Shopko Lacey, WA - The Maffia Team

offering memorandum.
Shopko
Lacey, WA
Olympia
North Thurston
High School
Northwest Christian
High School
AAD
T)
Furniture Factory
Direct
Martin
Way (3
3,8
36 AAD
T)
/ (1
14,0
00
Actual Site
$15,730,000
6.75% CAP Rate
••Long Term 20-Year Absolute NNN Lease
••
••Located on a High Traffic Thoroughfare
••
12 Years Remaining
Adjacent to Interstate 5 (114,000 AADT)
••Rental Increases Every 3 Years
••
Rebranded & Renovated at
••Recently
Tenant’s Expense
125% of CPI or 6%
This property is listed in conjunction with Washington-licensed real estate broker Newmark Grubb Knight Frank.
www.maffiateam.com
Confidentiality & Disclosure
Newmark Cornish & Carey (“Broker”) has been retained on an exclusive basis to market the property described herein (“Property”).
Broker has been authorized by the Seller of the Property (“Seller”) to prepare and distribute the enclosed information (“Material”) for
the purpose of soliciting offers to purchase from interested parties. More detailed financial, title and tenant lease information may be
made available upon request following the mutual execution of a letter of intent or contract to purchase between the Seller and a prospective purchaser. You are invited to review this opportunity and make an offer to purchase based upon your analysis. If your offer
results in the Seller choosing to open negotiations with you, you will be asked to provide financial references. The eventual purchaser
will be chosen based upon an assessment of price, terms, ability to close the transaction and such other matters as the Seller deems
appropriate.
The Material is intended solely for the purpose of soliciting expressions of interest from qualified investors for the acquisition of
the Property. The Material is not to be copied and/or used for any other purpose or made available to any other person without the
express written consent of Broker or Seller. The Material does not purport to be all-inclusive or to contain all of the information that
a prospective buyer may require. The information contained in the Material has been obtained from the Seller and other sources and
has not been verified by the Seller or its affiliates. The pro forma is delivered only as an accommodation and neither the Seller, Broker, nor any of their respective affiliates, agents, representatives, employees, parents, subsidiaries, members, managers, partners,
shareholders, directors, or officers, makes any representation or warranty regarding such pro forma. Purchaser must make its own
investigation of the Property and any existing or available financing, and must independently confirm the accuracy of the projections
contained in the pro forma.
Seller reserves the right, for any reason, to withdraw the Property from the market. Seller has no obligation, express or implied, to
accept any offer. Further, Seller has no obligation to sell the Property unless and until the Seller executes and delivers a signed agreement of purchase and sale on terms acceptable to the Seller, in its sole discretion. By submitting an offer, a purchaser will be deemed
to have acknowledged the foregoing and agreed to release Seller and Broker from any liability with respect thereto.
Property walk-throughs are to be conducted by appointment only. Contact Broker for additional information.
Ryan Forsyth
Senior Associate
916.504.4908
rforsyth@newmarkccarey.com
CA RE License #01716551
Vincent Aicale
Vice President
415.373.4057
vaicale@newmarkccarey.com
CA RE License #01728696
901 Mariners Island Boulevard, Suite 120 • San Mateo, CA 94404 • Tel 415.373.4060 • Fax 415.373.4060 • www.maffiateam.com
Table of Contents
•Property Information........................................................................................................................1
•Financial Analysis........................................................................................................................... 2
•Tenant Information.......................................................................................................................... 3
•About the Area................................................................................................................................ 4
•Site Plan......................................................................................................................................... 5
•Aerials............................................................................................................................................ 6
•Location Maps................................................................................................................................ 9
•Demographics...............................................................................................................................12
Property Information
Location
Located at 5500 Martin Way in Lacey, Washington.
Lot Size
Approximately 12.68 acres, or 552,341 square feet.
Improvements
Construction was completed in 1993 of an approximately 95,614 square foot building for Shopko.
Lease
Leased to Shopko for 20 years from January 29th, 2007 to January 31st 2027. The current net annual rent is $1,011,240.
During the initial term, the base rent shall increase every 3 years by the lesser of 125% of CPI or 6%. The tenant has four
5-year options and upon the commencement of each option, the base rent shall be adjusted by Fair Market Value. Shopko
pays all taxes, insurance, and maintenance, including roof and structure.
Rent Schedule
Years
Income*
7-9
Return
$1,011,240
N/A
$1,061,802
6.75%
13-15
$1,125,510
7.16%
16-18
$1,193,040
7.58%
19-20
$1,264,623
8.04%
10-12
21-25
(Current)
(Option 1)
Fair Market Value
26-30 (Option 2)
Fair Market Value
31-35
(Option 3)
Fair Market Value
36-40 (Option 4)
Fair Market Value
Price
$15,730,000 (6.75% Return)
Financing
The property will be delivered free and clear of permanent financing.
