PRÆDIUM Advisors Multi-Tenant NNN Shopping Center Investment Offered at Only $4,236,905 Fiesta Palms Retail Center Phase 2 2111 S. Alma School Road Mesa, AZ 85210 That s a 7.5 CAP on In-Place 2018 NOI! Exclusively Marketed by PRAEDIUM Advisors Victor Allison President 602 320.6200 victor@praedium-advisors.com
PRÆDIUM Advisors Multi-Tenant NNN Shopping Center Investment Offered at Only $4,236,905 That s a 7.5 CAP on In-Place 2018 NOI!
Metro Phoenix Vicinity Map 5
Aerial Photograph SITE 8
Offering Summary Location and Physical Characteristics: Fiesta Palms II is south of and contiguous to the larger Fiesta Palms Shopping Center located at the South East Corner of the signalized intersection at Alma School Road and Baseline Road in Mesa, AZ. The site has excellent freeway access being located just 0.5 miles south of US 60 (200,000+ cars/day) and 2 miles east of AZ Loop 202. This 28,383± s.f. multi-tenant, retail center has excellent visibility with three unobstructed left/right in/out access points. It s leased to national, regional and local tenants. Tenants within the overall Fiesta Palms Shopping Center create a high degree of retail synergy within the entire complex. Some of these tenants include Starbucks, Dunkin Donuts, Applebee s, Lotus Market Grocery, Baby Bargains, H&R Block, and Snap Fitness. (see leasing brochures in Appendix 9 on page 49) Trade Area Highlights: The five mile radius trade area is heavily populated with over 422,000 prospective customers within a dense residential community. Median Household Income withing a one mile radius is $51,763 (see full demographics in Appendix 11 on page 84) Over 62,000 vehicles per day pass through the intersection and almost 30,000 vehicles drive by Fiesta Palms II on Alma School Road. (see Traffic Count Map in Appendix 12 on page 94) Address: 2111 S. Alma School Road Mesa AZ 85210 Tax Assessor s Parcel # and Property Taxes: 302 04 001W $44,713± (see Appendix 6 on Page 36) 11
Offering Summary Owner: Zoning: Tenant Mix: Fiesta Palms Shopping Center, LLC 1599 E. Orangewood Avenue Suite 250 Phoenix, AZ 85020 LC Mesa s Limited Commercial zoning provides areas for indoor retail, entertainment and service oriented businesses that serve the surrounding residential trade area within a one to ten mile radius. (see details in Appendix 13 on page 96) Avalon School of Cosmetology Papa John s Pizza Arthur Murray Dance Studio Has been in business over 40 years 4200± locations in Tenant since 2006 2 locations in AZ and 1 in CA & UT 36 countries. Owner is a national dance champion Tenant since 1991. New, 6 year Tenant since 1998 lease starting April 2018 with existing owner contributing $10 psf for One Up Games new tenant improvements. 5 year lease signed May 2018 Massage Hau Munchkin s Place Vacant EndCap Love of God Ministires Tenant since 2011 Tenant since 1999 2,708± s.f. Lease thru Feb 2022 All tenants have annual rental increases and staggered lease terms. Year Built: 1988 Total Leaseable: 28,383± s.f. Occupancy: 90.5% as of April 2018 Site Area: 3.26± acres 12
Offering Summary Existing Assumable Financing: 3 Purchase Scenarios: $1,565,000± current principal balance 4.50% 10 year term ending July 2021 25 year amortization $10,637± per month Principal + Interest No Assumption Fee Prepayable w/1% Penalty Personal Guaranty Required All Cash Cash to New Financing Cash and Assume Existing $1.565M Loan 4/1/18 Leasing Status: Price: As of April 2018, the 2,708 s.f. End-Cap space is vacant. For this analysis, the End- Cap is assumed to remain vacant through all of 2018. Under this conservative assumption, the estimated 2018 NOI is $317,768 which, when capped at 7.5%, yields a Purchase Price of $4,236,905 Only $4,236,905 That s a 7.5 CAP on 2018 In-Place NOI which includes a 9.5% Vacancy Factor for all of 2018! 13
Appendix 2 Existing Tenant Mix & Vacant Suite 18
