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Offering memorandum PANDA EXPRESS 2031 COLISEUM DR | HAMPTON, VA CONTENTS
03 EXECUTIVE OVERVIEW
04 FINANCIAL OVERVIEW
12 TENANT OVERVIEW
14 AREA OVERVIEW LISTED BY
Aron Cline
SVP & Sr. Director DIRECT +1.949.432.4509 MOBILE +1.818.632.0233 [email protected] LICENSE NO. 01904371 (CA)
Chad Kurz SVP & National Director
LICENSE NO. 01911198 (CA) Calvin Short SVP & Senior Director
LICENSE NO. 01927216 (CA) Josh Bishop VP & Director
LICENSE NO. 688810 (CA)
BROKER OF RECORD
kyle matthews BROKER OF RECORD LIC # 22602771 2 EXECUTIVE OVERVIEW
INVESTMENT HIGHLIGHTS
• 20-year ground lease with approximately 15.5 years remaining on the primary term and Four (4), Five (5) year options to renew
• The Panda Express building is high quality, recently built construction
• Located as an outparcel to Peninsula Town Center, which is approximately 1.1M square feet with some of today’s hottest retailers (Target, Victoria’s Secret, Talbot’s, Chico’s, Forever 21, H&M, BWW, Chipotle, among others)
• Located in the dominant retail hub of Hampton, VA
• Strong retail corridor located at I-64 and Mercury Blvd, with traffic counts exceeding ± 200,000 VPD
• 10% rental increases every 5 years - asset will appreciate in value
• Peninsula Town Center is a mixed-use center that has over 150,000 SF of office space and hundreds of fully leased apartments, whose tenants shop and eat at the town center daily
• Peninsula Town Center was built in 2008 and nearly 100,000 SF has been added to accommodate Floor and Decor • and Sky Zone. It is a successful shopping destination that continues to grow and attract a strong consumer base
• Panda Express has over 1,750 restaurants located in all 50 states, the District of Columbia, Puerto Rico, Guam, Canada, Mexico, Korea, and the United Arab Emirates
• Panda Express is one of the largest privately held restaurant chains
• Panda Express had $2.5 billion in revenue in 2016
3 FINANCIAL OVERVIEW
LIST PRICE TENANT SUMMARY
$2,554,736 Tenant Trade Name Panda Express Type of Ownership Ground Lease Lease Guarantor Corporate Lease Type NNN CAP RATE Roof & Structure Tenant Responsible 4.75% Original Lease Term 20 years Lease Commencement Date 4/22/2013 Rent Commencement Date 4/18/2014 Lease Expiration Date 4/30/2034 Term Remaining ± 15.5 years TERM REMAINING Increases 10% every 5 years ± 16 YEARS Options Four, 5-Year Options
4 ANNUALIZED OPERATING DATA
Monthly Annual Panda CAM Increases POA Fee Slippage NOI Cap Rate Rent Rent Contribution 2018 $9,583.33 $115,000 N/A $2,185 $- N/A N/A *5/2019 $10,541.67 $126,500 10% *-$7,401 $2,251 - $5,150 $121,350 4.75% 2020 $10,541.67 $126,500 *-$7,401 $2,319 - $5,082 $121,418 4.75% 2021 $10,541.67 $126,500 *-$7,401 $2,389 - $5,012 $121,488 4.76% 2022 $10,541.67 $126,500 *-$7,401 $2,460 - $4,941 $121,559 4.76% 2023 $10,541.67 $126,500 *-$7,401 $2,534 - $4,867 $121,633 4.76% 2024 $11,595.83 $139,150 10% *-$7,401 $2,610 - $4,791 $134,359 5.26% 2025 $11,595.83 $139,150 *-$7,401 $2,688 - $4,713 $134,437 5.26% 2026 $11,595.83 $139,150 *-$7,401 $2,769 - $4,632 $134,518 5.27% 2027 $11,595.83 $139,150 *-$7,401 $2,852 - $4,549 $134,601 5.27% 2028 $11,595.83 $139,150 *-$7,401 $2,938 - $4,463 $134,687 5.27% 2029 $12,755.42 $153,065 10% *-$7,401 $3,026 - $4,375 $148,690 5.82% 2030 $12,755.42 $153,065 *-$7,401 $3,117 - $4,284 $148,781 5.82% 2031 $12,755.42 $153,065 *-$7,401 $3,210 - $4,191 $148,874 5.83% 2032 $12,755.42 $153,065 *-$7,401 $3,306 - $4,095 $148,970 5.83% 2033 $12,755.42 $153,065 *-$7,401 $3,406 - $3,995 $149,070 5.84% Option 1: 5/2034 $14,030.96 $168,372 10% *-$7,401 $3,508 - $3,893 $164,479 6.44% 2035 $14,030.96 $168,372 *-$7,401 $3,613 - $3,788 $164,584 6.44% 2036 $14,030.96 $168,372 *-$7,401 $3,721 - $3,680 $164,692 6.45% 2037 $14,030.96 $168,372 *-$7,401 $3,833 - $3,568 $164,804 6.45% 2038 $14,030.96 $168,372 *-$7,401 $3,948 - $3,453 $164,919 6.46% Option 2: 5/2039 $15,434.05 $185,209 10% *-$7,401 $4,066 - $3,335 $181,874 7.12% 2040 $15,434.05 $185,209 *-$7,401 $4,188 - $3,213 $181,996 7.12% 2041 $15,434.05 $185,209 *-$7,401 $4,314 - $3,087 $182,122 7.13% 2042 $15,434.05 $185,209 *-$7,401 $4,443 - $2,958 $182,251 7.13% 2043 $15,434.05 $185,209 *-$7,401 $4,577 - $2,824 $182,385 7.14% Option 3: 5/2044 $16,977.46 $203,730 10% *-$7,401 $4,714 - $2,687 $201,043 7.87% 2045 $16,977.46 $203,730 *-$7,401 $4,855 - $2,546 $201,184 7.87% 2046 $16,977.46 $203,730 *-$7,401 $5,001 - $2,400 $201,330 7.88% 2047 $16,977.46 $203,730 *-$7,401 $5,151 - $2,250 $201,480 7.89% 2048 $16,977.46 $203,730 *-$7,401 $5,306 - $2,095 $201,635 7.89% Option 4: 5/2049 $18,675.21 $224,102 10% *-$7,401 $5,465 - $1,936 $222,166 8.70% 2050 $18,675.21 $224,102 *-$7,401 $5,629 - $1,772 $222,330 8.70% 2051 $18,675.21 $224,102 *-$7,401 $5,798 - $1,603 $222,499 8.71% 2052 $18,675.21 $224,102 *-$7,401 $5,972 - $1,429 $222,673 8.72%
*The POA fee (Property Owners Association or Common Area Maintenance) is a set budget determined each year that is split among all the other owners and tenants based on their pro rata share or tax parcel. The POA Fee in 2019 is $7,401 in which Panda Express pays approximately $2,251 towards the yearly POA fee in 2019 as their contribution and the Tenant will increase their contribution 3.0% annually. Seller will credit the buyer the difference in NOI between now and May of 2019 at the close of escrow. For the model we used a fixed CAM/POA fee of $7,401 although that may change each year given the CAM costs and set budget each year. 5 LEASE ABSTRACT
Tenant: Panda Express, Inc., a California corporation Tenant Address: 1683 Walnut Grove Ave, Rosemead, CA 91770 Property Address: 2031 Coliseum Dr., Hampton VA 23666 Date Of Lease: April 22, 2013 Lease Commencement: April 18, 2014 Lease Expiration: April 30, 2034 Lease Term: Twenty (20) years Current Rent: $115,000.00 Building SF: 2,586 SF Rent Increases: 10% rental increases every five (5) years Renewal Options: Four five (5) year options Years 1-5 $115,000.00 Years 6-10 126,500.00 11-15 $139,036.00 16-20 $153,065.00 Annual Rent: Option Periods: 21-25 $168,371.50 26-30 $185,208.65 31-35 $203,729.51 36-40 $224,102.46 Tenants Proportionate A percentage computed on the ration of total Floor Area of the Premises bears to the total Floor Area of the building. Share: Landlord or POA shall operate, repair and maintain the Common Areas and all improvements of the Shopping Center, in safe, clean, order and repair. Landlord shall carry out a program of regular maintenance and repair to impede, to the extent commercially practical, CAM: deterioration by ordinary wear and tear. Tenant shall pay Two Thousand Dollars ($2,000) per year for Common Area maintenance expenses, with annual Three Percent (3%) increases. See section 18(c) on page 15 of the lease.
