Wilsonville crossing Wilsonville, or Recently Remodeled TWO-TENANT RETAIL CENTER IN PORTLAND MSA 29991 SW Town Center Loop, Wilsonville, OR 97070
WILSONVILLE CROSSING IS A NET-LEASED, REDEVELOPED RETAIL CENTER LEASED TO CHIPOTLE AND NOODLES & CO. LOCATED AT A MAJOR INTERSECTION IN THE PORTLAND MSA. Investment Highlights The Property is 100% occupied by Chipotle and Noodles & Co., two nationally-recognized brands. Both tenants have an 8-year remaining term with 10% rent increases at the beginning of the sixth lease year. Both Tenants are net-leased, providing limited Landlord responsibility. The Property underwent a $1.27M renovation in 2015, including an upgrade to the parking lot, landscaping, HVAC, and utility lines. Wilsonville Crossing is situated one block east of the Interstate-5 on and off ramps, and is exposed to high traffic counts of 22,700 VPD. The Property is within a major commercial area offering strong co-tenancy with adjacent anchor tenants Safeway, Fry s Electronics, Fred Meyer, and Regal Cinemas. PRICE: $3,500,000 CAP: 5.00% OCCUPANCY... 100% LEASABLE SF.... ±4,895 SF LAND AREA.... ±34,412 SF REDEVELOPED.... 2015 DEBT.... Free & Clear AVG CURRENT RENT... $35.50/SF PARKING*... ±48 Spaces (9.8/1,000 SF) TENANTS.... Chipotle (NYSE: CMG) Noodles & Co. (NASDAQ: NDLS) *11 spaces are part of a cross-easement parking agreement with larger shopping center. ADDRESS: 29991 SW Town Center Loop, Wilsonville, OR 97070 WILSONVILLE CROSSING 2
Core Characteristics LONG TERM CORPORATE LEASES NATIONAL TENANCY LONG REMAINING LEASE TERMS WITH RENT GROWTH Both tenants have an 8-year remaining lease term with 10% rent increases built in for the sixth lease year and beginning of each of the Tenants option periods. Upon the tenants rent escalations in 2020, an investor s yield will increase roughly 50 basis points. PROMINENT LOCATION WITH HIGHWAY PROXIMITY Located one block from the on/off ramps for Interstate 5, the Property is located on the signalized corner of SW Wilsonville Road and Town Center Loop. Serving the area s growing regional labor force composed of distribution and tech companies, there are traffic counts of 22,700 cars per day along SW Wilsonville Road, one of the busiest thoroughfares in Wilsonville. The Property is also situated in the primary commercial area of Wilsonville, anchored by major retailers Safeway, Fred Meyer, Fry s Electronics, Regal Cinemas, and located directly adjacent to a newly developed Starbucks drive-thru. The proximity to major area employers and retailers results in a consistent daily draw to the Subject. EXPANDING NATIONAL TENANTS Chipotle is a nationally recognized, publicly traded company (NYSE: CMG) since 2006, with nearly 2,200 locations currently in operation throughout the U.S. and are expected to open between 195-210 additional restaurants in 2017. Noodles & Co. (NASDAQ: NDLS) is a fast casual restaurant concept that went public in 2013 and that has since expanded to 488 restaurants across 32 states. RESIDENTIAL DEVELOPMENT With strong local employers, Wilsonville is projected to grow by 1.3% annually over the next 20 years. Several new residential developments are underway to keep up with Wilsonville s forecasted population growth. Please see page 5 for more information. WILSONVILLE CROSSING 3
