philip levy chris gainey · 2020. 9. 24. · financial analysis 12 sale comparables 18 rent...

PHILIP LEVY CHRIS GAINEY972.755.5225 817.932.6122SENIOR MANAGING DIRECTOR FIRST VICE PRESIDENT [email protected] [email protected]

OFFERING MEMORANDUM

2

PROPERTY INFORMATION 3

LOCATION INFORMATION 7

FINANCIAL ANALYSIS 12

SALE COMPARABLES 18

RENT COMPARABLES 23

DEMOGRAPHICS 28

ContentsConfidentiality & DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictlyconfidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichapand should not be made available to any other person or entity without the written consent ofMarcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverifiedinformation to prospective purchasers, and to establish only a preliminary level of interest in thesubject property. The information contained herein is not a substitute for a thorough due diligenceinvestigation. Marcus & Millichap has not made any investigation, and makes no warranty orrepresentation, with respect to the income or expenses for the subject property, the futureprojected financial performance of the property, the size and square footage of the property andimprovements, the presence or absence of contaminating substances, PCB's or asbestos, thecompliance with State and Federal regulations, the physical condition of the improvements thereon,or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions tocontinue its occupancy of the subject property. The information contained in this MarketingBrochure has been obtained from sources we believe to be reliable; however, Marcus & Millichaphas not verified, and will not verify, any of the information contained herein, nor has Marcus &Millichap conducted any investigation regarding these matters and makes no warranty orrepresentation whatsoever regarding the accuracy or completeness of the information provided.All potential buyers must take appropriate measures to verify all of the information set forth herein.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant orlessee identified in this marketing package. The presence of any corporation’s logo or name is notintended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation ofMarcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listingof Marcus & Millichap, and is solely included for the purpose of providing tenant lessee informationabout this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS

Special COVID-19 NoticeAll potential buyers are strongly advised to take advantage of their opportunities and obligations toconduct thorough due diligence and seek expert opinions as they may deem necessary, especiallygiven the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus &Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of anyprospective purchaser. Marcus & Millichap’s principal expertise is in marketing investmentproperties and acting as intermediaries between buyers and sellers. Marcus & Millichap and itsinvestment professionals cannot and will not act as lawyers, accountants, contractors, or engineers.All potential buyers are admonished and advised to engage other professionals on legal issues, tax,regulatory, financial, and accounting matters, and for questions involving the property’s physicalcondition or financial outlook. Projections and pro forma financial statements are not guaranteesand, given the potential volatility created by COVID-19, all potential buyers should be comfortablewith and rely solely on their own projections, analyses, and decision-making.)

Churchill Retail Center2750 Churchill Drive, Flower Mound, TX 75022

TABLE OF CONTENTS

Section 1 PROPERTY INFORMATION

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DEMOGRAPHICS 1 MILE 3 MILES 5 MILESTotal Households 4,948 33,227 66,133

Total Population 14,319 97,815 189,543

Average HH Income $140,442 $144,766 $127,773

PROPERTY OVERVIEW

Marcus & Millichap is pleased to offer the opportunity to acquire an 86 percent occupied, 13,937-square foot, multi-tenant

retail center located in a dense retail trade area of Flower Mound, Texas.

OFFERING SUMMARYSale Price: $4,011,000

Building Size: 13,937 SF

Available SF: 1,973 SF

Lot Size: 1.29 Acres

Price / SF: $287.80

Cap Rate: 7.0%

Current NOI: $280,779

Pro Forma Cap Rate: 8.59%

Pro Forma NOI: $344,641

Year Built: 2017


PROPERTY INFORMATION | EXECUTIVE SUMMARY

5

PROPERTY DESCRIPTION

Marcus & Millichap is pleased to offer the opportunity to acquire a 13,937-square foot,

multi-tenant retail center located in a dense retail trade area of Flower Mound, Texas.

Churchill Retail Center is currently 86 percent occupied, and all current tenants have triple

net leases. The center has a complementary mix of national credit and local tenants

including Fidelity Title, Sylvan Learning Center, Low-T Center, and Local Pint. The building is

newer 2017 construction and is situated on a 1.29-acre lot.

