WALGREENS FLAGSHIP STORE

Transcription

OFFERED
EXCLUSIVELY BY:
Chris Kostanecki
Managing Partner
Capital Pacific
ck@capitalpacific.com
P: +1 415.274.2701
WALGREENS FLAGSHIP STORE
1488 KAPIOLANI BOULEVARD | HONOLULU, HAWAII
Jim Gibson
Regional Director
Stan Johnson Company
jgibson@stanjohnsonco.com
P: +1 832.476.3440
OFFERING
MEMORANDUM
Actual Location Photo
Confidential Disclaimer
This Confidential Memorandum has been prepared by Stan Johnson Company (“SJC”) and Capital Pacific and is being furnished to you solely for the purpose of your review of the
commercial Property located at 1488 Kapiolani Boulevard, Honolulu, Hawaii (the “Property”). The material contained in this Offering Memorandum shall be used for the purposes of
evaluating the Property for acquisition and shall not be used for any purpose or made available to any other person without the express written consent of Stan Johnson Company
(“Broker”).
By accepting the Confidential Memorandum, you acknowledge and agree that: (1) all of the information contained herein and any other information you will be receiving in connection
with this transaction, whether oral, written or in any other form (collectively, the “Materials”), is confidential; (2) you will not reproduce the Confidential Memorandum in whole or in part;
(3) if you do not wish to pursue this matter, you will return this Confidential Memorandum to SJC or Capital Pacific as soon as practicable together with all other materials relating to the
Property which you may have received from SJC or Capital Pacific; and (4) any proposed actions by you which are inconsistent in any manner with the foregoing agreements will require
the prior written consent of SJC or Capital Pacific.
This Confidential Memorandum has been prepared by SJC and Capital Pacific, based upon certain information pertaining to the Property and any information obtained from SJC and
Capital Pacific to assist interested parties in making their own evaluation of the Property is offered on a no representation or warranty provision other than customary warranties of title
and is sold on an “as-is, where-is” basis and with all faults. The material and transaction does not purport to be all inclusive. This Confidential Memorandum contains descriptive materials,
financial information and other data compiled for the convenience of parties interested in the Property. The Materials are being delivered by SJC and Capital Pacific to prospective
investors with the understanding that it is not all inclusive and that it is qualified in its entirety by independent investigation by prospective investors of those matters which they deem
appropriate in evaluating this offering without reliance upon SJC and Capital Pacific, the Broker or any of their respective affiliates or any of the information set out in the Materials. Neither
SJC/Capital Pacific, the Broker, nor any of their respective affiliates have independently verified any of the information contained herein or in any of the Materials, and no representations
or warranties as to the accuracy or completeness thereof or of any other kind whatsoever are made or intended and none should be inferred.
SJC and Capital Pacific, for itself and its affiliates of the Property, expressly disclaim any and all liability for statements or representations, express or implied, contained herein or for
omissions from the Materials or for any other written, oral or other format of communication transmitted to a prospective investor in the course of its evaluation of the proposed
transaction. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or
financial statements, which upon request may be made available. The terms and conditions described herein are subject to change without notice.
This Confidential Memorandum does not constitute an offer to accept any investment proposal but is merely a solicitation of interest with respect to the investment described herein. The
Confidential Memorandum does not constitute an offer of security. The investment described herein may be financed or withdrawn from the market, without prior notice. By accepting
this Confidential Memorandum you agree to release SJC and Capital Pacific and hold it harmless from any kind of claim, expense, or liability arising out of your discovery or purchase
of the Property. SJC and Capital Pacific reserve the right to request the return of the Materials at any time. Ownership of the Property reserves the right to negotiate with one or more
prospective investors at any time.
Page 2 Walgreens Flagship Store | Honolulu, HI
Purchase Price: Call Broker for Details
Cap Rate: Call Broker for Details
Investment Summary
Capital Pacific and Stan Johnson Company are pleased to offer for sale to qualified investors a 100% feesimple Walgreens Flagship Store located at the hard corner of Kapiolani Boulevard and Keeaumoku Street, in the
heart of Honolulu’s major retail corridor. The Property is in a highly desirable area, across from Ala Moana Center,
the world’s largest open air mall. The Property benefits from excellent traffic counts, average household incomes
exceeding $76,000 within a 3-mile radius and over 48 million shoppers in the area annually.
The Property has +/- 36,058 SF of leasable space that sits on +/- 0.83 acres, and features award winning, stateof-the-art construction, and a contiguous parking garage with 96 parking spots (80 of which are dedicated).
