Wienerschnitzel

Transcription

Wienerschnitzel

Wienerschnitzel
TEMECULA, CA
OFFERING MEMORANDUM
Wienerschnitzel
TEMECULA, CA
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.
NON-ENDORSEMENT NOTICE
Marcus & Millichap Real Estate Investment Services, Inc. (“M&M”) is not affiliated with, sponsored by, or endorsed by any
commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not
intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of M&M, its affiliates or
subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing
tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR
MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
Wienerschnitzel
TEMECULA, CA
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.
Wienerschnitzel
TABLE OF CONTENTS
Section 1
PRICING AND FINANCIAL ANALYSIS
Section 2
PROPERTY DESCRIPTION
Section 3
RECENT SALES
Section 4
ON MARKET COMPARABLES
Section 5
DEMOGRAPHIC ANALYSIS
Section 6
MARKET OVERVIEW
Wienerschnitzel
TEMECULA, CA
Wienerschnitzel
TEMECULA, CA
FINANCIAL OVERVIEW
Location
Annualized Operating Data
32080 Temecula Parkway
Temecula, CA 92592
Rent Increases
Price
Down Payment
Rentable Square Feet
Price/SF
Annual Rent
Monthly Rent
Years 1 - 5
$132,000.00
$11,000.00
Years 6 - 10
$142,560.00
$11,880.00
100% / $2,640,000
Years 11 - 15
$153,964.00
$12,830.33
2,150
Years 16 - 20
$166,281.00
$13,856.75
$2,640,000
$1,227.91
CAP Rate
5.00%
Years 21 - 25
$179,583.00
$14,965.25
Year Built
2013
Years 26 - 30
$193,949.00
$16,162.42
Years 31 - 35
$209,464.00
$17,455.33
Years 36 - 40
$226,221.00
$18,851.75
Lot Size
Type of Ownership
22,001
Fee Simple
Tenant Summary
Tenant Trade Name
Ownership
Tenant
Lease Guarantor
Lease Type
Roof and Structure
Lease Term
Wienerschnitzel
5.00% / $132,000
Triple Net (NNN)
Tenant Responsible
20 Years
Upon the Close of Esrcow
Options
Total Return
Franchisee Guarantee
Rent Commencement Date
Increases
$132,000
Franchisee
Upon the Close of Escrow
Term Remaining on Lease
$132,000
Net Operating Income
Private
Lease Commencement Date
Lease Expiration Date
Base Rent ($61.40/SF)
20 Years Thereafter
20 Years
8% every 5-Years
Four 5-Year
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, Inc.
© 2014 Marcus & Millichap V0080164
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Wienerschnitzel
TEMECULA, CA
Wienerschnitzel
TEMECULA, CA
INVESTMENT OVERVIEW
Investment Highlights
Marcus and Millichap is pleased to present for sale this “Pride of Ownership” Wienerschnitzel located in Temecula, California.
The tenant THDT Investments, Inc. will be signing a new 20-year triple net lease upon the close of escrow. This lease will
include fixed eight percent rental increases every five years and four, five-year options to renew. The franchisee currently operates
five units.
This attractive Wienerschnitzel is located in the desirable Home Depot anchored Villages at Paseo del Sol on the northwest
corner of Camino Del Sol and Temecula Parkway. There are more than 111,100 people in a five mile radius with an average
household income exceeding $98,232. This high traffic intersection brings 35,282 vehicles per day to this busy location. Within
the immediate vicinity of the property are countless national retailers including, Staples, Albertsons, Walmart, Basset, Richie’s
Diner, U.S. Bank and so many others.
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Wienerschnitzel
TEMECULA, CA
ABOUT WIENERSCHNITZEL
Few foods hold the cultural significance of the great American hot dog. From ballparks to airports to home kitchens, hot dogs are
one of America’s favorite foods.
5000 B.C. - First recorded history of a primitive version of the sausage made and consumed by early meat eaters.
1630s - Much like Einstein split the atom, the sausage is divided into links. The skinless sausage makes its first appearance soon
after.
1834 - The phrase “It’s a dog-eat-dog world” is coined.
1852 - The frankfurter is born when a butchers’ guild in Frankfurt, Germany introduces a spiced and smoked sausage packed in
a thin, almost transparent casing.
1860s - Frankfurters are sold from pushcarts in New York City.
1890s - German immigrant Charles Feltman serves hot sausages in a roll from his pushcart on Coney Island.
1901 - Harry Mozley Stevens, a concessionaire at the New York Polo Grounds, sells hot “dachshund sausages” by having his
vendors yell, “Get your dachshund sausages while they’re red hot!” Sports cartoonist Tad Dorgan was nearing his deadline and
desperate for an idea. Hearing the above vendors, he hastily drew a cartoon of barking dachshund sausages nestled warmly in
rolls. Not sure how to spell “dachshund” he simply wrote “hot dog!” The cartoon was a sensation, and the term “hot dog” was
born.
1904 - Antoine Ludwig Feutchwanger, a concessionaire at the Louisiana Purchase Exposition, distributes white gloves to his
customers so they can eat his hot sausages without burning their fingers. When his gloves are not returned, he consults a baker
who creates a bun for the sausage.
