LINCOLN PLAZA CENTERastro.ngacres.com/Core/GetPropertyFlyer/property_id/...House of Tibet 1,292...

BRYCE BLANCHARD, [email protected]

EXCLUSIVELY LISTED BY:

LINCOLN PLAZA CENTER1300 South State StreetSalt Lake City, Utah 84115INVESTMENT OFFERING

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EXECUTIVE SUMMARY & HIGHLIGHTS

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LINCOLN PLAZA CENTERINVESTMENT OFFERING

EXECUTIVE SUMMARYNewmark Grubb ACRES is pleased to present the opportunity to acquire the notable Lin-coln Plaza Center located in periphery of downtown Salt Lake City.

The Lincoln Plaza Center is a multi-tenant retail/office strip that is 100% occupied, with 67% of the leasing being government-backed. The project has had an impressive 90-100% 15-yr occupancy history and features a strong tenant mix, including a cluster of di-verse international eateries, and benefits by the well established in-fill location. Some of the benefits are derived from the growing development of the area, including the recent multi-family project, 616 Lofts, under construction on State Street and the recent redevel-opment that has taken place surrounding nearby Liberty Park.

Salt Lake County is the lead tenant for the project. Salt Lake County occupies 40,679 square feet of office space at a lease rate that is well below market at $14.44 PSF Full Ser-vice. There is only one other available office property in the surrounding area with a lease rate below $16.00 PSF Full Service and the property is classified as a Class “C” property. In addition, Salt Lake County has invested a considerable amount of their own capital in the space over the last few years and has been a tenant since 2004.

PROPERTY HIGHLIGHTS# OF TENANTS 11

RENTABLE SQUARE FOOTAGE 60,318

TOTAL PROJECT ACREAGE 4.40

PARKING RATIO 3.17/1,000

INVESTMENT HIGHLIGHTSPURCHASE PRICE $7,950,000

NET OPERATING INCOME $634,497

PRICE PER SQUARE FOOT $132

CAP RATE 8.0%

1ST YEAR LEVERAGED CASH ON CASH RETURN 14.15%

10 YEAR LEVERAGED IRR: 16.97%

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AERIAL MAPS

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REGIONAL MAP

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Salt Lake CityInternational

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South ValleyRegionalAirport

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DOWNTOWN MAP

State Street

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376 East 400 South, Suite 120 l Salt Lake City, Utah 84111Offi ce 801.578.5555 l Fax 801.578.5500

Map Data and/or Imagery Courtesy of Google, UDOT (2014)www.ngacres.com

1300 South State StreetSalt Lake City, Utah

N

1300 South

Cleveland Avenue

Kelsey Avenue

Harvard Avenue

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13,545 cars/day25,330 cars/day

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Jody Wilkinson

Nate Wade

Spencer’sCar Wash

Big Kahuna’sPizza

Alvaro’s

Coachman’s

Pacifi c FoodKorea House

Mi Lindo NayaritDiamond Nails

Shanghai CafeHouse of Tibet

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LOCAL MAP

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SITE LAYOUT

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Suite Tenant SF1 TASC, INC 2,800

2 APEX STAFFING 912

3 TASC, INC 900

4 TASC, INC 1,250

5 FRISCH EATERY 1,540

6 PACIFIC FOODS, INC 1,539

7 KOREA HOUSE 2,750

8 IPHIXIT 1,186

9 OSCAR MORALES RAMOS 2,420

12 DIAMOND NAILS 720

14 SHANGHAI CAFÉ 2,268

15 HOUSE OF TIBET 1,29210,11,13,

16,17 SALT LAKE COUNTY 40,679

SALT LAKE COUNTY Storage Room 62

SITE PLAN

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RENT ROLL &FINANCIAL ANALYSIS


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RENT ROLL (12/31/16 – 12/31/17)

TENANT SF $ PSF MONTHLY ANNUAL LEASE TYPE

LEASESTART DATE LED ESCALATIONS COMMENTS

TASC, Inc. 2,800 $14.04 $3,277 $39,323 NNN 5/1/2015 6/30/2018 3% annually Rent bumps September. Renewal Option: One 3 year at 3% annual inc and 120 day notice

TASC, Inc. 900 $13.91 $1,043 $12,520 NNN 6/1/2012 6/30/2018 3% annually Rent bumps January. Same Renewal option as above.

TASC, Inc. 1,250 $13.91 $1,449 $17,388 NNN 12/31/2014 6/30/2018 3% annually Rent bumps January. Same Renewal option as above.