Walgreens reportedly invested over $43 million in the Property, and rent commenced December 2015.
Walgreens is operating under a fifteen (15) year base lease term. This lease features twelve (12) option periods,
with 5% rental increases in the first four (4) options and Fair Market Value in the final eight (8) option periods. The
lease is Absolute NNN and the lease rate for this Property is considered below market.
As of November 30, 2015, Walgreen Co., a subsidiary of Walgreens Boots Alliance, Inc., (NASDAQ: WBA), had
revenue of $112.92 billion, net income of $4.48 billion, and a net worth of $30.71 billion. Currently, Walgreen Co.
holds a BBB- rating by Standard and Poor’s and had a market capitalization of $88.26 billion as of January 14,
2016.
Actual Location
Investment Highlights
SAND
ISLAND
Best-in-Class Guaranty by Walgreen Co. – Walgreen Co is
a subsidiary of Walgreens Boots Alliance, Inc. (NASDAQ: WBA).
Walgreen Co. holds a BBB- rating by Standard and Poor’s,
and total revenue of $112.92 billion and net income of $4.48
billion, as of November 30, 2015.
DOWNTOWN
HONOLULU
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WORLD CLASS Investment Opportunity – Irreplaceable
real estate with below-market rents create high intrinsic and
residual value. Neighboring the Property is the Ala Moana
Center, the world’s largest open air mall, which underwent a
$573 million redevelopment and expansion. Ala Moana ranks
in the top 10 in sales-generating malls in the U.S. and reports
over $2.86 billion in annual sales.
MÃM
MAGIC
ISLAND
LAGOON
AL A
BAY
Walgreens Flagship Location – The Property presents the
rare opportunity to own a metropolitan 36,058-square-foot
Walgreens flagship building at a prime hard corner location
with over 48 million shoppers in the area annually. This
Walgreens is open 24-hours and is a top performing store for
the Hawaiian islands.
KAHANAMOKU
BEACH
Unrivaled Commitment to Location by Walgreens – In
June 2009, Walgreens purchased the property for $15.05
million, and has invested over $28 million to construct the
new store, for a combined total of over $43.05 million.
WAIKIKI
BEACH
Award Winning Design - The Property won the highest
level of recognition in the retail store design category of
the 2015 International Council of Shopping Centers’ awards
competition (see page 10 for more details).
Highly Accessible Location with Superior Visibility – The
Property is in a highly desirable location across from the
Ala Moana Center, which offers a wide variety of retail and
entertainment activities, and is minutes away from Honolulu’s
Central Business District. The Property benefits from
exceptional traffic counts from Kapiolani Boulevard (40,867
VPD), Kalakaua Avenue (48,788 VPD) and nearby W H1 Freeway
(169,488 VPD).
DIAMOND
HEAD
Strong Demographics – Population of approximately
239,707 and average household income of $76,722 within a
3-mile radius of the Property.
Property Overview
Lease Summary
Tenant:
Walgreen of Hawaii, LLC
Guarantor:
Walgreen Co. (S&P Credit Rating: BBB)
Address:
1488 Kapiolani Boulevard, Honolulu, HI
S&P Credit Rating:
BBB-
Rent Commencement:
December 2015
Initial Lease Term:
Fifteen (15) Years
Renewal Terms:
Twelve (12), Five (5) Year Options
First Four (4) Options include 5% Rent Increases
Final Eight (8) Options at FMV
Lease Type:
Absolute NNN
Base Rent:
$4.62 PSF/Month
$55.47 PSF/Year
Rent Increases:
Flat in Primary Term; Increases in Option Periods
Investment Summary
Address:
1488 Kapiolani Boulevard, Honolulu, HI
Ownership:
Fee Simple
Annual NOI:
$2,000,000
Store Opening:
February 2015
Building Size:
+/- 36,058 Leasable SF; +/- 37,516 Total SF
Land Area:
+/- 0.83 Acres
Actual Location Photos
Property Overview
Lease Abstract
Exit Fee:
In the event that Tenant fails to exercise its first
Renewal Option after the Firm Term as provided in
this Section 3(d), Tenant shall pay Landlord an exit
fee (the “Exit Fee”) equal to Two Million and No/100
Dollars ($2,000,000.00).
Utilities:
Tenant shall pay, when due, all bills for water, sewer
rents, sewer charges, heat, gas, phone, electricity and
any and all other services used in the Building or on
the Leased Premises from and after the Effective Date
until the expiration of the Term
Repairs:
Tenant, at Tenant’s sole cost and expense, shall
maintain the Leased Premises and make all necessary
repairs and replacements, whether interior or
exterior, to all parts of the same in all cases so as to
keep them in good condition and repair.
