Investment Offering Novato Fair Shopping Center, Novato, CA The

Transcription

Investment Offering
The Wald
Team
Novato Fair Shopping Center, Novato, CA
Novato Fair Shopping Center
Introduction
Table of Contents
Disclaimer & Confidentiality Statement.............................................. i
Marketing Team & Marketing Process............................................... ii
I. Investment Overview
IV. Market Analysis
Investment Overview..................................................................1
Financial Highlights....................................................................2
Location Highlights....................................................................2
Property Highlights....................................................................2
Demographic Summary.............................................................2
II. Location
Location Map..............................................................................3
Bay Area Regional Overview......................................................4
Marin County Overview..............................................................5
Novato Overview........................................................................7
III. Property Description
Property Photographs................................................................8
Site Plan & Tenant Roster.........................................................12
Anchor Tenant Profile...............................................................13
National Tenant Profiles...........................................................14
In-Line Tenant Profiles..............................................................20
Parcel Map...............................................................................21
Site Data...................................................................................22
Marin County Retail Overview..................................................23
Local Market Overview & Property Positioning.......................24
Novato Retail & Development Overview..................................25
Novato Shopping Center Map.................................................26
Market Area Aerials..................................................................27
Relevant Lease Comparables..................................................30
V. Financial Analysis
Financial Overview...................................................................31
Projected 10-Year Cash Flow...................................................32
Market Leasing Assumptions & Expense Recoveries
33
First Term Lease Expirations....................................................34
Rent Roll...................................................................................35
Introduction
Disclaimer & Confidentiality Statement
This confidential Offering Memorandum (“Memorandum”) is being
delivered subject to the terms of the Confidentiality and Registration
Agreement signed by you (“Confidentiality Agreement”) and
constitutes part of the confidential property information (“Confidential
Information”). It is being given to you for the sole purpose of
evaluating the possible acquisition of Novato Fair Shopping Center,
Novato, California (“Property”) and is not to be used for any other
purpose or made available to any other party without the prior
written consent of Kimco Realty Corporation (“Owner”) or NAI BT
Commercial Real Estate (“Broker”).
This Memorandum was prepared by Broker based on information
supplied by Owner and Broker. It contains selected information
about the Property and the real estate market, but does not
contain all the information necessary to evaluate the acquisition
of the Property. The financial projections contained herein (or in
any other Confidential Information) are for general reference only.
The projections are based on assumptions relating to the general
economy and local competition, among other factors. Accordingly,
actual results may vary materially from such projections. Various
documents have been summarized herein to facilitate your review;
these summaries are not intended to be a comprehensive statement
of the terms or legal analysis of such documents.
Owner expressly reserves the right, at its sole discretion, to reject
any offer to purchase the Property or to terminate any negotiations
with any party at any time with or without written notice. Owner
shall have no legal commitment or obligation to any prospective
purchaser unless and until a written sale agreement has been fully
executed, delivered and approved by Owner and any conditions to
Owner’s obligations thereunder have been satisfied or waived.
Owner has retained Broker as its exclusive broker and will be
responsible for any commission due to Broker in connection with
a sale of the Property pursuant to separate agreement. Broker is
not authorized to make any representation or agreement on behalf
of Owner.
This Memorandum is the property of Owner and Broker and may
be used only by parties approved by Owner or Broker. No portion
of this Memorandum may be copied or otherwise reproduced or
disclosed to anyone except as permitted under the Confidentiality
Agreement.
While the information contained in this Memorandum and any other
Confidential Information is believed to be reliable, neither Broker
nor Owner guarantees its accuracy or completeness. Due to the
foregoing and since the Property will be sold on an “As Is, Where
Is” basis, a prospective purchaser must make its own independent
investigations, projections, and conclusions regarding the
acquisition of the Property without reliance on this Memorandum or
any other Confidential Information. Although additional Confidential
Information, which may include engineering, environmental or other
reports, may be provided to qualified parties as marketing proceeds,
prospective purchasers should seek advice from their own attorneys,
accountants, engineering, environmental, and other experts.
i
Introduction
Marketing Team & Process
Terranomics
201 California Street, Suite 800
San Francisco, CA 94111
Investment Advisors:
Terranomics Retail Services has been authorized to prepare and
distribute the enclosed data for the purpose of soliciting offers to
purchase from interested and qualified parties. You are invited to
review this opportunity and make an offer to purchase based upon
your analysis.
Daniel Wald
Partner - Investments
Asking Price
Dave Nord
Investment Associate
Review Period & Deadline for Offers
415 677 0461
dwald@terranomics.com
The Property is being offered without an asking price. Each investor
should base its offer on the “As Is, Where Is” condition of the
property.
415 677 0460
dnord@terranomics.com
After an initial review period, we will announce a deadline for offers
and expressions of interest. At that point, the Owner will selectively
distribute additional data to interested parties who have submitted
compelling, qualified proposals by the bid deadline.
Steve Holm
Investment Associate
Buyer Negotiation & Selection
415 568 3403
sholm@terranomics.com
Market Advisors:
Mark Koenig
Senior Vice President
415 451 2404
mkoenig@terranomics.com
John Schaefer
Vice President
If your offer results in the Owner choosing to open negotiations with
you, you may be asked to provide financial references. The eventual
Buyer will be chosen based on an assessment of price, terms, and a
demonstrated ability to close the transaction.
Due Diligence Period
With an executed purchase and sale agreement, combined with
an initial deposit, the selected Buyer will be afforded a fixed period
of time to perform its due diligence on the property. A significant
additional deposit will be required with the Buyer’s removal of
contingencies upon the end of the due diligence period.
415 451 2407
jschaefer@terranomics.com
ii
Investment Overview
Investment Overview
Novato Fair is an irreplaceable grocery-anchored neighborhoon
shopping center located in Marin County, one the San Francisco
Bay Area’s most desireable, protected, and affluent residential
areas. This institutional-quality retail asset is anchored by northern
California’s dominant grocer, Safeway. This location has proven to
be one of Safeway’s top performing northern California stores by
generating substantial store sales (call broker for figures). Additional
anchors include RiteAid and Big Lots. These credit anchors tenants
are joined by such in-line and pad tenants as Jack in the Box, KFC,
24-hour Fitness, Radio Shack, and many others. The Property has
virtually complete protection from the potential development of new
competition in its high-income and under-retailed trade area.
Novato Fair provides investors with an extremely stable and secure
income stream based on a strong credit tenancy, a highly-desireable
location, and an affluent, under-retailed trade area.
Interested parties are invited to review this Offering Memorandum
in preparation for a formal “call for offers”. The Property is being
presented to the market on a Best Offers basis.
1
Investment Overview
Investment Summary
Property:
• High traffic counts:
Price:
Best Offer
Redwood Blvd:
11,063 AADT
Address:
900-920 Diablo Ave. &
7135-7145 Redwood Hwy.
Novato, California
DeLong Ave:
13,928 AADT
Year Built:
1962
Property Highlights
Year Renovated:
2004
• 133,862 square foot Safeway-anchored trophy asset
Leasable Square Footage:
133,862 SF
• Huge Safeway sales volumes
Number of Parcels:
Four
• 92% credit/national tenants
Site Area:
10.98 Acres
• Excellent tenant mix with staggered lease expirations
On-Site Parking/Ratio:
523 Spaces (3.91/1000)
• Drug anchor producing high sales
Demographic Summary
Financial Highlights
Price:
Best Offer
Projected Year-1 Net Operating Income:
$2,060,412
$2,153,876
Projected Year-5 Net Operating Income: $2,246,471
$2,535,149
Location Highlights
• Irreplaceable Marin County location
• Extremely high barriers to entry - future competition highly
unlikely
1-Mile
3-Miles
5-Miles
Novato
Total Population
13,252
46,207
61,483
51,158
Population change
2000-2008
2.90%
3.90%
6.49%
7.04%
Avg. Household
Income
Total Daytime
Population
Median Home Value
$95,007 $107,643 $109,233 $102,496
20,517
53,127
68,191
60,424
$508,767 $629,192 $666,134 $621,000
• Affluent trade area
• Weak grocer competition within trade area
2
Location & Market Analysis
Location Map
rin Dr
San Ma
ton
r
Athe
Ave
101
Gran
t Ave
SI
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d
TE
D e Lo
ng Ave
Santa Rosa
Vacaville
oo
dw
Re
Av
e
nte
Napa
d
D ia
blo
Ce
505
vd
SN
Bl
Sonoma
Petaluma
to
ova
Blvd
d
lan
101
lvd
B
E
S IT
w
Ro
1
101
37
Fairfield
1
80
37
Vallejo
Novato
San Rafael
580 Richmond
Mill Valley
Sausalito
680
Oakland
San Francisco
880
101
1
3
Bay Area Regional Overview
The San Francisco Bay Area is a major global center for high-tech
industries, education and international trade, as well as a premier
international tourist destination. In addition to its attractive business
and tourist environment, the Bay Area is a highly desirable place to
live and enjoys strong regional and local economies.
the table below illustrates, the Bay Area will undergo significant
population and job growth over the next two decades.
