high density infill los angeles county nnn leased investment n hacienda bl... · of the package....

Offering Memorandum15 Year NNN Lease W/ Rental Increments

High Density Infill Los Angeles County NNN Leased Investment1717 N. Hacienda Blvd., La Puente, CA 91744

COMMERCIAL

ALLIANCE

COLDWELL BANKER COMMERCIAL ALLIANCE | 701 North Brand Blvd. Suite 800 Glendale, CA 91203

© 2014 Coldwell Banker Real Estate Corporation. Coldwell Banker Commercial is a registered trademark licensed to Coldwell Banker Real Estate Corporation. An Equal Opportunity Company. Each Office Is Independently Owned And Operated Except Office Owned And Operated By NRT Incorporated. The information above is from sources we believe to be reliable. We have not verified its accuracy and make no guarantee about it. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

ALLIANCE


Investment Advisors:

Guillermo OlaizT: [email protected] CA Lic# 01778986

John S. ArchibaldT: [email protected] CA Lic# 00996775

Milos TasicT: [email protected] CA Lic# 01945733

701 North Brand Blvd.Suite 800Glendale, CA 91203

ALLIANCE

Actual Property

ALLIANCE


TABLE OF CONTENTS CONFIDENTIALITY AGREEMENT 1

AERIAL MAP 2

INVESTMENT SUMMARY 3

Offer ing Terms

Rental Schedule

Executive Summary

Investment Overview 4

TENANT INFORMATION 6

P lat Map 8

Location Map 9

Aer ial Map 10

DEMOGRAPHICS 11

CITY OF LA PUENTE OVERVIEW 12

ALLIANCE


Coldwell Banker Commercial Alliance (hereinafter “CBC Alliance”) has been retained as the exclusive advisor and broker regarding the sale of the Planet Fitness located at 1717 Hacienda Blvd., La Puente, CA (the “Property”).

This Offering has been prepared by CBC Alliance for use by a limited number of parties and does not purport to provide a necessarily complete summary of the Property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information which prospective investors may need or desire. All projections have been developed by CBC Alliance, the Owner, and designated sources and are based upon assumptions relating to the general economy, competition, and other factors beyond the control of the Owner and, therefore, are subject to variation. No representation is made by CBC Alliance or Owner as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of the Property. Although the information contained herein is believed to be correct, Owner and its employees disclaim any responsibility for inaccuracies and expect prospective purchasers to exercise independent due diligence in verifying all such information. Further, CBC Alliance, Owner, and its employees disclaim any and all liability for representations and warranties, expressed and implied, contained in, or for omission from, this Investment Offering or any other written or oral communication transmitted or made available to the recipient. This Offering does not constitute a representation that there has been no change in the business or affairs of the Property or the Owner since the date of preparation of the package. Analysis and verification of the information contained in this package is solely the responsibility of the prospective purchaser.Additional information and an opportunity to inspect the Property will be made available upon written request to interested and qualified prospective investors. Owner and CBC Alliance each expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers regarding the Property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligation to any entity reviewing this Offering or making an offer to purchase the Property unless and until a written agreement for the purchase of the Property has

been fully executed, delivered, and approved by Owner and its legal counsel, and any conditions to Owner’s obligations thereunder have been satisfied or waived. CBC Alliance is not authorized to make any representations or agreements on behalf of Owner.

This Offering and the contents, except such information which is a matter of public record or is provided in sources available to the public (such contents as so limited herein are called the “Contents”), are of a confidential nature. By accepting the package, you agree (i) to hold and treat it in the strictest confidence, (ii) not to photocopy or duplicate it, (iii) not to disclose the package or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Owner or CBC Alliance, (iv) not use the package or any of the contents in any fashion or manner detrimental to the interest of Owner or CBC Alliance, and (v) to return it to CBC Alliance immediately upon request of CBC Alliance or Owner.If you have no further interest in the Property, please return this Investment Offering forthwith.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT A COLDWELL BANKER COMMERCIAL MARKETING REPRESENTATIVE FOR MORE DETAILS.

