offering memorandum - Matthews Real Estate Investment Services

M AT T H E W S R E TA I L A D V I S O R S
OFFERING MEMORANDUM
The Shops at
505
LAHAINA, HAWAII 96761
Executive Summary
™
1
Exclusively Presented By
KY LE MAT T HE WS
CHAIRMAN AND CEO
Kyle. M atth ews@m atth ews.com
D IR
(310) 919-57 57
M O B (310) 622-3161
E L WAR NE R
SVP & NATIONAL DIRECTOR
SHOPPING CENTERS
M AT T H E W S R E TA I L A D V I S O R S
The Shops at
50 5
OFFERING MEMORANDUM
LAHAINA, HAWAII 96761
El.Warn er@m atth ews.com
D IR
(310) 57 9-9690
M O B (858) 7 52-307 8
PAT R I C K TOOME Y
FVP & SENIOR DIRECTOR
SHOPPING CENTERS
Patrick.Toom ey@m atth ews.com
D IR
(310) 919-57 65
M O B (310) 403-4984
LI NDSAY TS U MPE S
AVP & DIRECTOR
SHOPPING CENTERS
L i nds a y.Ts um p e s @m a tthe w s .c o m
D IR
MOB
(310) 57 9-9691
(310) 880-8418
K E ONI FU R S S E , C C I M, R ( PB )
KOKUA REALTY, LLC
BROKER OF RECORD
Ke o ni @k o k ua re a l ty.c o m
D IR
MOB
(808) 87 7 -9000
(808) 280-6556
™
M AT T H E W S R E TA I L A D V I S O R S
Contents
Executive
Summary
4
Area
Overview
7
Property
Overview
13
19
Financial
Overview
Executive Summary
Executive Summary
Matthews National Retail Investment Group - West is pleased to present the fee simple sale of The Shops at 505, part of the Lahaina Shores Condominium
Project, located in historic Lahaina Town on the Hawaiian island of Maui (“Property”).
The Shops at 505 offers a once-in-a-lifetime opportunity to acquire one of the few ocean front shopping centers in all of Hawaii. An irreplaceable oceanfront
resort retail center located in the heart of West Maui’s premier shopping and entertainment district, The Shops at 505 is comprised of ±65,433 SF and is part
of the Lahaina Shores Condominium Project.
M AT T H E W S R E TA I L A D V I S O R S
The Shops at 505 has excellent visibility and access, benefiting from 221 linear feet of frontage along Front Street, beach access, and an underground covered
parking garage. Home to an array of shops, galleries, boutiques, dining venues, and an upscale beach-side luau that has been located at the property since
1998, the Property is perfectly positioned to cater to the robust tourist market and strong demographic base that it serves.
In addition to being a trophy asset, the property exhibits significant increases in income due to the below market rents in place. This property provides both
stability and excellent growth while owning the fee interest in the irreplaceable land site.
Financial Summary
Price
Property Size (NRA)
Year Built
Current Occupancy
Existing Debt
Unpriced
March 1, 2015
1974
Maturity Date
May 1, 2025
Original Principle Loan Amount
$18,850,000
Current Loan Balance (9/16)
$18,334,340
90.5%
Feast at LeLe
15,434
Interest Rate
Wyndham Vacation Resorts
14,269
Amortization
Pacific'o
5,436
Year 1 Operating Data (DCF)
Effective Gross Income
Operating Expenses
Net Operating Income
*Annual Income Growth
*Excellent annual growth over 10-years.
The Shops at 505
KeyBank National Association
Date of Loan
Major Tenants
4
Lender
65,433
Annual Debt Service - Amortized
Assumption Fee
$2,823,192
$957,438
$1,865,754
6.30%
4.18%
30 Years
$1,103,518
1.0%
•
The Shops at 505 offers a rare opportunity to invest in a fee simple
irreplaceable oceanfront trophy asset located in historic Lahaina town
•
Excellent income growth due to below market rents
•
Prime location on Front Street, the main thoroughfare for Lahaina and
one of the most popular tourist shopping and dining destinations in Maui
•
Extremely high barriers to entry for any new product due to the high cost
of land and construction as well as political, environmental, and local
constraints on commercial development
•
Excellent visibility and convenient access with 221 feet of frontage along
Front Street as well as ocean frontage and beach access
•
Affluent demographics with an average household income of over
$96,621 in a three-mile radius
•
Population growth projected at nearly 7.6% over the next five years
within a 5-mile radius
•
Robust tourism market with visitor arrivals of 1,284,135 YTD through
March 2016
•
Very consistent and durable consumer base
•
Subterranean covered parking garage offers convenient parking for
customers and tenants
Executive Summary
M AT T H E W S R E TA I L A D V I S O R S
Investment Highlihghts
5
M AT T H E W S R E TA I L A D V I S O R S
The Shops at 505
6
Lahaina Overview
Often called the “jewel in the crown of Maui”, Lahaina town is the second most visited
spot on Maui, after its beaches.