1913 - Coney Island Chamber of Commerce bans the term “hot dog” because of the fear that people would think they were
actually made from dogs.
1939 - President Franklin D. Roosevelt serves hot dogs and beer to King George VI of England. Frankfurter is appointed to the
Supreme Court by President Roosevelt, which prompts the hamburger to hunger for revenge.
1957 - The U.S. Chamber of Commerce designates the month of July as National Hot Dog Month. Queen Elizabeth II serves
hot dogs at a royal banquet held for the American Bar Association.
1961 - Wienerschnitzel opens its first hot dog restaurant in Wilmington, California.
1970 - Prince Charles and Princess Anne attend a cookout at Camp David where hot dogs are served.
1977 - Mrs. Jimmy Carter serves hot dogs at a White House picnic.
1987 - Frankfurt celebrates the “official” 500th birthday of the hot dog.
1993 - Mile High Stadium in Denver, Colorado, sets the record for the most hot dogs sold at a single location with 2.3 million
hot dogs and bratwurst.
1995 - Approximately 17 billion hot dogs are eaten in the United States, about 75 for every man, woman and child.
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Wienerschnitzel
TEMECULA, CA
ABOUT TEMECULA
Temecula is well known for its championship golf courses, a
climate perfect for serene and beautiful hot-air ballooning
adventures and its award-winning wineries nestled in 3,000
acres of picturesque wine country, but that's just the beginning.
The community's mix of entertaining activities and friendly
residents makes visitors want to return again and again.
Located in the heart of Temecula, the Old Town district blends
historic buildings with over 640 antique dealers, unique
shopping and restaurants. Old Town Temecula is the site of
many special events including car shows, semi-annual Rod
Runs, Western Days and summer weekend entertainment.
Take a jaunt in a horse-drawn carriage or stroll along the
wooden boardwalks. Every Saturday, the popular Farmer's
Market offers a wealth of fresh produce, flowers and crafts.
The Temecula Valley Museum and holds the city's historical
treasures.
Temecula offers many shopping options like one-of-a-kind
specialty boutiques and modern neighborhood centers. The
Promenade Mall and Power Center offers the convenience of
large department store shopping at its best. When it's time to
dine, an array of dining experiences will fit any taste or budget.
The Santa Rosa Plateau Wildlife Preserve, boating and fishing
at Lake Skinner, the site of the annual Balloon and Wine
Festival, or nearby Diamond Valley Lake are all local
recreational venues.
Just south of Temecula, the Pechanga Tribe of American
Indians operates the Pechanga Resort and Entertainment
Center where visitors can enjoy gaming, boxing, or concerts.
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Wienerschnitzel
TEMECULA, CA
PROPERTY PHOTOS
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Wienerschnitzel
TEMECULA, CA
PROPERTY PHOTOS
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Wienerschnitzel
TEMECULA, CA
PROPERTY PHOTOS
East of Wienerschnitzel
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Wienerschnitzel
TEMECULA, CA
PROPERTY PHOTOS
Directly Across the Street from Wienerschnitzel
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Wienerschnitzel
TEMECULA, CA
AREA MAPS
Local Map
Regional Map
10
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, Inc.
AERIAL PHOTO
TEMECULA, CA
Wienerschnitzel
11
RECENT SALES
Wienerschnitzel
TEMECULA, CA
Wienerschnitzel
RECENT SALES
TEMECULA, CA
RECENT SALES MAP
1)
2)
3)
4)
5)
6)
7)
8)
9)
Wienerschnitzel
Union Bank
7-Eleven
7-Eleven
7-Eleven
Wells Fargo
IHOP
Chase Bank
AutoZone
Denny's
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Wienerschnitzel
RECENT SALES
TEMECULA, CA
CAP RATE AND PRICE PER SQUARE FOOT
Average Cap Rate
5.20
4.80
4.40
4.00
3.60
3.20
2.80
2.40
2.00
1.60
1.20
0.80
0.40
0.00
Subject
Union
Bank
7-Eleven
7-Eleven
7-Eleven
Wells
Fargo
IHOP
Chase
Bank
AutoZone
Denny's
Average Price per Square Foot
3,000.00
2,700.00
2,400.00
2,100.00
1,800.00
1,500.00
1,200.00
900.00
600.00
300.00
0.00
Subject
Union
Bank
7-Eleven
7-Eleven
7-Eleven
Wells
Fargo
IHOP
Chase
Bank
AutoZone
Denny's
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Wienerschnitzel
RECENT SALES
TEMECULA, CA
RECENT SALES
Wienerschnitzel
Temecula, CA 92592
Rentable Square Feet:
2,150
Sales Price:
$2,640,000
Year Built:
2013
Down Payment:
$2,640,000
CAP Rate:
5.00%
Price/SF:
$1,227.91
Subject Property
Union Bank
1
11900 Brookhurst Street
Garden Grove, CA 92840
Close of Escrow:
09/16/13
Sales Price:
$3,950,000
Rentable SF:
5,236
Down Payment:
100%
Year Built:
1973
CAP Rate:
5.07%
Price/SF:
$754.39
Comments
Lease Commencement Date: 11/14/2004. Lease Expiration Date: 10/31/2014. Term Remaining on Lease 2.5 Years. Increases: 7.5%
11/1/12. Options: None
7-Eleven
2
44046 Jackson Street
Indio, CA 92201
Close of Escrow:
06/21/13
Sales Price:
$1,560,000
Rentable SF:
2,934
Down Payment:
100%
Year Built:
1981
CAP Rate:
5.10%
Price/SF:
$531.70
Comments
7-Eleven has signed a brand new corporate guaranteed 10-year lease with 10% rental increases every five years. The lease includes two,
five-year options.
