applebee’s - loopnet · 2017. 10. 12. · dine equity, inc. dineequity, inc., owns, franchises,...

APPLEBEE’S 3039 COMMERCE LANE, IONIA, MI 48846

The information contained herein has been carefully compiled from sources we consider reliable, and while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date. The proforma revenues and expenses set forth in this brochure do not constitute a representation, warranty, or guaranty of any of the numbers set forth herein or of any economic value attributable to the property or income that may be derived therefrom. Independent estimates of proforma revenues and expenses should be developed before any decision is made on whether to invest in the property.

18301 Von Karman Avenue Suite 800

Irvine, CA 92612

Phone: (949) 221–1800

Fax: (949) 221–1830

www.farislee.com

BROKER OF RECORD:Joe Rizqallah

Sales Associate Signature Associates

1188 E. Paris Avenue SE Suite 220 Grand Rapids, MI 49546

R.E. License No. 6501342837

EXCLUSIVE INVESTMENT ADVISORS:

Thomas ChichesterManaging [email protected](949) 221-1820R.E. License No 01915137

Joseph [email protected](949) 221-1813R.E. License No. 01915138

Nicholas CooSenior Managing [email protected](949) 221-1811R.E. License No 01226006

Matt [email protected](949) 221-1832R.E. License No. 01976931

PRICING ANALYSIS 13 AREA OVERVIEW 16PROPERTY OVERVIEW 4

STATEMENT OF CONFIDENTIALITY & DISCLAIMERFaris Lee Investments (“FLI”) has been engaged as the exclusive financial advisor to the Seller in connection with Seller’s solicitation of offers for the purchase of the property known as Applebee’s, City of Ionia, County of Ionia, State of Michigan. Prospective purchasers are advised that as part of the solicitation process, Seller will be evaluating a number of factors including the current financial qualifications of the prospective purchaser. Seller expressly reserves the right in its sole and absolute discretion to evaluate the terms and conditions of any offer and to reject any offer without providing a reason therefore. Further, Seller reserves the right to terminate the solicitation process at any time prior to final execution of the Purchase Agreement.

The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property, and it is not to be used for any other purpose or made available to any other person without the express written consent of Seller or FLI. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by FLI from sources it deems

reasonably reliable. Summaries of any documents are not intended to be comprehensive or all-inclusive, but rather only outline some of the provisions contained therein and qualified in their entirety by the actual document to which they relate.

No representation or warranty, expressed or implied, is made by the Seller, FLI, or any of their respective affiliates as to the accuracy or completeness of the information contained herein. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the Property site or used in the construction or maintenance of the building at the Property site.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase

Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or FLI or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

Prospective purchasers are not to construe the contents of this Offering Memorandum or any prior or subsequent communication from FLI or Seller or their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents as legal, tax, or other advice. Prior to submitting an offer, prospective purchasers should consult with their own legal counsel and personal and tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment.

TABLE OF CONTENTS

PROPERTY OVERVIEW

PRICING

Pricing: $2,381,000

NOI: $148,834

Cap Rate: 6.25%

INVESTMENT SUMMARY

Faris Lee Investments is pleased to offer for sale the fee simple interest (land & building) in the only freestanding, single tenant, absolute NNN leased, Applebee’s (the “Property”), located in Ionia, Michigan. Applebee’s has over 11-years remaining on their primary term. The lease features 10% rent increases every 5 years during the primary term and each 4 (5-year) option period to extend, which generates steady NOI growth and hedges against inflation.

The Property is operated by one of the largest multi-brand restaurant groups in Michigan, Team Schostak Family Restaurants (TSFR), who operating an expansive portfolio of casual and fast-casual dining restaurants, including Applebee’s (64 units), Del Taco (5 units), MOD Pizza (8 units) and Olga’s Kitchen (12 units).