Though the town can be found in the county of Maui, Lahaina has made its own mark
and has established a distinction, which makes for easy recall. Today, it is bustling with
tourists visiting the shops, activities, restaurants and world renowned hotels and resorts.
It is the art capital of the Pacific and its main thoroughfare, Front Street, is one of a kind.
Demographics
Population
1 Mile
3 Miles
5 Miles
2021 Projection
6,160
14,044
15,818
2016 Estimate
5,760
13,136
14,703
2010 Census
5,275
12,055
13,306
Growth 2016 - 2021
6.95%
6.91%
7.58%
Growth 2010 - 2016
9.19%
8.97%
10.50%
Growth 2000 - 2010
62.03%
36.26%
43.74%
Households
Lahaina is the largest census-designated place in West Maui, Hawaii, and the gateway to
the famous Ka’anapali and Kapalua beach resorts to its north. Compared to other towns
and villages, the area of Lahaina covers an expanse of Maui, about a total of 18.1 square
kilometers, from Honokohau to Olowalu. During the tourist season, the population can
swell to nearly 40,000 people.
Lahaina is also home to the primary harbor in West Maui, and is where the majority
of West Maui fishing, snorkeling and whale watching tours depart. Cruise ships ferry
passengers for day-trips from their anchor further out in deeper water and this is also
where the Moloka’i and Lana’i ferries depart.
Due to the booming tourist industry of Lahaina, residents enjoy living a good life, balanced
between modernity and simplicity.
1 Miles
3 Miles
5 Miles
2021 Projection
2,186
4,340
5,092
2016 Estimate
2,044
4,045
4,715
2010 Census
1,886
3,667
4,206
Growth 2016 - 2021
6.93%
7.29%
8.00%
Growth 2010 - 2016
8.42%
10.29%
12.10%
Income
1 Miles
3 Miles
5 Miles
2016 Est. Average
Household Income
$82,930
$96,621
$103,789
2016 Est. Median
Household Income
$63,619
$73,334
$77,093
Area Overview
M AT T H E W S R E TA I L A D V I S O R S
Area Overview
7
Lahaina Economy
Lahaina is a historic town that has been transformed into a Hawaiian hot spot.
Once the capital of the Hawaiian Kingdom in the early nineteenth century,
Lahaina was also a historic whaling village during the whaling boom of the
mid-1800’s.
Though the town can be found in the county of Maui, Lahaina has made its own
mark and has established a distinction, which makes for easy recall. Today,
it is bustling with tourists visiting the shops, activities, restaurants and world
renowned hotels and resorts. It is the art capital of the Pacific and its main
thoroughfare, Front Street, is one of a kind.
M AT T H E W S R E TA I L A D V I S O R S
Lahaina is the largest census-designated place in West Maui, Hawaii, and
the gateway to the famous Ka’anapali and Kapalua beach resorts to its north.
Compared to other towns and villages, the area of Lahaina covers an expanse
of Maui, about a total of 18.1 square kilometers, from Honokohau to Olowalu.
During the tourist season, the population can swell to nearly 40,000 people.
Maui, Hawaii
Maui is the second largest island of Hawaiian and the county of Maui, and is
home to some 155,000 residents and over 2.5 million visitors per year. Maui
consists of four islands; Maui, Molokai, Lanai and Kaho’olawe.
Also known as the Valley Isle for its large fertile isthmus between its northwestern
and southeastern volcanoes, Maui is known for its pristine beaches and endless
FAIRMONT KEA
LANI RESORT
8
The Shops at 505
fun and relaxation. Maui is home to spectacular hotels, timeshares, restaurants,
shopping, and the beautiful resort towns.
The two major industries on Maui are agriculture and tourism. Government
research groups and high technology companies have discovered that Maui
has a business environment favorable for growth in those sectors as well.
Maui Fast Facts
•
Maui is made up of approximately an area of 727 square miles.
•
There are more than 80 beaches in Maui.
•
Maui’s population has increased by 20.9% from 2000 to 2010.
•
Maui is the third-most populous of the Hawaiian Islands.
•
3 airports provide scheduled flights to Maui.
•
Maui’s major exports are coffee, Macadamia nuts, papaya, tropical
flowers, sugar, pineapple.
Regional Map
K AUA I
M AT T H E W S R E TA I L A D V I S O R S
N I I H AU
OAHU
MOLOKAI
LANAI
M AU I
H AWA I I
M AU I
Local Map
Executive
Area
Summary
Overview
99
Maui Tourism
Maui continues to dominate the neighbor-island tourism market and has
consistently led the other counties in the rate of job growth and per-capita
income. Today, the County has approximately 4,700 business establishments,
which, when combined with Federal, State, and County jobs, provides about
71,600 wage and salary jobs.
