SINGLE-TENANT INVESTMENT Offering Memorandum SEC Highway 95 & Ramar Road Bullhead City, AZ 3020 E Camelback Rd, Ste 215 Phoenix, AZ 85016 P (602) 957-9800 F (602) 957-0889
Confidentiality Statement This Confidential Offering Memorandum has been prepared by Phoenix Commercial Advisors (PCA) for use by a limited number of parties whose sole purpose is to evaluate the possible purchase of the subject property. This Memorandum 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. The information contained in this Memorandum has been obtained from sources we believe to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used, are for example only, and do not represent the current or future performance of the property. The value of this transaction to you depends on taxes and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine, to your satisfaction, the suitability of the property for your needs. All potential buyers must take appropriate measures to verify all of the information set forth herein. Both Phoenix Commercial Advisors (PCA) and the Owner disclaim any responsibility for inaccuracies and expect prospective purchasers to exercise independent due diligence in verifying all such information. The contained information is subject to change at any time and without notice. The recipient of the Memorandum shall not look to the Owner or Phoenix Commercial Advisors (PCA) for the accuracy or completeness of this Memorandum. SENIOR INVESTMENT ADVISOR Chad Tiedeman (602) 288-3472 ctiedeman@pcaemail.com A prospective purchaser must make its own independent investigations, projections, and conclusions regarding the acquisition of the property without reliance on this Memorandum or any other Confidential Information, written or verbal, from the Broker or the Seller. The Owner expressly reserves the right, at its sole discretion, to reject any offer to purchase the property or to terminate any negotiations with any party, at any time, with or without written notice. Only a fully-executed Real Estate Purchase Agreement, approved by Seller, shall bind the property. Each prospective purchaser and/or broker proceeds at its own risk. All property showings are by appointment only. The information included in this complete investment package has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only, and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.
Table of Contents INVESTMENT SUMMARY 4 Investment Highlights Site Plan Lease Summaries Tenant Overview PROPERTY OVERVIEW 8 Location Highlights Exterior Photos Interior Photos AREA OVERVIEW 11 Aerials Surrounding Tenants City Profile Demographics CONTACT 16
Investment Summary Investment Highlights 4 INVESTMENT PROPERTY This Buffalo Wild Wings offering, located at 2040 Highway 95 in Bullhead City, Arizona, represents an opportunity to acquire a newly constructed ±6,121 SF single tenant building on a long-term 21-year lease. The subject property is strategically located on a dense retail arterial of Bullhead City, including a high-quality tenant mix consisting of regionally and nationally recognized tenants such as as Lowe s, Kmart, Office Max, JCPenney, JoAnn Fabrics, Bealls Outlet, Big Lots and Sears. This investment offers an investor the exceptional opportunity to purchase an ideal property with one of the nation s most flourishing and fastest-growing restaurant chains. INVESTMENT OVERVIEW Offering Price $3,020,000 INVESTMENT HIGHLIGHTS Stable Cash Flow Nationally recognized tenant on a 21-year, NNN lease ending in 2028 with four (4) five (5) year options to extend. Increases of 8% every 4 years throughout the lease term provide strong rent growth. Buffalo Wild Wings is the 8th largest casual dining chain in the United States with over 835 locations in 48 States. Successful Franchisee operates multiple Buffalo Wild Wings restaurants in Arizona and is recognized with 20+ years of experience in the restaurant business. Cap Rate 9.72% Ideal 1031 Exchange Property Building Size Land Size Lease Type Initial Lease Term Annual Increases Renewal Options ±6,121 SF ±2.36 AC NNN 21 Years 8% every 4 years Four (4) Five (5) Yr Options The subject property is located at a dominant intersection in the city off Highway 95. The immediate highway access and visibility makes this the prime location for Bullhead City residents and tourists. The property location is found on the main retail arterial of Bullhead City with a desirable tenant blend of regionally and nationally recognized tenants. Tourism is a primary activity through Bullhead City. Laughlin, NV receives ±3 million visitors per year and Lake Mead ±9 million per year. Free and clear of existing debt. Net Operating Income $293,544 Year Over Year Sales Up 10%
Investment Summary Site Plan 5 Not drawn to scale
Investment Summary Lease Summaries 6 LEASE SUMMARIES Tenant Guarantor DBA, Buffalo Wild Wings Grill & Bar Chris N. Miller RENTAL RATE Period Monthly Annual Lease Yrs 2-5 $22,650.00 $271,800.00 Lease Yrs 6-9 $24,462.00 $293,544.00 Lease Yrs 10-13 $26,418.96 $317,027.52 Date of Lease May 15, 2007 Lease Yrs 14-17 $28,532.48 $342,389.72 Lease Yrs 18-21 $30,815.07 $369,780.90 Approx. Rent Commencement Lease Expiration Renewal Options Dec. 7, 2007 Twenty-One (21) years after rent commencement Four (4) five (5) year extension periods Lease Yrs 22-26* $33,280.28 $399,363.37 Lease Yrs 27-31* $35,942.70 $431,312.43 Lease Yrs 32-36* $38,818.12 $465,817.42 Lease Yrs 37-41* $41,923.57 $503,082.81 *Provided Tenant has exercised the applicable Renewal Option in accordance with the lease. Operation Restaurant Grill & Bar Zoning C2-D9 About the Franchisee Expenses 20+ years in the restaurant business. Currently operates (4) four Buffalo Wild Wings restaurants in the State of Arizona. Tenant shall pay all expenses related to the operation, maintenance, and repair of the Premises including, but not limited to, taxes, assessments, insurance costs and any costs or expenses imposed under any Premises Encumbrances.
