the ross walgreens shopping center

OFFERING MEMORANDUM

THE ROSS WALGREENS SHOPPING CENTER234 EAST BELL ROAD | PHOENIX , AR IZONA 85022

AFFILIATED BUSINESS DISCLOSURE

Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of 234 East Bell Road, Phoenix (the ”Property”) by ‘Ownership’ (the “Seller”).

This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation December 15, 2018 of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser.

Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agent each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.

This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.

EXECUTIVE SUMMARY01

PROPERTY DESCRIPTION02

03

AREA OVERVIEW

04

TENANT PROFILES

05

FINANCIAL ANALYSIS

TABLE OF CONTENTS

TIM WESTFALL

Managing Director+1 602 952 [email protected]

DAVID GUIDO


RYAN MORONEY

Associate Director+1 602 952 [email protected]

EXCLUSIVELY LISTED BY:

THE OFFERINGNewmark Knight Frank (NKF), as exclusive advisor, is pleased to present the opportunity to acquire the The Ross Walgreens Shopping Center (the Property), a 94,600-square-foot retail project in Phoenix, Arizona.

This single-story two-building Property is located in an extremely dense North Phoenix submarket and is currently 100% leased. Built in 1995, the Property is situated on 2 parcels totaling ±7.92 acres, with ample surface parking and tremendous visibility from Phoenix's busiest arterial, Bell Road.

The Property offers an opportunity for an investor to capitalize on the increasing market fundamentals fueled by the continued development in the submarket. Located just 19 miles north of Sky Harbor International Airport, the site offers exceptional regional access with close proximity to three of Phoenix's most important arterials, the Loop 101 Freeway, State Route 51 and Interstate 17.

NOT A PART

01

EXECUTIVE SUMMARY

3 THE ROSS WALGREENS SHOPPING CENTER

OFFERING PRICE $13,850,000

TENANT LEASED SF % OF PROPERTY CREDIT RATING LEASE EXPIRATIONS

Walgreens 17,486 19% National 12/31/2020

Ross Stores 27,206 29% National 1/31/2021

Big Lots 28,552 30% National 1/31/2022

Beall's Outlet 21,137 22% National 1/31/2025

PROPERTY SUMMARY OFFERING SUMMARY

MAJOR TENANT SUMMARY

THE ROSS WALGREENS SHOPPING CENTER234 EAST BELL ROAD, PHOENIX 85022

94,600 GLA Total Building Area

1995Year Built

345,082 SFLand Area

208-11-001C208-11-001FAPNs

4/1,000Overall Parking Ratio

100%Leased

NNNLease Structure

NOT A PART

EXECUTIVE SUMMARY

THE ROSS WALGREENS SHOPPING CENTER 4

INVESTMENT OPPORTUNITY

The Property provides tenants a stable environment with close access to multiple major freeways, significant local thoroughfares and extensive amenities. Opportunities to acquire superior quality retail projects of this nature are highly sought after.

FINANCIAL SUMMARY

100% Leased

$13,850,000Price

$833,047In-Place NOI

6.0%In-Place Cap Rate

$146Price Per Building SF

INVESTMENT HIGHLIGHTS

• Currently 100% Occupied Stable Cash Flow Asset

• Outstanding National Credit Tenant Mix - Ross, Walgreens, Big Lots and Beall's Outlet

• Income Grows 11% within 2 Years and 22% within 3 Years

• Best in Class Credit Ratings

• Consistently ranked as #3 Top-Producing Walgreens in Arizona

• Developed and Last Sold in 1995 - FIRST TIME OFFERED FOR SALE SINCE!

• Generational Acquisition Opportunity

• High Ownership Barrier to Entry Along 7th Street Corridor

• Below Market Rents - 50% of Current Market Rents

• High Demand/Extremely Low Vacancy Submarket

• Irreplaceable Location - 7th Street & Bell is a Regional Intersection$40.38Price Per Land SF

5 PROPERTY NAME

ASSET OVERVIEW

1995Year Built

100%Current

Occupancy

94,600 SFGLA

4/1,000Parking Ratio

48,000VPD on Frontage

75,000VPD NearbyIntersection

TARGET & SPROUTS

Neighbors

2015RefurbishedLandscaping

2011-12New Roofs &

HVAC

2017Repaved

Parking Lot

This single-story two-building Property is located in an extremely dense North Phoenix submarket and is currently 100% leased. Built in 1995, the Property is situated on 2 parcels totaling ±7.92 acres, with ample surface parking and tremendous visibility from Phoenix's busiest arterial, Bell Road.

