IHOP 7240 W 79Th Street, Bridgeview, IL 60455
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OFFERING MEMORANDUM IHOP ™ 7240 W 79th Street, Bridgeview, IL 60455 EXCLUSIVELY LISTED BY Gary Chou Kevin Chang RANDY OLCZYK FVP & Senior Director Associate BROKER OF RECORD License No. 471.018001 License No. 01911222 (CA) License No. 01976724 (CA) O 310.919.5827 O 310.919.5828 M 714.928.8016 M 951.616.8918 [email protected] [email protected] ™ CONTENTS 4 INVESTMENT OVERVIEW Investment Highlights 6 FINANCIAL ANALYSIS Executive Summary Annualized Operating Data Tenant Summary 8 TENANT OVERVIEW IHOP The Offering Parcel Map Tenant Map 14 AREA OVERVIEW Bridgeview, IL Demographics Chicago, IL ™ INVESTMENT OVERVIEW 4 |IHOP - BRIDGEVIEW, IL Investment Highlights LONG-TERM IMPROVING FUTURE CASH FLOW • IHOP has successfully operated at this location since 1997 and recently signed a 15-year extension, showing excellent commitment to the site • The offering provides a very rare opportunity for an investor to purchase a corporately backed lease with sales performance reporting on a monthly basis • DineEquity, Inc. is one of the largest full-service restaurant companies in the world, with revenue in excess of $681 million • Strong historical sales performance at the location (see broker for details) • Absolute NNN investment with all expenses paid for directly by the tenant • Good hedges against inflation via fixed 7% rental increases every 5 years • Two 5-year options to renew EXCELLENT REAL ESTATE FUNDAMENTALS • Top Five MSA – Chicago is the third most populous city in the United States with over 2.7 million people living in the region • Property is located down the street from Toyota Park which hosts world-class concerts and sporting events – Over 500,000 people visit the venue every year • Healthy Mix of National Tenants - Nearby national tenants include Pizza Hut, Dollar General, ALDI, Panera Bread, Starbucks, Sears Outlet, K-Mart, Dunkin’ Donuts, McDonald’s and Taco Bell Amongst others • Impressive Traffic Counts - There are over 45,000 vehicles per day traveling on 79th St and over 44,000 vehicles per day traveling on Harlem Ave • There are over 15,500 residents in a 1-mile radius with an average household income exceeding $55,000 • There are over 132,000 residents in a 3-mile radius with an average household income exceeding $54,000 • There are over 369,500 residents in a 5-mile radius with an average household income exceeding $55,800 MATTHEWS REAL ESTATE INVESTMENT SERVICES | 5 FINANCIAL ANALYSIS 6 |IHOP - BRIDGEVIEW, IL Tenant Summary IHOP Tenant Trade Name IHOP 7240 W 79th Street, Bridgeview, IL Type of Ownership Fee Simple List Price .................................................................................................................... $3,335,130 Lease Guarantor Corporate CAP Rate - Current ........................................................................................................... 5.75% Lease Type NNN Roof and Structure Tenant Responsible Gross Leasable Area ...............................................................................................± 4,964 SF Original Lease Term 20 Years Lot Size .................................................................................................................... ± 1.10 Acres Lease Commencement Date 7/16/1997 Year Built ................................................................................................................................1990 Rent Commencement Date 7/16/2017 Lease Expiration Date 7/15/2032 Term Remaining on Lease 15 Years Increases 7% Every 5 Years Options Two, 5-Year Options Annualized Operating Data Loan Quote Monthly Rent Annual Rent Rent/SF Cap Rate 2017-2022 $15,980.83 $191,770.00 $38.63 5.75% Tenant IHOP 2022-2027 $17,099.49 $205,193.90 $41.34 6.15% Address 7240 W. 79th Street, Bridgeview, IL 2027-2032 $18,296.46 $219,557.47 $44.23 6.58% Loan Amount $2,265,900 Option 1 $19,577.21 $234,926.50 $47.33 7.04% LTV 65% Option 2 $20,947.61 $251,371.35 $50.64 7.54% Term 10 Years Amortization 25 Years Rate 4.37% Monthly Payment $12,428 Loan quote provided by Barrington Capital based on market conditions at this time. Actual rates and terms will vary based on market conditions at closing. Please contact Brian Krebs or Matt Marlin at the information below: Brian Krebs: (949) 777-5988 or [email protected] Matt Marlin: (949) 777-5991 or [email protected] MATTHEWS REAL ESTATE INVESTMENT SERVICES | 7 TENANT OVERVIEW 8 | IHOP - BRIDGEVIEW, IL Property Name IHOP Company Trade Name International House of Pancakes, LLC Parent Company Trade Name DineEquity, Inc. Ownership Public Credit Rating (S&P) B No. of Locations ± 1,700 No. of Employees ± 40,000 Headquartered Glendale, California Website www.ihop.com Year Founded 1958 TENANT OVERVIEW Since 1958, IHOP® has been the place where people connect over breakfast, enjoy study breaks, grab a bite before or after sporting events and so much more. The IHOP family restaurant chain continues to serve their world-famous pancakes and a wide variety