Retail Center - Capital Pacific

Arney
Retail Center
Woodburn,
or
New Development
adjacent to woodburn Premium outlets
3000-3060 Sprague Lane, Woodburn, OR 97071 (Portland Area)
[ www.CapitalPacific.com ]
Investment Highlights
ARNEY RETAIL CENTER OFFERS THE OPPORTUNITY TO
ACQUIRE QUALITY NEW CONSTRUCTION IN AN EXCEPTIONAL
LOCATION, NEXT TO THE LARGEST OUTLET MALL IN
OREGON JUST 30 MILES SOUTH OF THE PORTLAND
METRO AREA AND DIRECTLY OFF INTERSTATE 5.
Currently under construction, Arney Retail Center provides retail and restaurant
uses to complement the adjoining outlet mall, along with soft goods in a high
volume, seasoned location. Slated to open in Spring 2015, the center is expected to be
fully leased to long-term tenants.
PRICE: $12,660,000
CAP: 6.00%
RENTABLE SF. . . . . . . . . . . . . 38,930 SF
LAND AREA. . . . . . . . . . . . . 177,754 SF
OCCUPANCY . . . . . . . . . . . . 100% (Estimated upon Completion)
YEAR BUILT . . . . . . . . . . . . . 2015 Estimated Completion
PARKING . . . . . . . . . . . . . . . 254 Spaces, 6.6 per 1,000 SF (Proposed)
ANCHOR. . . . . . . . . . . . . . . . T.J. Maxx (NYSE: TJX)
OTHER MAJOR TENANTS. . . Red Robin (Nasdaq:RRGB) & Panera (Nasdaq:PNRA)
ADDRESS:
3000-3060 Sprague Lane, Woodburn, OR 97071
ARNEY RETAIL CENTER | 2
Quick Stats
EXPECTED CONSTRUCTION TIMELINE
REZONE & LAND USE REVIEW
NOV-13 TO JUN-14
SITE CONSTRUCTION
JUL-14 TO OCT-14
DELIVERY TO TENANTS
MAR-15
G RA N D
OPENING
APRIL 2015
PERMITTING
MAY-14 TO SEP-14
EXPECTED GRAND
OPENING DATE
BUILDING CONSTRUCTION
OCT-14 TO FEB-15
CURRENT STATUS
T.J. MAXX REVENUE TREND
"This property defines attractive ret ail
commercial real est ate - credit, quality,
location, and defensible categories.”
- Michael Horwitz,
Capital Pacific Broker
$1.9 B
$1.49 B
TRADE AREA
$2.13 B
3,945,000
2011 2012 2013
A+ STANDARD &
POOR’S RATING
PEOPLE
ARNEY RETAIL CENTER | 3
Core Characteristics
MAJOR RETAIL LOCATION
PROVEN HIGH
VOLUME
RETAIL SALES
LOCATION
adjacent to
OREGON’S LARGEST
OUTLET SHOPPING
CENTER >>
Arney Retail Center is situated at the epicenter of a premier trade area located at the intersection of Interstate
5 and Highway 219/214. Located 30 miles south of Portland and 15 miles north of Salem, visitors come from
all over the state to enjoy a day of shopping and dining. Along with ample freeway visibility, the Property
is situated on the only arterial entry and exit to the Woodburn Premium Outlets - the largest outlet mall in
Oregon with over 350,000 square feet and 100% occupied, it draws in excess of 4.5 million visitors annually.
CREDIT TENANTS WITH LEASING MOMENTUM
Strong anchor tenants include T.J. Maxx and Panera with new 10 year corporate leases, and Red Robin
on a new 12 year corporate lease. T.J. Maxx (NYSE: TJX) currently has an A+ credit rating, and Panera
(Nasdaq PNRA) and Red Robin (Nasdaq RRGB) continue to see strong upward market value. Leasing
discussions with quality tenants are underway to absorb the remaining space.
