Offering Memorandum Jellico Square 2310 W Southlake Blvd Southlake, Texas Dallas-Fort Worth MSA Avg HH Income: $192,000+ (1 Mile) New Leases
Confidentiality and Restricted Use Agreement This Confidential Offering Memorandum ( COM ) is provided by Stan Johnson Company ( SJC ), solely for your consideration of the opportunity to acquire the commercial property described herein (the Property ). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC. This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. 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. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC. The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title. BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the Information ), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief. Offered Exclusively by Ryan Butler Senior Director rbutler@stanjohnsonco.com Brad Moulder Director bmoulder@stanjohnsonco.com Anne Perrault Associate Director aperrault@stanjohnsonco.com Kaleb Rupp Associate krupp@stanjohnsonco.com Adrian Reents Analyst areents@stanjohnsonco.com In Association With: Brett Butler TX Lic # 558227 Stan Johnson Company 6120 South Yale Avenue Suite 300 Tulsa, Oklahoma 74136 P: 918.494.2690 stanjohnsonco.com
Purchase Price: $2,771,667 Cap Rate: 6.00% The Offering Investment Highlights Stan Johnson Company is pleased to present to qualified investors the opportunity to acquire a 3-Tenant Outparcel to Jellico Square located in Southlake, TX. Leased to a trio of tenants Chipotle, Verts and Smoker's Dream this fully-stabilized asset leverages an extremely appealing tenant mix and premier retail location within the Dallas MSA. Chipotle and Verts have each executed a new 10-year lease with scheduled rent increases. Smoker's Dream will operate under a 7-year lease term with annual rent increases after year 2. All three tenants have 2, 5-year renewal options. This attractive, high-quality new construction building measures 5,600 SF and is situated on a 0.85-acre outparcel to Jellico Square. Jellico Square is a fully-leased Sprouts-anchored center at the signalized intersection of Southlake Boulevard and Randol Mill Avenue. A strong tenant mix includes Chase Bank, The Little Gym and Massage Envy. Access to the Property is facilitated by the ingress/egress points on Southlake Boulevard (47,756 VPD) and Randol Mill Avenue (30,122 VPD). An affluent suburb of Dallas, tenants of Jellico Square benefit from Southlake s tremendous demographics and sustained population growth. Average household incomes exceeding $190,000 within a 1-mile radius of the Property, combined with population counts of more than 50,000 at 3 miles and 160,000 at 5 miles, suggest strong long-term commercial viability. Excellent Tenant Mix, Fully Stabilized Asset is 100% leased to Chipotle, Verts and Smoker's Dream each brand with strong appeal to affluent Dallas-area consumers. New Leases with Rent Increases Chipotle and Verts have executed 10- year lease terms, and Smoker's Dream has inked a 7-year deal. All three leases provide for rental increases. High Quality New Construction 5,600 SF masonry building features attractive architecture and is situated on 0.86 acres. Outpad to Sprouts This heavily-trafficked Sprouts-anchored center is fully leased to tenants including Chase Bank and The Little Gym. Exclusive Dallas Enclave Southlake is characterized by an affluent population and robust growth. Average household incomes within 1 mile of the Property exceed $190,000, and population counts at 3 miles and 5 miles exceed 50,000 and 160,000, respectively. Income Tax-Free Investment Texas does not charge a state-level tax on personal income. Premier Retail Corridor The Property is positioned at the signalized intersection with a combined 77,878 VPD. Other retailers located at this intersection include Walmart Neighborhood Market, Hobby Lobby, Sprouts Farmers Market, Wendy's, Shell and Chase Bank. Jellico Square Southlake, Texas 3
Lease Overview Address Price $2,771,667 Cap Rate 6.00% Tenants Rentable Area Land Area Year Built 2015 Rent Commencement 2310 W Southlake Blvd Southlake, Texas Chipotle Verts Smoker's Dream +/- 5,600 SF +/- 0.86 Acres Varies Combined NOI $166,300 Parking Spaces 51 Expenses NN - Landlord is responsible for roof, parking, structure & administration of CAM. See Tenant Lease Abstracts for more information Subject Property Rent Schedule Tenant Guarantor SF Chipotle Verts Smoker's Dream Chipotle Mexican Grill, Inc. Dominik Stein and Michael Heyne Mohammad Salman Talbani and Saba Talbani Primary Term Commencement (Est.) NOI (Annual) NOI (Monthly) NOI/SF NOI Pro Rata Increases Options 2,200 10 4/16/2015 $64,900.00 $5,408.33 $29.50 39% 10% every 5 2, 5 year 2,000 10 3/1/2015 $65,000.00 $5,416.67 $32.50 36% 1,400 7 12/1/2016 $36,400.00* $3,033.33 $26.00 25% Total 5,600 $166,300.00 $13,858.33 100% 9% year 6; Market Rate in Options $350/year starting in year 2 Averages 9 $29.33 *The cap rate is being calculated from the stabilized Year 1 NOI of $36,400, which is estimated to occur in March 2017. Seller shall credit the buyer for the monthly rental difference at closing. 2, 5 year 2, 5 year Jellico Square Southlake, Texas 4