Tenant shall be liable for all real estate taxes applicable to the Premises (the "Real Estate Taxes"). As the Premises is assessed as a separate Real Estate Taxes: tax parcel, Tenant shall pay the Real Estate Taxes imposed during the Term directly to the taxing authority before such taxes become delinquent, and shall provide proof of such payment to Landlord upon Landlord's written request. See section 12(a) on page 12 of the lease.
Tenant shall maintain property insurance with endorsements for all perils covering all Tenant Improvements on the Premises. Tenant shall Insurance (Tenant): maintain commercial general liability insurance against claims for personal injury, death and property damage occurring on the Premises in amounts of One Million Dollars ($1,000,000.00) per occurrence and Three Million Dollars ($3,000,000.00) in the aggregate. Utilities: Tenant responsible
Tenant responsible. Tenant Shall maintain and repair, at its expense, the Tenant Improvements, including paving slabs, curbs, driveways, Repairs and Maintenance: perimeter walls, storm drains, sewers, utility lines and landscaping on the Premises, in a state of good condition and repair, ordinary wear and tear excepted. Landlord shall have no duty or right to perform maintenance and repair on the Premises. 6 PARCEL MAP the offering
Property Name Panda Express 2031 Coliseum Drive Property Address Hampton, VA 23666 Assessor’s Parcel Number 13002026
Site Description Number of Stories One Year Built 2013 GLA ± 2,586 SF Lot Size ± 0.67 Acres (29,465 SF) Type of Ownership Ground Lease Parking ± 24 Surface Spaces Parking Ratio 9.28 : 1,000 SF Landscaping Professional Topography Generally Level
Coliseum Dr ± 25,000 ADT Construction Foundation Concrete Slab Framing Wood Exterior Brick Parking Surface Asphalt Roof Flat
7 surrounding tenants W Mercury Blvd ±54,000 ADT
9 10surrounding RETAIL 11 12 13 14 Peninsula Town Center Site Plan
15 Peninsula Town Center Roster
16 Tenant overview
17 PANDA EXPRESS COMPANY TRADE NAME Panda Express is a fast-casual restaurant chain which serves PANDA RESTAURANT GROUP, INC. American Chinese cuisine. It is the largest Asian segment restaurant chain in the United States, where it was founded and is mainly located (in addition to other countries and territories HEADQUARTERED in North America and Asia). Panda Express restaurants were ROSEMEAD, CA traditionally located in shopping mall food courts, but the chain now operates units in many other environments and formats, including stand-alone restaurants, as well as universities, NO. OF EMPLOYEES casinos, airports, military bases, and other venues. Panda ±13,000 Express has over 1,750 restaurants, located in 50 U.S. states, the District of Columbia, Puerto Rico, Guam, Canada, Mexico, Korea, and the United Arab Emirates. The company does not offer franchises. All units are company-owned and operated. WEBSITE Panda Express is headquartered in Rosemead, California. The WWW.PANDARG.COM Panda Express brand is a casual, fast-food variation of corporate sibling and predecessor Panda Inn (a chain of upscale, table service restaurants). # OF LOCATIONS ±1,750 The chain offers a variety of Chinese-cuisine-inspired dishes (e.g., Orange Chicken; Firecracker Chicken Breast; Beijing Beef; Grilled Teriyaki Chicken; Kung Pao Chicken). “Combo meals” are served with customer’s choice of either fried rice, steamed YEAR FOUNDED rice, chow mein, or mixed vegetables. No MSG is added to any 1983 of the items at Panda Express after it has been delivered to the restaurant, nor does Panda Express purchase from any suppliers who add MSG prior to delivery.
