REPRESENTATIVE IMAGE
HOUSTON, TEXAS MSA
Jones Lang LaSalle Americas, Inc.
HFF L.P., on behalf of the owner, is pleased to exclusively offer for sale the newly constructed Chick-Fil-A (the “Property”) pad site at Palmer Plaza in Texas City, TX, just southeast
of Houston. Chick-fil-A occupies ±0.9129 acres of land in Texas City, TX and has signed a 15-year absolute bondable NNN lease which commenced on February 7th, 2019. Shadow
anchored by two leading grocery stores, HEB and Aldi, Chick-fil-a is well-positioned in a location with a high volume of foot traffic, which is also generated by a third grocery store,
Kroger, located across Palmer Highway. This opportunity offers investors a stable asset with a high quality, investment grade tenant and no landlord responsibilities.
I N V E S T M E N T S U M M A R YLocation Palmer Plaza
Texas City, TX 77590
Tenant Chick-fil-A, Inc (Corporate Lease)
Site Area 0.9129 acres
Lease Type Absolute “Bondable” NNN
Rentable Building Area 4,880 SF
Construction Completion Date March 1, 2019
Rent Commencement Date February 2019
Lease Expiration Date January 2034
Monthly NOI $9,791.67
Annual NOI $117,500.00
Option Periods Six – 5 Year Options (30 Years) with 10% increases
Traffic CountPalmer Highway: 28,000 VPD 36th St N: 12,051 VPD Total: 40,051 VPD
Cap Rate 4.00%
Asking Price $2,937,500
2
E X E C U T I V E S U M M A R Y
REPRESENTATIVE IMAGE
Trinity Bay
George BushPark
Trinity River NationalWildlife Refuge
Anahuac NationalWildlife Refuge
Galveston Bay
East Bay
George BushInternational
Airport
George BushInternational
Airport
William P. HobbyAirport
William P. HobbyAirport
HOUSTON
WASHINGTON
MAGNOLIA
HEMPSTEAD
WALLER
CYPRESS
JERSEY VILLAGE
ALDINE
HUMBLE
PORTER
NEW CANEY
CLEVELAND
ATASCOCITAHUFFMAN
DAYTONLIBERTY
SARATOGA
SOUR LAKE
CROBY
MONT BELVIEU
HIGHLANDS
CHANNELVIEW
BAYTOWN
JACINTO CITY
GALENA PARK
BELLAIRE
MEADOWSPLACE
PECAN GROVE
MISSION BEND
RICHMOND
ROSENBERGEAST BERNARD
NEEDVILLE
WHARTON
ROSHARON
FRESNO
PEARLAND
FRIENDSWOOD WEBSTER
SEABROOKKEMAH
BACLIFF
SAN LEON
DICKINSON
HITCHCOCK
TEXAS CITY
GOAT ISLANDBOLIVAR
PENINSULA
SANTA FE
ALVIN
MANVEL
GREATWOOD
HUNTERSCREEK VILLAGE
DEER PARKPASADENA
LA PORTE
BELLVILLE
SEALY BROOKSHIRE KATY
CINCO RANCH
PINEHURST
TOMBALL
THEWOODLANDS
SPRING
CONROE
SUGAR LAND
LEAGUE CITY
GALVESTON
HOUSTON
WASHINGTON
MAGNOLIA
HEMPSTEAD
WALLER
CYPRESS
JERSEY VILLAGE
ALDINE
HUMBLE
PORTER
NEW CANEY
CLEVELAND
ATASCOCITAHUFFMAN
DAYTONLIBERTY
SARATOGA
SOUR LAKE
CROBY
MONT BELVIEU
HIGHLANDS
CHANNELVIEW
BAYTOWN
JACINTO CITY
GALENA PARK
BELLAIRE
MEADOWSPLACE
PECAN GROVE
MISSION BEND
RICHMOND
ROSENBERGEAST BERNARD
NEEDVILLE
WHARTON
ROSHARON
FRESNO
PEARLAND
FRIENDSWOOD WEBSTER
SEABROOKKEMAH
BACLIFF
SAN LEON
DICKINSON
HITCHCOCK
TEXAS CITY
GOAT ISLANDBOLIVAR
PENINSULA
SANTA FE
ALVIN
MANVEL
GREATWOOD
HUNTERSCREEK VILLAGE
DEER PARKPASADENA
LA PORTE
BELLVILLE
SEALY BROOKSHIRE KATY
CINCO RANCH
PINEHURST
TOMBALL
THEWOODLANDS
SPRING
