ulta beauty...ulta beauty 2068 dr. martin luther king jr parkway, chico, ca confidential offering...

ULTA Beauty2068 Dr. Martin Luther King Jr Parkway, Chico, CA

CONFIDENTIAL OFFERING MEMORANDUM

ANDY BOGARDUS+1 415 677 [email protected] LIC #00913825

SCOTT BORGIA+1 408 615 [email protected] LIC #00903600

Net Lease Group

SUBJECT PROPERTY

The information contained in this marketing brochure (“Materials”) is proprietary and confidential. It is intended to be reviewed only by the person or entity receiving the Materials from Cushman & Wakefield (“Agent”). The Materials are intended to be used for the sole purpose of preliminary evaluation of the subject property/properties (“Property”) for potential purchase.

The Materials have been prepared to provide unverified summary financial, property, and market information to a prospective purchaser to enable it to establish a preliminary level of interest in potential purchase of the Property. The Materials are not to be considered fact. The information contained in the Materials is not a substitute for thorough investigation of the financial, physical, and market conditions relating to the Property.

Photographs: The aerials in this offering memorandum show the actual property that is being offered for sale.

The information contained in the Materials has been obtained by Agent from sources believed to be reliable; however, no representation or warranty is made regarding the accuracy or completeness of the Materials. Agent makes no representation or warranty regarding the Property, including but not limited to income, expenses, or financial performance (past, present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws and regulations (local, state, and federal); or, financial condition or business prospects of any tenant (tenants’ intentions regarding continued occupancy, payment of rent, etc). A prospective purchaser must independently investigate and verify all of the information set forth in the Materials. A prospective purchaser is solely responsible for any and all costs and expenses incurred in reviewing the Materials and/or investigating and evaluating the Property.

By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set forth herein.

Disclaimer

SUBJECT PROPERTY

Investment Offering & Highlights 4

Investment Overview 5

Site Plan 6

Aerials 7

Regional Map 11

Local Area Map 12

Chico, California 11

Area Demographics 12

Demographics 13

About the Tenant 14

Chico, CA 15

DaVita Kidney Care

Table of Contents



SUBJECT PROPERTY

Ulta Beauty / 4

Investment Offering & Highlights

THE OFFERING

• Completed in 2016, a 10,055± square foot single story retail building leased to Ulta Salon, Cosmetics & Fragrance, and now Ulta Beauty for a remainder of over 11 years.

• Price: $7,260,000 – 5.00% Cap Rate

LEASE / TENANT

• 15-year lease term (11.5 years remaining) with 10% increase in 2026

• ULTA Beauty (NASDAQ:ULTA) is a publicly-traded Fortune 1000 company

• ULTA Beauty is the largest beauty retailer in the United States with over 907 locations across 48 states

• ULTA Beauty generated over $6.7 billion in 2019

REAL ESTATE / AREA STRENGTHS

• Shadow anchored by high performing Costco location – only Costco in the entire region servicing over 280,000 people from 11 different cities (Costco expanded and rebuilt its facility in 2008)

• The subject property is one of the first ULTA stores to open north of Auburn and is over 70 miles south of the nearest ULTA Beauty location

• Adjacent to Sierra Nevada Brewing Company – a major tourist destination and one of the nations largest brewers, producing over 1.25 million barrels of beer a year

• 3 miles from Chico State University – 17,019 total student body

• Kitty-corner to the Chico mall – a 528,000 square foot regional shopping mall anchored by Dick’s Sporting Goods, JCPenny, Chipotle, Panera and H&M

• Situated in a vibrant retail corridor – National tenants in the immediate area include: Walmart, Costco, Target, Home Depot, Lowe’s, Raley’s, Ross, Kohl’s, Dick’s, Best Buy, JCPenny, Men’s Warehouse, Michaels, Starbucks and In-N-Out to name a few

• Strong demographics - Population of 96,528 with a household income of $73,897 within a 5 miles radius

Ulta Beauty / 5

Investment Overview

LOCATION

2068 Dr. Martin Luther King Jr Parkway, Chico, CA, as a pad to Costco

LOT SIZE

Approximately 1.17 acres – 50,965 square feet

IMPROVEMENTS

Completed in 2016, a 10,055± square foot single story retail building with ample onsite parking

LEASE

Leased to ULTA Salon, Cosmetics & Fragrance, Inc now ULTA Beauty for 15 years from November 2016 until November 2031 at an annual rent of $363,000(1), increasing 10% in November 2026. There are three 5-year renewal options at the same terms with approximate 10% increases at the start of each option.