LOCATION DESCRIPTION

Churchill Retail Center is located on Churchill Drive near the signalized intersection of

Churchill Drive and Long Prairie Road. The center is shadow-anchored by Kroger and caddy

corner to Life Time Fitness. Other national and regional retailers in the area include Kohl’s,

Dollar Tree, Sprouts Farmers Market, Plato’s Closet, Great Clips, Hand & Stone Massage,

School of Rock, Jersey Mike’s Subs, FedEx, Verizon, GNC, Einstein Bros. Bagels, Nothing

Bundt Cakes, Regions Bank, Dickey’s Barbecue Pit, Domino’s Pizza, Sherwin-Williams,

Market Street grocery store, Floyd’s 99 Barbershop, Mooyah Burgers, Texas Roadhouse, La

Madeleine French Bakery & Café, Elements Massage, and others. The center is also in close

proximity to Flower Mound High School, providing additional traffic to the area. The

surrounding area has excellent demographics; the average household income within one

mile of the property is $140,442 and $127,773 within five miles. The area also has a dense

residential population of more than 189,543 people within five miles.

Centrally located in North Texas, Flower Mound is a family-oriented community that prides

itself on maintaining a small-town atmosphere while embracing and fostering a dynamic

economic development environment. After experiencing unprecedented residential growth

in the 1990's, the town now actively promotes a burgeoning commercial development scene

centered around the Lakeside Business District, located on the North Shore of Lake

Grapevine, and the Denton Creek District, located in the growing I-35 West corridor.


PROPERTY INFORMATION | PROPERTY DESCRIPTION

6

BUILDING INFORMATIONOccupancy % 86%

Year Built 2017

County Denton

PROPERTY HIGHLIGHTS• 100% Rent Collections for May and June

• 13,937-Square Foot, Multi-Tenant Retail Center Located in a Dense Retail Trade Area

• 86% Occupied | All Current Leases are Triple-Net | Upside Potential with Leasing theVacant Space

• All Current Leases have Personal Guarantees

• Sylvan Learning is Operated by A.R.E. Operations, LLC | Largest Sylvan LearningFranchisee with 14 Locations | Dual Lease Guarantees by BG Foods, Inc. and a PersonalGuarantee

• Located Near the Signalized Intersection of Churchill Drive and Long Prairie Road

• Building is New 2017 Construction with Attractive Architecture and Landscaping

• Shadow-Anchored by Kroger | Caddy Corner to Life Time Fitness

• Less than One Mile from Flower Mound High School | Estimated Enrollment of morethan 3,600 Students

• Numerous National and Regional Tenants in the Area, Including Kohl's, Dollar Tree,Sprouts, and More

• Highly Affluent Surrounding Area | One-Mile Household Income is $140,442 | Three-Mile Household Income is $144,766 | Five-Mile Household Income is $127,773

• Densely Populated with More than 189,000 Residents Within Five Miles of the Property

• In 2019, SmartAsset Ranked Flower Mound as the Number One "Most Livable SmallCity" | SafeHome and Home Security Advisor Ranks Flower Mound as the Number One"Safest Cities in Texas"


PROPERTY INFORMATION | COMPLETE HIGHLIGHTS

Section 2 LOCATION INFORMATION

8

Churchill Retail Center


LOCATION INFORMATION | REGIONAL MAP

9


LOCATION INFORMATION | AERIAL MAPS

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1 1



Section 3 FINANCIAL ANALYSIS

1 3

INVESTMENT OVERVIEW CURRENT PRO FORMAPrice $4,011,000 $4,011,000

Price per SF $287.80 $287.80

CAP Rate 7.0 % 8.59 %

Total Return (yr 1) $280,779 $344,641

OPERATING DATA CURRENT PRO FORMAGross Income $383,518 $447,380

Operating Expenses $102,739 $102,739

Net Operating Income $280,779 $344,641

FINANCING DATA CURRENT PRO FORMADown Payment $4,011,000 $4,011,000

Loan Type All Cash All Cash


FINANCIAL ANALYSIS | FINANCIAL SUMMARY

*Base Rent is based on the future base rent of $295,316 as of 2/15/2021. Current actual rent is $286,335. Seller shall credit Buyer the monthly rent differential on a pro rata basis, at Closing.

