apple valley, minnesota starbucks & sleep number

A PP LE VALLEY , M INNESOTA

Starbucks & Sleep Number

Asking Price: $5,119,208Cap Rate: 6.00%

BOSTON, MA | CHAPEL HILL, NC | CHARLOTTE, NC | JUPITER, FL | LOS ANGELES, CA | PITTSBURGH, PA | ATLANTICRETAIL.COM

Michael Zimmerman919.391.9901 [email protected]

Listed in conjunction with Minnesota real estate broker David B. Zacharia (license 40459837).

Representative Photo

ATLANT ICRETAIL .COM | 1STARBUCKS & SLEEP NUMBER

PRIME RETAIL LOCATIONThe Property is prominently positioned at the four-way signalized intersection of Cedar Avenue South (45,400 VPD) and 147th Street West, with Glenda Drive offering two more access points to the site. The Property is situated near multiple shopping centers that feature tenants like Burlington Coat Factory, Barnes & Noble, Target, Walmart, Kohl’s and Michael’s, and is within less than 10 miles of three major area attractions: the Minnesota Zoo, the University of Minnesota-UMore Park and the Mall of America.

STRONG, RECOGNIZED TENANTSStarbucks is an iconic coffee company and coffeehouse chain that owns and operates nearly 27,000 retail locations in 75 countries. In late July 2017, Starbucks reported increased consolidated net revenues of $5.7 billion and increased global store sales of four percent. Select Comfort Corporation—the parent Company of Sleep Number—has been transforming the specialty mattress industry for more than 30 years via its award-winning proprietary SleepIQ® technology. Today, there are 550 Sleep Number stores in 49 states, and Sleep Number has seen record operating cash flows during the first six months of 2017.

QUALITY, LONG-TERM INVESTMENTThe Property is 100 percent leased to Starbucks Corporation and Select Comfort Retail Corporation (DBA Sleep Number). These NN leases feature fixed 10 percent rental increases every five years and have varying options to renew.

$100,963AVG HH INCOME IN 5-MILE RADIUS

45,400VPD ON CEDAR AVENUE SOUTH

194,742EST POPULATION IN 5-MILE RADIUS

$5.24 BAVG HH SPENDING IN 5-MILE RADIUS




Starbucks Founded in 1971, Starbucks is undoubtedly the most iconic coffee company and coffeehouse chain in the United States—and the world. Today, Starbucks has a presence in 75 countries on six continents. As of 2017, the Company owns and operates nearly 27,000 retail locations that all offer high-quality coffee drinks, specialty drinks, pre-packaged food items and accessories to millions of customers each day.

Over its nearly 50-year history, the Company has experienced exceptional growth, opening an average of two new locations each day between the years of 1987 and 2007. Starbucks has won numerous awards and recognitions, including a 12-year run on Fortune’s list of the “Most Admired Companies in America” (2003–2015). Starbucks was also named by Fast Company in 2012 as one of the “World’s 50 Most Innovative Companies,” and was listed as one of the “World’s Most Ethical Companies” by Ethisphere for eight consecutive years (2007–2015).

In late July 2017, Starbucks reported record third quarter financial and operational results: consolidated net revenues rose by eight percent to $5.7 billion, and store sales in the Americas increased by five percent. Looking forward to the remaining of the 2017 fiscal year, the Company has announced several strategic actions to optimize its store portfolio, strengthen its core and further increase returns on capital.



Lease Summary

ADDRESS 7525 147th Street WestApple Valley, MN 55124

TENANT Starbucks Corporation

GUARANTOR Corporate

CREDIT RATING S&P: A

STOCK SYMBOL NYSE: SBX

MARKET Minneapolis-Saint Paul MSA

BUILDING +/- 2,005 SF (36.4% GLA)

LAND SIZE +/- 0.86 acres

YEAR BUILT 2017 (Under Construction)

COMMENCEMENT September 2017 (Estimate)

EXPIRATION September 2027 (Estimate)

LEASE TERM 10 Years

ANNUAL RENT $145,000.00 ($72.32/SF)

RENT INCREASES 10% Every 5 Years

OPTIONS 4 x 5-Year OptionsWith 10% Increases

LEASE TYPE NN

LANDLORD Roof, Structure, Parking Lot

ADDITIONAL RENT CAM, Insurance, Taxes

YEARS ANNUAL RENT INCREASE

1–5 (Base Term) $145,000.00 ($72.32/SF) None

6–10 (Base Term) $159,500.00 ($79.55/SF) 10%

11–15 (Option 1) $175,450.00 ($87.51/SF) 10%

16–20 (Option 3) $192,995.00 ($96.26/SF) 10%

21–25 (Option 4) $212,294.50 ($105.88/SF) 10%

26–30 (Option 5) $233,523.95 ($116.47/SF) 10%

Rent Schedule

ANNUAL RENT

CAM $1,503.75 ($0.75/SF)

Insurance $9,523.75 ($4.75/SF)

Taxes $7,518.75 ($3.75/SF)



Sleep Number The Select Comfort Corporation is the parent company of Sleep Number, and has been transforming the mattress industry for more than 30 years with the idea that “one size does not fit all” when it comes to sleep. What started out as a small kiosk in a shopping center in Roseville, Minnesota in 1992 has transformed into a thriving specialty mattress company with innovative products and a national footprint.

