shopko - matthews€¦ · confidentiality & disclaimer statement this offering memorandum...

™1209 18TH AVE NORTHWEST, AUSTIN, MN 55912

SHOPKO

OFFERING MEMORANDUM

CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Shopko located at 1209 18th Ave Northwest, Austin, MN 55912 (“Property”) . I t has been prepared by Matthews Retai l Advisors . 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 Retai l Advisors . 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 completweness 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 or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors 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 Retai l Advisors 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.

TABLE OF CONTENTS

04. Execut ive Summary

06. Lease Abstract

08. Property Overv iew

14. Tenant Overv iew

16. Area Overv iew

17. Demographics

1209 18TH AVE NORTHWEST, AUSTIN, MN 55912

SHOPKO

™

Mark HulseyBroker of Record

License No. 40169559

Lindsay TsumpesAVP & Director

License No. 01954256O 310.579.9691M [email protected]

Kyle Matthews, CCIMChairman & CEO


EXECUTIVE SUMMARY

Investment Highlights

• Absolute NNN lease – zero landlord responsibilities

• Fifteen (15) years remaining on the lease term, providing long-term passive income and security

• Guaranteed by Specialty Retail Shops Holding Corp. (“SRSHC”)

• Annual contractual rent increases provide a strong hedge against inflation

• YOY sales growth for the past three years

• Shadow anchored by Hy-Vee grocery store, Anytime Fitness, Younkers, and CineMagic 7 movie theatres – daily needs and entertainment tenants increase consumer draw to the shopping center

• The property benefits from the redevelopment of the Oak Park Mall – including a brand new 60,000 – 90,000 Hy-Vee grocery store, a redesigned smaller mall that will house the movie theater and AnyTime Fitness, and a remodeled stand-alone Younkers store

• Convenient accessibility and signage off of I-90, the main interstate arterial through the city

• Average household income of nearly $60,000 in a 5-mile radius

• Close proximity to the corporate headquarters of Austin’s largest employer, Hormel Foods Corporation, with more than 400 employees as well as the 80-bed Mayo Clinic Health System

• In the center of Austin’s retail corridor with strong neighboring tenants in the trade area including: Walmart Supercenter, Aldi, Sears Hometown Store, Dollar Tree, Jo-Ann Fabric and Craft Stores, Staples, Hibbett Sports, AutoZone, O’Reilly Auto Parts and more

4 | Shopko

Matthews Retail Advisors | 5

Executive Summary

SHOPKO1209 18th Ave NorthwestAustin, MN 55912

List Price ..........................................................................................$8,500,000

CAP Rate - Current ................................................................................... 7.50%Gross Leasable Area ....................................................................... 90,461 SF Lot Size ................................................................ ± 9.87 Acres (429,937 SF)Year Built ........................................................................................................1984

Annualized Operating DataMonthly Rent Annual Rent Rent/SF

Current $53,099 $637,188 $7.04

*Annual rent increase: Lesser of 1.25 x CPI or 1.95% every January 1st.

Tenant Summary

Tenant Trade Name Shopko Stores Operating Co., LLC

Type of Ownership Feel Simple

Lease Guarantor Specialty Retail Shops Holding Corp. (“SRSHC”)

Lease Type NNN

Landlord Responsibility None

Lease Dated Upon Execution at Closing

Rent Commencement Date 5/19/2016

Lease Expiration Date 12/31/2031

Term Remaining on Lease ± 15 Years

Increases Lesser of 1.25 x CPI or 1.95% every January 1st

Options Two (2), Ten (10) Year Options

6 | Shopko

Tenant: Shopko Stores Operating Co. LLC

Guarantor: Specialty Retail Shops Holding Corp. ("SRSHC")

Address:1209 18th Avenue Northwest Austin, MN 55912

Size: ± 90,461 SF

Rent Commencement: 5/19/2016

Lease Expiration: 12/31/2031

Renewal Options: Two (2), Ten (10) Year Options

Required Advance Notice of Exercise Options: One hundred twenty (120) days prior to the end of the initial Term of this Lease

Current Rent: $637,188

Rent Increases: The lesser of 1.25 x CPI or 1.95% annually every January 1

Net Lease: This Lease is a triple net lease and all costs, expenses and obligations relating to the Premises shall be paid by Tenant

Real Estate Taxes: Tenant agrees to pay real estate taxes and assessments levied or assessed against the property during the term

Insurance:Tenant shall maintain All-Risk insurance for the building for 100% of its reasonable replacement value. Tenant shall also maintain General Liability Coverage of no less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in aggregate. See Lease for other insurance policies required due to the location of the Premises.

