5692 Rising Sun Avenue, Philadelphia, Pa 19120 Executive Summary
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5692 RISING SUN AVENUE, PHILADELPHIA, PA 19120 EXECUTIVE SUMMARY Marcus & Millichap is pleased to present for sale a corporate guaranteed Rite Aid located in Philadelphia, Pennsylvania. Rite Aid is well located at the signalized intersection of Rising Sun Avenue and Adams Avenue. It is located in the neighborhood of Lawncrest, in the lower Northeast section of the city. Rising Sun Avenue is a main artery through Lawncrest, with over 18,000 vehicles passing by the Rite Aid daily. Surrounding national tenants include Dunkin Donuts, Burger King, Forman Mills, McDonald’s, Wells Fargo, Walmart, Ross and Staples. Rite Aid has 8 years left on their lease with eight, five year options. The original lease term was 20 years and is a NNN lease. Rite Aid was constructed in 2006. Rite Aid is one of the nation’s leading drugstore chains and dominates market share in Philadelphia. Rite Aid has over 2,500 stores concentrated on the east and west coasts. It was rated a B2 by Moody’s. The company is publicly traded on the New York stock exchange. PROPERTY INFORMATION PROPERTY OVERVIEW INVESTMENT HIGHLIGHTS AREA HIGHLIGHTS Address 5692 Rising Sun Avenue, Philadelphia, PA 19120 • Rite Aid has 8 years left on their NNN lease • Irreplaceable Philadelphia location Sale Price $5,084,000 • Corporate guaranteed and investment credit with • Well located at the signalized intersection of Rising CAP Rate 6.50% a credit rating of B2 by Moody’s Sun avenue and Adams Avenue Bldg SF 11,211 SF • Rental increases throughout the base term and • Surrounded by national retailers such as Wendy’s, five, five year option periods McDonald’s, Wells Fargo, Dunkin Donuts, Subway, Year Built 2006 Home Depot, Walmart, Dollar Tree, etc. Lot Size 0.82 Acres • NNN lease with no landlord responsibilities or expenses • Rite Aid is the dominant pharmacy in Philadelphia Type of Ownership Fee Simple • Publicly traded on the New York stock exchange • Dense population with a population of over peple APN 88-2-1816-25 under symbol RAD within a 5-mile radius • Rite Aid is the third largest pharmacy in the United • Rising Sun Avenue is a main arterial road through LEASE INFORMATION States Lawncrest • Rite Aid was constructed in 2006 Tenant Corporate Store Lease Guarantor Corporate Guarantee Lease Type NNN Lease Term 20 Years Roof and Structure Tenant Responsible Lease Commencement Date 5/4/2006 Lease Expiration Date 5/31/2026 Term Remaining on Lease 10+ years Increases Yes Options 8 x 5 ROFR 20 days TENANT INFORMATION FINANCIAL OVERVIEW RITE AID Rite Aid is the largest drugstore chain on the East Coast and the third-largest drugstore chain in the United States. Rite Aid has a large presence on the East and West coasts. Rite Aid sells prescription drugs and a wide assortment of other merchandise, including over-the-counter medications, health and beauty aids, CORPORATE OVERVIEW personal care items, cosmetics, household items, beverages, convenience foods, greeting cards, and photo processing. Tenant Trade Name Rite Aid Ownership Public The company is publicly traded on the New York Stock Ex- change under the ticker symbol RAD. Tenant Corporate Store In 2013, Rite Aid was the #1 Fortune 500 reail stock and the #3 Locations 2,569 overall Fortune 500 stock. In 2011, Rite Aid was ranked #100 on Credit Rating B Fortune 500 largest US corporations. Rating Agency Moody’s In 2018, Rite Aid is transferring 1,932 stores and three distribution Stock Symbol RAD centers to Walgreens for $4.4 billion cash. As a smaller phar- macy chain, Rite Aid is reducing its focus to the East and West Corporate Headquarters Camp Hill, PA Coasts, focusing primarily on eight states including California, Website www.riteaid.com Pennsylvania, Michigan, Ohio, New York, New Jersey, Washing- ton, and, Oregon. Sales Revenue $32.8 Billion (2017) RITE AID HIGHLIGHTS • 2,569 stores in 19 states as of December 2, 2017 • Approximately $16.0 billion in retail pharmacy sales and $6.0 billion in PBM sales for the LTM period • Fills over 180 million scripts per year in retail ended December 2, 2017 pharmacy • $632 million in proforma EBIDTA for the LTM period • Full-service pharmacy benefit management ended December 2, 2017 company (EnvisionRx) with over 4 million lives under management Map represents remaining stores and distribution centers following sale to Walgreens Boots Alliance pursuant to the Amended & Restated Asset Purchase Agreement dated September 18, 2017. PROPERTY INFORMATION FINANCIALS LOCATION YEAR BUILT LEASE ABSTRACT 5692 Rising Sun Avenue, Philadelphia, PA The subject property was built