james capital advisors, inc.€¦ · real estate taxes insurance cam commencement date lease...

JAMES CAPITAL ADVISORS, INC.

02 21214 66TH AVE S, KENT, WA 98032

JAMES CAPITAL ADVISORS

MARKETING PACKAGE

CONTENTS

CONTACT INFORMATION

PAGEThe Offering

Investment Summary

Property Summary

Highlights

Industrial Aerials

Site Plan

About the Brand

Location Overview

03

05

06

07

10

13

14

18

LA-Z-Boy Distribution CENTER

REED MELILLOSenior Director(424) 325-2606

MIKE JAMESManaging Director(424) 325-2601

ANTHONY COHENAssociate(424) 306-0320

LA-Z-BOY DISTRIBUTION CENTER - KENT, WA

03 21214 66TH AVE S, KENT, WA 98032

The Offering

James Capital Advisors is pleased to present this rare opportunity to purchase the Seattle MSA La-Z-Boy Distribution Center located in Kent Valley, WA 20 miles south of Seattle, WA.

La-Z-Boy Incorporated (LZB) will be acquiring a business that operates six independently owned La-Z-Boy Furniture Galleries® stores and one warehouse that serves the Seattle, WA market. The business currently generates $30 million in annual retail volume which is 25% higher than the average across the Furniture Galleries® network. The stores will become part of La-Z-Boy’s Retail segment, which today is composed of 155 stores. This M&A transaction is expected to close in June.

At the close of La-Z-Boy Incorporated’s (LZB) acquisition, La-Z-Boy Incorporated (LZB) will sign a 5-year Triple-Net (NNN) Lease. The lease will feature two, five-year extension options with a 10% rental increase. The subject lease will be backed by a corporate guaranty from La-Z-Boy Incorporated (NYSE: “LZB”), is a publicly traded company with over nine decades of servicing the home furniture industry.

This distribution facility services La-Z-Boy Incorporated’s Seattle customer base and is strategically located in one the U.S’s top industrial markets nearby a variety of Fortune 500 companies such as Amazon, Boeing, FedEx, etc. The facility includes 63,546 square feet of warehouse space situated on 3.24 acres of land with fourteen loading docks and one drive-in doors.


04 21214 66TH AVE S, KENT, WA 98032

PROPERTY Photo


05 21214 66TH AVE S, KENT, WA 98032

INVESTMENT SUMMARY

Tenant

Street Address

City

State

Zip

GLA

Lot Size

Year Built

$13M5.50%$741K

Price / SF $212.21

La-Z-Boy Distribution Center

21214 66th Ave S.

Kent

WA

98032

63,546 SF

3.24 AC

2016

$13,485,381PURCHASE PRICE

5.50%CAP RATE

$741,696NET OPERATING INCOME

PERIOD

COB - Year 5

Year 6 - 10

Year 11 - 15

TERM

Base Term

Option One

Option Two

ANNUAL RENT

$741,696

$815,866

$897,452

INCREASE

-

10%

10%

RENT / SF

$11.67

$12.84

$14.12

CAP RATE

5.50%

6.05%

6.66%


06 21214 66TH AVE S, KENT, WA 98032

PROPERTY SUMMARY

Lease Type

Real Estate Taxes

Insurance

CAM

Commencement Date

Lease Expiration

Increases

Options

*COB denotes Close of Business transaction between Seller and La-Z-Boy.

Parcel Number

Tenancy

Construction Class

Construction

Number of Stories

Number of Docks

Number of Dock Seals

Number of Oversized Ramp Doors

Triple-Net (NNN)

Tenant Responsible

Tenant Responsible

Tenant Responsible

COB*

5 Years from COB*

10% in Options

Two (2), 5-Year

112204-9079

Single

Masonry

Reinforced Concrete

2

14

8

1

Type of Ownership

Lease Guarantor

Company Name

Ownership

Years in Business

Market Capitalization

Revenue

Website

Zoning

Market

Warehouse SF

Office SF

Parking

Clear Height

Sprinkler System

Electrical Service

Fee Simple

Corporate

La-Z-Boy

Public (NYSE: LZB)

93 Years

$1.345 Billion

$1.745 Billion

La-Z-Boy.com

MIC

Seattle MSA

56,122 SF

7,424 SF

73 Spaces

30’

High Capacity ESFR

Three (3) Phase/480 AMP


Investment Highlights

07 21214 66TH AVE S, KENT, WA 98032

Mission-Critical Distribution Facility - This distribution facility serves all La-Z-Boy corporate stores in the greater Seattle Market, which were recently acquired by La-Z-Boy from their long-standing independent licensee in the market.

