offering memorandum - loopnet · 2018-06-28 · front during 2018. the labor pool’sexpansion...
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E X C L U S I V E L Y L I S T E D B Y
Tod Jones
Senior Associate
National Retail Group
Salt Lake City Office
Tel: (801) 736-2619
Fax: (801) 736-2610
tod.jones@marcusmillichap.com
License: UT 5450617-SA00
Brett Jones
Associate
National Retail Group
Salt Lake City Office
Tel: (801) 736-2651
Fax: (801) 736-2610
brett.jones@marcusmillichap.com
License: UT 9761802-SA00
Matthew Porter
Senior Associate
National Retail Group
Salt Lake City Office
Tel: (801) 736-2638
Fax: (801) 736-2610
matthew.porter@marcusmillichap.com
License: UT 7770209-SA00
Offering Memorandum
CLEARFIELD RETAIL CENTER638 S State St • Clearfield, UT 84015
FINANCIAL ANALYSIS
CLEARFIELD RETAIL
EXECUTIVE SUMMARY
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INVESTMENT HIGHLIGHTS
▪ 8.75% Going-In CAP Rate With Rent Guaranty
▪ Anchored by 39,000 SF Kent's Market Grocery
▪ Combined Traffic Counts in Excess of 30,075
▪ Abundant Parking; 8 stalls per 1,000 SF
▪ Population of 187,809 within a 5-Mile Radius
▪ Nearby Tenants include Family Dollar, First National Bank, AutoZone,
Pizza Hut, and 7-Eleven
SUITE # TENANT NAMEBLDG. % OF LEASE LEASE REMAINING ANNUAL ANNUAL CAM
Sq.ft. GLA START EXPIRES TERM RENT RENT/ INCOME
(Years) SQ. FT.
1 Cricket Wireless 1,800 19% 8/11/09 11/30/19 1.6 $18,234 $10.13 $4,872
2 Heartsong Spay/Neuter Clinic 1,500 16% 8/1/12 7/31/18 0.2 $14,734 $9.82 $4,060
3 H&R Block 1,500 16% 5/8/99 4/30/23 5.0 $24,000 $16.00 $4,060
4 Vacant (1 Year Rent Guaranty) 2,250 24% Upon Closing 12 Months After 1.0 $27,000 $12.00 $6,090
5 Vacant (1 Year Rent Guaranty) 2,250 24% Upon Closing 12 Months After 1.0 $27,000 $12.00 $6,090
9,300 Occupied GLA: 52% Unoccupied GLA: 48% $110,968 $25,170.00
51.6%
PROPOSED FINANCING
First Trust Deed
Loan Amount $723,000
Loan Type Proposed New
Interest Rate 5.00%
Amortization 25 Years
Loan Term 5 Years
Loan to Value 60%
Debt Coverage Ratio 2.92
RETAIL MAP
CLEARFIELD RETAIL
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Clearfield High School
700 S
North Davis Junior High School
Subject Property
FINANCIAL ANALYSIS
CLEARFIELD RETAIL
OPERATING STATEMENT
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SUITE # TENANT NAMEBLDG. % OF LEASE LEASE REMAINING ANNUAL ANNUAL CAM
Sq.ft. GLA START EXPIRES TERM RENT RENT/ INCOME
(Years) SQ. FT.
1 Cricket Wireless 1,800 19% 8/11/09 11/30/19 1.6 $18,234 $10.13 $4,872
2 Heartsong Spay/Neuter Clinic 1,500 16% 8/1/12 7/31/18 0.2 $14,734 $9.82 $4,060
3 H&R Block 1,500 16% 5/8/99 4/30/23 5.0 $24,000 $16.00 $4,060
4 Vacant (1 Year Rent Guaranty) 2,250 24% Upon Closing 12 Months After 1.0 $27,000 $12.00 $6,090
5 Vacant (1 Year Rent Guaranty) 2,250 24% Upon Closing 12 Months After 1.0 $27,000 $12.00 $6,090
9300 Occupied GLA: 52% Unoccupied GLA: 48% $110,968 $25,170.00
OCCUPIED ACTUAL RENTS: $56,968
1 YEAR RENT GUARANTY / POTENTIAL RENT AFTER LEASING $54,000
ACTUAL CAM RECEIVED $12,991
POTENTIAL CAM AFTER LEASING $12,179
TOTAL GROSS POTENTIAL INCOME $136,138
(Less) General Vacancy Allowance 5.00% ($5,548.40)
EFFECTIVE GROSS INCOME $130,590
EXPENSES:
CAM (Taxes, Insurance, Etc.) 19.27% ($25,170)
TOTAL EXPENSES 19.27% ($25,170)
PRO-FORMA NET OPERATING INCOME $105,420
PRO FORMA MARKET VALUE - INCOME APPROACH: Market CAP Rate
PRO FORMA MARKET VALUE 8.00% $1,317,745
PRICE ADJUSTMENTS FOR VACANCY & LEASING EXPENSES:
Leasing Agent Commission (6% on 3 years) $9,720
Tenant Improvement Costs $103,025
TOTAL PRICE REDUCTION: $112,745
MARKET VALUE AFTER VACANCY ADJUSTMENTS Year 1 CAP
MARKET VALUE AFTER VACANCY & LEASING EXPENSES 8.75% $1,205,000
FINANCIAL ANALYSIS
CLEARFIELD RETAIL
DETAILED EXPENSES
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REGIONAL MAP
CLEARFIELD RETAIL
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MARCUS & MILLICHAP CAPITAL CORPORATION
CAPABILITIES
MMCC—our fully integrated, dedicated financing arm—is committed to
providing superior capital market expertise, precisely managed execution, and
unparalleled access to capital sources providing the most competitive rates and
terms.
