Starbucks & Moe's Southwest Grill
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STARBUCKS & MOE’S SOUTHWEST GRILL MOBILE, ALABAMA Starbucks & Moe’s Southwest Grill | Mobile, AL | 1 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH TABLE OF CONTENTS TABLE OF CONTENTS • INVESTMENT SUMMARY • INVESTMENT HIGHLIGHTS • TENANT OVERVIEW • MAPS • DEMOGRAPHICS Andrew Chason, CCIM First Vice President Investments National Retail Group www.marcusmillichap.com TEL (251) 929-7254 [email protected] License: AL: 000079317 Starbucks & Moe’s Southwest Grill | Mobile, AL | 2 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH INVESTMENT SUMMARY Marcus & Millichap, as exclusive agent to the Seller, is pleased to present the opportunity to purchase the fee title to an attractive 4,245 square foot all brick strip center located at 390 Schillinger Road South in Mobile, Alabama. The center, which was constructed in 2004, is fully leased to Starbucks and Moes Southwest which are both original tenants of the property. The site is located on the southwest quadrant of Airport Boulevard and Schillinger Road; which is one of the busiest intersections in the county. Traffic counts exceed 68,000 cars per day. The site is .76 acres and has access and signage on both highways. The area is anchored by Lowes, Walmart, Home Depot, Target, Kohls, Hobby Lobby, Rouses and the Mobile Regional Airport. Starbucks and Moe’s Southwest are operating under NNN leases where each tenant reimburses for their pro rata share of property taxes, property insurance and common area maintenance. In addition, both tenants reimburse for management/admin fees. Each tenant is responsible for maintaining and replacing their HVAC units and both tenants are required to reimburse the Landlord for repaving the parking lot. The Landlord is responsible for the roof and structure of the building, however there is a transferable roof warranty in place. OVERVIEW PROJECTED FINANCIAL SUMMARY PURCHASE PRICE $2,255,000 PROJECTED GROSS INCOME CURRENT CAP RATE 6.85% Schedule Base Rental Income $154,457 Expense Reimbursement Income $37,012 NET OPERATING INCOME $154,457 Gross Potential Rental Income $191,469 BUILDINGG SIZE ±4,245 SF ANNUAL EXPENSES LOT SIZE ± ±0.75 ACRES Real Estate Taxes - $2.44 PSF $10,379 PARKING 33 SPACES Insurance - $1.51 PSF $6,410 OCCUPANCY 100% Common Area Maintenance - $3.24 PSF $13,741 YEAR BUILT 2004 Management Fee $6,482 Total Operating Expenses $37,012 ADDRESS 390 SCHILLINGER ROAD SOUTH MOBILE, AL 36695 NET OPERATING INCOME $154,457 RENT SCHEDULE LEASE TENANT GLA % OF GLA ANNUAL RENT RENT/SF LEASE START OPTIONS CHANGES ON CHANGES TO EXPIRATION 2nd Extension Option $80,242.38 3rd Extension Option $88,266.62 Starbucks ±1,775 SF 41.81% $72,947.62 $41.10 10/04/2004 02/28/2025 Four, Five-Year 4th Extension Option $97,093.28 5th Extension Option $106,802.61 Moe’s Southwest Grill ±2,470 SF 58.19% $81,510.00 $33.00 10/14/2004 10/31/2024 None - - TOTALS 4,245 SF 100% $154,457.62 Starbucks & Moe’s Southwest Grill | Mobile, AL | 3 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH SITE PHOTO Starbucks & Moe’s Southwest Grill | Mobile, AL | 4 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH SITE PHOTO Starbucks & Moe’s Southwest Grill | Mobile, AL | 5 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH SITE PHOTO Starbucks & Moe’s Southwest Grill | Mobile, AL | 6 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH SITE PLAN Starbucks & Moe’s Southwest Grill | Mobile, AL | 7 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH LOCAL AERIAL Starbucks & Moe’s Southwest Grill | Mobile, AL | 8 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH PARCEL MAP Starbucks & Moe’s Southwest Grill | Mobile, AL | 9 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH TENANT OVERVIEW The first Starbucks opened in 1971 as a single store in Seattle’s historic Pike Place Market. The name, inspired by Moby Dick, envoked the seafaring tradition of the early coffee traders. Starbucks offered some of the world’s finest fresh-roasted whole bean coffees, from a narrow storefront. From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection. In 1987, Howard Schultz acquired Starbucks assets and changed its name to Starbucks Corporation; at this time there were 17 locations. Now, Starbucks operates as a roaster, marketer and retailer and is known to be the preeminent coffee company worldwide. The company operates over 23,000 locations in more than 65 countries and is the fourth largest coffee producer in the world and benefits from its strong brand loyalty. Its stores offer coffee and tea beverages, packaged roasted whole-bean and ground coffees, single-serve ready-to-drink coffee and tea products, juices, bottled water, various