Redwood City Shops Downtown Redwood City
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Redwood City Shops Downtown Redwood City OFFERING MEMORANDUM Redwood City Shops Redwood City, CA | San Francisco Bay Area www.preservewestcapital.com TABLE OF CONTENTS PROPERTY HIGHLIGHTS 1 SITE PLAN 8 PROPERTY OVERVIEW 2 AERIAL 9 FINANCIAL ANALYSIS 3 ABOUT THE AREA 11 RENT ROLL 6 DEMOGRAPHICS 13 TENANT PROFILES 7 Disclaimer MGM Capital Corp dba Preserve West Capital (“Broker”) has been retained on an exclusive basis to market the property Putnam Daily described herein (“Property”). Broker has been authorized by the Seller of the Property (“Seller”) to prepare and distribute Partner the enclosed information (“Material”) for the purpose of soliciting offers to purchase from interested parties. More detailed financial, title and tenant lease information may be made available upon request following the mutual execution of a letter of 415.445.5107 intent or contract to purchase between the Seller and a prospective purchaser. You are invited to review this opportunity and [email protected] make an offer to purchase based upon your analysis. If your offer results in the Seller choosing to open negotiations with you, CA RE License #01750064 you will be asked to provide financial references. The eventual purchaser will be chosen based upon an assessment of price, terms, ability to close the transaction and such other matters as the Seller deems appropriate. Lindsey Snider The Material is intended solely for the purpose of soliciting expressions of interest from qualified investors for the acquisition of the Property. The Material is not to be copied and/or used for any other purpose or made available to any other person Vice President without the express written consent of Broker or Seller. The Material does not purport to be all-inclusive or to contain all of the 415.906.2887 information that a prospective buyer may require. The information contained in the Material has been obtained from the Seller [email protected] and other sources and has not been verified by the Seller or its affiliates. The pro forma is delivered only as an accommodation and neither the Seller, Broker, nor any of their respective affiliates, agents, representatives, employees, parents, subsidiaries, CA RE License #01443387 members, managers, partners, shareholders, directors, or officers, makes any representation or warranty regarding such pro forma. Purchaser must make its own investigation of the Property and any existing or available financing, and must Michael Maffia independently confirm the accuracy of the projections contained in the pro forma. Managing Partner Seller reserves the right, for any reason, to withdraw the Property from the market. Seller has no obligation, express or implied, 415.445.5144 to accept any offer. Further, Seller has no obligation to sell the Property unless and until the Seller executes and delivers a signed agreement of purchase and sale on terms acceptable to the Seller, in its sole discretion. By submitting an offer, a [email protected] purchaser will be deemed to have acknowledged the foregoing and agreed to release Seller and Broker from any liability with CA RE License #01340853 respect thereto. Property walk-throughs are to be conducted by appointment only. Contact Broker for additional information. www.preservewestcapital.com FOR TOC:PROPERTY HIGHLIGHTS • Value-Add Retail Investment Opportunity with Future Development Potential • Dense, Affluent Bay Area Demographics with High Disposable Incomes within 5 Mile Radius - Hard Corner Parcel with Favorable Zoning Allowing 3 to 8 Stories Depending on Use - Average Household Income of $189,441 • Substantial Development Activity in Surrounding Area - Median Home Value of $1.42 Million - 2,291 New Residential Units in Development Pipeline Located within - Approximately 63% of Households Earn $100,000+ Annually Downtown Redwood City Precise Plan Area • Prominent Retail Location Neighboring Major Shopping Centers & • Irreplaceable Bay Area Location on El Camino Real at the Entrance to Retail Tenants Downtown Redwood City - Nearby Anchor Tenants Include Whole Foods, Target, Safeway, - Total Daytime Population of 1,454,679 within 15 Miles of Site CVS, Costco, Smart & Final, and more - Strong Intrinsics in Market Where Demand for Real Estate Far • Located in Close Proximity to Major Redwood City Employers Exceeds Supply - Neighbors Offices of Box, Evernote, Google, WePay, Highfive, • Adjacent to Redwood City Caltrain Station Genomic Health, Informatica, Bristol-Myers Squibb, and more - 5th Busiest in Caltrain System, with Approximately 4,220 Riders • San Francisco Peninsula is a Major Node of Bay Area Economic Hub Boarding Trains from the Station Daily - GDP of $820.9 Billion within San Jose-San Francisco-Oakland • 100% Leased Retail Shops Building in Irreplaceable Infill Bay Area Location Combined Statistical Area - Annual Rental Escalations in Majority of Leases - Major Companies Headquartered in Region Include Tesla, Salesforce, Dropbox, PG&E, Yelp, Twitter, Uber, Lyft, Mozilla, Airbnb, and more • Approximately 24 Miles from San Jose & 27 Miles from San Francisco PRESERVE WEST CAPITAL | 1 FOR TOC:PROPERTY OVERVIEW Location The property is located at 825-831 El Camino Real and 2647-2655 Broadway Street in Redwood City, California. Lot Size Approximately 0.337 acres or 14,693 square feet. Improvements A 9,588 square foot retail building demised into 7 retail suites. 