NNN Leased Strip Center, Value-Add Potential 3105 Railroad Ave Mary Alam, MBA Joshua Ballesteros Pittsburg, CA 94565 Senior Vice President Investment Advisor O: 415.358.2111 O: 415.480.0214 M: 415.297.5586 M: 209.518.9025 [email protected] [email protected] CalDRE #01927340 CalDRE #02010271 OFFERING MEMORANDUM Table Of Contents Table of Contents 3 Section 1 Property Information 6 Section 2 Location Information 14 Section 3 Financial Analysis 18 Section 4 Sale Comparables 25 Section 5 Rent Comparables 34 Section 6 Demographics Section 1 THE OFFERING 1 Property Description Property Overview NAI Northern California is pleased to present for sale this well located strip center with 10 retail units and NNN leases. The property benefits from its strategic location in an emerging retail corridor just 0.7 miles from the Pittsburg Bart station and the California Delta Highway-4. Railroad Avenue enjoys close to a 20,000 vehicles per day traffic count which further adds to the visibility of this retail property and its success. This busy retail corridor includes, among others, the Atlantic Plaza Shopping Center, which features a wide variety of vendors such as FoodsCo, CVS, Goodwill, McDonald's, USPS, Little Caesar's, Mountain Mike's, Jackson Hewitt Tax and more Location Overview The subject is located on busy Railroad Avenue in Pittsburg, minutes from the Pittsburg Bart Station and busy Highway 4. It enjoys strong demographics of approximately 150,000 people within a five mile radius with an average household income of approximately $82,000 per year. Population growth within five miles has been phenomenal at nearly 12% between 2010 and 2018 and projected to be close to 6% in the next five years. The property is surrounded by residential, retail, medical offices and various ethnic grocers and restaurants that serve a diverse and growing community. nainorcal.com 4 Executive Summary SALE PRICE: $1,590,000 Property Highlights BUILDING SIZE: 8,758 SF • Potential for added value due to below-market rents. LOT SIZE: 0.50 AC • Strategically located on Railroad Avenue with approximately 20,000 cars per day. 919 2018 NOI: $100, • Emerging retail corridor 0.7 miles from Hwy 4 & Pittsburg Center BART station on Railroad Ave. 2018 CAP RATE: 6.35% • Excellent demographics with population size more than 152,456 within a 5-mile radius FULLY LEASED 7.20% CAP RATE: • Major retail nearby includes FoodsCo, Goodwill, Walgreens, CVS, La Superior Mercados, Dollar OCCUPANCY RATE: 88% Tree, Starbucks, Subway, McDonald's etc. PRICE/SF: $182 • Pittsburgh is projected to be the fastest growing city in Contra Costa County by 2020. YEAR BUILT: 1970 APN: 088-064-026-3 nainorcal.com 5 Section 2 LOCATION 2 INFORMATION Location Overview Location Overview SanSan FrancisFranciscoco BayBay Area,Area, CA CA The San Francisco Bay Area, Thecommonly San Francisco referred to asBay the Area, Bay commonlyArea, is a populatedreferred to regionas the thatBay Area,surrounds is a populatedthe San regionFrancisco that surroundsand San thePablo San estuaries Francisco in andNorthern San California.Pablo estuaries The region in Northern California. The region encompasses the major cities encompasses the major cities and metropolitan areas of San and metropolitan areas of San Francisco,Francisco, Oakland,Oakland, and SanSan Jose,Jose, alongalong with smallersmaller urbanurban andand ruralrural areas.areas. The BayBay Area’sArea’s ninenine countiescounties are Alameda,Alameda, ContraContra Costa,Costa, Marin, Napa, SanSan Francisco,Francisco, SanSan Mateo, SantaSanta Clara,Clara, Solano,Solano, and Sonoma.Sonoma. Home to approximately 7.44 Home to approximately 7.44 million people, the nine-county million people, the nine-county Bay Area contains many cities, towns,Bay Area airports, contains and many associated cities, regional,towns, airports, state, andand associated national parks,regional, connected state, andby a nationalnetwork Pittsburgh, CA ofparks, roads, connected highways, by a railroads,network The city of Pittsburg is located in Contra Costa County, California with a population size of 70,679. Located on the bridges,of roads, tunnels highways, and commuterrailroads, Richmond,southern shore of the Suisun CA Bay in the East Bay region of the San Francisco Bay Area, the city is 37 miles northeast rail.bridges, The combined tunnels and urban commuter area of of San Francisco, 29 miles northeast of Oakland, California, 60 miles north to San Jose and 65 miles south to therail. region The combined is the second-largest urban area of RichmondSacramento, is California.in western Pittsburg Contra