Madison Plaza
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OFFERING MEMORANDUM ™ MADISON PLAZA 930 OLD MONROVIA ROAD NW HUNTSVILLE, AL 35806 ™ MADISON PLAZA 930 OLD MONROVIA ROAD NW HUNTSVILLE, AL 35806 EXCLUSIVELY LISTED BY SCOTT HENARD JORDAN POWELL KYLE MATTHEWS BROKER OF RECORD SVP & REGIONAL DIRECTOR SHOPPING CENTERS CHAIRMAN AND CEO KYLE MATTHEWS SHOPPING CENTERS [email protected] [email protected] [email protected] LIC 00109289 DIR (214) 692-2046 DIR (214) 692-2160 DIR (310) 919-5757 MOB (214) 692-2046 MOB (916) 844-6454 MOB (310) 622-3161 LIC 684841 (TX) LIC 01982070 (CA) LIC 01469842 (CA) CONTENTS 4 EXECUTIVE SUMMARY Offering Summary Financial Summary Investment Highlights 8 AREA OVERVIEW Huntsville, Alabama MidCity Development Huntsville Economy Madison County Local Attractions 14 PROPERTY OVERVIEW Physical Description Parcel Map Site Plan 18 FINANCIAL OVERVIEW Rent Roll Income & Expenses Lease Expiration Schedule Summary Tenant Profile Assumptions Cash Flow 24 TENANT OVERVIEW Havertys Ross Medical Education Hobbytown USA EXECUTIVE SUMMARY Financial Summary Price Unpriced Propery Size (NRA) 153,739 Year Built/Renovated 1984/2007/2016 Current Occupancy 100% Operating Data Effective Gross Income $1,328,394 Operating Expenses $206,901 Net Operating Income - Yr 1 $1,121,493 Major Tenants (SF) Stars and Strikes 54,631 Havertys 45,028 Mission Thrift 24,057 4 | MADISON PLAZA Offering Summary Matthews Real Estate Investment Services is pleased to exclusively offer for sale the opportunity to own a 153,739 SF retail shopping center in the heart of Huntsville, AL. Anchored by Havertys and a new Stars and Strikes Entertainment Center, Madison Plaza is strategically located adjacent to MidCity Huntsville, a 100-acre mixed-used community that is under construction and includes Specialty Retail (345,000 SF), High-Tech Office (200,000 SF), 150-room Boutique Hotel, and over 900 Residential Units. The MidCity Development will be anchored by the first Topgolf in Huntsville. In addition to the MidCity Development, Madison Plaza is located just 2.5 miles from the renowned U.S. Space and Rocket Center and the Redstone Arsenal. The Center is in proximate location to Earth Fare, HomeGoods, Jo-Ann Fabric & Crafts, Chipotle, Best Buy, Sam’s Club, and Bridge Street Town Center, a mixed-use lifestyle center with over 70 upscale shops and full-service restaurants. The Center is also in proximity to Polaris’ recently opened $142MM all-terrain vehicle factory and Remington Outdoor Company’s new $110MM firearms plant. Both of these companies will be adding a combined 4,000 new jobs with the addition of these two facilities. Madison Plaza provides the opportunity to enjoy a stable cash flow stream with the ability to add value by increasing existing rents which are significantly below market. Investment Highlights • Anchored by Havertys Furniture (recent 5-Year Extension) and a new Stars and Strikes Family Entertainment Center (15-year Lease) • Adjacent to MidCity Development a 100-acre mixed-used community that is under construction and includes Specialty Retail (345,000 SF), High-Tech Office (200,000 SF), 150-room Boutique Hotel and over 900 Residential Units. The MidCity Development will be anchored by the first Topgolf in Huntsville • Stable cash flow with a value-add opportunity through increase of rents which are currently below market. • 5-year NOI growth of 27% and over 51% growth in 10 years • Huntsville’s economy is booming with military and aerospace industries – including the U.S. Space and Rocket Center, Cummins, Polaris ($142MM all-terrain factory), Remington ($110M firearms plant), and others • 2016 Renovation with new façade improvement and parking lot resurfacing MATTHEWS REAL ESTATE INVESTMENT SERVICES | 5 AREA OVERVIEW 6 | MADISON PLAZA Huntsville, Alabama Regional Map Huntsville is nicknamed The Rocket City for its close history with U.S. space missions. The city remains the center of rocket-propulsion research in the U.S. with many aerospace and defense contractors’ facilities located in the area. The city is home to the U.S. Army Aviation and Missile Command and NASA’s Marshall Space Flight Center, which is located at the nearby Redstone Arsenal. Huntsville is also the location of Alabama A&M University, Oakwood University, University of Alabama in Huntsville and the J.F. Drake State Technical College. The city itself is quite attractive; with mostly modern buildings in a wooded mountainous setting. Good neighborhoods spread south and into neighboring towns to the west. Huntsville is surrounded by Appalachian foothills and 1,200- foot to 1,400-foot mountains, and about 7 miles north of the Tennessee River Valley. Accolades #1 #2 IN EMPLOYEE ENGAGEMENT CITY FOR TECH JOBS TOP METRO #3 CITY WHERE YOUR MONEY TO BETTER THE U.S. ECONOMY GOES THE FARTHEST #1 BEST TOWN AFFORDABLE PLACE TO LIVE FOR COLLEGE STUDENTS MATTHEWS REAL ESTATE INVESTMENT SERVICES | 7 MidCity Development MADISON PLAZA 200,000 SF HIGH-TECH OFFICE $350 MILLION REDEVELOPMENT 