Applebee`s - NNNDeal.com

Transcription

Applebee's
CINCINNATI, OH
OFFERING MEMORANDUM
FILE PHOTO
Applebee's
CINCINNATI, OH
CONFIDENTIALITY AND DISCLAIMER
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 Marcus & Millichap and should not be made
available to any other person or entity without the written consent of Marcus & Millichap. 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. Marcus & Millichap 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, 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, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor
has Marcus & Millichap 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.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS
& MILLICHAP AGENT FOR MORE DETAILS.
Applebee's
CINCINNATI, OH
NET LEASED DISCLAIMER
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable.
However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap
conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or
representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and
completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute
for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies
any obligation to conduct a due diligence examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not
represent the current or future performance of this property. The value of a net leased property to you depends on
factors that should be evaluated by you and your tax, financial and legal advisors.
Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of
any net leased property to determine to your satisfaction with the suitability of the property for your needs.
Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors
must request and carefully review all legal and financial documents related to the property and tenant. While the
tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success.
Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be
set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area.
Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail
to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market,
economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible
for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any
long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or
abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant
considering the location of the property, and Buyer’s legal ability to make alternate use of the property.
By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services
and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or
purchase of this net leased property.
Applebee's
TABLE OF CONTENTS
Section 1
PRICING AND FINANCIAL ANALYSIS
Section 2
PROPERTY DESCRIPTION
Section 3
RECENT SALES
Section 4
MARKET OVERVIEW
Section 5
DEMOGRAPHIC ANALYSIS
Applebee's
CINCINNATI, OH
Applebee's
CINCINNATI, OH
FINANCING
Existing Financing
Loan Type
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to
the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any
inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
Ohio, Inc. © 2013 Marcus & Millichap U0120096
Free and Clear
1
Applebee's
CINCINNATI, OH
FINANCIAL OVERVIEW
Location
Annualized Operating Data
4440 Glen Este Withamsville Road
Cincinnati, OH 45245
Rent Increases
Annual Rent
Monthly Rent
$142,040.00
$11,836.67
Years 1 -10
Option 1 - FMV
Price
Down Payment
Rentable Square Feet
Price/SF
CAP Rate
Year Built
Lot Size
Type of Ownership
$2,104,000
100% / $2,104,000
Option 2 - FMV
Base Rent ($31.92/SF)
4,450
Net Operating Income
$472.81
Total Return
$142,040
$142,040
6.75% / $142,040
6.75%
1992
1.09 ACS
Fee Simple
Tenant Summary
Tenant Trade Name
Applebee's Neighborhood Grill
Ownership
Tenant Trade Name
Private
Ownership
Tenant
Tenant
Lease Guarantor
Private
Franchisee
Franchisee
Franchisee
Guarantee
Franchisee
Guarantee
Lease Type
Lease Type
Roof and Structure
Absolute Net
Absolute Net
Tenant Responsible
Roof
Structure
Leaseand
Term
Tenant
10Responsible
Years
Lease
Lease Term
Rent
02/22/2013
10 Years
02/22/2013
Lease
Lease Commencement
Expiration
Date
Term Commencement
Remaining on
Rent
02/22/2013
02/28/2023
Date
Increases
Lease Expiration Date
Options
Term Remaining on
Lease
Increases
Options
10 02/22/2013
Years
Percent Rent ++ and Options Fair
02/28/2023
Two Five-Year
10 Years
Percent Rent ++ and Options Fair
Market Value
Two Five-Year
2
Applebee's
CINCINNATI, OH
TENANT OVERVIEW
Property Name
