OFFERING MEMORANDUM Flowers Foods 875 S Beckford Drive Henderson, NC Flowers Foods, Henderson, NC 1
2 Matthews Real Estate Investment Services
contents 04 EXECUTIVE SUMMARY 06 08 12 financial OVERVIEW tenant overview area OVERVIEW exclusively listed by Josh Bishop VP & Director Josh.Bishop@matthews.com DIR (214) 692-2289 MOB (315) 730-6228 LIC # 688810 (TX) chad kurz SVP & National Director Chad.Kurz@matthews.com DIR (214) 692-2927 MOB (562) 480-2937 LIC # 01911198 (CA) Kyle Matthews Broker of Record Lic # C27092 Flowers Foods, Henderson, NC 3
executive Summary 4 Matthews Real Estate Investment Services
Investment Highlights 15-Year NN+ lease with ± 14 Years Remaining Extremely Rare 1.5% Annual rent increase during base term & extension periods Average Cap Rate of 7.73% over the base term (assuming a purchase at list price) Brand new construction 2016 built-to-suit for Flowers Foods 20 Year transferable roof & structure warranty (property acts as a NNN) Tenant responsible for parking lot, HVAC, CAM, taxes, and insurance Local retail tenants include Walmart, Sherwin Williams, Family Dollar, Tractor Supply, Lowe s, KFC, McDonald s, Food Lion, Wendy s, Chick-Fil-A, Big Lots, Taco Bell, Dollar Tree, Staples, and many more Henderson is in an ideal market for distribution and is even home to a Walmart distribution center Henderson is located just 35 miles north of Raleigh Flowers Foods, Inc. has strong investment grade credit, S&P rated BBB- & Moody s rated Baa2 The property is 100% leased to Flowers Baking Co. of Jamestown, LLC, a wholly owned subsidiary of Flowers Foods Inc. Flowers Foods is the second-largest producer and marketer of packaged bakery foods, serving over 90% of the United States population with baked goods Flowers Foods operates over 47 bakeries in 16 states, producing fresh baked products for some of the top brands including Wonder Bread, Hostess, Nature s Own, White Wheat, Bunny Bread, Sunbeam, Tastykake, Mary Jane, Holsum, Hattie s, and more Flowers Foods, Henderson, NC 5
financial overview
financial overview Flowers Foods 875 S Beckford Drive Henderson, NC 27536 List Price... $1,502,925 CAP Rate...7.00% Gross Leasable Area... ± 6,000 SF Lot Size... 2.67 Acres Year Built...2016 Annualized Operating Data Monthly Rent Annual Rent Rent/SF Increases Current $8,767.06 $105,204.75 $17.53 7.00% Year 3 $8,898.57 $106,782.82 $17.80 7.11% Year 4 $9,032.05 $108,384.56 $18.06 7.21% Year 5 $9,167.53 $110,010.33 $18.34 7.32% Year 6 $9,305.04 $111,660.49 $18.61 7.43% Year 7 $9,444.62 $113,335.39 $18.89 7.54% Year 8 $9,586.29 $115,035.43 $19.17 7.65% Year 9 $9,730.08 $116,760.96 $19.46 7.77% Year 10 $9,876.03 $118,512.37 $19.75 7.89% Year 11 $10,024.17 $120,290.06 $20.05 8.00% Year 12 $10,174.53 $122,094.41 $20.35 8.12% Year 13 $10,327.15 $123,925.82 $20.65 8.25% Year 14 $10,482.06 $125,784.71 $20.96 8.37% Year 15 $10,639.29 $127,671.48 $21.28 8.49% Extension 1 1.5% Annual Increases Extension 2 1.5% Annual Increases Tenant Summary Tenant Trade Name Flowers Foods Type of Ownership Fee Simple Lease Type NN+ Roof and Structure 20 Year Warranty Original Lease Term 15 Years Rent Commencement Date 9/15/2016 Lease Expiration Date 8/31/2031 Term Remaining on Lease ± 14 Years Increases 1.5% Annual Increases Options Two, 5-Year Options Flowers Foods, Henderson, NC 7
Tenant overview
Property Name Property Type Parent Company Trade Name Ownership Credit Rating (S&P) Revenue Net Income Flowers Foods Net Leased Distribution Center Flowers Foods, Inc. (NYSE: FLO) Public BBB- $3.77 B $189 M No. of Locations ± 46 No. of Employees ± 10,900 Headquartered Thomasville, Georgia Website www.flowersfoods.com Year Founded 1919 TENANT OVERVIEW As one of the largest wholesale bakeries in the US, Flowers Foods flour products business is booming. Flowers Foods bakes, markets and distributes fresh breads, buns, rolls, corn and flour tortillas, and sweet bakery goodies to retail food and food-service customers in the western, southern and northeastern US. The company s brand names include Cobblestone Mill, Nature s Own, Tastykake and Whitewheat. Flowers Foods makes snack cakes, pastries, donuts and frozen bread products for retail, vending and co-pack customers nationwide. It also rolls out hamburger buns for national fast-food chains. Flowers Foods bought several bread brands, including Wonder and about 20 bakeries from Hostess Brands. GEOGRAPHIC OUTREACH Flowers Foods operates in 18 states in US Southeast, Mid-Atlantic, New England, Southwest, California and select markets in Nevada, the Midwest, and the Pacific Northwest. STRATEGY The company focuses on developing new and core markets through new customers, new products, strong brands and acquisitions. From its stronghold in the Southeast, Flowers Foods has been expanding its retail and wholesale reach, moving north and west Flowers Foods in 2014 opened the Knoxville, Tennessee plant that was acquired as a part of the Hostess Brands deal in 2013. Acquisitive Flowers Foods purchases other businesses to grow and enter new markets. The company has completed more than 100 acquisitions during the past 40 years. SALES & MARKETING As a leading US baker, the company s products are available to consumers through traditional supermarkets and their in-store deli/bakeries, food service distributors, convenience stores, mass merchandisers, club stores, wholesalers, casual dining and quick-serve restaurants, schools, hospitals, dollar stores and vending machines. Flowers Foods direct-store-delivery system is comprised of 5,100 independent distributors who own the rights to distribute certain brands of the company s fresh packaged bakery foods in their geographic territories. Also, Flowers Foods has about 600 company-owned distributors and distributorships available for sale. The warehouse segment s fresh snack cakes and frozen breads and rolls are sold nationally direct to customers warehouses by frozen and non-frozen contract carriers. Flowers Foods, Henderson, NC 9