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Wienerschnitzel
RECENT SALES
TEMECULA, CA
RECENT SALES
7-Eleven
3
7807 Balboa Avenue
San Diego, CA 92111
Close of Escrow:
03/19/13
Sales Price:
$3,700,000
Rentable SF:
2,200
Down Payment:
100%
Year Built/Renovated:
1988/2012
CAP Rate:
5.10%
Price/SF:
$1,681.82
Comments
7 Eleven Corporate Guarantee. 15 Year absolute NNN Lease. 10% increases every five years and four, five-year options.
7-Eleven
4
9609 Aero Drive
San Diego, CA 92123
Close of Escrow:
12/27/12
Sales Price:
$2,350,000
Rentable SF:
2,940
Down Payment:
100%
Year Built:
1999
CAP Rate:
5.10%
Price/SF:
$2,940.00
Comments
Lease Term: Fifteen years, approximately two years remaining. Options: five, five-year options
Wells Fargo
5
811 West Foothill Boulevard
Upland, CA 91786
Close of Escrow:
11/07/12
Sales Price:
$2,950,000
Rentable SF:
3,500
Down Payment:
100%
Year Built:
2003
CAP Rate:
5.00%
Price/SF:
$842.86
Comments
The lease is a 15 year NNN ground lease and commenced in February 2008. The lease includes fixed rent increases and three-5 year
options.
16
Wienerschnitzel
RECENT SALES
TEMECULA, CA
RECENT SALES
IHOP
6
2258 Otay Lakes Road
Chula Vista, CA 91915
Close of Escrow:
09/26/12
Sales Price:
$4,282,500
Rentable SF:
4,066
Down Payment:
100%
Year Built:
1999
CAP Rate:
5.00%
Price/SF:
$1,053.25
Comments
12 Years Remaining on an Absolute Net Lease. Rare 12 Percent Rental Increases Every Five Years
Chase Bank
7
2175 Colorado Boulevard
Los Angeles, CA 90041
Close of Escrow:
06/22/12
Sales Price:
$4,140,000
Rentable SF:
4,672
Down Payment:
100%
Year Built/Renovated:
1966/2012
CAP Rate:
5.00%
Price/SF:
$886.13
Comments
Brand new 15-year lease, with three, five-year options to extend, for
a potential of 30 years.10% rent increases every five-years throughout the lease term.
AutoZone
8
6424 Mission George Road
San Diego, CA 92120
Close of Escrow:
06/22/12
Sales Price:
$3,035,000
Rentable SF:
7,500
Down Payment:
100%
Year Built:
2012
CAP Rate:
5.11%
Price/SF:
$405.00
Comments
New 20-year NNN lease with 10% increases every five years and three, five-year options.
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Wienerschnitzel
RECENT SALES
TEMECULA, CA
RECENT SALES
Denny's
9
1409 East 4th Street
Ontario, CA 91764
Close of Escrow:
02/06/12
Sales Price:
$844,560
Rentable SF:
4,360
Down Payment:
100%
Year Built:
1966
CAP Rate:
5.00%
Price/SF:
$193.71
Comments
8.5 Years Remaining on a 55 year Corporate Absolute NNN Lease. CPI Rental Increase Every 10 years – Next Increase in June 2015
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Wienerschnitzel
TEMECULA, CA
Wienerschnitzel
TEMECULA, CA
ON MARKET COMPARABLES MAP
1)
2)
3)
Wienerschnitzel
Wendy's
Red Lobster
Pizza Hut
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Wienerschnitzel
TEMECULA, CA
CAP RATE AND PRICE PER SQUARE FOOT
Average Cap Rate
4.80
4.40
4.00
3.60
3.20
2.80
2.40
2.00
1.60
1.20
0.80
0.40
0.00
Subject
Wendy's
Red
Lobster
Pizza
Hut
Average Price per Square Foot
1,300.00
1,200.00
1,100.00
1,000.00
900.00
800.00
700.00
600.00
500.00
400.00
300.00
200.00
100.00
0.00
Subject
Wendy's
Red
Lobster
Pizza
Hut
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Wienerschnitzel
TEMECULA, CA
Wienerschnitzel
Temecula, CA 92592
Rentable Square Feet:
2,150
List Price:
$2,640,000
Year Built:
2013
Down Payment:
$2,640,000
CAP Rate:
5.00%
Price/SF:
$1,227.91
Subject Property
Wendy's
1
39580 Lowes Drive
Palmdale, CA 93551
Status:
On Market
List Price:
$3,150,000
Rentable SF:
315,000
Down Payment:
100%
Year Built:
2000
CAP Rate:
5.00%
Price/SF:
$991.50
Comments
New 15 year lease at the close of escrow and five, five-year options with 6.5% increases every five-years.
