OFFERING MEMORANDUM T A C O B E L L YOUNGSTOWN, OHIO
2 INVESTMENT OVERVIEW INVESTMENT OVERVIEW Marcus & Millichap is pleased to present Taco Bell in Youngstown, Ohio, located 51 miles west of Akron and 78 miles south of Cleveland. There are more than 16 years remaining on Taco Bell s absolute-net lease, where the tenant is responsible for all expenses associated with the asset. The lease features one and a half percent annual rent bumps over the base term and in the four, five-year renewal options. The lease is guaranteed by Charter Foods North, Limited Liability Company (LLC). Charter Foods North operates 89 restaurants in Ohio, Pennsylvania, New Hampshire, and Massachusetts across multiple concepts including: Taco Bell, Long John Silver, and Kentucky Fried Chicken (KFC). Taco Bell has been operating at this location for more than a decade. The tenant demonstrated their commitment by signing a brand new 20-year absolute-net lease in 2014. The subject asset benefits from being highly visible to passing traffic on Market Street. This Taco Bell has more than 80 feet of frontage along this major north-south corridor running through the city. Market Street sees more than 16,000 vehicles per day (VPD). Taco Bell is also situated within a dense trade area. There is more than 56,000 square feet of retail within half of a mile. The subject parcel benefits from multiple points of ingress/egress. There are two access points from Market Street and an exterior access point on West Judson Avenue. Taco Bell benefits from being in a strong demographic area. There are more than 10,000 residents within one mile. Additional retailers in the immediate vicinity include: Popeyes, Burger King, Wendy s, O Reilly Auto Parts, AutoZone, and many more.
3 INVESTMENT OVERVIEW Taco Bell in Youngstown, Ohio 56 Miles West of Akron and 78 Miles South of Cleveland Strong Operating History Asset Has Operated as a Taco Bell For More Than 10 Years Brand New 20-Year Lease Signed in 2014 More Than 16 Years Remaining on Absolute-Net Lease with Zero Landlord Responsibilities Strong Annual Rent Increases 1.5 Percent Lease is Guaranteed by Charter Foods North, Limited Liability Company (LLC) Operates More Than 80 Units Highly Visible Along Market Street More Than 80 Feet of Frontage Major North-South Corridor in Youngstown With More Than 16,000 Vehicles Per Day (VPD) Multiple Points of Ingress/ Egress More Than 56,000 Square Feet of Retail Within Half of a Mile Strong Demographics More Than 10,000 Residents Within One Mile Additional Retailers in the Immediate Vicinity Include: Popeyes, Burger King, Wendy s, O Reilly Auto Parts, AutoZone, and Many More
4 FINANCIAL OVERVIEW FINANCIAL OVERVIEW PRICE $1,258,600 CAP RATE 6.00% NOI $75,516 PRICE PER SQUARE FOOT $580.54 RENT PER SQUARE FOOT $34.83 YEAR BUILT 1996 APPROXIMATE LOT SIZE 1.40 Acres GROSS LEASEABLE AREA 2,168 TYPE OF OWNERSHIP Fee Simple LEASE GUARANTOR Charter Foods North, Limited Liability Company (LLC) LEASE TYPE Absolute-Net ROOF AND STRUCTURE Tenant Responsible
5 LEASE SUMMARY LEASE SUMMARY LEASE COMMENCEMENT DATE 7/15/2014 LEASE EXPIRATION DATE 7/31/2034 LEASE TERM 20 Years ANNUALIZED OPERATING DATA BASE RENT ANNUAL RENT MONTHLY RENT 8/1/2018 7/31/2019 $75,516 $6,293 INCREASES 8/1/2019 7/31/2020 $76,649 $6,387 1.50% TERM REMAINING INCREASES OPTIONS TO RENEW 16.5 Years 1.5% Annually 4, 5-Year 8/1/2020 7/31/2021 $77,798 $6,483 1.50% 8/1/2021 7/31/2022 $78,965 $6,580 1.50% 8/1/2022 7/31/2023 $80,150 $6,679 1.50% 8/1/2023 7/31/2024 $81,352 $6,779 1.50% 8/1/2024 7/31/2025 $82,572 $6,881 1.50% 8/1/2025 7/31/2026 $83,811 $6,984 1.50% 8/1/2026 7/31/2027 $85,068 $7,089 1.50% 8/1/2027 7/31/2028 $86,344 $7,195 1.50% 8/1/2028 7/31/2029 $87,639 $7,303 1.50% 8/1/2029 7/31/2030 $88,954 $7,413 1.50% 8/1/2030 7/31/2031 $90,288 $7,524 1.50% 8/1/2031 7/31/2032 $91,643 $7,637 1.50% 8/1/2032 7/31/2033 $93,017 $7,751 1.50% 8/1/2033 7/31/2034 $94,413 $7,868 1.50%
