TWO-TENANT FREESTANDING BUILDING Brand New Construction Investment Opportunity
1313 South Power Road | Mesa, Arizona PHOENIX MSA ACTUAL SITE EXCLUSIVELY PRESENTED BY
SEAN THOMAS ED BEEH Vice President EVP & Designated Broker SRS National Net Lease Group SRS Real Estate Partners-West, LLC [email protected] D: 602.682.6088 AZ License No. BR032807000 3131 E. Camelback Road, Suite 110 Phoenix, AZ 85016 AZ License No. SA116826000
2 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC TABLE OF CONTENTS
INVESTMENT SUMMARY Offering Summary 5 Investment Highlights
PROPERTY OVERVIEW Aerials Site Plan 9 Location Map
AREA OVERVIEW 16 Demographics
FINANCIALS Rent Roll 18 Brand Profile
3 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC PROPERTY PHOTO
4 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC INVESTMENT SUMMARY
SRS National Net Lease Group is pleased to offer the opportunity to acquire the fee simple interest (land & building ownership) in a two-tenant, NNN leased, freestanding, Del Taco & Aspen Dental investment property located in Mesa, Arizona (Phoenix MSA). Both tenants have signed brand new 10-year leases with 2 (5-year) options to extend, each featuring scheduled rental increases every 5 years throughout the initial term and at the beginning of each option period. The leases are NNN, reducing expense leakage for a new investor. The building is currently under construction and is estimated to have a grand opening in Summer 2020. New construction limits the need for short-term capital expenditure by a new landlord.
The Del Taco & Aspen Dental property is strategically located near the signalized, hard corner intersection of S. Power Road and E. Southern Avenue, averaging a combined 55,700 vehicles passing by daily. The site benefits from nearby on/off ramp access to U.S. Highway 60 (155,600 VPD), a highway that connects directly to Interstate 10 (220,000 VPD), the primary east/west freeway serving the Southern United States. The asset is ideally situated as an outparcel to Mesa Pavilions, a 350,000+ SF power center anchored by Target, WinCo Foods, PetSmart, and Floor & Decor. The presence of two big box anchors like Target and WinCo Foods significantly increases consumer draw to the immediate trade area and promotes crossover store exposure for the site. The center is positioned across from Superstition Springs Center, a 1.1 million SF regional mall anchored by Macy’s, JCPenney, and Dillard’s. Superstition Springs Center caters to a diverse and family-oriented market, featuring over 150 retail, dining, and entertainment options, including an outdoor amphitheater that converts into a stage for free concerts in the Summer. Positioned in the heart of an immense retail corridor, Del Taco & Aspen Dental is within close proximity to a variety of other national/credit tenants including The Home Depot, Walmart Supercenter, Costco Wholesale, T.J. Maxx, OfficeMax, Burlington, Petco, and more. Moreover, the property is surrounded by several apartment complexes including Lakeview at Superstition Springs (677-units), Waterford at Superstition Springs (280-units), and San Montego Apartments (240-units), providing for a direct residential consumer base from which to draw. The 5-mile trade area is supported by nearly 289,000 residents and 70,000 daytime employees with a healthy average household income of $82,000.
5 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC PROPERTY PHOTOS
6 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC OFFERING SUMMARY
OFFERING
Pricing $5,545,000
Net Operating Income $305,000
Cap Rate 5.50%
Desert Taco East, LLC (Franchisee) Tenants Aspen Dental Management, Inc. (Corporate)
Lease Type NNN
Landlord Responsibilities Limited
PROPERTY SPECIFICATIONS
Rentable Area 6,500 SF
Land Area 1.34 Acres
East Southern Avenue & S. Power Road Property Address Mesa, AZ 85206
Year Built Under Construction
Parcel Number 218-58-984
Ownership Fee Simple (Land & Building)
7 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC INVESTMENT HIGHLIGHTS
