JCPENNEY (Ground Lease) 3400 South Rio Grande Avenue ... · Footwear, GNC and Natural Grocers....

JCPENNEY (Ground Lease)3400 South Rio Grande AvenueMontrose, CO 81401

NET LEASE INVESTMENT OFFERING

TABLE OF CONTENTS

II. Location Overview Photographs Aerial Site Plan Location Map Ski Resort Map

III. Market & Tenant Overview Demographic Report Market Overview Tenant Overview

I. Executive Profile Executive Summary Investment Highlights Property Overview


TABLE OF CONTENTS

DISCLAIMERSTATEMENT:

DISCLAIMER STATEMENT

The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group.

This Offering Memorandum has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. The Boulder Group has not made any investigation, and makes no warranty or representation.

The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.


EXECUTIVESUMMARY:

EXECUTIVE SUMMARY

The Boulder Group is pleased to exclusively market for sale a single tenant JCPenney ground lease located in Montrose, Colorado. The property is strategically located at a signalized intersection along the primary thoroughfare and retail corridor in the area that pulls customers from a 50-mile trade area. The JCPenney ground lease has over nine years remaining in the primary term. The lease features 10% rental escalations in each of the eleven 5-year renewal option periods and low rent per square foot ($4.14). JCPenney is an American department store chain with more than 875 locations across the United States and Puerto Rico. It is one of the largest apparel and home furnishings retailers in the United States.

The 7.7 acre property is strategically located at the signalized intersection of Rio Grande Avenue and U.S. Route 550, a spur of U.S. Highway 50. U.S. Route 550 is the primary thoroughfare and shopping corridor in the area. There are 19,990 people living within a three mile radius of the property earning an average household income exceeding $60,275 per year.

The JCPenney property co-anchors the River Landing Shopping Center, a 54 acre regional shopping hub, along with a Super Target. Additional retailers located in the shopping center include Ross Dress for Less, DaVita, Petco, Famous Footwear, GNC and Natural Grocers. Retailers in the immediate area include Walmart Supercenter, Home Depot, Walgreens, Office Depot and JOANN Fabrics. Russell Stover Candies has a 305,000 square foot factory less than one-mile from the property. The factory has been in operations for over 40 years and provides around 500 jobs to the immediate community.

Montrose has made Outdoor Life magazine’s list of “Top 200 Towns for Outdoorsmen” because it is surrounded by vast stretches of public lands where visitors can enjoy a seemingly endless variety of outdoor activities throughout the year. The Montrose Regional Airport, with regional service to Denver, is roughly four miles from the property. As the nearest major airport to the Telluride Ski Area and Crested Butte, the property sees heavy seasonal service.

There are over nine years remaining on the corporate guaranteed JCPenney ground lease featuring 10% rental escalations in each of the eleven 5-year renewal option periods. In addition to selling conventional merchandise, the JCPenney store features a salon and Sephora cosmetic department which includes more than 200 beauty brands. JCPenney is a publicly traded company on the New York Stock Exchange using the symbol “JCP”.


INVESTMENT HIGHLIGHTS:

INVESTMENT HIGHLIGHTS

• Ground lease with over nine years remaining

• Corporate guarantee

• 10% rental escalations in renewal option periods

• No landlord responsibilities

• Low rent per square foot ($4.14)

• Positioned at a signalized intersection along the primary retail corridor

• Anchor in regional shopping center also featuring Super Target, Ross Dress for Less, DaVita, Petco, Famous Footwear, GNC and Natural Grocers

• Additional retailers in the immediate area include Walmart Supercenter, The Home Depot, Walgreens, Office Depot and JOANN Fabrics

• 19,990 people living within a three mile radius of the property earning an average household income exceeding$60,275 per year.

• Pulls customers from a 50-mile trade area

• Total price per building square foot is less than $60


PROPERTY OVERVIEW:

PROPERTY OVERVIEW


Price: $5,287,536

Cap Rate: 6.90%

Net Operating Income: $364,840

Renewal Options: Eleven 5-Year; 10% Escalations

Lease Commencement Date: August 3, 2007

Lease Expiration Date; August 31, 2027

Tenant: J.C. Penney Properties, Inc.

Guarantor: J.C. Penney Corporation, Inc.

