2 S Whitehorse Pike Berlin, NJ 08009
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2 S Whitehorse Pike Berlin, NJ 08009 EXCLUSIVE OFFERING www.DoughertyTeam.com ROYAL FARMS | BERLIN, NEW JERSEY TABLE OF CONTENTS Lead Investment Advisors Investment Analysis............04 Derrick Dougherty Tenant Overview.................09 First Vice President Investments Lic: PA RS305854 (215) 531-7026 Location Overview..............12 Scott Woodard Senior Associate Lic: PA RS329242 (215) 531-7058 Mark Krantz Senior Associate Lic: NJ 1863254 | PA RS336064 (215) 531-7056 Steve Garthwaite Senior Associate License: PA RS332182 (215) 531-7025 Pavan Koneru Associate Lic: PA RS350910 (215) 531-7068 Nick Geaneotes Associate Lic: PA RS350646 (215) 531-7071 Colin Reder Associate (215) 531-7057 Broker of Record: Brian Hosey License: NJ 1434917 2 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM Berlin Circle Plaza Diggerland USA ROYAL FARMS | BERLIN, NEW JERSEY Hwy 73 (34,332 VPD) S. Whitehorse Pike (26,310 VPD) Berlin Farmers Market 2 S. White Horse Pike Berlin, NJ Berlin Cross-Keys Rd (17,414 VPD) 3 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM ROYAL FARMS | BERLIN, NEW JERSEY 01 INVESTMENT ANALYSIS 4 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM INVESTMENT OVERVIEW ROYAL FARMS | BERLIN, NEW JERSEY $6,190,000 5.25% $325,000 PRICE CAP RENT LEASE SUMMARY ANNUALIZED OPERATING DATA Tenant Royal Farms Term Dates Base Rent PSF Increase Guarantor Corporate Years 1-10 (Current) 12/5/2019 - 12/31/2029 $325,000 $60.51 - Lease Type NNN Ground Lease Years 11-20 1/1/2030 - 12/31/2039 $357,500 $66.56 10% Gross Leasable Area 5,371 SF Option Terms Lot Size 2.03 Acres Years 21-30 (Option 1) 1/1/2040 - 12/31/2049 $393,250 $73.22 10% Year Build 2019 Years 31-40 (Option 2) 1/1/2050 - 12/31/2059 $432,575 $80.54 10% Roof and Structure Tenant is Responsible Years 41-50 (Option 3) 1/1/2060 - 12/31/2069 $475,832 $88.59 10% Base Lease Term (20) Year Base Term Lease Commencement December-19 Lease/ Rent Expiration December-39 Term Remaining (19) Years Rent Increases 10% Increases every 10 Years Estoppel Tenant to provide certificate within (10) days request Options Three, (10) Year Options Option Notice (90) Days Notice prior to Term Expiration PROPOSED NEW FINANCING Equity (35%) $2,166,500 Loan to Value (65%) $4,023,500 Interest Rate 3% Amortization 30 Years Term 10 Years Annual Debt Service ($203,559) Net Cash Flow After Debt Service $121,441 Debt Service Coverage Ratio 1.60 *Loan information is subject to change. Contact your Marcus & Millichap Capital Corporation representative. 5 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM INVESTMENT HIGHLIGHTS ROYAL FARMS | BERLIN, NEW JERSEY PRICE: $6,190,000 | CAP: 5.25% | RENT: $325,000 About the Investment: • Long Term Corporate Lease with (19) Years Remaining on Term • Absolute Triple Net (NNN) Ground Lease with Zero Landlord Responsibilities • Significant Tenant Investment featuring (16) premium gas pumps and state-of-the-art convenience store • Essential Retailer in which Tenant has been open and operating • Attractive Rental Increases of Ten Percent (10%) in Year 11 & every Option Period About the Location: • Primary Retail Thoroughfare l Surrounded by National Tenants such as Walmart, Chick-Fil-A, McDonald’s, CVS, Home Depot, Shop Rite, AutoZone, Advance Auto Parts, Wawa, USPS, & Meineke • Highly Trafficked Location l Royal Farms at the intersection of S. White Horse Pike & Berlin Cross-Keys Road with a combined vehicle count in excess of 43.5K cars/day • Stable Upper Middle-Class Demographics l Average Household Income is $97K in a 3-mile radius & 123.5K Residents within a 5-mile trade area • Large Parcel Size l The Subject Property sits on a (2+) Acre Parcel at a signalized intersection providing for numerous redevelopment options in the future if necessary • Centrally Located l Approximately 20 Miles from Philadelphia & 12 Miles from Cherry Hill About the Tenant & Brand: • Chain Overview | Royal Farms has over 210 convenience store gas station locations in Maryland, Virginia, Delaware, & Pennsylvania • Firm Status | The Company is privately held & has been expanding in the Mid-Atlantic Region since 1959 – it is estimated each new facility costs $2.5M to construct – showing the brand’s commitment to its sites • Company Growth | Royal Farms has recently constructed (71) state-of-the-art gas & convenience facilities with an additional (3) locations under development currently • Essential Retail | Convenience stores are deemed an essential business and are considered recession proof tenants as over half of convenience stores have seen an increase in sales in the current health crisis per the National Association of Convenience Stores (NACS) 6 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM LEASE ABSTRACT ROYAL FARMS | BERLIN, NEW JERSEY Tenant TWO FARMS, INC. D/B/A ROYAL FARMS Guarantor Corporate Square Footage 5,371 SF Commencement Date December 5, 2019 Expiration Date December 31, 2039 Initial Term (20) Year Base Term Option Notice Tenant to provide notice (90) days prior to Term