executive summary

EXECUTIVE SUMMARY
2524 MACARTHUR RD | WHITEHALL, PA 18052
PROMINENT POWER CENTER IN THE LEHIGH VALLEY
VALUE-ADD RETAIL OPPORTUNITY
executive summary
executive summary
The Offering
Holliday Fenoglio Fowler, L.P. (“HFF”), is pleased to exclusively offer
MacArthur Towne Centre (the “Property”), a strategically located, 151,418 SF,
94.5% occupied power center. Anchored by American Signature Furniture, JoAnn Fabric, and 2nd & Charles (Books-A-Million), the Property is prominently
located on the highly traversed MacArthur Road (44,000 VPD), the dominant
retail corridor within the Lehigh Valley. The Lehigh Valley is currently one of
the foremost growing economies in Pennsylvania with net new job growth
of 7% from 2010-2014 and a 2015 GDP of $35.4 billion. With a current
occupancy of 94.5% and a roster of anchor tenants paying well below market
rental rates, MacArthur Towne Centre offers the opportunity for investors to
acquire strategically positioned real estate with the ability to increase income
significantly through re-merchandising and repositioning, in one of the most
sought after markets in Pennsylvania.
LOCATION
2524-2590 MacArthur Road
Whitehall, PA 18052
GROSS LEASABLE AREA
151,418
OCCUPANCY 94.5%
SHADOW ANCHORS
(NOT INCLUDED)
Kmart, Lowe’s
LAND AREA
24.0
YEAR BUILT ANCHOR TENANTS
1970
PARKING
792 Spaces 5.23 / 1,000
NOTABLE NATIONAL TENANTS
DEBT
Free & Clear
RETAIL INVESTMENT OPPORTUNITY
3
executive summary
Investment Highlights
HIGH ANCHOR-TO-SHOP RATIO WITH A SUPPORTIVE
NATIONAL TENANT ROSTER AND PROMINENT
SHADOW ANCHORS
MAJOR TENANT SUMMARY
TENANT
AREA
% OF TOTAL
BASE RENT EXPIRATION DATE
American Signature Furniture
48,800
32.23%
$6.00
Jan-21
MacArthur Towne Centre has a high concentration of anchor square
Jo-Ann Fabric
31,000
20.47%
$6.65
Sep-17
footage, with its three largest anchors, American Signature Furniture,
2nd & Charles
19,937
13.17%
$8.00
Jan-20
Jo-Ann Fabric, and 2nd & Charles (brand of Books-A-Million),
Party City
10,000
6.60%
$16.00
Jun-20
accounting for over 65% of the Property’s square footage. With the
David’s Bridal
9,000
5.94%
$16.00
Apr-20
$12.00
Dec-18
support of the nationally recognized brands of Party City, Aaron’s
and David’s Bridal, the collective square footage of the anchors and
junior anchors totals over 83%. The Property also shadow anchors
and shares access from MacArthur Road with Lowe’s and Kmart,
two national retailers which drive significant traffic to the Property.
Aaron’s
Occupied Inline
TOTAL OCCUPIED
Available
Grand Total
Shadow Anchors
PRIME OPPORTUNITY TO RE-MERCHANDISE THE PROPERTY, INCREASING
RENTAL RATES, TENANCY, AND CREDIT PROFILE
MacArthur Towne Centre offers an opportunity to mark-to-market the rental rates on the
anchor spaces while simultaneously improving the credit profile of the Property. American
Signature Furniture, Jo-Ann, and 2nd & Charles are currently paying well below the rental
rates for comparable real estate with Class A corporate tenancy in the market, by a delta
of $4.07/SF - $7.99/SF depending on the space. The current successful operations at the
Property which is 94.5% occupied, and the previous tenancy of GIANT in the American
Signature Space, before moving across the street to MacArthur Commons in 2002, speaks to
the potential upside of the location and supreme fundamentals of the real estate.
143,118
94.5%
8,300
5.48%
151,418
100%
MARK-TO-MARKET ANCHOR RENTAL RATES
Mkt Co-Anchor $
$16.00
$14.64
Mkt Co-Anchor $
$14.64
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$0.00
POWER CENTER | LEHIGH VALLEY, PA
5.28%
10.82%
Kmart, Lowe’s
$2.00
4
8,000
16,381
Mkt Primary Anchors $
$10.07
$7.99
DELTA
DELTA
$4.07
DELTA
$6.00
$6.64
$6.65
$8.00
executive summary
WHITEHALL
COPLAY
MIDDLE SCHOOL
Available
Space
PROPOSED 36,000 SF
LIDL DEVELOPMENT
AR
MAC
THUR
ROAD
145
SC
MACARTHUR
COMMONS
HA
DT
AV
EN
UE
The Property has an ideally positioned available
IDEALLY POSITIONED
AVAILABLE SPACE
OFFERING AN
IMMEDIATE LEASE-UP
OPPORTUNITY
space which is situated between two large
operators in American Signature Furniture and
Kmart. The availability has significant frontage,
ample parking, and a steady flow of consumers
from its location on the site plan. Investors will
have the immediate opportunity to lease this
space and improve income and cash returns.
