hooters - vereit · 2018. 7. 31. · hooters of america, llc, is the proud franchisor and operator...
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HOOTERSOFFERING MEMORANDUM | 2200 SOUTH TEXAS HWY 6 | HOUSTON, TEXAS
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2 HOOTERS: HOUSTON, TEXAS NATIONAL NET LEASE PRACTICE GROUP
HOOTERS2200 SOUTH TEXAS HWY 6 | HOUSTON, TEXAS
THE TEAM
AFFILIATED BUSINESS DISCLOSURE & CONFIDENTIALITY AGREEMENT
This Offering Memorandum has been prepared by NKF Capital Markets for use by a limited number of parties and has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it, and make no guarantee, warranty or representation about it. It is your responsibility to confirm, independently, its accuracy and completeness. All projections have been developed by NKF, Owner and designated sources, are based upon assumptions relating to the general economy, competition, and other factors beyond the control of Owner, and therefore are subject to variation. No representation is made by NKF 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, NKF, Owner and their employees disclaim any and all liability for representations and warranties, expressed and implied, contained in, or for omissions from, the Offering Memorandum or any other written or oral communication transmitted or made available to the recipient.
The Offering Memorandum does not constitute a representation that there has been no change in the business or affairs of the property or Owner since the date of preparation of the Offering Memorandum. Analysis and verification of the information contained in the Offering Memorandum 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 NKF each expressly reserve the right, at their sole discretion, to reject any or 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 obligations to any entity reviewing this Offering Memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.
This Offering Memorandum and the contents, except such information, which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Offering Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not photocopy or duplicate it, that you will not disclose this Offering Memorandum 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 NKF and that you will use the information in this Offering Memorandum for the sole purpose of evaluating your interest in the property and you will not use the Offering Memorandum or any of the contents in any fashion or manner detrimental to the interest of Owner or NKF. If you have no interest in the property, please return the Offering Memorandum forthwith.
NET LEASE PRACTICE GROUPKEN HEDRICKExecutive Managing Director Net Lease Practice [email protected]
JERRY HOPKINSSenior Managing Director Net Lease Practice [email protected]
SUPPORT
D. ANDREW RAGSDALE, Esq.Senior Managing Director Net Lease Practice [email protected]
JEN BLADENBrokerage ServicesNet Lease Practice [email protected]
MANDY POPE Local SpecialistNKF [email protected] Real Estate License 673743
DEBT & EQUITY FINANCE
DUSTIN STOLLYVice Chairman, Co-Head New York Debt/Structured [email protected]
JORDAN ROESCHLAUBVice Chairman, Co-Head New York Debt/Structured [email protected]
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THE INVESTMENT
5 THE OFFERING
INVESTMENT HIGHLIGHTS
THE TENANT
7 TENANT/CREDIT OVERVIEW
8 LEASE ABSTRACT
RENT SCHEDULE
HOUSTON, TEXAS
10 LOCATION OVERVIEW
11 DEMOGRAPHICS
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THE INVESTMENT
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THE OFFERINGNewmark Knight Frank’s National Net Lease Practice Group (“NKF”), as the exclusive listing agent, is pleased to present the opportunity to acquire a 100% leased Hooters casual dining retail property, in Houston, Texas.
Hooters recently entered into a twenty (20) year primary term lease agreement, which is accompanied by two, five year options. The lease is highly passive to the Landlord, and provides for 10% rental increases every five years.
INVESTMENT HIGHLIGHTSBRAND NEW 20 YEAR LEASE The Subject Property boasts a brand new 20 year primary lease, which is accompanied by two, five year renewal options.
10% SCHEDULED RENT INCREASES The Lease provided for scheduled 10% rent increases, every 5 years throughout the primary and option terms.
CORPORATE GUARANTEED The Lease is 100% Guaranteed by Hooters Corporate.
HIGHLY PASSIVE LEASE STRUCTURE The Subject Property provides investors with the opportunity to acquire a highly passive net lease, with minimal landlord responsibilities.
