385 wyoming valley mall wilkes barre, pa · 2019-10-25 · la-z-boy is an american furniture...
TRANSCRIPT
385 WYOMING VALLEY MALL WILKES BARRE, PA
Section 1: Offering SummaryProperty Analysis.......................................................5Investment Overview & Highlights................................6Financing Details........................................................7Lease Abstract............................................................8Competition Map.......................................................9Section 2: Tenant OverviewTenant Description....................................................10In The News............................................................11
NON-ENDORSEMENT AND DISCLAIMER NOTICENON-ENDORSEMENTSMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
DISCLAIMERThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.
Marcus & Millichap Real Estate Investment Services of Seattle, Inc. License: RB062197C
La-Z-Boy
TABLE OF CONTENTS
Broker of Record: Sean BeucheLicense: PA RM424190
Philadelphia, PA2005 Market Street #1510Philadelphia, PA 19103P: 215.531.7000
Derrick DoughertyFirst Vice PresidentPhiladelphia, [email protected]: PA RS305854
Scott WoodardNational Retail Group Philadelphia, PA PA RS329242
Lead Agents:
King Of Prussia, PA200 N. Warner RoadKing Of Prussia, PA 19406P: 215.531.7000
Our Locations:
New York, NY260 Madison Avenue5th FloorNew York, NY 10016
Stehen FilippoM&M Capital CorporationDirector-Capital MarketsNew York, [email protected]
Financing Contact:
Mark KrantzNational Retail GroupPhiladelphia, PA PA RS336064 | NJ 1537786
Steven GarthwaiteNational Retail Group Philadelphia, PA [email protected] RS332182
Section 3: Location OverviewArea Demographics.................................................12Economy and Travel.................................................13Economic Drivers.....................................................14Regional Map..........................................................15
Wilkes Barre VA Hospital
Subject Property
Wyoming Valley Mall
Arena Hub Plaza
Wyoming Valley Mall
Arena Hub Plaza
Wilkes Barre VA Hospital
Lord & Taylor Warehouse
Mohecan SunArenaM
UNDY
ST
(19,
105
VPD)
HIGHLAND PARK BLVD (10,188 VPD)
I-81 (61,278 VPD)
STAT
E RO
UTE
309
(35,
170
VPD)
Subject Property
Joe Amato East End Centre
Wilkes Barre Township Commons
DD&P | 5
385 Wyoming Valley MallWilkes Barre, PA
List Price:$3,426,686
$
7.00%
%Cap Rate:
NNNLease Type
1.68 AcresLot Size:
Rent ScheduleLease Summary
La-Z-Boy
PROPERTY OVERVIEW
Term Annual Rent % Increase
Years 1-5 $239,868.00
Years 6-10 $251,861.40 5%
Option Terms
Years 11-15 $264,454.47 5%
Years 16-20 $277,677.19 5%
Years 21-25 $291,561.05 5%
Years 26-30 $306,139.11 5%
Tenant LaZboy
Guarantor Corporate
Lease Type NNN
Roof and Structure Landlord
Base Lease Term 10 Years
Lease Commencement 10/30/2016
Lease/ Rent Expiration 10/31/2026
Rent Increases 5% In Year 6 and Options
6 | La-Z-Boy
La-Z-Boy
OVERVIEW & HIGHLIGHTS
HIGHLIGHTS:
Marcus and Millichap is pleased to offer the opportunity to acquire the fee simple interest (land & building ownership) in a NNN leased,
corporate guaranteed, La-Z-Boy investment property located in Wilkes-Barre, PA. La-Z-Boy is an American furniture manufacturer based in
Monroe, Michigan that makes home furniture, recliners, sofas and employs more than 11,000 people. The tenant has 7 years remaining
in their initial term with 4 (5-year) option periods to extend. The lease features a 5% rental increase in October 2022 and during each
option period, steadily growing NOI and hedging against inflation. The lease is NNN with few landlord responsibilities making it an ideal,
management free investment opportunity for a local or out of state investor.
La-Z-Boy is strategically located along Mundy Street which serves as the primary retail thoroughfare in the immediate trade area averaging
19,105 vehicles passing by daily. The asset is ideally positioned as an outparcel in the Wyoming Valley Mall alongside Macy’s, JCPenney,
H&M, OfficeMax, and Chipotle, promoting crossover traffic to the site. Additionally, the site sits across from The Mohegan Sun Arena, (8,050
Seats) a popular multi-purpose arena home to The Wilkes-Barre Penguins, further increasing consumer draw to the trade area. Moreover, the
asset is directly next to the Wilkes-Barre VA Medical Center (292,568 visitors in 2018) providing a direct consumer base from which to draw.
