Pocatello Retail Center

Pocatello
Retail Center
Poca
te
, ID
llo
Value-Add Retail center within
Prominent regional retail area
1737 Hurley Dr., Pocatello, ID 83201
[ www.CapitalPacific.com ]
POCATELLO RETAIL CENTER IS A 5,955 SF
MULTI-TENANT RETAIL CENTER LOCATED
WITHIN A MAJOR RETAIL DESTINATION
AREA IN POCATELLO, IDAHO.
Investment Highlights
The offering provides an opportunity to acquire a 75% occupied
value-add retail center with both existing tenants being first
generation tenants, occupying space at the Center since 2006. Pocatello
Retail Center benefits from the stability of its long-tenured existing tenants
and also provides an opportunity for an investor to increase their yield more than 200 basis
points upon lease up of the available suite.
The subject is situated within a regional shopping destination area with several national retailers
located in the immediate vicinity off of Highway 91. The frontage road, Hurley Drive, is part of
a business loop off Highway 91 that includes Dick’s, Ross, TJ Maxx, Lowe’s as well as a Walmart
Supercenter within close proximity.
PRICE: $1,195,000
IN PLACE CAP: 6.30%
BUILD-TO CAP: 8.30%
LEASABLE SF. . . . . . . . . . . . . ±5,955 SF
LAND AREA. . . . . . . . . . . . . . . ±34,848 SF
OCCUPANCY. . . . . . . . . . . . . . 75%
YEAR BUILT. . . . . . . . . . . . . . . 2006
PARKING. . . . . . . . . . . . . . . . . ±35 Spaces or 5.8/1,000 SF
MAJOR TENANT . . . . . . . . . . AT&T
ADDRESS:
1737 Hurley Dr., Pocatello, ID 83201
POCATELLO RETAIL CENTER | 2
Core Characteristics
NATIONAL RETAILER DESTINATION
SIGNIFICANT LEASING UPSIDE
RETAIL DESTINATION AREA IN SOUTHEASTERN IDAHO
Pocatello Retail Center is located within an area of Pocatello serviced by several major
national retailers that create a wide retail draw extending across the southeastern
Idaho region. Major retailers within close proximity to the Property include Walmart
Supercenter, Costco, and a Lowe’s Home Improvement Warehouse as well as the 526,000
SF Pine Ridge Mall. Additionally, Lithia auto group is in the process of developing a
new larger 4.5-acre site for the Chrysler Jeep Dodge dealership one block north of the
Property, to be open before 2017.
VALUE-ADD OPPORTUNITY
Pocatello Retail Center provides an opportunity for an investor to increase their yield as
much as 200 basis points upon stabilization. The lease up of the remaining 25% consists
of one available suite at 1,500 SF.
EXPOSURE TO HEAVILY TRAFFICKED HIGHWAY
The Property’s location on Hurley Drive is exposed Highway 91, the main retail thoroughfare
running through Pocatello. Highway 91 carries more than 25,000 vehicles per day and
connects Interstate 86 north of the Property to all the major retailers in Pocatello.
NATIONALLY-RECOGNIZED MAJOR TENANT WITH STRONG RENEWAL HISTORY
Both existing tenants are firs generation, having occupied space at the Subject since 2006.
AT&T occupies nearly half of the GLA at the Property and provides the ownership the stability
of a nationally-recognized tenant that just signed a three-year extension.
STRENGTHENING ECONOMIC REGION
Recent expansions of prominent area businesses and strong economic growth in Pocatello and
Idaho have helped the region and the state recognize extremely low unemployment rates. Idaho
currently sits at 3.8% unemployment statewide, much lower than the national average of 5.5%.
Idaho currently has the 11th-fastest growing population in the country and has recently added
50% more jobs than it lost in the recession.
POCATELLO RETAIL CENTER | 3
Quick Stats
LEASE TYPE: FRANCHISEE
NYSE: T
EMPLOYEES: 240,000+
5,000+
LOCATIONS WORLDWIDE
65+ LOCATIONS FRANCHISEE ONLY
BBB
STANDARD & POOR'S
INVESTMENT GRADE
CREDIT RATING
NET OPERATING INCOME
$102,669
200
BASIS POINT
GROWTH
CAP: 8.30%
Stabilized
$74,962
CAP: 6.30%
As-Is
$
POCATELLO RETAIL CENTER | 4
28,000 VPD
Surrounding Retail
PINE RIDGE MALL
C-A-L Ranch
Foot Locker
Herberger’s
JCPenny
Payless Shoe Source
Red Lobster
ShopKo
FULL LIST OF PINE
RIDGE MALL
91
OTHER RETAIL
Lowe’s
McDonald’s
Moutain America C.U.