NOI Calculation Base Rent $166,300.00 CAM $14,000.00 Taxes $41,500.00 Insurance $4,550.00 Management Fee $4,276.50 Total Income $230,626.50 Expenses CAM ($14,000.00) Taxes ($41,500.00) Insurance ($4,550.00) Management Fee ($4,276.50) Total Expenses ($64,326.50) Total NOI $166,300.00 Jellico Square Southlake, Texas 5
Lease Abstract Tenant Guarantor Rentable Area Verts Dominik Stein & Michael Heyne 2,000 SF (36% of total) Year Built 2015 Rent Commencement March 1, 2015 Current NOI/Base Rent $65,000 Expenses & Additional Rent Taxes Insurance Utilities HVAC Common Area Maintenance Management Fee Other Expenses Pro rata share, estimated at $7.00/SF/lease year. Reimbursement based on actual (uncapped). Pro rata share, estimated at $0.50/SF/lease year. Reimbursement based on actual (uncapped). Tenant Tenant Pro rata share, estimated at $2.75/SF/lease year, with any increases capped at 5% annually. Tenant shall pay as part of Common Area Maintenance charges a pro rata share of an administrative fee of 10% of the aggregate of all costs and expenses and liabilities (including without limitation, the reserve, insurance and real estate taxes) paid or incurred by the Landlord. Landlord to maintain the roof and structure. Tenant to maintain the HVAC. Rent Schedule Years NOI NOI/SF % Increase 1 to 5 $65,000.00 $32.50 n/a 6 to 10 $70,840.00 $35.42 9% 11 to 15 (Opt. 1) Market Rate TBD 16 to 20 (Opt. 2) Market Rate TBD Jellico Square Southlake, Texas 8 Representative Photos
Highlights 2015 Hot Concepts Winner Source: Nation's Restaurant News Verts Named 9th Fastest- Growing Fast Casual Restaurant Source: Restaurant Business Representative Photo Tenant Overview The concept formerly known as Verts Kebap shortened its name to just Verts and added the tagline Mediterranean Grill. It probably got tired of trying to explain the German-style variation on the Turkish street food. The concept still offers the doner kebap but updates include beef, lamb, chicken and falafel options, as well as wraps, rice bowls and salads topped assembly-style with fresh veggies and sauces. Watch for new menu variations as well as East Coast stores, as the concept recently hired a new executive chef and opened a test kitchen restaurant, thanks to a $20 million private investment. Verts is a fast-casual, German food restaurant in Texas.. Kebap is short for döner kebap, which translates loosely to spinning roasted meat and refers to the rotisserie meat that makes the kebap unique. The company started after Michael Heyne and Dominik Stein studied business together at the University of Texas at Austin. They opened the first location in Austin in 2011. Three years later, Verts served over 1 million kebaps, wraps & salads to customers all over Austin, Houston & Dallas. As of 2015, Verts had approximately 30 units, with plans to continue expanding the concept. The company looks to expand to the East Coast, seeking sites in Boston, New York and Washington, D.C. To keep things fresh and to support their communities, they source their ingredients and offerings locally whenever possible. Verts had 2015 sales of $22.3 million, reflecting a sales increase of 85.8%. source: Restaurant Business
Location Overview Southlake is an affluent suburban city located in Tarrant County in the state of Texas. It is located within the Dallas-Fort Worth metropolitan area. As of the 2015 the estimated population was 37,833. Southlake is known for public schools, Southlake Town Square, its wealth, and Carroll High School s 8-time state champion football team. Southlake Demographics February 2015 Population 27,833 (est.) Projected Build-out 34,118 Median Household Income $186,718 Average Home Sales Price $748,525 Source: City of Southlake Website Sabre Holdings, an S&P 500 company and owner of Travelocity, is headquartered in Southlake in the Solana business park. Industrial businesses include gasoline storage and distribution and concrete works on the east side of town off Highway 114 near DFW Airport. Southlake is approximately 27 miles northwest of Dallas. As the