M AT T H E W S R E TA I L A D V I S O R S
Maui was the first of the neighbor islands to attract large-scale resort
development as the islands transitioned from a plantation-based economy
to one based on tourism. People from all over the world also come to Maui
to enjoy surfing, kite surfing, windsurfing, snorkeling and whale watching.
Maui attracts visitors from around the world, but U.S. mainland and Canada
visitors are the most frequent. Around 2.5 million tourists visit Maui each
year generating US$3.5 billion.
Front Street
Lahaina’s famous Front Street remains is the main thoroughfare for Lahaina.
Front Street has a great assortment of hundreds of shops all along one
convenient stretch of pedestrian-friendly road: inexpensive shops selling
souvenirs all the way to high-end, elegant art galleries. The streets are lined
with great restaurants, shopping, art galleries and plenty of sight seeing.
Front Street, was named one of the “Top 10 Greatest Streets” in America.
And the county of Maui takes added measures to preserve and care for the
heritage of the area. You won’t find any billboards or flashy neon signs in this
historic strip, but instead painted wooden signs and crabs scattering across
the salty wet rocks.
10
The Shops at 505
FRONT STREET SHOPS
Local Developments
NEW AFFORDABLE HOUSING COMING TO LAHAINA
KAHOMA VILLAGE
Kahoma Village will be a total of 203 units spread throughout the 21.56 Acre parcel
located in the heart of Lahaina. Kahoma Village will have sustainable “green design”
features, 1.75 acres of parks and all within minutes of walking distance to the beach,
grocery store, or Shops at 505
A RESORT CELEBRATING THE ISLAND’S RICH HISTORY
WESTIN NANEA OCEAN VILLAS
Scheduled to open in 2017, The Westin Nanea Ocean Villas is ideally located on
Ka‘anapali Beach in Maui and will feature 390 luxurious villas and a variety of worldclass resort amenities, including an expansive lagoon-style pool and a beach bar.
Situated on a 26-acre property which includes a ten-acre public park, The Westin
Nanea Ocean Villas will be designed by local architects and infused with a variety
of Hawaiian design elements.
Area Overview
11
M AT T H E W S R E TA I L A D V I S O R S
The Shops at 505
12
Property Overview
Physical Description
The Shops at 505
Address
505 Front Street
Location
505 Front St, Lahaina, HI 96761
Cross Street
Square Footage (GLA)
Land Area
APN(s)
Year Built / Renovated
Zoning
Number of Stories
Parking Spaces
Shaw Street
±65,433
±43,041 SF (±0.99 Acres)
M AT T H E W S R E TA I L A D V I S O R S
Property Name
2-4-6-002-007-300
1974
H-2 Hotel District
2
123
Property Overview
13
LAHAINA
G AT E WAY
LAHAINA
C A N N E RY M A L L
K A H O M A V I L L AG E D E V E LO P M E N T
203 HOUSING UNITS
M AT T H E W S R E TA I L A D V I S O R S
T H E O U T L E T S O F M AU I
OLD LAHAINA
CENTER`
REGAL CINEMAS
LAHAINA HARBOR
SUBJEC T PROPERTY
L A H A I N A R E C R E AT I O N
C E N T E R PA R K
14
The Shops at 505
O
NT
ST
RE
ET
M AT T H E W S R E TA I L A D V I S O R S
FR
Property Overview
15
Main Level Site Plan
118-119
112/114
120-122
115-117
115-117
M AT T H E W S R E TA I L A D V I S O R S
107
138
Unit
Tenant
SF
120-122
Betty's Beach Café
2,853
115-117, 118-119
Feast at LeLe
14,269
112,114,114O
Pacific'o
5,436
107
Joelle C. Gallery
921
103, 103-A,
105, 106
Gallerie 505
2,683
101-102
Vacant
1,819
132-134
Whalers General Store
2,970
129-130
Spankys
3,090
127-128, 135AB, 136-138,
Wyndham Vacation Resorts
15,434
125-126
Vacant
1,680
123, 124
Goofy Foot Surf School
1,091
142
Vacant
590
139-140
Maui Ocean Sports
685
/140
139
137
123-124
BATHROOM
& STORAGE
B
135
142
A
135
125-126
106
136
105
103/103A
127-128
O C C U P IE D
VACA N T
129
16
The Shops at 505
130
132-134
101/102
Unit
Tenant
SF
212,213-214,
215, 215B,
216, 216-A,
219-A, 219-B,
232, 233, 234
Wyndham Vacation Resorts
15,434
206
Erica Pilch
1,161
204-A, 204-B,
215A
Feast at LeLe
14,269
Upper Level Site Plan
215A
203
Mina Massage
591
202
Dr. Sunjata Bhatia, DDS
1,044
201
Nancy Emerson School of
Surfing
475
228
Maui Lashes
384
230
Queen Lili'uokalani Children's Center - Queen Lili
867
212-214
215-219B
Ryan Carney
416
Vacant
351
225-A
Vacant
430
225-B
DaKine Fine Art Gallery
542
224-B
Goofy Foot Surf School
1,091
224-A
Republic Parking Northwest Inc.
