starbucks at palm court power center€¦ · starbucks at palm court power center 17142 slover...

Christopher DePierroManaging [email protected](949) 221-1824R.E. License No 01158321

Jeff Conover Senior Managing [email protected](949) 221-1810R.E. License No. 01008195

The information contained herein has been carefully compiled from sources we consider reliable, and while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date. The proforma revenues and expenses set forth in this brochure do not constitute a representation, warranty, or guaranty of any of the numbers set forth herein or of any economic value attributable to the property or income that may be derived therefrom. Independent estimates of proforma revenues and expenses should be developed before any decision is made on whether to invest in the property.

18301 Von Karman Avenue, Suite 800Irvine, CA 92612Phone: (949) 221–1800Fax: (949) 221–1830www.farislee.com

STARBUCKS AT PALM COURT POWER CENTER

17142 SLOVER AVENUE, FONTANA, CA 92337

EXCLUSIVE BROKERS:

PRICING ANALYSIS 14 AREA OVERVIEW 17PROPERTY OVERVIEW 4

STATEMENT OF CONFIDENTIALITY & DISCLAIMERFaris Lee Investments (“FLI”) has been engaged as the exclusive financial advisor to the Seller in connection with Seller’s solicitation of offers for the purchase of the property known as Starbucks, City of Fontana, County of San Bernardino, State of California. Prospective purchasers are advised that as part of the solicitation process, Seller will be evaluating a number of factors including the current financial qualifications of the prospective purchaser. Seller expressly reserves the right in its sole and absolute discretion to evaluate the terms and conditions of any offer and to reject any offer without providing a reason therefore. Further, Seller reserves the right to terminate the solicitation process at any time prior to final execution of the Purchase Agreement.

The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property, and it is not to be used for any other purpose or made available to any other person without the express written consent of Seller or FLI. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by FLI from sources it deems

reasonably reliable. Summaries of any documents are not intended to be comprehensive or all-inclusive, but rather only outline some of the provisions contained therein and qualified in their entirety by the actual document to which they relate.

No representation or warranty, expressed or implied, is made by the Seller, FLI, or any of their respective affiliates as to the accuracy or completeness of the information contained herein. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the Property site or used in the construction or maintenance of the building at the Property site.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase

Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or FLI or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

Prospective purchasers are not to construe the contents of this Offering Memorandum or any prior or subsequent communication from FLI or Seller or their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents as legal, tax, or other advice. Prior to submitting an offer, prospective purchasers should consult with their own legal counsel and personal and tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment.

TABLE OF CONTENTS

Property Overview

Vehicles Per Day

Slover Avenue 21,000

Sierra Avenue 35,000

Interstate 10 - San Bernardino Freeway 203,000

PARCEL NUMBERS

PARCEL ACRES SQUARE FEET0254-221-60-0000 0.67 29,263

PARCEL MAP

INVESTMENT SUMMARY

Faris Lee Investments is pleased to offer for sale the opportunity to acquire the fee simple interest (land & building) in a new single tenant Starbucks, located on an outparcel to the dominant Palm Court Center in Fontana, CA. This unique investment property consists of Starbucks’ latest prototype with a Drive-Thru, and will feature a new corporate guaranteed 10-year NNN lease. The lease features 10% increases every 5 years over the primary term and option periods, generating steady NOI growth and hedging against inflation. Starbucks is scheduled to have its grand opening in August 2017.

LOCATION SUMMARY

This Starbucks property is centrally located in Fontana, CA, which is the 20th most populous city within the state of California and the 2nd most populous within San Bernardino County. The asset is part of the 630,000 SF dominant Palm Court Center, which is anchored by Super Target, Ross, TJ Maxx, and 24 Hour Fitness and create strong cross-over traffic and excellent tenant synergy. In addition, the center contains Kaiser Permanente, which employs approximately 500 people on site, with hundreds more visiting each day. The Starbucks benefits from excellent street visibility and frontage off of Slover Avenue (21,000 vehicles per day). Additionally, the subject property enjoys multiple access points off of Slover Avenue, and will have pylon signage on I-10 Freeway (203,000 vehicles per day) which is one of the main corridors serving the entire Inland Empire and Los Angeles County. Furthermore, the property is located in a strong demographic corridor with over 332,000 permanent residents with an average household income of $65,000 within a 5-mile radius.

