offering memorandum starbucks

1470 S Robert Street | West St. Paul, MNStarbucksOFFERING MEMORANDUM

Starbucks • West St. Paul, MN 2 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 the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Invest-ment Services, Inc. © 2016 Marcus & Millichap. All rights reserved. Activity ID: X0670555

CONFIDENTIALITY AND DISCLAIMER

Offered Exclusively byThe 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 Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. 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. Marcus & Millichap 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, PCB’s 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 occupan-cy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap 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.

NON-ENDORSEMENT NOTICEMarcus & Millichap Real Estate Investment Services, Inc. (“M&M”) is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of M&M, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee iden-tified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affili-ates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Dominic SuloAssociate Vice President InvestmentsCHICAGO OAKBROOKTel: (630) 570-2171Fax: (630) [email protected] License: IL 475.134920

Matthew Wenger Associate CHICAGO OAKBROOKTel: (630) 570-2170Fax: (630) [email protected] License: IL 475.159226

Chad Lieber Associate CHICAGO OAKBROOKTel: (630) 570-2265Fax: (630) [email protected] License: IL 475.163385

Marcus & Millichap1 Mid America Plaza #200Oakbrook Terrace, IL 60181P: +1 630-570-2200

Craig Patterson Marcus & Millichap1350 Lagoon Avenue, Suite 840Minneapolis, MN 55408Tel: (952) 852-9700Fax: (952) 852-9710License: 40206188

Broker of Record:


THE OFFERING

FINANCIAL SUMMARYPrice $1,792,000

Down Payment 100% / $1,792,000

Cap Rate 5.25%

Building Sq Ft 1,850 Sq Ft

Net Operating Income $94,054

Year Built/Renovated 2005/2016

Lot Size +/- .46 Acres

LEASE SUMMARYLease Type Double Net

Tenant Starbucks Corporation

Guarantor Corporate

Roof and Structure Landlord Responsible

Primary Term 10 Years

Rent Commencement Date 1/1/2016

Lease Expiration Date 12/31/2025

Term Remaining 8+ Years

Rental Increases 31.39% In Option 1

Renewal Options One, Five-Year

ANNUALIZED OPERATING DATALEASE YEARS ANNUAL RENT CAP RATE

1-5 $94,054 5.25%

6-10 $95,275 5.32%

OPTIONS ANNUAL RENT CAP RATE

11-15 (Option 1) $125,189 6.99%

BASE RENT $94,054

Net Operating Income $94,054

Total Return 5.25% / $94,054

STARBUCKS1470 South Robert StreetWest St. Paul, MN 55118


LEASE ABSTRACT

Landlord Responsibilities:Landlord shall be responsible, at its sole cost and expense, maintenance and repair of all parking areas, sidewalks, driveways, all structural aspects of the building, including the foundation, roof and HVAC system.

Tenant Responsibilities:Tenant shall be responsible, at its cost, to maintain, repair and/or replace all windows, doors, or plate glass and store fronts, snow removal and trash removal.

Real Estate Taxes:Tenant shall reimburse landlord for all real estate taxes.

Insurance: Tenant shall obtain and keep in full force and effect its own liability and property insurance.Landlord shall obtain and keep in full force and effect liability insurance, property insurance and rental interruption insurance.Tenant shall reimburse landlord for the cost of landlord’s Insurance.

Utilities:Tenant shall pay for all water, gas and electricity used by tenant, all of which shall be separately metered to the premises by proper and sufficient meters at landlord’s sole cost and expense. Tenant shall be responsible for the payment of all utility bills.

Assignment and Subletting:Tenant shall not assign this Lease and shall not let or sublet the whole or any portion of the premises without the written consent of landlord, which consent shall not be unrea-sonable withheld, conditioned, or delayed. Estoppel:Tenant has 30 days from written request to provide an executed estoppel.


INVESTMENT HIGHLIGHTS

Investment Highlights

• Best-in-Class Guaranty by Starbucks International - Starbucks is the largest international coffee house brewing company with more than 22,000 loca-tions worldwide. The company is considered investment grade credit, with a current rating of A- by Standard & Poor’s.

• Property Underwent a $300,000 Plus Renovation - The tenant completed a $240,000 renovation to the interior, drive-thru and updated the properties façade. The city of West St. Paul spent another $75,000 of its’ own capital on repaving the parking lot, sidewalk and various landscaping work. The project is part of a multi-million dollar road construction project, with the bulk of the project on Robert Street, from Thompson Avenue to Mendota Road. Please contact agents for more information.

• 10-Year Extension with No Early Termination Clause - In December of 2015, Starbucks signed a new 10-year lease with no early termination clause.

• The Only Freestanding Drive-Thru Starbucks Within a Four-Mile Radius - This Starbucks location has proven itself through its’ 10-year operating history. It is the only Starbucks with a drive-thru in West St. Paul.

