golden corral sale- leaseback 5679 west northern avenue ... w northern ave... · services isa...

G o l d e n C o r r a l S a l e - L e a s e b a c k5 6 7 9 W e s t N o r t h e r n A v e n u eG l e n d a l e , A Z 8 5 0 3 1

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OFFERING MEMORANDUM

Marcus & Millichap hereby advises all prospectivepurchasers of Net Leased property as follows:

The information contained in this Marketing Brochure hasbeen obtained from sources we believe to be reliable.However, Marcus & Millichap has not and will not verifyany of this information, nor has Marcus & Millichapconducted any investigation regarding these matters.Marcus & Millichap makes no guarantee, warranty orrepresentation whatsoever about the accuracy orcompleteness of any information provided.

As the Buyer of a net leased property, it is the Buyer’sresponsibility to independently confirm the accuracy andcompleteness of all material information beforecompleting any purchase. This Marketing Brochure is nota substitute for your thorough due diligence investigationof this investment opportunity. Marcus & Millichapexpressly denies any obligation to conduct a due diligenceexamination of this Property for Buyer.

Any projections, opinions, assumptions or estimates usedin this Marketing Brochure are for example only and donot represent the current or future performance of thisproperty. The value of a net leased property to youdepends on factors that should be evaluated by you andyour tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and constructionadvisors should conduct a careful, independentinvestigation of any net leased property to determine toyour satisfaction with the suitability of the property foryour needs.

Like all real estate investments, this investment carriessignificant risks. Buyer and Buyer’s legal and financialadvisors must request and carefully review all legal andfinancial documents related to the property and tenant.While the tenant’s past performance at this or otherlocations is an important consideration, it is not aguarantee of future success. Similarly, the lease rate for

some properties, including newly-constructed facilities ornewly-acquired locations, may be set based on a tenant’sprojected sales with little or no record of actualperformance, or comparable rents for the area. Returnsare not guaranteed; the tenant and any guarantors mayfail to pay the lease rent or property taxes, or may fail tocomply with other material terms of the lease; cash flowmay be interrupted in part or in whole due to market,economic, environmental or other conditions. Regardlessof tenant history and lease guarantees, Buyer isresponsible for conducting his/her own investigation of allmatters affecting the intrinsic value of the property andthe value of any long-term lease, including the likelihoodof locating a replacement tenant if the current tenantshould default or abandon the property, and the leaseterms that Buyer may be able to negotiate with apotential replacement tenant considering the location ofthe property, and Buyer’s legal ability to make alternateuse of the property.

By accepting this Marketing Brochure you agree to releaseMarcus & Millichap Real Estate Investment Services andhold it harmless from any kind of claim, cost, expense, orliability arising out of your investigation and/or purchaseof this net leased property.

CONFIDENTIALITY AND DISCLAIMER

The information contained in the following MarketingBrochure is proprietary and strictly confidential. It isintended to be reviewed only by the party receiving itfrom Marcus & Millichap and should not be made availableto any other person or entity without the written consentof Marcus & Millichap. This Marketing Brochure has beenprepared to provide summary, unverified information toprospective purchasers, and to establish only a preliminarylevel of interest in the subject property. The informationcontained herein is not a substitute for a thorough duediligence investigation. Marcus & Millichap has not madeany investigation, and makes no warranty orrepresentation, with respect to the income or expenses for

the subject property, the future projected financialperformance of the property, the size and square footageof the property and improvements, the presence orabsence of contaminating substances, PCB’s or asbestos,the compliance with State and Federal regulations, thephysical condition of the improvements thereon, or thefinancial condition or business prospects of any tenant, orany tenant’s plans or intentions to continue its occupancyof the subject property. The information contained in thisMarketing Brochure has been obtained from sources webelieve to be reliable; however, Marcus & Millichap hasnot verified, and will not verify, any of the informationcontained herein, nor has Marcus & Millichap conductedany investigation regarding these matters and makes nowarranty or representation whatsoever regarding theaccuracy or completeness of the information provided. Allpotential buyers must take appropriate measures to verifyall of the information set forth herein.