Some of the nation’s top educational institutions such as the
University of California at Berkeley, Stanford University, UCSF
Medical Center, and many other major universities are located within
the Bay Area. These institutions, together with the unsurpassed
quality of life enjoyed by Bay Area residents, have attracted the most
educated, affluent employment base in the United States. Because
of these and other factors, San Francisco has been recognized for
many decades as one of the most dynamic and desirable places to
live in the world. It is not surprising that Price Waterhouse Coopers’
Emerging Trends in Real Estate, a survey of over 150 investors,
owners and other experts in the United States, regularly names
San Francisco as one of the most desirable targets for investment.
Among the reasons for this choice is San
Francisco’s status as one of the great “24hour” cities of the world.
San Francisco is the commercial center of the nine-county Bay Area
region and has historically been the financial and business center
of the western United States. During the rapid economic growth of
the 1980s, the built-out nature of San Francisco resulted in strong
growth in its surrounding counties, including Marin County.
Income/Economy
San Francisco Bay Area provides a stable basis for retail investment
opportunities. The nine-county San Francisco Bay Area represents
one of the world’s great regional economies. It successfully
competes in the global market as a knowledge-based economy
powered by its wealth of research, technology, and innovation. If
the Bay Area were a country, its economy would rank approximately
20th in the world. The gross regional product of the Bay Area
exceeds $200 billion, ranking fifth in the United States.
Population
The population of the greater Bay Area is over
7.1 million. According to the Association of
Bay Area Governments (ABAG), between
2000 and 2030 the San Francisco Bay Area
will add about 2 million new residents. In
addition to the current 3.5 million jobs in the
area, the economy should generate almost
1.6 million new jobs between 2005 and
2030. Housing production will continue to
lag behind demand despite a production
level of approximately 720,580 new housing
units between 2000 and 2020. This is lower
than the potential demand for housing, but
is generally reflective of local policies. As
4
Marin County Overview
As a bedroom community for San Francisco,
the City of Novato provides Novato
Fair Shopping Center with desireable
demographic
composed
of
affluent,
educated, family oriented consumers.
Because little developable land is available,
it is highly unlikely that any new competing
centers will be built in the Property’s primary
market area.
While Marin County is forecasted to continue
experiencing stable population and household
growth over the next decade, employment,
income and general economic growth are
projected to out-pace that of San Francisco
County to the south and to be in-line with the
Bay Area region as a whole. Marin County is
anticipated to continue to maintain its position
as one of the most desirable places to live in
the Bay Area and will continue to attract the
wealthiest sector of the population. Overall, both the immediate and
long term projections for the county are positive.
County is bordered by Sonoma County to the north, the San
Francisco Bay to the east, San Francisco to the south, and the
Pacific Ocean to the west. Marin County contains an approximate
521 square miles of which one-third is set aside for parks and open
space preserves.
The Association of Bay Area Governments (ABAG) divides the
county into 11 sub-regions on or near the highway. Each sub-region
denotes a city’s sphere of influence or an urban service area. Novato
is located in northern Marin County. Novato Fair sits as a gateway to
the City of Novato just off Hwy 101 on Novato’s main arterials Diablo
Ave & S Novato Blvd.
Population
The population of Marin County increased from 223,400 in 1985 to
256,600 in 2000, by 2010 the population is expected to increase
to 272,310. Marin’s growth rate through the 1990s was relatively
stable at approximately 0.7% annually
All the sub regions are clustered in the eastern part of the County,
along U.S. Highway 101. In 2005, 95% of the population lived within
these sub regions and ABAG estimates that 95% will still live within
these sub regions in 2050.
Location
The San Francisco Bay Area consists of nine counties on the San
Francisco and San Pablo Bays: Alameda, Contra Costa, Solano,
Sonoma, Napa, Marin, San Francisco, San Mateo and Santa Clara.
While Marin is the second smallest county within the Bay Area, it has
the wealthiest population.
Novato Fair Shopping Center is located in the City of Novato which
is Marin County’s north most City. San Rafael sits on Novato’s
southern boarder, and Sonoma County’s Petaluma to the north.
Marin County serves primarily as a upscale bedroom community for
San Francisco, San Rafael, and related Bay Area business centers.
It is blessed with an excellent climate, unsurpassed scenery and
recreational opportunities, low crime, and good schools. Marin
Income
Marin County is characterized by very high income levels. While the
population has grown slower than some neighboring counties over
the last 20 years, all indices of income have grown at a very rapid
pace. In essence, Marin County has furthered its repuation as an
area pf concentrated of wealth and disposable income. By way of
example, average household income grew from $83,000 in 1990 to
$128,478 in 2008. By 2011, that number is expected to climb again
to $158,703.
5
Marin County Overview
Employees
in Marin
Employment
Company
Headquarters
County of Marin
San Rafael
2,600
Kaiser Permanente
San Rafael
2,267
State of California
Sacramento
2,088
University of California, San Francisco
San Francisco
1,731
Marin General Hospital
Greenbrae
1,496
Autodesk Inc
San Rafael
1,200
Safeway Inc
Pleasanton
1,099
United States Postal Service
San Francisco
1,030
Fireman’s Fund Insurance Co.
Novato
1,000
Golden Gate Bridge, Highway &
Transportation District
San Rafael
828
Novato Unified School District
Novato
818
College of Marin
Kentfield
760
City of San Rafael
San Rafael
633
Housing
BioMarin Pharmaceutical Inc
Novato
520
Dominican University of California
San Rafael
506
Tamalpais Union High School District
Larkspur
450
Macy’s West
San Francisco
422
The median single family home sales price increased from $314,250
in 1993 to $615,000 in 2000, to $955,000 in 2006, $1,035,000 in
2007, and decreasing to $940,000 in 2008. Median condominium
and townhouse prices increased from $537,000 in 2006 to $308,000
in 2008.
Novato Community Hospital
Novato
361
Fair Isaac Corp.
San Rafael
350
YMCA of San Francisco
San Francisco
348
As of November 2008, Marin County had the lowest unemployment
rate in the State at 5.0 percent. In November 2008 the State average
was 8.0 percent, whereas the US average was 6.7 percent. According
to the California State Economic and Development Department, as of
January 2007 Marin County’s unemployment rate was 3.4 percent.
Many research and development companies are choosing to locate
in Marin due to the quality of life available to the employees and
the existence of a more natural environment which fosters creativity.
Other advantages include a much shorter and less hectic commute
to and from places of employment. Additionally, Marin County
has developed as a community of small entrepreneurs. Typical
businesses are service, professional, technical, or scientific in nature.
The broad base of small companies has resulted in a very stable
economic community. In fact, the County has consistently had one
of the lowest unemployment rates in California.
6
Novato Overview
Distance from major metros:
San Francisco 38 min.
San Rafael
12 min.
Oakland
40 min.
San Jose
80 min.
Sacramento
85 min.
Novato is a close-in suburb, approximately twenty-nine miles north
of San Francisco. Novato covers twenty-eight square miles, has
approximately 51,000 residents and is the Northern-most city
in Marin County. Novato is Marin County’s affordable bedroom
community and is both a convenient location for commuters to Bay
Area employment as well as a regional employment center due to
its proximity to Sonoma, Napa, and Solano counties.
seamless network that creates true transportation options for North
Bay residents. In the next several months, vehicles will be selected
and final engineering will begin. Construction activity should start in
2011, with train service now scheduled to begin in 2014.
