offering memorandum pizzarev & tropical smoothie · property name pizzarev & tropical...

1PizzaRev & Tropical Smoothie

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7 6 5 N G E R M A N TOW N P K W Y | C O R D OVA , T N 3 8 0 1 8

O F F E R I N G M E M O R A N D U M

PizzaRev & Tropical Smoothie

2 Cordova, TN

™

L I S T I N G T E A M :

C had KurzSVP & National Director

[email protected] 214.692.2927MOB 562.480.2937LIC # 01911198(CA)

Kyle MatthewsBroker of Record

LIC # 263667

Aron C l ineSVP & Senior Director

Aron.Cl [email protected] 949.432.4509MOB 818.632.0233LIC # 01904371 (CA)


Year Built

2017

Square Footage

± 4,100

List Price

$2,746,925

Cap Rate

6.50%

Property Name


The subject property is located in the wealthy suburb of Memphis, TN which boasts an average household income over $100,000 and 150,000 people in the 5-mile radius. The property is located on Germantown Parkway, a major thoroughfare with over 55,000 vehicles per day. The immediate area is anchored by Walmart Supercenter, Super Target, Kroger, and a brand-new LA Fitness directly behind the subject property.

The property presents the opportunity for an investor to acquire two strong e-commerce proof tenants in a great area.

Term Remaining

± 10 Years


Investment Highlights

Strong E-Commerce Proof Tenants

• The subject property is 100% occupied by two strong e-commerce proof tenants whose products and services cannot be purchased online

Affluent Demographics

• The property is located in a wealthy suburb of Memphis, TN that boasts an average household income over $100,000 and more than 150,000people in the 5-mile radius

Long-Term Leases with Rent Increases

• PizzaRev recently signed a brand new 10-year lease with a 10% rent increase after the first five years

• Tropical Smoothie Café recently signed a 10-year lease with 10% rent increases every five years

Brand New Construction

• The best-in-class construction with stone and brick construction completed in late 2016. In addition to the subject property, numerous otherretailers were recently constructed including LA Fitness, Dunkin’ Donuts, Hardee’s, Discount Tire, Aspen Dental, and Chipotle

Strong Location in Top Tax-Free MSA

• The property is located on Germantown Parkway, a major thoroughfare with over 55,000 vehicles per day

• Memphis is a top 50 MSA in the United States and Tennessee is one of the few states with no state income tax

Solid Retail Trade Area

• The immediate area is anchored by Walmart Supercenter, Super Target, and Kroger

• Other tenants include: Walgreens, McDonald’s, CVS, Panera Bread, Panda Express, Firestone, AutoZone, and O’Reilly Auto Parts

Executive Summary

4 Cordova, TN

Financial Overview


Rent RollTENANT GLA % OF

TOTAL GLA ANNUAL RENT RENT/SF INITIAL LEASETERM

RENT COMMENCEMENT

LEASE EXPIRATION OPTIONS

PERCENTAGE

INCREASESRENT SCHEDULE

PizzaRev 2,500 SF 61% $93,750.00 $37.50/SF 10 Years 4/24/2017 4/23/2027One, 5-year

option10%

Years 1 – 5: $93,750.00 Years 6 – 10: $103,125.00

Option 1: $108,450.00

Tropical Smoothie 1,600 SF 39% $60,800.04 $38.00/SF 10 Years 4/24/2017 4/23/2027One, 5-Year

option10%

Years 1 – 5: $60,800.04 Years 6 – 10: $66,879.96

Option 1: $73,568.04

LA FitnessEasement Fee

$24,000.00 15 Years 10/12/2017 11/30/2032Six, 5-Year

options10%

Easement Years 1-5: $24,000 Easement Years 6-10: $26,000 Easement Years 11-15: $29,040

Totals 4,100 SF 100% $178,550.04

Financial Overview

Price $2,746,925

Capitalization Rate 6.50%

Gross Leasable Area (GLA) ± 4,100 SF

Year Built 2017

Lot Size ± 0.76 AC

6 Cordova, TN

Lease AbstractPizzaRevTenant: TennRev, LLC, dba PizzaRevGuaranty of Lease: TennRev, LLCProperty Address: 765 N Germantown Parkway, Suite #102, Cordova, TN 38018Lease Commencement: December 30, 2015Rent Commencement: April 24, 2017Lease Expiration: April 23, 2027Initial Lease Term: 10 yearsBuilding Size: 4,100 square feet Tenants Proportionate Share: 2,500 square feet square feet (60.98%)Current Minimum Rent: $93,750.00 per yearRenewal Options: One, 5-year option

Extensions of Options: Tenant shall give Landlord at least one hundred eighty (180) days written notice of its intent to terminate this Lease prior to the end of the then-current term.

