OFFERING MEMORANDUM OLLIE’S BARGAIN OUTLET 969 E BARNES CROSSING RD. | TUPELO, MS 38804
*STORE UNDER CONSTRUCTION EXCLUSIVELY LISTED BY:
BEN SNYDER KYLE MATTHEWS ZACK BATES SVP & Senior Director Chairman & CEO Associate Vice President
+1 (216) 503-3607 +1 (310) 919-5757 +1 (216) 503-3608 [email protected] [email protected] [email protected]
License No. 2018002569 (OH) License No. 1469842 (CA) License No. 2018002393 (OH)
BROKER OF RECORD Phillip Carpenter License No. 18906 (MS)
*STORE UNDER CONSTRUCTION *STORE UNDER CONSTRUCTION
2 969 E Barnes Crossing Rd. | Tupelo, MS OLLIE’S BARGAIN OUTLET 969 E BARNES CROSSING RD. | TUPELO, MS 38804
4 INVESTMENT SUMMARY
6 PROPERTY OVERVIEW
8 TENANT PROFILE
10 LEASE ABSTRACT
14 AREA OVERVIEW
*STORE UNDER CONSTRUCTION
OLLIE’S BARGAIN OUTLET 3 OFFERING SUMMARY Matthews™ is pleased to exclusively offer a 31,059-square-foot freestanding Ollie’s Bargain Outlet situated on 3.59 acres in Tupelo, MS – the main component of the Tupelo Metropolitan Area (MSA Population: INVESTMENT SUMMARY 140,081). Ollie’s net lease is expected to commence in February 2020 and will feature 10 years of primary term with three 5-year renewal options. The property has excellent access and visibility off U.S. Highway 45 (Traffic Count: 36,800 VPD), which is the main freeway that runs north-south across eastern
969 E Barnes Crossing Rd. Mississippi. ADDRESS Tupelo, MS 38804 Ollie’s is strategically positioned within Barnes Crossing Plaza, which is anchored by Hobby Lobby, TJ
LIST PRICE $3,336,000 Maxx, Burke’s Outlet, and Office Max. Ollie’s is also adjacent to the 746,194-square-foot The Mall at Barnes Crossing, which includes over 90 stores and is anchored by Belk, JCPenney, Dick’s Sporting PRICE PSF $107 Goods, Cinemark, and Barnes & Noble. The Mall at Barnes Crossing is the only mall within 90 miles and serves North Mississippi, Northwest Alabama and South Tennessee. YEAR 1 CAP RATE 6.75% The site benefits from its location within Northeast Mississippi’s main retail and commercial corridor YEAR 1 NOI $225,178 with 3.2 MSF of retail, 0.5 MSF of office, and 1.2 MSF of industrial within a 3-mile radius. Other major retailers within the immediate vicinity include Walmart, Sam’s Club, Lowe’s Home Improvement, Kohl’s, TERM REMAINING ± 10 Years Ross Dress for Less, Bed Bath & Beyond, Petco, JOANN, Dollar Tree, among many others. Furthermore, RENT INCREASES $0.25/SF after year 5 Ollie’s enjoys strong demographics with a population of 7,511 and an average household income of $61,154 within a 3-mile radius. BUILDING SIZE ± 31,059 SF INVESTMENT HIGHLIGHTS SITE SIZE ± 3.59 AC NATIONAL TENANT ▶ Headquartered in Harrisburg, Pennsylvania, Ollie’s Bargain Outlet Holdings Inc. (NASDAQ: OLLI) is one of the largest retailers of closeout merchandise and excess inventory. Known for their assortment of “Good Stuff Cheap,” they offer customers a broad selection of brand name products, including housewares, food, books and stationery, bed and bath, floor coverings, toys and hardware. Originally founded in 1982, Ollie’s currently operates 342 stores in 23 states. For the fiscal year ended February 2, 2019, Ollie’s reported net sales of $1.2 billion, net income of $135 million, and had net cash of $51 DEMOGRAPHICS million.
NET LEASE WITH CONTRACTUAL RENT INCREASES 1-MILE 3-MILE 5-MILE ▶ Ollie’s net lease is expected to commence in February 2020 and features 10 years of primary term and three 5-year renewal options. Their net lease also contains contractual rent increases of $0.25 POPULATION 1,289 7,511 32,712 per square foot every five years, including in the renewal options.
