raley’s food source...raley’s started food source in 1995. raley’s operates 128 stores, 40 of...

o f f e r i n g m e m o r a n d u m

™

Raley’s food source3 5 5 7 B R A D S H A W R D ,S A C R A M E N T O , C A 9 5 8 2 7

S U B J E C TP R O P E R T Y

R A N C H O C O R D O VA

D O W N T O W N S AC R A M E N T O

BRADSHAW ROAD ±42,000 ADT

±171,000 ADT

OLD PLACERVILLE ±16 ,000 ADT

0 4

T A B L E O F C O N T E N T S

p r i c i n g & f i n a n c i a l a n a lys i sFinancial SummaryInvestment HighlightsTenant Summaries

Physical DescriptionBirds EyeRegional Map

P R O P E R T Y d e s c r i p t i o n0 8

Rent RollSummary Tenant ProfileIncome & ExpensesLease Expiration ScheduleAssumptionsCash Flow

DemographicsTop Employers City & MSA Overview | Sacramento, CARecent Developments

f i n a n c i a l ov e r v i e w

c i t y ov e r v i e w

1 2

1 6

e x c l u s i v e ly l i s t e d b y :J O R DA N U T TA LV P & D i r e c t o r D i r e c t + 1 3 1 0 9 1 9 5 7 0 7M o b i l e + 1 8 1 8 2 3 1 4 6 7 0j o r d a n . u t t a l @ m a t t h e w s . c o mL i c . # 0 1 5 1 2 7 5 5

™

R a l e y ’ s f o o d s o u r c e

p r i c i n g & f i n a n c i a l a n a ly s i s

4 | O f f e r i n g M e m o r a n d u m

O f f e r i n g M e m o r a n d u m | 5

D e a l h i g h l i g h t s

l o c a t i o n h i g h l i g h t s

• Full Raley’s corporate guarantee backed by 121 stores and $3.2B in revenue

• Retail NNN lease structures provide for very minimal landlord responsibilities

• This location’s site performance is well above average, with Raley’s having a 3.5% rent to sales ratio

• Raley’s has over 28% of the Sacramento market share and this is the largest grocery store in a 3-mile radius

• Excellent financing available with a 10-year term at 75% LTV in the low 4% interest rate range

• Raley’s next rent bump is in 2019 increasing total rent by $49,815

• Starbucks recently renewed their 5 year option early with zero concessions given, extending the lease to a total of 10 years, demonstrating how profitable and committed they are to this site

• Infill grocer location with roughly 15,000 people in the 1 mile radius (220,000 in a 5 mile radius) and projected growth of over 5%

• Incomes in the surrounding area above the national average ranging from $67k-$82k

• Excellent stoplight intersection location at the NW corner of Bradshaw Rd. & Old Placerville Rd. boasting over 68,000 average cars per day

F i n a n c i a l S u m m a r y

Price $15,250,000

Property Size (NRA) 65,000

Price Per SF $235

Year Built/Renovated 1999

Current Occupancy 100.0%

Investment Returns

Cap Rate - Yr 1 5.75%

Operating Data

Effective Gross Income $1,244,373

Operating Expenses $368,839

Net Operating Income - Yr 1 $875,534

Major Tenants (SF)

Raley's Supermarkets 61,500

Starbucks Coffee 1,820

Kintaro Sushi 1,680


Raley’s Supermarkets is a privately held, family-owned supermarket chain that operates stores under the Raley’s, Bel Air Markets, Nob Hill Foods and Food Source names in northern California and Nevada. Founded on February 16, 1935 by Thomas P. Raley in Placerville as Raley’s Drive-In Market, Raley’s employs around 12,000 workers. Headquartered in West Sacramento, California, Raley’s is the dominant supermarket operator in the Sacramento metropolitan area.

Raley’s started Food Source in 1995. Raley’s operates 128 stores, 40 of them in the Greater Sacramento area. According to Metro Market Studies, those stores control the city’s largest market share of 28%. By comparison, other local market shares are Safeway at 16.7%, Costco at 11.9% and Save Mart Supermarkets at 9.2%.

