offering memorandum net leased cvs - ackerman & co. · absolute net lease (nnn) structure: due...
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Net Leased CVSoffering memorandum
1541 Highway 20 neConyers, georgia 30012
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 CVS (the “Property”) located in Conyers, Georgia. 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 INFORMATION (INFORMATION 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 Conyers, georgia Competitive Property map detailed demographics
04 finanCiaL oVerView financial Summary
Table Of ContentsNET LEASED CVS – CONyERS, gEORgIA
ConTaCTS
JASON POWELL, CCIMVice President, Investment Sales
Ackerman & [email protected]
ACKERMAN & CO.10 Glenlake Parkway
South Tower, Suite 1000Atlanta, Georgia 30328
770.913.3900 | www.ackermanco.com
Net Leased CVS – Conyers, georgia
eXeCuTiVe SummarY investment Summary Location and demographics Property aerials Property overview
01
net leased cvs – conyers, georgia 5
The Conyers CVS store is located on a hard corner directly across the street from the Rockdale Medical Center (a 138-bed acute-care hospital) at a heavily traveled signalized intersection with over 30,000 vehicles per day traffic counts. In addition to outstanding proximity to the area hospital, the CVS property is located at the core of the area’s major retail corridor with major retailers such as Walgreens, Publix, Papa John’s Pizza, Subway, Wendy’s and United Community Bank surrounding the site. The property is an outparcel to the Milstead Crossing Shopping Center anchored by a Publix Supermarket. According to Costar, the Milstead Crossing shopping Center totals over 64,000 square feet of building area with a current occupancy rate of approximately 98%. The CVS store features a drive-thru pharmacy and several points of ingress / egress.
INVESTMENT HIgHLIgHTS
Proximity to Major Hospital & Medical Park: The subject, CVS property, is located directly across the street from a 138-bed hospital, the Rockdale Medical Center, and less than a half mile from Conyers Medical Park. This premium access to the Hospital and Medical Park enables CVS to pull patients and visitors looking to fill prescription orders and pick-up other non-pharmacy goods with quick access and ease.
Absolute Net Lease (NNN) Structure: Due to the absolute net lease structure, this property serves well as a passive investment. Under the terms of the lease, the tenant is responsible for all expenses on the leased premises. These responsibilities include, but not limited to, interior, exterior, roof, and structure.
INVESTMENT SUMMARY
Ackerman & Co.’s Retail Investment Sales Team is pleased to exclusively present for sale an absolute net-leased CVS located in Conyers, Georgia. The CVS property, originally constructed in 1996, includes a 9,504 square feet building on approximately 1.21 acres. The offering provides stable cash flow from an investment grade (S&P: BBB+) tenant. This asset is fee simple, and is being offered free and clear of debt.
01 Executive Summary
INVESTMENT SUMMARy
Square Footage / Acreage: 9,504 Sf
Acreage: 1.21 acres
Offering Price / Price per Square Foot : $1,935,000 ($202/Sf)
Debt Structure: market (offered free & clear)
Lease Structure: nnn
Cap Rate: 8.75%
Lease Expiration: 5/24/2016
Reported Store Sales (4/2011 - 3/2012): $592/Sf
1541 Highway 20 ne, Conyers, georgia
net leased cvs – conyers, georgia 6
INVESTMENT SUMMARY, CON’T.
01 Executive Summary
Stable Cash Flow with Appreciation: This asset should provide steady cash flow to ownership over the remainder of the current lease term. In addition, there are four (4), five (5) year tenant renewal options upon the term’s expiration with rent increases of approximately ± 2.75% at the beginning of each option period. The next scheduled rent increase would begin during the first option period if exercised by CVS in 5/2016.
Low Entry Price Point: The offering price of $1,935,000 is significantly lower than the current average price point for a CVS and Walgreens store offered fee simple. This low entry price point enables the investor to purchase the land and building at a much lower basis when compared to similar offerings.
Offered Free and Clear of Debt: With limited single tenant product in the market, this is a benefit for an investor looking for an all cash deal or market debt with low current low interest rates.
High Yield Opportunity: This investment offers the opportunity to purchase a CVS at a higher than market cap rate due to the current point within the initial lease term.
Superior Credit Tenant: CVS originated in 1963, the second largest Pharmacy presently has over 7,300 drugstores in the United States and Puerto Rico. For fiscal year ended December 31, 2012, CVS reported revenue of $123 billion with net income of $3.884 billion. Currently, CVS has a total of more than 201,000 employees and currently holds a BBB+ Investment grade rating from Standard & Poor’s.
net leased cvs – conyers, georgia 7
HRockdaleMedical Center
20
278
138
138
20
20
Sigman Rd
Old Covington Hwy
Hi Roc Rd
Old Salem R
d
Flat Shoals Rd
Klondike Rd
Irwin B
ridge Rd
Loganville H
wy
Bald Rock R d
cvs/pharmacy1541 HIGHWAY 20 NE CoNYErs, GA 30012
The subject CVS, located in Conyers, Georgia, was built in 1996 and is in excellent physical condition.