HOUSTON INFILL MARKET LOCATION The Subject Property is well located amongst many national credit tenants, within a dense retail corridor of west Houston.
20 YEARLEASE TERM
10% RENT INCREASES
EVERY FIVE YEARS
AT MARKET RENTS
LOCATED ONTEXAS HWY 667,674 VPD
TEXAS
6
PURCHASE PRICE $3,533,000
CAP RATE 6.00%
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THE TENANT
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R E P S IT E
TENANT/CREDIT OVERVIEWBack in 1983 in Clearwater, Florida, six businessmen with no restaurant experience whatsoever got together to open a place they couldn’t get kicked out of. True story.
More than three decades later, the Hooters brand has grown into an international sensation, with more than 420 Hooters in 42 states and 29 countries.
Hooters of America, LLC, is the proud franchisor and operator of more than 420 Hooters restaurants in 42 states and 29 countries. Throughout the years, Hooters has been delighted to rescue millions from the ordinary with one-of-a-kind hospitality and consistently good food. And though they didn’t expect the crazy growth they’ve had, they’re committed to not mess it up.
In 2013, the company announced a plan to remodel every restaurant in the chain. The prototype restaurant first remodeled was the location in Houston, Texas located off the Southwest Freeway at Kirby Drive near Downtown Houston. The new design features more windows and outdoor dining and upgraded audio-visual systems to better appeal to sports enthusiasts.
The first completely redesigned Hooters opened in New Orleans in July 2013. The company also announced changes to its menu, such as the addition of entrée salads.
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LEASE ABSTRACTHooters Houston 2200 South Hwy 6 Houston, TX 77077
Tenant TW Restaurant Holder LLC
Guarantor HOA Holdco LLC
Tenant Trade Name Hooters
Rent Commencement Date January 26, 2018
Primary Term Expiration Date January 31, 2038
Annual Rent $212,000
Rentable Builidng Area 8,159 square feet
Acreage 1.49 acres
Rental Increases 10% Bumps Every 5 years throughout primary term and option periods.
Lease Type
NN, Landlord responsible for roof. Additionally, LL responsible for HVAC during first two years of lease term.
Estoppel 30 day response period.
Financial Statements Lessee to provide financial statement upon request by Landlord.
Right of First Refusal Commencing in the 3rd Lease year, Tenant has a ROFR to purchase the property.
RENT SCHEDULEYear Annual Rent Rent Escalations
1-5 $212,000 CURRENT
6-10 $233,200 10%
11-15 $256,520 10%
16-20 $282,172 10%
Options
21-25 $305,492 10%
26-30 $336,041 10%
R E P S IT E
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HOUSTON, TEXAS
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LOCATION MAP
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HOUSTON, TEXASHouston is the most populous city in the state of Texas and the fourth-most populous city in the United States. It is also the largest city in the Southern United States, and the seat of Harris County. Located near the Gulf of Mexico, it is the principal city of the Greater Houston metro area, which is the fifth-most populated MSA in the United States.
The city was named after former General Sam Houston, who was president of the Republic of Texas and had commanded and won at the Battle of San Jacinto 25 miles east of where the city was established. The burgeoning port and railroad industry, combined with oil discovery in 1901, has induced continual surges in the city’s population. In the mid-20th century, Houston became the home of the Texas Medical Center—the world’s largest concentration of healthcare and research institutions—and NASA’s Johnson Space Center, where Mission Control Center is located.
The economy of Houston is based primarily on the energy industry, particularly oil. However, health care, biomedical research, and aerospace also constitute large sectors. In 2012, the gross domestic product (GDP) of the Houston–The Woodlands–Sugar Land metropolitan statistical area (MSA) was $449 billion, the fourth-largest of any metro area in the United States. The Houston metropolitan area comprises the largest concentration of petrochemical manufacturing in the world, including for synthetic rubber, insecticides, and fertilizers. It is the world’s leading center for oilfield equipment construction, with the city of Houston home to more than 3,000 energy-related businesses, including many of the top oil and gas exploration and production firms and petroleum pipeline operators. Twenty-three companies on the Fortune 500 list have their headquarters in, or around, Houston.
