confidential offering memorandum · executive summary offering highlights . this information has...

P R O P E R T Y

C H E S T E R B R O O K A C A D E M Y

L O C A T I O N

7 1 1 H O L L O W R O A D

P H O E N I X V I L L E , P A 1 9 4 6 0

C O N F I D E N T I A L O F F E R I N G M E M O R A N D U M

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.

NON-ENDORSEMENT NOTICE

Marcus & 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.

CONFIDENT IAL I TY AND DISCLAIMER

Marcus & Millichap hereby advises all prospective purchasers of 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 net leased 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 net leased 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 net leased 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 net leased property.

NET LEASE DISCLAIMER

TABLE OF CONTENTS

1 E X E C U T I V E S U M M A R Y Offe r ing H igh l igh ts 6 I nves tm ent Overv iew 7

3 P R O P E R T Y O V E R V I E W Proper ty Deta i l s 13 Reg iona l M ap 14 Loca l M ap 15 Aer ia l M ap 16

2 F I N A N C I A L O V E R V I E W Offe r ing & Tenan t Sum m ary 9 I ncom e Sum m ary 10 Tenan t Overv iew 11

4 M A R K E T O V E R V I E W Dem ograph ic Data 18 Dem ograph ic Sum m ary 19

4 Y0410001

EXECUTIVE SUMMARY 1

E X E C U T I V E S U M M A R Y

OFFER ING H IGHL IGHTS

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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016 Marcus & Millichap 6

O F F E R I N G S U M M A R Y

O F F E R I N G P R I C E $ 6 , 2 3 5 , 0 0 0

D O W N P A Y M E N T 1 0 0 % / $ 6 , 2 3 5 , 0 0 0

C A P R A T E 8 . 2 5 %

N O I $ 5 1 4 , 3 9 3

R E N T A B L E S Q U A R E F E E T 1 4 , 7 5 0

Y E A R B U I L T 2 0 0 2

L O T S I Z E ( A C R E S ) 4 . 4 0

L E A S E S U M M A R Y

L E A S E T Y P E T R I P L E N E T ( N N N )

R O O F A N D S T R U C T U R E * T E N A N T R E S P O N S I B L E

L E A S E G U A R A N T O R N O B E L L E A R N I N G C O M M U N I T I E S , I N C .

O R I G I N A L L E A S E T E R M 1 5 Y E A R S

L E A S E C O M M E N C E M E N T D A T E 8 / 1 / 2 0 0 7

O P T I O N S ( 2 ) 5 - Y R ; ( 1 ) 4 - Y R , 1 1 - M O N T H S

I N C R E A S E S * * E V E R Y 5 Y E A R S

C H E S T E R B R O O K A C A D E M Y 7 1 1 H O L L O W R O A D , P H O E N I X V I L L E , P A 1 9 4 6 0

* T E N A N T S H A L L M A I N T A I N A L L I N T E R I O R A N D E X T E R I O R P O R T I O N S O F T H E P R E M I S E S , I N C L U D I N G T H E R O O F , R O O F S K I N , G U T T E R S , A N D D O W N S P O U T S . L A N D L O R D I S R E S P O N S I B L E F O R T H E R E P A I R A N D / O R R E P L A C E M E N T O F T H E S T R U C T U R A L E L E M E N T S O F T H E P R E M I S E S , I N C L U D I N G T H E S T R U C T U R A L E L E M E N T S O F T H E R O O F , B E A R I N G W A L L S , A N D F O U N D A T I O N . * * B A S E R E N T I N C R E A S E S B Y C P I A D J U S T M E N T E V E R Y 5 Y E A R S , N O T T O E X C E E D 1 0 % C U M U L A T I V E F O R E A C H 5 Y E A R S .

