3516 E. Southern Ave. - Strategic Retail...

STRATEGIC

3516 E. Southern Ave., Mesa, AZNORTHWEST CORNER OF VAL VISTA DR. & SOUTHERN AVE., MESA, AZ

RETAIL GROUP

David JarandSenior Vice [email protected]

Erin SchrauthSenior [email protected]

INVESTMENT OPPORTUNITY FOR SALE

Subject

South Mountain Plaza, Phoenix, AZ

Table of Contents

Information contained herein is believed to be accurate but is not warranted as to accuracy and maychange or be updated without notice. Seller or landlord makes no representation as to the environ-mental condition of the property and recommends purchaser’s or tenant’s independent investigation.

3516 E. Southern Ave., Mesa, AZ 2

Confi dentiality Agreement/Disclosure 3

Executive Summary 4-5

Aerial Photo 6

Parcel 7

Proximity Map 8

Trade Area Demographics 9

Metropolitan Phoenix Information 10-11Adjacent Tenants in out building

( Not a Part)

This is a Confi dential Memorandum intended solely for your use and benefi t in determining whether you desire to express further inter-est in the acquisition of 3516 E. Southern Ave., Mesa, AZ (“Property”, “Project”). The Memorandum contains selected unverifi ed infor-mation pertaining to the Project and does not purport to be a representation of the state of aff airs 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 fi nancial 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, offi cers, broker, affi liates 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 fi nancial 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 fi nancial 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 off ers 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 Memo-randum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an off er 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 satisfi ed or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are or a confi dential nature, that you will hold and treat it in strictest confi dence 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.

Confi dentiality Agreement



Executive SummarySingle Tenant Investment

ExecutiveSummary

4

Property: 3516 E. Southern Ave., Mesa, AZ

FINANCIAL SUMMARY

Price: $1,283,400.00

Down Payment: 100% $1,283,400.00

Cap Rate: 6%

Building Size: 9,200 Square Feet

Net Cash Flow: 6%-$77,004.00

Year Constructed: 1985

Lot Size: .82 Acres


LEASE SUMMARY

Lease Type: Triple Net Lease

Tenant: Dollar Tree Stores, Inc.

Roof Structure: Landlord Responsible

Lease Commencement Date: Approx. July 1st, 2017

Lease Expiration Date: Approx June 30th, 2024

Lease Term Remaining: 7 years

Rental Increases: See Table

Renewal Options: 3,5 year options

Occupancy: 100%

Parcel #: 140-46-610B

Zoning: LC, City of Mesa ANNUALIZED OPERATING DATA

LEASE YEARS ANNUAL RENT

1-7 $77,004.00

OPTIONS ANNUAL RENT

Option 1 $81,604.00

Option 2 $86,204.00

Option 3 $94,668.00

Base Rent ($8.37) $77,004.00

Net Operating Income $77,004.00

Total Return 6% $77,004.00

2017 Expenses Total PSF

Property Taxes: $10,681.22 $1.16

CAM: $7,268.00 $.79

Insurance: $3,036.00 $.33

TOTAL $20,985.22 $2.28 psf

*100% Reimbursed by Tenant-Subject to 5% Annual CAM Cap.


Executive Summary

This building is part of the shopping center at the Northwest corner of Val Vista Drive and Southern Avenue in Mesa, Arizona. This trade area lo-cated in the east Mesa area is one of the fastest growing areas in the Valley. With a population of nearly 500,000, Mesa, Arizona is the 38th largest city in the United States and second largest in the Phoenix-Mesa metro area and is larger than Miami, Minneapolis, Atlanta and St. Louis. Mesa encompasses 133 square miles (344 square kilometers) inside a 21-city region that has a population of 4.3 million people, and is projected to grow to 6 million by 2030.

Dollartree

Headquartered in Chesapeake, VA, Dollar Tree is the largest and most successful single-price-point retailer in the country. A Fortune 500 Company, Dollar Tree operates 5,367+ stores in 48 states and fi ve Canadian Provinces. They have worked hard to create an environment where shopping is fun, a place where their customers can discover new treasures every week, a store where entire families can enjoy hunting for that special something. Every Dollar Tree store is bright and well lit, clean and well organized, and stocked with endless hidden treasures. They carry a broad, exciting mix of merchandise that includes many trusted national and regional brands. Some of the product departments you'll fi nd at Dollar Tree include housewares, glassware, dinnerware, cleaning supplies, candy, snacks, food, health and beauty, toys, gifts, gift bags and wrap, party supplies, stationary, craft supplies, teaching supplies, books, seasonal decor, and more. Everything you need for every day, every holiday, and occasion ... And every single item is only $1 (or less). On July 6, 2015 Dollartree acquired Family Dollar.

Subject Anchor Adjacent Anchor


Aerial


Subject

Southern Ave.Southern Ave.

Val V

ista

Dr.

Val V

ista

Dr.

