Palace Korean Bar & Grill

Palace Korean Bar & Grill31525 20th Avenue South Federal Way, WA 98003

SINGLE TENANT NNN INVESTMENT OPPORTUNITY

KIDDER MATHEWS I 31525 20th Avenue S 2

Table of Contents

Executive Summary .................................... 3The Opportunity ................................................. 3

Property Detail ................................................... 4

Property Aerial ................................................... 5

Parcel Map ......................................................... 6

Federal Way Amenities Aerial ............................ 7

Financial Analysis ....................................... 8Rent Roll ............................................................ 8

Investment Summary ......................................... 8

Location and Market Overview ................. 9Federal Way Overview ....................................... 9

Location Map ................................................... 10

Demographics ................................................. 11

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

This Marketing Brochure 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. Kidder Mathews has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, current or past tax payments, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews 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.

This information has been secured from sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

Benjamin A. [email protected]

D. William Frame, III, [email protected]

kiddermathews.com

C o n t a c t I n f o r m a t i o n


THE OPPORTUNITY

Palace Korean Bar & Grill is a 7,470 SF single tenant NNN property located 20 minutes south of Seattle in Federal Way, Washington.

Positioned north of The Commons Mall, Palace Korean Bar & Grill is just off 320th Street, which is a major east-west retail thoroughfare that leads from Interstate 5. 320th Street runs along the primary retail trade corridor of Federal Way. The restaurant property benefits from its proximity to the Federal Way Commons Regional Mall and numerous other national retailers including Walmart, Petco, Best Buy, and many national restaurants.

5 Years of Lease Term Remaining

Tenant executed a 10-year lease that commenced in January 2009. The tenant has three (3) 5-year renewal terms remaining.

Proven Location

Aside from operating two other restaurants, the Tenant has operated at this location since 2009.

New Construction

The masonry, wood frame & stucco building was constructed in 2006.

Strong Retail Corridor

Nearby retailers include Walmart, PetSmart, Macy’s, Sears, Target, Kohl’s, Dick’s Sporting Goods, Best Buy and numerous national fast food restaurants.

Tax Free State

Washington is only one of seven states that has no income tax.

Ease of Management - NNN Investment

The lease is triple net (NNN) with minimal landlord responsibilities. The Tenant is responsible for all of their own expenses including property taxes, utilities, landscaping and HVAC repairs.

Executive Summary

INVESTMENT SUMMARY

Offering Price $1,679,000

Cap Rate 9.30%

Occupancy 100%

Lease Type NNN

In-place NOI $156,123

Lease Expiration 01/11/2019

Options Three, Five-Year

Escalations CPI


PROPERTY DETAIL

PROPERTY SUMMARY

Address 31525 20th Avenue SouthFederal Way, WA

Construction Masonry & Wood Frame (2006)

County King Zoning City Center Frame (CC-F)

Municipality City of Federal Way Parcel Number 092104-9019, 092104-9111

Building Size 7,470 SF Parking 75 stalls (10:1,000)

Land Area 1.31 Acres Assessment & Taxation $1,753,100 (2014)

Signage Monument & buildig signs Access From 314th Street & 20th Avenue S


PROPERTY AERIAL


PARCEL MAP


FEDERAL WAY AMENITIES AERIAL


TENANT SIZE % RSFLEASE START

LEASE EXPIRATION

MONTHLY RENT

ANNUAL RENT

ANNUAL RENT / SF

LEASE TYPE

COMMENTS

SONA, INC. 7,470 100.0% 01/12/09 01/11/19 $13,695 $164,340 $22.00 NNN Initial 10-year lease

Financial Analysis

RENT ROLL

INVESTMENT SUMMARY

PRICING

Price $1,679,000

Price/SF $224

Cap Rate 9.30%

OPERATING DATA

Scheduled Rent $164,340

Gross Operating Income $164,340

Expenses

Property Tax tenant pays

Insurance tenant pays

Utilities tenant pays

Vacancy & Reserves ($8,217)

Net Operating Income $156,123

FINANCING

Price $1,679,000

Down Payment $503,700

LTV 70%

New Loan $1,175,300

Interest Rate 4.25%

Amortization 25

Debt Coverago Ratio 2.04

Current Net Operating Income $156,123

Annual Debt Service ($76,405)

Cash Flow After Debt Service $79,718

Leveraged Cash on Cash Return 15.8%

Principal Reduction $31,570

Return with Principal Reduction $111,288

Total Return on Equity 22.1%

LOAN QUOTE PROVIDED BY: SCHIRO FINANCIAL

[email protected]

253.566.7155


FEDERAL WAY OVERVIEW

Federal Way Retail Market

The property’s market is defined as Federal Way, which serves the surrounding residential population in all directions, most of which lies west of I-5, north of Commencement Bay. Pacific Highway S, S 320th Street and S 348th Street are the primary arterials with a concentration of a variety of retail uses including grocery-anchored neighborhood shopping centers, community centers, several larger anchor stores, restaurants, mixed-use retail/office, and strip retail centers, and the Commons - a regional mall.

