Offering Memorandum
870 BROADWAY 870 Broadway • Newark, NJ 07104 NON - ENDORSEMENT AND DISCLAIMER NOTICE
Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure 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. Marcus & Millichap 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 or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.
Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
870 BROADWAY Newark, NJ ACT ID ZAA0280987
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TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01 Offering Summary Regional Map Local Map Aerial Photo Floor Plans Site Plan Parcel Map
FINANCIAL ANALYSIS 02 Rent Roll Summary Commercial Operating Statement Notes Pricing Detail Acquisition Financing
MARKET OVERVIEW 03 Market Analysis
Demographic Analysis
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INVESTMENT OVERVIEW
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OFFERING SUMMARY EXECUTIVE SUMMARY
VITAL DATA CURRENT YEAR 1 Price $1,325,000 CAP Rate 7.93% 7.93% MAJOR EMPLOYERS Net Operating Down Payment 25% / $331,250 $105,070 $105,070 Income # OF Net Cash Flow EMPLOYER Loan Amount $993,750 After Debt 12.72% / $42,125 12.72% / $42,125 EMPLOYEES Service Prudential 10,771 Loan Type Proposed New Total Return 19.87% / $65,829 20.16% / $66,794 County Hall of Records 4,000 Interest Rate / 4% / 25 Years Amortization University Hospital 3,620 Total Rentable SF 9,794 New Jrsey Trnst Bus 3,400 Price/SF $0.00 Operations Year Built / Renovated 1925 / 2018 Allied Building Products Co 3,300 NJ Transit 3,295 UNIT MIX Scher Chemicals Inc 2,780 UNIT CURRENT AVG. AVG. MONTHLY POTENTIAL AVG. MONTHLY UNIT TYPE AVG. SF COUNT RENTS RENTS/SF INCOME RENTS RENTS/SF INCOME Horizon Blue Cross Blue Shld 2,700 ESSEX COUNTY HOSPITAL SUITE CURRENT MONTHLY PRO FORMA 2,500 TYPE TOTAL GLA CURRENT RENT RANGE CENTER COUNT INCOME MONTHLY INCOME Housing Auth of The Cy 2,347 4 Retail 8,486 $1,200 - $3,000 $9,625 $9,625 Newark 1 Office 1,308 $2,500 - $2,500 $2,500 $2,500 County Clerk 2,264 RAb Food Group 2,198 DEMOGRAPHICS
1-Miles 3-Miles 5-Miles 2018 Estimate 306,911 678,208 Pop 44,974 2010 Census Pop 43,216 294,881 656,470 2018 Estimate HH 15,739 111,227 247,156 2010 Census HH 15,153 106,635 238,414 Median HH $53,526 $51,081 Income $51,161 Per Capita $27,681 $29,078 Income $25,154 Average HH $75,419 $78,570 Income $71,745
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OFFERING SUMMARY INVESTMENT OVERVIEW Marcus & Millichap is pleased to exclusively list for a sale a five-tenant mixed-use retail and office building located in Newark (Essex County), New Jersey. The subject property is 100 percent occupied and with a majority of the tenants being in the same location for numerous years. The building is on a 0.12 acre lot and is located at the intersection of Broadway and Verona Avenue. The building is situated on the border of Newark and Belleville, which allows easy access Interstate 280 and Route 21. There is a bus stop directly in front of the building, where NJ Transit provides bus service to Downtown Newark, Belleville, Nutley and Clifton.
Newark is the largest city in New Jersey and the county seat of Essex County. Newark is located 9 miles northwest of New York City. Newark allows quick and easy accessibility to New York City by means of train or bus.
Within a five-mile radius of Newark, the average household income is $78,570 among the 678,208 individuals who reside within a five-mile radius of the subject property.
The asking price of $1,325,000 represents a 7.93 percent cap rate.
INVESTMENT HIGHLIGHTS . 100% Occupied Mixed-Use Building (Four Retail Tenants/ One Office Tenant) . Majority of the Tenants Have Long Term Leases Expiring Beyond 2024 . Check Cashing Tenant in Same Location for 30+ Years . High Population Density with 44,974 Residing in Square Mile . Proximity to Route 21 and Interstate 280 . Located in the Woodside Section of Newark on Busy Intersection
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OFFERING SUMMARY PROPERTY OVERVIEW
Newark is a city located in Essex County, New Jersey. The subject property is approximately 13 miles southwest of New York City. Newark is the largest city in New Jersey, and is the county seat of Essex County. In 2015, Newark was ranked as the 70th largest city in the nation. Newark is a hub of air, road, rail, and ship traffic; making it a significant gateway into the New York metropolitan area and the northeastern United States. The major roadways that pass through the city are Interstate 95(New Jersey Turnpike), Interstate 280, Interstate 78, the Garden State Parkway, Route 1/9, Route 22, and Route 21. Newark is connected to the Holland Tunnel and Lower Manhattan by the Pulaski Skyway. Newark Penn Station is the citys major train station, passengers are able to access the PATH train, three NJ Transit commuter rail lines, and Amtrak service. Bus service for Newark is provided by NJ Transit, and Coach USA.