• “Main-on-Main” Real Estate Location at Signalized Intersection - The prop-erty is located at the corner of Thompson Avenue East and South Robert Street, with traffic counts in excess of 24,000 vehicles per day.

• Strong Display of National Retailers in Immediate Area - To the north of Star-bucks are retailers Menards, CVS, McDonald’s, Kmart, Walgreens, Chuck E Cheese and T-Mobile. To the south are retailers TCF Bank, Noodles & Com-pany, Walmart, Target, Lowe’s Home Improvement, Cub Foods, Home De-pot, Chipotle and more.

• Located in the 16th Largest Metropolitan Area in the United States - The subject property sits just eight-miles south of downtown St. Paul. The Min-neapolis/St. Paul MSA encompasses a vast 3,700,000 people. The 245,197 population within five miles of Starbucks makes this a desirable and funda-mental real estate opportunity.

• Rare 31.9 Percent Rental Increase in the Option Period - This above market rental increase provides future upside for a landlord to improve their cash-on-cash return and negotiating position.

West St. Paul is a first ring suburb adjacent to St. Paul which offers the tranquility and beauty of the country, as well as the diverse amenities of the city. Lush green fields, lakes, and wildlife are minutes from a vast array of stores, restaurants, theaters, and educational institutions. We are a full-service city that offers a high-quality of life and is rich with opportu-nities for enjoyment, growth, and development.

West St. Paul has 15 parks, a municipal golf course, ice arena, the Region-al Athletics Center dome, and community swimming pool. The city is also home to Dodge Nature Center, Southview Country Club, and Thompson County Park. West St. Paul boasts a superior public educational system, along with some great private schools. We have a diverse, well-main-tained housing stock available with an established housing program to maintain the housing quality. There are over 600 businesses in West St. Paul, including a light industrial park. South Robert Street is a busy thor-oughfare that has approximately 30,000 cars travel it per day. Accord-ing to the 2010 U.S. Census, the population of West St. Paul is 19,504.

Location Overview


TENANT OVERVIEW

TENANT PROFILECompany: Starbucks Corporation

No. of Retail Locations: 22,519

Credit Rating: A- (S&P)

Total Revenue: $19.6 Billion (2015)

Net Worth: $5.8 Billion

Year Founded: 1985

Headquarters: Seattle, WA

Website: www.starbucks.com

Some recent awards and recognition:

One of the “Most Admired Companies in America”Fortune – 2003–2015

One of the “World’s Most Ethical Companies” Ethisphere – 2007-2015

“Employer of the Year” U.S. Business Leadership Network Annual Leadership Awards – 2014

“Retailer of the Year” Visual Merchandising and Store Design – 2013

One of the “World’s 50 Most Innovative Companies” Fast Company – 2012

One of the “Best Workplaces in Canada” Great Place to Work Institute – 2011-2014

Starbuck’s Corporation is an international coffee and coffeehouse chain based in Seattle, Washington, United States. Starbucks is the largest coffeehouse company in the world, with over 22,000 stores globally, including around 13,000 in the United States, followed by nearly 1,000 in Canada and more than 900 in Japan. Starbuck’s sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks, and items such as mugs and coffee beans. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company’s products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores.

Starbucks retail stores are located in high-traffic, high-visibility locations. Its stores are located in or near a variety of settings, including downtown and suburban retail centers, office buildings and university campuses. The Company sells whole bean and ground coffees, including the Starbucks and Seattle’s Best Coffee brands, as well as a selection of premium Tazo teas, VIA and other related products, to institutional foodservice companies that service business and industry, education, healthcare, office coffee distributors, hotels, restaurants, airlines and other retailers. At September 27, 2009, the company’s total foodservice operations had over 21,000 accounts primarily in the United States.

From Starbucks’ founding in later forms as a local coffee bean roaster and retailer, the company has expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into the 2000s. The first store outside the United States or Canada opened in the mid-’90s, and overseas stores now constitute almost one third of Starbucks’ stores. In fiscal 2014, the company reported revenues of $16.4 billion and net income of $3.1 billion.


PROPERTY PHOTOS


AERIAL - NORTH

Subject Property

Downtown St. Paul

St. Croix LutheranGrades 6-12

S Ro

bert

Stre

et21

,664

CPD

Thompson Ave9,216CPD


AERIAL - SOUTH

Subject Property

West St. PaulSports Center

S Robert Street

21,664 CPD

Thompson Ave 9,216 CPD


AERIAL

N

52

INTERSTATE

494

110

S Robert St

Thom

pson

Ave

E

* South Robert Street and Thompson Avenue East Combined24,000 CPD

*

Subject Property


AERIAL VIDEO

Click to watch video in browser

https://youtu.be/KJs40qRpQyw


SITE PLAN

24,000 Daily

S Robert St

SITE PLAN KEYParcel Outline:Land Area: .46 AcresLeasable Area: 1,850 Sq FtIngress/Egress:Sign:

N

Thompson Ave

Dum

pster

Patio Seating

* Survey subject to change following completion of the renovation.


