offering memorandum net leased walgreens · 2018-06-22 · major online pharmacy provider...

Net Leased Walgreensoffering memorandum

7455 West Peoria avenue Peoria, arizona 85345

(Phoenix, aZ mSa)

This Offering Memorandum and any subsequent

evaluation material you may be provided (collectively

known as the “Offering Memorandum”) is intended

solely for your limited use in considering whether

to pursue negotiations to acquire Walgreens (the

“Property”) located in Peoria, Arizona. The Property is

being marketed for sale by Ackerman & Co. (“Broker”).

The Offering Memorandum contains brief, selected

information pertaining to the business and affairs of the

Property and has been prepared by Broker. It does not,

however, purport to be all-inclusive or to contain all of

the information that a prospective purchaser may desire.

Broker makes no representation or warranty, express

or implied, as to the accuracy or completeness of the

Offering Memorandum or any of its contents, and no

legal liability is assumed to be implied with respect

thereto.

By acknowledgment of your receipt of the Offering

Memorandum you agree that the Offering

Memorandum and its contents are confidential, that

you will hold and treat it in the strictest of confidence,

that you will not directly or indirectly disclose, or permit

anyone else to disclose, the Offering Memorandum

or its contents to any other person, firm, or entity

(including, without limitation, any principal for whom

you have been engaged), without prior written

authorization of Owner or Broker and that you will not

use or permit to be used the Offering Memorandum

or its contents to be copied or used in any fashion or

manner detrimental to the interest of Owner. Photocopy

or other duplication is strictly prohibited.

THE OFFERING MEMORANDUM SHALL NOT BE

DEEMED TO REPRESENT THAT STATE OF AFFAIRS

OF THE PROPERTY OR CONSTITUTE AN INDICATION

THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS

OR AFFAIRS OF THE PROPERTY SINCE THE DATE OF

PREPARATION OF THE OFFERING MEMORANDUM.

The information provided in the Offering Memorandum

has been gathered from sources that are deemed

reliable, but the Broker does not warrant or represent

that the information is true or correct. Prospective

offerors are advised to verify information independently.

The Offering Memorandum is not to be construed as an

offer or as any part of a contract to sell the property.

Furthermore, the inclusion or exclusion in the Offering

Memorandum of information relating to asbestos or

any other hazardous, toxic or dangerous chemical item,

waste or substance (hereinafter collectively referred to

as “Waste”) relating to the Property shall in no way be

construed as creating any warranties or representations,

expressed or implied by the Broker as to the existence

or nonexistence or nature of Waste in, under or on the

Property, it may create significant legal and/or economic

obligations upon the Owner, lessee and/or other holders

of interest in the Property or a part thereof and you are

hereby advised to obtain professional assistance such

as from a consultant, engineer and/or attorney prior to

taking an interest in the Property or a part thereof.

CONFIDENTIAL INFORMATIONINFORMATION NOT WARRANTED

01 eXeCuTiVe SummarY investment Summary Location and demographics Property aerials Property overview

02 TenanT oVerVieW Tenant overview rent roll Site Plan

03 marKeT oVerVieW Peoria, arizona Competitive Property Survey detailed demographics

04 finanCiaL oVerVieW financial Summary

ConTaCTS

JASON POWELL, CCIMVice President, Investment Sales

Ackerman & [email protected]

SEAN W. PATRICK Vice President, Investment Sales

Ackerman & [email protected]

Table Of ContentsNET LEAsED WALgREENs

Net Leased Walgreens

eXeCuTiVe SummarY investment Summary Location and demographics Property aerials Property overview

01

net leased walgreens 5

Square Footage: 14,420 Sf

Acreage: 2.09 aC

Offering Price: $3,246,560 ($225/Sf)

CAP Rate: 8.75%

Initial Term Expiration: 3/17/2017

In-place NOI: $284,074

Year Built: 1996

INVEsTMENT sUMMARY

In addition to the remaining five-year term, Walgreens has eight (8), five-year renewal options. This institutional-quality asset is located in the affluent market of the Phoenix, Arizona MsA. This asset is fee simple, and is being offered with free and clear of existing debt.

