1547 S Dale Mabry Highway Tampa FL 33629
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OFFERING MEMORANDUM ™ SOUTH TAMPA, FLORIDA EXCLUSIVELY LISTED BY ARON CLINE CALVIN SHORT CHAD KURZ JOSH BISHOP SVP & Senior Director SVP & Senior Director SVP & National Director VP & Director LIC# 01927216 (CA) LIC# 01911198 (CA) LIC# 688810 (TX) DIRECT (949) 432-4509 MOBILE (818) 632 0233 LIC# 01904371 (CA) BROKER OF RECORD KYLE MATTHEWS [email protected] LIC# CQ1052263 (FL) SOUTH TAMPA, FLORIDA 0 4 | Executive Summary T a b l e 0 6 | Financial Overview of Contents 1 4 | Tenant Overview 1 6 | Area Overview ™ INVESTMENT HIGHLIGHTS › Strong Credit Tenant – Sprouts Farmers Market (NDAQ: SFM) is one of the nation’s top natural organic retailers with more EXECUTIVE than 285 stores throughout 13 states. OVERVIEW › Long-Term Corporate Lease – 15-year primary lease term with 4, 5-year options to renew. Sprouts also has rental increases throughout the lease. › Brand New, High-Quality Construction Grocery Store (Sprouts Famers Market) – The store was built and opened in 2017 and is one of South Tampa’s newest retail developments. Roofs and mechanical systems are under warranty and can be transferable to a purchaser. INVESTMENT SUMMARY › Robust Demographics - The subject property is located in the heart of South Tampa which is an affluent and dense trade area. › Irreplaceable Location - The Property is situated along the primary signalized thoroughfare of Tampa, Dale Mabry Highway. Property Name Dale Mabry Highway has approximately 37,500 cars per day. Furthermore, the Property is situated in close proximity to Sprouts Farmers Market numerous schools, many of which are among the best in the state. The Property is located less than 5 miles from Tampa International Airport, 1.5 miles from the Westshore area and just over 3 miles from the Tampa Central Business District. Property Address 1547 S Dale Mabry Highway • Strong Incomes - The average household income within a 1-mile radius is north of $130,743, which is more than double the Tampa, FL 33629 national average and shows the strength of the location. Further, the average household income within a 3-mile radius of the subject property is $94,809, and there are over 93,619 residents and 109,865 daytime employees, which combined is a customer base north of 203,481. GLA ± 29,929 SF Lot Size ± 2 AC / 87,120 SF Year Built 2017 4 • High Barriers to Entry – Given the density of the › Sprouts is actively expanding throughout the › On Sprouts Farmers Market’s (NASDAQ: SFM) corridor and surrounding area, this is essentially Southeast and already has 12 locations in Georgia, earnings conference call on February 22nd, a landlocked area making it extremely difficult 4 in Florida, 4 in Alabama and 4 in Tennessee. company management discussed a number of for tenants to relocate or for new competition to factors underlying a projected 2018 revenue penetrate the market. › For the 3rd quarter, ending Oct-2017, Sprouts increase of 11.5% to 12.5%, and expected reported net sales of $1.2 Billion (16% increase), comparable sales, or “comps” improvement of › Sprouts Farmers Market - With 285 stores in 13 comparable store sales growth of 4.6% and net 2.5% to 3.5% - Positive outlook! states, Sprouts Farmers Market (Nasdaq: SFM) income growth of 32%. is one of the nation’s largest natural organic › Surrounding Retailers – Trader Joe’s, Whole retailers. Sprouts’ 2018 outlook calls for the › In January 2018, Sprouts announced a new Foods, Publix, Fresh Market, Target, TJ Maxx, opening of 30 new stores this year. partnership with privately held grocery delivery Sam’s Club, Walmart, Total Wine and Beer, company Instacart, aimed at expanding the HomeGoods, Stein Mart, amongst many others. › Sprouts had sales of $3.6 billion in 2015, which company’s current delivery capability to each of represented an increase of 24% from prior year. its major markets, beginning with a phased roll- Adjusted EBITDA was $243 million in 2015, out in its home base state of Arizona. which was an increase of 3% from prior year. 5 203,481 Daytime Population within a 3-mile radius FINANCIAL OVERVIEW FINANCIAL HIGHLIGHTS List Price $14,250,000 ANNUALIZED OPERATING DATA Base Rent PSF Monthly Rent Annual Rent Increases Cap Rate Year 1-10 $26.75 $66,716.75 $800,601 - 5.62% Year 11-15 $27.75 $69,210.83 $830,530 $1.00/SF 5.81% Option 1 $28.75 $71,704.92 $860,459 $1.00/SF 6.02% Cap Rate Option 2 $29.75 $74,199.00 $890,388 $1.00/SF 6.23% 5.62% Option 3 $30.75 $76,693.08 $920,317 $1.00/SF 6.44% Option 4 $31.75 $79,178.17 $950,246 $1.00/SF 6.65% TENANT SUMMARY SFM, LLC dba Tenant Trade Name Original Lease Term 15 Years Sprouts Farmers Market Rent Commencement Date 5/24/17 Type of Ownership Fee Simple Lease Expiration Date 5/23/32 Term