Year Built: 2007

Lease Type: Ground Lease - No Landlord Responsibilities*

Parking: 395 Spaces

Building Size: 88,141 SF

Land Size: 7.77 Acres

* Landlord maintains parking lot, landscaping, and other common areas, however, the Tenant reimburses Landlord for share of costs. Landlord collects an ‘Administrative Fee’ equal to 10% of common area expenses. The fee is not included in the NOI


PHOTOGRAPHS


AERIAL


SITE PLAN


MAPMAPLOCATION MAP

MONTROSEREGIONAL AIRPORT


MAPMAPSKI RESORT MAP

DEMOGRAPHICREPORT:

DEMOGRAPHIC REPORT

Population 3-Mile 5-Mile 7-Mile

Total Population 19,990 27,450 30,345

Total Households 8,268 11,138 12,314

Income 3-Mile 5-Mile 7-Mile

Median Household Income $46,389 $47,479 $49,123

Average Household Income $60,288 $61,747 $63,215


MARKET OVERVIEW

MARKETOVERVIEW:

Montrose, ColoradoMontrose is the Home Rule Municipality that is the county seat and the most populous municipality of Montrose County, Colorado. The city has a population of roughly 19,250 people. The main road that leads in and out of Montrose is U.S. Highway 50. The town is located on the beautiful Western Slope of the Rocky Mountains, and is well known for its regional recreational areas.

Montrose was incorporated in 1882 and named after Sir Walter Scott’s novel A Legend of Montrose. The Denver & Rio Grande railroad was built west toward Grand Junction and reached Montrose later in 1882, and the town became an important regional shipping center. Montrose is known as a manufacturing hub for outdoor products, with fly-fishing companies Ross Reels and Scott Fly Rods both located in Montrose since 1983 and 1993, respectively. In addition, Gordon Composites, maker of nearly 90 percent of the high-performance laminate material used in the bow-hunting industry, is located in Montrose. Colorado Yurt Company, maker of handcrafted yurts, tipis and rugged canvas wall tents, is also located in Montrose.

Montrose Regional Airport serves the Montrose area with regional service to Denver. As the nearest major airport to the Telluride Ski Area, Montrose sees heavy seasonal service.

The city has made Outdoor Life magazine’s list of “Top 200 Towns for Outdoorsmen” because it is surrounded by vast stretches of public lands where visitors can enjoy a seemingly endless variety of outdoor activities throughout the year. From spring through fall, lodging in Montrose puts you within minutes of some of Colorado’s prime scenic and recreational attractions. Black Canyon National Park, the crown jewel of all Montrose attractions, combines spectacular views with a satisfying menu of activities ranging from hiking to adrenaline-pumping rock climbing. The Gunnison Gorge National Conservation Area features one-of-a-kind rafting and fishing adventures in Gold Medal waters. In the winter, Montrose is a familiar waypoint for skiers making their way to the winter wonderlands of Telluride, located just 1.5 hours away from Montrose Regional Airport, and Crested Butte 92 miles to the east. But Montrose has winter attractions of its own with snowshoeing at the Black Canyon National Park, prime snowmobiling and Nordic terrain on the Uncompahgre Plateau and nearby Grand Mesa (largest flattop mountain in the world).

www.cityofmontrose.org


TENANT OVERVIEW

TENANT OVERVIEW:


JCPenneyJCPenney is an American department store chain with approximately 875 locations across the United States and Puerto Rico. It is one of the nation’s largest apparel and home furnishings retailers. In addition to selling conventional merchandise, JCPenney stores often house several leased departments such as Sephora, Seattle’s Best Coffee, salons, optical centers, portrait studios, and jewelry repair.

On April 14, 1902, founder James Cash Penney and two partners opened the Golden Rule dry-goods store in the small town of Kemmerer, Wyoming. During the following two years they opened stores in two other Wyoming frontier towns. In 1907 Penney bought out his original partners and took on new ones, beginning with Earl Corder Sams (president of the company from 1914 to 1946). When the firm was incorporated on January 17, 1913, as the J.C. Penney Stores Company, there were 34 stores in the American West. The following year the company’s headquarters were moved to New York City. In 1927 JCPenney became a publicly traded corporation listed on the New York Stock Exchange, and by 1929 it had increased the number of its stores to 1,392.

In 1988 the firm relocated its headquarters from New York City to Plano, Texas, near Dallas. The company has a partnership with Sephora, a cosmetics chain, to open Sephora outlets inside select JCPenney stores. In 2008 it launched the American Living brand, a line of clothing, accessories, and home decor developed by the American fashion designer Ralph Lauren. Later brand additions include Linden Street home furnishings and several clothing lines for juniors and young men, notably Fabulosity, by American fashion designer Kimora Lee Simmons. JCPenney has a diversified supplier base, purchasing merchandise from approximately 2,700 domestic and foreign suppliers.

Website: www.jcpenney.comLocations: 875 ±Employees: 100,000 ±Stock Symbol: JCP (New York Stock Exchange)Market Capitalization: $1.15 billion ±Year Founded: 1902Headquarters: Plano, Texas

666 Dundee Road, Suite 1801Northbrook, IL 60062

www.bouldergroup.com

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JCPENNEY (Ground Lease) 3400 South Rio Grande Avenue ... · Footwear, GNC and Natural Grocers....

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