Harbor Freight Tools

Harbor Freight Tools
Single Tenant NNN Offering Memorandum
Brand New 10 Year Lease
5035 SE 82nd Ave Portland OR 97266
Lisa LaManna | Principal Broker
Marshall Proehl | Broker
Chase McPherson | Broker
Jay Fetherston | Broker
Jim Pate | Broker
503-764-1723 O | 971-400-6021 C
503-422-2580
503-208-5524
503-936-1100
503-764-1724
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Table Of Contents
Executive Summary
The Offering …................................3
Asset Summary ..………….………..4
Location Map & Aerial Photo ….…..5
Parcel Map ………………………….6
Property Overview
Property Description ……………….7
Site Plan ..…………….……………..8
Interior Plan ..……………………….9
Market Overview
Portland Area Overview….……....10
Retail Market Overview ..….…......10
Tenant Profile
Tenant Summary ……..…………..11
Financials
Financial Summary ……..………..12
Lease Summary ……….….……...13
Harbor Freight Tools | Portland, OR
Page 2
Executive Summary
The Offering
As the exclusive agent to the Owner,
Pate LaManna Commercial is
Price
$4,100,000
pleased to offer a highly desirable
Cap Rate
6.36%
NOI
$260,700
Building Size
± 21,725 SF
redevelopment of an existing asset
Year Built
1969, Renovated in 2014
with a brand new, single tenant, NNN
Lot Size
± 57,370SF
10 year lease. HFT has locations in
Interest
Fee Simple
46 states and reported a 2012
Property Tours
Lisa LaManna
971-400-6021
Marshall Proehl
503-422-2580
Chase McPherson
503-208-5524
investment opportunity in Portland,
OR. Harbor Freight Tools (HFT), in a
fee simple interest, is a
revenue of 1.91 billion dollars. It
currently holds a B+ credit rating
from Standard & Poor’s.
Located at 5035 SE 82nd Ave
Portland, Oregon, this offering is a
21,725 square foot building on 1.3
acres. With its prime location
immediately adjacent to Fred Meyer,
a Kroger operation and local favorite,
close proximity to many other
national retailers, and a growing,
secure income stream, this asset is
an ideal single tenant NNN
investment.
Harbor Freight Tools | Portland, OR
Page 3
Executive Summary
Asset Summary
• National Credit Tenant – Standard & Poor’s Rates Harbor Freight at B+. At 1.91 billion in annual revenue, Harbor Freight has over 500
stores in 46 states.
• Brand New Lease – Harbor Freight represents a brand new 10 year NNN lease which is estimated to commence in July 2014.
• Fred Meyer Shadow Anchored – The proximity to Fred Meyer, which is a dominant national credit tenant, serves as a strong, drawing
power and will be a value add for Harbor Freight’s consumers.
• Location - A superb location close to one of the city’s busiest intersections at the corner of SE 82nd Avenue and SE Foster Road which has
an average daily count of over 95,000 vehicles. Additionally the property is surrounded by an abundance of single and multi-family residential
development. The asset is also located in an established retail trade area with close proximity to restaurants and entertainment uses.
• Building Layout – The property is well served as a single tenant retail building. However given the size and shape of the building, it also
lends itself well to a multi-tenant use for maximum flexibility.
• Demographics – The total population within a 3-mile radius is over 180,000 with over 71,000 households. The average household income
within a 3-mile radius is around $50,000. These demographics match the Harbor Freight target consumer.
• Debt Free – With the property being offered debt free, it makes the process of acquisition for new ownership much easier and more
attractive.
• Lents Redevelopment Plan – Local government is supportive of redevelopment in the Lents Neighborhood Urban Renewal plan. The
district is designed to bring urban renewal to the area.
Harbor Freight Tools | Portland, OR
Page 4
Executive Summary
Location & Aerial Photo
Harbor Freight Tools | Portland, OR
Page 5
Executive Summary
Parcel Map
Harbor Freight Tools | Portland, OR
Page 6
Property Overview
Property Description
Property Tenant
Harbor Freight Tools
Address
5035 SE 82nd Ave Portland, Multnomah
County, Oregon 97266
Parcel Number (APN)
R214036
Zoning
Exd – Central Employment
Type of Ownership
Fee Simple
Building Area
21,725 SF
Lot Size (AC)
57,370 SF
Year Built
1969, Renovated in 2014
Foundation
Concrete
Exterior
Concrete Block
Roof
Built Up Material
HVAC
Rooftop Mounted (2014)
Fire Protection /
Security
Fire Alarm and Sprinkler Systems
Flood Zone
The Property is in an SFHA.
Harbor Freight Tools | Portland, OR
*Not actual photo but representative of Harbor Freight
Page 7
Property Overview
Site Plan
Property Overview
Interior Plan
Market Overview
Portland Area Overview
The Portland Metropolitan Statistical Area (MSA) straddles two states and encompasses five counties. The
Portland MSA is a strategic center of trade and commerce due to its coastal access and river highways. At its
center, the city of Portland provides an inviting environment for both businesses and residents. A skilled
workforce, strong infrastructure and access to Pacific Rim markets, forms an attractive investment destination
while unlimited recreation options and the region’s environmental consciousness provide a high quality of life for
residents. Strategic planning enables Portland to undergo population increases and infrastructure expansion
while maintaining the city’s position as an inviting urban area, both in terms of commerce and livability.
The Portland MSA is located 175 miles south of Seattle and 650 miles north of San Francisco. The area is
bisected by the Columbia River, which also acts as the state boundary between Oregon and Washington.
