Actual Location Offering Memorandum hhgregg 1810 Rinehart Road Sanford, Florida 32771 Atlanta Chicago New York Houston Los Angeles Phoenix San Francisco Tulsa
Confidential Disclaimer This Confidential Memorandum has been prepared by Stan Johnson Company ( SJC ) and is being furnished to you solely for the purpose of your review of the commercial Property located at 1810 Rinehart Road, Sanford, Florida 32771 (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 Stan Johnson Company ( 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 SJC as soon as practicable together with all other materials relating to the Property which you may have received from SJC; and (4) any proposed actions by you which are inconsistent in any manner with the foregoing agreements will require the prior written consent of SJC. This Confidential Memorandum has been prepared by SJC, based upon certain information pertaining to the Property and any information obtained from SJC 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 SJC 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 SJC, the Broker or any of their respective affiliates or any of the information set out in the Materials. Neither SJC, 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. SJC, 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 SJC and hold it harmless from any kind of claim, expense, or liability arising out of your discovery or purchase of the Property. SJC 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. Exclusively Listed By: Van Barron Associate Director vbarron@stanjohnsonco.com 1+ 404.823.6758 In Association With: Jason Long, Florida #BK3302956 Stan Johnson Company 3340 Peachtree Road NE, Suite 650 Atlanta, GA 30326 D 404.823.6758 C: 404.229.8522 www.stanjohnsonco.com Page 2
ctual Location with Adjacent Pad RESIDENCES OF SEMINOLE (TO BE BUILT) Investment Summary Stan Johnson Company is pleased to offer for sale to qualified investors a free-standing building 100% leased to hhgregg located at 1810 Rinehart Road, Sanford, Florida. The hhgregg lease has approximately seven (7) years and three (3) months remaining with three (3), five (5) year renewal options with annual escalations. The Property is located adjacent to the Residences at Seminole Commons being developed by Inland Atlantic Development Corporation (IADC). It will be a 175 unit apartment project comprising one and two bedroom units. Construction is targeted to begin first quarter 2016 and deliver mid year 2017. Located 20 miles north of the Orlando CBD, the subject Property is strategically located at the interchange of Interstate 4 and State Road 46 in a commercial location comprising shopping centers, office buildings and national brand auto sales and services. The area is also well established as a multi-family residential community. New Price: $5,500,000 Cap Rate: 9.55% Tenant Profile The H.H. Gregg company (now known as hhgregg), has been a leading retailer of appliances, electronics and furniture since founded in 1955. Originally based in Indiana, hhgregg has grown to nearly 230 brick-andmortar stores in twenty U.S. states. hhgregg is publicly traded on the New York Stock Exchange (NYSE: HGG). hhgregg differentiates by providing customers with a consultative and educational purchase experience by employing extensively trained and knowledgeable sales associates. hhgregg carries over 350 models of major appliances, and offers a range of electronics including computing and wireless products and services. J.D. Power and Associates, in its 2014 Appliance Retailer Satisfaction survey, ranked hhgregg highest in customer satisfaction among appliance retailers. hhgregg has also expanded its online presence by providing "friction-free" online research, in-store or athome delivery, and "white glove" installation. hhgregg was recognized as one of Internet Retailer's Top 500 fastest growing e-commerce sites in 2014. Investment Highlights Outstanding Store Sales The Sanford hhgregg is purportedly among the top 10 stores in terms of sales. For 2012 through 2014, the average Sanford sales were ~$480 per square foot, revealing a healthy 3.7% rent-tosales ratio. For comparison, the Sanford sales reflect an impressive 1.5 multiple over hhgregg s average store sales. Florida Commitment hhgregg has launched a Grand Reopening store redesign campaign, and the Sanford location is among the first to benefit. Partnering with Samsung, the redesign showcases the latest in home and technology products and interactive experiences. Orlando and Tampa are the first targeted markets. Adjacent multi-family development The Residences of Seminole is a 175 unit apartment