CONROE
SUGAR LAND
LEAGUE CITY
GALVESTON
69
610
69
1010
10
69
45
45
105
6
6
159
36
36
10
60
60
99
99
288
35
6
6
3
197
146
8
8
225
146
99
330
249
336
242
105
105
321146
770
326
770
61
65
105
290
290
90
90
90
90
59
59
59
HEB & ALDI
Grocery Anchored
15-YEAR Remaining Term
ABSOLUTE BONDABLE
NNN Lease
$117,500 YEAR 1 NOI
10% Increases Every Five Years
MAILBOXMONEY
$4.4M* AVG. SALES
Average Chick-fil-A Store - QSR Magazine
3
S I T E P L A N
36
TH
ST
RE
ET
NO
RT
H
36
TH
ST
RE
ET
NO
RT
H
36
TH
ST
RE
ET
NO
RT
H A
CC
ES
S R
OA
D
36
TH
ST
RE
ET
NO
RT
H A
CC
ES
S R
OA
D
GUS’RESTAURANT
TEXA
S CI
TYUR
GENT
CAR
EDI
LLON
LIQU
OR
CHEC
KS C
ASHE
DCL
EANE
RS
AVAI
LABL
ET M
OBILE
DILL
ON LI
QUOR
residential
RETAIL
ATM
HEB FUEL
PA L M E R H I G H W AY
34
TH
ST
RE
ET
NO
RT
H
As part of a $3.5M renovation of Palmer Plaza, located on the northeast corner of Palmer Highway and 36th Street North in Texas City, Chick-fil-A has signed a 15-year
lease on a front pad shadow anchored by HEB and Aldi. Chick-fil-A built the restaurant at its sole cost and will continue to make rental payments beginning in February
2019. The redevelopment includes adding new tenants such as Aldi and Ross Dress for Less, improving the aesthetics with better lighting, signage and landscaping as
well as removing overhead lines that has already played a prominent role in attracting credit tenants. Additionally, existing tenant Dollar Tree will relocate within the
shopping center.
C H I C K - F I L- A L E A S E A B S T R A C TAddress: Palmer Plaza
Texas City, TX 77590
Lessee: Chick-Fil-A, Inc (Corporate Lease)
Trade Name: Chick-Fil-A
Rentable Building Area 4,880 SF
Site Area: 0.9129 Acres
Rent Commencement Date: February 4th, 2019
Term: 15 Years (After the Rent Commencement Date)
Base Rent: Years Monthly NOI Annual NOI
Year 1 - Year 5 $9,791.67 $117,500.00
Year 6 - Year 10 $10,770.83 $129,250.00
Year 11 - Year 15 $11,847.92 $142,175.00
Year 16 - Year 20 (Option Period I) $13,032.71 $156,392.50
Year 21 - Year 25 (Option Period II) $14,335.98 $172,031.75
Year 26 - Year 30 (Option Period III) $15,769.58 $189,234.93
Year 31 - Year 35 (Option Period IV) $17,346.53 $208,158.42
Year 36 - Year 40 (Option Period V) $19,081.19 $228,974.26
Year 41 - Year 45 (Option Period VI) $20,989.31 $251,871.69
Taxes, Insurance, Maintenance: Paid by Tenant directly to billing authority
Tenant Renewal Notice: 9 months before the expiration of the current term
Permitted Use: Any lawful retail purpose, including a restaurant
Vesting of Buildings and Improvements: Upon the expiration or sooner termination of the Lease, and so long as Tenant has no further leasehold or ownership interest in the real property constituting the Demised Premises, title to any buildings or improvements located on the Land (as such term is defined in the Lease), including those constituting the Demised Premises, will vest in and becomethe full and absolute property of Landlord.