Real Estate Taxes:
Upon receipt of the aforesaid tax bills, Tenant shall
pay, when due and before delinquency, the ad
valorem real estate taxes (including all special benefit
taxes and special assignments), levied and assessed
against the Leased Premises, commencing on the
Effective Date and continuing for the remainder of
the Term.
Insurance:
Tenant shall carry special form coverage insurance,
hurricane and flood (for not less than $500,000)
coverage covering the Building and the other
improvements on the Leased Premises, to the extent
of not less than 100% of the replacement value.
Tenant shall also procure and continue in effect
public liability and property damage insurance for
death or bodily injury in any one accident, mishap or
casualty in a combined single limit sum of not less
than $3,000,000.00.
Right of First Refusal:
None.
SUBJECT PROPERTY
ONE
ALA
MOANA
KA
PI O
LA
NI
VD
BL
(40
7V
, 86
ALA MOANA CENTER
PD
)
ALA
MOANA
HOTEL
FUTURE
5-STAR
HOTEL
HAWAII
CONVENTION
CENTER
MARINA
TOWER
HOTEL
THE SUBJECT PROPERTY SITS DIRECTLY ACROSS THE STREET
FROM THE ALA MOANA CENTER, WHICH IS HAWAII’S LARGEST
SHOPPING MALL, THE 7TH LARGEST SHOPPING MALL IN THE
US AND THE LARGEST OPEN AIR CENTER IN THE WORLD. IT
ATTRACTS OVER 48 MILLION SHOPPERS AND DOES OVER $2.68
BILLION IN ANNUAL SALES.
NATIONAL MEMORIAL
CEMETERY-PACIFIC
DOWNTOWN
HONOLULU
MCKINLEY
HIGH SCHOOL
K AP
IOL
AN I
BLV
D (4
0,86
7
THERE ARE 15+ HOTELS LESS THAN ONE MILE FROM WALGREENS.
W H1
V PD
)
ALA MOANA CENTER
ALA MOANA CENTER
HAWAII
CONVENTION
CENTER
KAHANAMOKU
LAGOON
KA
LA
E
AV
UA
KA
DENSE CONCENTRATION OF HOTELS
(48
MAGIC
ISLAND
LAGOON
ALA WAI
BOAT
HARBOR
8
,78
VP
D)
WAIKIKI
BEACH
FW Y
(169,
4 88
V PD
)
Makaloa Street
33,097 DAILY
UPPER
PARKING
DECK
2ND FLOOR
BUILDING
treet
Keeaumoku S
The adjacent parcel is
currently an office building
that was recently acquired.
Current ownership intends
to transform the property
into a highrise condo &
hotel development.
ENCLOSEDE
STAIRCAS
1ST FLOOR
BUILDING
Contact broker for details.
STEPS TO
CK
LOWER DE
R
ELEVATO
SHAFT
2ND FLOOR
BUILDING
RAMP TO
R
2ND FLOOCK
DE
PARKING
Kapiolani Boulevard
40,867 DAILY
Renderings of the prospective adjacent development
Site Plan
Ala Moana Expansion - Ewa Wing
Ala Moana Center's multi-level 650,000-square-foot expansion is now open! The Ewa Wing
Expansion includes the opening of a 167,000-square-foot Bloomingdale’s department store,
large-format retailers, dining, entertainment,
ALA MOANA CENTER
200,000 square feet of inline retailers and an
HIGH END TENANTS
additional 1,000 parking spaces in the Mauka
EXISTING TENANTS PRIOR TO 2015
Ewa Parking Structure. The project will also
Apple
Michael Kors
include the opening of a 186,000-squarefoot Nordstrom department store and a
Banana Republic
Neiman Marcus
47,000-square-foot Foodland Farms in 2016.
Oahu’s retail market consists of over 15.7 million
square feet of shopping center space, and is
one of the largest submarkets with over 4.1
million square feet of inventory. With most of
the high-rise condominium projects situated
near the Property, the urban core has the most
densely populated area in Hawaii.
Burberry
Ralph Lauren
Gucci
Tiffany & Co.
