Offering Memorandum PHARMACY Castro Valley, CA
NON- ENDORSEMENT AND DISCLAIMER NOTICE Confidentiality and Disclaimer 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 Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. 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. 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, PCB's or asbestos, the compliance with 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 Marketing Brochure 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â 2017 Marcus & Millichap. All rights reserved. Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. PHARMACY Castro Valley, CA ACT ID Y0380535
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.
PHARMACY CASTRO VALLEY, CA PHARMACY INVESTMENT OVERVIEW Marcus & Millichap is pleased to present for sale this approximately 30,343-square foot Pharmacy located in Castro Valley, California. The property is leased under a rare 25-year NNN lease with 16.6 years remaining and ten (10) five (5) year options to extend at fair market value. The lease includes a corporate guaranty from Caremark, a stable BBB+ rated company by Standard and Poor's. The property is located on Castro Valley Boulevard within 10 minutes of the Dublin/Pleasanton BART station. Traffic drivers within the immediate area include Castro Valley Library, TJ Maxx, Safeway, KFC, Wells Fargo Bank and Round Table Pizza. EXECUTIVE SUMMARY OFFERING SUMMARY Price $11,000,000 Net Operating Income $578,217 Capitalization Rate Current 5.26% Price / SF $362.52 Rent / SF $19.06 Lease Type NNN Gross Leasable Area 30,343 SF Year Built / Renovated 1962 / 2008 Lot Size 2.8 acre(s) INVESTMENT HIGHLIGHTS OFFERING SUMMARY 16.6 Years Remaining on NNN Lease is Investment Grade; BBB+ by Standard & Poor s Fair Market Value Rental Increases During Option Terms Strong Demographics - $90,228 Within a 5-Mile Radius Traffic Count: 23,800 CPD Absolutely No Landlord Responsibilities NOTES Tenant has a rent holiday from February 2032 to January 2034. 4 # 4
PHARMACY CASTRO VALLEY, CA PROPERTY SUMMARY OFFERING SUMMARY NOTES Tenant has a rent holiday from February 2032 to January 2034. # 5
PROPERTY PHARMACY PHARMACY NAME CASTRO VALLEY, CA PRICING AND TENANT VALUATION SUMMARY MATRIX Health Corporation (NYSE: ) operates retail pharmacy and pharmacy benefit management businesses in the United States. The company offers prescription drugs, general merchandise, including over the counter drugs, beauty products and cosmetics, seasonal merchandise, greeting cards, convenience foods, and film and photofinishing services. It sells its products through or Pharmacy retail stores, as well as through online retail website.com. The company also offers pharmacy benefit management services, including mail order pharmacy, specialty pharmacy, plan, design, and administration, formulary management, and claims processing services. As of December 31, 2015, it operated over 9,600 retail drugstores, 1,100+ health care clinics, 33 on-site pharmacies, 24 retail specialty pharmacy stores, 11 specialty mail order pharmacies, 5 mail service dispensing pharmacies, and 83 branches, as well as 6 centers of excellence for infusion and internal services. The company was formerly known as Caremark Corporation and changed its name to Health Corporation in September 2014. Health Corporation was founded in 1892 and is headquartered in Woonsocket, Rhode Island. On December 31, 2015, Health Corporation reported total revenue of $153.29 billion, net income of $5.23 billion, and a net worth in excess of $37.19 billion. currently holds a Standard & Poor s credit rating of BBB+/ Stable. No. of Locations: Credit Rating: Stock Symbol: Total Revenue: Net Worth: Ownership: Headquarters: Website: 9,900+ BBB+ $153 Billion (2015) $37.2 Billion (2015) Public Woonsocket, Rhode Island www.cvs.com # 6
PROPERTY PHARMACY PHARMACY NAME CASTRO VALLEY, CA 3667 Castro Valley Blvd, Castro Valley, CA 94546 PRICING REGIONAL AND LOCATION VALUATION TENANT AND LOCAL SUMMARY OVERVIEW MATRIX MAP # 7
PHARMACY CASTRO VALLEY, CA AERIAL PHOTO 8
PHARMACY - CASTRO VALLEY, CA 8 COMPARABLES MAP PHARMACY - CASTRO VALLEY, CA (SUBJECT) 1 2 3 4 - NN Lease SALES COMPARABLES 9
PHARMACY - CASTRO VALLEY, CA PROPERTY NAME MARKETING COMPARABLES TEAM SALES COMPARABLES PHARMACY - CASTRO VALLEY, CA 3667 CASTRO VALLEY BLVD, CASTRO VALLEY, CA, 94546 - NN LEASE 5200 UNIVERSITY PKWY, SAN BERNARDINO, CA, 92407 1 135 PIERCE ST, DALY CITY, CA, 94015 2 rentpropertyname1 rentpropertyname1 rentpropertyname1 SUBJECT PROPERTY Asking Price $11,000,000 Price/SF $362.52 CAP Rate 5.26% GLA 30,343 SF Year Built 1962 Lease Term Remaining 16.6 Years Close Of Escrow 6/21/2016 Days On Market 661 Sales Price $6,576,500 Price/SF $431.22 CAP Rate 5.65% GLA 15,251 SF Year Built 2002 Close Of Escrow 9/27/2016 Sales Price $7,671,000 Price/SF $529.03 CAP Rate 5.63% GLA 14,500 SF Year Built 2013 Lease Term Remaining 23 Years rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 10
PHARMACY - CASTRO VALLEY, CA PROPERTY NAME MARKETING COMPARABLES TEAM SALES COMPARABLES 4501 W SLAUSON AVE, LOS ANGELES, CA, 90043 3 26059 MISSION BLVD, HAYWARD, CA, 94544 4 rentpropertyname1 rentpropertyname1 rentpropertyname1 Close Of Escrow 2/28/2017 Days On Market 35 Sales Price $7,550,000 Price/SF $461.32 CAP Rate 4.64% GLA 16,366 SF Year Built 2002 Close Of Escrow 8/25/2016 Days On Market 255 Sales Price $8,670,000 Price/SF $597.93 CAP Rate 4.80% GLA 14,500 SF Year Built 2015 rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 11