NON-ENDORSEMENT NOTICE

Marcus & Millichap Real Estate Investment Services, Inc.(“M&M”) is not affiliated with, sponsored by, or endorsedby any commercial tenant or lessee identified in thismarketing package. The presence of any corporation’slogo or name is not intended to indicate or implyaffiliation with, or sponsorship or endorsement by, saidcorporation of M&M, its affiliates or subsidiaries, or anyagent, product, service, or commercial listing of M&M,and is solely included for the purpose of providing tenantlessee information about this listing to prospectivecustomers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENTONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAPAGENT FOR MORE DETAILS.

CONFIDENTIALITY AND DISCLAIMER

Table of Contents

Investment Overview

Investment Overview 5

Tenant Overview 6

Pricing and Financial Analysis

Financial Overview 8

Property Overview

Location Overview 10

Aerial Photo 11

Regional Map 12

State Map 13

Demographics

Demographic Report 15-18

I N V E S T M E N T O V E R V I E W

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify theinformation and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate InvestmentServices is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap

Long-Term Triple-Net (NNN) Sale Leaseback

At closing, the Tenant will execute a new 20-year lease, with zero landlordobligations.

Attractive Rental Increases & Renewal Options

This Golden Corral sale-leaseback will call for 1.75 percent rental increasesannually starting year 6, including through the four, five year option periods.

Strong Franchisee With Long-Term Operating History

GC Buffet & Associates has been in the Golden Corral system for over 11years and has consistently ranked within the top five franchisee’s in thewhole Golden Corral system.

Property Name Golden Corral

Location5679 West Northern Avenue

Glendale , AZ 85061

Price $4,402,117

CAP Rate 6.00%

Net Operating Income $264,127

Price PSF $363.72

Building Size 12,103 SF

Lot Size 1.20 Acres

Year Built 2006

Executive Summary | Investment Highlights

Marcus & Millichap is pleased to present the exclusive listing forGolden Corral located at 5679 West Northern Avenue in Glendale,Arizona. The property is roughly 12,103 square feet and is situated onapproximately 1.20 acres of land.

The subject Golden Corral will be subject to a 20-year triple-net(NNN), with GC Buffet & Associates, Inc. The lease will commenceupon close of escrow and the base annual rent will be $264,127. Therent will increase 1.75 percent annually starting year six , includingthrough the four, five year option periods.

GC Buffet & Associates is currently a nine unit franchisee with twoadditional locations currently being developed. The tenant has beenin the Golden Corral system for over 11 years and has consistentlyoutperformed Golden Corral Corporate on an average store salesbasis since inception. GC Buffet & Associates was recognized as thenumber one franchisee in 2013 and has consistently remained in thetop 5.

Investment Overview

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Executive Summary

Tenant Overview


About The Tenant:

Golden Corral is an American family-style restaurant chain that features a

large buffet and grill offering numerous hot and cold items, a carving station

and their Brass Bell Bakery. Each location serves a daily buffet lunch and

dinner and a weekend breakfast buffet. In 1971 James Maynard and William

Carl conceived the idea that became Golden Corral and opened its first

location in 1973. Golden Corral is a privately held company headquartered in

Raleigh, North Carolina with nearly 500 locations across 40 states. Of the

nearly 500 locations, over 100 sites are company-owned and the others

franchised. Gross sales for the company are over $1.5 billion. The success of

Golden Corral over the last 35 years can be attributed to two main factors,

strategic locations for each of its restaurants, and fresh ingredients. The

majority of the locations are constructed away from direct competition,

focusing on small-town America. To stay ahead of the competition Golden

Corral also focuses on freshness to separate it from other budget

steakhouses. From the start, each Golden Corral cuts its own USDA Choice

beef, offering a variety of steaks and does not charge much more than its

competitors charge for imported frozen steaks.

In addition to the buffet services, Golden Corral offers other

services such as To-Go, catering, and banquet services. The To-

Go service allows customers to pack anything they want into a

To-Go container and then pay for it by the pound. Many

locations also offer reserved parking spaces near the front of

the restaurant for those using the To-Go service. Some locations

provide full and part service catering and most locations have

banquet facilities which can be reserved free of charge for

parties and meetings.

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P R I C I N G A N D F I N A N C I A L A N A LY S I S

Property Name Golden Corral Sale-Leaseback

Property Type Net-Leased Restaurant

Ownership Private

Tenant GC Buffet & Associates, Inc.

