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770 dennery rd., San Diego, CA
SIGNAGE CHANGE IN THE WORKS, NOW AMC 14 1 OFFERING MEMORANDUM AMC Palm Promenade Theater San Diego, CA
I-805 ± 132,000 VPD
Dennery Rd ± 14,000 VPD TABLE OF CONTENTS
05 09 17 EXECUTIVE OVERVIEW PROPERTY OVERVIEW FINANCIAL OVERVIEW 21 27 AREA OVERVIEW TENANT OVERVIEW
LISTED BY:
CAITLIN ZIRPOLO KYLE MATTHEWS ASSOCIATE CHAIRMAN & CEO
DIRECT (949) 432-4518 DIRECT (310) 919-5757 MOBILE (760) 685-6873 MOBILE (310) 388-0788 [email protected] [email protected] LIC #01987844 (CA) LIC #01469842 (CA) 3 4 executive05 summary
5 OFFERING SUMMARY INVESTMENT SUMMARY Matthews Real Estate Investment Services is pleased to present the sale of AMC Palm Promenade, a ±61,005 SF movie theatre Sale Price Best Offer located in the heart of San Diego, California. The tenant has been operating at this location since 2001 and recently extended its Tenant AMC Theatres lease through May 2029 showing long term proven stability. AMC Current Rent $2,261,145 Palm Promenade features 14 screens and offers both IMAX and RealD 3D, providing its customers enhanced experiences. This is Current Occupancy 100% an excellent opportunity for investors to acquire an entertainment- Reimbursements NNN oriented asset with both e-commerce proof security and a long- Lease Expiration May 31, 2029 term income stream. Total Rentable Square Feet ± 61,005 SF Located directly off of Interstate 805 at Palm Avenue, the theatre Total Land Area ± 468,815 SF (± 10.76 AC) sits within the largest power center in San Diego anchored by Parking ± 943 dominant credit tenants such as Walmart, Home Depot, and Vons. In addition to these tenants, a new redevelopment project will soon Screen Count 14 add ± 73,000 SF of retail and restaurant space directly adjacent to Seat Count 3,142 the theatre. This retail project is already 92% pre-leased and will provide theatre goers a more synergistic experience. DEBT SUMMARY Loan Amount 70% LTV Interest Rate 4.80% Term 10 Years Amortization 30 Years * Terms quoted as of April 8, 2019, subject to change.
Please contact Brian Krebs for more information. Brian Krebs Barrington Capital Corporation Managing Partner DIRECT 949.777.5988 | MOBILE 818.606.9476 [email protected] Lic. # 01850811
6 INVESTMENT HIGHLIGHTS:
• Sales are extremely strong in this location at ± 60% above the national average
• The tenant chose to right-size (from 24 screens to 14) the building to allow for additional retail to boost already strong sales and energize the retail environment
• Approved redevelopment to add ± 73,000 SF of retail and restaurant space adjacent to the theatre providing a lifestyle component and additional foot traffic to the location • The tenant has operated at this location for nearly 19 years and recently extended their term through May 2029 providing an investor with long term proven stability
• Premier location with excellent freeway visibility and direct access to Interstate 805 that sees over 132,000 vehicles per day • AMC Palm Promenade is the only theater within a dense, 5-mile trade area and is only one of two theaters within 10 miles that offers IMAX screens
• Unparalleled density with over 160,000 residents in a 3-mile radius and over 317,000 in a 5-mile radius
• Pride of ownership through an incredible opportunity to invest in an entertainment oriented property located within San Diego’s dominant power center
• The property holds a corporate guarantee by AMC Theatres which is the largest movie theater operator in the world
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7 8 property 09description
9 PARCEL MAP N
AMC PALM PROMENADE THEATER
*Planned parcel after consolidation and resubdivision of current parcels.
