trader joe’s - - matthews real estate investment services · 1440 s voss rd, houston, tx 77057...
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™1440 S VOSS RD, HOUSTON, TX 77057
TRADER JOE’S - 15 YEAR GROUND LEASE
OFFERING MEMORANDUM
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CONFIDENTIALITY & DISCLAIMER STATEMENT
This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Trader Joe’s located at 1440 S Voss Rd , Houston, TX 77057 (“Property”) . I t has been prepared by Matthews Retai l Advisors . This Offer ing Memorandum 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 Offer ing Memorandum 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 completweness of th is Offer ing Memorandum 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 Offer ing Memorandum for the Property, you agree:
1 . The Offer ing Memorandum 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 Offer ing Memorandum 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 Offer ing Memorandum 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 Offer ing Memorandum.
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 Offer ing Memorandum 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 Offer ing Memorandum.
TABLE OF CONTENTS
04. Execut ive Summary
06. Property Overv iew
09. Lease Abstract
18 . Tenant Overv iew
20. Area Overv iew
22. Demographics
1440 S VOSS RD HOUSTON, TX 77057
TRADER JOE’S
Mark CohenBroker of Record
License No. 447509
™
Aron ClineVP & Sr. Director
License No. 01904371O 949.432.4509M [email protected]
EXECUTIVE SUMMARY
4 I Matthews Retail Advisors
Aron Cline and Matthews Retail Advisors are pleased to exclusively offer
for sale to qualified investors a prime trophy location net leased organic
grocery store opportunity located within close proximity to Downtown
Houston and Uptown Houston. The subject property is a ground Lease
(Land Fee Simple Ownership) with recent high quality construction
leased to highly desirable tenant Trader Joe’s. The building is not
included in the sale but will revert back to the land owner upon expiration.
The immediate trade area has incredibly high barriers to entry making it
very difficult for tenants to relocate or for new construction. Trader Joe’s
is a privately owned company with over 460 locations throughout the
country but has very strong brand recognition nationwide and has larger
profit margins than traditional grocery stores. Trader Joe’s has
approximately 11.3 years remaining on a 15-year lease with CPI increases
every 5 years that are not to exceed 12%. The subject property is
conveniently located to serve the affluent Uptown Houston area,
including Tanglewood; The Memorial Villages, which include Spring
Valley Village, Piney Point Village, Bunker Hill Village, Hedwig Village,
Hilshire Village and Hunters Creek Village; and the Woodlake/Briar
Meadow and Briargrove Communities.
Investment Overview
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Investment Highlights
• Trophy Location Net Lease Organic Grocer – incredibly high barrier to entry
• Long Term Ground Lease providing long term passive income and security – Trader Joe’s has approximately 11.3 years remaining on primary term
• Rare 10 Year Renewal Options providing better financing or refinancing scenarios in the future; Tenant has Three (3), Ten (10) Year Options to renew with increases
• Excellent location – Subject Property is located at the intersection of San Felipe Street and Voss Road, which has ±40,000 VPD and along the main retail corridor
• Across the street from Woodway Collection, a Whole Foods anchored center with national tenants such as Soulcycle, Francesca’s Collections, Chase Bank, Carrabba’s, amongst others
• Attractive CPI rental increases capped at 12% every 5 years during primary term and (including options) – Strong hedge against inflation
• Located in a growing area of upper income households: Average Household income within a 5-mile radius is $100,257
• Over 18,851 people within a 1-mile radius and an Average Household Income of $117,125
• Over 192,093 people within a 3-mile radius and an Average Household Income of $101,544
• Over 480,996 people within a 5-mile radius and an Average Household Income of $100,257
• Other dominant tenants in this trade area include: Whole Foods, HEB, Kroger, CVS, Walgreens, Pei Wei, Starbucks, Chase, Five Guys, Wells Fargo, 24 Hour Fitness, Mod Pizza, Zoe’s Kitchen, Comerica bank, Whataburger, amongst many others