E X E C U T I V E S U M M A R Y

INVESTMENT OVERVIEW

• 14,750 Square Foot Single-Tenant Building • Triple-Net Lease with Limited Landlord Responsibilities • Corporate Guarantee from Nobel Learning Communities, Inc. |

Guarantor Has Over 180 Private Schools in the U.S. • Over Five Years Remain on the Term with Three Options for Renewal • Scheduled Rent Bumps Every Five Years Based on CPI Adjustment, Not

to Exceed 10% • Located in the Northeastern Portion of Phoenixville on Hollow Road at

the Intersection with Egypt Road • Excellent Demographics | The One Mile Average Household Income is

$123,845 | Five Mile Population Exceeds 114,400 Residents

The subject property is a 14,750 square foot single-tenant Chesterbrook Academy located in Phoenixville, Pennsylvania. The triple-net lease has limited landlord responsibilities and has a corporate guarantee from Nobel Learning Communities, Inc., a network of over 180 private schools in the United States. Over five years remain on the primary term, and the tenant has three options for renewal. The base rent increases by CPI adjustment every five years, not to exceed 10% cumulative for each five years. The building was constructed in 2002 and sits on 4.4 acres.

The subject property is located on Hollow Road at the intersection with Egypt Road in the northeastern portion of Phoenixville. The surrounding area is largely manufacturing and distribution with facilities for Boehringer Laboratories, TB Philly, TBP Converting, Innovative Print and Media Group, Novatek Corporation, Graphic Packaging International, Ferguson, Sheppard Redistribution, and others. The surrounding area has excellent demographics, with a one mile average household income of $123,845 and the five mile population exceeding 114,400 residents.

Phoenixville is a borough in Chester County, Pennsylvania, about 28 miles northwest of Philadelphia. At the intersection of the Schuylkill River and French Creek, Phoenixville blends historic charm with a modern mindset. Today, Phoenixville boasts an artsy, low-key vibe that attracts visitors craving a relaxing day with a creative twist. Phoenixville is in close proximity to Valley Forge National Park and the Perkiomen and Schuylkill River trails.



FINANCIAL OVERVIEW 2

F I N A N C I A L O V E R V I E W

OFFER ING & TENANT SUMMARY



O F F E R I N G S U M M A R Y

P R I C E $ 6 , 2 3 5 , 0 0 0

D O W N P A Y M E N T 1 0 0 % / $ 6 , 2 3 5 , 0 0 0

R E N T A B L E S Q U A R E F O O T A G E 1 4 , 7 5 0

P R I C E P E R S Q U A R E F O O T $ 4 2 2 . 7 1

C A P R A T E 8 . 2 5 %

Y E A R B U I L T 2 0 0 2

L O T A R E A ( A C R E S ) 4 . 4 0

T Y P E O F O W N E R S H I P F E E S I M P L E

T E N A N T S U M M A R Y

O W N E R S H I P P R I V A T E

T E N A N T C O R P O R A T E S T O R E

L E A S E G U A R A N T O R N O B E L L E A R N I N G C O M M U N I T I E S , I N C .



L E A S E T E R M 1 5 Y E A R S

C O M M E N C E M E N T D A T E 8 / 1 / 2 0 0 7

E X P I R A T I O N D A T E 7 / 3 1 / 2 0 2 2

T E R M R E M A I N I N G O N L E A S E 5 + Y E A R S


O P T I O N S ( 2 ) 5 - Y R ; ( 1 ) 4 - Y R , 1 1 - M O N T H S



INCOME SUMMARY

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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016 Marcus & Millichap 1 0


