Package - Reata Real Estate

PERICOS MEXICAN CUISINE
NNN INVESTMENT OPPORTUNITY
CONFIDENTIAL OFFERING MEMORANDUM
SAN ANTONIO, TX
KEVIN CATALANI / DANNY ELLIOTT
NNN INVESTMENT OPPORTUNITY
CONFIDENTAL OFFERING MEMORANDUM
11075 IH-10 WEST
SAN ANTONIO, TX 78230
presented by
KEVIN CATALANI
VICE PRESIDENT INVESTMENT SALES
210.841.3237
[email protected]
DANNY ELLIOTT
PARTNER
210.841.3205
[email protected]
REATA REAL ESTATE INVESTMENT SALES
1100 NE Loop 410, Suite 400
San Antonio, TX 78209
TEL210.930.4111
FAX210.930.1114
REATAREALESTATE.COM
Information contained was obtained from sources believed reliable, However, REATA Real Estate Services, LP, makes no guarantees, warranties or representations as
to the completeness or accuracy thereof. The presentation of this project is submitted subject to the errors, omissions and change of price or conditions prior to lease
or withdrawal. ©REATA Real Estate Services, LP
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
OFFERING MEMORANDUM
PERICOS MEXICAN CUISINE
INVESTMENT HIGHLIGHTS
LEASE ABSTRACT
TENANT PROFILE
SECTION II. . .. . .. . .. . .. . .. . .. . .. . .. PROPERTY OVERVIEW
MAP
AERIALS
HUEBNER OAKS SITE PLAN
HUEBNER OAKS PHOTOS
PERICOS MEXICAN CUISINE PHOTOS
SECTION III. ... ... ... ... ... ... ... ..TRADE AREA OVERVIEW
SAN ANTONIO MARKET OVERVIEW
HUEBNER OAKS TRADE AREA OVERVIEW
PERICOS MEXICAN CUISINE DEMOGRAPHICS
SECTION IV. ... ... ... ... ... ... ... ..AGENCY DISCLOSURE
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
TABLE OF CONTENTS
SECTION I . . .. . .. . .. . .. . .. . .. . .. . .. EXECUTIVE SUMMARY
Pericos is located within Huebner Oaks Shopping Center, a 300,000 square foot
lifestyle center anchored by Regal Cinemas, Bed Bath & Beyond and REI, along
with a prominent lineup of national fashion retailers and restaurants.
This offering presents a rare opportunity to acquire an asset located within one
of San Antonio’s premiere shopping destinations.
EXECUTIVE SUMMARY
REATA Investment Sales has been exclusively retained to offer for sale Pericos
Mexican Cuisine (the “Property”), a 10,126 square-foot single-tenant net lease
asset in San Antonio, Texas.
INVESTMENT HIGHLIGHTS
• Irreplaceable location within Huebner Oak Center
• Located along Interstate 10 with traffic counts of 226,000 cars per day
• Experienced San Antonio restaurant operator with over 30 years experience
• Strong 2013 sales volumes resulted in a healthy 8.46% rent-to-sales ratio
• Four years remaining on their current lease term
• Current below market rental rate of $22.52 PSF
• Contractual rent bump in February 2016
• No fixed renewal options allows for upside opportunity upon lease expiration
• Minimal landlord responsibility
1
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
LOCATION
11075 IH-10 West
San Antonio, TX 78230
BUILDING SIZE
10,126 SF
LAND AREA
1.545 acres
TENANT
Pericos Mexican Cuisine
GUARANTOR
Baby Pericos, LLC
OFFERING PRICE
$3,310,000
CURRENT RENT
$240,000
CAP RATE
7.25%
RENT SUMMARY
Lease Years
1—2
3—4
4 —7
Effective Dates
Feb. 2012 — Jan. 2014
Feb. 2014 — Jan. 2016
Feb. 2016 — Jan. 2019
LEASE SUMMARY
Lease Commencement
Lease Expiration
Renewal Options
Lease Type
Roof & Structure
HVAC
Insurance
Property Taxes
Utilities
February 1, 2012
January 31, 2019
Two 5-year options at then Market Rental Rate.