The 3-mile trade area is supported by a dense population of over 63,182 residents with an average household income of $54,464.
• La-Z-Boy (NYSE: LZB) has over 350 locations and a market cap of $1.56 billion
• Rare 5% increases throughout the initial term and option periods, generating healthy NOI growth
• Tenant Renewal Options: 4 Periods of 5 Years, Each Bringing the Potential Lease Term to 30 Years
• Ideal, management-free investment for an out-of-state, passive investor
• Situated in the highly coveted Wilkes-Barre submarket in the path of growth. Located along Mundy Street with immediate access to I-81, providing access from all around Scranton/Wilkes-Barre
• Mundy Street serves as one of the primary retail thoroughfare in the immediate trade area with nearby national/credit tenants including Lowe’s, CVS, Walmart, Starbucks, Target, LongHorn Steakhouse, and Wendy’s.
• Positive Real Estate Fundamentals | Located Less Than 2-Miles from Downtown Wilkes-Barre
• Over the past 5 years, La-Z-Boy has seen a sales increase of $310 million, an operating income increase of over $60 million and a 65.6% increase in share price
DD&P | 7
La-Z-Boy
FINANCING DETAILS
Financing Summary
Price $3,426,686
Down Payment (25%) $856,671
Loan Amount $2,570,014
Interest Rate 3.80%
Amortization 25 Years
Term 2026
Operating Data
Income Year 1
Net Operating Income $239,868
Debt Service ($159,399)
Net Cash Flow After Debt Service 9.39% $80,469
Principal Reduction $62,826
Total Return 16.73% $143,294
Director - Capital Markets
STEPHEN FILIPPO(212) 430-5288
Marcus & Millichap Capital Corporation260 Madison Avenue, 5th FloorNew York, NY 10016
Returns Year 1
CAP Rate 7.00%
Cash-on-Cash 9.39%
Total Return 16.73%
Debt Coverage Ratio 1.50
8 | La-Z-Boy
La-Z-Boy
LEASE ABSTRACT
Tenant La-Z-Boy, Wilkes-Barre, PA
Guarantor Corporate
Square Footage 15,644 SF
Commencement Date 11/2/2016
Expiration Date 10/31/2026
Initial Term 10 Year Base Term
Option Notice Tenant must exercise option (6) months prior to Lease expiration
Estoppel/SNDA Tenant to provide certificate upon written request of Landlord
Taxes Tenant is responsible for Real Estate taxes
Insurance Tenant is responsible for Insurance expenses
CAM Tenant is responsible for CAM expenses
Utilities Tenant is responsible for Utility expenses
Roof & Structure Landlord is responsible for repair & replacement of the Premises' structure; Landlord is responsible for the replacement of the roof, Tenant is responsible for the maintenance of roof
HVAC (Maint & Replacement) Landlord is responsible for HVAC replacement, Tenant is responsible for HVAC maintenance
Permitted use Premises may be used for any lawful retail purpose
Required Occupancy Tenant may cease operation of business w/in Premises, while remaining responsible for Lease obligations
Assignment Note Tenant may assign lease w/ consent of Landlord, however shall remain liable for Lease obligations
DD&P | 9
La-Z-Boy
COMPETITION MAP
Subject Property
1 Mile Radius .5 Mile Radius1.5 Mile Radius
Address MILES FROM SUBJECT
Subject 385 Wyoming Valley Mall Wilkes Barre, PA Subject
Pier 1 407 Arena Hub Plaza, Wilkes-Barre, PA 0.4
Bobs Discount 3420 Wilkes Barre Twp Commons, Wilkes-Barre, PA 0.9
Ashley Homestore 101 Wyoming Valley Mall, Wilkes-Barre, PA 1
Raymour & Flanigan 53 Spring St, Wilkes-Barre, PA 1
EFO Furniture 500 Kidder St, Wilkes-Barre, PA 1.2
10 | La-Z-Boy
La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and re-tails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally. It operates through Upholstery, Case-goods, and Retail segments. The Upholstery segment manufactures and imports up-holstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas. It sells its products directly to La-Z-Boy Furniture Galleries stores, operators of La-Z-Boy Comfort Studio locations, England Custom Comfort Center locations, dealers, and other independent retailers.
The Casegoods segment imports, markets, and distributes casegoods (wood) furni-ture, including bedroom sets, dining room sets, entertainment centers, and occasion-al pieces, as well as manufactures upholstered furniture. This segment sells its prod-ucts to dealers, La-Z-Boy Furniture Galleries stores, and other independent retailers under the American Drew, Hammary, and Kincaid brands.
The Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network. It operates a network of 156 compa-ny-owned La-Z-Boy Furniture Galleries stores. La-Z-Boy Incorporated also produces reclining chairs; and manufactures and distributes residential furniture. The compa-ny was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is based in Monroe, Michigan.
La-Z-Boy includes various companies and brands including La-Z-Boy Residential, La-Z-Boy Kids, La-Z-Boy Hospitality, Lea Furniture, American Drew, Kincaid Furniture, Bauhaus USA Furniture, Hammary Furniture and England Furniture Incorporated.
OWNERSHIP:LA-Z-BOY INCORPORATED
FOUNDED1927
WEBSITE:www.la-z-boy.com
HEADQUARTEREDmoNRoE, mI
NO. OF LOCATIONS360+/-
INDUSTRY TYPEFuRNItuRE
2019 REVENUE$1.72 bIllIoN
La-Z-Boy Portfolio
TENANT DESCRIPTION
DD&P | 11
La-Z-Boy Portfolio
IN THE NEWS
In a stumbling market, La-Z-Boy Inc. shares are energized. The furniture retailer is up 14% so far this year, outpacing the broader market as well as the broader retail seg-ment. The latest boosts for the stock were some upbeat results, announced this week.
Upholstery sales were better than some analyst expectations, and other analysts cheered the company’s adjusted operating income and sales coming in above their estimates.
Sitting PrettyShares of La-Z-Boy are up this year, rising in recent sessions on the heels of solid earnings.
In its wholesale segment, higher-priced items bolstered upholstery sales. The results sent shares up 4.9% on Thursday, and the stock is one of the few gainers on Friday while the broader market slumps.
It is also a standout among home furnishing stocks. Residential furniture-maker HG Holdings Inc. was down 5.1% Friday, Bassett Furniture Industries Inc. fell 5.6% and Ethan Allen Interiors Inc. was off 2.2%.
There are still some concerns, however, for La-Z-Boy.
“In a vacuum where investors did not have to worry about a potential recession and/or China tariffs, La-Z-Boy would be a compelling buy,” said Robert Griffin, an analyst at Raymond James. Mr. Griffin added, however, that retail earnings over the past two weeks point to a relatively healthy U.S. consumer. Furthermore, La-Z-Boy’s balance sheet remains solid.
On its earnings call, La-Z-Boy executives addressed the trade situation and its potential impact on the company.
In regard to tariffs on materials coming from China, Kurt Darrow, the CEO, said La-Z-Boy increased its pass-through charge on products to account for the tariff increase on these goods.
However, he emphasized that the impact wasn’t too large.
Mr. Darrow also noted that approximately two-thirds of the company’s covers are converted into “cut and sew kits” in its Mexican facility and therefore not subject to the China tariffs.
“While the current tariff is at 25% due to our supply-chain strategy, our pass-through charge to customers is roughly only 3.5% on non-powered upholstery and about 4% on powered products, positioning us well,” he said.
By: Corrie Driebusch Aug 23, 2019
La-Z-Boy Shares Aren’t Taking a Break
12 | La-Z-Boy
RADIUS 1 MILE 3 MILE 5 MILES
Average HH Income $47,907 $54,715 $57,994
Median HH Income $35,708 $39,833 $42,186
Population 3,649 60,358 107,829
Households(#) 1,478 25,599 46,632
Median Age 40.70 40.30 41.10
Principal City in the Scranton-Wilkes Barre MSAThe City of Wilkes-Barre, Pennsylvania is a progressive city with industrial roots. Located
along the Susquehanna River, Wilkes-Barre is the seat of Luzerne County and is a keystone
of Northeastern PA. Conveniently situated in the tristate area, Wilkes-Barre offers easy
access to highways and airports. 60,358Population
within a 3 mile radius
$54,715AVG. HH Income
within a 3 mile radius
6.4%Unemployment Rate
within a 3 mile radius
0.8%Job Growth Rate
Wilkes Barre, PA
(0.81%)Population Growth
within a 3 mile radius
Seat of Luzerne County & Keystone of NE PACurrent Revitalization Driven by Emerging Businesses
Wilkes Barre, PA
AREA DEMOGRAPHICS
DD&P | 13
Wilkes Barre, PA
ECONOMY & TRAVELLocal Economy - Wilkes Barre, PAThe City’s current revitalization is driven by emerging businesses, thriving institutes for higher education, and non-profit organizations committed to serving the community. Through partnerships with both public and private organizations, the City of Wilkes-Barre has been a key player in many economic development projects that have shaped the future for Wilkes-Barre and it neighboring communities.
