rite aid 42481 west 12 mile road, novi, mi · 2019. 5. 16. · aid stores generate roughly 70% of...

R i t e A i d4 2 4 8 1 We s t 1 3 M i l e Ro a d | N o v i , M IO F F E R I N G M E M O R A N D U M

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REPRESENTATIVE PHOTO

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KYLE MATTHEWSBROKER OF RECORD

LIC # 65053994

E XC LU S I V E LY L I S T E D BY

BILL PEDERSENAssociate

Bi l l [email protected] (949) 432-4501MOB (831 ) 246-0646LIC # 01975700

KYLE B MATTHEWS, CCIMChairman & CEO

[email protected] (310) 919-5757MOB (310) 622-3161LIC # 01469842


M A T T H E W S R E T A I L A D V I S O R S | 3

C O N T E N T S

4 EXECUTIVE SUMMARYInvestment Highl ights

6 FINANCIAL OVERVIEWExecut ive SummaryCash FlowDebt QuoteAnnual ized Operat ing DataTenant Summary

8 TENANT OVERVIEWRite Aid

1 0 PROPERTY DESCRIPTIONThe Offer ingSi te Descr ipt ionParcel MapTenant Map

1 4 AREA OVERVIEWNovi , MIDetroi t , MIDemographics


4 | R i t e A i d , N O V I , M I

E X E C U T I V E S U M M A R YREPRESENTATIVE PHOTO


I n v e s t m e n t H i g h l i g h t s

LIMITED COMPETITION

• Closest Walgreens is three and a half miles away

EXCELLENT RETURN

• Listed at a 7.25% cap with the ability to achieve nearly 10% cash-on-cash return

LONG TERM LEASE

• Over 10 years remaining on lease

• NN+ lease with minimal landlord responsibilities

PROTOTYPE STORE FORMAT

• Prototype Rite Aid format with double drive-thru pharmacy

• Located on a hard corner and a signalized intersection

IDEAL LOCATION

• High average household incomes - 1-mile: $105.496; 3-mile: $97,108; 5-mile: $112,649

• Strong population growth – over 5% over the last five years and projected to grow by another 5%

over the next five years

• Less than a mile from the Twelve Oaks Mall and Novi Town Center which include Walmart

Supercenter, Nordstrom, Macy’s, Kohl’s, Toys”R”Us, Gander Mountain, and several other national

retail tenants


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F I N A N C I A L O V E R V I E W



R i t e A i d42481 W 13 Mile Rd Novi, MI 48377

List Price ...........................................................................................$5,079,462

CAP Rate - Current ....................................................................................7.25%

Gross Leasable Area ....................................................................... ± 11,180 SF

Lot Size .......................................................................................... ± 2.27 Acres

Year Built ...................................................................................................... 2006

Annualized Operating DataMonthly Rent Annual Rent Rent/SF CAP Rate

Current $30,688.42 $368,261.00 $32.94 7.25%

Option 1 $31,620.08 $379,441.00 $33.94 7.47%

Option 2 $32,551.75 $390,621.00 $34.94 7.69%

Option 3 $33,483.42 $401,801.00 $35.94 7.91%

Option 4 $34,415.08 $412,981.00 $36.94 8.13%

Tenant Summary

Tenant Trade Name Rite Aid

Type of Ownership Fee Simple

Lease Guarantor Corporate

Lease Type NN+

Landlord Responsibility Roof and Structure

Original Lease Term 20 Years

Lease Commencement Date 11/18/2005

Lease Expiration Date 1/17/2027

Term Remaining on Lease ±10.25 years

Increases In Options

Options Four (4) five (5) year options

Cash Flow Analysis

Equity Requirement (30%) $1,523,839

Principal Loan Amount $3,555,623

Annual NOI $368,261

Annual Debt Service $223,861

Cash Flow After Debt Service $144,400

Cash-on-Cash 9.48%

Debt Quote

Loan to Value Up to 70%

Interest Rate 4.80%

DCR 1.25x

Term 10 Years

Amortization 30 Years

Recourse Yes

Debt financing quote provided by:Brian KrebsBarrington Capital Corporation(949) [email protected]

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T E N A N T O V E R V I E WREPRESENTATIVE PHOTO