A N N U A L I Z E D O P E R A T I N G D A T A

R E N T I N C R E A S E S A N N U A L R E N T M O N T H L Y R E N T

7 / 1 9 / 1 7 - 7 / 3 1 / 2 2 $ 5 1 4 , 3 9 2 . 9 6 $ 4 2 , 8 6 6 . 0 8

* O 1 : 8 / 0 1 / 2 2 - 7 / 3 1 / 2 7 $ 5 6 5 , 8 3 2 . 2 5 $ 4 7 , 1 5 2 . 6 9

* O 2 : 8 / 0 1 / 2 7 - 7 / 3 1 / 3 2 $ 6 2 2 , 4 1 5 . 4 7 $ 5 1 , 8 6 7 . 9 6

* O 3 : 8 / 0 1 / 3 2 - 6 / 3 0 / 3 7 $ 6 8 4 , 6 5 7 . 0 7 $ 5 7 , 0 5 4 . 7 6

B A S E R E N T ( $ 3 4 . 8 7 / S F ) $ 5 1 4 , 3 9 3

N E T O P E R A T I N G I N C O M E $ 5 1 4 , 3 9 3

T O T A L R E T U R N 8 . 2 5 % / $ 5 1 4 , 3 9 3

* B A S E R E N T I N C R E A S E S B Y C P I A D J U S T M E N T E V E R Y 5 Y E A R S , N O T T O E X C E E D 1 0 % C U M U L A T I V E F O R E A C H 5 Y E A R S .


TENANT OVERVIEW


We are part of Nobel Learning Communities, a network of more than 180 private schools in 19 states and the District of Columbia, with a commitment to outstanding preschools and K-12 schools. Nobel Learning Communities also operates Laurel Springs School, an accredited private online school, offering challenging programs for students in kindergarten through twelfth grade. The schools around the country are all supported by the Nobel Learning Communities Education Department, a team of highly skilled experts in curriculum design, instruction and assessment. Their mission is to provide the highest caliber of support for their national network of private preschool through 12th grade schools to enable them to focus on the needs of individual students, families and local communities. By leveraging the strength of the national network, Nobel strives to deliver excellent value for private school tuition.


