walmart neighborhood market hope mills, nc · walmart neighborhood market offering memorandum hope...
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WALMART NEIGHBORHOOD MARKETO F F E R I N G M E M O R A N D U M
HOPE MILLS, NC
CREDIT RATINGAA/Stable
S&PAa2
Moody’s
NON-ENDORSEMENT & DISCLAIMER NOTICE
CONFIDENTIALITY & DISCLAIMER
The 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 Bro-chure 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 occupancy 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 infor-mation provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.
NON-ENDORSEMENT NOTICE
Marcus & Millichap 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 Marcus & Millichap, its affiliates 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 YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
JARED KAYE Senior Associate
Direct: (678) 808-2821
MARK RUBLE Senior Managing Director Investments
Direct: (602) 687-6766
WALMARTNEIGHBORHOOD MARKET
E X C L U S I V E L Y L I S T E D B Y
SONNY MOLLOY Senior Vice President Investments
Direct: (678) 808-2763
JAMIE MEDRESS Senior Managing Director Investments
Direct: (602) 687-6778
TABLE OF CONTENTS
EXECUTIVE SUMMARY
01Offering Highlights
Investment Overview
Summary of Terms
PROPERTY DETAILS
02Retail Market Aerials
Regional Map
Site Plan
LOCATION OVERVIEW
03Location Overview & Highlights
Demographics
FINANCIAL ANALYSIS
04Financial Summary
Rent Roll
Lease Abstracts
Tenant Summaries
Additional Offering
01-EXECUTIVE SUMMARY
TOTAL HOUSEHOLDS IN 5-MILE RADIUS
38,860
EXECUTIVE SU
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Price $10,176,000
GLA 41,389 SF
Cap Rate 5.65%
Price Per SF $245.86
Year Built 2017
Lot Size 5.22 Acres
Zoning R-10
Net Operating Income - Year 1 $575,000
MAJOR CUMBERLAND COUNTY EMPLOYERS
Department of Defense Goodyear Tire & Rubber, Inc.
Cumberland County Schools City of Fayetteville
Cape Fear Valley Health Systems Veterans Administration
Walmart Associates, Inc. Fayetteville Technical Community College
County of Cumberland Fayetteville State University
4220 Legion Road, Hope Mills, NC 28348
WALMART NEIGHBORHOOD MARKET
OFFERING HIGHLIGHTS
INVESTMENT OVERVIEWFundamental Location, Visibility & Access
◆ Located within Fayetteville, NC MSA (±377k People)
◆ Situated at the Signalized Intersection of Legion Road (±10k VPD) & Elk Road (±12k VPD)
◆ Located on a 5.22 Acre Lot
◆ Two Points of Ingress & Egress with Access to Traffic Signal
◆ ±600’ of Frontage Along Legion Road
◆ Robust Population Growth of 51.8% Since 2000 (1-Mile)
◆ Daytime Population of ±105k :: Density of ±46k (3-Mile) & ±102k (5-Mile)
◆ Attractive 2017 Construction :: 15 Year Roof Warranty (TPO Roof System)
Best-in-Class Tenant
◆ Unconditional Guaranty from Walmart Inc. (‘AA/Stable’ by S&P)
◆ New Walmart Neighborhood Market
◆ Prototypical 41,389 SF Store w/ Drive-Thru Pharmacy & Fuel Station
◆ WMT is World’s Largest Company Based Upon Revenues of ±$500 B (2017)
◆ 20 Year Base Term w/ Eight (8), 5 Year Renewal Options
◆ 5% Rent Escalation in Each Renewal Option
Economic Drivers
◆ Fort Bragg & Pope Field
- One of the Largest Military Installations in the World
- 50,000+ Active Duty Personnel
- Annual Economic Impact of ±4.5 Billion
◆ Cape Fear Valley Health Systems
- 3rd Largest Employer in Cumberland County
- Specializes in Cardiac Care, Cancer Treatment, Surgical Services, Neuroscience, Pediatrics, Rehabilitation, Orthopedics and More
◆ Goodyear Tire & Rubber Company
- Employs ±2,500 People
- Produces ±32,000 Per Day in Fayetteville
DAYTIME POPULATIONON LEGION RD.