CONFIDENTIALITY AGREEMENT




ALLIANCE


AERIAL MAP

®

1717 N. Hacienda Blvd., La Puente, CA, 91744

INVESTMENT SUMMARY

EXECUTIVE SUMMARY

Tenant Planet Fitness

Ownership Fee-Simple

Occupancy 100.00%

Building SF 20,500 SF

Land Size 99,752 SF (2.29 AC)

Year Built Constructed 1960 Newly renovated 2013

Primary Lease Term 15 Years (13 Years Remaining)

Lease Commencement December 1, 2013

Lease Expiration November 30, 2028

Renewal Options Three 5 Year Options W/ Rental Increases

Lease Type NNN


OFFERING TERMS

Price $5,300,000

Cap Rate 5.80%

Net Operating Income $307,500

Price Per Building SF $258.54

Price Per Land SF $53.13

Monthly Rent PSF $1.25 NNN

Annual Rent PSF $15 NNN

RENTAL SCHEDULE:

Date NOI Monthly NOI

Adjusted Cap Rate

Now - 11/30/2018 $307,500 $25,625 5.80%

12/1/2018 - 11/30/2023 $338,250 $28,188 6.38%

12//1/2023 - 11/30/2028 $372,075 $31,006 7.02%

12/1/2028 - 11/30/2033* $409,272 $34,106 7.72%

12/1/2033 - 11/30/2038* $446,100 $37,175 8.42%

12/1/2038 - 11/30/2043* $495,228 $41,269 9.34%

Investment Advisors:




*Option Terms


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IDEAL LOCATION:The subject property consists of a large land parcel of approximately 99,742 square feet, accommodating the high parking demand of the retailer’s customers. It is improved by a recently remodeled and highly visible 20,500 square foot building, leased long term to Planet Fitness. It enjoys great retail synergy from its neighboring credit tenants such as 99 Cents Only, Fallas Paredes, Ross Dress For Less, Food 4 Less, Big 5 Sporting Goods, Burger King and Wienerschnitzel. The retail thoroughfare, N. Hacienda Blvd., attracts over 30,000 cars per day, with the nearest intersection at E. Fracisquito Ave. amassing over 50,000 cars per day.

BELOW MARKET RENT AND LONG TERM LEASE WITH RENTAL INCREASES: The current rent of $1.25 per square foot per month is considered below market and very sustainable for a junior anchor in a Los Angeles County high density in-fill location. The Buyer of this passive income investment with minimal landlord responsibilities will enjoy a stable income stream from a 15 year triple net (NNN) lease (13 years remaining), with 10% increases every 5 years, a great hedge against inflation.

TENANT DEDICATION & PROVEN TRACK RECORD: Planet Fitness invested nearly $2 million in out of pocket improvements and FF&E. Their state of the art build-out features new fire life safety systems, exposed HVAC ducts, ADA bathrooms and showers, spacious locker rooms, tanning rooms, massage chair rooms, an attractive wide open floor plan with high ceilings and great lighting. Planet Fitness (“PF”) has a national proven track record: every club replaces its fitness equipment every 5-6 years and refreshes/refurbishes it’s layout and design every 4-5 years to address wear and tear (per PF’s corporate real estate book).

JUNIOR ANCHOR | STRONG TENANT MIXThe subject property is a mid-box junior anchor within the South Hills Shopping Square along with 99 Cents Only, Fallas Paredes and reliable demographic-focused inline tenants. This strong tenant mix caters to the city of La Puente’s diverse community. The city’s population density and average household incomes have proven favorably for discount retailers and fitness users with a successful business model such as Planet Fitness.

STRONG DEMOGRAPHICS: The property has over 30,000 residents within a 1 mile radius and over 225,000 people in a 3 mile radius. The population is projected to grow by nearly 3.0% in the next 5 years (per CoStar).

INVESTMENT OVERVIEW1717 N. Hacienda Blvd., La Puente, CA, 91744

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ALLIANCE


Actual Property

© 2014 Coldwell Banker Real Estate Corporation. Coldwell Banker Commercial is a registered trademark licensed to Coldwell Banker Real Estate Corporation. An Equal Opportunity Company. Each Office Is Independently Owned And Operated Except Office Owned And Operated By NRT Incorporated. The information above are from sources we believe to be reliable. We have not verified its accuracy and make no guarantee about it. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

TENANT INFORMATION

Number of Locations: 770 in over 47 StatesNumber of Employees: 10,000+ Website: www.planetfitness.comCorporate Office: Newington, New Hampshire

Company Profile:Planet Fitness is an American franchise of fitness centers based in Newington, New Hampshire. With over 800 locations and more than 5 million members, Planet Fitness aims to provide a “Judgement Free Zone” to cater to novice and casual gym users. Founded in 1992, the company anticipates opening its 1,000th location in 2015. With its monthly rate only $10 dollars, Planet Fitness is a strong competitor for new health members. Since 2008, U.S. health club members have risen 16% with growth in 2013 at 5.6%.

