Ross Dress for Less Leasehold Interest OFFERING MEMORANDUM San Jose, California (San Francisco Bay Area) E
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Ross Dress For Less Leasehold Interest OFFERING MEMORANDUM San Jose, California (San Francisco Bay Area) E. Capitol Expressway Location Net Lease Investment Services CUSHMAN & WAKEFIELD Andrew Bogardus Christopher Sheldon 201 California Street, Suite 800 +1 415 677 0421 +1 415 677 0441 San Francisco, CA 94111 [email protected] [email protected] Lic #00913825 Lic #01806345 www.thinknnn.com Net Lease Investment Services Disclaimer The information contained in this marketing brochure (“Materials”) is The information contained in the Materials has been obtained by proprietary and confidential. It is intended to be reviewed only by the Agent from sources believed to be reliable; however, no representation person or entity receiving the Materials from Cushman & Wakefield or warranty is made regarding the accuracy or completeness of the (“Agent”). The Materials are intended to be used for the sole purpose of Materials. Agent makes no representation or warranty regarding the preliminary evaluation of the subject property/properties (“Property”) Property, including but not limited to income, expenses, or financial for potential purchase. performance (past, present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence of The Materials have been prepared to provide unverified summary contaminating substances (PCB’s, asbestos, mold, etc.); compliance with financial, property, and market information to a prospective purchaser laws and regulations (local, state, and federal); or, financial condition to enable it to establish a preliminary level of interest in potential or business prospects of any tenant (tenants’ intentions regarding purchase of the Property. The Materials are not to be considered continued occupancy, payment of rent, etc). A prospective purchaser fact. The information contained in the Materials is not a substitute for must independently investigate and verify all of the information set thorough investigation of the financial, physical, and market conditions forth in the Materials. A prospective purchaser is solely responsible for relating to the Property. any and all costs and expenses incurred in reviewing the Materials and/ or investigating and evaluating the Property. By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set forth herein. Ross Dress For Less i Net Lease Investment Services Investment Offering & Highlights The Offering • A leasehold interest for an additional 26 years in a freestanding retail building located in San Jose, California leased to Ross Stores, Inc. through January 2019 • Price: $4,250,000 – 7.59% Cap Rate Lease / Tenant • Publicly traded Fortune 500® company with a net worth of $2 billion • S&P rated “BBB+” investment grade credit • Ross Stores is the nation’s largest off-price retailer • Tenant has been headquartered in the Bay Area since 1950 • Tenant has 1,146 locations nationwide Real Estate • Corner shopping center location along dominant traffic corridor • Single story concrete block building with on-site parking • Easy access to Hwy 101 and I-280 • Average 64,000 vehicles per day pass by the site Area Strengths • High density location with over 529,000 people within 5 miles • Average Household incomes of over $93,000 within 5 miles Ross Dress For Less ii Ross Dress For Less Table of Contents Disclaimer i Investment Offering & Highlights ii Investment Overview 1 Ross Stores, Inc. 2 Aerials 3 Neighboring Tenants 5 Location Map 6 San Jose Area Map 7 San Jose / Silicon Valley 8 Economy 9 Transportation 11 Demographics 12 CUSHMAN & WAKEFIELD Andrew Bogardus Christopher Sheldon 201 California Street, Suite 800 +1 415 677 0421 +1 415 677 0441 San Francisco, CA 94111 [email protected] [email protected] Lic #00913825 Lic #01806345 www.thinknnn.com Net Lease Investment Services Investment Overview Location Annual Rent Schedule 2950 Aborn Square Road at E. Capitol Expressway, San Jose, (Ground Lease Years Ross Rent NOI Cap Rate California Rent) 2015 $379,652 ($56,970) $322,682 7.59% Improvements 2016 $379,652 ($56,970) $322,682 7.59% Constructed in 1975, a one-story 27,118± square foot building with 2017 $379,652 ($62,149) $317,503 7.47% ample on-site parking spaces for ROSS DRESS FOR LESS in Aborn Square shopping center. 