community and is slated to begin development in early 2016. The Class A project will boost area households and attract consumer dollars to area retailers. Strong Retailer Submarket hhgregg is well positioned within a concentrated and established retailer marketplace including Michaels, Bed Bath & Beyond, Walmart, Marshalls, Target, as well as a variety of nationally recognized restaurants. Within walking distance is Seminole Towne Center, an enclosed mall featuring Dillard s, Macy s, Burlington, Sears and United Artists Theatres. Well positioned big-box retailer hhgregg is an industry leading appliance and electronics retailer. With over seven (7) years remaining on a corporate backed lease, the Sanford hhgregg big-box is well positioned for the near and long term. Page 3
Lease Abstract Tenant: Guarantor: Location: Gregg Appliances, Inc. Gregg Appliances, Inc. Premises Size (RSF): 30,000 Year Built: 2008 Land Area: ~3.82 Acres Lease Type: Lease Commencement Date: 1810 Rinehart Road, Sanford, Florida 32771 Double Net April 1, 2008 Lease Expiration Date: March 31, 2023 Term: Remaining Lease Term: Options: 15 Years 7 Years and 3 Months (as of 1/1/16) 3, 5 Year Options Options Minimum Rent: Option 1: Yrs 16-20 (4/1/23-3/31/28) Option 2: Yrs 21-25 (4/1/28-3/31/33) Option 3: Yrs 26-30 (4/1/33-3/31/38) Option Notice Period: Additional Rent: Minimum 180 day notice Common Area Maintenance, Insurance, Real Estate Taxes Additional Rent Escrow: Annual Monthly PSF Common Area Maintenance Insurance Real Estate Taxes Total Rent (Est. for period of Jan thru Dec, 2016): Landlord Maintenance: Holdover: 125% $21,689.53 $1,976.63 $52,826.16 $76,492.32 Excludes Sales Tax paid/collected from Tenant Roof & Structure $1,807.46 $164.72 $4,402.18 $6,374.36 PSF $18.50 $19.00 $19.50 $0.72 $0.07 $1.76 $2.55 $601,492.32 $50,124.36 $20.05 Minimum Rent Year Dates Annual Rent Monthly Rent PSF 6-10 4/1/2013-3/31/2018 $525,000.00 $43,750.00 $17.50 8-12 4/1/2018-3/31/2023 $540,000.00 $45,000.00 $18.00 Sales Analytics Gross Sales Detail Sales Analytics Year Gross Sales PSF Rent : Sales 2012 $14,601,729.92 $487 3.60% 2013 $14,801,448.91 $493 3.55% 2014 $13,705,726.10 $457 3.83% The hhgregg 2015 Annual Report notes approximately $2.12 billion in net sales which reflects average store sales of ~$310 per square foot (based upon 229 total stores and an average store size of 30,000 square feet). The Sanford hhgregg outperforms the average store by a 1.5 multiple. Actual Location Page 4
Financial Proforma 2016 2017 2018 2019 2020 2021 Revenue Minimum Rent $525,000.00 $525,000.00 $536,250.00 $540,000.00 $540,000.00 $540,000.00 Additional Rent $76,492.32 $78,022.17 $79,582.61 $81,174.26 $82,797.75 $84,453.70 Total Revenue (est.) $601,492.32 $603,022.17 $615,832.61 $621,174.26 $622,797.75 $624,453.70 Expenses CAM, INSR and RET $76,492.32 $78,022.17 $79,582.61 $81,174.26 $82,797.75 $84,453.70 Mgmt. Fee (assumed 1.0%) $6,014.92 $6,030.22 $6,158.33 $6,211.74 $6,227.98 $6,244.54 Total Expenses $82,507.24 $84,052.39 $85,740.94 $87,386.00 $89,025.72 $90,698.24 Net Operating Income $518,985.08 $518,969.78 $530,091.67 $533,788.26 $533,772.02 $533,755.46 Actual Location Page 5
Location Overview Sanford is a port city in the central region of Florida. It is the county seat of Seminole County. As of the 2010 census, the city had a population of 53,570. It is a principal city of the Orlando Kissimmee Sanford, FL Metropolitan Statistical Area, which was home to 2,267,846 people as of the 2013 census. Seminole State College of Florida - Sanford, FL Disney World - Orlando, FL Sanford is home to Seminole State College of Florida, the Central Florida Zoo and Botanical Gardens. Its downtown attracts tourists with shops, restaurants, a marina, and a lakefront walking trail. The Orlando Sanford International Airport, which is in the heart of the town and headquarters the Aerosim Flight Academy (formerly the Delta Connection Academy), functions as the secondary commercial airport for international and domestic carriers in the Orlando metropolitan area. The booming retail activity just west of downtown includes one of the largest malls in Central Florida, The Seminole Towne Center, as well as numerous retail enclaves surrounding the Property. One of the area s largest congregations of auto and motorcycle dealers is located in this vicinity as well. Sanford falls within the Greater Orlando MSA, which is best known for its tourism industry that attracts millions of visitors each year. Famous attractions include Walt Disney World Resort, SeaWorld, and Universal Studios. Tourism has brought to Orlando numerous hotels, restaurants, and shopping malls all ranging from low-cost to upscale options. Metro Orlando has served as a major military defense and aerospace center since World War II. The most prominent defense contractor in the area is Lockheed Martin, which operates both a laboratory and a manufacturing facility in Orlando. Seminole Towne Center - Sanford, FL Page 6