*NOI increases every 3 years by the lesser of 125% of CPI or 6%. For the upcoming increase in Feb. 2016, a 5% increase is assumed and
this is the income that is capitalized. For future increases 6% increases are assumed.
1
Financial Analysis | Possible Financing
Financing
The property will be delivered free and clear of permanent financing. A possible new 10-year loan may be secured in the
amount of $8,984,250. The loan will be fixed for 10 years at an interest rate of 4.40% with interest only for the entire term
of the loan. The cash-flow analysis is below:
Cash Flow
Year 1
Year 4
Year 7
Price
$16,335,000
Net Income
$1,061,802
$1,125,510
$1,193,041
Loan Amount
<$8,984,250>
Debt Service
<395,307>
<395,307>
<395,307>
Equity
$7,350,750
Cash Flow
$666,495
$730,203
Cash-on-Cash Return
9.07%
9.93%
$797,734
10.85%
To discuss this loan and other financing options, please contact Louis Weisman of Berkadia Commercial Mortgage at (206)
521-7219 or Louis.Weisman@berkadia.com.
2
Tenant Information
Shopko is a chain of retail stores based in Ashwaubenon, Wisconsin, near Green Bay. Shopko was founded in 1962 by
James Ruben, and its first store opened in Green Bay. From 1991 to 2005, the company was publicly held, with stock traded
on the New York Stock Exchange under the symbol SKO. In December 2005, the company was acquired by an affiliate of
Sun Capital Partners and reverted to private ownership. In 1999, Shopko purchased Pamida, a regional discount chain that
operated mainly in smaller communities of 3,000 to 8,000 people. Shopko operated Pamida as a separate division until
2007 when Pamida was separated from Shopko and reestablished as a separate company. In 2012, Shopko and Pamida
merged into one company. Shortly after, most Pamida stores were rebranded as Shopko Hometown. The company also
owns and operates a chain of pharmacies called Shopko Express.
Shopko operates nearly 350 located in 20 states including Northern California, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, North Dakota, Ohio, Oregon, South Dakota, Utah, Washington,
Wisconsin, and Wyoming. The majority of Shopko stores are located in small to mid-sized communities.
For more information, please visit www.Shopko.com.
3
About the Area
Site Information
The subject property is located in the Martin Village Shopping Center on Martin Way East, just off of the Interstate 5/
Martin Way off ramp in Lacey, Washington. The propery is located in a shopping center with anchor tenants such as Regal
Cinema and Top Drug. Other tenants in the shopping center are US Bank and Taco Bell. The immediate area contains
complementary retail tenants such as Starbucks, AutoZone, Regions Bank, Burger King and Metropolitan Bank.
General Overview
Lacey features a diverse array of businesses, ranging from retail to warehousing/distribution centers, a large retirement
community, a major mushroom farm, and Weyerhaeuser’s corrugated container facility. As Lacey continues to grow,
many businesses continue to feed into the city. Lacey now offers a Regal 16 Movie Theater, which is one of the largest
theaters in the area. Other businesses that have recently come into Lacey include LA Fitness, Best Buy, Costco, The Home
Depot, Lowe’s, Thrive Community Fitness Center and many strip malls and market squares. Sports outfitter Cabela’s
opened its Lacey location in November 2007, its first store in the south Puget Sound area. It attracts fishing, hunting,
and outdoor enthusiasts from around the state, many of whom spend more than three hours in the store per visit.
Lacey was the twelfth city to be designated an official “Green Power Community” by the U.S. Environmental Protection
Agency for its use of renewable energy sources; 5% of its total energy use comes from green power sources.
Being that Lacey is only 55 miles away from Seattle, some consider it part of Seattle Metro. With an estimated 652,405
residents as of 2013, Seattle is the largest city in both the State of Washington and the Pacific Northwest region of North
America and, as of July 2013, the fastest-growing major city in the United States. The Seattle metropolitan area of around
3.6 million inhabitants is the 15th largest metropolitan area in the United States.
Many of Lacey’s residents work in Seattle. Seattle’s economy is driven by a mix of older industrial companies, and “new
economy” Internet and technology companies, service, design and clean technology companies. The city’s gross metropolitan product was $231 billion in 2010, making it the 12th largest metropolitan economy in the United States. The Port
of Seattle, which also operates Seattle–Tacoma International Airport, is a major gateway for trade with Asia and cruises
to Alaska, and is the 8th largest port in the United States in terms of container capacity. Though it was affected by the
Great Recession, Seattle has retained a comparatively strong economy, and remains a hotbed for start-up businesses,
especially in green building and clean technologies: it was ranked as America’s No. 1 “smarter city” based on its government policies and green economy. February 2010, the city government committed Seattle to becoming North America’s
first “climate neutral” city, with a goal of reaching zero net per capita greenhouse gas emissions by 2030. Amazon headquarters building in South Lake Union. Still, very large companies dominate the business landscape. Four companies on
the 2013 Fortune 500 list of the United States’ largest companies, based on total revenue, are headquartered in Seattle:
Internet retailer Amazon.com (#49), coffee chain Starbucks (#208), department store Nordstrom (#227), and freight forwarder Expeditors International of Washington (#428). Other Fortune 500 companies popularly associated with Seattle
are based in nearby Puget Sound cities. Warehouse club chain Costco (#22), the largest retail company in Washington, is
based in Issaquah. Microsoft (#35) is located in Redmond.
