ALAMO DRAFTHOUSE CINEMA 2 MILES FROM TEXAS TECH UNIVERSITY CAMPUS (LUBBOCK, TEXAS)
ACTUAL PROPERTY SHOWN 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 Pegasus Investments and should not be made available to any other person or entity without the written consent of Pegasus Investments. This Offering Memorandum has been prepared to provide summary, unverified information to prospective purchasers, 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. Pegasus Investments 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 of the business prospects of any tenants, 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, Pegasus Investments has not verified, and will not verify, any of the information contained herein, nor has Pegasus Investments conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. Some or all of the photographs contained within may have been altered from their original format. All potential buyers must take appropriate measures to verify all of the information set forth herein.
– Lead Advisors –
David B. Chasin Brad Kritzer Daylin Ackerman Tony Veiller Managing Director Executive Vice President Associate Senior Analyst P (310) 691-1350 x101 P (310) 691-1350 x106 P (310) 691-1350 x114 P (310) 691-1350 x113 [email protected] [email protected] [email protected] [email protected]
Pegasus Investments Real Estate Advisory Inc. | www.PegasusInvestments.com 1901 Avenue of the Stars, Suite 630 | Los Angeles, CA 90067 | P (310) 691-1350 F (310) 691-1353 | CA BRE# 01961545 TEXAS TECH STUDENTS, FACULTY AND STAFF GENERATE AERIAL VIEW ~$1.5 BILLION IN ECONOMIC OUTPUT ANNUALLY
TEXAS TECH UNIVERSITY 35,661 TOTAL STUDENT BODY
Future Park
Future Future Student Housing Retail
Future Retail Development Site
TEXAS TECH STUDENTS SPEND AN AVERAGE OF $300 MILLION SHOPPING EACH SCHOOL YEAR LOCAL AREA MAP PART OF NORTH SLIDE SQUARE CENTER
Surrounded by new campus housing as well as several synergistic entertainment & hospitality properties ALAMO DRAFTHOUSE IS AT THE CENTER OF LUBBOCK’S North Point Housing Development NORTH PARK MASTER PLAN DEVELOPMENT (CLICK HERE) McDougal Properties
Future Housing Track McDougal Properties
4 5 3 2 62-acre Future Destination Retail Development Site 6 1 Future Housing Track Proposed Park No Development Area
Future Retail Development Site
Future Retail Development Site
Map Property Description 1 Renaissance at North Park 328-unit multi-family housing community 7 2 UMC Business & Tech Center UMC Health System development 3 UMC Health System Land UMC Health System development (pending) 4 United Supermarkets Land Prospective New development grocery site 5 Gateway at Lubbock Texas Tech Student Housing development 6 AG Texas Farm Credit Services Future Bank Branch development/Retail 7 The Landing at Pinewood Park 200+ unit apartment community PRICING SUMMARY Opportunity: Pegasus Investments, as exclusive investment sale advisor to Seller, is pleased to offer a single tenant 100% absolute triple net leased Alamo Drafthouse Cinema located in Lubbock, Texas. Located only 2 miles from Texas Tech University, the Purchase Price $10,333,500 property benefits tremendously from one of Texas’ top ranked universities with enrollment exceeding 35,000 students each year. Cap. Rate 7.00% Annual Rent $723,344 (NNN) Headquartered in Austin, Texas, Alamo Drafthouse Cinema is highly regarded as one of the leading luxury theaters in the country with 29 locations nationally including 17 in Building Size 33,167 SF Texas alone. The chain has grown rapidly since its inception in 1997 and has plans to develop 8 more theaters in major markets growing its footprint from its current span of Parking Count 277 stalls (8.4:1,000) 11 states. The lease guarantor, Triple Tap Ventures, LLC, currently holds three (3) Lot Size ~3.84 acres locations and owns the rights to five major metropolitan areas in Texas including Houston, Lubbock and El Paso. Year Built 2014 Investors will benefit from an institutionally authored 100% absolute triple net lease Address 120 West Loop 289 which features annual CPI-based rent increases, zero landlord obligations, favorable Lubbock, Texas tenant financial reporting requirements and personal guarantees from two high net 79416 worth individuals with restaurant and hospitality backgrounds and ownership in the guarantor (holding) company. With 16 years of remaining lease term the investment affords its landlord with the security of a long term lease backed by a quality tenant.
