SINGLE TENANT INVESTMENT OPPORTUNITY RECENTLY EXTENDED LEASE CLEVELAND HEIGHTS, OHIO (CLEVELAND MSA)
BRITT RAYMOND FIRST VICE PRESIDENT SRS NATIONAL NET LEASE GROUP 366 Madison Avenue, 5th Floor New York, NY 10017 DL: 929.229.2614 M: 704.517.4712 Britt.Raymond@srsre.com NY License No. 10401234463 EXCLUSIVELY MARKETED BY KYLE FANT SENIOR ASSOCIATE SRS NATIONAL NET LEASE GROUP 366 Madison Avenue, 5th Floor New York, NY 10017 DL: 929.229.2613 M: 973.632.1386 Kyle.Fant@srsre.com NY License No. 10401281546 ALLY O NEILL ASSOCIATE SRS NATIONAL NET LEASE GROUP 366 Madison Avenue, 5th Floor New York, NY 10017 DL: 929.251.7734 M:516.426.1873 Ally.Oneill@srsre.com NY License No. 10401297691 This Offering Memorandum has been prepared by SRS National Net Lease Group (SRS) and has been approved for distribution by the owner. Although effort has been made to provide accurate information, neither the owner nor SRS can warrant or represent accuracy or completeness of the materials presented herein or in any other written or oral communications transmitted or made available to the purchaser. Many documents have been referred to in summary form and these summaries do not purport to represent or constitute a legal analysis of the contents of the applicable documents. Neither owner nor SRS represents that this offering summary is all inclusive or contains all of the information a purchaser may require. All of the financial projections and/or conclusions presented herein are provided strictly for reference purposes and have been developed based upon assumptions and conditions in effect at the time the evaluations were undertaken. They do not purport to reflect changes in the economic performance of the property or the business activities of the owner since the date of preparation of this Offering Memorandum. The projected economic performance of the property, competitive submarket conditions, and selected economic and demographic statistics may have changed subsequent to the preparation of the package. Qualified purchasers are urged to inspect the property and undertake their own independent evaluation of the property, the market and the surrounding competitive environment. Broker of Record: Mac Lehrer - OH License No. 2001013563
5 7 14 16 INVESTMENT SUMMARY INVESTMENT HIGHLIGHTS PROPERTY OVERVIEW PARCEL MAP AERIALS SITE PLAN LOCATION MAP AREA OVERVIEW CITY OVERVIEW DEMOGRAPHICS FINANCIALS RENT ROLL TENANT PROFILE
INVESTMENT SUMMARY SRS National Net Lease Group is pleased to present the rare opportunity to acquire the fee simple interest (land and building) in Walgreens, an NN leased, investment property with drive-thru located in Cleveland Heights, Ohio (Cleveland MSA). The tenant, Walgreens, has approximately 10 years remaining in the initial term, with 7 (5-year) options to extend. The lease is corporate guaranteed and is NN with minimal landlord responsibilities restricted to roof & structure. The subject site is located at the signalized, hard corner intersection of Harvard Avenue and Lee Road (combined 35,100 cars per day) with excellent visibility and access on a corner site. The subject location is located in a better position to serve the market in comparison to the neighboring Rite Aid. Walgreens is an outparcel to a Dave s Supermarket anchored center, and benefits from nearby national/credit tenants that include Payless Shoesource, Family Dollar, Dollar General, AutoZone, MetroPCS, and more, further increasing consumer traffic and crossover shopping to the trade area. The 5-mile trade area is supported by a dense population of 291,000 and over 261,000 employees with an average household income of $63,000. OFFERING PRICING: $5,992,000 NET OPERATING INCOME: $371,500 CAP RATE: 6.20% GUARANTY: Corporate CREDIT RATING: S&P: BBB LEASE TYPE: NN LANDLORD RESPONSIBILITIES: Roof & Structure PROPERTY SPECIFICATIONS RENTABLE AREA: LAND AREA: 14,490 SF 0.96 Acres PROPERTY ADDRESS: 4071 Lee Road, Cleveland, OH 44128 YEAR BUILT: 2002 PARCEL NUMBER: 141-10-001 OWNERSHIP: Fee Simple (Land and Building) 5 / WALGREENS / CLEVELAND, OHIO INVESTMENT SUMMARY / SRS NATIONAL NET LEASE GROUP
