offering memorandum - loopnet · 2017. 11. 15. · stan johnson company 10333 richmond avenue |...

The Learning Experience801 Holly Springs Road | Holly Springs (Raleigh), NC 27526

Industry-Leading Tenant

Subject Property

Offering Memorandum

Confidentiality and Restricted Use Agreement

Stan Johnson Company10333 Richmond Avenue | Suite 740 Houston, Texas 77042 P: +1 832.476.3440

stanjohnsonco.com

Todd Moore [email protected]

Jim Gibson Regional [email protected] Marc Peeler Associate Director [email protected]

Marshall Thompson [email protected]

Neal Maranuk [email protected]

Offered Exclusively byThis Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC.

This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.

The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title.

BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief.

Listed in Association with: Jeff Hughes NC Broker #101282

The Learning Experience • Holly Springs (Raleigh), NC • Offering Memorandum 2

Investment Highlights

Purchase Price: $4,121,600 Cap Rate: 7.00%

The OfferingStan Johnson Company is pleased to offer for sale to qualified investors a 100% fee-simple retail building leased to The Learning Experience (TLE), one of the fastest growing childcare and early education franchises in the country. The ± 10,000 SF building is located in Holly Springs, North Carolina, an affluent suburb within the Raleigh-Durham-Chapel Hill Metropolitan Statistical Area.

The Learning Experience is operating under a seventeen (17) year lease with seven (7+) years remaining that features two (2), five (5) year options and twelve (12) percent rent bumps every five (5) years in the base term and option periods. TLE’s business will greatly benefit from the tremendous demographics (2016 average HHI of $105,085 within 5-mile radius) and population base (2016 estimated population of 86,413 within 5-mile radius) in the bustling and growing community of Holly Springs.

The Subject Property is located in the heart of a major residential corridor less than a mile away from both Holly Springs Elementary School and Holly Ridge Elementary.

Strategic Residential LocationThe Subject Property is strategically located within a mile of both Holly Springs Elementary School and Holly Ridge Elementary. This dense residential area has over 40K residents in the immediate surrounding neighborhoods, and will benefit from its convenient location and access to an estimated 3,300 children under the age of five.

“Recession-Proof” Business The Learning Experience is the fastest growing childcare and early education franchise in one of the fastest growing industries in the USA. The childcare industry has enjoyed revenue increases over 200% in the last half decade and is expected to see $1.8 billion in growth over the next five (5) years, especially with higher percentages of mothers in the workforce and the growing acceptance of the value of early education and socialization.

Rent Increases & Renewal OptionsThe Subject Property features twelve (12) percent rent increases every five (5) years during the primary term and both five (5) year renewal options.

Excellent Visibility and Robust Demographics The Subject Property features excellent visibility along Holly Springs Road (13,800 VPD), just east of downtown and Main Street (15,900 VPD). The 2016 estimated population within a5-mile radius is 86,413 and the average HHI within a 5-mile radius is $105,085.

Long Term Tenancy The Tenant has a successful 10-year operating history at the Subject Property.

Property Summary

Address: 801 Holly Springs Road

Building Size: +/- 10,000 SF

Land Area: +/- 1.89 Acres

Ownership Interest: Fee Simple

NOI: $288,512**Current rent based on increase on April 1st, 2018. Difference between current rent and April 2018 rent will be credited to buyer at closing.