Sleep Number is the exclusive designer, manufacturer, retailer, and servicer of a complete line of Sleep Number beds and bedding that utilize SleepIQ® technology to deliver a higher quality sleep to consumers. The Company was ranked “Highest in Customer Satisfaction with Mattresses” by J.D. Power in 2015 and 2016, and has been recognized by Forbes as one of the “100 Most Trustworthy Companies in America” for two consecutive years.

Today, the Company operates 550 Sleep Number stores in 49 states that offer an interactive, educational experience in an award-winning store environment. Through a retail strategy that seamlessly integrates a digital and physical experience, the Company has seen record operating cash flows during the first six months of 2017 ($89 million). The Company also reported a net sales increase of three percent to $285 million in the second quarter of 2017, and the introduction of the Sleep Number 360™ smart bed has been met with strong demand from consumers.



Lease Summary

ADDRESS 7525 147th Street WestApple Valley, MN 55124

TENANT Select Comfort Retail Corp. (DBA Sleep Number)

GUARANTOR Corporate

STOCK SYMBOL NYSE: SCSS

MARKET Minneapolis-Saint Paul MSA

BUILDING +/- 3,506 SF (63.6% GLA)

LAND SIZE +/- 0.86 acres

YEAR BUILT 2017 (Under Construction)

COMMENCEMENT September 2017 (Estimate)

EXPIRATION September 2027 (Estimate)

LEASE TERM 10 Years

ANNUAL RENT $162,152.50 ($46.25/SF)

RENT INCREASES 10% Every 5 Years

OPTIONS 2 x 5-Year OptionsWith 10% Increases

LEASE TYPE NN

LANDLORD Roof, Structure, Parking Lot

ADDITIONAL RENT CAM, Insurance, Taxes

YEARS ANNUAL RENT INCREASE

1–5 (Base Term) $162,152.50 ($46.25/SF) None

6–10 (Base Term) $178,385.28 ($50.88/SF) 10%

11–15 (Option 1) $196,195.76 ($55.96/SF) 10%

16–20 (Option 3) $215,794.30 ($61.55/SF) 10%

Rent Schedule

ANNUAL RENT

CAM/Insurance $12,271.00 ($3.50/SF)

Taxes $13.147.50 ($3.75/SF)


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147TH STREET WEST

150TH STREET WEST


GALAXIE AVENUE14,000 VPD

CEDAR AVENUE SOUTH45,400 VPD

150TH STREET WEST32,000 VPD


GALAXIELIBRARY

ECUMEN CENTENNIAL

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CEDAR PARK ELEMENTARY

SCHOOL

APPLE VALLEY HIGH SCHOOL

APPLE VALLEYTRANSIT STATION

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KELLEY PARK

GALAXIELIBRARY

APPLE VALLEY COMMUNITY

CENTER

VALLEY MIDDLE SCHOOL

GALAXIE AVENUE14,000 VPD

CEDAR AVENUE SOUTH45,400 VPD



ECUMEN CENTENNIAL

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AREA ATTRACTIONS 1. Minnesota Zoo • 3.8 miles2. University of Minnesota at UMore Park • 7.4 miles3. Mall of America • 8.8 miles4. Edinborough Park • 13.0 miles5. Minneapolis-Saint Paul International Airport • 14.2 miles6. Southdale Center • 14.8 miles7. Stone Arch Bridge • 18.9 miles8. Minneapolis, Minnesota • 19.1 miles9. Walker Art Center • 19.4 miles10. Minnesota State Fair • 19.9 miles11. Saint Paul Downtown Airport • 20.2 miles12. University of Minnesota • 20.4 miles13. Saint Paul, Minnesota • 20.7 miles


ATLANT ICRETAIL .COM | 1 1STARBUCKS & SLEEP NUMBER

ESTABLISHED ECONOMIC REGIONSituated in northwestern Dakota County, the city of Apple Valley is considered a suburb of the Twin Cities of Minneapolis and Saint Paul, Minnesota. Apple Valley is a pro-business community of 50,000 residents that has an established economy and a well-educated workforce, along with access to a trade area of more than 400,000 within a 10-mile radius of the city’s Downtown center.


