Offering Memorandum
CARL’S JR. RESTAURANT Douglas, AZ NON-ENDORSEMENT AND DISCLAIMER NOTICE
Confidentiality and 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 Brochure 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 information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2016 Marcus & Millichap. All rights reserved.
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.
CARL'S JR. Douglas, AZ ACT ID Y0010136 NET LEASED DISCLAIMER
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.
Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.
Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.
By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.
CARL'S JR.
OFFERINGOFFERING SUMMARY SUMMARY EXECUTIVE SUMMARY
OFFERING SUMMARY Price $2,198,000 MAJOR EMPLOYERS Net Operating Income $158,400 Capitalization Rate – Current 7.21% Price / SF $883.00 EMPLOYER # OF EMPLOYEES * Rent / SF $63.64 Tk Holdings Inc 1,000 Lease Type NNN Douglas Border Patrol 550 Gross Leasable Area 2,489 SF Douglas Raw Material Warehouse 500 Year Built / Renovated 2008 Walmart 400 Lot Size 0.7 acre(s) Windtech Inc 300
City of Douglas 276 CITY OF DOUGLAS 170 FINANCING Rubbermaid 163 Down Payment All Cash Douglas High School 107 Net Cash Flow 7.20% / $158,400 Cash on Cash Return 7.21% Huber Junior High School 80 Haven of Douglas LLC 70 Food City 112 65
DEMOGRAPHICS
1-Miles 3-Miles 5-Miles 2015 Estimate Pop 4,927 17,650 18,327 2010 Census Pop 5,058 18,109 18,807 2015 Estimate HH 1,674 5,745 5,970 2010 Census HH 1,719 5,866 6,097 Median HH Income $23,278 $27,096 $27,021 Per Capita Income $11,446 $13,373 $13,340 Average HH Income $33,524 $40,367 $40,230
* # of Employees based on 5 mile radius
4#
5 #
§ Directly Off Pan-American Highway (191) Highway Pan-American Off Directly
§ Near Major Retailers | Walmart, Supercenter, McDonalds and O'Reilly Auto Parts Auto O'Reilly and McDonalds Supercenter, Walmart, | Retailers Major Near
§ Walking Distance From Douglas US-Mexico Border US-Mexico Douglas From Distance Walking
§ Fixed Rental Increases Every Five Years Five Every Increases Rental Fixed
§ Approximately 9.5 Years Remaining on Absolute NNN Lease NNN Absolute on Remaining Years 9.5 Approximately
INVESTMENT HIGHLIGHTS INVESTMENT
daily. daily.
AZ AZ Douglas, in shop to Mexico Sonora, from crossing people 11,000 approximately with trade and industry for marketplace competitive bi-national a is economy Douglas
The The residents. 18,000 over are property subject the of miles three within and 191 Highway American Pan on day per cars 10,000 over sees property subject The year.
per per pedestrians million 1 over and year, per vehicles personal million 1.57 over year, per passengers vehicle million 2.8 oversaw entry of port Arizona Douglas the 2014, In
Douglas thrives with its cattle ranching and agriculture as an important part of the local economy. economy. local the of part important an as agriculture and ranching cattle its with thrives Douglas
mines, mines, copper its for known Once area. Metroplitan Phoenix the of southeast miles 229 and Tucson from southeast miles 118 approximately located is Douglas 80,000.
approximately approximately of population a with cities growing fastest Sonora’s of one is which Mexico, Sonora, Prieta, Agua bordering location its from benefits property subject The
KFC, Denny’s, Walmart Supercenter, AutoZone, O’Reilly Auto Parts, Dollar Tree, Dollar General, Game Stop, Sally’s Beauty Supply, JCPenney and several more. more. several and JCPenney Supply, Beauty Sally’s Stop, Game General, Dollar Tree, Dollar Parts, Auto O’Reilly AutoZone, Supercenter, Walmart Denny’s, KFC,
as as such nearby, situated properties retail other several are There Hotel. Western Best a and Chicken, Church’s a restaurant, McDonald’s a is property subject the from
street street the across directly Located restaurant. and stores retail adjacent the passing directly border the from and to walking those for walkway a has property subject The
Pizza. Pizza.