LANDLORD'S CASHFLOW PROJECTIONS for FIESTA PALMS 2 All Cash Sale YEAR 1 2 3 4 5 6 7 8 9 10 Totals 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Annual Minimum Rent* $386,635 $401,312 $367,232 $361,967 $371,341 $380,960 $390,798 $400,900 $411,272 $421,922 $3,472,419 Vacancy & Credit Losses** ($32,496) ($32,496) ($32,496) ($18,098) ($18,567) ($19,048) ($19,540) ($20,045) ($20,564) ($21,096) ($234,446) Landlord's Yearly CAM Expenses*** ($129,710) ($134,535) ($139,361) ($142,148) ($144,991) ($147,891) ($150,848) ($153,865) ($156,943) ($160,081) ($1,460,373) Tenant's CAM Reimbursements**** $117,335 $121,700 $126,064 $135,040 $137,741 $140,496 $143,306 $146,172 $149,095 $152,077 $1,369,027 Reserves (1%)***** ($3,866) ($4,013) ($3,672) ($3,620) ($3,713) ($3,810) ($3,908) ($4,009) ($4,113) ($4,219) ($38,943) NOI $337,897 $351,967 $317,768 $333,142 $341,811 $350,708 $359,808 $369,153 $378,748 $388,602 $3,529,605 Average Monthly Income $28,158 $29,331 $26,481 $27,762 $28,484 $29,226 $29,984 $30,763 $31,562 $32,384 Cash on Cash Return 7.5% 7.9% 8.1% 8.3% 8.5% 8.7% 8.9% 9.2% ASSUMPTIONS: *Annual Minimum Rent is total achievable rent at 100% occupancy **Rent Vacancy & Credit Losses are assumd to be 9.54% (i.e. End Cap) through 12/18 and 5% thereafter ***Landlord's CAMs are per Landlord's 2016 Budget of $4.57 p.s.f., $4.74 p.s.f for 2017, & $4.91 p.s.f. for 2018 and est. to increase by 2% per year starting in 2019 ****Tenant's CAM Reimbursements are calculated on the basis of 9.54% vacancy (i.e. End Cap) for all of 2018 but is 5% thereafter *****Buyer budgets 1% for Reserves Buyer purchases Fiesta Palms 2 at an 7.5% CAP @ 2018 NOI $317,768 = $4,236,905 *** While the figures contained herein are believed to be accurate, PRÆDIUM Advisors, Inc. makes no representations or warranties, expressed or implied, as to the accuracy of the information. Owner/Buyer must verify all information and bears all risk for any inaccuracies. *** 3-Apr-18
Appendix 9 Site Photographs Entrance Monument Sign on Alma School Road Vacant Suite & Papa John s Facing Alma School Road Avalon Cosmetology Suite Arthur Murray Suite 46
Appendix 11 Sales & For Sale Comparables 57
COMPARABLE SALES for Fiesta Palms Phase II Sale Sale Building % CAP Year Comp # Center Name / Address Date Price Area (SF) Occupied Rate $ / SF Built NOTES 2 Midtown Plaza 9-Jun-17 $6,000,000 30,376 95% 7.43% $198 1980 ground lease 2801-2847 N Central Ave, Phoenix Renovated 2015 5 Rancho Grande Center 12/18/17 $2,700,000 24,663 100% 7.75% $109 1955 Class C 4221-4231 S. Central Ave, Phoenix Sold at asking price 10 9-Feb-18 $4,675,000 23,026 95% 6.61% $203 1997 one vacant unit at COE 1239 E McKellips, Mesa 11 Fry's Marketplace 5-Oct-17 $3,150,000 23,790 79% 5.06% $132 1996 1031 buyer 1239 E McKellips, Mesa 13 Black Canyon Plaza 7-Jul-17 $3,025,000 22,740 100% 8.20% $133 1987 1031 buyer 1239 E McKellips, Mesa no deferred maintenance 15 Scottsdale Crossing 6-Apr-17 $7,600,000 44,607 73% 6.41% $170 1999 37% of tenants had below market rent 7077 E Bell Road, Scottsdale 23 51st Avenue Auto Center 29-Dec-17 $2,250,000 23,975 100% 7.00% $94 1986 1031 exchange 7105 N 51st Ave, Glendale leased to 3 auto tenants 25 22-Jan-18 $4,305,000 27,702 88% 8.53% $155 1998 sold at auction 694-884 S Cooper Rd, Gilbert 28 Shops at Gilbert Fiesta 19-Jan-18 $3,500,000 21,900 95% 7.50% $160 2003 1031 exchange 2531 S Gilbert Rd, Gilbert 30 18-Jan-18 $3,500,000 21,900 7.00% $160 2005 1031 exchange 183-195 E Williams Field Rd, Gilbert $35k credit for deferred maintenance 32 Palisades Center 15-Sep-17 $3,275,000 22,310 100% 6.84% $147 1976 16730-16760 E Palisades Blvd, Fountain Hills 33 Power & Baseline 2-Nov-17 $7,850,000 46,035 94% 8.20% $171 2006 2235 S Power Rd, Mesa 38 Brookside Village 20-Dec-17 $4,690,000 21,640 100% 7.26% $217 2006 1031 exchange 15332 W Bell Rd, Surprise SUBJECT Fiesta Palms II $4,236,905 28,383 91% 7.50% $149 1988 2111 S. Alma School Road, Mesa COSTAR SALES COMP FILTERS Multi-Tenant Retail Centers Sold between April 1, 2017 and April 4, 2018 Total SF > 20,000 s.f. Non-Arms Length sales, portfolios, condos, value-add, and no reported CAP rate sales are excluded Search Area as shown on Map on previous page