The City of Novato successfully mixes corporate headquarters,
state-of-the art technology companies and a variety of retail centers
in its business community. Fireman’s Fund Insurance Company,
founded in 1863, is the City’s largest employer with 2,400 employees.
In addition to Fireman’s Fund, Novato is the corporate headquarters
for footwear company Birkenstock Footprint Sandals, TravelSmith,
and Smith and Hawken. Novato is also a center of bio-technology,
computer software, and entertainment businesses
Density:
Novato has a rural atmosphere largely because of high amount
of open space and parks in and near the city. Novato’s sphere of
influence contains seven county-maintained open space preserves
with more than 2,600 acres of open space, including 1,600 acres
surrounding Mt. Burdell in Northern Novato. Including Olompali
State Park, just north of Novato, the total is nearly 3,500 acres. The
city itself is home to a total of twenty-seven parks, including three
major city parks.
Novato will benefit from the Nov 4, 2008 election which passed the
Measure Q sales tax increase for the SMART (Sonoma-Marin Area
Rail Transit) train. The Sonoma-Marin Area Rail Transit District will
build a 70-mile passenger railroad and parallel bicycle-pedestrian
path along the publicly owned Northwestern Pacific Railroad right
of way through the two counties. The rail line runs from Cloverdale,
at the north end of Sonoma County, to Larkspur, where the Golden
Gate Ferry connects Marin County with San Francisco. Along the way
SMART will have stations at the major population and job centers
of the North Bay: San Rafael, Novato, Petaluma, Cotati, Rohnert
Park, Santa Rosa, Windsor and Healdsburg. The SMART train
and pathway project will provide the backbone of a transportation
system that ties existing transit systems such as buses and ferries
along with future options such as shuttles and trollies into a
Location Summary:
Residential:Moderate, Single-Family &
Multi-Family
Retail:Moderate, protected retail
trade area
Office:Moderate
Industrial:Low
Access:Highways 101 & 37
Traffic Counts:
Redwood Blvd:11,063 AADT
DeLong Ave: 13,928 AADT
Highways:
101 and 37
Rail Transport:
Soon to come SMART
rail system (http://www.
sonomamarintrain.org/)
Bus Transit:
Golden Gate Transit System
7
Property Description
8
9
10
11
Site Plan & Tenant Roster
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133,862
S Novato Blvd
ila
Total Square Feet
Square
Footage
2,450
2,850
2,617
4,200
1,400
1,847
2,113
3,000
1,634
2,850
15,708
900
1,210
774
770
2,853
1,080
1,340
6,712
24,769
1,586
51,199
a
Av
Tenant
Jack in the Box
24 Hour LOOP Gym
KFC
Spec Tenant - 005
High Tech Burrito
Red Boy Pizza
Holiday Cleaners
Spec Tenant - 016
Subway
RadioShack
Big Lots!
Fast Frame
Postal Annex+
Beauty Nails
Specialty Tobacco
Phyllis' Giant Hamburgers
Papa Murphy's
Supercuts
Pet Food Express
Rite Aid
Pennzoil Fast Oil Change
Safeway
Redwood B
lvd
12
Anchor Tenant Profiles
Tenant
Safeway
Web Address
www.safeway.com
Lease Term
Rental Rate
Square Footage
43 yrs 1 mo (Expires: 1/31/2025) w/ five 10-yr options
$6.00/sf
51,199 sf
Ticker Symbol
S&P Rating
2008 Revenue
2008 Net Earnings
SWY
BBB/Stable/A-2
$44B
$929M
# of Stores
# of Stores in Marin County
Closest Store to Property
Competitors w/in 3-Mile Trade Area
1,775
9
0.7 mi
6
Grocery Outlet (0.7 mi)
Lucky (1.8 mi)
Whole Foods (0.3 mi)
Trader Joes (0.6 mi)
Delano Market (1.8 mi)
Apple Market (3.2 mi)
Comments
Safeway Inc. is one of the largest food and drug
retailers in North America. On September 6, 2008, the
company operated 1,738 stores in the Western,
Southwestern, Rocky Mountain, Midwestern and MidAtlantic regions of the United States and in Western
Canada. In support of its stores, Safeway has an
extensive network of distribution, manufacturing and
food processing facilities. Safeway also holds a 49%
interest in Casa Ley, S.A. de C.V., which as of
September 30, 2008, operated 141 food and general
merchandise stores in Western Mexico.
13
National Tenant Profiles
Tenant
Big Lots
Pet Food Express
Web Address
www.biglots.com
www.petfoodexpress.com
Lease Term
15 yrs 5 mo (Expires: 1/31/2010) w/ two 5-yr options
10 yrs 1 mo (Expires: 3/24/2013) w/ two 5-yr options
Rental Rate
$9.28/sf
$28.19
Square Footage
15,708 sf
6,712 sf
Ticker Symbol
BLI / BIG
N/A
S&P Rating
BBB-/Stable
N/A
2008 Revenue
$4.69B
N/A
2008 Net Earnings
$158M
N/A
# of Stores
1,300
34
1
3
25.7 mi
4.1mi
Comments
Big Lots, Inc., through its subsidiaries, operates as the
largest broadline closeout retailer in the United States.
The company offers products under six merchandising
categories: Consumables, Home, Furniture, Hardlines,
Seasonal, and Other. The Consumables category
includes food, health and beauty, plastics, paper, and
pet departments. As of February 2, 2008, it operated
1,353 stores. The company was founded in 1967 and is
based in Columbus, Ohio.
Pet Food Express is one of the country's leading
independent pet food and supply retailers. With 34,
stores, all located in the Greater San Francisco Bay
Area, Pet Food Express is the eighth largest pet
specialty retailer in the USA. The Pet Food University,
and distribution center are all housed in a 105,000 sq. ft.
facility located in San Leandro, California. Pet Food
Express has won numerous industry awards including:
1997- Best Employee Relations, 1998- Pet Retailer of
the Year, 1999- Best Independent Chain, and 2000Best Independent Chain.
14
Tenant
RadioShack
KFC
Web Address
www.radioshack.com
www.kfc.com
Lease Term
21 yr 7 mo (Expires: 4/30/2013)
20 yr 1 mo (Expires: 7/31/2009) w/ one 5 yr options
Rental Rate
$30.00
$28.14
Square Footage
2,850 sf
2,617 sf
Ticker Symbol
RSH
YUM
S&P Rating
BB/Stable
BBB-/Stable
2008 Revenue
$4.33B
$11.16B
2008 Net Earnings
$231M
$991M
# of Stores
6,000
11,000+
4
3
8.9 mi
10.9 mi
Comments
RadioShack Corporation engages in the retail sale of
consumer electronic goods and services, through its
RadioShack store chain and non-RadioShack branded
kiosk operations, in the United States. The company
also provides consumers access to third-party services,
such as wireless telephone and DTH satellite activation,
satellite radio service, prepaid wireless airtime, and
extended service plans. In addition, it manufactures
various products, including telephony, antennas, wire,
and cable products, as well as hard-to-find parts and
accessories for consumer electronics products.
KFC has more than 11,000 restaurants in more than 80
countries and territories around the world. Yum! Brands,
Inc. operates various quick service restaurant brands,
including KFC, Pizza Hut, Taco Bell, Long John Silvers,
and A&W All-American Food Restaurants. It develops,
operates, franchises, and licenses a system of
restaurants, which prepare, package, and sell various
priced food items. As of December 31, 2007, it operated
approximately 35,000 restaurants in 100 countries and
territories. The company was founded in 1997. It was
formerly known as TRICON Global Restaurants, Inc.
and changed its name to YUM! Brands, Inc. in 2002.
YUM! Brands, Inc. is headquartered in Louisville,
Kentucky.