Rent ScheduleLease Year Annual Rent

Years 1 - 5 $230,000

Years 6 - 10 (Current) $257,600

Years 11 - 15 $288,512

Years 16 - 17 $323,133

Years 18 - 20 (Opt 1) $323,133

Years 21 - 22 (Opt 1) $361,909

Years 23 - 25 (Opt 2) $361,909

Years 26 - 27 (Opt 2) $405,338

Lease Abstract801 Holly Springs Road | Holly Springs, NC 27526

Tenant: The Learning Experience

Building Size (SF): +/- 10,000 SF

Land Area (Acres): +/- 1.89 Acres

Year Built: 2008

Rent Commencement: March 11, 2008

Rent Expiration: March 31, 2025

Lease Term Remaining: Seven (7+) Plus Years

Renewal Options: Two (2), Five (5) year options

Rent Increases: Twelve percent (12%) every five years

Annual Rent: $288,512*

Expenses: NN – Roof, Structure and Foundation

Assumable Debt*Loan Start Date: August 1, 2014

Loan End Date: July 1, 2034

Loan Term: Twenty (20) Years

Amortization: Twenty (20) Years

Est. Loan Balance as of July 2017: $1,977,566

Fixed Interest Rate: 5.375%**

Assumption Fee: 2% of Outstanding Principal Balance

Annual Debt Service: $177,708

Cash Flow After Debt Service: $110,804

*Current rent based on increase on April 1st, 2018. Difference between current rent and April 2018 rent will be credited to buyer at closing.

*Loan assumption subject to lender underwriting of the borrower ** Loan becomes adjustable in year 15

Subject Property


Tenant OverviewThe Learning Experience Holding Corp. is a leading provider of childcare and early childhood development services. The Company offers full and part-time services for preschool children and supplemental after-school services for school-age children. The Learning Experience® (TLE®) is the nation’s fastest growing early learning academy franchises for children ages six weeks to five years old, with more than 184 locations nationwide, including 123 fully operational centers in 17 states and the remaining centers under various stages of development.

A family-run business, TLE® founders have more than 30 years of childcare and preschool experience. The company has been distinguished as one of America’s fastest growing franchises and a top education franchise for 2014 by Franchise Business Review magazine. The Learning Experience has successfully created one of the most trusted brands in the for-profit early childhood education industry. The foundation of The Learning Experience® was built on three key educational and core principles: cognitive, physical, and social. L.E.A.P.® (Learning Experience Academic Program) guarantees children will graduate TLE® with exceptional core academic skills that will start them on the path to a bright future. At TLE®, each child develops at their own pace, so the curriculum is designed to provide experiences for children that promote academic competency along with a mastery of developmental tasks, no matter what learning stage they are in.

At TLE®, children are taught to engage in a variety of controlled and safe activities that encourage them to adopt a healthy and active lifestyle at an early age. Healthy food choices are provided daily while teachers foster an awareness of proper nutrition. TLE® embraces important practical and real-world matters that most other early learning institutions often ignore. The proprietary Philanthropy Program lays the foundations for children to become respectful and wellmannered people by teaching them the value of selflessness, sharing and giving.

The Learning Experience Holding Corp.

No. of Locations: 184

Tenant Business: Retail Education

Headquarters: Boca Raton, FL

Website: www.thelearningexperience.com

Child Care Industry OverviewCOMPETITIVE LANDSCAPE

The U.S. child care services industry includes about 54,000 commercial facilities with combined annual revenue of $21 billion, plus about 21,000 facilities run by nonprofit organizations with combined annual revenue of about $12 billion. In 2014, 64% of mothers with children under the age of 6 participated in the workforce in the U.S., according to the Bureau of Labor Statistics.

Demand is driven primarily by growth in the youth population, and secondarily by employment and income. Recognition of the importance of early education is also driving demand for high-quality care. The profitability of individual child care facilities depends on good marketing, reputation, and efficient operations, as well as how saturated the local market is. Large companies have economies of scale in advertising and administration. Smaller companies can compete effectively in local markets by owning convenient locations.Source: http://www.hoovers.com

WHY BUSINESS IS BOOMING FOR DAY CARE BUSINESSES

The U.S. day care industry is in the middle of a massive growth spurt. “As the economy continues to improve and more people head back to work, the demand for child care services increases, which also allows providers the ability to raise prices and pad their margins,” Sageworks analyst Kevin Abbas says.Source: http://www.inc.com/sageworks/sageworks-why-day-care-profits-are-soaring.html

Property Photos


Child Care Industry Trends

Child Care is Now Early Education

No longer is child care for young children simply babysitting. Child care centers have mostly transitioned to centers for early education, where young tots are involved with early learning. The trend to learning centers is partly due to high parent and school expectations; it’s also attributable to research that shows that kids are capable of learning early academics and other skills that previously were not taught until later. Care centers often offer formalized early education curriculum, and staff receives extensive training in instruction geared for preschoolers.

