SINGLE TENANT 15 YEAR ABSOLUTE NNN INVESTMENT OPPORTUNITY VAN NUYS CALIFORNIA (LOS ANGELES COUNTY)
EXCLUSIVELY MARKETED BY MATTHEW MOUSAVI MANAGING PRINCIPAL 610 Newport Center Drive, Suite 1500 Newport Beach, CA 92660 DL: 949.698.1116 M: 714.404.8849 Matthew.Mousavi@srsre.com CA License No. 01732226 PATRICK R. LUTHER, CCIM MANAGING PRINCIPAL 610 Newport Center Drive, Suite 1500 Newport Beach, CA 92660 DL: 949.698.1115 M: 480.221.4221 Patrick.Luther@srsre.com CA License No. 01209944 MATTHEW G. HARDKE FIRST VICE PRESIDENT 610 Newport Center Drive, Suite 1500 Newport Beach, CA 92660 DL: 949.698.1106 M: 949.929.0558 Matt.Hardke@srsre.com License No. 01946266 This Offering Memorandum has been prepared by SRS National Net Lease Group (SRS) and has been approved for distribution by the owner. Although effort has been made to provide accurate information, neither the owner nor SRS can warrant or represent accuracy or completeness of the materials presented herein or in any other written or oral communications transmitted or made available to the purchaser. Many documents have been referred to in summary form and these summaries do not purport to represent or constitute a legal analysis of the contents of the applicable documents. Neither owner nor SRS represents that this offering summary is all inclusive or contains all of the information a purchaser may require. All of the financial projections and/or conclusions presented herein are provided strictly for reference purposes and have been developed based upon assumptions and conditions in effect at the time the evaluations were undertaken. They do not purport to reflect changes in the economic performance of the property or the business activities of the owner since the date of preparation of this Offering Memorandum. The projected economic performance of the property, competitive submarket conditions, and selected economic and demographic statistics may have changed subsequent to the preparation of the package. Qualified purchasers are urged to inspect the property and undertake their own independent evaluation of the property, the market and the surrounding competitive environment.
5 7 13 16 EXECUTIVE SUMMARY INVESTMENT HIGHLIGHTS PROPERTY OVERVIEW AERIALS PARCEL MAP SITE PLANS LOCATION MAP AREA OVERVIEW VAN NUYS, CA OVERVIEW DEMOGRAPHICS FINANCIALS RENT ROLL PRICING SUMMARY TENANT OVERVIEW
INVESTMENT SUMMARY SRS National Net Lease Group is pleased to present the rare opportunity to acquire the fee simple interest (land & building) in a freestanding, single tenant, absolute NNN leased, Crunch Fitness, located in Van Nuys, California. The tenant recently signed a brand new 15- year lease with 2 (5-Year) options to extend, demonstrating their commitment to the site. The lease is personally guaranteed by Crunch Fitness s CEO/Founder, the largest Crunch franchisee operator with 20+ Crunch Fitness locations across the nation (contact Agent for more details). The lease features a 10% rental increase in 2027. Crunch Fitness ust opened this July with well over $1 million invested in the buildout and capital improvements. The Crunch Fitness is located along Van Nuys Boulevard (37,200 vehicles per day) with excellent visibility. The gym is a co-anchor, along with Jons International Marketplace, Fallas, and Dearden s, to an inline shopping center. Other tenants within the shopping center include Payless Shoes and MTA Thrift Store. Crunch Fitness benefits from tenant synergy and crossover traffic with the retailers such as 99 Cents Only, Bank of America, Wells Fargo, Walgreens, Starbucks, and more, located along Van Nuys Boulevard, a major thoroughfare for the city of Van Nuys. The 5-mile trade area is supported by over 741,000 residents ($81,000 AHHI) and nearly 253,000 employees. OFFERING PRICING: $6,320,000 NET OPERATING INCOME: $395,000 CAP RATE: 6.25% GUARANTY: LEASE TYPE: LANDLORD RESPONSIBILITIES: PROPERTY SPECIFICATIONS RENTABLE AREA: LAND AREA: Strong Personal Guaranty (Contact Agent For Details) Absolute NNN None 20,662 SF 21,911 SF / 0.50 Acres PROPERTY ADDRESS: 6723 Van Nuys Boulevard, Van Nuys, CA 91405 YEAR BUILT / REMODELED: 1950 / 2017 PARCEL NUMBER: 2236-010-001 OWNERSHIP: Fee Simple (Land and Building) 5 / CRUNCH FITNESS / VAN NUYS, CALIFORNIA INVESTMENT SUMMARY / SRS NATIONAL NET LEASE GROUP
