investment property offering aid salisbury.pdf · 2005, its market capitalization was about $2.08...

All Sperry Van Ness® Offices Independently Owned and Operated.

Investment Property Offering

RITE AID 1605 E. Innes Street, Salisbury, NC 28146

$2,933,333

Presented By: Kase Abusharkh DRE#01311211 252 Abigail Circle Danville, CA 94506 (925)348-1844 [email protected]

Jacob Abusharkh 252 Abigail Circle Danville, CA 94506 (925)736-8405 [email protected]

Offering Highlights

New 20 Year Absolute Net Lease

Available Financing

Excellent Sales History

10.40% Cash on Cash Return

10/19/2010

The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness.

Table of Contents

1 Financial Analysis

Executive Summary

Investment Information

Rent Roll Summary

2 Additional Information


1 . Financial Analysis


Executive Summary RITE AID

1605 E. Innes Street

Salisbury, NC 28146

List Price $2,933,333

Price Per GLA $201.34

Price per S.F. $201.34

CAP 8.70 %

GLA 14,569

Building S.F. 14,569

Percent Occupied 100.00 %

Land Acres 1.51

Rite Aid (NYSE: RAD)

Cross Street N. Avalon Drive

Market Charlotte Metropolitan Area Sub Market Rowan County

Year Built 2004 Building Class A

Location Class A No. of Buildings 4

HVAC Yes No.Tenants 1

No. Stories 1

Property Descriptions

Construction Class 'A' construction was completed in 2004. The property benefits from a drive-thru.

Parking The asset is adequately parked.

Traffic Counts Traffic counts are strong.

Ingress/Egress The property provide excellent ingress and egress.

Major Tenants Rite Aid (NYSE: RAD) is a retail pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company is publicly traded on the New York Stock Exchange under the ticker RAD. Rite Aid began in 1962 as a single store opened in Scranton, Pennsylvania called Thrifty Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Rite Aid is headquartered in Camp Hill, a suburb of Harrisburg, Pennsylvania. Rite Aid reported total sales of USD $16.5 billion in fiscal 2004. As of 2005, its market capitalization was about $2.08 billion. Rite Aid is a Fortune 500 company.

Area Salisbury is a city in Rowan County, North Carolina. The population was 26,462 in 2000. It is the county seat of Rowan County. Salisbury is famously known as Tree City USA, the home to famed North Carolina soft drink, Cheerwine, and the one-time grocery store powerhouse, Food Lion. Salisbury is the site of a noted prisoner of war camp during the American Civil War and has a large historic home district with many large mansions, several of which are on the National Register of Historic Places. Salisbury is part of the Charlotte Metropolitan Area.


Property This offering is the rare opportunity for an investor to acquire an absolute net leased Rite Aid asset with a brand new 20 year lease. The lease term is 20 years with a 10% bump every 10 years. The lease is net and provides for zero landlord responsibilities. The lease provides for eight five year options.


Investment Information RITE AID 1605 E. Innes Street Salisbury, NC 28146

Listing Price $2,933,333

Current CAP 8.70 %

Year Ten CAP 9.57 %

Price Per S.F. $201.34

GLA 14,569

Building S.F. 14,569

Percent Occupied 100.00 %

Land Acres 1.51

Estimated Annualized Operating Data Current Year Ten

$255,200 $280,720 Net Operating Income

Highlights

New 20 Year Absolute Net Lease Available Financing Excellent Sales History 10.40% Cash on Cash Return

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2 . Additional Information


Tenant Overview

Rite Aid (NYSE: RAD) is a United States retailer and pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company is publicly traded on the New York Stock Exchange under the ticker RAD. Rite Aid began in 1962 as a single store opened in Scranton, Pennsylvania called Thrif D Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Rite Aid is headquartered in Camp Hill, a suburb of Harrisburg, Pennsylvania. Rite Aid reported total sales of USD $16.5 billion in fiscal 2004. As of 2005, its market capitalization was about $2 billion. Rite Aid is a Fortune 500 company. The first store opened in September 1962. Through acquisitions and new stores, Rite Aid quickly expanded into 5 northeast states by 1965. The chain was officially named Rite Aid Corporation in 1968 and made its debut on the American Stock Exchange. It moved to the New York Stock Exchange in 1970. Just ten years after its first store opened, Rite Aid operated 267 locations in 10 states. It was named the third largest drugstore in the United States by 1981; shortly thereafter, 1983 marked a sales milestone of $1 billion. A 420-store acquisition along the east coast expanded Rite Aid's holdings beyond 2,000 locations. Among the companies acquired was Baltimore, Maryland's Read's Drug Store. Rite Aid acquired twenty-four Hooks Drug stores from Revco in 1994, selling nine of those stores to Perry Drug Stores, a Michigan-based pharmacy chain. One year later, the 224-store Perry chain itself was acquired by Rite Aid. The 1,000-store West Coast chain Thrifty PayLess was later acquired in 1996. The acquisition of Thrifty PayLess included the Northwest-based Bi-Mart membership discount stores, which was sold off in 1998. Acquisitions of Harco, Inc. and K & B Inc. brought Rite Aid into the Gulf Coast area. General Nutrition Companies (GNC) and Rite Aid formed a partnership in January 1999, bringing GNC mini-stores within the Rite Aid pharmacies. A partnership with drugstore.com in June 1999 allowed customers of Rite Aid to place medical prescription orders online for same-day, in-store pickup. Beginning in March 2005, Rite Aid introduced Living More, a seniors' loyalty program; offering 10% off of prescription drugs purchased with cash, generic products, as well as other items. Additional benefits also include discounts on certain days of the week, as well as unadvertised sales on merchandise. This program is very similar to the former Revco program which was called "Senior Shoppers"; Rite Aid attempted to purchase Revco in 1996. This might be attributed to the fact that Revco's former Vice President of Marketing, James Mastrian, now holds the same position at Rite Aid.