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OFFERING SUMMARY PROPERTY SUMMARY
THE OFFERING EXISTING FINANCING Property 870 Broadway Loan Type None Price $1,325,000 PROPOSED FINANCING Property Address 870 Broadway, Newark, NJ First Trust Deed Assessors Parcel 14 00819-0000-00020 Loan Amount $993,750 Number Zoning C-3 Loan Type Proposed New SITE DESCRIPTION Interest Rate 4% Amortization 25 Years Number of Units 5 Loan Term 10 Years Number of Buildings 1 Loan to Value 75% Number of Stories 2 Debt Coverage Ratio 1.67 Year Built/Renovated 1925 / 2018 Retail - Gross Leaseable 8,486 Area (GLA) Office - Rentable Square 1,308 Feet Total Rentable Square 9,794 Feet Lot Size 0.12 acre(s) Type of Ownership Fee Simple Parking Street Parking Parking Ratio N/A CONSTRUCTION Foundation Masonary Stem Wall Framing Masonary Frame Exterior Stucco Roof Black Rubber Membrane Roof (Redone 3 Years Ago) MECHANICAL HVAC Radiator Heater and Forced Air Cooling Wiring New Electrical System Throughout System Fire Protection Fire Alarm, Smoke Detectors and Fire Extinguisher
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REGIONAL MAP
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LOCAL MAP
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AERIAL PHOTO
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FREEZER & REFRIDGERATOR
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FLOOR PLANS
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ZONING MAP
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PARCEL MAP
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FINANCIAL ANALYSIS
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FINANCIAL ANALYSIS RENT ROLL SUMMARY
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FINANCIAL ANALYSIS OPERATING STATEMENT
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FINANCIAL ANALYSIS PRICING DETAIL
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ACQUISITION FINANCING
MARCUS & MILLICHAP CAPITAL CORPORATION WHY MMCC?
CAPABILITIES Optimum financing solutions to enhance value MMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and Our ability to enhance terms. buyer pool by expanding finance options We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of Our ability to enhance financing options. seller control • Through buyer Our dedicated, knowledgeable experts understand the challenges of financing qualification support and work tirelessly to resolve all potential issues to the benefit of our clients. • Our ability to manage buyers finance expectations • Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings • By relying on a world class Closed 1,678 National platform $6.24 billion Access to set of debt/equity sources debt and equity operating total national more capital financings within the firm’s volume in 2018 sources than and presenting a tightly in 2018 brokerage any other firm underwritten credit file offices in the industry
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MARKET OVERVIEW
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MARKET OVERVIEW NORTHERN NEW JERSEY OVERVIEW
Northern New Jersey consists of Bergen, Hudson, Passaic, Essex, Morris and Union counties. The region contains roughly 4 million residents in more than 200 municipalities. Bergen County is home to nearly 1 million people, while Essex County, which includes the city of Newark, has approximately 804,000 citizens. The region is bordered to the east by the Hudson River and New York City, to the south by Middlesex and Somerset counties, to the west by Warren and Sussex counties, and to the north by New York State. A large portion of the area is almost fully developed and densely populated. The region is a part of the New York metro and is linked to the city by the George Washington Bridge, the Lincoln Tunnel, the Holland Tunnel, several ferries and commuter rail tunnels. METRO HIGHLIGHTS
DIVERSE INDUSTRIES Pharmaceuticals, healthcare and finance are a few of the segments that contribute to the metro’s economic base.
LARGE LABOR POOL The region’s diverse and highly skilled labor and access to workers in other nearby metros draws an array of businesses.
UNIQUE ECONOMY Northern New Jersey has its own economic drivers and is also well connected to New York City’s robust economy.
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MARKET OVERVIEW
ECONOMY . Northern New Jersey is home to numerous Fortune 500 companies including Prudential Financial, Merck, PBF Energy and Honeywell International. . The airline industry accounts for a significant share of jobs in the region. United Airlines has a major presence at Newark Liberty International Airport. . Trade is a key employment sector. Vehicle imports account for a substantial amount of the Port Newark-Elizabeth Marine Terminal’s business. . Spillover from Wall Street bolsters finance jobs in Essex, Hudson and Bergen counties.
MAJOR AREA EMPLOYERS
Prudential Financial United Continental Holdings Wells Fargo Hackensack University Medical Center Bank of America Wakefern Food Corp TD Bank St. Joseph’s Hospital and Medical Center Merck & Co. Inc. * Forecast RWJBarnabas Health
SHARE OF 2018 TOTAL EMPLOYMENT
6% 18% 14% 8% 7% MANUFACTURING PROFESSIONAL AND GOVERNMENT LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES BUSINESS SERVICES
22% 4% + 16% 2% 4% TRADE, TRANSPORTATION CONSTRUCTION EDUCATION AND INFORMATION OTHER SERVICES AND UTILITIES HEALTH SERVICES
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DEMOGRAPHICS
. Northern New Jersey will add nearly 40,000 people and approximately 36,000 households over the next five years, generating demand for housing. SPORTS . The homeownership rate of 54 percent is below the national rate of 64 percent, maintaining a strong rental market. . Approximately 39 percent of residents hold a bachelor’s degree, including 15 percent who have also obtained a graduate or professional degree.
