dollar general - stan johnson...

Dollar General 2828 Central Avenue | Lake Station, IN 46405

Premier Investment Grade Retail Asset (NYSE: DG) | Chicago MSA Location

Updated Block-Base Construction | Ideal Dollar-Store Demographics | Highly Visible, Easily Accessible Location

Subject Property

Confidential Disclaimer

Stan Johnson Company303 East Wacker Drive | Suite 1111 Chicago, IL 60601 P: +1 312.240.0127 | F: +1 312.240.0158stanjohnsonco.com

Brandon Duff Regional [email protected] P: +1 312.240.0162

Brad Feller Senior [email protected] P: +1 312.240.0194 IN Lic # RB14036515

Isaiah Harf Associate [email protected] P: +1 312.777.2437

Offered Exclusively by

This Confidential Memorandum has been prepared by Stan Johnson Company (“SJC”) and is being furnished to you solely for the purpose of your review of the commercial property located at 2828 Central Avenue, Lake Station, IN 46405 (the “Property”). The material contained in this Offering Memorandum shall be used for the purposes of evaluating the Property for acquisition and shall not be used for any purpose or made available to any other person without the express written consent of Stan Johnson Company (“Broker”).

By accepting the Confidential Memorandum, you acknowledge and agree that: (1) all of the information contained herein and any other information you will be receiving in connection with this transaction, whether oral, written or in any other form (collectively, the “Materials”), is confidential; (2) you will not reproduce the Confidential Memorandum in whole or in part; (3) if you do not wish to pursue this matter, you will return this Confidential Memorandum to SJC as soon as practicable together with all other materials relating to the Property which you may have received from SJC; and (4) any proposed actions by you which are inconsistent in any manner with the foregoing agreements will require the prior written consent of SJC.

This Confidential Memorandum has been prepared by SJC, based upon certain information pertaining to the Property and any information obtained from SJC to assist interested parties in making their own evaluation of the Property is offered on a no representation or warranty provision other than customary warranties of title and is sold on an “as-is, where-is” basis and with all faults. The material and transaction does not purport to be all inclusive. This Confidential Memorandum contains descriptive materials, financial information and other data compiled for the convenience of parties interested in the Property. The Materials are being delivered by SJC to prospective investors with the understanding that it is not all inclusive and that it is qualified in its entirety by independent investigation by prospective investors of those matters which they deem appropriate in evaluating this offering without reliance upon SJC, the Broker or any of their respective affiliates or any of the information set out in the Materials. Neither SJC, the Broker, nor any of their respective affiliates have independently verified any of the information contained herein or in any of the Materials, and no representations or warranties as to the accuracy or completeness thereof or of any other kind whatsoever are made or intended and none should be inferred.

SJC, for itself and its affiliates of the Property, expressly disclaim any and all liability for statements or representations, express or implied, contained herein or for omissions from the Materials or for any other written, oral or other format of communication transmitted to a prospective investor in the course of its evaluation of the proposed transaction. 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. The terms and conditions described herein are subject to change without notice.

This Confidential Memorandum does not constitute an offer to accept any investment proposal but is merely a solicitation of interest with respect to the investment described herein. The Confidential Memorandum does not constitute an offer of security. The investment described herein may be financed or withdrawn from the market, without prior notice. By accepting this Confidential Memorandum you agree to release SJC and hold it harmless from any kind of claim, expense, or liability arising out of your discovery or purchase of the Property. SJC reserves the right to request the return of the Materials at any time. Ownership of the Property reserves the right to negotiate with one or more prospective investors at any time.

Table of Contents

Section 1 - Investment Summary

The Offering .......................................................................................................................................................5

Investment Highlights ..................................................................................................................................6

Pricing and Property Overview .............................................................................................................7

Lease Abstract & Rent Schedule ..........................................................................................................8

Site Plan ................................................................................................................................................................9

Tenant Overview ...........................................................................................................................................10

Section 2 - Location Overview

Location Overview ........................................................................................................................................12

Strip Map ........................................................................................................................................................... 13

Subject Property Photos ......................................................................................................................... 14

Surrounding Retail ........................................................................................................................................15

Demographics ................................................................................................................................................ 16

Investment SummarySection One

NW

Subject Property

Section 1 • Dollar General • Lake Station, IN • 5

The OfferingStan Johnson Company is pleased to exclusively offer for sale to qualified investors, the opportunity to purchase a fee-simple interest in the Dollar General property located at 2828 Central Avenue in Lake Station, IN (the “Property”). The Property is located on busy Central Avenue, Lake Station’s main artery, and is approximately 30 miles from Chicago-Proper and dense Chicago Neighborhoods.

