Representative Photo OFFERING MEMORANDUM Hardee s 1703 South Neil Street Champaign, IL 61820
contents 04 EXECUTIVE SUMMARY 06 financial OVERVIEW 10 tenant overview 14 area OVERVIEW exclusively listed by Wesley connolly, MBA Senior Associate Wesley.Connolly@matthews.com DIR (949) 432-4512 MOB (707) 477-7185 LIC # 01962332 (CA) Alex harrold Associate Alex.Harrold@matthews.com DIR (310) 919-5790 MOB (310) 388-0788 LIC # 02009656 (CA) Randy Olczyk Broker on Record Lic # 471.018001
Representative Photo
Investment Highlights Long Term Investment Opportunity Nearly 11 years remaining on the initial lease term Absolute NNN investment Zero landlord responsibilities Attractive Percentage Rent in addition to minimum monthly rent Built in rental increases every 5 years solid hedge against inflation Healthy lease guarantee Approximately 68 units on the entity backing Well Positioned Property Located directly across the street from the University of Illinois at Urbana Champaign with over 44,000+ students enrolled Within walking distance from the University s Division I Football and Basketball stadiums Rare two way access from S State St 7,000 ADT and S Neil St 22,000 ADT Attractive demographics with over 150,000 people in the 5 mile radius Popular National Brand Strong franchisee Starcorp LLC operates 162 Hardee s and Carl s Jr locations across the US Carl Karcher Enterprises (CKE) is one of the largest national QSR concepts and has over 3,100 Hardee s and Carl s Jr locations 4 Matthews Real Estate Investment Services
Representative Photo Hardee s, Champaign, IL 5
financial overview
Hardee s 1703 South Neil Street Champaign, IL 61820 List Price... $1,744,615 CAP Rate - Current...6.50% Gross Leasable Area...± 3,115 SF Lot Size... ± 1.19 Acres Year Built... 2008 Annualized Operating Data Monthly Rent Annual Rent Current- 6/17/18 $9,450.00 $113,400 6/18/18-6/17/23 $9,922.50 $119,070 6/18/23-6/17/28 $10,418.63 $125,023 Representative Photo Tenant Summary Tenant Trade Name Hardee s Type of Ownership Franchisee Lease Guarantor Starcorp HD, LLC (68 Locations) Lease Type Fee Simple Roof and Structure Tenant Responsibility Original Lease Term 20 Years Lease Commencement Date 5/29/2008 Lease Expiration Date 6/17/2028 Term Remaining on Lease ± 11 Years Increases 5% Every 5 Years Options Four (4), Five (5) Year Options Hardee s, Champaign, IL 7
lease abstract Tenant: Guarantor: Hardee s Starcorp HD, LLC Address: 1703 S. Neil Street, Champaign, IL 61820 Size: Ownership type: ± 1.19 Acres Franchisee Date of Lease: 5/29/2008 Lease Expiration: 6/17/2028 Remaining Renewal Options: Required Advance Notice of Exercise Options: Current Rent: Rent Increases: ± 11 Years At least three (3) months but no more than nine (9) months prior to the expiration of the initial Term of this Lease or any extended Term. $113,400 Base Rent + Percentage Rent The base monthly rent will increase to $9,922.50 on 6/18/18. The base monthly rent will increase to $10,418.63 on 6/18/23. At the First five (5) year option term, the minimum monthly rent will be Market Rate (Determined under Section 1.03 of the lease). The Second five (5) year option term will be the negotiated market rate multiplied by 1.05. The Third five (5) year option term will be the negotiated market rate multiplied by 1.10. The Fourth five (5) year option term will be the negotiated market rate multiplied by 1.15. Net Lease: Real Estate Taxes: Repairs and Maintenance: Insurance: Utilities: Tenant Assignment and Subletting: Right of First Refusal : Absolute NNN Zero Landlord Responsibilities Tenant shall pay during the Term of the Lease all of the real and personal property taxes levied or assessed against the Premises and Improvements. Tenant shall, at Tenant s own cost and expense, keep, maintain, repair and replace the Premises including the roof, parking lot and exterior in good condition and repair, normal wear and tear. Tenant shall, at its own costs and expense, keep the Premises and other improvements insured against loss by fire and all of the risks and perils usually covered by an extended coverage endorsement. Tenant shall pay for all utilities and services. Tenant may assign this Lease, or sublet or permit any other person to occupy, part or all of the Premises, but Tenant shall not be relieved of its obligations under this Lease. Landlord shall give Tenant thirty (30) days notice to match the amount of a proposed offer and terms and shall have the first option to purchase. 8 Matthews Real Estate Investment Services
Representative Photo Hardee s, Champaign, IL 9
tenant overview Representative Photo