The drug store sits at a highly visible and busy intersection with approximately 33,624 vehicles per day. The site offers ample parking and good visibility from heavily traveled Sigman Road and Loganville Highway (GA Highway 20).
In 2011, total population within 5-miles was 57,887 and average household income within the 5-miles was $63,844.
LOCATION AND DEMOGRAPHICS
01 Executive Summary
DEMOgRAPHIC SUMMARy
1-MILE 3-MILES 5-MILES
Population 2011 5,150 28,869 57,887
Total Households 1,980 10,113 20,491
Average Household Income $51,918 $51,572 $63,844
Source: CoStar
TraffiC CounTS
19,338 vEHICLES Per daY on Sigman road
14,286 vEHICLES Per daY on LoganViLLe HwY (ga 20)
= 33,624 TOTAL
net leased cvs – conyers, georgia 8
Loga
nville
Hwy
Sigman Rd
cvs/pharmacy1541 GEorGIA 20 NECoNYErs, GEorGIA 30012
14,2
86 v
EHIC
LES
Per
daY
.
19,338 vEHICLES Per daY.
rockdalemedical center
close-up aerial view of the site
01 Executive Summary
net leased cvs – conyers, georgia 9
residential
rockdalemedical center
conyersmedical park
conyersmiddle school
Milstead Ave
Milstead Ave
Sigman Rd
Sigman Rd
rockdalemedical plaza
cvs/pharmacy1541 HIGHWAY 20 NECoNYErs, GEorGIA 30012
14,2
86 v
EHIC
LES
Per
daY.
19,338 vEHICLES Per daY.
11,8
62 v
EHIC
LES
Per
daY
.
AERIAL VIEW CAPTURING ThE sITE AND sURROUNDING RETAIL AND PROxImITy TO hOsPITAL AND mEDICAL PARk
01 Executive Summary
net leased cvs – conyers, georgia 10
PROPERTY OVERVIEW
01 Executive Summary
address: 1541 georgia 20 ne, Conyers, georgia 30012
Parcel id: 066006025B
County: rockdale
metro market: atlanta
Zoning: Bn (City of Conyers)
Building Size: 9,504 square feet
Land area: 1.21 acres
Year Built: 1996
Construction: Concrete block
Parking: approximately 58 spaces
Signage:Large dedicated pylon at the intersection of Sigman road ne and milstead ave (ga Highway 20)
access:There are two (2) points of ingress / egress via Sigman road ne and milstead ave (ga Highway 20)
Store number: 4694
drive-through: Yes
Pharmacy: Yes
Photo: Yes
Store Hours: Seven (7) days a week, 7:00 am - 10:00 Pm
Pharmacy Hours:monday - friday: 8:00 am - 10:00 Pm Saturday: 9:00 am - 6:00 Pm Sunday: 10:00 am - 6:00 Pm
Net Leased CVS – Conyers, georgia
TenanT oVerView Tenant overview rent roll Site Plan
02
net leased cvs – conyers, georgia 12
TENANT SUMMARY
SiZeone-Story Building
SQuare fooTage9,504
LeaSe eXPiraTion5/24/2016
CVS Caremark Corporation (NySE: CVS) operates as a pharmacy services company in the United States. Founded in 1967, it is the nation’s second largest Pharmacy company. The company’s Pharmacy Services segment provides a range of pharmacy benefit management services, including mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management, and claims processing; and drug benefits to eligible beneficiaries under the Federal government’s Medicare Part D program. This segment primarily serves employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans, and individuals. As of December 31, 2012, CVS had over 7,525 retail locations and operated 44 retail specialty pharmacy stores, 13 specialty mail order pharmacies, and 4 mail service pharmacies located in 45 states, Puerto Rico, Brazil, and the District of Columbia. This segment operates business under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica, Accordant, and TheraCom names. For the fiscal year ended December 31, 2012, CVS Caremark Corporation reported revenue of over $123 billion with net income of $3.884 billion.
CVS Caremark Corporation Common (NySE: CVS) S&P Rating: BBB+Headquarters: Woonsocket, Rhode Island USAStore Locations: 7,525year Founded: 1963Employees: 201,0002012 Revenue: $123 B
www.info.cvscaremark.com
02 Tenant Overview
net leased cvs – conyers, georgia 13
RENT ROLL
02 Tenant Overview
SuiTe TenanTSTarT daTe
eXPiraTion daTe
rSfannuaLiZed
renTmonTHLY
renTrenewaL
TermrenewaL inCreaSe
noTeS
1 CVS 5/1/1996 5/24/2016 9,504 $169,332 $14,111 5 years
Approximately two and three quarters percent (2.75%) rent increase during each
option period.
Tenant retains four (4) x five (5) year options after the initial twenty (20) year lease term.