Permitted Use: Tenant shall have the right during the term of this Lease to use the Premises for a PizzaRev Restaurant only.

Rent Schedule: Years 1 – 5: $93,750.00Years 6 – 10: $103,125.00Option 1: $108,450.00

Additional Rent: Tenant shall pay to Landlord, its proportionate share of all real estate taxes and assessments, and in addition, Tenant shall pay, as Additional Rent, its proportionate share of the Landlord’s cost of operating, maintaining and managing the Center. Operating expenses shall include expenses for water, sewer, gas, electricity, insurance (including Earthquake and Flood), management fees, administrative fees, maintenance, snow and ice removal, trash removal, landscaping, repairs, replacement of paying curbs, walkways, a pro rata portion of Landlord’s share of the Landlord’s monetary obligations set forth in that certain Declaration of easements with Covenants and Conditions of record at Instrument No. 15029323 of record in the Shelby County Register’s Office, drainage and similar non-capital items, and such other normal and usual costs and expenses of operating, maintaining and managing the Center of which the Premises is a part.

Management fees will not exceed 5% of common area maintenance charges for the Shopping Center (net of taxes and insurance). Landlord will charge and Tenant shall pay its proportionate share of an administrative fee of ten percent (10%) of the total common area maintenance charges, taxes, and insurance costs to cover the ongoing administrative/bookkeeping cost associated with paying these charges, reconciliations, and billings.

Landlord estimates that common area maintenance charges and charges for taxes and insurance will initially total Eight and 50/100th Dollars ($8.50) per square foot per year. In no event shall Tenant’s obligation for controllable items of common area maintenance charges in any lease year be increased by more than three (3%) after the first full lease year. The noncontrollable items of the common area maintenance costs include security, waste removal, common area utilities and snow and ice removal are not capped. Insurance and taxes are not capped. Tenant’s share of common area maintenance charges, taxes and insurance shall not include capital expenditures.

Current EstimateReal Property Taxes $4.50 PSF/yrInsurance $0.35 PSF/yrCAM Charges $3.65 PSF/yr

Landlord’s Repairs: Landlord agrees that it will keep and maintain the roof and the structural portions of the Center, exclusive of doors and exclusive of windows, in good tenantable condition and in compliance with all municipal building codes during the term of this Lease.

Tenant’s Repairs: Tenant shall keep the Premises and the fixtures, plumbing, heating, electrical and air conditioning systems and equipment therein and exclusively serving the Premises in good order and condition, including regular pest control and regular HVAC maintenance contracts.


Tropical Smoothie CafeTenant: Shree Hari Germantown Pkwy LLCGuaranty of Lease: TennRev, LLCProperty Address: 765 N Germantown Parkway, Suite #101, Cordova, TN 38018Lease Commencement: November 14, 2016Rent Commencement: April 24, 2017Lease Expiration: April 23,2027Initial Lease Term: 10 yearsBuilding Size: 4,100 square feetTenants Proportionate Share: 1,600 square feet (39.02%)Current Minimum Rent: $60,800.04 per yearRenewal Options: One, 5-year option

Extensions of Options: Tenant shall have not given Landlord at least one hundred eighty (180) days written notice of its intent to terminate this Lease prior to the end of the then- current term.

Tenant Improvement Allowance: Landlord shall pay to Tenant Forty-Five and 00/100 Dollars ($45.00) per rentable square foot of the Premises, that Tenant may use for the cost of constructing Tenant’s improvements in Tenant’s leasehold or any other area for the project. Tenant Improvement Allowance shall be due within twenty (20) days after the latter of (i) Tenant’s completion of its leasehold improvements and the issuance of a temporary Certificate of Occupancy for the same and (ii) delivery to Landlord of the lien waiver letter received from Tenant’s General Contractor.

Permitted Use: Tenant shall have the right during the term of this Lease to use the Premises for Tropical Smoothie Café, serving smoothies, sandwiches, wraps, flatbreads, salads, soups and other menu items required or authorized by the franchisor of the Tropical Smoothie Café brand.