Investment Highlights:

Above Market Yield/Not Encumbered by Debt: This investment offers the opportunity to purchase a net-leased property with an investment-grade tenant at a higher-than-market cap rate due to the current point within the initial lease term. In addition, an investor can purchase this asset free and clear of existing debt, thus providing the ability to obtain market debt and interest rates.

Mature Retail Submarket/Quality Demographics: The subject Walgreens is located at 7455 West Peoria Avenue in Peoria, Arizona. This area is well-known as a residential community located between sun City and glendale. The property is located just northeast of glendale where the Arizona Cardinals play in Cardinals stadium. This area is a maturing market with exposure in excess of 43,591 vehicles per day and home to retailers, such as Home Depot, AM/PM C-store and Circle K. In addition, the population within a three-mile radius is 124,329 and has an expected growth rate over the next five years of roughly 4.1%. The 2010 average household income for this three-mile population is $75,621.

Superior Credit Tenant: Walgreens originated in 1901 and presently has over 8,300 drugstores in the United states and Puerto Rico. In Fiscal year 2011, Walgreens reported $72.2 billion in gross sales, which is 7.1% greater than calendar year 2010. Currently, Walgreens has a total of 244,000 employees and has a BBB rating from standard & Poor’s.

INVESTMENT SUMMARY

The Ackerman & Co.’s retail investment sales team is pleased to exclusively present for sale a net- leased Walgreens located in Peoria, Arizona (Phoenix, AZ MSA). The property was built in 1996 and has just under five years remaining on its initial lease term. The building totals 14,420 square feet and provides investors with stable cash flow.

01 Executive Summary


10

17

17

101

101

60

60

GlendaleMunicipal

Airport

Peoria

GlendaleCardinalsStadium

Pheonix

W Peoria Ave

W Olive Ave

W Northern Ave

W Indian School Rd

W Glendale Ave

Papago Fwy

N 6

3rd

Ave

Bla

ck C

anyo

n Fw

y

N 6

7th

Ave

walgreens7455 W Peoria avenue Peoria, arizona 85345

DEMOgRAPHIC sUMMARY

1-MILE 3-MILES 5-MILES

Population 2010 19,059 124,329 351,265

Total Households 6,103 42,617 128,354

Average Household Income $72,351 $75,621 $68,544

The subject Walgreens, located in Peoria, Arizona was built in 1996 and is in excellent physical condition. The store fronts W Peoria Avenue andN 75th Avenue and has two points of ingress/egress on the site. The site offers ample parking.

In 2010, total population within three miles was 124,329 and average household income within the three miles was $75,621.

LOCATION AND DEMOGRAPHICS


Source: 2011 MPSI Systems Inc. d.b.a. DataMetrix®

TraffiC CounTS

22,559 vEHICLES Per daY W Peoria aVenue 21,032 vEHICLES Per daY on n 75Th aVenue

43,591 TOTAL vEHICLES


Cholla hillsfamily & CosmetiC

dentistry

W Peoria Ave

N 7

5th

Ave

22,559 vEHICLES Per daY.

21,0

32 v

EHIC

LES

Per

da

Y.


close-up aerial view of the site



residentialresidential

Car wash

Cholla hillsfamily dentistry

sunCrest mini storage

R

W Peoria Ave

W Comet Ave

22,559 VehiCLeS Per daY.

N 7

5th

Ave

21,0

32 v

EHIC

LES

PER

DA

Y.


