multi-tenant investment opportunity · purchaser of the asset, and is not to be used for any other...

MULTI-TENANT INVESTMENT OPPORTUNITY

THE BOULEVARD AT SURPRISE POINTESEC of Litchfield Road & Waddell Road | Surprise, AZ

CHRIS HOLLENBECKSenior Director +1 602 224 4475 [email protected]

SHANE CARTERAssociate +1 602 224 4442 [email protected]

CONFIDENTIALITY AGREEMENT

Cushman & Wakefield (“Advisor”) serves as the exclusive advisor in connection with the solicitation of offers for the purchase of a portion of The Boulevard at Surprise Pointe (“Asset”). The solicitation and potential sale is to be governed by this Confidential Offering Memorandum, as it may be modified or supplemented (“Offering Memorandum”) and the Purchase Agreement governing the sale of the Asset. Prospective purchasers are advised that as part of the solicitation process, Seller will be evaluating a number of factors including the current financial qualifications of the prospective purchaser. Prospective purchasers are further advised that the Seller expressly reserves the right, in its sole and absolute discretion, to evaluate the terms and conditions of any offer and to reject any offer without providing a reason. Further, Seller reserves the right to terminate the solicitation process at any time prior to final execution of the Purchase Agreement.

The information contained in this Offering Memorandum is confidential, furnished solely for the purpose of a review by a prospective purchaser of the Asset, and is not to be used for any other purpose or made available to any other person without the express written consent of the Seller or Advisor. Prospective purchasers should conduct their own due diligence, including, but not limited to, engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the Asset or used in the construction or maintenance of the building(s) at the Asset

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Asset, or information provided herein or in connection with the sale of the Asset shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Advisor or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees or agents, for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Asset. A Prospective purchaser is not to construe the contents of the Offering Memorandum or any prior or subsequent communications from the Seller or Advisor or their affiliates or any of their respective officers, directors, shareholders, owners, employees or agents as legal, tax or other advice. Prior to submitting an offer, prospective purchasers should consult with their own business advisors, legal counsel and tax professionals to determine the consequences of an investment in the Asset and arrive at an independent evaluation of such investment.

THE BOULEVARD AT SURPRISE POINTE 3

FOREIGN TR ADE ZONE

LITCHFIELD ROAD

WADDELL ROAD

SITE

SAFEWAY GAS

MARLEY PARKRESIDENTIAL

PHASE II

INVESTMENT OPPORTUNITYMULTI-TENANT BUILDING FOR SALE

4 CUSHMAN & WAKEFIELD | OFFERING MEMORANDUM

PROPERTY HIGHLIGHTS

ADDRESS SEC of Litchfield Road & Waddell Road

OFFERING PRICE $2,225,000

CAP RATE 7.00%

NET OPERATING INCOME $155,783*

OCCUPANCY 100%

TENANCY Mulit-Tenant Shops

PARCEL 501-36-954

LAND AREA ±3.175 Acres

BUILDING GLA ±8,009 SF

YEAR BUILT 2008

* NOI from May 1, 2018 to April 30, 2019

PROPERTY OVERVIEW• 100% leased property with almost no

vacancy at the intersection

• Located across from a planned 3,000 home residential development

• Tenants paying market rents with 5-7 years remaining

• Located in a busy movie theater/bowling alley anchored center

• Anchored by AMC Surprise Pointe 14 and the high class, modern Uptown Alley bowling/entertainment facility

• This is the retail/entertainment hub of the market and is easily accessed by neighborhood residents within several miles

• Adjacent to ESI Ventures’ 154 acre mixed-use business park with foreign trade zone capabilities


RENT ROLL

SUITE TENANT SQUARE FEET LEASE TERM

CURRENT ANNUAL BASE

RENT

CURRENTANNUAL RENT

PER SFESCALATIONS RENEWAL OPTIONS

E-000 1,945 SF

Apr 2018 to Jul 2025 $34,038

$17.50 Flat rate during primary term.