±10,000 VPD 104,902600 FeetOF ROAD FRONTAGE
LOCATION HIGHLIGHTS
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● Cumberland County is home to major manufacturing companies, including Goodyear Tire & Rubber Co., Mann+Hummel Purolator Filters LLC, and Eaton Corp.
● Fort Bragg, the largest military installation in the world by population (50,000+ active duty personnel), is only 15 miles away.
● Fort Bragg and Pope Field generate around $4.5 billion/year into the region’s economy, making it one of the best retail markets in the country.
● Part of one of the fastest growing areas in North Carolina
● More than 20 golf courses are within an hour drive of Hope Mills
● Fayetteville is a three-time winner of the National Civic League’s All-America City Award and is a part of the All-America City Hall of Fame.
● Fayetteville ranked 25th on Forbes “The Best Places for Business and Careers” List in 2017.
● Cumberland County is home to four colleges and universities, including Methodist University, Fayetteville State University, Fayetteville Technical Community College, and Miller-Motte College-Fayetteville (±23,000 Combined Students).
02-PROPERTY DETAILS
AHHI 5-MILE RADIUS
$58,280
EXECUTIVE SU
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AERIALS
Lee Nails & Spa
Yamato Express
Ed V Baldwin Elementary SchoolStudents: ± 643
South View Senior High SchoolStudents: ± 1,782
South View Middle SchoolStudents: ± 689
Industrial Space
Legio
n Roa
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Elk Road
± 12,000 Daily
± 10,000 Daily
China Star
1111
AERIALS
PROPERTY D
ETAILS
± 23,000 Daily
± 51,000 Daily
8,500 Seat Coliseum
5-Mile RadiusResidents: ±101,503
Average HH Income: $58,280
Lee Nails & Spa
Yamato ExpressChina Star
12
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AERIALS
±7 M
iles
±1 Million SF of Retail Space
200-Bed Hospital
Lee Nails & Spa
Yamato ExpressChina Star
PROPERTY D
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13
SITE PLAN
SUBJECT PROPERTY
Note: Hope Mills Marketplace, located adjacent to the Walmart Neighborhood Market offering, is also available for purchase. Please contact Listing Agent to obtain the Hope Mills Marketplace offering memorandum.
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03-LOCATION OVERVIEW
2017 TOTAL POPULATION | 5-MILE RADIUS
101,503
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LOCATION OVERVIEWHope Mills, NC
Hope Mills is located in western Cumberland County south of Fayetteville, the county seat. The town center is next to a dam on Little Rockfish Creek, forming Hope Mills Lake. Little Rockfish Creek flows southeast to Rockfish Creek, a tributary of the Cape Fear River.
North Carolina Highway 59 (Main Street) runs through the center of the town, leading north 5 miles to U.S. Route 401 in western Fayetteville, and south 2.5 miles to Interstate 95 at Exit 41. Chartered in 1891, Hope Mills can trace its beginning back to 1766, when due to the wealth of natural water power and the abundance of timber, a lumber camp, saw mill, grist mill and pottery business were established. In 1839, construction of the first cotton mill powered by the Hope Mills Dam was completed and was the beginning of a new era for the town. Much of the heritage and the town’s name itself can be attributed to the cotton milling industry that followed.
Hope Mills offers its residents a full variety of services and recreation. There are public parks and recreational facilities located throughout the town. These facilities provide walking trails to tennis courts. Hope Mills has its own police and fire departments and is only minutes away from four major hospitals (Cape Fear Valley Medical Center, Hoke Hospital, Highsmith-Rainey Specialty Hospital, and Fayetteville VA Medical Center). The new county library provides a number of special services including summer reading programs and public meeting rooms. Five shopping centers, the historic downtown district, a post office, two medical clinics, five elementary schools, two middle schools, two high schools, and more than twenty churches round out the community.
