corte madera, ca executive summary...executive summary. the offering ... condensed consolidated...

CORTE MADERA BUSINESS CENTER

HADEN ONGARO ● MARK CARRINGTON ● JOE MCCALLUM ● ALYSSA DOYLE

CORTE MADERA, CA

EXECUTIVE SUMMARY

THE OFFERING

55 KOCH ROAD


45 KOCH ROAD

US

101

THE OFFERINGNewmark Knight Frank (“NKF”), as an exclusive advisor, is pleased to present the opportunity to acquire the fee simple interest in Corte Madera Business Center (the “Property” or “CMBC”) at 45, 55, 65 Koch Road in Corte Madera, California. The Property is improved with three office/light industrial buildings totaling +/- 38,270 square feet which are currently 100% leased to two tenants. Restoration Hardware (“RH”) is the anchor tenant with +/- 36,420 square feet and Telischak & Company - the current ownership - occupying +/-1,850 square feet. The property has excel-lent visibility off Highway 101 and is easily accessible off the highway. The buildings are for sale individually or in combination.

15 KOCH ROAD(NOT A PART)

65 KOCH ROAD55 KOCH ROAD

5725 PARADISE DRIVE(NOT A PART)

RH HEADQUARTERS

OWNER OCCUPIED BYNANA WALL SYSTEMS

STABLE, CREDIT TENANCYRestoration Hardware (NYSE:RH) occupies over 95% of the Property - on a lease with 9 years remaining - as part of its Corporate Headquarters. RH has forecast revenues for 2019 of $2.66 billion and has increased revenues almost 7% annually over the past five years. EBITDA for 2019 is forecast at $377.26 million and the company has a market capitalization of $2.28 billion.

INVESTMENT HIGHLIGHTS

MISSION-CRITICAL FACILITYCMBC is part of RH’s 10-building, approximately 250,000 square foot headquarters campus. Buildings on the campus not included in this offering have an average parking ratio of just 1.64 spaces per 1,000 square feet. With a parking ratio of 4.89 spaces per 1,000 square feet, CMBC is esse ntial to providing sufficient parking for RH’s employees and visitors.

EXCELLENT IDENTITY AND FREEWAY ACCESSCMBC enjoys excellent visibility of Highway 101 in Corte Madera and is conveniently accessed from 101 via the Paradise Drive/Tamalpais Drive exit. Freeway visible signage opportunities add value to the Property.

STRONG MARKET FUNDAMENTALSCentral Marin County enjoys some of the strongest demographics in the nation in terms of household income and workforce education levels. The Central Marin office submarket is one of the most desired office locations in the San Francisco Bay Area. With proximity to the Larkspur Ferry Terminal, and retail and services at the nearby Corte Madera Village and Corte Madera Town Center malls, Central Marin County office vacancy is 5.7%. Submarket asking rents have increased 15% over the past year to $5.16 per square foot per month Full Service Gross. With no new competing product currently planned, and significant barriers to entry, tight office market conditions are forecast to persist.

COMPETITIVE MARKET POSITIONThe buildings at CMBC have no load factor. Other buildings in the submarket are taking advantage of new BOMA standards to increase load factors. Assuming average load factors of 18% for the submarket, average asking rents are in excess of $6.00 per useable square foot. Current rents are less than 60% of market rents on a useable basis.

EXECUTIVE SUMMARYTHE OPPORTUNITYWith secure, stable income through at least July 2028, extremely desirable locational attributes and exceptionally strong market fundamentals, CMBC provides an excellent investment opportunity - particularly for buyers looking for a low-risk vehicle providing excellent returns relative to other investment categories.

Price $24,755,000

Total SF 38,270

Price/SF $647

Cap Rate 5.00%

PROPERTY SUMMARY45 KO C H R OA D

Price $7,050,000

Price/SF $655

Parcel # 026-251-05

Year Constructed 1988

Building Area 10,770 SF

Stories 1

Site Area 46,174 SF

Parking Spaces 62

Parking Ratio 5.76/1,000 SF

No Load Factor

TERMS OF THE OFFERINGThe Fee-Simple Interest in CMBC is offered on an As-Is, Where-Is basis. The Property is offered individually or in combination.