Macy’s
Victoria’s Secret
OPENED IN 2015
COMING IN 2016
Bloomingdale’s
Aesop
Coach
Dolce& Cabana
General Growth Properties, the owner of the
Kate Spade
Forever 21
Ala Moana Center (the world’s largest openair mall with 2.2 million square feet of retail),
Lululemon
Nordstrom
has substantially completed a $573.2 million
Toys “R” Us
Omega
redevelopment which is expected to further
drive consumer traffic in the area and bring
Zara
Valentino
new tenants to the shopping center. The
redevelopment of the property will continue into 2016 with the arrival of many new tenants to
the mall. In March, the owner sold a 25% stake in the mall at a valuation of $5.5 billion. The deal
was reportedly completed at a cap rate of 2.9% and a price of approximately $2,520 per square
foot.
Boasting approximately $2.86 billion in gross sales, the mall is considered one of the top
shopping centers in the world. More than 48 million shoppers visit Ala Moana annually, and
Japanese tourists alone account for 14.5 million of these visits.
In the News:
Architects Hawaii Garners Top Design Award in National Competition
Commercial Property Executive (December 15, 2015) - Walgreens’ Hawaii flagship store in Honolulu
won this year’s highest level of recognition in the retail store design category of the International Council of
Shopping Centers’ awards competition for U.S. design and development.
Honolulu–Architects Hawaii is the gold winner in the retail store design category of the International Council of
Shopping Centers 2015 U.S. Design and Development Awards competition for the design of Walgreens’ Hawaii
flagship store.
The 36,700-square-foot building is located across from Ala Moana Center in downtown Honolulu, on the corner
of Kapiolani Boulevard and Keeaumoku Street, known to many as “the corner of Main & Main.”
Open since February, the store resulted from the redevelopment of a smaller retail unit. Known as Walgreens
Keeaumoku Flagship Store, the project marks the drugstore chain’s 15th flagship location and 18th store
in Hawaii. Its design is locally relevant, paying homage to the Hawaiian culture in a modern and contextually
appropriate way, using the Ala Moana region’s past—a popular fishing area—for inspiration.
According to the Pacific Business News, Walgreens Keeaumoku will now move to ICSC’s VIVA Awards
competition that recognizes the real estate industry’s most cutting-edge properties, innovative solutions and
creative responses to market trends globally.
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Actual Location
Location Overview
Honolulu is the state capital and the most populous city in the U.S.
state of Hawaii. It is the county seat of Honolulu. Hawaii is a major tourist
destination and Honolulu, situated on the island of Oahu, is the main
gateway to Hawaii and a major gateway into the United States. The city
is also a major hub for international business, military defense, as well as
famously being host to a diverse variety of east-west and Pacific culture,
cuisine, and traditions.
Hawaii Convention Center
Kahanamoku Beach
Honolulu is both the westernmost and the southernmost major
American city. For statistical purposes, the U.S. Census Bureau recognizes
the approximate area commonly referred to as “City of Honolulu” (not
to be confused with the “City and County”) as a census county division
(CCD). Honolulu is a major financial center of the islands and of the Pacific
Ocean. The population of Honolulu CCD was 390,738 at the 2010 census,
while the population of the consolidated city and county was 953,207.
Economy
Honolulu is the retail center of Hawaii that caters to everyone. Retail
options range from large international retailers to small, local boutiques.
The city has long been a top destination among both locals and tourists
that are looking to shop. The Property is located in the Ala Moana district
which borders the Waikiki and Honolulu submarkets.
The O’ahu retail market consists of approximately 15.7 million square
feet in nine different submarkets. The island’s retail vacancy rate stands
at a low 3.74% with the average triple net asking rents (excluding Waikiki)
standing at $4.28 per square foot. The increasing residential development
on the island is a good sign for the growth of its retail market. In addition,
leasing professionals believe that the average triple net asking rents for
new leases in the Ala Moana Center, which is directly across the street
from the Property, will average closer to $20 per square foot going
forward.
Aloha Stadium
Hawaii State Capitol Building
Honolulu Waterfront
Downtown Honolulu
State of Local Economy
Future Transit Project Terminating at Ala Moana Center
Honolulu High-Capacity Transit Corridor Project (HHCTCP)
The City and County of Honolulu have undertaken construction of its $5.2 billion high-speed rail project. To further spur development in this
region, the government is reviewing policies governing density bonuses for projects deemed to be within the influence of a transit station. The
Property lies within one of these TOD areas.
State of Local Economy, Cont’d
Public and Private Capital Expenditures
Current and planned capital expenditures by both the government
and the private sector are often indicators of the long term economic
health of a state. The island of O’ahu has planned on investing close
to $3.9 billion in infrastructure from 2014 to 2019 with many private
parties looking to invest in the state’s development as well. The
following is a summary of some of the major developments in the
area.