Applebee's
Property Address
Property Type
Net Leased Restaurant - Other
4,450
Tenant Trade Name
Ownership
Private
Tenant
Franchisee
Lease Guarantor
Franchisee Guarantee
Lease Commencement Date
02/22/2013
Rent Commencement Date
02/22/2013
Lease Expiration Date
02/28/2023
Term Remaining on Lease
10 Years
Lease Type
Absolute Net
Roof and Structure
Tenant Responsible
Lease Term
Increases
10 Years
Percent Rent ++ and Options Fair Market Value
Options to Renew
Two Five-Year
First Right of Refusal
No. of Locations
Three Day
Franchisee Has Approximately 90 Locations
Headquartered
Lexington, KY
Web Site
www.tandk.com
Franchisee Profile
Years in the Business
Other Concepts Owned
26+ Years
Approximately 12 Johnny Carino's Italian Restaurants
Thomas & King is number one in Applebee's neighborhood. The company is one of the largest franchisees of Applebee's, operating 88 of its
signature restaurants. The casual dining establishments offer a variety of menu items including burgers, steaks, and seafood, but are most popular
for their selection of appetizers.
Thomas & King also operates a half dozen Johnny Carino's Italian-themed restaurants franchised from Austin, Texas-based Fired Up. Co-founded in
1988 by CEO Mike Scanlon, the company operates restaurants in Arizona, Indiana, Kentucky, Ohio, and Pennsylvania.
3
Applebee's
CINCINNATI, OH
Applebee's
CINCINNATI, OH
INVESTMENT OVERVIEW
Investment Highlights
■ Newly Executed, Fee Simple, 10-Year NNN Lease
■ Tenant Has Been at Location for 20 Years Showing Commitment to the
Region
■ Base Rent Plus Percentage Rents and Tenant Covers All Common Area
Maintenance Fees
■ Shares Center with Pep Boys and Other Regional Chains
■ Thomas & King Is One of the Largest Applebee's Franchiees
■ Thomas & King, Inc Was Founded in 1988 by Michael Scanlon, Who Is
Still President and CEO
■ Located in the Heart of the Region's Retail Hub, the Area Is a Destination
Location
■ Quickly Growing Region with 10.2 Percent Population Growth Since
2000
Located just off the James A Rhodes Appalachian Highway, or I-32, in Cincinnati, Ohio, the Applebee's is located as an
out-pad to a Pep Boys-anchored regional center at the Glen Este Withamsville Road off ramp. Other national retailers
in the immediate area include Sam's Club, Meijer, Panera Bread, Chick-fil-A, Chuck E. Cheese's, Super Walmart,
Starbucks, LongHorn Steak House, Hampton Inn & Suites, Comfort Inn & Suites, Bed Bath & Beyond, Tractor
Supply, Meineke Car Care, and a US Army Recruiting Center.
Eastgate Mall is located just to the west of the site and is home to JC Penney, Dillard's, Kohl's, Sears and over 100 other
retailers including Krogers, LensCrafters, Marshalls, Payless ShoesSource, and Logan's Road House.
Thomas & King is America's nineteenth largest restaurant franchise company and sixth largest Applebee's franchisee.
With over 5,500 employees, 88 Applebee's Neighborhood Grill & Bar restaurants, and six Carino's Italian restaurants in
the following five states: Kentucky, Ohio, Arizona, Pennsylvania, and Indiana. Thomas and King is a leaser in the casual
dining industry.
Applebee's was founded in Atlanta, GA in 1980 by Bill and T.J. Palmer, and was acquired six years later by Applebee's
International, Inc. The company employs more than 100,000 team members worldwide, with Thomas & King
accounting for 5,500 employees. Applebee's Neighborhood Grill & Bar is the largest casual dining concept in the world
with 1,990 restaurants in 49 states and 15 other countries. Applebee's Services Inc., and its affiliates, franchise and
operate restaurants under Applebee's Neighborhood Grill & Bar and are a DineEquity, Inc (NYSE:DIN) brand.
5
Applebee's
CINCINNATI, OH
PROPERTY SUMMARY
The Offering
Property
Property Address
Applebee's
Site Description
Year Built
1992
4,450
Lot Size
Type of Ownership
1.09 ACS
Fee Simple
6
Applebee's
CINCINNATI, OH
AREA MAPS
Local Map
Regional Map
7
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
SITE PLAN
CINCINNATI, OH
Applebee's
8
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services of
AERIAL PHOTO
CINCINNATI, OH
Applebee's
9
RECENT SALES
Applebee's
CINCINNATI, OH
Applebee's
RECENT SALES
CINCINNATI, OH
RECENT SALES MAP
1)
2)
3)
4)
5)
6)
Applebee's
Applebee's - Lubbock, TX
Applebee's - Martinsburg, WV
Applebee's - Oldsmar, FL
Applebee's - Mobile, AL
Applebee's - Blaine, MN
Applebee's - South Hill VA
11
Applebee's
RECENT SALES
CINCINNATI, OH