Top Employers
Organization/Company Industry Type
Federal Government Government
State Government Government
Geisinger Wyoming Valley Medical Center Healthcare
Amazon Distribution
Wilkes Barre Hospital Healthcare
Luzerne County Public Works
TJ Maxx Distribution
Hazleton Area School District Education
Walmart Retail/Distribution
Conveniently situated in the tristate area, Wilkes-Barre offers easy access to highways (Interstates 81, 80, and 476) and airports. Wilkes-Barre is approximately 2 hours away from New York City and Philadelphia. Wilkes-Barre is also a short drive from the beautiful Pocono Mountains.
In the state of Pennsylvania, I-81 runs for 232.63 miles
(374.38 km) from the Maryland state line near Greencastle
to the New York state line near Hallstead.
(PA 309) is a major highway which runs for 134 miles
(216 km) through Pennsylvania. It connects Philadelphia
and its suburbs to Allentown, Hazleton, and Wilkes-Barre.
I-476 serves as the primary north–south Interstate corridor
through eastern Pennsylvania. It runs through rural areas
with development closer to Philadelphia and Lehigh Valley
476U.S. Route 11 (US 11) roughly parallels Interstate 81 (I-
81) in the U.S. state of Pennsylvania. It serves Harrisburg
and Scranton.
81
14 | La-Z-Boy
Wilkes Barre, PA
LOCATION OVERVIEW
Wilkes-Barre is one of the principal cities in the Scranton-Wilkes-Barre Hazleton metropolitan statistical area, the fourth largest metro/statistical area in Pennsylvania. Located at the center of the Wyoming Valley, it is second in size to the nearby city of Scranton. Wilkes-Barre and the surrounding Wyoming Valley are framed by the Pocono Mountains, the Endless Mountains, and the Lehigh Valley. Over 15,000 residents are employed in Wilkes-Barre’s downtown area, making it the fourth largest workforce in the Commonwealth of Pennsylvania. Through partnerships with both public and private organizations, the City of Wilkes-Barre has been a key player in many economic development projects.
2ndLARGEST IN
THE SCRANTON HAZELTON MSA
1M+SQUARE FEET OF RETAIL WITHIN 3
MILES OF THE SITE
2ndLARGEST COUNTY IN PA BY TOTAL
AREA
I-81CORRIDOR WITH OVER 37M SF OF
COMMERCIAL SPACE
3.8%VACANCY RATE DUE TO CONCENTRATED
TRADE AREA
6MAJOR COLLEGES
AND UNIVERSITIES IN THE AREA
WYOMING VALLEY MALL:• Largest enclosed mall in Northeast Pennsylvania, located directly across from the subject site. With 70 stores and services sharing over 910,000 square feet of retail floor area, the mall has a current 87.2-percent occupancy.
• Developed by Crown America, PREIT purchased Wyoming Valley Mall in 2003, and in 2006 invested $8 million in renovations with significant cosmetic changes.
WILKES BARRE VA MEDICAL:• A 945,000 square-foot teaching hospital that provides a full range of patient care services available, but not limited to, veterans living in eighteen counties in Pennsylvania, and one county in New York.
• The center operates 58 hospital beds, 10 domiciliary beds, and 105 Community Living Center beds. It is one of nine centers in the VA Healthcare - VISN 4 Network in the state.
La-Z-Boy
Brodheadsville
Hazleton
Scranton
DISCLAIMER NOTICE:
Marcus & Millichap hereby advises all prospective purchasers of Single Tenant 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 single tenant 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 single tenant 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 single tenant 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 areplacement 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 single tenant property.Philadelphia, PA
2005 Market Street #1510Philadelphia, PA 19103P: 215.531.7000
Derrick DoughertyFirst Vice PresidentPhiladelphia, [email protected]: PA RS305854
Scott WoodardNational Retail Group Philadelphia, PA PA RS329242
Lead Agents:
King Of Prussia, PA200 N. Warner RoadKing Of Prussia, PA 19406P: 215.531.7000
Our Locations:
New York, NY260 Madison Avenue5th FloorNew York, NY 10016
Stehen FilippoM&M Capital CorporationDirector-Capital MarketsNew York, [email protected]
Financing Contact:
Mark KrantzNational Retail GroupPhiladelphia, PA PA RS336064 | NJ 1537786
Steven GarthwaiteNational Retail Group Philadelphia, PA [email protected] RS332182
385 WYOMING VALLEY MALL WILKES BARRE, PA