Remaining Lease Guarantor SFM, LLC Corporate Rental increases of $1.00/SF Increase S Dale mabry highway ±37,500 ADT ± 14 Years Lease Type NN after 10th year of initial term Roof & Structure Landlord Responsibility Options Four, 5-Year Options 6 203,481 Daytime Population within a 3-mile radius S Dale mabry highway ±37,500 ADT 7 LEASE ABSTRACT » Sprout’s pays no more than $1.00/SF in CAM costs during the first full calendar year. After first year, CAM Costs shall not exceed PRS from prior year by more than 3%. Cap excludes snow and ice removal or other costs with respect to extraordinary weather events. Tenant does not pay an Administrative or Management Fee. » Tenant’s Proportionate Share is equal to Tenant’s SF/Total GLA of Shopping Center. INSURANCE REIMBURSEMENTS » Tenant pays pro rata share of Insurance expenses. During the first calendar year only, Sprout’s pays no more than $0.75/SF for Insurance costs, with no cap TENANT NAME thereafter. This first-year cap is NOT applied in the cash flow projections herein. SFM, LLC » Tenant’s Proportionate Share is equal to Tenant’s SF/Total GLA of Shopping d/b/a Sprouts Farmers Market Center. DEMISED PREMISES REAL ESTATE TAX REIMBURSEMENTS ± 29,929 SF » Tenant pays pro rata share of Real Estate Tax expenses. During the first calendar year only, Sprout’s pays no more than $1.75/SF for Real Estate Taxes, with no LEASE TERM cap thereafter. This first-year cap is NOT applied in the cash flow projections Tenant has a fifteen (15) year lease herein. » In connection with the second change in ownership, Tenant has a 60-month REMAINING RENEWAL OPTION(S) reassessment protection given that the property is transferred during the first Four, Five-year options 7 lease year of the term of this lease. Upon a ““ Transfer Reassessment”” the Tenant shall not be obligated to pay any portion of their Pro Rata Share of the RENEWAL OPTION NOTICE Transfer Increase continuing until the last day of the 60th full calendar month Notice of 210 days after Transfer Reassessment date. Tenant’s Proportionate Share is equal to Tenant’s SF/Total GLA of Shopping Center. COMMON AREA MAINTENANCE REIMBURSEMENTS » If the Premises is ever taxed separately from the other portions of the Shopping » Tenant pays pro rata share of Common Area Maintenance expenses. Center, Tenant will pay all Real Property taxes assessed against the Premises, as Reimbursable CAM expense include: (a) parking lot restriping, repaving and well as Tenant’s Proportionate Share of any Real Property Taxes assessed against resurfacing; (b) cleaning and sweeping; (c) landscaping; (d) snow and rubbish the Common Area. removal; (e) receptacle maintenance and trash removal; (f) maintaining signs; and (g) painting. 8 MAINTENANCE & REPAIRS ESTOPPEL REQUIREMENT » Tenant shall maintain, at its costs, regular trash removal from its dedicated Within 30 days. dumpster(s)/compactor(s). Tenant responsible for all maintenance repairs, and replacement of all parts of the HVAC system exclusively serving the Premises. CONTINUOUS OPERATION Tenant shall also maintain the interior of the Premises in good order. Not required. » Landlord is responsible for (a) repairing all damage to the Premises or Common Area caused by subsidence, settling of land or other structural or latent defects; ASSIGNMENT & SUBLEASING (b) maintaining the following in good condition and repair: roof and roof » Tenant may upon at least 30 days’ Notice to Landlord, but without requirement membrane repairs, all structural portions of the premises, soffits and exterior to obtain Landlord’s consent, assign this Lease or sublet all or any portion of installation and finish systems, sump pumps, storefront (excluding plate glass), the Premises so long as the Premises continues to be used for a lawful retail use and floor slab; and (c) making all repairs and replacements to the Premises or that does not violate any of the restrictions set forth in Exhibit G, G-1 or G-2 Common area required by reason of the negligence of Landlord. of Lease. EXCLUSIVE RIGHTS PARKING » Tenant shall have the exclusive right in the Shopping Center to conduct the » The Common Area shall at all times contain no less than the sum of 3.55 parking operation and sale of any of the following activities or merchandise: operation spaces per 1,000 square feet of Gross Floor Area for the entire Shopping of a grocery store, meat or seafood market or produce market, or the sale of Center, plus any additional parking spaces required by applicable laws. any such items; the sale of vitamins and supplements, ethnic foods, natural or health food, pet food, or packaged ice cream; the sale of natural cosmetics, EARLY TERMINATION natural health or beauty products; the sale of packaged beer and wine for off- » Not stipulated in Lease.