Red Lobster
2
9345 Monte Vista Avenue
Montclair, CA 91763
Status:
On Market
List Price:
$3,200,000
Rentable SF:
6,233
Down Payment:
100%
Year Built:
1981
CAP Rate:
5.06%
Price/SF:
$513.40
Comments
25 Year Absolute NNN lease with one, five-year option including percentage rent.
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Wienerschnitzel
TEMECULA, CA
Pizza Hut
3
3498 East 7th Street
Long Beach, CA 90804
Status:
On Market
List Price:
$1,060,000
Rentable SF:
1,220
Down Payment:
100%
Year Built:
1990
CAP Rate:
5.00%
Price/SF:
$868.85
Comments
Lease term: September 22, 2009 - September 30, 2024. Increases: 1.50% Annually. Three, five-year and one, four-year options.
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Wienerschnitzel
TEMECULA, CA
Wienerschnitzel
TEMECULA, CA
DEMOGRAPHIC REPORT
2000 Population
2010 Population
2013 Population
2018 Population
1 Mile
9,614
14,911
15,604
18,808
3 Miles
46,558
74,604
78,759
90,792
5 Miles
70,177
106,008
111,668
127,710
2000 Households
2010 Households
2013 Households
2018 Households
2,791
4,460
4,657
5,678
14,549
23,339
24,575
28,486
21,956
33,588
35,294
40,671
3.31
3.22
3.17
2,993
10,351
28,812
$0
$189,449
$196,985
2000 Owner Occupied Housing Units
2000 Renter Occupied Housing Units
2000 Vacant
90.57%
8.85%
2.96%
78.42%
17.59%
4.32%
73.96%
22.07%
4.50%
2013 Vacant
77.15%
22.85%
1.96%
72.79%
27.21%
3.29%
69.24%
30.76%
3.72%
2018 Vacant
76.07%
23.93%
1.90%
72.28%
27.72%
3.22%
68.92%
31.08%
3.61%
4.0%
4.2%
4.0%
9.6%
21.2%
18.1%
16.8%
9.8%
6.8%
2.2%
3.3%
4.6%
4.9%
5.7%
10.3%
20.2%
17.6%
15.6%
8.8%
6.8%
2.3%
3.4%
5.1%
5.1%
6.1%
10.6%
20.2%
17.7%
14.8%
8.1%
6.7%
2.2%
3.3%
2013 Median Household Income
2013 Per Capita Income
$84,397
$30,623
$81,098
$31,381
$78,834
$31,067
2013 Average Household Income
$102,604
$100,513
$98,232
2013 Average Household Size
2013 Daytime Population
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 © 2012 by Experian.
25
Wienerschnitzel
TEMECULA, CA
SUMMARY REPORT
Geography: 5 Miles
Population
In 2013, the population in your selected geography was 111,668. The population has changed by 59.12% since 2000. It is estimated
that the population in your area will be 127,710 five years from now, which represents a change of 14.36% from the current year.
The current population is 49.1% male and 50.8% female. The median age of the population in your area is 34.7, compare this to the
U.S. average which is 37. The population density in your area is 1,355.86 people per square mile.
Households
There are currently 35,294 households in your selected geography. The number of households has changed by 60.74% since 2000.
It is estimated that the number of households in your area will be 40,671 five years from now, which represents a change of 15.23%
from the current year. The average household size in your area is 3.16 persons.
Income
In 2013, the median household income for your selected geography is $78,834, compare this to the U.S. average which is currently
$53,535. The median household income for your area has changed by 26.04% since 2000. It is estimated that the median household
income in your area will be $87,712 five years from now, which represents a change of 11.26% from the current year.
The current year per capita income in your area is $31,067, compare this to the U.S. average, which is $28,888. The current year
average household income in your area is $98,232, compare this to the U.S. average which is $75,373.
Race & Ethnicity
The current year racial makeup of your selected area is as follows: 70.56% White, 3.95% African American, 1.30% Native American
and 10.37% Asian/Pacific Islander. Compare these to U.S. averages which are: 72.20% White, 12.65% African American, 0.96%
Native American and 5.01% Asian/Pacific Islander.
People of Hispanic origin are counted independently of race. People of Hispanic origin make up 25.19% of the current year
population in your selected area. Compare this to the U.S. average of 16.55%.
Housing
The median housing value in your area was $196,985 in 2000, compare this to the U.S. average of $110,781 for the same year. In
2000, there were 16,998 owner occupied housing units in your area and there were 5,073 renter occupied housing units in your area.
The median rent at the time was $761.
Employment
In 2013, there are 28,812 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed
that 63.6% of employees are employed in white-collar occupations in this geography, and 36.3% are employed in blue-collar
occupations. In 2013, unemployment in this area is 4.93%. In 2000, the median time traveled to work was 31.1 minutes.
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Wienerschnitzel
TEMECULA, CA
POPULATION DENSITY
Number of people living in a given area per square mile.
