Offering Memorandum - The James Group of Marcus

DOLLAR GENERAL
826 Highway 59 North, Heavener, Oklahoma 74937
Representative Photo
OFFERING MEMORANDUM
EXCLUSIVE NET–LEASE OFFERING
CONFIDENTIALITY AND DISCLAIMER
Marcus & Millichap hereby advises all prospective
purchasers of Net Leased property as follows:
The information contained in this Marketing Brochure has
been obtained from sources we believe to be reliable.
However, Marcus & Millichap has not and will not verify
any of this information, nor has Marcus & Millichap
conducted any investigation regarding these matters.
Marcus & Millichap makes no guarantee, warranty or
representation whatsoever about the accuracy or
completeness of any information provided.
As the Buyer of a net leased property, it is the Buyer’s
responsibility to independently confirm the accuracy and
completeness of all material information before
completing any purchase. This Marketing Brochure is not
a substitute for your thorough due diligence investigation
of this investment opportunity. Marcus & Millichap
expressly denies any obligation to conduct a due diligence
examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used
in this Marketing Brochure are for example only and do
not represent the current or future performance of this
property. The value of a net leased property to you
depends on factors that should be evaluated by you and
your tax, financial and legal advisors.
Buyer and Buyer’s tax, financial, legal, and construction
advisors should conduct a careful, independent
investigation of any net leased property to determine to
your satisfaction with the suitability of the property for
your needs.
Like all real estate investments, this investment carries
significant risks. Buyer and Buyer’s legal and financial
advisors must request and carefully review all legal and
financial documents related to the property and tenant.
While the tenant’s past performance at this or other
locations is an important consideration, it is not a
guarantee of future success. Similarly, the lease rate for
some properties, including newly-constructed facilities or
newly-acquired locations, may be set based on a tenant’s
projected sales with little or no record of actual
performance, or comparable rents for the area. Returns
are not guaranteed; the tenant and any guarantors may
fail to pay the lease rent or property taxes, or may fail to
comply with other material terms of the lease; cash flow
may be interrupted in part or in whole due to market,
economic, environmental or other conditions. Regardless
of tenant history and lease guarantees, Buyer is
responsible for conducting his/her own investigation of all
matters affecting the intrinsic value of the property and
the value of any long-term lease, including the likelihood
of locating a replacement tenant if the current tenant
should default or abandon the property, and the lease
terms that Buyer may be able to negotiate with a
potential replacement tenant considering the location of
the property, and Buyer’s legal ability to make alternate
use of the property.
the subject property, the future projected financial
performance of the property, the size and square footage
of the property and improvements, the presence or
absence of contaminating substances, PCB’s or asbestos,
the compliance with State and Federal regulations, the
physical condition of the improvements thereon, or the
financial condition or business prospects of any tenant, or
any tenant’s plans or intentions to continue its occupancy
of the subject property. The information contained in this
Marketing Brochure has been obtained from sources we
believe to be reliable; however, Marcus & Millichap has
not verified, and will not verify, any of the information
contained herein, nor has Marcus & Millichap conducted
any investigation regarding these matters and makes no
warranty or representation whatsoever regarding the
accuracy or completeness of the information provided. All
potential buyers must take appropriate measures to verify
all of the information set forth herein.
NON-ENDORSEMENT NOTICE
By accepting this Marketing Brochure you agree to release
Marcus & Millichap Real Estate Investment Services and
hold it harmless from any kind of claim, cost, expense, or
liability arising out of your investigation and/or purchase
of this net leased property.
CONFIDENTIALITY AND DISCLAIMER
The information contained in the following Marketing
Brochure is proprietary and strictly confidential. It is
intended to be reviewed only by the party receiving it
from Marcus & Millichap and should not be made available
to any other person or entity without the written consent
of Marcus & Millichap. This Marketing Brochure has been
prepared to provide summary, unverified information to
prospective purchasers, and to establish only a preliminary
level of interest in the subject property. The information
contained herein is not a substitute for a thorough due
diligence investigation. Marcus & Millichap has not made
any investigation, and makes no warranty or
representation, with respect to the income or expenses for
Marcus & Millichap Real Estate Investment Services, Inc.
(“M&M”) is not affiliated with, sponsored by, or endorsed
by any commercial tenant or lessee identified in this
marketing package. The presence of any corporation’s
logo or name is not intended to indicate or imply
affiliation with, or sponsorship or endorsement by, said
corporation of M&M, its affiliates or subsidiaries, or any
agent, product, service, or commercial listing of M&M,
and is solely included for the purpose of providing tenant
lessee information about this listing to prospective
customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT
ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP
AGENT FOR MORE DETAILS.