The distributor of this communication is performing acts for which a real estate license is required. The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

The Offering Memorandum is delivered under the terms and conditions of a Confidentiality Agreement which has been executed by the recipient as Potential Buyer and is on file at Broker’s office. All terms and conditions of the Confidentiality Agreement apply to all information contained herein where not a matter of public record.

OFFERING PROCESSOffers should be delivered to the office of the Exclusive Listing Broker, Newmark Knight Frank attention Haden Ongaro, via e-mail at [email protected]. Offers should include information on funding sources, experience in owning and operating similar properties and any other information likely to reflect on Offeror’s ability to close the transaction in a timely manner and accomodate Seller’s 1031 Exchange. Seller and Broker reserve the right to create a deadline for offers and request follow-up offers.

55 KO C H R OA D

Price $6,170,000

Price/SF $643

Parcel # 026-251-04



Stories 1

Site Area 40,946 SF

Parking Spaces 62


No load factor

65 KO C H R OA D

Price $11,535,000

Price/SF $644

Parcel # 026-251-02



Stories 1

Site Area 56,628 SF

Parking Spaces 63


No load factor

PORTFOLIO PRICING SUMMARY

RH Corte Madera flagship gallery under construction

TENANT PROFILE

RH is one of the most innovative and fastest growing luxury brands in the home furnishings marketplace. RH believes their brand stands alone and is redefining this highly fragmented and growing market, contributing to superior sales growth and

market share gains over the past several years as compared to industry growth rates. RH’s ability to innovate, curate and integrate products, categories, services and

businesses with a completely authentic and distinctive point of view, then rapidly scale them across their fully integrated multi-channel infrastructure is a powerful platform for continued long-term growth. They have evolved their brand to become RH, positioning

the Company to curate a lifestyle beyond the four walls of the home. Unique product development, go-to-market and supply chain capabilities, together with RH’s significant

scale, enable RH to offer a compelling combination of design, quality and value that they believe is unparalleled in the marketplace.

As of January 2017, the Company operated a total of 85 retail Galleries and outlet stores throughout the United States, United Kingdom and Canada. The Company’s retail

Galleries are located in Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Michigan,

Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Alberta, Virginia, Washington, District of

Columbia, British Columbia, London, Ontario and Virginia.

RH has forecast revenues for 2019 of $2.66 billion and has increased revenues almost 7% annually over the past five years. EBITDA for 2019 is forecast at $377.26 million and

the company has a market capitalization of $2.28 billion.

CONDENSEDCONSOLIDATED

STATEMENTSOF INCOME

CONDENSEDCONSOLIDATED

STATEMENTSOF INCOME

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)(UNAUDITED)

THREE MONTHS ENDEDMAY 4, 2019 MAY 5, 2018

Net revenues 598,421 557,406

Cost of good sold 365,607 348,073

Gross profit 232,814 209,333

Selling, general and administrative expenses 164,181 161,186

Income from operations 68,633 48,147

Interest expense - net 21,118 15,098

Income before income taxes 47,515 33,049

Income tax expense 11,793 7,588

Net income $35,722 $25,461

From RH Form 10Q filed June 13, 2019

Interior of RH New York


CORTE MADERA, CA

1101 Fifth Avenue, Suite 230, San Rafael, CA 94901 | 19-0917.07/19The distributor of this communication is performing acts for which a real estate license is required. The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

HADEN ONGAROExecutive Vice [email protected] RE License #00916960

MARK CARRINGTONManaging [email protected] RE License #01219528

JOE MCCALLUMTransaction Services [email protected] RE License #02048815

ALYSSA [email protected] RE License #02016068

EXCLUSIVE LISTING AGENTS

corte madera, ca executive summary...executive summary. the offering ... condensed consolidated...

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