cascade plaza - capital pacific · the diverse tenant mix within the larger shopping center ......
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Dollar Tree Anchored retail center Along major retail corridor7414-7458 N Division St., Spokane, WA, 99208
Cascade Plaza
[ www.CapitalPacific.com ]
Spokane, WA
The offering provides an opportunity to acquire an established multi-tenant retail center located along North Division Street, the primary commercial corridor in Spokane. Cascade Plaza is situated within a larger shopping center anchored by Hobby Lobby, Grocery Outlet, Michael’s, and Furniture Row, creating a daily needs draw to the
immediate area. The Property is anchored by publicly-traded Dollar Tree (NASDAQ: DLTR), who is issued a Standard and Poor’s credit rating
of ‘BB’ and has occupied space at the Property for more than 13 years. The Property also benefits from a balanced rollover schedule with the anchor
tenant having approximately eight years remaining on their lease term.
Cascade Plaza’s location along North Division Street boasts traffic counts of nearly 50,000 vehicles per day. The dominant retail corridor features several national retailers including a Costco located across the street and NorthTown Mall, a regional mall anchored by Macy’s, Kohl’s, and Regal Cinemas. Cascade Plaza’s location also benefits from the dense close-in population of more than 175,000 residents within a five mile radius.
OCCUPANCY . . . . . . . . . . . . 96%
LEASABLE SF . . . . . . . . . . . . ±26,818 SF
PRICE PER SF . . . . . . . . . . . . $96
LAND AREA* . . . . . . . . . . . . . ±27,000 SF
LEASE TYPE. . . . . . . . . . . . . . NNN
YEAR BUILT . . . . . . . . . . . . . . 1980
AVG CURRENT RENT . . . . . . $8.62/SF
PARKING* . . . . . . . . . . . . . . . ±99 Spaces or 3.7/1,000 SF
ANCHOR . . . . . . . . . . . . . . . . Dollar Tree
*Subject is located within a larger shopping center that has reciprocal parking and access easements.
CASCADE PLAZA IS A 26,818 SF MULTI-TENANT RETAIL CENTER WITH ROBUST TRAFFIC COUNTS IN SPOKANE,
WASHINGTON.
PRICE: $2,570,000CAP: 7.80%
ADDRESS: 7414-7458 N Division St., Spokane, WA, 99208
Investment Highlights
CASCADE PLAZA | 2
STRONG PERFORMING CREDIT TENANT ANCHOR
Cascade Plaza is anchored by publicly-traded Dollar Tree (NASDAQ: DLTR) who has a Standard and Poor’s credit rating of ‘BB’. Dollar Tree has occupied space at the Property for more than 13 years and has an additional eight years remaining on its lease term. Notably, Dollar Tree has reported strong store sales in this location and has one, five-year option period remaining. Please contact Capital Pacific for more information about store performance.
PRICED BELOW REPLACEMENT COST
With true replacement costs estimated in excess of $200/SF, the Property is offered well below replacement cost at $96/SF. An investor has the ability to remain competitive in the leasing market and be a lower cost provider in which cost-feasible rents are significantly higher. Cascade Plaza’s current in-place rent is $8.62/SF, which is significantly below market averages and minimizes risk upon turnover.
DOMINANT RETAIL ACROSS FROM COSTCO
The Property is located along Spokane’s main retail artery, North Division Street, which boasts traffic counts of nearly 50,000 vehicles per day. Division Street is home to several national retailers within close proximity to Cascade Plaza including Costco, located across the street. Additionally, NorthTown Mall is a more than one million square foot regional mall anchored by Macy’s, Nordstrom Rack, and Regal Cinemas located south of the Property on Division Street.
FAVORABLE LEASE TERMS WITH MINIMAL ROLLOVER EXPOSURE
Cascade Plaza benefits from the balanced rollover schedule of its shop tenants. Additionally, anchor Dollar Tree is committed to this location until 2023, spreading out future rollover risk over time and reducing the threat of any major decrease in cash flow.
PART OF LARGER CENTER ANCHORED BY HOBBY LOBBY
Cascade Plaza is part of a larger center anchored by Hobby Lobby, Grocery Outlet, Michael’s and Furniture Row. Also located within the larger center are pad restaurants, Noodle Express, The Onion and Old European. The diverse tenant mix within the larger shopping center creates excellent retail synergy and a wide draw. Further, each property owner within the larger shopping center benefits via reciprocal access and parking agreements.