STRONG GROWTH POTENTIAL• 5.3 million members representing 10% market share in the US (as of 3/1/14)• 770 open clubs in 47 states with 1,000 additional clubs committed to by franchisees• Increasing health and wellness awareness throughout the country is fueling the expansion of the fitness industry• The fitness Industry caters to the 15% of the population that currently work out. Planet Fitness appeals to the other 85%• The fitness sector is expected to grow at an average annual rate of 2.3%

PLANET FITNESS IS THE INDUSTRY LEADER• Revolutionized the industry as the pioneer of the High-Value / Low-Cost Fitness experience• Every club replaces its fitness equipment every 5-6 years and refreshes/refurbishes it’s layout and design every 4-5 years to

address wear and tear• Exclusive club sponsor of NBC’s The Biggest Loser show• Infinity partnership programs with New Balance and Subway• Has never closed a location system wide for financial reasons


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ALLIANCE


Actual Property

ALLIANCE


PLAT MAP1717 N. Hacienda Blvd., La Puente, CA, 91744


LOCATION MAP1717 N. Hacienda Blvd., La Puente, CA, 91744

ALLIANCE


AERIAL MAP1717 N. Hacienda Blvd., La Puente, CA, 91744

1 mile radius 3 mile radius 5 mile radius

White alone 22,678 176,296 375,727

Black or African American alone 1,075 6,722 13,885

American Indian and Alaska Native alone 580 4,375 9,372

Asian alone 5,145 34,187 104,981

Native Hawaiian and OPI alone 75 610 1,327

Some Other Race alone 594 4,370 9,886

Hispanic 21,777 167,750 347,950

Not Hispanic 8,371 58,811 167,227Popu

latio

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Sin

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Clas

sific

atio

n Ra

ce

(201

4 Es

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Street Cross Street Cars Per Day

W Francisquito Ave N Hacienda Blvd 20,596

N Hacienda Blvd E Alwood St. 29,456Traf

fic

Coun

ts


2019 Population Projection 31,007 233,101 531,942

2014 Population Estimate 30,147 226,560 515,178

2010 Poulation Census 29,793 223,615 502,745

% Population Change 2014-2019 2.85% 2.89% 3.25%

% Population Change 2010-2014 1.19% 1.32% 2.47%

2019 Total Households Projection 7,684 58,813 139,798

2014 Total Households Estimate 7,463 57,081 135,152

2010 Census Households 7,362 56,139 131,276

% Households Change 2014-2019 2.96% 3.03% 3.44%

% Households Change 2010-2014 1.54% 1.84% 2.78%

Popu

latio

n


34 33.70 34.50


Households 7,463 57,081 135,152

Owner Occupied 7,463 57,081 135,153

Renter Occupied 7,666 57,827 136,052


Household Income: Median $62,977 $58,564 $58,974

Household Income: Average $72,261 $71,444 $74,102

Household Income: Less than $25,000 1,034 10,054 25,163

Households (2014 Estimates)

Income (2014 Estimates)

Total Population Median Age (2014 Estimates)

DEMOGRAPHICS



ALLIANCE


Located 20 miles east of downtown Los Angeles in the San Gabriel Valley, the community of La Puente is predominantly residential and home to over 39,000 residents.

The City was incorporated on August 1, 1956; however, the history of the community extends back much further. The City’s name “La Puente” means the bridge in old Spanish and refers to an early bridge built across the San Jose Creek by members of the Portola-Serra expedition in 1769, as they surveyed the region for Spain. A modernized version of the bridge can be seen in the City’s colorful seal.

The 2010 United States Census reported that La Puente had a population of 39,816. The population density was 11,443.2 people per square mile (4,418.2/km²). La Puente is 49.4% White (4.6% Non-Hispanic White), 1.4% Black or African American, 1.1% Native American, 8.4% Asian, and 0.1% Pacific Islander. Hispanic or Latino of any race were 33,896 persons (85.1%). According to the 2010 United States Census, La Puente had a median household income of $52,886, with 11.8% of the population living below the federal poverty line.

According to the City’s 2013 Comprehensive Annual Financial Report, the top employers in the city are:

CITY OF OF LA PUENTE OVERVIEW

# Employer # of Employees1 Northgate González Markets 1202 Bodega Latina Corp (El Super) 803 Food 4 Less 754 Ed Butts Ford 705 Big Saver Foods 60

# Employer # of Employees6 Merritt’s Ace Hardware 437 Burger King 378 CVS/Pharmacy 359 99 Cents Only Stores 3210 Jack in the Box 32

ALLIANCE

Actual Property


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