Pizza Hut
Petco
Ross
Sally Beauty
Staples
Shops on Bullock
Starbucks
Subway
T.J. Maxx
T-Mobile
Verizon
Walgreens
Walmart Supercenter
Wendy’s
Xpress Cash
26,579 VPD
86
PINE RIDGE MALL
YELLOWSTONE AVE
Aaron’s
Anytime Fitness
Arby’s
Ashley Furniture
AT&T
Banzai’s
Bed Bath & Beyond
Burger King
Carmike Cinemas
Costco
Denny’s
Denver Mattress
Dick’s Sporting Goods
Dollar Tree
Harbor Freight Tools
Home Depot
IHOP
Joann Fabric & Craft
Les Schwab Tires
POCATELLO
RETAIL CENTER
CLICK HERE FOR FULL DIRECTORY
W QUINN AVE
POCATELLO RETAIL CENTER | 5
Aerial
26,579 VPD
YELLOWSTONE AVE
86
PINE RIDGE MALL
CLICK HERE FOR FULL DIRECTORY
28,000 VPD
POCATELLO
RETAIL CENTER
W QUINN AVE
POCATELLO RETAIL CENTER | 6
Site Plan
SITE PLAN KEY
PARCEL OUTLINE:
LAND AREA:
±34,848 SF
LEASABLE SF: ±5,955 SF
INGRESS/EGRESS:
SUBJECT:
MEDITERRANEAN
SUN
PYLON SIGN:
HURL
E
Y DR
5,90
5 DA
ILY
AVAILABLE
Site Plan Not To Scale
POCATELLO RETAIL CENTER | 7
Income & Expense
Financial Summary
IN-PLACE
PRICE
$1,195,000
$1,195,000
$1,234,000
PLUS: LEASING COSTS
$39,000
TOTAL INVESTMENT
Capitalization Rate
Price Per Foot
NET OPERATING INCOME SUMMARY
SCHEDULED INCOME
Scheduled Rent:
11/1/2016
Plus: Expense Reimbursement
Equals: Scheduled Gross Income
Current │ Proforma Vacancy
25%
Equals: Effective Gross Income (EGI)
Less: OPERATING EXPENSES
CAMS
Property Taxes
Insurance
Management Fee2
Reserves
Total Operating Expenses
6.30%
8.30%
$201
$207
IN-PLACE
4.0% of EGI
$15
1
6%
STABILIZED
Per SF1
$14.13
$3.74
$17.86
$84,135
$22,250
$106,385
$17.86
$106,385
$111,135
$30,015
$141,150
($7,058)
$134,093
Per SF1
$0.91
$3.06
$0.29
$0.92
$0.10
$5.28
$5,400
$18,227
$1,741
$5,460
$596
($31,423)
$5,400
$18,227
$1,741
$5,460
$596
($31,423)
$12.59
$74,962
$102,669
5%
Equals: NET OPERATING INCOME
LEASING COSTS
Tenant Improvement Allowance
CAMS on Vacancy
Leasing Commissions
TOTAL LEASING COSTS
STABILIZED
$1,195,000
SF
Year
5 Years
$23,000
$8,000
$8,000
$39,000
Notes:
1) Based on in-place occupancy.
2) Percentage based on Stabilized EGI.
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied,
as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or
implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
POCATELLO RETAIL CENTER | 8
Rent Roll
Rent Roll
TENANT INFO
LEASE TERMS
CURRENT RENT
Tenant Name
Suite
Size
% of SF
Occupancy
Date
Lease
Expiration
Monthly Base Rent
Rent/SF/YR
AT&T Wireless
1
2,800
47.0%
1/3/06
6/30/19
$4,667
$20.00
Available
2
1,500
25.2%
$2,250
$18.00
Mediterranean Sun
3
1,655
27.8%
$2,345
$17.00
$9,261
$7,011
$2,250
$18.66
$18.89
$18.00
8/1/06
9/30/17
comments: Tenant is currently month-to-month and in the process of signing a one-year
lease extension. Analysis dates assume a one-year extension.
