Wendy's 5070 Northland Drive NE, Grand Rapids, MI
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™ OFFERING MEMORANDUM Wendy’s Grand Rapids, MI ™ TABLE OF CONTENTS 10 PROPERTY FEATURES 4 ASSET PRECIS 12 TENANT REPORT 6 AREA OVERVIEW 13 INVESTMENT SUMMARY EXCLUSIVE LISTING AGENTS PROPERTY FEATURES GARY CHOU KEVIN CHANG FVP & Senior Director ASSOCIATE KYLE MATTHEWS [email protected] [email protected] BROKER OF RECORD DIR 310.919.5827 DIR 310.919.5828 LIC # 6505399495 (MI) MOB 714.928.8016 MOB 951.616.8918 LIC # 01911222 (CA) LIC # 01976724 (CA) ASSET PRECIS Wendy’s 5070 Northland Drive NE Grand Rapids, MI 49525 List Price ........................................................................................... $1,990,992 CAP Rate - Current ...................................................................................6.25% Gross Leasable Area .......................................................................± 3,378 SF Lot Size ...........................................................................................± 1.36 Acres Year Built / Renovated .............................................................................. 2002 INVESTMENT HIGHLIGHTS PASSIVE, SECURE INVESTMENT STRONG OPERATOR IN AN EXCELLENT BRAND • Long term lease: 7.5 Years remaining on the original 20-year lease with two • Seasoned operator: Meritage Hospitality Group is one of the largest operators (2), ten (10) year options to extend in the Wendy’s system operating over 180 units in over 8 states • Absolute NNN lease: Zero landlord responsibilities • Strong commitment: Meritage Hospitality continues to expand their Wendy’s operations and Image Activating existing stores • Hedge against inflation: 5% rent increases every 5 years • Iconic brand: Wendy’s has over 6,500 units worldwide and an annual revenue EXCELLENT LOCATION of $1.9B • High visibility: Located off of Northland Drive NE, this site benefits from GRAND RAPIDS, MICHIGAN ±25,000 ADT • Grand Rapids is the second largest city in the state of Michigan • Healthy demographics: Over 75,000 people within a 5-mile radius with average household incomes of $89,597 • The city is the primary business center of Western Michigan • Other National Tenants in the area include: Anytime Fitness, Walgreens, Cricket, Starbucks and Chase Bank 4 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ Annualized Operating Data Monthly Rent Annual Rent Rent/SF Cap Rate Current $10,369.17 $124,437 $36.84 6.25% 12/18/2019 $10,888.25 $130,659 $38.68 6.56% Option 1 $11,432.58 $137,191 $40.61 6.89% Option 1 - Increase $12,004.25 $144,051 $42.64 7.24% Option 2 $12,604.50 $151,254 $44.78 7.60% Option 2 - Increase $13,234.67 $158,816 $47.01 7.98% Tenant Summary Tenant Trade Name Wendy’s Type of Ownership Fee Simple Lease Guarantor Meritage Hospitality Group Lease Type NNN Roof and Structure Tenant Responsible Original Lease Term 20 Years Lease Commencement Date 12/18/2004 Rent Commencement Date 12/18/2004 Lease Expiration Date 12/18/2024 Term Remaining on Lease ± 7.8 Years Increases 5% Increases Every 5 Years Options Two (2), Ten (10) Year Options ~ Matthews Real Estate Investment Services ~ 5 AREA OVERVIEW Grand Rapids, Michigan Known for having the most vibrant downtown between Chicago and Cleveland, Grand Rapids is the primary cultural and business hub of Western Michigan. It located along the Grand River, just thirty minutes away from Lake Michigan’s golden beaches and captivating sunsets. As Michigan’s second largest city, Grand Rapids has long been a mecca for creators and admirers of craftsmanship. Artistic creativity became an integral part of the city’s identity in the 20th century, encompassing everything from visual and performing arts to brewery and cuisine. With high incomes and low living costs, Grand Rapids offers big city amenities and a high quality of life to its residents. Grand Rapids’ well-maintained and traditionally Midwestern downtown area has a European appearance where the Grand River flows through it. Bustling with numerous restaurants, clubs, theaters and museums, downtown’s walkable neighborhoods host a number of festivals. Many of these events take place at the Vandenberg Plaza, namely the Celebration on the Grand and Festival of the Arts. 6 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ AREA OVERVIEW Grand Rapids is home to one of the world’s most visited art museums, the Frederik Meijer Gardens & Sculpture Park, along with several other cultural assets including the Grand Rapids Subject Property Art Museum, the Van Andel Museum Center, the Gerald R. Ford Presidential Museum and the Roger B. Chaffee Planetarium. A myriad of theaters and stages further enhance Grand Rapids’ culture scene, offering live theater and performances by the city’s Grammy-nominated symphony. Economic Snapshot Upon its establishment, Grand Rapids emerged