Single Tenant Net Lease Investment Portfolio LYNNWOOD PUYALLUP FAIRBANKS OFFERING MEMORANDUM
Table of Contents 01 Executive Summary The Opportunity Investment Highlights Investment Summary Property Overview Aerials 02 03 04 Financial Analysis Rent Roll Lease Options Proposed Financing Tenant Profile Location Overview Site Overview Demographics Contact Information Erik Swanson eswanson@kiddermathews.com 206.296.9628 Mike King mking@kiddermathews.com 206.296.9624 Pamela Throop pam@realtyalaska.com 907.456.6008 The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews. This Marketing Brochure has been prepared to provide summary, unverified 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. Kidder Mathews 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, PCB s or asbestos, the compliance with State and Federal regulations, current or past tax payments, 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 Marketing Brochure has been obtained from sources we believe to be reliable; however, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews 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. This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies. kiddermathews.com
01 Executive Summary The Opportunity Investment Highlights Investment Summary Property Overview Aerials
OFFERING PRICE $9,660,000 CAP RATE 6.25% NET OPERATING INCOME $603,786 PRICE / SF $143 THE OPPORTUNITY Investment Highlights Internet Resistant Retail Value Village is a strong, global thrift store chain offering secondhand clothing, footwear, furniture, books & household items. Proven Retail Location The tenant has successfully operated these stores for an average of 21 years and has always exercised their renewal options. Strong Corporate Tenant Value Village owns over 330 thrift stores in the U.S. and Canada. Passive Investment All expenses are paid directly by the tenant. Landlord is responsible for the roof and structure. No State Income Tax The assets are located in Alaska and Washington which are 2 of 8 income tax free states. Investment Summary Kidder Mathews is pleased to offer for sale a portfolio of well-located Value Village stores in Washington and Alaska. The properties are offered free and clear of debt. FAIRBANKS PUYALLUP LYNNWOOD KIDDER MATHEWS OFFERING MEMORANDUM 4
PROPERTY OVERVIEW FAIRBANKS 3023 Airport Way Fairbanks, Alaska 99701 BUILDING Type Commercial Year Built 1992 Gross Leasable Area (GLA) ±20,750 SF Stories 1 Construction Parking Parking Ratio Concrete block 94 spaces 4.5 per 1,000 SF SITE Land Acres ±1.83 Parcel (APN) 93696 VALUE VILLAGE FAIRBANKS Municipality County City of Fairbanks Fairbanks North Star, AK 2017 Property Tax Amount $35,721 Assessed Value $2,186,850 KIDDER MATHEWS OFFERING MEMORANDUM 5
PROPERTY OVERVIEW PUYALLUP 1124 River Road Puyallup, WA 98371 BUILDING Type Commercial Year Built 1986 Gross Leasable Area (GLA) ±24,055 SF Stories 1 Construction Masonry Parking Parking Ratio 65 spaces 3.54 per 1,000 SF Chrisella Rd NE Puyallup Valley Ave NW SITE Land Acres ±1.64 VALUE VILLAGE PUYALLUP Parcel (APN) 492020-0888, 492020-0889 Municipality City of Puyallup County Pierce, WA 2017 Property Tax Amount $27,693.55 W Stewart Ave 11th St NW N Meridian Assessed Value $2,155,900 Woodland Ave E W Pioneer Ave 7th Ave SW N Meridian KIDDER MATHEWS OFFERING MEMORANDUM 6
PROPERTY OVERVIEW LYNNWOOD 17216 WA-99 Lynnwood, WA 98037 BUILDING Type Commercial Year Built 1992 Gross Leasable Area (GLA) ±22,810 SF Stories 1 Construction Reinforced Concrete Parking Parking Ratio 134 spaces 5.87 per 1,000 SF Lynnwood 52nd Ave W SITE Land Acres ±2.30 Parcel (APN) 005138-000-102-02 VALUE VILLAGE LYNNWOOD 168th St SW 164th St SW Municipality City of Lynnwood County Snohomish, WA 2017 Property Tax Amount $34,362.48 Assessed Value $3,250,000 76th Ave W 64th Ave W 176th St SW 188th St SW 44th Ave W 36th Ave W KIDDER MATHEWS OFFERING MEMORANDUM 7
Geraghty Ave ±23,125 COMBINED VPD Airport Way VALUE VILLAGE FAIRBANKS Rewak Drive N KIDDER MATHEWS OFFERING MEMORANDUM 8
±31,512 VALUE VILLAGE PUYALLUP CO MB INE DV PD Rive r Rd N KIDDER MATHEWS OFFERING MEMORANDUM 9