COMPETITIVELY PRICED NEW DEVELOPMENT
Quality construction and development is being performed by Deacon Development Group, with
254 parking spaces planned to accommodate heavy consumer traffic (6.6/1,000SF). This offering
is competitively priced at $325/SF with new construction and long-term leases, while the
neighboring Woodburn Premium Outlets sold for approximately $380/SF in 2013.
ARNEY RETAIL CENTER | 4
WOODBURN PREMIUM OUTLETS
Site
SOU
TH
BO
Partial list of 110 stores:
Adidas
Ann Taylor
ASICS
Banana Republic
UN
SURROUNDING RETAIL
BCBG Max Azria
Calvin Klein
Coach
Columbia Sportswear
Eddie Bauer Outlet
Gap
Guess
Helly Hansen
J.Crew
Nike Factory Store
The North Face
Oakley Vault
Polo Ralph Lauren
Puma
Tommy Hilfiger
Walmart Supercenter
Arby’s
Elmer’s
Jack In The Box
ARNEY
RETAIL
CENTER
D
PORTLAND
EY R
D
5
AR
YR
D
LN
219
GUE
SPR A
NE
WOODLAND AVE
81,9
NEWBERG HWY
FUTURE RETAIL
DEVELOPMENT
19,800 DAILY
ARN
00 D
AIL
Y
NO
R TH
BOU
ND
WOODLAND AVE
SALEM
ARNEY RETAIL CENTER | 5
Large Trade Area
5
vancouver
46 min to
Woodburn
ARNEY RETAIL
CENTER
33 min to
Woodburn
salem
22 min to
Woodburn
I-5 ACCESS, VISIBILITY & LACK OF OUTLET
MALL COMPETITION EXPANDS TRADE AREA
The magnitude of Woodburn Premium Outlets makes it a
destination for residents as far south as Medford, as well as North
to Vancouver, WA and East to Bend. As the largest outlet mall in
Oregon, this location creates a large draw of shoppers from Oregon
and SW Washington (see next page for more info).
84
portland
5
eugene
1 hr 22 min to
Woodburn
bend
2 hrs 44 min
to Woodburn
EXTENDED
TRADE AREA
Average Income
$67,765
Population
3,945,000
IMMEDIATE TRADE AREA
(5 Mile Radius)
Average Income
$72,743
Population
74,301
medford
4 hrs
to Woodburn
ARNEY RETAIL CENTER | 6
About Woodburn Premium Outlets
ARNEY RETAIL CENTER IS LOCATED NEXT TO WOODBURN PREMIUM
OUTLETS. THE OUTLETS’ 4.5 MILLION YEARLY VISITORS WILL BE PASSING BY
THE PROPERTY BOTH TO AND FROM THE OUTLET MALL.
110
STORES
WOODBURN PREMIUM OUTLETS SOLD IN 2013.
THE MALL WAS 100% OCCUPIED AT THE TIME OF SALE.
SALE PRICE
Originally built in 1999 consisting of 243,000 SF,
expanded in 2003, 2005, 2009, 2012 to its current
total of over 388,378 SF.
$147,692,824
AT $380/SF
SQUARE FOOTAGE
388,378 SF
ON 37.8 ACRES OF LAND
YEARLY SHOPPERS
4.5 Million
5
PRE WOOD
MIU BUR
MO
UTL N
ETS
ARN
EY
CEN RETAIL
TER
4.5 MILLION
YEARLY SHOPPERS
WILL BE PASSING BY
PROPERTY ON THEIR
WAY TO & FROM
THE OUTLETS
ARNEY
HAZEL
RETAIL
DELL CENTER
SQUARE | 7
SITE PLAN KEY
Site Plan
PARCEL OUTLINES:
BUILDING AREA: 38,930 SF
STOCK PRICE INCREASE
LOT 1 AREA: 80,315 SF
230%
LOT 2 AREA: 28,063 SF
LOT 3 AREA: 30,168 SF
Spr
agu
eL
ane
LAST 5 YEARS
LOT
1
LOT 4 AREA: 39,208 SF
TOTAL LAND AREA:177,754 SF
LOT
4
ARE THERE ANY CO-TENANCY
REQUIREMENTS?