PHARMACY CASTRO VALLEY, CA PROPERTY NAME Created on June 2017 POPULATION 1 Miles 3 Miles 5 Miles 2021 Projection Total Population 27,770 164,586 347,104 2016 Estimate Total Population 27,636 162,139 342,261 2010 Census Total Population 26,151 149,963 317,944 2000 Census Total Population 26,171 146,898 308,955 Current Daytime Population 2016 Estimate 25,101 112,230 267,708 HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2021 Projection Total Households 10,712 57,279 115,922 2016 Estimate Total Households 10,675 56,428 114,282 Average (Mean) Household Size 2.47 2.78 2.88 2010 Census Total Households 10,047 52,607 107,267 2000 Census Total Households 10,371 52,579 107,658 Occupied Units 2021 Projection 10,712 57,279 115,922 2016 Estimate 10,731 56,946 115,126 HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2016 Estimate $150,000 or More 10.47% 11.32% 10.55% $100,000 - $149,000 16.38% 16.40% 17.30% $75,000 - $99,999 13.61% 13.45% 14.29% $50,000 - $74,999 18.22% 17.23% 17.46% $35,000 - $49,999 12.61% 12.73% 12.44% Under $35,000 26.78% 25.99% 25.49% Average Household Income $85,814 $92,477 $90,228 Median Household Income $63,628 $65,516 $66,679 Per Capita Income $33,588 $32,507 $30,410 MARKETING DEMOGRAPHICS TEAM HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles Total Average Household Retail Expenditure $70,143 $71,246 $71,977 Consumer Expenditure Top 10 Categories Housing $21,345 $21,685 $21,737 Shelter $14,261 $14,472 $14,484 Transportation $11,216 $11,729 $11,930 Food $7,436 $7,644 $7,725 Personal Insurance and Pensions $6,624 $6,980 $7,047 Health Care $4,285 $4,256 $4,343 Utilities $3,435 $3,505 $3,535 Entertainment $2,743 $2,754 $2,755 Cash Contributions $1,913 $1,814 $1,892 Apparel $1,770 $1,814 $1,821 POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age 2016 Estimate Total Population 27,636 162,139 342,261 Under 20 23.62% 25.31% 25.04% 20 to 34 Years 19.98% 22.29% 22.32% 35 to 39 Years 6.78% 6.99% 6.92% 40 to 49 Years 14.39% 13.79% 13.69% 50 to 64 Years 20.70% 19.70% 19.47% Age 65+ 14.53% 11.91% 12.56% Median Age 39.72 36.66 36.85 Population 25+ by Education Level 2016 Estimate Population Age 25+ 19,563 110,897 234,372 Elementary (0-8) 3.51% 7.03% 7.41% Some High School (9-11) 4.72% 7.16% 7.79% High School Graduate (12) 27.68% 25.98% 26.42% Some College (13-15) 25.21% 22.12% 21.91% Associate Degree Only 8.85% 7.95% 7.59% Bachelors Degree Only 19.99% 18.98% 19.01% Graduate Degree 8.20% 8.20% 7.23% Source: 2016 Experian 12
PHARMACY - CASTRO VALLEY, CA PROPERTY NAME MARKETING DEMOGRAPHICS TEAM Population In 2016, the population in your selected geography is 27,636. The population has changed by 5.60% since 2000. It is estimated that the population in your area will be 27,770.00 five years from now, which represents a change of 0.48% from the current year. The current population is 47.77% male and 52.23% female. The median age of the population in your area is 39.72, compare this to the US average which is 37.68. The population density in your area is 8,788.25 people per square mile. Race and Ethnicity The current year racial makeup of your selected area is as follows: 55.86% White, 8.20% Black, 1.05% Native American and 17.57% Asian/Pacific Islander. Compare these to US averages which are: 70.77% White, 12.80% Black, 0.19% Native American and 5.36% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 23.23% of the current year population in your selected area. Compare this to the US average of 17.65%. Households There are currently 10,675 households in your selected geography. The number of households has changed by 2.93% since 2000. It is estimated that the number of households in your area will be 10,712 five years from now, which represents a change of 0.35% from the current year. The average household size in your area is 2.47 persons. Housing The median housing value in your area was $463,290 in 2016, compare this to the US average of $187,181. In 2000, there were 5,246 owner occupied housing units in your area and there were 5,125 renter occupied housing units in your area. The median rent at the time was $889. Income In 2016, the median household income for your selected geography is $63,628, compare this to the US average which is currently $54,505. The median household income for your area has changed by 21.05% since 2000. It is estimated that the median household income in your area will be $75,045 five years from now, which represents a change of 17.94% from the current year. Employment In 2016, there are 8,198 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 65.59% of employees are employed in white-collar occupations in this geography, and 34.55% are employed in blue-collar occupations. In 2016, unemployment in this area is 6.42%. In 2000, the average time traveled to work was 32.00 minutes. The current year per capita income in your area is $33,588, compare this to the US average, which is $29,962. The current year average household income in your area is $85,814, compare this to the US average which is $78,425. Source: 2016 Experian 13