The lease is net with the tenant responsible for taxes, insurance, their prorata share of the common area, and reimbursement to the landlord for maintaining of the exterior of the property including parking lot and landscaping. The Landlord is responsible for the roof, structure and maintenance of the exterior of property (which shall be reimbursed by the tenant). (1) Seller will make up the difference in rent between the closing date and the

date the rent increases as a credit in escrow.

RENT SCHEDULE

PRICE: $7,260,000 — 5.00% Cap Rate

RENT PER SQUARE FOOT $36.10 per sq. ft. per year – $3.01 per sq. ft. per month

$36.10 per sq. ft. per year – $3.01 per sq. ft. per month

Rent Per Square Foot

$36.10 per sq. ft. per year – $3.01 per sq. ft. per month

. per year – $3.01 per sq. ft. per month

Investment Period Annual Rent Cap Rate

6 - 10 $363,000 5.00%

11 - 15 $399,300 5.50%

16 - 20 (Option 1) $439,200 6.05%

21 - 25 (Option 2) $491,900 6.78%

26 - 30 (Option 3) $551,000 7.59%

N

Site Location

The ULTA property is located on the high traffic retail corridor of Dr. Martin Luther King Jr. Parkway just off Highway 99 (60,000 VPD) and a half mile from the main intersection of Highway 99 & Highway 32 (88,000 VPD). Highway 99 is the main north-south route for residents and visitors of Chico, providing them with direct access to Yuba City, Sacramento, Stockton, Fresno and Bakersfield. The subject location is located in the heart of the Chico’s main retail sector. National tenants located in the immediate area include: Walmart, Costco, Target, Home Depot, Lowe’s, Raley’s, Ross, Kohl’s, Dick’s, Best Buy, JCPenny, Men’s Warehouse, Michaels, Starbucks and In-N-Out to name a few.

