flowers foods 875 s beckford dr henderson nc · flowers foods 875 s beckford drive ... inc. has...

F l o w e r s F o o d s , H e n d e r s o n , N C | 1

Flowers Foods8 7 5 S B e c k f o r d D r i v e | H e n d e r s o n , N C

O F F E R I N G M E M O R A N D U M

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

f i n a n c i a l O V E R V I E W

a r e a O V E R V I E W

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Kyle MatthewsBroker of RecordLic # C27092

J o s h B i s h o p

VP & Director

[email protected] (214) 692-2289MOB (315) 730-6228LIC # 688810 (TX)

c h a d k u r z

SVP & National Director

[email protected] (214) 692-2927MOB (562) 480-2937LIC # 01911198 (CA)

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e x e c u t i v e S u m m a r y


I n v e s t m e n t H i g h l i g h t s

• 15-Year NN+ lease with ± 14 Years Remaining

• Extremely Rare 1.5% Annual rent increase during base term & extension periods

• Average Cap Rate of 7.73% over the base term (assuming a purchase at list price)

• Brand new construction – 2016 built-to-suit for Flowers Foods

• 20 Year transferable roof & structure warranty (property acts as a NNN)

• Tenant responsible for parking lot, HVAC, CAM, taxes, and insurance

• Local retail tenants include Walmart, Sherwin Williams, Family Dollar, Tractor Supply, Lowe’s, KFC, McDonald’s, Food Lion, Wendy’s, Chick-Fil-A, Big Lots, Taco Bell, Dollar Tree, Staples, and many more

• Henderson is in an ideal market for distribution and is even home to a Walmart distribution center

• Henderson is located just 35 miles north of Raleigh

• Flowers Foods, Inc. has strong investment grade credit, S&P rated BBB- & Moody’s rated Baa2

• The property is 100% leased to Flowers Baking Co. of Jamestown, LLC, a wholly owned subsidiary of Flowers Foods Inc.

• Flowers Foods is the second-largest producer and marketer of packaged bakery foods, serving over 90% of the United States population with baked goods

• Flowers Foods operates over 47 bakeries in 16 states, producing fresh baked products for some of the top brands including Wonder Bread, Hostess, Nature’s Own, White Wheat, Bunny Bread, Sunbeam, Tastykake, Mary Jane, Holsum, Hattie’s, and more

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F l o w e r s F o o d s875 S Beckford DriveHenderson, NC 27536

List Price ................................................................................................. $1,502,925

CAP Rate............................................................................................................7.00%Gross Leasable Area ........................................................................... ± 6,000 SFLot Size ................................................................................................... 2.67 Acres Year Built ..............................................................................................................2016

