kendig - my HFF

KENDIG
SQUARE
EXECUTIVE
SUMMARY
KENDIG
EXECUTIVE SUMMARY
SQUARE
THE OPPORTUNITY
Holliday Fenoglio Fowler, L.P. (“HFF”), is pleased to exclusively offer KENDIG SQUARE (the “Property”),
a 273,332 SF grocery-anchored retail center located in Lancaster, Pennsylvania. The Property is
anchored by a consistently high performing Weis Markets, the dominant regional grocer with over 164
locations. Big Kmart co-anchors the center, and generated an impressive $171/SF in gross sales at the
location in 2013, significantly greater than average store sales for the retailer nationally. Kendig Square
also has a premium roster of long-term inline tenants, with 62% having national brand recognition.
The Property benefits from a superior location on PA Route 272, the primary north-south arterial
roadway through Lancaster. The traffic patterns and positioning of the surrounding residential areas
have made Kendig Square the destination retail for the immediate and surrounding markets, allowing
synergies between anchors and co-tenants to capitalize on daily consumers. As a result of its prominent
market position, the tenants of Kendig Square maintain a weighted retention duration that exceeds
19 years, validation of the Property’s success and sustainability through all economic environments.
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PROPERTY
SUMMARY
ADDRESS
2 6 0 0 Wi l l o w S treet,
Wi l l o w S treet, PA 175 8 4
TOTAL AREA
2 73 , 3 3 2 S F
OCCUPANCY
95.2%
ANCHOR TENANTS
Wei s M arkets, Bi g Kmart, Ri te Ai d, D o l l ar Tree
NOTABLE NATIONAL TENANTS
PNC Ban k, Bu rger Ki n g, Taco Bel l , U PS ,
Payl ess S h o es, H& R Bl o ck, D o l l ar Gen eral
K E N D I G S Q U A R E PRESENTS AN OPPORTUNITY
FOR INVESTORS TO ACQUIRE AN ESTABLISHED,
DOMINANT, GROCERY-ANCHORED RETAIL
CENTER IN A MAJOR CENTRAL
PENNSYLVANIA RETAIL MARKET
FREE AND CLEAR OF EXISTING FINANCING.
TOTAL LAND AREA
3 0 . 2 5 Acres
YEAR BUILT
19 9 1
TOTAL PARKING
1, 2 2 0
PARKING RATIO
4 . 4 6 / 1, 0 0 0
OFFERING
Free & Cl ear
3
KENDIG
EXECUTIVE SUMMARY
SQUARE
INVESTMENT HIGHLIGHTS
STRONG GROCERY ANCHOR WITH DOMINANT REGIONAL PRESENCE
Weis Markets (NYSE:WMK) has over 164 locations throughout the Mid-Atlantic and Northeastern regions
and a market capitalization of $1.18 billion. The company’s annual revenue, which is in excess of $2.7 billion,
has grown 2.8% since 2012, and is reflective of strong consumer preferences for the grocery store. Weis
also has an ideal location in Kendig Square with superior frontage, and a footprint that fits the company’s
current prototype of 63,000 SF. Weis’s substantial regional market share and successful 24 year track
record at Kendig Square proves its dedication to the Property and long-term outlook for this trade area.
WEIS
Size
Base Rental Rate / SF
Expiration Date
Tenure
Options
WEIS FINANCIAL SUMMARY
60,284 SF
$8.05
Ticker
Market Cap 5/6/13
WMK
$1.18 billion
Aug-23
2014 Revenue
$2.7 billion
24.0 YRS
Dividend Yield
2.75%
4, 5-YR
Locations
164
HIGH PERFORMING BIG KMART LOCATION WITH UNLOCKED VALUE
KMART TENANCY
Size
86,479 SF
Kendig Square has one of the highest performing Kmart stores in the region, with total sales of $14,816,000 in 2013,
Base Rental Rate / SF
which equates to $171/SF. At a gross rental rate of $6.91 (base rental rate of $4.95), Big Kmart’s occupancy costs is only
Expiration Date
4.04% at the Property. Kmart’s strong performance and tenant tenure of 24 years at the Property signifies the ability of
Tenure
24.0 YRS
Kendig Square to support and sustain major tenants for extensive periods of time, and satisfy the significant consumer
Options
10, 5-YR
demand within the market. Big Kmart’s low market rent at $4.95/SF also represents a significant opportunity to
2013 Sales/SF
increase rental rates at the property if a deal was reached with Kmart, or if the tenant’s space needed to be backfilled.