257
224
Maui Pineapple Tours, LLC
213
224-C
Vacant
130
221-222
The Friends of Moku'ula
1,320
220-B, 220B-1
Theatre Theatre Maui
459
231
Soular Tattoo and Piercing
1,397
235
232-234
220A
227
226
M AT T H E W S R E TA I L A D V I S O R S
1
A-2.2
220B
206
231
221
205
204-B
223
Vacant
905
235
Management Office
310
229
Lisa Newman
424
220-A
Coastline Limousine
236
204-A
222
223
203
224C
224B
224A
225A 225B 226
227
228
229
230
201
202
224
O CC UPIE D
VACANT
Property Overview
17
M AT T H E W S R E TA I L A D V I S O R S
The Shops at 505
18
Financial Overview
Unit
Tenant
Lease
Start
Lease
End
SF
% of
GLA
120-122
Betty's Beach Café
Dec-08
Nov-24
2,853
4.4%
115-117,
118-119,
204-A,
204-B,
215A
Feast at LeLe
Feb-14
Dec-23
14,269
21.8%
Contract Rental Rate
Rent PSF
Annual
Recovery
Recovery
Per Area
Options
$145,500
$159,192
$166,044
$47,392
$16.61
2x5 yrs
$2.01
Feb-2017
Feb-2018
Feb-2019
Feb-2020
Feb-2021
Feb-2022
Feb-2023
$354,252
$364,872
$375,828
$387,096
$398,712
$410,676
$422,664
$78,339
$5.49
2x5 yrs
$277,080
$282,624
$288,276
$294,048
$106,144
$19.53
1x5 yrs
Rent Increases
Year
Month
Year
Month
$136,944
$11,412
$48.00
$4.00
Dec-2017
Dec-2019
Dec-2021
$343,932
$28,661
$24.10
112,114,114O
Pacific'o
Feb-91
Jan-21
5,436
8.3%
$271,652
$22,638
$49.97
$4.16
Feb-2017
Feb-2018
Feb-2019
Feb-2020
107
Joelle C. Gallery
Jul-99
May-18
921
1.4%
$24,878
$2,073
$27.01
$2.25
Jan-2017
$25,620
$17,985
$19.53
None
103, 103-A,
105, 106
Gallerie 505
Jul-08
Jun-19
2,683
4.1%
$35,736
$2,978
$13.32
$1.11
April-2017
April-2018
July-2018
$38,604
$42,900
$45,036
$52,387
$19.53
1x5 yrs
101-102
Vacant
1,819
2.8%
$92,769
$7,731
$51.00
$4.25
$36,696
$20.17
None
132-134
Whalers General
Store
Nov-00
Oct-20
2,970
4.5%
$142,560
$11,880
$48.00
$4.00
Nov-2016
Nov-2017
Nov-2018
Nov-2019
$146,844
$151,116
$155,736
$160,380
$49,337
$16.61
1x5 yrs
$61,380
$64,716
$68,040
$71,364
$74,700
$51,329
$16.61
2x5 yrs
$388,932
$401,976
$425,976
$254,572
$16.49
1x5 yrs
$33,891
$20.17
None
129-130
Spankys
Nov-11
Oct-21
3,090
4.7%
$58,044
$4,837
$18.78
$1.57
Nov-2016
Nov-2017
Nov-2018
Nov-2019
Nov-2020
127-128,
135A-B,
136-138,
212,213214, 215,
215B, 216,
216-A, 219A, 219-B,
232, 233,
234
Wyndham Vacation
Resorts
Aug-13
Jul-20
15,434
23.6%
$370,416
$30,868
$24.00
$2.00
Aug-2017
Aug-2018
Aug-2019
125-126
Vacant
1,680
2.6%
$85,680
$7,140
$51.00
$4.25
Financial Overview
19
M AT T H E W S R E TA I L A D V I S O R S
Rent Roll
Rent Roll, continued
Lease
Start
Tenant
123, 124,
224-B
Goofy Foot Surf
School
142
Vacant
139-140
Maui Ocean Sports
Jan-10
206
Erica Pilch
203
M AT T H E W S R E TA I L A D V I S O R S
Unit
Contract Rental Rate
Year
Month
Rent PSF
Year
Month
Rent Increases
May-2017
May-2018
May-2019
May-2020
$22,887
$23,568
$24,283
$25,008
Annual
Recovery
Recovery
Per Area
Options
$18,122
$16.61
None
$10,131
$17.17
None
$22,212
$1,851
$20.36
$1.70
590
0.9%
$30,090
$2,508
$51.00
$4.25
Dec-19
685
1.0%
$14,385
