OFFERING MEMORANDUM OFFERING MEMORANDUM Representative Photo 481 North 1st Street Lehighton, PA 18235 Dollar General 481 North 1st Street Lehighton, PA 18235
Representative Photo EXCLUSIVELY LISTED BY JOSH BISHOP VP & Director Josh.Bishop@matthews.com DIR (214) 692-2289 MOB (315) 730-6228 LIC # 688810 (TX) CALVIN SHORT FVP & Senior Director Calvin.Short@matthews.com DIR (949) 432-4506 MOB (310) 567-3525 LIC # 01927216 (CA) CHAD KURZ SVP & National Director Chad.Kurz@matthews.com DIR (214) 692-2927 MOB (562) 480-2937 LIC # 0191198 (CA) SCOTT BURDETT BROKER OF RECORD LIC#RSR001342
Representative Photo CONTENTS 4 INVESTMENT OVERVIEW Investment Highlights 6 FINANCIAL ANALYSIS Executive Summary Annualized Operating Data Tenant Summary 8 TENANT OVERIVEW Site Description Bird s Eye The Offering 12 AREA OVERVIEW Lehighton, PA Demographics Allentown, PA
Representative Photo INVESTMENT OVERVIEW 4 DOLLAR GENERAL-LEHIGHTON,PA
Investment Highlights Ideal 1031 exchange property Newer 2014 construction Dollar General Strong 6.95% cap rate on a stable deal Very rare 3% increase in year 11 of the base term. Cap rate will increase to a 7.17% cap, assuming a purchase at list price Absolute NNN lease; Zero management responsibility Strong traffic counts of more than 14,000 vehicles daily on North 1st Street 3-mile population of more than 14,600 residents 5-mile population of more than 21,800 residents Average household incomes of more than $60,000 annually Lehighton is located just 25 miles north of Allentown, PA Dollar General holds a strong investment grade credit rating of BBB (recently upgraded from BBB-) Dollar General is the only dollar store with investment grade credit Dollar General has more than 13,500 locations and has plans to continue expansion over the next several years MATTHEWS REAL ESTATE INVESTMENT SERVICES 5
Representative Photo FINANCIAL ANALYSIS 6 DOLLAR GENERAL-LEHIGHTON,PA
Dollar General 481 North 1st Street, Lehighton, PA 18235 List Price...$1,712,230 CAP Rate - Current... 6.95% Gross Leasable Area... ± 9,100 SF Lot Size... ± 1.10 Acres Year Built...2014 Annualized Operating Data Monthly Rent Annual Rent Rent/SF Cap Rate Current - 1/31/2024 $9,916.67 $119,000.04 $13.08 6.95% 2/1/2024-1/31/2029 $10,229.17 $122,750.04 $13.49 7.17% Extension 1 $11,190.58 $134,286.96 $14.76 7.84% Extension 2 $12,359.17 $148,310.04 $16.30 8.66% Extension 3 $13,595.08 $163,140.96 $17.93 9.53% Tenant Summary Tenant Trade Name Dollar General Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NNN Roof and Structure Tenant Responsible Original Lease Term 15 years Rent Commencement Date 1/11/2014 Lease Expiration Date 1/31/2029 Term Remaining on Lease ± 11.50 years Increases 3% Increase in Year 11 and 10% in Options Options Three (3), Five (5) Year Options MATTHEWS REAL ESTATE INVESTMENT SERVICES 7
Representative Photo TENANT OVERVIEW 8 DOLLAR GENERAL-LEHIGHTON,PA
Company Name Parent Company Trade Name Ownership Credit Rating (S&P) Dollar General Dollar General Corporation (NYSE: DG) Public BBB No. of Locations ± 13,000 No. of Employees ± 113,400 Headquartered Website Goodlettsville, TN www.dollargeneral.com Tenant Overview Year Founded 1939 Dollar General is the fast-growing retailer that boasts roughly 13,000 discount stores in over 40 US states, mostly in the South, East, the Midwest, and the Southwest. It generates about 75% of its sales from consumables (including refrigerated, shelf-stable, and perishable foods) and another 10% from seasonal items. The stores also offer household products and apparel. Pricing its items at $10 or less, Dollar General targets low-, middle-, and fixed-income shoppers while selling brand-name products from manufacturers such as Procter & Gamble, Kimberly-Clark, Unilever, Kellogg s, General Mills, Nabisco, Hanes, PepsiCo, and Coca-Cola. The retailer devotes its dollars to promotional circulars, targeted circulars that support new stores, television and radio advertising, in-store signage, and costs associated with the sponsorship of certain auto racing activities. Because Dollar General s customers typically live in small towns, the company doesn t allocate ample amounts of money to advertising. It has spent increasingly more on advertising in recent years, however, as the company expands its stores footprint. STRATEGY With its small-box stores typically measuring some 9,100 sq. ft, Dollar General targets cost-conscious consumers that prefer easier and quicker access to items than at super-sized competitors such as Wal-Mart and Costco (which are also often much farther away). Indeed, Dollar General s strategy of catering to the value conscious has paid off big, both during and after the recession. The discount retailer boasted its 26th consecutive year of same-store sales growth in 2016 (ended January), attributable to its value and convenience proposition. OPERATIONS Dollar General s massive stores network is supported by 13 distribution centers that are strategically located throughout its geographic footprint. Dollar General owns several trademarks, including Dollar General, Dollar General Market, Clover Valley, DG, DG Deals, Smart & Simple, trueliving, Forever Pals, I*Magine, OT Sport, and Sweet Smiles. It also boasts a few licenses, such as Bobbie Brooks and Fisher Price for clothing and Rexall for health and beauty aids. GEOGRAPHIC REACH Dollar General operates nearly 13,000 stores in 43 US states in 2015. About 10% of its stores are in Texas and another 20% are spread across Florida, Georgia, Ohio, and North Carolina. MATTHEWS REAL ESTATE INVESTMENT SERVICES 9
Bird s Eye 10 DOLLAR GENERAL-LEHIGHTON,PA