INVESTMENT HIGHLIGHTS Strong National Brand - Crunch Fitness Headquartered in New York City, Crunch Fitness serves over 650,000 members across 150+ locations throughout the United States and Australia Strong personal guarantee from Crunch Fitness Founder/CEO, the largest Crunch franchisee with over 20 units (contact Agent for more details) Brand New Long-Term 15-Year Lease Rental Increases Brand new 15-Year lease with 2 (5-Year) options 10% rental increase in 2027 Just opened this July Absolute NNN Lease Fee Simple Ownership Zero Responsibilities Tenant pays for all CAM, insurance, taxes, and maintains all aspects of the building No landlord responsibilities Ideal, management-free investment for an out of state, passive investor Completely Renovated Building Tenant Buildout $700k in Equipment New roof installed by tenant in late 2016 Structural retrofit, including mezzanine space, performed by tenant in late 2016 and early 2017 Tenant is currently completing new facade, signage, and exterior painting Front and rear doors and windows will be replaced by Tenant prior to opening Tenant spent over $700,000 on equipment alone Crunch Fitness will have spent ±$350,000 on roof and structural upgrades (totaling ±$600,000 with seller s share) prior to fitness center buildout Adjacent to Supermarket Part Of Inline Shopping Center Shared Parking Adjacent to Jons International Marketplace Endcap and co-anchor a shopping center with Jons International Marketplace, Fallas, and Dearden s as tenants Shared parking lot with approximately 428 spaces - no cost to Tenant or Landlord Excellent tenant synergy with crossover traffic Along Major Thoroughfare Retail Corridor Prominent Monument Signage The gym is located along Van Nuys Boulevard (37,200 vehicles per day) with excellent visibility, street frontage, and access Van Nuys Boulevard is the primary thoroughfare for the city of Van Nuys National tenants along Van Nuys Boulevard include Wells Fargo, Bank of America, 99 Cents Only, McDonald s, Starbucks, and more Prominent monument signage further increases visibility for the subject property Extremely Dense In-Fill Trade Area Supported By Affluent Population 741,000 residents and 253,000 employees support the 5-mile trade area $81,000 average household income 6 / CRUNCH FITNESS / VAN NUYS, CALIFORNIA INVESTMENT HIGHLIGHTS / SRS NATIONAL NET LEASE GROUP
PROPERTY OVERVIEW ACCESS There are two (2) access points with one (1) along Kittridge St and one (1) along Archwood St. PARCEL Parcel: 2236-010-001 Acres: 0.50 Square Feet: 21,911 SF TRAFFIC COUNTS Van Nuys Boulevard:... 37,200 San Diego Freeway/ Interstate 405:... 212,000 ZONING C2: Commercial IMPROVEMENTS There is approximately 20,662 SF of existing building area. PARKING There are approximately 428 shared parking stalls. YEAR BUILT / REMODELED 1950 / 2017 PARCEL MAP 7 / CRUNCH FITNESS / VAN NUYS, CALIFORNIA PROPERTY OVERVIEW / SRS NATIONAL NET LEASE GROUP
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ACTUAL SITE N
Pylon Sign Van Nuys Blvd. - 37,200 VPD Kittridge St. UNDER CONSTRUCTION Archwood St. Shared Parking - 448 Spaces (No Cost To Tenant or Landlord) Residential N
ACTUAL INTERIOR PHOTOS
SAN FERNANDO 2015 ESTIMATED POPULATION 3 Mile...326,715 5 Mile...741,388 VAN NUYS BURBANK GLENDALE 2015 AVERAGE HOUSEHOLD INCOME 3 Mile...$69,229 5 Mile...$81,087 2015 ESTIMATED TOTAL EMPLOYEES 3 Mile...129,549 5 Mile...252,758 BEVERLY HILLS LOS ANGELES SANTA MONICA N
AREA OVERVIEW OF THE CITY OF VAN NUYS Van Nuys is a neighborhood in the central San Fernando Valley region of the city of Los Angeles, California. Van Nuys is directly served by the 405 (San Diego Freeway) passing through it. Other nearby freeways include: the Route 101 (Ventura Freeway), the Route 170 (Hollywood Freeway), the Route 118 (Simi Valley Freeway), and the Golden State Freeway section of Interstate 5. Van Nuys Boulevard has a long and diverse commercial district along it, as do other major streets crossing through Van Nuys. From 1947 until 1992, GM operated an automobile factory called Van Nuys Assembly at the location of Van Nuys Boulevard and Arminta Street. Grupo TACA operates a Van Nuys-area TACA Center at 6710 Van Nuys Boulevard The town was founded in 1911, and named for Isaac Newton Van Nuys, one of its developers. It was annexed by Los Angeles on May 22, 1915, after completion of the Los Angeles Aqueduct, providing it with the water required for further growth. Van Nuys was the first new stop on the San Fernando Line of the Pacific Electric Railway red cars system, which boosted its early land sales and commercial success. Van Nuys became the Valley s satellite