Investment OFFERING | $3616000 - 6.50% CAP

Investment OFFERING | $3,616,000 - 6.50% CAP
ulta
East highland road & stadium boulevard, jonesboro, ar
EXP DALLAS
214.522.7200
JOE CAPUTO
[email protected]
BOB MOORHEAD
[email protected]
property. 10,000+ SF building on 1.09+ acre site.
tenant. Lessee: Ulta (NASDAQ: ULTA) | $2.2 billion in revenue over previous 12 month period as of February 2013. Company operates 550 stores in 45 states.
lease structure. New, 10-year, corporate, net lease with a 14% increase to the NOI in year 6.
location. Ulta is located at the corner of East Highland Drive (19,766 Cars / Day) and Stadium Boulevard (30,794 Cars / Day). Ulta is across East Highland Drive
from The Mall at Turtle Creek (732,070 SF). The Mall at Turtle Creek is anchored by Dillard’s, JCPenney, Target, Bed Bath & Beyond, and Best Buy and includes
over 80 additional retail stores. The mall also has Chili’s, Olive Garden, AT&T, and Chick-fil-A outparcels. The subject property is adjacent to Kirkland’s, Office
Depot, and Lifeway. Other nearby big box retailers include a Walmart Supercenter, Lowe’s, Kohl’s, Big Kmart, Steinmart, and Kroger. Arkansas State University
(16,311 Students) is 1.4-miles north of site. The NEA Baptist Health System is currently building a 550,000 SF hospital to the northwest of the subject property.
Table of contents | Disclaimer
ulta
East highland road & stadium boulevard, jonesboro, ar
Disclaimer
PAGE 1:
COVER
PAGE 2:
TABLE OF CONTENTS | DISCLAIMER
PAGE 3:
INVESTMENT | TENANT | LEASE OVERVIEW
PAGE 4:
INCOME & EXPENSES
PAGE 5:
SITE PLAN
PAGE 6:
SITE ELEVATIONS
PAGE 7:
AERIAL PHOTO
PAGE 8:
LOCATION OVERVIEW
PAGE 9-10:
LOCATION MAPS
PAGE 11:
DEMOGRAPHICS
REP PHOTO
EXP Realty Advisors, Inc. (“Agent”) has been engaged as an agent for the sale of the
property located at East Highland Road & Stadium Boulevard, Jonesboro, AR 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 ARKANSAS broker of record:
Flake & kelley commercial
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Investment overview
ulta
East highland road & stadium boulevard, jonesboro, ar
Lease overview
PRICE:
$3,616,000
Leasable Area:
Approximately 10,000 Square Feet
CAP RATE (CURRENT):
6.50%
Initial Lease Term:
10-Years
CAP RATE (YEAR 6):
7.41%
Options to Renew:
3, 5-Year Options to Renew
NET OPERATING INCOME:
$235,000
Projected Rent Commencement:
November 2013
Projected Lease Expiration:
November 2023
BUILDING AREA:
10,000+ Square Feet
Lease Type:
Net Lease
LAND AREA:
1.09+ Acres
Year 1-5 Annual Rent (Current):
$220,000
YEAR BUILT:
2013 (Under Construction)
Year 6-10 Annual Rent:
$253,000
15% Increase
LANDLORD RESPONSIBILITY:
Roof, Structure, &
Year 11-15 Annual Rent (Option 1):
$278,300
10% Increase
Year 16-20 Annual Rent (Option 2):
$292,800
5.2% Increase
Year 21-25 Annual Rent (Option 3):
$336,700
15% Increase
HVAC Replacement
OCCUPANCY:
100%
Tenant’s CAM contribution is $2.00 PSF and increases 3% every year. Actual CAM
expenses are estimated to be $0.50 PSF in Year 1. Net Operating Income includes this
projected net gain of $1.50 PSF or $15,000 / year.
Tenant overview
Roof Warranty in place for 15 Years.
Ulta Salon, Cosmetics, & Fragrance, Inc.
HVAC Warranty in place for 5 Years, the duration of Landlord HVAC responsibility.
ULTA | www.ulta.com | NASDAQ: ULTA
Ulta Salon, Cosmetics & Fragrance, Inc. operates as a beauty retailer that provides prestige, mass, and salon products; and salon services in the United States.
The company offers cosmetics, including products for the face, eyes, cheeks, lips, and nails; haircare products comprising shampoos, conditioners, styling
products, and hair accessories; salon styling tools, such as hair dryers, curling irons, and flat irons; skincare, and bath and body products consisting of products for
the face, hands, and body; and fragrances for men and women. It also provides private label products that comprise Ulta branded cosmetics, skincare, bath and
body products, and haircare products; and other products, which include candles, home fragrance products, and other health and beauty products. As of February
SUBJECT
PROPERTY
2, 2013, the company operated 550 retail stores in 45 states. It also operates full services salons in its stores; and distributes
its products
through operating
PRIOR TO PANDA EXPRESS EXPANSION
ulta.com. The company was founded in 1990 and is based in Bolingbrook, Illinois.
