Freddy s 667 Russ Avenue Frozen Custard Lakewood, Waynesville, CONC 28786 Offering Memorandum
Confidentiality Agreement The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
Net Leased Disclaimer 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.
exclusively listed Exclusively listed by: Jamie Medress Senior Vice President Investments PHOENIX Office Tel: (602) 687-6778 Fax: (602) 687-6717 jamie.medress@marcusmillichap.com Mark Ruble First Vice President Investments phoenix Office Tel: (602) 687-6766 Fax: (602) 687-6710 mark.ruble@marcusmillichap.com Henry Kerson Associate Advisor phoenix Office Tel: (602) 687-6652 Fax: (602) 687-6710 henry.kerson@marcusmillichap.com Raj Ravi Broker of Record Charlotte Office Tel: (704) 831-4650 Fax: (704) 831-4610 raj.ravi@marcusmillichap.com OFFICES NATIONWIDE www.marcusmillichap.com
Table of Contents Executive Summary Offering Summary...2 Property Description Investment Overview...5 Regional Map......................................... 6 Local Map....7 Aerial Photographs...8 Surrounding Property Photos...9 Market Overview Market Overview...16 Demographic Summary...17 Financial Analysis Financial Summary...12 Tenant Overview...13
summaryexecutive summary
EXECUTIVE SUMMARY 667 Russ Avenue Waynesville, NC 28786 OFFERING SUMMARY Offering Price $910,345 Down Payment 100% $910,345 CAP Rate 7.25% Rentable SF Lot Size 2,135 SF.77 Acres Year Built 1992 LEASE SUMMARY Lease Type Tenant Roof & Structure Original Lease Term Triple-Net (NNN) Coward Enterprises, Inc., dba Kentucky Fried Chicken of Waynesville Tenant Responsible 10 Years Lease Commencement May 1, 2011 Lease Expiration Date April 30, 2021 Effective Lease Term Remaining Rental Increases Renewal Options 6 Years Change in CPI in Each Option 3, 5 Year Options Executive Summary Property Description Financial Analysis Market Overview This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207 2
description property description
Aerial photo
Property Description Executive Summary Property Description Financial Analysis market overview Investment Overview is located at 667 Russ Avenue in Waynesville, North Carolina. The subject is an approximate 2,135-square-foot single-tenant building on an estimated.77 acres of land. Built in 1992, has approximately 6 years remaining on a triplenet (NNN) lease. There are 3, 5 Year renewal options remaining. The system serves more than 12 million customers each day in more than 115 countries and territories around the world. operates over 17,000 restaurants in the Unites States and internationally. The subject property is located directly off of Russ Avenue, near access to the Great Smoky Mountain Expressway - a primary connector between Waynesville and Asheville. The restaurant is ideally situated in the town s only retail corridor. Tenants in the immediate area include Verizon, Rite Aid, Staples, Dollar General, Sherwin- Williams, McDonald s, Ingles, Hibbett Sports, Burger King, Wendy s, KMart, Advance Auto Parts, Bi-Lo, Grocery Outlet and more. Tuscola High School (1,052 students) is a short drive away. Waynesville is a friendly small town nestled in the Great Smoky Mountains National Park with magnificent mountain views of the Blue Ridge Parkway. The town boasts fine shops, galleries, cafés and restaurants. Historic buildings, relaxing benches, public art and a welcoming atmosphere make Waynesville an enjoyable place to live and visit. Numerous popular events, parades and festivals occur throughout the year. The heart of Appalachian culture and heritage, Waynesville hosts Folkmoot USA, North Carolina s official international music and dance festival annually. Investment Highlights Triple-Net (NNN) Lease Ideally Situated in Waynesville s Only Retail Corridor Close Proximity to Great Smoky Mountain Expressway - a Primary Connector Between Waynesville and Asheville Average Household Income Exceeds $58,000 within a 3-Mile Radius 20+ Year History 5 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207
Property Description Regional Map Executive Summary MAP Property Description Financial Analysis Williams-Sonoma Market overview This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207 6
Property Description Local Map Property Description market overview Financial Analysis Executive Summary MAP Williams-Sonoma 7 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207
Property Description Aerial photo Executive Summary great smoky Mountain Expy Property Description McDonald s Financial Analysis Burger King Russ Avenue Market overview N This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207 8
Property Description Surrounding Properties market overview Financial Analysis Property Description Executive Summary 9 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207
Property Description Executive Summary Property Description Financial Analysis Market overview This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207 10
analysis financial analysis
financial analysis Financial Analysis Financial Summary FINANCIAL SUMMARY Price $910,345 Down Payment 100% $910,345 Building SF 2,135 SF Price per SF $426.39 PSF Cap Rate 7.25% Net Cash Flow 7.25% $66,000 Year Built 1992 Lot Size.77 Acres BASE RENT (31.13/SF) $66,000 Net Operating Income $66,000 Total Return 7.25% $66,000 Executive Summary Property Description LEASE SUMMARY Lease Type Triple Net (NNN) Tenant Coward Enterprises, Inc., dba Kentucky Fried Chicken of Waynesville Roof & Structure Tenant Responsible Original Lease Term 10 Years Lease Commencement Date May 1, 2011 Lease Expiration Date April 30, 2021 Effective Lease Term Remaining 6.5 Years Options 3, 5 Year Options Increases Change in CPI in Each Option Financial Analysis market overview This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207 12