HAS AN ENVIRONMENTAL ASSESSMENT
BEEN COMPLETED ON THE PROPERTY?
A. Based on the results of a Phase I ESA, ACM
survey, and Phase II ESA during Q413, it was
recommended that no further environmental
inquiries regarding the project site were
warranted at this time. A copy of the report can be
made available to engaged buyers.
S TBD
A. T.J. Maxx has an inducement condition that
requires occupancy of 70% at Woodburn Premium
Outlet, not including seasonal tenants and short
term leases. If the occupancy threshold of 70% is
not met for 180 days, tenant would pay the lesser
of minimum rent or 2% of sales. If condition is not
met for more than one year, tenant may terminate
or recommence full payment of minimum rent and
percentage rent.
TENANT
V
DRI
LO
T3
HR
ET
U
STOCK PRICE INCREASE
LO
T2
ad
Ro
y
ne
Ar
.
N
186%
LAST 5 YEARS
tio
Pa
STOCK PRICE INCREASE
174%
LAST 5 YEARS
Site Plan Not To Scale
ARNEY RETAIL CENTER | 8
Four Parcels
LOT
TENANT
BUILDING SIZE
LAND AREA
1
TJ MAXX
23,100 SF
80,315 SF
$20,694
2
SHOPS*
7,130 SF
39,208 SF
$19,013
3
RED ROBIN
4,400 SF
28,063 SF
$13,200
4
PANERA
4,300 SF
30,168 SF
$11,467
38,930 SF
177,754 SF
$64,374
*Estimated at $32.00/SF
LOT
1
TENANT
S TBD
LOT
4
LO
T3
Site Plan Not To Scale
MONTHLY RENT
FOUR (4) SEPARATE PARCELS
PROVIDE FLEXIBILITY FOR
LONG-TERM
REDEVELOPMENT OR
INDIVIDUAL PARCEL SALES
LO
T2
ARNEY RETAIL CENTER | 9
Elevations
ARNEY RETAIL CENTER | 10
Elevations
ARNEY RETAIL CENTER | 11
Financial Summary
OFFERED FREE AND CLEAR OF DEBT
PRICE
$12,660,000
Capitalization Rate:
6.00%
Price Per Foot:
$325
NET OPERATING INCOME SUMMARY
Plus: SCHEDULED INCOME
Scheduled Rent:
1/1/2015
Plus: Expense Reimbursement
Equals: Scheduled Gross Income
Vacancy Factor: Shop Space Only1
5%
Equals: Effective Gross Income (EGI)
Less: OPERATING EXPENSES
CAMS
Property Taxes
Insurance
Management Fee
Total Operating Expenses
3.0% of EGI
Per SF
$19.84
$3.94
$23.79
$23.46
Per SF
$1.25
$1.50
$0.50
$0.69
$3.94
Equals: NET OPERATING INCOME
NEW LOAN TERMS – AS STABILIZED
$772,485
$153,493
$925,978
($12,814)
$913,164
$48,663
$58,395
$19,465
$26,970
($153,493)
$759,671
Notes:
1) Vacancy factor excludes T.J. Maxx, Red Robin, and Panera.
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.
Arney Retail Center is being offered free and clear of any
existing debt. The following loan summary is for consideration
purposes only, and not a guarantee of loan terms.