6 TENANT OVERVIEW TENANT OVERVIEW - TACO BELL YUM! BRANDS YUM! Brands is the largest fast-food operator in the world in terms of number of locations, with more than 42,000 outlets in some 130 countries. The company s flagship chains include Kentucky Fried Chicken, Pizza Hut, and Taco Bell. YUM! sold the Long John Silver s seafood chain, along with several hundred A&W root beer and burger stands to two separate buyers in late 2011. In 2016, YUM! Brands spun off its Chinese operations into a separately traded public company. CHARTER FOODS Charter Foods owns and operates 200 restaurants across the United States. Charter Foods predominant operations are in the Taco Bell system, but the company also operates Long John Silver and Kentucky Fried Chicken (KFC) restaurants. Charter Foods North, Limited Liability Company (LLC) operates 89 restaurants across the northeast and midwest in states such as: Ohio, Pennsylvania, New Hampshire, and Massachusetts. The company was founded in 1998 and is based in Morristown, Tennessee. TENANT PROFILE TENANT TRADE NAME PARENT COMPANY TENANT LEASE GUARANTOR NUMBER OF LOCATIONS HEADQUARTERED Taco Bell Yum! Brands Taco Bell Charter Foods North, Limited Liability Company (LLC) 89 Units Morristown, Tennessee WEB SITE http://charterfoodscareers.com/
Pennsylvania Ohio Pennsylvania Ohio 45 7 46 Mineral Ridge DEMOGRAPHICS 80 Girard 422 711 193 80 62 304 Hubbard Maplewood Park DEMOGRAPHICS 45 80 76 46 5 MILE RADIUS 11 West Austintown Austintown 11 3 MILE RADIUS 680 62 1 MILE 62 Youngstown 422 7 680 Campbell SITE Struthers 616 New Bedford 422 Villa Maria 208 Frizzle P sworth Westhill Heights 224 Canfield 224 Boardman Poland Lowellville 224 5 45 62 76 680 170 Hillsville Ed 46 1-Mile 3-Mile 5-Mile 62 POPULATION 2000 Population 15,558 79,777 181,553 2010 Population 11,933 68,631 161,589 2017 Population 10,772 65,610 156,272 2022 Population 10,455 64,503 154,024 7 11 Willow 1-Mile Crest 3-Mile 5-Mile HOUSEHOLDS 2000 Households 6,057 33,053 73,949 2010 Households 4,861 29,474 67,977 2017 Households 4,391 28,245 65,692 2022 Households 4,259 27,777 64,712 630 1-Mile Bessemer 3-Mile 5-Mile HOUSEHOLD (HH) INCOMES 2017 Average HH Income $43,317 $50,864 $53,632 2017 Median HH Income $29,671 $37,169 $38,072 2017 Per Capita Income $17,657 $21,897 $22,545 3
8 YOUNGSTOWN, OHIO ABOUT YOUNGSTOWN Youngstown is a city in Mahoning County, Ohio. It is part of the Youngstown-Warren-Boardman, OH-PA Metropolitan Statistical Area (MSA). Located on the Mahoning River, Youngstown is approximately 65 miles southeast of Cleveland and 61 miles northwest of Pittsburgh. Despite having its own media market, Youngstown is often included in commercial and cultural depictions of both Northeast Ohio as well as the Pittsburgh Tri- State Area due to these proximities. Youngstown lies 10 miles west of the Pennsylvania state line, midway between New York City and Chicago via Interstate 80. Youngstown has a rich cultural history and every Youngstowner has a story to tell. Ranked by Forbes, Entrepreneur and Site Selection magazines as one of the best places for businesses to locate. Youngstown-Warren is the only place that provides effective overnight ground access to New York City, Chicago, and Toronto. Some of the prominent companies with facilities in the Youngstown region include Delphi, WCI Steel Plant, Packard Electric Systems, Exal Corporation and V&M Star Steel Company. A nearby General Motor s plant is the region s largest industrial employer. In addition, Youngstown is the site of the prominent Turning Technologies, a notable software company.
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 part or in 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.
T A C O B E L L YOUNGSTOWN, OHIO 3726 MARKET STREET YOUNGSTOWN, OHIO 44507 BROKER OF RECORD: MICHAEL GLASS MARCUS & MILLICHAP OHIO LICENSE: BRK.2007005898