Offering Memorandum Marysville (Seattle Msa), Washington Pad to & &
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PAD TO & & • 2-TENANT SERVICE-BASED NNN INVESTMENT • DOMINANT RETAIL CORRIDOR • SEATTLE-TACOMA MSA • OFFERING MEMORANDUM MARYSVILLE (SEATTLE MSA), WASHINGTON PAD TO & & • 2-TENANT SERVICE-BASED NNN INVESTMENT • DOMINANT RETAIL CORRIDOR • SEATTLE-TACOMA MSA • In Association with Mattis Partners, LLC | Licensed Washington Broker #: 19234 OFFERING MEMORANDUM MARYSVILLE (SEATTLE MSA), WASHINGTON PAD TO COSTCO AND TARGET OFFERING MEMORANDUM MARYSVILLE (SEATTLE MSA), WASHINGTON TABLE OF CONTENTS: EXCLUSIVELY LISTED BY: Offering Summary 4 Jeff Lefko Investment Highlights 5 Executive Vice President Lease Summary 7 [email protected] 844.585.7682 Income & Expense 8 Site Plan 9 Bill Asher Parcel Map 10 Executive Vice President Aerial Overview 13 [email protected] Regional Map 16 844.585.7684 Tenant Profile 17 Tenant Overview 19 David Merisko Area Overview 20 Mattis Partners, LLC [email protected] Demographics 23 206.375.4343 In Association with Mattis Partners, LLC | Licensed Washington Broker #: 19234 OFFERING SUMMARY CHIPOTLE & PACIFIC DENTAL SERVICES LOCATION Chipotle & Pacific Dental Services VIEW ON GOOGLE MAPS 17103 28th Drive NE Marysville, WA 98271 NOT A PART OFFERING SUMMARY Price: $3,860,000 Current Net Operating Income: $193,087 Current Capitalization Rate: 5.00% July 2023 Net Operating Income: $211,615 July 2023 Capitalization Rate: 5.48% Net Rentable Area: 5,485 Year Built: 2016 Lot Size (Acres): 0.62 FINANCING SUMMARY All Cash or Cash to New Financing (Contact Hanley Investment Group for Further Details) NOT A PART The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 4 INVESTMENT HIGHLIGHTS CHIPOTLE & PACIFIC DENTAL SERVICES y New Construction Two-Tenant NNN Service-Based Retail Investment: ο Chipotle 6.5+ years remaining on the initial 10-year lease term Over 2,700 stores in the U.S. and Canada, France, Germany, and the United Kingdom Chipotle reported Q3 2020 comparable restaurant sales increased 8.3%, while revenue increased 14.1% to $1.6 billion #12 “Top 500 Chain Restaurant Report” – Restaurant Business (2019, 2020) #7 “World’s Most Valuable Quick Service Restaurant Brand” by Statista (2020) ο Pacific Dental Services 5+ years remaining on the initial 10-year lease term Rare 3% annual increases Pacific Dental Services is one of the nation’s largest private dental companies with over 800 locations in 23 states, and plans to add more than 80 offices each year y Rare and Attractive Fixed Rental Increases: Fixed increases provide an unleveraged increase in return of almost 50 basis points by 2023 The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 5 INVESTMENT HIGHLIGHTS CHIPOTLE & PACIFIC DENTAL SERVICES y Dominant Regional Retail Trade Area: The subject property is located in the heart of the Marysville- Arlington regional trade area, which serves over 175,000 people ο Surrounding notable anchor tenants include Costco, Target, Walmart Supercenter, Lowe’s, Dick’s Sporting Goods, Hobby Lobby, Best Buy, JoAnn Fabrics, Marshalls, Michaels, Office Depot, Party City, Petco, Safeway, Tractor Supply Co., and Tuesday Morning y Excellent Freeway Accessibility; Strategically Located at the 172nd Street Off Ramp: The property is located immediately off of Interstate-5, and ideally situated at the entry point of the retail corridor ο Interstate 5 is the major north/south freeway connecting Marysville to Canada to the North and Seattle-Tacoma to the South; 118,000 cars per day y Affluent, High Growth Demographics: Average household incomes are in excess of $89,000 within a 5-mile radius of the subject property ο The number of households increased 20% within a 1-mile radius of the property from 2010 to 2019 and are projected to increase an additional 10% by 2024 ο The trade area is one of the fastest growing markets in the greater Seattle region and a direct link in retail hubs from Seattle to Bellingham y Seattle-Tacoma MSA: ο 14th largest metropolitan area in the United States ο Over 3.9 million people; projected to grow by 4.7% in the next 5 years ο #8 “Best Performing Metros in the U.S.” by Milken Institute (2020) ο #1 “Best Places for Business and Careers” by Forbes (2019) The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 6 LEASE SUMMARY CHIPOTLE & PACIFIC DENTAL SERVICES LEASE SUMMARY (1) Guarantor: Chipotle Mexican Grill, Inc. Pacific Dental Services, LLC Rent