CAP RATE AND PRICE PER SQUARE FOOT
Average Cap Rate
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Subject
Applebee's
Lubbock,
TX
Applebee's
Martinsburg,
WV
Applebee's
Oldsmar,
FL
Applebee's
Mobile,
AL
Applebee's
Blaine,
MN
Applebee's
South
Hill
VA
Applebee's
Blaine,
MN
Applebee's
South
Hill
VA
Average Price per Square Foot
700.00
600.00
500.00
400.00
300.00
200.00
100.00
0.00
Subject
Applebee's
Lubbock,
TX
Applebee's
Martinsburg,
WV
Applebee's
Oldsmar,
FL
Applebee's
Mobile,
AL
12
Applebee's
RECENT SALES
CINCINNATI, OH
RECENT SALES
Applebee's
Rentable Square Feet:
4,450
Sales Price:
$2,104,000
Year Built:
1992
Down Payment:
$2,104,000
CAP Rate:
6.75%
Price/SF:
$472.81
Subject Property
Applebee's - Lubbock, TX
1
6501 4th Street
Lubbock, TX 79416
Close of Escrow:
On Market
Sales Price:
$2,096,260
Rentable SF:
5,395
Down Payment:
100%
Year Built:
2005
CAP Rate:
6.75%
Price/SF:
$388.56
Comments
New 20-year NNN lease with annual increases in rent.
Applebee's - Martinsburg, WV
2
755 Foxcroft Avenue North
Martinsburg, WV 25401
Close of Escrow:
On Market
Sales Price:
$2,760,000
Rentable SF:
5,002
Down Payment:
100%
Year Built:
1995
CAP Rate:
7.00%
Price/SF:
$551.78
Comments
15 years remaining on 20-year NNN lease. Located as an out-pad to North Mall Plaza Shopping Center which is home to AnyTime
Fitness and Outback Steakhouse. Part of four property portfolio offering.
13
Applebee's
RECENT SALES
CINCINNATI, OH
RECENT SALES
Applebee's - Oldsmar, FL
3
4016 Tampa Road
Oldsmar, FL 34677
Close of Escrow:
08/27/2012
Sales Price:
$2,237,600
Rentable SF:
4,998
Down Payment:
100%
Year Built:
2007
CAP Rate:
7.00%
Price/SF:
$447.70
Comments
15 years remaining on 20-year lease with seven and one half percent rent escalations every five years written into the lease.
Applebee's - Mobile, AL
4
4721 Airport Boulevard
Mobile, AL 36608
Close of Escrow:
On Market
Sales Price:
$2,207,333
Rentable SF:
4,847
Down Payment:
100%
Year Built:
2013
CAP Rate:
6.75%
Price/SF:
$455.40
Comments
New 20-year NNN lease with annual escalations in rent.
Applebee's - Blaine, MN
5
199 Northtown Drive Northeast
Blaine, MN 55434
Close of Escrow:
On Market
Sales Price:
$2,086,000
Rentable SF:
5,500
Down Payment:
100%
Year Built:
2007
CAP Rate:
5.80%
Price/SF:
$379.00
Comments
10 years remaining on 20 year ground lease.
14
Applebee's
RECENT SALES
CINCINNATI, OH
RECENT SALES
Applebee's - South Hill VA
6
100 Wells Street
South Hill, VA 23970
Close of Escrow:
On Market
Sales Price:
$2,164,000
Rentable SF:
3,140
Down Payment:
100%
Year Built:
2006
CAP Rate:
7.00%
Price/SF:
$689.00
Comments
NNN franchised lease with 69-unit operator.
15
MARKET OVERVIEW
Applebee's
CINCINNATI, OH
Applebee's
MARKET OVERVIEW
CINCINNATI, OH
CINCINNATI
Market Highlights
Diversified economy
■ Growth in services industries has lessened
the metro's dependence on manufacturing
and transportation.
Attractive business, living environment
■ Companies are drawn to the region’s low
cost of doing business, while employees can
enjoy an affordable place to live.
Central distribution point
■ Half of the U.S. population and 30 major
markets are within a one-day drive.
An abundance of higher education
■ There are 250 colleges and universities
within a 200-mile radius.
Geography
The Cincinnati MSA is located in the
southwestern corner of Ohio and extends into
northern Kentucky and southeastern Indiana,
covering 3,343 square miles. Ohio counties in
the MSA are: Hamilton, Brown, Warren,
Butler, and Clermont. The counties in Indiana
include Dearborn, Ohio and Franklin, while
Kentucky counties are Campbell, Grant,
Boone, Gallatin, Pendleton, Bracken and
Kenton. The Ohio River runs through the area,
establishing the border between Ohio and
Kentucky. The terrain is hilly, with bluffs and
low ridges along the river.
Cincinnati-Middletown MSA
17
Applebee's
MARKET OVERVIEW
CINCINNATI, OH
CINCINNATI
Metro
The Cincinnati-Middletown MSA is a unique 15county region located within portions of Ohio,
Kentucky and Indiana and maintaining a population of
around 2.1 million. Cincinnati is the third largest city
in Ohio, with 292,900 residents. The highest rates of
growth occur in outlying cities such as Hamilton,
which will post annual gains of more than 1 percent
through 2016.
Infrastructure
Cincinnati is known for its premier business support
services. Most recognizable is the Cincinnati/ Northern
Kentucky International Airport (CVG). CVG provides
