Exclusive Offering By: Kyle Hartung 216-381-8200 x 205 kyle@goodmanrealestate.com Offering Memorandum
Disclaimer PLEASE REVIEW THIS INFORMATION CAREFULLY - Disclaimer - The information contained herein has been obtained from sources believed to be reliable. and its agents, associates, and employees make no guarantee, warranty or representation about it. The information may be subject to changes in price, financing, leases, or other errors and omissions without prior notice. Evaluating retail investment opportunities requires careful due diligence and information gathering, which is why we suggest that you and your advisors conduct your own careful investigation of the property.
Table of Contents SECTION 1 - The Property Investment Summary Pg. 1 Property Description Pg. 2 Property Photos Pg. 3 SECTION 11 - Performance and Tenancy Rent Roll Pg. 4 Tenant Information Pg. 5 Presented By: Kyle Hartung Director of Investment Sales Goodman Real Estate Services Group LLC 25333 Cedar Road, Suite 305 Cleveland, Ohio 44122 Email: kyle@goodmanrealestate.com Phone: 216-381-8200 x205 SECTION 111 - Market Overview Market Aerial Pg. 6 Regional Map Pg. 7 Local Map Pg. 8 Demographics Pg. 9-11
The Property - Investment Summary Property Lease Guarantor Shadow Anchors Address Parcel Number Deal Type Lease Type Market Population Rentable Area Year Built Lot Size Rent Commencement Lease Expiration Renewal Options Net Operating Income Cap Rate Pricing Staples Staples, Inc. Walmart, Kohl s, Hobby Lobby 4029 Pearl Road Medina, OH 44256 026-06C-07-261 Single Tenant Net Lease NN+ Lease - Very Minimal Landlord Responsibilities Cleveland-Elyria MSA 2,055,612 23,925 Square Feet 1996 1.95 Acres June 26, 1996 February 28, 2022 One 5-Year Option $311,025 7.9% $3,937,025 1
The Property - Property Description Investment Highlights Staples, Inc. Recently Executed 5 Year Lease Renewal Proven Location with 20+ Years of Operating History on Site Shadow Anchored by Walmart, Kohl s, and Hobby Lobby All Brand New HVAC - Completed in 2017 NN+ Lease - Minimal Landlord Responsibilities Part of the Cleveland-Elyria MSA - Population of 2,055,612 Situated at Signalized, Hard Corner Intersection of State Route 42 (Pearl Road) & Stonegate Drive - Providing Access Point to Walmart and Kohl s Medina is a city and the county seat of Medina County in the state of Ohio. Medina County is part of the larger Cleveland-Elyria Metropolitan Statistical Area and consists of a population of 2,055,612. Founded in 1818, the city of Medina reveals a long and rich history that is evident in the restored Victorian architecture of its picturesque Public Square. The rich history attracts tourists and residents to its unique shops, fine restaurants and many special events. Due to Medina s geographic location, approximately 30 miles south of Cleveland and 25 miles west of Akron, many residents of Medina work in the Cleveland and Akron areas. Northeast Ohio is home to approximately 4 million people and has a labor force of almost 2 million with a gross regional product of nearly $170 billion. In 2009, CNNMoney named the 40th most desirable American city to live in. Ohio Magazine followed by naming Medina the 2011 Best Hometown in Northeast Ohio. Property Description For sale to qualified investors is the 100% fee-simple interest in the single tenant, NN-leased Staples in. Staples has been the tenant at this location since 1996 and recently showed their commitment to the site by extending the lease for an additional five years. This investment is being offered at an attractive 7.9% cap rate and corresponding price of $3,937,025. The lease is double-net with minimal landlord obligations and is corporately guaranteed by Staples, Inc. The landlord s only repair and maintenance obligations are roof and structural portions of the building. Staples handles and pays for all dayto-day maintenance. The