2018 $379,652 ($62,149) $317,503 7.47% 2019 $429,368 ($62,149) $367,219 8.64% • Only the improvements are for sale. 2020 $433,888 ($62,149) $371,739 8.75% 2021 $433,888 ($62,149) $371,739 8.75% Lease and Ground Lease 2022 $433,888 ($67,328) $366,560 8.62% Leased to ROSS STORES, INC., for 30 years, 4 months from September 30, 1988 until January 31, 2019 (4 years remaining) with 2023 $433,888 ($67,328) $366,560 8.62% four 5-year options. The current annual net rent from Ross Stores, 2024 $483,604 ($67,328) $416,276 9.79% Inc. is $379,652 and increases every option by $2.00 per square 2025 $488,124 ($67,328) $420,796 9.90% foot per year. The current annual ground lease rent is $56,970. The net operating income is $322,682. The lease is absolute net with 2026 $488,124 ($67,328) $420,796 9.90% the tenant responsible for all taxes, insurance and maintenance, 2027 $488,124 ($72,507) $415,617 9.78% including roof and structure. The ground lease expires on December 2028 $488,124 ($72,507) $415,617 9.78% 31, 2041 (26 years remaining), and the rent increases every 5 years at fixed rents with the next rent increase to commence January 1, 2029 $537,840 ($72,507) $465,333 10.95% 2017 at a net annual amount of $62,149. 2030 $542,360 ($72,507) $469,853 11.06% 2031 $542,360 ($72,507) $469,853 11.06% 2032 $542,360 ($77,686) $464,674 10.93% Price: $4,250,000 – 7.59% Cap Rate 2033 $542,360 ($77,686) $464,674 10.93% 2034 $592,076 ($77,686) $514,390 12.10% 2035 $596,596 ($77,686) $518,910 12.21% Rent Per Square Foot $14.00 net per year – $1.17 net per month 2036 $596,596 ($77,686) $518,910 12.21% 2037 $596,596 ($82,865) $513,731 12.09% 2038 $596,596 ($82,865) $513,731 12.09% 2039 $596,596 ($82,865) $513,731 12.09% 2040 $596,596 ($82,865) $513,731 12.09% 2041 $596,596 ($82,865) $513,731 12.09% Ross Dress For Less 1 Net Lease Investment Services Ross Stores, Inc. ROSS STORES, INC. (NASDAQ: ROST), a public company, is in the S&P 500, the Fortune 500® and the Nasdaq 100. Headquartered in Dublin, California, it is the nation’s largest off-price retailer. As of the fiscal 2013 year end, the Company operated 1,146 Ross Dress for Less® stores in 33 states, the District of Columbia and Guam and 130 dd’s DISCOUNTS® locations in ten states. Ross Dress for Less offers first-quality, inseason, name brand and designer apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20% to 60% off department and specialty store regular prices. dd’s DISCOUNTS features a more moderately-priced assortment of first-quality, in-season, name brand and fashion apparel, accessories and footwear for the entire family at everyday savings of 20% to 70% off moderate department and discount store regular prices as well as similar savings on a wide assortment of merchandise for the home. For the fiscal year ended February 1, 2014, the company reported revenues of $10.2 billion with a net income of $837.3 million and net worth of $2 billion. More information can be obtained at www.rossstores.com. Ross Stores, Inc. Headquarters Dublin, California Ross Dress For Less 2 AD VER CREEK RO SIL ARE RO QU AD S N R O B A ABORN ROAD Net Lease Investment Services Y A W S S E R P AD X E N L O IT P 3 AB A C E SILVER LAKE ORN RO VER CREEK RO PLAZA Ross Dress For Less SIL AD Y E CAPITOL EXPRESSWA AD VER CREEK RO SIL Net Lease Investment Services 78,000 vpd 64,000 vpd 680 280 180,000 vpd 680 280 E 101 C A P I T O L E X P R E S S N W A Y REID-HILLVIEW AIRPORT Y ROAD TULLY ROAD TULL EASTRIDGE MALL 101 SILVER LAKE Y A PLAZA W S S E R P X E L TO PI CA E Ross Dress For Less 4 Neighboring Tenants Ross Dress For Less 5 Location The subject property is a single-tenant, freestanding Ross Dress For Less store located in the heart of the area’s retail hub, located at 2950 Aborn Square Road, San Jose, California at the intersection of Capitol Expressway and Aborn Road, approximately 36 miles south of the Ross Stores headquarters in Dublin, California. The subject property is directly across from the Silver Creek Plaza, a 100,000 square foot retail center anchored by Safeway, Orchard Supply Hardware and Walgreens. The subject property is also located one mile south of Eastridge Mall, a 1.4 million square foot regional mall anchored by Barnes & Noble, JCPenney, and Macy’s. Other national and local tenants in the immediate area include Target, 24 Hour Fitness, Target, Baskin-Robbins, Starbucks, Wendy’s, Red Lobster, Sizzler, Popeyes, Little Cesar, T-Mobile and Bank of America. There are over 237,000 residents with an average household income over $99,000 located within a three mile radius of the subject property. Ross Dress For Less 6 Area Map San Jose (population of 1,00,536), the county seat of Santa Clara County, is located on the northern edge of the Monterey Bay, 50 miles south of San Francisco, 76 miles south of Stockton, and 119 miles south of the State Capital of Sacramento.