Offering Memorandum TITLEMAX CORPORATE GROUND LEASE 5102 W Thomas Rd Phoenix, AZ 85031
NON-ENDORSEMENT AND DISCLAIMER NOTICE Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â 2017 Marcus & Millichap. All rights reserved. Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. TITLEMAX CORPORATE GROUND LEASE Phoenix, AZ ACT ID Y0070355 2
NET LEASED DISCLAIMER Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in partorin whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. 3
EXECUTIVE SUMMARY OFFERING SUMMARY Price $1,037,143 Net Operating Income $72,600 Capitalization Rate Current 7.0% Price / SF $676.10 Rent / SF $43.95 Lease Type NNN Ground Lease Gross Leasable Area 1,652 SF Year Built / Renovated 1962 / 2012 Lot Size 0.52 acre(s) MAJOR EMPLOYERS OFFERING SUMMARY EMPLOYER # OF EMPLOYEES * Integrity Stffing Slutions Inc 5,006 Arizona Department Trnsp 4,700 Communication and Cmnty Partnr 4,500 Swift Logistics Co Inc 3,000 DCA 2,120 Division Business & Fincl Svcs 1,800 FINANCING Down Payment All Cash Net Cash Flow 6.50% / $72,600 Cash on Cash Return 6.50% Cartwright School Dst No83 1,560 Southern Wine Spirits Ariz Inc 1,234 Kenyon Companies 1,200 Phoenix Baptist Hospital 1,100 Swift 1,080 Walmart 1,040 DEMOGRAPHICS 1-Miles 3-Miles 5-Miles 2016 Estimate Pop 33,261 194,641 463,159 2016 Census Pop 30,260 177,820 425,509 2016 Estimate HH 7,566 49,595 126,749 2016 Census HH 7,223 46,986 119,814 Median HH Income $33,525 $30,778 $33,675 Per Capita Income $9,504 $10,191 $12,448 Average HH Income $41,763 $39,834 $44,390 * # of Employees based on 5 mile radius 4 #
INVESTMENT OVERVIEW OFFERING SUMMARY The subject property is a.52 acre parcel leased to TitleMax of Arizona, Inc., which operates out of its 1,652 square foot building located thereon. The ground lease is additionally guaranteed by TitleMax's parent company, TMX Finance, LLC, and has five years remaining before the first of two five year options to extend. The lease has zero landlord obligations and calls for 10% increases in each option period as well. The subject is well located in the heart of Phoenix and the Phoenix MSA at the intersection of 51st Avenue and Thomas Rd. National retailer's in a one block radius include Wal-Mart, El Super, Los Altos Ranch Market, Arco, Circle K, ChevRon, 7-Eleven, McDonald's, Burger King, Taco Bell, Wendy's, Church's Chicken, Chase, Wells Fargo, etc. Nearly one third of the 1.6m people living in the city of Phoenix live within 5 miles of the subject and that number is expected to grow approximately two percent by 2021. The Phoenix MSA is home approximately 4.6 million people and is expected to grow 10% by 2021. The MSA's economy is expected to grow faster than the national average as well and is anchored by multiple Fortune 500 companies and the construction, high-tech manufacturing, healthcare and tourism industries. INVESTMENT HIGHLIGHTS Hard Corner - Major Signalized Intersection Dense Infill Location - 474,000+ People in a 5-Mile Radius Strong Traffic Counts 70,000+/- Cars Per Day TitleMax Corporate Ground Lease - Zero Landlord Obligations 5 Years of Lease Term Remaining 10% Increases in Each Option 5
TENANT PROFILES TitleMax of Arizona, Inc. General Information Tenant Name Website Parent Company Headquartered Rentable Square Feet TitleMax of Arizona, Inc. www.titlemax.com TMX Finance, LLC Savannah, GA 1,652 SF Percentage of RBA 100.00% Lease Commencement 12/14/2012 Lease Expiration 12/13/2022 No. of Locations 1100+ 126
PROPERTY TITLEMAX CORPORATE NAME GROUND LEASE PRICING AND LOCATION VALUATION TENANT SUMMARY OVERVIEW MATRIX 5102 W Thomas Rd, Phoenix, AZ 85031 Corporate Ground Lease Hard Corner - Infill Phoenix Main Retail Intersection Core Tenant Demographics At or Below Market Rent Strong Traffic Counts The subject property is ground leased to TitleMax of Arizona, Inc. and guaranteed by TMX Finance, LLC which operates more than 1100 locations nationwide. The lease has 5+ years remaining and 10% increases in each option. CLOSE PROXIMITY TO: 7#
PROPERTY TITLEMAX CORPORATE NAME GROUND LEASE 5102 W Thomas Rd, Phoenix, AZ 85031 PRICING REGIONAL AND LOCATION VALUATION TENANT AND LOCAL SUMMARY OVERVIEW MATRIX MAP 8#
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PROPERTY SUMMARY OFFERING SUMMARY 10 #
ACQUISITION FINANCING MARCUS & MILLICHAP CAPITAL CORPORATION CAPABILITIES MMCC our fully integrated, dedicated financing arm is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms. We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options. Our dedicated, knowledgeable experts understand the challenges of financing and work tirelessly to resolve all potential issues to the benefit of our clients. WHY MMCC? Optimum financing solutions to enhance value Our ability to enhance buyer pool by expanding finance options Our ability to enhance seller control Through buyer qualification support Our ability to manage buyers finance expectations Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings Closed 1,651 debt and equity financings in 2016 National platform operating within the firm s brokerage offices $5.1 billion total national volume in 2016 Access to more capital sources than any other firm in the industry By relying on a world class set of debt/equity sources and presenting a tightly underwritten credit file 11
