Alamo Drafthouse Cinema 2 Miles from Texas Tech University Campus (Lubbock, Texas)
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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