Drop-In Child Care is More Common

It’s no surprise that drop-in child care is on the grow. What may come as a surprise to some is that these facilities typically offer high-quality, safe, and affordable care options. The drop-in care facilities focus on fun activities for kids and often include mealtimes and special theme events to provide parents with a worry-free evening or time away from kids. Gyms, recreation centers, churches an even schools are getting into the act of offering Parent Nights Out or similar events. Look for this trend to continue with even greater flexibility in the future.

Technology is Changing Provider/Parent Connection

An increasing number of facilities offer parents the piece of mind of being able to check on their child while at daycare as desired through video streaming of classroom activities throughout the day. Other providers regularly take photos of children and send to parents, post daily or weekly blogs or e-newsletters online for parents to view, or even exchange emails or text messages throughout the day. The technology provides parents and providers with another tool for staying “in touch” and bonding with activities and events planned for youngsters.

Communications Are More Frequent, More Useful

In today’s instantaneous, “tell me now” society, communications between child care provider and parent continue to strengthen. Where once a month newsletters used to suffice in addition to daily greetings and goodbyes, child care providers are using a variety of tools to provide parents with ongoing information about their child’s day. Some providers create websites where they post monthly menus, weekly day-by-day activities, and even behavioral reports. Others provide parents with a daily update that is then emailed (written during naptime). Even with technology, face-to-face communications is still the best.

Source: Top Trends in Child Care: As Lifestyles Change, So Do Child Care Offerings

Property Photos

https://www.verywell.com/top-trends-in-child-care-616937


Location OverviewHolly Springs is a town in Wake County, North Carolina, United States. As of the 2010 census, the town population was 24,661, over 2½ times its population in 2000.

According to the 2010 census, Holly Springs population density was 1,633.18 people per square mile. There were 8,658 housing units available in 2010, an increase from only 3,642 housing units in 2000. The racial makeup of the town was 79.80% White, 12.6% African American, 0.40% Native American, 2.9% Asian, 0.01% Pacific Islander, 1.8% from other races, and 2.5% from two or more races. Hispanic or Latino of any race were 6.30% of the population.

In 2010 Holly Springs had 8,147 households, out of which 55.5% had children under the age of 18 living with them, 70.1% were married couples living together, 9.4% had a female householder with no husband present, and 17.7% were non-families. 14.5% of all households were made up of individuals and 2.9% had someone living alone who was 65 years of age or older. The average household size was 3.03 and the average family size was 3.38.

In the town, the population was spread out with 32.4% under the age of 18, 5.0% from 18 to 24, 45.0% from 25 to 44, 15.9% from 45 to 64, and 4.9% who were 65 years of age or older. The median age was 33.1 years. For every 100 females there were 97.3 males. The population was also 51.4% female and 48.6% male.

The median income for a household in the town was $85,000, and the median income for a family was $92,539. Males had a median income of $66,630 versus $43,326 for females. The per capita income for the town was $31,527. About 2.6% of families and 3.7% of the population were below the poverty line, including 4.7% of those under age 18 and 12.9% of those age 65 or over.

Raleigh, North Carolina

Raleigh is the capital of the state of North Carolina and the seat of Wake County in the United States. Raleigh is known as the “City of Oaks” for its many oak trees, which line the streets in the heart of the city. The city covers a land area of 142.8 square mile. The U.S. Census Bureau estimated the city’s population as 451,066 as of July 1, 2015. It is one of the fastest-growing cities in the country. The city of Raleigh is named after Sir Walter Raleigh, who established the lost Roanoke Colony in present-day Dare County.