Two (2), Five (5) year options 5% increases each option periodApril 2018 commencement

date is estimated. Lease expires 88 full months

following

Base rent is abated for 4 months following the commencement

date

E-002 4,362 SF

Feb 2016 to Aug 2023 $79,063 $18.13 3% annual increases

in March of each year

One (1), Five (5) year option at fair market rent but not less than

the previous year

E-123 1,702 SF Oct 2017 to March 2023 $31,019* $18.23

3% annual increases in December of

each year

One (1), Five (5) year option at fair market rent but not less than

the previous year

TOTALS 8,009 SF $144,120

* FREE RENT EVERY DECEMBER


INCOME VALUATION

IncomeBase Rental Income $144,120

Admin Fee Income $8,820

Expense Reimbursement Income $58,800

Total Income $211,740

Operating ExpensesProperty Taxes $30,274

Insurance $1,736

Property Management Fees (3%) $6,352

Repairs & Maintenance $1,200

Fire Alarm Monitoring & Inspection $420

Trash Disposal $745

Utilities - Water & Sewer $4,000

Association CAM's $11,230

Total Expenses $55,939

NET OPERATING INCOME $155,783Financials propvided are Pro Forma figures from May 2018 to April 2019


TENANT PROFILES

WEBSITE www.jabzboxing.com

# OF LOCATIONS 18

GUARANTEE Personal

WEBSITE www.maximusnutritionaz.com

# OF LOCATIONS 3

GUARANTEE Personal

WEBSITE www.team4kids.com

# OF LOCATIONS 1

GUARANTEE Personal

Maximus Nutrition is a a Texas based nutrition and supplement chain with two locations in Texas and one location in Arizona, at the subject property. Backed by a team of certified nutritionists and body builders, Maximus Nutrition helps people supply their bodies with all of the right nutrients. They carry a number of high-quality products and offer expert nutritional advice to guide their customers toward the best results, whether they are striving to lose weight, excel in competition, or simply live a better lifestyle. The lease is guaranteed personally by two seperate groups.

TEAM 4 Kids operates on the belief that your child’s needs are of the utmost importance. In addition to therapy services, they offer a wide array of classes to supplement and enhance your child’s therapy success. Before opening TEAM 4 Kids, the Co-Owner was an occupational therapist by trade and treated children out of her home for 10 years. As her business grew, she was determined to expand her patient outreach and thus opened TEAM 4 Kids. They originally opened near Greenway Rd and the 303 Freeway but quickly outgrew that space in a span of two years. They then moved to their current location, the Boulevard at Surprise Pointe, where they have operated since 2016.

Jabz Boxing Fitness for Women is a 45 minute circuit workout that combines boxing exercises with cardio, strength training, plyometrics, and numerous other functional exercises used to produce maximum results for your body. The franchisee owns two Jabz studios in the Phoenix Metro area.


DEMOGRAPHICS

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P E O R I A A V E

W A D D E L L R D

G R E E N W AY R D

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S I T E

1 Mile 3 Mile 5 Mile

2010 Population 11,965 94,815 181,318

2017 Population 12,823 106,228 200,193

2022 Population Estimated 13,659 114,695 215,768

2010-2017 Annual Rate 1.07% 1.12% 1.10%

2017-2022 Annual Rate 1.27% 1.55% 1.51%

2017 Daytime Population 8,212 81,043 183,813

2010 Households 3,396 31,384 72,794

2017 Total Households 3,946 34,799 79,103

2022 Total Households 4,196 37,462 84,740

2010-2017 Annual Rate 1.16% 1.11% 1.09%

2017-2022 Annual Rate 1.24% 1.49% 1.39%

2017 Avg HH Income $69,127 $57,299 $51,789

2022 Avg HH Income $77,023 $62,574 $56,166

2017-2022 Annual Rate 1.11% 1.09% 1.08%

Traffic Counts N: 19,369 S: 18,522

E: 22,377 W: 20,468 ESRI, 2017


LOCATION MAP

UNDER CONSTRUCTION

WADDELL ROAD

FOREIGN TR ADE ZONE

MARLE Y PARKRESIDENTIAL PHASE I I


SITE PLAN

C131

C134

B122

SalonBoutique

F10

7F1

08

F10

5

Outlot 1

G11

4B

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B137B136

PAD 1

PAD 2

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Suite TenantE-002 Maximus NutritionE-123 T.E.A.M. For KidsE-000 Jabz BoxingOutlot 1 WalgreensPAD 2 Car Wash - under contractPAD 3 Filiberto’sD-001 Salon BoutiqueN-001 Under Review Sports BarA-000 AMCB-122 Rocket FizzB-135 Cold Stone CreameryB-136 Sugar and SpiceB-137 Tax SaverC-131 La Fuentes Mexican Grill & BarC-134 CG Martial Arts AcademyF-105 Urgent CareF-107 Sports ClipsF-108 DentistG-000A Tropical Smoothie CafeG-000B Papa John’sG-001 New Look Hair & NailG-112 State FarmG-114A&B NoodlesH-000&001 DentistH-002 Nick’s DinerM-001 Fitness 1 Gym

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PROPERTY PHOTOS


MARKET OVERVIEWMARKET OVERVIEW

Location & Market Analysis - Surprise

The City of Surprise Arizona is located in the North West portion of Maricopa County and has a current population of 128,000 people. It is approximately 45 minutes from Downtown Phoenix. The community is surrounded by mountain park lands, a regional lake, and pristine open Sonoran desert.