Consumer Reports surveys rank Raley’s among the top U.S. supermarket chains, in particular for customer service.

t e n a n t o v e r v i e w

Property Name Starbucks

Property Type Net Lease Quick Service Restaurant

Parent Company Trade Name Starbucks Corporation

Ownership Public

Revenue $19 B

No. of Locations ±23,921

No. of Employees ±157,000

Headquartered Seattle, WA

Year Founded 1985

Website www.starbucks.com

tenant summary - RALEY ’S food source

Property Name Raley’s Food Source Supermarkets

Property Type Retail / Grocery

Ownership Private

Revenue $3.2 billion

No. of Locations 121 stores: 72 Raley’s, 20 Bel Air, 20 Nob Hill Foods and 9 Food Source stores

No. of Employees ±12,000

Headquartered West Sacramento, California

Year Founded 1935

Website www.raleys.com

tenant summary - starbucks

Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; Europe, Middle East, and Africa; China/Asia Pacific; and Channel Development.

Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices, and bottled water. The company’s stores also provide fresh food and snack offerings; and various food products, such as pastries, and breakfast sandwiches and lunch items, as well as serve ware, beverage making equipment, and accessories.

t e n a n t o v e r v i e w BRADSHAW ROAD ±42,000

OLD PLACERVILLE ±16 ,000

M AT H E R A I R P O R T

SUBJECT PROPERTY

BRADSHAW ROAD ±42,000

OLD PLACERVILLE ±16 ,000

M AT H E R A I R P O R T

SUBJECT PROPERTY

p r o p e r t y d e s c r i p t i o n

8 | O f f e r i n g M e m o r a n d u m

O f f e r i n g M e m o r a n d u m | 9

p h y s i c a l d e s c r i p t i o n

Property Name Raley’s Food Source

Address 3539-3547 Bradshaw Road

Location Sacramento, CA

Cross Street Old Placerville Road

Square Footage (GLA) ±65,000

Land Area ±283,000 SF (±6.5 Acres)

APN(s) 068-0030-052

Year Built 1999

Zoning VCMU

Number of Stories 1

Parking Spaces (Estimated) 315

Parking Ratio 4.85:1,000 b r a d s h aw r o a d


S U B J E C TP R O P E R T Y

BRADSHAW ROAD ±42,000 ADT

OLD PLACERVILLE ±16 ,000 ADT

±171,000 ADT

R A N C H O C O R D O VA

C A R M I C H A E L

O R A N G E VA L E

p r o p e r t y d e s c r i p t i o nb i r d ’ s e y e m a p

1 0 | O f f e r i n g M e m o r a n d u m

r e g i o n a l m a p

O f f e r i n g M e m o r a n d u m | 1 1


f i n a n c i a l o v e r v i e w


Unit Tenant Lease Start

Lease End SF % of GLA

Contract Rental Rate Rent PSFRent Increases Options

Options ($/SF)Year Month Year Month

Raley's Food Source 11/99 11/24 61,500 94.6% $767,520 $63,960 $12.48 $1.04 12/2019 $13.2912/1/2412/1/2912/1/34

$14.15$15.07$16.05

3A Starbuck’s Coffee 4/01 4/26 1,820 2.8% $72,936 $6,078 $40.07 $3.34 05/2021 $46.08 5/1/26 $52.99

3B Kintaro Sushi 9/14 9/21 1,680 2.6% $34,272 $2,856 $20.40 $1.70

10/201710/201810/201910/2020

$21.12$22.20$23.16$24.00

10/1/21 See notes below

Occupied Totals - In Place 65,000 100.0% $874,728 $72,894 $13.46 $1.12

Vacant Totals 0 0.0% 0 0 0.00 $0.00

Totals 65,000 100.0% $874,728 $72,894 $13.46 $1.12

r e n t r o l l

S U M M A R Y T E N A N T P R O F I L E

Notes 1. Raley’s Food Source has three 5-Year options remaining on their lease term. 2. Starbuck’s Coffee has two 5-Year options remaining on their lease term. 3. Kintaro Sushi has one 5-Year option remaining on their lease term. Minimum rent during the option period is the greater of FMV or a 103% increase over previous rent continuing to escalate 3% annually thoughout the option period.