INVESTMENT HIGHLIGHTS RECENTLY EXTENDED LEASE 10 YEARS REMAINING INVESTMENT GRADE TENANT CORPORATE GUARANTEED 10 years remaining on initial term with 7 (5-year) options to extend Walgreens corporate guaranteed lease Tenant renewed the lease for 10 years prior to lease expiration The subject location is located in a better position to serve the market in comparison to the neighboring Rite Aid Invesment grade tenant (NYSE: WBA S&P: BBB) NN LEASE FEE SIMPLE OWNERSHIP MINIMAL LANDLORD RESPONSIBILITIES Tenant pays for CAM, insurance, taxes and parking Ideal, low management investment for an out-of-state, passive investor Minimal landlord responsibilities restricted to roof & structure SIGNALIZED HARD CORNER INTERSECTION EXCELLENT VISIBILITY AND ACCESS DRIVE-THRU EQUIPPED The subject site is located at the signalized, hard corner intersection of Harvard Avenue and Lee Road (combined 35,100 cars per day) The property has excellent visibility and access with multiple points of ingress/egress Drive-thru feature provides ease and convenience for customers OUTPARCEL TO GROCERY ANCHORED CENTER STRONG RETAIL CORRIDOR NEARBY NATIONAL/CREDIT TENANTS Walgreens is an outparcel to a Dave s Supermarket anchored center The property is located in a strong retail corridor with nearby national/credit tenants that include Payless Shoesource, Family Dollar, Dollar General, AutoZone, MetroPCS, and more Increases consumer traffic and crossover shopping to the trade area STRONG DEMOGRAPHICS IN DENSE 5-MILE TRADE AREA More than 291,000 residents and 261,000 employees support the trade area 6 / WALGREENS / CLEVELAND, OHIO INVESTMENT HIGHLIGHTS / SRS NATIONAL NET LEASE GROUP
PROPERTY OVERVIEW ACCESS There are three (3) access points with two (2) access points along Lee Road and one (1) along Harvard Avenue. TRAFFIC COUNTS Lee Road:...19,400 VPD Harvard Avenue:...15,700 VPD PARCEL Parcel Number: 141-10-001 Acres: 0.96 Square Feet: 42,035 SF ZONING SC (Shopping Center) IMPROVEMENTS There is approximately 14,490 SF of existing building area. PARKING There are approximately 77 parking spaces on the owned parcel. The parking ratio is approximately 5.31 stalls per 1,000 SF of leasable area. YEAR BUILT 2002 PARCEL MAP 7 / WALGREENS / CLEVELAND, OHIO PROPERTY OVERVIEW / SRS NATIONAL NET LEASE GROUP
19,400 CARS PER DAY 15,700 CARS PER DAY N
19,400 CARS PER DAY 15,700 CARS PER DAY N
LEE RD. HARVARD AVE. Monument Sign JOY OF MUSIC N
2016 ESTIMATED POPULATION 1 Mile... 17,414 3 Mile...126,683 5 Mile...291,379 2016 AVERAGE HOUSEHOLD INCOME 1 Mile...$47,623 3 Mile...$60,524 5 Mile...$63,311 CLEVELAND 2016 ESTIMATED TOTAL EMPLOYEES 1 Mile... 3,736 3 Mile... 82,724 5 Mile...261,854 N
AREA OVERVIEW OF CLEVELAND, OHIO Cleveland is located on the southern shore of Lake Erie and is the county seat of Cuyahoga County. The City is included in the Cleveland-Elyria, OH Metropolitan Statistical Area (MSA), comprised of Cuyahoga, Lake, Lorain, Geauga and Medina counties. This MSA is the 31st largest of 381 Metropolitan Areas in the United States and the second largest Metropolitan Area in the State of Ohio. The 2015 population of the city is 396,815. Cleveland is located in the northeast part of the state, approximately 150 miles north-east of Columbus. Bordering Lake Erie, Cleveland is home to world-renowned medical facilities, professional sports venues, a casino, Severance Hall, numerous lakefront parks, the Port of Cleveland, the Rock and Roll Hall of Fame and operates the nation s ninth largest water system. Interstate highways I-71, I-480, I-77 and I-90 serve as some of the City s major transportation arteries. The City s economic condition draws strength and stability from its evolving role as the focal point of a growing, changing and substantial regional economy. The City is located at the center of one of the nation s heaviest population concentrations. The Cleveland Metropolitan area is a significant local market, housing 2.1 million people. The City also provides superior links to the global markets. The Cleveland-Cuyahoga Port Authority handles the largest amount of overseas cargo on Lake Erie and includes a Foreign Trade Zone. The City is also well-served with extensive highways and Cleveland Hopkins International Airport is serviced by all major airlines. The re-emergence of downtown Cleveland as