shopko - Matthews Real Estate Investment Services

SHOPKO
699 S GREEN BAY ROAD, NEENAH, WI 54956
OFFERING MEMORANDUM
™
C O N FID EN T I A L I T Y & DI SCL A IMER STATEMEN T
T his Of f er ing M e m o r a n du m co n t a i n s s e l e c t i nform ati on pertai ni ng to the busi ness and affai rs of Shopko located at 699 S Green Bay Road, Neenah,
WI 54956 ( “ P r o p e rt y ” ) . It h a s be e n p r e p a red by Matthews Retai l Advi sors . Thi s O fferi ng Mem oran d u m may n ot b e all-in clu s ive or con t ain all
o f t he inf o r ma t i o n a p r o s p e ct i v e p u r ch a s er m ay desi re. The i nform ati on c ontai ned i n thi s O fferin g M emoran d u m is con fid en t ial an d fu rn is h ed
s o le ly f o r t he p u r p o s e o f a r e v i e w by a p rospec ti ve purc haser of the Property. It i s not to be used for an y ot h er pu rpos e or mad e availab le t o
a ny o t he r p e r s o n w i t h o u t t h e w r i t t e n co n sent of Sel l er or Matthews Retai l Advi sors . The m aterial is b as ed in part u pon in format ion s u pplied
b y t he Selle r an d i n p a r t u p o n f i n a n ci a l i nform ati on obtai ned from sourc es i t deem s rel i abl e. Own er, n or t h eir officers , employees , or agen t s
ma kes a ny r e p r e s e n t a t i o n o r w a r r a n t y, e xpress or i m pl i ed, as to the ac c urac y or c om pl etwene s s of t h is Offerin g M emoran d u m or an y of it s
c o nt e nt s a nd n o l e g a l l i a bi l i t y i s a s s u m e d or shal l be i m pl i ed wi th respec t thereto. Prospec ti ve pu rch as ers s h ou ld make t h eir own project ion s
a nd f o r m t he ir o w n co n cl u s i o n s w i t h o u t rel i anc e upon the m ateri al c ontai ned herei n and c ondu ct t h eir own d u e d iligen ce.
B y a c kno w le dg i n g y o u r r e ce i p t o f t h i s O fferi ng Mem orandum for the Property, you agree:
1. T he Of f e r i n g M e m o r a n du m a n d i t s c ontents are c onfi denti al ;
2. Yo u w il l h o l d i t a n d t r e a t i t i n t h e s tri c test of c onfi denc e; and
3. Yo u w ill n o t , di r e ct l y o r i n di r e ct l y, di sc l ose or perm i t anyone el se to di sc l ose thi s O fferi n g M emoran d u m or it s con t en t s in an y fas h ion
o r ma nn e r de t r i m e n t a l t o t h e i n t e rest of the Sel l er.
Ow ne r a nd Mat t h e w s Re t a i l A dv i s o r s e x pressl y reserve the ri ght, at thei r sol e di sc reti on, to reject an y an d all expres s ion s of in t eres t or
o f f er s t o p ur ch a s e t h e P r o p e r t y a n d t o t erm i nate di sc ussi ons wi th any person or enti ty revi ewin g t h is Offerin g M emoran d u m or makin g an
o f f er t o p ur c h a s e t h e P r o p e r t y u n l e s s a nd unti l a wri tten agreem ent for the purc hase and sal e of t h e Propert y h as b een fu lly execu t ed an d
d e liv er e d .
I f y o u w ish no t t o p u r s u e n e g o t i a t i o n s l e adi ng to the ac qui si ti on of the Property or i n the future you d is con t in u e s u ch n egot iat ion s , t h en you
a g r ee t o p ur g e a l l m a t e r i a l s r e l a t i n g t o t hi s Property i nc l udi ng thi s O fferi ng Mem orandum .