$1,199
$21.00
$1.75
Jan-2017
Jan-2018
Jan-2019
$14,796
$15,204
$15,612
$11,380
$16.61
None
Jan-16
Mar-19
1,161
1.8%
$14,628
$1,219
$12.60
$1.05
Jan-2017
Jan-2018
$16,812
$17,652
$22,670
$19.53
None
Mina Massage
Feb-15
Mar-15
591
0.9%
$8,156
$680
$13.80
$1.15
April-2017
April-2018
April-2019
April-2020
$8,365
$8,652
$8,936
$9,149
$9,818
$16.61
1x5 yrs
202
Dr. Sunjata Bhatia,
DDS
Nov-11
Oct-21
1,044
1.6%
$21,924
$1,827
$21.00
$1.75
Nov-2016
Nov-2018
Nov-2019
$25,056
$28,188
$31,320
$20,384
$19.52
2x5 yrs
201
Nancy Emerson
School of Surfing
Jan-05
Nov-19
475
0.7%
$9,408
$784
$19.81
$1.65
Dec-2016
Dec-2017
Dec-2018
9,732
$10,068
$10,416
$7,891
$16.61
1x3 yrs
228
Maui Lashes
Mar-14
Sep-17
384
0.6%
$5,411
$451
$14.09
$1.17
March-2017
$5,568
$5,586
$14.55
None
230
Queen Lili'uokalani
Children's Center Queen Lili
Jul-09
Sep-17
867
1.3%
$10,716
$893
$12.36
$1.03
$14,402
$16.61
None
227
Ryan Carney
Sep-15
Oct-20
416
0.6%
$4,992
$416
$12.00
$1.00
$6,912
$16.62
1x5 yrs
226
Vacant
351
0.5%
$5,265
$439
$15.00
$1.25
None
$7,081
$20.17
None
225-A
Vacant
430
0.7%
$6,450
$538
$15.00
$1.25
None
$7,618
$17.72
None
224-A
224
20
% of
GLA
1.7%
DaKine Fine Art
Gallery
Republic Parking
Northwest Inc.
Maui Pineapple
Tours, LLC
The Shops at 505
Apr-21
SF
1,091
225-B
May-01
Lease
End
None
Nov-2016
Nov-2017
Nov-2018
Nov-2019
$5,148
$5,292
$5,436
$5,640
Jun-16
Sep-17
542
0.8%
$7,480
$623
$13.80
$1.15
None
$8,804
$16.24
None
Sep-15
Sep-17
257
0.4%
$5,726
$477
$22.28
$1.86
None
$4,269
$16.61
None
Sep-15
Sep-17
213
0.3%
$2,939
$245
$13.80
$1.15
None
$4,160
$19.53
None
Unit
Tenant
Lease
Start
Lease
End
SF
% of
GLA
Contract Rental Rate
Year
Month
Year
Month
224-C
Vacant
Jul-14
Sep-17
130
0.2%
$2,730
$228
$21.00
Feb-99
Nov-17
1,320
2.0%
$0
$0
Nov-07
Feb-18
459
0.7%
$5,508
$459
The Friends of
221-222
Moku'ula
220-B,
Theatre Theatre
220-B-1
Maui
231
Soular Tattoo and
Piercing
223
Nov-10
Sep-22
Rent PSF
Rent Increases
Annual
Recovery
Recovery
Per Area
Options
$1.75
None
$2,623
$20.18
None
$0.00
$0.00
None
$302
$0.23
None
$12.00
$1.00
None
$105
$0.23
None
$23,205
$16.61
1x5 yrs
$18,256
$20.17
None
Oct-2016
Oct-2017
Oct-2018
Oct-2019
Oct-2020
Oct-2021
$16,764
$17,280
$17,820
$18,600
$19,164
$19,740
1,397
2.1%
$12,573
$1,048
$9.00
$0.75
Vacant
905
1.4%
$13,575
$1,131
$15.00
$1.25
None
235
Management Office
310
0.5%
$3,840
$320
$12.39
$1.03
None
229
Lisa Newman
None
Nov-15
Dec-18
424
0.6%
$5,088
$424
$12.00
$1.00
Nov-2016
Nov-2017
$5,340
Dec-11
Nov-17
236
0.4%
$3,060
$255
$12.97
$1.08
Dec-2016
$3,204
Occupied Totals - In Place
59,218
90.5%
$1,538,367
$128,197
$25.98
Vacant Totals
6,215
9.5%
240,399
20,033
65,433
100.0%
$1,778,766
$148,231
220-A
Totals
Coastline
Limousine
None
$7,046
$16.62
None
$3,921
$16.61
None
$2.16
$924,502
$15.61
$38.68
$3.22
18,256
$2.94
$27.18
$2.27
$942,758
$14.41
$5,616
"1. We have assumed MTM tenants will renew through the first year of the analysis period.
