sprouts | flight net leased investment€¦ · the timing and procedures for the offering process...
TRANSCRIPT
OFFERING MEMORANDUM
SPROUTS | FLIGHT NET LEASED INVESTMENT5665 WEST BELL ROAD | GLENDALE, AR IZONA 85308
AFFILIATED BUSINESS DISCLOSURE
Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of 5665 West Bell Road, Glendale, Arizona (the ”Property”) by ‘Ownership’ (the “Seller”).
This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation (January 6, 2020) of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser.
Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agent each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.
This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.
EXECUTIVE SUMMARY01
PROPERTY DESCRIPTION02
03
AREA OVERVIEW
04
TENANT PROFILES
05
FINANCIAL ANALYSIS
TABLE OF CONTENTS
DAVID GUIDO
Managing Director+1 602 952 [email protected]
EXCLUSIVELY LISTED BY:
TIM WESTFALL
Managing Director+1 602 952 [email protected]
RYAN MORONEY
Director+1 602 952 [email protected]
THE OFFERINGNewmark Knight Frank (NKF), as exclusive advisor, is pleased to present the opportunity to acquire the Sprouts | Flight Center (the Property), a 61,302-square-foot retail project in Phoenix, Arizona.
This single-story two-tenant Property is located in an extremely dense Glendale submarket and is currently 100% leased. Built in 1994, the Property is situated ±5.68 acres with ample surface parking and tremendous visibility from Phoenix's busiest arterial, Bell Road.
The Property offers an opportunity for an investor to capitalize on the increasing market fundamentals fueled by the continued development in the submarket. Located less than 3 miles east of the community of Arrowhead and Arrowhead Towne Center, the site offers exceptional regional access with close proximity to several of Phoenix's most important arterials, the Loop 101 Freeway and Interstate 17.
01
EXECUTIVE SUMMARY
3 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE
OFFERING PRICE $11,900,000
TENANT LEASED SF % OF PROPERTY CREDIT RATING LEASE EXPIRATION
Sprouts 30,000 49% National 2/28/2023
Flight Fit N Fun 31,302 51% National 6/30/2030
PROPERTY SUMMARY OFFERING SUMMARY
MAJOR TENANT SUMMARY
SPROUTS | FLIGHT FIT N FUN CENTER5665 WEST BELL ROAD, GLENDALE 85308
61,302 GLA Total Building Area
1994Year Built
5.68 ACLand Area
200-50-204APN
4.75/1,000Overall Parking Ratio
100%Leased
NNNLease Structure
EXECUTIVE SUMMARY
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 4
INVESTMENT OPPORTUNITY
The Property provides tenants a stable environment with close access to multiple major freeways, significant local thoroughfares and extensive amenities. Opportunities to acquire superior quality retail projects of this nature are highly sought after.
FINANCIAL SUMMARY
100% Leased
$11,900,000Price
$906,445In-Place NOI
7.62%In-Place Cap Rate
$194.12Price Per Building SF
INVESTMENT HIGHLIGHTS
• 100% Occupied Stable Cash Flow Asset
• National Credit Tenant Mix Sprouts: one of the fastest growing supermarket chains in the country with
319 locations in 19 states and counting.
Jumpstreet: 15 locations in 7 states and expanding.
• High Demand/Extremely Low Vacancy Submarket
• Irreplaceable Location – 57th Avenue & Bell Road is a heavily trafficked
intersection that sees 72,000 vehicles per day
• Low Price Per Square Foot
• Low Management investment for an out-of-state passive investor
• Long-Term Tenancy – Sprouts has been a tenant here since 2002
• Excellent Long-Term Value within an established trade area and affluent
customer base
$48.13Price Per Land SF
5 PROPERTY NAME
N 57TH AVENUE
N 57TH AVENUE
W BELL ROADW BELL ROAD
• 100% Occupied Stable Cash Flow Asset
• National Credit Tenant Mix Sprouts: one of the fastest growing supermarket chains in the country with
319 locations in 19 states and counting.
