SHOPS at CROSSROADS 395 9,000 SF Retail Strip in Walmart-Anchored Center | Victorville, CA
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OFFERING MEMORANDUM SHOPS AT CROSSROADS 395 9,000 SF Retail Strip in Walmart-Anchored Center | Victorville, CA EXCLUSIVELY LISTED BY: JOSEPH BLATNER / Senior Vice President (503) 200-2029 / [email protected] HARRIS NIAZI / Associate (503) 200-2044 / [email protected] SHOPS AT CROSSROADS 395 | VICTORVILLE, CA CONFIDENTIALITY DISCLAIMER: The information contained in this 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, PCBs 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. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. The information contained in this 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, PCBs 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. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. ACTIVITY ID: Z0210289 2 SHOPS AT CROSSROADS 395 | VICTORVILLE, CA TABLE OF CONTENTS ABOUT THE PROPERTY 04 07 10 INVESTMENT OVERVIEW FINANCIAL OVERVIEW PROPERTY OVERVIEW Executive Summary Pricing Detail Location Summary Property Highlights Rent Roll Detail Tenant Overview Aerial Maps Property Photos ABOUT THE MARKET 21 27 COMPARABLES MARKET SUMMARY Market Comps Map Market Area Description Market Comps Market Advantages Demographics 3 SHOPS AT CROSSROADS 395 VICTORVILLE, CA INVESTMENT OVERVIEW 4 SHOPS AT CROSSROADS 395 | VICTORVILLE, CA Walmart, anchoring Crossroads at 395, brings in a constant stream of traffic. 5 SHOPS AT CROSSROADS 395 | VICTORVILLE, CA EXECUTIVE SUMMARY SHOPS AT CROSSROADS 395 12274 PALMDALE RD, VICTORVILLE, CA 92392 HIGHLIGHTS • Built in 2014, Southern California Retail Shadow-Anchored By OFFERING PRICE Walmart • 100% Leased to Six National and Regional Chain Tenants $5,394,000 • Surrounded by 25+ Major National Retailers within a Quarter Mile Including Walmart, Walgreens, McDonald’s, Auto Zone, Dollar Tree, CAP RATE and More • Strong Demographics – Over 71,000 Residents and Average % Household Incomes of $65,000 Within a 3-Mile Radius 5.20 • High-Traffic Counts at Over 96,000 Vehicles Per Day Number of Suites 6 • Located at the Entrance of the Crossroads at 395 Retail Center for Excellent Visibility and Convenient Access from Regional Highways Lease Types NNN • Several Upcoming Projects and Developments in the Area Year Built 2014 • Explosive Trade Area Growth Building Size 9,000 SF Lot Size 0.85 Acres TENANTS Occupancy 100% Base Rental Revenue $293,426 Total Reimbursements $111,268 Total Expenses $112,050 Effective Gross Income $392,553 General Vacancy (3%) ($12,141) Net Operating Income $280,503 6 SHOPS AT CROSSROADS 395 VICTORVILLE, CA FINANCIAL OVERVIEW 7 PRICING SUMMARY Price $5,394,000 CAP Rate 5.20% Number of Suites 6 Gross Leasable Area (GLA) 9,000 SF Lot Size 0.85 Acres Year Built 2014 Occupancy 100% CURRENT OCT 18 - SEPT 19 Base Rental Revenue $293,426* Total Reimbursements $111,268 Potential Gross Revenue $404,694 General Vacancy (3%) ($12,141) Effective Gross Income $392,553 Operating Expenses CAMs $13,983 Utilities $12,173 Insurance $6,517 Property Tax $65,277 Management Fee $13,200 Reserves $900 Total Operating Expenses $112,050 NET OPERATING INCOME $280,503 *Annualized rent from 10/18 - 9/19 8 SHOPS AT