2. We have assumed Queen Lili'uokalani Children's Center - Queen Lili will extend through the first year of the analysis period. The contractual lease expires 6/2017.
3. We have assumed DaKine Fine Art will extend through the first year of the analysis period.
4. We have assumed Theatre Theatre Maui extends through 2/2018.
5. We have assumed Maui Lashes will extend through the first year of the analysis period. The contractual lease expires 3/2017.
6. We have assumed Maiu Pineapple Tours will extend through the first year analysis period.
7. We have assumed Republic Parking Northwest will extend through the first year of the analysis period. The contractual lease expires 8/2017.
8. Percentage rents based on current and historical sales for the tenant.
"`
Financial Overview
21
M AT T H E W S R E TA I L A D V I S O R S
Rent Roll, continued
Lease Expiration Schedule
Income & Expenses
Year
In Place
Year
Ending
Sq. Ft.
Annual % of Total
Aggregate % of Total
1
Aug-17
0
0.00%
0.00%
2
Aug-18
8,231
13.78%
13.78%
3
Aug-19
4,028
6.74%
20.52%
4
Aug-20
15,899
26.61%
47.13%
Total
$/SF
5
Aug-21
9,173
15.35%
62.48%
Rental Income
$1,564,235
$26.41
6
Aug-22
3,897
6.52%
69.00%
Percentage Rent
$264,772
$4.47
7
Aug-23
1,397
2.34%
71.34%
Other Income
$167,723
$2.83
8
Aug-24
17,122
28.66%
100.00%
Expense Reimbursements
$826,462
$13.96
9
Aug-25
0
0.00%
100.00%
Effective Gross Income
$2,823,192
$47.67
10
Aug-26
0
0.00%
100.00%
11
Aug-27
0
0.00%
100.00%
59,747
100.00%
Income
M AT T H E W S R E TA I L A D V I S O R S
Expenses
Real Estate Taxes
$110,575
$1.87
Property Insurance
$99,455
$1.68
CAM/R&M
$684,401
$11.56
Management
$56,464
$0.95
EGI (%)
2.00%
Non-Reimbursable Expenses
Operating Expenses
Net Operating Income
Total
10-Year Rollover
100%
6,543
$0.11
$957,438
$16.17
$1,865,754
$31.51
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1
2
3
4
5
6
7
8
9
10
*The property exhibits a strong lease expiration schedule that will help
22
increase NOI as tenants roll to higher markets rents.
The Shops at 505
11
Assumptions
Analysis Period
Cash Flow Projection Begin Date
Holding Period for Net Present Value
September 1, 2016
10 Years
Net Rentable Area in SF
65,433
General Projection Assumptions
Cost of Living Growth per Annum
3.00%
General Expense Growth per Annum
3.00%
Real Estate Tax Growth per Annum
3.00%
Market Rent Growth per Annum
3.00%
Exit Cost of Sale
1.00%
Leasing Assumptions - Shops and Restaurants
Market Rent
Renewal Probability
Downtime
$14.00 - $42.00/SF/Yr
75.00%
6 Months
Tenant Improvement Allowance
$10/SF
Leasing Commissions
6.00%
Free Rent
None
Escalations
3.00%
Operating Expenses
Term
NNN
3-10 Years
Financial Overview
23
M AT T H E W S R E TA I L A D V I S O R S
Area Measures
Cash Flow
For the Years Ending
Potential Gross Revenue
Base Rental Revenue
Absorption & Turnover Vacancy
Base Rent Abatements
Year 2
Aug-2018
Year 3
Aug-2019
Year 4
Aug-2020
Year 5
Aug-2021
Year 6
Aug-2022
Year 7
Aug-2023
Year 8
Aug-2024
Year 9
Aug-2025
Year 10
Aug-2026
Year 11
Aug-2027
M AT T H E W S R E TA I L A D V I S O R S
$1,760,851
-196,616
0
$1,853,252
-18,703
-1,440
$1,933,607
-4,285
-1,485
$2,032,011
-5,342
-1,550
$2,271,673
-13,238
-1,597
$2,346,749
-12,531
0
$2,426,544
-31,737
0
$2,726,610
-27,591
0
$2,970,269
-69,533
0
$3,077,846
-190,496
0
$3,165,016
-26,379
0
Scheduled Base Rental Revenue
Percentage Rent
Expense Reimbursement Revenue
Parking
Storage
Other Rental Income
Misc. Inc
1,564,235
264,772
826,462
140,000
3,000
19,270
5,453
1,833,109
271,194
988,774
147,000
3,090
19,848
5,617
1,927,837
277,863
1,040,290