2018 Population by Age
6% 19% 6% 28% 27% 14% 0-4 YEARS 5-19 YEARS 20-24 YEARS 25-44 YEARS 45-64 YEARS 65+ YEARS EDUCATION
2018 2018 2018 2018 MEDIAN POPULATION: HOUSEHOLDS: MEDIAN AGE: HOUSEHOLD INCOME: 4M 1.5M 38.4 $74,200 Growth Growth U.S. Median: U.S. Median: 2018-2023*: 2018-2023*: 1.0% 2.4% 38.0 $58,800
QUALITY OF LIFE Northern New Jersey offers a variety of amenities and cultural activities. Sports and entertainment are available in East Rutherford at the Meadowlands. The MetLife Stadium is home to the Giants and Jets of the NFL. The Prudential Center, also known as the ARTS & ENTERTAINMENT Rock, is an indoor arena in downtown Newark where the Devils (NHL) and Seton Hall University play. Downtown Newark also houses the New Jersey Performing Arts Center and Bears and Eagles Riverfront Stadium, home of the Newark Bears, a minor-league baseball team. Numerous community colleges and universities are located in the metro, including Seton Hall University, the Newark campus of Rutgers University, Stevens Institute of Technology, William Paterson University and Bergen Community College.
* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau
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MARKETINGDEMOGRAPHICS TEAM Created on September 2019
POPULATION 1 Miles 3 Miles 5 Miles HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles . 2023 Projection . 2018 Estimate Total Population 45,470 308,184 680,626 $250,000 or More 1.87% 2.64% 3.45% . 2018 Estimate $200,000 - $249,999 1.36% 1.50% 2.06% Total Population 44,974 306,911 678,208 $150,000 - $199,000 5.88% 5.41% 5.49% . 2010 Census $100,000 - $149,000 13.91% 13.42% 12.78% Total Population 43,216 294,881 656,470 $75,000 - $99,999 11.09% 11.65% 10.66% . 2000 Census $50,000 - $74,999 16.77% 18.09% 16.35% Total Population 43,038 295,718 660,291 $35,000 - $49,999 13.60% 13.39% 12.57% . Daytime Population $25,000 - $34,999 9.57% 8.83% 9.55% 2018 Estimate 26,395 252,832 627,878 $15,000 - $24,999 11.71% 10.27% 10.85% HOUSEHOLDS 1 Miles 3 Miles 5 Miles Under $15,000 14.24% 14.79% 16.25% . 2023 Projection Average Household Income $71,745 $75,419 $78,570 Total Households 16,099 112,828 250,788 Median Household Income $51,161 $53,526 $51,081 . 2018 Estimate Per Capita Income $25,154 $27,681 $29,078 Total Households 15,739 111,227 247,156 Average (Mean) Household Size 2.84 2.69 2.66 . 2010 Census Total Households 15,153 106,635 238,414 . 2000 Census Total Households 15,080 106,792 239,466
Source: © 2018 Experian
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MARKETINGDEMOGRAPHICS TEAM
Population Race and Ethnicity In 2018, the population in your selected geography is 678,208. The The current year racial makeup of your selected area is as follows: population has changed by 2.71% since 2000. It is estimated that the 42.37% White, 34.71% Black, 0.04% Native American and 5.78% population in your area will be 680,626.00 five years from now, which Asian/Pacific Islander. Compare these to US averages which are: represents a change of 0.36% from the current year. The current 70.20% White, 12.89% Black, 0.19% Native American and 5.59% population is 48.62% male and 51.38% female. The median age of Asian/Pacific Islander. People of Hispanic origin are counted the population in your area is 36.14, compare this to the US average independently of race. which is 37.95. The population density in your area is 8,620.84 people per square mile. People of Hispanic origin make up 31.35% of the current year population in your selected area. Compare this to the US average of 18.01%.
Households Housing There are currently 247,156 households in your selected geography. The median housing value in your area was $330,433 in 2018, The number of households has changed by 3.21% since 2000. It is compare this to the US average of $201,842. In 2000, there were estimated that the number of households in your area will be 250,788 95,730 owner occupied housing units in your area and there were five years from now, which represents a change of 1.47% from the 143,736 renter occupied housing units in your area. The median rent current year. The average household size in your area is 2.66 persons. at the time was $625.
Income Employment In 2018, the median household income for your selected geography is In 2018, there are 302,431 employees in your selected area, this is $51,081, compare this to the US average which is currently $58,754. also known as the daytime population. The 2000 Census revealed The median household income for your area has changed by 26.33% that 59.19% of employees are employed in white-collar occupations since 2000. It is estimated that the median household income in your in this geography, and 40.84% are employed in blue-collar area will be $58,486 five years from now, which represents a change occupations. In 2018, unemployment in this area is 6.13%. In 2000, of 14.50% from the current year. the average time traveled to work was 35.00 minutes.
The current year per capita income in your area is $29,078, compare this to the US average, which is $32,356. The current year average household income in your area is $78,570, compare this to the US average which is $84,609.
Source: © 2018 Experian
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