ACTUAL PROPERTY SHOWN LEASE SUMMARY Location: The investment benefits tremendously from its strategic Tenant Name Alamo Drafthouse Cinema location along TX 289, approximately 2 miles from Texas Tech Lessee Triple Tap Alamo Lubbock, LLC University. With annual enrollment exceeding 35,000 students, the University contributes tremendously to the economic output of Guarantors Franchisee & Personal Lubbock and the surrounding region while providing high paying, Lease Expiration August 31, 2033 skilled jobs to its workforce.
Initial Term Remaining ~16 years Prominently situated on 3.5 acres within the NorthPark masterplan, Renewal Options (4) 5 year the property is surrounded by a myriad of synergistic uses including newly developed student housing, multifamily apartment Lease Structure 100% absolute triple net (NNN) communities, hotels, restaurants and other forms of entertainment. Annual Base Rent $723,344 The property’s convenient access from TX 289, which carries average daily traffic of 30,000 cars per day, combined with it’s Rental Increases Annually at lesser of 1.75% or 1.25x prominent visibility has positioned Alamo Drafthouse Cinema to CPI record strong revenue per screen metrics as well as impressive food Next Rental Increase September 1, 2018 and beverage sales. Some investors will further benefit from the Landlord Responsibility None state of Texas’ income tax free status. Investment Highlights INVESTMENT HIGHLIGHTS
. Long Term Lease w/ 16-years Remaining. The . Near Replacement Cost Pricing. Assuming . 16 Years Remaining on Lease investment provides ownership with the construction and tenant improvement opportunity to hold long-term or to hold for 5- finishing costs of $250 PSF plus land costs of . 100% Absolute Triple Net years and capturing compounding annual rent $14 PSF, today’s replacement cost is . Annual Rent Increases growth while preserving lease term upon exit. equivalent or slightly greater than the projected purchase price. . Institutional Quality Lease . Institutional 100% Absolute NNN Lease. The subject property was acquired via sale leaseback . Seasoned, Best in Class Operators. In . Priced at Replacement Cost by one of the largest publicly traded single addition to being a high performing store, the . Seasoned Operators tenant REITs in the country. Subsequent lease guarantors are experienced restaurant ownership will benefit from one of the industry’s and hospitality executives with impressive . High Barrier to Entry strongest forms of lease with ongoing unit level track records of running public companies. . Expensive to Replicate and parent level financial reporting. . High Barrier to Entry. Due to high start-up . Creditworthy Guarantors . Annual CPI-based Rent Increases. Rent will costs and studio mandated radius restrictions, grow quickly due to the power of annual the tenant is insulated from competition . Detailed Tenant Financials compounding rent increases tied to CPI. entering the immediate trade area. Location Highlights LOCATION HIGHLIGHTS
. 2 Miles from Texas Tech University. Alamo . Strong Visibility & Access from Texas 289. . 2 miles from Texas Tech Univ. Drafthouse benefits from annual enrollment in The property benefits from direct access and excess of 35,000 students and nearly $1.5 billion excellent visibility to over 30,000 cars per day . Part of NorthPark Master Plan estimated annual economic contribution to along Texas 289 – Lubbock’s primary . Synergistic Co-Tenancy Lubbock’s local economy. outerbelt which provides access to a vast regional trade area. . Surrounded by Student Housing . Critical Mass Entertainment District. The property anchors the NorthPark Master Plan’s . Several Hundred Million in Planned . Surrounding New Development entertainment and lifestyle component, which is Development. In addition to new student . Superior Access from TX-289 home to several new restaurants, hotels and housing and sports facility projects on the planned mixed-use. main campus of Texas Tech exceeding $150 . Dedicated Pylon Signage million in 2017, Texas Tech Health Sciences . Path of Growth – NorthPark Master Plan. The . 30,000 CPD Traffic Counts Center just broke ground on an $85+ million master plan is focused along the 289 corridor campus expansion project which is expected . New Health Science Center with convenient access to highways, schools, to feature up to 125,000 SF across several new hospitals, and access to new affordable housing. . New Limited Service Hotels health science facilities. Less than 2 miles from Texas Tech University, the subject is a favorite for student & faculty entertainment