27
Wienerschnitzel
TEMECULA, CA
EMPLOYMENT DENSITY
The number of people employed in a given area per square mile.
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Wienerschnitzel
TEMECULA, CA
AVERAGE HOUSEHOLD INCOME
Average income of all the people 15 years and older occupying a
single housing unit.
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Wienerschnitzel
TEMECULA, CA
TRAFFIC COUNTS
Traffic Count data © 2012 by TrafficMetrix. All rights reserved.
Two-way, average daily traffic volumes.
* Traffic Count Estimate
Average Daily Traffic Counts
Temecula Parkway- 35,282 Cars per Day (2008)
Margarita Road- 23,844 Cars per Day (2008)
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MARKET OVERVIEW
Wienerschnitzel
TEMECULA, CA
Wienerschnitzel
MARKET OVERVIEW
TEMECULA, CA
RIVERSIDE-SAN BERNARDINO
Market Highlights
Rapid employment growth
■ Employment is forecast to grow faster than the
nation's rate over the next five years.
Strong demographic trends
■ The Inland Empire is forecast to add nearly
290,000 new residents through 2017.
Low cost of living
■ Housing prices are considerably less than in
neighboring metros.
Geography
The
Riverside-San
Bernardino-Ontario
metro, also referred to as the Inland Empire,
is a 28,000-square-mile region in Southern
California comprised of San Bernardino and
Riverside
counties.
Valleys
in
the
southwestern portion of the region, adjacent
to Los Angeles, Orange County and San
Diego County, are the most populous in the
metro. These areas abut the San Bernardino
and San Jacinto mountains, behind which lies
the high desert area of Victorville/Barstow to
the north and, to the east, the low desert
Coachella Valley, home of Palm Springs.
Riverside-San Bernardino-Ontario Metro
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MARKET OVERVIEW
TEMECULA, CA
Metro
The Riverside-San Bernardino metro contains a
population of nearly 4.4 million. The largest city is
Riverside with 314,400 residents, followed by San
Bernardino. Although population growth slowed
during the housing crisis, four of the six most populous
municipalities are still gaining residents at a pace faster
than the nation.
Infrastructure
Largest Cities: Riverside-San Bernardino
Riverside-San Bernardino features three interstate
Riverside
314,400
freeways — I-10, I-215 and I-15 — that form a
San Bernardino
214,400
Fontana
201,200
triangle around one of the region's core growth centers.
Moreno Valley
200,700
Also, completion of the 210 freeway extension makes
Rancho Cucamonga
170,100
commuting to and from Rialto and San Bernardino
Ontario
167,500
considerably easier.
2012 Estimate
Sources: Marcus & Millichap Research Services, Experian
Airports
The Riverside-San Bernardino metro has two major
International. The region also has a cargo dedicated
■ Ontario International
■ Palm Springs International
■ 33 smaller airports
facility, the Southern California Logistics Airport,
Major Roadways
located just north of Victorville in the High Desert.
■ Interstates 10, 15 and 215
■ Highways 60 , 71, 91 and 210
airports: Ontario International and Palm Springs
Two rail lines serve Riverside-San Bernardino, and the
Rail
intermodal facilities in the nation. Amtrak provides
■ Freight - BNSF and Union Pacific
■ Passenger - Amtrak
■ Commuter - MetroLink
passenger rail service, and MetroLink connects the area
The Riverside-San Bernardino MSA is:
region boasts one of the largest and most modern
to Orange County and Los Angeles. Local transit
agencies run bus service throughout the area.
■
■
■
■
60 miles from Los Angeles
100 miles from San Diego
113 miles from Tijuana
400 miles from San Francisco
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MARKET OVERVIEW
TEMECULA, CA
Economy
The Riverside-San Bernardino metro has one of the
largest economies in the United States. While the
region's economic expansion has been fueled by a
number of factors, robust population growth has been
the primary demand driver. Despite recent pull backs
in housing costs, still-high home prices throughout
much of Southern California leave residents seeking
more affordable options in the Inland Empire. The
resulting increase in population will continue to
heighten the need for housing, retail goods, personal
services and government services.
There has also been exceptional growth in wholesale
trade and warehousing as the area becomes an
important
distribution
hub
for
the
Southwest.
Riverside-San Bernardino is the premier location in the
Los Angeles Basin for new distribution facilities. This is
due to its large pool of experienced workers, relatively
inexpensive land, and highly efficient intermodal
transportation system that reduces the cost of both
aggregating and distributing shipments.
During the past year, the Riverside-San Bernardino
metro recorded higher industrial absorption than most
other industrial markets in the state. The distribution
system also benefits two major cargo airports: Ontario
International and the Southern California Logistics
Airport in Victorville.
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TEMECULA, CA
MARKET OVERVIEW
Labor
The Riverside-San Bernardino metro employment base contains nearly 1.2 million workers and new jobs are
projected to be generated at an annual average pace of 2.3 percent through the next five years, even with the
national growth rate. Traditionally, area residents who relocated from neighboring Los Angeles County or Orange
County continued to commute to these markets for work. In recent years though, a rise in commercial
development in the Inland Empire has generated more local jobs. As such, the job pool is becoming increasingly
diverse, and many of the metro's population-serving industries are growing.