LOCATION SUMMARY

The subject property is ideally located along South State Road 66 with more than 19,200 vehicles per day. South State Road 66 is a major arterial north-south corridor with many national tenants such as: Wal-Mart, Meijer, Taco Bell, Dollar Tree, and more creating strong tenant synergy and crossover foot traffic. Additionally, the South State Road 66 is the most travelled road within Ionia, which connects Interstate 96 (a major transportation corridor between Grand Rapids and Lansing) to Ionia. Applebee’s also has a built in consumer base, with Sparrow Ionia Hospital within close proximity, which has over 290 employees that operate the hospital. Furthermore, there are more than 18,300 permanent residents with an average household income higher than $53,000, and a trade area that is supported by more than 8,000 daytime employees within a 5 mile radius.

PROPERTY OVERVIEW · 5

INVESTMENT SUMMARY

STRONG NATIONAL TENANT - APPLEBEE’S/ DINEEQUITY (NASDAQ: DIN) / STRONG FRANCHISE OPERATOR

Q TEAM Schostak Family Restaurants, based in Livonia, MI, is a family-owned restaurant group with an expansive portfolio of casual and fast-casual dining restaurants throughout the state of Michigan, including Applebee’s, MOD Pizza and Del Taco. TEAM Schostak Family Restuarants is one of Michigan’s largest multi-brand restaurant groups, with an expansive portfolio of casual and fast-casual dining restaurants, including Applebee’s (64 units), Del Taco (5 units), MOD Pizza (8 units) & Olga’s Kitchen (12 units)

Q Website: http://teamschostak.com/

LONG-TERM FRANCHISE GUARANTEED LEASE / 10% RENT INCREASES

Q Over 11 years remaining on the initial term Q There are 2 (5-year) 10% rental increases in years 2018 and 2023, creating

security for the future investor Q Additionally, the property has 4 (5-year) 10% rental increase options to

extend upon expiration of initial term Q Hedges against inflation

ABSOLUTE (NNN) LEASE / FEE SIMPLE OWNERSHIP Q No landlord expense to maintain land or building Q Minimal landlord management Q CAM, insurance and taxes are paid by tenant Q Tenant is responsible for roof and structure

MONUMENTAL SIGNAGE / EXCELLENT STREET FRONTAGE AND VISIBILITY ON MAIN THOROUGHFARE

Q The property features a large monument sign that fronts South State Road 66 (19,200 vehicles per day), which is the main arterial road through Ionia

Q South State Road is the only arterial road that enters into Ionia from Interstate 96, which is the main interstate connecting Lansing and Grand Rapids

Q Features excellent street frontage and visibility Q Convenient access

LOCATED NEAR THE BUSIEST SIGNALIZED, HARD CORNER INTERSECTION IONIA

Q The property is ideally located near the signalized, hard corner intersection of South State Road 66 and Sprague Road

Q The intersection of South State Road 66 and Sprague Road is one of the busiest intersections in Ionia, with traffic counts in excess of 19,200 vehicles per day

OUTPARCEL TO THE DOMINATE SHOPPING CENTER IN THE TRADE AREA | WALMART SUPERCENTER ANCHORED

Q Strong national credit tenant further creates strong tenant synergy and cross-over traffic in immediate area

Q Wal-Mart: Public company (NYSE: WMT): S&P: AA, 2017 Equity: $77.79 billion, 2017 revenue: $485.87 billion

LOCATED ADJACENT TO SPARROW IONIA HOSPITAL Q Sparrow Ionia Hospital has approximately 22 beds for its patients and has

more than 290 employees who assist with daily operations. Q This close proximity provides a built in customer base


INVESTMENT HIGHLIGHTS

Vehicles Per Day

South State Road 66: 19,200

PARCEL NUMBER

PARCEL ACRES SQUARE FEET34-011-001-000-085-60 1.41 61,420

PARCEL MAP

TRAFFIC COUNTS (COSTAR)PROPERTY SPECIFICATIONSRentable Area: 3,720 SFSF Land Area: 61,420 SF / 1.41 AcresYear Built: 2006Zoning: B-3 General Business District

Ownership: Fee Simple (Land & Building)Guaranty: FranshiseeTenant: Applebee’s

Address: 3039 Commerce Lane, Ionia, MI 48846Access: There are two (2) access points along Commerce LaneImprovements: There is approximately 3,720 SF of existing building area.Parking: There are approximately 73 dedicated parking stalls on the owned parcel. The parking ratio is

approximately 19.62 parking stalls per 1,000 SF of leasable area.


