TILTED KILT - EXP Realty Advisors

REPRESENTATIVE PHOTO
EXCLUSIVE OFFERING | $4,634,000 - 7.50% CAP
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
214.915.8890
JOE CAPUTO
[email protected]
BOB MOORHEAD
[email protected]
RUSSELL SMITH
[email protected]
Property. 8,257 + square foot building on 1.84 + acres. Extensive remodel in 2014.
Tenant. AC RESTAURANTS, LLC dba Tilted Kilt. Tilted Kilt’s largest franchise operator. The principal has been an owner/operator of restaurants for over 20
years with extensive experience in the Cincinnati trade area. Franchisee also serves as Area Developer (AD) for corporate and will oversee operations on future
locations in Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia, and Northern Florida. As of December 2013, Tilted Kilt has 90 locations and
20 in development. The company employs 4,000+ people and generated approximately $243 million in revenue as of May 1, 2014.
Lease Structure. 15 year absolute NNN lease beginning December 2014, with 10% rent increases every 5 years during primary term and option periods.
Location. Tilted Kilt is located at the intersection of Houston Road (30,310 Cars / Day) and Turfway Road (29,954 Cars / Day) on the north side of Florence in a
retail corridor that is both established and growing. I-71 N/I-75 N (171,468 Cars / Day) has been a key instrument in developing the area, providing high traffic
outflow to the surrounding streets and allowing direct access to major cities; the biggest being Cincinnati, OH, just 11 miles via I-71 N/I-75 N. Florence Mall
(890,000 SF), anchored by Sears, JCPenny, Macy’s, and Macy’s Home, is located 3 miles south of Tilted Kilt and is host to 130+ tenants, including the likes of
Bath & Body Works, Buca di Beppo, BJ’s Restaurant and Brewhouse, Foot Locker, Finish Line. Major retailers surrounding the mall include Old Navy, Pier 1
Imports, Old Navy, TJ Maxx, David’s Bridal, Mattress Firm, Barnes & Noble, Staples, Kroger, Chipotle, Qdoba, and many others.
Table of contents | Disclaimer
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
Disclaimer
PAGE 1:
COVER
PAGE 2:
TABLE OF CONTENTS | DISCLAIMER
PAGE 3:
INVESTMENT | TENANT | LEASE OVERVIEW
PAGE 4-7:
AERIAL PHOTOS
PAGE 8:
LOCATION OVERVIEW
PAGE 9-10:
LOCATION MAPS
PAGE 11:
DEMOGRAPHICS
REPRESENTATIVE PHOTO
EXP Realty Advisors, Inc. (“Agent”) has been engaged as an agent for the sale of the
property located 4911 Houston Road, Florence, KY by the owner of the Property (“Seller”).
The Property is being offered for sale in an “as-is, where-is” condition and Seller and Agent
make no representations or warranties as to the accuracy of the information contained in
this Offering Memorandum. The enclosed materials include highly confidential information
and are being furnished solely for the purpose of review by prospective purchasers of the
interest described herein. The enclosed materials are being provided solely to facilitate the
prospective investor’s own due diligence for which it shall be fully and solely responsible.
The material contained herein is based on information and sources deemed to be reliable,
but no representation or warranty, express or implied, is being made by Agent or Seller or
any of their respective representatives, affiliates, officers, employees, shareholders,
partners and directors, as to the accuracy or completeness of the information contained
herein. Summaries contained herein of any legal or other documents are not intended to be
comprehensive statements of the terms of such documents, but rather only outlines of
some of the principal provisions contained therein. Neither the Agent nor the Seller shall
have any liability whatsoever for the accuracy or completeness of the information contained
herein or any other written or oral communication or information transmitted or made
available or any action taken or decision made by the recipient with respect to the Property.
Interested parties are to make their own investigations, projections and conclusions without
reliance upon the material contained herein. Seller reserves the right, at its sole and
absolute discretion, to withdraw the Property from being marketed for sale at any time and
for any reason. Seller and Agent each expressly reserves the right, at their sole and
absolute discretion, to reject any and all expressions of interest or offers regarding the
Property and/or to terminate discussions with any entity at any time, with or without notice.
This offering is made subject to omissions, correction of errors, change of price or other
terms, prior sale or withdrawal from the market without notice. Agent is not authorized to
make any representations or agreements on behalf of Seller. Seller shall have no legal
commitment or obligation to any interested party reviewing the enclosed materials,
performing additional investigation and/or making an offer to purchase the Property unless
and until a binding written agreement for the purchase of the Property has been fully
executed, delivered, and approved by Seller and any conditions to Seller’s obligations
hereunder have been satisfied or waived. By taking possession of and reviewing the
information contained herein, the recipient agrees that (a) the enclosed materials and their
contents are of a highly confidential nature and will be held and treated in the strictest
confidence and shall be returned to Agent or Seller promptly upon request; and (b) the
recipient shall not contact employees or tenants of the Property directly or indirectly
regarding any aspect of the enclosed materials or the Property without the prior written
approval of the Seller or Agent; and (c) no portion of the enclosed materials may be copied
or otherwise reproduced without the prior written authorization of Seller and Agent.