DENSE DEMOGRAPHIC AREA
The area surrounding the Property is densely populated with more than 175,000 residents living within a five mile radius.
Core Characteristics
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Quick Stats
STAGGERED LEASE EXPIRATIONS
0%
100%
50%
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7
CumulativeAnnual
39%
17%
64%
100%
10+ YEARS - 51%
3+ YEARS - 13%
< 2 YEAR - 32%
AVAILABLE - 4%
LEASE TENANCY
ABOUT
BBSTANDARD & POOR’S
CREDIT RATING
NASDAQ: DLTR
955%10-YEAR SHARE
PRICE GAIN SINCE 2005
2014
2013
2012
ANNUAL REVENUE
$8.60B
$7.39B$7.84B
US & CANADA
13,600+CURRENT LOCATIONS
OCCUPANCY
96%OCCUPANCY
CASCADE PLAZA | 4
Retail Corridor
N N
evad
a St
reet
N New
port
HWY
W Francis Avenue
E Magnesium Road
E Hawthorne Road
OTHER SURROUNDING RETAIL
AlbertsonsBabies “R” UsBed Bath & BeyondBig 5 Sporting GoodsBurlington Coat Factory
Carl’s JrCostcoDollar TreeGrocery OutletHobby Lobby
IHOPKMartOffice DepotPetcoQuizno’s
Rite AidRoss Dress for LessShari’s RestaurantTaco BellWalmart Supercenter
NORTHPOINTE PLAZA
Best BuyBig LotsHobbyTown USAOlive GardenPanda Express
PetSmartPier 1 ImportsRed RobinSafewayShakey’s Pizza
ShopkoSports AuthorityStaplesStarbucksT.J.Maxx
Taco BellTargetTotal Wine & More
FRANKLIN PARK COMMONS
Bed, Bath & BeyondBurlington Coat FactoryGuitar CenterOutback Steakhouse
Rite AidRossShari’s RestaurantTrader Joe’s
NORTHTOWN MALL
AT&TBarnes & NobleBaskin RobbinsBath & Body WorksChili’s
Famous FootwearGame StopJCPenneyKohl’sMacy’s
Marshall’sMen’s WearhousePayless Shoe SourceRadioShackRed Lobster
Regal CinemasSearsStarbucksSubwayYankee Candle
FOR A FULL LIST OF RETAILERS, CLICK HERE
N D
ivis
ion
Stre
et
395
2
2
395
291
SEATTLE NORTHTOWN MALL
NORTHPOINTE PLAZA
CASCADE PLAZA
Site
CASCADE PLAZA
N D
ivis
ion
Stre
et
E Lincoln Rd
3,900 DAILY
10,710 DAILY
44,000 DAILY
CASCADE PLAZA IS LOCATED AMONG NUMEROUS NATIONAL RETAILERS AND REGIONAL RESTAURANTS, SURROUNDED BY HIGH TRAFFIC COUNTS.
CASCADE PLAZA | 6
44,0
00 D
AIL
Y
SITE PLAN KEY
PARCEL OUTLINE:
LAND AREA: ±27,000 SF
LEASABLE AREA: ±26,818 SF
LEASED:
AVAILABLE:
NOT A PART:
INGRESS/EGRESS:
Site Plan
N D
ivisi
on S
t.
*Site plan not to scale
KINJA SU
SHI
JULIE’S
DAN
CE
ESCAPEEN
TERTAINM
ENT
BEYON
D BEAD
S
DOLLAR TREEPYLON SIGN
RECIPROCAL EASEMENT AGREEMENTThere shall be established mutual ingress and egress areas providing for ingress and egress between the Northgate, LLC Property and the Subject Property. The agreement runs with the land and shall be binding upon the owners of the Subject Property and The Northgate, LLC Property, and their successors.
MAINTENANCE AGREEMENTBuilding owners are responsible for reimbursing their proportionate share of Real Estate taxes, General Liability Insurance and all maintenance and utilities including paving, lighting, water, sewer, gas and striping of the common area costs incurred by the larger shopping center’s land owner, Northgate, LLC.