Annualized Operating DataMonthly Rent Annual Rent Rent/SF Increases

Current $8,767.06 $105,204.75 $17.53 7.00%

Year 3 $8,898.57 $106,782.82 $17.80 7.11%

Year 4 $9,032.05 $108,384.56 $18.06 7.21%

Year 5 $9,167.53 $110,010.33 $18.34 7.32%

Year 6 $9,305.04 $111,660.49 $18.61 7.43%

Year 7 $9,444.62 $113,335.39 $18.89 7.54%

Year 8 $9,586.29 $115,035.43 $19.17 7.65%

Year 9 $9,730.08 $116,760.96 $19.46 7.77%

Year 10 $9,876.03 $118,512.37 $19.75 7.89%

Year 11 $10,024.17 $120,290.06 $20.05 8.00%

Year 12 $10,174.53 $122,094.41 $20.35 8.12%

Year 13 $10,327.15 $123,925.82 $20.65 8.25%

Year 14 $10,482.06 $125,784.71 $20.96 8.37%

Year 15 $10,639.29 $127,671.48 $21.28 8.49%

Extension 1 1.5% Annual Increases

Extension 2 1.5% Annual Increases

Tenant Summary

Tenant Trade Name Flowers Foods

Type of Ownership Fee Simple

Lease Type NN+

Roof and Structure 20 Year Warranty

Original Lease Term 15 Years

Rent Commencement Date 9/15/2016

Lease Expiration Date 8/31/2031

Term Remaining on Lease ± 14 Years

Increases 1.5% Annual Increases

Options Two, 5-Year Options

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T e n a n to v e r v i e w


TENANT OVERVIEW

As one of the largest wholesale bakeries in the US, Flowers Foods’ flour products business is booming. Flowers Foods bakes, markets and distributes fresh breads, buns, rolls, corn and flour tortillas, and sweet bakery goodies to retail food and food-service customers in the western, southern and northeastern US. The company’s brand names include Cobblestone Mill, Nature’s Own, Tastykake and Whitewheat. Flowers Foods makes snack cakes, pastries, donuts and frozen bread products for retail, vending and co-pack customers nationwide. It also rolls out hamburger buns for national fast-food chains. Flowers Foods bought several bread brands, including Wonder and about 20 bakeries from Hostess Brands.

GEOGRAPHIC OUTREACH

Flowers Foods operates in 18 states in US Southeast, Mid-Atlantic, New England, Southwest, California and select markets in Nevada, the Midwest, and the Pacific Northwest.

STRATEGY

The company focuses on developing new and core markets through new customers, new products, strong brands and acquisitions. From its stronghold in the Southeast, Flowers Foods has been expanding its retail and wholesale reach, moving north and west Flowers Foods in 2014 opened the Knoxville, Tennessee plant that was acquired as a part of the Hostess Brands deal in 2013. Acquisitive Flowers Foods purchases other businesses to grow and enter new markets. The company has completed more than 100 acquisitions during the past 40 years.

SALES & MARKETING

As a leading US baker, the company’s products are available to consumers through traditional supermarkets and their in-store deli/bakeries, food service distributors, convenience stores, mass merchandisers, club stores, wholesalers, casual dining and quick-serve restaurants, schools, hospitals, dollar stores and vending machines. Flowers Foods’ direct-store-delivery system is comprised of 5,100 independent distributors who own the rights to distribute certain brands of the company’s fresh packaged bakery foods in their geographic territories. Also, Flowers Foods has about 600 company-owned distributors and distributorships available for sale. The warehouse segment’s fresh snack cakes and frozen breads and rolls are sold nationally direct to customers’ warehouses by frozen and non-frozen contract carriers.

Property Name Flowers Foods

Property Type Net Leased Distribution Center

Parent Company Trade Name Flowers Foods, Inc. (NYSE: FLO)

Ownership Public

Credit Rating (S&P) BBB-

Revenue $3.77 B

Net Income $189 M

No. of Locations ± 46

No. of Employees ± 10,900

Headquartered Thomasville, Georgia

Website www.flowersfoods.com

Year Founded 1919

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Property Name Flowers Foods

Property Address 875 S Beckford Drive

Henderson, NC 27536

Assessor’s Parcel Number 135-22-0-30-02-001.01-0

Site DescriptionNumber of Stories One

Year Built 2016

Gross Leasable Area (GLA) ± 6,000 SF

Lot Size ± 2.67 Acres (116,305 SF)

Type of Ownership Fee Simple

Parking ± 15 Surface Spaces

Parking Ratio 2.50 : 1000

Landscaping Professional

Topography Generally Level

Oceanside Blvd ± 31,792

p a r c e l m a p

S B E C K F O R D D R ± 1 0 ,0 0 0 A DT

F l o w e r s F o o d s , H e n d e r s o n , N C | 1 1

Government Buildings

Pacific Coast Feather

S u b j e c t P r o p e r t y

s u r r o u N d i n g t e n a n t s

p r o p e r t y d e m o g r a p h i c s1 0 - M i l e R a d i u s

5 6 , 2 5 42017 Est.

Population

2 1 , 9 0 12017 Est.