Listed in association with KENTUCKY broker of record:
Potter commercial Group, Inc. – KY License: 65749
Investment overview
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
Lease overview
PRICE:
$4,634,000
Initial Lease Term:
15-Years, Plus 4, 5-Year Options to Renew
CAP RATE:
7.50%
Projected Rent Commencement:
December 2014
NET OPERATING INCOME:
$347,530
Projected Lease Expiration:
December 2029
BUILDING AREA:
8,257+ Square Feet
Lease Type:
Absolute NNN
LAND AREA:
1.84+ Acres
Rent Increases:
10% Every 5-Years In Primary Term & Options
Year 1-5 Annual Rent (Current):
$347,530
YEAR RENOVATED:
2014
Year 6-10 Annual Rent:
$382,283
LANDLORD RESPONSIBILITY:
None
Year 11-15 Annual Rent:
$420,511
OWNERSHIP:
Fee Simple Interest
Year 16-20 Annual Rent (Option 1):
$462,562
OCCUPANCY:
100%
Year 21-25 Annual Rent (Option 2):
$508,818
Year 26-30 Annual Rent (Option 3):
$559,700
Year 31-35 Annual Rent (Option 4):
$615,670
Personal Guarantee:
First 7-Years of Lease Term
Tenant overview
AC RESTAURANTS, LLC, an Ohio limited liability company dba Tilted Kilt
Dan Allen & AC RESTARAUNTS, LLC, an Ohio limited liability company
Dan Allen has been an owner/operator of restaurants for over 20 years. He began his career as a franchisee in 1993 with Burger King and owned 25 restaurants
during this time. In 1998, he added Popeye’s to his portfolio. Today, Mr. Allen is the majority owner of 7 Popeye’s restaurants in Cincinnati, Ohio and 3 Popeye’s
restaurants in Chicago, Illinois. AC Restaurants, LLC (Lessee) is the operating company for Mr. Allen’s 3 existing Tilted Kilts in Novi, Michigan (opened December
2012), Hagerstown, Maryland (opened May 2013), and Toledo, Ohio (opened May 2014), as well as any future locations. The existing stores perform well above
the system average and Novi, Michigan had the 3rd strongest opening of any Tilted Kilt. Once Florence, Kentucky opens AC Restaurants, LLC will be their
largest franchisee. Tilted Kilt’s long term growth plan is to open 300 locations in the next 5 years. Dan Allen is looking to open approximately 2-4 stores per
annum. Dan Allen serves as Tilted Kilt’s Area Developer (AD) for Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia, and Northern Florida
where he oversees all stores and receives royalties on each location – 21 stores. In addition to AC Restaurants, LLC corporate credit, Dan Allen has personally
SUBJECT
PROPERTY
guaranteed the lease for 7 years. Mr. Allen has never defaulted on his lease obligations or received rent forgiveness during his 20+
year career.
Tilted Kilt | www.tiltedkilt.com
PRIOR TO PANDA EXPRESS EXPANSION
Tilted Kilt is a Celtic themed sports bar and restaurant chain in the United States and Canada. The first Tilted Kilt Pub & Eatery was opened in the Las Vegas Rio
Hotel and Casino in 2003 by restaurateur Mark DiMartino and business partners and co-founders Shannon Reilly and John Reynaud. The concept was a
"contemporary, Celtic theme sports bar, staffed with beautiful servers. It took one hour after the concept meeting for Harrah's to contact DiMartino and inquire
about immediate development. Tilted Kilt describes itself as "a modern American, Irish, Scottish, and English sports pub". The menu is a mix of traditional and
contemporary pub food, serving items such as fish and chips, "Sloppy Janes", and "Drunken Clams". Each bar features 24 beers, including flagship beverages
such as Guinness and Harp Lager. The establishments are filled with televisions for sporting events and games such as billiards, shuffleboard, and darts are
available for the patrons. As of December 2013, Tilted Kilt has 90 locations and 20 in development. The company employs 4,000+ people and generated
approximately $243 million in revenue as of May 1, 2014. Each restaurant averages approximately $2.5 million in annual revenue.
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Aerial photo
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
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Aerial photo
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
Macy’s
Home
Cincinnati/Northern Kentucky
International Airport
Photo Taken 7/22/14 – Site Under Construction
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Aerial photo
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
Boone County High School
Photo Taken 7/22/14 – Site Under Construction
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Aerial photo
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
Photo Taken 7/22/14 – Site Under Construction
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Location overview
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
IMMEDIATE TRADE AREA
CINCINNATI-MIDDLETOWN METROPOLITAN AREA
Tilted Kilt is located at the intersection of Houston Road (30,310 Cars / Day)
and Turfway Road (29,954 Cars / Day) on the north side of Florence in a retail
corridor that is both established and growing. I-71 N/I-75 N (171,468 Cars /
Day) has been a key instrument in developing the area, providing high traffic
outflow to the surrounding streets and allowing direct access to major cities; the
biggest being Cincinnati, OH, just 11 miles via I-71 N/I-75 N.