ONE OF THE BEST PLACES TO LIVE IN THE U.S.Apple Valley was recently named the 17th “Best Place to Live” in the United States by CNN/Money Magazine, and the city currently carries a “AAA” bond rating from both Moody’s and Standard & Poor’s. Apple Valley is home to the Minnesota Zoo, and is equidistant from the Downtown areas of Minneapolis and Saint Paul. The Mall of America—the largest shopping mall in the United States in terms of number of stores and total floor area—is a five-minute drive from Downtown Apple Valley, and is a major economic driver to the area.


CLOSE PROXIMITY TO TWIN CITIESThe Minneapolis-Saint Paul area is a major metropolitan center built around the Mississippi, Minnesota, and St. Croix rivers, and is often referred to as the “Twin Cities.” This region has a population of 3,866,768, and is home to all but one of Minnesota’s Fortune 500 company headquarters, which include Target, UnitedHealth Group, Best Buy, General Mills, Land O’Lakes, 3M and Ameriprise Financial.


THRIVING METROPOLITAN AREAThe Twin Cities’ economy is the 13th largest in the country and the second largest in the entire Midwestern region, and the area also ranks as the second largest medical device manufacturer and the fourth biggest U.S. banking center. The Twin Cities contribute 63.8 percent of the gross state product of Minnesota ($199.6 billion GMP), and its per capita personal income ranks 13th in the country.


RANKED AS TOP TECH CITYMinnesota was named the “Top Tech City” in the United States in 2005 by Popular Science, and the Twin Cities was ranked as the country’s second best city in a 2006 Kiplinger poll of “Smart Places to Live.” Saint Paul is the state capital of Minnesota and is the second most populous city in the state. Regionally, Saint Paul is known for the Xcel Energy Center and the Science Museum of Minnesota.


2017 DEMOGRAPHICS 1 MILE 3 MILES 5 MILES

Estimated Population 10,970 87,263 194,742

2022 Projected Population 11,238 89,463 199,887

2010 Census Population 9,332 83,246 185,907

2000 Census Population 9,114 77,088 169,440

Projected Annual Growth (2017–2022) 0.5% 0.5% 0.5%

Historical Annual Growth (2000–2017) 1.2% 0.8% 0.9%

Estimated Households 4,444 32,799 73,892

2022 Projected Households 4,670 34,514 77,889

2010 Census Households 3,754 30,847 69,532

2000 Census Households 3,498 27,102 60,908

Projected Annual Growth (2017–2022) 1.0% 1.0% 1.1%

Historical Annual Growth (2000–2017) 1.6% 1.2% 1.3%

Est. HH Income $200,000+ 4.6% 9.7% 8.8%

Est. HH Income $150,000-$199,999 8.8% 11.5% 11.2%

Est. HH Income $100,000–$149,999 16.1% 22.5% 21.5%

Est. HH Income $75,000-$99,999 17.3% 17.3% 16.4%

Est. HH Income $50,000–$74,999 20.0% 16.5% 17.3%

Est. HH Income $35,000–$49,999 13.7% 8.9% 9.5%

Est. HH Income $25,000–$34,999 6.1% 5.4% 5.9%

Est. HH Income $15,000–$24,999 6.0% 5.0% 5.3%

Est. HH Income Under $15,000 7.4% 3.1% 4.0%

Est. Average Household Income $81,805 $105,749 $100,963

Est. Median Household Income $73,921 $93,105 $90,302

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2017 DEMOGRAPHICS 1 MILE 3 MILES 5 MILES

Est. White 80.1% 82.4% 81.1%

Est. Black 9.2% 6.5% 7.4%

Est. Asian or Pacific Islander

5.5% 5.7% 5.8%

Est. American Indian or Alaska Native

0.4% 0.4% 0.3%

Est. Other Races 4.8% 5.1% 5.3%

Est. HispanicPopulation

544 4,448 10,956

Est. HispanicPopulation

5.0% 5.1% 5.6%

2022 ProjectedHispanic Population

5.5% 5.7% 6.3%

2010 HispanicPopulation

4.5% 4.6% 5.0%

2017 Area Demographics


Confidentiality & DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Atlantic Retail Investment Services and should not be made available to any other person or entity without the written consent of Atlantic Retail Investment Services. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Atlantic Retail Investment Services has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Atlantic Retail Investment Services has not verified, and will not verify, any of the information contained herein, nor has Atlantic Retail Investment Services conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

A PP LE VALLEY , M INNESOTA

Starbucks & Sleep Number

Asking Price: $5,119,208Cap Rate: 6.00%

BOSTON, MA | CHAPEL HILL, NC | CHARLOTTE, NC | JUPITER, FL | LOS ANGELES, CA | PITTSBURGH, PA | ATLANTICRETAIL.COM

Michael Zimmerman919.391.9901 [email protected]

Listed in conjunction with Minnesota real estate broker David B. Zacharia (license 40459837).


apple valley, minnesota starbucks & sleep number

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