GAS

ULTA Beauty / 6

ULTA Beauty / 7

CHICO MALL

DR MARTIN LUTHER KING JR PKWY

SILVER DOLLAR WAY

99

NORTH AERIAL

E 20TH ST

DaVita, Inc. / 8

SW

A U T O M A L L

EAST AERIAL

99

SUBJECT PROPERTY


DaVita, Inc. / 9

E

580

46,000CARS PER DAY

EDEN MEDICAL EDEN MEDICAL CENTERCENTER

202,000CARS PER DAY


SW

SUBJECT PROPERTY

DR

MA

RTIN

LUTH

ER

KIN

G JR

PK

WY

SILVER DOLLAR WAY

NE

SUBJECT PROPERTY

£¤95

£¤6

£¤395

£¤101

£¤50

£¤95

£¤101

£¤395

£¤97

£¤101

£¤95

£¤6

£¤50

£¤95

£¤199

£¤395

Susanville

Eureka

Red Blu�

Shasta Lake

TruckeeGrass Valley

Sparks

Turlock

Merced

Carson City

Folsom

Livermore

Lodi

Manteca

Mountain View

Napa

Novato

Petaluma

Redding

San Mateo

Carmichael

Chico

Tracy

Davis

YubaCity

Reno

Modesto

Fairfield

FremontHayward

Roseville

Santa Clara

Santa Rosa

BerkeleyStocktonConcord

Vallejo

Daly City

Elk Grove

OAKLAND

SACRAMENTO

SAN JOSE

SAN FRANCISCO

5

5

5

5

80

80

CALIFORNIA

NEVADA

Regional Area Map

N

ULTA Beauty / 11

UV32

UV32

UV32

UV99

UV99

UV99

Fir St

Walnut St

Esplanade

Esplanade

Chi

coCa

nyon

Rd

Memorial Way

Manzanita Ave

Cypress St

Eaton Rd

Eaton Rd

East Ave

Skyway

W 5th St

Pine StMain St

Bruc

eR

d

Broadway St

E 7th Ave

Mar

igol

d Av

e

Mar

ipos

a A

ve

W 8th AveM

idway

E Park Ave

Day

ton

Rd

Flor

al A

ve

Park Ave

E 1st Ave

E Lassen Ave

Mangrove Ave

W Sacramento Ave

W East Ave

E 8th St

Coh

asse

t Rd

E 20th St

Chico River Rd

Vallombrosa Ave

CHICO

CHICO MALL

CYPERSSACRES

LOWERBIDWELL

PARK

CALIFORNIA STATEUNIV. OF CHICO

RANCHEROAIRPORT

Local Area Map

GROVE WAY

GROVE WAY

ULTA Beauty / 12

ULTA Beauty / 13

Demographics - Chico, CA

2020 Summary 1 mile 3 miles 5 miles

Population 9,819 64,424 106,533

Households 3,674 25,893 43,316

Families 2,090 12,324 22,604

Average Household Size 2.58 2.38 2.38

Owner Occupied Housing Units 1,357 10,416 19,792

Renter Occupied Housing Units 2,318 15,477 23,524

Median Age 32.4 29.4 32.2

Median Household Income $42,152 $44,337 $50,231

Average Household Income $58,669 $67,783 $73,897

Projected 2025 Summary 1 mile 3 miles 5 miles

Population 9,851 64,976 107,788

Households 3,764 26,644 44,695

Families 2,137 12,660 23,303

Average Household Size 2.53 2.33 2.33

Owner Occupied Housing Units 1,392 10,778 20,633

Renter Occupied Housing Units 2,372 15,866 24,062

Median Age 33.2 30.1 32.9

Median Household Income $47,910 $50,527 $56,207

Average Household Income $70,341 $79,526 $86,852

SUBJECT PROPERTY

Ulta Beauty / 14

Ulta Beauty

ULTA Beauty (NASDAQ: ULTA), formerly known ULTA Salon, Cosmetics & Fra-grance Inc. is the largest beauty retailer in the United States with over 1,196 stores across all 50 states. They are publicly traded and headquartered in Bolingbrook, IL. ULTA Beauty carries cosmetics and skincare brands, men’s and women’s fragrances, nail products, bath and body products, beauty tools and hair care products. Each store is also equipped with a salon, Benefit brow bar and Derm-alogica skin bar.

For the nine months ending November 2, 2019 the company reported total revenue of $5.08 billion, net income of $483 million and a shareholder’s equity of $1.85 billion and no long-term debt.

ULTA Beauty / 14

Location - Chico, CA

Chico is the most populous city in Butte County, California, United States. Following the 2018 Camp Fire that destroyed much of the neighboring town of Paradise, the population of Chico surged as many people who lost their homes in the fire moved to Chico. In 2018, the California Department of Finance estimated the population of Chico is 111,706, an increase of more than 20% from the 2018 population estimate. Chico is now the largest city in California north of Sacramento. The city is the cultural, economic, and educational center of the northern Sacramento Valley and home to both California State University, Chico and Bidwell Park, the country’s 26th largest municipal park and the 13th largest municipally-owned park.

ECONOMY

Economic Development is one of the Chico’s top priorities. The City understands the relationship between a healthy and prosperous economy and the quality of life experienced and expected by Chico residents and visitors. In 2007 the City Council unanimously adopted The City’s Economic Development Strategy outlining the City’s role in strengthening the economic base of Chico. In 2012 the Council adopted an Economic Development Action Plan which aligns the City’s economic development efforts with the key priorities of Chico’s business community and addresses the outcomes envisioned in the Economic Development Element of the General Plan and the City’s Economic Development Strategy.