The metro's infrastructure and proximity to the Los Angeles and Long Beach ports attract companies seeking West
Coast distribution hubs. As a result, the trade, transportation and utilities sector accounts for 24 percent of all
metro jobs. Given the area’s considerable warehouse and distribution facilities, this trend is expected to persist,
expanding 1 percent each of the next five years.
While trade and transportation will continue to account for the largest share of metro jobs, growth of over 2
percent annually is expected in the construction, education and health services, and the leisure and hospitality
sectors over the next five years.
Additionally, freeway improvements that make accessing the eastern part of the metro and cities, including
Moreno Valley, Palm Springs and Palm Desert, easier should promote healthy employment growth as companies
move into these areas in the years ahead.
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MARKET OVERVIEW
TEMECULA, CA
Employers
While Riverside-San Bernardino has a significant share
of large employers, the majority of companies are small.
More than 60 percent of firms in the metro have four
or fewer employees, and less than 1 percent have 250
employees or more. This emphasis on small firms
encourages innovation and flexibility and is positive for
the area's long-term outlook, as most of the growth
taking place in the economy is occurring in the small
business sector.
Government entities account for some of the largest
Major Employers
employers in the region, including Fort Irwin and
San Bernardino County
March Air Force Base. Major healthcare providers such
Riverside County
as Loma Linda University Medical Center and Kaiser
Stater Bros.
Permanente also maintain a big portion of the region's
Loma Linda University Medical Center
jobs. Demand for medical services is projected to rise
Kaiser Permanente
rapidly in the coming years due to the area’s increasing
Walmart Stores, Inc.
population and the baby-boomer generation's move
University of California, Riverside
into its retirement years.
Fort Irwin
Ontario International Airport
Another significant employer is Ontario International
March Air Force Base
Airport. The facility provides around 7,700 jobs at the
airport and another 55,400 indirect, off-site positions.
Strong growth will continue at the airport, given the
limits to expansion placed on neighboring airports in
Los Angeles and Orange counties.
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MARKET OVERVIEW
TEMECULA, CA
Demographics
The Riverside-San Bernardino metro consists of more
than 1.3 million households and nearly 4.4 million
residents, making it one of the largest metropolitan
areas in the nation. While expansion will slow from
earlier in the decade, the Inland Empire is still on pace
to grow 1.5 percent per year during the next five years,
outpacing the national rate of 0.9 percent annually.
The majority of recent growth in the area was due to
in-migration
rather than coming from natural
increases. Factors fueling in-migration include the
strong local economy; relatively affordable housing;
large parcels of vacant, developable land; and a sharp
drop in available land in Los Angeles County. The
median
existing
home
price
in
Riverside-San
Bernardino, at $180,500, also remains much lower
than medians in adjacent counties, affording over 54
percent of households to own their home.
Residents are becoming more educated, as over 50
percent of adults in the metro have at least some college
education, and close to 20 percent of those ages 25 and
above have attained a bachelor’s degree or higher.
Increasing education levels have helped to raise
household earnings. The median household income
stands at $58,700 per year, higher than the national
median of $53,100. Over the next five years, the most
significant income gains will be among those earning
$150,000 or more annually.
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Wienerschnitzel
TEMECULA, CA
MARKET OVERVIEW
Quality Of Life
Riverside-San Bernardino offers a wide diversity of
landscapes, including the palm tree-lined and poolstudded Coachella Valley, the mountain communities
of Big Bear and Lake Arrowhead, the rolling hills and
wineries of Temecula Valley, and the suburban
communities of the West San Bernardino Valley and
Moreno Valley. A temperate climate offers moderate
winters, warm summers and generally low humidity.
One of the greatest draws of the metro is relatively
affordable housing. The median home price in
Riverside-San Bernardino is 42 percent lower than in
Los Angeles County and 65 percent lower than in
Orange County.
The Inland Empire provides a number of cultural
opportunities, including the Riverside Metropolitan
Museum, the Mission Inn Museum, and the Museum
of History and Art in Ontario. The California Theatre
of Performing Arts in San Bernardino stages a number
of performances throughout the year, as does the
refurbished Fox Center for the Performing Arts, which
reopened in 2010. The Riverside County Philharmonic
provides classical music concerts throughout the area.
Shopping opportunities are plentiful no matter where
you live in the metro, as are parks and golf courses.
The region features an impressive offering of more than
20 college campuses, including the University of
California, Riverside; two campuses of California State
University; and nine community colleges.
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MARKET OVERVIEW
TEMECULA, CA
Recovering Housing and Job Markets Reviving Retail
Supported by healthy job growth in the construction and trade, transportation and utilities sectors, and a
recovering housing market, retail operations in the Inland Empire are expected to strengthen. Job creation
associated with trade continues to recover as the twin ports record greater volume, necessitating the need for
warehouse space. As a result, trade, transportation and utilities have expanded employment close to pre-recession
levels in the last year. The housing sector, another primary driver of economic activity in the metro and a
generator of demand for retail space, continues to recover. Sales of existing single-family homes have spiked over
the past 18 months, encouraging developers to break ground on new homes. Home sales will support greater
spending at home-improvement and furniture stores, and also create additional traffic for necessity retailers.