Key Assets:

• Major economic drivers include healthcare, Luke Air Force Base, and tourism

• Banner health employs more than 4000 people in the Surprise area through the numerous clinics and hospitals they operate.

• Luke Air Force Base employs more than 8,000 military and civilian workers, with an overall impact on Arizona’s economy of $1.4 billion.

• Surprise is home to the Kansas City Royals and the Texas Rangers for their Cactus League Spring Training facilities. Their stadium seats approximately 11,000 fans.

• Other amenities include the 25-court USTA facility that hosts numerous tournaments, 7 golf courses, the White Tank Mountain Regional Park, multiple parks, libraries, and public aquatic centers.


MARKET OVERVIEW MARKET OVERVIEW

Economy The Metro Phoenix job market continued to show signs of improvement, adding nearly 39,000 jobs year-over-year through December. During the same time period, the unemployment rate decreased 50-basis-points (bps) to close the fourth quarter at 3.8%, according to the Bureau of Labor Statistics.

Market Overview The Metro Phoenix Retail market closed out 2017 on a high note, absorbing over 1 million square feet in the fourth quarter alone. This net gain equates to a 37% increase from the third quarter (644,379 sf), bringing the overall 2017 absorption to over 2.15 million square feet (msf). Neighborhood & community centers saw the largest recorded increase with over 741,900 sf of positive absorption in the fourth quarter of 2017, noting a 54% increase from the fourth quarter of 2016. Positive absorption was also recorded in strip centers (258,258 sf), power & regional malls (38,933 sf). Only lifestyle centers saw negative absorption (-13,877 sf) in fourth quarter 2017. The Mesa submarket (308,940

sf) recorded the strongest fourth quarter absorption. The Southeast Valley (640,408 sf) recorded the highest net absorption year-to-date (ytd).

Vacancy fell from the third quarter 2017 (10.5%) to 9.8% in the fourth quarter of 2017. This 70 basis point fall marked the lowest vacancy the Metro Phoenix retail market saw in 2017. Vacancy fell 100 bps from fourth quarter 2016 (10.8%) to fourth quarter 2017. For the fourth quarter 2017, the East Phoenix submarket (6.1%) and the Sky Harbor submarket (8.0%) recorded the lowest vacancies while the Central Business District (CBD) submarket (31.2%) and the Mesa submarket (13.2%) recorded the highest.

MAJOR PHOENIX EMPLOYERS

• Banner Health (27,230)

• State of Arizona (24,670)

• Walmart (17,270)

• Fry’s (13,340)

• Maricopa County (12,960)

• Wells Fargo (12,740)

• City of Phoenix (11,080)

• Intel (10,940)

• ASU (10,550)

• Bank of America (9,800)

• Honeywell (9,502)

• American Express (5,235)

Location & Market Analysis - Metro Phoenix


MARKET OVERVIEWMARKET OVERVIEW

Market Analysis

RETAIL MARKET SNAPSHOT Metro Phoenix • Fourth Quarter • 2017 Positive absorption was the narrative for the fourth quarter of 2017

Average asking rates for the Metro Phoenix retail market increased to $14.93 per square foot (psf) on an annual triple net basis, in the fourth quarter. Strip centers experienced the most significant growth quarter-overquarter, increasing $0.89 psf. The Tempe and East Phoenix submarkets experienced the highest annual rent increase of $5.91 and $4.15 psf correspondingly.

Cushman & Wakefield is tracking 632,000 sf of construction in the Phoenix Metro retail market in the fourth quarter of 2017. The San Tan Pavilions project in the Southeast Valley submarket is the largest, at 193,000 sf. Approximately 848,000 sf of new supply was added during 2017, which was a decrease from the nearly 1.11 msf added in 2016. The Mesa (131,000 sf) and Southeast Phoenix (15,590 sf) submarkets saw the most new inventory in the fourth quarter 2017.

Throughout 2017, the demand for all retail types held strong against the continued rise of the e-commerce market. Overall amount of space available for lease fell year-over-year as well as quarter-over-quarter by nearly -1.3 msf and -855,000 sf correspondingly. 2017 ended with vacancy rates falling below 10% for the first

time since the second quarter of 2008 (9.6%). Neighborhood & community centers vacancy dropped 140 bps and absorption increased nearly 54% year-overyear. Strip centers recorded a 130 bps drop in vacancy from 13.4% in the fourth quarter of 2016 to 12.1% in the fourth quarter of 2017 while power & regional mall vacancy increased 10 bps year-over-year. In stark contrast to the previous year, broad-based retail demand was up.