The Offering Property Name Property Address Assessor s Parcel Number Dollar General 481 North 1st Street Lehighton, PA 18235 70A-10-30-S23.06 Site Description Number of Stories One Year Built 2014 Gross Leasable Area (GLA) ± 9,100 SF Lot Size ± 1.10 Acres (47,916 SF) Type of Ownership Fee Simple Parking ± 30 Surface Spaces Parking Ratio 3.30 : 1,000 SF Landscaping Professional Topography N Generally Level N. 1st Street ± 14,000 ADT MATTHEWS REAL ESTATE INVESTMENT SERVICES 11
AREA OVERVIEW 12 DOLLAR GENERAL-LEHIGHTON,PA
Lehighton, PA Lehighton, PA is the most populated borough in Carbon County. The town first developed because the water power from the Lehigh River developed many different industries such as silk and lace mills, automatic-press works, and stonework. People on the east coast slowly started migrating to Lehighton and building their lives around the different industries they created within the town. During WWII, the Lehigh Valley Railroad was essential to the war and provided thousands of jobs. Since then, the community is working to rebuild and open up many of the industries that once made the town so popular. A majority of residents, today, work in construction, manufacturing, and production. Lehighton holds value in their history and looks towards the future to build up their town both with new innovations as well as sticking to their roots. Demographics Population 1 Mile 3 Miles 5 Miles 2021 Projection 5,667 14,151 21,285 2017 Estimate 5,871 14,648 21,859 2010 Census 6,284 15,686 23,014 2000 Census 6,205 15,874 22,494 Households 1 Miles 3 Miles 5 Miles 2021 Projection 2,388 5,924 8,814 2017 Estimate 2,467 6,104 9,015 2010 Census 2,622 6,471 9,403 2000 Census 2,619 6,520 9,110 Income 1 Miles 3 Miles 5 Miles 2017 Est. Average Household Income $52,138 $60,065 $63,295 Things to do Lehighton is a very community oriented town. The Country Junction is a main attraction for the town. It is a farmers market, where all the residents come together and provide whatever they can. Whether you are looking for fresh groceries, appliances and supplies, or clothes, you can always find what you are looking for here. Another great spot is Beltzville State Park. It is a great place to take a bike ride or hang out at the beach. It is one of the few State Parks that you are still allowed to swim in. They also have paddle boats and kayaks to explore the lake. Beltzville has many hiking and biking trails that take you all over the Park, with great views of the lake. MATTHEWS REAL ESTATE INVESTMENT SERVICES 13
Allentown, PA Just 20 miles outside of Lehighton is Allentown, the third most populated city in Pennsylvania. It is 50 miles from Philadelphia and 90 miles from New York City, although it is still considered part of the New York City Metropolitan Area. Allentown is on the rise and constantly evolving with the perfect mix of new age renovations while keeping its historic charm. Allentown was first in the limelight when they hid the Liberty Bell so the British did not steal it when they invaded Philadelphia. Throughout the years, the town has made headway through the railroad development and industrial services. Allentown has developed into a fully operating city and takes after Philadelphia with most of its economic success within the service industries. 14 DOLLAR GENERAL-LEHIGHTON,PA
Places to Visit Allentown has a ton of exciting things to see and do. The America on Wheels Museum, is all about the development of transportation. It has everything from bicycles and motorcycles to automobiles and trucks. It is 43,000 square feet and is divided up into three main galleries. The museum has interactive exhibits that rotate on a regular basis. If you are looking to explore Allentown, there are several different parks that are great for hiking, biking, and offer many activities. Canal Park is a great place to take a stroll and admire the Lehigh River. Wayne A. Grube Memorial Park is more inland and has a lot of outdoor activities for both children and adults. Economy Overall, Allentown has strived in the service industries, recently, health care and transportation have been making steady strides in their economy as well. Their largest employer is Lehigh Valley Hospital and Health Network, with over 7,800 employees. With 4 different locations throughout the Lehigh Valley, the Lehigh Valley Hospital is the most successful hospital in the area. Allentown is the home to several corporate and global company headquarters including Air Products and Chemicals and Pennsylvania Power and Light. The city is slowly growing into a corporate hub for many business, although they help build any business, small or big. An organization called Allentown Economic Development Corporation (AEDC) is dedicated to bringing in new and young business into town and building them up for success.
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Dollar General located at 481 North 1st Street, Lehighton, PA 18235 ( Property ). It has been prepared by Matthews Retail Advisors. 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 Retail Advisors. 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 Retail Advisors 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 Retail Advisors 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.
OFFERING MEMORANDUM EXCLUSIVELY LISTED BY JOSH BISHOP VP & Director Josh.Bishop@matthews.com DIR (214) 692-2289 MOB (315) 730-6228 LIC # 688810 (TX) CALVIN SHORT FVP & Senior Director Calvin.Short@matthews.com DIR (949) 432-4506 MOB (310) 567-3525 LIC # 01927216 (CA) CHAD KURZ SVP & National Director Chad.Kurz@matthews.com DIR (214) 692-2927 MOB (562) 480-2937 LIC # 0191198 (CA) SCOTT BURDETT BROKER OF RECORD LIC#RSR001342 Dollar General 481 North 1st Street, Lehighton, PA 18235