KENDIG Executive Summary
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY KENDIG THE OPPORTUNITY Holliday Fenoglio Fowler, L.P. ( HFF ), is pleased to exclusively offer KENDIG (the Property ), a 271,487 SF grocery-anchored retail center located in Lancaster, Pennsylvania. The Property is anchored by a consistently high performing Weis Markets, a dominant regional grocer with over 163 locations. Big Kmart co-anchors the center, and generated an impressive $168/SF in gross sales at the location in 2015, significantly greater than average store sales for the retailer nationally. Kendig Square also has a premium roster of long-term inline tenants, with 63% having national brand recognition. The Property benefits from a superior location on PA Route 272, the primary north-south arterial roadway through Lancaster. The traffic patterns and positioning of the surrounding residential areas have made Kendig Square the destination retail for the immediate and surrounding markets, allowing synergies between anchors and co-tenants to capitalize on daily consumers. As a result of its prominent market position, the tenants of Kendig Square maintain a weighted retention duration that exceeds 20 years, validation of the Property s success and sustainability through all economic environments. KENDIG PRESENTS AN OPPORTUNITY FOR INVESTORS TO ACQUIRE AN ESTABLISHED, DOMINANT, GROCERY-ANCHORED RETAIL CENTER IN A MAJOR CENTRAL PENNSYLVANIA RETAIL MARKET FREE AND CLEAR OF EXISTING FINANCING. \ PROPERTY SUMMARY ADDRESS 2600 Willow Street, Willow Street, PA 17584 TOTAL AREA 271,487 SF OCCUPANCY 95.1% ANCHOR TENANTS Weis Markets, Big Kmart, Rite Aid, Dollar Tree NOTABLE NATIONAL TENANTS PNC Bank, Burger King, UPS, Payless Shoes, H&R Block, Dollar General TOTAL LAND AREA 29.4 Acres YEAR BUILT 1991 TOTAL PARKING 1,180 PARKING RATIO 4.35 / 1,000 OFFERING Free & Clear 3
KENDIG EXECUTIVE SUMMARY INVESTMENT HIGHLIGHTS STRONG GROCERY ANCHOR WITH DOMINANT REGIONAL PRESENCE Weis Markets (NYSE:WMK) has over 163 locations throughout the Mid-Atlantic and Northeastern regions and a market capitalization of $1.16 billion. The company s annual revenue, which is in excess of $2.87 billion, has grown 6.8% since 2013, and is reflective of strong consumer preferences for the grocery store. Weis also has an ideal location in Kendig Square with superior frontage, and a footprint that fits the company s current prototype of 63,000 SF. Weis s substantial regional market share and successful 25 year track record at Kendig Square proves its dedication to the Property and long-term outlook for this trade area. WEIS Size 60,284 SF Base Rental Rate / SF $8.05 Expiration Date Aug-23 WEIS FINANCIAL SUMMARY Ticker WMK Market Cap 3/28/16 $1.16 billion 2015 Revenue $2.87 billion Tenure Options 25.0 YRS 4, 5-YR Dividend Yield 2.60% Locations 163 HIGH PERFORMING BIG KMART LOCATION WITH UNLOCKED VALUE Kendig Square has one of the highest performing Kmart stores in the region, with total sales of $14,541,000 in 2015, which equates to $168/SF. At a gross rental rate of $6.96 (base rental rate of $4.95), Big Kmart s occupancy costs is only 4.14% at the Property. Kmart s strong performance and tenant tenure of 25 years at the Property signifies the ability of Kendig Square to support and sustain major tenants for extensive periods of time, and satisfy the significant consumer demand within the market. Big Kmart s low market rent at $4.95/SF also represents a significant opportunity to increase rental rates at the property if a deal was reached with Kmart, or if the tenant s space needed to be backfilled. KMART TENANCY Size 86,479 SF Base Rental Rate / SF $4.95 Expiration Date Sep-21 Tenure 25.0 YRS Options 9, 5-YR 2015 Sales/SF $168 Gross Rent $6.96 Occupancy Cost 4.14% 4
EXECUTIVE SUMMARY KENDIG INVESTMENT HIGHLIGHTS RENT ROLL STABILITY AND RAPID LEASING ACTIVITY A robust and stable consumer demand has enabled both national and local tenants to thrive at Kendig Square. Average weighted tenure at the property is over 20 years, with duplicate uses also being able to thrive in close adjacency to one another. Dollar Tree and Dollar General have both been successfully operating at the Property since 1997. Leasing activity at the Property has also picked up as the market and location have become more attractive to retailers. In 2015, ownership executed new leases with Planet Fitness and PA Wine & Spirits for a total of 18,300 square feet. NATIONAL RETAIL TENANTS TENANT TYPE SUMMARY Tenant Type % of Gross Income Grocery 22.05% National 55.06% Local 22.89% SPACE LEASED IN 2015 Tenant Size Planet Fitness 13,171 PA Liquor Control Board 5,134 18,305 Average Weighted Tenure 20.88 YRS TENANT SUMMARY Tenant Type Size % of Total Expiration Date Big Kmart 86,479 31.85% Sep-21 Weis Markets 60,284 22.21% Aug-23 Planet Fitness 13,171 4.85% Dec-20 Fun Time Cinemas 1 12,375 4.56% May-21 Rite Aid 10,950 4.03% Oct-22 Dollar Tree 10,397 3.83% Sep-21 Tenants > 10,000 SF 193,656 71.3% Leased Inline/OP SF 64,616 23.8% Vacant SF 13,215 4.9% Total SF 271,487 100.0% Total Occupancy 95.1% 1 Landlord is currently negotiating a 5-year, flat rate extension. & MANY MORE DIRECT ACCESS TO THE IDEAL CONSUMER Kendig Square s value and necessity based retailers benefit significantly from the Property s close proximity to a major traffic driver, the Willow Valley Communities. The senior living facility, which has over 2,500 residents and 1,300 workers on a 210 acre campus, supplies a constant daily flow of consumers to the Property in addition to the surrounding residential communities. Furthermore, Kendig Square is located just south of the City of Lancaster, which is the eighth largest city in the state with over 60,000 people. Lancaster County also has a robust tourism industry, with direct consumer spending of $2 Billion in 2014. 5
HFF Philadelphia Eight Tower Bridge 161 Washington Street Suite 925 Conshohocken, PA 19428 hfflp.com EXCLUSIVE MARKETING ADVISORS If you have any questions or require additional information, please contact any of the individuals below. CHRIS MUNLEY JOSE CRUZ Managing Director Senior Managing Director T 484.532.4207 T 973.549.2011 cmunley@hfflp.com jcruz@hfflp.com MICHAEL DICOSIMO Senior Real Estate Analyst T 484.532.4169 mdicosimo@hfflp.com FINANCING CONTACTS NEIL CAMPBELL Associate Director T 484.532.4176 ncampbell@hfflp.com KENDIG