154,350
3,183
20,444
5,785
2,025,119
284,910
1,077,034
162,068
3,278
21,057
5,959
2,256,838
293,599
1,104,472
170,171
3,377
21,689
6,137
2,334,218
302,682
1,133,309
178,679
3,478
22,339
6,322
2,394,807
311,998
1,166,042
187,613
3,582
23,009
6,511
2,699,019
151,514
1,210,336
196,994
3,690
23,700
6,707
2,900,736
64,708
1,224,652
206,844
3,800
24,411
6,908
2,887,350
63,424
1,239,336
217,186
3,914
25,143
7,115
3,138,637
66,649
1,382,841
228,045
4,032
25,897
7,328
Total Potential Gross Revenue
General Vacancy
2,823,192
0
3,268,632
-80,095
3,429,752
-99,510
3,579,425
-102,887
3,856,283
-98,799
3,981,027
-103,254
4,093,562
-88,107
4,291,960
-97,261
4,432,059
-122,169
4,443,468
-2,976
4,853,429
-113,190
Effective Gross Revenue
2,823,192
3,188,537
3,330,242
3,476,538
3,757,484
3,877,773
4,005,455
4,194,699
4,309,890
4,440,492
4,740,239
Operating Expenses
HVAC
Elevator
Fire Life Safety
Insurance
Janitorial
Landscape
Management Fees
General and Administrative
Repairs and Maintenance
Security
Taxes
Utilities
Non-recoverable Expenses
14,984
6,695
5,069
99,455
172,892
4,406
56,464
6,708
68,001
106,488
110,575
299,158
6,543
15,433
6,896
5,221
102,439
178,079
4,539
63,771
6,909
70,041
109,683
113,892
308,133
6,740
15,896
7,103
5,378
105,512
183,421
4,675
66,605
7,116
72,143
112,973
117,309
317,377
6,942
16,373
7,316
5,539
108,677
188,924
4,815
69,531
7,329
74,307
116,362
120,828
326,898
7,150
16,864
7,536
5,706
111,938
194,592
4,959
75,150
7,549
76,536
119,853
124,453
336,705
7,365
17,370
7,762
5,877
115,296
200,429
5,108
77,555
7,776
78,832
123,449
128,187
346,806
7,585
17,891
7,995
6,053
118,755
206,442
5,261
80,109
8,009
81,197
127,152
132,032
357,210
7,813
18,428
8,234
6,235
122,317
212,635
5,419
83,894
8,249
83,633
130,967
135,993
367,926
8,047
18,981
8,481
6,422
125,987
219,014
5,582
86,198
8,497
86,142
134,896
140,073
378,964
8,289
19,550
8,736
6,614
129,766
225,585
5,749
88,810
8,752
88,726
138,943
144,275
390,333
8,538
20,137
8,998
6,813
133,659
232,352
5,922
94,805
9,014
91,388
143,111
148,604
402,043
8,794
Total Operating Expenses
957,438
991,776
1,022,450
1,054,049
1,089,206
1,122,032
1,155,919
1,191,977
1,227,526
1,264,377
1,305,640
1,865,754
2,196,761
2,307,792
2,422,489
2,668,278
2,755,741
2,849,536
3,002,722
3,082,364
3,176,115
3,434,599
3,704
2,179
9,815
70,755
69,583
10,109
6,726
4,034
10,413
2,994
6,381
10,725
10,715
13,949
11,047
20,050
12,548
11,378
22,127
27,992
11,720
4,531
9,656
12,071
25,900
39,123
12,433
179,786
276,661
12,806
26,823
32,972
13,190
15,698
150,447
21,173
20,100
35,711
43,976
61,839
26,258
77,456
469,253
72,985
$1,850,056
$2,046,314
$2,286,619
$2,402,389
$2,632,567
$2,711,765
$2,787,697
$2,976,464
Net Operating Income
Leasing & Capital Costs
Tenant Improvements
Leasing Commissions
Capex
24
Year 1
Aug-2017
Total Leasing & Capital Costs
Cash Flow Before Debt Service
The Shops at 505
$3,004,908
$2,706,862
$3,361,614
Financial Overview
25
M AT T H E W S R E TA I L A D V I S O R S
™
C O N FID EN T I A L I T Y & DI SCL A IMER STATEMEN T
M AT T H E W S R E TA I L A D V I S O R S
T his Tea ser co n t a i n s s e l e ct i n f o r m a t i o n pertai ni ng to the busi ness and affai rs of Shops at 505 located at 505 Front Street, Lahaina, HI 96761
( “ P r o p er t y” ). It h a s be e n p r e p a r e d by Matthews Retai l Advi sors. Thi s Teaser m ay not be al l-in clu s ive or con t ain all of t h e in format ion a
p r o s p ec t iv e pu r ch a s e r m a y de s i r e. T h e i n form ati on c ontai ned i n thi s Teaser i s c onfi denti al and fu rn is h ed s olely for t h e pu rpos e of a review