According to 2010 Census, The Portland Metropolitan Area is Oregon’s largest with a population of nearly 3
million. The city of Portland itself accounted for nearly 600,000 of this figure.
•
Portland was ranked #5 by Bloomberg Business Week in America’s Best 50 Cities to Live In.
•
According to Corporate Knights, Portland was tied for the Greenest City in America.
•
Portland is known for its Urban Growth Boundary - a regional barrier established to prevent urban sprawl and preventing overdevelopment.
•
Portland residents have a high level of education with over 1/3 of the population having a bachelor’s degree or greater.
•
The Portland MSA has one of the most accessible transportation systems in the nation with an average commute time of 27 minutes for residents.
•
TriMet, the public transportation service in the Portland MSA, is a national leader carrying more people than any other U.S. transit system its size with almost
100 million rider trips in 2011.
•
The region’s sense of place and community, mild climate, abundant recreational and cultural activities, excellent school systems and affordability all make
Portland a great place to call home.
Retail Market Overview
The Portland Retail Market contains 23,521,000 total square feet of space and has a current vacancy rate of 8.4%. Overall, vacancy rates continue to decline
while contract rental rates continue to strengthen.
There is an abundance of new retailers locating within the Portland MSA. New retailers include Wal-Mart, Natural Grocers & Orchard Supply
Hardware. Expanding (existing) retailers include LA Fitness, Planet Fitness, Sportsman’s Warehouse & Petco, to name a few. Other smaller footprint
retailers such as MOD Pizza, Jimmy Johns, Potbelly, Jersey Mikes, Firehouse Subs and Subway remain very active and competitive for space and Starbucks
is pushing their drive-thru concept into the market as well. Other non-traditional service commercial tenants include ZoomCare, Doctor’s Express, Pacific
Dental, Aspen Dental & Gentle Dental. These non-retailers have been crowding into shopping centers as new space becomes available. Finally, other food
concepts such as Panda Express, Cafe Yumm, & Buffalo Wild Wings continue to seek new locations as well.
Harbor Freight Tools | Portland, OR
Page 10
Tenant Profile
Tenant Summary
Harbor Freight Tools is a privately-held company that retails tools and accessories. The company
was founded in 1977 by Allan Smidt and is currently headquartered in Calabasas, CA. Harbor
Freight Tools started as a small, family-owned business with a commitment to provide working
people with quality tools at low prices. Harbor Freight currently offers more than 7,000 tools and
accessories at a quality that matches or exceeds competing brands, but at prices that are up to 80%
cheaper.
Today, Harbor Freight serves over 20 million customers and is continuing to grow. The company is
still family owned and operated and maintains its original goal of delivering a wide variety of tools at
affordable prices. The company also continues to experience sustained revenue growth. Since 2007
and through the economic downturn, Harbor Freight grew its annual revenue from 1.25 billion to
approximately 1.91 billion and employs over 11,000 associates nationwide. It currently holds a B+
credit rating from Standard & Poor’s.
Harbor Freight Tools | Portland, OR
Page 11
Financials
Financial Summary
Size (SF)
21,725
Lease Year
Contract Rent
$/SF
Year 1-5
$260,700
$12.00
Year 6-10
$286,770
$13.20
Option 1
$315,447
$14.52
Option 2
$346,948
$15.97
Option 3
$381,708
$17.57
Option 4
$419,944
$19.33
Potential Gross
Income
Recoveries (est.)
Effective Gross
Income
$/SF
Total
$12.00
$260,700
$45,000
$14.07
$305,700
Less Expenses
Property Taxes (est.)
-$42,000
Insurance (est.)
NOI
-$3,000
$12.00
Cap Rate
6.36%
$260,700
Price
$/SF
$4,100,000
$188.72
Harbor Freight Tools | Portland, OR
Page 12
Financials
Lease Summary
Harbor Freight Tools | Portland, OR
Page 13
Confidentiality and Disclosure Statement
The information provided in this Offering Memorandum is deemed to be confidential. Through Pate LaManna Commercial (PLC),The Owner has agreed to permit The Purchaser to receive and review certain
non-public documents and information relating to the asset owned by the Owner, or an affiliate thereof (the “Asset”) including confidential, proprietary, financial, property, and economic information (collectively,
the “Offering Memorandum” or “OM”). All data in this OM has been obtained from sources, whether public or private, which PLC and The Owner deem to be reliable but is not guaranteed. The information is
not intended to be comprehensive but intended to assist the Purchaser in evaluating the Asset. The Purchaser agrees that its intended use for the value conclusions expressed herein are for their own internal
decision making processes solely.
The Purchaser acknowledges and agrees that the Broker makes no representations or warranties, whether express or implied, in fact or in law, with respect to the content, accuracy or completeness of any part
of the OM. The Purchaser shall have no recourse against the Broker, its advisors, counsel or associates in the event of any errors or omissions regarding the OMor any other matter. Should additional
information be presented to the broker relating to the property, the broker reserves the right to amend the conclusion reported herein.
Exclusively Prepared By:
Lisa LaManna | Principal Broker
Jim Pate | Broker
Jay Fetherston | Broker
Pate LaManna Commercial
503-764-1723 O | 971-400-6021 C
503-764-1724
503-936-1100
[email protected]
[email protected]
[email protected]
OR License 200706166
OR License 201107058
OR License 201207855
2375 130th Avenue NE
Marshall Proehl | Broker
Chase McPherson | Broker
Bellevue, WA 98005
503-422-2580
503-208-5524
[email protected]
[email protected]
OR License 201201045
OR License 200901109
901 NE Glisan Street, Suite 150
Portland, OR 97232
www.patelamanna.com
Page 14