VALUE VILLAGE LYNNWOOD ±36,819 COMBINED VPD Pacific Hwy N KIDDER MATHEWS OFFERING MEMORANDUM 10
02 Financial Analysis Rent Roll Lease Options Proposed Financing
RENT ROLL TENANT SQUARE FEET PERCENT FEET MONTHLY RENT ANNUAL RENT ANNUAL PER SF LEASE TYPE LEASE COMMENCEMENT CURRENT TERM END Value Village - Lynnwood, WA 22,854 33.78% $24,282.38 $291,389 $12.75 NNN 04/01/92 12/31/23 Value Village - Puyallup, WA 24,055 35.55% $13,029.79 $156,357 $6.50 NNN 08/01/98 12/31/23 Value Village - Fairbanks, AK 20,750 30.67% $13,003.33 $156,040 $7.52 NNN 08/01/98 07/31/23 TOTAL 67,659 $50,315.50 $603,786 OPTIONS No Remaining Options 2-5 Year Options at Fair Market Value 2-5 Year Options at Fair Market Value 2018 2019 2020 2021 2022 2023 Net Operating Income $586,645 $603,786 $603,786 $603,786 $603,786 $603,786 Note: Value Village Lynnwood s contracted rent bump occurs 01/01/2019. The cap rate and offering net operating income is based on this rent bump. Seller will credit buyer $17,141 at closing to increase the 2018 NOI to $603,786. The net operating income in 2023 assumes a lease renewal in July 2023 at the Fairbanks location. KIDDER MATHEWS OFFERING MEMORANDUM 12
LEASE OPTIONS FAIRBANKS Lease Abstract TENANT MONTHLY RENT ANNUAL RENT ANNUAL RENT / SF SF START END COMMENTS Value Village - Fairbanks, AK $13,003.33 $156,040 $7.52 20,750 08/01/13 07/31/23 Current Term 08/01/24 07/31/28 First Option at Fair Market Value 08/01/29 07/31/33 Second Option at Fair Market Value LEASE SUMMARY Tenant Guarantor Lease Type Security Deposit Renewal Options EXPENSES Utilities Taxes Insurance Cams MAINTENANCE OBLIGATIONS Landlord Tenant TERMS Exclusives Estoppels Right of First Offer Option to Purchase Value Village TVI, Inc. dba Value Village and Savers NNN N/A 2-5 Year Options at Fair Market Value Remaining Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Roof & Structure All Maintenance Except Roof & Structure N/A Tenant will provide within 14 days No No The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to review the original lease to verify all information contained herein. KIDDER MATHEWS OFFERING MEMORANDUM 13
LEASE OPTIONS LYNNWOOD Lease Abstract TENANT MONTHLY RENT ANNUAL RENT ANNUAL RENT / SF SF START END COMMENTS Value Village - Lynnwood, WA $24,282.38 $291,389 $12.75 22,854 01/01/19 12/31/23 Current Term Note: Value Village Lynnwood s contracted rent bump occurs 01/01/2019. The cap rate and offering net operating income is based on this rent bump. Seller will credit buyer $17,141 at closing to increase the 2018 NOI to $603,786. LEASE SUMMARY Tenant Guarantor Lease Type Security Deposit Renewal Options EXPENSES Utilities Taxes Insurance Cams MAINTENANCE OBLIGATIONS Landlord Tenant TERMS Exclusives Estoppels Right of First Offer Option to Purchase Value Village TVI, Inc. dba Value Village and Savers NNN N/A No Remaining Options Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Roof & Structure All Maintenance Except Roof & Structure N/A Tenant will provide within 14 days No No The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to review the original lease to verify all information contained herein. KIDDER MATHEWS OFFERING MEMORANDUM 14
LEASE OPTIONS PUYALLUP Lease Abstract TENANT MONTHLY RENT ANNUAL RENT ANNUAL RENT / SF SF START END COMMENTS Value Village - Puyallup, WA $13,029.79 $156,357 $6.50 24,055 01/01/18 12/31/23 Current Term 01/01/24 12/31/28 First Option at Fair Market Value 01/01/29 12/31/33 Second Option at Fair Market Value LEASE SUMMARY Tenant Guarantor Lease Type Security Deposit Renewal Options EXPENSES Utilities Taxes Insurance Cams MAINTENANCE OBLIGATIONS Landlord Tenant TERMS Exclusives Estoppels Right of First Offer Option to Purchase Value Village TVI, Inc. dba Value Village and Savers NNN N/A 2-5 Year Options at Fair Market Value Remaining Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Tenant Responsibility - Tenant Pays Direct Roof & Structure All Maintenance Except Roof & Structure N/A Tenant will provide within 14 days No No The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to review the original lease to verify all information contained herein. KIDDER MATHEWS OFFERING MEMORANDUM 15