Households

$ 5 1 , 3 1 0Average Household

Income

Pacific Coast Feather

± 38,000 ADT

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D e m o g r a p h i c s

POPULATION 3 Mile 5 Mile 10 Mile

2022 Projection 18,930 26,767 56,567

2017 Estimate 18,961 26,729 56,254

2010 Census 19,723 27,592 57,681

2000 Census 20,583 27,818 54,530

HOUSEHOLDS 3 Mile 5 Mile 10 Mile

2022 Projection 7,693 10,670 22,116

2017 Estimate 7,638 10,578 21,901

Growth 2017 - 2021 0.72% 0.87% 0.98%

INCOME 3 Mile 5 Mile 10 Mile

2017 Est. Average Household Income

$45,025 $47,017 $51,310

Located just 40 minutes north of the capital city of Raleigh, Henderson is a rural town rich with history. If you are looking for a piece of “Small-Town Americana” you can find it in Henderson, North Carolina. Henderson is strategically located directly from I-85 or from Hwy 1 North of Raleigh. Henderson and Vance County have many landmarks and historical properties that offer places to visit and enjoy.

H e n d e r s o n , N o r t h C a r o l i n a


The City of Henderson sought designation as a North Carolina Main Street City and gained that status in 1986. Composing of 16 square blocks and occupying approximately 46 acres, Henderson’s Central Business Historic District is a testimony to the city’s role as the largest town and seat of Vance County since 1881. The district was placed on the National Register of Historic Place in 1987. The district contains 128 structures, 97 of which are contributing structures. Business and retail properties are available in historic downtown Henderson, home to the brand new McGregor Performing Arts Center.

E c o n o m i c d e v e l o p m e n t

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raleighRaleigh is the capital of North Carolina and a blossoming Southern metropolis. Raleigh is known as the “City of Oaks” for its many oak trees that line the street in the heart of the city. Raleigh is one of the fastest-growing cities in the country. Raleigh is home to North Carolina State University and is part of the Research Triangle area, with Durham and Chapel Hill. Raleigh is a bevy of cultural and culinary touchstones, and leads in most recent quality of life rankings.


The triangleRaleigh, Durham and Chapel Hill are known for their research and technology roots in addition to collegiate rivalries. North Carolina’s Research Triangle is one of the country’s largest and most successful research parks, a major center in the United States for high-tech and biotech research, as well as a hub for advanced textile and development. This tri-city region known as the Triangle is luring nearly 80 new residents a day with strong job growth and a high quality of life. Many people who call the Raleigh and Durham metro areas home are young, friendly, diverse and educated.

HIgher EducationAs home to eleven traditional universities, colleges, numerous satellite campuses and for-profit institutions of higher education, the Raleigh area is unusually rich in educational opportunities. Among the traditional colleges are North Carolina State University, a major research center; a private women’s college; a law school; three seminaries; and two historically black colleges. The area is also enhanced by the presence of the University of North Carolina at Chapel Hill and by Duke University and North Caroline Central University. All of these North Carolina universities are within a 45-minute commute of each other and from the Research Triangle Park, one of the nation’s largest and most prestigious R&D business parks (located in Durham and Wake counties).

#1 America’s Best Places to Live Businessweek.com

#1 Fastest Growing Cities for Technology Jobs Dice

#5 Most Cost-Attractive Business Location KPMG

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Flowers Foods located at 875 S Beckford Drive, Henderson, NC 27536 (“Property”) . I t has been prepared by Matthews Real Estate Investment Services. This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Real Estate Investment Services. The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Real Estate Investment Services expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Real Estate Investment Services or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

C O N F I D E N T I A L I T Y & D I S C L A I M E R S TAT E M E N T


BROKER OF RECORD

e x c l u s i v e ly l i s t e d b y

Flowers Foods8 7 5 S B e c k f o r d D r i v e | H e n d e r s o n , N C

™

Kyle MatthewsBroker of RecordLic # C27092

J o s h B i s h o p

VP & Director

[email protected] (214) 692-2289MOB (315) 730-6228LIC # 688810 (TX)

c h a d k u r z

SVP & National Director

[email protected] (214) 692-2927MOB (562) 480-2937LIC # 01911198 (CA)

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