Red Lobster- Orlando, FL OM321
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OFFERING MEMORANDUM Red Lobster 7373 West Colonial Drive | Orlando, FL 32818 ACTUAL PROPERTY PHOTO CONFIDENTIALITY AND DISCLAIMER The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Tiktin Real Estate Investment Services ("TREIS") and should not be made available to any other person or entity without the written consent of TREIS. This Offering Memorandum has been prepared to provide summary, unverified information to the current ownership, 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. TREIS 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 Offering Memorandum has been obtained from sources we believe to be reliable; however, TREIS has not verified, and will not verify, any of the information contained herein, nor has TREIS 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. NON-ENDORSEMENT NOTICE: Tiktin Real Estate Investment Services, Inc. (“TREIS”) is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this Offering Memorandum. 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 TREIS, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of TREIS, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. 2 TABLE OF CONTENTS Red Lobster | Orlando, FL FINANCIAL ANALYSIS Pricing Analysis . 5 - 6 EXECUTIVE SUMMARY Investment Overview . .8 PROPERTY DESCRIPTION Tenant Overview . 9 - 11 Property Details. .12 Aerial Photos. .13 Local Map . 14 Regional Map . 15 MARKET OVERVIEW Market Overview . 17 - 18 COMPETITIVE PROPERTY SET Sale Comparables Map . .21 Sale Comparables . 22 - 24 DEMOGRAPHIC Demographic Summary . 26 - 27 3 FINANCIAL ANALYSIS PRICING ANALYSIS Red Lobster | Orlando, FL Offering Summary Lease Summary Purchase Price: $4,733,000 Lease Type: Absolute Triple-Net (NNN) Cap Rate: 5.00% Roof and Structure: Tenant Responsible Net Operating Income: $236,650 Lease Guarantor: Red Lobster Intermediate Holdings LLC Rentable Square Feet: 7,909 SF Original Lease Term: 25 Years Price/Rentable SF: $598.43 Rent Commencement Date: August 1, 2014 Lot Size: 62,552 SF (1.44 Acres) Lease Expiration Date: July 31, 2039 Year Built/Renovated: 1992 Remaining Lease Term: 18.5 Years Options: 4 (5-Years) Increases: 2% Annual Increases 5 PRICING ANALYSIS Red Lobster | Orlando, FL Rent Schedule Lease Year Annual Bumps Annual Rent Monthly Rent Cap Rate August 1, 2020 July 31, 2021 $236,650 $19,720.83 5.00% August 1, 2021 July 31, 2022 $241,383 $20,115.25 5.10% August 1, 2022 July 31, 2023 $246,211 $20,517.56 5.20% August 1, 2023 July 31, 2024 $251,135 $20,927.91 5.31% August 1, 2024 July 31, 2025 $256,158 $21,346.46 5.41% August 1, 2025 July 31, 2026 $261,281 $21,773.39 5.52% August 1, 2026 July 31, 2027 $266,506 $22,208.86 5.63% August 1, 2027 July 31, 2028 $271,836 $22,653.04 5.74% August 1, 2028 July 31, 2029 $277,273 $23,106.10 5.86% August 1, 2029 July 31, 2030 $282,819 $23,568.22 5.98% August 1, 2030 July 31, 2031 $288,475 $24,039.59 6.10% August 1, 2031 July 31, 2032 $294,245 $24,520.38 6.22% August 1, 2032 July 31, 2033 $300,129 $25,010.79 6.34% August 1, 2033 July 31, 2034 $306,132 $25,511.00 6.47% August 1, 2034 July 31, 2035 $312,255 $26,021.22 6.60% August 1, 2035 July 31, 2036 $318,500 $26,541.65 6.73% August 1, 2036 July 31, 2037 $324,870 $27,072.48 6.86% August 1, 2037 July 31, 2038 $331,367 $27,613.93 7.00% August 1, 2038 July 31, 2039 $337,994 $28,166.21 7.14% Base Rent ($29.92/SF) $236,650 Total Return 5%/236,650 6 6 EXECUTIVE SUMMARY HIGHLIGHTS Red Lobster | Orlando, FL WHY BUY RED LOBSTER IN ORLANDO, FL: Tiktin Real Estate Investment Services is pleased to present this Red Lobster located at 7373 W. Colonial Drive in Orlando, Florida. The • Average Annual Cap Rate is 6.01% Over Remaining Base Term property is roughly 7,909 square feet and is situated on 1.44 acres • Outparcel for Shopping Center with 209,686 Sq. Ft. of Rentable of land. Space, Which Includes Burlington, Ross, Marshall's and More This Red Lobster is subject to a 25-year triple-net (NNN) lease, • 25 Year Corporate Guaranteed Absolute NNN Lease with roughly 18.5 years remaining on the lease and no landlord • 18.5 Years Remaining and Four, Five-Year Tenant Renewal responsibilities. The current annual rent is $236,650. The rent is Options • Two Percent (2%) Annual Rent Increases scheduled to increase