4
MARTIN WAY
Site Plan
95,614 SF
Furniture Factory
Direct
5
Aerial | Close-Up View
/ (114,000 AADT)
Ma
rtin
Wa
y(
33
,83
6A
AD
T)
Furniture Factory
Direct
Aerial | West View
Olympia
North Thurston
High School
Northwest Christian
High School
Martin
Way (3
3,8
36 AAD
T)
/ (1
14,0
00
AAD
T)
Furniture Factory
Direct
Aerial | East View
River Ridge
High School
Lacey Regional
Athletic Complex
rt
Ma
y(
Wa
in
6A
,83
33
T)
AD
/(
11
4,
00
0
AA
DT
)
Furniture Factory
Direct
Location Map
Site
Location Map
Site
Location Map
Site
Demographics
5500 Martin Way E
Lacey, WA 98516
2014 Group Quarters
582
1,493
2,014
2019 Total Population
4,087
58,820
137,166
2014-2019 Annual Rate
0.52%
0.78%
1.06%
Household Summary
2000 Households
1,362
19,584
41,826
2000 Average Household Size
2.37
2.46
2.48
2010 Households
1,462
22,240
50,661
2010 Average Household Size
2.32
2.43
2.44
2014 Households
1,482
22,837
52,808
5500 Martin Way E, Lacey, Washington, 98516
2014 Average Household Rings:
Size
2.29
2.41
2.43
1, 3, 5 mile radii
Latitude: 47.04938
2019 Households
1,539
23,863
55,819
Longitude: -122.81191
2019 Average Household Size
2.28
2.40
2.42
1 mile
3 mile
5 mile
2014-2019 Annual Rate
0.76%
0.88%
1.12%
Population
Summary
2010 Families
825
13,810
32,501
2000
Total
Population
3,394
49,036
104,894
2010
Average
Family Size
2.95
3.00
2.97
2010
Total
Population
3,911
55,435
125,404
2014 Families
820
14,061
33,708
2014
Total
Population
3,983
56,569
130,116
2014 Average Family Size
2.93
2.98
2.95
2014
Group Quarters
582
1,493
2,014
2019
Families
839
14,604
35,512
2019
Total
Population
4,087
58,820
137,166
2019 Average Family Size
2.92
2.97
2.94
2014-2019
0.52%
0.78%
1.06%
2014-2019 Annual
Annual Rate
Rate
0.46%
0.76%
1.05%
Household
Summary
Housing
Unit
Summary
2000 Housing
Households
1,362
19,584
41,826
2000
Units
1,434
20,589
44,017
2000
Household
Size
2.37
2.46
2.48
OwnerAverage
Occupied
Housing Units
55.2%
54.3%
60.3%
2010
Households
1,462
22,240
50,661
Renter
Occupied Housing Units
39.8%
40.8%
34.7%
2010
Average
Size
2.32
2.43
2.44
Vacant
HousingHousehold
Units
5.0%
4.9%
5.0%
2014
1,482
22,837
52,808
2010 Households
Housing Units
1,575
23,699
54,026
2014
Household
Size
2.29
2.41
2.43
OwnerAverage
Occupied
Housing Units
48.0%
51.9%
58.9%
2019
Households
1,539
23,863
55,819
Renter
Occupied Housing Units
44.8%
42.0%
34.8%
2019
Average
Size
2.28
2.40
2.42
Vacant
HousingHousehold
Units
7.2%
6.2%
6.2%
2014-2019
0.76%
0.88%
1.12%
2014
Housing Annual
Units Rate
1,621
24,515
56,560
2010
Families
825
13,810
32,501
Owner
Occupied Housing Units
44.4%
49.8%
57.4%
2010
Family
SizeUnits
2.95
3.00
2.97
RenterAverage
Occupied
Housing
47.0%
43.3%
36.0%
2014
Families
820
14,061
33,708
Vacant Housing Units
8.6%
6.8%
6.6%
2014
Average
Family Size
2.93
2.98
2.95
2019
Housing
Units
1,699
25,679
59,727
2019
Families
839
14,604
35,512
Owner
Occupied Housing Units
43.0%
49.7%
57.6%
2019
Family
SizeUnits
2.92
2.97
2.94
RenterAverage
Occupied
Housing
47.6%
43.2%
35.8%
2014-2019
Annual
Rate
0.46%
0.76%
1.05%
Vacant Housing
Units
9.4%
7.1%
6.5%
HousingHousehold
Unit Summary
Median
Income
1,434
20,589
44,017
2000 Housing Units
2014
$39,798
$55,548
$62,793
Owner Occupied Housing Units
55.2%
54.3%
60.3%
2019
$47,856
$63,433
$74,438
Renter
Occupied
39.8%
40.8%
34.7%
Median
Home