Casualty: If the building upon the land shall be destroyed or damaged by fire or other casualty: A) to any extent during the last 5 years of the initial term or any extension period OR B) At any other time to the extent 25% or more of the full replacement value, Tenant may elect to terminate the lease with 60 days notice. Tenant is responsible for demolition and debris removal with written notice from landlord. If tenant does not elect to terminate the lease, they shall restore the improvements to prior condition and continue paying rent.
4
L E A S E A B S T R A C T
With more than 2,300 stores in 47 states and Washington D.C., Chick-Fil-A has become the largest quick service chicken restaurant
chain in the United States. The privately held company is headquartered in College Park, Georgia, was founded in 1946, and has the
largest revenue per restaurant of any other fast food chain in the US ($4+ million in 2017). Even though it is closed on Sunday, Chick-
fil-A generates more revenue per restaurant than McDonald’s, Starbucks, and Subway combined. The Company has the 8th largest
revenue of all quick service restaurants ($9 Billion in 2017 with 49 consecutive years of sales growth) despite having about 3000 less
stores than the smallest competitor in the top-7. The fast-food chain, best known for its Chick-fil-A® Chicken Sandwich, has seen
consistent growth by adding 75 to 80 stores yearly and only accepting 0.4% of franchisee applicants.
C U S T O M E R E X P E R I E N C E R A N K S A M O N G T H E B E S TChick-Fil-A is able to maintain the highest revenue per restaurant amongst fast food chains due to customer loyalty, a unique menu,
and a friendly staff providing an enjoyable dining experience.
• Recognized for customer experience in the 2018 Temkin Experience Ratings survey
• Earned the top spot in American Customer Satisfaction Index’s 2018 survey of customer satisfaction.
• Named “Best Franchise Brand” in 2018 by Airport Revenue News.
• The Temkin Report found that fast food chains had the 4th highest loyalty rating of 20 industries, only trailing supermarkets, hotels,
and retailers
• Ranked #1 quick service restaurant for “Consumers Choice – Best Overall” category by the Technomic 2018 Consumers’ Choice
Awards
• Only restaurant brand named to the Top 10 “Best Companies to Work For” by 24/7 Wall Street
• Ranked 4th overall, scoring an 81.68 out of 100 on Harris Poll’s Reputation Quotient (80.00 or higher is considered excellent)
• Chick-fil-A locations generate more revenue than any other fast-food restaurant in the U.S. The average franchise of the chicken
company saw $4.4M in sales in 2016, according to restaurant trade publication QSR. The next-closest chains in per-store sales were
Panera Bread and Whataburger, at $2.7M each. - Biznow June 7, 2018
TOP FAST FOOD CHAINS
Rank Company
1 Chick-Fil-A 2 In-N-Out Burger3 Raising Cane’s4 La Madeleine5 Torchy’s Tacos6 Five Guys7 Lion’s Choice8 P. Terry’s9 Habit
10 Mod Pizza
TOP FAST FOOD CHAINS
Company Score
Chick-Fil-A 87Panera Bread 81Papa John's 80
Pizza Hut 80Subway 80Arby's 79
Chipotle 79Domino's 79
Dunkin Donuts 78
Starbucks 78
S A N D L E M A N ’ S A W A R D S O F E X C E L L E N C E 2 0 1 8
A M E R I C A N C O N S U M E R S A T I S F A C T I O N I N D E X 2 0 1 8
5
T E N A N T P R O F I L E
$4.4 MILLION
Average Revenue per Store
#1 FAST FOOD
Chain
#1 NATIONWIDE
in Customer Loyalty
8TH LARGEST
fast-food chain (revenue)
1
Source: QSR Magazine Source: Delish & Fox Business Source: QSR Magazine Source: Sandleman’s Awards of Excellence
* The top ten chains were excellent in taste and the quality of their food. Other factors were health and kid appeal.
* The American Customer Satisfaction Index (ACSI®) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States.
