000 Census Population 27,146 169,502 426,937 Projected Annual Growth 2015 to 2020 0.4% 0.2% 0.2% Historical Annual Growth 2000 to 2015-1.5% -1.2% -1.0% 2015 Estimated Households 8,202 57,535 148,746 2020 Projected Households 8,513 58,984 153,031 2010 Census Households 7,677 54,025 139,905 2000 Census Households 9,167 62,289 159,199 Projected Annual Growth 2015 to 2020 0.8% 0.5% 0.6% Historical Annual Growth 2000 to 2015-0.7% -0.5% -0.4% 2015 Est. White 11.1% 15.7% 24.9% 2015 Est. Black 85.7% 80.6% 71.0% 2015 Est. Asian or Pacific Islander 0.6% 0.8% 1.1% 2015 Est. American Indian or Alaska Native 0.2% 0.3% 0.3% 2015 Est. Other Races 2.5% 2.6% 2.8% INCOME BUSIN ESS 2015 Est. Average Household Income $44,302 $47,757 $51,437 2015 Est. Median Household Income $35,443 $37,983 $41,557 2015 Est. Per Capita Income $17,388 $19,688 $21,220 2015 Est. Total Businesses 422 5,413 14,204 2015 Est. Total Employees 2,247 41,703 132,042
Daniel Kukes is a Principal and Co-Founder of Landmark Investment Sales. Daniel specializes in the sale of retail shopping centers, medical office, and single tenant net lease investment properties across all property types. He currently represents some of the nation s largest institutional real estate funds, private equity group, and high net worth investors in acquiring and listing investment properties all over the country. Since 2010, Daniel has closed deals totaling over 5,000,000 SF valued at over $450,000,000. Daniel joined Landmark in 2009 as an Associate Broker. He began his real estate career at NAI Farbman where he focused on shopping center leasing and retail tenant representation. After five years at NAI Farbman, Daniel joined DAP Investments as a partner responsible for retail development, acquisitions and leasing. While there, he developed several single tenant and shopping center projects in Michigan and Illinois. Daniel is a graduate of Michigan State University with a Bachelor of Arts degree in Pre-Law & Society. Email: dkukes@landmarkcres.com Scott Landers is a recent graduate of the University of Michigan, with a Bachelor of Arts degree in Economics and Environmental Studies. Scott gained extensive business research and capital raising experience through his internship at Madison Capital Markets and 1st BridgeHouse Securities, where he worked with fixed income trading and investment banking teams. He currently holds four Securities licenses; Series 7, Series 63, Series 65, and Series 99, allowing him to transact securities and sell investment advice. Scott joined the Landmark team in 2012 as a business analyst and sales associate working on both investment sales and shopping center leasing. Email: slanders@landmarkcres.com