LOAN TO VALUE: INTEREST RATE: TERM: AMORTIZATION: 65% - 70%
4.50%
10 Year Fixed
30 Years
FOR MORE INFORMATION, INCLUDING FIXED-RATE
FORWARD FUNDING, PLEASE CONTACT:
DAVID SCHAFFER
Melvin Mark Capital Group
(503) 546-4780
dschaffer@melvinmarkcapital.com
JOHN PETERSEN
Melvin Mark Capital Group
(503) 546-4778
jpetersen@melvinmarkcapital.com
ARNEY RETAIL CENTER | 12
Rent Roll
A
NEW LEASES
B
10+
$27,133
Arney Retail Center
YEAR
LEASES
Rent
Roll
TENANT INFO
Tenant Name
T.J. Maxx
LEASE TERMS
Site
Size
% of SF
Occupancy
Date
Lease
Expiration
Building A
23,100
59.34%
4/1/15
3/31/25
comments: Rent commencement earlier of 60 days after delivery or 10 days after occupancy. Percentage rent
of 2% over natural breakpoint, tenant reports sales 120 days following lease year. Exclusive use: apparel and
home furnishings for stores greater than 15,000 SF, and shoe stores greater than 7,500 SF (Does not apply to
private label retailers like Gap, Old Navy, etc.)
Red Robin
Building D
4,400
11.30%
ADDED YEARLY INCOME
CURRENT RENT
Building C
4,300
11.05%
RENT INCREASES
Monthly Base
Rent/SF/YR
Rent
$20,694
Date of
Increase
Monthly
Base Rent
$10.75
A
4/1/15
3/31/27
$13,200
$36.00
comments: Rent commencement earlier of 150 days after delivery or date of opening. Option rent $15,972
lease years 13-15, $17,569 years 16-20, $19,326 years 21-25, and $21,259 years 26-30. Exclusive use: sit
down casual restaurant specializing in hamburgers.
Panera
4/1/20 RENT INCREASES
B
4/1/15
3/31/25
$11,467
$32.00
Shops B
7,130
18.31%
4/1/15
TBD
$19,013
$32.00
$64,374
$19.84
LEASE
TYPE
Additional
Annual
4-5 Years
NNN
180 Days Notice
$1.00/SF Increase for
each Option
Corporate
4/1/20
$14,520
1-3 Year, 3-5 Years
NNN
4/1/25
$15,972
180 Days Notice
See Comment
Corporate
4/1/20
$12,613
comments: Rent commencement earlier of 120 days after delivery, date of opening, or date tenant obtains
approved plans and permits. Exclusive use: bakery/café and sale of coffee/espresso.
Pending Tenants
OPTIONS
TBD
TBD
3-5 Year
NNN
120 Days Notice
10% Increase Each Option
Corporate
TBD
NNN
comments: Attached to Building A, current leasing discussions with tenants to absorb available space.
Totals:
Occupied
Leasable
38,930
38,930
0
100%
100%
0%
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.
ARNEY RETAIL CENTER | 13
Operating Expenses
Arney Retail Center
Operating Expenses
BUDGETED OPERATING EXPENSES
REIMBURSEMENTS
Total
/SF
Notes
CAMs
$48,663
$1.25
$48,663
Property Taxes
$58,395
$1.50
$58,395
Insurance
$19,465
$0.50
$19,465
Management
$26,970
$0.69
Total Expenses
$153,493
$3.94
$26,970
1
$153,493
Notes:
1) Based on 3.0% of Effective Gross Income (EGI)
10/14/2014
[ 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.
>
ARNEY RETAIL CENTER | 14
Operating Expenses & Reimbursements
Arney Retail Center
Reimbursements
Tenant Name
Pro Rata %
Expense Total
CAMs
Property Taxes
Insurance
Management
$48,663
$58,395
$19,465
$26,970
Notes
T.J. Maxx
59.34%
$28,875
$34,650
$11,550
$16,003
1
Red Robin
11.30%
$5,500
$6,600
$2,200
$3,048
2
Panera
11.05%
$5,375
$6,450
$2,150
$2,979
3
Pending Tenants
18.31%
$8,913
$10,695
$3,565
$4,940
TOTAL
100.00%
$48,663
$58,395
$19,465
$26,970
Notes:
1) Cap on 1st year of Property Taxes of $1.75/SF, no cap thereafter. Cap on 1st year of CAMs & Insurance of $1.75, 3% annual increase max
thereafter; however tenant is responsible for Insurance Costs that exceeds CAM cap. Landlord responsible for foundation, roof, and exterior
walls, and repair and replacement in Common Areas for the first year following commencement. If property manager is elected Common Area
Maintenance Director, tenant reimburses in CAM expenses; otherwise tenant is responsible for own management for their lot.