Table of Contents
Financial Overview
Offering Terms
Investment Highlights & Overview
Concept/Tenant Overview
Lease Summary
Location Overview
Location Highlights & Overview
Surrounding Aerial Map
Property Photos
Local Map
Map Map
Demographics
FINANCIAL
OVERVIEW
Offering Terms
Purchase Price
NOI
CAP Rate
$1,501,507
$105,105
7.00%
Financial Summary
Price
CAP Rate
Net Operating Income
Price Per SF
Rent Per SF
Building Size
Year Built
Lot Size
Dollar General
826 Highway 59 North
Heavener, OK 74937
$1,501,507
7.00%
$105,105.48
$121.03
$8.47
12,406 SF
2012
1.38 Acres
Representative Photo
 Investment Grade Credit (S&P: BBB) | Lease Guaranteed by Dollar
General Corporate (NYSE: DG)
 Roughly 12 Years Remaining on an Original 15-Year Absolute Triple
Net (NNN) Lease
 3.0% Rental Escalation in Year 11 of the Lease | 10% Rental
Escalations in each Tenant Renewal Option
 Prime Positioning to Serve its Target Market | Limited to No
Competition in the Area
Investment Overview
Marcus & Millichap is pleased to present the exclusive listing for a
Dollar General located at 826 Highway 59 North in Heavener,
Oklahoma. Built in 2012, the property consists of 12,406 square feet of
building space and is situated on a 1.38-acre parcel.
This investment is subject to an absolute triple net (NNN) lease and
has roughly 12 years remaining on an original 15-year lease. This is a
corporate location and is guaranteed by Dollar General corporate
(NYSE: DG), which has an investment grade credit rating (S&P BBB,
Stable). The base rent is $105,105 and is subject to a three percent
(3.0%) increase in year 11 of the lease. Rent is scheduled to increase
by 10 percent in each of the three, five-year tenant renewal options.
Dollar General Corporation has been delivering value to shoppers for
over 75 years. Dollar General helps shoppers Save time. Save money.
Every day!® by offering products that are frequently used and
replenished, such as food, snacks, health and beauty aids, cleaning
supplies, clothing for the family, housewares and seasonal items at low
everyday prices in convenient neighborhood locations. With 12,483
stores in 43 states as of January 29, 2016, Dollar General is among the
largest discount retailers.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
FINANCIAL OVERVIEW
Property Name
Location
Investment Highlights
5
ABOUT DOLLAR GENERAL
Dollar General Corporation has been delivering value to shoppers
for over 75 years. Dollar General helps shoppers Save time. Save
money. Every day!® by offering products that are frequently used
and replenished, such as food, snacks, health and beauty aids,
cleaning supplies, clothing for the family, housewares and
seasonal items at low everyday prices in convenient neighborhood
locations. With 12,483 stores in 43 states as of January 29, 2016,
Dollar General is among the largest discount retailers
Dollar General offers both name brand and generic merchandise
— including off-brand goods and closeouts of name-brand items
— in the same store, often on the same shelf. Although it has the
word "dollar" in the name, Dollar General is not a dollar store.
Most of its products are priced at more than $1.00. However,
goods are usually sold at set price points the range of .50 to 60
dollars, not counting phone cards and loadable store gift cards. In
the United States. In addition to high quality private brands, Dollar
General sells products from America’s most-trusted
manufacturers such as Procter & Gamble, Kimberly-Clark,
Unilever, Kellogg’s, General Mills, Nabisco, Hanes, PepsiCo and
Coca-Cola.
NYSE: DG
The common stock of Dollar General
Corporation is traded on the New York Stock Exchange
under the trading symbol “DG.” The number of
shareholders of record as of March 17, 2016 was 1,879.
Dollar General often serves communities that are too small for
Walmart stores (although many locations are in relatively close
driving distance to a Walmart store or in the same communities
that Walmart is located). It competes in the dollar store format
with national chains Family Dollar and Dollar Tree, regional chains
such as Fred's in the southeast, and numerous independently
owned stores.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
TENANT OVERVIEW
The company acquired the 280 stores of the P.N. Hirsh Division of
Interco, Inc. (now Heritage Home Group) in 1983, and in 1985
added 206 stores and a warehouse from Eagle Family Discount
Stores, also from Interco, Inc. In recent years, the chain has
started constructing more stand-alone stores, typically in areas
not served by another general-merchandise retailer. In some
cases, stores are within a few city blocks of each other.