Brand New Lease - As they complete their acquisition of the business, La-Z-Boy will be executing a brand new, 5-year lease with two 5-year options to extend.

Triple-Net (NNN) Investment - The lease structure calls for zero operating expenses.

Corporate Guaranty From Publicly Traded Company - La-Z-Boy Incorporated (NYSE: “LZB”) is a publicly traded company with $1.7 billion in revenue spanning across 155 corporate owned stores and a total of 2,400 independently owned retail outlets.

Strong Operating History - La-Z-Boy has been serving its clients since 1927 and has experienced $388 million in sales growth in the last 5 years.


08 21214 66TH AVE S, KENT, WA 98032

PROPERTY Photo


Real Estate Highlights

09 21214 66TH AVE S, KENT, WA 98032

Rent / SF in Line With Market With Room For Growth - La-Z-Boy is currently paying $11.67 / sq. ft, which is in line with market for comparable properties in the area and provides a runway for continued rent growth over the life of the investment.

Trophy Real Estate Investment in Coveted Kent Valley Industrial Market - Kent Valley industrial rents have trended substantially upwards, increasing more than 93% in the last 5 years with more than 7.5% growth coming in the last 12 months.

High Barrier to Entry Market with limited vacancy - Market vacancy rate has shrunk by more than 38% since 2014 to less than 4% vacancy in 2019. Furthermore, there are no comparable properties for sale or lease in the immediate area.

Substantial Rent Growth Trend - Kent Valley industrial rents have trended substantially upwards, increasing more than 93% in the last 5 years.

Continued Growth and Development in Greater Seattle Market - There are currently more than 3.3 Million square feet of industrial projects under construction in the area, and an average of 9.6% in price / sq. ft. premium for properties sold over the last 12 months.


Industrial AERIAL

10 21214 66TH AVE S, KENT, WA 98032


Industrial AERIAL

11 21214 66TH AVE S, KENT, WA 98032


Industrial AERIAL

12 21214 66TH AVE S, KENT, WA 98032


13 21214 66TH AVE S, KENT, WA 98032

Site Plan


14 21214 66TH AVE S, KENT, WA 98032

ABOUT THE BRAND

La-Z-Boy

In 1928 the first recliner was born and a legendary company was founded on the principles of comfort, innovation, and industry-leading craftsmanship. For more than 90 years, the American furniture manufacturer based in Monroe, Michigan, USA has manufactured and distributed some of the most comfortable furniture available. La-Z-Boy furniture is sold in thousands of retail residential outlets in the United States and Canada and is manufactured and distributed under license in other countries including the United Kingdom, Australia, Germany, Indonesia, Italy, Japan, Mexico, New Zealand, Turkey and South Africa.

The company manufactures a full line of comfortable products for the living room and family room, including the company’s world-famous recliners, reclining sofas and love seats, sleep sofas, modular furniture and leather upholstery, as well as stationary sofas, love seats and chairs. La Z Boy Incorporated (NYSE: LZB), one of the world’s leading residential furniture producers, marketing furniture for every room of the home. "Live Life Comfortably.®"

La-Z-Boy includes various companies and brands including La-Z-Boy Residential, La-Z-Boy Kids, La-Z-Boy Hospitality, Lea Furniture, American Drew, Kincaid Furniture, Bauhaus USA Furniture, Hammary Furniture and England Furniture Incorporated. The company has a network of approximately 350 La-Z-Boy Furniture Galleries stores and over 560 Comfort Studio locations. The company owns approximately 155 of the La-Z-Boy Furniture Galleries stores. La-Z-Boy’s world-famous furniture is sure to make your home more elegant & comfortable.