PROPERTY SPECIFICATIONS


AERIAL VIEW


LOCATION MAP


AERIAL VIEW


PHOTOS

Pylon Sign

S. State Road

Sprague Road

SITE PLAN NOT TO SCALE


SITE PLAN

PRICING ANALYSIS

DINE EQUITY, INC.

DineEquity, Inc., owns, franchises, operates, and rents full-service restaurants in the United States and internationally. It owns and operates two restaurant concepts: Applebee’s Neighborhood Grill & Bar (Applebee’s) and International House of Pancakes (IHOP). As of December 31, 2016, it had 2,016 Applebee’s franchised restaurants. DineEquity, Inc. was founded in 1958 and is headquartered in Glendale, California.

Company Type: Public: (NYSE: DIN)2016 Net Income: $97.99 Million2016 Equity: $252.77 MillionFiscal Year End: December

2016 Revenue: $633.97 Million2016 Assets: $2.27 BillionWebsite: www.dineequity.com

APPLEBEE’S

Applebee’s is an American subsidiary of DineEquity, Inc.. The company develops, franchises, and operates its full-service restaurants around the United States and in other countries. The restaurant offers a casual dining experience with mainstream American dishes such as salads, shrimp, pasta, chicken, and its signature dish “riblets”. The company is currently headquarter in Kansas City, Missouri.

Company Type: Subsidiary Website: www.applebees.com

TEAM SCHOSTAK FAMILY RESTAURANTS

TEAM Schostak Family Restaurants, based in Livonia, MI, is a family-owned restaurant group with an expansive portfolio of casual and fast-casual dining restaurants throughout the state of Michigan, including Applebee’s, MOD Pizza and Del Taco. TEAM Schostak Family Restuarants is one of Michigan’s largest multi-brand restaurant groups, with an expansive portfolio of casual and fast-casual dining restaurants, including Applebee’s (64 units), Del Taco (5 units), MOD Pizza (8 units) and Olga’s Kitchen (12 units).

Website: http://teamschostak.com/

APPLEBEE’S

TEAM Schostak Family Restaurants acquired 64 Applebee’s Restaurants located throughout lower Michigan. Since purchasing the 64 Applebee’s in 2012, TSFR has elevated the dining experience for guests by undergoing a more than $12 million revitalization of 60 Applebee’s restaurants and building an additional four new locations in key communities throughout the state.

News: http://teamschostak.com/team-schostak-celebrates-5th-anniversary-applebees/

DEL TACO

TEAM Schostak Family Restaurants introduced the Del Taco brand to Michigan with the opening of the Dearborn Heights location in June 2005. TEAM Schostak was recognized by Del Taco Corp. as Multi Unit Franchisee of the Year in both 2009 and 2010.

MOD PIZZA

TEAM Schostak Family Restaurants plans to open 25 MOD Pizza locations in Michigan during the next five years, with five locations currently open and others slated to open in 2017 & 2018.

OLGA’S KITCHEN

In 2015 Team Schostak Family Restaurants purchased the Olga’s Kitchen brand, marking the first corporate entity acquisition. After rebranding, TSFR will remodel existing restaurants and open new restaurants in 12 Michigan markets by 2018.

PRICING ANALYSIS · 14

TENANT SYNOPSIS

FRANCHISE INFORMATION (GUARANTOR)

CORPORATE INFORMATION

Financial Information Lease Type:Price (Jul-2018): $2,381,000

Property SpecificationsRentable Area: 3,720 SFLand Area: 1.412 AC (61,523 SF)Year Built: 2006Address: 3039 Commerce Lane

Ionia, MIAPN: 123-45-678Ownership: Fee Simple (Land & Building)Tenant: TSFR Apple Venture, LLC (dba. Applebee's)Guaranty: Franchise

Estimated Operating Information Jul-2018

Gross Potential Rent $148,834Plus Recapture NNN

Effective Gross Income $148,834Less Expenses (NNN)

Net Operating Income $148,834

Cap Rate (1): 6.25%

Notes:(1) Seller to credit Buyer Rent & NNN from COE thru Jun-2018.

