kmart bay.pdf · kmart. the information contained in the following marketing brochure is...

COOS BAY, OR

OFFERING MEMORANDUM

KMART

The 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.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed orimplied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify theinformation and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus& Millichap Real Estate Investment Services of Seattle, Inc. © 2012 Marcus & Millichap T0020013

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Single-Tenant Net-Leased Disclaimer

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 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 single-tenant property.

SECTION ONE

...............................................PRICING & FINANCIAL ANALYSIS

SECTION TWO

..................................................PROPERTY DESCRIPTION

SECTION THREE......................................DEMOGRAPHIC ANALYSIS


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ANNUALIZED OPERATING DATA3111 Ocean Boulevard SE

Coos Bay, OR 97420

Price $2,500,000

Down Payment 100% $2,500,000

Rentable Square Feet 68,337

Price/SF $36.58

CAP Rate 9.23%

Year Built 1978

Lot Size 14.7 Acres

Type of Ownership Fee Simple

LOCATION


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Rent Increases Annual Rent

Through 11/30/2013 $230,800.00

Option 3 $230,800.00

Option 4 $230,800.00

Option 5 $230,800.00

Option 6 $230,800.00

Option 7 $230,800.00

Option 8 $230,800.00

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Base Rent ($3.38/SF) $230,800

Net Operating Income $230,800Total Return 9.23% $230,800

Tenant Trade Name Kmart Corporation

Ownership Public - Parent Co.*

Tenant Kmart Corporation

Lease Guarantor Kmart Corporation

Lease Type Double Net

Roof and Structure Landlord Responsible

Lease Term 25 Years

Lease Commencement Date 01/20/1978

Rent Commencement Date 01/19/1978

Lease Expiration Date 11/30/2013

Term Remaining on Lease 22 Months

Increases None

Options Eight, Five-Year Options

TENANT SUMMARY

Financial Overview

* See Tenant Overview Page.


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Property Name Kmart

Property Address 3111 Ocean Boulevard SE

Coos Bay, OR 97420

Property Type Net Leased Department Store

Rentable Square Feet 68,337

Tenant Trade Name Kmart Corporation

Ownership Public - Parent Co.*

Tenant Kmart Corporation

Lease Guarantor Kmart Corporation

Lease Commencement Date 01/20/1978

Lease Option Expiration Date 11/30/2013

Lease Type Double Net

Roof and Structure Landlord Responsible

Lease Term 25 Years

Options to Renew Eight, Five-Year Options

Headquartered

Web Site www.kmart.com

Tenant Overview

*The parent company does not guaranty the lease. Sears Holdings Corporation

(Holdings) is the parent company of Kmart Holding Corporation (Kmart) and Sears,

Roebuck and Co. (Sears). Holdings is broadline retailer with 2,201 full-line and 1,354

specialty retail stores in the United States operating through Kmart and Sears and 483

full-line and specialty retail stores in Canada operating through Sears Canada Inc.

(Sears Canada), a 92%-owned subsidiary. During the fiscal year ended January 29,

2010 (fiscal 2010), it operated three segments: Kmart, Sears Domestic and Sears

Canada. As of January 29, 2011, Holdings operated a total of 1,307 Kmart stores across

49 states, Guam, Puerto Rico, and the United States Virgin Islands. As of January 29,

2011, Sears Domestic operations consisted of full-line stores, specialty stores, Lands’

End, Inc., commercial sales and home services. Sears Canada conducts retail

operations in Canada similar to those conducted by Sears.

The subject property is a freestanding, net-leased Big Kmart located in

Coos Bay Oregon. The original 25 year primary term is in its second

option period which expires in November of 2013. There are an

additional eight, five-year options follow. Built in 1978, Kmart boasts

a 33 year operating history at this location. The property is 68,337

square feet and situated on approximately 13 acres of land.

Kmart currently pays an monthly rent of $0.28 per square foot, which

equates to a 5.3% rent-to-sales ratio.* The building is priced below

replacement cost and pays a below market rent. Kmart has above

average demographics with a population of over 25,000 and average

household income of over $50,000 within five miles.

This site fronts Ocean Boulevard and benefits from strong visibility

and easy ingress/egress on. Ocean Boulevard is a major artery

extending from Highway 101 to Cape Arago Highway. The property

is located near a number of schools including Southwestern Oregon

Community College with an enrollment of approximately 10,000

students. National tenants in close proximity to the subject property

include Walgreens, Walmart, Staples, KFC and Burger King.

Sears Holdings Corporation (Holdings) is the parent company of

Kmart Holding Corporation (Kmart) and Sears, Roebuck and Co.

(Sears). Holdings is broadline retailer with 2,201 full-line and 1,354

specialty retail stores in the United States operating through Kmart

and Sears and 483 full-line and specialty retail stores in Canada

operating through Sears Canada Inc. (Sears Canada), a 92%-owned

subsidiary. During the fiscal year ended January 29, 2010 (fiscal 2010),

it operated three segments: Kmart, Sears Domestic and Sears Canada.

As of January 29, 2011, Holdings operated a total of 1,307 Kmart

stores across 49 states, Guam, Puerto Rico, and the United States

Virgin Islands. As of January 29, 2011, Sears Domestic operations

consisted of full-line stores, specialty stores, Lands’ End, Inc.,

commercial sales and home services. Sears Canada conducts retail

operations in Canada similar to those conducted by Sears Domestic

* As of Lease Year End 2010.