PROPOSED FINANCING POTENTIAL LOAN TERMS BANK LIFE INS CO Loan to Value 70% LTV 65% LTV Amortization 15-30 Years 25 Years Term 5-10 Years 7-10 Years Rate Range 4.75% - 5.50% 4.75% - 5.25% Recourse Full Full to Partial Holdbacks Leasing Fees None PROPOSED FINANCING Price $9,660,000 Down Payment $3,381,000 Loan To Value (LTV) 65% New Loan Amount $6,279,000 Interest Rate 4.60% Amortization 25 Debt Coverage Ratio 1.43 Current Net Operating Income $603,786 Annual Debt Service ($423,097) Cash Flow After Debt Service $180,689 PRICING SNAPSHOT Offering Price CAP Rate Net Operating Income Building Price/SF Loan quote provided by: Glenn Gioseffi Vice President Debt & Equity Finance ggioseffi@kiddermathews.com $9,660,000 6.25% $603,786 $143 LEVERAGED CASH ON CASH RETURN 5.34% Principal Reduction $137,130 Return with Principal Reduction $317,819 TOTAL RETURN ON EQUITY 9.40% KIDDER MATHEWS OFFERING MEMORANDUM 16
03 Tenant Profile
Tenant Profile VALUE VILLAGE Value Village, a Savers brand, is a for-profit, global thrift retailer offering great quality, gently used clothing, accessories and household goods. Their business model of purchasing, reselling and recycling gives communities a smart way to shop and keeps more than 700 million pounds of used goods from landfills each year. They also help more than 120 nonprofit organizations by paying them for donated goods, which supports their vital community programs and services. All in all, Value Village operates over 330 locations and have 20,000 employees in Canada, the United States, and Australia. Locations 330 Annual Revenue $1+ Billion KIDDER MATHEWS OFFERING MEMORANDUM 18
04 Location Overview Site Overview Demographics
SITE OVERVIEW FAIRBANKS SITE CHARACTERISTICS Large, level 1.83 acre parcel with frontage on Airport Way Easy access from a signalized intersection Site benefits from cross access and cross parking of adjacent retail properties Located just off Airport Way, a major east-west retail thoroughfare that leads from Fairbanks International Airport (PAFA) to Ladd Army Airfield (PAFB) KIDDER MATHEWS OFFERING MEMORANDUM 20
SITE OVERVIEW LYNNWOOD SITE CHARACTERISTICS Large, level 2.30 acre parcel with visibility from Pacific Highway Easy access from a signalized intersection Site benefits from cross access and cross parking of adjacent Walmart Property includes large pylon sign with high visibility to Highway 99 KIDDER MATHEWS OFFERING MEMORANDUM 21
SITE OVERVIEW PUYALLUP SITE CHARACTERISTICS Large, level 1.64 acre parcel with frontage on River Road Easy access from a signalized intersection Site benefits from cross access and cross parking of adjacent properties KIDDER MATHEWS OFFERING MEMORANDUM 22
DEMOGRAPHICS FAIRBANKS 5 MILES POPULATION 1 MILE 3 MILES 5 MILES 2017 5,364 31,247 48,986 3 MILES 2022 5,355 31,244 49,297 HOUSEHOLDS 1 MILE 1 MILE 3 MILES 5 MILES 2017 2,220 12,355 18,359 2022 2,215 12,316 18,429 $ AVERAGE HOUSEHOLD INCOME 1 MILE 3 MILES 5 MILES 2017 $70,688 $58,572 $63,488 VALUE VILLAGE FAIRBANKS 2022 $78,982 $66,039 $72,924 KIDDER MATHEWS OFFERING MEMORANDUM 23
DEMOGRAPHICS LYNNWOOD 5 MILES POPULATION 1 MILE 3 MILES 5 MILES 2017 21,781 125,453 293,890 3 MILES 2022 23,544 135,734 318,189 HOUSEHOLDS 1 MILE 3 MILES 5 MILES 2017 8,636 47,803 115,547 PUGET SOUND VALUE VILLAGE LYNNWOOD 1 MILE Martha Lake 2022 9,239 51,220 123,847 AVERAGE HOUSEHOLD INCOME Lynnwood $ 1 MILE 3 MILES 5 MILES 2017 $72,660 $84,839 $91,002 2022 $87,734 $104,986 $112,785 Edmonds 104 KIDDER MATHEWS OFFERING MEMORANDUM 24
DEMOGRAPHICS PUYALLUP POPULATION 1 MILE 3 MILES 5 MILES Tacoma 5 MILES Edgewood 2017 7,843 56,714 155,273 2022 8,440 60,917 166,659 3 MILES HOUSEHOLDS 1 MILE 3 MILES 5 MILES 2017 3,291 23,227 60,295 1 MILE Sumner 2022 3,496 24,644 63,915 $ AVERAGE HOUSEHOLD INCOME 1 MILE 3 MILES 5 MILES 2017 $69,569 $83,500 $80,539 2022 $83,480 $102,543 $100,274 VALUE VILLAGE PUYALLUP Puyallup KIDDER MATHEWS OFFERING MEMORANDUM 25
Contact Information Erik Swanson eswanson@kiddermathews.com 206.296.9628 Mike King mking@kiddermathews.com 206.296.9624 Pamela Throop pam@realtyalaska.com 907.456.6008 Kidder Mathews 601 Union Street, Suite 4720 Seattle, WA 98101 kiddermathews.com