the offering parcel map Property Name Property Address Flowers Foods 875 S Beckford Drive Henderson, NC 27536 Assessor s Parcel Number 135-22-0-30-02-001.01-0 Site Description Number of Stories One Year Built 2016 Gross Leasable Area (GLA) Lot Size Type of Ownership Parking ± 6,000 SF ± 2.67 Acres (116,305 SF) Fee Simple ± 15 Surface Spaces Parking Ratio 2.50 : 1000 Landscaping Topography Professional Generally Level S BECKFORD DR ± 10,000 ADT Oceanside Blvd ± 31,792 College Blvd ± 40,116 10 Matthews Real Estate Investment Services
surrounding tenants Pacific Pacific Coast Coast Feather Feather ± 38,000 ADT Government Buildings Subject Property property demographics 10- Mile Radius 56,254 2017 Est. Population 21,901 2017 Est. Households $51,310 Average Household Income Flowers Foods, Henderson, NC 11
area overview Henderson, North Carolina Located just 40 minutes north of the capital city of Raleigh, Henderson is a rural town rich with history. If you are looking for a piece of Small-Town Americana you can find it in Henderson, North Carolina. Henderson is strategically located directly from I-85 or from Hwy 1 North of Raleigh. Henderson and Vance County have many landmarks and historical properties that offer places to visit and enjoy. Demographics POPULATION 3 Mile 5 Mile 10 Mile 2022 Projection 18,930 26,767 56,567 2017 Estimate 18,961 26,729 56,254 2010 Census 19,723 27,592 57,681 2000 Census 20,583 27,818 54,530 HOUSEHOLDS 3 Mile 5 Mile 10 Mile 2022 Projection 7,693 10,670 22,116 2017 Estimate 7,638 10,578 21,901 Growth 2017-2021 0.72% 0.87% 0.98% INCOME 3 Mile 5 Mile 10 Mile 2017 Est. Average Household Income $45,025 $47,017 $51,310
Economic development The City of Henderson sought designation as a North Carolina Main Street City and gained that status in 1986. Composing of 16 square blocks and occupying approximately 46 acres, Henderson s Central Business Historic District is a testimony to the city s role as the largest town and seat of Vance County since 1881. The district was placed on the National Register of Historic Place in 1987. The district contains 128 structures, 97 of which are contributing structures. Business and retail properties are available in historic downtown Henderson, home to the brand new McGregor Performing Arts Center. Flowers Foods, Henderson, NC 13
raleigh Raleigh is the capital of North Carolina and a blossoming Southern metropolis. Raleigh is known as the City of Oaks for its many oak trees that line the street in the heart of the city. Raleigh is one of the fastest-growing cities in the country. Raleigh is home to North Carolina State University and is part of the Research Triangle area, with Durham and Chapel Hill. Raleigh is a bevy of cultural and culinary touchstones, and leads in most recent quality of life rankings. 14 Matthews Real Estate Investment Services
The triangle Raleigh, Durham and Chapel Hill are known for their research and technology roots in addition to collegiate rivalries. North Carolina s Research Triangle is one of the country s largest and most successful research parks, a major center in the United States for high-tech and biotech research, as well as a hub for advanced textile and development. This tri-city region known as the Triangle is luring nearly 80 new residents a day with strong job growth and a high quality of life. Many people who call the Raleigh and Durham metro areas home are young, friendly, diverse and educated. #1 America s Best Places to Live Businessweek.com #1 Fastest Growing Cities for Technology Jobs Dice #5 Most Cost-Attractive Business Location KPMG HIgher Education As home to eleven traditional universities, colleges, numerous satellite campuses and for-profit institutions of higher education, the Raleigh area is unusually rich in educational opportunities. Among the traditional colleges are North Carolina State University, a major research center; a private women s college; a law school; three seminaries; and two historically black colleges. The area is also enhanced by the presence of the University of North Carolina at Chapel Hill and by Duke University and North Caroline Central University. All of these North Carolina universities are within a 45-minute commute of each other and from the Research Triangle Park, one of the nation s largest and most prestigious R&D business parks (located in Durham and Wake counties). Flowers Foods, Henderson, NC 15
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Flowers Foods located at 875 S Beckford Drive, Henderson, NC 27536 ( Property ). It has been prepared by Matthews Real Estate Investment Services. 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 Real Estate Investment Services. 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 Real Estate Investment Services 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 Real Estate Investment Services 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.
exclusively listed by Josh Bishop VP & Director Josh.Bishop@matthews.com DIR (214) 692-2289 MOB (315) 730-6228 LIC # 688810 (TX) chad kurz SVP & National Director Chad.Kurz@matthews.com DIR (214) 692-2927 MOB (562) 480-2937 LIC # 01911198 (CA) Kyle Matthews Broker of Record Lic # C27092 Flowers Foods 875 S Beckford Drive Henderson, NC Flowers Foods, Henderson, NC 17