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INVESTMENT HIGHLIGHTS

• Rare Coastal Oregon Single-Tenant Investment

• 5.3% Rent-to-Sales Ratio*

• Corporate Guarantee fromKmart Corporation

• 14.7 Acres of Land

• Below Market Rent

• Area retailers include WalmartSupercenter, Walgreens, BurgerKing, MinaStar, Staples andKFC

• 33 Year Operating History atThis Location

• Possible FutureRepositioning/RedevelopmentOpportunity

Investment Overview

Coos Bay is located in Coos County along the Oregon Coast. As the largest coastal city in Oregon, Coos

Bay borders the city of North Bend, together often called the Bay Area. Coos County has a population of

approximately 65,000 residents and is home to the worldwide famous golf course, Bandon Dunes Golf

Resort, located just south of Coos Bay. Roughly 70 miles south of Eugene, OR, Coos Bay is a regional hub

and boasts a rich history as a shipbuilding and lumber shipping center for Oregon’s south coast.

Currently under development in Coos Bay County, is the most advanced and economic change known as

the Jordan Cove Energy Project. This project includes the plans to develop a shipping terminal within the

Oregon International Port of Coos Bay. This will be a half billion dollar facility and a pipeline to deliver

liquefied natural gas to southern Oregon and northern California. This is a projected 3 year project and

will employ nearly 1,000 people at the peak of construction.

Coos Bay is also home to Southwestern Oregon Community College, a 158 acre campus with

approximately 10,000 enrolled students.

The Jordan Cove Energy Project has acquired land and parcels in preparation for the design and permitting

phase of the current development. The pipeline for the energy project goes throughout three separate

counties along the Oregon and California coast, with the bulk of the assignment set for development in

Coos Bay. (Source: www.jordancoveenergy.com/faq.htm.)


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Location Overview

* As of FY2010 Sales Reports.

LOCAL MAP

REGIONAL MAP


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Area Maps

PROPERTY DESCRIPTION

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1 Mile 3 Miles 5 Miles

1990 Population 2,564 17,120 23,5042000 Population 2,734 16,929 23,8072010 Population 6,073 27,051 34,5422011 Population 6,057 26,645 34,4072016 Population 6,002 25,590 34,006

1990 Households 1,044 6,935 9,5492000 Households 1,191 7,149 10,0612010 Households 2,774 11,663 14,8282011 Households 2,795 11,598 14,9092016 Households 2,877 11,565 15,291

2011 Average Household Size 2.12 2.27 2.28

2011 Daytime Population 3,422 15,957 16,994

1990 Median Housing Value $56,779 $51,385 $51,8982000 Median Housing Value $106,087 $100,019 $101,920

2000 Owner Occupied Housing Units 59.62% 56.27% 59.01%2000 Renter Occupied Housing Units 34.74% 36.45% 33.30%2000 Vacant 5.64% 7.28% 7.69%



$ 0 - $14,999 22.8% 19.2% 19.0%$ 15,000 - $24,999 17.3% 14.4% 13.9%$ 25,000 - $34,999 11.6% 13.6% 13.3%$ 35,000 - $49,999 13.0% 14.6% 15.9%$ 50,000 - $74,999 18.0% 18.5% 17.6%$ 75,000 - $99,999 9.4% 10.5% 10.2%

$100,000 - $124,999 3.7% 4.5% 4.9%$125,000 - $149,999 1.6% 1.6% 1.9%$150,000 - $199,999 1.2% 1.3% 1.3%$200,000 - $249,999 0.2% 0.2% 0.3%$250,000 + 1.3% 1.6% 1.7%

2011 Median Household Income $33,278 $37,384 $38,028

2011 Per Capita Income $21,486 $22,693 $23,026

2011 Average Household Income $46,785 $51,292 $52,366

Demographic data © 2010 by Experian/Applied Geographic Solutions.This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed orimplied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify theinformation and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus& Millichap Real Estate Investment Services of Seattle, Inc. © 2012 Marcus & Millichap T0020013

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Demographic Report

Geography: 5 Miles

PopulationIn 2011, the population in your selected geography was 34,407. The population has changed by 44.53% since 2000. It isestimated that the population in your area will be 34,006 five years from now, which represents a change of -1.17%from the current year. The current population is 48.4% male and 51.6% female. The median age of the population inyour area is 47.3, compare this to the U.S. average which is 36.9. The population density in your area is 437.09 peopleper square mile.

HouseholdsThere are currently 14,909 households in your selected geography. The number of households has changed by 48.19%since 2000. It is estimated that the number of households in your area will be 15,291 five years from now, whichrepresents a change of 2.56% from the current year. The average household size in your area is 2.28 persons.

Income

In 2011, the median household income for your selected geography is $38,028, compare this to the U.S. average whichis currently $53,620. The median household income for your area has changed by 10.93% since 2000. It is estimated thatthe median household income in your area will be $41,150 five years from now, which represents a change of 8.21%from the current year.

The current year per capita income in your area is $23,026, compare this to the U.S. average, which is $28,713. Thecurrent year average household income in your area is $52,366, compare this to the U.S. average which is $73,458.

Housing

The median housing value in your area was $101,920 in 2000, compare this to the U.S. average of $110,796 for the sameyear. In 2000, there were 6,431 owner occupied housing units in your area and there were 3,630 renter occupiedhousing units in your area. The median rent at the time was $433.

EmploymentIn 2011, there are 16,994 employees in your selected area, this is also known as the daytime population. The 2000Census revealed that 57.6% of employees are employed in white-collar occupations in this geography, and 42.4% areemployed in blue-collar occupations. In 2011, unemployment in this area is 15.22%. In 2000, the median time traveledto work was 12.8 minutes.

Demographic data © 2010 by Experian/Applied Geographic Solutions.


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Summary Report

OFFERING MEMORANDUM

COOS BAY, OR

Offices Nationwidewww.MarcusMillichap.com

KMART

kmart bay.pdf · kmart. the information contained in the following marketing brochure is...

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