RITE AID 125 South Park Street, Carrollton, GA 30117
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Investment Property Offering $2,997,677 RITE AID 125 South Park Street, Carrollton, GA 30117 Presented By: Kase Abusharkh Offering Highlights 252 Abigail Circle Danville, CA 94506 (925)348-1844 New 20 Year Absolute Net Lease [email protected] Zero Landlord Responsibilities David A. Dreiling Excellent Sales History 1616 Westgate Circle Nashville, TN 37027 (615)500-0200 [email protected] 12/16/2008 Table of Contents 1 Financial Analysis Executive Summary Investment Information Rent Roll Summary 2 Additional Information Pictures The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness. 1 . Financial Analysis Executive Summary RITE AID 125 South Park Street Carrollton, GA 30117 List Price $2,997,677 Price Per GLA $265.38 Price per S.F. $265.38 CAP 7.75 % GLA 11,296 Building S.F. 11,296 Percent Occupied 100.00 % Land Acres 2.26 Rite Aid (NYSE: RAD) Cross Street Alabama Street Tax Parcel Number Market Atlanta MSA Sub Market Carroll County Year Built 1999 Building Class A Location Class A No. of Buildings 4 HVAC Yes No.Tenants 1 No. Stories 1 Property Descriptions Construction Class 'A' construction was completed in 1999. The property benefits from a drive-thru. Parking The asset is adequately parked. Traffic Counts Traffic counts are strong. Ingress/Egress The property provide excellent ingress and egress. Major Tenants Rite Aid (NYSE: RAD) is a retail pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company is publicly traded on the New York Stock Exchange under the ticker RAD. Rite Aid began in 1962 as a single store opened in Scranton, Pennsylvania called Thrifty Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Rite Aid is headquartered in Camp Hill, a suburb of Harrisburg, Pennsylvania. Rite Aid reported total sales of USD $16.5 billion in fiscal 2004. As of 2005, its market capitalization was about $2.08 billion. Rite Aid is a Fortune 500 company. Rite Aid has a Standard & Poor’s Rating B. Area Located in the Atlanta Metropolitan area, Carrollton is a city in west central Georgia, in the foothills of the Appalachian Mountains. It is the county seat of Carroll County, and the largest town in the county, with a population of 19,843 at the 2000 census. Historically, Carrollton has been a commercial and cultural center for Carroll and neighboring Georgia and Alabama counties, and is the home of the University of West Georgia and Southwire, the world's largest privately-owned manufacturer of wire and cable. The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness. Property This offering is the rare opportunity for an investor to acquire an absolute net leased Rite Aid asset with a brand new 20 year lease. The lease term is 20 years with a 10% bump every 10 years. The lease is net and provides for zero landlord responsibilities. The lease provides for eight five year options. The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness. Investment Information RITE AID 125 South Park Street Carrollton, GA 30117 Listing Price $2,997,677 GLA 11,296 Current CAP 7.75 % Building S.F. 11,296 Year Ten CAP 8.53 % Percent Occupied 100.00 % Price Per S.F. $265.38 Land Acres 2.26 Estimated Annualized Operating Data Current Year Ten Net Operating Income $232,320 $255,552 Highlights New 20 Year Absolute Net Lease Zero Landlord Responsibilities Excellent Sales History The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness. www.svn.com Rent Roll Summary Tenant Name Start Date End Date Occupied Annual Occupied % of Escalations / Options / Comments S.F. Rent S.F. Rent Total Rite Aid 5/13/2008 6/1/2028 11,296 $20.57 $232,320 100.0 % 10% increases every 10 years. Eight five year options to renew. Total 11,296 $232,320 100.0 % The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness. 2 . Additional Information Tenant Overview Rite Aid (NYSE: RAD) is a United States retailer and pharmacy chain, operating over 5,000 stores in 31 states and the District of Columbia. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S. The company is publicly traded on the New York Stock Exchange under the ticker RAD. Rite Aid began in 1962 as a single store opened in Scranton, Pennsylvania called Thrif D Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Rite Aid is headquartered in Camp Hill, a suburb of Harrisburg, Pennsylvania. Rite Aid reported total sales of USD $16.5 billion in fiscal 2004. As of 2005, its market capitalization was about $2 billion. Rite Aid is a Fortune 500 company. The first store opened in September 1962. Through acquisitions and new stores, Rite Aid quickly expanded into 5 northeast states by 1965. The chain was officially named Rite Aid Corporation in 1968 and made its debut on the American Stock Exchange. It moved to the New York Stock Exchange in 1970. Just ten years after its first store opened, Rite Aid operated 267 locations in 10 states. It was named the third largest drugstore in the United States by 1981; shortly thereafter, 1983 marked a sales milestone of $1 billion. A 420-store acquisition along the east coast expanded Rite Aid's holdings beyond 2,000 locations. Among the companies acquired was Baltimore, Maryland's Read's Drug Store. Rite Aid acquired twenty-four Hooks Drug stores from Revco in 1994, selling nine of those stores to Perry Drug Stores, a Michigan-based pharmacy chain. One year later, the 224-store Perry chain itself was acquired by Rite Aid. The 1,000-store West Coast chain Thrifty PayLess was later acquired in 1996. The acquisition of Thrifty PayLess included the Northwest-based Bi-Mart membership discount stores, which was sold off in 1998. Acquisitions of Harco, Inc. and K & B Inc. brought Rite Aid into the Gulf Coast area. General Nutrition Companies (GNC) and Rite Aid formed a partnership in January 1999, bringing GNC mini-stores within the Rite Aid pharmacies. A partnership with drugstore.com in June 1999 allowed customers of Rite Aid to place medical prescription orders online for same-day, in-store pickup. Beginning in March 2005, Rite Aid introduced Living More, a seniors' loyalty program; offering 10% off of prescription drugs purchased with cash, generic products, as well as other items. Additional benefits also include discounts on certain days of the week, as well as unadvertised sales on merchandise. This program is very similar to the former Revco program which was called "Senior Shoppers"; Rite Aid attempted to purchase Revco in 1996. This might be attributed to the fact that Revco's former Vice President of Marketing, James Mastrian, now holds the same position at Rite Aid. The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness. Early in 2005, the UAW announced that its members' prescriptions would be filled through mail order. This decision by the union disproportionately affected Rite Aid as it has predominant market strength where the UAW has its highest union density nationally. In July 2005, Rite Aid completed its acquisition of Shelley's Pharmacy, a chain pharmacy in Philadelphia. On August 23, 2006, the Wall Street Journal announced that Rite Aid would be buying the Eckerd Pharmacy and Brooks Pharmacy chains (Brooks Eckerd Pharmacy) from the Quebec-based Jean Coutu Group for US$3.4 billion, and merging the two chains into one dominant pharmacy system. The company's shareholders overwhelmingly approved the merger on January 18, 2007.[2] After some store closures and the conversion of the two chains to Rite Aid is complete, the deal will make Rite Aid the dominating drug store retailer in the Eastern U.S., and secures its place as the third largest drug retailer nationwide. Similar to what CVS has gone through in Chicagoland after its purchase of Albertson's drug store chains, the deal has left Rite Aid with some locations in close proximity to each other. (Only 23 store locations nationally were sold off to Walgreens, The Medicine Shoppe, or independent owners in order to meet federal regulations.) In many situations, especially Pennsylvania where both chains were dominant and had roots in those states (Rite Aid originated in Scranton, while Eckerd has roots in Western Pennsylvania via Erie for itself and Pittsburgh for converted Thrift Drug locations), there are now two Rite Aids as close as right next door to each other. Rite Aid had sold some locations to J.C. Penney's Thrift Drug chain in the mid-1990s shortly before J.C. Penney's acquisition of Eckerd, and had also sold all of their Massachusetts stores to Brooks in 1995, bringing some existing Eckerds and Brooks that were once Rite Aids full circle. Because Eckerd was previously owned by J.C. Penney, Eckerd stores accepted J.C. Penney charge cards.