Apex Staffing 912 $14.49 $1,101 $13,215 NNN 7/1/2006 12/31/2016 3% annually Rent bumps January. Renewal Option: None

Frisch Eatery 1,540 $14.21 $1,823 $21,876 NNN 3/13/2014 12/31/2018 3% annually Rent bumps January. Renewal Option: One 5 year at FMV plus 3% annual increases with 90 day notice

Pacific Foods, Inc. 1,539 $12.73 $1,632 $19,585 NNN 7/10/2010 6/30/2020 3% annually Rent bumps July. Renewal Option: None

Korea House 2,750 $12.91 $2,958 $35,495 NNN 12/1/2013 11/30/2018 3% annually Rent bumps December. Renewal Option: None

iPhixit 1,186 $13.33 $1,317 $15,810 NNN 5/1/2012 4/30/2018 3% annually Rent bumps May. Renewal Option: None

Oscar Morales Ramos Mi Lindo 2,420 $12.89 $2,599 $31,189 NNN 4/1/2013 7/31/2018 3% annually Rent bumps August. Renewal Option: None

Diamond Nails (Betty Howard, Mai) 720 $20.83 $1,250 $15,000 NNN 2/1/1997 1/31/2017 3% annually Rent bumps February. Renewal option: None

Shanghai Café 2,268 $16.19 $3,059 $36,713 NNN 8/1/1995 7/31/2021 One bump of 5% in 8/1/18

Rent bumps August 2018. Renewal Option: One 5 year at 3% annual inc and 90 day notice

House of Tibet 1,292 $17.13 $1,844 $22,128 NNN 9/1/2014 8/31/2017 CPI Annually Rent bumps September. Renewal Option: None

Salt Lake Criminal Justice 40,679 $14.44 $48,942 $587,304 FS 10/18/2004 10/31/2019 FlatOutstanding credit available for T.I.'s from Landlord

to Tenant for approximately $30,000. Renewal Option: One 5 year at 10% increase at renewal and 18

month notice

Property Storage Room 62 $- $- $-

SUBTOTAL 60,318 $14.38 $72,296 $867,547

Add: NNN Tenants Reimbursable Income $58,652

Add: SL Criminal Justice Estimated Reimbursable Income $53,291

Add: Parking Income $1,200

GROSS INCOME TOTALS $980,690

Less: Vacancy on Retail (None on Office Space) 5.00% $(11,080)

Less: Reimbursable Operating Expenses $(180,711)

Less: SL Criminal Justice OpEx Only $(134,813)

Less: Reserves 2.00% $(19,590)

Expense/Vacancy Totals $(346,193)

TOTAL NET OPERATING INCOME $634,497


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VALUATION AND CASH ON CASHNet Operating Income $634,497

Value $7,950,000

Price PSF $132

Cap Rate 8.0%

Loan to Value Ratio 65.00%

Down Payment $2,782,500

Mortgage Balance $5,167,500

Amortization (in years) 25

Payments per Year 12

Loan Term 10

Interest Rate 4.500%

Annual P&I $344,672

Annual Cash Return (NOI less P&I) $289,825

Origin Fee/Closing Costs: 1.00% $51,675

Total Cost $8,001,675

Total Cash Invested $2,834,175

Cash on Cash Return 10.23%

1st Year Principal Reduction $111,220

Total Return Including Principal Reduction $401,046

FIRST YEAR TOTAL RETURN ON INVESTMENT 14.15%

FINANCIAL ANALYSIS

LEASE EXPIRATION DATE (% OF INCOME)

2019

2020+

2016

2017

2018

20.01%

1.52% 4.28%

67.70%

6.49%


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2017YEAR 1

2018YEAR 2

2019YEAR 3

2020YEAR 4

2021YEAR 5

2022YEAR 6

2023YEAR 7

2024YEAR 8

2025YEAR 9

2026YEAR 10

Capital Investment (2,834,175)Net Operating Income CashflowsRent Roll Income 867,547 884,898 902,596 920,648 939,061 957,842 976,999 996,539 1,016,470 1,036,799 Add: NNN Tenants Reimbursable Income 58,652 59,825 61,022 62,242 63,487 64,757 66,052 67,373 68,720 70,095 Add: SL Criminal Justice Estimated Reimbursable Income 53,291 54,357 55,444 56,553 57,684 58,838 60,014 61,215 62,439 63,688 Add: Parking Income 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Less: Vacancy on Retail (None on Office Space) 5.00% (11,080) (11,301) (11,527) (11,758) (11,993) (12,233) (12,477) (12,727) (12,981) (13,241) Less: Reimbursable Operating Expenses (180,711) (184,325) (188,011) (191,771) (195,607) (199,519) (203,509) (207,580) (211,731) (215,966) Less: SL Criminal Justice OpEx Only (134,813) (137,509) (140,260) (143,065) (145,926) (148,845) (151,822) (154,858) (157,955) (161,114) Less: Reserves 2.00% (19,590) (19,982) (20,381) (20,789) (21,205) (21,629) (22,061) (22,503) (22,953) (23,412)Total Net Operating Income 634,497 647,163 660,082 673,260 686,701 700,411 714,395 728,659 743,208 758,048 NOI Return on Cost 7.93% 8.09% 8.25% 8.41% 8.58% 8.75% 8.93% 9.11% 9.29% 9.47%Debt Coverage Ratio 1.84 1.88 1.92 1.95 1.99 2.03 2.07 2.11 2.16 2.20Annual Cash FlowsTotal Net Operating Income 634,497 647,163 660,082 673,260 686,701 700,411 714,395 728,659 743,208 758,048 Less: Tenant Improvements $10.00 PSF (30,159) (30,762) (31,377) (32,005) (32,645) (33,298) (33,964) (34,643) (35,336) (36,043) Less: Brokerage Costs 6.00% (7,860) (8,017) (8,178) (8,341) (8,508) (8,678) (8,852) (9,029) (9,209) (9,393) Less: Leasing Costs (T.I.'s and Brokerage Costs) (38,019) (38,779) (39,555) (40,346) (41,153) (41,976) (42,816) (43,672) (44,545) (45,436) Less: Vacancy Down Time Included as a deduction in Incoming cash flows above Less: Debt Service (344,672) (344,672) (344,672) (344,672) (344,672) (344,672) (344,672) (344,672) (344,672) (344,672)Total Annual Cash Flows (2,582,369) 263,712 275,855 288,242 300,876 313,763 326,908 340,315 353,991 367,941 Cash on Cash Return n/a 9.30% 9.73% 10.17% 10.62% 11.07% 11.53% 12.01% 12.49% 12.98%Sales Proceeds (Valuation):Year of Sale 2027Exit Cap Rate 8.25%Sale Value 9,188,466 Less: Debt Payoff (3,778,028) Less: Cost of Sale 3.50% (321,596)Total Sale Proceeds at Cap Rate 5,088,842 IRR AnalysisExit Cap Rate 8.25%Total Cash Flows (2,582,369) 263,712 275,855 288,242 300,876 313,763 326,908 340,315 353,991 5,456,782 IRR 16.97%

