next endeavor commercial re advisors 561-255-7285 · 28,980-square-foot nissan dealership situated...
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Next Endeavor Commercial RE Advisors
NISSAN DEALERSHIP 4515 Clinton Highway | Knoxville, Tennessee
OFFERING MEMORANDUM
Not Actual Location
561-255-7285
NOI: $336,000
PRICE: $5,135,000
CAP: 6.5%
INVESTMENT OVERVIEW
28,980-square-foot Nissan dealership situated on 5.72 acres in Knoxville, Tennessee. Fenton Nissan recently signed a 10-year lease and has ±8.3 years remaining with three 3-year options to renew. The property is ideally positioned with excellent frontage on Clinton Highway (Traffic Count: 25,841 VPD), about a half-mile from the junction of I-75 and I-640 (Combined Traffic Count: 158,372 VPD). The location also benefits from its location within a cluster of other auto dealerships near one of the city’s primary commercial and residential corridors with 5.2 MSF of retail, 3.2 MSF of office, 8.5 MSF of industrial and 6,811 multifamily housing units within a 3-mile radius. Other major retailers with a presence in the immediate area include Ingles, CVS, Walgreens, Advance Auto Parts, O’Reilly Auto Parts, NAPA Auto Parts, Dollar General, Family Dollar, Sprint, Food City, Ace Hardware, SunTrust Bank, BB&T, Red Lobster, Outback Steakhouse, Cracker Barrel, Applebee’s, IHOP, McDonald’s, Burger King, Arby’s, Jimmy John’s, Waffle House and Starbucks among many others. The property is just 5 miles from the University of Tennessee (Enrollment: 27,845), and benefits from strong demographics with a 5-mile population of 159,141 and average household income of $47,275.
DEMOGRAPHICS
1-Mile Population 3-Mile Population 5-Mile Population 1-Mile AHHI 3 -Mile AHHI 5 -Mile AHHI Traffic Count
6,760 59,585 159,141 $38,983 $42,813 $47,275 25,841 VPD on Clinton Highway
INVESTMENT SUMMARY
Actual Location
• NET LEASE: ±8.3 years of primary term remaining with three 3-year options to renew
• EXPERIENCED OPERATOR: Fenton Motor Group currently operates 13 automobiledealerships in 5 states – 7 of which are Nissan dealerships – with 2 more Nissandealerships slated to open soon. Family-owned and operated since the 1950s, thecompany maintains a strong presence in the Southeast with most major auto brandsrepresented—including Chevrolet, GMC, Cadillac, Buick, Ford, Lincoln, Chrysler,Dodge, Jeep, Ram, Hyundai, Honda, Mitsubishi, Infiniti, Mazda and Nissan
• PURCHASE OPTION: Tenant has an option to purchase in the first 5 years of the leasefor $5,050,000 (6.65% Cap) and for the greater of that price or Fair Market Value in theremainder of the term
• EXCELLENT ACCESS & VISIBILITY: Ideally positioned with excellent frontage on ClintonHighway (Traffic Count: 25,841 VPD), just a half-mile from the junction of Interstate 75and Interstate 640 (Combined Traffic Count: 158,372 VPD)
• DOMINANT COMMERCIAL CORRIDOR: Near one of the city’s primary retail corridors,with 5.2 MSF of retail, 3.2 MSF of office, 5.2 MSF of industrial, and 6,845 units ofmultifamily housing within a 3-mile radius
• STRATEGIC LOCATION: Fenton Nissan is situated within a major cluster of autodealerships, including two of the largest Ford and Chevrolet dealerships in Knoxville
• SURROUNDING USES: Other major retailers with a presence in the immediate areainclude Ingles, CVS, Walgreens, Advance Auto Parts, O’Reilly Auto Parts, NAPA AutoParts, Dollar General, Family Dollar, Sprint, Food City, Ace Hardware, SunTrust Bank,BB&T, Red Lobster, Outback Steakhouse, Cracker Barrel, Applebee’s, IHOP,McDonald’s, Burger King, Arby’s, Jimmy John’s, Waffle House and Starbucks, amongmany others
• STRONG DEMOGRAPHICS: 5-mile population of 159,141 and average householdincome of $47,275
• MARKET: With an overall population of over 850,000 throughout the 9-countyMetropolitan Statistical Area, Knoxville is the 3rd largest metro area in Tennessee. Hometo the University of Tennessee (Enrollment: 27,000) and the Oak Ridge NationalLaboratory, Knoxville boasts substantially lower unemployment than state and nationalaverages and has recently seen hundreds of millions in investment from high-techmanufacturers relocating to the area Not Actual Location
PROPERTY OVERVIEW
ADDRESS: 4515 Clinton Highway Knoxville, Tennessee 37912
TENANT: Super Automotive, LLC
GUARANTEE: Lease is personally guaranteed by the Operator, Brad Fenton. See Tenant Overview for more information.