Jumpstreet: 15 locations in 7 states and expanding.
• High Demand/Extremely Low Vacancy Submarket
• Irreplaceable Location – 57th Avenue & Bell Road is a heavily trafficked
intersection that sees 72,000 vehicles per day
• Low Price Per Square Foot
• Low Management investment for an out-of-state passive investor
• Long-Term Tenancy – Sprouts has been a tenant here since 2002
• Excellent Long-Term Value within an established trade area and affluent
customer base
±72,703 VPD±72,703 VPD
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 6
© 2008, ALL RIGHTS RESERVED. Reprinted with permission.
© 2008, ALL RIGHTS RESERVED. Reprinted with permission.
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Buckeye
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Guadalupe
ApacheJunction
Gilbert
Ahwatukee
Chandler
SunLakes
Queen Creek
Tempe
Peoria
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( 8 7 7 ) C A L L - P H X118 OFFICIAL VISITORS GUIDE V I S I T P H O E N I X . C O M OFFICIAL VISITORS GUIDE 119
Sprouts | Flight DEER VALLEY AIRPORTDEER VALLEY AIRPORT
TURF PARADISETURF PARADISE
BELL ROADBELL ROAD
UNION HILLS DRIVEUNION HILLS DRIVE
CORPORATE CAMPUS4,500 EMPLOYEES
NORTERRA &NORTERRA &HAPPY VALLEY TOWNE CENTERHAPPY VALLEY TOWNE CENTER
3,200 EMPLOYEES
350 EMPLOYEES
UNIVERSITY OF PHOENIXUNIVERSITY OF PHOENIXSTADIUMSTADIUM
TANGER OUTLETSTANGER OUTLETSWESTGATEWESTGATE
GILA RIVER ARENAGILA RIVER ARENA
DESERT DIAMONDDESERT DIAMONDCASINOCASINO
ASU WESTASU WEST
ARIZONAARIZONACHRISTIANCHRISTIANUNIVERSITYUNIVERSITY
ARROWHEADARROWHEADTOWNE CENTER MALLTOWNE CENTER MALL
PEORIA SPORTS COMPLEXPEORIA SPORTS COMPLEX
ARROWHEAD TOWNE CENTER & SURROUNDING RETAILARROWHEAD TOWNE CENTER & SURROUNDING RETAIL
GLENDALEGLENDALECOMMUNITYCOMMUNITY
COLLEGECOLLEGE
METROCENTERMETROCENTERMALLMALL
MIDWESTERNMIDWESTERNUNIVERSITYUNIVERSITY
5665 WEST BELL GLENDALE | AZ
SPROUTSFLIGHTCENTER
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 7
ASSET OVERVIEW
1994Year Built
100%Occupancy
61,302 SFGLA
4.75/1,000Parking Ratio
72,703VPD
WALMARTSUPERCENTER,
WINCO, STEINMART Neighbors
This single-story two-building Property is located in an extremely dense Glendale submarket and is currently 100% leased. Built in 1994, the Property is situated on a ±5.68 parcel with ample surface parking and tremendous visibility from Phoenix's busiest arterial, Bell Road.
The Property offers an opportunity for an investor to capitalize on the increasing market fundamentals fueled by the continued development in the submarket.
Located less than 3 miles east of the community of Arrowhead and Arrowhead Towne Center, the site offers exceptional regional access with close proximity to several of Phoenix's most important arterials, the Loop 101 Freeway and Interstate 17.
The Property benefits from excellent visibility, ingress and egress, ample parking and a large monument sign.