NORTHGATE LLC
Old European
The
Oni
on
Furniture Row
Jump-N-Party
Cash And Carry
Michael’s
NoodlesExpress
CASCADE PLAZA | 7
Cascade PlazaIncome & Expense
PRICE $2,570,000Capitalization Rate 7.80%Price Per Foot $96
NET OPERATING INCOME SUMMARYSCHEDULED INCOME Per SFScheduled Rent: 6/1/2016 $8.27 $221,853Plus: Rent Increases Through: 5/31/2017 $0.04 $1,202Plus: Expense Reimbursement $3.48 $89,529Equals: Scheduled Gross Income $12.14 $312,585Vacancy Factor 5% ($15,629)Equals: Effective Gross Income (EGI) $11.07 $296,955
Less: OPERATING EXPENSES Per SFCAMS $1.59 $42,655Property Taxes $1.37 $36,634Insurance $0.16 $4,200Management Fee 3.5% of EGI $0.40 $10,645Reserves $0.10 $2,682Total Operating Expenses $3.61 ($96,815)
Equals: NET OPERATING INCOME $200,140
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
3/21/2016 [ <www.CapitalPacific.com> ]
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
Financial Summary
CASCADE PLAZA | 8
Cascade PlazaRent Roll
LEASE TYPE
Tenant Name Suite Size % of SFOccupancy
DateLease
ExpirationMonthly Base
RentRent/SF/YR
Date of Increase
Monthly Base Rent
Additional Annual
Dollar Tree 7414 10,316 38.47% 12/1/02 1/31/23 $8,597 $10.00 2/1/18 $9,362 NNN
Beyond Beads 7452 3,428 12.78% 5/1/05 11/30/16 $2,200 $7.70 NNN
Available 7452R 1,072 4.00%
Julie's Dance Academy 7454 5,532 20.63% 9/1/14 11/30/17 $4,034 $8.75 12/1/16 $4,149 $692 NNN
Escape Entertainment 7456 3,050 11.37% 8/1/15 10/31/18 $2,033 $8.00 11/1/16 $2,097 $445 NNN11/1/17 $2,160
Kinja Sushi 7458 3,420 12.75% 12/1/12 3/31/19 $1,624 $5.70 4/1/17 $1,657 $66 NNN4/1/18 $1,690
Totals: 26,818 100% $18,488 $8.27 $1,202Occupied 25,746 96% $18,488 $8.62Leasable 1,072 4%
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information.Buyer must verify the information and bears all risk for any inaccuracies.
comments: Lease is personal guaranteed.
10% Increase1-2 YR
180 Days
comments: Space is not leasable for retail use in currrent status. Space is being used by Beyond Beads free of charge as storage space. Analysis assumes lease up of space with no base rent but Tenant will assume pro-rata share of NNN charges.
RENT INCREASES
1-5 YR180 Days
180 Days$2,287.50
comments: Percentage rent of 5% of Gross Sales if total exceeds base rent. Tenant must provide statement of Sales monthly. Lease has personal guarantee.
FMR
1-3 YR
OPTIONS
comments: Tenant has exercised the two of their three (3) option periods.
TENANT INFO LEASE TERMS CURRENT RENT
3/21/2016 [ <www.CapitalPacific.com> ]
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
Rent Roll
CASCADE PLAZA | 9
Cascade PlazaOperating Expenses
REIMBURSEMENTS
Total /SF Notes
Total Expenses $96,815 $3.61 $89,529
Notes:1) Based on 2015 Operating Budget.
3) Based on 3.5% of Stabilized EGI.4) Methodology: $0.10/SF for maintenance and repairs.
2) Based on 2015 Spokane County Tax Assessment of Cascade Plaza building parcel plus 15.197% share of Northgate Center parking lot parcel.
