BONNERS FERRY SHOPKO HOMETOWN - LoopNet · industry, long-term competitive advantages and...

BONNERS FERRYSHOPKO HOMETOWN

6348 MAIN STREETBONNERS FERRY, ID 83805

OFFERING MEMORANDUM

PROPERTY DETAILS 3

FINANCIAL SUMMARY 8

SHOPKO HOMETOWNOVERVIEW 10

PROPERTY PHOTOS 16

LOCATIONINFORMATION 19

MARKET ANALYSIS 23

ADDITIONALINFORMATION 25

TABLE OF CONTENTS

111 S. Main St., Suite 2200Salt Lake City, Utah 84111801.947.8300cbcadvisors.com

EXCLUSIVELY MARKETED BY:

All materials and information received or derived from Utah its directors, officers, agents, advisors, affiliates and/orany third party sources are provided without representation or warranty as to completeness , veracity, or accuracy,condition of the property, compliance or lack of compliance with applicable governmental requirements,developability or suitability, financial performance of the property, projected financial performance of the propertyfor any party’s intended use or any and all other matters.

Neither Utah its directors, officers, agents, advisors, or affiliates makes any representation or warranty, express orimplied, as to accuracy or completeness of the any materials or information provided, derived, or received.Materials and information from any source, whether written or verbal, that may be furnished for review are not asubstitute for a party’s active conduct of its own due diligence to determine these and other matters of significanceto such party. Utah will not investigate or verify any such matters or conduct due diligence for a party unlessotherwise agreed in writing.

EACH PARTY SHALL CONDUCT ITS OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE.

Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and toconduct their own inspections and investigations including through appropriate third party independentprofessionals selected by such party. All financial data should be verified by the party including by obtaining andreading applicable documents and reports and consulting appropriate independent professionals. Utah makes nowarranties and/or representations regarding the veracity, completeness, or relevance of any financial data orassumptions. Utah does not serve as a financial advisor to any party regarding any proposed transaction. All dataand assumptions regarding financial performance, including that used for financial modeling purposes, may differfrom actual data or performance. Any estimates of market rents and/or projected rents that may be provided to aparty do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate anyapplicable contractual and governmental limitations as well as market conditions,vacancy factors and other issuesin order to determine rents from or for the property.

Legal questions should be discussed by the party with an attorney. Tax questions should be discussed by the partywith a certified public accountant or tax attorney. Title questions should be discussed by the party with a titleofficer or attorney. Questions regarding the condition of the property and whether the property complies withapplicable governmental requirements should be discussed by the party with appropriate engineers, architects,contractors, other consultants and governmental agencies. All properties and services are marketed by Utah incompliance with all applicable fair housing and equal opportunity laws.

Principal Broker

[email protected]

Steve Bogden

SECTION 1

PROPERTYDETAILS

6348 MAIN STREET, BONNERS FERRY, ID 4

PROPERTY HIGHLIGHTS- New construction. Completed at the end of 2016.

- New 15-Year Double Net Lease

- Corporate Guaranteed Lease. $3.2 Billion in 2016 Sales. Over 370 Stores in 25 States.

- Bonners Ferry Store has done 2 times expected sales since opening in October 2016.

- 30 miles from closest competitor -- Walmart

- Bonners Ferry: Ideal Demographics for Shopko's Hometown model

- Located on high-traffic route 30 minutes from Canada

- Drive-Thru Pharmacy

•

PROPERTY SUMMARYAddress: 6348 Main Street

Bonners Ferry, Idaho 83805

Built: 2016

Price: $4,325,000

Cap Rate: 7.50%

Lease: 15-Year Double Net

Lot Size: 4.27 Acres

Building Size: 25,860 SF

Ownership: Fee Simple

EXECUTIVE SUMMARY

INVESTMENT OVERVIEW


INVESTMENT OVERVIEW

CBC Advisors is pleased to offer the brand new Bonners Ferry Shopko Hometown. This investment

consists of a new 15-year lease wth a corporate guarantee within a newly constructed, 25,860 square

foot Single Tenant building on 4.27 acres. The building is a build-to-suit for Shopko Hometown, the very

successful newer model from Shopko aimed at smaller communities ranging from 3,000 to 8,000 in

population. These stores carry 70% of the merchandise carried at Shopko's larger stores and target

underserved rural communities. As a result, Shopko Hometown stores are uniquely embraced by the

communities where they are built.