P R O P E R T Y N A M E C H E S T E R B R O O K A C A D E M Y

P R O P E R T Y T Y P E N E T L E A S E D C H I L D C A R E

R E N T A B L E S Q U A R E F E E T 1 4 , 7 5 0

O W N E R S H I P P R I V A T E

T E N A N T C O R P O R A T E S T O R E

N O . O F L O C A T I O N S 1 8 0

H E A D Q U A R T E R E D W E S T C H E S T E R , P A

W E B S I T E W W W . N O B E L L E A R N I N G . C O M

R E N T C O M M E N C E M E N T D A T E 8 / 1 / 2 0 0 7

L E A S E E X P I R A T I O N D A T E 7 / 3 1 / 2 0 2 2

T E R M R E M A I N I N G O N L E A S E 5 + Y E A R S



L E A S E T E R M 1 5 Y E A R S


O P T I O N S T O R E N E W ( 2 ) 5 - Y R ; ( 1 ) 4 - Y R , 1 1 - M O N T H S

O P T I O N S T O T E R M I N A T E N O N E

O P T I O N S T O P U R C H A S E N O N E

F I R S T R I G H T O F R E F U S A L N O N E


PROPERTY OVERVIEW 3

P R O P E R T Y O V E R V I E W

PROPERTY DETAILS


T H E O F F E R I N G

P R O P E R T Y C H E S T E R B R O O K A C A D E M Y

P R O P E R T Y A D D R E S S 7 1 1 H O L L O W R O A D P H O E N I X V I L L E , P A 1 9 4 6 0

S I T E D E S C R I P T I O N

G R O S S L E A S A B L E A R E A 1 4 , 7 5 0

O W N E R S H I P F E E S I M P L E

Y E A R B U I L T 2 0 0 2

L O T S I Z E ( A C R E S ) 4 . 4 0



R E G I O N A L M A P

1 4


L O C A L M A P

1 5


A E R I A L M A P

1 6

SUBJECT

MARKET OVERVIEW 4

M A R K E T O V E R V I E W

DEMOGRAPHIC DATA



P O P U L A T I O N 1 - M I L E 3 - M I L E S 5 - M I L E S

2 0 0 0 P O P U L A T I O N 2 , 7 6 4 3 4 , 0 5 9 9 6 , 8 1 4

2 0 1 0 P O P U L A T I O N 4 , 3 9 7 4 1 , 8 3 3 1 1 1 , 8 6 4

2 0 1 4 P O P U L A T I O N 4 , 4 7 1 4 2 , 7 2 8 1 1 4 , 4 4 6

2 0 1 9 P O P U L A T I O N 5 , 1 0 0 4 5 , 7 6 5 1 2 0 , 4 6 8

I N C O M E 1 - M I L E 3 - M I L E S 5 - M I L E S

$ 0 - $ 1 4 , 9 9 9 3 . 0 0 % 7 . 2 0 % 6 . 0 0 %

$ 1 5 , 0 0 0 - $ 2 4 , 9 9 9 3 . 8 0 % 6 . 4 0 % 6 . 6 0 %

$ 2 5 , 0 0 0 - $ 3 4 , 9 9 9 7 . 5 0 % 7 . 6 0 % 7 . 0 0 %

$ 3 5 , 0 0 0 - $ 4 9 , 9 9 9 9 . 7 0 % 9 . 9 0 % 9 . 6 0 %

$ 5 0 , 0 0 0 - $ 7 4 , 9 9 9 1 5 . 0 0 % 1 6 . 4 0 % 1 6 . 5 0 %

$ 7 5 , 0 0 0 - $ 9 9 , 9 9 9 1 5 . 7 0 % 1 4 . 4 0 % 1 5 . 3 0 %

$ 1 0 0 , 0 0 0 - $ 1 2 4 , 9 9 9 1 3 . 1 0 % 1 0 . 6 0 % 1 1 . 8 0 %

$ 1 2 5 , 0 0 0 - $ 1 4 9 , 9 9 9 1 2 . 5 0 % 8 . 5 0 % 8 . 5 0 %

$ 1 5 0 , 0 0 0 - $ 2 0 0 , 0 0 0 8 . 7 0 % 9 . 1 0 % 9 . 4 0 %

$ 2 0 0 , 0 0 0 - $ 2 4 9 , 9 9 9 4 . 0 0 % 3 . 9 0 % 3 . 7 0 %

$ 2 5 0 , 0 0 0 + 7 . 0 0 % 6 . 1 0 % 5 . 8 0 %

2 0 1 4 M E D I A N H H I N C O M E $ 9 2 , 2 2 0 $ 7 9 , 2 5 9 $ 8 1 , 8 8 0

2 0 1 4 P E R C A P I T A I N C O M E $ 5 3 , 8 1 5 $ 4 2 , 9 3 0 $ 4 3 , 7 0 2

2 0 1 4 A V E R A G E H H I N C O M E $ 1 2 3 , 8 4 5 $ 1 1 0 , 8 1 2 $ 1 1 1 , 3 2 0

H O U S E H O L D S 1 - M I L E 3 - M I L E S 5 - M I L E S

2 0 0 0 H O U S E H O L D S 1 , 1 6 6 1 3 , 3 2 3 3 5 , 6 6 9

2 0 1 0 H O U S E H O L D S 1 , 9 0 5 1 6 , 0 5 9 4 3 , 1 8 6

2 0 1 4 H O U S E H O L D S 1 , 9 4 3 1 6 , 4 5 2 4 4 , 3 4 7

2 0 1 9 H O U S E H O L D S 2 , 2 3 1 1 7 , 6 3 2 4 7 , 0 0 5

2 0 1 4 A V E R A G E H H S I Z E 2 . 4 2 2 . 5 3 2 . 4 7

2 0 1 4 D A Y T I M E P O P U L A T I O N 1 , 9 6 2 2 6 , 7 2 3 7 5 , 5 3 4

2 0 0 0 O W N E R O C C U P I E D 8 0 . 5 6 % 6 7 . 5 2 % 7 1 . 3 2 %

2 0 0 0 R E N T E R O C C U P I E D 1 5 . 3 6 % 2 8 . 0 4 % 2 4 . 7 3 %

2 0 0 0 V A C A N T 4 . 0 8 % 4 . 4 4 % 3 . 9 5 %

2 0 1 4 O W N E R O C C U P I E D 8 7 . 9 6 % 7 1 . 8 4 % 7 2 . 5 4 %

2 0 1 4 R E N T E R O C C U P I E D 1 2 . 0 4 % 2 8 . 1 6 % 2 7 . 4 6 %