PRICING

PRICE: $3,470,000

NOI: $130,000

CAP RATE: 3.75%

TRAFFIC COUNTS (COSTAR 2017)

PROPERTY SPECIFICATIONSRentable Area: 2,500 SFSF Land Area: 29,263 SF (0.67 Acres)Year Built: 2017Zoning: Regional - Mixed Use (R-MU)

Ownership: Fee Simple (Land & Building)Guaranty: CorporateTenant: StarbucksCredit Rating: S&P: A

Address: 17142 Slover Avenue, Fontana, CA 92337Access: There are five (5) access points, and all five (5) are along Slover Avenue Improvements: There is approximately 2,500 SF of existing building area.

PROPERTY OVERVIEW · 5

INVESTMENT SUMMARY

NEW LONG TERM CORPORATE STARBUCKS GUARANTEED LEASE WITH 10% RENT INCREASES EVERY 5 YEARS

Q New 10 year lease (no early termination clause) with 4-5 year options, creates a long term stability and secure income stream for the investor

Q Provides investor strong increases in cash flow and asset appreciation for potentially (30) years

Q Excellent hedge against inflation

FREE STANDING PAD BUILDING TO HIGHLY SUCCESSFUL AND DYNAMIC TARGET/ KAISER PERMANENTE ANCHORED POWER CENTER

Q Starbucks is strategically located on a highly visible outparcel to the 630,000 square foot Palm Court Center anchored by Super Target, Kaiser Permanente, 24 Hour Fitness, Ross, and TJ Maxx

Q Centrally located in the City of Fontana with signage and visibility to the 10 Freeway (203,000 VPD)

Q Palm Court Power Center benefits from direct on & off access from the 10 Freeway & Sierra Avenue

Q Starbucks pad location enjoys multiple access points and frontage on Slover Avenue (21,000 VPD)

BRAND NEW 2017 CONSTRUCTION OPENED AUGUST 3, 2017

Q No deferred maintenance Q New prototype store Q Drive-Thru location

NNN LEASE/MINIMAL LANDLORD RESPONSIBILTY

Q Tenant reimburses for Taxes, Insurance, Common Area Maintenance

Q Allows buyer to own a minimal management intensive asset and passive investment

Q Ideal investment for 1031/1033 exchange buyer

CREDIT INCOME STREAM FROM STARBUCKS CORPORATION/BEST IN CLASS CATEGORY LEADER WORLDWIDE

Q “A” S&P Rating Q Publicly traded company (NASDAQ: SBUX) Q $21.31 Billion 2017 Revenue; Market Capitalization of

$92 Billion

STRUCTURED RENTAL INCREASES THROUGHOUT LEASE TERM

Q Investment features 10% increases every 5 years over the primary term and option periods

KAISER PERMANANTE PROVIDES CONSISTENT DAILY “BUILT-IN” CUSTOMER BASE FOR STARBUCKS

Q Over 1,000 employees at on site Kaiser Permanente offices with hundreds more visiting on a daily basis

Q Kaiser Facility does not have a full service cafeteria on site which greatly enhances Starbucks traffic and sales.

OUTSTANDING DEMOGRAPHICS Q 332,000 population within 5 miles Q $65,000 Average Household Income Q 10,000 employees within 1 mile/29,000 within 3

miles

PLANNED PYLON SIGNAGE ON 10 FREEWAY/ ESTIMATED COMPLETION 4TH QUARTER 2017

Q Starbucks will have a panel on the new approximate 100 foot high Freeway Pylon sign facing the 10 Freeway (203,000 VPD). See rendering of pylon sign on page 11

Q 10 Freeway is one of the main corridors serving the entire Inland Empire and LA County

Q Seller will be responsible for their share of the costs attributed to the construction of the sign.KAISER HOSPITAL, FONTANA


INVESTMENT HIGHLIGHTS


AERIAL VIEW


LOCATION MAP


AERIAL VIEW


ANCHOR TENANT PHOTOS

SALES: DRAWN BY:DATE: CONCEPT:

ADDRESS:

LOCATION:

CLIENT:REVISIONS:

PAGE:

OF

OPTION:

CUSTOMER / LANDLORD APPROVAL

SIGNATURE

DATE

3301 S. Susan St.Santa Ana, CA 92704(714) 540-5454 PHONE (714) 540-5959 FAX 11-23-15

MILAN CAPITAL

17284 SLOVER AVE

FONTANA, CA.