15
Tenant
Jack In The Box
Subway
Web Address
www.jackinthebox.com
www.subway.com
Lease Term
5 yr 6 mo (Expires: 8/31/2013) w/ two 5 yr options
Rental Rate
$34.69
$30.00
Square Footage
2,450 sf
1,634 sf
Ticker Symbol
JACK
N/A
S&P Rating
BB-/Stable
N/A
2008 Revenue
$2.54B
N/A
2008 Net Earnings
$118M
N/A
# of Stores
2,166
30,524
4
12
3.6 mi
0.8 mi
Comments
Jack in the Box Inc. (NASDAQ: JACK), based in San
Diego, is a restaurant company that operates and
franchises Jack in the Box® restaurants, one of the
nation’s largest hamburger chains, with more than 2,100
restaurants in 18 states. Additionally, through a wholly
owned subsidiary, the company operates and franchises
Qdoba Mexican Grill®, a leader in fast-casual dining,
with more than 450 restaurants in 41 states and the
District of Columbia. The company also operates a
proprietary chain of 61 convenience stores called Quick
Stuff®, each built adjacent to a full-size Jack in the Box
restaurant and including a major-brand fuel station.
The SUBWAY® chain consistently ranks at the top of
Entrepreneur magazine’s Franchise 500® rankings.
Besides being number one for the Submarine Sandwich
Category, the SUBWAY® chain has received the
distinction as being the number one Franchise
Opportunity for 15 of the past 21 years.
16
Tenant
Supercuts
Web Address
www.penn10.com
www.supercuts.com
Lease Term
Rental Rate
$41.57
$31.69
Square Footage
1,586 sf
1,340 sf
Ticker Symbol
N/A
N/A
S&P Rating
N/A
N/A
2008 Revenue
N/A
N/A
2008 Net Earnings
N/A
N/A
# of Stores
150+
2,100+
2
5
11.7 mi
2.7
Comments
This Diamond Certified 10 Minute Oil Change does oil,
filter, and other fluid changes while you wait. This
operator owns three other Bay Area 10 Minute Lube
location: San Francisco, Santa Rosa and San Rafael.
They recycle materials from your vehicle. Used oil and
other fluids are re-refined to provide fuel oil and bunker
fuel for vessels. Used oil filters are recycled into
construction rebar (reinforcing steel bars).
The Company has over 2,100 locations across the U.S.,
Canada, Puerto Rico and the United Kingdom.
Supercuts is a mens and womens hair salon featuring
hairstyles, hair cuts, hair color and hair products. It is a
wholly owned subsidiary of Regis, which also owns
Regis Salons, Trade Secret, MasterCuts, Cost Cutters,
SmartStyle and First Choice Haircutters in the United
States and Canada
17
Tenant
Postal Annex
Papa Murphy's
Web Address
www.postalannex.com
www.papamurphys.com
Lease Term
12 yr 0 mo (Expires: 11/30/2009)
Rental Rate
$26.78
$29.50
Square Footage
1,210 sf
1080 sf
Ticker Symbol
N/A
N/A
S&P Rating
N/A
N/A
2008 Revenue
N/A
$585M
2008 Net Earnings
N/A
N/A
# of Stores
400+
1,000+
4
2
3.9 mi
13.8 mi
Comments
PostalAnnex+ locations provide this one-stop shopping
solution for printing, copying, shipping, packaging, mail
and package receiving, office supplies and many other
business support services. The Company also serves
the consumer and small-office, home-office user with a
variety of business services including private mailbox
rental, notary service, high-speed copying in black &
white and color, office supplies, web site/e-commerce
services, faxing service, printing, stationery, rubber
address stamps, key duplication, greeting cards and
assorted gift item, all in a convenient, service-oriented
environment.
Papa Murphy's pioneered the take and bake concept
and is the largest take and bake pizza company in the
world. The company is now the fifth largest pizza chain
in the country based on U.S. locations. Customers
decide which ingredients top their pizza, then take the
pizza home to be baked at the customer's convience.
18
Tenant
Fast Frame
The Loop - 24 Hour Fitness
Web Address
www.fastframe.com
Lease Term
11 yr 0 mo (Expires: 4/30/2010)
5 yr (Expires: 8/2012)
Rental Rate
$39.50
$27.81
Square Footage
900 sf
2850 sf
Ticker Symbol
N/A
N/A
S&P Rating
N/A
N/A
2008 Revenue
N/A
N/A
2008 Net Earnings
N/A
N/A
# of Stores
300+
400+
4
3
11 mi
11.2 mi
Comments
Fast Frame was started in Europe in 1986 and has
Founded in 1983 in the Bay Area, 24 Hour Fitness has
quickly spread world wide. They currently operate over grown to more than 425 clubs in 16 states with three
300 locations through franchisees in 36 states, along
million club members. The company also operates two
with affiliates in Brazil, Japan, Australia, and the U.K.
dozen clubs in five Asian countries. They have four
The Fast Frame Operating System is unique in the
levels of clubs: Acitve / Express / FitLite (aka: The Loop)
framing industry and allows Fast Frame to produce
/ Super-Sport and Ultra-Sport. The Loop is a new
products in a fraction of the time that it takes our
concept by 24 Hour Fitness, also branded as Fit Lite.
competitors. Fast Frame has been ranked #1 in category This corporate owned small format gym gives patorns a
by Entrepreneur Magazine for 9 years in a row.
full body workout in 30 - 35 minutes. Similar to Curves,
patorns start with a 2-5 minute warm-up, then spend one
minute on each of the 25 different weight, resistance, or
mat exercise machines.
19
In-Line Tenant Profiles
Tenant
Year
Founded
Products / Number of
Services Stores
Website
Summary
Phyllis' Giant Hamburgers
1981
Hamburgers
3
www.phyllisgiantburgers.com
Known to have the "Best Burgers in Marin," Phyllis'
has won many awards in the past and has been in
the news a few times, most of the awards are from
the Pacific Sun and the San Francisco Chronicl for
Best Burger. Serving over 20 kinds of burgers, corn
dogs, chicken, hot dogs, and salads. It has 5
plasma screen TV's and outdoor seating. The
Phyllis' in Novato also has beer on tap and Dreyer's
ice cream in a variety of flavors.
Holiday Cleaners
1990
Dry Cleaners
1
N/A
The current owner has been operating this store for
13 years since she bought the existing business.
This dry cleaner has a non-toxic, hydrocarbon plant
on premises.
Redboy Pizza
1970
Pizza
8
www.redboypizza.com/
Established in 1970, Red Boy Pizza began as a
single, 90-square-foot location in San Francisco,
California and now has 8 locations Bay Area wide.
The founders owned and operated the business for
more than 35 years. Red Boy remains a family
owned business
High Tech Burrito
N/A
Food
14
www.hightechburrito.com
High Tech Burrito gives customers the freedom and
flexibility to choose just how they want their burrito.
Selections in beans, rice, tortillas, salsas, and fresh
cilantro, fresh juicy tomatoes, chunky house-made
guacamole and much more.
Beauty Nails
2002
Nails Care
1
This nail salon specializes in manicures and
pedicures.
Specialty Tobacco Outlet
2003
Tobacco
1
Sells tobacco and tobacco products.
20
Parcel Map
21
Site Data
Property Summary:
Number of Buildings: Suite Size
Primary Frontage: 6
51,199 square foot Safeway
Redwood Blvd
543 Feet
24,769 square foot Rite Aid
Diablo Ave
1,276 Feet
15,708 square foot Big Lots
S Novato Blvd
76 Feet
Three In-line shop buildings
Signage
Anchors:
In-line:
Three property signs
Out-parcels:
Three Out-parcels
Two have drive-through
windows
One has a drive in bay
Address:
100-170 Robles Way
Vallejo, CA
Acres
Square Feet
140-061-11
0.25
10,725
140-061-14
8.85
385,506
140-071-46
0.94
40,946
140-071-50
0.94
40,946
10.98
478,123
Total:
Redwood Blvd / Diablo Ave / S Novato Blvd
Shape & Parking
Irregular in shape providing a parking ratio of 3.91/1000 or
523 public spaces.