Utilities: Tenant to contract and pay all utilities

Tenant Assignment and Subletting: Tenant Shall have the right to assign the Lease, or to sublet the whole or any part of the Premises provided the Landlord's consent

Right of First Refusal: None

Lease Abstract - Shopko

Matthews Retail Advisors | 7 Matthews Retail Advisors | 7

8 | Shopko

PROPERTY OVERVIEW

8 | Shopko


Physical Description

Property Name Shopko

Property Address 1209 18th Ave Northwest Austin, MN 55912

Assessor’s Parcel Number 34-521-0120

ZoningB-2, Commercial Business

District

Site Description

Number of Stories One

Year Built 1984

Gross Leasable Area (GLA) ± 90,461 SF

Lot Size ± 9.87 Acres (429,937 SF)

Type of Ownership Fee Simple

Parking ± 450 Surface Spaces

Parking Ratio 4.97 : 1,000 SF

Landscaping Professional

Topography Generally Level

Construction

Foundation Concrete Slab

Framing Metal

Exterior Painted CMU

Parking Surface Asphalt

Roof Flat

10 | Shopko

Aerial

18th Ave NW ± 7,000 ADT

I-90 ± 18,000 ADT

Oak Park Mall Redevelopment

Site


Regional Map

Tenant Map

12 | Shopko

Matthews Retail Advisors | 13 13 | Shopko

Bird’s Eye

I-90 ± 18,000 ADT

Oak Park Mall Redevelopment

TENANT OVERVIEW

14 | Shopko


Tenant Shopko

Company Name Sun Capital Partners, Inc.

Ownership Private

No. of Locations ± 330

No. of Employees ± 23,000

Headquartered Green Bay, WI

Website www.Shopko.com

Year Founded 1961

TENANT OVERVIEW

Shopko Stores focuses on a select product range across US small and rural areas. The company operates more than 320 stores, including about 135 Shopko discount stores and about 180 Shopko Hometown shops (formerly Pamida stores) in more than 20 states across the Midwest, Mountain, and Pacific Northwest regions. The company also sells goods online. Shopko offers a large selection of many retail categories, it pushes popular, high-margin categories such as casual apparel, health and beauty aids, and housewares. Most Shopko stores have optical centers and pharmacies. The company is owned by Sun Capital Partners.

Source: hoovers.com

16 | Shopko

Austin, MN Located in Mower County in southern Minnesota, it is about a two hour drive south of Minneapolis and St. Paul. Also known as “SPAM Town USA”, Austin is home to the headquarters of the factory that makes most of North America’s SPAM tinned meat: Hormel Foods Corporation. Additionally, the Hormel Institute, a leading cancer research institution operated by the University of Minnesota, is also based in Austin.

Recently, Austin has undergone notable developments, including the construction of a new courthouse, jail and intermediate school and the redevelopment of the Oak Park Mall. The city is currently taking initiatives to make the downtown business district more of a destination, which has been aided by the relocation of the Spam Museum to Main Street.

AREA OVERVIEW

16 | Shopko

Austin, MN Top Employers

# Employer

1 Hormel Foods

2 Quality Pork Processors

3 Mayo Clinic Health System

4 Austin Public Schools

5 Hy-Vee

6 Cedar Valley Services

7 Bellisio Foods

8 Mower County

Oak Park Mall RedevelopmentIn October 2015, the Austin Port Authority unanimously approved plans to redevelop the Oak Park Mall, headed by Idaho-based company Hy-Vee. The Hormel Foundation provided Austin with a $3.5 million grant to purchase the property. While Hy-Vee will get a majority of the land, the Port Authority will keep two lots for future development and the previous Hy-Vee property. Hy-Vee sees “good growth potential” in Austin and is building a new 60,000 to 90,000 square foot grocery store at the former Oak Park Mall site. A redesigned, smaller mall will house the CineMagic 7 movie theater and the AnyTime Fitness whereas the Younkers will become a standalone store.


Demographics

Population 5-Mile 15-Mile 30-Mile

2021 Projection 27,887 39,740 141,225

2016 Estimate 27,424 39,274 139,040

2010 Census 27,173 39,246 138,129

2000 Census 26,417 39,033 134,222

Growth 2016 - 2021 1.69% 1.19% 1.57%

Growth 2010 - 2016 0.92% 0.07% 0.66%

Growth 2000 - 2010 2.86% 0.55% 2.91%

Households 5-Mile 15-Mile 30-Mile

2021 Projection 11,349 16,128 57,590

2016 Estimate 11,182 15,933 56,502

2010 Census 11,121 15,915 55,766

2000 Census 11,063 15,785 53,156

Growth 2016 - 2021 1.49% 1.22% 1.93%

Growth 2010 - 2016 0.55% 0.12% 1.32%

Growth 2000 - 2010 0.52% 0.83% 4.91%

Income 5-Mile 15-Mile 30-Mile

2016 Est. Average Household Income $59,786 $63,846 $67,396

2016 Est. Median Household Income $45,024 $49,613 $54,270

™

Mark HulseyBroker of Record

License No. 40169559

Lindsay TsumpesAVP & Director


Kyle Matthews, CCIMChairman & CEO


shopko - matthews€¦ · confidentiality & disclaimer statement this offering memorandum...

Documents