OFFERING MEMORANDUM WACO SHOPPING CENTER / Kelley Workman SHERMAN SHOPPING CENTER Vice President David H. Luther Executive Vice President Morgan Hansen Senior Associate INVESTMENT SALES INVESTMENT NON-ENDORSEMENT AND DISCLAIMER NOTICE CONFIDENTIALITY AND DISCLAIMER The information contained in the following marketing brochure is proprietary and strictly confidential. It is intended to be reviewed only buy the party receiving it from NewQuest Properties and should not be made available to any other person or entity without the written consent of NewQuest Properties. 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. NewQuest Properties 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 square footage of the property and improvements, 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 tenants plans or intentions to continue it’s occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, NewQuest Properties has not verified, and will not verify, any of the information contained herein, nor has NewQuest Properties conducted any investigation regarding these matters and makes no warrantee or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all the information set forth herein. NewQuest Properties is a service mark of NewQuest Properties Real Estate Investment Services, Inc. © 2018 NewQuest Properties. All rights reserved. THE TEXAS REAL ESTATE COMMISSION (TREC) REGULATES REAL ESTATE BROKERS AND SALES AGENTS, REAL ESTATE INSPECTORS,HOME WARRANTY COMPANIES, EASEMENT AND RIGHT-OF-WAY AGENTS AND TIMESHARE INTEREST PROVIDERS. YOU CAN FIND MORE INFORMATION AND CHECK THE STATUS OF A LICENSE HOLDER AT WWW.TREC.TEXAS.GOV. YOU CAN SEND A COMPLAINT AGAINST A LICENSE HOLDER TO TREC. A COMPLAINT FORM IS AVAILABLE ON THE TREC WEBSITE. TREC ADMINISTERS TWO RECOVERY FUNDS WHICH MAY BE USED TO SATISFY A CIVIL COURT JUDGMENT AGAINST A BROKER, SALES AGENT, REAL ESTATE INSPECTOR, OR EASEMENT OR RIGHT-OF-WAY AGENT, IF CERTAIN REQUIREMENTS ARE MET. IF YOU HAVE QUESTIONS OR ISSUES ABOUT THE ACTIVITIES OF A LICENSE HOLDER, THE COMPLAINT PROCESS OR THE RECOVERY FUNDS, PLEASE VISIT THE WEBSITE OR CONTACT TREC AT: TEXAS REAL ESTATE COMMISSION P.O. BOX 12188 AUSTIN, TEXAS 78711-2188 512.936.3000 NON-ENDORSEMENT NOTICE NewQuest Properties is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of NewQuest Properties, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of NewQuest Properties, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR NEWQUEST PROPERTIES AGENT FOR MORE DETAILS. MEET THE TEAM KELLEY WORKMAN DAVID H. LUTHER MORGAN HANSEN Vice President Executive Vice President Senior Associate Investment Sales Investment Sales Investment Sales [email protected] [email protected] [email protected] 281.477.4355 281.477.4373 281.640.7904 3 EXECUTIVE SUMMARY WACO SHOPPING CENTER SHERMAN SHOPPING CENTER 2725 N. Hwy 75, Sherman TX ADDRESS 200 N. New Rd., Waco TX 76710 ADDRESS 75090 OCCUPANCY 87.5% OCCUPANCY 100% GLA 218,598 SF GLA 170,722 SF LAND AREA 29.30 ACRES LAND AREA 23.84 ACRES YEAR BUILT/RENOV 1994/2006 YEAR BUILT/RENOV 1994/2008 • Offered as a portfolio purchase* at $35,750,000 at 8.50% CAP $91/PSF (NOI: $3,039,291) well below replacement cost for high quality construction with attractive assumable debt of $24,000,000 at 4.92% until September 2022 with German America Capital Corporation parent to Deutsche Bank and serviced by Wells Fargo. The total portfolio is 389,320 square feet. 4 EXECUTIVE SUMMARY WACO SHOPPING CENTER SHERMAN SHOPPING CENTER • Built in 1994 and renovated in 2006, Located in Waco, • Built in 1994 and renovated in 2008, Located in Sherman, Texas at 200 North New Road retail corridor anchored by Texas at 2725 N. Highway 75, the retail corridor anchored Academy Sports and Outdoors, Conn’s Home Plus and Boot by Orschein, Nautilus Family Fitness and Tuesdays Morning Barn Western Wear with Texas Roadhouse on a pad. • In-line space of 218,598 Square Feet in four retail buildings • In-line space of 170,722 Square Feet in two retail buildings sitting on 29.3 Acres with Value being added by developing the 1.96-acre parcel with Highway 75 frontage with up to 7,000 square feet of • This center is served by a regional trade area of a 20+-mile GLA radius and a population of over 670,000 