100-ACRE MIXED-USE COMMUNITY OVER 900 RESIDENTIAL UNITS 345,000 SF SPECIALTY RETAIL 150-ROOM BOUTIQUE HOTEL 8 | MADISON PLAZA Proximity to Madison Plaza Directly adjacent to Madison Plaza at the intersection of Research Park Boulevard and University Drive is the development of MidCity which is poised to become the ultimate community destination with an array of retail, dining and entertainment options in addition to fitness and recreational MID CITY DEVELOPMENT SITE opportunities, walkable streets, and neighborhoods. The project is among (CURRENTLY UNDER CONSTRUCTION) the 12 largest commercial real estate projects in the United States. MADISON PLAZA MidCity will have five main sections: MidCity Park will include a 38-acre public park, 8,500-seat public amphitheater, Topgolf, lake and kayak center, adrenaline zone, bike and running trails and an outdoor recreation retailer. Back Street and West Park Promenade will be a connection to MidCity Park and feature specialty shops and restaurants and residential apartments above the retail space. Area 120 will include 200,000 square feet of high-technology office space and a public plaza which will be ideal for research, development and creative companies. The Residential District will be adjacent to shops and restaurants with a trail connection to MidCity Park. The Point and Jake’s Mews will be the heart of the development featuring a boutique hotel, outdoor performance venue, farm-to-table dining, sidewalk cafes, a food hall and shops. MATTHEWS REAL ESTATE INVESTMENT SERVICES | 9 Topgolf announces new location in MidCity Huntsville Topgolf will anchor of the up and coming MidCity Huntsville which is being built adjacent to Madison Plaza. Topgolf is a popular driving range and entertainment hub with 29 locations in the United States and the U.K. which serves 13 million guests each year. The Huntsville location alone is projected to receive 300,000 guests in its first year of operation. The $20 million project began construction in March and is expected to open later this year or early 2018. Not only will this project bring in thousands of visitors, but will create 325 full and part-time jobs. The venue will feature three levels with 72 climate-controlled hitting bays each which can host up to six players at a time. Each golf ball has a microchip which score themselves and provide players with instant feedback on each shot’s accuracy and distance. While this is a golf- focused entertainment venue, Topgolf can be enjoyed by people of all ages and skill level while nearly half of all guests describe themselves as “non-golfers”. The new venue is the turning point of creating MidCity into a premier destination. Click here to learn more about the development. 10 | MADISON PLAZA Huntsville Economy Demographics With a positive job growth and the cost of living and unemployment rate being below the national average, Huntsville is one of the best places for businesses and careers according to Forbes. AVERAGE HOUSEHOLD NUMBER OF POPULATION The economy is literally bulletproof with its critical mass for the nation’s INCOME HOUSEHOLDS missile-defense and aerospace industries along with the medical and life-sciences. Huntsville has the pleasant problem of having more jobs than they can fill. Business Facilities magazine recently rated Alabama among the top states for workforce training programs, auto manufacturing strength, and foreign direct investment in its 110,478 $66,129 46,529 2016 rankings. In addition, the economic development-focused publication rated Huntsville No. 1 among U.S. cities for STEM job growth, and No. 3 for economic growth potential. The Rocket City was No. 5 for cost of living. MATTHEWS REAL ESTATE INVESTMENT SERVICES | 11 Top Madison County Employers Employer # of Employees U.S. Army/Redstone Arsenal 35,000 NASA / Marshall Space Flight Center 6,500 Huntsville Hospital 6,341 Huntsville City Schools 3,000 The Boeing Company 2,750 Madison County Schools 2,389 SAIC (Science Applications International Corporation) 2,277 City of Huntsville 2,206 Madison County Madison County is recognized as the birthplace of Alabama and has a population of 334,811. The county is named in honor of James Madison, the fourth President of the United States of America and the first President to visit the state of Alabama. Its county seat, the city that is the governmental center of the county, is Huntsville. Madison County covers parts of the former Decatur County and is included in the Huntsville, AL Metropolitan Statistical Area. For the majority of the county’s history, the economy revolved around agriculture as it was one of the largest cotton-producing counties in the state. The switch to being known as the “Rocket Capitol” happened when a group of rocket scientists came to Redstone Arsenal and developed, among others, the Redstone rocket which was modified to launch the first two Americans into space. Thousands of jobs came to this area as a result of the Space Race and the population in Madison County rose by over 200,000.