Financial Analysis Tenant Overview Executive Summary Property Description Financial Analysis market overview Based in Louisville, KY, Corporation is the franchisor of the world s most popular chicken restaurant chain, specializing in Original Recipe, Extra Crispy, Kentucky Grilled Chicken and Extra Crispy Strips with home-style sides, Hot Wings and freshly made chicken sandwiches. has been serving customers complete, freshly prepared, family meals since Colonel Harland Sanders founded the concept in 1952. Famous for its Original Recipe fried chicken, which is made with the same secret blend of 11 herbs and spices Colonel Sanders perfected more than a half century ago, it is estimated that, on average, more than 185 million people see a commercial at least once a week that s more than half the U.S. population. The system serves more than 12 million customers each day in more than 115 countries and territories around the world. operates over 17,000 restaurants in the Unites States and internationally. s parent company is Yum! Brands, Inc., the world s largest restaurant company in terms of system restaurants, with more than 40,000 locations in more than 130 countries and territories and employing more than one million associates. Yum! is ranked number 201 on the Fortune 500 List, with revenues exceeding $13 billion in 2012. Website: www.kfc.com Franchisee: The operator of the subject property is a single unit operator. 13 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207
overviewmarket overview
Aerial photo
Market Overview Waynesville, NC Waynesville NC is a simple small American town nestled inside lush Blue Ridge Mountain peaks, within an hour s drive to the Great Smoky Mountains National Park. There are four seasons here, including an infamous autumn, which sets the surrounding North Carolina mountains on fire during October and November with brilliant orange and red fall foliage. Waynesville is the county seat of Haywood County, North Carolina, United States. It is the largest town in Haywood County and the largest in Western North Carolina west of Asheville. Executive Summary Waynesville, NC was founded 1810 by revolutionary war soldier, Colonel Robert Love, who named the town after his former commander, General Mad Anthony Wayne. Waynesville incorporated in 1871. The railroad arrived in the Frog Level district in 1884. A new depot was built after the original one was destroyed in a fire in 1900. The weather in Waynesville NC consists of all four seasons. The town typically receives snow in the winter time and plenty of rain in the spring. In July and August, temperatures average about 88 degrees for the daily high and 58 degrees for the daily low. Property Description Waynesville is serviced by two or more freight trains daily via the Norfolk Southern Railway and is connected to Interstate 40 and the rest of Southwestern North Carolina via the Great Smoky Mountains Expressway giving it easy access to Knoxville, Tennessee and Asheville. There is no airport in Haywood County mostly due to its close proximity to the Asheville Regional Airport and Knoxville s McGhee Tyson Airport. Asheville is about a 30 minute drive east, Knoxville is an hour and a half to the west. It is served by the Great Smoky Mountain Expressway which is a 4 lane divided highway between Sylva and Exit 98 near West Waynesville. Then it is a 4 lane freeway to Interstate 40 near Canton. It has exits for Hazelwood, West Waynesville and Russ Avenue through the town. Financial Analysis marketn overview This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207 16
Market Overview Demographic Summary Executive Summary Property Description Financial Analysis Population 1-Mile 3-Miles 5-Miles 2019 Projection 3,073 15,534 29,124 2014 Estimate 3,091 15,154 28,187 2000 Census 3,066 14,382 26,545 2010 Census 3,112 15,166 28,175 Households 1-Mile 3-Miles 5-Miles 2019 Projections 1,291 7,267 12,998 2014 Estimate 1,285 7,004 12,457 2000 Census 1,311 6,505 11,482 2010 Census 1,295 7,008 12,445 Daytime Population 1-Mile 3-Miles 5-Miles 2014 Estimate 2,519 9,224 12,440 2014 Income 1-Mile 3-Miles 5-Miles $200,000 or More 1.09% 2.52% 2.21% $150,000 - $199,999 2.20% 2.56% 2.44% $100,000 - $149,999 7.92% 7.84% 7.67% $75,000 - $99,999 9.06% 11.70% 11.68% $50,000 - $74,999 16.74% 17.09% 17.14% $35,000 - $49,999 15.14% 15.89% 16.10% $25,000 - $34,999 15.63% 12.23% 12.87% $15,000 - $24,999 11.85% 12.20% 12.61% $10,000 - $14,999 11.02% 8.81% 8.37% Under $9,999 9.35% 9.17% 8.90% 2014 Est. Average Household Income $51,330 $58,083 $57,156 2014 Est. Median Household Income $36,645 $40,592 $40,813 2014 Est. Per Capita Income $22,190 $27,232 $25,504 market overview 17 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. 2013 Marcus & Millichap ACT ID W0070207
exclusively listed Exclusively listed by: Jamie Medress Senior Vice President Investments PHOENIX Office Tel: (602) 687-6778 Fax: (602) 687-6717 jamie.medress@marcusmillichap.com Mark Ruble First Vice President Investments phoenix Office Tel: (602) 687-6766 Fax: (602) 687-6710 mark.ruble@marcusmillichap.com Henry Kerson Associate Advisor phoenix Office Tel: (602) 687-6652 Fax: (602) 687-6710 henry.kerson@marcusmillichap.com Raj Ravi Broker of Record OFFICES NATIONWIDE Charlotte Office www.marcusmillichap.com Tel: (704) 831-4650 Fax: (704) 831-4610 raj.ravi@marcusmillichap.com