INCOME SUMMARY CURRENT PER SF PRO FORMA PER SF

Base Rent $295,316 $24.68 $295,316 $24.68

Vacant Space at Market Rents $0 $0.00 $49,325 $24.99

Real Estate Taxes Reimbursements $43,768 $3.14 $50,982 $3.66

Insurance Reimbursements $8,951 $0.64 $10,426 $0.75

Common Area Maintenance Reimbursements $20,731 $1.49 $24,148 $1.73

Management Fee Reimbursements $14,752 $1.06 $17,183 $1.23

GROSS INCOME $383,518 $27.52 $447,380 $32.10

EXPENSE SUMMARY CURRENT PER SF PRO FORMA PER SF

Real Estate Taxes $50,982 $3.66 $50,982 $3.66

Insurance $10,426 $0.75 $10,426 $0.75

Utilities $6,053 $0.43 $6,053 $0.43

Repairs & Maintenance $3,250 $0.23 $3,250 $0.23

Landscaping $6,982 $0.50 $6,982 $0.50

Pest Control $650 $0.05 $650 $0.05

Porter Service $1,379 $0.10 $1,379 $0.10

Trash Removal $1,834 $0.13 $1,834 $0.13

Professional Fees $4,000 $0.29 $4,000 $0.29

Management Fee $17,183 $1.23 $17,183 $1.23

GROSS EXPENSES $102,739 $7.37 $102,739 $7.37

NET OPERATING INCOME $280,779 $20.15 $344,641 $24.73

1 4


FINANCIAL ANALYSIS | INCOME & EXPENSES

TENANTNAME

UNITNUMBER

UNITSIZE (SF)

% OFGLA

LEASESTART

LEASEEND

ANNUALRENT

PRICEPER YEAR

LEASETYPE OPTION

EXPENSEREIMBURSEMENT

Fidelity Title (1) 110 3,994 28.66 9/01/17 8/31/22 $107,838 $27.00 NNN (1) 3-Yr @ Mkt $29,445.00

Sylvan Learning (1) 130 2,021 14.5 7/21/18 7/31/23 $50,525 $25.00 NNN (2) 5-Yr @ Mkt $14,897.00

Low-T Center (1) 140 3,994 28.66 12/15/17 2/14/23 $97,853 $24.50 NNN (1) 5-Yr @ Mkt $29,445.00

Vacant 160 1,973 14.16 $0 $0.00

Local Pint (1) 170 1,955 14.03 7/01/17 6/30/22 $39,100 $20.00 NNN (1) 5-Yr @ $21.00 $14,414.28

Totals/Averages 13,937 $295,316 $21.19 $88,201.28

(1) Leases have a Personal Guaranty.

Sylvan Learning and Local Pint received Payment Protection Program funding.

*Total Annual Rent is based on the future base rent of $295,316 as of 2/15/2021. Current actual rent is $286,335. Seller shall credit Buyer the monthly rent differential on a pro rata basis, at Closing.

1 5


FINANCIAL ANALYSIS | RENT ROLL

FIDELITY TITLE

Fidelity National Title Group is a member of the Fidelity National Financial (NYSE: FNF)family of companies and the nation’s largest group of title companies and title insuranceunderwriters that collectively issue more title insurance policies than any other titlecompany in the United States

FOUNDED 1847

SQ. FT. 3,994

TENANT TRADE NAME FNF | NYSE (Parent Company)

OPTIONS (1) 3-Yr @ Mkt

LOW-T CENTER

Low T Center is reinventing men’s healthcare by slowing the onset of, preventing, oreliminating these serious health issues through treatment of the underlying conditions.Our services treat the underlying issues with bio-identical hormone therapies liketestosterone replacement therapy, diabetes management and sleep apnea treatments formany different sleep issues.

FOUNDED 2009

LOCATIONS 45+

SQ. FT. 3,994


SYLVAN LEARNING

Sylvan Learning, Inc. consists of franchised and corporate supplemental learning centerswhich provide personalized instruction in reading, writing, mathematics, study skills,homework support, and test preparation for college entrance and state exams. SylvanLearning is operated by A.R.E. Operations, LLC, the largest Sylvan Learning Franchiseewith 14 locations. The location has dual lease guarantees by BG Foods, Inc. and a personalguarantee

FOUNDED 1979

LOCATIONS 200+

SQ. FT. 2,021


LOCAL PINT

Local Pint offers delicious food options and 50 craft beer taps, scratch kitchen, wine ondraft. and small bottle and can options as well.