Triple Net (NNN)
Landlord Responsibility
Tenant Responsibility
Tenant Responsibility
Tenant Responsibility
Tenant Responsibility
DEMOGRAPHIC SNAPSHOT
2016 Estimated Population
2016 Estimated Households
2016 Estimated Daytime Population
2016 Average Household Income
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
Base Rent Annual Base Rent
$21.33
$216,000
$22.52
$228,000
$23.70
$240,000
EXECUTIVE SUMMARY
LEASE ABSTRACT
1 Mile
13,800
6,717
21,781
$56,823
3 Miles
119,036
53,410
99,316
$69,005
5 Miles
304,379
127,999
211,936
$71,966
2
EXECUTIVE SUMMARY
Pericos Mexican Cuisine was derived from Panchito’s Mexican
Restaurants, two family owned and operated full-service
restaurants in San Antonio, TX. The owners of Panchito’s, Roy
and Evelyn Reyes, opened their first restaurant in 1980 on the
Southwest side of the city with the help of Evelyn’s parents,
Frank and Lupe Sepulveda. Both Pericos Mexican Cuisine and
Panchito’s Mexican Restaurants have won numerous awards for
culinary excellence and appear regularly in local and statewide
lists of best places to eat in San Antonio .
There are three Pericos locations in San Antonio. All are owned
and operated by Roy and Evelyn’s son, Russell Reyes. Pericos,
using the same family recipes, offers true authentic Mexican
food while providing a magnificently multi-colored parrot theme
throughout the restaurant.
3
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
PROPERTY OVERVIEW
4
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
ALON TOWN CENTRE
UR
ZB
AC
H
RD
HUEBNER OAKS
PROPERTY OVERVIEW
FIESTA TRAILS
W
CITY VIEW VILLAGE
W
UR
ZB
AC
H
RD
CARILLON HILLS
BABCOCK NORTH
MEDICAL CENTER
5
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
PROPERTY OVERVIEW
SM
Print & Ship Serivces
22
6,
00
0
CP
CITY VIEW VILLAGE
49
,0
00
CP
D
D
21
1,0
0
0
CP
D
6
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
PROPERTY OVERVIEW
HUEBNER OAKS SITE PLAN
14 1 5
13
17
16
19
2
7
4
8
9
10
6
11
12
20
22
21
23
24
26
59
35
28
30
31
25
27
29
36
32
34
6
33
EB
HU
51
5
0
OA
49
KS
60
48
61
52
R
NE
VE
I
DR
54
39
14
24
34
4
38
45
4
37
47
55
33
40
4
1
ST
WE
2,942 SF
4,760 SF
1,103 SF
2,721 SF
7,002 SF
35,009 SF
14,000 SF
28,200 SF
1,200 SF
1,498 SF
2,028 SF
6,416 SF
4,500 SF
2,166 SF
5,800 SF
9,488 SF
6,278 SF
5,964 SF
4,500 SF
6,384 SF
6,314 SF
1,690 SF
3,060 SF
1,925 SF
2,500 SF
8,500 SF
4,301 SF
2,204 SF
2,556 SF
3,681 SF
1,824 SF
8,990 SF
7,900 SF
8,036 SF
27,500 SF
3,234 SF
4,735 SF
2,254 SF
1,264 SF
1,000 SF
854 SF
1,160 SF
930 SF
1,542 SF
2,500 SF
3,917 SF
1,663 SF
1,155 SF
1,057 SF
3,682 SF
2,083 SF
1,803 SF
3,914 SF
1,000 SF
4,498 SF
60 SF
0
Mattress Firm
FEDEX
Available
Lenscrafters
Men’s Wearhouse
Bed, Bath & Beyond
Old Navy
Ross Dress for Less
Claire’s Boutique
Brighton
Yankee Candle
Hallmark
Lane Bryant
Changes Naturel
American Eagle
Versona
Victoria’s Secret
Banana Republic
Ann Taylor
Eddie Bauer
Talbots
Starbucks
Chico’s
Gymboree
Bath & Bodyworks
GAP/GAP Kids
California Pizza Kitchen
Soma
Chipotle Mexican Grill
Gengis Grill
Tanfastic
Pier 1 Imports
Macaroni Grill
Saltgrass Steakhouse
REI
AT&T
La Madeleine
Available
Diamond Gallery
Verizon Wireless
Frankly Fake Jewels
GameStop
Madame Lui Lui
Marble Slab Creamery
Fire Wok
Ride Away Bicycle
Garbanzo
GNC
Sports Clips
AAA Texas
Available
Available
Casusal Male XL
Available
Panera Bread
Compass Bank ATM
Regal Theater
Altitude Trampoline Park
I-1
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53
56
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27,428 SF
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CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
PROPERTY OVERVIEW
8
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
PROPERTY OVERVIEW
9
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
PROPERTY OVERVIEW
10
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
San Antonio is the nation’s 7th largest city and
the 24th largest metropolitan service area
(MSA) in the United States. The San Antonio-New Braunsfels MSA (referred to as Greater San Antonio) encompasses eight counties
and is situated in South-Central Texas along
the I-35 corridor with a population of nearly
2.3 million people; 200 miles west of Houston,
280 miles southwest of Dallas and 84 miles
south of Austin
The MSA is centrally located between the East
and West Coasts, with close proximity to Mexico. Due to its central location and positioning
along Interstate 35, more than half of the total goods flowing between the U.S. and Mexico travel through San Antonio before reaching their final destination. San Antonio is also
home to a number of national landmarks and
famous attractions, making it Texas’ most visited city with about 20 million visitors annually.