Early in 2005, the UAW announced that its members' prescriptions would be filled through mail order. This decision by the union disproportionately affected Rite Aid as it has predominant market strength where the UAW has its highest union density nationally. In July 2005, Rite Aid completed its acquisition of Shelley's Pharmacy, a chain pharmacy in Philadelphia. On August 23, 2006, the Wall Street Journal announced that Rite Aid would be buying the Eckerd Pharmacy and Brooks Pharmacy chains (Brooks Eckerd Pharmacy) from the Quebec-based Jean Coutu Group for US$3.4 billion, and merging the two chains into one dominant pharmacy system. The company's shareholders overwhelmingly approved the merger on January 18, 2007.[2] After some store closures and the conversion of the two chains to Rite Aid is complete, the deal will make Rite Aid the dominating drug store retailer in the Eastern U.S., and secures its place as the third largest drug retailer nationwide. Similar to what CVS has gone through in Chicagoland after its purchase of Albertson's drug store chains, the deal has left Rite Aid with some locations in close proximity to each other. (Only 23 store locations nationally were sold off to Walgreens, The Medicine Shoppe, or independent owners in order to meet federal regulations.) In many situations, especially Pennsylvania where both chains were dominant and had roots in those states (Rite Aid originated in Scranton, while Eckerd has roots in Western Pennsylvania via Erie for itself and Pittsburgh for converted Thrift Drug locations), there are now two Rite Aids as close as right next door to each other. Rite Aid had sold some locations to J.C. Penney's Thrift Drug chain in the mid-1990s shortly before J.C. Penney's acquisition of Eckerd, and had also sold all of their Massachusetts stores to Brooks in 1995, bringing some existing Eckerds and Brooks that were once Rite Aids full circle. Because Eckerd was previously owned by J.C. Penney, Eckerd stores accepted J.C. Penney charge cards. Since the merger, all Rite Aids accept J.C. Penney charge cards. 2007 revenues were reported at $27 Billion For more information about Rite Aid, please visit their website at www.riteaid.com.


Property Overview

Location The property is a free-standing parcel situated within a market

that serves the greater community. It is located mid-block on E. Innes St (NC-52) and just east of a large retail center anchored by Lowe’s, Food Lion, Circuit City and Staples.

Roadway E. Innes St. has four lanes (two northbound and two

southbound), which are divided by a small concrete barrier. This road serves at a primary commercial corridor hosting family restaurants, QSRs, gas stations, and other retail stores.

Visibility/Signage The building has excellent visibility from all directions.

The property has satisfactory signage. Signage consists of building-mounted signage, a medium-sized pylon located on E. Innes St. and a small-sized pylon located on Faith Rd. Faith Rd. runs parallel to E. Innes St. near the Site then intersects with E. Innes St. just north of the site.

Access There are two points of ingress/egress, one on E. Innes St. and

one on Faith Rd. The easiest ingress/egress point that to access is from southbound E. Innes St. traffic, which can simply make a right into or out of the property. Ingress for northbound E. Innes St traffic must turn left at the lighted intersection of E. Innes St. and N. Avalon Dr. (which is just south of the site), then make a right onto Faith Rd. Egress for northbound E. Innes St. traffic must turn left onto Faith Rd., then left onto N. Avalon Dr., then left onto E. Innes St.

Physical Condition (Int) The interior of the building shows well. It is clean and appears to

be well maintained. Physical Condition (Ext) The building shows well. It looks relatively new and appears to

be well maintained. The building has a drive-thru. The parking lot appears to be in good condition.

Local RE Environment The site is located within a retail pocket that serves the greater

community, but also includes some nearby national retailers to the west. The property is situated approximately one-half mile south of the I-85 interchange. The market is stable with limited vacancies. CVS is located on the southeast corner of E. Innes St. and N. Avalon Dr.. Walgreens is located on E. Innes St. approximately one-quarter mile north of the site.

Contiguous Properties The property is well situated within the retail market and located

on a primary commercial corridor. North: is a dentist office, Mexican restaurant, gas station and Walgreens; East: is an oil supply company, tire repair company and BP Gas station; South: is F&M Bank and an animal hospital; West: is Tire Kingdom, Rack Room Shoes, and across Faith Rd. is the large retail center, which includes Lowe’s, Food Lion,


Circuit City, Staples, Tinseltown USA movie theater, Old Navy, Game Stop, and other smaller retail stores.

Alternate Uses Retail or office.

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investment property offering aid salisbury.pdf · 2005, its market capitalization was about $2.08...

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