Property Name Rite Aid

Property Type Net Leased Drugstore

Parent Company Trade Name Rite Aid Corporation

Ownership Public

Credit Rating B

Rating Agency Standard & Poor’s

Revenue $30.74 B

Net Income $165.47 M

Stock Symbol RAD

Board NYSE

No. of Locations ± 4,600

No. of Employees ± 88,000

Headquartered Camp Hill, Pennsylvania

Website www.RiteAid.com

Year Founded 1962

TENANT OVERVIEW

Rite Aid Corporation, through its subsidiaries, operates a chain of retail drugstores in the United States. The company operates through two segments, Retail Pharmacy and Pharmacy Services. The Retail Pharmacy Segment sells prescription drugs; and a range of other merchandises, such as over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, and other every day and convenience products. Rite Aid stores generate roughly 70% of their sales from filling prescriptions, while the rest comes from selling health and beauty aids, convenience foods, greeting cards, and more, including some 3,500 Rite Aid brand private-label products. More than 60% of all Rite Aid stores are freestanding and over half have drive-through pharmacies.

GEOGRAPHIC OUTREACH

Rite Aid operates stores in 31 US states and the District of Columbia. Its largest markets are New York, California, and Pennsylvania, home to more than a third of its drugstores.

STRATEGY

A key focus of the company’s strategy for 2017 is to continue expanding its retail healthcare capabilities to provide a higher level of care to the communities it serves. This includes continuing to introduce unique and integrated offerings to the healthcare marketplace by leveraging its conveniently located retail stores and the capabilities of its 100% owned subsidiaries Health Dialog, RediClinic and EnvisionRx.

P R O P E R T Y D E S C R I P T I O N

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N

T h e O f f e r i n gProperty Name Tenant name

Property Address 42481 West 13 Mile Rd

Novi, MI 48377

Assessor’s Parcel Number 50-22-11-126-004

Zoning BV

Site Description

Number of Stories One

Year Built 2006

Gross Leasable Area (GLA) ± 11,180 SF

Lot Size ±2.27 Acres (SF)

Type of Ownership Fee Simple

Parking ±55 Surface Spaces

Parking Ratio 4.92 : 1,000 SF

Landscaping Professional

Topography Generally Level

Construction

Foundation Concrete Slab

Framing Steel

Exterior Brick

Parking Surface Asphalt

Roof Flat




1 2 | R i t e A i d , N O V I , M I

P a r c e l M a p

W 13 Mile Road ±10,000 ADT

M A T T H E W S R E T A I L A D V I S O R S | 1 3

Te n a n t M a p

S U B J E C T P R O P E R T Y

T W E L V E M I L E R O A D± 6 6 , 0 0 0 A D T

TWELVE OAKS MALL

1 4 | R i t e A i d , N O V I , M I

A R E A O V E R V I E W


N o v i , M i c h i g a n

A c c o l a d e s

L o c a l & R e g i o n a l M a p

Novi continues to be one of the fastest growing cities in Michigan. The construction of Twelve Oaks Mall in the 1970s made the city a major shopping destination in the Detroit metropolitan area. The city has a local economy that includes businesses of all sizes from international corporations with local and regional offices in Novi to owner-operated businesses serving the local area.

While Novi is recognized for its large concentration of retail businesses clustered at the Novi Road and I-96 interchange, there are several large retail centers in the city as well as many individual retail businesses. Novi has a number of car dealerships along Haggerty Road and Grand River Avenue. The city’s industrial and office parks are home to companies in high tech research and development, health care, transportation and logistics, manufacturing and domestic and foreign automotive-related suppliers. Additionally, energy-related companies are one of the fastest growing sectors in the city. These companies include the headquarters for ITC Transmission, Novi Energy and offices of Patrick Energy Services.

• National Recreation and Park Association’s Commission for Accreditation

of Park and Recreation Agencies accreditation

• Michigan Recreation & Park Association’s Design Award for Outstanding

Park: Kids Single Mountain Bike Trail

• Michigan Recreation & Park Association’s Elected Official of the Year: State

Rep. Kathy Crawford (R-Novi, District 38)

• Novi was voted one of the Top 10 cities and towns for families in the United

States by Family Circle Magazine.