• Net leased Trader Joe’s ground lease with no management responsibilities – Absolute NNN true “coupon clipper”
• Approximately 11.3 years of guaranteed income with an additional 30 years of potential income upon tenant renewing options
• Trader Joe’s is one of America’s favorite grocery stores that is family owned and has a history of being incredibly popular and successful
Rare Net Lease Organic Grocer - Trader Joe’s Strong Infill Location with Affluent Demographics
Ideal 1031 Exchange Property
Matthews Retail Advisors | 6
Executive Summary
TRADER JOE’S1440 S Voss Rd Houston, TX 77057
List Price .........................................................................................$15,422,000
CAP Rate - Current .................................................................................... 4.15%Gross Leasable Area ..................................................................... ± 15,433 SF Lot Size....................................................................... ± 1.73 Acres (75,357 SF) Year Built ....................................................................................................... 2012
Annualized Operating DataMonthly Rent Annual Rent Increases CAP Rate
Current - 12/31/17 $53,333.33 $640,000 4.15%
* 1/1/18 - 12/31/22 $58,666.66 $704,000 CPI 4.56%
*1/1/23 - 12/31/27 $64,533.33 $774,400 CPI 5.02%
* Option 1 (10 Years) $70,986.66 $851,840 CPI 5.52%
* Option 2 (10 Years) $78,085.33 $937,024 CPI 6.07%
* Option 3 (10 Years) $85,893.86 $1,030,726 CPI 6.68%
*Increases are based on a CPI formula, not to exceed 12%. The rental increases assume the CPI increase will be 10% when every increase takes place.
Tenant Summary
Tenant Trade Name Trader Joe’s
Type of Ownership Fee Simple
Lease Guarantor Corporate
Lease Type Ground Lease NNN
Landlord Responsibility None
Lease Dated 12/06/11
Rent Commencement Date 1/04/13
Lease Expiration Date 12/31/27
Term Remaining on Lease ± 11.3 Years
Increases CPI Increases Every Five (5) Years and in Options
Options Three (3), Ten (10) Year Options
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PROPERTY OVERVIEW
6 I Trader Joe’s
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Physical Description
Property Name Trader Joe’s
Property Address 1440 S Voss Rd
Houston, TX 77057
Assessor’s Parcel Number 1294280010001
Site Description
Number of Stories One
Year Built 2012
Gross Leasable Area (GLA) ± 15,433 SF
Lot Size ± 1.73 Acres (75,359 SF)
Type of Ownership Fee Simple
Parking ± 76 Surface Spaces
Parking Ratio 3.70 : 1,000 SF
Landscaping Professional
Topography Generally Level
9 | Trader Joe’s
Tenant: Trader Joe’s East, Inc., a Massachussetts Corporation
Tenant Address: 800 South Shamrock, Monrovia, CA 91016
Property Address: 1440 South Voss Road, Houston, TX 77057
Date of Lease: December 16, 2011
Rent Commencement: January 4, 2013
Lease Expiration: December 31, 2027
Lease Term: Fifteen (15) Years
Current Rent: $640,000
Rent Increases: CPI Rental Increases Every Five (5) Years during the primary term and in options; Not to Exceed 12%
Renewal Options: Three (3), Ten (10) Year Options
Annual Rent: 1/01/13 - 12/31/171/01/18 - 12/31/221/01/23 - 12/31/27Option 1 (16 - 26)Option 2 (26 - 36)Option 3 (36 - 46)
Rental Increases: Rent shall increase by cumulative CPI (all Urban Consumers, All Items) every Five (5) Years, not to exceed 12% (refer to p. 6, section 3 of lease)
Real Estate Taxes Tenant Shall Pay (refer to p. 11, section 7 of lease)
Insurance (Tenant): Tenant Shall Pay (refer to p. 13-14, section 9 of lease)
Utilities: Tenant Shall Pay (refer to p. 17, section 11 of lease)
Repairs & Maintenance: Tenant, at Tenant’s sole cost and expense, shall maintain the property and all the improvements thereon (refer to p. 19, section 16 of lease)
ROFR: None
Lease Abstract - Trader Joe’s
$8.49/SF ; $640,000 per YearBased on CPI IncreaseBased on CPI IncreaseBased on CPI IncreaseBased on CPI IncreaseBased on CPI Increase
Matthews Retail Advisors | 10
Site Plan
11 | Trader Joe’s
Voss Rd ± 40,0
00
AD
T
Aerial
12 | Trader Joe’s
Matthews Retail Advisors | 13
Regional Map
RARE TRADER JOE’S IN A MAJOR TEXAS
CITY
14 | Trader Joe’s
Tenant Map
Matthews Retail Advisors | 15 15 | Trader Joe’s
Bird’s Eye
S Voss Rd ±
40,000 ADT
16 | Trader Joe’s
Uptown HoustonAerial Tenant Map - North
Matthews Retail Advisors | 17
Uptown Houston3.3 miles from site
Aerial Tenant Map - South
TENANT OVERVIEW
18 | Trader Joe’s
Matthews Retail Advisors | 19
Property Name Trader Joe’s
Property Type Net Leased Grocery Store
Parent Company Trade Name T.A.C.T. HOLDING, INC.
