El Pollo Loco - Strategic Retail Group

El Pollo Loco -Absolute Net Ground Lease
STRATEGIC
NWC COUNTRY CLUB DR. & SOUTHERN AVE., MESA, ARIZONA
RETAIL GROUP
INVESTMENT OPPORTUNITY
Outstanding Location. Long Term Lease
Greg Abbott
Senior Vice President
602.792.5200
grega@srgaz.com
Brian Gast
Vice President
602.792.5201
briang@srgaz.com
STRATEGIC
El Pollo Loco, Mesa, AZ
RETAIL GROUP
STRATEGIC
Table of Contents
RETAIL GROUP
Executive Summary
3
Site Plan
4
Trade Area Aerial
5
Proximity Map
6
Tenant Information
7
Income Statement/Operating Data
8
Metropolitan Phoenix Information
9
Confidentiality Agreement/Disclosure
10
Information contained herein is believed to be accurate but is not warranted as to accuracy and may
change or be updated without notice. Seller or landlord makes no representation as to the environmental condition of the property and recommends purchaser’s or tenant’s independent investigation.
El Pollo Loco, Mesa, AZ
Table of
Contents
Executive Summary
STRATEGIC
RETAIL GROUP
Property:
El Pollo Loco -Absolute Net Ground Lease
Property Location:
North of Northwest Corner Country Club & Southern Ave., Mesa, AZ
1036 S. Country Club Dr., Mesa, AZ 85210
Parcel Number:
134-17-022D
Property Type:
Ground Lease. Improved by a single drive-thru restaurant building. Part of a larger shopping center.
Land Area:
21,606 sf (.5 acre) includes cross access and parking with the shopping center behind subject property.
Building Size:
3,060 SF
Year Constructed:
1998
Occupancy:
100%
NOI:
$75,600.00
Cap Rate:
6.0%
Price:
$1,260,000
Lease Term:
5 years expiring (4/30/2018) with four (4) five (5) year options to renew
Comments:
Long term ground lease, improved with a successful single tenant drive-thru restaurant building.
-Successful franchisee with 13 locations (9 in Metropolitan Phoenix and 3 in California).
-Very strong location with extremely busy traffic and surrounded by very dense residential and
employment demographics.
El Pollo Loco, Mesa, AZ
Executive
Summary
3
Site Plan
STRATEGIC
RETAIL GROUP
Salon
1 Insurance
2 Massage
3
4 CONV. MARKET
5
Samurai
Comics
11 12
14
13
J&K
Trading
7
17
GG & D Financial
& Check Cashing
10
15 16
GCB Sports Exchange
United Beauty
Supply
18 19 20
22
21
8 9
23
31
30
BOSA
DONUTS
Southern Avenue
6
Su
27 Rent1st
28
25
Gold
Exchange
bje
ct
26
29
24
Country Club Drive
El Pollo Loco, Mesa, AZ
Site Plan
4
Trade Area Aerial
STRATEGIC
Alma School Rd.
RETAIL GROUP
Mesa Dr.
Mesa Riverview
Tempe Marketplace
Stapley Dr.
Spring Training
Brown Rd.
2,681 employees
186,161 patient visit/
admissions per year
Country Club Dr.
Mekong Plaza
Asain Cultural Center
Dobson Rd.
Downtown Mesa
Fiesta Mall
Main St.
Gilbert Rd.
University Dr.
Broadway Rd.
Over 27,000 students
Largest Community College
in the US
Su
bje
ct
Mesa Grand
Southern Ave.
McClintock Dr.
Mesa Financial Plaza
(Bank of America Building)
16 Stories -Mesa’s tallest
building
Baseline Rd.
Over 15,000 residents
and one of the largest
master planned
communities in AZ.
Dobson
Ranch
Golf Course
Kokopelli
Golf Club
Gilbert Commons
El Pollo Loco, Mesa, AZ
Trade Area
Aerial
5
STRATEGIC
Proximity Map
RETAIL GROUP
t
ec
bj
Su
•
•
•
Excellent location in the center of Phoenix’s Southeast Valley.
Surrounded by very dense residential and daytime employment population.
Very close to numerous freeways which provide easy & convenient access to a wide area of Metro Phoenix.
El Pollo Loco, Mesa, AZ
Proximity
Map
6
STRATEGIC
Tenant Information
RETAIL GROUP
El Pollo Loco operates nearly 400 restaurants located in California, Arizona, Nevada, Utah and Texas. El Pollo Loco’s menu
features its signature fire grilled chicken in individual and family sized meals with warm tortillas, freshly prepared salsas, and
an assortment of sides. El Pollo also serves a variety of Mexican inspired entrees featuring the chain’s grilled chicken including
“Pollo Bowl” entrees, grilled chicken salads, grilled burritos, stuffed quesadillas, tacos and more. For more information visit
www.elpolloloco.com
THE TENANT – PACK-HUYNH, LLC with ARIZONA COLORADO ENTERPRISES, LLC as additional guarantor
Pack-Huynh, LLC, an extremely successful, multi-unit franchisee with multiple restaurant brand experience and a strong track record of success,
owns and operates nine (9) El Pollo Loco restaurants in Metropolitan Phoenix as well as three other El Pollo Loco restaurants in California that are
owned and operated by Tenant’s principals and/or sister companies. Tenant’s principals have a successful 40 year track record of franchise restaurant operations, 20 of which have been with El Pollo Loco. Additionally, one of Tenant’s principals has 26 years of El Pollo Loco corporate experience where he worked his way up, through the ranks, to Director of Franchise Operations where he oversaw 72 restaurants and all new restaurant
openings for El Pollo Loco. He is widely considered the most knowledgeable and capable operator in the El Pollo Loco chain.
