OFFERING MEMORANDUM M O O R E S V I L L E NORTH CAROLINA
2 INVESTMENT OVERVIEW INVESTMENT OVERVIEW Marcus & Millichap is pleased to present Tutor Time Learning Center in Mooresville, North Carolina, 25 miles north of Charlotte. There are more than four and a half years remaining on a triple-net (NNN) lease with zero landlord responsibilities. This lease provides a strong hedge against inflation with two and a half percent annual rent bumps. The lease is backed by a corporate guaranty from Tutor Learning Centers, Limited Liability Company (LLC), a wholly owned subsidiary of Learning Care Group Incorporated (Inc), the secondlargest for-profit child care provider with more than 900 locations in the United States. The subject property is located on a large, 1.9-acre, full block parcel. Tutor Time also sits between Brawley School Road and Charlotte Highway, these two thoroughfares equate to more than 37,000 vehicles per day (VPD). Additionally, there are more than seven schools within three and a half miles of this asset. The Mooresville market is also experiencing an influx of capital, there is more than $850 million in active development permits. Some of the projects include a new 250 room hotel, a two-story medical facility, as well as 720 multi-residential units. Tutor Time is situated within a strong demographic area, there is more than 67,000 residents with an average household income greater than $90,000 within five miles. This represented a 12 percent increase in population from 2010 to 2017.
3 INVESTMENT OVERVIEW Tutor Time in Mooresville, North Carolina 25 Miles North of Charlotte More Than Four and a Half Years Remaining on a Triple-Net (NNN) Lease With Zero Landlord Responsibilities Corporate Guaranty Wholly Owned Subsidiary of Learning Care Group Incorporated (Inc) 900 Locations in the United States Hedge Against Inflation 2.5 Percent Annual Rent Escalations Strong Demographics More Than 67,000 Residents With an Average Household Income Greater Than $90,000 Within Five Miles Ideally Located between Brawley School Road and Charlotte Highway More Than 37,000 Vehicles Per Day (VPD) Capital Commitment to Mooresville More Than $850 Million in Active Development Permits New Medical Facility, Hotel, and Mixed-Use Center More Than Seven Schools Within Three and a Half Miles of Asset
4 FINANCIAL OVERVIEW FINANCIAL OVERVIEW 122 BALMY LANE MOORESVILLE, NORTH CAROLINA PRICE $3,796,703 CAP RATE 7.25% NOI $275,261 PRICE PER SQUARE FOOT $373.69 RENT PER SQUARE FOOT $27.09 YEAR BUILT 2002 APPROXIMATE LOT SIZE 1.97 Acres GROSS LEASEABLE AREA 10,160 TYPE OF OWNERSHIP Fee Simple LEASE GUARANTOR Tutor Time Learning Centers, Limited Liability Company (LLC) LEASE TYPE Triple-Net (NNN) ROOF AND STRUCTURE Tenant Responsible
5 LEASE SUMMARY LEASE SUMMARY LEASE COMMENCEMENT DATE 2/1/2003 LEASE EXPIRATION DATE 1/31/2023 LEASE TERM 20 Years TERM REMAINING 4.5+ Years INCREASES 2.5 Percent Annually; Options Based on CPI Increase OPTIONS TO RENEW 2, 5-Year ANNUALIZED OPERATING DATA Base Rent Annual Rent Monthly Rent 2/1/2018 1/31/2019 $275,261.00 $22,938.42 2/1/2019 1/31/2020 $282,142.53 $23,511.88 2.50% 2/1/2020 1/31/2021 $289,196.09 $24,099.67 2.50% 2/1/2021 1/31/2022 $296,425.99 $24,702.17 2.50% 2/1/2022 1/31/2023 $303,836.64 $25,319.72 2.50%
6 TENANT OVERVIEW TENANT OVERVIEW - TUTOR TIME Established in 1988 in Boca Raton, Florida, Tutor Time has nearly 200 corporate and franchise child care schools throughout the United States, Hong Kong and Indonesia. Tutor Time is dedicated to fostering educational development, building self-esteem and sparking imagination in a safe and loving environment. They offer a Whole Child Education that focuses on more than just reading, writing and math skills. They cultivate a child s entire being by teaching skills like teamwork, citizenship and respect. This philosophy inspired the proprietary Tutor Time LifeSmart curriculum, which focuses on developing children s unique interests and abilities with opportunities for self-expression. Experienced, licensed teachers focus on meeting every child s developmental and educational needs by helping them advance through each program at his or her own pace. LEARNING CARE GROUP Learning Care Group, Incorporated (Inc) is the second-largest for-profit child care provider in North America and a leader in early education. Their programs are designed for children ages 6 weeks to 12 years. Across their seven unique brands, Learning Care Group is committed to creating state-of-the-art facilities with the latest technology and expert-driven curricula. Headquartered in Novi, Michigan, Learning Care Group operates more than 900 schools across the country and around the world. On a daily basis, with the help of 18,000+ educators, they have the capacity to educate, care for, and prepare 130,000+ children for school and the future. TENANT PROFILE TENANT TRADE NAME Learning Care Group, Incorporated (Inc) OWNERSHIP TENANT LEASE GUARANTOR Private NUMBER OF LOCATIONS 900+ Tutor Time Learning Centers, Limited Liability Company (LLC) Tutor Time Learning Centers, Limited Liability Company (LLC) HEADQUARTERED WEB SITE Novi, Michigan www.tutortime.com, www.learningcaregroup.com
7 DEMOGRAPHICS DEMOGRAPHICS 1-Mile 3-Mile 5-Mile POPULATION 2000 Population 3,392 21,872 38,076 2010 Population 4,823 32,596 60,159 2017 Population 5,227 35,678 67,636 2022 Population 5,566 38,058 72,481 1-Mile 3-Mile 5-Mile HOUSEHOLDS 2000 Households 1,339 8,417 14,461 2010 Households 2,085 12,694 22,693 2017 Households 2,278 13,966 25,567 2022 Households 2,430 14,911 27,414 1-Mile 3-Mile 5-Mile HOUSEHOLD (HH) INCOMES 2017 Average HH Income $73,525 $81,858 $90,483 2017 Median HH Income $61,955 $67,483 $71,073 2017 Per Capita Income $32,043 $32,043 $34,203
8 MOORESVILLE, NORTH CAROLINA ABOUT MOORESVILLE Mooresville, North Carolina is located on picturesque Lake Norman just a few miles north of Charlotte. Known as Race City USA, it is the home to many of NASCAR s most prominent teams as well as some of the nation s top businesses, including Lowe s Companies. Additionally, Mooresville offers great family fun attractions making it a great place for stay for business or pleasure. Mooresville offers a desirable quality of life and has been described as the optimum environment for living, working and playing. Iredell County is one of the few counties in the Carolinas with two connecting interstates. I-77 runs north and south; I-40 runs east and west. In addition, I-85 is only 15 miles away. Due to its accessibility to these three interstates, an unmatched 54% of the U.S. population live within a 650-mile radius of Mooresville a day s drive or a short 90-minute flight.
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.
M O O R E S V I L L E NORTH CAROLINA 122 BALMY LANE MOORESVILLE, NORTH CAROLINA BROKER OF RECORD: JD PARKER MARCUS & MILLICHAP NEW YORK, NY LICENSE: 31PA1159742