EXECUTIVE SUMMARY 2524 MACARTHUR RD WHITEHALL, PA 18052 PROMINENT POWER CENTER IN THE LEHIGH VALLEY VALUE-ADD RETAIL OPPORTUNITY
executive summary
executive summary The Offering Holliday Fenoglio Fowler, L.P. ( HFF ), is pleased to exclusively offer MacArthur Towne Centre (the Property ), a strategically located, 151,418 SF, 94.5% occupied power center. Anchored by American Signature Furniture, Jo- Ann Fabric, and 2nd & Charles (Books-A-Million), the Property is prominently located on the highly traversed MacArthur Road (44,000 VPD), the dominant retail corridor within the Lehigh Valley. The Lehigh Valley is currently one of the foremost growing economies in Pennsylvania with net new job growth of 7% from 2010-2014 and a 2015 GDP of $35.4 billion. With a current occupancy of 94.5% and a roster of anchor tenants paying well below market rental rates, MacArthur Towne Centre offers the opportunity for investors to acquire strategically positioned real estate with the ability to increase income significantly through re-merchandising and repositioning, in one of the most sought after markets in Pennsylvania. ANCHOR TENANTS LOCATION 2524-2590 MacArthur Road Whitehall, PA 18052 GROSS LEASABLE AREA 151,418 OCCUPANCY 94.5% SHADOW ANCHORS (NOT INCLUDED) Kmart, Lowe s LAND AREA 24.0 YEAR BUILT 1970 PARKING 792 Spaces 5.23 / 1,000 NOTABLE NATIONAL TENANTS DEBT Free & Clear RETAIL INVESTMENT OPPORTUNITY 3
Investment Highlights HIGH ANCHOR-TO-SHOP RATIO WITH A SUPPORTIVE NATIONAL TENANT ROSTER AND PROMINENT SHADOW ANCHORS MacArthur Towne Centre has a high concentration of anchor square footage, with its three largest anchors, American Signature Furniture, Jo-Ann Fabric, and 2nd & Charles (brand of Books-A-Million), accounting for over 65% of the Property s square footage. With the support of the nationally recognized brands of Party City, Aaron s and David s Bridal, the collective square footage of the anchors and junior anchors totals over 83%. The Property also shadow anchors and shares access from MacArthur Road with Lowe s and Kmart, two national retailers which drive significant traffic to the Property. executive summary MAJOR TENANT SUMMARY TENANT AREA % OF TOTAL BASE RENT EXPIRATION DATE American Signature Furniture 48,800 32.23% $6.00 Jan-21 Jo-Ann Fabric 31,000 20.47% $6.65 Sep-17 2nd & Charles 19,937 13.17% $8.00 Jan-20 Party City 10,000 6.60% $16.00 Jun-20 David s Bridal 9,000 5.94% $16.00 Apr-20 Aaron s 8,000 5.28% $12.00 Dec-18 Occupied Inline 16,381 10.82% TOTAL OCCUPIED 143,118 94.5% Available 8,300 5.48% Grand Total 151,418 100% Shadow Anchors Kmart, Lowe s PRIME OPPORTUNITY TO RE-MERCHANDISE THE PROPERTY, INCREASING RENTAL RATES, TENANCY, AND CREDIT PROFILE MacArthur Towne Centre offers an opportunity to mark-to-market the rental rates on the anchor spaces while simultaneously improving the credit profile of the Property. American Signature Furniture, Jo-Ann, and 2nd & Charles are currently paying well below the rental rates for comparable real estate with Class A corporate tenancy in the market, by a delta of $4.07/SF - $7.99/SF depending on the space. The current successful operations at the Property which is 94.5% occupied, and the previous tenancy of GIANT in the American Signature Space, before moving across the street to MacArthur Commons in 2002, speaks to the potential upside of the location and supreme fundamentals of the real estate. MARK-TO-MARKET ANCHOR RENTAL RATES $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 Mkt Primary Anchors $ $10.07 $4.07 DELTA $6.00 Mkt Co-Anchor $ $14.64 $7.99 DELTA $6.65 Mkt Co-Anchor $ $14.64 $6.64 DELTA $8.00 $0.00 4 POWER CENTER LEHIGH VALLEY, PA
executive summary WHITEHALL COPLAY MIDDLE SCHOOL Available Space PROPOSED 36,000 SF LIDL DEVELOPMENT AR MAC THUR ROAD SC MACARTHUR COMMONS HA DT AV EN UE The Property has an ideally positioned available IDEALLY POSITIONED AVAILABLE SPACE OFFERING AN IMMEDIATE LEASE-UP OPPORTUNITY space which is situated between two large operators in American Signature Furniture and Kmart. The availability has significant frontage, ample parking, and a steady flow of consumers from its location on the site plan. Investors will have the immediate opportunity to lease this space and improve income and cash returns. RETAIL INVESTMENT OPPORTUNITY 5