Chick-fil-A is shadow anchored by two leading grocers, HEB and Aldi, with a third grocer,
Kroger, located across Palmer Highway. With Palmer highway frontage, the property will
be easily accessible and visible to both residential and workforce customers. Alternatively,
the restaurant is a part of a major retail redevelopment which has already attracted credit
tenants that generate significant foot traffic to the shopping center. Surrounded by multiple
residential neighborhoods, Chick-fil-A will benefit from the family-oriented population,
which experienced growth rates among the highest in Houston due to the growth of the
petrochemical industry. Texas City is a busy deep-water port on Texas’ Gulf Coast, as well
as a petroleum-refining and petrochemical-manufacturing center; this creates a demand
for jobs allowing an increase in disposable income. In efforts to increase population density
and job opportunities, Texas City has been authorized to offer developers incentives
designed to promote economic development such as commercial and retail projects under
Chapter 380 of the local government code. The population was 48,558 in 2017, making it
the third-largest city in Galveston County, behind League City and Galveston.
6
L O C A T I O N H I G H L I G H T S
DEMOGRAPHIC
Population 1-mile 3-mile 5-mile
2023 Projection 8,069 49,284 71,2182018 Estimate 7,580 46,596 66,9482010 Census 6,906 42,489 60,3812000 Census 6,868 41,999 58,074
Population Growth2000 to 2010 0.6% 1.2% 4.0%2010 to 2018 9.8% 9.7% 10.9%2018 to 2023 6.5% 5.8% 6.4%
HH Income 2018 Est. Average Household Income $57,280 $63,942 $67,826
Home Value 2018 Est. Median All Owner-Occupied Housing Value $93,806 $102,177 $110,746
Trinity Bay
5-Mile 10-Mile
George BushPark
Trinity River NationalWildlife Refuge
Anahuac NationalWildlife Refuge
Galveston Bay
East Bay
George BushInternational
Airport
George BushInternational
Airport
William P. HobbyAirport
William P. HobbyAirport
69
610
69
1010
10
69
45
45
105
6
6
159
36
36
10
60
60
99
99
288
35
6
6
3
197
146
8
8
225
146
99
330
249
336
242
105
105
321146
770
326
770
61
65
105
290
290
90
90
90
90
59
59
59
PALMER HIGHW
AY | 28,000 VPD
PALMER HIGHW
AY | 28,000 VPD
STATE HIGHWAY 146 | 43,000 VPD
STATE HIGHWAY 146 | 43,000 VPD
N 34TH STREET N 34TH STREET
MA
GN
OLIA
AV
EN
UE
MA
GN
OLIA
AV
EN
UE
TEXAS CITY REFINERIES TEXAS CITY REFINERIES
®
8
T E X A S C I T Y O V E R V I E W
Texas City is defined by it’s particularly strong economic base, which is built around the petrochemical industry, good educational institution capacity, and a strong health care industry. Texas City employers employ a highly skilled, technical workforce which should be an attraction to newly developing markets in science education products and systems, health care products, and home health care services. Part of the economic development focus of the city will be on recruiting and encouraging new business developments that target these areas. Efforts will be directed toward firms which could be the most successful in the Texas City area, and which can best take advantage of the community’s resources
E C O N O M Y The Texas City economy has long been based on heavy industry, particularly shipping
at the Port of Texas City, as well as petroleum and petrochemical refining. The Texas
City Industrial Complex is a leading center of the petrochemical industry. Within this
complex, the Galveston Bay Refinery operated by Marathon is the second-largest
petroleum refinery in Texas and third-largest in the United States. The Port of Texas
City became the third-leading port in Texas by tonnage and ninth in the nation. In
recent decades, the city’s planners have made efforts to diversify the economy into
tourism, health care, and many other sectors. As early as 1974, Texas City was placed
on the top-ten list for the EPA superfund. Outdated practices for the disposal of toxic
waste have continued there for years.
As of 2010, SSA Marine Company had plans to build a major new cargo container
shipping terminal known as the Texas City International Terminal at Shoal Point. The
project is intended to capitalize on the expansion of the Panama Canal, scheduled for
completion in 2014, which city officials expect to substantially increase trade between
the Gulf Coast and Asia.