8525 DC TB7

17 10-12-16 TB

8 10-14-16 TB

PROPOSED ELEVATION

SCALE: PROPORTIONATE A

ASCALE: 3/16” = 1’-0”

NEW DOUBLE FACED PYLON SIGN WITH CHANNEL LETTER GRAPHICS

ONE (1) SET REQUIRED

TENANT NAMES TO BE5” DEEP CHANNELLETTER TENANT NAMESWITH INTERNAL LED ILLUMINATION

.125 ALUMINUM POLE COVERSPAINTED TO MATCH (VERIFY) WITHPAINTED CROSSHATCH PATTERNREVEAL LINES

.125 ALUMINUM SKINNED CORNICE WITH LITE TEX-COTE FINISH

8'-0"

5" CHANNEL LETTER

8'-0"

NON-ILLUMINATED ALUMINUM CABINET SIGN WITH VINYL OVERLAYS, MOUNTED TO SQ. TUBE INTOPOLE COVERS

10'-0"

19'-6"

4'-9"

8'-0"

8'-10"

2'-0"

9'-8"2'-0"

2'-0"

2'-0"

4"

1"

4"

4"

8'-0"

98'-8"

40'-0"

.090 ALUMINUM SKINNED CORNICE WITH LITE TEX-COTE FINISH

PLEX FACED CHANNEL LETTERWHITE ACRYLIC FACE, BRONZE TRIM CAPAND 5” DEEP RETURNS, WHITE LED’STO THRU FACE ILLUMINATE

8'-1"

PLEX FACED CHANNEL LETTERWHITE ACRYLIC FACE WITH DUALAPPLIED VINYL OVERLAYS TO SHOW BLACKDURING DAY, WHITE AT NIGHT, BRONZE TRIM CAP AND 5” DEEP RETURNS, WHITE LED’S TO THRU FACE ILLUMINATE

T E N A N T

.125 ALUMINUM PANELSPAINTED TO MATCH (VERIFY)

ALUMINUM

PAINT INTERIOR OF LETTER WHITE

LED ILLUMINATION

ACRYLIC FACE

TRIM CAP

DRAIN HOLE

5"METAL SCREW

AC INPUT: 100-240VAC DC OUTPUT: 60 WATTS - 12V / 5A

POWER UNIT: SLOAN LED

PRIMARY ELECTRICALSOURCE ½" CONDUIT

½" CONDUIT

CHANNEL LETTER DETAIL

PROGECT WILL COMPLY WITH FOLLOWING BUILDING CODES AND ASSOCIATED CITY OF FONTANA AMENDMENTS:

2013 CALIFORNIA BUILDING CODE (CBC)

2013 CALIFORNIA ELECTRICAL CODE (CEC)

2013 CALIFORNIA FIRE CODE (CFC)

2013 CALIFORNIA BUILDING ENERGY EFFICIENCY STANDARDS (CBEES)


PLANNED FREEWAY PYLON SIGN


AERIAL VIEW

N

Slover Avenue

San Bernardino Freeway

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On Ramp

Off Ramp

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Starbucksw/Drive Thru

SLOVER AVE.

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Developed By:VALUEROCK REALTY PARTNERS INC.

SITE PLAN

A1.1

LOADING

10SITE PLAN

NORTH

PROJECT INFORMATION

SITE PLAN NOT TO SCALE


SITE PLAN

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Pricing Analysis

STARBUCKS

Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. With its subsidiaries, Starbucks operates in multiple segments including: Americas, China/ Asia Pacific, Europe, Middle East, and Africa. The company offers a variety of products such as coffee and tea beverages, packaged roasted whole bean and ground coffees, single -serve and ready-to-drink coffee, juices, as well as an assortment of foods and snacks. Starbucks licenses its trademarks through licensed stores and offers its producks under the Starbucks, Teavana, Tazo, Seattles Best Coffee, Evolution Fresh, La Boulange, Ethos, Frappuccino, and Starbucks Doubleshot brands. As of November 3, 2016 the company operated 25,085 stores worldwide. Starbucks was founded in 1971 and is headquartered in Seattle, Washington.

Company Type: Public: (NASDAQ: SBUX)2017 Employees: 254,0002017 Net Income: 2.81 Billion2017 Equity: 5.88 BillionFiscal Year End: October

2017 Revenue: 21.31 Billion2017 Assets: 14.32 BillionS&P Ranking: A Website: www.starbucks.com

Annual$/SF

2,500 $10,833 $4.33 $130,000 $52.00 Aug-2022 10% $11,917 $4.77 $143,000 $57.20 NNN 8/1/2017 7/31/2027

MonthlyRent$/SF

Current Monthly

Rent

CAM Recovery

Type

LeaseStart

LeaseExpires

CurrentAnnual

Rent

AnnualRent$/SF

IncreaseDate Increase Monthly

RentMonthly

$/SFAnnual

RentLease Options

Opt 1: $157,300 / yrOpt 2: 173,030 / yr

Opt 3: $190,333 / yrOpt 4: $209,366.30 / yr

Size (SF)Tenant

Starbucks 4 (5-Year)

Rental Increases

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness.