expiration Estoppel/SNDA Tenant to provide certificate within (10) days request Taxes Tenant is responsible for Real Estate Taxes Insurance Tenant is responsible for Insurance Expenses CAM Tenant is responsible for CAM Expenses Utilities Tenant is responsible for Utilities Expenses Roof & Structure Tenant is responsible for repair & replacement of Roof and Structure HVAC (Maint & Replacement) Tenant is responsible for HVAC repairs & replacement Landlord shall not lease space or engage in a Purchase and Sale agreement within (1)-mile of the Subject Property with any gasoline or Exclusive other fuel pump operation; any quick service restaurant; quick serve coffee establishment; stand-alone convenience store; or a dollar store Tenant may use Premises for the operation of a Royal Farms Store with Permitted Use accompanying fuel pumps & tanks, or any lawful purpose. During the final year of any Option Term, Tenant shall have the option to purchase the Subject Property at Fair Market Value; (FMV) shall Option to Purchase be determined based on a mutually selected appraiser's Opinion of Value on the Premises, which will be without regard to the value of the improvements located thereon, but inclusive of the Land Lease value Tenant may not assign Lease without Landlord's consent; in event of Assignment Note assignment, Tenant will remain liable for its obligations under this Lease 7 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM SITE OVERVIEW ROYAL FARMS | BERLIN, NEW JERSEY Berlin Cross-Keys Rd (17,414 VPD) 2 S. Whitehorse Pk. Full Access (IN) Berlin, NJ Right Only (Out) ADDRESS 2019 YEAR BUILT Right Only (Out) Full Access (IN) 5,371 SF CONVENIENCE STORE AREA 2.03 Acres S. Whitehorse Pike (26,310 VPD) LAND AREA 8 PUMPS GAS STATION Full Access (IN) Right Only (Out) 43,724 VPD COMBINED TRAFFIC MAJOR ROADWAYS White Horse Pike: 26,310 VPD Berlin Cross Keys Rd: 17,414 VPD Right Only (Out) Full Access (IN) Highway 73: 34,332 VPD 8 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM ROYAL FARMS | BERLIN, NEW JERSEY 02 TENANT OVERVIEW 9 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM TENANT DESCRIPTION ROYAL FARMS | BERLIN, NEW JERSEY BEST MID SIZE TOP CONVENIENCE TENANT NAME: Royal Farms EMPLOYER STORES OWNERSHIP: Privately Owned 2018 2019 DESCRIPTION: Convenience Store FORBES CSP (2018) MAGAZINE AREA SERVED: Mid-Atlantic States • AWARDED BEST MID-SIZED EMPLOYER BY YEAR FOUNDED: 1959 FORBES MAGAZINE (2017 & 2018) • BEST EMPLOYER FOR DIVERSITY BY # OF LOCATIONS(2019): 214+/- FORBES MAGAZINE (2019) HEADQUARTERS: Baltimore, MD • 33RD TOP CONVENIENCE STORE BY CSP MAGAZINE (2020) WEBSITE: www.RoyalFarms.com Royal Farms is a privately-owned chain of convenience stores Royal Farms’ major competitors include Wawa, Sheetz, Rutter’s, High’s, headquartered in Baltimore, Maryland. As of 2019, the company and 7-Eleven. In September 2014, Royal Farms purchased naming operates 214 stores throughout Delaware, Maryland, Pennsylvania, and rights to the Baltimore Arena. According to Royal Farm’s website the Virginia. Many of the stores also have gasoline sold on the premises, as company was awarded Best Mid-Sized Employer (2017 & 2018) and well as their famous house made fried chicken and chicken sandwiches. Best Employer for Diversity (2019). Royal Farms opened its first store in 1959 in Baltimore, Maryland. The company is headquartered in Baltimore. The chain sells many typical, convenience store items such as coffee, candy, soft drinks, bagels and donuts, lotto tickets, and other basic groceries. All locations also offer a kitchen serving hot food items such as chicken, Western Fries, along with sandwiches. Their current slogan is “Real Fresh. Real Fast. Real Green.” 10 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM RECENTLY FEATURED ROYAL FARMS | BERLIN, NEW JERSEY A New Rival For Wawa, Sheetz? Convenience Store Chain Royal Farms Plans To Enter Lehigh Valley Market By: Anthony Salamone Royal Farms, the convenience store chain known around the mid- Atlantic region for its fried chicken, appears ready to flap its wings for the first time in the Lehigh Valley. Two Farms Inc., the corporate owner of the Baltimore-based Royal Farms, has acquired property near Airport Road and Route 22 for $4.5 million, according to Lehigh County property records. Royal Farms officials did not return several messages seeking comment. Assuming a Royal Farms is built, it would mark its first entry in the Valley, an area that’s seen a healthy and growing competition for consumers’ wallets. CONVENIENCE STORE CHAIN ROYAL FARMS ROYAL FARMS, BREWERY COLLABORATE ON ROYAL FARMS DONATES 20,000 POUNDS OF PLANS TO ENTER LEHIGH VALLEY MARKET BEER CELEBRATING CHAIN’S FRIED CHICKEN FOOD TO THE FOOD BANK OF SOUTH JERSEY INFORMATIONAL ARTICLE | CLICK TO READ INFORMATIONAL ARTICLE | CLICK TO READ INFORMATIONAL ARTICLE | CLICK TO READ 11 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM ROYAL FARMS | BERLIN, NEW JERSEY 03 LOCATION OVERVIEW 12 ROYAL FARMS | BERLIN, NEW JERSEY DOUGHERTYTEAM.COM Diggerland USA ROYAL FARMS | BERLIN, NEW JERSEY Berlin Circle Plaza S.