Honolulu International Airport Modernization
In the latter half of 2013, the state of Hawaii started a four-year, $750
million renovation and expansion plan of the Honolulu International
Airport which is expected to create jobs and stimulate the state’s
economy. The program’s ultimate aim is to transform the state’s
airports into world-class facilities that will satisfy the future needs of
both Hawaii’s residents and visitors.
HI Growth Initiative
Started in 2013, the HI Growth Initiative is a state investment program
that is focused on fostering innovation and entrepreneurship
within the state of Hawaii. The program’s goals are to create highpaying jobs for Hawaiian residents in rapidly growing businesses.
The initiative will provide $20 million of investment capital that is
focused on the developing an innovation ecosystem which includes
entrepreneur development, research commercialization and the
deployment of startup capital.
Honolulu International Airport
State of Local Economy, Cont’d
12
Recent Projects
There has been huge growth in the greater Honolulu area with the
influx of new high-rise residential tower developments. This influx
of activity has shown no signs of slowing down as demand has far
outstripped supply, evidenced by the large amount of pre-sales that
occur before groundbreaking.
Primary Vehicle
Entrance to
Ala Moana Center
4
8
5
13
3
17
18 15
14
9
10
2
11
1
16
Some of the major developers in this region include the Howard
Hughes Corporation, Forest City Enterprises, the Kamehameha
Schools, the MacNaughton Group, the Kobayashi Group, Oliver
McMillan, Marshall Hung and Alexander & Baldwin.
7
6
Proposed/Under Construction/Completed Condominium Towers (As of August 2015)
Map #
Tower Name
Stories
Units
Status
Percent Sold
Presales Start
Date
Sales Finish
Date
Estimated
Completion
2016
1
One Ala Moana
23
210
Completed
100%
12/7/12
12/8/12
2
Wahoma Kewab
43
341
Under Construction
100%
12/15/11
12/15/14
3
Symphony Honolulu
45
388
Under Construction
86%
8/31/13
4
801 South Street Building 1
46
635
Under Construction
100%
3/22/13
3/27/13
2015
5
801 South Street Building 2
46
410
Under Construction
100%
3/29/14
5/28/14
2016
6
Ritz-Carlton Residencies, Wakiki Beach West
36
309
Under Construction
100%
6/22/13
12/15/14
2016
2015
2016
7
Ritz-Carlton Residencies, Wakiki Beach East
36
280
Under Construction
80%
6/22/13
2016
8
The Collection (3 buildings, 1 high rise)
43
465
Under Construction
96%
8/19/13
2016
9
Waiea at Ward Village
36
171
Under Construction
89%
2/1/14
2016
10
Araha at Ward Village
38
311
Under Construction
82%
2/1/14
2016
11
Park Lane
8
215
Under Construction
70%
11/15/14
2017
12
Keauthou Place
43
423
In Presales
80%
4/25/15
2017
13
Vida at 8888 Ala Moana
39
265
In Presales
55%
5/9/15
2018
14
Ae’o
39
466
In Presales
N/A
7/18/15
2018
15
Ward Village Gateway (Tower 1)
34
125
In Presales
N/A
7/8/15
2018
16
Aloha Kai
39
128
Proposed
0%
N/A
17
988 Halekauwla (404 Ward Avenue)
43
375
Proposed
0%
N/A
18
Ward Village Gateway (Tower 2)
34
111
Proposed
0%
N/A
Page 15 Total Presales/Under Construction/Completed Units
5,014
Total Units
5,628
Walgreens Flagship Store | Honolulu, HI
79%
Ala Moana Center Expansion and Nearby Developments
Ala Moana Center has substantially completed a $573 million expansion on the Ewa (west) end of the center where the former Sears store once
stood. This project will include the opening of Hawaii’s first Bloomingdale’s department store, as well as additional dining and entertainment
options and 200,000 square feet of inline retailers. In addition, Nordstrom will be relocating from its existing 211,000 square foot store to a new,
smaller 186,000 square foot space. Ala Moana Center tenants generate $2.06 billion dollars in annual revenue.
DEVELOPMENT
Page 16 DESCRIPTION
ONE Ala Moana
ONE Ala Moana, located directly across from the Property and above the existing Nordstrom
store, is an exclusive 23-story residential tower comprised of 206 one-, two- and threebedroom condominium homes ranging in size from 760 to 4,100 square feet. In addition to
exceptional interiors, the building will feature an exclusive service, amenity and concierge
package unique to Hawaii.