Anchors - 88%Restaurants - 12%

Anchors - 96%Restaurants - 4%

INCOME DISTRIBUTION

Tenant Name In Place Rent % of Income Expiration Date

Anchor/Junior Anchors

Raley's Supermarkets $767,520 87.74% Nov-24

Subtotal $767,520 87.74%

Restaurants

Kintaro Sushi $34,272 3.92% Sep-21

Starbucks's Coffee $72,936 8.34% Apr-26

Subtotal $107,208 12.26%

Total $874,728 100.00% Avg. Lease Term Remaining - 6.9



Analysis Period

Cash Flow Projection Begin Date June 1, 2017Holding Period for Net Present Value 10 Years

Area Measures

Net Rentable Area in SF 65,000General Projection Assumptions

General Expense Growth per Annum 2.00%Real Estate Tax Growth per Annum 2.00%Market Rent Growth per Annum 3.00%Exit Cost of Sale 1.00%

l e a s e e x p i r a t i o n s c h e d u l e

a s s u m p t i o n s

Year Ending Sq. Ft. Annual % of Total Aggregate % of Total

1 May-18 0 0.00% 0.00%

2 May-19 0 0.00% 0.00%

3 May-20 0 0.00% 0.00%

4 May-21 0 0.00% 0.00%

5 May-22 1,680 2.58% 2.58%

6 May-23 0 0.00% 2.58%

7 May-24 0 0.00% 2.58%

8 May-25 61,500 94.62% 97.20%

9 May-26 1,820 2.80% 100.00%

10 May-27 0 0.00% 100.00%

11 May-28 0 0.00% 100.00%

Total 65,000 100.00%

1 0 - y e a r r o l l o v e r

100%

30%

70%

20%

60%

90%

0%1 32

40%

10%

50%

80%

4 5 6 7 8 9 10 11

A N N UA L % O F TOTA L

i n c o m e a n d e x p e n s e sTotal $/SF

Income

Rental Income $875,535 $13.47

Expense Reimbursements $368,838 $5.67

Effective Gross Income $1,244,373 $19.14

Expenses

Common Area Maintenance $195,000 $3.00

Real Estate Taxes $173,839 $2.67

Operating Expenses $368,839 $5.67

Net Operating Income $875,534 $13.47

Operating Expense Ratio 29.6%

1. Each tenant has renewal options after the current lease term expires.

C a s h f l o w

f i n a n c i a l o v e r v i e w

Year1 Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9 Year10FortheYearsEnding May-2018 May-2019 May-2020 May-2021 May-2022 May-2023 May-2024 May-2025 May-2026 May-2027 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________PotentialGrossRevenue BaseRentalRevenue $875,535 $877,147 $903,735 $931,032 $942,327 $943,561 $944,832 $972,705 $1,001,664 $1,014,583 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ScheduledBaseRentalRevenue 875,535 877,147 903,735 931,032 942,327 943,561 944,832 972,705 1,001,664 1,014,583 ExpenseReimbursementRevenue 1.CAM 195,000 200,850 206,876 213,081 219,474 226,059 232,841 239,826 247,020 254,431Prop13A 173,838 177,316 180,862 184,479 188,169 191,933 195,771 199,686 203,680 207,754 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________TotalReimbursementRevenue 368,838 378,166 387,738 397,560 407,643 417,992 428,612 439,512 450,700 462,185 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________TotalPotentialGrossRevenue 1,244,373 1,255,313 1,291,473 1,328,592 1,349,970 1,361,553 1,373,444 1,412,217 1,452,364 1,476,768 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________OperatingExpenses 1.CAM 195,000 200,850 206,876 213,082 219,474 226,058 232,840 239,825 247,020 254,431Prop13A 173,839 177,316 180,862 184,479 188,169 191,932 195,771 199,686 203,680 207,754 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________TotalOperatingExpenses 368,839 378,166 387,738 397,561 407,643 417,990 428,611 439,511 450,700 462,185 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________NetOperatingIncome 875,534 877,147 903,735 931,031 942,327 943,563 944,833 972,706 1,001,664 1,014,583 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Leasing&CapitalCosts CapitalReserves 6,500 6,695 6,896 7,103 7,316 7,535 7,761 7,994 8,234 8,481 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________TotalLeasing&CapitalCosts 6,500 6,695 6,896 7,103 7,316 7,535 7,761 7,994 8,234 8,481 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________CashFlowBeforeDebtService 869,034 870,452 896,839 923,928 935,011 936,028 937,072 964,712 993,430 1,006,102&Taxes =========== =========== =========== =========== =========== =========== =========== =========== =========== ===========1.CAMamountsareestimates.Pleasenotealltenantsreimburse100%ofoperatingexpenses.


c i t y o v e r v i e w


As the capital of the world’s 6th largest economy, Sacramento is undergoing a transition, with technological and cultural developments breathing new life into the city. Sacramento is seeing a growth in population, especially young professionals who are drawn to the reasonable cost of living, abundant sunshine and ethnic diversity. Sacramento beckons many visitors as well, due to its strategic location at the heart of the Central Valley, the metro area is at the forefront of the farm-to-fork movement. Resident have access to an abundance of fresh, locally sourced foods from nearby farms, wineries and breweries.