R E G I O N A L M A P

L O C A L M A P

1 6 | R i t e A i d , N O V I , M I

D e t r o i t , M I O v e r v i e wThe Metro Detroit area is a major metropolitan area located in Southeast Michigan. Metro Detroit is known for its automotive heritage, arts, entertainment, popular music, and sports. The area includes a variety of natural landscapes, parks, and beaches, with a recreational coastline linking the Great Lakes. It is one of the nation’s largest metropolitan economies, with seventeen Fortune 500 companies. Detroit and the surrounding region constitute a major center of commerce and global trade. Firms in the region pursue emerging technologies including biotechnology, nanotechnology, information technology, and hydrogen fuel cell development.

Tourism is an important component of the region’s culture and economy, comprising nine percent of the area’s two million jobs. About 15.9 million people visit metro Detroit annually, spending about $4.8 billion. Metro Detroit is a tourist destination easily accommodating super-sized crowds to events such as the Woodward Dream Cruise, North American International Auto Show, the Windsor-Detroit International Freedom Festival, 2009 NCAA Final Four, and Super Bowl XL. The Detroit International Riverfront links the Renaissance Center a series of venues, parks, restaurants, and hotels. Detroit’s metroparks include fresh water beaches such as Metropolitan Beach, Kensington Beach, and Stony Creek Beach. Metro Detroit offers canoeing through the Huron-Clinton Metroparks as well as downhill and cross-county skiing at Alpine Valley Ski Resort, Mt. Brighton, Mt. Holly, and Pine Knob Ski Resort.


D e m o g r a p h i c s

Population 1 Mile 3 Mile 5 Mile

2022 Projection 8,977 59,961 171,136

2017 Estimate 8,336 57,087 164,870

2011 Census 7,223 52,122 154,040

Growth 2017 - 2022 7.69% 5.03% 3.80%

Growth 2011 - 2017 15.40% 9.52% 7.03%

Growth 2001 - 2011 45.61% 15.14% 8.19%

Households 1 Mile 3 Mile 5 Mile

2022 Projection 3,875 26,560 69,870

2017 Estimate 3,605 25,298 67,203

2011 Census 3,155 23,145 62,631

Growth 2017 - 2022 14.26% 9.30% 7.30%

Growth 2011 - 2017 44.49% 16.13% 9.63%

Income 1 Mile 3 Mile 5 Mile

2017 Est. Average Household Income

$105,496 $97,108 $112,649

Tr a n s p o r t a t i o n

E c o n o m y

Transportation in metropolitan Detroit is provided by a combination of airports, freeways and transit services. The Detroit Metropolitan Airport is one of America’s largest and most modernized facilities. Aside from the comprehensive network of interconnecting freeways including interstate highways such as I-75, I-94 and I-96, there are several additional means of ground transportation including the Suburban Mobility Authority for Regional Transportation (SMART), the public bus transit, Detroit People Mover, an elevated light rail that encircles the central business district of downtown Detroit, M-1 Light Rail, Intercity rail and SEMCOG Commuter Rail.

The metropolitan area surrounding and including Detroit, Michigan is a ten-county area with a population of over 5.3 million, a workforce of 2.6 million, and about 247,000 businesses.

Metro Detroit has propelled Michigan’s national ranking in emerging technology fields such as life sciences, information technology, and advanced manufacturing; Michigan ranks fourth in the U.S. in high tech employment with 568,000 high tech workers, which includes 70,000 in the automotive industry. Additionally, Detroit is second largest source of architectural and engineering job opportunities in the United States.

D O W N T O W N D E T R O I T

D E T R O I T P E O P L E M O V E R

1 8 | R i t e A i d , N O V I , M I

This Teaser contains select informat ion pertaining to the business and af fa i rs of Rite Aid located at 42481 West 13 Mile Road, Novi, MI (“Property”) . I t has been prepared by Matthews Retai l Advisors. This Teaser may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Teaser is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors. The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Teaser or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Teaser for the Property, you agree:

1 . The Teaser and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Teaser or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Teaser or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Teaser.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Teaser shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Teaser.

C O N F I D E N T I A L I T Y & D I S C L A I M E R S TAT E M E N T


KYLE MATTHEWSBROKER OF RECORD

LIC # 65053994

E XC LU S I V E LY L I S T E D BY

BILL PEDERSENAssociate

Bi l l [email protected] (949) 432-4501MOB (831 ) 246-0646LIC # 01975700

KYLE B MATTHEWS, CCIMChairman & CEO

[email protected] (310) 919-5757MOB (310) 622-3161LIC # 01469842


rite aid 42481 west 12 mile road, novi, mi · 2019. 5. 16. · aid stores generate roughly 70% of...

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