Commencement: November 16, 2017 June 13, 2016 Lease Expiration: November 30, 2027 June 30, 2026 Lease Type: NNN NNN Net Rentable Area: 2,682 2,803 Monthly Rent: $7,152 $8,939 Annual Rent: $85,824 $107,263 Rental Increases: 10% Every 5 Years (December 2022) 3% Annually (July 2021) Renewal Options: Two 5-Year @ 10% Increases Two 5-Year @ 3% Annually REIMBURSEMENTS Property Taxes: Tenant Responsibility Tenant Responsibility Insurance: Tenant Responsibility Tenant Responsibility Common Area Maintenance: Tenant Responsibility Tenant Responsibility Roof and Structure: Landlord Responsibility (2) Landlord Responsibility (2) Management Fee: 3% of Base Rent 3% of Base Rent plus 12% Admin Fee on CAM NOTES (1) All lease provisions to be independently verified by Buyer during the Due Diligence Period (2) Transferrable 15-Year Roof Warranty The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 7 MULTI-TENANT ONLY INCOME & EXPENSE CHIPOTLE & PACIFIC DENTAL SERVICES ANNUALIZED OPERATING DATA Current July 2023 Scheduled Gross Income (SGI): $193,087 $211,615 Expense Reimbursement: NNN NNN Gross Operating Income: $193,087 $211,615 Total Operating Expenses: NNN NNN Net Operating Income (NOI): $193,087 $211,615 OPERATING EXPENSES Amount Taxes: NNN Insurance: NNN CAM: NNN Management: NNN Total Expenses: NNN The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 8 SITE PLAN CHIPOTLE & PACIFIC DENTAL SERVICES 172ND STREET SIGN SIGN SIGN DRIVE THRU 27TH AVENUE SIGN 28TH DRIVE 28TH ON RAMP SUITE # DRIVETHRU SIGN SIGN TWIN LAKES AVENUE 171ST PLACE N SUBJECT PROPERTY NOT A PART The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 9 PARCEL MAP CHIPOTLE & PACIFIC DENTAL SERVICES SUBJECT PROPERTY N APN: 00697200000200 The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 10 SURROUNDING TENANTS | NAP AERIAL OVERVIEW CHIPOTLE & PACIFIC DENTAL SERVICES STRAWBERRY FIELDS ATHLETIC COMPLEX 118,000 CPD SUBJECT PROPERTY 28TH DRIVE DEMOGRAPHICS 172ND STREET 42,000 CPD Population: 1-Mile Radius 6,898 3-Mile Radius 24,454 5-Mile Radius 59,650 Household Income: 1-Mile Radius $65,774 3-Mile Radius $82,877 5-Mile Radius $89,258 N The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 13 AERIAL OVERVIEW CHIPOTLE & PACIFIC DENTAL SERVICES ARLINGTON HIGH SCHOOL - 1,604 Students - 51ST AVENUE URBAN VILLAGE PROJECT ROXY - 448-Multi-Family Units, 22,000 SF -$355 Million, 2.8 Million SF Industrial Office, 70,000 SF Retail Proposed - Development 1,000+ New Jobs Proposed - ARLINGTON MUNICIPAL AIRPORT (AWO) 118,000 CPD 42,000 CPD SUBJECT PROPERTY 172ND STREET NE N The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 14 AERIAL OVERVIEW CHIPOTLE & PACIFIC DENTAL SERVICES SUBJECT PROPERTY 42,000 CPD 172ND STREET NE 118,000 CPD N The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 15 REGIONAL MAP CHIPOTLE & PACIFIC DENTAL SERVICES SEATTLE-TACOMA INTERNATIONAL AIRPORT (SEA) y 1-Hour Drive from Subject Property SUBJECT y 50 Million Annual Passengers PROPERTY y 32 Airlines; 120 Domestic and International Destinations y 8th Busiest Airport in the U.S. MARYSVILLE SEA N The information contained herein has been obtained from sources we deem reliable. We cannot assume responsibility for its accuracy. 16 TENANT PROFILE CHIPOTLE & PACIFIC DENTAL SERVICES Chipotle Mexican Grill is a leading fast-casual restaurant chain serving burritos, burrito bowls, tacos, and salads. It was ranked #12 on Restaurant Business’s “Top 500 Chain Restaurant Report” in 2019. The restaurant is popular for its fast and healthy meals made directly in front of the customer with high-quality, raw ingredients and classic cooking techniques. Chipotle leads the way in sustainable business practices as they partner with humane and environmentally friendly farmers, ranchers, and suppliers. The company has a “Food with Integrity” business model that pledges to source the most responsible and highest-quality ingredients for customers. The company was founded in 1993 by Steve Ellis in Denver, Colorado, and in 2018, they relocated their headquarters to Newport Beach, California. They currently operate more than 2,600 restaurants in the United States, Canada, United Kingdom, France, and Germany. Chipotle is the only restaurant company of its size to own and operate all of its restaurants. The restaurant chain opened 140 new locations in 2019 and has plans to open approximately 150 to 165 locations in 2020. Chipotle’s revenue in 2019 was $5.6 billion, an increase of 14.8% over the prior