The original term is a 15-year lease with 4 five-year options to extend. Starting at year 11 there is

scheduled to be 3% rental increases every five years, including during the option terms.

The lease is structured as double-net lease where the tenant is responsible for common area

maintenance & repairs, snow removal, utilities, taxes directly paid, property/liability insurance, HVAC

maint/repairs up to $1,000 annually, parking lot & landscaping maintenance. Landlord is responsible for

replacement of the parking lot, general liability insurance, roof, structure and HVAC repairs over $1,000

annually and replacement.

Shopko is a private company with over $3 Billion in annual sales revenue owned and operated by Sun

Capital Partners. Shopko is headquartered in Green Bay, Wisconsin. Shopko has 370+ locations across

25 States. Shopko has been rapidly expanding their Shopko Hometown brand over the last 2 years.

INVESTMENT OVERVIEW


BONNERS FERRY, IDAHO

Bonners Ferry grew out of a river crossing for prospectors heading to gold discoveries in Canada in the

1860’s. It is the county seat of Boundary County, with a population of about 2,500 of Idaho’s friendliest

people. The quaint downtown has been revitalized with pedestrian friendly street upgrades, improved

parking, and a new visitors center. It is a city that respects its past and is proactive towards the

future. Within seven miles the population is over 7,200 with it projected to increase over the next several

years.

The county is bisected by the Kootenai River, a major tributary of the Columbia River. The river’s course

between two great mountain ranges created the resource rich valley that was the ancestral home of the

Kootenai Tribe. Today, this great floodplain is an agricultural gem, growing such diverse crops as hops,

wheat, canola and nursery trees.

Forested mountains lie beyond the river valley, giving the county its unique picturesque beauty. Lumber

and related forest products have been the mainstay of the economy since the settlement of the area.

The additional benefits from the National Forest lands include camping, hiking, fishing, hunting, skiing

and snowmobiling. The recreational opportunities in the county are limitless.


PROPERTY NAME: Bonners Ferry Shopko Hometown

PROPERTY ADDRESS: 6348 Main StreetBonners Ferry, ID 83805

YEAR BUILT: 2016

PROPERTY TYPE: Net Leased Department Store

BUILDING SIZE: 25,860 RSF

LEASE TYPE: Double Net

GUARANTOR: Shopko Corporate Guarantee

SHOPKO REVENUE: $3.2 Billion (2016)

LEASE COMMENCEMENT: 9/15/2016

LEASE EXPIRATION: 9/30/2031

TERM REMAINING: 14+ Years

INCREASES: Starting in year 11, 3% increases every five years (includingoption terms)

OPTIONS: 4 Five-Year Options w/ increases

ROOF AND STRUCTURE: Landlord Responsibility

NOI: $324,414

CAP RATE: 7.50%

PRICE: $4,325,000

PROPERTY DETAILS

SECTION 2

FINANCIALSUMMARY


FINANCIAL SUMMARY

SECTION 3

SHOPKO HOMETOWN

OVERVIEW

SHOPKO HOMETOWN OVERVIEW


TENANT DESCRIPTIONShopko was founded in 1962 by pharmacist James Ruben. When Ruben opened the first Shopko storein Green Bay in 1962, he envisioned a company focused on quality, convenience and value. He saw theopportunity to combine health care services with a large discount store, and in 1971 Shopko becameone of the first mass retailers to feature a pharmacy in its stores. In another innovative step, Shopkoadded optical care centers to its stores in 1978. Today Shopko is known for its excellence in optical careand its best in class pharmacy services.

In December of 2005, Shopko Stores, Inc. was purchased by an affiliate of Sun Capital Partners, Inc., aleading private investment firm, and is no longer a publicly owned corporation.