Sacramento has experienced economic growth in the last ten years. Unemployment has fallen below 6 percent and job growth is very evident in industries like technology, construction and healthcare. Healthcare is a major industries and Sutter Memorial Hospital and UC Davis Medical center employ a large number of residents. The government continues to be the region’s largest employer and continues to remain stable.

Sacramento’s economy has been fueled by recent job growth in leisure and hospitality, which saw a 12 percent increase in 2016 compared to 2015. This growth in tourism is largely due to Sacramento’s ability to host large events and conventions. Recently these large events have been professional sporting events, like the yearly cycling competition, the Amgen Tour of California and the California International Marathon.

s a c r a m e n t o , c a l i f o r n i a

j o b m a r k e t

M e t r o P o p u l a t i o n :2 , 2 2 1 , 5 2 5

Av e r a g e S a l a r y :$ 5 3 , 3 4 0

POPULATION 1 Mile 3 Mile 5 Mile

2022 Projection 14,696 89,690 217,755

2017 Estimate 13,960 86,108 209,753

Growth 2017 - 2022 5.27% 4.16% 3.81%

HOUSEHOLDS 1 Mile 3 Mile 5 Mile

2022 Projection 5,100 34,366 88,367

2017 Estimate 4,859 32,981 85,010

Growth 2017 - 2022 4.97% 4.20% 3.95%

INCOME 1 Mile 3 Mile 5 Mile

2017 Est. Average Household Income $67,627 $82,567 $76,840

Employer Name # of Employees

State of California 69,763

Sacramento County 11,450

UC Davis Health System 7,725

Dignity Health/Catholic Healthcare West 7,069

Intel 6,633

Kaiser Permanente 6,360

Sutter Health 5,765

Elk Grove Unified School District 5,021

Sacramento City Unified School District 5,000

San Juan Unified School District 4,700

d e m o g r a p h i c s t o p e m p l o y e r s

c i t y o v e r v i e w


700 Block of K Street

The Metropolitan

This block, near the arena, is in the middle of a dramatic transformation. Developers are currently partnering to build an urban hive of shops and restaurants, topped with 137 apartments. This will be a trailblazer for Sacramento’s aspirations of turning the core downtown into a true live-work community.

A high-rise-project full of condo/hotel towers that will be 41 stories, with 190 high-end hotel rooms, 190 condos and retail on the ground floor.

Cal State University-Sacramento

The Downtown Railyard

California State University-Sacramento is a public institution that was founded in 1947. Cal State University Sacramento has a total student population of 30,510 and 2,800 total staff. The university offer 151 different Bachelor’s degrees, 69 Master’s degrees, 28 types of teaching credentials, and 2 Doctoral degrees.

The university has a high magnitude economic impact on the Sacramento Valley region and the State of California is enormous. Annual spending related to Sacramento State is $607 million and generates a total impact of $816 million on the regional economy, and more than $1 billion on the statewide economy. This impact sustains nearly 9,000 jobs in the region and statewide economy.

A 224-acre railyard, a massive former industrial site has more potential to redefine downtown than any other site. Ultimately the plan is for 20,000 people to live there, which are more than Land Park and Curtis Park together. Also included in the Railyard project will be a 20,000 seat soccer stadium and a Kaiser Permanente Medical Campus with a 14-story hospital.

Downtown Sacramento is constantly evolving and the development projects are transforming downtown’s landscape. Over the past decade, more than $1 billion in public and private investment were made in Downtown.

R E C E N T D E V E L O P M E N T S




e x c l u s i v e ly l i s t e d b y :J O R DA N U T TA LV P & D i r e c t o r D i r e c t + 1 3 1 0 9 1 9 5 7 0 7M o b i l e + 1 8 1 8 2 3 1 4 6 7 0j o r d a n . u t t a l @ m a t t h e w s . c o mL i c . # 0 1 5 1 2 7 5 5

™

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Raley’s Food Source located at 3557 Bradshaw Rd, Sacramento, CA 95827 (“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 a g r e e m e n t

raley’s food source...raley’s started food source in 1995. raley’s operates 128 stores, 40 of...

Documents