The Port of Houston ranks first in the United States in international waterborne tonnage handled and second in total cargo tonnage handled. The city has a large and growing international community. Houston is the most diverse city in Texas and has been described as the most racially and ethnically diverse major metropolis in the U.S.
Houston is home to the Tier 1 research institutions of Rice University and the University of Houston.
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DEMOGRAPHICS ANALYTICS
Retail2200 S Hwy
6
Far Katy South 2-4
StarFar Katy
South Houston
Buildings 1 733 744 25,556
Existing SF 8,159 16,409,850 16,508,966 382,488,829
Average Building SF 8,159 22,387 22,189 3,333,448
Leasing
NNN Rent Per SF $24.15 $24.15 $16.72
Vacancy Rate 0.0% 5.1% 5.1% 5.3%
Available Spaces 0 213 213 6,249
Available SF 0 1,116,294 1,116,294 27,766,259
12 Mo. Absorption SF 8,159 525,127 525,727 10,179,746
Population 1 Mile 3 Mile 5 Mile
2017 Total Population 9,660 113,925 328,835
2022 Population 10,687 124,920 363,473
Pop Growth 2017-2022 10.63% 9.65% 10.53%
Average Age 35.90 36.00 35.40
Households
2017 Total Households 3,980 46,092 121,255
HH Growth 2017-2022 10.40% 9.53% 10.19%
Median Household Income $68,518 $62,304 $62,424
Housing
Median Home Value $241,586 $189,164 $181,021
Median Year Built: 1999 1989 1987
HOUSTON is...
GROWING10.5%
POPULATION GROWTH
YOUNG35
AVERAGE AGE
BUSTLING67,674
VEHICLES PER DAY ON HWY 6
OCCUPIED5.3%
RETAIL VACANCY
SOCIAL$398,562,000
SPENT ON DINING OUT & ALCOHOL
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NET LEASE PRACTICE GROUP
D. ANDREW RAGSDALE J.D.Senior Managing Director918.878.9535 [email protected]
JERRY HOPKINSSenior Managing Director918.878.9536 [email protected]
KEN HEDRICKExecutive Managing Director918.878.9540 [email protected]
MANDY POPE1700 Post Oak Blvd, 2 BLVD Place, Suite 250Houston, TX [email protected] Real Estate Broker License 673743
HOOTERS2200 SOUTH TEXAS HWY 6 | HOUSTON, TEXAS
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11-2-2015
TYPES OF REAL ESTATE LICENSE HOLDERS: A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker. A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.
A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): Put the interests of the client above all others, including the broker’s own interests; Inform the client of any material information about the property or transaction received by the broker; Answer the client’s questions and present any offer to or counter-offer from the client; and Treat all parties to a real estate transaction honestly and fairly.
A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:
AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent.
AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller’s agent.
AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary: Must treat all parties to the transaction impartially and fairly; May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and
buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction. Must not, unless specifically authorized in writing to do so by the party, disclose:
ᴑ that the owner will accept a price less than the written asking price;ᴑ that the buyer/tenant will pay a price greater than the price submitted in a written offer; andᴑ any confidential information or any other information that a party specifically instructs the broker in writing not to
disclose, unless required to do so by law.
AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.
TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH: The broker’s duties and responsibilities to you, and your obligations under the representation agreement. Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.
LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.
Information About Brokerage Services Texas law requires all real estate license holders to give the following information about
brokerage services to prospective buyers, tenants, sellers and landlords.
.
Designated Broker of Firm License No. Email Phone
Licensed Supervisor of Sales Agent/Associate
License No. Email Phone
Licensed Broker /Broker Firm Name or Primary Assumed Business Name
License No. Email Phone
Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov IABS 1-0
Date Buyer/Tenant/Seller/Landlord Initials
Sales Agent/Associate’s Name License No. Email Phone
Newmark Real Estate of Houston LLC 537005 713.626.8888
Arispah Hogan 342405 [email protected] 713.490.9994
Amanda Pope 673743 [email protected] 713.300.7908