OFFERING MEMORANDUM CHURCH S CHICKEN 678 US-83 McAllen (MSA), TX
CONTENTS 03 04 06 11 EXECUTIVE SUMMARY FINANCIAL OVERVIEW TENANT OVERVIEW AREA OVERVIEW LISTED BY Mitchell Glasson ASSOCIATE MITCHELL.GLASSON@MATTHEWS.COM DIR 949.432.4502 MOB 707.364.5650 LIC # 02016029 (CA) Wesley Connolly Senior Associate WESLEY.CONNOLLY@MATTHEWS.COM DIR 949.432.4512 MOB 707.477.7185 LIC # 01962332 (CA) BROKER OF RECORD KYLE MATTHEWS BROKER OF RECORD LIC # 9005919 (TX)
EXECUTIVE OVERVIEW WORRY-FREE INVESTMENT AND LONG-TERM TENANT COMMITMENT Corporate Tenant - Provides peace of mind and a stable lease guarantee Growing Cash Flow - 10% increases every 5 years with next in Dec 2018 for an 8% return Newest Prototype Renovation at Tenant s Expense - The Star Initiative Design package demonstrates excellent commitment by the tenant Absolute NNN Lease - Tenant takes care of all landlord responsibilities including tax, insurance, maintenance, roof and structure IDEAL RETAIL LOCATION Main Thoroughfare Location - Excellent visibility and traffic counts exceed ±27,000 VPD Strategic Positioning - middle schools, La Joya High, Jimmy Carter College, police and fire station within a 1/8 mile Dense Retail Corridor - National tenants include Walmart Supercenter, McDonald s, AutoZone, O Reilly Auto Parts, Stripes, Burger King, Subway, and Whataburger among others Growing Market - New development and 9% growth in a 5-mile radius between 2018-2023 DOMINANT SOUTHERN OPERATOR High Growth and Sales! - 1,700+ locations and system-wide sales in excess of $1.425 Billion Focused Operational Strategy - Church s Chicken is the most profitable in the Southeast, specifically TX and GA, and rapidly expanding 3
FINANCIAL OVERVIEW EXECUTIVE SUMMARY Property Name Church s Chicken Property Street 678 US-83 City, State, Zip McAllen, TX (MSA) GLA ± 2,171 SF Lot Size 0.76 AC (33,106 SF) Year Built / Renovated 2008 / 2017 ANNUALIZED OPERATING DATA Monthly Rent Annual Rent Increases Current - December 2023 $7,791.67 $93,500 10% December 2023 - December 2028 $8,570.83 $102,850 10% 4
TENANT SUMMARY FINANCIAL HIGHLIGHTS LIST PRICE CAP RATE $1,558,333 6.00% TERM REMAINING ±10 YEARS Tenant Trade Name Church s Chicken Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NNN Roof & Structure Tenant Responsibility Rent Commencement Date 12/2/2008 Lease Expiration Date 12/2028 Term Remaining ±10 Years Increases 10% Options 2, Five-Year Options 5
6 TENANT OVERVIEW
CHURCH S CHICKEN For more than 60 years, Church s Chicken has been one of the largest quick service restaurant chicken chains in the world. Founded in Texas by George W. Church, Sr., in 1952, Church s Chicken is now an international brand and one of the fastest growing chicken franchises worldwide. In addition to its famous fried chicken, Church s offers a diverse menu that includes chicken wings and sandwiches as well as fried okra and jalapeño cheese bombers as side dishes. A big hit with customers is Church s unique Honey Butter Biscuits, which are hand-made from scratch. With their dedication to providing affordable and flavorful home-style chicken meals in a business model proven to be efficient and profitable, Church s Chicken offers highly attractive franchise opportunities for entrepreneurs. OWNERSHIP PRIVATE PARENT COMPANY TRADE NAME FRIEDMAN FLEISCHER & LOWE WEBSITE WWW.CHURCHS.COM COMMUNITY INVOLVEMENT Church s chicken is about to undergo a large-scale domestic 10-year expansion. Some of the new markets slated for this expansion include multiple restaurants in the Nashville, Knoxville, and Chattanooga areas with another 10-restaurant deal expected to follow in 2021. Leaders have estimated that the real estate construction and design value will be more than a $40 million investment. In 2017, Church s Chicken is also looking to expand about 80-100 units in the international market. Church s Chicken is also looking at more non-traditional locations such as airports, bus stops, and malls. conducts Limeades for Learning, a large fundraising event supporting teacher s projects across the nation. # OF LOCATIONS ±1,700 HEADQUARTERED SANDY SPRINGS, GEORGIA YEAR FOUNDED 1952 7
PARCEL MAP THE OFFERING Property Name Property Address Site Description Number of Stories Church s Chicken 678 US-83 McAllen, TX (MSA) One Year Built / Renovated 2008 / 2017 GLA ± 2,171 Lot Size Type of Ownership Landscaping Topography Parking Spaces Parking Ratio ± 0.76 Acres (33,106 SF) Fee Simple Professional Generally Level ± 23 Surface Spaces 10.59 : 1,000 SF Oceanside Blvd ± 31,792 College Blvd ± 40,116 8
SURROUNDING TENANTS 9
10 SURROUNDING TENANTS