San Antonio benefits greatly from the city’s
close proximity to Mexico and the cost advantages of living in this unique city. The economy
of San Antonio is a healthy mix of financial services, government services, manufacturing,
education and health care, biosciences, communications, oil & gas and tourism industries.
San Antonio is home to five Fortune 500 companies including Valero Energy, Tesoro, USAA,
NuStar Energy and Clear Channel Communications. In addition, other major companies call
San Antonio home for their corporate headquarters, including H-E-B and Rackspace.
According to the Council for Community and
Economic Research, the cost of living is nearly 12 percent below the U.S. average, allowing
residents and companies alike to enjoy affordable living in a cultural and business-savvy
environment. Home prices in San Antonio are
more than 35 percent below the U.S. median
and are less than half the cost of comparable
housing in some cities in California and the
East Coast.
In recent years, San Antonio has been among
the top of a number of economic indicator
rankings including Milken Institute’s list of
top performing cities (#1 in 2011), Brookings
Institution’s top-economic performer list and
Forbes list of America’s Fastest Recovering
Cities (#2 in 2009). The Eagle Ford Shale play
that is currently taking place in South Texas has made significant contributions to the
city’s recent success. The Eagle Ford Shale
(EFS) is quite possibly the largest single economic development in the history of the state
of Texas and ranks as the largest oil & gas
development in the world based on capital
invested. The EFS is a gas and oil producing
shale rock formation in south Texas that runs
from the US-Mexico border north of Lare-
TRADE AREA OVERVIEW
SAN ANTONIO MARKET OVERVIEW
11
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
in the 20 county area impacted by the play.
Since the beginning of 2010 over 7% of the
state’s employment gains are attributed to
the EFS. It is currently the most active shale
play in the world with over 200 rigs running.
From record drilling levels to wells producing
over 4,000 barrels per day of oil, the play is
redefining South Texas as an oil industry hotbed and bringing new wealth to the region.
CORPORATE HEADQUARTERS IN SAN ANTONIO
COMPANY H-E-B USAA Bill Miller Bar-B-Q Cullen / Frost Bankers Valero Energy Rackspace Southwest Research Institute Toyota Motor Manufacturing Clear Channel Communications, Inc. Kinetic Concepts, Inc.
Harland Clarke Tesoro NuStar Energy BUSINESS Super Market Chain Financial Services and Insurance Fast Food Chain Financial Services Oil Refinery & Gasoline Mktg. IT Managed Hosting Solutions Applied Research Auto Manufacturing TV & Radio Stations, Outdoor Ads Medical Supplies Check Printing Oil Refiner & Petroleum Products Energy EMPLOYED IN SAN ANTONIO
20,000
17,000
4,190
3,982
3,777
3,300
3,046
2,900
2,800
2,000
1,500
800
550
TRADE AREA OVERVIEW
do in a narrow band extending northeast
for several hundred miles to just north of Houston. The EFS takes its name from the town of
Eagle Ford, Texas where the shale outcrops
at the surface in clay form. Approximately
$30 billion was spent developing the play in
2013 and had more than a $60 billion dollar
impact on the South Texas economy in 2012;
over 116,000 Eagle Ford jobs were supported
Source: The San Antonio Business Journal and by contact with company representatives. Updated August 2013.