BUILDING SIZE: 28,980 SF
PARCEL SIZE: 5.72 Acres
YEAR BUILT: 1986
YEAR RENOVATED: 2012
LEASE SUMMARY
LEASE COMMENCEMENT: May 1, 2014
LEASE EXPIRATION: May 1, 2024
TERM REMAINING: ±8.3 Years
PURCHASE OPTION: Tenant has option to purchase in the first 5 years of the lease for $5,050,000 (6.65% Cap) and for the remainder of the term at the greater of the greater of that price or Fair Market Value.
LEASE TYPE: NNN
BASE RENT: $336,000
OPTION: Three 3-year options to renew
OPTION RENT INCREASES: 5% bumps in each option
TAXES: Tenant shall pay all real and personal property taxes levied or assessed against Tenant’s property and improvements upon or affixed to the Facility, including taxes attributable to all alterations, additions, or improvements made by Tenant, as well as all water and sewer charges and all other governmental impositions levied during the Lease Term upon the Facility.
INSURANCE: Tenant shall procure and keep in effect during the Lease Term, for the benefit of Landlord and any mortgagee of the Facility, commercial general liability insurance on an occurrence basis, including operations and blanket contractual coverage for personal injury, death or property damage occurring in, upon or about the facility or any street, drive, sidewalk, curb or passageway adjacent thereto in the amount reasonably required by Landlord but in no event not less than Two Million Dollars ($2,000,000) combined single limit per unit.
REPAIRS & MAINTENANCE: Tenant shall, at its sole cost and expense, throughout the Lease Term, keep the Facility (including, but not limited to, paving, parking areas, sidewalks, lawns and landscaping) in good order and condition, and shall make and perform all repairs and maintenance associated with the Facility.
PURCHASE OPTION: At any time during the lease, provided that Tenant is not in default, Tenant shall have the right and option to purchase the Facility by giving written notice to Landlord. If Tenant exercises said purchase option during the first 5 years of the term of the Lease, the purchase price shall be $5,050,000. If the purchase option is exercised during the Term but after the first 5 years, the purchase price shall be the greater of $5,050,000 or the Fair Market Value Purchase Price.
TENANT OVERVIEW
NISSAN
Nissan Motor Company Ltd is a Japanese multinational automobile manufacturer. Headquartered in Yokohama, Japan, Nissan Motor designs, develops, manufactures, and markets its cars under the Nissan, Infiniti and Datsun brands. As the second largest auto maker in global sales, Nissan offers various cars such as sedans, electric cars, sports cars, crossovers and SUVs among others. In 2014, Nissan was the fourth-best selling auto brand in the U.S. with 10% of the national market for new car sales.
SUPER AUTOMOTIVE, LLC
The tenant under the lease, Super Automotive, LLC, is a single-asset entity controlled by Fenton Motor Group for the purposes of leasing this dealership. Fenton Motor Group currently operates 13 automobile dealerships in 5 states – 7 of which are Nissan dealerships – with two more Nissan dealerships slated to open soon. Family owned and operated since the 1950s, the company maintains a strong presence in the Southeast with most major auto brands represented, including Chevrolet, GMC, Cadillac, Buick, Ford, Lincoln, Chrysler, Dodge, Jeep, Ram, Hyundai, Honda, Mitsubishi, Infiniti, Mazda and Nissan. The company boasts impressive system-wide sales of approximately 600 new and 600 used cars per month.