The Cincinnati-Northern Kentucky metropolitan area, informally known as
Greater Cincinnati, includes counties in Ohio, Kentucky, and Indiana around
the city of Cincinnati, Ohio. The United States Census’s formal name for the
area is the Cincinnati-Middletown Metropolitan Statistical Area (“MSA”). As of
the 2010 census, the MSA had a population of 2,130,151, the largest
metropolitan area involving Ohio and the 27th largest in the United States.
The subject property is located in a dense retail area and is surround by major
credit tenants such as Target, Subway, Wendy’s, Radioshack, Petco, Dick’s
Sporting Goods, and Sam’s Club. Other major retailers in the immediate area
include Walmart, Lowe’s, Home Depot, Best Buy, Babies R Us, Payless,
Michael’s, Office Depot, Burger King, Chilis, Golden Corral, Fazoli’s, Panda
Express, Firehouse Subs, Cheddar’s, and many more. Florence Mall (890,000
SF), anchored by Sears, JCPenny, Macy’s, and Macy’s Home, is located 3
miles south of Tilted Kilt and is host to 130+ tenants, including the likes of Bath
& Body Works, Buca di Beppo, BJ’s Restaurant and Brewhouse, Foot Locker,
Finish LIne. Major retailers surrounding the mall include Old Navy, Pier 1
Imports, Old Navy, TJ Maxx, David’s Bridal, Mattress Firm, Barnes & Noble,
Staples, Kroger, Chipotle, Qdoba, and many others. As a result of the
convenience and amenities that the trade area provides, the population is
projected to grow by 8.03% over the next 5-years within a 1-mile radius of
Titled Kilt.
Some of the highlights in this MSA include a diversified economy, Growth in
services industries has lessened the metro’s dependence on manufacturing
and transportation. Companies are drawn to the region’s low cost of doing
business, while employees can enjoy an affordable place to live, making the
MSA an attractive environment for business and living. The area is a central
distribution point, half of the U.S. population and 30 major markets are within a
one-day drive. With 250 colleges and universities within a 200-mile radius,
there is also an abundance of higher education in the MSA.
FLORENCE, KY
The City of Florence is the eighth largest city in Kentucky and is located in the
71st most rapidly growing county in the country. Florence has approximately
28,381 residents and is located in Boone County, Kentucky, just 10 miles south
of the City of Cincinnati, Ohio. Florence is home to a large number of
employers in the industrial fields and many hotels, restaurants, and retail
shopping areas. The City of Florence is situated within 600 miles of 60% if the
U.S. population, 58% of the country's manufacturing firms, and 59% of the
nation's purchasing power. Florence is a full service community offering police,
fire, EMS/ALS, water, sewer, public services, recreation, and administrative
support services. Florence is 10.31 sq. miles in area and has phenomenal
visibility due to their transportation infrastructure which includes I-71, I-75, I275, the Cincinnati/Northern Kentucky International Airport and the Ohio River.
The portion of interstate 71/75 that traverses the City of Florence maintains
one of the highest average daily traffic counts along I-71/I-75 in the nation.
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 5 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 excellent
transportation infrastructure and lower property, corporate and state taxes have
attracted major companies. There are ten fortune 500 firms headquartered in
the region. Growth in the technology sector has aided in the boost to the
regions economy. Approximately 225 area firms are engaged in high-tech
research, employing over 9,500 people. More than 300 firms involved in
aerospace products are housed in the Cincinnati-Dayton corridor and employ
around 180,000 people.
Cincinnati, a hub of the Cincinnati-Middletown metropolitan area 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 have attracted large distribution
facilities, including Toyota Motor Sales, Levis Strauss, and Gap Inc. to the area.
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Location map
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
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Location map
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
10
Demographics
TILTED KILT
4911 Houston Road, Florence, KY - Cincinnati Metro AREA
Demographic snapshot
Radius
1 Mile
3 Mile
5 Mile
2018 Projection
4,653
54,709
150,175
2013 Estimate
4,307
51,869
142,504
2010 Census
4,061
50,058
137,143
Growth 2013-2018
8.03%
5.48%
5.38%
Growth 2010-2013
6.06%
3.62%
3.91%
2018 Projection
1,781
22,158
58,300
2013 Estimate
1,650
20,995
55,336
2010 Census
1,559
20,255
53,286
Growth 2013 - 2018
7.94%
5.54%
5.36%
Growth 2010 - 2013
2.43%
1.07%
1.64%
Owner Occupied
771
12,862
38,261
Renter Occupied
879
8,132
17,075
2013 Avg Household Income
$44,239
$56,410
$70,087
2013 Med Household Income
$41,358
$47,228
$57,192
<$25,000
555
5,181
10,215
$25,000 - $50,000
517
5,919
13,633
$50,000 - $75,000
410
4,744
11,747
$75,000 - $100,000
83
2,480
8,247
$100,000 - $125,000
63
1,431
5,061
$125,000 - $150,000
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665
2,766
$150,000 - $200,000
1
423
2,468
11
152
1,199
Population:
Households:
KENTUCKY SPEEDWAY, SPARTA, KY
2013 Households by Household Inc:
$200,000+
DOWNTOWN CINCINNATI, CINCINNATI, OH
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