A p r o sp ec t iv e p u r ch a s e r ’s s o l e a n d e xcl usi ve ri ghts wi th respec t to thi s prospec ti ve transac ti on , t h e Propert y, or in format ion provid ed h erein
o r in c o nne c t i o n w i t h t h e s a l e o f t h e P r o perty shal l be l i m i ted to those expressl y provi ded i n an execu t ed Pu rch as e Agreemen t an d s h all b e
s ub je c t t o t he t e r m s t h e r e o f. In n o e v e n t shal l a prospec ti ve purc haser have any other c l ai m s again s t Seller or M at t h ews Ret ail Ad vis ors or
a ny o f t heir a ff i l i a t e s o r a n y o f t h e i r r e s p ec ti ve offi c ers, Di rec tors, sharehol ders, owners, em ployees , or agen t s for an y d amages , liab ilit y, or
c a us es o f a c t i o n r e l a t i n g t o t h i s s o l i ci t a t i on proc ess or the m arketi ng or sal e of the Property.
T his Of f er ing M e m o r a n du m s h a l l n o t be deem ed to represent the state of affai rs of the Prope rt y or con s t it u t e an in d icat ion t h at t h ere h as
b e en no c ha nge i n t h e s t a t e o f a f f a i r s o f the Property si nc e the date thi s O fferi ng Mem orandum.
SHOPKO
699 S GREEN BAY ROAD NEENAH, WI 54956
TABLE O F CO NT ENTS
04. Executive Summary
06. Lease Abstract
07. Property Overview
14. Tenant Overview
15. Area Overview
17. Demographics
™
Kyle Matthews, CCIM
Chairman & CEO
Lindsay Tsumpes
AVP & Director
Beau Beach
Broker of Record
License No. 01469842
O 310.919.5757
M 310.622.3161
kyle.matthews@matthews.com
License No. 01954256
O 310.579.9691
M 310.880.8418
lindsay.tsumpes@matthews.com
License No. 55685-90
E XECUTIVE S UMMARY
Investment Highlights
4 I Shopko
•
Absolute NNN lease – zero landlord responsibilities
•
More than fifteen (15) years remaining on lease term, providing long
term passive income and security
•
Guaranteed by Specialty Retail Shops Holding Corp. (“SRSHC”)
•
Annual contractual rent increases provide a strong hedge against
inflation
•
Healthy rent to sales ratio of 5.05%
•
Strategically located just off of Interstate 41, the Property benefits
from highway visibility that sees 76,000 cars per day
•
Traffic count of 28,000 cars per day along W Winneconne Ave.
•
Shadow anchored by Dollar Tree and grocery store Festival Foods
– a daily needs tenant increases consumer draw and traffic to the
shopping center
•
Average household income of over $70,000 within a 3-mile radius
•
Growing community with positive population growth over the last 10
years
•
In a retail corridor with strong neighboring tenants in the trade area:
Wal-Mart Supercenter, CVS, Kohl’s, Anytime Fitness, Walgreens,
Mcdonalds, and more
Executive Summary
SHOPKO
699 S Green Bay Road
Neenah, WI 54956
List Price........................................................................................... $9,990,000
CAP Rate - Current������������������������������������������������������������������������������������7.35%
Gross Leasable Area��������������������������������������������������������������������± 94,225 SF
Lot Size ������������������������������������������������������������������������������������������ ± 7.90 Acres
Year Built/Reno��������������������������������������������������������������������������������� 1989/2003
Annualized Operating Data
Current
Monthly Rent
Annual Rent
Rent/SF
$61,250
$735,000
$7.80
*Annual rent increase: Lesser of 1.25 x CPI or 1.95% every January 1st
Tenant Summary
Tenant Trade Name
Shopko Stores Operating Co., LLC
Type of Ownership
Fee Simple
Lease Guarantor
Specialty Retail Shops Holding Corp. ("SRSHC")
Lease Type
NNN
Landlord Responsibility
None
Lease Dated
Upon execution at closing
Rent Commencement Date
5/19/2016
Lease Expiration Date
12/31/2031
Term Remaining on Lease
15.5 Years
Increases
Options
Lesser of 1.25 x CPI or 1.95% every January 1st
Two (2) Ten (10) Year
Matthews Retail Advisors | 5
Lease Abstract - Shopko
Tenant:
Shopko Stores Operating Co. LLC
Guarantor:
Specialty Retail Shops Holding Corp. ("SRSHC")
Address:
699 S Green Bay Road
Neenah, WI 54956
Size:
±94,225 SF
Rent Commencement:
05/19/2016
Lease Expiration:
12/31/2031
Renewal Options:
2 (Two) 10 (Ten) year options
Required Advance Notice of Exercise
Options:
One Hundred Twenty (120) days prior to the end of the Initial Term of this Lease
Current Rent:
$735,000
Rent Increases:
The lesser of 1.25 x CPI or 1.95% annually every January 1
Net Lease:
This Lease is a triple net lease and all costs, expenses, and obligations relating to the Premises shall be paid by Tenant
Real Estate Taxes:
Tenant agrees to pay real estate taxes and assessments levied or assessed against the Property during the Term
Insurance:
Tenant shall maintain all-risk insurance for the building for 100% of its reasonable replacement value. Tenant shall also maintain general
liability coverage of no less than One Million Dollars ($1,000,000) per occurance and Two Million Dollars ($2,000,000) in aggregate. See
Lease for other insurance policies.