BELOW REPLACEMENT COST HOUSEHOLDS 534 3,091 13,076 ▶ At $107 per square foot, this offering is an excellent opportunity to acquire a highly desirable retail box at a price that is significantly below the replacement cost.
HH INCOME $74,673 $61,154 $57,885 EXCELLENT ACCESS & VISIBILITY ▶ The property has excellent access and visibility off U.S. Highway 45 (Traffic Count: 36,800 VPD), which is the main freeway that runs north-south across eastern Mississippi.
4 969 E Barnes Crossing Rd. | Tupelo, MS REGIONAL MAP
INVESTMENT HIGHLIGHTS CONTD.
STRATEGIC LOCATION 150-MILES ▶ Ollie’s is strategically positioned within Barnes Crossing Plaza, which is anchored by Hobby Lobby, TJ Maxx, Burke’s Outlet, and Office Max. Ollie’s is also adjacent to the 746,194-square-foot The Mall at Barnes Crossing, which includes over 90 stores and is anchored by Belk, 100-MILES JCPenney, Dick’s Sporting Goods, Cinemark, and Barnes & Noble. The Mall at Barnes Crossing is the only mall within 90 miles and serves North Mississippi, Northwest Alabama and South Tennessee. The site benefits from its location within Northeast Mississippi’s main retail and commercial corridor with 3.2 MSF of retail, 0.5 MSF of 50-MILES office, and 1.2 MSF of industrial within a 3-mile radius. Other major retailers within the immediate vicinity include Walmart, Sam’s Club, Lowe’s Home Improvement, Kohl’s, Ross Dress for Less, Bed Bath & Beyond, Petco, JOANN, Dollar Tree, among many others.
STRONG DEMOGRAPHICS ▶ Ollie’s enjoys strong demographics with a population of 7,511 and an average household income of $61,154 within a 3-mile radius.
TUPELO/LEE COUNTY AREA ▶ Tupelo/Lee County is consistently ranked as one of the OLLIE’S BARGAIN OUTLET top counties in Mississippi for personal income, retail sales, total employment, and business activity. Tupelo is the headquarters of the North Mississippi Medical Center, the largest non-metropolitan hospital in the United States. It serves people in North Mississippi, northwest Alabama and portions of Tennessee. Also, Tupelo is recognized around the world as the birthplace of Elvis Presley. The house where Elvis was born, and the adjacent Elvis Presley Museum and memorial chapel, draw nearly 100,000 visitors each year. They are centerpieces of Tupelo’s $46 million tourism and hospitality industry.
OLLIE’S BARGAIN OUTLET 5 2
1
PROPERTY OVERVIEW
PROPERTY DESCRIPTION ▶ PROPERTY ADDRESS ▶ PARKING SPACES 969 E Barnes Crossing Rd.Tupelo, MS ± 210
▶ BUILDING SIZE ▶ YEAR BUILT ± 31,059 SF 1994
▶ SITE SIZE ▶ FRONTAGE & ACCESS ± 3.59 AC E Barnes Crossing Rd / US-45
▶ APN ▶ TRAFFIC COUNTS 1 083V-08-041-03 US-45 ±36,800 VPD *STORE UNDER CONSTRUCTION 2 083U-07-086-08
6 969 E Barnes Crossing Rd. | Tupelo, MS SITE PLAN
M A L L D R
LEGEND: BARNES CROSSING RD SUBJECT PROPERTY
NAP
OLLIE’S BARGAIN OUTLET 7 TENANT PROFILE TOTAL SHAREHOLDER RETURN SINCE OLLIE’S IPO
OLLIE’S BARGAIN OUTLET Ollie’s Bargain Outlet is one of America’s largest retailers of closeout TENANT merchandise and excess inventory. The 342 “semi-lovely” stores sell merchandise of all descriptions and some beyond description. Ollie’s Bargain Outlet 305%