2) Tenant CAMs not to exceed 2% on a non-cumulative basis for controllable CAM expenses. Management fee shall not exceed 10% of base
rent. Tenant to pay for insurance if premises are situated on separate tax parcel. Landlord responsible for roof and structure.
3) CAMs not to exceed $3.00/SF for first two years, and not to exceed 5% on a non-cumulative basis thereafter, excluding taxes, insurance, CAM
utilities, garbage and snow removal. Management Fees of Center not to exceed 4% of scheduled rent. Landlord responsible for roof and
structure.
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.
10/14/2014
ARNEY RETAIL CENTER | 15
[ www.CapitalPacific.com ]
<
>
New Paradigm in Retail
ANCHORS
58%
BIG BOX
T.J. Maxx
Major Tenants
REPRESENTATIVE
PHOTO
82%
REPRESENTATIVE
PHOTO
DINING
Red Robin
& Panera Bread
SMALL SHOPS
“EXPERIENCE” ORIENTED TENANT ROSTER
Through its location and tenant mix of T.J. Maxx,
two restaurant pads and retail shops, Arney Retail
Center represents a new paradigm in mid-sized
shopping centers with a focus on destination
shopping and dining.
The property is positioned to prosper in the
competitive retail world that contends with
e-commerce.
Leasing discussions
underway with wellknown tenants
ARNEY RETAIL CENTER | 16
ELECTRICAL / WATER / GAS
Construction Details
ELECTRICAL: Each building has 800 amps UG, providing 120/208V
or 400 amp 480/277V with step down transformers as per tenant.
FOUNDATION
WATER: 2” service line.
Concrete footings with 4-6” on grade
concrete slab.
GAS: Services provided per tenant.
HVAC
FIRE PROTECTION
Rooftop packages to be
determined by tenants.
Automatic fire sprinkler
system throughout and
fire alarm systems.
EXTERIOR WALLS
ACCESSIBILITY
INTERIOR WALLS
Ashlar ground face concrete masonry unit
(CMU), precision CMU, smooth/sand finish
stucco, fiber cement lap siding, cement
plaster wall, and thin tile wall.
Two ingress/egress
driveways, and one loading
driveway for TJ Maxx from
Sprague Lane. Drive-thru
for Panera.
Metal stud framing, sheet
rock ready for painting.
Interior wall/floor/ceiling
finishes per tenant.
ZONING
AMERICANS WITH
DISABILITIES
PARKING
Total: 246 Spaces, 6.4/1,000 SF.
Bike Stalls: 24.
ROOF
Metal roof assembly, galvanized steel
canopies, PVC membrane.
Z
General Commercial (CG):
Allows a full range of retail
and service businesses for a
local or regional market.
Property is ADA
compliant.
ARNEY RETAIL CENTER | 17
In The News
TJX COMPANIES IS WORTH CONSIDERING FOR THE LONG RUN
October 24, 2014 - gurufocus.com
Discount retailer TJX Companies (TJX) reported better-than-expected results for the
second quarter as its same-store sales grew in most of its regions driven by improved
performance of its apparel business. The stock has risen almost 8.65% due to excellent
performance of both the top and bottom lines that topped the analyst’s estimates and an
improved outlook for the third quarter 2015.