AREA OVERVIEW DEMOGRAPHICS POPULATION 3 Mile 5 Mile 7 Mile 2023 Projection 10,886 29,885 64,535 LA JOYA, TX La Joya is a city in western Hidalgo County, Texas. La Joya is part of the McAllen-Edinburg-Mission and Reynosa-McAllen metropolitan areas. La Joya or The Jewel of the Valley got its name after a lake just to the west of the city. La Joya is just a 20-minute drive to McAllen, TX and it sits just north of the Rio Grande separating Texas from Mexico. 2018 Estimate 9,942 27,381 60,118 Growth 2018-2023 9.49% 9.14% 7.35% Growth 2010-2018 20.92% 19.46% 13.55% HOUSEHOLDS 3 Mile 5 Mile 7 Mile 2023 Projection 2,980 8,209 17,164 2018 Estimate 2,718 7,524 15,950 Growth 2018-2023 9.64% 9.10% 7.61% Growth 2010-2018 21.88% 19.48% 14.67% INCOME 3 Mile 5 Mile 7 Mile 2018 Est. Average Household Income $53,536 $51,439 $48,667 11
McAllen, TX Located at the southern tip of Texas along the Rio Grande in the Rio Grande Valley, the city of McAllen is a gateway to Mexico and the largest city in Hidalgo County. With origins as a major agricultural center, McAllen is known for its flourishing arts culture, including its Creative Arts Incubator, which supports aspiring artists in the Rio Grande Valley. The incubator also houses Techspace, created to provide low-cost space for startups as well as coworking opportunities; Techspace is just one of several initiatives in place that foster entrepreneurship in McAllen. Nicknamed City of Palms, McAllen has a thriving downtown filled with galleries, restaurants, and nightclubs. Downtown McAllen is recognized as a top downtown, where the business climate continues to grow and is consistently led by retail. Wealthy Mexican residents from northern Mexico visit McAllen for their shopping needs, contributing to its strong retail presence. Economy Since the ratification of the North American Free Trade Agreement in 1994, the focal point of the McAllen s economic activity has diversified from agriculture and petroleum to include international trade, healthcare, retail, and tourism; The manufacturing and agricultural economy remains healthy. Its designation as a foreign trade zone allowed McAllen to use its proximity to the U.S.-Mexico border to its advantage. Having established itself as a major hub for international trade and distribution, McAllen is now the regional Valley leader in commerce and government as well as home to a large number of national businesses. Today, the area is being transformed into a major international trade area by developing first-rate commercial, retail, office, industrial, medical, retirement and educational facilities. 12
13 Rio Grande Valley The Rio Grande Valley is an area located on the southernmost tip of South Texas. This metropolitan area is comprised of several cities, towns, and communities, the largest of which are Brownsville, McAllen, Mission, Edinburg, Pharr, Weslaco, Harlingen, Rio Grande City, and Hidalgo. As one of the fastest growing places in the country, the Rio Grande Valley Historically, the Valley has been reliant on agribusiness and tourism. Leading crops in the region consist of cotton, grapefruit, sorghum, maize, and sugarcane. Given that the region is the center of citrus production and the most important area of vegetable production in Texas, which is the third largest producer of citrus fruits in the United States due to the quantity grown in the Valley. In recent years, the emergence of maquiladoras, fabrication plans has propagated a surge of industrial development along the border. Health care has also become a substantial part of the economy with major hospitals and many clinics and private practices in Brownsville, Harlingen, and McAllen. During the winter months, many retirees arrive in the area to enjoy the warm weather and access to pharmaceuticals and quality health care. One of the Valley s major tourist attractions is the semi-tropical wildlife. Every year many visitors flock to the area in search of exotic birds and butterflies. Popular wildlife destinations include Laguna Atascosa National Wildlife Refuge, Santa Ana National Wildlife Refuge, and Bentsen-Rio Grande Valley State Park. In addition to eco-tourism being a major economic force in the Rio Grande Valley, the geographic inclusion of South Padre Island, Brazos Island and the Port Isabel Lighthouse drives tourism, especially during the Spring Break Season. During this time, South Padre Island become reminiscent of New Orleans during Mardi Gras.
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Church s Chicken located at 678 US-83 La Joya, TX 78596 ( Property ). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum for the Property, you agree: 1. The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.
LISTED BY Mitchell Glasson ASSOCIATE MITCHELL.GLASSON@MATTHEWS.COM DIR 949.432.4502 MOB 707.364.5650 LIC # 02016029 (CA) Wesley Connolly Senior Associate WESLEY.CONNOLLY@MATTHEWS.COM DIR 949.432.4512 MOB 707.477.7185 LIC # 01962332 (CA) BROKER OF RECORD KYLE MATTHEWS BROKER OF RECORD LIC # 9005919 (TX) CHURCH S CHICKEN 678 US-83 McAllen, TX (MSA)