Built in 2010, the Property is 9,014 square feet on 1.27 acres with 30 parking spaces. Dollar General is currently operating under a 15 year lease with nine years of base lease term remaining, immediately followed by four, five-year option periods. There is a three-percent (3.0%) rental escalation beginning in year 11 of the base lease term, which occurs in less than four years, as well as ten-percent (10.0%) rental escalations at the beginning of each renewal option period. Additionally, the lease is NNN, with landlord responsibilities limited to capital expenditures for the roof, structure, and parking lot (fixed reimbursement).

Positioned on Central Avenue and near multiple modes of transportation, including I-94, I-65, and I-80/90, the Property benefits from combined daily traffic counts of 144,561 VPD. The asset is surrounded by dense residential neighborhoods and ideal demographics for dollar stores, with population in excess of 49,637 and average household income of approximately $52,402 within three miles.

Dollar General’s lease is corporately guaranteed by Dollar General Corporation, a publicly traded entity on the New York Stock Exchange under ticker symbol “DG.” Dollar General currently has reported total revenues of $20.37 billion, a net income of $1.17 billion, and a net worth in excess of $5.38 billion. Dollar General currently holds a Standard & Poor’s credit rating of BBB/Stable.

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Subject Property


Investment Highlights

Subject Property Photos

9 Years of Base Lease Term Remaining

Dollar General is operating under a 15 year base lease term which expires

March 31, 2025, followed by four, five-year renewal options

Rental Escalations

Lease features a three-percent (3.0%) rental increase beginning in year 11,

which occurs in less than four years, as well as ten-percent (10.0%) rental

escalations at the beginning of each renewal option period

Corporate Guarantee

Lease guaranteed by Dollar General Corporation, an S&P BBB/Stable rated

corporation with total revenues of $20.37 billion, a net income of $1.17 billion,

and a net worth in excess of $5.38 billion

NNN Lease w/Limited LL Responsibility

Lease is NNN in nature, with Landlord responsibilities limited to capital

expenses to roof, structure and parking lot (fixed reimbursement)

Chicago MSA Acquisition Opportunity

Property is located approximately 30 miles from Chicago-Proper and dense

Chicago Neighborhoods, offering excellent exposure

Excellent Access & Transportation

Property near multiple modes of transportation, including I-90, I-65, and

I-80/94 with combined daily traffic counts of 144,561 VPD

Ideal Dollar-Store Demographics

The Property benefits from a population in excess of 49,637 with average

household income of approximately $52,402 within a 3-mile radius


Pricing Overview

Property Overview

Dollar General

Offering Price: $1,169,729

Offering Cap Rate: 7.00%

Annual Rent: $81,881

Tenant: Dolgencorp, LLC (d/b/a Dollar General)

Guarantor:Dollar General Corporation (S&P: BBB/Stable)

Property Type: Dollar Store

2828 Central Avenue | Lake Station, IN 46405

Total Building Size (SF): 9,014 SF

Lot Size (Acres): 1.27 Acres

Year Built: 2010

Property ID: 45-09-17-256-017.000-021

Encumbrances: None, Delivered Free & Clear

Parking: 30+ Spaces

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Years Dates Annual Rent

Monthly Rent Rent PSF Increase

1-10 3/29/2010 – 3/31/2020 $81,881 $6,823.42 $9.08

11-15 4/1/2020 – 3/31/2025 $84,337 $7,028.08 $9.36 3.0%

16-20 (Option 1) 4/1/2025 – 3/31/2030 $92,771 $7,730.92 $10.29 10.0%

21-25 (Option 2) 4/1/2030 – 3/31/2035 $102,048 $8,504.00 $11.32 10.0%

26-30 (Option 3) 4/1/2035 – 3/31/2040 $112,253 $9,354.42 $12.45 10.0%

31-35 (Option 4) 4/1/2040 – 3/31/2045 $123,478 $10,289.83 $13.70 10.0%

Rent Schedule

Tenant: Dolgencorp, LLC (d/b/a Dollar General)

Lease Guarantor: Dollar General Corporation (S&P: BBB/Stable)

Address: 2828 Central Avenue, Lake Station, IN 46405

Building Size (SF): 9,014 SF

Lot Size (Acres): 1.27 acres

Year Built: 2010

Lease/Rent Commencement: March 29, 2010

Lease/Rent Expiration: March 31, 2025

Base Lease Term: 15 years

Base Lease Term Remaining: 9 years

Annual Base Rent: $81,881

Annual Base Rent PSF: $9.08 PSF

Rental Increase: 3% beginning year 11

Renewal Options: 4, 5-year renewal options

Renewal Notice: 6 months

Renewal Option Increases: 10% at the beginning of each option

Lease Type: NNN

Landlord Responsibilities: Roof, structure, parking lot (fixed reimbursement)

ROFR: None

Parking: +/- 30 spaces

Property ID: 45-09-17-256-017.000-021

Ownership Interest: Fee-simple

Encumbrances: None, delivered free & clear

Lease Abstract

Subject Property


Site Plan

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APPROX PROPERTY /I AND/OR LEASE LINE___..........