825 El Camino Real | Bangkok Bay | 1,950 square feet 827 El Camino Real | H&R Block | 1,904 square feet 831 El Camino Real | Redwood Tattoo Co. | 960 square feet 2647 Broadway Street | Naranjo’s Taqueria | 744 square feet 2649 Broadway Street | Shiny Nails | 780 square feet 2653 Broadway Street | Zadna Mediterannean | 1,800 square feet Environmental 2655 Broadway Street | Ike’s Lair | 1,450 square feet Environmental testing suggests a limited, minor release of dry-cleaning solvent from the former dry cleaning facility at the site. Elevated levels of the contaminants associated with this solvent have been found in the sub-slab vapor; this may indicate indoor air contamination, which can be mitigated by engineering controls, including HVAC adjustments and ongoing monitoring. In the event the property is redeveloped, excavation would remove potentially impacted soil vapor, soil, and groundwater, and would be likely to resolve subsurface contamination related to the former dry-cleaning facility. Additionally, the site is a former Unocal service station that operated between the early 1950s and mid-1980s. Former site features included a station building, gasoline underground storage tank (UST), product dispenser islands, a waste oil UST, and hydraulic hoists. All former station features, including the station building USTs and product lines, were removed from the Site in the late-1980s. Chevron Environmental Management Company (CEMC) is responsible for the cleanup and liable for any contamination at the site. Soil excavating and backfilling activities were performed at the site between October 12 and November 9, 2017 by SDI and JHA under Stantec oversight. A total of approximately 878 tons of soil, CDF overlap material and historical construction debris was removed from the site and transported under manifest for proper disposal. Monitoring wells have been installed and Chevron participates in routine a semi-annual groundwater sampling program. PRESERVE WEST CAPITAL | 2 FOR TOC:FINANCIAL ANALYSIS PRICING PRICE $7,000,000 4.72% CAP Rate Projected Gross Revenue YEAR 1 YEAR 10 YEAR 1 YEAR 10 Scheduled Base Rental Revenue $372,290 $506,204 Expense Reimbursement Revenue $135,946 $207,095 Net Operating Income $330,179 $500,896 Total Potential Gross Revenue $508,236 $713,299 Return 4.72% 7.16% General Vacancy ($15,247) ($6,979) Effective Gross Revenue $492,989 $706,320 Annual Expenses Note The net income is an estimate and does not provide for all potential costs and expenses (i.e. Common Area Maintenance $55,994 $73,059 maintenance, repair, etc.) that may be required of the owner. Any reserves set forth herein are merely estimates and not based on any experience, physical inspection, or prior knowledge. All Insurance $5,561 $7,256 prospective purchasers are strongly advised to make an independent investigation to determine Taxes $84,000 $100,388 their estimate of costs and expenses prior to entering into an agreement to purchase. Management @ 3.5% $17,255 $24,721 Total Operating Expenses $162,810 $205,424 PRESERVE WEST CAPITAL | 3 FOR TOC:FINANCIAL ANALYSIS CASH FLOW PROJECTION Redwood City Shops Cash Flow Projection Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028 Jun-2029 Jun-2030 May-2021 May-2022 May-2023 May-2024 May-2025 May-2026 May-2027 May-2028 May-2029 May-2030 May-2031 Net Rentable Area -Sq. Ft. 9,588 Base Rental Revenue PSF/mo. $3.24 $3.32 $3.77 $3.77 $3.89 $4.04 $4.16 $4.28 $4.40 $4.53 $4.66 Total Operating Expenses PSF/yr. $16.98 $17.39 $18.03 $18.50 $18.96 $19.44 $19.84 $20.30 $20.92 $21.43 $24.41 Absorption & Turnover Vacancy % - 1.3% 1.2% - - - 4.6% 5.5% - 2.0% - General Vacancy % 3.0% 1.7% 1.8% 3.0% 3.0% 3.0% - - 3.0% 1.0% 3.0% Potential Gross Revenue Base Rental Revenue 372,290 381,900 433,939 433,315 447,013 464,861 478,805 492,248 505,894 521,070 536,256 Absorption & Turnover Vacancy - (6,864) (7,070) - - - (30,747) (37,349) - (14,866) - Scheduled Base Rental Revenue 372,290 375,036 426,869 433,315 447,013 464,861 448,058 454,899 505,894 506,204 536,256 Expense Reimbursement Revenue