OFFERING MEMORANDUM 127,148-SQUARE-FOOT REGIONAL SHOPPING CENTER LOCATED IN YREKA, CALIFORNIA YREKA JUNCTION 127,148-SQUARE-FOOT REGIONAL SHOPPING CENTER LOCATED IN YREKA, CALIFORNIA YREKA JUNCTION EXCLUSIVELY LISTED BY Edward J. Nelson First Vice President Investments Director - National Retail Group Sacramento Phone: (916) 724-1326 [email protected] License: CA 01452610 OFFERING MEMORANDUM 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 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved. NON-ENDORSEMENT NOTICE Marcus & Millichap 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 Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, 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 MARCUS & MILLICHAP AGENT FOR MORE DETAILS. TABLE OF CONTENTS TABLE OF CONTENTS 07 29 EXECUTIVE SUMMARY FINANCIAL ANALYSIS Investment Overview .......................................................................... Schedule of Prospective Cash Flow ...................................................... Investment Highlights ......................................................................... Assumptions ....................................................................................... Offering Summary .............................................................................. Rent Roll ............................................................................................ Summary of Terms .............................................................................. Lease Expiration Schedule ................................................................... Tenant Summaries............................................................................... 17 53 PROPERTY DESCRIPTION MARKET OVERVIEW Property Details .................................................................................. Location Overview .............................................................................. Aerial Map .......................................................................................... Location Highlights ............................................................................ Regional/Local Map ............................................................................ Demographic Summary ...................................................................... Site Plan .............................................................................................. Demographic Highlights ..................................................................... YREKA JUNCTION EXECUTIVE SUMMARY $13,835,000 $108.81/SF SALES PRICE SALES PRICE PER SF EXECUTIVE SUMMARY YREKA JUNCTION 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. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap ACT ID Z0030034 YREKA EXECUTIVE SUMMARY JUNCTION INVESTMENT OVERVIEW Marcus & Millichap has been selected to exclusively market for sale Yreka Junction, a 127,148-square-foot grocery-anchored retail center in Yreka, California. This offering, which contains three separate parcels totaling 13.97 acres, presents investors the opportunity to own a stabilized grocery-anchored center in Northern California. The subject property is anchored by a 60,000-square-foot Raley’s, a dominant grocer in Northern California. Raley’s is performing extremely well at this location, with average store sales of roughly $400 per square foot. In addition, Raley’s is the only 100 percent grocery-focused grocery store in Yreka. There is also a strong presence by national tenants, including Dollar Tree, JCPenney, Carl’s Jr., Subway, Papa Murphy’s and Advance America. The center’s remaining tenants provide a balanced retail mix that serves the local community. With current occupancy at 86.65 percent, Yreka Junction offers investors stable cash flow with upside potential through lease-up of the vacant space. An undeveloped pad site also offers investors the ability to increase the center’s net operating income. Originally constructed in 1983, Yreka Junction has a history of long-term tenants. Raley’s and JCPenney have occupied the center since it was developed. In 2010, Raley’s extended its lease early for an additional 15 years. Earlier this year, JCPenney exercised its option to extend for an additional 10 years. Dollar Tree has occupied the center since 1996 and has extended its term multiple times. Together, Raley’s, JCPenney, and Dollar Tree occupy 92,554 square feet, or 72.8% of the gross leasable area. In addition, Carl’s Jr. exercised a five-year option on December 31, 2017, extending its lease through December 31, 2022. Finally, the property has excellent Interstate 5 frontage (monument sign on I-5), with average daily traffic counts in excess of 36,500. Yreka Junction can be delivered free and clear of existing debt, providing investors the opportunity to lock in financing at today’s historically low interest rates and achieve attractive leveraged returns. 8 EXECUTIVE SUMMARY YREKA EXECUTIVE SUMMARY JUNCTION INVESTMENT HIGHLIGHTS Northern California Deliverable free and History of long-term Upside in leasing vacant grocery-anchored center clear of existing debt tenants space and developing pad site Great visibility and ease of access from Interstate 5 Strong store sales 9 YREKA EXECUTIVE SUMMARY JUNCTION OFFERING SUMMARY YREKA JUNCTION 1810 - 1888 Fort Jones Rd, Yreka, CA OFFERING SUMMARY Price $13,835,000 Current Occupancy 86.65% Total Net Rentable Area 127,148 SF Price Per SF $108.81 SF Year Built 1983 Lot Size 13.97 Acres VITAL DATA Cap Rate 6.85% Year 1 NOI $948,118 10 Year Unleveraged IRR 8.26% 10 Year Leveraged IRR 12.45% MAJOR TENANTS MAJOR EMPLOYERS SERVICE DEBT FINANCING TENANT GLA LEASE EXP LEASE TYPE Siskiyou County Family Plng Health Care Loan Amount $8,992,750 Raley's 60,000 11/30/29 NNN Walmart Retail Fairchild Medical Center Health Care Loan-to-Sales Price Ratio 65.00% JCPenney 22,204 1/31/26 NNN Environmental Protection Agency Government Interest Rate 4.75% Dollar Tree 10,350 1/31/23 NNN Nor-Cal Products In Retail Term 10 Years DMV 3,488 7/31/19 Gross Coroner Office Government Amortization Period 25 Years Carl's Jr. (Ground Lease) 2,500 12/31/22 NNN Department of Public Works Government Year 1 Debt Service Coverage Ratio w/pt. 1.09 Siskiyou County Sheriffs Dept Government United States Dept of Army Military Yreka Division Government Raley’s Supermarket Retail American Linen Retail 10 EXECUTIVE SUMMARY YREKA EXECUTIVE SUMMARY JUNCTION SUMMARY OF TERMS INTEREST OFFERED Fee simple interest in Yreka, a 127,148-square-foot retail property located at 1810-1888 Fort Jones Road, Yreka, CA 96097. TERMS OF SALE Yreka Junction is offered on an open bid basis. Buyers will be notified when the call for offers date has been set. The operating figures for the subject property assume a fiscal year that