Investment Offering - Jesse Lee › docs › -SangGa › 4835 Kingston Pike...Mercedes Place...

5825 Glenridge Drive ♦ Building 1 Suite 206 ♦ Atlanta, GA 30328

Telephone: 404.812.8910 ♦ Fax: 678.916.4149 ♦ skylineseven.com

Mercedes Place4835 Kingston Pike

Knoxville, TN

Investment Offering

Statement of Confidentiality & Disclaimer

skylineseven.com

The information contained herein is subject to change without notice and the recipient of these

materials shall not look to the Owner or Skyline Seven Real Estate, nor any of their officers,

employees, representatives, independent contractors or affiliates, for the accuracy or

completeness thereof. Recipients of this Investment Offering Brochure are advised and

encouraged to conduct their own comprehensive review and analysis of the Property.

This Investment Offering Brochure is a solicitation of interest only and is not an offer to sell the

Property. The Owner expressly reserves the right, at its sole discretion, to reject any or all

expressions of interest to purchase the Property and expressly reserves the right, at its sole

discretion, to terminate discussions with any entity at any time with or without notice. The Owner

shall have no legal commitment or obligation to any entity reviewing the Investment Offering

Brochure or making an offer to purchase the Property unless and until the Owner executes and

delivers a signed Purchase Agreement on terms acceptable to the Owner, at Owner’s sole

discretion. By submitting an offer, a prospective purchaser will be deemed to have

acknowledged the foregoing and agrees to release the Owner from any liability with respect

hereto.

Neither Skyline Seven Real Estate nor the Owner make any representation or warranty, express

or implied, as to the accuracy or completeness of the information contained herein, and nothing

contained herein shall be relied upon as a promise or representation as to the future performance

of the Property. This Investment Offering Brochure may include certain statements and

estimates by Skyline Seven Real Estate with respect to the projected future performance of the

Property. These assumptions may or may not be proven to be correct, and there can be no

assurance that such estimates will be achieved. Further, Skyline Seven Real Estate and the

Owner disclaim any and all liability for representations or warranties, expressed or implied,

contained in or omitted from this Investment Offering Brochure, or any other written or oral

communication transmitted or made available to the recipient. The recipient shall be entitled to

rely solely on those representations and warranties that may be made to it in any final, fully

executed and delivered Purchase Agreement between it and the Owner.

Skyline Seven Real Estate has been engaged as the exclusive agent and representative of the

Owner. No contacts shall be made by any prospective purchaser or agents to the Owner, its

executives, personnel or related entities.

The enclosed materials are being provided solely to facilitate the prospective purchaser’s own

due diligence for which the purchaser shall be fully and solely responsible.

Mercedes PlaceKnoxville, TN

Investment Overview

$296,311 GLA 26,228 SF

$3,385,000 Occupied 26,208 SF

8.75% Vacant 20 ATM

Panera Bread

Jersey Mike's

Westwood Antiques

H&R Block

Prestige Cleaners

Persian Galleries

Lilly's Bead Box

Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.

Mercedes Place is situated in an affluent area of Knoxville, with many of the tenants catering to the design and needs of

the area residents. When driving in the area, it is easy to see why retail tenants are drawn to Mercedes Place. Located

close to downtown and the University of Tennessee, this is where retailers want to be.

CAP

Mercedes Place is a high-end shopping center, consisting of 7 tenants, in an affluent area of Knoxville. The property

consist of a 22,735 square foot inline shopping center, anchored by Panera Bread, which recently renewed for 5 years,

and a free standing building leased to Westwood Antiques & Design Market. The other tenants are an excellent fit for

the area, and includes: Jersey Mike's Subs, H&R Block, Persian Rug Galleries, Prestige Cleaners and Lilly's Beads,

which is a new tenant that recently re-located from another center in the area. The location is superb, which can be seen

as Mercedes Place is surrounded by Kroger, Fresh Market, and Earth Fare, in addition to Starbucks, Chick-fil-a, several

banks, and many other retailers. Another good indicator of the area is the close proximity to Cherokee Country Club,

which is across the street, and lined with many impressive homes. Downtown Knoxville is a short drive, and then there is

also the University of Tennessee nearby, with all of their faculty and students

Current NOI

Price

With only 7 tenants, this center provides ease of management and excellent returns to investors, with additional upside

obtained through leasing the ATM on the property. Mercedes Place is well located on Kingston Pike, which is the main

corridor in this part of Knoxville, with 16,568 cars passing per day. The property is in very good condition, and the

parking lot was recently re-sealed and re-stripped, giving the property a fresh look. There is limited competition in the

area, with minimal vacancy. The building was constructed in 1999, and is located on 3.68 acres. The property is located

on a ground lease, where the options run through 2058 - see the lease abstract for more details.