Raleigh is home to North Carolina State University and is part of the Research Triangle area, together with Durham (home of Duke University) and Chapel Hill (home of the University of North Carolina at Chapel Hill). The “Triangle” nickname originated after the 1959 creation of the Research Triangle Park, located in Durham and Wake counties, among the three cities and their universities. The Research Triangle region encompasses the U.S. Census Bureau’s Raleigh-Durham-Chapel Hill Combined Statistical Area (CSA), which had an estimated population of 2,037,430 in 2013. The Raleigh Metropolitan Statistical Area (MSA) had an estimated population of 1,214,516 in 2013.

Most of Raleigh is located within Wake County, with a very small portion extending into Durham County. The towns of Cary, Morrisville, Garner, Clayton, Wake Forest, Apex, Holly Springs, Fuquay-Varina, Knightdale, Wendell, Zebulon, and Rolesville are some of Raleigh’s primary nearby suburbs and satellite towns.

Holly Springs, NC

Downtown Raleigh, NC


Raleigh is an early example in the United States of a planned city. Following the American Revolutionary War when the U.S. gained independence, this was chosen as the site of the state capital in 1788 and incorporated in 1792 as such. The city was originally laid out in a grid pattern with the North Carolina State Capitol in Union Square at the center. During the United States Civil War, the city was spared from any significant battle. It fell to the Union in the closing days of the war, and struggled with the economic hardships in the postwar period related to the reconstitution of labor markets, over-reliance on agriculture, and the social unrest of the Reconstruction Era.

Following the establishment of the Research Triangle Park in 1959, numerous jobs were created in science and technology. The region and city have attracted a large influx of population, making it one of the fastest growing communities in the United States by the early 21st century.

Raleigh is home to numerous cultural, educational, and historic sites. The Duke Energy Center for the Performing Arts features three theater venues and serves as the home for the North Carolina Symphony and the Carolina Ballet. Coastal Credit Union Music Park at Walnut Creek is a large music amphitheater. Museums include the state museums of art, history and natural sciences, two in downtown. Major universities and colleges, in addition to those above, include Shaw University, the first historically black university in the American South. In the 1960s, the Student Nonviolent Coordinating Committee, an important civil rights organization, was founded here. One U.S. president, Andrew Johnson, was born in Raleigh.

The Research Triangle, commonly referred to as simply The Triangle, is a region in the Piedmont of North Carolina, anchored by North Carolina State University, Duke University, University of North Carolina at Chapel Hill, and the cities of Raleigh and Durham and the town of Chapel Hill. The eight-county region, officially named the Raleigh–Durham–Chapel Hill combined statistical area (CSA), comprises the Raleigh and Durham–Chapel Hill metropolitan areas and the Dunn, Henderson, Oxford, and Sanford Micropolitan Statistical Areas. A 2013 Census estimate put the population at 2,037,430, making it the second largest metropolitan area in the state of North Carolina behind Charlotte. The Raleigh–Durham television market includes a broader 24-county area which includes Fayetteville, and has a population of 2,726,000 persons.

The “Triangle” name was cemented in the public consciousness in the 1950s with the creation of Research Triangle Park, home to numerous high-tech companies and enterprises. Although the name is now used to refer to the geographic region, “the Triangle” originally referred to the universities, whose research facilities, and the educated workforce they provide, have historically served as a major attraction for businesses located in the region. The region should not be confused with The Triad, which is a North Carolina region adjacent to and directly west of the Triangle comprising Greensboro, Winston-Salem, and High Point, among other cities.

Most of the Triangle is part of North Carolina’s second, fourth, and thirteenth congressional districts.