ValueHousing Units
Vacant Housing Units
5.0%
4.9%
5.0%
2014
$203,631
$235,180
$251,421
5500 Martin Way E, Lacey, Washington, 98516
2010
1,575
23,699
54,026
2019 Housing Units
$236,972
$267,899
$293,987
Rings: 1, 3, 5 mile radii
Latitude: 47.04938
Owner Occupied
48.0%
51.9%
58.9%
Per Capita
Income Housing Units
Renter Occupied Housing Units
44.8%
42.0% Longitude: -122.81191
34.8%
2014
$21,638
$28,167
$31,998
17.2%
mile
36.2%
mile
56.2%
mile
Vacant Housing Units
2019
$25,323
$32,356
$36,650
2014
Households
by Income
2014
Housing
Units
1,621
24,515
56,560
Median
Age
Owner Occupied
Housing Units
44.4%
49.8%
57.4%
Household
Income Base
1,482
22,837
52,808
2010
31.7
36.9
37.6
Renter Occupied Housing Units
47.0%
43.3%
36.0%
<$15,000
14.4%
9.4%
8.7%
2014
30.7
37.4
38.2
Vacant Housing
Units
8.6%
6.8%
6.6%
2019
30.7
38.0
38.8
$15,000
- $24,999
13.7%
10.1%
7.7%
2019
Housing
Units
1,699
25,679
59,727
$25,000
- $34,999
16.7%
10.4%
8.3%
Owner Occupied
Housing Units
43.0%
49.7%
57.6%
$35,000
- $49,999
13.1%
13.8%
13.1%
Renter
Occupied
Housing
Units
47.6%
43.2%
35.8%
Data Note:$50,000
Household
includes
persons not residing in group quarters. Average Household Size
is the household population
divided by total households.
- population
$74,999
17.7%
20.6%
20.0%
Persons in families
theUnits
householder and persons related to the householder by birth, marriage, or adoption.
Per Capita Income7.1%
represents the income received
by
Vacantinclude
Housing
9.4%
6.5%
$75,000 - $99,999
11.5%
14.8%
15.4%
all persons
agedHousehold
15 years and Income
over divided by the total population.
Median
$100,000
$149,999
10.5%
15.5%
18.4%
Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2014 and 2019. Esri converted Census 2000 data into 2010 geography.
2014
$39,798
$55,548
$62,793
$150,000 - $199,999
1.0%
2.9%
4.9%
January$74,438
09, 2015
2019
$47,856
$63,433
$200,000+
1.3%
2.5%
3.5%
Median Home Value
Average Household Income
$52,665
$68,513
$78,098
2014
$203,631
$235,180
$251,421
©2014 Esri
Page 1 of 7
2019
Households by Income
2019
$236,972
$267,899
$293,987
Household
Income Base
1,539
23,863
55,819
Per
Capita Income
<$15,000
13.7%
8.8%
7.9%
2014
$21,638
$28,167
$31,998
$15,000 - $24,999
10.7%
7.5%
5.6%
2019
$25,323
$32,356
$36,650
$25,000
14.1%
8.1%
6.2%
Median
Age - $34,999
Market Profile
Market Profile
$35,000 - $49,999
2010
$50,000 - $74,999
2014
2019
$75,000 - $99,999
$100,000 - $149,999
$150,000 - $199,999
12.9%
31.7
17.9%
30.7
30.7
14.1%
13.1%
36.9
19.7%
37.4
38.0
17.3%
11.9%
37.6
18.7%
38.2
38.8
17.5%
12.9%
1.8%
17.8%
4.1%
20.5%
6.9%
Data Note:$200,000+
Household population includes persons not residing in group quarters. Average Household Size
is the household population
divided by total households.
1.9%
3.6%
4.8%
Persons in families include the householder and persons related to the householder by birth, marriage, or adoption. Per Capita Income represents the income received by
Average Household Income
$60,692
$78,241
$89,184
all persons aged 15 years and over divided by the total population.
2014
Occupied
Housing
Units by
Source:
U.S. Owner
Census Bureau,
Census
2010 Summary
FileValue
1. Esri forecasts for 2014 and 2019. Esri converted Census 2000 data into 2010 geography.
Total
<$50,000
720
8.1%
12,216
5.0%
32,466
3.5%
January 09, 2015
12