Panda Express 2031 Coliseum Dr | Hampton, Va Contents
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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.