Guarantor Franchisee

Lease Term 20 Years

Lease Commencement Close of Escrow

Lease Expiration 20 Years from Close of Escrow

Lease Type Triple-Net (NNN)

Roof & Structure Tenant Responsible

Options to Renew Four, Five Year Options

Rental Increases 1.75 Percent Annually Starting Year Six

Annualized Operating Data

Financial Analysis

Financial Offering Summary


Rent Increases Annual Rent Monthly Rent

Year 1 - 5 $264,127 $22,010.58

Year 6 $268,749 $22,395.77

Year 7 $273,452 $22,787.69

Year 8 $278,238 $23,186.48

Year 9 $283,107 $23,592.24

Year 10 $288,061 $24,005.11

Year 11 $293,102 $24,425.20

Year 12 $298,232 $24,852.64

Year 13 $303,451 $25,287.56

Year 14 $308,761 $25,730.09

Year 15 $314,164 $26,180.37

Year 16 $319,662 $26,638.52

Year 17 $325,256 $27,104.70

Year 18 $330,948 $27,579.03

Year 19 $336,740 $28,061.66

Year 20 $342,633 $28,552.74

Annual Rent $264,127

CAP Rate 6.00%

Price $4,402,117

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P R O P E R T Y O V E R V I E W

LOCATION OVERVIEW

This Golden Corral is located at 5079 West Northern Avenue inGlendale, Arizona. Glendale is home to two major sporting venues,University of Phoenix Stadium, home of the Arizona Cardinals andGila River Arena, home of the Arizona Coyotes.

There is a population of over 174,903 within a three-mile radius ofthe property and approximately 472,556 within five miles. GoldenCorral is situated on West Northern Avenue with traffic Counts ofapproximately 34,057 vehicles a day, while Highway 60 adds anaverage daily traffic count of 32,273 vehicles to the site dailyproviding a consistent flow of traffic to this Golden Corral location.

The subject Property is well-positioned on a highly activecommercial corridor that harbors a great deal of both local andnational retailers. Retail includes: Walmart, Loews, Walgreens,Chipotle, PetSmart, Subway, Dominoes and many more.

The subject property is roughly nine miles from Phoenix, Arizona.Phoenix is the capital and largest city in the state of Arizona.Phoenix is the most populous state capital in the United States, aswell as the sixth most populous city nationwide. The populationgrowth rate of Phoenix metro area has been nearly 4% per year forthe past 40 years.

Golden Corral is Located in Glendale, Arizona

Population of Over 174,903 Within 3 Miles | Strong Daily Traffic Counts of 34,057 Vehicles Per Day

Located In a Dense Retail Corridor

Nine Miles From Phoenix, Arizona

Property Overview

Location Highlights | Property Description


ADTC 32,273

ADTC 34,057

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Aerial Photo | Surrounding Area


W Northern Avenue

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Property Overview

Regional Map

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify theinformation and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate InvestmentServices is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap 12

Property Overview

State Map

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify theinformation and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate InvestmentServices is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap 13

M A R K E T O V E R V I E W A N D D E M O G R A P H I C S

Market Overview

Phoenix, Arizona


The Phoenix metro is hemmed in by mountains to the north and east.American Indian reservations to the east and south limit development inthose directions, leaving the southeastern corridor and western half ofthe metro as the primary growth areas. The majority of land is flat orsmoothly sloping, with a clay-loam base, making developmentrelatively easy. The area’s climate is arid with hot summers and mildwinters.

Employment Growth

Job increases will average more than 2 percent annually over the next fiveyears.

Large high-tech Manufacturing Base

Intel Corp., Motorola Inc., Honeywell and others have large Phoenixoperations.

Active Tourism Industry

Warm winters and amenities including golf courses and resorts attractvacationers.

Geography Market Highlights

The Phoenix metro consists of Maricopa and Pinal counties, and includes over30 incorporated and more than 30 unincorporated towns and cities. Since2000, the population in the metro increased by more than 36 percent. Thelargest city is Phoenix, which encompasses about 520 square miles, is thecapital city and boasts a population of more than 1.5 million.