Multi-Tenant Offering | Brand New 10-Year Leases | Signalized, Hard Corner Intersection | U.S. Highway 60 | Scheduled Rental Increases Excellent Visibility & Access | Drive-Thru Equipped • Opportunity to purchase a 1.34 acre parcel with a freestanding, two-tenant • Located near the signalized, hard corner intersection of S. Power Rd and E. building occupied by both Del Taco and Aspen Dental Southern Ave, averaging a combined 55,700 vehicles passing by daily • Corporate guaranteed by Aspen Dental Management, Inc. • Benefits from nearby on/off ramp access to U.S. Highway 60 (155,600 VPD), • Del Taco is franchisee guaranteed by an experienced regional operator a highway that connects directly to Interstate 10 (220,000 VPD), the primary • Both tenants have signed brand new 10-year leases with 2 (5-year) options to east/west freeway serving the Southern United States extend, each featuring scheduled rental increases every 5 years throughout the • Significant street frontage and multiple points of ingress/egress initial term and at the beginning of each option period • Del Taco will feature a drive-thru, providing convenience and ease for customers Brand New Construction | High Barriers to Entry • On average, stores with drive-thrus experience higher sales than • The building is currently under construction and is estimated to have a grand those without opening in Summer 2020 • State-of-the-art building with attractive facade and high quality materials Outparcel to Mesa Pavilions | Dense Retail Corridor | used, featuring Del Taco & Aspen Dental’s most recent prototype Superstition Springs Center | National/Credit Tenants • Dense, infill trade area with high barriers for new development • Ideally situated as an outparcel to Mesa Pavilions, a 350,000+ SF power center anchored by Target, WinCo Foods, PetSmart, and Floor & Decor Direct Residential Consumer Base | • The presence of two big box anchors like Target and WinCo Foods significantly Strong Demographics in 5-Mile Trade Area increases consumer draw to the immediate trade area and promotes crossover • Nearby apartment complexes include Lakeview at Superstition Springs (677 store exposure for the site units), Waterford at Superstition Springs (280 units), and San Montego • Positioned across from Superstition Springs Center, a 1.1 million SF regional Apartments (240 units) mall anchored by Macy’s, JC Penney, and Dillard’s • Provides a direct residential consumer base from which to draw • Within close proximity to a variety of other national/credit tenants including • Nearly 289,000 residents and 70,000 employees support the trade area The Home Depot, Walmart Supercenter, Costco Wholesale, T.J. Maxx, • $82,000 average household income OfficeMax, Burlington, Petco, and more
8 SRS REAL ESTATE PARTNERS-WEST, LLC PROPERTY OVERVIEW
Location Parking There are approximately 32 parking spaces Mesa, Arizona on the owned parcel. Maricopa County The site benefits from reciprocal parking with Phoenix MSA Winco Foods.
Parcel Access Parcel Number: 218-58-984 S. Power Road: 2 Access Points Acres: 1.34 E. Hampton Avenue: 2 Access Points Square Feet: 58,176
Traffic Counts Construction S Power Road: 38,600 Vehicles Per Day Year Built: Under Construction U.S. Highway 60: 155,600 Vehicles Per Day
Improvements Zoning There is approximately 6,500 SF LC: Limited Commercial of existing building area
9 SRS REAL ESTATE PARTNERS-WEST, LLC SUPERSTITION SPRINGS CENTER
164,900 VEHICLES PER DAY BANNER GATEWAY MEDICAL CENTER
U.S. HIGHWAY 60 S. POWER RD.
E. HAMPTON AVE.
MESA PAVILIONS 38,600 VEHICLES PER DAY 8,000 VEHICLES PER DAY
E. SOUTHERN AVE.
17,100 VEHICLES PER DAY
10 Arizona: SRS REAL ESTATE PARTNERS-WEST, LLC 88,300 VEHICLES PER DAY
STATE HIGHWAY 202 WATERFORD AT DESERT SANDS SUPERSTITION SPRINGS 8,000 GOLF COURSE 164,900 (280 UNITS) VEHICLES PER DAY VEHICLES PER DAY U.S. HIGHWAY 60
ARIZONA GOLF RESORT
17,100 VEHICLES PER DAY MESA PAVILIONS E. HAMPTON AVE. E. SOUTHERN AVE.
S. POWER RD.
38,600 VEHICLES PER DAY
11 Arizona: SRS REAL ESTATE PARTNERS-WEST, LLC E AST SOU THER N AVE.
17,100 VEHICLES PER DAY S. POWERS. RD.
38,600 VEHICLES PER DAY
MESA PAVILIONS
E. HAMPTON AVE.
12 Arizona: SRS REAL ESTATE PARTNERS-WEST, LLC S. POWERS. RD.
38,600 VEHICLES PER DAY
17,100 VEHICLES PER DAY EAST SOUTHERN AVE.
SUPERSTITION SPRINGS CENTER WATERFORD AT SUPERSTITION SPRINGS (280 UNITS)
MESA PAVILIONS
155,600 VEHICLES PER DAY
U.S. HIGHWAY 60
SAN MONTEGO APARTMENTS (240 UNITS)
LAKEVIEW AT SUPERSTITION SPRINGS (677 UNITS)
13 Arizona: SRS REAL ESTATE PARTNERS-WEST, LLC S. 70THS. ST. THAI HOUSE MESA 17,100 VEHICLES PER DAY
E. SOUTHERN AVE.
MASKADORES TACO SHOP S. POWERS. RD.