Investment Summary Tenant Overview 7 ABOUT BUFFALO WILD WINGS www.buffalowildwings.com Buffalo Wild Wings Grill & Bar is one of the Top 10 Fastest-Growing Restaurant Chains in the country and is currently traded on the Nasdaq stock exchange under the symbol BWLD. The chain also ranks as the 8th largest Casual Dining chain based on number of locations. Buffalo Wild Wings is a sports bar and casual dining restaurant, with a sports and entertainment theme featuring multiple satellite feeds as well as several big-screen, flat-screen, and high-definition televisions for sports and entertainment viewing. They offer a full menu featuring everything from salads and appetizers to burgers and specialty wings. The atmosphere is enjoyable for all ages where people like to relax with friends, play trivia on the Buzztime Trivia System and watch their favorite games on one of the many big-screen TV s. Buffalo Wild Wings Grill & Bar, (or B-Dubs ), is a fun, high-energy, and easygoing restaurant much like the personality of their customers. Today, there are currently over 835 restaurants in 48 states and growing (there are 13 locations in Arizona). A modified wait-style service allows for affordable, made-to-order food with a focus on Buffalo, New York-style chicken wings. The food can be enjoyed in the restaurant or at home through takeout. The franchise is designed to generate revenue from additional sources as well, including a full-service bar, designed to appeal to thirsty customers. Buffalo Wild Wings, Inc. Announces Third Quarter 2012 Results Total revenue increased 24.8% to $246.9 million in the third quarter compared to $197.8 million in the third quarter of 2011. Company-owned restaurant sales for the quarter increased 26.2% over the same period in 2011, to $228.4 million, driven by a company-owned same-store sales increase of 6.2% and 55 additional company-owned restaurants at the end of third quarter 2012 relative to the same period in 2011. Franchise royalties and fees increased 10.2% to $18.4 million for the quarter versus $16.7 million in the third quarter of 2011. This increase is attributed to a franchise same-store sales increase of 5.8% and 13 additional franchised restaurants at the end of the period versus a year ago. Fiscal Years Ended (1) (in thousands) 30-DEC 30-DEC 30-DEC 30-DEC 2008 2009 2010 2011 Restaurant Sales $379,686 $488,702 $555,184 $717,395 Franchising & Royalty Fees $42,731 $50,222 $58,072 $67,083 Total Revenue $422,417 $538,924 $613,256 $784,478 (2011 10K Report) Total revenue increased 24.8% to $246.9 million Company-owned restaurant sales grew 26.2% to $228.4 million Same-store sales increased 6.2% at company-owned restaurants and 5.8% at franchised restaurants Net earnings decreased 5.0% to $10.7 million from $11.3 million, and earnings per diluted share decreased 6.6% to $0.57 from $0.61
Property Overview Location Highlights 8 The subject property is located in Bullhead City, in Mohave County, Arizona; directly across the Colorado River from Laughlin, Nevada and only 100 miles south of Las Vegas, Nevada. Arizona is one of the nation s fastest-growing states, growing 20.2% since the year 2000. Mohave County, in which Bullhead City is located, has grown over 29% since the year 2000. The estimated active population within a 5-mile radius of the subject property is ±33,902 residents; Mohave County with ±200,186 residents in 2010, and the state of Arizona with ±6,482,505 residents in 2011. LAS VEGAS Tourism is a primary economic activity, centering on the Laughlin resort/gaming industry. Laughlin is home to 11 casinos/resort hotels with over 10,000 rooms, and more than 6 million visitors on average per year. The Colorado River and Lake Mead National Recreation Area (including Lake Mohave) offer area visitors year-round, water-related recreation. The 67-mile long Lake Mohave is the gateway to the Lake Mead Recreation Area; which receives about 9 million visitors per year. The Buffalo Wild Wings property is located in a successful retail location off of Highway 95. The Highway 95 traffic includes residents as well as visitors to Laughlin, Las Vegas, and the surrounding lakes. BULLHEAD CITY The subject property is ±2 miles from Mohave Crossroads, a ±46 acre retail development including national tenants such as: Target, Kohl s, Marshalls, Ross, Bed Bath & Beyond, Staples, and Petsmart. There is also a Phase II, ±40 acre development proposed to the west of Mohave Crossroads.