b y a p r o sp ec t i v e p u r ch a s e r o f t h e P r o p erty. It i s not to be used for any other purpose or m ad e availab le t o an y ot h er pers on wit h ou t t h e
w r it t e n c o nsen t o f S e l l e r o r M a t t h e w s Re tai l Advi sors. The m ateri al i s based i n part upon i nformat ion s u pplied b y t h e Seller an d in part u pon
f ina nc ia l inf o rm a t i o n o bt a i n e d f r o m s o u r ces i t deem s rel i abl e. O wner, nor thei r offi c ers, em pl oyees , or agen t s makes an y repres en t at ion or
w a r r a nt y, ex p re s s o r i m p l i e d, a s t o t h e a c c urac y or c om pl eteness of thi s Teaser or any of i ts c on t en t s an d n o legal liab ilit y is as s u med or s h all
b e imp lie d w it h r e s p e ct t h e r e t o. P r o s p e c ti ve purc hasers shoul d m ake thei r own proj ec ti ons and form t h eir own con clu s ion s wit h ou t relian ce
up o n t he ma t e r i a l co n t a i n e d h e r e i n a n d conduc t thei r own due di l i genc e.
B y a c kno w le dg i n g y o u r r e ce i p t o f t h i s Teaser for the Property, you agree:
1. T he Teas e r a n d i t s co n t e n t s a r e confi denti al ;
2. Yo u w il l h o l d i t a n d t r e a t i t i n t h e s tri c test of c onfi denc e; and
3. Yo u w il l n o t , di r e ct l y o r i n di r e ct l y, di sc l ose or perm i t anyone el se to di sc l ose thi s Teas er or it s con t en t s in an y fas h ion or man n er
d e t r ime n t a l t o t h e i n t e r e s t o f t h e S el l er.
Ow ne r a nd Mat t h e w s Re t a i l A dv i s o r s e x pressl y reserve the ri ght, at thei r sol e di sc reti on, to reject an y an d all expres s ion s of in t eres t or
o f f er s t o p ur c h a s e t h e P r o p e r t y a n d t o t erm i nate di sc ussi ons wi th any person or enti ty revi ewin g t h is Teas er or makin g an offer t o pu rch as e
t he P r o p er t y u n l e s s a n d u n t i l a w r i t t e n a greem ent for the purc hase and sal e of the Property has b een fu lly execu t ed an d d elivered .
I f y o u w ish no t t o p u r s u e n e g o t i a t i o n s l e adi ng to the ac qui si ti on of the Property or i n the future you d is con t in u e s u ch n egot iat ion s , t h en you
a g r ee t o p ur g e a l l m a t e r i a l s r e l a t i n g t o t hi s Property i nc l udi ng thi s Teaser.
A p r o sp ec t iv e p u r ch a s e r ’s s o l e a n d e xcl usi ve ri ghts wi th respec t to thi s prospec ti ve transac ti on , t h e Propert y, or in format ion provid ed h erein
o r in c o nne c t i o n w i t h t h e s a l e o f t h e P r o perty shal l be l i m i ted to those expressl y provi ded i n an execu t ed Pu rch as e Agreemen t an d s h all b e
s ub je c t t o t he t e r m s t h e r e o f. In n o e v e n t shal l a prospec ti ve purc haser have any other c l ai m s again s t Seller or M at t h ews Ret ail Ad vis ors or
a ny o f t heir a ff i l i a t e s o r a n y o f t h e i r r e s p ec ti ve offi c ers, Di rec tors, sharehol ders, owners, em ployees , or agen t s for an y d amages , liab ilit y, or
c a us es o f a c t i o n r e l a t i n g t o t h i s s o l i ci t a t i on proc ess or the m arketi ng or sal e of the Property.
26
T his Tea ser sh a l l n o t be de e m e d t o r e p r e sent the state of affai rs of the Property or c onsti tute an in d icat ion t h at t h ere h as b een n o ch an ge
in t he s t a t e o f a f f a i r s o f t h e P r o p e r t y s i n c e the date thi s Teaser.
The Shops at 505
Confidentiality Agreement
27
M AT T H E W S R E TA I L A D V I S O R S