Cici's Cici's and Taco Del Denny's, operating with along Restaurants Jr. Carl's 9 operates and owns who Inc. Restaurants, CKE of franchisee a is LLC, Enterprises Leto tenant,
The The terms. five-year four, includes option lease The years. five every increases five-percent with lease 20-year original an on remaining years 9.5 approximately are There
America. Located on 0.70 acres, this 2,489 square feet Carl's Jr. is equipped with a drive-thru lane. drive-thru a with equipped is Jr. Carl's feet square 2,489 this acres, 0.70 on Located America.
of of States United the exiting or entering when available restaurant fast-food last and first the is Jr. Carl’s Entry, of Port Mexico States/ United trafficked highly the of north
mile mile half one Just Arizona. Douglas, in Street 5th East and 191 Highway American Pan of intersection signalized the off just located Jr. Carl's a is property subject The INVESTMENT OVERVIEW INVESTMENT
OFFERING SUMMARY OFFERING CARL'S JR. CARL'S
6 12
franchisee for Denny’s, Del Taco and Cici’s Pizza. Pizza. Cici’s and Taco Del Denny’s, for franchisee
a a also is and Arizona in restaurants Jr. Carl’s 9 operates
that that Arizona Scottsdale, in headquartered franchisee, Jr.
Carl’s Carl’s experienced an LLC, Enterprises, Leto with lease net triple
absolute absolute the on remaining years 9.5 approximately are There 3300 + 3300 Locations of No.
5/31/2026 Expiration Lease
6/27/2006 Commencement Lease
headquartered in Carpinteria, California. Carpinteria, in headquartered
100.00% RBA of Percentage
is is CKE countries. foreign 28 in and states 42 in locations
2,489 SF 2,489 Feet Square Rentable
restaurant restaurant 3,300 than more includes system CKE The brands.
Carpinteria, California Carpinteria, Headquartered
restaurant restaurant Burrito Red and Burrito, Green Hardee’s, Jr., Carl’s
CKE Restaurants, Inc. Restaurants, CKE Company Parent
the the including dining, casual fast and service quick in brands
http://www.carlsjr.com/ Website
regional regional U.S. popular most the of some operates licensees,
Tenant Name Tenant Leto Enterprises, LLC Enterprises, Leto
and and franchisees, subsidiaries, its through Inc. Restaurants, CKE Information General Leto Enterprises, LLC Enterprises, Leto
TENANT PROFILES TENANT CARL'S JR. CARL'S PROPERTYCARL'S JR. NAME
PRICINGPRICING ANDANDLOCATIONLOCATION VALUATIONVALUATIONTENANT SUMMARYOVERVIEWOVERVIEW MATRIXMATRIX
105 East 5th Street, Douglas, AZ 85607
INVESTMENT HIGHLIGHTS:
• Attractive Building Design • Absolute NNN Lease • Fixed Rent Increases Every 5 Years • Surrounded by Other National Retailers
CLOSE PROXIMITY TO:
7# PROPERTYCARL'S JR. NAME
PRICINGPRICINGREGIONAL ANDANDLOCATION VALUATIONVALUATIONTENANT AND LOCAL SUMMARYOVERVIEW MATRIXMATRIX MAP 105 East 5th Street, Douglas, AZ 85607
8# 9
AERIAL PHOTO AERIAL CARL'S JR. CARL'S CARL'S JR.
OFFERINGOFFERING SUMMARY SUMMARY PROPERTY SUMMARY
NOTES
10# CARL'S JR.
8 COMPARABLES MAP
CARL'S JR. (SUBJECT)