Restaurants and bars are also benefiting from a resurgence in home sales, a trend that will continue in the coming
months.
Investor interest in retail assets will remain healthy during the coming months as investors chase higher yields into
the Inland Empire. In the multi-tenant segment, buyers are pursuing properties with a lineup of credit tenants.
Grocery-anchored properties are in high demand, typically trading in the 6 percent range. However, the limited
supply is forcing investors to look at centers anchored by discounters or strip centers with national-credit tenants.
The number of distressed assets, meanwhile, is waning, but a number of funds are shuffling their portfolios and
divesting assets, including some with upside potential. These properties are generating a high degree of buyer
interest as local buyers seek value-add opportunities. The single-tenant market remains competitive, and high
demand for these assets has compressed cap rates to as low as 4 percent for new construction. Due to elevated
interest in net-leased properties, buyers will consider properties occupied by franchisees and less-creditworthy
tenants in the coming months.
2013 Annual Retail Forecast
Employment: Total employment will slightly advance in the second half, bringing
annual employment growth to 8,000 positions, representing a 0.7 percent expansion.
In the prior year, 34,400 positions were generated.
Construction: Builders will continue the muted pace of construction through the end
of the year, delivering 680,000 square feet of retail space. In 2012, developers wrapped
up construction on nearly 1.1 million square feet of retail space.
Vacancy: As available space in traffic-generating centers dissipates, demand at smaller
centers will increase through the holiday season. As a result, vacancy will dip below the
double digits to 9.8 percent, an annual improvement of 50 basis points.
Rents: Operators will continue to lower rents to attract expanding retailers. By year
end, asking rents will fall to $16.66 per square foot, a decrease of 1.1 percent from
year-end 2012. Last year, average asking rents slid 2.5 percent.
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Wienerschnitzel
TEMECULA, CA
MARKET OVERVIEW
Economy
■ Employment in the Inland Empire increased 0.6 percent, or by 6,900 jobs, during the year-long period ending
in the second quarter. In the previous year, local payrolls expanded by 25,100 positions, an expansion of 2.2
percent.
■ Retail sales have increased 3.6 percent in the last 12 months. Since the end of the recession, retail sales have
advanced 23 percent as a resurgence in consumer spending was fueled by hiring and strong home sales.
■ Nearly 6,000 jobs were created in the trade, transportation and utilities sector over the past year as retailers and
local logistics companies expanded. The expansion of e-commerce encouraged firms to open order fulfillment
centers in the area.
■ Outlook: Total employment will slightly advance in the second half, bringing annual employment growth to
8,000 positions, representing a 0.7 percent expansion. In the prior year, 34,400 positions were generated.
Construction
■ Over the last year, 1.4 million square feet of retail space came online in the metro. Developers completed
620,000 square feet of multi-tenant and 785,000 square feet of single-tenant space. In the previous 12-month
period, only 320,000 square feet were delivered.
■ More than 450,000 square feet of retail space is under construction in the metro, including a 140,000-square
foot Wal-Mart Supercenter in Ontario, which will be completed in the third quarter of this year.
■ Approximately 4.6 million square feet of retail space is in planned in the region, although just a handful of
properties have projected start dates. One of the largest projects slated with a scheduled groundbreaking date is
a 250,000-square foot shopping center in Chino.
■ Outlook: Builders will continue the muted pace of construction through the end of the year, delivering
680,000 square feet of retail space. In 2012, developers wrapped up construction on nearly 1.1 million square
feet of retail space.
* Forecast
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Wienerschnitzel
TEMECULA, CA
MARKET OVERVIEW
Vacancy
■ Average vacancy has hovered in the low-10 percent range since mid-2011 as retailers have been sluggish to
absorb dark space remaining from the housing collapse. At the end of the second quarter, vacancy was 10.1
percent, down only 10 basis points from one year ago.
■ Space demand at regional and super-regional malls increased over the last 12 months as retailers remained
cautious when considering expansion. At midyear, average vacancy at these centers was 8 percent, down 130
basis points from the second quarter of last year.
■ Leasing activity at neighborhood/community centers has been slow to gain traction, weighing on the
marketwide vacancy rate. Over the past 12 months, shopping center vacancy climbed 40 basis points to 11.7
percent, matching the post-recession peak.
■ Outlook: As available space in traffic-generating centers dissipates, demand at smaller centers will increase
through the holiday season. As a result, vacancy will dip to 9.8 percent, an annual improvement of 50 basis
points.
Rents
■ Total average asking rents for marketable space were $16.61 per square foot in the second quarter, a decline of
0.1 percent over the past year. In the previous 12-month period, asking rents declined 3.1 percent.
■ At large, open-air centers, where vacancy is 150 basis points below the market average, operators lifted asking
rents 8.5 percent year over year to $18.59 per square foot in the second quarter. Higher rents at new space was
a partial contributor to the rise.
■ Smaller shopping centers were a drag on rents, offsetting strength exhibited by traffic generators.
Neighborhood/community center rents declined 2.8 percent to $15.77 per square foot during the 12-month
period ending in second quarter. Asking rents are nearly 23 percent below the pre-recession peak.