easy access to major business and leisure destinations, as
Largest Cities: Cincinnati MSA
Cincinnati
292,900
Hamilton
62,200
Middletown
Fairfield
Covington
Mason
49,100
42,900
40,600
31,700
2011 Estimate
Sources: Marcus & Millichap Research Services, AGS
half of the United States is within a one-hour flight.
The region’s central location makes it ideal for
transporting goods via the extensive highway network,
rail system, air, or by barge down the Ohio River. The
Airports
■ Cincinnati/Northern Kentucky International
Airport
■ Four regional airports
Major Roadways
area is well-served by interstate freeways and major
■ Interstates 71, 74, 75, 275 and 471
highways. CSX, Conrail and Norfolk Southern provide
■ Highways 22, 27, 50, 52 and 127
freight service, while Amtrak offers passenger rail.
Nearly 12 million tons of goods pass through the Port
Rail
■ Freight - CSX, Conrail, Norfolk Southern
of Cincinnati annually.
■ Passenger - Amtrak
Port
Regional bus service is provided by the Southwest Ohio
■ Port of Cincinnati
Regional Transit Authority and the Transit Authority
The Cincinnati MSA is:
■ 100 miles from Indianapolis
of Northern Kentucky.
■ 235 miles from Detroit
■ 250 miles from Cleveland
■ 250 miles from Chicago
18
Applebee's
CINCINNATI, OH
MARKET OVERVIEW
CINCINNATI
Economy
The Cincinnati MSA economy continues to rebound
from the recession, with GMP anticipated to rise over 2
percent as retail sales jump nearly 12 percent in 2012.
In addition, annual employment growth of 1.9 percent
is projected over the next five years. The area's
significant employment bases in consumer products,
finance and logistics have helped the economy bounce
back from the downturn faster than many Midwestern
cities. An excellent transportation system and lower
property, corporate and state taxes are major incentives
to attract companies. Ten Fortune 500 firms are
headquartered in the region.
Growth in the technology sector has also aided
stabilization of the region's economy. Approximately
225 area firms are engaged in high-tech research,
employing over 9,500 people. More than 300 firms
involved in aerospace products and parts manufacturing
are housed in the Cincinnati-Dayton corridor and
employ around 180,000 people.
The advanced-energy sector is receiving state incentives
for energy capital investments in production facilities
and manufacturing capabilities. Research is being
conducted in biomass, fuel cell, solar and wind energy.
Automobile-part manufacturing, chemistry and plastics
are also large sectors of the economy.
19
Applebee's
CINCINNATI, OH
MARKET OVERVIEW
CINCINNATI
Labor
The Cincinnati MSA labor force consists of more than 1 million workers skilled in a wide range of occupations.
Quality of life and diverse job opportunities make it easy for area companies to attract and retain employees.
Once a manufacturing-dominated employment base, the region now focuses on trade, transportation and utilities,
which hires 20 percent of the work force. The education and health services, and professional and business services
segments account for 16 percent and 15 percent, respectively. All employment categories will increase during the
next five years, with the strongest gains projected in professional and business services and information, which each
will increase more than 3 percent annually through 2016.
The quality and abundance of workers are key assets in the Cincinnati MSA. Local colleges and universities train
and equip professionals to enter the labor pool. Universities also serve as major players in technology research and
innovation. The University of Cincinnati’s Vontz Center of Molecular Studies and the Hamilton County Business
Center, a hotbed for high-tech startups, have attracted many technology professionals to the region. Several of the
top-100 information technology companies now have area operations.
20
Applebee's
MARKET OVERVIEW
CINCINNATI, OH
CINCINNATI
Employers
Cincinnati remains one of the nation's primary
industrial and commercial centers, with a major port on
the Ohio River. Distribution of raw materials and
manufactured goods serves as the city’s chief economic
activity, led by GE Aircraft Engines and AK Steel Corp.
The regional airport and Cincinnati’s water port
provide access to domestic and international markets,
which attracts large distribution facilities, including
Toyota Motor Sales, Levi Strauss and Gap Inc.
Major Employers
Kroger Co.