LOCA
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7 Miles to Downtown Fayetteville
15 Miles to Fort Bragg, the largest U.S. Army Base in terms of population
(±240,000)
Hope Mills has an average household income of $58,280 within a 5-Mile
Radius (2017)
LOCATION HIGHLIGHTS
DEMOGRAPHICS
LOCATIO
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POPULATION 1 - MILE 3 - MILE 5 - MILE2022 Projection 8,344 49,503 107,175
2017 Estimate 7,103 45,950 101,503
Growth 2017 - 2022 17.48% 7.73% 5.59%
2000 Census 4,678 35,668 83,409
2010 Census 6,650 43,652 97,153
Growth 2000 - 2010 42.15% 22.38% 16.48%
HOUSEHOLDS2022 Projections 2,893 18,996 41,361
2017 Estimate 2,454 17,499 38,860
Growth 2017 - 2022 17.88% 8.56% 6.44%
2010 Census 2,307 16,635 37,376
2000 Census 1,655 13,285 31,246
Growth 2000 - 2010 39.36% 25.21% 19.62%
2016A EST. HOUSEHOLDS BY INCOME
$200,000 or More 1.30% 0.81% 1.69%
$150,000 - $199,999 1.67% 1.84% 2.57%
$100,000 - $149,999 10.81% 9.31% 9.64%
$75,000 - $99,999 12.55% 10.93% 10.69%
$50,000 - $74,999 19.03% 19.00% 18.78%
$35,000 - $49,999 14.05% 16.59% 15.98%
$25,000 - $34,999 12.65% 12.61% 13.15%
$15,000 - $24,999 11.62% 12.58% 12.66%
$10,000 - $14,999 6.29% 6.44% 6.00%
Under $9,999 10.04% 9.89% 8.85%
Average Household Income $57,644 $53,484 $58,280
POPULATION PROFILE
20 to 34 Years 25.00% 24.50% 23.20%
35 to 59 Years 31.50% 30.60% 31.50%
60 to 74 Years 8.50% 10.60% 11.70%
Age 75+ 2.9% 4.1% 5.0%
2017 Median Age 30.8 32.2 33.7
2017 Population 25 + by Education Level 4,258 28,543 64,518
Elementary (0-8) 3.37% 3.61% 3.29%
Some High School (9-11) 8.99% 9.22% 7.52%
High School Graduate (12) 25.95% 29.64% 28.63%
Some College (13-15) 27.63% 28.12% 27.67%
Associates Degree Only 13.43% 11.01% 10.91%
Bachelors Degree Only 12.54% 11.66% 13.62%
Graduate Degree 6.50% 5.32% 7.26%
1 - MILE 3 - MILE 5 - MILE
04-FINANCIAL ANALYSIS
2017 DAYTIME POPULATION | 5-MILE RADIUS
104,902
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OPERATING STATEMENTTHE OFFERINGProperty Walmart Neighborhood Market
Property Address 4220 Legion RoadHope Mills, NC 28348
Price $10,176,000
Capitalization Rate 5.65%
Price/SF $245.86
PROPERTY DESCRIPTIONYear Built / Renovated 2017
Gross Leasable Area 41,389 SF
Zoning R-10
Type of Ownership Fee Simple
Lot Size 5.22 Acres
LEASE SUMMARY
Property Subtype Net Leased Grocery Store
Tenant Walmart Inc.