Arizona Colorado Enterprises, LLC and/or its principals were one of the first El Pollo Loco franchisees and have owned and operated 12 locations
in California as well as 11 in Arizona. In 1994 principals of Arizona Colorado Enterprises took over operation of their first El Pollo Loco location in
California. They continued to add locations in California and in 1997 were given the rights to develop El Pollo Loco in Arizona where they added 11
locations. Principals of Arizona Colorado Enterprises have served on the El Pollo Loco Franchisee Association Board.
In 2013, Pack-Huynh, LLC acquired nine El Pollo Loco Restaurants from Arizona Colorado Enterprises, LLC and both entities remain liable under the
lease. Pack-Huynh have a proven track record of increasing sales through improved operations. They emphasize service through careful training
of the crew, keeping facilities in top notch condition and providing consistent and high quality product. Pack-Hyunh plans to complete significant
upgrades to the recently acquired restaurants, including the subject property, including new kitchen equipment, drive-thru equipment and point
of sale computer systems all to provide the consistent service and food quality that Pack-Huynh are known for and demand.
Tenant
Information
El Pollo Loco, Mesa, AZ
7
STRATEGIC
Income Statement/Operating Data
RETAIL GROUP
RENT ROLL
Tenant
El Pollo Loco
Lease Type
Commencement
Date
Expiration
Date
Monthly Rent
Ground
Lease
6/1/1998
4/30/2018
$6,300.00
Annual Rent
$
75,600.00
Future Rent
Increase Date
5/1/2018
5/1/2023
5/1/2028
5/1/2033
Future Increase
Rent
Future Rent
Type
$
$
$
$
Option Rent
Option Rent
Option Rent
Option Rent
84,900.00
95,508.00
107,448.00
120,876.00
El Pollo Loco, Mesa, AZ
Income
Statement/
Operating Data
8
STRATEGIC
Metropolitan Phoenix Information
RETAIL GROUP
Greater Phoenix Community Profile:
Principal Industries
Greater Phoenix has consistently outpaced the U.S. population
growth over the last 20 years. With 4.3 million people, Greater
Phoenix’s population is expected to nearly double in the next two
decades which equates to a growth rate four times the national
average. The area’s past and future growth is largely attributable
to the availability of jobs and a low cost of living. The region offers a pro-business and low-cost operating environment and a
vast pool of young, diverse and educated talent. Additionally, the
area enjoys over 300 days of sunshine a year offering an attractive
environment to live and work. Phoenix’s strategic and centrally
located southwest location has made Greater Phoenix a choice
business and innovative hub with international access for aerospace, high-tech, bioscience, advanced business, and sustainable
technology companies.
Metropolitan Phoenix’s industry base has evolved and matured from its original base of the “Five C’s” (cotton, cattle, copper, climate, and citrus), to where it
is today with a well-diversified mix of multiple next generation sustainable industries including high-tech manufacturing, information services, and international trade and tourism. Nearly half of the city’s employment base is anchored
by financial activities, professional and business services, education and health
services and government which fuel absorption of retail, office, and industrial
space. Near term employment growth will come from education and healthcare services, profession and business services, leisure and hospitality, and FIRE
(finance, insurance, and real estate) sectors. Growth in these sectors will be the
catalyst for future commercial space absorption. The recovery in the Metro
Phoenix construction industry which currently accounts for only 5% of our 1.7
million employment base has begun and is expected to continue to grow concurrently with housing and commercial starts.
Population and Workforce
From 2002 through 2007 Metropolitan Phoenix created more jobs
over that five-year span than any metro area in the United States,
expanding its employment base by 23.4%. While the MSA was
not immune to the effects of the national recession, during 2012
it experienced a positive gain of more than 41,000 jobs. Over the
next two years Moody’s Analytics projects a gain of over 40,000
jobs annually, increasing to 66,000 jobs annually between 2014 to
2016. The unemployment rate in Metropolitan Phoenix is consistently below the national average and is currently at 7.2%, which
is 40 basis points lower than the national average of 7.8%.
Metropolitan
Phoenix
El Pollo Loco, Mesa, AZ
9
Confidentiality Agreement
STRATEGIC
RETAIL
RETAIL GROUP
GROUP
This is a Confidential Memorandum intended solely for your use and benefit in determining whether you desire to express further
interest in the acquisition of El Pollo Loco Ground Lease-1036 S. Country Club Dr., Mesa, Arizona (“Property”, “Project”). The Memorandum contains selected unverified information pertaining to the Project and does not purport to be a representation of the state
of affairs of the Owner of the Property, to be all-inclusive or to contain all or part of the information which prospective investors may
require to evaluate a purchase of the Property. All financial projections and information are provided for general reference purposes
only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the
control of the Owner and Strategic Retail Group, Inc. Therefore, all projections, assumptions and other information provided and made
herein are subject to material variation. All references to acreage, square footages and other measurements are approximations. Neither the Owner nor Strategic Retail Group, Inc. nor any of their respective directors, officers, broker, affiliates and/or representatives
make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its
contents, nor any warranty or representation, with respect to the future projected financial performance of the property, the presence
or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions
to continue its occupancy of the subject Property, and no legal commitment or obligation shall arise by reason of you receipt of this
Memorandum or use of its contents.
The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property and/or terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer
to purchase this Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered
and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived. By receipt of this
Memorandum, you agree that this Memorandum and its contents are or a confidential nature, that you will hold and treat it in strictest
confidence and that you will not disclose this Memorandum or any of its contents to any other person/entity without the prior written
authorization of the Owner or Strategic Retail Group. You also agree that you will not use contents in any manner detrimental to the
interest of the Owner or Strategic Retail Group.
Confidentiality
Agreement
El Pollo Loco, Mesa, AZ
10