Cincinnati is home to 10 Fortune 500 headquarters.
University of Cincinnati
Procter & Gamble, Kroger Co. and GE Aircraft
Proctor & Gamble
Engines are three of the largest. There is healthy
Cincinnati Children's Hospital Medical Center
diversity among other major employers, which
Health Alliance Greater Cincinnati Inc.
represent the banking, financial services and healthcare
sectors.
TriHealth Inc.
Wal-Mart Stores Inc.
Mercy Health Partners
Fifth Third Bancorp
The American Financial Group and Fifth Third
GE Aviation
Bancorp lead the banking and financial services sector,
while Mercy Health Partners is one of the largest
employers
in
Cincinnati’s
expanding
healthcare
industry.
21
Applebee's
MARKET OVERVIEW
CINCINNATI, OH
CINCINNATI
Demographics
Although population in the MSA will decline over the
coming five years, the Northern Kentucky portion will
register the strong gains. More robust growth in these
areas, specifically Boone County, has been supported
by an influx of young professionals attracted to lessexpensive
neighborhoods
with
easy
access
to
Cincinnati.
Growth is also taking place along the beltway in Ohio.
Population gains of nearly 8 percent will occur in
Warren County, located just north of Interstate 275,
through 2016.
Educational attainment exceeds the national average,
with 88 percent of all adults having completed high
school compared with 86 percent nationally. Slightly
more than 28 percent of local residents have attained a
bachelor's degree, with 10 percent having gone on to
earn a graduate or professional degree.
The median household income in the MSA, at $56,400
per year, is above the national figure of $54,200
annually, and will rise an average of 2.4 percent each
year through 2015. Higher incomes and affordable
home prices have increased the homeownership rate in
the MSA to over 60 percent. The median price of
homes in Cincinnati stands at $121,400, well below
the national median of $167,800.
22
Applebee's
CINCINNATI, OH
MARKET OVERVIEW
CINCINNATI
Quality Of Life
Cincinnati offers a wide range of cultural and
entertainment activities. The Cincinnati Symphony
Orchestra is one of the country’s finest orchestras.
Riverbend, an outdoor concert facility located on the
banks of the Ohio River, provides entertainment
throughout the summer. The city also boasts a summer
opera program, a world-famous zoo and botanical
garden, a planetarium, and an outstanding ballet
company. More than 100 museums and galleries are
located throughout the region.
There are several entertainment corridors, including
Mount Adams and the expanding Main Street district,
where numerous restaurants and clubs can be found.
For the sports enthusiast, Cincinnati offers professional
baseball, football, hockey, soccer, tennis, volleyball, car
racing and horse racing. In addition, there are many
golf courses and parks. Two amusement parks are
within a short distance of the city, and skiing is
available at Perfect North Slopes 30 minutes from
downtown Cincinnati in Indiana.
A number of universities have main campuses in the
area, including the University of Cincinnati, Xavier
University and Northern Kentucky University. Miami
University is located in nearby Oxford.
23
Applebee's
MARKET OVERVIEW
CINCINNATI, OH
CINCINNATI
Revitalization Efforts Foster Favorable Outlook Downtown
As tax incentives attract businesses to the Cincinnati area, household formation and income growth will drive retail
sales, improving the sector’s performance going into 2013. Operations in urban areas will outperform, as
revitalization efforts attract residents and shoppers to the area. Specifically, fundamentals in the Over-the-Rhine
neighborhood will benefit as tax credits and private investments fund the redevelopment of vacant historical
buildings to accommodate additional apartment, office, and retail space. A boost in consumer spending will
spillover into the nearby CBD, further aiding retailers already benefitting from increased visitor traffic from The
Banks. In suburban districts, an expanding manufacturing base will help stabilize retail operations. Several
manufacturers in West Chester, Fairfield, and Blue Ash are growing their work force. Koch Foods, for example, is
expanding its processing plant in Fairfield, creating more than 390 jobs. Retailers are responding, capitalizing on
low rents and favorable leasing terms to expand in the early stages of the recovery. For instance, DSW is opening a