CSC Investments operates 25 Panera Bread restaurants in 4 states

Over 12,000 locations; Fiscal 2014 Revenues over $3 Billion

While Knoxville has a rich history, going back to the French and Indian War, the city really took off following the 1982

Worlds Fair. This was seen as one of the most popular World's Fair in U.S. history, with over 11 million visitors.

Knoxville has continued to thrive, and is evident by the downtown re-development, which includes museums, a new

convention center, and many redeveloped residential condos. Knoxville is also known for being the home to the

University of Tennessee, with over 27,000 students, plus faculty and staff.

Highlights

● Anchored by Panera Bread - New 5 Year Extension

● Fully Leased Center with an excellent tenant mix, with upside by leasing the ATM

● Excellent Location: surrounded by Kroger, The Fresh Market, and Earth Fare

● 7 Tenants = Ease of Management

● Limited Competition, in a tight market with minimal vacancy

● Strong Demographics: Nearly 142,000 people living within 5 miles

Tenants

High end design and antique store, in business since 1998

Chesapeake Bay Subs operates 4 Jersey Mike's Subs and growing

One of 11 drop off locations in the Knoxville area (not a plant)

High end oriental and middle eastern rug gallery

Area Information

Experienced operator, with a focus on jewelry and beads

JC

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Aerial View

Main

Building

Westwood Antiques

Please Note: Lot Lines are approximate



Aerial Map

Subject


Aerial View


Subject


Photographs

Front View - Panera Bread On The Left / Recently Re-Sealed Parking Lot


Photographs

Below - Drive Thru For The Dry Cleaners & Rear Access


Photographs

Right Side Tenants / Below - Patio For Panera & ATM That Can Be Leased


Photographs

Nice & Large Pylon Sign / Front View Of Mercedes Place Below


Photographs

View Of Panera Bread Side / Center View From The Parking Lot Below


Photographs

Free Standing Westwood Antiques Building With Large Pylon Sign


Rent Roll Summary

Start Expiration

Prestige Cleaners 4,000 15.25% 02/08/98 08/31/15 $67,884 $16.97 $21,806

Jersey Mike's Subs 1,980 7.55% 12/16/13 12/31/18 $36,175 $18.27 $9,523

H&R Block 2,011 7.67% 04/22/14 04/30/18 $36,198 $18.00 $9,673

Persian Rug Galleries 6,750 25.74% 01/01/10 01/31/17 $108,000 $16.00 $36,804

Lilly's Bead Box / Lucky Staar Jewelry 1,354 5.16% 01/01/15 01/01/20 $29,788 $22.00 $6,513

Panera Bread - CSC Investments 6,640 25.32% 05/21/99 08/01/19 $130,971 $19.72 $47,938

Westwood Antiques - Free Standing 3,473 13.24% 10/04/13 10/31/18 $58,451 $16.83 $16,705

Vacant 20 0.08% $12,000

26,228 $479,467 $148,962

99.92% 26,208 97.50% $467,467 $17.84 $148,962

0.08% 20 2.50% $12,000

Estimated

Recapture

4839

4841

4845

Annual

Rent/ Sq.Ft.