The Property offers an opportunity for an investor to capitalize on the increasing market fundamentals fueled by the continued development in the submarket.

Located just 19 miles north of Sky Harbor International Airport, the site offers exceptional regional access with close proximity to three of Phoenix's most important arterials, the Loop 101 Freeway, State Route 51 and Interstate 17.

The Property benefits from excellent visibility, ingress and egress, ample parking and large monumen sign. The same management company has taken care of the Property and its Tenants since it was constructed in 1995.

02

PROPERTYDESCRIPTION


SITE PLANPROPERTY

DESCRIPTION


BELL ROAD ±48,000 VPD

NOT A PART

208-11-001C 208-11-001F


#3 PERFORMING WALGREENS IN THE STATE OF ARIZONA


Suites 204

Lease Expiration 12/31/2020

SF Leased 17,486

% of Total SF 18.5%

Credit Rating BBB

Ticker Symbol WBA

Website www.walgreens.com

Suites 220


SF Leased 27,200

% of Total SF 28.8%

Credit Rating A-

Ticker Symbol ROST

Website www.rossstores.com

The Walgreen Company (or simply Walgreens) is an American company that operates as the second-largest pharmacy store chain in the United States behind CVS Health. It specializes in filling prescriptions, health and wellness products, health information, and photo services. As of August 31, 2016, the company operated 8,175 stores in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. It was founded in Chicago, Illinois, in 1901. The Walgreens headquarters office is in the Chicago suburb of Deerfield, Illinois.

Ross Stores, Inc. is an American chain of off-price department stores headquartered in Dublin, California, officially operating under the brandname, Ross Dress for Less. It is the largest off-priced retailer in the U.S.

As of August 2015, Ross operates 1,412 stores in 37 U.S. states, the District of Columbia and Guam, covering much of the country, but with no presence in New England, New York, northern New Jersey, Alaska, and areas of the Midwest.

03

TENANT PROFILES

TENANT OVERVIEW


Suite 210


SF Leased 21,137

% of Total SF 22.4%

Credit Rating Private

Ticker Symbol N/A

Website www.beallsoutlet.com

Suite 230


SF Leased 28,552

% of Total SF 30.3%

Credit Rating BBB

Ticker Symbol BIG

Website www.biglots.com

Bealls, Inc. is a United States retail corporation of 500 stores founded in 1915 in Bradenton, Florida. Bealls consists of three chains, Bealls Department Stores, Bealls Outlet Stores, and Bunulu. Bealls Inc. serves as the parent corporation. The group is not affiliated with Bealls Texas, although the two overlap in some markets. Where there is overlap, Bealls Outlet operates as Burkes Outlet. The CEO of Bealls Inc. is Steve Knopik. Bealls (FL) Department Stores, Inc. and Bealls Outlet Stores, Inc. are headed by Presidents Dan Love and Dave Alves, respectively. They are still owned by the founding family, all headquartered in Bradenton.

Headquartered in Columbus, Ohio, Big Lots, Inc. is a community retailer operating more than 1,400 Big Lots stores in 47 states, dedicated to friendly service, trustworthy value, and affordable solutions in every season and category – furniture, food, décor, and more. The stock is traded on the New York Stock Exchange under the symbol BIG.