Costashares County,a border California,with Antioch United to the States. east, Bay The Point city to was the incorporatedwest, and Concord on August to the in California (after the Greater southwest. The Suisun Bay is directly north of the city and connects the San Francisco Bay to the Sacramento and the region is the second-largest 7, 1905. Located in the eastern region of the San Francisco Bay Area, Richmond’s 33.7 square miles Los Angeles area), the fifthlargest San Joaquin rivers. There are two BART stations in Pittsburg - the Pittsburg/Bay Point Station located on Bailey Road in California (after the Greater borders the cities of San Pablo, Albany, El Cerrito and Pinole in addition to the unincorporated communities in the United States, and ofand North Highway Richmond, 4 and the Hasford Pittsburg Heights, Center Station Kensington, located Elon Sobrante, Railroad Avenue Bayview-Mountalvin and Highway 4. TriManor, Delta TaraTransit Hills, provides and Los Angeles area), the fifth- bus service in the area. California State Route 4 bisects the city from west to east. The economy of Pittsburg, CA is the 43rd-largest urban area in East Richmond Heights, and briefly San Francisco on Red Rock Island. thelargest world. in the United States, and specialized in Admin, Support, Waste Management Services; Construction; and Healthcare & Social Assistance. The the 43rd-largest urban area in total population employed in the economy is 30,460. The largest industries are Healthcare & Social Assistance(5,645), UnderRetail trade the McLaughlin(3,306), and Administration,Construction (2,934), Richmond and the was highest the largestpaying industriescity in the include United Utilities States ($63,333), served by a Green the world. PartyManagement mayor. of As Companies of the 2013 & Enterprises($62,750), U.S. Census, the city’s and populationProfessional, is Scientific, at 107,571. Tech Services($57,692). 4 Aerial Map nainorcal.com 8 Retailer Map nainorcal.com 9 Current Projects nainorcal.com 11 Employers Map nainorcal.com 10 Plot Map nainorcal.com 12 Additional Photos nainorcal.com 13 Section 3 FINANCIAL 3 ANALYSIS Rent Roll Fully Fully Fully Fully Monthly NNN Total Annual Leased Fully Leased Leased Leased Approx. Rent (CAM) Monthly Annual Monthly Annual Lease Lease Rent Monthly/ Leased Monthly Annual/ Annual Unit # Tenant SF % SF 2018 Month Payment Rent 2018 Rent/SF Rent/SF Start Exp. Options Increase SF Monthly Total SF Rent A E-Vapor * 1,000 12% $1,650 $200 $1,850 $19,800 $1.65 $19.80 2013 2019 1x5 CPI $1.65 $1,650 $1,850 $19.80 $19,800 A-1 Dos Market 1,000 12% $1,400 $200 $1,600 $16,800 $1.40 $16.80 2006 2023 1X5 CPI $1.40 $1,400 $1,600 $16.80 $16,800 B Body Art 540 6% $648 $119 $767 $7,776 $1.20 $14.40 2018 2021 CPI $1.20 $648 $767 $14.40 $7,776 C Barber 400 5% $480 $80 $560 $5,760 $1.20 $14.40 1991 2022 CPI $1.20 $480 $560 $14.40 $5,760 D1 Insurance 409 5% $552 $112 $664 $6,624 $1.35 $16.20 1994 2020 CPI $1.35 $552 $664 $16.20 $6,624 D Spa Salon 800 9% $960 $176 $1,136 $11,520 $1.20 $14.40 2018 2021 CPI $1.20 $960 $1,136 $14.40 $11,520 E Vacant 1,000 12% $0 $1.20 $1,200 $1,420 $14.40 $14,400 Accounting F 1,280 15% $1,560 $230 $1,790 $18,720 $1.22 $14.63 2003 2020 CPI $1.22 $1,560 $1,790 $14.63 $18,720 Office G Hair Salon 1,000 12% $1,200 $200 $1,400 $14,400 $1.20 $14.40 2017 2019 CPI $1.20 $1,200 $1,400 $14.40 $14,400 H Herbal 1,000 12% $1,200 $200 $1,400 $14,400 $1.20 $14.40 2013 2020 CPI $1.20 $1,200 $1,400 $14.40 $14,400 Totals 8,429 88% $9,650 $1,517 $11,167 $115,800 $1.14 $13.74 $1.29 $10,850 $12,587 $15.45 $130,200 nainorcal.com 15 Financial Summary Debt and Return Calculations Loan Quote (subject to change) Sale Price $1,590,000 Loan Amount $954,000 Loan To Value 60% Down payment $636,000 Interest Rate 4.80% Amortization 30 Return Calculations Net Operating Income: $100,919 Debt Service: $5,068 $60,064 Pre-Tax Cash Flow: (Cash on Cash return) 6.4% $40,855 Principal Reduction: 14,272 Total Return: 8.7% $55,127 Principal Interest $14,272 $45,792 Year 1 nainorcal.com 16 Financial Summary Income And Expenses 2018 ACTUAL 2019 Proforma Rental Income $115,800 $130,200 NNN Income $18,204 $20,844 Total Gross Income $134,004 $151,044 Expense Breakdown Cleaning & Maintenance $6,633 $6,633 MGMT $3,600 $3,600 Utilities $1,840 $1,840 Tax $24,555 $24,555 Insurance $3,090 $3,090 Total Expenses $33,085 $33,085 NOI $100,919 $117,959 Valuation Analysis 2018 2019 Net Income $100,919 $117,959 Vacancy Rate (3%) $3,539 NOI $100,919 $114,420 PRICE $1,590,000 $1,590,000 nainorcal.com 17 Section 4 SALE 4 COMPARABLES Sales Comparables Subject Property 3105 Railroad Ave.