a vibrant center for national and regional entertainment and major cultural activities signals a turning point in the City s overall fortunes and is paving the way for further economic expansion that will be significantly more entrepreneurial in scope. Once a manufacturing center, Cleveland has since transitioned to a more service-based economy. The city s downtown area is home to University Circle, a concentration of cultural, educational, and medical institutions, including the Cleveland Botanical Garden, Case Western Reserve University, University Hospitals, Severance Hall, the Cleveland Museum of Art, the Cleveland Museum of Natural History, and the Western Reserve Historical Society. Cleveland is considered part of the Midwest, as well as what many refer to as the Great Lakes Region. Cleveland is also home to the I. M. Pei-designed Rock and Roll Hall of Fame, located on the Lake Erie waterfront at North Coast Harbor. Neighboring attractions include the Great Lakes Science Center, the Steamship Mather Museum, and the USS Cod, a World War II submarine. Sports fans in Cleveland can root for three major league teams. Jacobs Field, considered one of the finest ballparks in baseball, is the downtown home of the Cleveland Indians. 12 / WALGREENS / CLEVELAND, OHIO AREA OVERVIEW / SRS NATIONAL NET LEASE GROUP
AREA OVERVIEW (CONTINUED) DEMOGRAPHICS 1 MILE 3 MILES 5 MILES 2016 Estimated Population 17,414 126,683 291,379 2021 Projected Population 16,904 123,999 286,503 2010 Census Population 18,470 131,545 298,664 2016 Estimated Households 7,392 54,021 123,561 2021 Projected Households 7,208 53,088 121,921 2010 Census Households 7,760 55,629 125,696 2016 Estimated White 2.30% 20.40% 34.80% 2016 Estimated Black or African American 95.10% 75.40% 58.90% 2016 Estimated Asian or Pacific Islander 0.20% 1.40% 2.90% 2016 Estimated American Indian or Native Alaskan 0.20% 0.20% 0.20% 2016 Estimated Other Races 0.40% 0.40% 0.80% 2016 Estimated Hispanic 1.20% 1.70% 2.50% 2016 Estimated Average Household Income $47,623 $60,524 $63,311 2016 Estimated Median Household Income $36,359 $37,764 $40,020 2016 Estimated Per Capita Income $20,508 $26,130 $27,336 2016 Estimated Total Businesses 356 3,344 10,052 2016 Estimated Total Employees 3,736 82,724 261,854 13 / WALGREENS / CLEVELAND, OHIO AREA OVERVIEW / SRS NATIONAL NET LEASE GROUP
RENT ROLL LEASE TERM RENTAL RATES TENANT NAME SQUARE FEET LEASE START LEASE END BEGIN INCREASE MONTHLY PSF ANNUALLY PSF RECOVERY TYPE OPTIONS Walgreens 14,490 4/12/2002 4/30/2027 Current - $30,958 $2.14 $371,500 $25.64 NN 7 (5-Year) Corporate Guaranty Note: Tenant has the right of first refusal and must respond in 10 days. FINANCIAL INFORMATION PROPERTY SPECIFICATIONS Price:...$5,992,000 Net Operating Income:...$371,500 Cap Rate:... 6.20% Lease Type:... NN TENANT PROFILE WALGREENS Walgreens, one of the nation s largest drugstore chains, is included in the Retail Pharmacy USA Division of Walgreens Boots Alliance, Inc. (NASDAQ: WBA), the first global pharmacy-led, health and wellbeing enterprise. More than 8 million customers interact with Walgreens each day in communities across America, using the most convenient, multichannel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice. Walgreens operates 8,173 drugstores with a presence in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Walgreens digital business includes Walgreens.com, drugstore.com, Beauty.com and VisionDirect.com. More than 400 Walgreens stores offer Healthcare Clinic or other provider retail clinic services. Year Built:... 2002 Rentable Area:...14,490 SF Land Area:... 0.96 Acres Address:... 4071 Lee Road, Cleveland, OH 44128 Company Type:...Public (NASDAQ: WBA) 2016 Employees:... 247,000 2016 Revenue:... $117 Billion 2016 Net Income:... $4.14 Billion 2016 Assets:...$72.69 Billion 2016 Equity:...$29.88 Billion Ranking:...#19 in Fortune 500 14 / WALGREENS / CLEVELAND, OHIO RENT ROLL / SRS NATIONAL NET LEASE GROUP
SRS GLOBAL STATS 800+ PROPERTIES CURRENTLY REPRESENTED 600+ CLIENTS REPRESENTED IN 2016 $2.6B* TRANSACTION VALUE 20+ OFFICES 250+ BROKERS, PROFESSIONALS, AND STAFF #1 LARGEST REAL ESTATE FIRM EXCLUSIVELY DEDICATED TO RETAIL SERVICES IN NORTH AMERICA *STATISTICS ARE FOR 2016.