N 7

3rd

Ave

AERIAL VIEW CAPTURING ThE sITE AND sURROUNDING RETAIL



PROPERTY OVERVIEW

address:7455 W. Peoria avenue Peoria, arizona 85345 (Phoenix mSa)

County: maricopa

municipality: City of Peoria

Building Size: 14,420 square feet/one-story building

Land area 2.09 acres

Year Built: 1996

Construction: Concrete block and stucco

Parking: approximately 72 spaces

Signage:monument sign along W. Peoria avenue and n. 75th avenue.

access:There are points of ingress/egress via W. Peoria avenue and n. 75th avenue

Store number: 4019

drive-thru: Yes

health Center: no

Store hours: monday - Sunday, 7 am - 10 Pm



TenanT oVerVieW Tenant overview rent roll Site Plan

02


TENANT SUMMARY

02 Tenant Overview

SiZeone-Story Building

SQuare fooTage14,420

LeaSe eXPiraTion2017

WaLgreenS

Founded in 1901, Walgreens currently operates over 8,000 drugstore chains across the United states and Puerto Rico. Walgreens is a national leader in providing prescription and non-prescription drugs and household consumer products. With an s&P credit rating of BBB, Walgreens is consistently regarded as one of the most financially sound organizations in the United states. Innovations such as store layout remodeling and in-store health centers have allowed Walgreens to consistently outperform its competitors with regard to earnings per share, revenue growth, net income growth, and cash flow from operations. In 2010, Walgreens posted its unprecedented 36th straight year of record sales and earnings. In April of 2010, to increase their presence in New York City, the largest pharmacy market in the United states, Walgreens acquired longtime New York-Based pharmacy chain Duane Reade. The acquisition included 257 drug stores and two distribution centers. In June of 2011, Walgreens again showed their ability to innovate and expand their customer base by acquiring major online pharmacy provider Drugstore.com. Most analysts believe superior operations and customer service will allow Walgreens to continue their domination in the rapidly growing drugstore industry.

Walgreen CO (NYsE: WAg) s&P Rating: BBB Headquarters: Deerfield, IL UsA store Locations: 8,046Year Founded: 1901Employees: 244,0002011 Revenue: $72.2 B

www.walgreens.com


RENT ROLL

02 Tenant Overview

SuiTe TenanTSTarT daTe

eXPiraTion daTe

rSfannuaLiZed

renTmonThLY

renTreneWaL

TermreneWaL inCreaSe

CommenTS

1 Walgreens 3/17/1997 3/17/2017 14,420 $284,074 $23,673Eight (8) x five (5)

YearNone

NN Lease - Landlord is responsible for exterior structural maintenance and repairs.

Tenant has a right of first refusal to purchase the property


SITE PLAN

PEORIA AvE

75TH

Av

E

02 Tenant Overview

14,420 sF BUILDINg

DRIVE-THRU

72 PARKINg sPACEs



marKeT oVerVieW Peoria, arizona Competitive Property Survey detailed demographics

03

net leased walgreens 1503 Market Overviewpeoria, arizona

Peoria is the 4th largest city in Arizona, in terms of land area. The dynamic desert community comprised of more than 154,000 residents, is situated between Sun City and Glendale, and is located northwest of Phoenix. Peoria is located primarily in Maricopa County which is a major suburb of Phoenix. In July 2008, Money magazine listed Peoria in its “Top 100 Places to Live.”

growth of the Town

Founded by settlers from Peoria, Illinois in 1886, this onetime farming community is one of the nation’s fastest growing cities. Peoria’s population grew almost 42% from 2000 to 2010. In 2000, Peoria’s population was 108,498 and rose to 154,067 in 2010. The projected population for 2017 is 164,541. Officially incorporated in 1954, Peoria has grown from the original one-square-mile in Old Town Peoria to more than 176-square miles of beautiful sonoran desert in both Maricopa and Yavapai counties.

Peoria’s sports and schools

The seattle Mariners and the san Diego Padres conduct spring training at the Peoria sports Complex each February and March. Peoria is known for its school system, boasting a 93% high school graduation rate, with 20 elementary schools and 4 high schools within its city limits, all part of the Peoria Unified school District. The vision for the district is “every student, every day, prepared to meet tomorrow.”