PRICING ANALYSIS · 15

RENT ROLL

TENANT SYNOPSIS

Financial Information Lease Type: NNNPrice: $3,470,000

Property SpecificationsRentable Area: 2,500 SFLand Area: 29,263 SFYear Built: 2017Address: 17142 Slover Avenue

Fontana, CAAPN: 0254-221-61Tenant: Starbucks

Estimated Operating Information In-Place Aug-2022

Gross Potential Rent $130,000 $143,000Plus Recapture NNN NNN

Effective Gross Income $130,000 $143,000Less Expenses (NNN) (NNN)

Net Operating Income $130,000 $143,000

Cap Rate: 3.75% 4.12%

Tenant reimburses for taxes, insurance, CAM, and HVAC. Landlord is responsible for roof and structure. New roof warranty in place.

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness.


TRANSACTION SUMMARY

Area Overview

THE CITY OF FONTANA

Fontana is the second largest city in San Bernardino County, and the 20th largest in the State of California. The city had a 2015 estimated population of 207,460 residents according to U.S. Census Bureau. Nestled against the San Bernardino Mountains, Fontana is a modern city that offers its residents and visitors a wealth of community activities, combined with a thriving local economy and central and easy access to major business centers.

Fontana’s low crime rate, affordable housing, diversity, and below average unemployment rate has made the city one of the fastest growing in California and a trendsetter in San Bernardino County. Despite the city’s rapid growth, Fontana still maintains a hometown atmosphere. Temperate southern California weather allows the City to host festivals, parades and walks/races throughout the year (including the Fontana Days Half Marathon, considered the fastest half-marathon course in the world).

Fontana is particularly proud of its numerous cultural, sporting, and recreational opportunities, including those offered by Center Stage Theater, the Art Depot, the Auto Club Speedway, 59 sports fields, 36 parks, Pacific Electric

Trail, highly acclaimed sports and recreation facilities, and the state-of-the-art Lewis Library and Technology Center. The Center is an iconic landmark within the City – offering the largest collection and library space in all of San Bernardino County, as well as hundreds of computer work stations, a career center, literacy center, homework clubs and tutoring, meeting rooms, and a large auditorium.

STRATEGIC LOCATION:

Industrial and trucking-based industries continue to prosper in Fontana, due to the City’s location at the crossroads of major trade routes (Interstates 10, 15, and 210) and the presence of the Union Pacific Railroad. The City is also home to many large retailers and small businesses. The Fontana Metrolink station provides a low-stress commuting option for residents working in the Los Angeles metropolitan area.

EDUCATION:

Five school districts serve Fontana’s children, offering a variety of educational opportunities. Chaffey Community College and Westech College also maintain campuses for approximately 5,000 students in the core of Fontana, offering a multitude of general education and career advancement courses.

ECONOMY:

Fontana transformed from a once rural farming community of the early 1900s to a bustling manufacturing center, thanks to Henry J. Kaiser’s steel mill operations during World War II. His legacy lives on at the Fontana Kaiser Permanente Facility, which now employs more than 5,000 people.

Fontana’s current economy is driven largely by industrial uses, particularly trucking-based industries. The city is home to several truck dealerships and other industrial equipment sales centers. Much like its neighbors, Ontario and Rancho Cucamonga, many product distribution centers call the city home. Fontana is also home to several small manufacturers of building materials and other locally used products, such as small auto dealerships and salvage yards. Fontana’s economy has also heavily encouraged the planning, developing and construction of new housing developments. Fontana also has numerous local shopping centers, such as the Summit Heights Gateway, Falcon Ridge Town Center and Palm Court in the southern section. The city also features commercial strip zoning along several of its major avenues and boulevards, such as the “Miracle Mile.” The official Fontana Auto Center is part of that zone, with two major dealerships located in the area. Perhaps the


AREA OVERVIEW

city’s largest economic contributor, however, is the Auto Club Speedway. Although not located within the city limits, the speedway brings tens of thousands of racing fans to the city each year, which can be a major boon for local restaurants, motels, hotels and service stations.

THE FONTANA AUTO CENTER:

Located along the south side of 210 Freeway between Sierra Avenue and Citrus Avenue, this large multi-acre development area has been zoned specifically for automotive sales and will accommodate as many as 12 dealerships, bringing together some of the finest automotive facilities in the Inland Empire.

Fontana Nissan, Rotolo Chevrolet and Rock Honda constructed new luxury facilities within the auto center and Valley KIA recently relocated to the Auto Center in the spring of 2016.