A DETAILED LOOK
The discount retailer reported revenue of $6.92 billion, an increase of 7.45% as compared
to $6.44 billion in the second quarter last year, exceeding the analysts’ estimates of $6.8
billion in revenue for the quarter. Its net income on the other side grew about 8% to
$517.6 million or earnings of $0.75 per share, compared to $479.6 million or earnings of
$0.66 per share in the same quarter a year earlier. The consensus was estimating earnings
of $0.73 per share for the second quarter 2015.
Looking ahead, TJX is off to a good start for the third quarter and it is practicing various
strategic initiatives to maximize the opportunity that lies in the second half of the year,
said Carol Meyrowitz, Chief Executive Officer of The TJX Companies. The company is
looking forward to continue its gift-giving initiatives in the remaining quarters with
“
TJX is investing heavily in its
global marketing abilities
especially in its Marmaxx division that includes brands such as
T.J. Maxx and Marshalls. The company plans to increase the
frequency of its commercials on TV. Further, the company is
keenly engaged in executing its dual and tri-branding marketing
campaign for these brands in the United States .
“
improved services and is increasing slabs on its marketing campaign this year that will
certainly drive customer traffics and increase its margins in the second half. The CEO also
said, “We are very confident in our ability to deliver another strong year, on top of many, as
we continue on the path to being a $40 billion-plus company.”
TJX has raised the outlook for the third quarter; it now expects its earnings in the range of
$0.81 to $0.85 per share, while the analysts are estimating earnings of $0.85 per share for the
third quarter 2015. The company also expects its same store sales to increase between 1-2%
in the third quarter. TJX has also accelerated its full year outlook on EPS to range between
$3.10-3.18, while the Wall Street analysts’ calls for full-year EPS of $3.14.
FOUR STRATEGIES TO POWER GROWTH
TJX looks strong with its four strategic pillars that are driving growth for the company this
year, such as driving comp sales, brick-and-mortar growth, e-commerce developments and
modernization. The company expects tremendous opportunity that can potentially lead to
a rise in the U.S. and International market share.
TJX is investing heavily in its global marketing abilities, especially in its Marmaxx division
that includes brands such as T.J. Maxx and Marshalls. The company plans to increase the
frequency of its commercials on TV. Further, the company is keenly engaged in executing
its dual and tri-branding marketing campaign for these brands in the United States with
in-depth concentration on the social media that will certainly drive growth for its brands.
TJX launched its HomeGoods app called The Goods in July, which should bring more
transparency in the process removing the complication at the physical store. Moreover,
the company is implementing its loyalty programs that will attract new customers to its
stores across the country. These loyalty programs consist of various soft paybacks like early
shopping hours and a non-credit card choice. These strategic moves will certainly help the
company to attract more traffic in stores.
In addition, the company is working to remodel approximately 250 stores this year. Also, the
brick-and-mortar stores are now considered a newfound potential as the company now sees
a long-term opportunity to expand to almost 5,150 stores. It plans to open about 1,400 new
stores in North America alone. Currently, TJX has about 3,200 stores.
For full article go to:
http://www.gurufocus.com/news/287293/tjx-companies-is-worth-considering-for-the-long-run
ARNEY RETAIL CENTER | 18
A unique HUMAN
RESULTS-DRIVEN
client experience
THE CAPITAL PACIFIC EXPERIENCE - OUR DAILY COMMITMENT TO OUR CLIENTS
[ www.CapitalPacific.com ]
MICHAEL HORWITZ
KEVIN ADATTO
SCOTT FRANK
SEAN MACK
PETER DUNN
SEAN TUFTS
mhorwitz@capitalpacific.com | (503) 675-8381
smack@capitalpacific.com | (503) 675-8378
kadatto@capitalpacific.com | (503) 675-7726
pdunn@capitalpacific.com | (503) 607-0197
[ Copyright © 2015 Capital Pacific LLC ]
sfrank@capitalpacific.com | (503) 675-8383
stufts@capitalpacific.com | (206) 743-8468