PHYSICAL DESCRIPTION
Name AMC Palm Promenade
Address 770 Dennery Road, San Diego, CA 92154
Cross Street Palm Avenue Land Area ± 10.76 Acres Year Built / Year Renovated 2001/2017 Property Type STNL Net Rentable Area ± 61,005 SF Current Occupancy 100% Average Remaining Term 10 Years
10 I 8 0 5 ± 1 3 2 , 0 0 0 V P D ■■■■■■ AMC ■■■■■■ Future Developments
1 The UPS Store 2 Available 3 Pho Hung Cali 4 Available 5 Russell-Cellular 6 Navy Federal Credit Union 7 Jersey Mikes 8 Yogurtland 9 Starbucks 10 Chick Fil A
Please note that not all leases have been executed and are still in negotiations. D E N N E R Y R D 11 THE SHOPS AT AMC PALM PROMENADE - REDEVELOPMENT
• Located directly adjacent to the theater, The Shops at AMC Palm Promenade will add ± 73,000 sf of additional retail and restaurant space • The approved redevelopment will provide a lifestyle component and bring additional foot traffic to the location • The new retail project is almost fully pre-leased to tenants such as Burlington, Chick Fil A, Starbucks, Jersey Mikes, and Yogurtland
RENDERING PHOTO
12 RENDERING PHOTO
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13 AMC Palm Promenade Theater San Diego, CA
*redevelopment coming soon
*redevelopment coming soon
Dennery Rd ± 14,000 VPD
14 I-805 ± 132,000 VPD
15 16 financial17 overview
17 RENT ROLL
Lease Lease Square Contract Rental Rate Rent $ PSF Rent Increases Suite Tenant % of NRA Options Start End Feet Year Month $ PSF % Yr. $ PSF % Mo. Date $ PSF % Yr. $ PSF % Mo. AMC 3 x 5 1 Theater 2/1/00 5/31/29 61,005 100% $2,261,145 $188,429 $37.06 $3.09 Jun-25 $38.92 $3.24 YR
18 LEASE ABSTRACT - AMC THEATER
Lessor HCP-CCI Palm Promenade, LLC Lessee American Multi-Cinema, Inc. Tenant Name AMC Theatres Landlord HCP-CCI Palm Promenade, LLC Tenant Size (SF) 61,005 SF Lease Commencement Date February 11, 2000 Expiration Date May 31, 2029 Lease Term 351 Months Remaining Lease Term (Current - 5/31/2029) 122 Months No. & Term of Options Three, 5-Year Options Contract Rental Rate (Current - 5/31/2025) $2,261,145 Contractual Rent Increase (6/1/2025 - 5/31/2029 ) $2,374,315 1st Option (6/1/2029 - 5/31/2034) $2,611,622 2nd Option (6/1/2034 - 5/31/2039) $2,872,784 3rd Option (6/1/2039 - 5/31/2044) $3,160,063 Lessee Operating Expenses Tenant pays pro rata share of Common Area Costs Property Tax Expenses Tenant pays its share of ad valorem real estate taxes assessed on the land and buildings. Property Insurance Tenant pays pro rata share of Insurance Costs.
Tenant shall pay all costs, expenses, fees and charges incurred in connection with the use or occupancy of Maintenance & Repairs the Leased Premises. Tenant shall at all times, at its own expense, and subject to reasonable wear and tear, keep the Leased Premises in good operating order, repair, condition and appearance.
Estoppel 20 days
Landlord will not use or permit to be used all or any portion of the Entire Premises (other than the Theatre Facility) for the following uses: a health club, bowling alley, skating rink, game room, funeral home, so-called “head shop”, or bookstore or other business engaged in selling, exhibiting or delivering pornographic or Restricted Use obscene materials (provided, however, that the incidental sale of materials such as books, magazines, DVDs and videos commonly carried by reputable national or regional retailers such as Barnes & Noble shall not be deemed pornographic or obscene hereunder).
So long as Tenant shall not have ceased operating more than 50% of the Floor Area of the Theatre Facility for more than 180 consecutive calendar days for reasons other than Permitted Closures, from and after the Exclusive Use Surrender Date, Landlord shall not permit the operation of a movie theatre (as the movie theatre concept may expand, change and/or evolve over time through technology or otherwise with the evolution of the movie theatre industry), within the Entire Premises, other than within the Theatre Facility.
19 20 area overview21
21 San Diego is known for its culture, attractions and beautiful beaches. With an average temperature of 70 degrees’ year-round, this city is a prime location for living so it’s no surprise that San Diego is the second largest city in California and eighth largest in the United States.
Tourism is a huge part of San Diego’s economy. The city hosts close to 34 million visitors each year who in total spend nearly $9.9 billion. At the end of 2015, tourism broke records in hotel stays and visitor spending with a 1.2% overall visitation growth. Of the 34.3 million total visitors, about half (17.2 million) stay overnight in a hotel or a private home.
Popular attractions include the world-famous San Diego Zoo and San Diego Zoo Safari Park, SeaWorld San Diego and LEGOLAND California. San Diego offers an expansive variety of things to see and do, appealing to guests of all ages from around the world. SOUTH ORANGE COUNTY ±82 MILES
#1 #1 CARLSBAD COASTLINE CONCENTRATION OF MILITARY/ LOWEST AVERAGE COMMUTE ±45 MILES DEFENSE ASSETS IN THE WORLD TIMES AMONG PEER CITIES
DOWNTOWN SAN DIEGO 80+ #2 ±16 MILES EDUCATIONAL AND RESEARCH MOST INVENTIVE INSTITUTES IN THE REGION CITY IN THE WORLD
22 SAN DIEGO With an estimated population of 1,419,516 as of July 1, 2017, San Diego is the eighth-largest city in the United States and second-largest in California. It is part of the San Diego–Tijuana conurbation, the second-largest transborder agglomeration between the US and a bordering country after Detroit–Windsor, with a population of 4,922,723 people. The city is known for its mild year- round climate, natural deep-water harbor, extensive beaches, long association with the United States Navy, and recent emergence as a healthcare and biotechnology development center.
The city is the seat of San Diego County and is the economic center of the region as well as the San Diego–Tijuana metropolitan area. San Diego’s main economic engines are military and defense-related activities, tourism, international trade, and manufacturing. The presence of the University of California, San Diego (UCSD), with the affiliated UCSD Medical Center, has helped make the area a center of research in biotechnology.