Totals:
Occupied
Leasable
5,955
4,455
1,500
100%
75%
25%
OPTIONS
LEASE
TYPE
1-3 YR
6% Increase
90 Days Notice
NNN
1-3 YR
3% Annual Increases
180 Days Notice
NNN
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must
verify the information and bears all risk for any inaccuracies.
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or
implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
POCATELLO RETAIL CENTER | 9
Operating Expenses
Operating Expenses
2016 OPERATING EXPENSES
Total
CAMS
/SF
REIMBURSEMENTS
Notes
In-Place
Stabilized
$5,400
$0.91
1
$4,040
$5,400
$18,227
$3.06
2
$13,636
$18,227
Insurance
$1,741
$0.29
1
$1,302
$1,741
Management Fee
$5,460
$0.92
3
$3,272
$4,648
$596
$0.10
4
-
-
$31,423
$5.28
$22,250
$30,015
Property Taxes
Reserves
Total Expenses
Notes:
1) Based on 2015 Actuals plus 3% increase.
2) Based on 2016 Bannock County Tax Assessment.
3) Based on 4% of Stabilized EGI.
4) Methodology: $0.10/SF.
8/8/2016
[ www.CapitalPacific.com ]
<
>
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or
implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
POCATELLO RETAIL CENTER | 10
Reimbursements
Reimbursements
Tenant Name
Size
Pro Rata
%
Expense Totals
Pro Rata
CAM
Pro Rata
Property
Taxes
Pro Rata
Insurance
Pro Rata
Management
$5,400
$18,227
$1,741
$5,460
Notes
In-Place
Reimbursements
Vacancy
Reimbursements
AT&T Wireless
2,800
47.0%
$2,539
$8,570
$818
$2,567
$14,495
$0
Available
1,500
25.2%
$1,360
$4,591
$438
$1,375
$0
$7,765
Mediterranean Sun
1,655
27.8%
$1,501
$5,066
$484
$705
$7,755
$0
100%
$5,400
$18,227
$1,741
$4,648
$22,250
$7,765
TOTAL
1
Notes:
1) Management Fee shall not exceed 10% of operating costs.
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or
implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
POCATELLO RETAIL CENTER | 11
Lease Abstract
COMMON AREA MAINTENANCE
Tenant to reimburse Landlord for all operating costs necessary for
maintenance and repair of the Premises including all management costs.
LANDLORD MAINTENANCE OBLIGATIONS
Landlord shall maintain, repair and replace all life safety systems,
foundations, walls, unexposed plumbing, all structural elements, all
mechanical equipment not serving the Premises exclusively, all HVAC
equipment not serving the Premises exclusively and the roof.
PREMISES/TERM
TENANT
SQUARE FEET
RENT COMMENCEMENT
LEASE EXPIRATION
OPTIONS PERIOD(S)
New Cingular Wireless, LLC dba AT&T
±2,800 SF
January 3, 2006
June 30, 2019
One, three-year option with a 6%
increase in base rent.
TENANT MAINTENANCE RESPONSIBILITIES
Tenant is responsible for repair of the Premises, including plumbing, HVAC,
mechanical and electrical systems, security and fire protection systems.
EXCLUSIVES
Tenant shall have the exclusive right to sell wireless communication
equipment, and operate as a wireless service provider and distributor.
BASE RENT
LEASE YEAR
PER SQUARE FOOT
MONTHLY
ANNUALLY
7/1/16–6/30/19
3rd Option Period
$20.00
$21.20
$4,666.67
$4,946.67
$56,000
$59,360
UTILITIES
Tenant to pay for all electric, gas, water, sewer, phone, computer and
internet services.
REAL ESTATE TAXES
Tenant shall be responsible for all real estate taxes, charges and
assessments on the Premises including any improvements and fixtures.
INSURANCE
Tenant responsible for general liability policy as well as an all risk insurance
policy.
POCATELLO RETAIL CENTER | 12
Construction Details
FOUNDATION
WINDOWS AND DOORS
Swinging glass doors with
aluminum frame storefront
systems.
Concrete slab on grade foundation.
EXTERIOR WALLS
CMU block construction with
decorative stucco and stacked stone
veneer accents.
PLUMBING
HVAC
One restroom with
toilet and sink for
each suite, typical of a
retail use.
Three roof-mounted
units at the center service
the three individual
suites.