The Port of Texas City, operated by the Port of Texas City / Texas City Terminal Railway,
is the eighth-largest port in the United States and the third-largest in Texas, with
waterborne tonnage exceeding 78 million net tons. The Texas City Terminal Railway
Company provides an important land link to the port, handling over 25,000 carloads
per year. The Port of Texas City’s success as a privately-owned port has been aided by
its shareholders, the Union Pacific and Burlington Northern Santa Fe railroads, whose
connections allow for expeditious interchange of their traffic.
E X P A N D I N G P E T R O C H E M I C A L M A R K E T Houston is home to the largest petrochemical complex in the nation and the second-
largest in the world. The Houston petrochemical complex represents 25% of U.S.
refining capacity and 40% of U.S. petrochemical capacity and is located along the 25-
mile Houston Ship Channel at the Port of Houston.
In the Texas Gulf Coast region, more than 20 Polyethylene projects worth more than
$50 billion are under construction and are scheduled to open within the coming years,
as companies invest in new ethylene crackers, propylene production units, refineries
and other expansion projects. The primary driver of this activity is that petrochemical
enterprises benefit directly from lower oil and natural gas prices, as this reduces their
cost to purchase their primary feed stocks for producing/refining plastics, resins, and
other petrochemical products, and transporting oil and natural gas across geographies.
9
T E X A S C I T Y O V E R V I E W
This flurry of petrochemical construction – as firms continue to take advantage of a
low-cost feed stock environment is expected to create tens of thousands of construction
jobs in the short-term and the need for thousands of blue-collar jobs in the longer-term.
E D U C A T I O N The Property is located in the Texas City Independent School District (TCISD), which
serves most of Texas City, and a portion of Tiki Island. On December 2, 2015, Texas
Education Agency Commissioner Michael Williams announced that Texas City ISD
would absorb the La Marque Independent School District (LMISD) effective July 1,
2016; the LMISD annexation increased the size of TCISD by about 33%
The school district accounts for nearly 9,000 students, 14 distinct campuses (4 high
schools, 3 middle schools, 7 elementary schools), and 10 Afterschool Centers on
Education (ACE) administered by the Texas Education Agency. Texas City ISD has
a proud past and a promising future. Graduates have gone on to write and direct
world-renown movies, play professional sports, lead military units, preside as judges
in courts, serve as State Senators, and more; they have become doctors, lawyers,
business owners, mayors and teachers.
Many graduates have returned to Texas City and La Marque to raise their own children
who are now on the path for their own success. The goals in Texas City ISD are high
and are being accomplished thanks to the continued effort by the district, students,
parents and the community. Texas City ISD has proven throughout the last century to
be one of the more innovative school districts in Texas.
ADDITIONAL INFORMATIONRYAN WEST Senior Managing Director | [email protected] | 713-852-3535
JOHN INDELLI Director | [email protected] | 713-852-3407
CHARLES STRAUSS Analyst | [email protected] | 713-212-6574
MARCUS MOODY Analyst | [email protected] | 713-852-3484
Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the property [properties] to market it [them] for [sale] [lease]. Information concerning the property [properties] described
herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, express or implied, as to the
accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein
are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser. JLL and owner disclaim any liability that may be based upon or related to the
information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. The Property may be withdrawn without
notice. If the recipient of this information has signed a confidentiality agreement regarding this matter, this information is subject to the terms of that agreement. ©2019. Jones Lang LaSalle IP, Inc. All rights reserved.
Deals represented were secured by Holliday Fenoglio Fowler LP (“HFF”) prior to being acquired by JLL. HFF is now a JLL company. Jones Lang LaSalle Americas, Inc. (or Jones Lang LaSalle Americas (Illinois), L.P. for Illinois listings)
are providing co-brokerage services for HFF listings, and licensees may hold licenses with either HFF or such JLL entities. ©2019. Jones Lang LaSalle IP, Inc. All rights reserved.