in 2006. Tenant Corporate Store 19120 Lease Guarantor Corporate Guarantee APN Lease Type NNN SITE 88-2-1816-25 Lease Term 20 Years The subject property is located at the signalized corner of Rising Sun Avenue and Roof and Structure Tenant Responsible Adams Avenue. Lease Commencement Date 5/4/2006 Lease Expiration Date 5/31/2026 SQUARE FOOTAGES Term Remaining on Lease 10+ years The building square footage is 11,211 SF on a 0.82 acre lot. Increases Yes Options 8 x 5 ROFR 20 days FRONTAGE AND ACCESS Approximately 145 feet of frontage on Rising Sun Avenue. FINANCIALS Sales Price $5,084,000 TRAFFIC COUNTS Bldg SF 11,211 SF Adams Avenue: CAP Rate 6.50% 16,607 vehicles per day Lot Size 0.82 acres Rising Sun Avenue: Net Operating Income $330,495 15,750 vehicles per day RENT INCREASES ANNUAL MONTHLY 6/1/2016-7/31/2024 $330,495.00 $27,541.25 8/1/2024-5/31/2026 $340,395.00 $28,366.25 Option 1 $363,545.50 $30,295.46 $374,434.50 $31,202.88 Option 2 $374,434.50 $31,202.88 $386,413.50 $32,201.13 Option 3 $411,877.95 $34,323.16 $425,054.91 $35,421.24 Option 4 $425,054.91 $35,421.24 $439,549.47 $36,629.12 Option 5 $467,560.36 $38,963.36 $483,504.40 $40,292.03 Option 6 $483,504.40 $40,292.03 $501,042.88 $41,753.57 Option 7 $531,854.86 $44,321.24 $531,854.86 $44,321.24 Option 8 $551,147.13 $45,928.93 $551,147.13 $45,928.93 5692 RISING SUN AVENUE, PHILADELPHIA, PA 19120 RISING SUN AVENUE ADAMS AVENUE AREA OVERVIEW PHILADELPHIA Philadelphia is the largest city in the Commonwealth of DEMOGRAPHICS 1 MILE 3 MILE 5 MILE Pennsylvania and the sixth-most populous city in the United States, with an estimated population of 1,567,872 and more 2016 Population 47,102 423,059 876,340 than 6 million in the seventh-largest metropolitan statistical 2016 Households 15,830 145,877 320,960 area, as of 2016. Philadelphia is the economic and cultural 2016 Average HH Size 2.961600 2.862000 2.660200 anchor of the Delaware Valley, located along the lower 2016 Daytime Population 27,328 292,113 673,531 Delaware and Schuylkill Rivers, within both the Mid-Atlantic 2016 Owner Occupied 61.0% 57.4% 56.0% region and the Northeast megalopolis. The Delaware Housing Units Valley's population of 7.2 million ranks it as the eighth-largest combined statistical area in the United States. 2016 Renter Occupied 39.0% 42.6% 44.0% Housing Units The Philadelphia area’s many universities and colleges make 2016 Vacant 3.9% 6.7% 7.6% it a top study destination, as the city has evolved into an educational and economic hub. According to the Bureau $ 0 - $ 14,999 17. 2% 20.7% 20.9% of Economic Analysis, the Philadelphia area had a gross $ 15,000 - $24,999 14.3% 13.7% 13.1% domestic product of US$431 billion in 2016, the eighth-largest metropolitan economy in the United States. Philadelphia is $ 25,000 - $34,999 12.3% 12.3% 11.6% the center of economic activity in Pennsylvania and is home $ 35,000 - $49,999 16.1% 15.6% 14.7% to five Fortune 1000 companies. The Philadelphia skyline $ 50,000 - $74,999 19.8% 17.3% 16.5% is expanding, with a market of almost 81,900 commercial $ 75,000 - $99,999 9.4% 9.1% 9.6% properties in 2016, including several nationally prominent $100,000 - $124,999 6.1% 5.3% 6.0% skyscrapers. Philadelphia has more outdoor sculptures and murals than any other American city. The city is known for its $125,000 - $149,999 2.4% 2.4% 2.9% arts, culture, and colonial history which attracted 42 million $150,000 - $200,000 1.4% 2.1% 2.6% domestic tourists in 2016 who spent $6.8 billion, generating $200,000 to $249,999 0.6% 0.7% 0.9% an estimated $11 billion in total economic impact in the city $250,000 + 0.6% 0.8% 1.3% and surrounding four counties of Pennsylvania. Philadelphia has also emerged as a biotechnology hub. Median HH Income $41,060 $38,100 $39,486 Philadelphia’s economic sectors include financial services, Per Capita Income $17,571 $18,023 $20,932 health care, biotechnology, information technology, Average HH Income $52,218 $51,806 $56,280 manufacturing, oil refining, food processing, and tourism. Financial activities account for the largest economic sector of the metropolitan area, which is also one of the largest The city is home to the Philadelphia Stock Exchange and health education and research centers in the United States. some of the area’s largest companies including cable television and internet provider Comcast, insurance companies Cigna, Colonial Penn, and Independence Blue Cross, energy company Sunoco, food services company Aramark, packaging company Crown Holdings, chemical makers FMC and Rohm and Haas, pharmaceutical company LAWNDALE GlaxoSmithKline, Boeing Rotorcraft Systems, apparel retailer Urban Outfitters, and automotive parts retailer Pep Boys.