18 AREA OVERVIEW
HAMPTON, VA Hampton is an independent city in Virginia located on the mouth of the Chesapeake Bay with a population of about 137,000. As one of the seven major cities that compose the Hampton Roads metropolitan area, Hampton is graced with miles of shoreline and breathtaking water views. The city is located in the heart of the Hampton Roads region and the center of the East Coast. Located on the Hampton Roads Beltway, it hosts the Hampton Roads Bridge-Tunnel (HRBT) on Interstate 64. First opened in 1957, it was the world’s first bridge tunnel, crossing the mouth of the Hampton Roads harbor, which serves as the gateway to the Chesapeake Bay and the Atlantic Ocean from the eastern United States’ largest ice-free harbor and its tributary rivers. Expanded in the 1970s, the HRBT remains Virginia’s busiest and deepest such facility.
Established in 1610, Hampton is one of America’s oldest cities and is also one of the fastest growing cities in the region. Rich in history with small-town charm, Hampton has been recognized by Money magazine as one of the best places to live, as well as a national model for youth development and civic engagement. The quality of life is a breath of fresh air and one of the best kept secrets on the East Coast. A waterfront city with a mild climate, Hampton has one of the lowest crime rates in the region. The city has been named one of the most technology advanced cities in the nation by the Center for Digital Government for 14 of the past 15 years and one of the top 20 hot spots for young professionals to live and work by Next Generation Consulting.
ECONOMY DEMOGRAPHICS
For residents and visitors alike, the city features a wide array of business and industrial POPULATION 1 Mile 3 Mile 5 Mile enterprises, retail and residential areas, and historical sites. Most recently, the new Peninsula Town Center and other developments have reestablished Hampton as 2018 Estimate 10,454 79,602 197,959 the premier shopping, dining and entertainment destination of Hampton Roads. Peninsula Town Center features retail, dining, entertainment, office and residential 2023 Projection 10,703 80,092 200,004 opportunities. Other developments include The Power Plant of Hampton Roads with HOUSEHOLDS 1 Mile 3 Mile 5 Mile Bass Pro Shops Outdoor World, the Hampton Roads Convention Center, Embassy Suites hotel and new residential communities. 2018 Estimate 5,082 33,525 80,012
There is also an abundance of things to see and do in Hampton. Downtown Hampton 2023 Projection 5,184 33,913 81,165 alone brings in 500,000 annual visitors drawn to attractions, conferences, boating amenities, and military contracting work. The city has a vibrant arts community, INCOME 1 Mile 3 Mile 5 Mile distinctive festivals, signature events and cultural attractions that include the Fort 2018 Est. Average $53,149.22 $60,330.33 $65,619.33 Monroe National Monument, Virginia Air and Space Center, Hampton History Household Income Museum, Hampton Coliseum, The American Theatre, harbor tours, cruises and more.
19 19 CONFIDENTIALITY & DISCLAIMER STATEMENT
This Offering Memorandum contains select information pertaining to the business and affairs of Panda Express located at 2031 Coliseum Dr, Hampton, VA 23666 (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.
By acknowledging your receipt of this Offering Memorandum for the Property, you agree:
1. The Offering Memorandum and its contents are confidential;
2. You will hold it and treat it in the strictest of confidence; and
3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.
Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.
If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.
A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.
This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.
20 EXCLUSIVELY LISTED BY
Chad Kurz SVP & National Director
Aron Cline LICENSE NO. 01911198 (CA) kyle matthews SVP & Sr. Director Calvin Short BROKER OF RECORD DIRECT +1.949.432.4509 SVP & Senior Director LIC # 22602771 MOBILE +1.818.632.0233 [email protected] LICENSE NO. 01927216 (CA) LICENSE NO. 01904371 (CA) Josh Bishop VP & Director
LICENSE NO. 688810 (CA)
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