Quick Stats NASDAQ: NDLS 488 Locations ACROSS 31 STATES NYSE: CMG 2,200 Locations BETWEEN 195-210 MORE EXPECTED TO OPEN IN 2017 64,000 APPROXIMATE NUMBER OF EMPLOYEES #20 most Innovative Companies 2014 $3.21B FORBES LIST $4.11B $4.5B 10,600 APPROXIMATE NUMBER OF EMPLOYEES 2013 2014 REVENUE 2015 WILSONVILLE CROSSING 4
Aerial SW ELLIGSEN RD 5 ARGYLE SQUARE ARGYLE SQUARE - MAJOR RETAILERS America s Tire Burger King Costco GameStop Hobby Town USA Moe s Southwest Grill Office Depot Panda Express PetSmart Pier 1 Imports Sally Beauty Supply Sprint Starbucks Subway Target WILSONVILLE TOWN CENTER - MAJOR RETAILERS Ace Hardware Arby s AT&T Bank of America Chase Bank Denny s Dollar Tree Edge Family Fitness Fry s Electronics GNC Goodwill Jamba Juice Jiffy Lube Les Schwab McDonald s NAPA Auto Parts Papa Murphy s Red Robin Regal Cinemas Rite Aid Safeway Shari s Restaurant Starbucks Taco Bell US Bank Wells Fargo Bank Wendy s BOECKMAN RD WILSONVILLE TOWN CENTER OLD TOWN SQUARE & LOWRIES MARKETPLACE - MAJOR RETAILERS 7-Eleven Baskin Robbins Biscuits Café Burger King Domino s Pizza Fred Meyer Great Clips McMenamins RAM Restaurant Sonic Drive-In Starbucks Walgreens Clackamas Community College Wilsonville High school SW WILSONVILLE RD NEARBY DISTRIBUTION & TECHNOLOGY COMPANIES APCON, Inc Cascadia Metals Chez Marie Coca-Cola Enterprises Coherent DataSafe Flir Foodguys Integrity Logistics isense Keystone Mentor Graphics Pacific Foods Perceptive Pixel Rite Aid Building Solutions SAM Medical Products Southern Wine & Spirits of America Sysco Food Service Xerox OLD TOWN SQUARE & LOWRIES MARKETPLACE PORTLAND 20 MILES 5 WILSONVILLE CROSSING WILLAMETTE RIVER WILSONVILLE CROSSING 5
Developments in the Area GROWING POPULATION Located between Salem and the Portland MSA, Wilsonville draws from a broad and diverse regional labor force that is home to over 2.4 million people and forecasted to grow to 3.2 million by 2035. The average growth in Wilsonville alone is projected to be 1.3% annually, over the next 20 years. Several new developments have been completed to keep up with Wilsonville s forecasted population growth. 14% EXPECTED 10-YEAR POPULATION GROWTH WILLAMETTE VALLEY BEHAVIORAL HEALTH PR0JECT - EST $35.8M 8.8 Acres - 100-bed psychiatric hospital 1 MILE NORTH: PROJECTED WILLAMETTE VALLEY BEHAVIORAL HEALTH GRANDE POINTE AT VILLEBOIS 42.8 Acres - 100 Single Family Home Lots 23 Acres - Parks & Open Spaces 5 I-5 CORPORATE PARK BLDG W3 VILLEBOIS TONQUIN MEADOWS 205 Single Family Home Lots VILLEBOIS TONQUIN MEADOWS II SW GRAHAMS FERRY RD VILLEBOIS TONQUIN MEADOWS BOECKMAN RD 13 Acres - 93 Single Family Home Lots 3 Acres - Parks & Open Spaces OLD TOWN WILSONVILLE 9-Lot Single Family Subdivision GRANDE POINTE AT VILLEBOIS VILLEBOIS TONQUIN MEADOWS II OLD TOWN WILSONVILLE 5 WILSONVILLE CROSSING SW WILSONVILLE RD WILSONVILLE GREENS TOWNHOMES 7.9 Acres - 12 Townhomes WILSONVILLE GREENS TOWNHOMES I-5 CORPORATE PARK BLDG W3 34,500 SF - 2-Story Flex/Office Building WILSONVILLE CROSSING 6
Site OLD TOWN SQUARE & LOWRIES MARKETPLACE - MAJOR RETAILERS 7-Eleven Baskin Robbins Biscuits Café Burger King Domino s Pizza Fred Meyer Great Clips McMenamins RAM Restaurant Sonic Drive-In Starbucks Walgreens WILSONVILLE TOWN CENTER - MAJOR RETAILERS Ace Hardware Arby s AT&T Bank of America Chase Bank Denny s Dollar Tree Edge Family Fitness Fry s Electronics GNC Goodwill Jamba Juice Jiffy Lube Les Schwab McDonald s NAPA Auto Parts Papa Murphy s Red Robin Regal Cinemas Rite Aid Safeway Shari s Restaurant Starbucks Taco Bell US Bank Wells Fargo Bank Wendy s TOWN CENTER LOOP DISTRIBUTION CENTER 124,200 DAILY Clackamas Community College SW BOONES FERRY RD WILSONVILLE CROSSING 5 22,700 DAILY SW WILSONVILLE RD WILSONVILLE CROSSING 7