MESA PAVILIONS
MUSIC & ARTS 38,600 VEHICLES PER DAY
E. HAMPTON AVE.
14 Arizona: SRS REAL ESTATE PARTNERS-WEST, LLC LOCATION MAP
PHOENIX 43 min | 29 miles
MESA
20XX ESTIMATED POPULATION 1 Mile 7,710 3 Miles 111,966 5 Miles 288,843 20XX AVERAGE HOUSEHOLD INCOME TUCSON 1 Mile $66,139 111 min | 114 miles 3 Miles $71,362 5 Miles $82,174 20XX ESTIMATED TOTAL EMPLOYEES 1 Mile 10,389 3 Miles 33,393 5 Miles 70,089
15 SRS REAL ESTATE PARTNERS-WEST, LLC AREA OVERVIEW
MESA, ARIZONA
Mesa is located in Maricopa County and just 15 miles east of Phoenix. Mesa covers 138 square miles and is the third largest city in Arizona and the 36th largest city in the nation. The City provides the advantages of a thriving metropolis while maintaining the feel of a suburban environment. The City of Mesa, Arizona had a population of 511,334 as of July 1, 2019.
Economic Development priorities are guided by Mesa’s industries of opportunity: Healthcare; Education; Aerospace/Aviation/Defense; Tourism/Technology. Building on Mesa’s strengths, quality infrastructure, talented workforce, projected growth and global market trends, the City of Mesa is already realizing significant benefit in each industry space. As part of the Phoenix- Mesa metro area, Mesa is a premier location for medical device design and manufacturing. Mesa hosts major facilities for some of the world’s top Aerospace and Defense companies including The Boeing Company, Cessna, a Textron company, Northrop Grumman, Embraer, Nammo Talley, L3 Communications and a few more. Smart companies such as Apple, Boeing, Bridgestone, FUJIFILM, and Mitsubishi all have large operations in Mesa.
Mesa offers a diverse and sustainable economy that features a balance of base industries that create high quality jobs, an educated workforce, a partnership of government and industry that considers next generation technologies and products as economic opportunities and business people who see Mesa as their home and the world as their marketplace.
Mesa is a city on the move with an abundance of freeways, highways and state routes strategically located along commerce corridors and current and future population centers. The 101 runs along Mesa’s west border and the Loop 202 circles the interior of Mesa. US 60 and SR 87 intersect in Mesa and minutes away are Interstates 10, 17 and 8, plus state routes 51, 74, 85 and 88 linking Mesa to other Arizona markets, California and Mexico. Mesa has two airports, Falcon Field Airport and Phoenix-Mesa Gateway Airport, and is minutes from Phoenix Sky Harbor International Airport.
16 SRS REAL ESTATE PARTNERS-WEST, LLC AREA DEMOGRAPHICS
1 MILE 3 MILES 5 MILES POPULATION 2019 Estimated Population 7,710 111,966 288,843 2024 Projected Population 8,224 121,062 312,853 2010 Census Population 6,916 96,978 246,711 Projected Annual Growth 2019 to 2024 1.30% 1.57% 1.61% Historical Annual Growth 2010 to 2019 1.16% 1.42% 1.70% HOUSEHOLDS & GROWTH 2019 Estimated Households 3,909 47,550 113,028 2024 Projected Households 4,176 51,224 121,822 2010 Census Households 3,478 41,723 97,983 Projected Annual Growth 2019 to 2024 1.33% 1.50% 1.51% Historical Annual Growth 2010 to 2019 1.27% 1.31% 1.55% RACE & ETHNICITY 2019 Estimated White 89.55% 88.89% 87.82% 2019 Estimated Black or African American 3.26% 3.08% 3.34% 2019 Estimated Asian or Pacific Islander 3.31% 3.07% 3.23% 2019 Estimated American Indian or Native Alaskan 0.96% 1.14% 1.20% 2019 Estimated Other Races 6.39% 7.07% 6.75% 2019 Estimated Hispanic 15.21% 17.73% 18.33% INCOME 2019 Estimated Average Household Income $66,139 $71,362 $82,174 2019 Estimated Median Household Income $51,839 $54,086 $61,773 2019 Estimated Per Capita Income $33,224 $30,250 $32,166 DAYTIME POPULATION 2019 Estimated Total Businesses 651 2,477 6,236 2019 Estimated Total Employees 10,389 33,393 70,089
17 SRS REAL ESTATE PARTNERS-WEST, LLC RENT ROLL
Pro Pro Rental Increases Lease Lease Suite Tenant Name Size Rata Rent Rent Rent Rent Rata Increase Rent Rent Rent Rent Start End Lease Options # SF (SF) Monthly $/SF/Mo Annual $/SF/Yr ($) Date Inc. Monthly $/SF/Mo Annual $/SF/Yr Date Date 1 Desert Taco East, LLC 2,000 31% $8,167 $4.08 $98,000 $49.00 32% Year 6 5.0% $8,575 $4.29 $102,900 $51.45 TBD 10 Yrs 2 (5-year) 5% Increase at Beg. of Each Option Period
Aspen Dental 2 4,500 69% $17,250 $3.83 $207,000 $46.00 68% Year 6 10.0% $18,975 $4.22 $227,700 $50.60 TBD 10 Yrs 2 (5-year) Management, Inc. 10% Increase at Beg. of Each Option Period
Total Occupied 6,500 100% $25,417 $3.91 $305,000 $46.92 100% Total Vacant 0 0% $0 $0 0% Total / Wtd. Avg: 6,500 100% $25,417 $3.91 $305,000 $46.92 100%
Pro Suite Tenant Name Size Rata Prop. Ins. CAM Mngmt. Reimbursement Reimbursement Notes # SF (SF) Taxes PSF Annual Desert Taco East, 1 2,000 31% Net Net Net - $6.40 $12,807 Full Pass Through LLC Aspen Dental Controllable CAM (excludes snow removal and utilities) cannot increase more 2 4,500 69% Net Net Net - $6.40 $28,816 Management, Inc. than 5% over previous year.