Access/Egress
Three access points to the Property
Parcel Summary:
APN
Redwood Blvd – Left / right turns on ingress & egress
Diablo Ave – Left / right turns on ingress & right turn
only on egress
S Novato Blvd – Left / right turns on ingress & egress
Topography & Drainage
Generally level
22
Market Analysis
Marin County Retail Overview
The Marin County retail shopping centers market ended 2008 in
a healthy state with a vacancy of 6.2%. Consistent with current
economic conditions, however, the market experienced a moderate
220 basis-point increase in vacancy year-over-year compared to its
mark of just 4.0% at the close of 2007. The average asking rental
rate for shop space was $27.87 per square foot NNN at the yearend 2008. The total GLA (gross leasable area) of all retail centers in
Marin County, excluding malls, is approximately 3.7 million square
feet in 37 retail centers. The bulk of the inventory lies within the
neighborhood center category, accounting for 36%, or 1.4 million
square feet, of the total GLA. The next highest inventory contributors
are power and community centers at 773,250 SF and 745,142 SF,
respectively. Total availability across all retail centers, excluding
malls, amounted to just 231,816 square feet, comprised of shop and
anchor spaces.
The Marin County retail centers market is divided into three
submarkets: South, Central & North Marin. The total GLA square
footage in these submarkets is 675,630 SF (South), 1.1 million
SF (Central) and 1.9 million SF (North). The vacancy rates for
South, Central and North Marin County were widespread, closing
year-end 2008 at 3.4%, 3.5% and 8.6%, respectively. The top tier
average asking rental rates were $0.47 apart for South and Central
Marin County, which ended 2008 at $36.06 and $35.59 per square
foot NNN, respectively, while North Marin recorded a much lower
average asking rate of $25.64 due in part to the diversity of property
type in this submarket. Average asking rates for the entire County
ranged from a low of $15.00 to as much as $55.00 per square foot
NNN annually.
Marin County Retail Development
For 2009, there is no new ground up retail developments
planned in Marin county. The most recent retail development is
Grosvenor’s Hamilton Marketplace in southern Novato. The
center opened in September of 2008 and is anchored by a 55,000
SF Safeway lifestyle store which also offers a gas station to its
customers. The 33,000 SF of adjacent shop space is approximately
75% leased. There are 3 re-development projects (2 of which
are under construction) that will be watched closely in 2009 in
Marin; Pacheco Plaza in southern Novato, Northgate Mall in San
Rafael, and Larkspur Landing in Larkspur. Pacheco Plaza lost its
anchor tenant Safeway when it moved across Highway 101 to
Hamilton Marketplace. It is believed a regional grocer will backfill
the ±22,000 SF anchor position, and the remaining 50,000 SF of
shop space is to be re-positioned from a neighborhood shopping
center to a lifestyle ”green” village. Macerich-owned Northgate
Mall, anchored by Sears, Macy’s and soon-to-be Kohl’s (backfilling
the former Mervyn’s space) is undergoing a full-scale renovation,
transforming the more than 40-year old center into a more modern
shopping environment with new upscale and lifestyle-type tenants.
Larkspur Landing, a 173,000 SF center, recently sold to J.S.
Rosenfield & Co. out of Santa Monica for approximately $65,000,000.
The new owner plans to reposition the center as a ‘country mart,’
which it describes as ‘an intimate non-anchored, open air, public
environment with services, shops, boutiques, and food purveyors’.
The company similarly repositioned a center in West Los Angeles
that it now calls Brentwood Country Mart.
Marin County Retail Leasing
Marin County had a few notable lease transactions in 2008. In
Novato, Safeway leased 55,000 SF at Hamilton Marketplace. At the
Cove Shopping Center in Tiburon, Delano’s Market took over the
former Bell Market comprising approximately 16,000 SF. The highly
successful Corte Madera Town Center in Corte Madera added an
18,877 SF Crate & Barrel store which is set to open in the 1st quarter
of this year.
Asking rents and vacancy levels will remain fairly strong in the wellanchored, established centers in Marin along the Highway 101
corridor. Neighborhood and strip centers and less well-positioned
centers will likely experience a fall out of weaker tenants, have slow
deal velocity, and will have to provide rental or other concessions to
attract new users and retain existing Tenants.
23
Market Analysis
Local Market Overview & Property Positioning
Retail Market Facts
Total Retail Square Footage:
Novato with approximately 51,000 residents is located at the north
end of Marin County which is a lineal retail trade area and population
base hugging 25 miles along Highway 101.
County:
3,643,625 SF
Novato:
1,247,751 SF
Novato Fair is a 133,862 SF neighborhood shopping center anchored
by a 51,199 SF Safeway “lifestyle” store, and is located at the SWC
of Redwood Blvd and Diablo Avenue in the middle of town. The
property offers excellent access and visibility to the primary surface
streets, and also has secondary access to South Novato Boulevard
which is a major north/south artery to the primary residential trade
area. Consisting of a combination of national and local tenants,
the merchandising mix of the shop spaces includes food, service,
and soft and hard goods tenants. The primary trade area includes
the majority of Novato stretching to the city limits at the north end
of town and down to Highway 37 to the south. Grocery/Drug
competition to the center comes from a Lucky/Long’s Center, Trader
Joe’s, Costco and a soon to open Whole Foods Market all of which
are located within a 3-mile radius. Novato Fair Shopping Center is
truly the premier neighborhood center in Novato, and residents from
within the primary trade area are assumed to do most of their routine
shopping at the center. Lack of available land and a challenging
entitlement process further substantiates the property’s strong
position in the marketplace.
The balance of the national anchor tenants in the City of Novato are
primarily at the Vintage Oaks at Novato power center and include
Target, Macy’s Furniture, Ross, Marshalls, Petco and Old Navy.
Demographics:
County:
6.2%
Novato:
8.6%
New Developments:
Hamilton Landing Available Land:
Hanna Ranch
Retail Market Overview
Market Environment:
Secondary
Retail Density:
Suburban Infill
Residential Density:
Dense Suburban Infill
Household Growth:
2.4%
Office Density:
Medium
Industrial Density:
Low
Location within Northern California:A-
Average Annual Income:
$102,496
Population:
51,158
Daytime Population:
37,060
Employment Base:
Vacancy:
Secondary – bedroom
community, majority of
employment in San Francisco
& San Rafael
Location within Submarket:
Barriers to Entry:
A
High – Lack of developable
land, community resistance
24
Market Analysis
Novato Retail & Development Overview
Hamilton Landing
Pacheco Plaza
Grosvenor completed its entitlement process in 2007 for the 105,000 squarefoot Safeway anchored shopping center on the former Albertsons site at
Hamilton Field in south Novato. The project has completed construction
and Safeway opened in September of 2008 and also offers its customers
a gas station. To date, the lead shop tenants in the center are Pet Food
Express with 7,456 SF, Wells Fargo with 4,000 SF and Peet’s Coffee & Tea
occupying 1,885 SF. Restaurant tenants include Toast, Boulange Bakery
and Pasta Moto who are all currently under construction. The property is
located approximately 3.5 miles south of Novato Fair.
Pacheco Plaza is 72,446 square feet of retail space located in southeast
Novato in Ignacio Boulevard. The center was originally developed in 1961
and it is currently being repositioned from a neighborhood shopping
center to a lifestyle “green” village with the hopes of replacing the former
Safeway location with a specialty grocer. Construction is scheduled to be
completed in the 3rd quarter of 2009. Pacheco Plaza is approximately 3.5
miles south of Novato Fair.
Vintage Oaks at Novato
This 135,000 SF (including strip center across the street) neighborhood
center is anchored by Lucky and Long’s (soon to be CVS) and is
approximately .5 miles northwest from Novato Fair in downtown Novato.
Shop tenants include Noah’s Bagels and Peet’s Coffee. The center was
built in 1966 and went through various remodels in the 90’s.
The project totals approximately 620,000 SF and additional anchor and Jr.
anchor tenants include Target, Macy’s Furniture, Marshalls, Ross, Sports
Authority, Petco, Old Navy, and Sephora. Recent vacancies by the Shane
Company and Shoe Pavilion will allow this ownership to pursue new users
to this already solid lineup of promotional, service and food tenants. The
property is located approximately 1 mile southeast of Novato Fair.
