OFFERING MEMORANDUM 7 - E L E V E N DALLAS, TEXAS
2 INVESTMENT OVERVIEW INVESTMENT OVERVIEW Marcus & Millichap is pleased to present this 7-Eleven in Dallas, the third largest city in Texas. 7-Eleven demonstrates commitment through their 36-year operating history and recent 10-year extension. The tenant currently has more than 11.5 years remaining on an absolute-net lease featuring zero landlord responsibilities. There are 10 percent rent bumps every six years over the base term and in all four, five-year extension options. The lease is backed by a corporate guaranty from 7-Eleven, Incorporated (Inc); who is consistently ranked number one on CSP Magazine s Top 202 Convenience Stores. The subject property is located at the signalized, hard corner at the intersection of Lake June Road and North Jim Miller Road. More than 28,000 vehicles pass through this intersection daily. There are three elementary schools within one and a half miles of this asset, totaling more than 1,700 students. This asset benefits from being in walking distance to Lake June Station. Dallas Area Rapid Transportation s (DART) Green Line provides direct access to downtown Dallas. 7-Eleven benefits from strong demographics. Within five miles, there are more than 211,000 residents. Additional retailers in the immediate vicinity include: MetroPCS, Shell, CVS, AutoZone, Circle K, Wingstop, Bank of America, O Reilly Auto Parts, KFC, Planet Fitness, Chase Bank, Subway, and many more.
3 INVESTMENT OVERVIEW 7-Eleven in Dallas The Third Largest City in Texas Income Tax Free State More Than 35-Year Operating History Exercised 10-Year Extension in October 2017 Currently More Than 11.5 Years Remaining on Absolute-Net Lease Zero Landlord Responsibilities Hedge Against Inflation 10 Percent Rent Bumps Every Six Years Corporate Guaranty 7-Eleven, Incorporated (Inc) Standard & Poor (S&P): AA- Consistently Number One on CSP Magazine s Top 202 Convenience Stores More Than 8,000 Locations in North America Signalized, Hard Corner Location at the Intersection of Lake June Road and North Jim Miller Road More Than 28,000 Vehicles Per Day (VPD) Additional Traffic Driven by Four Fueling Pumps Strategically Located Seven Tenths of a Mile from Lake June Station Dallas Area Rapid Transportation (DART) Green Line Provides Direct Access to Downtown Dallas Strong Demographics More Than 211,000 Residents Within Five Miles 6 Percent Increase From 2010 Additional Retailers in the Immediate Vicinity Include: MetroPCS, Shell, CVS, AutoZone, Circle K, Wingstop, Bank of America, O Reilly Auto Parts, KFC, Planet Fitness, Chase Bank, Subway, and Many More
4 FINANCIAL OVERVIEW FINANCIAL OVERVIEW PRICE $1,676,114 CAP RATE 5.25% NOI $87,996 PRICE PER SQUARE FOOT $703.66 RENT PER SQUARE FOOT $36.94 YEAR BUILT 1981 APPROXIMATE LOT SIZE 0.36 Acres GROSS LEASEABLE AREA 2,382 TYPE OF OWNERSHIP Fee Simple LEASE GUARANTOR 7-Eleven, Incorporated (Inc) LEASE TYPE ROOF AND STRUCTURE Triple-Net (NNN) Tenant Responsible
5 LEASE SUMMARY LEASE SUMMARY LEASE COMMENCEMENT DATE 1/1/1982 LEASE EXPIRATION DATE 9/30/2029 BASE RENT RENT SCHEDULE ANNUAL RENT MONTHLY RENT 10/6/2017 9/30/2023 $87,996 $7,333 INCREASES LEASE TERM 15 Years 10/1/2023 9/30/2029 $96,800 $8,067 10% TERM REMAINING 11+ Years INCREASES 10% Every 6 OPTIONS TO RENEW 4, 5-Year OPTIONS 10/1/2029 9/30/2034 $106,480 $8,873 10% 10/1/2034 9/30/2039 $117,8 $9,761 10% 10/1/2039 9/30/2044 $8,841 $10,737 10% FIRST RIGHT OF REFUSAL Yes 10/1/2044 9/30/2049 $141,722 $11,810 10%
6 TENANT OVERVIEW TENANT OVERVIEW - 7 - ELEVEN 7-Eleven is among the world s largest and most widely recognized and iconic retailers, both inside and outside the c-store channel. The company s iconic Slurpee, Big Gulp soft drinks and fresh-made coffees have helped 7-Eleven grow throughout North America and in several countries overseas. Convenience items range from cigarettes and magazines, to sweet and salty snacks, beer and wine. 7-Eleven distinguishes itself from the competition with its many proprietary and private-label items. On the foodservice front, the chain has recently rolled out its fresh initiative, adding more fresh food items across the chain. Technology meanwhile plays a major role in the brand s evolution, including its 7Rewards loyalty app, a new BillPay app, third-party delivery and even a promotional play around drone delivery. For management purposes, corporate/franchised stores are organized into geographical zones. 