WHY SAN DIEGO? With its warm, year-round climate, 50 miles of sun-soaked coastline and world- famous attractions, San Diego is a top tourist destination. But this Southern California metropolis with a laid-back vibe is also home to cutting-edge businesses for telecommunications, biotechnology, software, electronics and other major innovative industries.
EMPLOYER # OF EMPLOYEES United States Navy 29,948 University of California, San Diego 28,459 Sharp HealthCare 16,896 San Diego County 16,427 Qualcomm 13,725 San Diego Unified School District 13,446
City of San Diego 10,968 Dexcom 10,540 Kaiser Permanente 7,549
Scripps Health 6,111
23 DEMOGRAPHICS
Population 1 Mile 3 Mile 5 Mile 2023 Projection 10,677 103,809 214,809 2018 Estimate 10,226 98,556 204,505 Growth 2018-2023 4.41% 5.33% 5.04% Growth 2010-2018 8.86% 15.14% 13.05% Households 1 Mile 3 Mile 5 Mile 2023 Projection 4,185 35,091 75,707 2018 Estimate 4,008 33,289 72,047 Growth 2018-2023 4.42% 5.41% 5.08% Growth 2010-2018 8.82% 15.75% 13.37% Income 1 Mile 3 Mile 5 Mile Average Household Income $67,109 $92,237 $100,374 Median Household Income $50,915 $68,115 $76,435
OTAY MESA, CALIFORNIA The community of Otay Mesa (and Chula Vista) sits in the southern region of San Diego, just above the U.S. - Mexico border. Otay Mesa is located along the Otay River Valley to the east of Interstate 805 with Ocean View Hills and San Ysidro neighborhoods on the west side. Visitors or residents often visit the Otay Ranch Town Center which is known as one of the best shopping malls in San Diego. With over 100 stores, including REI, Macy’s, and an Anthropologie, this open-air mall offers a dog park and plenty of dining and entertainment options. Additional attractions include the Mattress Firm Amphitheater, Elite Athlete Training Center, Otay Valley Regional Park Trails, and more. The city of Otay Mesa also has easy access to the Cross Border Xpress Terminal (CBX) - Tijuana Airport.
24 Points of Interest
6
1 BALBOA PARK 2 SEAWORLD
2 8 3 SAN DIEGO ZOO 4 GASLAMP QUARTER 3 1
7 4
5 5 HOTEL DEL CORONADO 6 TORREY PINES GOLF COURSE
7 SEAPORT VILLAGE 8 OLD TOWN
25 26 tenant 27overview
27 AMC Palm Promenade Theater San Diego, CA
I-805 ± 132,000 VPD
Dennery Rd ± 14,000 VPD
28 28 AMERICAN MULTI-CINEMA (AMC) 11,000 AMC Theatres is an American movie theater chain. Founded in 1920, AMC has the largest share of the Screens American theater market ahead of Regal Cinemas and Cinemark Theatres. The company’s headquarters are located in Leawood, Kansas. In 2016, it became the largest movie theater chain in the U.S., Europe, and the world. AMC FEATURES
AMC introduced stadium-style seating, in which the seats are placed on risers so that each person has an unobstructed view of the screen and have adjustable armrests that can be raised to create “Love Seat” style seating. Both of these features have become standard for nearly all movie theaters built today by all major chains. AMC offers a few premium formats at their locations that have 12-30 screens, while all locations are equipped to show 3D films in RealD 3D in select auditoriums. Premium features include 15 IMAX, Dolby Cinemas (Dolby Atmos sound, HDR Laser projection with Dolby Vision technology providing Countries the darkest blacks and highest color spectrum available), Prime at AMC. In some locations, AMC has invested $20 million in virtual-reality and productions: $10 million to virtual reality entertainment company Dreamscape Immersive and another $10 million in a content fund.
AMC GROWTH
Approximately 200 million guests will enjoy the best movie-going experience in the industry at more than 380 AMC Theatres. AMC was on the cutting-edge of innovation through the co-founding of online ticketing, circuit-wide gift cards, a groundbreaking partnership with IMAX, the launch of AMC Stubs rewards program, and the introduction of AMC Dine-In Theatres. AMC also greatly expanded its footprint in North America through the acquisition of Loews Theatres and Kerasotes Theatres. Adam Aron, who joined the company as CEO and President in 2016, has taken the Company to new heights, as AMC announced in 1,000+ 2016 acquisitions of both Carmike Cinemas in the United States, and Odeon & UCI Cinemas in Europe. theatres
29 CONFIDENTIALITY AGREEMENT & DISCLAIMER This Offering Memorandum contains select information pertaining to the business and affairs ofAMC Palm Promenade located at 770 Dennery Rd., San Diego, CA 91254 (“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.
30 Click to View Property Video
770 dennery rd., San Diego, CA
LISTED BY:
CAITLIN ZIRPOLO KYLE MATTHEWS ASSOCIATE CHAIRMAN & CEO
DIRECT (949) 432-4518 DIRECT (310) 919-5757 MOBILE (760) 685-6873 MOBILE (310) 388-0788 [email protected] [email protected] LIC #01987844 (CA) LIC #01469842 (CA)
31 OFFERING MEMORANDUM