Site Plan SITE PLAN KEY PARCEL: LAND AREA: BUILDING AREA: INGRESS/EGRESS: ±34,412 SF ±4,895 SF TOWN CENTER LOOP TRASH ENCLOSURE HAS AN ENVIRONMENTAL ASSESSMENT BEEN COMPLETED ON THE PROPERTY? A: An Environmental Database Review records and risk assessment was performed in August 2014. No environmental concerns were identified. A copy of the findings can be made available to engaged buyers. Patio Seating Patio Seating SW WILSONVILLE RD 22,700 DAILY DOES THE PROPERTY HAVE ANY CROSS- EASEMENT PARKING? A: Yes. Of the 48 estimated parking stalls on the Property, 11 are part of the cross-easement agreement. An additional 34 spaces are available to Wilsonville Crossing customers on the adjacent parcel. Monument Sign Site Plan Not To Scale WILSONVILLE CROSSING 8
Construction Timeline & Budget DUE DILIGENCE & SPECIAL STUDIES FEB-14 TO APR-14 ARCHITECTURAL & PERMITTING AUG-14 TO OCT-14 DELIVERY TO TENANTS MAR-15 GRAND OPENING LAND USE REVIEW JAN-14 TO SEP-14 BUILDING CONSTRUCTION OCT-14 TO FEB-15 JULY 2015 TOTAL RENOVATION COSTS - $1,270,000 $30,000 $720,000 $310,000 $210,000 PRE-DEVELOPMENT COSTS CONSTRUCTION HARD COSTS CONSTRUCTION SOFT COSTS TENANT IMPROVEMENT ALLOWANCES WILSONVILLE CROSSING 9
Construction Details Notable Improvements Estimated Cost Façade $ 220,000 Tenant Improvement Allowances $ 195,000 Parking Lot/Patio/Landscaping $ 120,000 Utility Updates $ 80,000 Roof Updates & HVAC* $ 30,000 *Includes HVAC TI Allowance of $15,000 ELECTRICAL / WATER / GAS Updated Electrical, Plumbing and Gas Services. Each tenant is separately metered: ELECTRICAL: 400 amp, 120/208V, 3-phase, 4-wire metered service. WATER:1.5 or greater supply. GAS: Natural gas minimum 1600 MBH service with ¼ PSI. HVAC HVAC and mechanical equipment installed upon roof. INTERIOR WALLS EXTERIOR WALLS Painted Drywall. Interior wall/floor/ceiling finishes per tenant. Wood frame with new siding including exterior insulation finishes (EIFS) for stucco and fiber cement lap siding. FIRE PROTECTION Property furnished with mechanical alarms. LANDSCAPING Updated low maintenance landscaping. PARKING Entire lot repaved and striped for 48 Spaces, 9.8/1,000 SF. ROOF New roof installed in 2008 with 15-year warranty. Wood decking and built-up composition cover to be prepared by Landlord for Tenant mechanical equipment. FOUNDATION Z ZONING Planned Development Commercial Town Center (PDC-TC). Includes Retail, Office, Medical, Hospital, Day Care, Public Facilities, Motels, Apartments, and Condominiums. AMERICANS WITH DISABILITIES Poured concrete slab. Landlord will also install concrete slabs for patio use. Property is ADA compliant. WILSONVILLE CROSSING 10
Financial Summary Target Price Range PRICE $3,500,000 Capitalization Rate 5.00% NET OPERATING INCOME SUMMARY SCHEDULED INCOME Per SF Scheduled Rent: 3/1/2018 $35.50 $173,773 Plus: Expense Reimbursement $11.63 $56,905 Equals: Effective Gross Income (EGI) $47.13 $230,678 Less: OPERATING EXPENSES Per SF CAMS $1.17 $5,745 Utilities $4.98 $24,368 Property Taxes $4.86 $23,798 Insurance $0.49 $2,419 Total Operating Expenses ($11.51) ($56,330) Equals: NET OPERATING INCOME $35.62 $174,347 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. WILSONVILLE CROSSING 11