Metro

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Market Overview

Phoenix, Arizona


During the past decade, substantial investments were made to the metro’s freewaysystem to accommodate such as Loops 101 and 202 provide easy travel around theValley. Interstates are a significant factor for many distribution and transportationoperations in the metro. Interstate 10 is a major trucking route directly connecting thearea to Los Angeles and the Southeast. The Burlington Northern Santa Fe and UnionPacific railroads provide freight rail service to the Valley.

The newest transportation system is the $1.4 billion METRO light rail. The 20-milestarter segment travels through Phoenix, Tempe and into Mesa. Future extensions areplanned for these cities and Glendale. METRO has generated retail, residential andoffice developments along the route. The PHX Sky Train carries passengers fromMETRO to Phoenix Sky Harbor International Airport.

Airports

Phoenix Sky Harbor International Airport Phoenix – Mesa Gateway Airport 11 Smaller Airports

Major Roadways Interstates 10 and 17 Loop 101, Loop 202, U.S. 60, SR-51, SR-143

Rail

Freight – Union Pacific, BNSF Commuter – Metro Light Rail

Phoenix Is:

115 miles from Tucson 350 miles from San Diego 370 miles from Los Angeles 1,060 miles from Dallas

Infrastructure Largest Cities in Metro by Population

As one of the primary beneficiaries of the massive shift in the U.S. population from north to south,Phoenix has had little difficulty finding workers; the challenge, though, is attracting high-paying jobs.Phoenix claims five Fortune 500 headquarters, including Freeport-McMoRan, Republic Services, InsightEnterprises, Avnet and PetSmart. Construction, high-tech manufacturing, healthcare and tourismdominate the Phoenix economy. The local economy has strengthened since the recession, with retail salesprojected above 5 percent this year and hotel occupancy levels rising.

High-tech manufacturing has been a powerful driver in the local economy for two decades. The region’srelatively low cost of doing business has encouraged several manufacturers to remain and expand in thearea, while attracting others.

Healthcare is also a critical industry to the Phoenix economy, with around 20 hospitals and the UA medicalschool located in the metro. Also, a new cancer center is underway at the Mayo Clinic.

Although the economic downturn slowed retail sales and construction, the weaker dollar increased theattractiveness of the Valley to foreign tourists and investors. Home sales to international buyers remainstrong and new home starts are rising.

Economy

Phoenix 1,517,200

Mesa 463,900

Chandler 250,800

Glendale 237,400

Scottsdale 230,300

Gilbert 223,900

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Market Overview


Phoenix has evolved from a tourism- and resource-based market to a majorcenter of high-tech manufacturing and a regional base for customer service,distribution and professional services. While the metro has its share of largeemployers, small employers provide the majority of jobs. The resultingdiversification reduces workforce volatility and encourages innovation.

The trade, transportation and utilities sector claims the largest share ofemployees at 20 percent. Sky Harbor Airport accounts for a large portion ofthese workers as does US Airways, which is based locally. The professional andbusiness services sector employs 17 percent of the workforce.

Education and healthcare also have major presences in the Valley, with 15percent of jobs. Phoenix is home to Banner Health, one of the largest nonprofithealthcare systems in the country, with 20 hospitals, including eight inPhoenix. In addition, the Mayo Clinic has a medical research center inScottsdale. Education employers include Arizona State University and ApolloGroup, a for-profit education company.

With the state capital located in Phoenix and Luke Air Force Base in the WestValley, 12 percent of employment is in government. Employment in this sectorwill increase 1.7 percent annually over the coming five years.

Employers

Phoenix offers a lower cost of living than other metros its size, a moderateclimate, and a wide variety of recreational and cultural activities.

The Phoenix region boasts almost 300 days of sunshine annually, lowhumidity and mild winters. In addition to hiking, camping and boating,sports enthusiasts can enjoy one of the most complete lineups of major-league teams found in any city, including teams in all four major sports. TheCactus League holds spring training baseball throughout the Valley, and thearea has numerous golf courses and tennis courts.