by two percent (2%) annually, including 4, • Over 250,000 People Within a 5-Mile Radius five-year tenant renewal options. • Fantastic Centralized Location, Being Seven Miles From Uni- This Red Lobster is in a privileged location by being the only versal Studios, Eight Miles From Orlando and 20 Miles From Red Lobster located in the North West of Orlando and being Orlando International Airport easily reachable from highway 408, serving households from • Traffic Counts Over 46,000 Vehicles Per Day neighborhoods like Pine Hills and Orlovista, while also being the • Surrounded By National Retailers Including Golden Corral, Sam's Club, Walmart, GNC, and McDonalds Among Others closest location to the neighboring city, Winter Garden. Residents choose to go to this location to fill the cravings for their legendary Cheddar Bay Biscuits and delicious fresh seafood in a casual and family-friendly environment. Also, Red Lobster is considered slightly upscale within the national casual dining chains. This Red Lobster is also an outparcel that benefits from neighboring retailers such as Sam’s Club, Walmart, Marshall’s, Ross, Burlington, McDonald's, among many more. There are approximately 250,000 people within a 5-mile radius of this property. The property is situated on the highly traveled West Colonial Drive, and experiences average daily traffic counts of over 46,000 vehicles. 8 TENANT OVERVIEW Red Lobster | Orlando, FL TENANT TRADE NAME Red Lobster OWNERSHIP Private TENANT Corporate LEASE GUARANTOR Red Lobster Intermediate Holdings LLC LEASE COMMENCEMENT DATE August 1, 2014 RENT COMMENCEMENT DATE August 1, 2014 LEASE EXPIRATION DATE July 31, 2039 ORIGINAL LEASE TERM 25 Years TERM REMAINING ON LEASE 18.5 Years RENEWAL OPTIONS 4 (5-Year) RENT INCREASES 2% Annually LEASE TYPE Absolute Triple Net (NNN) ROOF AND STRUCTURE Tenant Responsibility RIGHT OF FIRST REFUSAL No OPTION TO PURCHASE No 9 TENANT OVERVIEW Red Lobster | Orlando, FL Red Lobster is an American casual dining restaurant chain headquartered in Orlando, Florida. Founded in 1968, the chain has evolved throughout the decades from exclusively serving lobsters, snow crabs and jumbo shrimp to now offering customers a variety of options such as their world-famous Cheddar Bay Biscuits, wild- caught seafood and fresh fish, with superior quality and service, compared to other casual dining competitors. While many chains struggled with COVID-19, Red Lobster thrived by quickly adjusting their focus on their curbside sales. The company has operations across the United States, and internationally in Ecuador, Canada, Malaysia, Saudi Arabia, the United Arab Emirates, Qatar, Mexico, and Japan. As of 2020, Red Lobster had 719 locations worldwide. Thai Union, a publicly traded seafood supplier best known for their brand Chicken of the Sea, started their relationship with Red Lobster with an investment of $575 million dollars in 2016, which evolved into Thai Union acquiring control of the company in September 2020 under a new company named Seafood Alliance. Thai Union Group PCL (BBK:TU) has an enterprise value of approximately $4 Billion. ( See more details on the following page). COMPANY TYPE FOUNDED # OF LOCATIONS HEADQUARTERS WEBSITE Casual Dining 1968 Over 700 worldwide Orlando, FL RedLobster.com Restaurant 10 TENANT OVERVIEW Red Lobster | Orlando, FL Thai Union, Investor Group Led By International Restaurant Executives, And Red Lobster Management Acquire Red Lobster* BANGKOK, ORLANDO, Fla. and SAN FRANCISCO, Aug. 31, 2020 /PRNewswire/ -- Golden Gate Capital today announced that it has agreed to sell its remaining equity stake in Red Lobster Seafood Co. ("Red Lobster") to a consortium comprised of existing Red Lobster investor Thai Union Group PCL (BKK:TU) ("Thai Union"), an investor group consisting of highly experienced global restau- rateurs and hospitality industry executives, and Red Lobster management. With more than 40 years of industry experience, Thai Union is a leading, publicly-traded global seafood supplier with an enterprise value of approximately $4 billion. This transaction represents a deepening of Thai Union's commitment to Red Lobster. Thai Union's involvement in Red Lobster began with a $575 million strategic investment in 2016, when it also added two representatives to the Red Lobster Board of Directors.