Square

Footage

Current

Annual Base

Rent

% of

Center

Lease TermTenantSuite

ATM

4837

TOTALS

Vacant

Occupied


* Panera - pays CAM/T/I + $942.83 per month for parking lot fees on the west side parking lot - they just renewed thru 2019

* Lilly's Beads is an experience operator, and recently relocated to Mercedes Place from a center in the area

4851/53

4861

4849

* The ATM is part of the property, where this could be leased to a bank or credit union, estimated at $1,000 per month


CURRENT

SCHEDULED LEASED INCOME $479,467

Add Scheduled Tenant Reimbursements:

CAM/Tax/Insurance 148,962

TOTAL SCHEDULED INCOME $628,429

31,421 5%

GROSS OPERATING INCOME $597,008

EXPENSES (2014 Budget)

Property Taxes $55,700

Property Insurance $3,119

Ground Lease Payments $177,132

CAM

● Security System, Contract & Phone Line $6,822

● Electricity (General) $6,572

● Trash $8,453

● Landscaping $14,610

● Parking Lot Sweeping $3,444

● Maintenance / Repairs (Estimate $250 / month) $3,000

Reserves ($.15/SF) $3,934

Management (3% x Gross Operating Income) $17,910

$300,696

NET OPERATING INCOME $296,311

NOTES

Supplemental Information:

Annual Expenses per Square Foot $11.46


* The property is situated on land owned by others, thus the monthly payment of $14,761 per month

* The ground lease payment is a non-CAM expense

VACANCY RESERVE

Net Operating Income

JC

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JC

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About

6,640 Annual Base Rent $130,971

May 21, 1999 Annual Rent PSF $19.72

August 1, 2019 Security Deposit None

About


April 22, 2014 Annual Rent PSF $18.00

April 30, 2018 Security Deposit None

Termination Date

Lease Abstract

Tenant Panera Bread - operated by CSC Investments LLC

CSC Investments operates 25 Panera Bread Cafes in

Tennessee, Georgia, North Carolina, an Alabama

Square Feet

Commencement Date

Landlord Responsibility Landlord shall use good faith efforts to maintain the public and common

areas of the shopping center, including…windows, plumbing and electrical

serving the building, and the structure itself…Tenant is responsible for

maintaining the HVAC. Landlord agrees to be reasonable for replacement of

HVAC, plumbing or other mechanicals servicing the Premises

Increases / Renewals Just renewed the second option for 5 years - 3% annual increases

Percentage Rent

Website www.hrblock.com

Tenant H&R Block Eastern Enterprises, Inc., a Missouri Corporation

Square Feet

Commencement Date

H&R Block is the world's largest tax service provider, with

approximately 12,000 locations across the country. In

fiscal 2014, revenues exceed $3 billion.

Increases / Renewals

Landlord Responsibility Landlord will keep in good repair…roof, foundations, sprinkler system,

exterior walls, excluding interior walls, plate glass and other windows.

Landlord shall warrant the HVAC for the first year of the lease.

Tenant Responsibility Tenant pays its own utilities, plus pro-rata share of Operating Costs, Taxes,

Insurance, and reimburses the pro-rata share of cost Landlord incurred in

performing repair and maintenance obligations with respect to the Shopping

Center. Tenant shall be responsible for a HVAC service contract and repairs

not to exceed $2,000 per year.

3% annual increases, and One x 3 year option to renew with 3% increases

5% times the gross receipts in excess of $2,539,295.64


Tenant Responsibility Tenant pays its own electricity, plus pro-rata share of CAM, Taxes,

Insurance, HVAC repair (all landlord operating expenses) - also $942.83 per

month for parking lot fees in the west parking lot.

Termination Date

http://www.hrblock.com/


Website

About


August 1, 2009 Annual Rent PSF $16.83

October 31, 2018 Security Deposit $4,775.38

About


December 13, 2013 Annual Rent PSF $18.27

December 31, 2018 Security Deposit $3,000.00

Landlord Responsibility Landlord will keep in good repair…foundations and exterior walls, excluding

interior walls, plate glass and other windows.




Center. Tenant shall be responsible for a HVAC with a service twice a year.

Termination Date

Increases / Renewals

Website www.jerseymikes.com

Increases / Renewals 2% annual increases, and 3 x 5 year option to renew with 2% increases


Landlord Responsibility Landlord will keep in good repair…foundation, roof, and exterior walls,

excluding interior walls, plate glass and other windows.

Square Feet

Commencement Date

Termination Date

Jersey Mike's Subs started in 1957, and now has 1,300

locations. The operator of this location is Chesapeake

Bay Subs out of Charleston, which currently operates 4

locations, with plans to open another 20 restaurants in

Maryland and Tennessee.