of breakfast, lunch and dinner items that are loved by people of all ages. The casual dining restaurant offers pancakes, omelets, French toasts and waffles, crepes, burgers, sandwiches, soups, salads, hash brown stacks, desserts and beverages. International House of Pancakes, LLC also provides a line of syrups through retail stores, mass merchandisers and grocery outlets in the United States. Offering an affordable, everyday dining experience with warm and friendly service, IHOP restaurants are franchised and operated by Glendale, California-based International House of Pancakes, LLC, a wholly-owned subsidiary of DineEquity, Inc., and its affiliates. DineEquity, Inc. is one of the largest full- service restaurant companies in the world with more than 400 franchisee partners. STRATEGY As the leader in Family Dining, IHOP’s 99%-franchised system delivers strong free cash flow results that have been the hallmark of the brand’s financial performance for more than half a century. IHOP relies primarily on discounted value pricing and limited-time offers, such as its Free Pancake Giveaway, to drive traffic to its restaurants. The company operates in four segments: franchise operations, company restaurant operations, rental operations, and financing operations. With mostly franchised locations, the IHOP chain includes a dozen corporate-run locations used mostly for testing and training. Focused on providing strategic, visionary leadership for their franchisees, DineEquity successfully brought Applebee’s and IHOP together in 2007 to revitalize the brands. The company’s dedicated focus combined with an expertise in brand revitalization and franchising have been the basis of their financial success in recent years. GEOGRAPHIC REACH DineEquity operates in more than 20 countries. International House of Pancakes, LLC operates and franchises a chain of restaurants in all 50 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico. Internationally, the company has locations in Canada, Bahrain, Dubai, Guam, Guatemala, Kuwait, Qatar, Saudi Arabia, The Philippines and Mexico. As of 2015, there were 1,650 IHOP restaurants in 50 states. MATTHEWS REAL ESTATE INVESTMENT SERVICES | 9 Tenant Map 10 |IHOP - BRIDGEVIEW, IL The Offering Parcel Map Property Name IHOP 7240 W 79th Street Property Address Bridgeview, IL 60455 Assessor’s Parcel Number 18-25-406-016 Zoning C-2, Bridgeview Site Description Number of Stories One Year Built 1990 Gross Leasable Area (GLA) ± 4,964 SF Lot Size ± 1.10 Acres (47,851 SF) Type of Ownership Fee Simple Parking ± 64 Surface Spaces Parking Ratio 12.89 : 1,000 SF Landscaping Professional N Topography Generally Level W 79th St ± 45,000 ADT MATTHEWS REAL ESTATE INVESTMENT SERVICES | 11 North Bound Subject Property West 79th Street ± 45,000 ADT 12 | IHOP - BRIDGEVIEW, IL South Bound West 79th Street Subject Property Harlem Ave MATTHEWS REAL ESTATE INVESTMENT SERVICES | 13 AREA OVERVIEW 14 | IHOP - BRIDGEVIEW, IL Bridgeview, IL Bridgeview, Illinois is located in Cook County, 9 miles outside of Chicago. It is a nice change from the hustle and bustle of the big city. The green trees and suburban atmosphere is the perfect mix from the city in the near distance. Demographics For being so close to a big city, Bridgeview has a low crime rate with a higher Population 1 Mile 3 Mile 5 Mile average of students graduating with their high school degree or equivalent 2022 Projection 15,569 130,491 361,566 than the state. 2017 Estimate 15,522 129,796 360,361 The most popular industries within this region is manufacturing and construction, 2010 Census 15,369 128,256 357,500 while the most common occupations are construction management and sales. 2000 Census 15,186 124,001 344,219 Their is an equal amount of private and corporate companies throughout the Growth 2017 - 2022 0.30% 0.54% 0.33% city. The residents treat this city as a small town and provide for their residents. Growth 2010 - 2017 0.99% 1.20% 0.80% Households 1 Mile 3 Mile 5 Mile 2022 Projection 5,373 45,980 128,139 Things to do 2017 Estimate 5,325 45,628 127,472 There are a lot of great activities to do right in Bridgeview. Head over to the 2010 Census 5,203 44,869 125,955 Brookfield Zoo to explore a constantly evolving environment. The zoo first 2000 Census 5,284 44,994 127,387 opened in 1934 and has changed the way zoos run. They are the first zoo Growth 2017 - 2022 0.91% 0.77% 0.52% to create moats and ditches as a way to view the animals, instead of cages. Growth 2010 - 2017 2.35% 1.69% 1.20% Brookfield was also the first to have a Panda Exhibit as well as a full indoor dolphins exhibit. The zoo is constantly pressing the boundaries and are Income 1 Mile 3 Mile 5 Mile constantly looking at what to do next. 2017 Est. Average $67,860 $70,776 $72,506 Household Income If you are a sports fan, Toyota Park is in the heart of Bridgeview. It is the home to the Chicago Fire (MLB), Chicago Red Stars (NWSL), and the Chicago Bliss (LFL). The stadium gained a large amount of press when it held the 2011 FIFA World Cup qualification match.