In 2010, Shopko introduced a new retail concept to augment Shopko’s larger store format: ShopkoHometown. The Shopko Hometown retail format offers a differentiated and financially successfulmerchandising strategy. Shopko Hometown combines pharmacy services and a comprehensive HBA,household goods and dry grocery assortment with a broad and dynamic offering of strong nationalbrands and high-value private label brands of apparel, home goods, toys, consumer electronics,seasonal items, and lawn and garden products - all in attractive, well laid out, easy-to-shop store formatthat range in size from 15,000 - 35,000 square feet.

Following its merger with Pamida in early 2012, Shopko acquired and converted over 170 stores andpharmacies to the Shopko brand.

Shopko stores deliver a great customer experience. Clean, spacious and well-lit, the easy to shop storesoffer friendly service and on-trend, quality merchandise. Shopko carries name brands such as Nike,Adidas, New Balance, Kitchen Aid, Fisher-Price, Gloria Vanderbilt and Sony. Shopko’s popular privatelabel brands include Willow Bay, Bailey's Point, NorthCrest, Energy Zone, Soft Sensations, Peanut & Ollieand Green Soda.

Headquartered in Green Bay, Wisconsin, Shopko Stores Operating Co., LLC is now a $3.2 billion (2016)retailer that operates over 370 stores in 25 states throughout the Midwest, Mountain, North Central andPacific Northwest regions. Retail formats include 131 Shopko stores, providing quality name-brandmerchandise, great values, pharmacy and optical services in small to mid-sized cities; 5 Shopko ExpressRX stores and 5 Shopko pharmacy locations; and 222 Shopko Hometown locations, a smaller conceptstore developed to meet the needs of smaller communities.



SUN CAPITAL PARTNERS

Sun Capital Partners, Inc. has been partnering with Shopko since December 2005 to improve the retail

company’s business model and market position. Sun Capital Partners, Inc. is a leading private

investment firm focused on leveraged buyouts, private equity, debt and other investments in

market-leading companies that can benefit from the financial investor’s in-house professionals and

operating experience. They currently have over $9.2 Billion of capital under management. Sun Capital

affiliates invest in companies which typically have the number one or two market position in their

industry, long-term competitive advantages and significant barriers to entry. Sun Capital has offices

located in Boca Raton, Los Angeles and New York and affiliates in London, Frankfurt, Paris, Luxembourg,

Shanghai and Shenzhen.

Sun Capital affiliates have invested in more than 285 companies worldwide since Sun Capital’s inception

in 1995, with combined sales in excess of $45 billion and more than 200,000 employees. On a

consolidated basis, Sun Capital's affiliated portfolio companies would rank in the top 100 of Fortune

Magazine's listing of the 500 largest companies in the United States. Sun Capital Partners targets a

variety of industries and has a strong history of working with companies specializing in consumer

products like Shopko.



SHOPKO PROJECTS SIGNIFICANT CONTINUED GROWTH THROUGH 2017Green Bay, Wisconsin. – March 2, 2016

Having opened 53 new stores in 2015, Shopko is projecting continued growth over the next two yearswith the expected opening of additional stores in markets across the country. To reinforce itscommitment to growth, Shopko announced today the opening of 10 new Shopko Hometown stores,bringing the total number of stores opened this year to 12. Grand opening celebrations for the neweststores are planned for late March in the following locations:

• Springerville, AZ • Clarinda, IA • Cresco, IA • Vinton, IA • Phillipsburg, KS• Mayville, ND • Albion, NE • Comanche, TX • Cotulla, TX • Beaver, UT

The Shopko Hometown retail format, developed over the past five years to augment Shopko’s largerstore model and focus on serving the needs of smaller rural communities, provides a broad anddynamic offering of strong national brands and high-value private label brands of apparel, homefurnishings, toys, consumer electronics, seasonal items, groceries and lawn and garden products – all inan attractive, easy-to-shop store thatranges from 15,000 to 35,000 square feet.

"The rural population is grossly underserved by retailers, so we’re eager to bring Shopko Hometown tomore communities,” said Peter McMahon, Shopko CEO. “We’ve received overwhelmingly positivefeedback from customers in our current hometown communities who tell us they appreciate theimproved shopping experience and access to a broader, differentiated selection of merchandise,including products and brands previously notavailable in their community.”