2 Carl's Jr.
3 El Pollo Loco
5 Culver's
SALES COMPARABLES
11 CARL'SPROPERTY JR. NAME
COMPARABLES SALES COMPARABLES SALES COMPS AVG
Average Cap Rate Average Price Per Square Foot 8 $900
7 Avg. 6.08% $810 Avg. $695 6 $720
6 $630
5 $540
4 $450
3 $360
2 $270
2 $180
1 $90
0 $0 Carl's Jr. Taco Bell Carl's Jr. El Pollo Burger King Culver's Carl's Jr. Taco Bell Carl's Jr. El Pollo Burger King Culver's Loco Loco
12
PROPERTYCARL'S JR. NAME
MARKETINGCOMPARABLES TEAM
SALES COMPARABLES
TACO BELL CARL'S JR. 13837 WEST MCDOWELL ROAD, GOODYEAR, AZ, 1014 MAIN STREET, TUBA CITY, AZ, 86045 CARL'S JR. 85338 105 EAST 5TH STREET, DOUGLAS, AZ, 85607 1 2
rentpropertyname1 rentpropertyname1 rentpropertyname1
SUBJECT PROPERTY Close Of Escrow 11/17/2016 Close Of Escrow 12/16/2016 Asking Price $2,198,000 Sales Price $1,734,333 Sales Price $2,780,000 Price/SF $883.09 Price/SF $749.00 Price/SF $838.00 CAP Rate 7.21% CAP Rate 6.00% CAP Rate 7.52% GLA 2,489 SF GLA 2316 SF GLA 3319 SF Year Built 2008 Year Built 2006 Year Built 2000 Lease Term Remaining 9.5 Years
NOTES NOTES NOTES Approximately 9.5 yearsrentpropertyaddress1 remaining on franchisee lease with 5 percent fixed Approximately 10 yearsrentpropertyaddress1 remaining on an original 20-year franchisee lease Approximately 7 years remainingrentpropertyaddress1 on an original 20-year franchisee lease rent increases every 5 years (9-store operator) with 10% rental increases every 5 years (13 unit operator) with 8% rental increases every 5 years. (9-unit operator)
13
PROPERTYCARL'S JR. NAME
MARKETINGCOMPARABLES TEAM
SALES COMPARABLES
BURGER KING CULVER'S EL POLLO LOCO 3490 NORTH LITCHFIELD ROAD, GOODYEAR, AZ, 4810 N 1ST AVE, TUCSON, AZ, 85718 5810 W BELL RD, GLENDALE, AZ, 85308 85395 3 4 5
rentpropertyname1 rentpropertyname1 rentpropertyname1
Close Of Escrow 11/15/2016 Close Of Escrow 6/30/2016 Close Of Escrow 2/16/2016 Sales Price $2,290,000 Sales Price $1,925,000 Sales Price $2,345,000 Price/SF $813.00 Price/SF $496.00 Price/SF $579.00 CAP Rate 5.02% CAP Rate 5.19% CAP Rate 6.65% GLA 2815 SF GLA 3880 SF GLA 4052 SF Year Built 1992 Year Built 2007 Year Built 2013
NOTES NOTES NOTES Approximately 9.5 yearsrentpropertyaddress1 remaining on the original 20-year term NNN lease Approximately 11 yearsrentpropertyaddress1 remaining on franchisee lease with 10 percent Approximately 14 years rentpropertyaddress1remaining on an original 15-year lease with five with 10% rental increases every 5 years. fixed rent increases every 10 years (20-store operator) percent fixed rent increases every five years (2 store franchise)
14 PROPERTYCARL'S JR. NAME
PRICINGPRICING ANDANDLOCATION VALUATIONVALUATIONTENANTMARKETINGDEMOGRAPHICS SUMMARYOVERVIEW MATRIXMATRIX TEAM
CREATED ON FEBRUARY 24, 2017
1 Miles 3 Miles 5 Miles POPULATION 2020 Projection 4,855 17,843 18,562 2015 Estimate 4,927 17,650 18,327 2010 Census 5,058 18,109 18,807 2000 Census 5,313 17,017 17,893
INCOME Average $33,524 $40,367 $40,230 Median $23,278 $27,096 $27,021 Per Capita $11,446 $13,373 $13,340
HOUSEHOLDS 2020 Projection 1,662 5,853 6,092 2015 Estimate 1,674 5,745 5,970 2010 Census 1,719 5,866 6,097 2000 Census 1,755 5,401 5,673
HOUSING 2015 $65,986 $84,494 $84,524
EMPLOYMENT 2015 Daytime 8,375 20,895 21,554 Population 2015 Unemployment 12.73% 10.34% 10.27% 2015 Median Time 18 17 17 Traveled
RACE & ETHNICITY White 67.45% 68.10% 68.09% Native American 0.02% 0.07% 0.09% African American 0.70% 0.93% 0.92% Asian/Pacific Islander 0.25% 0.49% 0.50%
Source: © 2015 Experian
15# PRESENTED BY
Steve Sauter Brian Tranetzki Senior Vice President Investments Broker Senior Director, National Retail Group Tel: (602) 687-6700 Palo Alto Office License: AZ BR581404000 Tel: (650) 391-1700 Fax: (650) 391-1710 [email protected] License: CA 01084092
www.MarcusMillichap.com