Utilities:
Tenant to contract and pay all utilites
Tenant Assignment and Subletting:
Tenant shall have the right to assign the Lease, or to sublet the whole or any part of the Premises provided the Landlord's consent
Right of First Refusal:
None
6 | Shopko
Matthews Retail Advisors | 7
P ROPERTY O VERVIEW
8 | Shopko
Physical Description
Property Name
Property Address
Assessor’s Parcel Number
Zoning
Shopko
699 S Green Bay Road
Neenah, WI 54956
07-0616-0100
I1 - Planned Business Center
Site Description
Number of Stories
Year Built/Reno
One
1989/2003
Gross Leasable Area (GLA)
± 94,225 SF
Lot Size
± 7.90 Acres
Type of Ownership
Parking
Fee Simple
± 600 Surface Spaces
Parking Ratio
6.37 : 1,000 SF
Landscaping
Professional
Topography
Generally Level
Construction
Foundation
Concrete Slab
Framing
Metal
Exterior
Painted CMU
Parking Surface
Roof
Asphalt
Flat
Matthews Retail Advisors | 9
Aerial
10 | Shopko
Regional Map
Matthews Retail Advisors | 11
Tenant Map
12 | Shopko
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13 | Shopko
Matthews Retail Advisors | 13
T ENANT O VERVIEW
14 | Shopko
Property Name
Property Type
Parent Company Trade Name
Ownership
No. of Locations
No. of Employees (All)
Headquartered
Web Site
Year Founded
Shopko
Department
Sun Capital Partners, Inc.
Private
± 320
± 23,000
Green Bay. WI
www.shopko.com
1961
Shopko Stores focuses on a select product range across US small and
rural areas. The company operates more than 320 stores, including
about 135 Shopko discount stores and about 180 Shopko Hometown
shops (formerly Pamida stores) in more than 20 states across the
Midwest, Mountain, and Pacific Northwest regions. The company also
sells goods online. Shopko offers a large selection of many retail
categories; it pushes popular, high-margin categories such as casual
apparel, health and beauty aids, and housewares. Most Shopko stores
have optical centers and pharmacies. The company is owned by Sun
Capital Partners.
hoovers.com
Matthews Retail Advisors | 15
A REA O VERVIEW
Neenah, WI
Neenah is a city in Winnebago County, Wisconsin. It is situated on the banks of Lake
Winnebago, Little Lake Butte des Morts, and the Fox River. Neenah is sometimes referred
to as a twin city of the City of Menasha with which it shares Doty Island. Neenah is part of
the Fox Cities metropolitan area which is the fastest growing urban center in Wisconsin.
Neenah offers something special for everyone and has plenty of historic charm and natural
beauty. The Fox Valley metro area’s business climate has earned it the ranking of third
best market for business development among all small metropolitan areas in the nation.
There are plenty of attractions in Neenah and something for everyone. Bergstrom-Mahler
Museum of Glass is a regional art museum with glass-focused programming. The museum
has four permanent glass collections: the world’s most representative collection of antique
and contemporary glass paperweights, a stunning collection of Germanic drinking vessels
dating from 1573, a collection of Victorian-Era glass baskets and an ever-growing collection
of contemporary glass.
Riverside Park Pavilion is another major attraction that hosts two performances each year
by the Riverside Players, a community theatre group. Riverside Players “Theatre in the
Park” began back in 1955. It is an almost twenty acre city park offering playground
equipment, shoreline, shelter, paved trails, and a fishing deck.
Top Employers
#
Employer
1
Kimberly-Clark
2
Plexus Corporation
3
Theda Clark Medical Center
4
Neenah Foundry
5
Alta Resources Corporation
6
Neenah Joint School District
7
Bemis Company, Inc.