new location at Northgate Mall, while Fresh Market signed on to a new space at the Voice of America Center in
West Chester, for a combined 40,000 square feet. Positive signs in the economy have given operators the
confidence to raise rents, but remaining headwinds prevent a full-scale recovery.
Well-located, urban infill assets will garner the most interest from investors in the second half. The market for
these properties is supply constrained, with multiple buyers targeting the few high-quality assets that become
available. Competition among investors is causing cap rate compression, forcing those with a greater risk tolerance
down the quality scale to achieve higher yields. A ground-leased McDonald’s, for example, can trade with cap rates
in the high-4 to low-5 percent range, while an unanchored strip center offers first-year returns in the low-8 to low9 percent range. A greater appetite for risk among investors will increase transaction activity outside core areas and
for Class B/C product. On a longer time horizon, the strengthening economy and expanding retail sales, along
with new entrants into the market, such as Jack-in-the-Box, will attract additional investor interest.
2012 Annual Retail Forecast
Employment: In 2012, Cincinnati employment will expand by 22,300 positions, a 2.2
percent increase. In the prior year, a gain of 17,200 jobs grew staff levels by 1.8
percent. Broad-based gains across most sectors indicates a widespread increase in
economic activity.
Construction: This year, builders will increase retail inventory a scant 0.2 percent with
the addition of 210,000 square feet of space, well below the metro’s five-year annual
average delivery of 1 million square feet. In 2011, stock additions totaled 318,000
square feet.
Vacancy: Vacancy will trend down in the second half as employment growth translates
to retail sales, and increased space demand outpaces supply additions. After dipping 20
basis points in 2011, vacancy will end the year at 12.8 percent, a 40-basis point
decline.
Rents: In 2012, asking rents will grow 1.0 percent to $14.20 per square foot, while
effective rents rise 1.3 percent to $12.00 per square foot. In the prior 12-month
period, both asking and effective rents remained unchanged.
24
Applebee's
CINCINNATI, OH
MARKET OVERVIEW
CINCINNATI
Economy
■ Cincinnati employers grew payrolls by 14,900 workers in the first six months of the year, or 1.5 percent,
accelerating growth from the second half of 2011, when 10,900 jobs were created.
■ So far this year, the professional and business services sector added the most jobs, with head counts expanding
by 3.5 percent or 5,300 employees. Retail trade job additions totaled 2,100 positions year to date, or a 2.1
percent gain.
■ Over the past three years, retail sales in Cincinnati increased 18 percent, surpassing the prerecession high by 6
percent. The rise in consumer demand has fueled job gains in the retail trade sector, as companies expand and
add staff.
■ Outlook: In 2012, Cincinnati employment will swell by 22,300 positions, a 2.2 percent increase. In the prior
year, a gain of 17,200 workers grew staffing levels by 1.8 percent.
* Forecast. Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics
Construction
■ Over the past 12 months, developers brought 163,000 square feet of retail space to the market, down slightly
from the 203,000 square feet completed in the prior year-long period.
■ One of the largest developments under way is a 130,000-square foot Kroger Marketplace store in Amelia.
The project is expected to be completed in November, when the store will become the anchor tenant for the
Pierce Town Center.
■ Nearly 2.5 million square feet of retail space is in the planning pipeline, with over half of the development
coming to West Chester. Construction of the 1.3 million-square foot first phase of the Liberty Town Square
in Liberty Township is expected to commence in early 2013. The project will include three department
stores, a movie theater, a 135-room hotel, in addition to residential and office space.
■ Outlook: This year, builders will increase retail inventory a scant 0.2 percent with the addition of 210,000
square feet of space. In the previous year, deliveries totaled 318,000 square feet.
25
Applebee's
CINCINNATI, OH
MARKET OVERVIEW
CINCINNATI
Vacancy
■ The vacancy rate ticked up 10 basis points in the second quarter to 13.2 percent, a return to the year-end 2011