Rent Increases 5% Increases in Each Option Period
Guarantor Corporate Guarantee
Lease Type NN
Lease Commencement January 25, 2017
Lease Expiration January 25, 2037
Lease Term 20
Renewal Options Eight (8), 5 Year Options
Landlord Responsibility Roof & Structure (15-Year TPO Roof Warranty)
Tenant Responsibility CAM, Taxes, Insurance, all other maintenance
Right of First Refusal/Offer Yes
RESPONSIBILITY OVERVIEW
RESPONSIBILITY RESPONSIBLE PARTY
Taxes Tenant
Utilities Tenant
Roof & Structure Landlord
Landscaping Tenant
HVAC Tenant
Parking Lot Tenant
Insurance Tenant
Operational Notes: 1) Walmart Neighborhood Market (WNM) self-manages their building.
2) WNM, on a quarterly basis, reimburses the adjacent shopping center owner for shared CAM maintenance costs relating to parking lot, landscaping, pond maintenance, and common area lights.
3) WNM, in addition to reimbursing shopping center owner for shared CAM items, reimburses shopping center owner an Admin Fee based on 5% of shared CAM, currently calculated in Year 1 to be $1,711.
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OPERATING STATEMENTANNUALIZED OPERATING INFORMATIONNet Operating Income $575,000
RENT SCHEDULE
5.65%5.93%
6.23%6.54%
6.87%
7.21%
7.57%
7.95%
8.35%
1-20 21-25 (Option 1) 26-30 (Option 2) 31-35 (Option 3) 36-40 (Option 4) 41-45 (Option 5) 46-50 (Option 6) 51-55 (Option 7) 56-60 (Option 8)Lease Year
YEAR ANNUAL RENT MONTHLY RENT RENT/SF CAP RATE
Current $575,000.00 $47,916.67 $13.89 5.65%
Years 1-20 $575,000.00 $47,916.67 $13.89 5.65%
Option 1 (21-25) $603,750.00 $50,312.50 $14.59 5.93%
Option 2 (26-30) $633,937.50 $52,828.13 $15.32 6.23%
Option 3 (31-35) $665,634.38 $55,469.53 $16.08 6.54%
Option 4 (36-40) $698,916.09 $58,243.01 $16.89 6.87%
Option 5 (41-45) $733,861.90 $61,155.16 $17.73 7.21%
Option 6 (46-50) $770,554.99 $64,212.92 $18.62 7.57%
Option 7 (51-55) $809,082.74 $67,423.56 $19.55 7.95%
Option 8 (56-60) $849,536.88 $70,794.74 $20.53 8.35%
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LEASE ABSTRACT
1962 77.47% WWW.WALMART.COM
TENANT: Walmart Neighborhood Market
LEASE GUARANTOR: Unconditional Lease Guaranty by Walmart Inc.
PREMISES: 41,389 Square Feet
LEASE COMMENCEMENT:January 25, 2017
LEASE EXPIRATION:January 25, 2037
BASE TERM:20 Years
BASE RENT:$13.89 PSF/$575,000.00 annually (Years 1-20)
OPTIONS:Eight (8), 5 year options
OPTION RENT:Option 1: $14.59 PSF or $603,750.00 annuallyOption 2: $15.32 PSF or $633,937.50 annuallyOption 3: $16.08 PSF or $665,634.38 annuallyOption 4: $16.89 PSF or $698,916.09 annuallyOption 5: $17.73 PSF or $733,861.90 annuallyOption 6: $18.62 PSF or $770,554.99 annuallyOption 7: $19.55 PSF or $809,082.74 annuallyOption 8: $20.53 PSF or $849,536.88 annually
TENANT’S PERMITTED USE:During the Term, the Demised Premises may be used for any lawful purpose not otherwise prohibited under the lease
COMMON AREA MAINTENANCE:Lessee shall maintain Demised Premises and appurtenances there-to in good condition and repair including the replacement thereof, excluding the roof and structural elements of the Demised Premis-es, including without limitation exterior walls” “heating and air-con-ditioning units and all components thereof” “gutters, downspouts and canopy” “sidewalks and other pavement” “and those portions of the landscaping, parking lot, lighting and other portions of the Common Areas lying within the Demised Premises
ADMIN FEE ON CAM:Lessor may charge Lessee with an Administration Fee not to ex-ceed 5% of CAM costs.