Ownership Private
No. of Locations ±460
No. of Employees (All) ±5,500
Headquartered Monrovia, California
Web Site www.traderjoes.com
Year Founded 1958
Trader Joe’s Stores offer upscale grocery fare such as health foods, organic produce, and nutritional supplements. Trader Joe’s stocks about 4,000 items, 80% of which are its own private labels, including its signature Charles Shaw brand wine that sells for $3 a bottle, soup, snacks, and frozen items. It is the exotic mix of private-label and imported specialty products combined with the hip vibe of their stores that draws shoppers into Trader Joe’s grocery chains.
Started by Joe Coulombe as a Los Angeles convenience store chain in 1958, fast-growing Trader Joe’s is owned by German billionaire Karl Albrecht, who founded the ALDI food chain with his late brother Theo.
Originally a West Coast company, California is Trader Joe’s largest market. In recent years, the company has been aggressively adding stores and expanding into new markets, including Florida, Texas, and upstate New York.
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Houston, Texas
The city of Houston, Texas is located in southeastern part of the state near the Gulf of Mexico. It is the most populous city in Texas and the fourth most populous city in the United States. Alive with energy and rich in diversity, Houston is a dynamic mix of imagination, talent and first-class attractions that makes it a world-class city. It exudes a cosmopolitan and down-home vibe while being nicknamed the “Space City”. With more than 2.2 million residents, Houston attracts visitors and transplants with a wonderful mix of world-class arts, booming business, pro sports and award-winning cuisine.
Understandably, businesses recognize the allure of all Houston has to offer. Twenty-five companies on the Fortune 500 list call the Energy Capital of the World home. Once dominated by oil-related jobs, Houston’s economy has diversified as new, core industries join energy in the regional employment mix.
Aeronautic research is unsurpassed at NASA headquarters and Texas Medical Center remains the largest in the world with 47 highly lauded research and treatment institutions.
# Employer
1 Memorial Hermann Healthcare System
2 Continental Airlines, Inc.
3 The University of Texas M.D. Anderson Cancer Center
4 ExxonMobil
5 Shell Oil Company
6 Kroger Company
7 National Oilwell Varco
8 The Methodist Hospital
9 The University of Texas Medical Branch at Galveston
10 Baylor College of Medicine
AREA OVERVIEW
Top Employers
20 | Trader Joe’s
Discovering HoustonHouston is a city of endless possibilities: Its history has been marked with achievements from the first word heard from the moon to the first artificial heart transplant. Known as the Bayou City for its waterway system, Houston thrives because it is a great place to work and a great place to live.
The Port of Houston, one of the region’s greatest assets, ranks as the nation’s largest port in international tonnage and second in total tonnage. It is an economic engine that produces jobs and economic prosperity for the local Houston and state economy. Throughout its history, whenever the port has grown, Houston has also grown, showing that it has been instrumental in the city’s development as a center of international trade.
Offering a richly-diverse pool of highly-skilled, multilingual, multicultural workers, Houston is an attractive city for businesses. Nearly 25 percent of all adults have completed four years of college, surpassing the national average, while the median age is three years younger than the national average.
Houston’s downtown has been revitalized with numerous clubs, professional sports facilities and musical entertainment that has helped bring nightlife back to downtown. As one of the few U.S. cities with resident companies in theater, ballet, symphony and opera, Houston’s Theater District, located in downtown, offers visitors and residents alike exciting performances all season long. The city also shows its devotion to the arts through a full complement of art museums and critically acclaimed galleries in its Museum District.