02
PROPERTYDESCRIPTION
NNNLease Type
8 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE
SITE PLANPROPERTY
DESCRIPTION
NOT A PART
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 9
10 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 11
N 57TH AVENUEN 57TH AVENUE
W BELL ROADW BELL ROAD
12 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE
W BELL ROAD
W BELL ROAD
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 13
Lease Expiration 2/28/2023
SF Leased 30,000
% of Total SF 49%
Ticker Symbol SFM
Website www.sprouts.com
Sprouts Farmers Market, Inc., is a publicly-traded health and wellness oriented grocery chain headquartered in Phoenix, Arizona with 321 stores diversified across 19 states. The company currently employees over 30,000 employees and plans to open 30 additional stores in 2019, including penetrating 3 new states, in addition to the 30 stores opened in 2018. Sprouts claims that 90% of products sold are minimally processed and free of artificial, preservative, and synthetic ingredients.
In 1943, Henry Boney began Sprouts' longstanding legacy of providing fresh, natural food available to anyone interested in eating well and spending less when he opened a San Diego fruit stand. Our company was founded by members of the Boney family, long-time San Diego grocers with a focus on making fresh foods affordable. Our founders opened the first Sprouts store in Chandler, Ariz. in 2002
with abundant produce and thousands of natural, organic and great-tasting foods at remarkably low prices. Our story continued with a period of rapid growth through acquisitions and new store development. In 2011, Sprouts joined with Henry's Holdings, which ran 35 Henry's Farmers Markets stores and eight Sun Harvest Market stores. A year later, Sprouts bought Sunflower Farmers Market, which ran 37 stores. Sprouts became a public company traded on the NASDAQ Stock Market in August, 2013. In recent years, we expanded into the Southeast by adding new stores in Georgia, Missouri, Alabama and Tennessee. Today, Sprouts is one of the fastest growing retailers in the country. Sprouts (New York Stock Exchange under “SFM”) employs more than 22,000 team members and operates more than 224 stores in 13 states from coast to coast. For more information, visit sprouts.com.
Please also view Bloomberg’s story on Sprout’s market growth: www.bloomberg.com/news/videos/b/fdbca187-47db-48ce-ba9a-76bf28804240
HIGHLIGHTS
1.4% Same Store Sales Growth (1Q 2019)
8.9% YOY Increase in Gross Profit ($444.6M in 1Q 2018 to $484.4M in 1Q 2019)
11.6% YOY Increase in Net Sales ($4.67B in FY 2017 to $5.21B in FY 2018)
03
TENANT PROFILES
TENANT OVERVIEW
AWARD ORGANIZATION YEAR
#3 Most Admired Companies (Food & Drug) Forbes 2019
#16 Most Popular Grocery Store YouGov.com 2019
#20 Hottest Retailers STORES / Kantar Consulting 2018
#40 Largest Employer in AZ Arizona Republic 2018
14 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE
Lease Expiration 6/30/2030
SF Leased 31,302
% of Total SF 51%
Ticker Symbol n/a
Website www.flightfitnfun.com
Vision: Grounded in family and deep core values, we aspire to help create special memories and to be the family entertainment destination park in each and every community we serve.
Our Difference – We care
Our People Commitment: Hire good people, teach them well, treat them well then let them care for our customers.
Our Service Commitment: Always deliver on that which is expected, promised or hoped for.
Our Safety Commitment: Caring for our employees and customers demands we operate our parks fully compliant with manufacturers guidelines and state law.
Our Community Commitment: Be a valued partner in the communities we serve.
Mission
Our mission is to deliver on our belief that to create special memories and to be your “go-to” family destination, we must create lasting relationships, deliver an exceptional experience, honestly reflect on who we are and constantly improve.
We operate 19 locations in the US and Canada that range from 17,000 to 88,000 square feet. Our parks are designed with a variety of fun activities, including freestyle jumps, dodgeball, basketball, foam pits, designated children’s areas, Ninja Warrior courses, ice skating and much more.