level. Over the past year, vacancy rose 20 basis points, pushed up by big-box retailers exiting the market,
including several Borders stores.
■ Neighborhood centers recorded a 190-basis point decline in vacancy over the past year to 14.9 percent. During
the same period, vacancy for community centers fell to 13.4 percent, a 20-basis point drop.
■ Northern Kentucky was the only submarket to post vacancy improvement over the past 12 months. Vacancy in
the area shrink 190 basis points to 5 percent, the lowest rate in the metro.
■ Outlook: Vacancy will trend down in the second half as employment growth translates to retail sales, and
increased space demand outpaces supply additions. After dipping 20 basis points in 2011, vacancy will end the
year at 12.8 percent, a 40-basis point drop.
Rents
■ Asking rents were $14.11 per square foot in the second quarter, advancing 0.2 percent year over year. Effective
rents performed slightly better, rising 0.3 percent to $11.90 per square foot over the same period. Both asking
and effective rents improved 0.4 percent in the first half.
■ Northern Kentucky outperformed other areas of the metro as tight vacancy gave owners the leverage to raise
rents. Annually, average asking rents increased 2.0 percent to $13.99 per square foot, while effective rents
jumped 2.1 percent to $11.93 per square foot.
■ Weak rent growth and rising vacancy resulted in operators’ average revenue remaining virtually unchanged over
the past 12 months.
■ Outlook: In 2012, asking rents will grow 1.0 percent to $14.20 per square foot, while effective rents rise 1.3
percent to $12.00 per square foot. Last year, both asking and effective rents remained unchanged.
26
Applebee's
CINCINNATI, OH
MARKET OVERVIEW
CINCINNATI
Single-Tenant Sales Trends**
■ Sales activity among single-tenant properties rose 39 percent over the past 12 months. Sales of restaurants and
fast-food buildings, accounting for about one-third of transactions, more than doubled during that time.
■ The median price of assets changing hands over the past 12 months was $194 per square foot, an increase of 7
percent over the prior 12-month period. Fast-food restaurants sold at a median price of $356 per square foot,
while prices for drugstores ranged from $270 per square foot to $350 per square foot.
■ Single-tenant properties traded with cap rates averaging in the high-8 percent range, unchanged over the past
year. Initial yields for drugstores, such as Walgreens, were in the low-6 percent area.
■ Outlook: Historically low interest rates will spur risk-adverse investors to buy single-tenant, net-leased assets
with credit tenants. Buyers will capitalize on the yield spread, earning greater returns than bonds or other
similar investment vehicles.
Multi-Tenant Sales Trends**
■ Multi-tenant transaction velocity increased 7 percent over the 12 months ending in the second quarter. Sales
trended upward, with deal activity in the first half 14 percent higher than the second half of 2011.
■ During the past year, the median price for multi-tenant properties averaged $58per square foot, a 6 percent
increase from the previous year-long period.
■ Multi-tenant properties traded at cap rates in the low-9 percent range on average, but varied by age and
location. Institutional-grade anchored assets changed hands with first-year yields in the mid-7 to low-8 percent
range. Unanchored strip centers with national-brand tenants commanded cap rates in the low-8 to low-9
percent range.
■ Outlook: Performing properties with strong anchor tenants will garner the most attention from buyers.
Investors will focus on prime locations in Hamilton County and Northern Kentucky.
** Trailing 12-month period
27
Applebee's
CINCINNATI, OH
MARKET OVERVIEW
CINCINATTI
Capital Markets
■ Limited retailer expansions are supporting a sluggish recovery in the national retail sector. Nationwide vacancy
was unchanged in the first half at 9.7 percent, while asking and effective rents rose nominally. Additional store
openings related to holiday shopping will modestly accelerate demand by year end, resulting in a 30-basis point
vacancy reduction to 9.4 percent.
■ In general, decent leverage is available to financing purchases of multi-tenant and single-tenant net-leased
properties. For each property segment, LTVs typically start at 65 percent for nonrecourse loans and can range
up to 75 percent depending on deal merits and recourse provisions.