Freeway visible pylon to 30k VPD LOCATED 2-MILES FROM THE SUBJECT PROPERTY
1,839 ACRE CAMPUS | 6 PROJECTS CURRENTLY UNDER DEVELOPMENT | PROJECT COSTS TOTALING ~$150 MILLION
FOUNDED IN 1923 | 36,551 TOTAL ENROLLMENT| 250 DEGREE’S ACROSS BACHELOR, MASTER’S & DOCTORAL | BIG 12 CONFERENCE | D1 KEY EMPLOYERS LUBBOCK, TEXAS IS A REGIONAL ECONOMIC HUB, THE CENTER OF A DIVERSIFIED AGRICULTURE-INDUSTRIAL COMPLEX, AND HOME TO THE LARGEST HEALTHCARE SYSTEM IN ALL OF WEST TEXAS AND EAST NEW MEXICO.
KEY LUBBOCK EMPLOYERS
• Established in 1923, TTU is the 6th largest school in Texas • Approximately 5,578 employees work within the TTU system • Student enrollment exceeded 36,500 students in 2016 • Only campus in Texas with undergrad, law and medical schools
• Headquartered in Lubbock, Texas and founded in 1998 • Approximately 4,570 employees within Lubbock County • Largest healthcare system in West Texas and East New Mexico • 20 clinics, 50 physician practices, nearly 40,000 annual admissions
• Public healthcare system comprised of over 3,800 team members • Owned by the taxpayers of Lubbock County • Hospital holds 412 beds and the only Level 1 Trauma Center in the entire west Texas region
• Multi-campus health, biomedical, nursing and pharmacy institution • Based in Lubbock, Texas, it serves more than 100 counties • Employs approximately 4,300 with enrollment in excess of 4,440 • The Lubbock campus is the largest campus in the system
• Supermarket chain headquartered in Lubbock and founded in 1916 • Employs nearly 2,800 within in the county and over 11,000 national • Some 66 stores across 30 Texas cities with annual revenues of $1.4B • Acquired by Albertson in late 2013 HOUSING & HEALTHCARE Covenant Health System Covenant Health System, founded in 1998, is part of the St. Joseph Health System, and includes an LUBBOCK HEART & organization of acute-care, specialty, and community hospitals servicing West Texas and Eastern New SURGICAL HOSPITAL Mexico. Covenant is the largest employer in Lubbock County and includes over 20 clinics and 50 physician Lubbock Heart & Surgical Hospital is a practices. heart hospital just off the Texas 289 Loop. The hospital has been improving the healthcare experience of South Plains residents since 2003 through continual investment in its team members ability to succeed. GATEWAY AT LUBBOCK Gateway at Lubbock is an apartment complex that offers luxury at an affordable rate. Now under new managment. the UMC Health System apartment complex has experienced new renovations in UMC Health System is a public health organization its 24-hour fitness center, club comprised of a team of nearly 4,000 healthcare house, study rooms and pool providers and professionals which have served the oasis. In addition to these citizens of Lubbock County and west Texas for 36 upgraded features, Gateway at years. The system has nearly 28 locations throughout Lubbock offers fully-furnished Lubbock with 2 new locations under development RENAISSANCE AT units. just north of the Alamo Drafthouse property. NORTHPARK Directly across the street from the Subject Property, the Renaissance at NorthPark features 328 apartment homes. Residents enjoy amenities such as a 4,200 SF Clubhouse with a full kitchen, free-wifi and ample seating, an interior garden and a state-of-the-art 24-hour fitness center. ABOUT ALAMO DRAFTHOUSE
OVERVIEW Founded in 1997, Alamo Drafthouse Cinemas, Ltd. is an Austin, Texas-based theater chain that operates theaters throughout the United States. Each Alamo Drafthouse theater offers various movies and events, food and beverage service, film presentation, and original programming as well as gift cards and venue rental services. The company has steadily and systematically expanded and as of 2016 was reportedly achieving in excess of $170 million in annual sales. The lease guarantor, Triple Tap Ventures, LLC, is a holding company that owns majority interest in three (3) locations and owns the rights to five major metropolitan areas in Texas including Houston, Lubbock and El Paso.