Gross Rent
Occupancy Cost
4
$4.95
Sep-16
$171
$6.91
4.04%
KENDIG
EXECUTIVE SUMMARY
SQUARE
INVESTMENT HIGHLIGHTS
RENT ROLL STABILITY AND RAPID LEASING ACTIVITY
A robust and stable consumer demand has enabled both national and local tenants to thrive at Kendig
NATIONAL RETAIL TENANTS
Square. Average weighted tenure at the property is over 19 years, with duplicate uses also being able
to thrive in close adjacency to one another. Dollar Tree and Dollar General have both been successfully
operating at the Property since 1997. Leasing activity at the Property has also picked up as the market and
location have become more attractive to retailers. In 2015, current ownership has executed new leases with
Planet Fitness and PA Wine & Spirits for a total of 18,300 square feet, and just recently executed a LOI with
Dunkin’ Donuts.
& MANY MORE
TENANT SUMMARY
TENANT TYPE SUMMARY
Size
% o f To t a l
22.20%
Big Kmart
86,479
31.64%
Sep-16
National
56.09%
Weis Markets
60,284
22.06%
Aug-23
Local
21.71%
Planet Fitness
13,171
4.82%
Aug-20
Fun Time Cinemas
12,375
4.53%
May-16
Rite Aid
10,950
4.01%
Oct-22
Dollar Tree
10,397
3.80%
Sep-16
Te n a n t Ty p e
Grocery
% of Gross Income
SPACE LEASED IN 2015
Te n a n t
Planet Fitness
PA Liquor Control Board
Dunkin' Donuts
Size
13,171
Te n a n t Ty p e
5,134
Te n a n t s > 1 0 , 0 0 0 S F
193,656
70.9%
Pad Site
Leased Inline/OP SF
66,461
24.3%
Va c a n t S F
13,215
4.8%
273,332
100.0%
18,305
To t a l S F
Average Weighted Tenure
19.89 YRS
To t a l O c c u p a n c y
Expiration Date
95.2%
DIRECT ACCESS TO THE IDEAL CONSUMER
Kendig Square’s value and necessity based retailers benefit significantly from the Property’s close
proximity to a major traffic driver, Willow Valley Communities. The senior living facility, which has over 2,500
residents and 1,300 workers on a 210 acre campus, supplies a constant daily flow of consumers to the
Property in addition to the surrounding residential communities. Furthermore, Kendig Square is located
just south of the City of Lancaster, which is the eighth largest city in the state with over 60,000 people.
Lancaster County also has a robust tourism industry, with direct consumer spending of $121 million in 2013.
5
KENDIG
EXECUTIVE SUMMARY
SQUARE
INVESTMENT HIGHLIGHTS
SOUND MARKET FUNDAMENTALS
Lancaster is located in a prime distribution corridor,
LANCASTER, PA
and has direct access to the Pennsylvania Turnpike
(I-76) and US Routes 30, 222, and 283. It also has
freight and passenger rail service through the Norfolk
Southern Railway (NS) and Amtrak. Its access to
regional roadways and railways enables working
populations to commute to Philadelphia and the
Capital City of Harrisburg. The local population
has
strong
income
profiles,
and
with
Willow
Valley Communities surrounding the property, an
additional consumer base that compounds demand.
RADIUS
1 MILE
3 MILES
5 MILES
Population
4,912
23,583
132,346
Households
2,272
9,129
49,065
Median HH Income
69,720
70,052
57,991
55.2
44.7
38.2
Average Age
WILLOW VALLEY GOLF COURSE
6
WILLOW VALLEY CULTURAL CENTER
KENDIG
PROPERTY DESCRIPTION
SQUARE
PROPERTY DESCRIPTION
te 74
Rou
Ke
n
dig
Ro
a
d
1
Route 272 South
Route 272
North
7
HFF Philadelphia
Eight Tower Bridge
161 Washington Street
Suite 925
Conshohocken, PA 19428
hfflp.com
EXCLUSIVE MARKETING ADVISORS
If you have any questions or require additional information,
please contact any of the individuals below.
CHRIS MUNLEY
Managing Director
T 484.532.4207
[email protected]
JOSE CRUZ
Senior Managing Director
T 973.549.2011
[email protected]
MICHAEL DICOSIMO
Senior Real Estate Analyst
T 484.532.4169
[email protected]
FINANCING CONTACTS
JAMES CONLEY
Managing Director
T 484.532.4208
[email protected]
RYAN ADE
Managing Director
T 484.532.4209
[email protected]
KENDIG
SQUARE