FITNESS 19 OFFERING MEMORANDUM ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 1
Financial Overview OFFERING SUMMARY PRICE $3,076,923 CAP RATE 6.50% NOI $200,000 PRICE PER SQUARE FOOT $170.94 RENT PER SQUARE FOOT $11.11 YEAR BUILT 1951/2009/2016 APPROXIMATE LOT SIZE 0.28 Acres GROSS LEASEABLE AREA 18,000 TYPE OF OWNERSHIP LEASE GUARANTOR LEASE TYPE ROOF AND STRUCTURE Fee Simple F-19 Holdings, Limited Liability Company (LLC)* Double-Net (NN) Landlord LEASE SUMMARY LEASE COMMENCEMENT DATE 12/16/2016 RENT COMMENCEMENT DATE 10/19/2017 LEASE EXPIRATION DATE 12/31/2026 LEASE TERM 10 Years TERM REMAINING 9+ Years INCREASES 10% Every 5 Years OPTIONS TO RENEW 2, 5-Year *Limited Guaranty: F-19 Holdings, LLC has a financial interest in Fitness 19 NY 293, LLC. F-19 Holdings, LLC only guarantees the first 36 months of rent. ACTUAL PROPERTY ANNUALIZED OPERATING DATA BASE RENT ANNUAL RENT Monthly Rent 10/19/2017 12/31/2021 $200,000 $16,667 1/1/2022 12/31/2026 $220,000 $18,333 10.00% Options 1/1/2026 12/31/2030 $242,000 $20,167 10.00% 1/1/2031 12/31/2035 $266,200 $22,183 10.00% Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 2
Investment Overview Marcus & Millichap is pleased to present this newly renovated Fitness 19 in Malverne, New York; which is less than 20 miles from Manhattan. Fitness 19 NY 293, Limited Liability Company (LLC) recently signed a 10-year double-net (NN) lease with 10 percent rent increases every five years. The tenant invested over $1 million in their buildout. This operator has one other location, and two units in total. Membership has grown substantially since tenant opened for business in early April of 2017. F-19 Holdings, Limited Liability Company (LLC) is guaranteeing the first 36 months of rent. Fitness 19 is in the center of Malverne on Hempstead Avenue between Francis Street and Arlington Avenue. This main and main location benefits from more than 50 feet of frontage on Hempstead Avenue. Fitness 19 is directly adjacent to the Malverne Diner and Malverne Cinema. The asset is in walking distance to the Malverne Train Station, which is serviced by the Long Island Rail Road s (LIRR) West Hempstead Line, providing direct access to Pennsylvania (Penn) Station in Manhattan. The West Hempstead Line provides service to more than 900,000 riders per year. This offering features more than a quarter of an acre, in a dense infill market with high barriers to entry. There are more than 700,000 people within five miles. Additionally, this asset benefits from affluent demographics. Within one mile, there are 25,500 residents with an average household income (AHHI) greater than $130,000. Newly Renovated Fitness 19 in Malverne, New York Less Than 20 Miles from Manhattan Tenant Invested over $1 Million in Their Buildout Substantial Growth in Membership Since Tenant Opened for Business in Early April 2017 Fitness 19 NY 293, Limited Liability Company (LLC) Recently Signed a 10-Year Lease Double- Net (NN) Lease 10 Percent Rent Increases Every Five Years Operator at has Two Fitness 19 Locations F-19 Holdings, Limited Liability Company (LLC) Guaranties First 36 Months of Rent More 17,000 Square Feet of Space Featuring 60 Cardio Machines, 27 Compound Machines, 31 Spin Bikes, Six Bench Presses, Iso Lateral Machines, and a Dumbbell Station Main and Main Fundamentals More than 50 Feet of Frontage on Hempstead Avenue Adjacent to Malverne Diner and Malverne Cinema Less than Two Tenths of a Mile from Malverne Station Long Island Rail Road s (LIRR) West Hempstead Line Provides Direct Access to Manhattan More than 900,000 Riders Annually Dense Infill Market with High Barriers to Entry More than Quarter-Acre Parcel Nearly 700,000 People in Five Miles Affluent Demographics Average Household Income (AHHI) in One-Mile is More Than $130,000 ACTUAL PROPERTY Proposed Development 12-Unit Luxury Condominium Complex Less Than a Third of a Mile North FILE PHOTO Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 3
Tenant Overview - Fitness 19 ACTUAL PROPERTY TENANT TRADE NAME Fitness 19 TENANT PROFILE OWNERSHIP Private Fitness 19 was founded in 2003 by Earl (Packy) Wilson, Robert Lineberger, and Nick Milat. Together they have engineered an affordable, family-oriented, friendly health club specializing in state-of-the-art cardio, strength and free weight equipment. They started Fitness 19 to give customers more of what they really want out of a fitness membership. Today there are more than 150 locations in 25 states. Many locations offer group classes to help members reach their personal fitness goals, including: Zumba, Boot Camp, Yoga, Pilates, Spinn & Insanity. Whatever members personal fitness goals are, Fitness 19 trainers can show members the most efficient path to reaching them. Members benefit from the expertise of professionals, who have the training and experience to guide them toward success. TENANT LEASE GUARANTOR NUMBER OF LOCATIONS 2 WEB SITE Fitness 19 NY 293, Limited Liability Company (LLC) F19 Holdings, Limited Liability Company (LLC)* https://www.fitness19.com/centers/malverne-ny/ *Limited Guaranty: F-19 Holdings, LLC has a financial interest in Fitness 19 NY 293, LLC. F-19 Holdings, LLC only guarantees the first 36 months of rent. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 4