*The lease is personally guaranteed by Brad Fenton, ownerof Fenton Motor Group and previous chairman of theNissan National Dealer Advisory Board
KNOXVILLE, TENNESSEE
Knoxville is located in the eastern portion of Tennessee and lies in the shadows of the Great Smokey Mountains and Cumberland Mountains. The Knoxville Metropolitan Statistical Area (MSA) has a population of 857,585 and is comprised of Anderson, Blount, Campbell, Grainger, Knox, Loudon, Morgan, Roane, and Union counties. The third largest metropolitan area in Tennessee, Knoxville is perhaps one of the most scenic cities in the country and provides endless opportunities for recreation and outdoor lifestyle.
The cost of living in Knoxville, nearly 13 percent below the national average, is just one of the many factors to the great quality of life residents enjoy. Payroll growth is the second-highest in Tennessee after Nashville’s metro area. Housing prices are among the lowest in the state and are 13.5 percent below the national average. A low tax burden also makes Knoxville one of the nation’s more affordable locations for both businesses and individuals.
TRANSPORTATION
The Knoxville area is the hub for three major interstate systems including Interstate 40, Interstate 75 and Interstate 81, and is within one day’s drive of half of the nation’s population. Additionally, Interstate 640 circles the city to the north and Interstate 140 connects the airport to surrounding cities such as Alcoa and Oak Ridge. The McGhee Tyson Airport, a regional passenger and freight airport, handles over 100 commercial flights daily for the region. The airport is located approximately 12 miles from downtown Knoxville and offers service through 7 commercial airlines. Passengers using McGhee Tyson Airport are linked to 16 non-stop destinations. Annually, nearly two million passengers travel through the airport along with nearly 74,500 tons of airfreight.
EDUCATION & CULTURE
Knoxville is rich with cultural attractions: a symphony orchestra, an opera company, a city ballet, a professional theater company and multiple museums boasting national exhibits, as well as excellent parks and a thriving downtown. The main campus of the University of Tennessee adds to the allure of this area, with nationally ranked sporting events, and the energy of a 27,000-student community. The University of Tennessee is situated on a 417-acre campus and offers over 415 degree programs including agriculture, business administration, communications, education, engineering, law, veterinary medicine, social work and liberal arts.
AREA OVERVIEW
ECONOMY
The City of Knoxville is characterized by a strong business climate and stable, secure employee base provided by The University of Tennessee, Tennessee Valley Authority and the Oak Ridge National Laboratory. Once noted for its manufacturing and distribution operations, Knoxville has seen recent growth in the technology, government and healthcare employment base. More than a thousand wholesale distribution centers call Knoxville home, as well as several customer service call centers for various corporations.
As a result of high educational attainment, favorable business climate, and the presence of Oak Ridge National Laboratory (the area’s largest employer), Knoxville has emerged as a high-tech manufacturing center, particularly in the area of additive manufacturing (commonly referred to as 3-D printing). Local Motors, a company that assembles cars from 3D-printed parts, recently relocated from Las Vegas to Knoxville to be near ORNL. Additionally, high-tech metals manufacturer CMVR Corp has invested $313 million in the metro area to move its headquarters from Toronto to Knoxville, with plans to employ 120 scientists and create 400 manufacturing jobs.
AREA OVERVIEW
TOP EMPLOYERS
Employer Number of Employees
U.S. Dept. of Energy Oak Ridge Office 11,877
Covenant Health 9,122
University of Tennessee 6,550
Wal-Mart Stores Inc. 5,776
McGhee Tyson Air National Guard Base 4,897
University Health System 4,061
K-VA-T Food Stores 3,857
Knoxville’s diverse economy greatly benefits from low unemployment, consistent job growth and a well-trained growing labor force. As of May 2015, the Knoxville Area labor force consisted of over 414,800 employees. According to the US Bureau of Labor Statistics, the unemployment rate in Knox County as of May 2015 was 4.7%, significantly below state and national averages. With a median age of 32.9 and 30.6% of residents 25 years and older holding a bachelor’s degree, the City of Knoxville continues to provide East Tennessee with a large and educated workforce.