passive nature of this lease combined with the corporate guaranty make this an ideal 1031 replacement property or acquisition for an investor desiring a passive real estate investment. The property is located on heavily-trafficked State Route 42 (14,280 VPD) in the center of the Medina retail trade area and is surrounded by national retailers including Walmart, Home Depot, Kohl s, Target, Hobby Lobby, Marshalls, Dollar Tree, McDonald s, PetSmart, Bed Bath & Beyond, Chipotle, Walgreens, Sherwin-Williams, Applebee s, Starbucks, Panera Bread, Bob Evans, Tractor Supply, Shoe Carnival, Wendy s, Pizza Hut, GameStop, Taco Bell, KFC, Ruby Tuesday and others. 2
The Property - Property Photos 3
Performance & Tenancy - Rent Roll Square Lease Term Rental Rates Recovery Tenant Name Feet Pro rata Begin End Begin Annually Avg PSF Type Comments/Op ons Staples, Inc. 23,925 100% 6 26 1996 2 28 2022 Current $311,025 $13 NN+ Op ons: 3 1 2022 $334,950 $14 Tenant is leasing the building on a double net basis. Tenant pays real estate taxes directly and reimburses Landlord for insurance. Landlord s responsibili es are roof and structural por ons of the building only. Op on: One 5 year op on. Tenant must give wri en no ce 9 months prior to lease expira on date. 4
Performance & Tenancy - Tenant Information Staples, Inc. is an American office supply retailing corporation, with over 1,500 stores in North America, including locations in South America and Asia, and headquartered in Framingham, Massachusetts. In 1985, Staples founder Tom Stemberg, a former supermarket chain executive turned entrepreneur, opened the first supermarket for office products after failed attempts to locate the proper office supplies at multiple stores in the area. The first store was opened in the Brighton neighborhood of Boston in 1986 with financial backing from private equity firms, including Bain Capital. During its tenth anniversary in 1996, Staples became a member of the Fortune 500 companies as sales surpassed $3 billion. By the early 2000s, Staples introduced a new tagline, that was easy. These three words set them apart from competition and signified that they were more than just selection of office products but also about the easiest shopping experience possible. In 2001, Staples integrated its e-commerce website to all its subsidiaries across the world, staying ahead of the changing retail landscape. Many things have changed over the last thirty years, from an expanded product selection, multiple acquisitions, to a growing number of stores and ways to shop to become a truly global company, but one thing has remained constant, their customers are top priority. On September 12, 2017, Sycamore Partners purchased Staples, Inc. for $6.9 billion. The Wall Street Journal has reported that the Sycamore purchase is the largest leveraged buyout announced this year. 5
Market Overview - Market Aerial PEARL RD 6
Market Overview - Regional Map 7
Market Overview - Local Map 8
Market Overview - Demographics 1 mi 3 mi 5 mi 7 mi Population 2016 Estimated Population 5,171 28,766 61,987 103,125 2021 Projected Population 5,350 29,574 63,832 106,421 2010 Census Population 4,959 27,971 60,178 99,862 2000 Census Population 4,415 26,029 49,379 83,781 Projected Annual Growth 2016-2021 3.46% 2.81% 2.98% 3.20% Historical Annual Growth 2000-2016 17.12% 10.51% 25.53% 23.09% Households 2016 Estimated Households 2,423 11,632 23,663 38,925 2021 Projected Households 2,507 11,961 24,364 40,166 2010 Census Households 2,323 11,303 22,975 37,705 2000 Census Households 1,923 9,985 18,033 30,123 Projected Annual Growth 2016-2021 3.47% 2.83% 2.96% 3.19% Historical Annual Growth 2000-2016 26.03% 16.49% 31.22% 29.22% Age (2016) Est. Population Under 10 Years 11.2% 12.6% 12.4% 12.0% Est. Population 10-19 12.7% 14.8% 15.9% 15.5% Est. Population 20-30 9.2% 10.6% 10.2% 10.4% Est. Population 30-44 16.7% 