Countless cutting-edge chefs have made a home in Houston, where diners eat out more than residents of any other city. There are more than 10,00 restaurants in the Houston area with culinary choices that represent more than 70 countries and American regions. This stylish dining scene only provides a glimpse of Houston’s epicureans offerings, a fact that the city’s culinary masterminds intent to prove with the Houston Culinary Tours.
Matthews Retail Advisors | 21
22 | Trader Joe’s
DemographicsPopulation 1-Mile 3-Mile 5-Mile
2021 Projection 19,985 205,686 511,316
2016 Estimate 18,851 192,093 480,996
2010 Census 17,645 175,743 446,433
2000 Census 16,871 159,657 430,200
Growth 2016 - 2021 6.02% 7.08% 6.30%
Growth 2010 - 2016 6.83% 9.30% 7.74%
Growth 2000 - 2010 4.59% 10.08% 3.77%
Households 1-Mile 3-Mile 5-Mile
2021 Projection 10,376 94,310 215,133
2016 Estimate 9,740 87,757 201,364
2010 Census 9,045 79,866 185,407
2000 Census 9,253 75,563 180,652
Growth 2016 - 2021 6.53% 7.47% 6.84%
Growth 2010 - 2016 7.68% 9.88% 8.61%
Growth 2000 - 2010 -2.25% 5.69% 2.63%
Income 1-Mile 3-Mile 5-Mile
Income < $15,000 7.92% 11.61% 11.67%
Income $15,000 - $24,999 7.92% 11.48% 11.79%
Income $25,000 - $34,999 7.60% 9.39% 10.04%
Income $35,000 - $49,999 13.70% 13.38% 12.96%
Income $50,000 - $74,999 15.31% 15.39% 15.11%
Income $75,000 - $99,999 10.99% 9.43% 9.05%
Income $100,000 - $124,999 7.50% 6.64% 6.50%
Income $125,000 - $149,999 6.12% 4.44% 4.51%
Income $150,000 - $199,999 7.07% 5.02% 5.34%
Income $200,000 - $249,999 3.69% 2.81% 3.03%
Income $250,000 - $499,999 6.81% 5.66% 5.54%
Income $500,000+ 5.35% 4.74% 4.48%
2016 Est. Average Household Income $117,125 $101,544 $100,257
2016 Est. Median Household Income $71,000 $56,718 $55,871
Matthews Retail Advisors | 23
™
Mark CohenBroker of Record
License No. 447509
Aron ClineVP & Sr. Director
License No. 01904371O 949.432.4509M [email protected]
11-2-2015
TYPES OF REAL ESTATE LICENSE HOLDERS: A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker. A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.
A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): Put the interests of the client above all others, including the broker’s own interests; Inform the client of any material information about the property or transaction received by the broker; Answer the client’s questions and present any offer to or counter-offer from the client; and Treat all parties to a real estate transaction honestly and fairly.
A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:
AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent.
AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller’s agent.
AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary:
Must treat all parties to the transaction impartially and fairly; May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and
buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction. Must not, unless specifically authorized in writing to do so by the party, disclose:
ᴑ that the owner will accept a price less than the written asking price;ᴑ that the buyer/tenant will pay a price greater than the price submitted in a written offer; andᴑ any confidential information or any other information that a party specifically instructs the broker in writing not to
disclose, unless required to do so by law.
AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.
TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH: The broker’s duties and responsibilities to you, and your obligations under the representation agreement. Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.
LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.
Information About Brokerage Services Texas law requires all real estate license holders to give the following information about
brokerage services to prospective buyers, tenants, sellers and landlords.
.
Designated Broker of Firm License No. Email Phone
Licensed Supervisor of Sales Agent/Associate
License No. Email Phone
Licensed Broker /Broker Firm Name or Primary Assumed Business Name
License No. Email Phone
Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov
IABS 1-0
Date Buyer/Tenant/Seller/Landlord Initials
Sales Agent/Associate’s Name License No. Email Phone