ABOUT THE BRAND

Five-Year Performance ($ in Millions)

$388*SALES GROWTH

$39*GAAP OPERATINGINCOME GROWTH

$41*NON-GAAP OPERATING

INCOME GROWTH

$388TOTAL SHARE PURCHASES

$39TOTAL DIVIDENDS PAID

TO SHAREHOLDERS

32%SHARE PRICE INCREASE

$627TOTAL CASH GENERATED

FROM OP. ACTIVITIES

*Five-year sales and operating income growth is calculated as sales / operating income for fiscal ‘19less the sales / operating income for fiscal ‘14.


15 21214 66TH AVE S, KENT, WA 98032

ABOUT THE BRANDABOUT THE BRAND

GENERAL INFORMATION

Headquarters

Website

One La-Z-Boy Dr, Monroe, MI 48162

La-Z-Boy.com

$1.7 billion (+28% from 2014)

$77 million (+370% from 2015)

Public NYSE: LZB

Kurt L. Darrow

BUSINESS DESCRIPTION

Sales

Cash Used for Acquisitions

OWNERSHIP AND KEY PERSONNEL

Ownership

CEO


16 21214 66TH AVE S, KENT, WA 98032

Kurt L. Darrow, Chairman, President and Chief Executive Officer, of La-Z-Boy, said, “The La-Z-Boy Furniture Galleries® network is growing and performing well, with consumers demonstrating a preference to shop in store. We are thrilled to acquire the successful Seattle stores which have sales 25% higher than average across the Furniture Galleries® network. The stores are profitable, will be integrated into our Retail segment, and will be immediately accretive. Additionally, having a dedicated warehouse in the market will provide enhanced distribution capabilities for all the La-Z-Boy companies. As we continue to grow our company-owned store base, we have the opportunity to further leverage the combined margin associated with our integrated retail model, where we earn a profit on both the wholesale and retail sales. Chris and Lisa have been great leaders and friends of La-Z-Boy and we wish them all the best in their well-deserved retirement.”

Tj Linz, President of La-Z-Boy Retail, said, “We expect a smooth and seamless transition for all involved so that customers will continue to enjoy the excellent shopping experience and service they have come to expect from the La-Z-Boy Furniture Galleries® store teams in the Seattle market.” Terms of the deal were not disclosed.

Click here to read the full article on Yahoo! Finance.

La-Z-Boy to Acquire La-Z-Boy Furniture Galleries® Stores in Seattle Market

La-Z-Boy Incorporated (LZB) announced on March 5th, 2020 that it intends to acquire the business that operates six independently owned La-Z-Boy Furniture Galleries® stores, with approximately $30 million in annual retail volume, and one warehouse in the Seattle, Washington market. The transaction is a result of the planned retirement of independent dealers, Chris and Lisa Washko, who took over the stores in 2011, and the mutually agreed-upon decision that selling the stores to La-Z-Boy Incorporated would be in the best interest of their employees while providing for the greatest stability and continuity of the business.

The transaction is expected to close in June and is subject to customary closing conditions. The stores will become part of La-Z-Boy’s Retail segment, which today is composed of 155 stores.As La-Z-Boy is already recording a portion of the Seattle-based store volume in its wholesale segments, the acquisition of the six stores will contribute approximately $15 million of additional sales annually to the company on a consolidated basis. Chris Washko said, “It has been an honor to be part of the La-Z-Boy organization. Lisa and I have worked with a great team of talented and passionate individuals across our business and we are proud of what we have built and the support the team has given to our local community. Additionally, it has been a distinct pleasure to work with the many executives at La-Z-Boy Incorporated as we have collectively grown our businesses.”


PROPERTY Photo

17 21214 66TH AVE S, KENT, WA 98032


18 21214 66TH AVE S, KENT, WA 98032

Kent, WALocated midway between Seattle and Tacoma, Kent, Washington is the fourth largest city in King County and the sixth largest in Washington state. It currently has a population of 128,000+ including a culturally diverse mix of residents from around the globe. The city is approximately 34 square miles in size and is known for its rolling hills, lush valleys, Green River and views of Mt. Rainier. Boasting dozens of parks and award-winning schools, Kent retains some of its agricultural roots while also serving as an industry hub to companies including Amazon Boeing, Blue Origin, Oberto Sausage Company, Flow International and OMAX Corporation and as the home to the Maleng Regional Justice Center and the Kent campus of Green River Community College.