We leverage our prominent capital market relationships with commercial banks,
life insurance companies, CMBS, private and public debt/equity funds, Fannie
Mae, Freddie Mac and HUD to provide our clients with the greatest range of
financing options.
Our dedicated, knowledgeable experts understand the challenges of financing
and work tirelessly to resolve all potential issues to the benefit of our clients.
National platform
operating
within the firm’s
brokerage
offices
$5.63 billion
total national
volume in 2017
Access to
more capital
sources than
any other firm
in the industry
Optimum financing solutions
to enhance value
Our ability to enhance
buyer pool by expanding
finance options
Our ability to enhance
seller control
• Through buyer
qualification support
• Our ability to manage buyers
finance expectations
• Ability to monitor and
manage buyer/lender
progress, insuring timely,
predictable closings
• By relying on a world class
set of debt/equity sources
and presenting a tightly
underwritten credit file
WHY MMCC?
Closed 1,707
debt and equity
financings
in 2017
ACQUISITION FINANCING
CLEARFIELD RETAIL
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CLEARFIELD RETAIL
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MARKET
OVERVIEW
MARKET OVERVIEW
OVERVIEW
OGDEN-CLEARFIELD
The Ogden-Clearfield metro is situated in northern Utah between the
Wasatch Mountains and the Great Salt Lake, and it consists of Weber,
Davis and Morgan counties. The metro contains 659,000 residents with
more than 345,600 in Davis County. Ogden is the most populous city,
containing 87,700 citizens. The Salt Lake City metro borders to the south
and the state of Idaho is to the north.
▪ Ogden is an important distribution hub, located along the transcontinental railroad system. It is a
national center for east-west rail traffic.
▪ Ogden’s roots in the railroad industry have expanded into military and manufacturing. Hill Air Force
Base, home of the Ogden Air Logistics Center, is a major driver of the economy as the area’s largest
employer. The center offers engineering and logistics management for aircrafts worldwide.
▪ A significant location in the metro is the redeveloped Business Depot Ogden. The center provides
6.5 million square feet of industrial and office space to tenants such as Nutraceutical, Fresenius USA
Manufacturing, ICON Health and Fitness, Petersen Inc. and Kenco Logistic Services.
DEMOGRAPHICS
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ECONOMY
METRO HIGHLIGHTS
* Forecast
Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau
CLEARFIELD RETAIL
STRATEGIC LOCATION
Strategically located for highway, rail and air access, Ogden sits at the
crossroads of the CANAMEX shipping corridor.
MILITARY PRESENCE
The Hill Air Force Base has an annual economic impact of $3.4 billion with
nearly 25,500 personnel within the base.
POPULATION GROWTH
The expanding economy will help push population growth above the U.S.
average. The metro is forecast to gain 45,000 additional people over the next
five years.