The City of Fontana has received interest from a variety of brokers working on behalf of auto dealers looking to relocate within the new Fontana Auto Center. The entire Auto Center project is dealer driven with individual dealers negotiating and buying their own property. To assist in advertising for the Auto Center, the City has constructed a state-of-the-art 65 foot freeway message center sign with a large full color digital display located adjacent to the 210 Freeway.

COUNTY OF SAN BERNARDINO

Located at the heart of Southern California, an economy of 22 million people, the County of San Bernardino is the largest county in the United States. Its vast borders stretch from the greater Los Angeles area to the Nevada border and the Colorado River encompassing a total

area of 20,160 square miles. Comprised of 24 cities, the County of San Bernardino encompasses more than two million residents with a workforce exceeding 900,000. Its assets include an innovation corridor of close to two dozen colleges and universities supporting a strong, diverse workforce along with an unparalleled collection of roadways, runways and railways that lead to regional, national and international business centers. One of its transportation assets is the Ontario International Airport featuring the western hub for UPS.

STRATEGIC LOCATION:

The County of San Bernardino has a vibrant economy on a local, national, and global level. The County’s infrastructure and transportation assets provide unrivaled access to lucrative consumer and business markets. The region is the nation’s leading logistics, warehouse, and distribution market for a multitude of Fortune 500 firms thanks to a location of approximately 40 miles from the seaports of Los Angeles/Long Beach, which are known as the nation’s busiest in the world.

The County and its businesses also benefit from three large airports with spare capacity and available space nearby (ONT, SBD, and VCV). LA/Ontario International Airport (ONT) is a medium-hub, full-service airport with commercial passenger service to major U.S. cities. ONT is also a major cargo airport and serves as the UPS West Coast air hub.

The busiest rail corridors in the U.S. run through the County. Union Pacific and BNSF rail lines connect the ports of Los Angeles/ Long Beach with designation east of the Rockies providing even more reason that the County is a great location for U.S. regional distribution centers.

Businesses also benefits from a strategic network of roadways that provide important links to business centers across the country. The interstate highways (I-10, I-15, and I-40) are powerful corridors for business and good movement. This infrastructure asset makes the County a perfect location for a western U.S. regional distribution center for national brands.

MAJOR EMPLOYERS # OF EMPLOYEES Q Arrowhead Regional Medical Center, Colton 18,000 Q Stater Bros. Markets, San Bernardino 18,000 Q County Of San Bernardino, San Bernardino 17,395 Q San Bernardino City Unified School District 8,574 Q Ontario International Airport, Ontario 7,510 Q Kaiser Medical Center, Fontana 5,682 Q Loma Linda University Medical Center, Loma Linda

4,676 Q Fontana Unified School District, Fontana 3,953 Q Loma Linda University, Loma Linda 3,906 Q San Manuel Band Of Mission Indians 3,261


AREA OVERVIEW (CONT.)

DESCRIPTION (WWW.ROL3.SITESUSA.COM) 5 MILE3 MILE1 MILE

2017 Estimated Population 12,344 136,396 332,926

2022 Projected Population 12,640 140,297 343,898

2010 Census Population 10,936 130,279 315,524

2000 Census Population 6,787 109,442 268,251

Projected Annual Growth 2017 to 2022 0.5% 0.6% 0.7%

Historical Annual Growth 2000 to 2017 4.8% 1.4% 1.4%

2017 Median Age 30.4 29.1 29.5

2017 Estimated Households 3,289 33,461 82,248

2022 Projected Households 3,382 34,540 85,126

2010 Census Households 2,874 31,361 76,658

2000 Census Households 2,128 28,791 69,770

Projected Annual Growth 2017 to 2022 0.6% 0.6% 0.7%

Historical Annual Growth 2000 to 2017 3.2% 1.0% 1.1%

2017 Estimated White 46.6% 47.5% 46.4%

2017 Estimated Black or African American 7.5% 6.7% 8.1%

2017 Estimated Asian or Pacific Islander 5.8% 3.3% 3.9%

2017 Estimated American Indian or Native Alaskan 1.1% 1.1% 1.1%

2017 Estimated Other Races 39.0% 41.3% 40.5%

2017 Estimated Hispanic 72.4% 79.0% 76.2%

76,71429,19010,0392017 Estimated Total Employees

$65,528

2017 Estimated Total Businesses 969 2,853 6,740

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2017 Estimated Average Household Income $66,926 $61,927

©2017, Sites USA, Chandler, Arizona, 480-491-1112 page 1 of 1 Demographic Source: Applied Geographic Solutions 04/2017, TIGER Geography


DEMOGRAPHICS

www. f a r i s l e e . c om

starbucks at palm court power center€¦ · starbucks at palm court power center 17142 slover...

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