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TENANT PROFILES
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 15
BUILDING ADDRESS 5665 West Bell Road, Glendale, AZ 85308
PRICE $11,900,000
CAP RATE 7.62%
NOI / ANNUALLY $906,445 (as of 7/1/2020)
TOTAL BUILDING AREA ±61,302
LAND AREA ±5.68 AC
YEAR BUILT 1994
FINANCING Free & Clear
04
FINANCIALSUMMARY
TENANT NAME RSF RENT ACTUAL
(MONTHLY)RENT ACTUAL
(ANNUAL)RENT PSF (PSF/YR)
RENT PSF (PSF/MO)
PRORATA SHARE
LEASE FROM
LEASE EXP LEASE TYPE NEXT
INCREASE
Sprouts 30,000 $48,603 $585,600 $19.52 $1.63 49% 03/01/2002 02/28/2023 NNN
Renewal Option
3/1/2023
Flight Fit N Fun 31,302 $26,737 $320,845 $10.25 $0.85 51% 07/01/2020 06/30/2030 NNN
Renewal Option
7/1/2030
Total SF 61,302 $75,340 $906,445
RENT ROLL
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 16
FINANCIALSUMMARY
TENANT NAME RSF RENT ACTUAL
(MONTHLY)RENT ACTUAL
(ANNUAL)RENT PSF (PSF/YR)
RENT PSF (PSF/MO)
PRORATA SHARE
LEASE FROM
LEASE EXP LEASE TYPE NEXT
INCREASE
Sprouts 30,000 $48,603 $585,600 $19.52 $1.63 49% 03/01/2002 02/28/2023 NNN
Renewal Option
3/1/2023
Flight Fit N Fun 31,302 $26,737 $320,845 $10.25 $0.85 51% 07/01/2020 06/30/2030 NNN
Renewal Option
7/1/2030
Total SF 61,302 $75,340 $906,445
TENANTSprouts Farmers Markets, LLC,an Arizona Limited Liability Company
PRIMARY LEASE TERMThe original 20 year lease commenced in June of 2002 and expires on February 28, 2023
PREMISESApproximately 30,000 square feet
MINIMUM ANNUAL RENTAL RATEPRIMARY TERM:
3/1/13 - 2/28/18: $532,4003/1/18 - 2/28/23: $585,640
TENANT’S MAINTENANCE AND REPAIR OBLIGATIONSExcept for the portion and components of the Premises to be maintained by Landlord, Tenant shall keep the Premises and all utility facilities and systems exclusively serving the Premises in good condition and repair and shall make all replacements necessary to keep the Premises and the Tenant utility facilities in such condition. Tenant shall also be obligated to maintain, repair and/or replace the HVAC systems servicing the Premises. Tenant shall also reimburse Landlord 100% of Landlord’s common area costs, including the cost of a property manager.
EXTENTION OPTIONS:Four (4) Five-Year Options Option Periods Rent Schedule:
3/1/23 – 2/28/28: $644,2043/1/33 – 2/28/33: $708,6243/1/38 – 2/28/38: $779,4863/1/38 – 2/28/43: $857,435
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 17
TENANTJumpstreet 4, LLCan Arizona Limited Liability Company
PRIMARY LEASE TERMThe original Lease commenced on August 1, 2010 and expires on June 30, 2020
PREMISESApproximately 31,302 square feet
ANNUAL RENTAL RATEPRIMARY TERM:7/1/2016 – 6/30/2017: $249,7907/1/2017 – 6/30/2018: $257,3027/1/2018 – 6/30/2019: $265,1287/1/2019 – 6/30/2020: $272,953
TENANT’S MAINTENANCE AND REPAIR OBLIGATIONSTenant shall at all times keep all portions of the Premises (not specified to be maintained by Landlord) including maintenance of exterior entrances, all glass and show windows and their moldings and all partitions, doors, door jambs, door closures, door hardware, fixtures, equipment and appurtenances thereof (including electrical, lighting, heating and plumbing, and plumbing fixtures, and any air condition systems, including leaks around ducts, pipes, vents, or other parts of the air conditioning, heating or plumbing systems which protrude through the roof) and any replacement thereof, in good order, condition and repair.