Property Overview Exterior Photos 9
Property Overview Interior Photos 10 *SOME PHOTOS NOT OF ACTUAL LOCATION
Area Overview Surrounding Retailers 13
Area Overview City Profile 14 BULLHEAD CITY, AZ Bullhead City is a rapidly growing community in the northwest of Arizona. The community serves as the economic hub and retail shopping center for Western Mohave County and Southeastern Clark County, Nevada. Each year, more than five million people travel through Bullhead City to enjoy the wonderful weather and great community atmosphere. Bullhead City is located across the Colorado River from one of the nation s most popular gaming communities: Laughlin, Nevada as well as a mere 90 minutes from Las Vegas, Nevada. On average, Bullhead City/Laughlin attracts more than 6 million visitors each year. With over 11 casino/resort hotels, Laughlin employs ±15,000 people, most of whom make their home in Bullhead City. On the Arizona side, more than 2,000 businesses employ approximately 7,500 residents. The year-round sunshine makes Bullhead City perfect for families, retirees and vacationers. Laughlin, Nevada Lake Mohave is a lake formed by Davis Dam on the Colorado River, which defines the border between Nevada and Arizona in the United States. The lake lies at an elevation of 647 feet (197 m) near Laughlin, Nevada and Bullhead City, AZ, about 67 miles (108 km) downstream from Hoover Dam. The lake and adjacent lands forming its shoreline are part of the Lake Mead National Recreation Area administered by the U.S. National Park Service. Lake Mead is the largest man-made lake and reservoir in the United States. It is located about 30 miles (48 km) southeast of Las Vegas, Nevada, in the states of Nevada and Arizona. Lake Mead receives over 9 million visitors per year due to the great year-round weather. Bullhead City/Lake Mohave Lake Mead
Area Overview Demographics 15 DEMOGRAPHIC PROFILE EXPANDED 2000-2010 Census, 2012 Estimates with 2017 Projections January 2013 1 mi radius 3 mi radius 5 mi radius Population Estimated Population (2012) 6,763 25,867 33,876 Projected Population (2017) 6,912 26,440 34,629 Forecasted Population (2022) 6,919 26,466 34,663 Census Population (2010) 6,695 25,611 33,538 Census Population (2000) 6,631 24,163 29,897 Households Estimated Households (2012) 2,890 10,930 14,523 Projected Households (2017) 3,119 11,795 15,673 Forecasted Households (2022) 3,128 11,830 15,719 Census Households (2010) 2,792 10,555 14,026 Census Households (2000) 2,712 9,792 12,262 Estimated Households with Children (2012) 554 2,712 3,429 Estimated Average Household Size (2012) 2.33 2.36 2.32 Average Household Income Estimated Average Household Income (2012) $57,561 $49,731 $48,970 Projected Average Household Income (2017) $60,511 $52,818 $52,464 Estimated Average Family Income (2012) $68,887 $56,123 $55,748 Median Household Income Estimated Median Household Income (2012) $40,739 $36,567 $37,213 Projected Median Household Income (2017) $44,899 $40,300 $40,943 Estimated Median Family Income (2012) $46,342 $42,586 $43,926 Daytime Demos Total Businesses 480 1,084 1,513 Total Employees 3,121 7,962 11,491 Employee Population per Business 6.5 7.3 7.6 Residential Population per Business 14.1 23.9 22.4 Lat/Lon: 35.1157/-114.5987 HWY 95 & RAMAR RD BULLHEAD CITY, AZ 2013, Sites USA, Chandler, Arizona, 480-491-1112. Demographic Source: Applied Geographic Solutions 06/2012. TIGER Geography. This report was produced using data from private and government sources deemed to be reliable. The information herein is provided without representation or warranty.
For Further Information, Contact: CHAD TIEDEMAN (602) 288-3472 ctiedeman@pcaemail.com BUFFALO WILD WINGS SEC Highway 95 & Ramar Road Bullhead City, Arizona 3020 East Camelback Road, Suite 215 Phoenix, Arizona 85016 P. 602-957-9800 F. 602-957-0889 www.phoenixcommercialadvisors.com