CROSSROADS 395 | VICTORVILLE, CA RENT SUMMARY LEASE DATES FUTURE BASE RENT INCREASES SQUARE COMMENCE EXPIRATION MONTHLY TOTAL TOTAL OPERATION TENANT SUITE CATEGORY MONTH MONTHLY AMOUNT FEET DATE DATE RENT/SF RENT/MONTH RENT/YEAR CHARGES Sweet Frog 101 1,710 11/24/14 11/30/20 $3.01 $5,139 $61,663 $1,734 Scheduled Dec-18 $5,293 Scheduled Dec-19 $5,451 Notes: NNN lease. Tenant has one 5-year renewal option. First year minimum rent set at greater of FMV or 103% of prior rent. Annual in- Greater of $5,615 Option 1 - creases of 3% thereafter. Tenant Pays Pro Rata Share of CAM, Taxes, Mgmt., Insurance, plus 15% of NNN expenses for admin and overhead. Dec-20 or FMV; then 3% 5 Years annual increase GNC 102 1,200 10/22/14 10/31/19 $2.29 $2,742 $32,904 $1,396 Option 1 Nov-19 $3,038 Notes: NNN lease. Tenant has three 5-year renewal options. 1st and 3rd Option rent set at 112.5% of rent for prior period. 2nd Option Rent Option 2 Nov-14 $3,417 set at FMV. Tenant Pays Pro Rata Share of CAM (subject to CAM Cap), Taxes, Insurance, plus 10% of CAM for admin and overhead. Option 3 Nov-29 $3,844 Option 1 - Sally Beauty 103 1,500 10/25/14 10/31/19 $2.13 $3,200 $38,400 $1,487 Nov-19 $3,600 5 Years Notes: NNN lease. Tenant has one 5-year renewal option at rental rate of $3,600/mo. Tenant Pays Pro Rata Share of CAM (subject to CAM Cap), Taxes, Insurance, plus 10% of CAM for admin and overhead Great Clips 104 900 10/25/14 10/31/24 $3.21 $2,891 $34,696 $913 Scheduled Nov-18 $2,978 Scheduled Nov-19 to 23 3% Increase Notes: NNN lease. Tenant has one 5-year renewal option. Rent shall increase annually 3% Annually. Tenant Pays Pro Rata Share of CAM, Taxes, Mgmt., Insurance, plus 15% of NNN expenses for admin and overhead. Option 1 - $3,556; then 3% Nov-24 5 Years annual increases Option 1 - MetroPCS 105 1,200 12/4/14 11/30/20 $2.75 $3,300 $39,600 $1,217 Dec-20 $3,630 3 Years Notes: NNN lease. Tenant has two 3-year renewal options at 10% rental increase in 1st Year of Option 1 and Option 2. Tenant Pays Pro Rata Option 2 - Dec-23 $3,993 Share of CAM, Taxes, Mgmt., Insurance, plus 15% of NNN expenses for admin and overhead. 3 Years Domino’s Pizza 106 2,490 12/1/14 11/30/21 $2.73 $6,802 $81,627 $2,525 Scheduled Dec-18 $7,006 Scheduled Dec-19 $7.216 Notes: NNN lease. Tenant has one 5-year renewal options at annual rental increase of 103% over prior year’s rent. Tenant Pays Pro Rata Scheduled Dec-20 $7,433 Share of CAM, Taxes, Mgmt., Insurance, plus 15% of NNN expenses for admin and overhead. Option 1 - $7,656; then 3% Dec-21 5 Years annual increases TOTALS 9,000 (AVG $2.69) $24,072 $288,890 $9,272 9 SHOPS AT CROSSROADS 395 VICTORVILLE, CA PROPERTY OVERVIEW 10 SHOPS AT CROSSROADS 395 | VICTORVILLE, CA LOCATION OVERVIEW LOCATION The subject property is a 9,000 SF retail building in Victorville, California. The building is an out-pad to a Walmart-anchored center at the entrance of Crossroads at 395 shopping center. The center is located in the Victor Valley area of Southern California at the crossroads of US Highway 395 and Palmdale Road. US 395 is the major north-south highway connecting Newport Beach, San Diego, Ontario, Riverside, and San Bernardino to the eastern Sierra communities of Lone Pine, Bishop, Yosemite National Park, and Mammoth Ski Resort.