Dollar General 110% Real brands at real bargain prices in every department, from housewares to sporting goods to flooring and to food. Ollie’s buyers scour the world Dollar Tree 33% looking for closeouts, overstocks, package changes, manufacturer refurbished goods, and irregulars. Big Lots -48%
Much of the merchandise comes direct from the finest manufacturers in * As of November 18, 2019 the country and abroad. For example, if a manufacturer makes too much of an item, or changes their packaging, Ollie’s will buy the overstocked or old packaged items. The customer will always find famous brand name products at Ollie’s, but a lot of them could be last year’s colors, patterns, NET SALES AND SAME STORE SALES or packaging that traditional retailers won’t sell. $1,400 +18.1% CAGR $1,241 $1,200 Ollie’s has also liquidated major retail centers, working very closely with $1,077 financial institutions. When companies liquidate, the banks will often $1,000 $890 dispose of remaining inventories and turn them into cash. Ollie’s brings $762 $800 the goods back to their stores and passes the savings to the customer. $638
$600
$400
$200
$0 2014 2015 2016 2017 2018
1982 HARRISBURG, PA OLLI SAME STORE SALES 4.4% 6.0% 3.2% 3.3% 4.2%
*+18.1% CAGR FROM 2014-2018 Year NASDAQ: Headquarters Founded (S&P MidCap 400 Component)
8 969 E Barnes Crossing Rd. | Tupelo, MS COMPANY OVERVIEW
Fast growing, extreme Total annual sales of Market cap of over $4 Share price has 342 stores in Opportunity to value retailer offering over $1.3 billion billion (compared to increased more than 23 states expand to 950 stores a broad selection of Big Lots’ market cap 300% since IPO in nationally “good cheap stuff” of $825 million) July 2015
CREDIT SNAPSHOT VS PEERS
S&P COMP STORE EBIDTA MARGIN NET DEBT/(NET TENANTS DEBT TO EBITDA CREDIT RATING SALES (8Q AVG) (TTM) CASH)
Ollie’s Bargain Outlet N/A 2.7% 14.0% ($77.7) 0.00x
Big Lots BBB 1.1% 6.0% $495.9 1.73x
Dollar General BBB 3.5% 10.2% $2,314.5 0.95x
Dollar Tree BBB- 2.4% 10.1% $3,645.2 1.81x
*As of February 2, 2019; $ in mil Higher Comp Store Sales + Higher Margins + ZERO Debt = Healthier Tenant
OLLIE’S BARGAIN OUTLET 9 LEASE ABSTRACT
LEASE ABSTRACT
TENANT Ollie’s Bargain Outlet, Inc.
TENANT SIZE (SF) ± 31,059
*RENT COMMENCEMENT DATE February 12, 2020
LEASE EXPIRATION DATE February 28, 2030
LEASE TERM (YEARS) 10 Years
LEASE TERM (MONTHS) 120 Months
LEASE TYPE NN
REMAINING OPTIONS 3x5 years
CONTRACT RENTAL RATE (YEAR 1-5) $225,178
CONTRACT RENT INCREASE (YEAR 6-10) $232,943
1ST OPTION (5 YEARS) $240,707
2ND OPTION (5 YEARS) $248,472
3RD OPTION (5 YEARS) $256,237
*Estimated
*STORE UNDER CONSTRUCTION
10 969 E Barnes Crossing Rd. | Tupelo, MS LEASE ABSTRACT CONT.
TAXES Landlord shall pay all Taxes levied against the Entire Property before the same become delinquent and shall take advantage of any and all available discounts, abatement or credits for early payment of the same. Tenant shall be responsible for reimbursing the Landlord for all Taxes.