659K
2017POPULATION:
210K
2017HOUSEHOLDS:
31.5
2017MEDIAN AGE:
$68,500
2017 MEDIAN HOUSEHOLD INCOME:
U.S. Median:
37.8U.S. Median:
$56,3009.2%
Growth2017-2022*:
6.8%
Growth2017-2022*:
MARKET OVERVIEW
CLEARFIELD RETAIL
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SALT LAKE CITY METRO AREA
Escalated Household Growth, Construction
Garner Investor Interest
Robust tenant demand produces bolstered rent gains. Employment growth in Salt Lake City remains
considerably higher than the national rate, though it will experience a slight slowdown this year. The tech
sector leads job creation as Snapchat, Carta and Recursion begin to open new offices along the Wasatch
Front during 2018. The labor pool’s expansion results in notable climbs in population growth and household
formation, both exceeding national levels. As demographic trends remain strong, retailers flock to Salt Lake
City this year, prompting construction to reach the highest figure since 2012 when over 2.2 million square
feet was delivered. The largest development is Mountain View Village in Riverton, a massive mixed-use
development that includes more than 700,000 square feet of retail space. The project also encompasses a
hotel and office space. Amid heightened construction activity, metro vacancy will rise this year, pushing the
rate over 5 percent. Salt Lake City logs strong rent growth for the fourth consecutive year despite an
increased amount of available space.
The availability of portfolio repositioning forges investor interest. Historically, local buyers, as well as
investors from coastal markets seeking higher yields, found a number of opportunities within the city limits
of Salt Lake City, a trend that should persist in 2018. Properties in the State Street corridor, extending from
University Boulevard to the Lincoln Highway, lure many out-of-state investors seeking projects boasting
high-traffic locations. Here, multi-tenant assets average initial returns in the low-7 percent realm. The Sugar
House neighborhood, an area headlined by a notable nightlife scene, will be a primary target for investors. In
this locale, cap rates sit in the high-6 to mid-7 percent range. In-state buyers remain focused on multi-
tenant options in communities near South Valley Regional Airport, where first-year yields are typically in line
with the metro average, approximately 7 percent.
* Forecast
Sources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.
MARKET OVERVIEW
CLEARFIELD RETAIL
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SALT LAKE CITY METRO AREA
2018 Market Forecast
Strong growth in retail sales and healthy rent gains push Salt Lake City up
two ranks.
Salt Lake City organizations staff 27,300 employees this year with tech
companies leading the way. Last year, 25,900 workers were staffed.
The metro reports a increase in development activity this year following a
2017 total of 1.1 million square feet.
Another year of below-trend absorption and rising completions result in a
50-basis-point climb, putting the rate at 5.5 percent. Last year, vacancy
rose 100 basis points.
This year the average asking rent pushes up to $15.88 per square foot. Last
year, lease rates increased 3.2 percent.
Investors will direct their attention to new mix-used developments in
Riverton and Sandy, presenting opportunities to capitalize on the surging
population and diversify their portfolios.
* Forecast
Sources: Marcus & Millichap Research Services; CoStar Group, Inc.;
Real Capital Analytics
NRI Rank
7, up 2 places
Employment
up 2.2%
Construction
1.4 million sq. ft.
Vacancy
up 50 bps
Rent
up 4.7%
Investment
PROPERTY NAME
MARKETING TEAM
CLEARFIELD RETAIL
DEMOGRAPHICS
Source: © 2017 Experian
Created on May 2018
POPULATION 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Population 9,993 97,293 211,595
▪ 2017 Estimate
Total Population 10,177 89,974 195,457
▪ 2010 Census
Total Population 9,781 82,100 175,364
▪ 2000 Census
Total Population 10,047 63,336 133,655
▪ Current Daytime Population
2017 Estimate 26,652 103,645 182,122
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Households 3,406 30,522 66,432
▪ 2017 Estimate
Total Households 3,392 27,722 60,180
Average (Mean) Household Size 2.79 3.15 3.18
▪ 2010 Census
Total Households 3,177 25,273 54,074
▪ 2000 Census
Total Households 3,253 19,831 41,278
▪ Occupied Units
2022 Projection 3,406 30,522 66,432
2017 Estimate 3,633 28,633 61,574
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
▪ 2017 Estimate
$150,000 or More 2.44% 5.39% 6.94%
$100,000 - $149,000 8.94% 14.83% 17.22%
$75,000 - $99,999 10.87% 18.65% 19.56%
$50,000 - $74,999 25.12% 24.14% 24.20%
$35,000 - $49,999 16.86% 14.02% 12.99%
Under $35,000 35.79% 22.95% 19.09%
Average Household Income $54,573 $72,795 $78,958
Median Household Income $47,587 $61,956 $67,813
Per Capita Income $18,633 $22,665 $24,451
HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 MilesTotal Average Household Retail Expenditure