AREA OVERVIEW

Southview Country ClubA meticulously kept par 71 course originally designed by noted "golf course expert." The original layout was redesigned in the mid 60’s. Today, Southview is noted for its immaculate rolling fairways, mature trees, numerous water hazards featuring fountains and magnificent landscaping. And of course, the finest greens in this part of the country.

As a member of Southview one quickly learns that this is not a course easily overcome by raw power off the tee. To the con-trary, accuracy is at a premium. The fairways are narrow and undulating. The trees are close and often times unforgiving. To score here, you have to be in the fairway where lush, tightly mowed conditions allow for crisp iron shots that bite and hold the slippery, subtle greens. They roll true, smooth and more often than not – Fast. At Southview Country Club one will enjoy a challenging course that delivers a true test to every part of the golf game.

Dodge Nature CenterThe Thomas Irvine Dodge Nature Center is an environmental education organization in Minnesota with 4 metro nature destinations located in West St. Paul, Cottage Grove and Mendota Heights. Dodge Nature Center was founded in 1967 by Olivia Irvine Dodge and was one of the first Nature Centers in the state of Minnesota. The Nature Center and preschool are recognized nationally in the field of environmental education.

Dodge offers a unique experience for people of all ages with 460+ acres of prairies, hardwood forest, lakes, wetland, miles of open hiking trials, a working farm, orchard, bee apiary, and a variety of animals to discover. Over 59,000 nature experi-ences are offered annually.

Paintball ParadisePaintball Paradise was established in 1983 and was one of the first commercially operating paintball facilities in North America. They are passionate about paintball and that passion has stretched over the combined 50 years of competitive paintball that the key management brings to the daily operations. They understand how accessible the sport can be for people of all ages and fitness levels and strive to share that passion for the sport whether competing or just spending a leisurely day with friends. The paintball facilities are extensive, regularly hosting team building activities, bachelor / bachelorette parties as well as birthday parties or family gatherings. Paintball Paradise uses paintballs that are made of non- toxic, bio-degradable, water soluble gelatin. Games are played on outdoor and indoor fields, a paintball game field has a variety of natural and built terrain where players try to gain tactical advantage.


DEMOGRAPHICS

N

Starbucks

POPULATION 1-MILE 3-MILE 5-MILE2010 Population 11,185 72,177 235,739

2014 Population 11,360 73,961 242,876

2019 Population 11,587 75,986 246,318

HOUSEHOLDS 1-MILE 3-MILE 5-MILE2010 Households 5,049 29,374 94,861

2014 Households 5,142 30,234 98,413

2019 Households 5,278 31,304 100,711

INCOME 1-MILE 3-MILE 5-MILE2014 Median Household Income $50,189 $53,067 $50,102

2014 Per Capita Income $31,439 $30,025 $28,900

2014 Average Household Income $69,103 $72,875 $70,625

PopulationIn 2014, the population in your selected geography is 242,875. The population has changed by 2.49% since 2000. It is estimated that the population in your area will be 246,317 five years from now, which represents a change of 1.41% from the current year. The current population is 48.76% male and 51.23% female. The median age of the population in your area is 34.4, compare this to the Entire US average which is 37.3. The population density in your area is 3,084.27 people per square mile.

HouseholdsThere are currently 98,412 households in your selected geography. The number of households has changed by 5.50% since 2000. It is estimated that the number of house-holds in your area will be 100,711 five years from now, which represents a change of 2.33% from the current year. The average household size in your area is 2.40 persons.

IncomeIn 2014, the median household income for your selected geography is $50,102, com-pare this to the Entire US average which is currently $51,972. The median household in-come for your area has changed by 18.93% since 2000. It is estimated that the median household income in your area will be $56,050 five years from now, which represents a change of 11.87% from the current year.

The current year per capita income in your area is $28,899, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $70,624, compare this to the Entire US average which is $74,533.

Race & EthnicityThe current year racial makeup of your selected area is as follows: 65.77% White, 13.79% Black, 0.06% Native American and 10.76% Asian/Pacific Islander. Com-pare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander.

People of Hispanic origin are counted independently of race. People of Hispanic origin make up 11.13% of the current year population in your selected area. Com-pare this to the Entire US average of 17.13%.

HousingIn 2000, there were 54,317 owner occupied housing units in your area and there were 38,956 renter occupied housing units in your area. The median rent at the time was $554.

EmploymentIn 2014, there are 163,771 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 63.69% of employees are em-ployed in white-collar occupations in this geography, and 36.26% are employed in blue-collar occupations. In 2014, unemployment in this area is 6.18%. In 2000, the aver-age time traveled to work was 23.2 minutes.

offering memorandum starbucks

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