GEOGRAPHIC REACH Alamo Drafthouse Cinemas has locations in 11 different states: Arizona, California, Colorado, Maryland, Missouri, Nebraska, New York, North Carolina, Texas, and Virginia, with 17 locations in Texas alone. Alamo Drafthouse Cinemas currently operates 29 locations with plans to open 8 more locations in the near future including for the first time in major cities such as Los Angeles, Denver and Washington, D.C.
REDEFINING THE CINEMA EXPERIENCE Alamo Drafthouse is an entertainment destination that telecasts movies and provides dinner, drinks and events which include eclectic film line-ups and screenings of older films. The seating is arranged with rows of cabaret style tables in front of each row of seats, with an aisle between each row to accommodate waiter service. The company’s attention to detail in film presentation and program has garnered the chain accolades from Entertainment Weekly as the #1 Theater in America; Wired.com as the “Coolest Movie Theater in the World;” Fandango.com as “One of the Best Theaters in the Country;” and, recently for its growth by Bloomberg Business. INTERIOR PHOTOS
Alamo Drafthouse is an entertainment destination where patrons can enjoy food and beverage service before and during a film via an indoor/outdoor restaurant, bar and patio and cabaret style tables in front of each theater seat. DEMOGRAPHICS Population 1-Mile 3-Mile 5-Mile Population (2017 est.) 14,045 74,423 166,954 % Pop. Growth (‘10-’17) 5.80% 6.28% 6.62% Households Households (2017 est.) 5,646 27,821 60,743 Income Demographics Avg. Income (2017 est.) $56,717 $57,009 $56,331 About Pegasus Investments Pegasus Investments is a boutique commercial real estate investment and advisory firm based in Los Angeles, CA. Specializing in retail shopping centers, single tenant net leased and multifamily properties throughout the United States, Pegasus has consistently delivered on its 28 year reputation of providing high quality, white glove service throughout all stages of the investment sales process. Pegasus provides its clients, which include high net worth private investors, family trusts, private & public REIT’s, local and regional developers and syndicators with advisory services encompassing underwriting, market research, investment sales and asset management. Pegasus continues to set the bar for high quality, boutique investment sales brokerage and advisory by relying on its industry-leading talent which include experienced institutional and private sector investors.
David Chasin Brad Kritzer Managing Director Executive Vice President P (310) 691-1350 x101 P (310) 691-1350 x106 [email protected] [email protected]
Trevor Nelson Ken Chasin Managing Director Founder P (310) 691-1350 x104 P (310) 691-1350 x100 Pegasus Investments [email protected] [email protected] 1901 Avenue of the Stars, Suite 630 Los Angeles, CA 90067 Kevin Shelburn Brian Wolfman www.pegasusinvestments.com Vice President Senior Associate (310) 691-1350 P (310) 691-1350 x105 P (310) 691-1350 x107 DRE# 00776468 [email protected] [email protected]
Daylin Ackerman Michael Spector Associate Associate P (310) 691-1350 x114 P (310) 691-1350 x109 [email protected] [email protected]
Katherine Weaver Tony Veiller Associate Senior Analyst P (310) 691-1350 x115 P (310) 691-1350 x113 Pegasus Capital Markets: [email protected] [email protected] Chad Buelow Tyler Johnson Aaron Aszkenazy Talia Tonti Managing Director Analyst Associate Vice President Office Manager DRE Lic# 01854509 DRE Lic# 01947197 P (310) 691-1350 x103 P (310) 691-1350 x108 P (310) 691-1350 x111 P (310) 691-1350 x112 [email protected] [email protected] [email protected] [email protected]