Tenant Jersey Mike's Subs - Chesapeake Bay Subs, LLC as operator





not to exceed $2,000 per year.

http://westwoodantiquemarket.com

Square Feet

Commencement Date

Lease Abstract

Tenant Westwood Antiques & Design Market

2% Annual Increases, and 2 x 5 year option to renew with 2% increases.

Westwood Antique & Design Market was founded in 1998 as a source of

quality antiques of a wide variety and as a place where the emphasis on

good design and style is equal to the emphasis on antique

http://www.jerseymikes.com/

http://westwoodantiquemarket.com/


About


January 1, 2010 Annual Rent PSF $16.00

January 31, 2017 Security Deposit None

About


February 8, 1998 Annual Rent PSF $16.97

August 31, 2015 Security Deposit NA

Landlord Responsibility Landlord will keep in good repair…foundation, roof, and exterior walls,

excluding doors, windows and window frames in the exterior walls.

Termination Date

Increases / Renewals In their second/last option now. $5,657/month base + $1,817.20 CAM




Center. Tenant shall be responsible for doors, windows, plumbing, heating

and air conditioning, and electrical systems.


Square Feet

Commencement Date

This is one of 11 drop off dry cleaner locations owned by Prestige Cleaners,

with the dry cleaning plant located at their Emory Road facility.

Website www.prestigecleanersinc.net

Tenant Prestige Cleaners







with a service twice a year.

Increases / Renewals 4.7% Annual Increases, and 1 x 3 year option to renew with 3% increases.

Persian Galleries is an high-end oriental and middle eastern rug gallery

Square Feet

Commencement Date

Termination Date

Lease Abstract

Tenant Persian Galleries, Inc.

http://www.prestigecleanersinc.net/


About


January 1, 2015 Annual Rent PSF $22.00

January 1, 2025 Security Deposit

About

September 3, 1998 Termination Date September 9, 2018

Lease Year

16-20 $177,131

21-25 $200,407 26-30 $226,743

31-35 $256,539

36-40 $290,250

41-45 $328,391

46-50 $371,544

51-55 $420,368

56-60 $475,608

Annual RentAnnual Payments


First Refusal Lessee has a right of first refusal to acquire the property (land) by matching

any bonafide 3rd party offer to purchase.

Commencement Date

Increases / Renewals Lessee has the right to extend for 8 x 5 year renewal options, with a

termination date of September 9, 2058.

Mercedes Place is situated on a long term ground lease, where the owner

(Tenant) makes monthly payments to the owner of the land, and the Tenant

also pays the property taxes.




Center. Tenant shall be responsible for a HVAC service.

Ground Lease Lessors Oliver A Smith, IV, Diana Smith Flaherty, and Carol Smith Tombras, as co-

trustees of the Oliver and Evelyn Smith Irrevocable Trust.

Recent re-location to Mercedes Place

Square Feet

Commencement Date

Termination Date

Increases / Renewals 3% annual increases starting year 2



Lease Abstract

Tenant Lilly's Bead Box / Lucky Staar Jewelry


Subject

Downtown Knoxville


Location Maps

Subject

Subject


Demographics

One Mile Three Miles Five Miles

2013 Population 5,705 45,441 141,981

2010 Population 5,785 45,030 139,886

5 Year Projected 5,705 46,575 146,508

Growth 2010 to 2013 0.91% 1.50%

Projected Growth 2013 to 2018 2.50% 3.19%

2013 Households 2,887 19,111 60,041

2010 Households 2,936 18,966 59,223

5 Year Projected 2,879 19,609 61,981

Growth 2010 to 2013 0.76% 1.38%

Projected Growth 2013 to 2018 2.61% 3.23%

2013 Average Household Income $63,884 $63,104 $56,602

5 Year Projected $81,493 $79,265 $68,117

Projected Growth 2013 to 2018 27.56% 25.61% 20.34%

White 83.40% 81.40% 80.40%

Black 7.40% 10.40% 11.50%

American Indian/Eskimo 0.30% 0.30% 0.40%

Asian/Pacific Islander 5.00% 3.10% 2.50%

Other Race 4.00% 4.70% 5.20%

Hispanic Ethnicity 7.10% 5.40% 6.00%

Race

Population

Households

Income

Investment Offering - Jesse Lee › docs › -SangGa › 4835 Kingston Pike...Mercedes Place...

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