Shopko Hometown’s excellent customer service, as well as its continued commitment to support localcommunities through its Shopko Foundation and other initiatives, ensures these stores will be wellreceived. Once the addition of these 10 stores is complete, the company plans to continue to acceleratethe addition of new Shopko Hometown stores through 2017.

“This is a major upgrade in services that aren’t currently provided within the county. It will help us reduce our retail leakage to other areas like Bonner County." -Dennis Weed, Bonners Ferry Economic Development Council, 8/18/2016

“Our Canadian friends will be able to find what they want in Boundary County.” - Dennis Weed, Bonners Ferry Economic Development Council, 8/18/2016

“The new store will provide shoppers ultimate convenience, with product offerings including clothing, home furnishings, toys, consumer electronics, seasonal items, every day consumable items and lawn and garden products – all in an attractive, well laid out, easy-to-shop store format." -Priest River Times, 8/17/2016

“One of the biggest draws is the surprisingly wide selection of name brand merchandise. [Shopko] Hometown offers Nike, Adidas and New Balance athletic shoes and apparel. It’s got Gloria Vanderbilt designer clothing, Sony electronics, Kitchen Aid appliances and Fisher-Price toys. These are the kinds of brands that many rural residents are accustomed to driving miles to find." - National Retail Federation, 7/12/2016

"Hometown stores tend to be a bit larger — and carry more items — than typical Dollar General or Family Dollar stores. What’s more, store managers are given a sizable budget for community involvement. Beyond local schools and charities, the stores also try to purchase from local vendors — including some locations that buy beer from local breweries." -National Retail Federation, 7/12/2016

"When many consumers have to travel a half hour or more each way to shop a supercenter or major discount store, local availability of recognized brand goods could become a distinct selling point. The convenience factor is critical in the Hometown format, one that becomes even more important to parents who may not look forward to a two hour shopping trip to the nearest supercenter with one or more children strapped into the back seat." -HomeWorld Business, 5/23/2016

“I cannot begin to tell you how comforting it is to see a full parking lot, because it is a sign of good business and revenue, two things that are vital to the continued growth of White Pine County. Shopko brings a variety of items to consumers that up until now was a car trip out of town or a few days wait in the mail.” -Mayor Melody VanCamp, Ely, Nevada

“It’s great for our economy. Shopko is a store that has just about everything we need. Brand names, wide variety, convenient location and lots of parking. And it’s right here. Best yet, they hired local people, and we’re keeping our residents’ money here in town.” -Arlene Alen, CEO and president of the Chino Valley Chamber of Commerce, 8/11/2016

"I know there's lots of small communities and rural towns in the United States that don't have the variety of product Shopko has, the great brands we have, the great food we have in our stores. They have to drive 30, 40, 50 miles now, so why not come to Shopko locally where we have the product in stock?" -Peter McMahon, CEO of Shopko

INTEGRAL TO THE COMMUNITY

CONVENIENCE IN AN UNDERSERVED MARKET


SECTION 4

PROPERTYPHOTOS

SECTION 5

LOCATIONINFORMATION

SECTION 6

MARKETANALYSIS

DEMOGRAPHICS MAP


*Information provided from 2010 Census

3 Miles 5 Miles 7 Miles

Total Population 3,515 5,245 7,242Population Density 124 67 23Median Age 41.2 42.5 42.7Median Age (Male) 40.0 42.0 42.3Median Age (Female) 43.7 43.5 43.4Total Households 1,505 2,160 2,935# of Persons Per HH 2.7 2.6 2.6Average HH Income $47,987 $48,817 $48,264Average House Value $234,079 $232,457 $232,343

SECTION 7

ADDITIONALINFORMATION


SITE PLAN

SALT LAKE CITY, UTAH

www.cbcadvisors.com www.investment-cre.com

111 SOUTH MAIN STREET, SUITE 2200

SALT LAKE CITY, UT 84111

801.947.8300

Corporate Headquarters | 6550 South Millrock Dr., Suite 200 Salt Lake City, UT 84121 | 801.947.8300

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https://cbcadvisors.com

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