ELECTRICAL
LANDSCAPING
200-amp service for
each individual suite,
which is separately
metered.
Manicured grass and
deciduous trees line the
parcel exterior bordering
Hurley Drive.
ROOF
SIGNAGE
Flat, built-up membrane roof.
PARKING
14’ Pylon sign exposed to
north and southbound traffic
on Hurley Drive.
Total: ±35 Spaces or 5.8/1,000 SF
POCATELLO RETAIL CENTER | 13
Pocatello, ID
ABOUT POCATELLO, ID
Founded in 1889, Pocatello is known as the “Gateway
to the Northwest.” Located in southeast Idaho,
Pocatello is the county seat and largest city of Bannock
County, Idaho. It is the principal city of the Pocatello
metropolitan area, which encompasses all of Bannock
and Power counties, and is the fifth largest city in
Idaho. Pocatello has a four-season climate where clear,
sunny and dry is the norm. The area is popular for its
numerous outdoor activities including hiking, biking,
fishing, skiing and riding ATV’s.
POPULATION – DRIVE-TIMES
2010
2016 2021
2016 HOUSEHOLD INCOMES – DRIVE-TIMES
Employment in Pocatello is anchored by education,
health and social services. The city’s largest employer
is Idaho State University, a public university with
over 15,000 students. Pocatello benefits from a 4.6%
unemployment rate compared to the national average
of 6.3% and expects near term future job growth of
more than double the national average.
Median Average
10-Min20-Min30-Min
$40,940 $42,723 $43,087
$55,987 $58,479 $58,183
POPULATION – RADIUS
2010
2016 2021
1-Mile3-Mile5-Mile
7,903 51,473 67,057
8,091 53,039 69,044
8,151 53,585 69,671
2016 HOUSEHOLD INCOMES – RADIUS
Median Average
1-Mile3-Mile 5-Mile
$36,352 $42,183 $41,490
$46,403 $57,090 $56,906
DRIVE-TIME
KEY
Idaho
Falls
Boise
10-Min20-Min30-Min
52,347 75,185 100,008
53,953 77,399 102,575
54,508
78,111 103,309
10 minutes
Pocatello
50 Min
52 Miles
20 minutes
30 minutes
3 Hr, 18 Min
240 Miles
5-MILES
2 Hr, 19 Min
165 Miles
3-MILES
1-MILE
POCATELLO
RETAIL CENTER
Salt Lake City
POCATELLO RETAIL CENTER | 14
Idaho/Pocatello Economic Growth
TOP EMPLOYERS
# Of
Employer
Employees
Idaho State University
3,811
Pocatello/Chubbuck School District
1,716
Portneuf Medical Center
1,294
ON Semiconductor
700
Pocatello City Government
654
Convergys564
Union Pacific Railroad
470
Bannock County
420
FBI DATA CENTER EXPANSION
Operating in Pocatello since 1985
Adding 300+ High Paying Jobs
Expansion will be complete in the Spring of 2017
Pocatello Location is a major hub for the Federal Agency
$10 Million Project
CLICK HERE FOR MORE INFO
CATERPILLAR EXPANSION
150,000 SF Built on a 26-Acre Site
Provides added jobs to the Pocatello Market
$25 Million Construction Project
60 year history in Pocatello with an implied
long-term commitment
CLICK HERE FOR MORE INFO
IDAHO GROWTH
11th FASTEST
GROWING POPULATION
IN THE UNITED STATES
93,000
NEW JOBS
REPLACED 60,000 LOST
DURING THE RECESSION
3.8%
UNEMPLOYMENT RATE
STATEWIDE
Caterpillar, Pocatello, ID
www.caterpillar.com/en/company.html
POCATELLO RETAIL CENTER | 15
A unique HUMAN
RESULTS-DRIVEN
client experience
THE CAPITAL PACIFIC EXPERIENCE - OUR DAILY COMMITMENT TO OUR CLIENTS
[ www.CapitalPacific.com ]
PETER DUNN
KEVIN ADATTO
SEAN MACK
SEAN TUFTS
pdunn@capitalpacific.com | (503) 607-0197
smack@capitalpacific.com | (503) 675-8378
kadatto@capitalpacific.com | (503) 675-7726
stufts@capitalpacific.com | (206) 743-8468
[ Copyright © 2016 Capital Pacific LLC ]
MICHAEL HORWITZ
mhorwitz@capitalpacific.com | (503) 675-8381