FOUNDED 2017

LOCATIONS 1

SQ. FT. 1,955

OPTIONS (1) 5-Yr @ $21.00

1 6


FINANCIAL ANALYSIS | TENANT INFORMATION

1 7


FINANCIAL ANALYSIS | SITE PLAN

Section 4 SALE COMPARABLES

SUBJECT PROPERTY

2750 Churchill Drive | Flower Mound, TX 75022

$4,011,000Sale Price: 1.29 ACLot Size:

2017Year Built: 13,937 SFBuilding SF:

$287.80Price PSF: 7.0%Cap:

$280,779NOI:

1

BELT LINE SHOPPING CENTER

105 E Belt Line Road | Cedar Hill, TX 75104



$105.28Price PSF: 5.5%CAP:

03/01/2018Closed: 90%Occupancy:

Mint Dentistry, Papa Johns, Enjoy Nails & Spa, Painting with a Twist

1

2

KROGER SHADOW-ANCHORED RETAIL CENTER

3680 SH 121 | Plano, TX 75025





Dental Studio 121, Cozy Nail Spa, Saalna

2

1 9


SALE COMPARABLES | SALE COMPS

3

LITTLE ELM RETAIL CENTER

2180 FM 423 | Little Elm, TX 75068

$4,900,000Sale Price: 1 ACLot Size:




Lapels Dry Cleaner, Pacific Dental, Verizon, ATI Physical Therapy

3

4

STARBUCKS RETAIL AT HUDSON OAKS

2970 Fort Worth Highway | Hudson Oaks, TX 76087





Starbucks, GNC, Metro PCS, Sports Clips, 702 Nail Lounge, Hacienda Pools

4

5

DOMINO'S PIZZA - DENTIST

3380 Long Prairie Road | Flower Mound, TX 75022





5

2 0


SALE COMPARABLES | SALE COMPS

SUBJECT PROPERTY PRICE BLDG SF PRICE/SF CAP

Churchill Retail Center

2750 Churchill Drive

Flower Mound, TX 75022

$4,011,000 13,937 SF $287.80 7.0%

SALE COMPS PRICE BLDG SF PRICE/SF CAP CLOSE

Belt Line Shopping Center105 E Belt Line Road

Cedar Hill, TX 75104

$1,700,000 16,147 SF $105.28 5.5% 03/01/2018

Kroger Shadow-Anchored RetailCenter3680 SH 121

Plano, TX 75025

$4,060,000 8,957 SF $453.28 5.7% 06/13/2018

Little Elm Retail Center2180 FM 423

Little Elm, TX 75068

$4,900,000 8,750 SF $560.00 5.85% 11/02/2018

Starbucks Retail at Hudson Oaks2970 Fort Worth Highway

Hudson Oaks, TX 76087

$4,550,500 9,109 SF $499.56 6.07% 04/18/2018

Domino's Pizza - Dentist3380 Long Prairie Road


$1,875,000 3,380 SF $554.73 6.21% 01/11/2019

PRICE BLDG SF PRICE/SF CAP CLOSE

Totals/Averages $3,417,100 9,269 SF $368.66 5.87%

1

2

3

4

5

2 1


SALE COMPARABLES | SALE COMPS SUMMARY

2 2

1 BELT LINE SHOPPINGCENTER105 E Belt Line RoadCedar Hill, TX 75104

2 KROGERSHADOW-ANCHOREDRETAIL CENTER3680 SH 121Plano, TX 75025

3 LITTLE ELM RETAILCENTER2180 FM 423Little Elm, TX 75068

4 STARBUCKS RETAIL ATHUDSON OAKS2970 Fort Worth HighwayHudson Oaks, TX 76087

5 DOMINO'S PIZZA -DENTIST3380 Long Prairie RoadFlower Mound, TX 75022

2750 Churchill Drive | Flower Mound, TX 75022SUBJECT PROPERTY


SALE COMPARABLES | SALE COMPS MAP

Section 5 RENT COMPARABLES

2 4

1LAKE FOREST PLAZA2201 Long Prairie Road | Flower Mound, TX 75022

$25.50 SF/YRLease Rate: NNNLease Type: 2,525 SFSpace Size:

1997Year Built: 13,265 SFBldg Size: 1.47 AcresLot Size:

81%Occupancy:

1

2DOMINO'S | DENTIST3380 Long Prairie Road | Flower Mound, TX 75022

$27.30 SF/YRLease Rate: NNNLease Type: 0 SFSpace Size:


100%Occupancy:

2

SUBJECT PROPERTY2750 Churchill Drive | Flower Mound, TX 75022

$25.00 SF/yr (NNN)Lease Rate: NNNLease Type: 1,973 SFSpace Size:

2017Year Built: 1.29 AcresLot Size: No. Units:

Occupancy: 85.84%

TBD


RENT COMPARABLES | RENT COMPS

2 5

3JERNIGAN HEIGHTS4130 Justin Road | Flower Mound, TX 75077

$26.11 SF/YRLease Rate: NNNLease Type: 0 SFSpace Size:


100%Occupancy:

3

4CROSS TIMBERS VILLAGE4301 Cross Timbers Boulevard | Flower Mound, TX 75022

$35.00 SF/YRLease Rate: NNNLease Type: 11,424 SFSpace Size:


0%Occupancy:

4


RENT COMPARABLES | RENT COMPS

2 6

SUBJECT PROPERTY PRICE/SF/YR AVAILABLE SF BLDG SF OCCUPANCY %

Churchill Retail Center2750 Churchill Drive


$25.00 SF/yr (NNN) 1,973 SF 13,937 SF 85.84%

RENT COMPS PRICE/SF/YR AVAILABLE SF BLDG SF OCCUPANCY %

1

Lake Forest Plaza2201 Long Prairie Road


$25.50 2,525 SF 13,265 SF 81%

2

Domino's | Dentist3380 Long Prairie Road


$27.30 0 SF 4,550 SF 100%

3

Jernigan Heights4130 Justin Road


$26.11 0 SF 9,651 SF 100%

4

Cross Timbers Village4301 Cross Timbers Boulevard


$35.00 11,424 SF 11,424 SF 0%

PRICE/SF/YR AVAILABLE SF BLDG SF OCCUPANCY %TOTALS/AVERAGES $28.48 6,975 SF 9,723 SF 93.67%


RENT COMPARABLES | RENT COMPS SUMMARY

2 7

1 LAKE FOREST PLAZA2201 Long Prairie RoadFlower Mound, TX 75022

2 DOMINO'S | DENTIST3380 Long Prairie RoadFlower Mound, TX 75022

3 JERNIGAN HEIGHTS4130 Justin RoadFlower Mound, TX 75077

4 CROSS TIMBERS VILLAGE4301 Cross Timbers BoulevardFlower Mound, TX 75022

2750 Churchill Drive | Flower Mound, TX 75022SUBJECT PROPERTY


RENT COMPARABLES | RENT COMPS MAP

Section 6 DEMOGRAPHICS

2 9

POPULATION 1 MILE 3 MILES 5 MILESTotal Population 14,319 97,815 189,543

Average age 37.7 37.3 37.3

Average age (Male) 37 36.6 36.7

Average age (Female) 38.3 37.9 37.9

HOUSEHOLDS & INCOME 1 MILE 3 MILES 5 MILESTotal households 4,948 33,227 66,133

# of persons per HH 2.9 2.9 2.8

Average HH income $140,442 $144,766 $127,773

Average house value $328,814 $332,294 $309,869

ETHNICITY (%) 1 MILE 3 MILES 5 MILESHispanic 9.7% 12.7% 19.6%

RACE 1 MILE 3 MILES 5 MILES% White 83.2% 80.3% 81.0%

% Black 4.1% 5.7% 7.2%

% Asian 9.8% 11.0% 8.7%

% Hawaiian 0.0% 0.1% 0.1%

% American Indian 0.8% 0.7% 0.8%

% Other 2.1% 2.2% 2.3%* Demographic data derived from CoStar Realty Information Group


DEMOGRAPHICS | DEMOGRAPHICS MAP & REPORT

P H I L I P L E V YSenior Managing DirectorDallas Office

972.755.5225 Office817.380.1153 [email protected]: TX 0522087

5001 Spring Valley RoadDallas, TX 75244

C H R I S G A I N E YFirst Vice President InvestmentsFort Worth Office

817.932.6122 Office817.380.1153 [email protected]: TX 0612970

300 Throckmorton StreetFort Worth, TX 76102

philip levy chris gainey · 2020. 9. 24. · financial analysis 12 sale comparables 18 rent...

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