Parcel


Building Area Parcel Area+/- 9,200 SF +/- 36,000 SF


Proximity Map

SUBJECT

SUBJECT

SUBJECT3516 E. Southern Ave., Mesa, AZ 8

SUBJECT

2017 Demographics 1 Mile 3 Mile 5 Mile

Estimated Population 15,668 146,567 354,254

Estimated Households 5,660 56,456 131,190

Estimated Families 13,227 120,825 297,257

Total Housing Units 5,883 65,262 144,571

Average Household Income $88,486 $70,853 $75,183

Total Businesses 440 5,115 13,735

Total Employees 3,259 38,530 131,872

High School Graduate 22.6% 25.6% 24.7%

Some College, No Degree 31.6% 28.7% 26.7%

Associate Degree 10.3% 9.1% 9.1%

Bachelor’s Degree 20.3% 17.6% 18.8%

Graduate/Professional Degree 8.3% 8.6% 9.6%

Trade Area Demographics



Market Overview

GREATER PHOENIX OVERVIEWExceptional lifestyle, a pro-growth business environment and aff ordable housing have long made metropolitan Phoenix one of the most attractive areas in the country. Now the fi fth largest metropolitan area in the United States, Phoenix has grown from a hum-ble western community in 1950 to highly developed and diverse community that is home to nearly 4.4 million residents today.

Sunshine, blue skies, temperate weather, and an environment free from natural disas-ters have all contributed to the exceptional quality of life that Phoenicians have come to enjoy. The area has the largest urban mountain park system in the United States and is home to more than 125 golf courses. The metropolitan area is one of the few MSAs in the country that is host of all fi ve professional sports organizations including the NFL (Cardinals), NBA (Suns), MLB (Diamondbacks), the NHL (Coyotes) and the WNBA (Mer-cury).

For twenty years local governments have continued to make signifi cant investments into the Metropolitan freeway systems developing one of the most effi cient urban free-ways in the country. Because of these interstate highway improvements, Phoenix has become a distribution hub for southwestern markets including those in California and Mexico. Sky Harbor International Airport, the 9th largest airport in the country, serves the region and is conveniently located less than fi ve minutes from the Central Business District in the heart of the metropolitan area. This airport, which handles more than 100,000 customers a day, services more than 25 diff erent airlines and is the regional headquarters for Southwest Airlines and US Airways.

To accommodate the rapidly growing urban populations in Mesa, Tempe, Downtown Phoenix and Midtown Phoenix a light rail rapid transit system was completed in 2008. This 20.3 mile system with 28 stations is the fi rst leg of a system that will expand as the region continues to grow. After its fi rst full year of operation ridership exceed expecta-tions and served more than 5.5 million passengers.

The Phoenix area provides employers with a young and well-educated labor force. As the area has grown, greater Phoenix has matured to include a diverse range of indus-tries including high-tech manufacturing, information services, and many regional cor-porate headquarters. With a dynamic work force, solid infrastructure, and high quality of life, Phoenix will continue to provide one of the most attractive business climates in the nation as it recovers from the 2008 national recession.

STRONG POPULATION GROWTHThe Metropolitan Phoenix area off ers businesses the opportunity to capitalize on the exceptional growth that is occurring in the southwestern United States. Since 1995 Metropolitan Phoenix has grown from 2.744 million residents to 4.40 million residents today. Due to the foresight of the regional planners who expanded the local infrastruc-ture ahead of the growth curve, this expansion has had very few negative impacts on the existing population base. During the peak growth years the population expanded by 120,000 residents annually with the lowest increase in population over the last 15 years at approximately 65,000. Phoenix has historically experienced very rapid growth during the years just after nation recessions with annual growth of as much as 4.2%. If this holds true for the 2008 recession, the region may expect to add between 600,000 and 800,000 residents over the next fi ve years.


Market Overview

CONSISTENT EMPLOYMENT GROWTHFrom 2002 through 2007 Metropolitan Phoenix created more jobs over that fi ve-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 eff ects of the national recession, the area is forecasted to be among the best in the Country for job growth. 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 6.3%.

Originally known for its fi ve Cs (cotton, cattle, copper, climate, and citrus), Phoenix has matured into a diverse job growth engine with multiple demand drivers including high-tech manufacturing, information services, and international trade and tourism. Nearly half of the city’s employment base is anchored by fi nancial activities, professional and business services, education and health services and government which fuel absorption of retail, offi ce, and industrial space. Near term employment growth will come from education and healthcare services, professional and business services, leisure and hospitality, and FIRE (fi nance, insurance, and real estate) sectors. Growth in these sectors will be the catalyst for future absorption. Recovery in construction, which currently accounts for only 5% of our 1.7 million employment base, will be dependent upon future hous-ing starts. Demand for future commercial construction (offi ce, industrial and retail development) will be down for several years as the markets digest existing supply.

HOUSING AFFORDABILITYDuring the peak of the nationwide home building boom in 2007 Phoe-nix permitted and built more than 63,000 single family homes. One of the causes of the boom was the rapid increase in home values. Be-tween June 2002 and June 2006 the median home price in the area rose from $138,000 to $265,000, a 92% increase in price. The result of this rapid growth was excess supply and a market where the average family at the median income was priced out of the entry level homes, which slowed the net in-migration of new residents to the area.

The 2008 recession and the rise in foreclosures dramatically slowed the housing market. Single family permits fell to less than 10,000 annually during 2009, 2010 and 2011. The good news is that by the end of 2011, the median home price in the Phoenix MSA fell back to 125,000, which had not been as low since 2002. On an aff ordability index Phoenix now ranks as one of the most aff ordable cities in the Western United States. Approximately 80% of households in Phoenix can aff ord a home com-pared to 74% in Tucson, 44% in San Diego, 33% in Los Angeles and 22% in San Francisco. The availability of aff ordable housing combined with unemployment rates signifi cantly below nation levels, a great climate and an outdoors oriented western lifestyle will ensure that the Phoenix MSA will continue to be a wonderful community for people to move to to raise their families.


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