2 0 1 4 V A C A N T 1 . 8 4 % 3 . 0 2 % 4 . 0 4 %

2 0 1 9 O W N E R O C C U P I E D 8 7 . 9 4 % 7 2 . 5 3 % 7 2 . 6 0 %

2 0 1 9 R E N T E R O C C U P I E D 1 2 . 0 6 % 2 7 . 4 7 % 2 7 . 4 0 %

2 0 1 9 V A C A N T 1 . 5 5 % 2 . 8 2 % 4 . 1 6 %


DEMOGRAPHIC SUMMARY M A R K E T O V E R V I E W

RACE & ETHNICITY

The current year racial makeup of your selected area is as follows: 84.63% White, 5.27% Black, 0.03% Native American and 7.04% Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander.

People of Hispanic origin are counted independently of race. People of Hispanic origin make up 3.57% of the current year population in your selected area. Compare this to the Entire US average of 17.13%.

HOUSING

In 2000, there were 26,484 owner occupied housing units in your area and there were 9,183 renter occupied housing units in your area. The median rent at the time was $653.

EMPLOYMENT

In 2014, there are 75,533 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 73.87% of employees are employed in white-collar occupations in this geography, and 25.97% are employed in blue-collar occupations. In 2014, unemployment in this area is 6.54%. In 2000, the average time traveled to work was 29.3 minutes.

POPULATION

In 2014, the population in your selected geography is 114,445. The population has changed by 18.21% since 2000. It is estimated that the population in your area will be 120,468 five years from now, which represents a change of 5.26% from the current year. The current population is 49.59% male and 50.40% female. The median age of the population in your area is 39.3, compare this to the Entire US average which is 37.3. The population density in your area is 1,454.95 people per square mile.

HOUSEHOLDS

There are currently 44,347 households in your selected geography. The number of households has changed by 24.33% since 2000. It is estimated that the number of households in your area will be 47,005 five years from now, which represents a change of 5.99% from the current year. The average household size in your area is 2.47 persons.

INCOME

In 2014, the median household income for your selected geography is $81,879, compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 31.79% since 2000. It is estimated that the median household income in your area will be $98,846 five years from now, which represents a change of 20.72% from the current year.

The current year per capita income in your area is $43,701, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $111,320, compare this to the Entire US average which is $74,533.

G E O G R A P H Y : 5 - M I L E R A D I U S


P H I L I P L E V Y

8 1 7 - 9 3 2 - 6 1 2 3 O F F I C E 8 1 7 - 3 8 0 - 1 1 5 3 F A X P H I L I P . L E V Y @ M A R C U S M I L L I C H A P . C O M L I C E N S E : T X 0 5 2 2 0 8 7

F O R T W O R T H O F F I C E S e n i o r M a n a g i n g D i r e c t o r

C H R I S G A I N E Y

8 1 7 - 9 3 2 - 6 1 2 2 O F F I C E 8 1 7 - 3 8 0 - 1 1 5 3 F A X C H R I S . G A I N E Y @ M M R E I S . C O M L I C E N S E : T X 0 6 1 2 9 7 0

F O R T W O R T H O F F I C E S e n i o r A s s o c i a t e

Y0410001

B R E N T O N B A S K I N

2 1 5 - 5 3 1 - 7 0 5 0 O F F I C E 2 1 5 - 5 3 1 - 7 0 1 0 F A X B R E N T O N . B A S K I N @ M M R E I S . C O M L I C E N S E : P A R M 4 2 3 0 7 1

P H I L A D E L P H I A O F F I C E R e g i o n a l M a n a g e r

confidential offering memorandum · executive summary offering highlights . this information has...

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