Phoenix is home to the world-famous Heard Museum, Frank Lloyd Wright’sTaliesin West, the Phoenix Art Museum and the Musical InstrumentMuseum, in addition to many other museums. Music venues includePhoenix Symphony Hall, which houses the Phoenix Symphony and ArizonaOpera; the Orpheum Theatre; and the Herberger Theatre Center. For thosewho enjoy being outdoors, the Phoenix Zoo and Desert Botanical Gardensare not far from the city center.

The Valley offers many institutions of higher learning, including ArizonaState University, the University of Phoenix, Thunderbird School of GlobalManagement, and other private universities and community colleges.

Quality of Life

Wal-Mart Intel Corp.

Banner Health Honeywell Aerospace

JPMorgan Chase & Co. Apollo Group

Arizona State University US Airways Group

Wells Fargo Bank of America

Major Employers

Phoenix, Arizona

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PopulationIn 2014, the population in your selected geography is 472,555. The population haschanged by 5.63% since 2000. It is estimated that the population in your area will be479,813 five years from now, which represents a change of 1.53% from the currentyear. The current population is 49.55% male and 50.44% female. The median age ofthe population in your area is 31.1, compare this to the Entire US average which is37.3. The population density in your area is 6,016.51 people per square mile.

HouseholdsThere are currently 156,229 households in your selected geography. The number ofhouseholds has changed by 2.39% since 2000. It is estimated that the number ofhouseholds in your area will be 159,114 five years from now, which represents achange of 1.84% from the current year. The average household size in your area is3.00 persons.

IncomeIn 2014, the median household income for your selected geography is $41,767,compare this to the Entire US average which is currently $51,972. The medianhousehold income for your area has changed by 6.51% since 2000. It is estimated thatthe median household income in your area will be $46,597 five years from now, whichrepresents a change of 11.56% from the current year. The current year per capitaincome in your area is $18,142, compare this to the Entire US average, which is$28,599. The current year average household income in your area is $54,590,compare this to the Entire US average which is $74,533.

Race & EthnicityThe current year racial makeup of your selected area is as follows: 60.92% White,6.45% Black, 0.19% Native American and 3.36% Asian/Pacific Islander. Comparethese to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% NativeAmerican and 5.02% Asian/Pacific Islander.

EmploymentIn 2014, there are 99,300 employees in your selected area, this is also known as thedaytime population. The 2000 Census revealed that 55.71% of employees areemployed in white-collar occupations in this geography, and 44.32% are employed inblue-collar occupations. In 2014, unemployment in this area is 8.51%. In 2000, theaverage time traveled to work was 28.7 minutes.

Demographics

Demographic Summary Report


1 Mile 3 Miles 5 Miles

2014 Population 18,501 174,903 472,5562019 Population 19,103 177,737 479,814

2014 Households 7,039 59,822 156,2302019 Households 7,287 60,856 159,114

2014 Average Household Size 5.57 2.9 3.0

2014 Daytime Population 3,760 31,517 99,301

2014 Owner Occupied Housing Units 40.62% 52.83% 52.94%2014 Renter Occupied Housing Units 59.27% 47.54% 47.54%2014 Vacant 12.40% 10.60% 10.09%

2019 Owner Occupied Housing Units 40.73% 52.46% 52.46%2019 Renter Occupied Housing Units 59.27% 47.54% 47.54%2019 Vacant 12.40% 10.66% 10.09%

$0 - $14,000 18.90% 15.90% 14.80%$15,000 - $24,999 15.20% 14.40% 13.80%$25,000 - $34,999 12.80% 13.80% 13.30%$35,000 - $49,999 14.40% 16.50% 16.90%$50,000 - $74,999 18.90% 19.00% 19.00%$75,000 - $99,999 9.70% 10.10% 10.50%$100,000 - $124,999 5.00% 5.40% 5.90%$125,000 - $149,999 1.60% 2.40% 2.70%$150,000 - $199,999 2.70% 1.60% 1.70%$200,000 - $249,999 0.30% 0.50% 0.60%$250,000 + 0.60% 0.60% 0.80%

2014 Median Household Income $38,451 $40,093 $41,7682014 Per Capita Income $19,262 $17,833 $18,143

2104 Average Household Income $50,338 $51,850 $54,591

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Offering Memorandum | 5679 West Northern Avenue in Glendale, AZ

golden corral sale- leaseback 5679 west northern avenue ... w northern ave... · services isa...

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