Rent Schedule: Years 1 – 5: $60,800.04Years 6 – 10: $66,879.96Option 1: $73,568.04

Additional Rent: Tenant shall pay to Landlord, its proportionate share of all real estate taxes and assessments, and in addition, Tenant shall pay, as Additional Rent, its proportionate share of the Landlord’s cost of operating, maintaining and managing the Center. Operating expenses shall include expenses for water, sewer, gas, electricity, insurance (including Earthquake and Flood), management fees, administrative fees, maintenance, snow and ice removal, trash removal, landscaping, repairs, replacement of paying curbs, walkways, a pro rata portion of Landlord’s share of the Landlord’s monetary obligations set forth in that certain Declaration of easements with Covenants and Conditions of record at Instrument No. 15029323 of record in the Shelby County Register’s Office, drainage and similar non-capital items, and such other normal and usual costs and expenses of operating, maintaining and managing the Center of which the Premises is a part.

Management fees will not exceed 5% of common area maintenance charges for the Shopping Center (net of taxes and insurance). Landlord will charge and Tenant shall pay its proportionate share of an administrative fee of ten percent (10%) of the total common area maintenance charges, taxes, and insurance costs to cover the ongoing administrative/bookkeeping cost associated with paying these charges, reconciliations, and billings.

Landlord estimates that common area maintenance charges and charges for taxes and insurance will initially total Eight and 50/100th Dollars ($8.50) per square foot per year. In no event shall Tenant’s obligation for controllable items of common area maintenance charges in any lease year be increased by more than three (3%) after the first full lease year. The noncontrollable items of the common area maintenance costs include security, waste removal, common area utilities and snow and ice removal are not capped. Insurance and taxes are not capped. Tenant’s share of common area maintenance charges, taxes and insurance shall not include capital expenditures.

Current EstimateReal Property Taxes $4.50 PSF/yrInsurance $0.35 PSF/yrCAM Charges $3.65 PSF/yr

Landlord’s Repairs: Landlord agrees that it will keep and maintain the roof and the structural portions of the Center, exclusive of doors and exclusive of windows, in good tenantable condition and in compliance with all municipal building codes during the term of this Lease.

Tenant’s Repairs: Tenant shall keep the Premises and the fixtures, plumbing, heating, electrical and air conditioning systems and equipment therein and exclusively serving the Premises in good order and condition, including regular pest control and regular HVAC maintenance contracts.

8 Cordova, TN

Property Details


Property Name PizzaRev & Tropical Smoothie

Address765 N Germantown Pkwy

Cordova, TN 38018

Gross Leasable Area ± 4,100 SF

Land Area ± 0.76 Acres

Year Built 2017

Type of Ownership Fee Simple

Number of Stories 1

Parking Spaces ± 38 Surface Spaces

Parking Ratio 9.27 : 1,000 SF

Physical Description Parcel Map

N Germantown Pkwy ± 55,000 VPD

1 0 Cordova, TN

Surrounding Retail

1 1PizzaRev & Tropical Smoothie

Property Demographics

POPULATION 1-Mile 3-Mile 5-Mile

2017 Estimate 8,401 60,719 155,768

INCOME 1-Mile 3-Mile 5-Mile

2017 Est. Average Household Income

$69,721 $86,321 $103,479

Smart City Top 10 Best Suburban Towns in the US#2 Livability score for Tennessee

Caucasian African American Asian Other

1 2 Cordova, TN

(NOT A PART)

Site Plan

TENANT GLA

PizzaRev 2,500 SF

Tropical Smoothie 1,600 SF

Total 4,100 SF


Tenant Overviews

1 4 Cordova, TN

Property Name PizzaRev

HeadquarteredDenver, CO

Websitewww.pizzarev.com

TENANT OVERVIEW

PizzaRev is well positioned in the strongest fast-casual restaurant segment, seeing incredible growth for the last several years. With more than 40 open locations and another 200+ under development across the U.S. and Mexico, PizzaRev intends to double its footprint each year. PizzaRev restaurants are sleek, simple, and modern. Exposed ceilings, concrete floors, and natural tones offer a minimalist yet inviting atmosphere. Fun and bold wall art educates guests about the quality of ingredients and draws attention to beer offerings and Rev It Up sauce and condiment counter. Most unique to PizzaRev, and what enables unprecedented speed of service, is the 900-degree stone-bed oven. Guests watch the dancing flames in thebackground as their pizzas are fired to crispy perfection in just three minutes.

STRATEGY

A focus on building our online community and grassroots marketing has been the foundation of PizzaRev success. PizzaRev is passionate about delivering a revolutionary dining experience, empowering guests, and inspiring confidence through marketing messages.