Tenant is responsible for taxes, insurance, CAM, roof and structure. Landlord has Zero responsibilities.

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness.

Rent RollApplebee's - Ionia, MI

Annual$/SF

3,720 $11,275 $3.03 $135,304 $36.37 Jul-2018 10% $12,403 $3.33 $148,834 $40.01 Absolute 10/1/2009 6/12/2028Jul-2023 10% $13,643 $3.67 $163,718 $44.01 NNN 95% of FMV @ Each Option;

No less than 10% over prior Lease Year

Size (SF)Tenant

Applebee's 4 (5-Year)

Rental Increases

(TSFR Apple Venture, LLC)

MonthlyRent$/SF

Current Monthly

Rent

CAM Recovery

Type

LeaseStart

LeaseExpires

CurrentAnnual

Rent

AnnualRent$/SF

IncreaseDate Increase

MonthlyRent

Monthly$/SF

AnnualRent

Lease Options

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness.


RENT ROLL & TRANSACTION SUMMARY

AREA OVERVIEW

MAJOR EMPLOYERS

NEARBY ATTRACTIONS

TOP SCHOOLSFAST FACTS

A diverse and growing cityThe city of Ionia Ionia is the largest city and holds the county seat for Ionia County. The city is located along the Grand River, in-between Grand Rapids and Michigan’s capital of Lansing. The city has a population of approximately 11,500 people and is was established as a city in 1873. Ionia County Economy Ionia County is heavily based in agriculture, encompassing over 248,000 acres of farmland. According to city’s economic development department, the city is ranked #4 in Michigan’s total livestock sales, #4 in Michigan’s total revenue from dairy, and #5 in Michigan’s total market value of agricultural production. Additionally, the county is also rooted in manufacturing and healthcare. Ionia County Population 63,700 residentsIonia County AHHI $61,800

Ionia County experiences employment from a number of organizationsVentra Ionia Main, LLC Ventra Ionia Main is an O.E. manufacturing company, who manufactures plastics, metals, mechanical assemblies, and automotive parts. The company employs more than 1,200 workers throughout the county. Ionia Public Schools Ionia County’s public school system serves the needs of over 3,300 students between grade K-12. The school district employs more than 350 faculty and staff to operate the 10 schools within the district.MeijerMeijer is a regional supermarket chain located around the Grand Rapids metropolitan area and in other states. The company is based within Michigan, and employs more than 300 employees within Ionia County.

Ionia County enjoys access to several highly-ranked colleges and universitiesMichigan State University (Lansing)Michigan State University is located in Michigan’s Capitol of Lansing, and has a total undergraduate and graduate enrollment in excess of 50,000 students. The university has more than 600 student clubs and was first established in 1855. Michigan State University employs more than 2,000 faculty members and has satellite campuses throughout Michigan including Ionia. Western Michigan University Grand Rapids Campus (Grand Rapids) Western Michigan University’s main campus is located in Kalamazoo. It’s Grand Rapids campus has more than 1,500 students and is the largest regional location for the University. The University offers more than 20 graduate degree programs for its students.

Some of Cental Michigan’s best attractions are just a short distance from Ionia County Ionia State Recreation Area Ionia State Recreation Area offers more than 4,500 acres for recreation. The park has 3.5 miles of hiking trails, 15 miles of horse trails, 9 miles of mountain bike trails, and a boat launching area for Session Lake. Additionally, the park has more than 140 campsites for visitorsIonia Free Fair Ionia Free Fair is a regional fair within Ionia County. The fair attracts approximately 240,000 visitors annually, who come to experience the marketplace, games, rides, and live entertainment. John C. Blanchard House Home to the Ionia County Historical Society and Ionia County Museum, this building is a preserved property with Italianate architecture. The house is located in the heart of Ionia’s Historic District, and was once home to a very prominent lawyer and politician.