POPULATION gROWTH OF PEORIA, ARIzONA (2000-2017)

Rio Vista Community Center, Peoria, Arizona

TOTA

L PO

PULA

TIO

N IN

TH

OU

sAN

Ds

Source: Nielsen Demographics

2000 2010 2017

170,000

150,000

130,000

110,000

90,000

70,000

50,000

30,000

10,000


101

60

Agua Fria

Fwy

NW Grand Ave

W Cactus Rd

Thunderbird Rd

W Peoria Ave

W Olive Ave

N 5

1st A

ve

N 5

0th

Ave

N 6

7th

Ave

N 7

5th

Ave

N 8

3rd

Ave

Pheo

nix

Peoria

Walmart 6645 W Peoria aveglendale, aZ 85302

Walgreens9009 n 67th ave

glendale, aZ 85302

Walgreens 6739 W Cactus rdPeoria, aZ 85381

CVS 7530 W Cactus rd Peoria, aZ 85381

fry’s food Store7455 W Cactus rdPeoria, aZ 85381

1.5-mile radius


03 Market OverviewCOMPETITIVE PROPERTY SURVEY (wIThIn a 1.5-MIlE RadIUS)

net leased walgreens 1703 Market Overview

demograPhiCS 1-miLe 3-miLeS 5-miLeS

2010 Population 19,059 124,329 351,268

2015 Projected Population 19,223 129,397 363,838

2000 Census Population 18,527 113,133 322,152

1990 Census Population 14,792 83,143 246,236

growth 2000 - 2010 -1.53% 1.18% 0.95%

growth 2010 - 2015 0.17% 0.8% 0.71%

2010 median age 33.0 33.9 36.4

Total employees 3,338 39,368 104,996

2010 households 6,103 42,617 128,354

2015 Projected households 6,155 44,163 132,254

2000 Census households 5,949 39,323 119,897

1990 Census households 4,774 29,335 94,640

growth 2000 - 2010 0.25% 0.79% 0.67%

growth 2010 - 2015 0.17% 0.72% 0.6%

2010 average household Size 3.09 2.89 2.71

2010 median household income $64,484 $63,939 $58,693

2010 average household income $72,351 $75,621 $68,544

2010 Per Capita income $23,612 $26,168 $25,225

2010 housing units 3,580 22,525 45,979

2010 owner occupied units 75.7% 64.8% 61.9%

2010 renter occupied units 17.8% 27.8% 28.8%

DETAILED DEMOGRAPHICS


finanCiaL oVerVieW financial Summary

04


financial summary

04 Financial Overview

finanCiaL oVerVieW

sales Price $3,246,000

square Feet 14,420

Price Per square Feet $225.10

CAP Rate 8.75%

Financing Property is offered free and clear of existing debt

BuiLding informaTion

Address 7455 W Peoria Ave, Peoria, Az 85345 (Phoenix MsA)

Propety Type single-tenant retail

Year Built 1996

Parcel size 2.09 acres

Type of Ownership Fee simple

Recent Improvements Roof renovations in 2005

LeaSe deTaiLS

Commencement Date 3/17/1997

End Date 3/17/2017

Lease Term 20 years

Annual Rent $284,074

Rent Escalations (Current Term) None

Rent Per Month $23,672.83

Lease Type NN - Landlord is responsible for roof and structure

Options Eight (8) x five (5) year

Landlord Responsibilities Exterior maintenance and repairs

Rent Escalations (Options) Ordinary maintenance; HVAC, exterior painting, insurance (including fire and rent), utilities, and taxes

© 2012 Ackerman & Co. All rights reserved.

FOR MORE INFORMATION, PLEASE CONTACT:

JaSon PoWeLL, CCim | Vice President, investment Sales

770.913.3952 [email protected]

Sean W. PaTriCK | Vice President, investment Sales 770.913.3946 [email protected]

offering memorandum net leased walgreens · 2018-06-22 · major online pharmacy provider...

Documents