Location Overview Continued

Research Triangle Park - Raleigh, NC

North Carolina State University - Raleigh, NC

North Carolina State University - Raleigh, NC


Affluent Estates: Professional Pride 1BMedian Age: 40.5

Professional Pride consumers are well-educated career professionals that have prospered through the Great Recession. To maintain their upscale

suburban lifestyles, these goal oriented couples work, often commuting far and working long hours. However, their schedules are fine-tuned to meet the needs of their school age children.

Ethnic Enclaves: American Dreamers 7CMedian Age: 31.8

American Dreamer residents own their own homes, primarily single-family homes, farther out of the city, where housing is more affordable.

They are family-centric and diverse. Most are married couples with children with an average household size of 3.16

Family Landscapes: Soccer Moms 4AMedian Age: 36.6

Soccer Moms is an affluent, family-oriented market with a country flavor. Family-oriented purchases and activities dominate, including movie purchases or rentals, children’s apparel and toys, and visits to theme parks or zoos. This market spends 45% above the national average on entertainment and recreation.

Demographic ProfilesTapestry segmentation (as seen below) provides an accurate, detailed description of America’s neighborhoods – U.S. residential areas are divided into 67 distinctive segments based on their socioeconomic and demographic composition, then further classified into LifeMode and Urbanization Groups. The result is a detailed picture of the socioeconomics and demographics as well as attitudes and brand preferences of people in a given area. As you can see from this illustration, the immediate area is supported by an affluent family landscape. Residents in this area focus heavily on professional accomplishments and family lifestyle.

Dominant Tapestry Map850 S Allen Heights Dr, Allen, Texas, 75002 Prepared by EsriRings: 1, 3, 5 mile radii Latitude: 33.08346

Longitude: -96.64631

Source: Esri

April 18, 2017

©2016 Esri Page 1 of 2

Esri is an international supplier of Geographic Information System (GIS) software, web GIS and geodatabase management applications. The company was founded in 1969 and has 40% of the global GIS market share. Learn more at www.esri.com.

Dominant Profiles within a 1-Mile Radius


Subject Property Photos


Aerial Photos

UPS

Holly SpringsElementary School

AllstateInsurance

Holly Springs Community

Library

NE

W H

ILL RD

W HOLLY SPRINGS RD

NORTH MAINATHLETIC COMPLEX

Daniel Dher’s ActionSports Complex

Seqirus Pharmaceutical Company

Jeffers Mann & Artman Pediatric

Dressen MedicalSupply

Sonshine GymnasticsHolly

Holland Grill

UNC EyeHolly Springs

Bass Lake Park

Parrish Womble Park

Holly Ridge Middle& Elementary School

Main StreetFamily Dentist

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Surrounding Retail

13,813 VPD

17,428 VPD

Main Street 15,935 VPD


Bristol

Demographics 724 Holly Springs Rd, Holly Springs, NC 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.

Population

2016 Population 9,091 40,294 86,413

2021 Population 10,146 47,246 100,627

2016-2021 Annual Rate 2.22% 3.23% 3.09%

Households

2016 Total Households 2,999 13,401 29,528

2021 Total Households 3,331 15,617 34,197

2016-2021 Annual Rate 2.12% 3.11% 2.98%

Household Income

2016 Median Household Income $78,218 $87,839 $87,527

2016 Average Household Income $97,912 $103,335 $105,085

N

going beyond

The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.

Stan Johnson Company10333 Richmond Avenue | Suite 740Houston, Texas 77042P: +1 832.476.3440 | F: +1 832.476.3449

stanjohnsonco.com

Todd [email protected]

Jim GibsonRegional [email protected]

Marc PeelerAssociate [email protected]

Marshall Thompson [email protected]

Neal [email protected]

Offered Exclusively by

Listed in Association with: Jeff Hughes NC Broker #101282

offering memorandum - loopnet · 2017. 11. 15. · stan johnson company 10333 richmond avenue |...

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