Total Occupied 6,500 100% Total Occupied $6.40 $41,623 100% Total Vacant 0 0% Total Vacant $0.00 $0 0% Total / Wtd. Avg: 6,500 100% Total Reimbursement $6.40 $41,623 100% Total Operating Expenses $6.40 $41,623 100%
18 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC RENT ROLL
OPERATING CASH FLOW IN-PLACE PRICING SUMMARY Potential Rental Revenue $305,000 Price $5,545,000 Potential Reimbursement Revenue ($41,623) Price/SF $831 Effective Gross Revenue $346,623 Net Operating Income $305,000 Less Expenses ($41,623) Cap Rate 5.50% Net Operating Income $305,000
OPERATING EXPENSES IN-PLACE PSF/YR NOTES Taxes: $16,000 $2.46 1. Taxes, Insurance, and CAM are per the 2021 Budget Insurance: $2,883 $0.44 CAM: $22,740 $3.50 Total: $41,623 $6.40
19 ACTUAL SITE SRS REAL ESTATE PARTNERS-WEST, LLC BRAND PROFILE
DEL TACO ASPEN DENTAL
Company Type: Public (NASDAQ: TACO) aspendental.com 2019 Employees: 7,544 Company Type: Private 2019 Revenue: $505.49 Million Locations: 800 2019 Net Income: $18.96 Million 2019 Assets: $758.96 Million 2019 Equity: $422.27 Million
Del Taco (NASDAQ: TACO) offers a unique variety of both Mexican and American Aspen Dental-branded practices are committed to breaking down the barriers to favorites such as burritos and fries, prepared fresh in every restaurant’s working better dental care, better smiles and better lives by making dentistry easier for kitchen with the value and convenience of a drive-thru. Made with quality patients. With close to 800 offices in 42 states, Aspen Dental practices provide ingredients like freshly grated cheddar, hand-chopped pico de gallo, sliced avocado, a wide range of general dentistry and denture-related services and offer patient- slow-cooked beans made from scratch, and fresh-grilled marinated chicken and friendly programs and services that help thousands of people every day get the carne asada. The brand’s UnFreshing Believable campaign further communicates dental care they need, including convenient locations, onsite labs, extended hours, Del Taco’s commitment to provide guests with the best quality and value for their and acceptance of most dental insurance. An unaffiliated company called Aspen money. Founded in 1964, today Del Taco serves more than three million guests Dental Management, Inc. provides administrative and business support services each week at its more than 580 restaurants across 14 states.
20 SRS REAL ESTATE PARTNERS-WEST, LLC THE EXCLUSIVE NET LEASE CAPITAL MARKETS TEAM OF SRS REAL ESTATE PARTNERS
275+ 25+ #1 2K+ 485 $1.5B
RETAIL OFFICES LARGEST REAL ESTATE RETAIL NET LEASE NET LEASE PROFESSIONALS SERVICES FIRM TRANSACTIONS PROPERTIES SOLD TRANSACTION VALUE in North America company-wide in 2019 in 2019 exclusively dedicated in 2019 to retail
This document has been prepared by SRS Real Estate Partners-West, LLC and has been approved for distribution by all necessary parties. Although effort has been made to provide accurate information, SRS and those represented by SRS make no guarantees, warranties, or representations as to the completeness of the materials presented herein or in any other written or oral communications transmitted or made available. Documents may have been referred to in summary form and these summaries do not purport to represent or constitute a legal analysis of the contents of the applicable documents. Neither SRS or those represented by SRS represent that this document is all inclusive or contains all of the information you may require. Any financial projections and/or conclusions presented herein are provided strictly for reference and have been developed based upon assumptions and conditions in effect at the time the evaluations were undertaken. They do not purport to reflect changes in economic performance, local market conditions, economic and demographic statistics, or futher business activities since the date of preparation of this document. Recipients of this document are urged to undertake their own independent evaluation of the subject and/or asset(s) being shared in this document.
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