ECONOMIC INDICATORS

Overall Net Absorption/Overall Asking Rent 4-QTR TRAILING AVERAGE (IN THOUSANDS)

$12

$14

$16

$18

$20

200

250

300

350

400

450

500

550

Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017

Thou

sand

s

Net Absorption, 000's Asking Rent, $ PSF

RegionalQ4 2016 Q4 2017 12-Month

Forecast

Household Income $56,825 $61,708

Population Growth 2.3% 2.3%

Unemployment 4.7% 3.8%

National Q4 2016 Q4 2017 12-Month Forecast

GDP Growth 1.8% 2.3%

CPI Growth 1.8% 2.0%

Consumer Spending Growth 2.8% 2.6%

Retail Sales Growth 3.7% 4.3%

*Q4 values. **Forecast by Cushman & Wakefield. Values Represent year-over-year %.

Moody’s data buffet for HH Income, Population Growth

Average Asking Rate By Market(NNN)CBD OVERTAKES HIGH WATER MARK

$20.98

$18.99

$11.27

$15.68

$12.41

$14.43

$20.73

$15.86

$19.56

$13.93

$19.94

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

$20.00

$22.00

$24.00

Cen

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MARKET OVERVIEW MARKET OVERVIEW

Market Analysis

1 Northwest Phoenix

2 Southwest Phoenix

3 North I-17

4 North Central Phoenix

5 Scottsdale

6 Mesa

7 Southeast Valley

8 Tempe

9 Sky Harbor Airport

10 East Phoenix

11 Central Business District

The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

Copyright © 2018 Cushman & WakedfieldAll rights reserved.

SUBMARKET INVENTORY SUBLET VACNANT

DIRECT VACANT

VACANCY RATE

Q3 NET ABSORPTION

2017 NET ABSORPTION

AVERAGE ASKING RATE

(NNN)

Neighborhood & Community 90,836,736 227,660 9,666,890 10.9% 741,937 1,858,990 $14.33

Strip 13,294,687 12,857 1,599,422 12.1% 258,258 336,093 $15.78

Power & Regional Mall 31,246,620 78,797 1,769,487 5.9% 38,933 -9,735 $19.46

Lifestyle 1,736,921 - 108,930 6.3% -13,877 -29,992 $26.61

All Types 137,114,964 319,314 13,144,729 9.8% 1,025,251 2,155,356 $14.93

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P H O E N I X

M E S A

C H A N D L E R

G I L B E R T

Q U E E N C R E E K

S A LT R I V E RP I M A - M A R I C O PA

C O M M U N I T Y

F O R TM C D O W E L L

YAVA PA I N AT I O N

F O U N TA I N H I L L S

S C O T T S D A L E

PA R A D I S E VA L L E Y

G I L A R I V E R C O M M U N I T Y

T O L L E S O N

AV O N D A L E

G O O DY E A R

L I T C H F I E L DPA R K

G L E N D A L E

P E O R I AS U R P R I S E

E L M I R A G E

T E M P E

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P H O E N I X

1011

RETAIL MARKET SNAPSHOT Metro Phoenix • Fourth Quarter • 2017

Outlook• The average asking rate in the Cen-

tral Business District and Scotts-dale submarkets should remain the market’s highest due to inventory constraint.

• Tempe’s growth factors of new office and multifamily construction will remain strong; in 2018 they wel-come their second Whole Foods.

• Despite online retail’s success, Phoenix saw brick-and-mortar retail demand growth increase along with economic growth in 2017.

• With vacancy rates at a near ten year low, inventory demand is ex-pected to increase in 2018.

Approximately 214,828 SF of new supply has been added in Northwest Phownix during 2017. This is on par with the same four quarters in 2016.

CHRIS HOLLENBECKSenior Director +1 602 224 4475 [email protected]

2555 E Camelback Rd, Suite 400Phoenix, Arizona 85016

ph: +1 602 954 9000fx: +1 602 253 0528

cushmanwakefield.com

THE BOULEVARD AT SURPRISE POINTESEC Litchfield Road & Waddell Road | Surprise, AZ

SHANE CARTERAssociate +1 602 224 4442

[email protected]

multi-tenant investment opportunity · purchaser of the asset, and is not to be used for any other...

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