This center’s owners obtained the necessary entitlements to expand
Costco to approximately 150,000 SF and construction started in late 2007
and was completed in the 4th quarter of 2008. New tenants that opened
in 2008 were a 2,522 SF Bath & Body Works and a 1,210 SF See’s Candy
which is their 4th store in Marin. The property was constructed in 1994 and
went through a repositioning in the late 90’s. This property continues to
be the “critical mass” for retail in Novato and is the largest single property
tax generator in the city.
The Village at Novato
Located in downtown Novato on North Redwood Boulevard at Olive
Avenue, this specialty retail property opened with great fanfare with anchor
tenants Trader Joes, Pharmaca Integrative Pharmacy, and Starbucks in
2006. Phase 1 comprises approximately 20,000 SF and a phase-two on
four acres is scheduled for the entitlement process as soon as specific
direction is given by the City of Novato and constituents on the North
Redwood Boulevard Corridor which runs concurrent with the updating of
the General Plan. The property is located .5 miles north of Novato Fair.
Downtown Novato Shopping Center
Nave Center
A 100,000 SF neighborhood shopping center fronting South Novato
Boulevard and approximately .2 miles southwest from Novato Fair. The
center is anchored by Grocery Outlet, Pini Hardware (local Ace Franchisee)
and the U.S. Post Office. The balance of the shop space is occupied by
food and service tenants and the center went trough a minor “facelift” in
2006.
Pini Hardware Building
Located in mid-town Novato, the former 20,000 SF former Pini Hardware
Building is still looking for a replacement Tenant on Grant Avenue which
is the central business of Novato and consists of retail, restaurant, and
service tenants and street front parking.
Hanna Ranch Development
The 19-acre Hanna Ranch property just south of Vintage Oaks was sold
in May of 2008 to Pacific Star Capital out of Southern California. Although
there has been no official application as of yet, early indications are that a
mixed use development could be contemplated with a hotel, athletic
facility, retail and office. The property is located 1.5 southeast of
Novato Fair.
25
Market Analysis
Novato Shopping Center Map
in Dr
San Marin Plaza
6
The Square
7
Vintage Oaks at Novato
8
Ignacio Center
9
The Village at Novato
nA
ve
5
101
SI
lso
Pacheco Plaza
1
Wi
4
o Av
Hamilton Marketplace
6
Sutr
3
Novato
rto
nA
ve
TE
ab
Di
l
ve
oA
2
lvd
Nave Center
he
to B
2
At
9
ova
Downtown Novato Shopping Center
SN
1
e
Mar
5 San
37
7
Ignacio Blvd 4
8
3
26
Market Analysis
d
in Blv
ar
San M
101
Village at Novato
Trader Joe’s & Starbucks
New
Whole Foods
Site
Re
dw
oo
d
t
an
Bl
vd
ng
De
e
Av
Lo
101
e
Av
Gr
Downtown Novato
Shopping Center
Lucky’s & Long’s Drugs
vd
o Bl
bl
ia
D
vat
S No
Novato Fair
Shopping Center
Safeway, Rite-Aid & Big Lots
o
e
Av
Ce
d
rR
e
nt
27
Market Analysis
Novato Fair
Shopping Center
Safeway, Rite-Aid & Big Lots
Nave Center
Grocery Outlet &
Ace Hardware
Downtown Novato
Shopping Center
Lucky’s & Long’s Drugs
lvd
De
ve
tA
an
Gr
S
B
ato
Nov
Lo
d
lv
ng
B
od
e
Av
wo
d
Re
101
Ro
wl
101
an
d
Bl
vd
Vintage Oaks
Shopping Center
Target, Costco &
Macy’s Furniture
Staples
New
Whole Foods
Site
Novato Community
Hospital - Sutter
Century Rowland
Plaza - 7 Plex Cinema
28
Market Analysis
29
Market Analysis
Relevant Lease Comparables
Annual
PSF
Monthly
PSF
Start
Date
Term
2,755
$48.00
$4.00
Sep-08
10 years
Hwy 101 & Nava Ave.
Novato, CA
4,000
$60.00
$5.00
Aug-08
10 years
Peet's Coffee
Hwy 101 & Nava Ave.
Novato, CA
1,885
$55.00
$4.58
May-08
10 years
Wireless Depot
Hwy 101 & Nava Ave.
Novato, CA
1,287
$48.00
$4.00
Aug-08
10 years
Pet Food Express
Hwy 101 & Nava Ave.
Novato, CA
7,448
$37.00
$3.08
Nov-08
10 years
Sushiholic
Vintage Oaks At Novato
208 Vintage Way
Novato, CA
1,680
$26.64
$2.22
Mar-07
11 years
GNC
208 Vintage Way
Novato, CA
1,078
$32.00
$2.67
Dec-07
5 years
Bath & Body Works
208 Vintage Way
Novato, CA
2,522
$29.04
$2.42
Dec-07
10 years
See's Candy
208 Vintage Way
Novato, CA
1,210
$34.80
$2.90
May-07
5 years
$41.16
$3.43
Tenant
Location
Tamalpais Bank
999 Grant Ave.
Novato, CA
Wells Fargo Bank
Average Rental Rate
Square
Footage
30
Financial Analysis
Financial Overview
Novato Fair Shopping Center comes to market with a longestablished history of full occupancy due to some of the strongest
tenant sales in Marin. Additionally, the center occupies a marketdominant location with a low likelyhood of new competion. This
combonation provides investors with a dependable and secure
stream of net operating income.
Novato Fair Shopping Center is a Marin County trophy asset that
offers investors a low-risk, high-quality, stabilized income stream.
Attractive features of the asset include;
PLEASE NOTE THAT THE FOLLOWING PROJECTIONS ARE BEING
PROVIDED FOR CONVENIENCE ONLY. NO REPRESENTATIONS
OR WARRANTIES OF ANY KIND ARE BEING MADE BY THE OWNER
OR NAI BT COMMERCIAL REAL ESTATE REGARDING THESE OR
ANY OTHER FINANCIAL PROJECTIONS. INTERESTED PARTIES
ARE MOST STRONGLY ENCOURAGED TO CONSULT WITH
EXPERTS TO REACH THEIR OWN INDEPENDENT CONCLUSIONS
REGARDING THE POTENTIAL FINANCIAL PERFORMANCE OF
ANY POTENTIAL INVESTMENT.
• A shopping center that is over 95% leased with a long history of
high occupancy
• Safeway, northern California’s dominant grocer, anchors the
property and generate 2007 sales of $875/psf (over $44 million
annually).