REAL ESTATE TAXES:Lessee shall pay all real estate taxes and assessments attributable to the Demised Premises imposed by any levying authority after the commencement date and during the Term.
INSURANCE:Lessee agrees during the term to provide and keep in force gener-al liability insurance” “Throughout the term, Lessor shall maintain commercial general liability insurance, property damage and all-risk hazard insurance on the common areas, buildings (excluding the Demised Premises), appurtenances and other improvements constituting the Shopping Center.” Lessee shall reimburse to Lessor “liability insurance, property dam-age and all-risk hazard insurance premiums for the Common Areas as provided in Section 15(b) shall be prorated over the coverage period and the corresponding installment shall be billed and paid with CAM Costs.
ASSIGNMENT & SUBLETTING:Lessee may assign this Lease or sublease all or any part of the De-mised Premises without need for obtaining the consent of Lessor, provided that Lessee shall not be relieved of liability under this lease in connection with any such assignment or sublease.
YEAR FOUNDED PRO RATA
Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam’s Club retail warehouses. As of January 31, 2018, Walmart has 11,718 stores and clubs in 28 countries, operating under 59 different names. The company operates under the name Walmart in the United States and Canada, as Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Chile, Brazil, and Canada.
Walmart is the world’s largest company by revenue – approximately US$480 billion according to Fortune Global 500 list in 2016 – as well as the largest private employer in the world with 2.3 million employees. It is a publicly traded family-owned business, as the company is controlled by the Walton family. Walmart was the largest U.S. grocery retailer in 2016, and 62.3 percent of Walmart’s US$478.614 billion sales came from U.S. operations.
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LEASE ABSTRACT
1962 77.47% WWW.WALMART.COM
RIGHT OF FIRST REFUSAL:In the event that at any time during the Term Lessor shall elect to sell all or any portion of the Demised Premises, Lessee shall have a one-time right of first refusal to pur-chase to purchase” “Upon receiving a bona fide offer to purchase all or any part of the Demised Premises signed by a third-party that Lessor desires to accept, Lessor shall submit said offer to Lessee within five days after receipt thereof” “Lessee shall have 45 days from the date of receipt of said offer in which to give written notice signed by Lessee electing to purchase the prop-erty offered, on the same material terms and conditions
OPENING PROVISION:Subject to the termination rights set forth in the Lease, and further subject to Lessor not then being in default under the Lease beyond the applicable cure period for such default, Lessee agrees that it shall open for one day a fully stocked and staffed Walmart Neighborhood Market.
ESTOPPEL:Upon request by Landlord, Tenant shall execute and deliver to Landlord an Estoppel Certificate. Within 20 days of Lessor’s request.
YEAR FOUNDED PRO RATA
Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam’s Club retail warehouses. As of January 31, 2018, Walmart has 11,718 stores and clubs in 28 countries, operating under 59 different names. The company operates under the name Walmart in the United States and Canada, as Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Chile, Brazil, and Canada.
Walmart is the world’s largest company by revenue – approximately US$480 billion according to Fortune Global 500 list in 2016 – as well as the largest private employer in the world with 2.3 million employees. It is a publicly traded family-owned business, as the company is controlled by the Walton family. Walmart was the largest U.S. grocery retailer in 2016, and 62.3 percent of Walmart’s US$478.614 billion sales came from U.S. operations.
2017 TOTAL POPULATION
101,503
5 - MILE LOCAL DEMOGRAPHIC Highlights
P O P U L AT I O N G R O W T H 2 0 0 0 - 2 0 1 0
16.48%=
MARK RUBLESenior Managing Director Investments
Direct: (602) 8687-6766
JARED KAYESenior Associate
Direct: (678) 808-2821
SONNY MOLLOYSenior Vice President Investments
Direct: (678) 808-2763
JAMIE MEDRESS Senior Managing Director Investments
Direct: (602) 687-6778