MAJOR REGIONAL EMPLOYERS IN SAN ANTONIO
COMPANY Lackland Air Force Base Fort Sam Houston H-E-B USAA Northside Independent School District
City of San Antonio Randolph Air Force Base North East Independent School District Methodist Healthcare System San Antonio Independent School District
BUSINESS Military Military Super Market Chain Financial Services and Insurance School District City Government Military School District Health Care Services School District EMPLOYED IN SAN ANTONIO
37,097
32,000
20,000
17,000
12,751
11,731
11,068
10,522
8,000
7,374
Source: The 2013 Book of Lists, The San Antonio Business Journal
FORTUNE 500 COMPANIES HEADQUARTERED IN SAN ANTONIO
COMPANY RANK Valero Energy
9
Tesoro95
USAA139
NuStar Energy
389
Clear Channel Communications, Inc.
407
Source: Fortune Magazine
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CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
HUEBNER OAKS TRADE AREA
CITY VIEW VILLAGE
CP
00
38
,9
40
211
,0
FAJITA
TACO PLACE
CP
D
HUEBNER OAKS
Fiesta Trails and Huebner Oaks, the major retail centers, are positioned at opposite ends
of the trade area. Fiesta Trails, a 488,000
square foot power center, is located at
De Zavala and IH-10; Huebner Oaks, a
400,000 square foot lifestyle center, occupies the North East corner of Huebner Oaks
and IH-10.
FIESTA TRAILS
47
,5
94
CP
D
0C
,74
52
PD
000
226,
000
177,
CPD
CPD
32,920 CPD
The area inside of IH-10 and Loop 1604 offers very high density due to the presence of
USAA and the South Texas Medical Center,
two of the city’s largest employers. USAA is
home to 15,000 employees while the South
Texas Medical Center has grown to more than
60,000 workers.
D
STARLIGHT OAKS
PIONEER EARL COBB
PHARMACY Dance Studio
TRADE AREA OVERVIEW
Huebner and De Zavala Roads define the
boundaries of Huebner Oaks, one of San Antonio’s most established retail trade areas.
AND
OAKL
RD
HUEBNER OAKS RETAILERS
13
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
2000-2010 Census, 2016 Estimates with 2021 Projections
Calculated using Weighted Block Centroid from Block Groups
Lat/Lon: 29.5471/-98.5811
PERICOS
MEXICAN CUISINE DEMOGRAPHICS
HOUSEHOLDS
RACE AND
ETHNICITY
INCOME
5 mi radius
13,800
119,036
304,379
2021 Projected Population
14,972
127,643
325,905
2010 Census Population
12,674
108,961
280,824
2000 Census Population
11,322
91,799
237,278
Projected Annual Growth 2016 to 2021
1.7%
1.4%
1.4%
Historical Annual Growth 2000 to 2016
1.4%
1.9%
1.8%
29.7
33.5
34
2016 Estimated Households
6,717
53,410
127,999
2021 Projected Households
7,072
56,195
134,593
2010 Census Households
6,257
49,601
119,454
2000 Census Households
5,218
40,219
100,108
Projected Annual Growth 2016 to 2021
1.1%
1.0%
1.0%
Historical Annual Growth 2000 to 2016
1.8%
2.0%
1.7%
70.5%
71.6%
73.4%
2016 Estimated Black or African American
6.9%
6.8%
6.2%
2016 Estimated Asian or Pacific Islander
8.6%
8.4%
6.1%
2016 Estimated American Indian or Native Alaskan
0.5%
0.6%
0.7%
2016 Estimated Other Races
13.5%
12.5%
13.6%
2016 Estimated Hispanic
50.7%
45.8%
49.9%
2016 Estimated Average Household Income
$56,823
$69,005
$71,966
2016 Estimated Median Household Income
$48,319
$58,651
$59,723
2016 Estimated Per Capita Income
$27,669
$31,002
$30,334
8.2%
4.1%
4.2%
2016 Estimated White
2016 Estimated Elementary (Grade Level 0 to 8)
EDUCATION
(AGE 25+)
3 mi radius
2016 Estimated Population
2016 Median Age
BUSINESS
1 mi radius
2.1%
3.9%
4.5%
2016 Estimated High School Graduate
12.6%
16.0%
19.1%
2016 Estimated Some College
21.5%
23.5%
24.8%
2016 Estimated Associates Degree Only
10.6%
9.2%
8.2%
2016 Estimated Bachelors Degree Only
30.0%
26.8%
24.3%
2016 Estimated Graduate Degree
15.0%
16.5%
15.0%
2016 Estimated Some High School (Grade Level 9 to 11)
2016 Estimated Total Businesses
3,323
9,514
18,346
2016 Estimated Total Employees
21,781
99,316
211,936
2016 Estimated Employee Population per Business
6.6
10.4
11.6
2016 Estimated Residential Population per Business
4.2
12.5
16.6
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
©2016, Sites USA, Chandler, Arizona, 480-491-1112
page 1 of 1
Demographic Source: Applied Geographic Solutions 04/2016, TIGER Geography
TRADE AREA OVERVIEW
POPULATION
11075 Interstate 10 Frontage Rd, San Antonio, TX 78230
This report was produced using data from private and government sources deemed to be reliable. The information herein is provided without representation or warranty.