In addition to its lush landscape and sports & recreation opportunities, the City of Kent offers a wide variety of shopping, dining and cultural options for its residents and visitors. Highlights include Kent’s historic district, Kent Station, Pacific Raceways, the Kent Historical Museum and a range of live entertainment at local restaurants, coffee shops and pubs. There is never a shortage of things to do in Kent. Come for the day or stay for the weekend.

Seattle, WASeattle, chief city of the state of Washington & the largest metropolis of the Pacific Northwest, and one of the largest and most affluent urban centers in the United States. A major port of entry and an air and sea gateway to Asia and Alaska, Seattle lies alongside Puget Sound, a deep inland arm of the northern Pacific Ocean, and is at the center of a conurbation that is defined roughly by Everett to the north, Bellevue to the east, and Tacoma to the south.

Seattle is a city of distinct neighborhoods and urban districts that, though close to one another, change from one street to the next. Seattle’s districts have a comfortably prosperous but not ostentatious feel, characterized by neat family homes and townhouses occupied by industrial workers, artists, academics, professionals, and that odd class of technology workers. Seattle is a bustling place that thrives with industrial, commercial, and cultural activity around the clock. Despite Seattle’s enormous growth, it still maintains a high level of social and public services, excellent schools, and abundant parks and greenbelts, which have earned it the sobriquet “the Emerald City.”

Location Overview


19 21214 66TH AVE S, KENT, WA 98032

1. Amazon Fulfillment Center20526 59th Pl S, Kent, WA 98032

0.4 MILES FROM SUBJECT PROPERTY

2. Boeing20403 68th Ave S, Kent, WA 98032


3. Blue Origin21218 76th Ave S, Kent, WA 98032


4. FedEx Ship Center6633 S. 216th St, Kent, WA 98032


5. Columbia Distributing20301 59th Pl S, Kent, WA 98032

1 MILE FROM SUBJECT PROPERTY

6. Center Point Offices20819 72nd Ave S, Kent, WA 98032


Local Points of Interest


20 21214 66TH AVE S, KENT, WA 98032

Local Points of Interest

01

04

02

05

03

06

Amazon Fulfillment CenterAmazon is a multinational technology company based in Seattle, with 75k+ employees. This is their BFI4 location.

FedEx Ship CenterThis center serves as a main facilitator for delivery goods through FedEx Express and FedEx Ground shipping in Kent, WA.

BoeingBoeing designs, manufactures, and sells airplanes, rockets, satellites, telecommunication equipment & more.

Columbia DistributingColumbia is the largest beer and non-alcoholic beverage distribution company in the Pacific Northwest.

Blue OriginBlue Origin, LLC is an American privately funded aerospace manufacturer and sub-orbital spaceflight services company.

Center Point OfficesThis center houses offices for national companies such as Alaska Airlines, Blue Origin, Bright Horizons & more.