■ Outlook: Operators will continue to adjust rents lower to attract expanding retailers. By year end, asking rents
will fall to $16.66 per square foot, a decrease of 1.1 percent from year-end 2012. Last year, average asking rents
slid 2.5 percent.
* Forecast
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TEMECULA, CA
MARKET OVERVIEW
Single-Tenant Sales Trends**
■ Single-tenant transactions jumped 40 percent over the past 12 months, reflecting investor demand for assets
with stable income streams. The number of restaurants and fast-food properties sold rose more than 25 percent
and collectively accounted for more than one-third of all transactions during the period.
■ The median sales price was $337 per square foot, down 12 percent from the prior year. Assets occupied by
national fast-food chains sold for as much as $1,150 per square foot in the last four quarters.
■ Average cap rates were in the high-5 to mid-6 percent range in the past 12 months, moderately lower than
during the preceding year. Properties occupied by investment-grade tenants with a lengthy remaining lease can
change hands at 50 to 100 basis points below the average.
■ Outlook: Investors will become less risk-averse in the coming months, broadening their search for a wider array
of single-tenant properties. Properties occupied by a franchisee or regional tenant will become more attractive
as a result.
Multi-Tenant Sales Trends**
■ Deal flow in the multi-tenant sector accelerated, climbing 16 percent during the past year. More than 55
percent of the deals executed during the period closed during the last six months as investors assumed greater
risk.
■ Prices have remained relatively stable over the past 12 months compared with the previous year. The median
sales price increased 6 percent over the past year to $138 per square foot as investors targeted smaller properties.
■ Average cap rates were in the low- to high-7 percent range during the last year, down 20 basis points from the
previous period. The largest decline was in community centers, where the average cap rate slipped below 7
percent.
■ Outlook: Grocery-anchored properties near densely populated areas will seize the attention of investors. As
buyers are pressured to place capital, investors will become increasingly interested in smaller properties.
** Trailing 12-Month Period
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Wienerschnitzel
TEMECULA, CA
MARKET OVERVIEW
Capital Markets
■ The FOMC seems poised to begin withdrawing the third round of quantitative easing by year end and, as
stated, terminating the program by mid-2014. Speculation that a drawdown was eminent has pushed up the
yield on 10-year Treasurys from 1.6 percent to the high-2 percent range in September. The Fed is currently
purchasing $85 billion per month in bonds and mortgage-backed securities.
■ Although the third round of quantitative easing will likely come to an end in the next 12 months, the federal
funds rate should remain between 0 and 0.25 percent, which will keep short-term interest rates close to
historically low levels. Additionally, the Fed has backed away from tying the rate to 6.5 percent unemployment.
■ Most lenders are active in the single-tenant arena, though the cost of debt is becoming a consideration for
investors and a deterrent to high-cost transactions. Underwriting is also reflecting an increase in the cost of
capital. Most loans originate at LTVs between 60 and 70 percent with investment-grade, credit-tenant-lease
financing near 85 percent. Assets with investment-grade tenants can be leveraged for 10- to 25-year terms at
interest rates in the mid- to high-4 percent range, while less-creditworthy tenants are financed in the low- to
mid-5 percent area.
■ In the multi-tenant sector, LTVs are between 70 and 75 percent, depending on the presence of an anchor.
Loans for anchored centers above $10 million are typically funded by life companies or CMBS lenders at rates
in the low-5 percent range for 10-year terms. National and regional banks are more active for unanchored
centers priced below $10 million. Interest rates for these assets begin in the mid- to high-4 percent range for
five- to seven-year terms.
Local Highlights
■ In Palm Desert, 120 acres were recently donated to California State University for the expansion of the existing
satellite campus. The addition of 18 buildings, including colleges of engineering, business and education, will
attract students to the Coachella Valley submarket and support retailers nearby.
■ The leisure and hospitality sector was bolstered by rising tourism in the Inland Empire, resulting in a 4.2
percent increase in staffing levels. Over the past year, the sector added 5,400 jobs, bringing overall employment
in the sector to 1.1 percent above the pre-recession peak.
■ A recent ruling on the environmental impact of a commuter line from Riverside to the south end of Perris
Valley has put the project on hold. The $233 million development would have added 24 miles of track and
four stops, potentially increasing the flow of traffic to Riverside retail properties.
■ Home builder confidence is returning to the Inland Empire, supporting greater spending at home
improvement stores and furnishing retailers. In the second quarter, developers pulled an annualized 6,900
single-family permits, more than double the level from one year ago. Multifamily developers permitted 1,600
units, a 55 percent increase from one year ago.
Sources: CoStar Group, Inc., Real Capital Analytics
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Wienerschnitzel
TEMECULA, CA
OFFERING MEMORANDUM
Exclusively Listed By:
Don Emas
First Vice President Investments
Senior Director, Net Leased Properties Group
Ontario Office
License: CA: 00620818
Tel: (909)456-3425
Fax: (909)366-2255
[email protected]
www.marcusmillichap.com/DonEmas
Offices Nationwide
www.MarcusMillichap.com

Wienerschnitzel

Transcription

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