Rent Roll 2020 RENT INCREASES $17,376 ADDED YEARLY INCOME LEASE TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES OPTIONS TYPE Occupancy Lease Monthly Base Date of Monthly Base Tenant Name Suite Size % of SF Rent/SF/YR Date Expiration Rent Increase Rent Chipotle Mexican Grill Suite A 2,448 50.01% 7/1/15 6/30/25 $7,344 $36.00 7/1/20 $8,078 3-5 YR NNN Comments: Tenant has exclusive use for the sale of burritos and tacos. 10% Increases Noodles & Company Suite B 2,447 49.99% 7/14/15 7/31/25 $7,137 $35.00 8/1/20 $7,851 2-5 YR NNN Comments: Tenant has exclusive use for the sale of noodles and pasta. 10% Increases Totals: 4,895 100% $14,481 $35.50 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. 120 Days' Notice 180 Days' Notice This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. WILSONVILLE CROSSING 12
Operating Expenses PROJECTED OPERATING EXPENSES REIMBURSEMENTS Total /SF Notes CAMS $5,745 $1.17 1 $6,320 Utilities $24,368 $4.98 1 $24,368 Property Taxes $23,798 $4.86 2 $23,798 Insurance $2,419 $0.49 3 $2,419 Total Expenses $56,330 $11.51 $56,905 Notes: 1) Annualized 2016 YTD Operating Expenses. Reimbursements include Admin Fees. 2) Based on 2015-2016 Tax Assessment. 3) Based on 2015 Assessment with assumed 3% increase This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. WILSONVILLE CROSSING 13
Reimbursements Tenant Name Pro Rata % CAMS Utilities Property Taxes Insurance Admin Fee Expense Total $5,745 $24,368 $23,798 $2,419 Admin Collected Notes Tenant Totals Chipotle Mexican Grill 50.01% $2,873 $12,186 $11,902 $1,210 10% $287 1, 2 $28,458 Noodles & Company 49.99% $2,872 $12,181 $11,897 $1,209 10% $287 1, 3 $28,446 TOTAL 100.00% $5,745 $24,368 $23,798 $2,419 $575 $56,905 Notes: 1) Admin fee based on 10% of CAMs. 2) CAM and taxes collectively capped at $7.02/SF for the first lease year. Such cap will increase annually to the lessor of (i) actual increases of CAM and taxes or (ii) 5% of charges previously paid by Tenant. Cap is currently not applicable. 3) CAMs, taxes, and insurance are collectively capped the first lease year at $7.02/SF, and CAM individually at $1.64/SF. The CAM cap may not increase by more than 105% on a non-cumulative basis of charges previously paid by Tenant. Cap is currently not applicable. This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. WILSONVILLE CROSSING 14
Chipotle Mexican Grill - Lease Abstract MONTHLY BASE RENT Primary Term Monthly Rent Per Foot 7/1/2015-6/30/2020 $7,344 $36.00 7/1/2020-6/30/2025 $8,078 $39.60 OPTIONS PREMISES/TERM TENANT: Chipotle Mexican Grill, Inc SQUARE FEET: ±2,448 RENT COMMENCEMENT: 7/1/2015 LEASE EXPIRATION: 6/30/2025 OPTIONS: Three, 5-Year Options; 180 Day s Notice Option Period Monthly Rent Per Foot 7/1/2025-6/30/2030 $8,886 $43.56 7/1/2030-6/30/2035 $9,775 $47.92 7/1/2035-6/30/2040 $10,752 $52.71 ADDITIONAL RENT Tenant is responsible for their prorata share of common area operating expenses. CAM and taxes are capped the first lease year at $7.02/SF, and may increase each year thereafter to the lessor of (i) actual increases or (ii) 5% of changes previously paid by Tenant. TAXES Tenant reimburses