Park Lane Ala Moana
Additionally, General Growth Properties, the owner of the shopping center, and a
development partner have begun construction on Park Lane Ala Moana, a $300 million
ultra-luxury residential condominium project on the ocean side of the mall. The project is
planned for 215 units ranging in size from 850 square feet units to 6,000 square feet. The
spacious and linear layout of these units provide a unique product type different than any
other units offered in the market today.
Ward Village
A few blocks away from the Property, Ward Village is also undergoing intensive
redevelopment plans led by the Howard Hughes Corporation. The master plan includes
20 mixed-use high-rise towers to be developed over the next 15 to 20 years. Construction
has begun on the first two luxury high-rise condominiums, Anaha and Waiea. Howard
Hughes Corporation has also recently been awarded a 45-year management contract to
operate the adjacent Kewalo Basin, and is expected to revitalize the harbor with $20 million
in improvements. There are plans for a new 50,000 square foot flagship Whole Foods store,
plus another 12,000 square feet of retail and more than 700 parking spaces, in the former
Nordstrom Rack space at Ward Village. The new store will be the company’s largest location
in Hawaii and be a part of a mixed-use development.
“Our Kakaako”
The nearby master-planned community of Kakaako is undergoing a major growth spurt. A
majority of the activity is occurring on a nine block area owned by Kamehameha Schools.
The plan is referred to as “Our Kakaako”. The master plan includes a wide range of housing
development including low-rise residences, high-rise towers, workforce housing, open
green spaces, networked walking pass and unique one-of-a-kind retail experiences. “Salt
at our Kakaako”, which is currently under construction, will provide unique pedestrian
experiences with open space and an eclectic mix of local retailers and restaurants. The “Our
Kakaako” project is located along Ala Moana Boulevard with its main intersection at Cooke
Street. A rail station has been planned for the Kakaako neighborhood.
Retail Market Overview
Third Quarter 2015
§ Honolulu is the retail center of Hawaii: options range from large
international retailers to small, local boutiques. The city has long been
a top destination among both locals and tourists. The project site is
located in the Ala Moana district which borders the Waikiki and Honolulu
submarkets.
§ The July 2015 residential median home price of $710,000 set a new
record high.
§ Statewide consumer confidence, currently at 120.0, is at its highest level
since 2007.
§ Vacancy rates declined to 3.74% from 3.77% during the third quarter of § Oahu air passenger arrival counts rose by 2.7% to 3.09 million for year-todate July 2015.
2015.
THIRD QUARTER 2015 - O’ahu Retail Market Statistics
RETAIL MARKET INVENTORY - BY SUBMARKET AREA
Total Inventory
(SF)
Vacant Space
(SF)
Vacancy Rate
3rdQtr Net
Absorption (SF)
YTD Net
Absportion (SF)
Avg. Low NNN Asking
Rents (PSF/MO)
Avg. High NNN Asking
Rents (PSF/MO)
Avg. OP. Exp.
(PSF/MO)
Central Oahu
889,235
52,017
5.85%
4,839
14,073
$3.33
$4.79
$0.97
East Oahu
1,511,774
34,560
2.29%
5,637
-424
$3.88
$5.63
$1.65
Honolulu
4,183,231
115,336
2.76%
-4,429
12,900
$3.02
$3.87
$1.43
Leeward Oahu
4,407,948
112,296
2.55%
12,164
-9,443
$3.45
$3.90
$1.14
North Shore
198,125
7,307
3.69%
-4,714
-3,340
$3.19
$4.06
$1.39
Waianae
342,060
59,217
17.31%
0
-5,785
$1.58
$2.33
$0.98
Waikiki
1,440,527
122,143
8.48%
-5,649
30,505
$8.37
$20.59
$1.96
West Oahu
1,140,957
21,599
1.89%
1,195
10,161
$4.20
$4.62
$1.29
Windward Oahu
1,621,750
63,502
3.92%
-3,075
5,943
$3.15
$4.60
$1.38
TOTALS
15,735,607
587,977
3.74%
5,968
54,590
$3.36
$4.28
*Islandwide total for average rents and operating expense calculations exclude Waikiki and Ala Moana Center.
$1.31
Source: Colliers International
Retail Market Overview, Cont’d
HAWAII HOTEL AND TRAVEL STATISTICS
Market Highlights - Third Quarter 2015
§ A new record high was established for the first half of 2015 when $3.05
billion in properties traded hands, a 39% jump over 2014 sales volume.
HOTEL INVENTORY
Statewide Occupancy
Statewide ADR
§ Of the $3.05 billion spent on commercial real estate. 87% was from offshore
investors, who spent, on average, more than $80 million per property.