RETAIL INVESTMENT OPPORTUNITY
5
executive summary
MacArthur Road is the leading retail focal point throughout the Lehigh Valley Market and continues to garner interest from
STRATEGIC POSITIONING
ON A SUCCESSFUL
RETAIL CORRIDOR THAT
ATTRACTS THE MOST
NOTABLE NAMES IN
RETAIL
an impressive and extensive list of national tenants. Anchored by the Lehigh Valley Mall, where the full anchor tenant roster
are strong performers, the stretch of MacArthur Road from Route 22 to Eberhart Road has zero available anchor space and
continues to attract out-of-market tenants, while keeping the most prominent tenants in the market. Most notably, the area
has seen a recent proposal from Lidl, a growing German discount supermarket, proposing a new development just
0.25 miles north of the Property on the corner of MacArthur Road and Eberhart Road. Furthermore, the Walmart just across
the street recently upgraded its presence by developing a new Walmart Supercenter in 2012, increasing its square footage
by nearly 70,000 square feet to 186,000 square feet. The location has also recently attracted Chik-Fil-A (not included), which
is being developed at the main entrance to MacArthur Towne Centre.
LEHIGH VALLEY MALL
22
145
WHITEHALL
SQUARE
22
WHITEHALL MALL
145
SCHADT AVENUE
MA
CA
RT
HU
RR
OA
D
(Under construction,
not included)
(Upgraded to Supercenter in 2012)
MACARTHUR COMMONS
145
‘
MULLIGAN’S FAMILY
GOLF CENTER
PROPOSED 36,000 SF
LIDL DEVELOPMENT
6
POWER CENTER | LEHIGH VALLEY, PA
executive summary
A FOREMOST PENNSYLVANIA ECONOMY WITH SIGNIFICANT JOB GROWTH AND
POISED FOR FUTURE SUCCESS
LIMITED CAPITAL EXPOSURE AND SUPERIOR
REAL ESTATE FUNDAMENTALS
Lehigh Valley is a leading economic marketplace with impressive 2015 GDP of over $35.4 billion, a
Current ownership replaced the full roof systems in 2011
growth of $1 billion dollars over its 2014 GDP of $34.4 billion. From 2015-2020 the Lehigh Valley is
(44,600 SF) and 2013 (115,500 SF). The replacements came
expected to generate 22,150 jobs in addition to the 22,100 new jobs which were added between
with 15-year warranties, and will limit the capital costs above
2010-2014. The Lehigh Valley has seen the highest percentage increase of post-recession job levels
common maintenance over a new owner’s hold period.
of any area in the Pennsylvania. Additionally, downtown Allentown, just 3 miles south of the Property,
The Property has been kept in optimal condition by current
is undergoing a major development period through its tax incentive program, the Neighborhood
ownership and out position competitors with multiple access
Improvement Zone Program (NIZ), which has been responsible for over $1 billion in new development
points on MacArthur Road, an impressive signage package,
since its creation in 2011.
and ample parking field for consumers.
$35.4 Billion
$1 Billion
Lehigh Valley 2015 GDP
Invested in Downtown Allentown
Development since 2011
$1 Billion
7%
Lehigh Valley GDP Growth
2014-2015
Net New Job Growth from 2010-2014 –
22,150 new jobs in the pipeline
W AL NUT P OR T
N A ZA RETH
248
611
B ATH
145
946
33
LAFAYETTE COLLEGE
EASTON HOSPITAL
EA STO N
476
248
22
78
611
309
33
LEHIGH
VALLEY ZOO
378
TREXLER
NATURE
PRESERVE
MORAVIAN COLLEGE
WH I T E H A LL
SACRED HEART HEALTHCARE SYSTEM
22
B E T H L EH EM
PARK
A LLE N T O WN
MUHLENBERG COLLEGE
GOOD SHEPARD REHAB HOSPITAL
145
78
78
100
ST. LUKE’S HOSPITAL
946
LEHIGH VALLEY
INTERNATIONAL
AIRPORT
LEHIGH UNIVERSITY
H EL L ERTO WN
LEHIGH VALLEY HOSPITAL
611
78
476
T REX L E R T OW N
EMMAUS
378
309
© OpenStreetMap contributors
RETAIL INVESTMENT OPPORTUNITY
7
contacts
I NV E S TMENT S ALES
F IN A N C IN G
CHRIS MUNLEY
Managing Director
T 484.532.4207
cmunley@hfflp.com
JOSE CRUZ
Senior Managing Director
T 973.549.2011
jcruz@hfflp.com
KEVIN O’HEARN
Managing Director
T 973.549.2018
kohearn@hfflp.com
MICHAEL DICOSIMO
Senior Real Estate Analyst
T 484.532.4169
mdicosimo@hfflp.com
NEIL CAMPBELL
Associate Director
T 484.532.4176
ncampbell@hfflp.com
HFF Philadelphia
161 Washington Street, Suite 925
Conshohocken, PA 19428
hfflp.com
© 2016 Holliday Fenoglio Fowler, L.P. (“HFF”) a Pennsylvania licensed real estate broker.
HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the
U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement,
advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.
HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF and we make no
representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific
information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria
different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.
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POWER CENTER | LEHIGH VALLEY, PA