6
Property Name
Property Type
Ownership
Guarantor
Original Lease Term
Lease Commencement
Lease Expiration
Lease Term Remaining
Lease Type
Roof & Structure
Rental Increases
Options to Renew
Rental Increases in Options
Annualized Operating Data
Dollar General
Net Leased Discount Dollar Store
Fee Simple
Dollar General Corporation
Public (NYSE: DG)
15 Years
2/9/2013
2/29/2028
11.6 Years
Triple Net (NNN)
Tenant Responsible
3% in Year 11 & In Options
Three (3), 5-Year Options
10% in Each Option Period
Lease Year
Annual Rent
Monthly Rent
Current Year
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Year 14
Year 15
Option Periods
Option 1
Option 2
Option 3
$105,105
$105,105
$105,105
$105,105
$105,105
$105,105
$105,105
$108,259
$108,259
$108,259
$108,259
$108,259
$8,759
$8,759
$8,759
$8,759
$8,759
$8,759
$8,759
$9,022
$9,022
$9,022
$9,022
$9,022
$119,085
$130,993
$144,092
$9,924
$10,916
$12,008
Annual Rent
CAP Rate
Purchase Price
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
$105,105
7.00%
$1,501,507
FINANCIAL OVERVIEW
Lease Summary
7
LOCATION
OVERVIEW
Location Highlights
 Strategically Located Three Miles North of U.S. Interstate 40 | Traffic
Counts In Excess of 51,800 Vehicles Per Day
 OK Foods Manufacturing Plant and Heavener Municipal Airport | Less
Than One Mile Away
 Heavener | 45 Miles South of Fort Smith | Second-Largest City in
Arkansas
Heavener, OK
Location Overview
This Dollar General is located at 826 Highway 59 North in Heavener,
Oklahoma. Heavener is a city in Le Flore County, Oklahoma. It is part of the
Fort Smith, Arkansas-Oklahoma Metropolitan Statistical Area. Heavener is
notable for the Heavener Runestone just outside the city limits, which draws
tourists to the town.
Traffic Counts and Demographics
There are approximately 5,784 people within a five-mile radius of this
property and more than 11,302 people within a ten-mile radius. The property
is situated on U.S. Highway 59 North, which is the main thoroughfare into the
center of Heavener. The Oklahoma-Arkansas border is located approximately
ten miles east of the property.
Surrounding Retail and Points of Interest
The subject property is well-positioned on U.S. Highway 59 North next to a
variety of nationally and locally recognized tenants. Sonic, Family Dollar,
O’Reilly Auto Parts, Marvin’s Food Stores, Phillips 66, La Magia Del Trigo,
Green Country Inn, Southern Belle, Subway, and many other retailers are
located in the immediate vicinity. OK Foods has a manufacturing a plant less
than one mile from the subject property, right next to the Heavener Municipal
Airport. Heavener High School, located approximately one mile away, has
over 350 students enrolled. Fort Smith, the second-largest city in Arkansas, is
located approximately 45 miles north of Heavener.
Fort Smith, Arkansas
Fort Smith is the main shopping destination of Western Arkansas and Eastern
Oklahoma. Downtown Fort Smith offers a variety of restaurants, bakeries,
retail stores, museums, and churches. The Park at West End is a retro
amusement park in historic downtown Fort Smith known for its 56- foot
Ferris wheel and covered arcade. Minutes away from the downtown area is
Western Arkansas’ Mountain Frontier which is known for its beautiful
scenery, as well as historic sites and museums.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
LOCATION OVERVIEW
 Major National Tenants in the Surrounding Area Include: Sonic, Subway,
Family Dollar, O’Reilly Auto Parts, Philipps 66
9
SURROUNDING AREA MAP
Southern
Belle
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
10
PROPERTY PHOTOS
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
11
PROPERTY PHOTOS
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
12
LOCAL MAP
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
13
REGIONAL MAP
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment
Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
14
DEMOGRAPHICS
Heavener, OK
In 2014, the population in your selected geography is 11,302. The population has
changed by 3.69% since 2000. It is estimated that the population in your area will be
11,558 five years from now, which represents a change of 2.27% from the current
year. The current population is 52.57% male and 47.42% female. The median age of
the population in your area is 36.1, compare this to the Entire US average which is
37.3. The population density in your area is 35.96 people per square mile.
POPULATION
3-Mile
5-Mile
10-Mile
2010
4,255
6,247
11,996
2014
3,832
5,784
11,302
Income
2019
3,795
5,909
11,559
In 2014, the median household income for your selected geography is $34,825,
compare this to the Entire US average which is currently $51,972. The median
household income for your area has changed by 28.67% since 2000. It is estimated
that the median household income in your area will be $41,967 five years from now,
which represents a change of 20.50% from the current year. The current year per
capita income in your area is $16,519, compare this to the Entire US average, which is
$28,599. The current year average household income in your area is $48,532,
compare this to the Entire US average which is $74,533.
2014 HOUSEHOLD INCOME
Employment
In 2014, there are 1,950 employees in your selected area, this is also known as the
daytime population. The 2000 Census revealed that 40.95% of employees are
employed in white-collar occupations in this geography, and 58.95% are employed in
blue-collar occupations. In 2014, unemployment in this area is 8.53%. In 2000, the
average time traveled to work was 22.1 minutes.
3-Mile
5-Mile
10-Mile
Average
$41,196
$44,075
$48,533
Median
$31,711
$32,818
$34,825
TOP EMPLOYERS IN FORT SMITH
Employers
# of Employees
O.K. Industries
4,748
Whirlpool Corporation
4,200
Baldor Electric Company
2,262
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears
all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus &
Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap
DEMOGRAPHICS
Population
16