■ CMBS lenders offer terms of seven and 10 years on multi-tenant assets, and rates from 300 to 350 basis points
above U.S. Treasurys. Many conduits have shown greater willingness to finance unanchored properties and
assets with lower-rated anchors. For shopping center loans under $5 million, banks remain a primary lender
and offer rates in the high-3s to low-4s for terms of three to five years, low- to mid-4s for sevens and high-4s to
mid-5s for 10 years.
■ Lenders focusing on STNL assets are underwriting specific merits of each property. Terms vary from five to 10
years, with spreads ranging from 240 basis points to 300 basis points over U.S. Treasurys. Walgreens’ recent
strategic partnership with Alliance Boots, a European pharmacy chain, has resulted in a lower credit rating and
elevated caution among lenders.
Submarket Overview
■ Development of a mixed-use building in downtown Cincinnati could further bolster retail spending in the
area. The project, at the corner of Fifth and Race Streets, would serve as dunnhumbyUSA’s headquarters, and
add 200 apartment units, 250,000 square feet of office space, and 40,000 square feet of retail space to the area.
The complex would serve as a catalyst for development activity on Race Street, but a construction timetable has
not been established.
■ Construction of the Horseshoe Casino at Broadway Commons is nearing completion. The casino, expected to
open in early 2013, will add 750 jobs downtown, and increase foot traffic for nearby retailers.
■ Ollie’s Bargain Outlet is opening a new store in Anderson Township. The new location will employ 60 workers
in the area and help meet the growing demand for discount retailers.
28
Applebee's
CINCINNATI, OH
Applebee's
CINCINNATI, OH
DEMOGRAPHIC REPORT
1 Mile
3 Miles
5 Miles
1990 Population
2000 Population
2010 Population
2012 Population
2017 Population
4,463
5,110
5,666
5,739
5,900
32,907
42,390
46,226
46,711
47,778
75,788
92,070
100,472
101,302
103,123
1990 Households
2000 Households
2010 Households
2012 Households
2017 Households
1,790
2,232
2,467
2,545
2,705
12,265
16,888
18,781
19,343
20,491
27,126
35,228
39,256
40,370
42,610
2.26
2.40
2.49
2,082
19,274
36,137
$70,399
$111,664
$78,071
$125,128
$82,444
$127,155
2000 Owner Occupied Housing Units
2000 Renter Occupied Housing Units
2000 Vacant
51.87%
43.99%
4.14%
64.53%
30.88%
4.60%
67.97%
27.81%
4.22%
2012 Vacant
49.30%
44.04%
6.67%
61.26%
33.43%
5.31%
65.02%
30.39%
4.59%
2017 Vacant
45.82%
50.49%
3.69%
57.32%
40.20%
2.48%
60.84%
37.21%
1.96%
1.5%
14.9%
13.7%
14.0%
23.4%
17.0%
7.4%
2.1%
1.6%
0.7%
4.0%
5.0%
9.9%
10.2%
14.6%
21.8%
15.0%
9.6%
4.9%
3.4%
1.2%
4.4%
6.9%
8.7%
9.1%
13.5%
20.4%
14.4%
10.1%
6.0%
4.5%
1.7%
4.7%
2012 Median Household Income
2012 Per Capita Income
$55,634
$30,452
$60,613
$33,084
$63,390
$32,543
2012 Average Household Income
$72,162
$79,629
$81,510
2012 Average Household Size
2012 Daytime Population
1990 Median Housing Value
2000 Median Housing Value
$ 0 - $14,999
$ 15,000 - $24,999
$ 25,000 - $34,999
$ 35,000 - $49,999
$ 50,000 - $74,999
$ 75,000 - $99,999
$100,000 - $124,999
$125,000 - $149,999
$150,000 - $199,999
$200,000 - $249,999
$250,000 +
Demographic data © 2010 by Experian/Applied Geographic Solutions.
30
Applebee's
CINCINNATI, OH
POPULATION DENSITY
Number of people living in a given area per square mile.
31
Applebee's
CINCINNATI, OH
EMPLOYMENT DENSITY
The number of people employed in a given area per square mile.
32
Applebee's
CINCINNATI, OH
AVERAGE HOUSEHOLD INCOME
Average income of all the people 15 years and older occupying a
single housing unit.
33
Applebee's
CINCINNATI, OH
OFFERING MEMORANDUM
Exclusively Listed By:
Lior Regenstreif
Vice President Investments
Senior Director, Net Leased Properties Group
Encino Office
License: CA 01267761
Tel: (818)212-2730
Fax: (818)212-2710
[email protected]
www.marcusmillichap.com/LiorRegenstreif
Michael Glass
Broker
Marcus & Millichap REIBC of Ohio
License: OH BRK.2007005898
Offices Nationwide
www.MarcusMillichap.com

Applebee`s - NNNDeal.com

Transcription

Similar documents

28325 North Tatum Boulevard Cave Creek, AZ 85331

Property Brochure

go figure

University of Cincinnati`s Nippert Stadium Renovation

Packet Pick-up and Registration: MILE MARKERS

CincinnatiChapter

SUNDAY, JUNE 1, 2014 CrosstheBridgeforLife.com

Offering Memorandum - The James Group of Marcus

View the members - National Multiple Sclerosis Society

CAYCEE BOYCE