7-Eleven, Incorporated is wholly owned subsidiary of Tokyo-based Seven & I Holdings Co., Limited; which is publicly-traded on the Tokyo Stock Exchange. Its Retailer Initiative allows an operator to align product assortment with the store s customer preferences, it offers many proprietary and private-label items, and it has assembled a restaurant-quality team that is introducing more fresh foods to the chain. TENANT PROFILE TENANT TRADE NAME OWNERSHIP TENANT LEASE GUARANTOR NUMBER OF LOCATIONS HEADQUARTERED CREDIT RATING RATING AGENCY 7-Eleven Wholly Owned Subsidiary of Seven & I Holdings Co., Limited 7-Eleven, Incorporated 7-Eleven, Incorporated 8,000 Plus Irving, Texas AA- Standard & Poor (S&P) RANK #1 CSP Daily News, #7 Franchise 500
7 LOWER GREENVILLE DEMOGRAPHICS 356 35E OAK LAWN DEMOGRAPHICS UPTOWN WEST DALLAS DOWNTOWN Dallas 78 30 SOUTH DALLAS/ FAIR PARK 352 5 MILE RADIUS 30 3 MILE RADIUS 80 635 Sunnyvale 80 30 KESSLER 35E 175 352 1 MILE 352 635 Mesquite rell Hill WYNNEWOOD NORTH PLEASANT GROW SITE Balch Springs EDBIRD 67 340 175 20 20 Lawson 35E 342 20 175 1-Mile 3-Mile 5-Mile POPULATION 2000 Population 14,733 81,359 202,792 2010 Population 16,078 87,787 211,679 2017 Population 16,142 90,995 224,662 2022 Population 16,846 95,502 236,732 1-Mile 3-Mile 5-Mile HOUSEHOLDS 2000 Households 4,026 23,474 64,414 2010 Households 4,093 23,944 64,868 2017 Households 4,076 24,698 68,671 2022 Households 4,249 25,903 72,345 1-Mile 3-Mile 5-Mile HOUSEHOLD (HH) INCOMES 2017 Average HH Income $50,093 $44,246 $44,375 2017 Median HH Income $39,518 $36,765 $34,695 2017 Per Capita Income $,649 $,009 $13,564
8 DALLAS, TEXAS ABOUT DALLAS Dallas is one of the largest cities in the United States, and is located at the center of the Dallas-Fort Worth-Arlington metropolitan statistical area (MSA). The Dallas-Fort Worth (DFW) area was developed due to the construction of major railroad lines, allowing access to cotton, cattle, and later oil in North and East Texas. The city has developed as a strong industrial and financial center, and a major inland port, due to the convergence of major railroads, interstate highways, and the Dallas/Fort Worth International Airport. The city is home to 9 Fortune 500 companies, including household names such as Halliburton, Southwest Airlines, and Texas Instruments. Dallas is one of the fastest-growing cities in the United States. From 2010 to 2016, the city recorded the highest net domestic migration in the country, in excess of 300,000. Overall, the Dallas Fort Worth metro area had the second largest population increase among metro areas in the United States (US), which recorded a population of 7,233,323 as of July 1, 2016, an increase of 807,000 people since the 2010 census. The Dallas-Fort Worth Metropolitan Statistical Area (MSA) has one of the largest concentrations of corporate headquarters for publicly traded companies in the United States. Fortune Magazine s 2017 annual list of the Fortune 500 Companies recorded 9 companies within Dallas city limits and 22 companies within the Dallas-Fort Worth (DFW) region. The Dallas-Fort Worth (DFW) region now represents the largest concentration of Fortune 500 headquarters in the State of Texas, followed by the Houston. In 2008, AT&T relocated their corporate headquarters to Downtown Dallas. AT&T is the largest telecommunications company in the world and the ninth largest company in the nation by revenue in 2017. Additional Fortune 500 companies headquartered in Dallas include: Energy Transfer Equity, Tenet Healthcare, Southwest Airlines, Texas Instruments, Jacobs Engineering, HollyFrontier, Dean Foods, and Builders FirstSource. In October 2016, Jacobs Engineering, one of the world s largest engineering companies, relocated from Pasadena, California to Downtown Dallas.
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.
7 - E L E V E N DALLAS, TEXAS 7037 LAKE JUNE ROAD DALLAS, TEXAS 72517 BROKER OF RECORD: TIMOTHY SPECK MARCUS & MILLICHAP DALLAS, TX LICENSE: 432723