The property is located approximately 25 miles south of Seattle’s CBD and about ten miles northeast of Tacoma’s CBD. Residents have fairly short commutes to either CBD and very easy access to the industrial Kent Valley. Federal Way is primarily residential in nature, although it does contain a suitable amount of office and retail space. The neighborhood is loosely defined by I-5 to the east, Pacific Highway S to the west, S 314th Street to the north and S 320th Street to the south.

Neighborhood Character

The immediate neighborhood is primarily developed with retail uses. The largest is south of the property, The Commons at Federal Way, which was formerly known as SeaTac Mall. Anchors include Sears, Macy’s, Target, Century Theaters, Kohl’s and Dick’s Sporting Goods.

There are several other community and neighborhood centers in the immediate vicinity. The market also contains a number of freestanding stores, restaurants, branch banks, and strip centers.

Conclusion

The neighborhood is well accessed, both locally and regionally in a neighborhood that has traditionally been a retail destination area due to the Commons at Federal Way and several larger neighborhood shopping centers.

Location and Market Overview


LOCATION MAP5

5

5

405

405

52299

99

18

16

3

169

167

104

512

510 507

161

165

1627

7101

90

520

2

9

RENTON

ISSAQUAH

KENT

BURIEN

MERCERISLAND

BELLEVUE

REDMONDKIRKLAND

BOTHELL

LYNNWOOD

EVERETT

SEATTLE

VASHON

GIGHARBOR

BAINBRIDGEISLAND

AUBURN

TACOMA

PUYALLUP

LACEY

DUPONT

TUMWATER

OLYMPIA

LakeWashington

PugetSound

31525 20TH AVENUE S


DEMOGRAPHICS

1 MILE 3 MILES 5 MILES

POPULATION

Projected Population (2019) 13,583 103,491 225,952

Estimated Population (2014) 12,918 98,379 214,799

Census Population (2010) 12,363 94,100 205,550

Projected Annual Growth (2014-2019) 665 5,113 11,154

Historical Annual Growth (2010-2014) 555 4,279 9,249

2014 POPULATION BY RACE

White 6,962 (53.9%) 58,476 (59.4%) 137,151 (63.9%)

Hispanic or Latino Population 2,638 (20.4%) 15,911 (16.2%) 33,285 (15.5%)

Black or African American 1,282 (9.9%) 8,622 (8.8%) 16,796 (7.8%)

American Indian or Alaska Native 135 (1.0%) 920 (0.9%) 2,588 (1.2%)

Asian 1,741 (13.5%) 13,808 (14.0%) 24,493 (11.4%)

Hawaiian or Pacific Islander 456 (3.5%) 2,499 (2.5%) 4,766 (2.2%)

Other Race 1,533 (11.9%) 7,974 (8.1%) 15,931 (7.4%)

Two or More Races 809 (6.3%) 6,079 (6.2%) 13,075 (6.1%)

HOUSEHOLDS

Estimated Households (2014) 5,233 36,203 79,327

Projected Households (2019) 5,527 38,236 83,781

Census Households (2010) 5,024 34,756 76,158

Projected Annual Growth (2014-2019) 294 (1.1%) 2,033 (1.1%) 4,453 (1.1%)

Historical Annual Change (2000-2014) 256 (0.4%) 3,291 (0.7%) 6,542 (0.6%)

Housing Units Owner-Occupied 2,345 (44.8%) 21,192 (58.5%) 47,634 (60.0%)

Housing Units Renter-Occupied 2,888 (55.2%) 15,012 (41.5%) 31,693 (40.0%)

Estimated Average Household Income (2014) $56,684 $71,950 $72,803

Estimated Median Household Income (2014) $51,500 $64,358 $64,970

Estimated Per Capita Income (2014) $23,161 $26,571 $27,012

2014 HOUSEHOLDS BY INCOME DISTRIBUTION

HH Income $200,000 or More 119 (2.3%) 1,411 (3.9%) 2,985 (3.8%)

HH Income $150,000 to $199,999 142 (2.7%) 2,060 (5.7%) 4,626 (5.8%)

HH Income $125,000 to $149,999 133 (2.5%) 1,989 (5.5%) 4,488 (5.7%)

HH Income $100,000 to $124,999 346 (6.6%) 6,364 (10.0%) 7,876 (9.9%)

HH Income $75,000 to $99,999 722 (13.8%) 5,461 (15.1%) 12,089 (15.2%)

HH Income $50,000 to $74,999 1,135 (21.7%) 7,060 (19.5%) 15,536 (19.6%)

HH Income $35,000 to $49,999 789 (15.1%) 4,405 (12.2%) 10,326 (13.0%)

HH Income $25,000 to $34,999 680 (13.0%) 3,507 (9.7%) 7,271 (9.2%)

HH Income $15,000 to $24,999 600 (11.5%) 3,507 (9.7%) 7,271 (9.2%)

HH Income $10,000 to $14,999 214 (4.1%) 1,106 (3.1%) 2,308 (2.9%)

1 MILE

3 MILES

5 MILES

Contact

Benjamin A. [email protected]

D. William Frame, III, [email protected]

kiddermathews.com

Palace Korean Bar & Grill

Documents

Transcript of Palace Korean Bar & Grill