DOLLAR GENERAL

9,100 SFT

18'x59.5' CONCRETE PAD 18'x18' (MIN.) DUMPSTER PAD (PROVIDE 18'x12' DUMPSTER ENCLOSURE IF REQUIRED) AREA FOR (2) STD DUMPSTERS

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Dollar General is a U.S. chain of variety stores headquartered in Goodlettsville, Tennessee. Dollar General was founded in 1939 by Cal Turner in Scottsville, Kentucky as J.L. Turner & Son, Inc. In 1968 the business changed its name to Dollar General Corporation. In 2007 the company was acquired by the private equity firm Kohlberg Kravis Roberts & Co. (KKR), which took the company public in 2009.

Dollar General offers both name-brand and generic merchandise — including off-brand goods and closeouts of name-brand items — in the same store, often on the same shelf. Although it has the word “dollar” in the name, Dollar General is not a dollar store. Many of its offerings are priced at more than one dollar. However, goods are usually sold at set price points of penny items and up to the range of 50 to 60 dollars.

Dollar General has thrived during the economic recovery of the last several years and their stock has increased 16.37% in the past 12 months. They have reported a twenty-sixth consecutive year of same-store sales growth in FY 2015 and overall sales grew by 7.7%.

As of February 26, 2016, it operated 12,575 stores located in 43 states. Citing Dollar General’s positive operating momentum, healthy sales and expected cash flow growth, the company currently holds an investment grade rating of BBB/ Stable with Standard & Poor’s.

For Fiscal Year 2015, ended January 29, 2016, Dollar General Corporation (NYSE: DG) reported annual total revenues of $20.37 billion, a net income of $1.17 billion, and a net worth in excess of $5.38 billion.

Tenant Overview

Tenant Credit Summary

Company: Dollar General Corp.Number of Locations: 12,575 Credit Rating: S&P: BBB/StableStock Symbol: DGExchange: NYSEFY 2015 Total Revenue: $20.37 billionFY 2015 Net Income: $1.17 billionFY 2015 Net Worth: $5.38 billionTenant Business Discount, Variety storeFounded: 1939Headquartered Goodlettsville, TennesseeWebsite: www.dg.com

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Location OverviewSection Two

Subject Property


Locally known as the crossroads of America due to the easy access to Interstate I-80/94, the Indiana Toll Road and Lake Michigan, Lake Station is a residential community with a population of approximately 14,000 people. The city is focusing on its positives and building the future. They are making the kinds of infrastructure and revitalization investments that will help future development. Water and sewer line upgrades are in the works and many road projects are coming to fruition. New residential housing located on Old Hobart Road has begun with Phase I which will include lots 73 to 146. The development will provide housing for residents and newcomers.

Some major employers are the Sun Engineering Company and Pro-Chem-Co, Inc. However, the area has a strong railroad industry. Lake Station’s busiest rail line is CSX Transportation’s Porter Subdivision. The Chicago, Fort Wayne and Eastern Railroad also runs through Lake Station, crossing at Liverpool Road. Lake Station is five (5) miles east of Gary, IN and is approximately thirty (30) miles from Chicago’s South Side.

Location Overview

Lake Station, IN

Downtown Lake Station, IN


I-90 INDIANA EAST-WEST TOLL RD (32,883 VPD)

EAST DUNES HWY (20,177 VPD)

CENTRAL AVE (10,379 VPD)

I-94/I-80 (82,826 VPD)

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Subject Property Photos


Surrounding Retail Photos


2828 Central Avenue | Lake Station, IN 46405 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.

Population

2015 Population 3,984 49,637 104,827

2020 Population 4,026 49,498 104,227

2000-2010 Annual Rate -0.57% -0.68% -0.72%

2010-2015 Annual Rate 0.26% -0.20% -0.34%

2015-2020 Annual Rate 0.21% -0.06% -0.11%

2015 Median Age 38.0 37.6 37.9

Households

2015 Total Households 1,479 19,280 40,832

2020 Total Households 1,497 19,273 40,670

2000-2010 Annual Rate -0.32% -0.55% -0.52%

2010-2015 Annual Rate 0.30% -0.11% -0.26%

2015-2020 Annual Rate 0.24% -0.01% -0.08%

2015 Average Household Income $51,949 $52,402 $53,185

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Demographics

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 Company303 East Wacker Drive | Suite 1111Chicago, IL 60601P: +1 312.240.0127 | F: +1 312.240.0158

stanjohnsonco.com

Brandon DuffRegional [email protected]+1 312.240.0162

Brad FellerSenior [email protected]+1 312.240.0194 IN Lic #RB14036515

Isaiah HarfAssociate [email protected] +1 312.777.2437

Offered Exclusively by

dollar general - stan johnson...

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