$55,655 $72,854 $77,987
▪ Consumer Expenditure Top 10 Categories
Housing $13,814 $16,538 $17,460
Transportation $8,968 $11,308 $12,120
Shelter $8,317 $9,830 $10,325
Food $6,055 $7,385 $7,782
Personal Insurance and Pensions $4,540 $7,089 $7,844
Health Care $3,636 $4,932 $5,476
Cash Contributions $2,956 $4,913 $5,460
Utilities $2,717 $3,294 $3,497
Entertainment $2,599 $3,908 $4,360
Household Furnishings and Equipment
$1,340 $1,718 $1,835
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
▪ Population By Age
2017 Estimate Total Population 10,177 89,974 195,457
Under 20 36.15% 37.21% 36.43%
20 to 34 Years 31.92% 24.60% 22.56%
35 to 39 Years 6.73% 8.50% 8.21%
40 to 49 Years 8.66% 11.33% 11.73%
50 to 64 Years 9.17% 11.67% 13.36%
Age 65+ 7.38% 6.70% 7.71%
Median Age 25.11 28.04 29.50
▪ Population 25+ by Education Level
2017 Estimate Population Age 25+ 5,114 49,238 110,276
Elementary (0-8) 2.89% 1.43% 1.08%
Some High School (9-11) 5.06% 4.63% 4.70%
High School Graduate (12) 34.03% 27.26% 26.40%
Some College (13-15) 28.00% 30.21% 29.99%
Associate Degree Only 11.05% 11.60% 10.94%
Bachelors Degree Only 13.40% 18.38% 19.63%
Graduate Degree 5.17% 5.95% 6.86%
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Income
In 2017, the median household income for your selected geography is
$47,587, compare this to the US average which is currently $56,286.
The median household income for your area has changed by 29.65%
since 2000. It is estimated that the median household income in your
area will be $51,512 five years from now, which represents a change
of 8.25% from the current year.
The current year per capita income in your area is $18,633, compare
this to the US average, which is $30,982. The current year average
household income in your area is $54,573, compare this to the US
average which is $81,217.
Population
In 2017, the population in your selected geography is 10,177. The
population has changed by 1.29% since 2000. It is estimated that the
population in your area will be 9,993.00 five years from now, which
represents a change of -1.81% from the current year. The current
population is 52.05% male and 47.95% female. The median age of
the population in your area is 25.11, compare this to the US average
which is 37.83. The population density in your area is 3,233.94 people
per square mile.
Households
There are currently 3,392 households in your selected geography. The
number of households has changed by 4.27% since 2000. It is
estimated that the number of households in your area will be 3,406
five years from now, which represents a change of 0.41% from the
current year. The average household size in your area is 2.79 persons.
Employment
In 2017, there are 7,525 employees in your selected area, this is also
known as the daytime population. The 2000 Census revealed that
50.05% of employees are employed in white-collar occupations in
this geography, and 49.92% are employed in blue-collar occupations.
In 2017, unemployment in this area is 9.19%. In 2000, the average
time traveled to work was 24.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
77.25% White, 4.88% Black, 1.38% Native American and 2.61%
Asian/Pacific Islander. Compare these to US averages which are:
70.42% White, 12.85% Black, 0.19% Native American and 5.53%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 17.99% of the current year
population in your selected area. Compare this to the US average of
17.88%.
PROPERTY NAME
MARKETING TEAM
CLEARFIELD RETAIL
Housing
The median housing value in your area was $146,229 in 2017,
compare this to the US average of $193,953. In 2000, there were
1,432 owner occupied housing units in your area and there were
1,821 renter occupied housing units in your area. The median rent at
the time was $551.
Source: © 2017 Experian
DEMOGRAPHICS
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CLEARFIELD RETAIL
DEMOGRAPHICS
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N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E
Confidentiality and 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. © 2018 Marcus & Millichap. All rights reserved.
Non-Endorsement NoticeMarcus & 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.
CLEARFIELD RETAIL
Clearfield, UT
ACT ID Z0200090
15
E X C L U S I V E LY L I S T E D B Y
Brett Jones
Associate
Associate Member - National Retail Group
Salt Lake City Office
Tel: (801) 736-2651
Fax: (801) 736-2610
brett.jones@marcusmillichap.com
License: UT 9761802-SA00
Tod Jones
Senior Associate
Associate Director - National Retail
Group
Salt Lake City Office
Tel: (801) 736-2619
Fax: (801) 736-2610
tod.jones@marcusmillichap.com
License: UT 5450617-SA00
Matthew Porter
Senior Associate
Associate Member - National Retail Group
Salt Lake City Office
Tel: (801) 736-2638
Fax: (801) 736-2610
matthew.porter@marcusmillichap.com
License: UT 7770209-SA00
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