POPULATION GROWTH SINCE 2000

91.61%

PREDICTED JOB GROWTH OVER THE NEXT 10 YEARS

41.01%

RECENT JOB GROWTH IN IONIA

2.50%

MEDIAN AGE IN IONIA33.8

HOME APPRICIATION IN THE LAST 12 MONTHS

7.2%

MEDIAN HOME VALUE$80,000

AVERAGE COMMUTE24 Mins


IONIA OVERVIEW

DESCRIPTION (WWW.ROL3.SITESUSA.COM) 5 MILE3 MILE1 MILE 10 MILE

2017 Estimated Population 1,281 9,625 18,302 36,768

2022 Projected Population 1,287 9,656 18,325 36,479

2010 Census Population 976 9,364 18,245 36,661

2000 Census Population 997 9,632 17,473 34,893

Projected Annual Growth 2017 to 2022 0.1% 0.1% - -0.2%

Historical Annual Growth 2000 to 2017 1.7% - 0.3% 0.3%

2017 Median Age 40.7 34.9 35.7 37.7

2017 Estimated Households 521 2,570 5,235 12,371

2022 Projected Households 541 2,669 5,422 12,672

2010 Census Households 389 2,375 5,024 11,920

2000 Census Households 335 2,261 4,845 10,960

Projected Annual Growth 2017 to 2022 0.8% 0.8% 0.7% 0.5%

Historical Annual Growth 2000 to 2017 3.3% 0.8% 0.5% 0.8%

2017 Estimated White 93.9% 76.0% 79.4% 87.6%

2017 Estimated Black or African American 0.5% 19.2% 15.9% 8.2%

2017 Estimated Asian or Pacific Islander 0.8% 0.5% 0.5% 0.4%

2017 Estimated American Indian or Native Alaskan 0.6% 0.6% 0.5% 0.5%

2017 Estimated Other Races 4.1% 3.8% 3.7% 3.3%

2017 Estimated Hispanic 4.4% 7.2% 7.0% 5.3%

2017 Estimated Average Household Income $59,565 $52,407 $53,060 $60,650

2017 Estimated Median Household Income $46,035 $41,670 $42,324 $51,240

2017 Estimated Per Capita Income $24,216 $19,653 $20,057 $22,852

2017 Estimated Total Businesses 160 499 726 1,102

2017 Estimated Total Employees 2,058 5,807 8,801 11,618

2017 Estimated Employee Population per Business 12.8 11.6 12.1 10.5

2017 Estimated Residential Population per Business 8.0 19.3 25.2 33.4

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©2017, Sites USA, Chandler, Arizona, 480-491-1112 page 1 of 2 Demographic Source: Applied Geographic Solutions 04/2017, TIGER Geography


DEMOGRAPHICS

APPLEBEE’S 3039 COMMERCE LANE, IONIA, MI 48846

The information contained herein has been carefully compiled from sources we consider reliable, and while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date. The proforma revenues and expenses set forth in this brochure do not constitute a representation, warranty, or guaranty of any of the numbers set forth herein or of any economic value attributable to the property or income that may be derived therefrom. Independent estimates of proforma revenues and expenses should be developed before any decision is made on whether to invest in the property.

18301 Von Karman Avenue Suite 800

Irvine, CA 92612

Phone: (949) 221–1800

Fax: (949) 221–1830

www.farislee.com

BROKER OF RECORD:Joe Rizqallah

Sales Associate Signature Associates

1188 E. Paris Avenue SE Suite 220 Grand Rapids, MI 49546

R.E. License No. 6501342837

EXCLUSIVE INVESTMENT ADVISORS:

Thomas ChichesterManaging [email protected](949) 221-1820R.E. License No 01915137

Joseph [email protected](949) 221-1813R.E. License No. 01915138

Nicholas CooSenior Managing [email protected](949) 221-1811R.E. License No 01226006

Matt [email protected](949) 221-1832R.E. License No. 01976931

applebee’s - loopnet · 2017. 10. 12. · dine equity, inc. dineequity, inc., owns, franchises,...

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