ninth-largest city and part of the fourth-largest metropolitan area in the nation, Dallas has a population of 1,257,676. The sophisticated city attracts worldwide travelers, making the area the No. 1 visitor and leisure destination in Texas. In 2013 the metropolitan area led the nation with the largest year-over-year increase in employment, and advanced to become the fourth-largest employment center in the nation. Southlake Town Square Dallas is centrally located and within a four-hour flight from most North American destinations. DFW International Airport is the world s fourth busiest airport, offering nearly 1,750 flights per day. In addition, Dallas Love Field Airport is conveniently located 10 minutes from downtown. Dallas also offers DART, one of the fastest-growing light rail systems in the nation, and the historic McKinney Avenue Trolley which runs through the Dallas Arts District. Southlake Town Hall
Subject Property Randol Mill Ave (30,122 VPD) Southlake Blvd (47,756 VPD) Peytonville Ave (5,192 VPD) Carroll Senior High School >1,200 Students Ranked among Newsweek's "Best High Schools in Nation"
Northwest Pkwy (95,449 VPD) Valquero Club Randol Mill Ave (30,122 VPD) Don T Durham Intermediate School Carroll High School Forest Park Medical Center Southlake Bicentennial Park Florence Elementary School Subject Property Southlake Blvd (47,756 VPD) Carroll Senior High School Sky Creek Ranch Golf Club DALLAS/FORT WORTH INTERNATIONAL AIRPORT
Average Household Income Subject Property 2016 Average Household Income $212,160 - $303,930 $143,469 - $212,159 $100,125 - $143,468 $65,348 - $100,124 $0 - $65,347 US National Average = $77,008
Subject Property Subject Property N Section 1 Walgreens North Myrtle Beach, SC 16
Demographics 2310 W Southlake Blvd Southlake, Texas 0-1 mi. 0-3 mi. 0-5 mi. Population 2010 Population 6,125 46,560 145,425 2016 Population 6,768 51,729 162,327 2021 Population 7,306 56,167 175,842 2010-2016 Annual Rate 1.61% 1.70% 1.77% 2016-2021 Annual Rate 1.54% 1.66% 1.61% Subject Property Households 2010 Households 1,899 15,109 49,808 2016 Total Households 2,094 16,718 55,105 2021 Total Households 2,256 18,114 59,452 2010-2016 Annual Rate 1.58% 1.63% 1.63% 2016-2021 Annual Rate 1.50% 1.62% 1.53% 2016 Race and Ethnicity White Alone 84.8% 87.0% 84.4% Black Alone 2.9% 2.6% 3.5% American Indian/Alaska Native Alone 0.2% 0.4% 0.5% Asian Alone 8.1% 6.0% 5.7% Pacific Islander Alone 0.1% 0.1% 0.1% Other Race 1.0% 1.4% 3.2% Two or More Races 2.9% 2.6% 2.7% Hispanic Origin (Any Race) 7.3% 7.3% 10.8% 2016 Average Household Income $192,824 $191,140 $152,218
Ryan Butler Senior Director rbutler@stanjohnsonco.com Brad Moulder Director bmoulder@stanjohnsonco.com going beyond Anne Perrault Associate Director aperrault@stanjohnsonco.com Kaleb Rupp Associate krupp@stanjohnsonco.com Adrian Reents Analyst areents@stanjohnsonco.com In Association With: Brett Butler TX Lic # 558227 Stan Johnson Company 6120 South Yale Avenue Suite 300 Tulsa, Oklahoma 74136 P: 918.494.2690 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 Jellico or conditions, Square Southlake, or withdrawal Texas 18 without notices.
Approved by the Texas Real Estate Commission for Voluntary Use Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords. Information About Brokerage Services efore working with a real estate broker, you should Bknow that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly. IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner s agent by entering into an agreement with the owner, usually through a written - listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner s agent anything the buyer would not want the owner to know because an owner s agent must disclose to the owner any material information known to the agent. IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer s agent anything the owner would not want the buyer to know because a buyer s agent must disclose to the buyer any material information known to the agent. IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction: (1) shall treat all parties honestly; (2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner; (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and (4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property. With the parties consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party. If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding. Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee s records. Buyer, Seller, Landlord or Tenant Date Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 or 512-465-3960. EQUAL HOUSING OPPORTUNITY 01A TREC No. OP-K