8
Neenah Paper
9
Menasha Corporation
10 Alcan Packaging
16 | Shopko
Fox Cities
The Fox Cities of Northeastern Wisconsin are the cities, towns and villages along the Fox
River as it flows from Lake Winnebago northward into Green Bay.
A center of papermaking and printing, the area is one of the 50 top manufacturing regions
in the nation. Companies such as Kimberly-Clark and Pierce Manufacturing were founded
more than 100 years ago and remain the region’s largest employers today.
In the Fox Cities area there are plenty of cultural activities, dining and nightlife in downtown
Appleton. The Charles A. Grignon Mansion known to countless travelers is known as “The
Mansions in the Woods”. It is a National and State Historic Site that is a proud reminder of
the state’s beginnings. The house currently serves as a museum and was added to the
National Register of Historic Places in 1972. The EAA AirVenture Museum is one of the
most extensive aviation attractions in the world, a year-round destination for the entire
family. There is a collection of more than 250 historic airplances.
The Fox City area has great shopping and is home to the Fox River Mall. The Fox River
Mall is a super regional shopping center of 1.2 million square feet making it the largest
shopping mall in Wisconsin. The Fox River Mall features more than 140 retailers including
Macy’s, Scheels, Pottery Barn, Ann Taylor, Build-A-Bear and many more of the nation’s
top brands. The mall has over 16 million visitors each year and is a must-stop shopping
destination.
The Fox Cities offer an exciting array of venues-from Earth’s core to the cosmos and
everything in between. Getting out in nature is easy at the many inviting parks and unique
nature centers. Appleton Memorial Park Gardens features many gardens including a
native rose garden, serenity butterfly garden, native wildflower garden, fragrance garden,
Veterans memorial garden and a water feature. You can stroll through the themed gardens
which have been designed to offer changing patterns of natural beauty throughout the
year. Most of the plants featured are native to Wisconsin.
Matthews Retail Advisors | 17
Demographics
Population
1-Mile
3-Mile
5-Mile
2021 Projection
8,006
39,299
65,168
2016 Estimate
7,917
38,510
63,842
2010 Census
7,840
37,537
62,267
2000 Census
8,124
35,687
58,146
Growth 2016 - 2021
1.12%
2.05%
2.08%
Growth 2010 - 2016
0.98%
2.59%
2.53%
Growth 2000 - 2010
-3.50%
5.18%
7.09%
Households
1-Mile
3-Mile
5-Mile
2021 Projection
3,722
16,989
28,160
2016 Estimate
3,616
16,454
27,323
2010 Census
3,459
15,680
26,170
2000 Census
3,438
14,363
23,319
Growth 2016 - 2021
2.92%
3.25%
3.06%
Growth 2010 - 2016
4.54%
4.94%
4.41%
Growth 2000 - 2010
0.63%
9.17%
12.23%
Income
1-Mile
3-Mile
5-Mile
Income < $15,000
10.79%
10.97%
9.82%
Income $15,000 - $24,999
11.87%
10.90%
10.24%
Income $25,000 - $34,999
12.31%
10.48%
10.98%
Income $35,000 - $49,999
21.00%
15.39%
15.18%
Income $50,000 - $74,999
22.18%
20.75%
21.44%
Income $75,000 - $99,999
11.39%
12.12%
12.68%
Income $100,000 - $124,999
6.02%
8.24%
8.78%
Income $125,000 - $149,999
2.15%
3.77%
4.05%
Income $150,000 - $199,999
1.17%
3.08%
2.95%
Income $200,000 - $249,999
0.46%
1.44%
1.35%
Income $250,000 - $499,999
0.55%
2.14%
1.93%
0.12%
0.74%
0.59%
2016 Est. Average Household Income
$54,842
$70,247
$70,097
2016 Est. Median Household Income
$45,738
$52,732
$54,402
Income $500,000+
18 | Shopko
Matthews Retail Advisors | 19
™
Kyle Matthews, CCIM
Chairman & CEO
Lindsay Tsumpes
AVP & Director
Beau Beach
Broker of Record
License No. 01469842
O 310.919.5757
M 310.622.3161
kyle.matthews@matthews.com
License No. 01954256
O 310.579.9691
M 310.880.8418
lindsay.tsumpes@matthews.com
License No. 55685-90