Assumptions1 Annual Turnover: 5%2 Typical Renewal/New Lease Term: 3 Years3 Typical Renewal/New Lease Escalations: 2%4 Annual Rent/Expense Inflation: 2%5 Annual TI Inflation: 2%

FINANCIAL ANALYSIS - INCOME STATEMENT AND IRR ANALYSIS

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ASSET SPECIFICATIONS

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ASSET SPECIFICATIONS

TOTAL RENTABLE SF 60,318 SF

ACREAGE 4.40 Acres

PROPERTY TYPE Strip Center

YEAR BUILT 1990

EFFECTIVE YEAR BUILT

1996

CONSTRUCTION TYPE

Block

EXTERIOR Glass store front with aluminum frames, painted concrete block, and decorative stuc-co sign fascia.

ROOF Metal roof deck with a 4-ply John Manville built-up roof with gravel ballast.

MECHANICAL Roof-mounted heating and air conditioning units, with thermostat controls in each tenant space.

ELEVATOR US Elevator-2 story hydraulic

PARKING RATIO 3.17/1000

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PHOTOS

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PHOTOS

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AREA INFORMATION

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AREA INFORMATION

WHY INVEST IN UTAH?

TOP 10

TOP STATE FOR BUSINESS

#1 ECONOMY

EMPLOYMENT

GLOBALLY RANKED

AAA

#1 FOR BUSINESS

#1

by Area Development Magazine for “significant job creation, infrastructure improvement and for leading the nation in fostering a world-class business environment.” (Utah Governor’s Office of Economic Development, 2016)

AWARDEDGOLD SHOVEL

FUNAMENTALLYSOUNDHIGHEST RESULTS IN 6 PERFORMANCE CATEGORIES(US Chamber Foundation, October 2015)

LABOR MARKETSALT LAKE & PROVO BOTH RANKED TOP 10 (Forbes, 2015)

RATED AMERICA’S TOP STATE FOR BUSINESS (CNBC, 2016)

#1 STATE WITH THE BEST ECONOMY (WalletHub, 2016)

UNEMPLOYMENT IS SECOND LOWEST IN NATION(Dept. of Workforce Services)

SALT LAKE CITY RANKED ONE OF THE “15 BEST CITIES TO DO BUSINESS GLOBALLY”(Fortune)

1 OF 13 STATES AWARDED A AAA CREDIT RATING(Standard & Poor’s, 2015)

#1 BEST STATE FOR BUSINESS(Forbes, 2015)

#1 PRO-BUSINESS STATE FOR 3RD CONSECUTIVE YEAR(Pollina and AEDI)

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AREA INFORMATION

5 NATIONAL PARKS

43 STATE PARKS

14 WORLD-CLASS SKI RESORTS

SALT LAKE RANKED ONE OF THE HEALTHIEST METRO AREAS(ATLANTIC CITIES MAGAZINE)

OVER 9 MILLION ACRES OF NATIONAL FOREST

UTAH HAS 6TH LOWEST CRIME RATE IN THE U.S.

#1 HIKING CITY (SALT LAKE CITY)

(NATIONAL GEOGRAPHIC ADVENTURE)

SALT LAKE RANKED BEST PLACE TO LIVEPARK CITY RANKED BEST TOWN EVER(OUTSIDE MAGAZINE)

2ND MOST LIVABLE STATE(CQ PRESS, 2013)

#1 STATE FOR FUTURE LIVABILITY(GALLUP WELLBEING)

SALT LAKE CITY LIFESTYLE

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MARKET INFORMATION

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MARKET INFORMATION

2016 MIDYEAR MARKET REPORTCLICK TO VIEW

LINCOLN PLAZA CENTERastro.ngacres.com/Core/GetPropertyFlyer/property_id/...House of Tibet 1,292...

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