Property Name Tropical Smoothie Cafe

HeadquarteredAtlanta, GA

Websitewww.tropicalsmoothiecafe.com

TENANT OVERVIEW

Tropical Smoothie Cafe’s menu boasts bold, flavorful food and smoothies with a healthy appeal, all made to order from the freshest ingredients. Tropical Smoothie finds that superior, simple ingredients including real fruit and veggies sets their smoothies apart from the others. Toasted wraps, sandwiches, flatbreads, and gourmet salads are made fresh with high-quality meats and cheeses and topped with fresh produce and flavorful sauces.Combine that with a fun atmosphere and unparalleled hospitality and you can see why people return again and again for the Tropical Smoothie Cafe experience.

1 6 Cordova, TN

Area Overview

Cordova, TNCordova is a city in Shelby County, Tennessee. Cordova lies east of Memphis, north of Germantown, south of Bartlett, and northwest of Collierville.

Cordova grew from a quiet country farm hamlet with a population of 150 people in 1912 to one of the fastest growing neighborhoods in Memphis. Retail growth exploded in the late 1990s thanks to the Wolfchase Galleria shopping mall, which at the time was the largest retail center in Shelby County outside of Memphis city limits. Today the majority of the growth is along Houston Levee Road and Macon Road as well as major retail and commercial centers on Germantown Parkway. There are now over 1,226 businesses with over 19,400 employees working in Cordova.


Memphis, Tennessee is the largest city on the Mississippi River. Located in Shelby County, Memphis is a vibrant and historic city. It is the second largest city in Tennessee and brings in a large amount of tourist because of its famous, historical landmarks. Being only 3 miles from Memphis, Arkansas, it is only a hop, skip, and a jump from the Arkansas/Tennessee border.

Known as the “Birthplace of Rock and Roll,” the city holds a significant amount of history within its borders. The residents of Memphis take pride of their city, and are usually known as “Memphians.” Although this town has a variety of entertainment to offer. The sports fans of the area love to cheer on the University of Memphis Tigers. As for professional teams, many cheers on the Memphis Grizzlies. The animal lovers enjoy the Memphis Zoo. Memphis has been the zoo’s home for over 100 years and has over 3,500 animals.

1 7

Memphis, TN

1 8 Cordova, TN

Many of Memphis’s residents are blue-collar, hard workers. The most common industries within this area are Transportation and Warehousing, Construction, and Manufacturing. Within those, the most common occupations are Material Moving, Construction, and Extraction. The unemployment rate has started to decrease with the overall household income increasing since early 2000.

Located on the Mississippi River, Memphis is one of the largest metropolitan areas in the Southeast, ranking 41st out of the top 75 according to a Department of Labor Release. Of the 40 metropolitan areas ahead of Memphis, only 12 are in the South. The city has historically been one of the largest shipping hubs in the Mid-South, dating back to the Civil War. As transportation methods developed, Memphis has continued to hold significance as a transportation hub. Now the city is home to the second largest cargo airport in the world, Memphis International Airport, and the world’s busiest domestic airport with 3.9 million metric tonnes. Memphis International Airport and Memphis have had huge significance in the railroad industry. The city has the 3rd largest rail center in the U.S. behind Chicago and St. Louis. It is also one of only four U.S. cities with five Class 1 railroads.

Because Memphis has been such an important city for transportation and shipping, it is attractive to businesses, especially those producing goods shipped nationwide. Three Fortune 500 companies, FedEx, AutoZone, and International Paper Co. call Memphis home. These significant businesses have brought a large manufacturing industry. Of the 607,900 jobs in Memphis in July 2014, 209,900 are in the Manufacturing and Transportation industries, around 34.5 percent.

Economy

Top Employers

GMP

$67.8 Billion

Top 50 MSA

MetroPopulation

1,344,100


This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of the PizzaRev & Tropical Smoothie located at 765 N Germantown Pkwy, Cordova TN 38018 (“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 ormanner 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 & D I S C L A I M E R S TAT E M E N T

2 0 Cordova, TN

™

7 6 5 N G E R M A N TOW N P K W Y | C O R D OVA T N 3 8 0 1 8


L I S T I N G T E A M :

C had KurzSVP & National Director

[email protected] 214.692.2927MOB 562.480.2937LIC # 01911198(CA)

Kyle MatthewsBroker of Record

LIC # 263667

Aron C l ineSVP & Senior Director

Aron.Cl [email protected] 949.432.4509MOB 818.632.0233LIC # 01904371 (CA)

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