Los Angeles municipal civic center, with the 1932 Art Deco Valley Municipal Building (Van Nuys City Hall), a visual landmark and Los Angeles Historic-Cultural Monument starting the present day Government Center complex of government services buildings. In 1991 Marvin Braude, a member of the Los Angeles City Council, redesignated a 45-block area from being a part of Van Nuys to being a part of Sherman Oaks. This redesignated area included the community of Magnolia Woods. Some area residents had presented a petition and several original deeds that stated Sherman Oaks to Braude. They argued that the area was originally a part of Sherman Oaks until the 1960s, when ZIP codes labeling the area as Van Nuys were established. In 2014, A Great Streets project was introduced by Mayor Eric Garcetti with Van Nuys Blvd. to be redesigned between Victory Blvd. and Oxnard Street. Also, Sepulveda Blvd. was resurfaced between Victory Blvd and Oxnard Street in May 2014. A new Los Angeles County services building is under construction on the southwest corner of Van Nuys Blvd. and Saticoy Street in 2014.. 13 / CRUNCH FITNESS / VAN NUYS, CALIFORNIA AREA OVERVIEW / SRS NATIONAL NET LEASE GROUP
AREA OVERVIEW OF THE CITY OF VAN NUYS (CONTINUED) DEMOGRAPHICS 1 MILE 3 MILES 5 MILES 2016 Estimated Population 59,961 326,715 741,388 2021 Projected Population 61,983 337,312 766,353 2010 Census Population 57,846 316,690 716,519 Projected Annual Growth 2016 to 2021 0.67% 0.64% 0.66% Historical Annual Growth 2010 to 2016 0.58% 0.50% 0.55% 2016 Estimated Households 18,601 107,570 244,535 2021 Projected Households 19,156 110,595 251,820 2010 Census Households 18,074 105,188 238,366 Projected Annual Growth 2016 to 2021 0.59% 0.56% 0.59% Historical Annual Growth 2010 to 2015 0.46% 0.36% 0.41% 2016 Estimated White 50.70% 53.90% 55.90% 2016 Estimated Black or African American 4.90% 4.30% 3.90% 2016 Estimated Asian or Pacific Islander 7.30% 9.50% 9.00% 2016 Estimated American Indian or Native Alaskan 0.80% 0.60% 0.60% 2016 Estimated Other Races 31.30% 26.60% 25.40% 2016 Estimated Hispanic 65.70% 55.30% 53.40% 2016 Estimated Average Household Income $54,299 $69,229 $81,087 2016 Estimated Median Household Income $36,608 $46,103 $53,412 2016 Estimated Per Capita Income $17,652 $23,170 $27,065 2016 Estimated Total Businesses 2,577 14,205 30,055 2016 Estimated Total Employees 18,448 129,549 252,758 14 / CRUNCH FITNESS / VAN NUYS, CALIFORNIA AREA OVERVIEW / SRS NATIONAL NET LEASE GROUP
ADJACENT PROPERTIES 15 / CRUNCH FITNESS / VAN NUYS, CALIFORNIA PHOTOS / SRS NATIONAL NET LEASE GROUP
RENT ROLL LEASE TERM RENTAL RATES TENANT NAME SQUARE FEET LEASE START LEASE END BEGIN INCREASE MONTHLY PSF ANNUALLY PSF RECOVERY TYPE OPTIONS Crunch Fitness 20,662 Jan 2017 Jan 2032 Current - $32,916 $1.59 $395,000 $19.12 Absolute NNN 2 (5-Year) Personal Guaranty* Jan 2027 10% $36,083 $1.75 $433,000 $20.96 Option 1: $497,950 Option 2: $572,643 Notes: 1) Tenant has partial rent abatement for the first 66 months of the term. Seller will credit the Buyer the difference at the close of escrow. Contact Agent for details. 2) Lease is personally guaranteed by the largest Crunch Fitness franchisee, the Founder/CEO of Crunch Fitness. FINANCIAL INFORMATION Price:...$6,320,000 Net Operating Income:...$395,000 Cap Rate:... 6.25% Lease Type:...Absolute NNN PROPERTY SPECIFICATIONS Address:... 6723 Van Nuys Boulevard, Van Nuys, CA 91405 Year Built / Remodeled:... 1950 / 2017 Rentable Area:...20,662 SF Parcel Number:... 2236-010-001 BRAND PROFILE CRUNCH FITNESS Crunch Fitness owns, operates, and franchises fitness centers in the United States and Australia. It offers hip-hop aerobics, co-ed action wrestling, cyked yoga cycling, and other classes, as well as personal and treadmill training services in its corporately owned and franchised locations. Headquartered in New York City, and coowned by New Evolution Ventures (NeV) and private-equity firm Angelo Gordon, Crunch serves over 400,000 members with both corporately owned and franchised locations (Crunch Essential) in cities throughout the U.S. and in Australia. Company Type:... Private Locations:... 163 Website:... www.crunch.com 16 / CRUNCH FITNESS / VAN NUYS, CALIFORNIA RENT ROLL / SRS NATIONAL NET LEASE GROUP
SRS GLOBAL STATS 500+ PROPERTIES CURRENTLY REPRESENTED $180M+ HOW MUCH CLIENTS SAVED IN 2014 600+ CLIENTS REPRESENTED IN 2014 *STATISTICS ARE FOR 2015. $1.8B* TRANSACTION VALUE 20+ OFFICES 280+ BROKERS, PROFESSIONALS, AND STAFF