Lease Abstract - Fitness 19 TENANT Fitness 19 NY 293, Limited Liability Company (LLC) LEASE ABSTRACT GUARANTOR 36 MONTH RENT GUARANTY TENANT OBLIGATIONS LANDLORD OBLIGATIONS REAL ESTATE TAXES F-19 Holdings, Limited Liability Company (LLC) "Guarantor has a financial interest in Tenant. Notwithstanding anything to the contrary in this Monetary Guaranty or in the Lease (i) Guarantor absolutely guarantees to Landlord the full and complete payment of the Fixed Rents (the ""36 Month Rent Guaranty"") to be paid by Tenant during the first thirty (36) months following the Lease Commencement Date which period shall be defined as the ""Guaranty Period""; and (ii) Guarantor's maximum liability under this Rent Guaranty shall be in an amount equal to the Fixed Rents due from Tenant during the first thirty six (36) months following the Lease Commencement Date; and (iii) such maximum liability amount as mentioned in (ii) above shall be reduced by any payment of Fixed Rents made by Tenant during the Guaranty Period. Tenant shall be obligated for the entire maintenance and upkeep of the Demised Premises, provided however, Tenant shall not be responsible for the maintenance, repair, or replacement of any structural components of the Premises. Tenant, subject to the terms of this lease, shall be required to pay all taxes, assessments and/or other charges levied against the Premises by any governmental agency as well as the costs for insurance, including but not limited to fire and liability, in the amounts and type stated herein and as further required by Landlord in its reasonable estimation will be required to adequately protect the Landlord's interest in the Demised Premises. Landlord shall repair and maintain the foundations, exterior walls and structural portions of the Premises. If replacement is recommended by a reputable third party contractor, Landlord shall be responsible for the replacement of the roof while Tenant shall be responsible for the maintenance and repair of the roof. If the Real Estate Taxes increase due to a re-assessment following completion of, and as a result of, the Landlord's Work, Tenant's Work and Tenant opening for business, then Tenant shall be responsible for two thirds (2/3) of said increase and Landlord shall be responsible for the remaining one third (1/3). Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 5
Aerial Overview Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 6
Area Overview & Demographics 1-Mile 3-Mile 5-Mile Population 2000 Population 25,302 237,843 691,910 2010 Population 25,147 239,820 689,390 2017 Population 25,554 240,279 697,994 2022 Population 25,841 242,307 708,690 1-Mile 3-Mile 5-Mile Households 2000 Households 8,302 80,958 223,647 2010 Households 8,301 80,536 220,167 2017 Households 8,415 80,600 222,297 2022 Households 8,505 81,247 225,503 1-Mile 3-Mile 5-Mile Household (HH) Incomes 2017 Average HH Income $130,276 120,232 114,066 2017 Median HH Income $114,808 $99,432 $92,567 2017 Per Capita Income $42,900 $40,331 $36,328 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 7
Market Overview - Malverne, New York Malverne is ideally situated 45 minutes from the heart of New York City, and within 10 minutes of some of the world s most beautiful white sand beaches. Part of Hempstead, Malverne is a village south of the Southern State Parkway Exit 17S and Franklin Square. Its eastern edge runs along Ocean Avenue, a thoroughfare bordering Lakeview. To the west is Valley Stream and Lynbrook is to the south. Malverne is widely known for its charming, small-town appeal with lovely residential homes, quaint downtown shops and restaurants as well as its beautiful recreational parks and facilities. Curving tree-lined streets are punctuated with primly kept colonials, Tudors and Capes on well-tended lots, many 40 feet by 100 feet, or 60 feet by 100 feet. The business district has three banks, a deli, a bakery, a luncheonette, a liquor store, hair and nail salons, insurance agencies, a supermarket, a four-screen cinema and bowling alley. Malverne Station is serviced by the Long Island Rail Road s (LIRR) West Hempstead Line, which provides direct access to Pennsylvania (Penn) Station in Manhattan. Crossroads Farm is a five-acre certified organic vegetable farm located in Malverne. Formerly owned and operated by the Grossmann Family, Nassau County acquired the farmland under proceeds from a 2006 Environmental Bond Act designed to preserve open space and revive farming in the area. Today, the Crossroads Farm is a project of the Nassau Land Trust, a 501(c)3 not-for-profit organization whose mission is to conserve land and preserve Nassau County for future generations. The farm sells seasonal vegetables, herbs, and flowers, as well as Long Island corn, berries, and fruit. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2016 Marcus & Millichap. Activity ID: Y0332165 8
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.
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