$2,682 $0.10 4 $0 Reserves
$36,634
Insurance
2015 OPERATING EXPENSES
$4,200 $4,200 $0.16 1
$40,244
$10,645 $0.40 3 $8,452
$36,634 $1.37
1$42,655 $1.59
2
CAMS
Property Taxes
Management
3/21/2016 [ <www.CapitalPacific.com> ]
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
Operating Expenses
CASCADE PLAZA | 10
Cascade PlazaReimbursements
Tenant Name Pro Rata % CAMS Property Taxes Insurance Management Notes Tenant Totals
Expense Total $42,655 $36,634 $4,200 $10,645
Dollar Tree 38.47% $19,020 $14,092 $1,616 $1,902 1, 2 $36,629
Beyond Beads 12.78% $4,598 $4,683 $537 $1,361 3 $11,179
Available - Storage Space 4.00% $1,375 $1,464 $168 $425 4 $3,433
Julie's Dance Academy 20.63% $5,983 $7,557 $866 $2,196 5 $16,602
Escape Entertainment 11.37% $4,368 $4,166 $478 $1,211 3 $10,223
Kinja Sushi 12.75% $4,898 $4,672 $536 $1,357 $11,463
TOTAL 100.00% $40,244 $36,634 $4,200 $8,452 $89,529
1) Dollar Tree has a combined Admin and Management fee not to exceed 10% of CAM charges.2) Tenant has 5% year over year cap on CAM charges.3) Tenant 's management reimbursement NTE 5% of minimum and additional rent.4) Assumes space can be leased for an amount equal to its pro-rata share of expenses.5) Tenant has a cap on all common charges of $3.00/SF
Notes:
3/21/2016 [ <www.CapitalPacific.com> ]
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
Reimbursements
CASCADE PLAZA | 11
Featured Photos
<< N DIVISION ST >>
CASCADE PLAZA | 12
Area Intel & Demos
OVERVIEWSettled in 1871 on the Spokane River, the city of Spokane is presently the second largest city in Washington. The city is 92 miles south of the Canadian border, approximately 20 miles from the Washington–Idaho border, and 232 miles east of Seattle. Spokane is known as the birthplace of Father’s Day, hosted the first environmentally themed World’s Fair, Expo ‘74, and is home to Gonzaga University, Whitworth University, and the growing Riverpoint campus that includes satellite campuses for Eastern Washington University and Washington State University.
ECONOMY
NATURAL RESOURCESNatural resources have historically been the foundation of Spokane’s economy, with the mining, logging, and agriculture industries providing much of the region’s economic activity. Considered to be one of the most productive mining districts in North America and due to its location between mining and farming areas, Spokane became an important rail and shipping center.
DIVERSIFIED INDUSTRYToday the city’s economy has diversified to include other industries, including the high-tech and biotech sectors. As the metropolitan center of the Inland Northwest as well as southeastern British Columbia and Alberta, Spokane serves as a commercial manufacturing, transportation, medical, financial, shopping, and entertainment hub.
CORPORATE HEADQUARTERS & OFFICESGenetics company, Signature Genomic Laboratories and Fortune 1000 technology company, Itron are headquartered in the area.
Other companies with head offices in the Spokane area include technology company Key Tronic, hotelier Red Lion Hotels Corporation, and automaker Commuter Cars. The largest military facility in the area is Fairchild Air Force Base near Airway Heights, which employs over 5,100 military and civilian employees and is home to the 92d Air Refueling Wing.
1-Mile 3-Mile 5-MileAverage $46,265 $53,570 $54,047Median $33,922 $40,506 $39,649
2015 HOUSEHOLD INCOMES
1-Mile 3-Mile 5-Mile 2010 16,918 97,611 171,7402015 16,812 99,265 175,1972020 16,881 101,158 178,898
POPULATION
Tri-Cities
Spokane
Coeur D’Alene
moses lake
90
40 min37 Miles
2 Hours140 Miles
1.5 Hours100 Miles
5 Miles
3 Miles
1 Mile
CASCADE PLAZA
MICHAEL [email protected] | (503) 675-8381
PETER [email protected] | (503) 607-0197
KEVIN ADATTO [email protected] | (503) 675-7726
SCOTT FRANK [email protected] | (503) 675-8383
SEAN MACK [email protected] | (503) 675-8378
SEAN TUFTS [email protected] | (206) 743-8468
DAVID GELLNER [email protected] | (206) 913-2842
THE CAPITAL PACIFIC EXPERIENCE - OUR DAILY COMMITMENT TO OUR CLIENTS
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