Offering Memorandum California Patio & Payless
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CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA OFFERING MEMORANDUM CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA CONFIDENTIALITYAGREEMENT CONFIDENTIALITY AND DISCLAIMER The information contained in the following 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, PCB's 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. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2012 Marcus & Millichap S0080131 CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA TABLE OF CONTENTS SECTION ONE ...............................................PRICING & FINANCIAL ANALYSIS SECTION TWO ..................................................PROPERTY DESCRIPTION SECTION THREE .............................................MARKET OVERVIEW SECTION FOUR ...............................DEMOGRAPHIC ANALYSIS This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2012 Marcus & Millichap S0080131 PRICING & FINANCIAL ANALYSIS CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA PRICING & FINANCIAL ANALYSIS Income & Expenses Gross Leasable Area (GLA) 7,602 SF CURRENT PER SF Base Rent Occupied Space $190,056 $25.00 GROSS POTENTIAL RENT $190,056 $25.00 Expense Reimbursements Total Expense Reimbursements 43,269 5.69 Total Expense Reimbursements $43,269 $5.69 GROSS POTENTIAL INCOME $233,325 $30.69 EFFECTIVE GROSS INCOME $233,325 $30.69 Total Expenses $43,269 5.69 NET OPERATING INCOME $190,056 $25.00 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2012 Marcus & Millichap S0080131 1 CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA PRICING & FINANCIAL ANALYSIS Tenant Summary Suite Tenant GLA % of Lease Lease Annual Rent/ Changes Changes Expense Other: Lease GLA Commence Expire Rent SF On To Reimbs. Options/ Type % Rent A California Patio 4,789 63.00% 10/01/10 01/31/16 $88,788.00 $18.54 02/01/13 $91,452.00 $27,585.00 Two 5-Yr NNN 02/01/14 $94,195.00 02/01/15 $97,020.00 B Payless Shoes* 2,813 37.00% 04/03/08 04/30/18 $101,268.00 $36.00 05/01/12 $104,306.00 $15,684.00 One 10-Yr NNN 05/01/13 $107,435.00 05/01/14 $110,658.00 05/01/15 $113,978.00 05/01/16 $117,397.00 05/01/17 $120,919.00 TOTAL VACANT TOTAL OCCUPIED 7,602 100.00% $190,056.00 $957,360.00 $43,269.00 TOTAL 7,602 100.00% $190,056.00 $957,360.00 $43,269.00 COMMENTS *Payless Shoes has elected to close this location and this unit will be vacant at the close of escrow. The closure of the store does not relieve Payless from any of its obligations under the lease and the rent will be guaranteed by corporate for the remainder of the term. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2012 Marcus & Millichap S0080131 2 CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA PRICING & FINANCIAL ANALYSIS Lease Expiration Summary For The Year Beginning Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 Tenant(s) Name California Payless Patio Shoes* Total Number of Tenants 1 1 Total Square Feet 4,789 2,813 Total Percentage 63.0% 37.0% Cumulative Percentage 63.0% 100.0% 100% 1 90% 80% 70% 60% 50% 40% Number of Tenants of Number Total Project Square Footage Square Project Total 30% 20% 10% 0% 0 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2020 0% 0% 0% 0% 0% 63% 0% 37% 0% 0% Percentage of SF Expiring Number of Tenants Expiring Cumulative % of SF Expiring Any projections, opinions, assumptions or estimates used here within are for example purposes only and do not represent the current or future performance of the property. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2012 Marcus & Millichap S0080131 3 CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA PRICING & FINANCIAL ANALYSIS Tenant & Lease Summary Tenant Name: California Patio Lease Commencement: 10/01/2010 Lease Expiration: 01/31/2016 Gross Leasable Area (GLA): 4,789 Original Term: 5 Years Option Term: Two 5-Year Pro Rata Share of Project: 63% Headquartered: Palm Desert, CA No. of Locations: 8 Web Site: www.californiapatio.com California Patio has been servicing the Southern California market with outdoor furniture and accessories since 1981. Family owned, California Patio has grown to one of Southern California's largest outdoor retailers. With eight locations: San Juan Capistrano, Encinitas, Rancho Mirage, Palm Desert, Lake Forest, La Quinta, San Marcos and Anaheim; California Patio has the resources to stock outdoor furniture from simple to spectacular. As one of the largest outdoor furniture retailers, they have the purchasing power to buy directly from the manufacturer, so they can sell at the most competitive prices. LEASE SUMMARY BASE RENT Lease Years Annual Rent Monthly Rent Monthly Rent/SF 1 $86,202.00 $7,184 $1.50 2 $88,788.00 $7,399 $1.54 3 $91,452.00 $7,621 $1.59 4 $94,195.00 $7,850 $1.64 5 $97,020.00 $8,085 $1.69 OPTION RENT Lease Years Annual Rent Monthly Rent Monthly Rent/SF 6 $99,930.00 $8,327.50 $1.74 7 $102,928.00 $8,577.33 $1.79 8 $106,015.00 $8,834.58 $1.84 9 $109,195.00 $9,099.58 $1.90 10 $112,470.00 $9,372.50 $1.96 Second 5-Year Option: Fair market rent with 3% annual increases This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2012 Marcus & Millichap S0080131 4 CALIFORNIA PATIO & PAYLESS SHOES PALM DESERT, CA PRICING & FINANCIAL ANALYSIS PRICING & FINANCIAL ANALYSIS Tenant & Lease Summary Tenant Name: Payless Shoes Lease Commencement: 04/03/2008 *Payless Shoes has elected to Lease Expiration: 04/30/2018 close this location and this unit Gross Leasable Area (GLA): 2,813 will be vacant at the close of Original Term: 10 Years escrow. The closure of the store Option Term: One 10-Year does not relieve Payless from Pro Rata Share of Project: 37% any of its obligations under the Headquartered: Topeka, KS lease and the rent will be No.