Pericos Mexican Cuisine
RS1
14
TYPES OF REAL ESTATE LICENSE HOLDERS:
• A BROKER is responsible for all brokerage activities,
including acts performed by sales agents sponsored by
the broker.
• A SALES AGENT must be sponsored by a broker and
works with clients on behalf of the broker.
A BROKER’S MINIMUM DUTIES REQUIRED BY LAW
(A client is the person or party that the broker represents):
• Put the interests of the client above all others, including
the broker’s own interests;
• Inform the client of any material informaton about the
property or transaction received by the broker;
• Answer the client’s questions and present any offer to
or counter-offer from the client; and
• Treat all parties to a real estate transaction honestly
and fairly.
A LICENSE HOLDER CAN REPRESENT A PARTY IN A
REAL ESTATE TRANSACTION:
AS AGENT FOR OWNER (SELLER/LANDLORD): The
broker becomes the property owner’s agent through an
agreement with the owner, usually in a written listng to
sell or property management agreement. An owner’s
agent must perform the broker’s minimum duties above
and must inform the owner of any material information
about the property or transaction known by the agent,
including information disclosed to the agent or subagent
by the buyer or buyer’s agent.
› that the owner will accept a price less than the written
asking price;
AS AGENT FOR BUYER/TENANT: The broker becomes
the buyer/tenant’s agent by agreeing to represent the
buyer, usually through a written representation agreement. A buyer’s agent must perform the broker’s minimum duties above and must inform the buyer of any
material information about the property or transaction
known by the agent, including information disclosed to
the agent by the seller or seller’s agent.
› that the buyer/tenant will pay a price greater than the
price submitted in a written offer; and
AS AGENT FOR BOTH — INTERMEDIARY: To act as an
intermediary between the parties the broker must first
obtain the written agreement of each party to the transaction. The written agreement must state who will pay
the broker and, in conspicuous bold or underlined print,
set forth the broker’s obligations as an intermediary. A
broker who acts as an intermediary:
• Must treat all partes to the transaction impartially and
fairly;
• May, with the parties’ written consent, appoint a different license holder associated with the broker to each
party (owner and buyer) to communicate with, provide
opinions and advice to, and carry out the instructions
of each party to the transaction.
• Must not, unless specifically authorized in writng to do
so by the party, disclose:
› any confidential information or any other information
that a party specifically instructs the broker in writing not to disclose, unless required to do so by law.
AS SUBAGENT: A license holder acts as a subagent
when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the
buyer but does not represent the buyer and must place
the interests of the owner first.
TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN
YOU AND A BROKER SHOULD BE IN WRITING AND
CLEARLY ESTABLISH:
• The broker’s duties and responsibilities to you, and your
obligations under the representation agreement.
• Who will pay the broker for services provided to you,
when payment will be made and how the payment will
be calculated.
LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does
not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below
and retain a copy for your records.
REATA Real Estate Services, LP
Licensed Broker/Broker Firm Name or
Primary Assumed Business Name
9002891
License Number
[email protected]
Email
210.930.4111
Phone
Thomas C. Tyng, Jr.
Designated Broker of Firm
0406718
License Number
[email protected]
Email
210.930.4111
Phone
Kevin Catalani
Sales Agent
590070
License Number
[email protected]
Email
210.930.4111
Phone
Sales Agent
License Number
Email
Phone
Sales Agent
License Number
Email
Phone
Buyer/Tenant/Seller/Landlord Initials
CONFIDENTIAL OFFERING MEMORANDUM — PERICOS MEXICAN CUISINE
AGENCY DISCLOSURE
AGENCY DISCLOSURE
Date
REGULATED BY THE TEXAS REAL ESTATE COMMISSION. INFORMATION AVAILABLE AT WWW.TREC.TEXAS.GOV IABS 1-0 02/16/16
15
OUR MISSION is to provide excellent real estate services to
both external and internal customers while building a lasting
Company committed to profitability and opportunity.
We strive for the highest standards of service, integrity and
accountability to our EMPLOYEES, CLIENTS and PARTNERS.