Surrounding Area The Residences at Seminole Commons The hhgregg site originally consisted of 10+ acres. Targeted for retail development, the owner/ developer subsequently determined a more favorable use for the balance of the site is multifamily. The site has since been revised to include Lot 1 - hhgregg, and Lot 2 - Residences of Seminole. Lot 2 will be a Class A apartment community comprising 175 one and two bedroom units. The unit sizes and rental price points have been strategically planned to provide a niche offering in the marketplace. Development is projected to begin first quarter 2016 and the completion is expected mid-year 2017. Colonial Center at Lake Mary The Colonial Center at Lake Mary is a new mixeduse development, which is located at the northwest corner of Interstate 4 and State Road 46A. This development includes several high-quality office buildings, a lifestyle retail center, a hotel and luxury apartments. Currently the development contains 1.7 million square feet of office space, 850 luxury apartment homes and a 225,000 square foot lifestyle center. Colonial Town Park Colonial Center at Lake Mary Residences at Seminole Commons Rendering Residences at Seminole Commons Page 7
Surrounding Area Seminole Towne Center One of the primary influences, and most important commercial development in the area, is the Seminole Towne Center. This regional mall, built in 1995, is comprised of 1.2 million square feet and is located at the southeast quadrant of Interstate 4 and State Road 46. STC features 120 specialty shops on 2 floors and features anchor tenants consisting of Sears, JCPenney, Macy s and Dillard s. The shopping center also features 5 full-service restaurants, a food court and a United Artists movie theater. The area surrounding the mall has attracted significant new commercial uses to the neighborhood, including power centers and multiple big box retailers. Central Florida Zoo and Botanical Gardens In 1923, the Central Florida Zoo, at that time called Sanford Municipal Zoo, opened its doors to the public with a small collection of animals donated by the local fire department. Starting in 1941 the zoo was relocated several times and fi nally settled down on its current location on July 4, 1975. The zoo now boasts over 400 animals including Asian elephants, cheetahs, Amur leopards, alligators, crocodiles, clouded leopards and kangaroos, as well as the Southeast s largest collection of venomous snakes and non-venomous reptiles. The zoo hosts numerous local events throughout the year, including an annual Fourth of July celebration known as Red, White and ZOO. Seminole Towne Center Central FL Zoo & Botanical Gardens Page 8
Site Plan RESIDENCES OF SEMINOLE (TO BE BUILT) Lot 1: hhgregg 3.82 Acres (~166,400 sf) 151 Parking Spaces (5.0 : 1,000 RSF) Lot 2: Residences of Seminole (to be built) 6.73 Acres Page 9
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RINEHART RD (19,128 VPD) UPSALA RD (7,492 VPD) TOWNE CENTER RLVD ROUTE 46 (35,978 VPD) SEMINOLE TOWNE CENTER I -4 (92,5 00 V PD ) ST JOHNS PKWY O CE N TR AL FL RI DA G RE EN WAY (22,19 9 VPD) N Page 11
Demographics 1810 Rinehart Rd, Sanford, Florida, 32771 0-1 mi. 0-3 mi. 0-5 mi. Population 2015 Population 5,175 45,385 109,342 2020 Population 5,550 48,481 115,427 2010-2015 Annual Rate 2.30% 1.38% 1.02% 2015-2020 Annual Rate 1.41% 1.33% 1.09% Households 2015 Total Households 2,070 17,819 42,521 2020 Total Households 2,219 19,093 45,070 2010-2015 Annual Rate 2.13% 1.41% 1.11% 2015-2020 Annual Rate 1.40% 1.39% 1.17% Race and Ethnicity 2015 White Alone 62.9% 67.0% 68.5% 2015 Black Alone 21.8% 20.2% 18.8% 2015 American Indian/Alaska Native Alone 0.6% 0.4% 0.4% 2015 Asian Alone 4.0% 5.4% 4.5% 2015 Pacific Islander Alone 0.1% 0.1% 0.1% 2015 Other Race 6.1% 3.7% 4.3% 2015 Two or More Races 4.5% 3.3% 3.4% 2015 Hispanic Origin (Any Race) 28.7% 17.6% 18.8% 2015 Median Household Income $40,376 $57,517 $54,432 2015 Average Household Income $55,450 $79,519 $79,008 N Page 12
Van Barron Associate Director vbarron@stanjohnsonco.com Jason Long, Florida #BK3302956 Stan Johnson Company 3340 Peachtree Road NE Suite 650 Atlanta, GA 30326 D 404.823.6758 C: 404.229.8522 www.stanjohnsonco.com The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this Property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notice.