TENANT PROFILES


BUILDING ADDRESS 234 East Bell Road, Phoenix, Arizona 85022

PRICE $13,850,000

CAP RATE 6.0%

NOI / ANNUALLY $833,047 (as of 12/17/2018)

TOTAL BUILDING AREA ±94,600

LAND AREA ±7.92 AC

YEAR BUILT 1994-95

FINANCING Free & Clear

FINANCIAL SUMMARY

04

FINANCIALSUMMARY


FINANCIALSUMMARY

Base Rent $858,872

CAM & Insurance Reimbursement $279,959 (91%)

Total Revenue: $1,138,831Estimated Operating Expenses: Annually

Maintenance Personnel $24,460

Pressure Washing $6,640

Trash Collection $200

Repair & Maintenance $8,435

Signage $200

Parking Lot $17,460

Pest Control $576

Landscaping $19,290

Security $5,460

Fire Protection $645Electricity $10,158Water/Sewer $13,671Management Fees $25,000Miscellaneous $500Real Estate Taxes $151,734Insurance $20,955Total Operating Expenses: $305,384 $833,047 NOI

INCOME/EXPENSE

SUITETENANT

NAMERSF

RENT ACTUAL (MONTHLY)

RENT ACTUAL (ANNUAL)

PERCENTAGE RENT

BREAK POINT

RENT PSF (PSF/YR)

RENT PSF (PSF/MO)

PRORATA SHARE

LEASE FROM

LEASE EXP

CAM INSPROPERTY

TAXESCAM

TOTAL2018

CAM/SFNEXT

INCREASE

220 Ross 27,200 $17,566.67 $210,800 2.0% Annual Rent $7.75 $0.65 28.80% 09/01/95 01/31/21 $33,334 $2,454 $42,824 $78,612 $2.89 at option $11.25 PSF

204 Walgreens 17,486 $19,671.75 $236,061 2.0% 1.0% 0.5%

$262,500 cap

$13.50 $1.13 18.50% 07/24/95 08/31/20 $20,710 $4,764 $28,049 $53,523 $3.06 N/A

230 Big Lots! 28,552 $18,481.50 $221,778 1.5% $13,775,000 $7.77 $0.65 30.30% 08/12/94 01/31/22 $31,995 $3,754 $45,793 $81,502 $2.85 at option $10.93 PSF

210 Beall's Outlet 21,137 $15,852.75 $190,233 $3,804,660 $9.00 $0.75 22.40% 03/01/14 01/31/25 $26,631 $5,790 $33,901 $66,322 $3.14 03/01/22 $10.00 PSF

Total SF 94,375 $71,572.67 $858,872 $9.10 $0.76

RENT ROLL

Options/Notes: One 5-year option remaining: renewed 3 previous options

Options/Notes: Seven 5-year options beginning 9/1/2020

Options/Notes: Two 5-year options remaining: Renewed 3 previous options. Relocated/upsized within center in October 2011.

Options/Notes: Two 5-year options. One time conditional termination right on 8/30/21 with 6 months advance notice and a $50,000 penalty.


PROPERTY SQUAREFEET

ANNUALRENT

RENT PERSQUARE FOOT

SUBJECT PROPERTY:

ROSS 27,206 $210,800 $7.75

BIG LOTS 28,552 $221,778 $7.77

BEALL’S OUTLET 21,137 $190,233 $9.00

COMPARABLES:1. MICHAEL’S*

731 East Bell Road Phoenix

24,400 $308,172 $12.63

MARSHALL’S* 731 East Bell Road Phoenix

24,400 $307,928 $12.62

*Former Fr y’s demised in half and backfilled

2. ROSS 3202 East Greenway Road Phoenix

27,000 $405,000 $15.00

3. CRUNCH FITNESS1818 East Bell Road Phoenix

23,868 $298,350 $12.50

4. ROSS SWC 32nd Street & Indian School Road Phoenix

30,190 $392,470 $13.00

5. OFFICEMAX 245 East Bell Road Phoenix

19,651 $314,416 $16.00

6. SMART & FINAL 1450 North 43rd Avenue Phoenix

20,844 $424,544 $20.36

LEASE COMPARABLES


PROPERTY SQUAREFEET

ANNUALRENT

RENT PERSQUARE FOOT

SUBJECT PROPERTY:

ROSS 27,206 $210,800 $7.75

BIG LOTS 28,552 $221,778 $7.77

BEALL’S OUTLET 21,137 $190,233 $9.00

WALGREENS AVERAGE LEASE RATE COMPARABLE:

WALGREENS 204 East Bell Road Phoenix

17,486 $236,061 $13.50

Averages Calculated of 103 Walgreens Sold in Last 12 Months: 15,331 $414,845 $27.00

LEASE COMPARABLES


6. Smart & Final

2. Ross1. Michael’s &

Marshall’s

3. Crunch Fitness

4. Ross

COMPARABLES:

1. MICHAEL’S* 731 East Bell Road Phoenix

MARSHALL’S* 731 East Bell Road Phoenix

*Former Fr y’s demised in half and backfilled

2. ROSS 3202 East Greenway Road Phoenix

3. CRUNCH FITNESS 1818 East Bell Road Phoenix

4. ROSS SWC 32nd Street & Indian School Road Phoenix

5. OFFICE MA X 245 East Bell Road Phoenix

6. SMART & FINAL1450 North 43rd Avenue Phoenix

234 E A S T B E L LPHOENIX | AZ

THE ROSSWALGREENS

SHOPPING CENTER

5. Office Max


QUALITY OF LIFE BY THE NUMBERS5 MILE RADIUSat-a-glance

335,557Population

133,282Households

35.3Median Age

$53,154Median Income

$223,100Median HomePrice

300Residents in Arizona can take advantage of the outdoors thanks to more than 300 days of sunshine

325Improve your golf game at the more than 325 golf courses throughout the region

#1Arizona State University has been ranked the #1 most innovative university in the nation three years in a row

<25Spend more time outdoors, with your family or doing other things you enjoy with a less than 25-minute average commute time

33 public high schools in Arizona are ranked in the top 10 nationally

6The state of Arizona is home to 6 professional sports teams: NFL, MLB, NHL, NBA, WNBA and USL

3 MILE RADIUSat-a-glance

140,347Population

57,540Households

36.9Median Age


1 MILE RADIUSat-a-glance

23,961Population

10,967Households

35.6Median Age


DEMOGRAPHICS

05

AREAOVERVIEW


ARIZONA BILTMORE

DOWNTOWN PHOENIX

CENTRAL CORRIDOR

PHOENIX MOUNTAIN PRESERVE

CHASE FIELD

PLAYArizona BiltmoreThis exclusive resort was built in 1929 and is set on 39 lush acres. Amenities in-clude 8 outdoor pools including a 92-ft waterslide and a swim-up bar, 7 tennis courts, 2 golf courses and 5 dining options along with a fitness center, kids camp and splaygound.

Phoenix Mountain PreserveThis park contains Piestewa Peak, the second highest point in the Phoenix moun-tain and third highest in the city of Phoenix. The Summit Trail is climbed thou-sands of times per week by locals and visitors seeking a great workout, great views, or a family outing.

Central Corridor / Downtown PhoenixJust 10 minutes away is the Central Corridor, a thriving restaurant and arts and culture scene with great access on the light rail. Just 15 minutes away is the heart of Phoenix with museums, major league sports, and an active prerforming arts scene.

QUALITY OF LIFE BY THE NUMBERS

AREAOVERVIEW


CENTRAL CORRIDOR

WORK

5,785BUSINESSES

76,349EMPLOYEES20%

FINANCE, INSURANCE & REAL ESTATE

INDUSTRY

50%SERVICE INDUSTRY

(LEGAL, HEALTH, AUTOMOTIVE...)

Easily accessible via Loop 101, Interstate 17 and State Route 51, the 7th Street & Bell Corridor services major employment centers for the city of Phoenix. 7th Street & Bell Road is one of Phoenix's most vital and heavily traffiked stretches of roadway and near major employers including major banks and financial institutions, hi-tech companies, and several major law firms and government agencies. 7th Street Corridor is one of the city's most acclaimed neighborhoods. Top employers for include Honeywell, USAA, Discover Financial Services, American Express, Cigna and ASU.


TIM WESTFALL


DAVID GUIDO


RYAN MORONEY

Associate Director+1 602 952 [email protected]

EXCLUSIVELY LISTED BY:

CORPORATE LICENSE #01355491

Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of [insert building address here] (the ”Property”) by ‘Ownership’ (the “Seller”). The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

the ross walgreens shopping center

Documents