YEAR RENT PSF/YEAR MONTHLY RENT ANNUAL RENT11/1/2019 – 6/30/2020 $ 8.72/SF, NNN $22,746.12 $272,953.44 7/1/2020 – 6/30/2025 $10.25/SF, NNN $26,737.13 $320,845.50 7/1/2025 – 6/30/2030 $11.53/SF, NNN $30,076.00 $360,912.06
LEASE HAS BEEN AMENDED FOR FLIGHT FIT N FUN AS TENANT:
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 18
ARIZONA QUALITY OF LIFE BY THE NUMBERS5 MILE RADIUSat-a-glance
348,088Population
131,847Households
38.5Median Age
$64,582Median Income
$267,331Average HomeValue
300Residents in Arizona can take advantage of the outdoors thanks to more than 300 days of sunshine
325Improve your golf game at the more than 325 golf courses throughout the region
#1Arizona State University has been ranked the #1 most innovative university in the nation three years in a row
<25Spend more time outdoors, with your family or doing other things you enjoy with a less than 25-minute average commute time
33 public high schools in Arizona are ranked in the top 10 nationally
6The state of Arizona is home to 6 professional sports teams: NFL, MLB, NHL, NBA, WNBA and USL
3 MILE RADIUSat-a-glance
118,278Population
44,903Households
39.1Median Age
$71,047Median Income
1 MILE RADIUSat-a-glance
11,084Population
3,753Households
41.9Median Age
$78,589Median Income
GLENDALE DEMOGRAPHICS
05
AREAOVERVIEW
$287,392Average HomeValue
$265,875Average HomeValue
19 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE
ARIZONA QUALITY OF LIFE BY THE NUMBERS
AREAOVERVIEW
G L E N D A L EG L E N D A L E
STATE FARM STADIUM
State Farm StadiumState Farm Stadium, formerly known as University of Phoenix Stadium, is a multi-purpose American football stadium located in Glendale, Arizona, west of Phoe-nix. It is the home of the Arizona Cardinals of the National Football League (NFL) and the annual Fiesta Bowl. It replaced Tempe's Sun Devil Stadium as the Valley of the Sun's main stadium. The stadium is adjacent to the Gila River Arena, home of the Arizona Coyotes NHL team.
Westgate Entertainment DistrictOffering a vibrant outdoor setting with unique water features, Westgate Enter-tainment District delivers an interactive shopping, dining and entertainment ex-perience. It is anchored by Gila River Arena, home of the Arizona Coyotes, and adjacent to the State Farm Stadium, home to the Arizona Cardinals.
WESTGATE ENTERTAINMENT DISTRICT
HERITAGE, ARTS, CULTURE
Glendale is a city with a diverse history that is treasured not only by its residents and community members, but also by the visitors who come and experience the roots of the city. Its his-tory provides the foundation of Glendale but many new cul-tural attractions are thriving, as well.
Glendale Civic CenterThe Glendale Civic Center, located in historic downtown Glen-dale, Arizona is the ideal destination for top-quality meetings and events in the valley. With over 40,000 square feet of flexible event space and on-site catering, the Glendale Civic Center can accommodate day conferences, meetings, tradeshows, gradua-tions and a variety of social events such as proms, weddings, and quinceaneras. Located just minutes away from Glendale’s Sports and Entertainment District and the Bell Road Corridor, it is the per-fect location for those that want to work, then play!
CIVIC CENTER
SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 20
DAVID GUIDO
Managing Director+1 602 952 [email protected]
EXCLUSIVELY LISTED BY:
CORPORATE LICENSE #01355491
Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of 234 East Bell Road (the ”Property”) by ‘Ownership’ (the “Seller”). The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.
TIM WESTFALL
Managing Director+1 602 952 [email protected]
RYAN MORONEY
Director+1 602 952 [email protected]