INSURANCE Landlord shall maintain and keep in effect through the term: (a) Special form cause of loss insurance insuring against loss or damage with respect to Premises and the Entire Property by fire and such other perils as may be included in the form of all-risk insurance from time to time most commonly available for similar commercial properties, in an amount equal to (i) at least 90% of the full insurable replacement value thereof TRU 2005 REI, LLC is the Landlord hereunder, and (ii) thereafter, at full insurable replacement value of the Premises and the Entire Property; and (b) Commercial general liability insurance against claims for bodily injury and property damage occurring on, in, or about the Entire Property and the Premises and all areas appurtenant thereto with limits of not less than $2,000,000 per occurrence for bodily injury and property damage and limits of not less than $5,000,000 annual general aggregate. Tenant shall be responsible for reimbursing Landlord for all Insurance Costs. Tenant, at Tenant’s sole cost and expense, shall maintain and keep in effect throughout the term: (a) Special form cause of loss property insurance including extended coverage endorsements, insuring against loss or damage to Tenant’s and any of its subtenants’ inventory, personal property and trade fixtures contained on, in, or about the Premises by fire, theft and such other peril, in an amount equal to the full insurable actual cash value thereof, as same may exist from time to time; (b) Commercial general liability insurance against claims for bodily injury and property damage occurring on or in the Premises and Tenant’s use thereof, together with contractual liability endorsements covering Tenant’s obligations set forth in this Lease, with limits of not less than $2,000,000 per occurrence for bodily injury and property damage and limits of not less than $5,000,000 annual general aggregate and (c) Worker’s compensation insurance meeting the requirements of the workers’ compensation laws of the State in which the Premises is located covering Tenant’s employees at the Premises. (d) During the period of time in which Tenant is completing the Tenant’s Work at the Premises and at any time during which any material Alterations are being completed by Tenant during the Term, Tenant shall maintain, or cause the applicable contractor to maintain builders’ risk insurance insuring against “all risks” or an equivalent form in accordance with requirements of this Section 23.
REPAIRS & MAINTENANCE Landlord shall operate, manage and maintain the Common Areas and Entire Property in compliance in all material respects with all Applicable Laws and in good condition and repair and otherwise in a condition similar to the condition of similar properties in the market area of the Entire Property and perform all necessary maintenance, repairs, and replacements thereto, except to the extent such obligation for compliance with applicable Laws, maintenance, repairs, and replacements are the express of Tenant pursuant to this Lease.
COMMON AREA MAINTENANCE Landlord shall be solely responsible for paying prior to delinquency all costs and expenses related in any manner to (i) the Common Area of the Entire Property, (ii) the portions of the Premises for which Landlord is responsible pursuant to the express terms of this Lease, and (iii) any other costs due and payable under any Permitted Exceptions or any other document or agreement affecting title to the Entire Property, or any portion thereof (collectively, “CAM Expenses”). Tenant shall pay to Landlord an annual fixed payment (the “CAM Payment”). Tenant’s obligation to pay the CAM Payment shall commence on the Rent Commencement Date. The CAM Payment for the first Lease Year based on the Rentable Area of the Premises is $0.95 PSF ($29,506.05 per annum). Beginning on the 1st day of the second Lease Year and the first day of each Lease Year thereafter, Tenant’s then applicable CAM Payment shall be increased annually by an amount equal to 2% of the amount of Tenant’s CAM Payment during the immediately preceding Lease Year.
OLLIE’S BARGAIN OUTLET 11 AERIAL
THE MALL AT BARNES CROSSING
45
± 36,800 VPD
BARNES CROSSING RD
45
± 36,800 VPD
12 969 E Barnes Crossing Rd. | Tupelo, MS AERIAL
THE MALL AT BARNES CROSSING
45
± 36,800 VPD
BARNES CROSSING RD
45
± 36,800 VPD
OLLIE’S BARGAIN OUTLET 13 BUSINESS DISTRICT
AREA OVERVIEW
TUPELO, MS Tupelo is located in the northeast corner of Mississippi, which is commonly known as the Hills region. Tupelo is intersected by Highways 45, Interstate 22, and the Natchez Trace Parkway. Located just 90 miles from Memphis, TN, and 135 miles from Birmingham, AL, Tupelo serves as a regional hub for the area whose population swells by 300% each day as people travel here to work and play. With an estimated population of 38,114 in 2017, Tupelo is the sixth-largest city in Mississippi and is considered a commercial, industrial, and cultural hub of North Mississippi. Tupelo is the smallest city in the United States that is the headquarters of more than one bank with over $10 billion in assets. $146,907 ±35,736 $76,648 Tupelo has a deep connection to Mississippi’s MEDIAN HOME PRICE POPULATION AVG. ANNUAL SALARY music history, being associated with artists as diverse as Elvis Presley, Rae Sremmurd, and Diplo. The city is home to multiple art and cultural institutions, including the Elvis Presley Tupelo is the headquarters of the North The headquarters of two large banking Birthplace and the 10,000-seat BancorpSouth Mississippi Medical Center, the largest non- institutions are located here: BancorpSouth, Arena, the largest multipurpose indoor arena in metropolitan hospital in the United States. It with approximately nearly $18 billion in assets, Mississippi. Tupelo is the only city in the Southern serves people in North Mississippi, northwest and Renasant Bank, with assets of more than United States to be named an All-America City Alabama, and portions of Tennessee. The $12.7 billion. Tupelo is the smallest U.S. city five times, most recently in 2015. medical center was a winner of the prestigious that hosts the headquarters of more than one Malcolm Baldrige National Quality Award in bank with over $10 billion in assets. 2006 and 2012.