Property Name Parent Company Trade Name Ownership Hardee s CKE Restaurants Private No. of Locations ± 1,950 No. of Employees ± 16,680 Headquartered St. Louis, Missouri Website www.hardees.com Year Founded 1960 TENANT OVERVIEW As a subsidiary of fast food giant CKE Restaurants, Hardee s Food Systems is a leading fast food chain operator with more than 1,900 locations in some 30 states, primarily in the Midwest and Southeast. The chain offers a variety of premium-priced Angus beef hamburgers under such names as Thickburger, Six Dollar Burger, and the Monster Thickburger. Hardee s also serves up chicken sandwiches, salads, fries, and beverages, as well as dessert items. About 475 of the restaurants are operated by the company, while the rest are franchised. GEOGRAPHIC OUTREACH Since the opening of the first restaurant in Greenville, North Carolina in 1960, Hardee s has established a strong presence throughout the Midwest and Southeast. Most locations are in the United States, distributed among some 30 states. STRATEGY The company s Hardee s chain has started to incorporate its own dual branding strategy, pairing some of its locations with Red Burrito outlets. Plans to continue expansion in international markets are underway and involve the use of franchise development agreements. CKE is targeting growth in Brazil, Canada, China, and Russia. In 2014 Carl s Jr. announced plans to expand in Ontario, Canada s Golden Horseshoe, a territory that includes Toronto, Mississauga, Oakville, Burlington, Hamilton, Brantford and London. Hardee s chains market themselves as gourmet burger outlets with slightly higher menu prices. In lieu of rapid expansion, CKE has focused on managing costs and investing in additional marketing efforts to drive traffic to its restaurants. Its chains target primarily a young, male demographic with oversized burgers made with premium Angus beef. Hardee s, Champaign, IL 11
the offering parcel map Property Name Property Address Hardee s 1703 South Neil Street Champaign, IL 92056 Assessor s Parcel Number 162-241-18-00 Site Description Number of Stories One Year Built 2008 Gross Leasable Area (GLA) Lot Size Type of Ownership Parking ± 3,115 SF ± 1.19 Acres (51,836 SF) Franchise ± 66 Suface Spaces Oceanside Blvd ± 31,792 College Blvd ± 40,116 S. Neil Street ± 22,000 ADT 12 Matthews Real Estate Investment Services
Tenant Overview University of Illinois at Urbana-Champaign
area overview Champaign, IL Champaign, Illinois, located in Champaign County, is the 10th most populated city in Illinois. The University of Illinois at Urbana-Champaign has a large influence on the city and has helped the city succeed throughout the years. There have been many start-up companies in the area, making Champaign a hub for Silicon Prairie. Today, the city houses many major offices for Abbott, IBM, State Farm, and other Fortune 500 companies. The most common industries within the region is Educational Services and Retail Trade. Most occupations are within training and management. With Champaign being a college town, Downtown Champaign is a great entertainment district that has many upscale restaurants, boutiques, nightclubs, and art galleries. During the spring, Champaign houses the Boneyard Arts Festival. It is a unique four-day event that showcases a broad range of artistic work within the community. Champaign demographics POPULATION 1 Mile 3 Mile 5 Mile 2022 Projection 16,017 111,001 154,317 2017 Estimate 15,953 109,247 150,079 2010 Census 15,855 106,223 142,724 2000 Census 15,493 100,044 125,109 Growth 2017-2022 0.40% 1.61% 2.82% HOUSEHOLDS 1 Mile 3 Mile 5 Mile 2022 Projection 4,691 45,885 63,783 2017 Estimate 4,640 44,765 61,692 2010 Census 4,545 42,685 57,938 2000 Census 4,613 39,787 50,143 Growth 2017-2022 1.09% 2.50% 3.39% Growth 2010-2017 2.10% 4.87% 6.48% INCOME 1 Mile 3 Mile 5 Mile 2017 Est. Average Household Income $56,324 $60,102 $65,594
University of Illinois at Urbana-Champaign The University of Illinois at Urbana-Champaign is known for its amazing landscapes and architecture. The public research-intensive university was founded in 1867 and has helped build Champaign s population ever since. They accept over 45,000 students and employs 30,000 full and part time employees. Over half of Champaign s residents have a bachelor s degree or higher, with a majority earning their degree from UIUC. Fighting Illini, the university s mascot, is a favorite of the city and hosts the top sporting events within the area. With a history of striving football, basketball, and baseball organizations, UIUC has built up a loyal fan base. The football team currently has 15 Big Ten Championship Football victories and 8 Bowl Game victories. Hardee s, Champaign, IL 15
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Hardee s located at 1703 South Neil Street, Champaign, IL 61820 ( 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.
exclusively listed by Wesley connolly, MBA Senior Associate Wesley.Connolly@matthews.com DIR (949) 432-4512 MOB (707) 477-7185 LIC # 01962332 (CA) Alex harrold Associate Alex.Harrold@matthews.com DIR (310) 919-5790 MOB (310) 388-0788 LIC # 02009656 (CA) Randy Olczyk Broker on Record Lic # 471.018001 Hardee s 1703 South Neil Street Champaign, IL