17.6% 17.2% 17.0% Est. Population 45-59 21.3% 21.5% 22.8% 23.1% Est. Population 60-74 17.9% 16.4% 15.9% 16.4% Est. Population 75 Years or Over 11.0% 6.6% 5.6% 5.5% Income (2016) Est. HH Inc $200,000 or more 2.1% 2.6% 3.8% 3.5% Est. HH Inc $150,000 to $199,999 4.6% 7.4% 8.2% 7.4% Est. HH Inc $100,000 to $149,999 13.6% 14.2% 17.4% 17.7% Est. HH Inc $75,000 to $99,999 14.3% 14.3% 15.4% 16.1% Est. HH Inc $50,000 to $74,999 19.0% 18.7% 18.7% 19.9% Est. HH Inc $35,000 to $49,999 19.7% 16.5% 13.8% 13.3% Est. HH Inc $25,000 to $34,999 8.5% 8.6% 7.6% 8.0% Est. HH Inc $15,000 to $24,999 10.2% 9.5% 8.3% 7.7% Est. HH Inc Under $15,000 8.1% 8.2% 6.8% 6.4% Est. Average Household Income $ 68,591 $ 75,970 $ 83,519 $ 82,486 Est. Median Household Income $ 54,807 $ 59,534 $ 67,332 $ 67,569 Est. Per Capita Income $ 32,140 $ 30,719 $ 31,883 $ 31,135 9
Market Overview - Demographics 1 mi 3 mi 5 mi 7 mi Education (2016) Est Pop Age 25+ by Educ Attain. 3,688 19,326 41,065 69,001 Less than 9th grade 1.0% 1.5% 1.6% 1.6% Some High School, no diploma 2.0% 3.8% 4.0% 4.2% High School Graduate (or GED) 34.2% 30.8% 29.3% 31.8% Some College, no degree 24.0% 22.6% 21.8% 22.3% Associate Degree 6.7% 8.8% 9.1% 9.3% Bachelor's Degree 19.5% 21.6% 22.6% 20.8% Graduate Degree 12.6% 10.9% 11.6% 10.0% Housing (2016) Est. Total Housing Units 2,589 12,418 25,028 41,002 Est. Owner-Occupied 62.5% 64.6% 72.6% 75.2% Est. Renter-Occupied 31.1% 29.1% 21.9% 19.8% Est. Vacant Housing Units 6.4% 6.3% 5.5% 5.1% Homes Built by Year (ACS) Homes Built 2005 Or Later 2.1% 0.9% 1.1% 1.1% Homes Built 2000 To 2004 14.6% 13.8% 22.3% 21.7% Homes Built 1990 To 1999 48.8% 24.1% 23.6% 21.0% Homes Built 1980 To 1989 11.5% 10.3% 10.0% 10.2% Homes Built 1970 To 1979 11.3% 19.9% 17.8% 20.2% Homes Built 1960 To 1969 5.7% 9.4% 7.4% 8.2% Homes Built 1950 To 1959 4.4% 8.5% 8.9% 9.2% Homes Built 1940 To 1949 0.5% 2.6% 2.1% 2.1% Homes Built 1939 Or Earlier 1.2% 10.7% 6.8% 6.2% Housing (2016) Home Value $1,000,000 or more 1% 0% 0% 1% Home Value $500,000 to $999,999 1% 2% 2% 2% Home Value $400,000 to $499,999 2% 3% 4% 4% Home Value $300,000 to $399,999 4% 7% 11% 10% Home Value $200,000 to $299,999 30% 30% 34% 33% Home Value $150,000 to $199,999 36% 29% 25% 26% Home Value $100,000 to $149,999 18% 20% 17% 17% Home Value $70,000 to $99,999 3% 5% 4% 4% Home Value $50,000 to $69,999 1% 1% 0% 0% Home Value $25,000 to $49,999 0% 1% 1% 1% Home Value Under $25,000 5% 2% 2% 2% Median Housing Unit Value $ 180,502 $ 187,651 $ 203,752 $ 200,901 10
Market Overview - Demographics 1 mi 3 mi 5 mi 7 mi Labor Force (2016) Est Pop Age 16+ by Employ. Status 4,236 22,800 48,949 82,127 Labor Force 63.6% 67.3% 68.4% 69.1% In Armed Forces 0.0% 0.0% 0.0% 0.0% Civilian, Employed 61.2% 64.8% 65.9% 66.5% Civilian, Unemployed 2.4% 2.5% 2.5% 2.6% Not in Labor Force 36.4% 32.7% 31.6% 30.9% Occupation (2016) Agr, forest, fish & hunt., min and const. 6.7% 6.5% 6.4% 6.7% Manufacturing 9.1% 13.0% 13.8% 14.8% Wholesale & retail trade 15.2% 15.6% 16.3% 16.4% Transp. and warehousing, and utilities 7.4% 4.5% 5.0% 5.5% Information 3.3% 2.5% 2.2% 2.0% Fin, ins., real estate, rental & leasing 4.8% 7.2% 7.8% 7.1% Prof, sci, manag, admin, & waste ms 6.8% 10.0% 10.0% 9.8% Educational, health and social services 26.3% 20.7% 21.5% 20.9% Arts, enter., rec., accom. & food services 8.3% 10.9% 9.1% 8.7% Other services (except pub admin.) 7.9% 4.4% 3.9% 4.1% Public Administration 4.2% 4.6% 4.0% 3.9% Travel Time (ACS) 14 Minutes or Less 25.7% 30.4% 26.3% 23.8% 15 to 29 Minutes 23.9% 25.8% 27.5% 28.5% 30 to 59 Minutes 44.6% 37.5% 39.2% 40.2% 60 Or More Minutes 5.8% 6.3% 7.0% 7.5% Weekly Per Capita Consumer Expenditures Market Basket $ 53.14 $ 52.86 $ 52.89 $ 52.83 Apparel and services $ 12.73 $ 13.15 $ 13.49 $ 13.44 Transportation $ 73.29 $ 74.54 $ 76.20 $ 76.13 Health Care $ 34.04 $ 33.37 $ 33.89 $ 33.95 Entertainment $ 19.99 $ 20.20 $ 20.65 $ 20.61 11