executive summary STRATEGIC POSITIONING ON A SUCCESSFUL RETAIL CORRIDOR THAT ATTRACTS THE MOST NOTABLE NAMES IN RETAIL MacArthur Road is the leading retail focal point throughout the Lehigh Valley Market and continues to garner interest from an impressive and extensive list of national tenants. Anchored by the Lehigh Valley Mall, where the full anchor tenant roster are strong performers, the stretch of MacArthur Road from Route 22 to Eberhart Road has zero available anchor space and continues to attract out-of-market tenants, while keeping the most prominent tenants in the market. Most notably, the area has seen a recent proposal from Lidl, a growing German discount supermarket, proposing a new development just 0.25 miles north of the Property on the corner of MacArthur Road and Eberhart Road. Furthermore, the Walmart just across the street recently upgraded its presence by developing a new Walmart Supercenter in 2012, increasing its square footage by nearly 70,000 square feet to 186,000 square feet. The location has also recently attracted Chik-Fil-A (not included), which is being developed at the main entrance to MacArthur Towne Centre. LEHIGH VALLEY MALL 22 22 WHITEHALL SQUARE WHITEHALL MALL SCHADT AVENUE MACARTHUR ROAD (Under construction, not included) (Upgraded to Supercenter in 2012) MACARTHUR COMMONS MULLIGAN S FAMILY GOLF CENTER PROPOSED 36,000 SF LIDL DEVELOPMENT 6 POWER CENTER LEHIGH VALLEY, PA
executive summary A FOREMOST PENNSYLVANIA ECONOMY WITH SIGNIFICANT JOB GROWTH AND POISED FOR FUTURE SUCCESS LIMITED CAPITAL EXPOSURE AND SUPERIOR REAL ESTATE FUNDAMENTALS Lehigh Valley is a leading economic marketplace with impressive 2015 GDP of over $35.4 billion, a Current ownership replaced the full roof systems in 2011 growth of $1 billion dollars over its 2014 GDP of $34.4 billion. From 2015-2020 the Lehigh Valley is (44,600 SF) and 2013 (115,500 SF). The replacements came expected to generate 22,150 jobs in addition to the 22,100 new jobs which were added between with 15-year warranties, and will limit the capital costs above 2010-2014. The Lehigh Valley has seen the highest percentage increase of post-recession job levels common maintenance over a new owner s hold period. of any area in the Pennsylvania. Additionally, downtown Allentown, just 3 miles south of the Property, The Property has been kept in optimal condition by current is undergoing a major development period through its tax incentive program, the Neighborhood ownership and out position competitors with multiple access Improvement Zone Program (NIZ), which has been responsible for over $1 billion in new development points on MacArthur Road, an impressive signage package, since its creation in 2011. and ample parking field for consumers. $35.4 Billion $1 Billion Lehigh Valley 2015 GDP Invested in Downtown Allentown Development since 2011 $1 Billion 7% Lehigh Valley GDP Growth 2014-2015 Net New Job Growth from 2010-2014 22,150 new jobs in the pipeline W AL NUT P OR T N A ZA RETH 248 611 B ATH 946 33 LAFAYETTE COLLEGE EASTON HOSPITAL EA STO N 476 248 22 78 611 309 33 LEHIGH VALLEY ZOO 378 TREXLER NATURE PRESERVE MORAVIAN COLLEGE WH I T E H A LL SACRED HEART HEALTHCARE SYSTEM 22 B E T H L EH EM PARK A LLE N T O WN MUHLENBERG COLLEGE GOOD SHEPARD REHAB HOSPITAL 78 78 100 ST. LUKE S HOSPITAL 946 LEHIGH VALLEY INTERNATIONAL AIRPORT LEHIGH UNIVERSITY H EL L ERTO WN LEHIGH VALLEY HOSPITAL 611 78 476 T REX L E R T OW N EMMAUS 378 309 OpenStreetMap contributors RETAIL INVESTMENT OPPORTUNITY 7
contacts INVESTMENT SALES CHRIS MUNLEY Managing Director T 484.532.4207 cmunley@hfflp.com KEVIN O HEARN Managing Director T 973.549.2018 kohearn@hfflp.com JOSE CRUZ Senior Managing Director T 973.549.2011 jcruz@hfflp.com MICHAEL DICOSIMO Senior Real Estate Analyst T 484.532.4169 mdicosimo@hfflp.com FINANCING NEIL CAMPBELL Associate Director T 484.532.4176 ncampbell@hfflp.com HFF Philadelphia 161 Washington Street, Suite 925 Conshohocken, PA 19428 hfflp.com 2016 Holliday Fenoglio Fowler, L.P. ( HFF ) a Pennsylvania licensed real estate broker. HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF. HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. 8 POWER CENTER LEHIGH VALLEY, PA