Chico has always been a regional retail shopping destination. Chico’s largest retail district is focused around the Chico Mall on East 20th Street. In the two

decades since the Chico Mall was constructed, many national retailers have located nearby, including Target, Kohl’s, Forever 21, Best Buy, and Walmart. In January 2008, plans were unveiled to remodel the Chico Mall by demolishing the westernmost portion of the mall (previously home to Troutman’s) and constructing an open air “lifestyle” shopping center that will connect the mall with the Kohl’s shopping center nearby. This has since been amended as Dick’s Sporting Goods has renovated both the interior and exterior the space formerly occupied by Troutmans, and officially opened on July 10, 2013.

Much of the local economy is driven by the presence of Chico State. The main Industries that providing employment are: educational, health and social services, retail trade, arts, entertainment, recreation, accommodation and food services.

Sierra Nevada Brewing Co. Founded in 1979, Sierra Nevada Brewing Co. is considered one of the earliest and most influential breweries which spawned the craft beer movement of the 1980s and 1990s. Whereas many of the newly spawned microbreweries of the 1980s went out of business, Sierra Nevada Brewing endured to become one of the larges independent brewers in the country. Today, Sierra Nevada is a household name, and a major economic driver in Chico, employing upwards of 1,050 associates nationwide, producing nearly 1.25 million barrels of beer a year, and ringing up more than $252 million in annual sales. Every year Sierra Nevada hosts “Obtoberfest”, a two-weekend beer festival that has consistently sold out since it started in 2009.

DaVita, Inc. / 15

Chico, CA (cont)

ULTA Beauty / 16

EDUCATION

Much of the local economy is driven by the presence of Chico State, the 2nd oldest campus in the California State University system and home to approximately 18,000 students. The university offers 126 bachelor’s degrees, 35 master’s degrees, and 4 types of teaching credentials via 7 colleges and 5 schools. Chico State is known for its academic programs in engineering, science, computing, business, technology, environmental studies, theatre arts and communication. The school has been rated a “Top 10 Regional Public University in the West” by U.S. News and World Report since 1998.

TRANSPORTATION

Highways

Chico primary surface transportation link is via State Route 99 and State Route 32. State Route 99, commonly known as Highway 99, is a north–south state highway in the U.S. state of California, stretching almost the entire length of the Central Valley. From its southern end at Interstate 5 to its northern end at SR 36 near Red Bluff, SR 99 goes through the densely populated eastern parts of the central valley, including Bakersfield, Visalia, Fresno, Madera, Merced, Turlock, Modesto, Manteca, Stockton, Sacramento, Yuba City and Chico. State Route 32 (SR 32) is an east–west state highway in the U.S. State of California which is routed from Interstate 5 in Orland, across the Sacramento Valley and through Chico, through the northern Sierra Nevada, and ending at SR 36 and SR 89 in

eastern Tehama County. Chico is approximately 20 miles east of Interstate 5, which provides the city with access to major metro areas including Sacramento, Los Angeles, San Diego, Portland and Seattle.

Airport The nearest airport serving the Chico area is Redding Municipal Airport (RDD) located one hour north of the city. RDD is a full-service airport providing flights to San Francisco and the Portland area. The nearest international airport is Sacramento International Airport (SMF) located one and half hour south of the city.

Rail Amtrak operates the Chico Amtrak station at Fifth and Orange Streets for the Coast Starlight service. Trains run between Seattle and Los Angeles with a northbound, and a southbound train departing from the station daily.

Public Transportation The B-Line (Butte Regional Transit) serves the Chico Urban area with eight routes operating Monday through Saturday and two shuttle routes for Chico State students during the academic year. It also serves the Chico urban area with nine modified vans providing transportation for the elderly and the mobility impaired seven days a week. The transit center in Chico is located at Second and Salem Streets.

SUBJECT PROPERTY



NET LEASE GROUP

ulta beauty...ulta beauty 2068 dr. martin luther king jr parkway, chico, ca confidential offering...

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