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Candace Bare Senior Associate LAS VEGAS OFFICE Tel: (702) 215-7125 Fax: (702) 215-7110 Candace.Bare@marcusmillichap.com License: NV S.0171556 Ray Germain First Vice President Investments LAS VEGAS OFFICE Tel: (702) 215-7153 Fax: (702) 215-7110 Ray.Germain@marcusmillichap.com License: NV S.0168487 Cody Cannon Broker of Record ONTARIO, CA OFFICE Tel: (909) 456-3400
4 6 10 11 EXECUTIVE SUMMARY OFFERING SUMMARY INVESTMENT OVERVIEW INVESTMENT HIGHLIGHTS TENANT PROFILE PROPERTY DESCRIPTION AERIAL PHOTOS SITE PLAN LOCAL MAP FINANCIAL ANALYSIS PRICING & FINANCIAL SUMMARY LEASE SUMMARY AREA OVERVIEW DEMOGRAPHICS
EXECUTIVE SUMMARY TRACTOR SUPPLY COMPANY 480 North Mill Street Tehachapi, CA 93561 OFFERING SUMMARY Offering Price $5,140,000 Gross Leasable Area (GLA) 19,031 SF Price/SF (GLA) $270.09 Year Built 2014 LEASE SUMMARY Property Subtype Net Leased Dry Goods Tenant Rent Increases Guarantor Lease Type Tractor Supply Co. 10% Every Five Years Corporate Guarantee NN Rent Commencement 5/24/2014 Lease Expiration 5/31/2029 Lease Term 15 Term Remaining on Lease (Yrs) 12 Renewal Options Landlord Responsibility Tenant Responsibility Right of First Refusal/Offer Four 5-Year Options Roof & Structure, Elements of Paved Areas + Commercial General Liability Insurance Taxes, Insurance, Maintenance Yes - 30 Day Notice INVESTMENT OVERVIEW Marcus & Millichap is pleased to present this exclusive investment opportunity for the fee simple interest in an outstanding net leased Tractor Supply Company in the agricultural community of Tehachapi, California. New build-to-suit construction in 2014, the initial term of the corporately guaranteed, 15 Year lease expires March of 2029 and features four, five-year options thereafter. The lease provides for 10% rental increases every five years, including the option periods. The next rental increase is effective in April 2019. Tehachapi is considered the jewel of Kern County and is conveniently located with easy access to many larger markets, major transportation hubs and expanding industry. Tehachapi is home to a highly-educated workforce and is located just a few miles from the nation s largest windfarm, the only spaceport, and several major solar projects. Tehachapi is also the 10th fastest growing retail market in the State of California. The Subject Tractor Supply is able to draw business not only from Tehachapi residents but also from the many smaller farming communities surrounding the location. The Great Central Valley Farming Region is one of the most productive regions on Earth.
INVESTMENT HIGHLIGHTS TSCO: NASDAQ & S&P 500 Company $7.4 Billion Market Cap 1,700 Stores in 49 States 10% Rental Increase in May 2019 Tractor Supply Company: Annual Sales of $6.8 Billion in 2016 Corporately Guaranteed 15+ Year Lease With 10% Increases Every Five Years Adjacent to Highway 58 With 30,000 AADT Excellent Investment Yield On A Risk-Adjusted Basis Superior Credit Tenant: Impeccable Financials and Minimal Outstanding Debt
TENANT PROFILE Tractor Supply Company is the largest operator of rural lifestyle retail stores in the United States. Founded in 1938 as a mail order tractor parts business, Tractor Supply Company (also referred to as TSC) owns and operates over 1,600 stores in 49 states supplying basic maintenance products to home, land, pet and animal owners. Based in Brentwood, Tenn., Tractor Supply is a public company whose stock is traded on The NASDAQ National Market under the symbol TSCO. Tractor Supply Company appeals to a niche market of farmers, horse owners, ranchers, part-time and hobby farmers, and suburban and rural homeowners, as well as contractors and tradesmen. TSC stores are located primarily in towns outlying major metropolitan areas and in rural areas. What can you buy at Tractor Supply Company? Everything except tractors. At TSC, customers find everything they need to maintain their farms, ranches, homes and animals. As the inventors of the do it yourself trend, our customers handle practically every chore themselves, from repairing wells to building fences, welding gates together, constructing feed bins, taking care of livestock and pets, repairing tractors and trucks and building trailers for hauling. TSC s products include: clothing, equine and pet supplies, tractor/trailer parts and accessories, lawn and garden supplies, sprinkler/irrigation parts, power tools, fencing, welding and pump supplies, riding mowers and more. In 2016, Tractor Supply Company announced the acquisition of Petsense, a growth-oriented pet specialty retailer with 136 stores.this strategy marked an important expansion to embrace their share of the $60 billion pet industry market.
PROPERTY
SITE PLAN OUTDOOR SALES 15,000 SF 19,031 SF INDUSTRIAL PKWY DISPLAY AREA SIGN N. MILL ST
SURROUNDING RETAILERS - SOUTHWEST FACING
AERIAL - EAST FACING
FINANCIAL SUMMARY PURCHASE PRICE: $5,140,000 LEASE SUMMARY Tenant Guarantor Credit Rating Tractor Supply Company Corporate Guarantee Not Rated (Minimal Debt) Rent Commencement May 24, 2014 Initial Lease Term Options Lease Type Base Rent Rent Increases Next Rent Increase 15 Years Four 5-year Options Each with 10% Increase NN Please Inquire 10% Every 5 Years May 2019-10% Increase PROPOSED FINANCING New Acquisition Financing $3,341,000 Loan to Value 65.00% Interest Rate 4.30% Amortization Period 25 Loan Constant 6.53% Annual Debt Service Payment $218,318 Year 1 Debt Service Coverage 1.26 Year 1 Debt Yeild 8.23% Year 1 Net Cash Flow After Debt Service $56,682 FINANCING QUOTE PROVIDED BY: NICK GRAY (MMCC) NICK.GRAY@MARCUSMILLICHAP.COM 702.215.7144
DEMOGRAPHICS TRACTOR SUPPLY COMPANY POPULATION 5 Miles 10 Miles 15 Miles 2021 Projection 2016 Estimate 2010 Census 2000 Census 21,993 20,344 19,160 15,665 32,116 30,072 29,103 22,165 40,388 37,567 35,768 27,969 INCOME Average Median Per Capita $68,589 $54,150 $25,415 $73,394 $56,998 $26,052 $78,102 $60,234 $28,532 HOUSEHOLDS 2021 Projection 2016 Estimate 2010 Census 2000 Census 8,199 7,529 7,017 5,530 10,285 9,376 8,632 6,382 13,760 12,504 11,388 8,650 HOUSING 2016 $201,701 $215,161 $235,171 EMPLOYMENT 2016 Daytime Population 2016 Unemployment 2016 Median Time Traveled 21,039 5.27% 28 25,749 4.88% 30 30,499 4.68% 31 RACE & ETHNICITY White Native American African American Asian/Pacific Islander 78.14% 0.13% 1.48% 1.93% 74.77% 0.15% 4.46% 1.61% 77.88% 0.14% 3.80% 1.54%
Exclusively listed by: OFFICES NATIONWIDE www.marcusmillichap.com Candace Bare Senior Associate LAS VEGAS OFFICE Tel: (702) 215-7125 Fax: (702) 215-7110 Candace.Bare@marcusmillichap.com License: NV S.0171556 Ray Germain First Vice President Investments LAS VEGAS OFFICE Tel: (702) 215-7153 Fax: (702) 215-7110 Ray.Germain@marcusmillichap.com License: NV S.0168487