82.8%
$244.84
O’ahu Occupancy Rate
90.2%
O’ahu ADR
$223.15
§ Cap rates continue to compress as institutional and private investors seek
yields in world-class markets such as Hawaii.
* U.S. Hotel Occupancy was 64.4% during the same
timeframe.
§ The 37.5% minority interest sale of Ala Moana Center to Australian Super
and TIAA-CREF totaled more than $1.3 billion and topped the list of most
notable sales for the year.
Total Room Count as of 2015
HOSPITALITY INVENTORY
Statewide
100,000+
O’ahu
45,000+
TOURIST DATA
2015 YTD Visitor Arrivals as of Nov 2015
7.85 million
Walgreens Boots Alliance Overview
Walgreens Boots Alliance (Nasdaq: WBA) is the
first global pharmacy-led, health and wellbeing
enterprise in the world. The company was
created through the combination of Walgreens
and Alliance Boots in December 2014, bringing
together two leading companies with iconic
brands, complementary geographic footprints,
shared values and a heritage of trusted health care
services through pharmaceutical wholesaling and
community pharmacy care, dating back more than
100 years.
The company employs over 370,000 people and has
a presence in more than 25 countries; it is the largest
retail pharmacy, health and daily living destination
in the USA and Europe. Including its equity method
investments, Walgreens Boots Alliance is the global
leader in pharmacy-led, health and wellbeing retail
with over 13,100 stores in 11 countries. The company
includes the largest global pharmaceutical wholesale
and distribution network with over 350 distribution
centers delivering to more than 200,000 pharmacies,
doctors, health centers and hospitals each year in 19
countries. In addition, Walgreens Boots Alliance is
the world’s largest purchaser of prescription drugs
and many other health and wellbeing products.
Its portfolio of retail and business brands includes
Walgreens, Duane Reade, Boots and Alliance
Healthcare, as well as increasingly global health and
beauty product brands, such as No7, Botanics and
Soap & Glory.
Page 21 The creation of Walgreens Boots Alliance provides an
opportunity to further accelerate the development
of a fully integrated, global platform for the future
to provide innovative ways to address health and
wellness challenges. The company is well-positioned
to expand customer offerings in existing markets
and become the health and wellbeing partner of
choice in emerging markets.
Walgreens is the largest drugstore chain in the U.S.
The company had fiscal 2014 sales of more than
$76 billion. Founded with a single store in Chicago
in 1901, Walgreens is today continuing to build a
seamless customer experience through its more
than 8,200 drugstores and its digital businesses that
include Walgreens.com, drugstore.com, Beauty.com,
SkinStore.com and VisionDirect.com.
COMPANY PROFILE
Current Store Growth Plans:
60-120 Stores in Fiscal 2015
Company:
Walgreens Boots Alliance
No. of Retail
Locations:
13,100 (as of 2/2015)
Credit Rating:
S&P: BBB-
Stock Symbol:
WBA (Nasdaq)
Employees:
370,000
Website:
www.walgreensbootsalliance.com
Fortune Magazine: Top 5 World’s Most
Admired Companies (March 2015)
Forbes: 165th out of 2000 Largest
Global Public Companies (May 2015)
6.2 Million Customers Visit
Walgreens Stores Daily
TENANT PROFILE
Company:
Walgreen Co.
No. of Retail
Locations:
8,232 (as of 2/2015)
Credit Rating:
S&P: BBB-
Total Revenue:
$112.92 Billion (as of 11/30/15)
Net Worth:
$30.86 Billion (as of 11/30/15)
Year Founded:
1901
Headquarters:
Deerfield, Illinois
Website:
www.walgreens.com
Walgreens Boots Alliance Merger
•
This merger brought together Walgreens, the largest drugstore chain in the U.S., Boots, the forerunner in the European Pharmacy Retail Market, and Alliance Healthcare,
the world’s most prominent pharmaceutical wholesaler and distributor. The potential for streamlining and synergic relationships is estimated to increase the firms’ value
by $650 million in 2015.
•
By combining some of the largest pharmaceutical firms in the world into one entity, which is now the largest purchaser of pharmaceuticals in the world, WBA will be able
to combat the rising cost of pharmaceuticals and dominate the market. By sharing a wholesaler, technology and a multitude of other corporate costs between the other
subsidiaries of WBA, Walgreens is poised to become more efficient and profitable.