as a notable furniture-producing center due to nearby hardwood forests. Today, that industry has transitioned towards high-tech office furniture with the headquarters for such names as Steelcase and Herman Miller in the city, two of the world’s leading office furniture REGIONAL MAP companies. The surrounding area is agricultural, where greater agricultural variety than otherwise found in many Midwestern locations is promoted by the tempering effect of Lake Michigan. Michigan is second only to California in agricultural diversity; the area is responsible for producing 85% of all crops harvested in Michigan. In part because of the agricultural environment, the area was attractive to settlers who started large, successful businesses such as the Meijer, Van Andel and De Vos families, all of whom left large endowments to the city. Consequently, Meijer and Alticor are both headquartered in Grand Rapids along with other national and multi-national companies, such as Haworth, Wolverine World Wide and Zondervan. MAJOR EMPLOYERS 7 Development Interest in rebuilding Grand Rapids’ downtown core has been an ongoing theme since the late 1990’s with eleven LEED projects, new construction and renovations on historic buildings. An estimated $3 billion of generated investment has brought countless jobs to the active, high-energy urban center of a growing region of more than one million people. Moreover, the redevelopment of historic buildings into urban condominiums and apartments have brought over 4,000 young professionals into the walkable downtown area. Grand Rapids has demonstrated an innate ability to forge a dynamic public-private partnership between businesses and community leaders, setting a multi-billion-dollar development boom in motion. The city’s revitalization initiatives are viewed as a template for generating innovative public-private partnerships and a catalyst for world-class life sciences and biotechnology research. DEMOGRAPHICS 198,701 2017 Estimate 2.95% Projected Growth 2017 - 2022 POPULATION 80,660 2017 Estimate 3.82% # of Employees Projected Growth 2017 - 2022 HOUSEHOLDS $57,813 2017 Est. Average Household Income Western Michigan is the fastest growing region in the upper Midwest as start-ups, software firms and high-tech corporations continue to move into Grand Rapids, which surpasses eleven of its peer communities in manufacturing and job and wealth creation. Businesses find the city to be a great place to do business; Grand Rapids’ infrastructure is ready-made for business, offering facilities that range from incubator space for startups to industrial parks for manufacturing and centers for research development. It offers lower business taxes and opportunities for companies of any size and type. 8 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ UNIQUELY GRAND RAPIDS Beer City Ale Trail Voted Beer City USA in national polls, the city also attracts beer lovers to its Beer City Ale Trail, which boasts more than 40 breweries. A booming craft brewery industry has garnered Grand Rapids a lot of attention. The Beer City Ale Trail takes visitors through a self-guided craft beer tour, allowing them to experience local craft breweries. Many of the area’s most notable breweries offer an insider look at the creation of their product. Grand Rapids is home to Founders, the third best brewery in the world, and HopCat, which was voted as the number one brewpub in the United States and the third best beer bar in the world: Two places certainly worth checking out! ArtPrize ArtPrize is Grand Rapids’ independent international art competition held every summer. The nineteen day-long event is unlike traditional competitions in that contestants are judged by the public and a jury of professional artists; It is the largest art competition decided by public vote. During the competition, art from all over the world can be seen on every corner of downtown. An approximate 200 venues open their doors for this event as the city serves as an opent platform for those wanting to share their artistic opinion, knowledge, and skills. Frederik Meijer Gardens & Sculpture Park As an emerging worldwide cultural destination, Meijer Gardens is the state’s second-largest tourist attraction as well as a feature venue in ArtPrize. Located on a 158-acre campus, Meijer Gardens features Michigan’s largest tropical conservatory, sculpture galleries and permanent sculpture collection, outdoor gardens, nature trails and outdoor gardens. This attraction is one of the nation’s most significant sculpture and botanic experiences, drawing more than ten million visitors since its opening in 1995. GETTING AROUND Gerald R. Ford International Airport Situated twenty-five miles southeast of Grand Rapids, Gerald R. Ford International Airport is the largest commercial airport in the West Michigan region and the second largest