21 21214 66TH AVE S, KENT, WA 98032

DEMOGRAPHICS

POPULATION

2024 Projection

2019 Estimate

2010 Census

Growth ‘19 - ‘24

Growth ‘10 - ‘19

HOUSEHOLDS

2024 Projection

2019 Estimate

2010 Census

Growth ‘19 - ‘24

Growth ‘10 - ‘19

Average Income

Median Income

3-Mile

110,123

101,484

80,835

8.51%

25.54%

3-Mile

43,073

39,574

30,865

8.84%

28.22%

$75,276

$56,277

1-Mile

190

160

28

18.75%

471.43%

1-Mile

79

66

11

19.70%

500.00%

$37,096

$31,666

5-Mile

294,633

274,779

274,779

7.23%

14.63%

5-Mile

112,182

104,358

89,578

7.50%

16.50%

$81,733

$63,194

22 21214 66TH AVE S, KENT, WA 98032

The information contained in this Marketing Brochure has been obtained from sources believed to be reliable, but the accuracy or completeness of the information contained therein cannot be guaranteed. James Capital Advisors, Inc. & Brian Brockman (“Broker”) has not, and will not, verify any of this information, nor has Broker conducted, nor will it conduct, any investigation regarding these matters. Broker makes no representations, guarantees, or warranties of any nature about the accuracy or completeness of any information provided. The information provided in this brochure is in no way a substitute for a thorough due diligence investigation by Buyer. Broker has made no investigation of, and has made no representations, guarantees, or warranties of any nature, with regard to income and expenses for this property nor the future financial performance of the property. In addition, Broker has made no investigation of, and has made no representations, guarantees, or warranties as to the size and square footage of the property, the presence of any contaminating substances at the property, the physical condition of the property or compliance with any State, Local or Federal regulations. In addition, Broker has made no investigation of, and has made no representations, guarantees, or warranties of any nature, with regard to the financial condition or future financial condition of any tenants, nor any future plans or intentions of tenants with regard to the continued occupancy of the property. All parties are aware that Broker has no affirmative obligation to conduct a due diligence examination of the property for any Buyer. Any and all projections or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. Therefore, Broker assumes no legal responsibility for accuracy or completeness of this information, and expressly disclaims all representations, guarantees, or warranties related thereto. The value of the property to any Buyer depends on numerous factors that must be evaluated by Buyer and Buyer’s legal, tax, construction, and financial advisors. Buyer and Buyer’s advisors should conduct a thorough, independent investigation of the property to determine its suitability for Buyer’s intended usage. This investment, as with all real estate investments, carries a substantial risk. As such, Buyer and Buyer’s legal and financial advisors are strongly advised to request and review all legal and financial documentations related to the property and tenants.

A tenant’s past performance is not a guarantee of future performance. The lease rate stated for some properties may be based on a tenant’s projected sales with little or no record of actual performance or com-parable rents for the area in question. Returns are in no way guaranteed. Tenants may fail to pay the rent or property taxes or any other tenant obligations under the terms of the lease or may default under the terms of such lease. Regardless of tenant’s history of performance, and/or any lease guarantors and/or guarantees, Buyer is responsible for conducting Buyer’s own investigation of all matters related to any and all tenants and lease agreements. Broker is not, in any way, responsible for the performance of any tenant or for any breach or default by any tenant of any terms of any lease agreement related to the property. Further, Buyer is responsible for conducting Buyer’s own independent investigation of all matters related to the value of the property, including, but not limited to, the value of any long-term leases. Buyer must carefully evaluate the possibility of tenants vacating the property or breaching their leases and the likelihood and financial impact of being required to find a replacement tenant if the current tenant should default and/or abandon the property. Buyer must also evaluate Buyer’s legal ability to make alternate use of the property in the event of a tenant abandonment of the property.

CONFIDENTIALITYThis Marketing Brochure and the information contained within, is propriety and strictly confidential. It is intended to be used only by the party receiving it from Broker. It should not be made available to any other person or entity without the express written consent of Broker.

RELEASEThis Marketing Brochure has been prepared to provide basic, unverified information for prospective purchasers. By accepting this Marketing Brochure, the recipient agrees to release and hold harmless Broker from any claim, demand, liability or loss arising out, or relating in any way, to the information contained in this Marketing Brochure and from Buyer’s investigation of the property. In no event shall James Capital Advisors, Inc. or Broker be liable to any party for any direct, indirect, special, incidental, or consequential damages of any kind whatsoever arising out of the use of this Marketing Brochure or any information contained herein.

NON-ENDORSEMENTBroker is not affiliated with, endorsed by or sponsored in any way by any tenant or lessee identified in this Marketing Brochure. The presence of any entity’s logo or name is not intended in any way to indicate affiliation, sponsorship or endorsement by said entity of Broker.

JAMES CAPITAL ADVISORS, INC.

DISCLAIMER

23 21214 66TH AVE S, KENT, WA 98032

THANK YOU FOR YOUR TIME

CONTACT

ANTHONY COHENAssociate

(424) [email protected] RE Lic. 02097395

REED MELILLOSenior Director


MIKE JAMESManaging Director


Brian BrockmanBroker of Record

(513) [email protected] RE Lic #: 27380Bang Realty, IncCincinnati, OH

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