14 969 E Barnes Crossing Rd. | Tupelo, MS DISTANCE TO:
TUSCALOOSA MEMPHIS OLLIE’S 93 MILES 98 MILES BARGAIN OUTLET BIRMINGHAM HUNTSVILLE 116 MILES 118 MILES
NASHVILLE ATLANTA 155 MILES 250 MILES
NATCHEZ TRACE ELVIS JOURNEY BUFFALO PARK & ZOO
The Natchez Trace Parkway, one of America’s Top Elvis Presley was born in a two-room house Tupelo Buffalo Park & Zoo is located on 210 10 National Parks, is headquartered in Tupelo, in East Tupelo where he grew up dreaming of acres and boasts over 260 animals. The park is Mississippi – where the power of possibility becoming a superhero with wavy hair, a cape, home to a 19 foot tall Giraffe, Tall Boy, who is helped turn a primitive trail into a national scenic and a lightning bolt on his chest. For his 10th one of the tallest giraffes in the United States. treasure. Traveled by Native Americans over birthday, his mother bought him a guitar from It is also home to the world famous Oliver, a 8,000 years ago, the Natchez Trace Parkway Tupelo Hardware Company. Ten years later, he Capuchin monkey, whose 2 escapes in 2007 spans 444 miles and reaches from Natchez, MS, made his first gold record. made newspapers all over the world. to Nashville, TN.
OLLIE’S BARGAIN OUTLET 15 REGIONAL MAP
DEMOGRAPHICS
150-MILES POPULATION 1-MILE 3-MILE 5-MILE 2025 Projection 1,360 7,760 33,185 2020 Estimate 1,289 7,511 32,712 2010 Census 1,105 6,820 31,571
100-MILES 2000 Census 704 5,749 28,515 MEMPHIS 95 MILES POPULATION GROWTH 1-MILE 3-MILE 5-MILE Growth 2020-2025 5.51% 3.31% 1.45% HUNTSVILLE Growth 2010-2020 16.65% 10.13% 3.61% 118 MILES HOUSEHOLDS 1-MILE 3-MILE 5-MILE 2025 Projection 559 3,207 13,240 50-MILES ATLANTA 2020 Estimate 534 3,091 13,076 250 MILES 2010 Census 468 2,772 12,708 2000 Census 288 2,304 11,421 INCOME 1-MILE 3-MILE 5-MILE 2020 Avg. $74,673 $61,154 $57,885 Household Income
ALL OPERATE OR ARE HEADQUARTERED OLLIE’S IN TUPELO AND LEE COUNTY: BARGAIN OUTLET
16 969 E Barnes Crossing Rd. | Tupelo, MS CONFIDENTIALITY AGREEMENT & DISCLOSURE
This Offering Memorandum contains select information pertaining to the business and affairs of Ollie’s Bargain Outlet located at 969 E Barnes Crossing Rd, Tupelo, MS 38804 (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.
By acknowledging your receipt of this Offering Memorandum for the Property, you agree:
1. The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.
Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.
If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.
A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.
This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.
OLLIE’S BARGAIN OUTLET 17 OFFERING MEMORANDUM
OLLIE’S BARGAIN OUTLET 969 E BARNES CROSSING RD. | TUPELO, MS 38804
EXCLUSIVELY LISTED BY:
BEN SNYDER KYLE MATTHEWS ZACK BATES SVP & Senior Director Chairman & CEO Associate Vice President
+1 (216) 503-3607 +1 (310) 919-5757 +1 (216) 503-3608 [email protected] [email protected] [email protected]
License No. 2018002569 (OH) License No. 1469842 (CA) License No. 2018002393 (OH)
BROKER OF RECORD Phillip Carpenter License No. 18906 (MS)