• A trade area that is almost entirely closed off to new competion
due to substantial community resistance and a lack of available
land
• An affluent customer base
The Property is being offered a unpriced. On the following pages are
the summary data of our financial model as well as the Property’s rent
roll. The model was developed using ARGUS software. A full copy
of the Argus model and comprehensive investment assumptions
are available by email upon request
31
Financial Analysis
Projected 10-Year Cash Flow
Year 1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
PSF
Apr-2010
Apr-2011
Apr-2012
Apr-2013
Apr-2014
Apr-2015
Apr-2016
Apr-2017
Apr-2018
Apr-2019
Base Rental Revenue
$16.97
$2,271,768
$2,334,946
$2,363,076
$2,409,537
$2,457,419
$2,512,226
$2,571,796
$2,607,402
$2,659,650
$2,752,546
Absorption & Turnover Vacancy
($0.02)
-2,310
-15,151
0
-18,705
-33,157
-84,313
-37,367
0
-27,248
-60,772
Scheduled Base Rental Revenue
$16.95
2,269,458
2,319,795
2,363,076
2,390,832
2,424,262
2,427,913
2,534,429
2,607,402
2,632,402
2,691,774
For the Years Ending
Potential Gross Revenue
Expense Reimbursement Revenue
Total Potential Gross Revenue
General Vacancy
Effective Gross Revenue
$3.87
517,611
534,893
550,334
560,700
573,721
576,249
602,982
622,643
633,418
643,779
$21.18
2,835,522
2,908,511
2,971,005
3,012,546
3,072,279
3,085,899
3,229,968
3,330,151
3,372,815
3,449,025
($0.52)
-69,736
-60,006
-77,015
-60,365
-49,396
-1,298
-51,776
-91,715
-66,944
-36,742
$20.66
$2,765,786 $2,848,505 $2,893,990
$2,952,181 $3,022,883 $3,084,601 $3,178,192 $3,238,436 $3,305,871 $3,412,283
Reimbursable Operating Expenses
Management Fee
$0.83
110,631
113,940
115,760
118,087
120,915
123,384
127,128
129,537
132,235
136,491
CAM
$1.81
242,764
250,047
257,549
265,274
273,231
281,432
289,871
298,571
307,524
316,754
Insurance
$0.22
29,554
30,440
31,354
32,294
33,263
34,262
35,289
36,348
37,438
38,561
Real Estate Taxes
$2.41
322,425
328,873
335,451
342,161
349,003
355,984
363,103
370,365
377,772
385,328
Total Operating Expenses
$5.27
705,374
723,300
740,114
757,816
776,412
795,062
815,391
834,821
854,969
877,134
Net Operating Income
$15.39
$2,060,412 $2,125,205 $2,153,876
$2,194,365 $2,246,471 $2,289,539 $2,362,801 $2,403,615 $2,450,902 $2,535,149
Leasing & Capital Costs
Tenant Improvements
$0.65
86,635
19,764
0
0
60,426
102,044
34,747
0
32,144
70,050
Leasing Commissions
$0.40
53,653
15,357
0
0
45,924
73,860
32,734
0
23,869
53,238
Cap Ex
$0.10
13,386
13,788
14,201
14,627
15,066
15,518
15,984
16,463
16,957
17,466
$1.15
153,674
48,909
14,201
14,627
121,416
191,422
83,465
16,463
72,970
140,754
Total Leasing & Capital Costs
Cash Flow Before Debt Service
$14.24
1,906,738
2,076,296
2,139,675
2,179,738
2,125,055
2,098,117
2,279,336
2,387,152
2,377,932
32
2,394,395
Financial Analysis
Market Leasing Assumptions & Expense Recoveries
General Assumptions
Analysis Start
Number of Tenants
Rentable Square Feet
Purchase Price
Price PSF
Growth/Inflation Rates
Consumer Price Index (CPI)
Property Taxes
Expenses
Rent Growth (Unless specified in lease)
General Vacancy
Lease-up Assumptons
Existing Vacancy (From Analysis Start)
Month-to-month tenants (Released at Mkt)
Lease-up Period for Existing Tenants Upon Rollover
Less than 4,000 Square Feet
Greater than 4,000 Square Feet
Lease term
Lease Commissions: New Tenants
Lease Commissions: Existing Tenants
Tenant Improvements: New Tenants
Tenant Improvements: Existing Tenants
May 1, 2009
22
133,862
Best Offer
N/A
3.00%
2.00%
3.00%
3.00%
5.00%
6 months
6 months
6 Months
6 Months
5 years
5%
2%
$10
$5
Electrical
Materials and Supplies
Rep & Maint - Misc
Painting
Pest Control
Plumbing
Repairs
Roof
Sidewalks
Janitorial Services
Electrical Repair
Fence
Irrigation
Landscape
Light Poles & Lamps
Misc
Patching
Storm Drains
Striping
Sweeping
Tenant Expense Reimbursement
$1,103
General
1,134
Signage
330
General Security
2,839
Telephone - Security
1,241
Sprinkler & Fire Protection
1,379
General - Electric
345
Parking Lot
1,429
Water - Fire Service
4,015
Water
22,748
Employee Benefits
1,515
Payroll Expense
3,979
Trash Removal
1,808
Tenant Electric
59,233
Tenant Gas
7,393
Management Fee
948
Liability Insurance
2,277
Building Insurance
3,508
RE Tax
2,652
KFC Parcel Tax
14,784
Jack in the Box Parcel Tax
4,548
1,895
11,165
2,008
3,221
3,698
10,951
137
2,775
1,011
3,698
9,430
5,549
1,109
10,149
16,347
244,067
27,250
23,943
Total Expense Reimbursement
Total Expenses
705,374
Total Yr-1 Expense Loss
Tenant Occupancy Assumptions
Retention Rate
$517,611
$187,763
75.00%
33
Financial Analysis
First Term Lease Expirations
Expiration
Date
Suite Tenant
Square
Feet
Percent of
Total
2009 Expirations
3
40
38
12
KFC
Supercuts
Papa Murphy's
Red Boy Pizza
7/09
10/09
11/09
12/09
Total for Year Ending Dec-
Big Lots!
Specialty Tobacco
Fast Frame
High Tech Burrito
1/10
3/10
4/10
7/10
9/10
Square
Feet
Percent of
Total
2013 Expirations
2,617
1,340
1,080
1,847
2.00
1.00
0.80
1.40
6,884
5.10%
15,708
770
900
1,400
1,586
11.70
0.60
0.70
1.00
1.20
20,364
15.20%
29
36
44
14
20
31
18
50
2010 Expirations
25
33
27
10
55
Expiration
Date
Suite Tenant
Postal Annex+
Phyllis' Giant Hambur
Pet Food Express
Holiday Cleaners
RadioShack
Beauty Nails
Subway
Rite Aid
1/13
2/13
3/13
4/13
4/13
8/13
8/13
10/13
1,210
2,853
6,712
2,113
2,850
774
1,634
24,769
0.90
2.10
5.00
1.60
2.10
0.60
1.20
18.50
42,915
32.10%
4,200
3,000
3.10
2.20
7,200
5.40%
2,450
1.80
2,450
1.80%
51,199
38.20
51,199
38.20%
2014 Expirations
5
16
Spec Tenant - 005
Spec Tenant - 016
6/14
6/14
2012 Expirations
2
24 Hour LOOP Gym
8/12
2,850
2.10
2,850
2.10%
2022 Expirations
2
Jack in the Box
9/22
2025 Expirations
2
Safeway
1/25
34
Building Total
133,862
100%
Financial Analysis
Rent Roll
Rent Roll 1
Tenant Name
Contract Lease Rental Rates
Type & Suite Number
Square Feet
Lease Dates & Term
Pro Rata
24 Hour LOOP Gym
2,850
Retail, Suite: 002
2.13%
Expires Aug-2012
Date
Current
Annual
Monthly
Expense
Monthly
Annual
PSF Rent
Rent
PSF Rent
Reimbursements
Rent PSF
Rent
$79,259
$2.32
NNN
$2.50
$30.00
$3.00
$36.00
$1.67
$20.00
$3.00
$36.00
$27.81
Sep-2009
$28.64
10% Admin Fee
Sep-2010
$29.50
(See Argus Model)
Sep-2011
$30.39
Sep-2012
$31.30
Sep-2013
$32.24
Sep-2014
$33.21
Sep-2015
$34.20
Sep-2016
$35.23
Options:
One 5-year option to extend at a fixed rate
Notes:
None
Beauty Nails
774
Retail, Suite: 031
0.58%
Expires Aug-2013
Options:
None
Notes:
None
Big Lots!