PHOENIX OVERVIEW MARKET OVERVIEW The Phoenix metro consists of Maricopa and Pinal counties, and it includes more than 30 incorporated and more than 30 unincorporated towns and cities. The region is hemmed in by mountains to the north and east. American Indian reservations to the east and south limit development in those directions, leaving the southeastern corridor and western half of the metro as the primary growth areas. The largest city is Phoenix, which encompasses about 520 square miles, is the capital city and boasts a population of nearly 1.6 million. Interstate 10 is a major trucking route directly connecting the region to Southern California, which is supporting a growing distribution industry. Various rail and air lines connect the metro nationally. METRO HIGHLIGHTS EMPLOYMENT GROWTH Job gains will increase faster than the national rate during the next five years, drawing new residents to the metro. HIGH-TECH MANUFACTURING BASE Intel Corp., Motorola Inc., Honeywell and others have large Phoenix operations, attracting additional companies serving these corporations. ACTIVE TOURISM INDUSTRY Warm winters and amenities including golf courses and resorts attract vacationers. 12
MARKET OVERVIEW ECONOMY Phoenix claims multiple Fortune 500 headquarters, including Freeport-McMoRan, Republic Services, Insight Enterprises, Avnet and PetSmart. The construction, high-tech manufacturing, healthcare and tourism industries dominate the Phoenix economy. Healthcare is a critical industry, with around 20 hospitals and the UA medical school located in the metro. Also, the Mayo Clinic has added multiple facilities located throughout the metro. MAJOR AREA EMPLOYERS Banner Health JPMorgan Chase & Co. Arizona State University Wells Fargo Intel Corp. Honeywell Aerospace Fry s American Airlines Bank of America Wal-Mart * Forecast SHARE OF 2016 TOTAL EMPLOYMENT 6% MANUFACTURING 17% PROFESSIONAL AND BUSINESS SERVICES 12% 11% 9% GOVERNMENT LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES 20% TRADE, TRANSPORTATION AND UTILITIES 6% CONSTRUCTION + 15% EDUCATION AND HEALTH SERVICES 2% INFORMATION 3% OTHER SERVICES 13
MARKET OVERVIEW DEMOGRAPHICS The metro is expected to add almost 500,000 people through 2021, resulting in the formation of nearly 170,000 households. A median home price of nearly $243,000 has afforded 62 percent of households to own a home, which is slightly below the national homeownership rate. Roughly 28 percent of people age 25 and older hold bachelor s degrees and 10 percent also obtained a graduate or professional degree. SPORTS 2016 Population by Age 7% 0-4 YEARS 21% 5-19 YEARS 7% 20-24 YEARS 27% 25-44 YEARS 24% 45-64 YEARS 14% 65+ YEARS EDUCATION 2016 POPULATION: 4.6M Growth 2016-2021*: 9.9% 2016 HOUSEHOLDS: 1.7M Growth 2016-2021*: 9.9% 2016 MEDIAN AGE: 36 U.S. Median: 37.7 2016 MEDIAN HOUSEHOLD INCOME: $54,200 U.S. Median: $54,500 QUALITY OF LIFE Phoenix offers a lower cost of living than other metros its size, a moderate climate and a variety of recreational and cultural options. In addition to outdoor activities, sports enthusiasts can enjoy one of the most complete lineups of major-league teams found in any city, including teams in all four major sports. The Cactus League holds spring training baseball throughout the Valley, and the area has numerous golf courses and tennis courts. Phoenix is home to the world-famous Heard Museum and Frank Lloyd Wright s Taliesin West. Music venues include Phoenix Symphony Hall and the Orpheum Theatre. Highereducation institutions include Arizona State University, Grand Canyon University and community colleges. ARTS & ENTERTAINMENT * Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody s Analytics; U.S. Census Bureau 14
PROPERTY TITLEMAX CORPORATE NAME GROUND LEASE PRICING AND LOCATION VALUATION TENANT MARKETING DEMOGRAPHICS SUMMARY OVERVIEW MATRIX TEAM CREATED ON NOVEMBER 29, 2017 1 Miles 3 Miles 5 Miles POPULATION 2021 Projection 33,438 197,284 473,839 2016 Estimate 33,261 194,641 463,159 2010 Census 30,260 177,820 425,509 2000 Census 32,319 177,406 416,606 INCOME Average $41,763 $39,834 $44,390 Median $33,525 $30,778 $33,675 Per Capita $9,504 $10,191 $12,448 HOUSEHOLDS 2021 Projection 7,606 50,306 129,888 2016 Estimate 7,566 49,595 126,749 2010 Census 7,223 46,986 119,814 2000 Census 8,362 49,522 123,741 HOUSING 2016 $83,496 $78,134 $92,940 EMPLOYMENT 2016 Daytime Population 2016 Unemployment 2016 Median Time Traveled 20,157 167,332 411,645 7.25% 8.46% 8.41% 29 30 29 RACE & ETHNICITY White 44.85% 46.84% 49.26% Native American 0.15% 0.13% 0.16% African American 4.52% 5.42% 6.70% Asian/Pacific Islander 0.92% 1.11% 2.34% Source: 2015 Experian # 15