including Fort Hood, Killeen and Temple, Texas. • This center is served by a regional trade of 20 miles including in the Sherman-Denison Metropolitan area (MSA) • Excellent Service oriented tenant mix with average lease in which is a component of the Dallas-Ft. Worth combined place over 10 years statistical area, which estimated population of over 6.8 million • Over 1.9 Million visitors to Waco in 2017 • Excellent Service oriented tenant mix with average lease in place over 12+ years 5 PRICING DETAIL WACO SHERMAN SHOPPING CENTER SHOPPING CENTER RETURNS YEAR 1 YEAR 2 RETURNS YEAR 1 YEAR 2 CAP Rate 8.50% 9.12% CAP Rate 8.50% 9.15% Cash-on-Cash 11.22% 13.72% Cash-on-Cash 11.22% 13.82% Debt Coverage Ratio 1.49 1.60 Debt Coverage Ratio 1.49 1.61 INCOME YEAR 1 YEAR 2 INCOME YEAR 1 YEAR 2 Scheduled Base Rental Income $1,878,154 $2,013,564 Scheduled Base Rental Income $1,235,883 $1,327,083 Total Reimbursement Income 49.2% $923,326 45.9% $923,326 Total Reimbursement Income 40.1% $495,990 37.4% $495,991 Other Income $0 $0 Other Income $0 $0 Potential Gross Revenue $2,801,480 $2,936,890 Potential Gross Revenue $1,731,873 $1,823,074 General Vacancy $0 ($0) General Vacancy $0 ($0) Effective Gross Revenue $2,801,480 $2,936,890 Effective Gross Revenue $1,731,873 $1,823,074 Less: Operating Expenses 34.2% ($958,806) 32.6% ($958,806) Less: Operating Expenses 30.9% ($535,257) 29.4% ($535,257) Net Operating Income $1,842,674 $1,978,084 Net Operating Income $1,196,617 $1,287,818 Tenant Improvements $0 $0 Tenant Improvements $0 $0 Leasing Commissions $0 $0 Leasing Commissions $0 $0 Capital Expenditures $0 $0 Capital Expenditures $0 $0 Cash Flow $1,842,674 $1,978,084 Cash Flow $1,196,617 $1,287,818 Debt Service ($1,234,341) ($1,234,341) Debt Service ($801,571) ($801,571) Net Cash Flow After Debt Service 11.22% $608,333 13.72% $743,743 Net Cash Flow After Debt Service 11.22% $395,046 13.82% $486,247 Principal Reduction $513,190 $536,766 Principal Reduction $333,261 $348,571 TOTAL RETURN 20.69% $1,121,523 23.63% $1,280,509 TOTAL RETURN 20.69% $728,307 23.72% $834,818 6 OFFERINGWACO MEMORANDUMSHOPPING CENTER WACO200 NORTH SHOPPING NEW ROAD,CENTER Kelley Workman WACO,200 N NEW TX RD. |76710 WACO, TX 76710 Vice President David H. Luther Executive Vice President Morgan Hansen Senior Associate INVESTMENT SALES INVESTMENT 7 INVESTMENT HIGHLIGHTS WACO $21.67M price NewQuest Properties is pleased to exclusively represent the ownership group in the disposition of the Waco Centre which is a 218,598 square foot multi-tenant shopping experience sitting in the heart of the retail shopping corridor in Waco Texas on Highway 84 and 298 off Highway 6 and Highway 35. The shopping center has 218,598 square feet of inline space in four retail buildings which is currently 87.5% occupied while allowing an investor to see the upside in leasing 2nd generation space of 12.5%. It is a well-built tilt wall and block construction from 1994 and 8.50% renovated in 2006 keeping in the same format of quality construction with tinted window storefront retail spaces as well as office storefronts. cap rate Waco is located halfway between Dallas and Austin and in 2010 had a population of 235,000 but fast forward to 2018 and Waco has seen a big increase in population of 29% growth in 8 years. Waco is home to Baylor University with an enrollment count of 17,217 for Fall of 2018. Other university’s include McLennan Community College with enrollment of 9,000 students and 700 employees and Texas State Technical college, a 2-year school that provides technical education for people entering the workforce or a change of career, enrolls 4,000 students annually in the Waco location. 218,598 Major employers in Waco are Baylor University, Waco ISD, Providence Health Care, L3 Technologies, Baylor Scott & White Health System, Walmart, City of Waco, Midway ISD and RBA Sanderson Farms. One of Waco’s most famous employers is the TV Show “Fixer Upper” and their local stars, Chip & Joanna Gaines. Their renovation of the grain silos into Magnolia Market, a shopping complex with specialty stores, food trucks and event space has increased the visitors coming into Waco to over 1.9 Million visitors and in 2019 Magnolia has announced a $10.4 Million-dollar expansion.