their prorata share of real Property Taxes. LANDLORD RESPONSIBILITIES Landlord is responsible for the building s structure, roof, and maintaining all common areas of the Premises. TENANT RESPONSIBILITIES Tenant is responsible for all interior maintenance and repair to the Premises. INSURANCE Tenant must maintain a general liability and special form insurance policies, and reimburse their prorata share of Landlord s standard broad form property insurance policy. UTILITIES Tenant is responsible for their share of all sub-metered utilities. EXCLUSIVE USE The Tenant has the exclusive right to sell burritos, wraps, fajitas and tacos at the property. WILSONVILLE CROSSING 15
Noodles & Co. - Lease Abstract PREMISES/TERM TENANT: Noodles & Company SQUARE FEET: ±2,447 RENT COMMENCEMENT: 7/14/2015 LEASE EXPIRATION: 7/31/2025 OPTIONS: Two, 5-Year Options; 180 Day s Notice MONTHLY BASE RENT Primary Term Monthly Rent Per Foot 7/14/2015-7/31/2020 $7,137 $35.00 8/1/2020-7/31/2025 $7,851 $38.50 OPTIONS Option Period Monthly Rent Per Foot 8/1/2025-7/31/2030 $8,636 $42.35 8/1/2030-7/31/2035 $9,498 $46.58 ADDITIONAL RENT Tenant is responsible for their prorata share of common area operating expenses, capped the first lease year at $7.02/SF. CAM are capped specifically at $1.64/SF the first lease year and may increase each year thereafter by more than 105% of Tenant s charges from the previous year. TAXES Tenant reimburses their prorata share of real Property Taxes. LANDLORD RESPONSIBILITIES Landlord is responsible for the building s structure, roof, and maintaining all common areas of the Premises. TENANT RESPONSIBILITIES Tenant is responsible for all interior maintenance and repair to the Premises. INSURANCE Tenant must maintain property insurance and reimburse their prorata share of Landlord s property damage insurance policy. UTILITIES Tenant is responsible for their share of all sub-metered utilities. EXCLUSIVE USE The Tenant has the exclusive right to sell noodles, pasta, and pasta-related dishes at the property. WILSONVILLE CROSSING 16
Area Insight & Demos WILSONVILLE OVERVIEW Located at the southern end of the Portland Metropolitan Area, Wilsonville is a well-planned city with a mix of high-tech industries and family businesses. Over the past 10 years, Wilsonville has been one of Oregon s top-10 fastest growing cities. POPULATION 3-Mile 5-Mile 2010 21,949 58,011 2016 25,475 63,474 2021 27,961 67,693 HOUSEHOLD INCOMES 3-Mile 5-Mile Median $58,063 $73,189 Average $78,685 $91,528 TOP EMPLOYERS # Of Employer Mentor Graphics Employees* 1,085 Stream 1,066 Xerox Corporation 1,032 Rockwell Collins 510 Sysco Food Service 491 TE Connectivity 418 Flir Systems, Inc. 335 Rite Aid Distribution 271 Kinetics Climax 210 *Approximate Vancouver, WA 5 PORTLAND 20 MILES WILSONVILLE CROSSING 3 Miles 5 Miles 5 Wilsonville 5 Wilsonville WILSONVILLE CROSSING 17
KEVIN ADATTO kadatto@capitalpacific.com (503) 675-7726 MICHAEL HORWITZ mhorwitz@capitalpacific.com (503) 675-8381 SCOTT FRANK sfrank@capitalpacific.com (503) 675-8383 SEAN MACK smack@capitalpacific.com (503) 675-8378 PETER DUNN pdunn@capitalpacific.com (503) 607-0197 SEAN TUFTS stufts@capitalpacific.com (206) 743-8468 DAVID GELLNER dgellner@capitalpacific.com (206) 913-2842 NATE FLIFLET nfliflet@capitalpacific.com (206) 457.8613 [ Copyright 2017 Capital Pacific LLC ]