•
In conjunction with the merger, Walgreens pledged to cut costs by $1 billion by the end of 2015, as well as increase earnings per share by 7.1% quarterly.
•
The merger prompted Moody’s to downgrade WBA to a Baa2, and S&P to downgrade WBA to a BBB. This was prompted by the large amount of debt that Walgreens took on
in order to finance the purchase of Boots Alliance.
•
Walgreens’ stock fell from around $72 per share to about $60 per share when the firm purchased the remaining 55% of Boots Alliance. However, since then, the stock has
steadily increased. Immediately before and after the merger, the stock stayed steady at $76 per share and as of January 20th, it is at $79 per share.
As a part of a threeyear merger plan,
Walgreens entered
into a purchase and
option agreement
to acquire the
outstanding shares
Alliance Boots
JUNE 2012
Page 22 Pursuant to the
purchase and
option agreement
Walgreens
purchased a 45%
stake in Alliance
Boots in exchange
for $6.7 billion
and announced a
long-term, strategic
partnership with
Alliance Boots
AUG 2012
As a part of rolling
out the Boots brand
across the U.S.,
Boots skincare brand
No7 debuted in
Walgreens stores.
NOV 2012
The purchase and
option agreement
was amended to
permit the exercise
of the call option to
acquire the remaining
55% of Alliance Boots
beginning on Aug 5.
Walgreens Boots Alliance became the successor
of Walgreen Co. pursuant to a reorganization of
Walgreens into a holding company structure.
Walgreens became a wholly owned subsidiary
of Walgreens Boots Alliance. Existing shares of
Walgreens common stock were converted into shares
of Walgreens Boots Alliance on an one-for-one basis.
Walgreens exercised
the call option to
acquire the remaining
portion of Alliance
Boots
The transaction to acquire the remaining 55% of
Alliance Boots GmbH for about $15.3 billion was
completed following completion of the reorganization.
Walgreens shareholders approved both proposals with
an approximately 97% affirmative vote.
AUG 2014
DEC 2014
Walgreens-Rite Aid Merger
•
On Oct 27th, 2015, both parties entered into a definitive agreement for WAG-Boots Alliance to purchase all outstanding shares of Rite Aid stock. Walgreens agreed to a
purchase of Rite Aid stock at $9.00 per share (totaling $9.4 billion in cash). Including the assumptionof net debt, the deal gave Rite Aid a total enterprise value of $17.2 billion.
•
At the time of purchase, Rite Aid had approximately 4,600 stores in 31 states and the District of Columbia with fiscal annual revenues of $26.5 billion. It is estimated that
with the purchase of Rite Aid, Walgreens Boots Alliance will go from a 31% market share in the drug store market to an estimated 41% market share.
•
Pending approval from the Federal Trade Commission (FTC), the transaction is projected to close in the 2nd half of 2016. The deal must be approved by both the FTC and
Rite Aid’s shareholders. The FTC is currently in the process of reviewing the terms of the merger.
Change in Walgreens/Rite Aid Combined Store Count, Post Merger
*NOTE: There are currently no Rite Aid pharmacies in Hawaii.
DEMOGRAPHICS
1488 Kapiolani Blvd | Honolulu, Hawaii 96814
0-1 Miles
0-3 Miles
0-5 Miles
2020 Population
80,714
239,707
327,807
2015 Population
75,582
228,006
313,910
2010 Population
64,963
211,359
300,140
2015-2020 Annual Growth
6.79%
5.13%
4.43%
16.35%
7.88%
4.59%
2020 Households
40,159
102,892
127,684
2015 Households
37,836
98,049
122,268
2010 Total Households
33,685
92,116
117,426
6.14%
4.94%
4.43%
12.32%
6.44%
4.14%
2015 White Alone
18,241
51,094
62,680
2015 Black Alone
1,454
4,067
5,163
228
668
837
40,074
120,081
168,898
4,768
16,222
26,689
10,817
35,873
49,643
2015 Average Household Income
$69,066
$76,722
$83,471
2015 Median Household Income
$52,582
$57,295
$61,768
Population
Households
2015 Population by Race and Ethnicity
2015 American Indian/Alaska Native Alone
2015 Asian Alone
2015 Pacific Islander Alone
2015 Other Race
Average Household Income
Chris Kostanecki | Managing Partner
Capital Pacific
ck@capitalpacific.com
+1 415.274.2701
In Association With:
Greg Gadd, HI License #12495
Jim Gibson | Regional Director
Stan Johnson Company
jgibson@stanjohnsonco.com
+1 832.476.3440

WALGREENS FLAGSHIP STORE

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