RENEWAL INCREASES
option 1option 2option 3option 4
$174,108 $178,860 $183,612 $188,364
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SITE PLAN
1-STorY
ConCreTe BLoCk BuiLding
9,504 Sf1.21 aCreS
58 SPaCeS
MIL
STEA
D RO
AD
SIgMAN ROAD
cvs/pharmacy1541 HIGHWAY 20 NECoNYErs, GEorGIA 30012
driVe-THru
02 Tenant Overview
Net Leased CVS – Conyers, georgia
markeT oVerView Conyers, georgia Competitive Property Survey detailed demographics
03
net leased cvs – conyers, georgia 1603 Market Overviewconyers, georgia
Conyers, GA is the only city in Rockdale County. It is located approximately 24 miles east of the city of Atlanta and is part of the Atlanta Metro Statistical Area (MSA). Metro Atlanta is the most populous metro area in the state of Georgia and the ninth-largest MSA in the United States with close to 5.5 million residents.
Lower Cost of Living
According to a recent Bizjournals report, the Atlanta MSA is expected to reach 7.3 million residents by the year 2025. Conyers serves as a major housing area for Atlanta workers looking for a manageable commute and a lower cost of living. Compared to the rest of the country, Conyers’s cost of living is 10.50% lower than the U.S. average.
Proximity to Rockdale Medical Center
In addition to the diverse and expanding Atlanta economy, Conyers is home to a number of large employers. Rockdale Medical Center, the area’s hospital, is the largest employer in Conyers with 3,000 employees. The subject, CVS property, is situated directly across the street from this major hospital. Some of the other large employers in Conyers include Rockdale County Public Schools and AT&T.
TOP EMPLOyERS IN CONyERS, gEORgIA
Company industry # employees
rockdale medical Center Healthcare 3,000
rockdale County Public Schools
education 2,640
aT&T Communications 2,209
acuity Lighting group manufacturing 880
Hill-Phoenix manufacturing 835
Pratt industries manufacturing 800
golden State foods food wholesale/Trade 480
Solo Cup Company, inc. manufacturing 410
wal-mart Stores retail 400
Bio-Lab manufacturing 210
rockdale medical Center, Conyers, georgia
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H
20
278
138
138
20
20
Old Covington Hwy
Hi Roc Rd
Old Salem R
d
Flat Shoals Rd
Klondike Rd
Sigman Rd
3-MILE RADIUS
03 Market OverviewCOMPETITIVE PROPERTY MAP (3 MILES)
Publix Pharmacy1591 Sr-20
walmart Pharmacy1436 dogwood dr Se
walgreens1510 milstead ave ne
walgreens1738 Highway 138 Se
cvs/pharmacy1541 GEorGIA 20 NECoNYErs, GEorGIA 30012
net leased cvs – conyers, georgia 1803 Market Overviewdemographics
demograPHiCS 1-miLe 3-miLeS 5-miLeS
2011 Population 5,150 28,869 57,887
2016 Projected Population 4,980 30,437 60,323
2010 Census Population 5,418 28,707 57,631
growth 2011 - 2016 -3.30% 5.40% 4.20%
growth 2010 - 2011 -4.90% 0.60% 0.40%
2011 Households 1,980 10,113 20,491
2016 Projected Households 1,909 10,631 21,408
2010 Census Households 2,093 10,088 20,416
growth 2011 - 2016 -3.50% 5.10% 4.50%
growth 2010 - 2011 -5.40% 0.30% 0.40%
owner occupied 44.29% 49.62% 60.84%
renter occupied 55.66% 50.39% 39.16%
2011 avg Household income $51,918 $51,572 $63,844
2011 med Household income $38,482 $38,316 $47,554
2011 Per Capita income $20,686 $18,400 $23,096
CONyERS COST OF LIVINg
Compared to the rest of the country, Conyers’s cost of living is 10.50% lower than the u.S. average.
Net Leased CVS – Conyers, georgia
finanCiaL oVerView financial Summary
04
net leased cvs – conyers, georgia 2004 Financial Overviewfinancial summary
finanCiaL oVerView
Sales Price $1,935,000
Square Feet 9,504
Price Per Square Feet $203
CAP Rate 8.75%
Financing Property is offered free and clear of existing debt
BuiLding informaTion
Address 1541 georgia 20 NE, Conyers, georgia 30012
Property Type Single-tenant retail
year Built 1996
Parcel Size 1.21 acres
Type of Ownership Fee Simple
Recent Improvements CVS renovations in 2009
LeaSe deTaiLS
Commencement Date 5/1/1996
End Date 5/24/2016
Lease Term 20 years
Annual Rent $169,332
Rent Escalations (Current Term) None
Rent Per Month $14,111
Lease Type Absolute NNN
Options Four (4) x five (5) year
Option Rental Increases Approximately 2.75% during each option period
Landlord Responsibilities None
Reported Store Sales (4/2011 - 3/2012) $592/SF
© 2013 Ackerman & Co. All rights reserved.
FOR MORE INFORMATION, PLEASE CONTACT:
JaSon PoweLL, CCim | Vice President, investment Sales
770.913.3952 | [email protected]