15,708
Retail, Suite: 025
11.73%
Expires Jan-2010
Current
$43.80
Sep-2010
$46.47
(See Argus Model)
Sep-2011
$47.86
Sep-2012
$49.30
Current
$9.28
Expires Apr-2010
$145,770
$0.77
NNN
Feb-2010
$10.44
Big Lots
Feb-2015
$11.75
(See Argus Model)
Tenant pays 10% Admin Fee on top of CAM
900
NNN
15% Admin Fee
Notes:
0.67%
$3.65
$45.11
Two 5-year options to extend at fixed rates
Retail, Suite: 027
$33,901
Sep-2009
Options:
Fast Frame
Market Rental Rates
Annual
Current
$41.00
$36,900
$3.42
NNN
10% Admin Fee
(See Argus Model)
Options:
None
Notes:
None
35
Financial Analysis
Rent Roll
Rent Roll 1 (2)
Tenant Name
Type & Suite Number
Square Feet
Lease Dates & Term
Pro Rata
Date
Annual
Monthly
Expense
Monthly
Annual
PSF Rent
Rent
PSF Rent
Reimbursements
Rent PSF
Rent
$56,602
$3.37
NNN
$2.50
$30.00
$2.50
$30.00
$2.92
$35.00
$3.17
$38.00
High Tech Burrito
1,400
Current
$40.43
Retail, Suite: 010
1.05%
Aug-2009
$41.64
Options:
None
Notes:
None
Market Rental Rates
Annual
10% Admin Fee
Holiday Cleaners
2,113
Current
$28.66
Retail, Suite: 014
1.58%
May-2010
$29.52
10% Admin Fee
(See Argus Model)
Expires Apr-2013
Options:
None
Notes:
None
May-2011
$30.40
May-2012
$31.31
$60,559
2,450
Current
$34.69
Retail, Suite: 001
1.83%
Oct-2012
$40.82
15% NNN-Mgmt Fee
Oct-2017
$46.94
(See Argus Model)
Oct-2022
$54.00
Options:
One 5-year option to extend at a fixed rate
Notes:
2,617
Current
$28.14
Retail, Suite: 003
1.95%
Aug-2009
$38.00
KFC
Aug-2010
$39.14
(See Argus Model)
Aug-2011
$40.31
Aug-2012
$41.52
Aug-2013
$42.77
Options:
One 5-year option to extend at FMV
Notes:
$2.35
NNN
KFC
Expires Jul-2009
$73,642
$2.89
NNN
Jack in the Box
Expires Sep-2022
$84,991
$2.39
NNN
36
Financial Analysis
Rent Roll
Rent Roll 1 (3)
Tenant Name
Type & Suite Number
Square Feet
Lease Dates & Term
Pro Rata
Papa Murphy's
1,080
Retail, Suite: 038
0.81%
Date
Current
Market Rental Rates
Annual
Annual
Monthly
Expense
Monthly
Annual
PSF Rent
Rent
PSF Rent
Reimbursements
Rent PSF
Rent
$32,821
$2.53
NNN
$3.00
$36.00
$4.50
$54.00
$2.00
$24.00
$3.00
$36.00
$30.39
10% Admin Fee
Expires Nov-2009
(See Argus Model)
Options:
None
Notes:
None
Pennzoil Fast Oil Cha
1,586
Retail, Suite: 055
1.18%
Expires Sep-2010
Current
$43.45
$68,912
$45.40
Pennzoil
Oct-2010
$55.62
(See Argus Model)
Oct-2011
$57.29
Oct-2012
$59.01
Oct-2013
$60.78
Oct-2014
$62.60
One 5-year option to extend at fixed rate
Notes:
Ground Lease. Tenant pays 10% Admin Fee on top of CAM
6,712
Retail, Suite: 044
5.01%
Expires Mar-2013
Current
$28.19
$31.00
Pet Food Express
(See Argus Model)
2,853
Expires Feb-2013
NNN
$34.11
Two 5-year options at fixed rates
2.13%
$2.35
Apr-2013
Notes:
Phyllis' Giant Hambur
$189,211
Apr-2018
Options:
Retail, Suite: 036
NNN
Oct-2009
Options:
Pet Food Express
$3.62
Current
Mar-2012
$39.93
$43.92
$113,920
$3.33
NNN
15% Admin Fee
(See Argus Model)
Options:
None
Notes:
None
37
Financial Analysis
Rent Roll
Rent Roll 1 (4)
Tenant Name
Type & Suite Number
Square Feet
Lease Dates & Term
Pro Rata
Postal Annex+
1,210
Retail, Suite: 029
0.90%
Expires Jan-2013
Date
Current
Annual
Monthly
Expense
Monthly
Annual
PSF Rent
Rent
PSF Rent
Reimbursements
Rent PSF
Rent
$32,404
$2.23
NNN
$3.00
$36.00
$2.50
$30.00
$2.50
$30.00
$1.67
$20.00
$26.78
Feb-2013
$39.34
Postal Annex
Feb-2015
$43.27
(See Argus Model)
Options:
One 5-year option exists at FMV with increases
Notes:
Tenant currently in 1st option term. Tenant pays 15% Admin Fee on top of CAM
RadioShack
2,850
Retail, Suite: 020
2.13%
Current
$30.00
$85,500
$2.50
NNN
Radio Shack
Expires Apr-2013
(See Argus Model)
Options:
None
Notes:
Red Boy Pizza
1,847
Retail, Suite: 012
1.38%
Current
$27.01
$76,979
$2.25
NNN
15% Admin Fee
Expires Dec-2009
(See Argus Model)
Options:
None
Notes:
None
Rite Aid
24,769
Retail, Suite: 050
18.50%
Expires Oct-2013
Market Rental Rates
Annual
Current
$21.00
$59,850
$1.75
NNN
Nov-2013
$20.00
RiteAid
Nov-2018
$20.00
(See Argus Model)
Options:
Four 5-year option at FMV. Tenant Currently in 2nd option term. Two options remaining.
Notes:
38
Financial Analysis
Rent Roll
Rent Roll 1 (11)
Tenant Name
Type & Suite Number
Square Feet
Lease Dates & Term
Pro Rata
Safeway
51,199
Retail, Suite: 060
38.25%
Expires Jan-2025
Date
Current
Jan-2018
Annual
Monthly
Expense
Monthly
Annual
PSF Rent
Rent
PSF Rent
Reimbursements
Rent PSF
Rent
$307,194
$0.50
NNN
$1.00
$12.00
$2.25
$27.00
$2.25
$27.00
$3.00
$36.00
$6.00
$6.59
Safeway
(See Argus Model)
Feb-2025
$7.25
Feb-2035
$7.97
Feb-2045
$8.77
Feb-2050
$9.65
Feb-2055
$10.61
Options:
Two 10-Year & three 5-year option exists at 10% increase over prior period
Notes:
Spec Tenant - 005
4,200
Retail, Suite: 005
3.14%
Jul-2009 to Jun-2014
Options:
None
Notes:
None
Spec Tenant - 016
3,000
Retail, Suite: 016
2.24%
Jul-2009 to Jun-2014
Options:
None
Notes:
None
Specialty Tobacco
Retail, Suite: 033
770
Current
Market Rental Rates
Annual
$22.00
$92,400
$1.83
NNN
Jul-2010
$22.66
15% Admin Fee
Jul-2011
$23.34
(See Argus Model)
Jul-2012
$24.04
Jul-2013
$24.76
Current
$24.00
$100,800
$2.00
NNN
Jul-2010
$24.72
15% Admin Fee
Jul-2011
$25.46
(See Argus Model)
Jul-2012
$26.23
Jul-2013
$27.01
Current
$45.02
0.58%
Expires Mar-2010
$189,084
$3.75
NNN
15% Admin Fee
(See Argus Model)
Options:
Four 5-year option at FMV. Tenant Currently in 2nd option term. Two options remaining.
Notes:
39
Financial Analysis
Rent Roll
Rent Roll 1 (10)
Tenant Name
Type & Suite Number
Square Feet
Lease Dates & Term
Pro Rata
Subway
1,634
Retail, Suite: 018
1.22%
Expires Aug-2013
Date
Current
Sep-2009
Annual
Monthly
Expense
Monthly
Annual
PSF Rent
Rent
PSF Rent
Reimbursements
Rent PSF
Rent
$49,020
$2.50
NNN
$2.50
$30.00
$3.00
$36.00
$30.00
$30.90
15% Admin Fee
(See Argus Model)
Sep-2010
$31.83
Sep-2011
$32.78
Sep-2012
$33.77
Sep-2013
$34.78
Sep-2014
$35.82
Sep-2015
$36.90
Sep-2016
$38.00
Sep-2017
$39.14
Sep-2018
$40.32
Sep-2019
$41.53
Sep-2020
$42.77
Sep-2021
$44.06
Sep-2022
$45.38
Options:
Two 5-year options exist at fixed, 3% year-over-year increases
Notes:
None
Supercuts
2,850
Retail, Suite: 040
2.13%
Expires Oct-2009
Current
Market Rental Rates
Annual
$32.64
$93,024
$2.72
NNN
Nov-2009
$33.62
15% Admin Fee
Nov-2010
$34.63
(See Argus Model)
Nov-2011
$35.67
Nov-2012
$36.74
Nov-2013
$37.84
Options:
One 5-year option at fixed, 3% year-over-year increases
Notes:
40

Investment Offering Novato Fair Shopping Center, Novato, CA The

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