food products, such as pastries, breakfast sandwiches and lunch items. The company offers its products under the Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Starbucks VIA, Starbucks Doubleshot, Starbucks Refreshers, and Starbucks Iced Cafè Favorites brand names. Starbucks currently has a net worth in excess of $5.8 billion, TTM revenue of $21.6 billion and TTM net income of $2.8 billion as of January 1, 2017. https://www.starbucks.com Serving a wide variety of fresh, made-to-order Southwest fare, Moe’s Southwest Grill, opened their first location in Atlanta, Georgia in 2000. The name Moe’s is actually an acronym standing for Musicians, Outlaws and Entertainers, which lends to the music related artwork that can be found in each restaurant . In 2010, Moe’s signed its first overseas development agreement to open 40 restaurants in Turkey, prior to this the restaurant could only be found in the Americas. Nearly 20 years after the original location opened, Moe’s is serving Southwest fare at more than 700 locations in both the U.S. and abroad. Beyond their restaurant walls, fan favorites, can be found in Walmart, Kroger and BJs Warehouses across the United States. Eddie Webster is the franchisee at this location and has operated this unit since 2004. Eddie currently operates four units in the Mobile, AL and Pensacola, FL markets. Store sales are strong and well above the average unit volume for Moe’s Southwest. Moe’s Schillinger, LLC is the tenant at this location with personal guarantees from Eddie and others. https://www.moes.com Starbucks & Moe’s Southwest Grill | Mobile, AL | 10 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH LOCATION OVERVIEW MOBILE OVERVIEW METRO HIGHLIGHTS Mobile County is on the Alabama coast, partially bordered by Mobile Bay and the Gulf of Mexico. Known for its many PORT ACTIVITY live oak-lined streets, the metro is a Gulf Coast cultural center that boasts a concentration of historical architecture, The Port of Mobile is one of the largest deep-water ports in the nation, focusing on neighborhoods and museums. Additionally, the metro hosts forest products. In 2018, 26.8 million tons of cargo moved through the port. Alabama’s only deep-water port and a growing manufacturing AFFORDABILITY & HOMEOWNERSHIP industry. It is the third largest metro in the state with 418,000 Mobile’s low cost of living compared with other midsize metros allows 58 percent residents and is expected to add 6,700 people through 2024. of households to own a home, in line with the national rate. SHIPBUILDING INDUSTRY Austal USA builds combat ships and high-speed vessels for the U.S. Navy and is one of the metro’s top employers. Shipbuilder BAE Systems Southeast also calls Mobile home. ECONOMY Shipbuilding, steel and chemical companies drive the growth of the metro’s manufacturing industry. The entry of Airbus to the metro has elevated the aerospace sector, which is also occupied by ST Aerospace and Continental Aerospace Technologies. Education-related positions are numerous, with the Mobile County Public School System and the University of South Alabama representing the metro’s top employers. Activities on and near the water and attractions such as the USS Alabama Battleship Memorial Park result in tourism having a $1 billion economic impact annually in the region. Infirmary Health Systems leads a trio of larger medical systems that employ more than 5,000 people. DEMOGRAPHICS 2019 2019 2019 2019 MEDIAN POPULATION HOUSEHOLDS MEDIAN AGE HOUSEHOLD 418 K INCOME 161 K 37.7 $48,200 Growth Growth U.S. Median 2019-2024* 2019-2024* U.S. Median 1.6% 2.2% 38.1 $60,800 * Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau Starbucks & Moe’s Southwest Grill | Mobile, AL | 11 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH REGIONAL MAP Starbucks & Moe’s Southwest Grill | Mobile, AL | 12 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH LOCAL MAP Starbucks & Moe’s Southwest Grill | Mobile, AL | 13 STARBUCKS & MOE’S | 390 SCHILLINGER ROAD SOUTH DEMOGRAPHICS POPULATION 1 MILES 3 MILES 5 MILES HOUSEHOLDS BY EXPENDITURE 1 MILES 3 MILES 5 MILES 2024 Projection Total Average Household Retail Expenditure $52,654 $64,383 $61,326 Total Population 1,118 27,768 93,958 Consumer Expenditure Top 10 Categories 2019 Estimate Housing $12,932 $15,204 $14,677 Total Population 1,078 26,828 92,934 Transportation $10,527 $12,881 $12,188 2010 Census Shelter $6,444 $7,579 $7,409 Total Population 1,037 25,843 92,672 Food $5,610 $6,926 $6,595 2000 Census Personal Insurance and Pensions $4,095 $5,578 $5,259 Total Population 1,062 26,800 88,907 Health Care $3,983 $4,969 $4,634 Current Daytime Population Utilities $3,457 $3,937 $3,828 2019 Estimate 1,290 23,400 82,511 Entertainment $1,853 $2,316