Ulta opened 61 new stores during fiscal 2011, representing a 16% increase in square footage growth and a 30% increase in the number of new stores opened
compared to 47 in fiscal 2010. The company’s strategy is to continue to expand our portfolio of products, brands and services both by capitalizing on the success
of existing vendor relationships and by identifying and developing new vendor relationships. Over the last several years the company added new products from
existing vendors across product categories. Ulta has also added a number of new brands in recent years, most notably in their prestige category which is currently
the beauty industry’s highest growth category. As of February 2013 the company generated $2.2 billion in revenue, net income of $172.6 million, and operating
cash flow of $239 million. Earnings grew by 39.4% over the previous year.
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Income & expenses
ulta
East highland road & stadium boulevard, jonesboro, ar
Sale Price
$3,616,000
Capitalization Rate
6.50%
Total Rentable Area (Square Feet)
10,000
Potential Gross Revenue
Scheduled Base Rental Revene
$220,000
CAM Reimbursement Revenue
$2.00 PSF
$20,000
Real Estate Tax Reimbursement Revenue
$1.02 PSF
$10,200
Insurance Reimbursement Revenue
$0.56 PSF
$5,600
Efffecive Gross Revenue
$255,800
Operating Expenses
Estimated CAM Expenses
Estimated Real Estate Taxes
Estimated Insurance
Total Operating Expense
Equals: Net Operating Income
$5,000
$10,200
$5,600
$20,800
$235,000
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SITE PLAN
ulta
East highland road & stadium boulevard, jonesboro, ar
5
SITE elevations
ulta
East highland road & stadium boulevard, jonesboro, ar
6
Aerial photo
ulta
East highland road & stadium boulevard, jonesboro, ar
Jonesboro Country Club
Stadium Boulevard (30,794 Cars / Day)
South Caraway Road (25,000 Cars / Day)
Jonesboro Municipal Airport
East Highland Drive (19,766 Cars / Day)
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Location overview
ulta
East highland road & stadium boulevard, jonesboro, ar
IMMEDIATE TRADE AREA
Ulta is located at the corner of East Highland Drive (19,766 Cars / Day) and
Stadium Boulevard (30,794 Cars / Day). Stadium Drive is a primary arterial
road and provides direct access between the subject property and Arkansas
State University (16,311 Students) which is located 1.4-miles to the north. East
Highland Drive traverses the eastern 2 thirds of Jonesboro and is one of the
city’s main retail corridors.
Ulta is across East Highland Drive from The Mall at Turtle Creek (732,070 SF).
The Mall at Turtle Creek is anchored by Dillard’s, JCPenney, Target, Bed Bath
& Beyond, and Best Buy and includes over 80 additional retail stores. The mall
also has Chili’s, Olive Garden, AT&T, and Chick-fil-A outparcels. The subject
property is adjacent to Kirkland’s, Office Depot, and Lifeway. Other nearby big
box retailers include a Walmart Supercenter, Lowe’s, Kohl’s, Big Kmart,
Steinmart, and Kroger.
Arkansas State University provides the immediate trade area with a sizable and
permanent retail customer base. Consumer spending is projected to grow by
10.2% over the 5-year period ending in 2016 within a 1-mile radius of the site.
Additionally, the population within this radius is projected to grow by 7.7%
within a 3-mile radius over this time period. The NEA Baptist Health System is
currently building a 550,000 SF hospital to the northwest of the subject
property. This $400 million project is the single largest investment made by
NEA Baptist in any community and the largest health care investment in
Arkansas in the last decade.
JONESBORO, AR
Jonesboro is a city in northeast Arkansas with a population of 67,263, making it
the 5th largest city in the state. Jonesboro is centrally located with easy access
to other major markets, including America's Distribution Center, Memphis,
Tennessee. Jonesboro provides a positive business environment with a
diversified economic foundation. A well qualified workforce, low cost utilities,
the training capabilities of Arkansas State University and an overall low cost of
doing business have drawn numerous companies to Jonesboro. Additionally,
the high-quality educational system, excellent healthcare facilities, abundant
retail opportunities, and numerous recreational and cultural activities have
contributed to significant recent gains in population. Over the 2000s Jonesboro
grew by 21.2%.
There are more than 100 industrial facilities in the Jonesboro area. The city
boasts 4 large-scale industrial parks, and a high-quality transportation
infrastructure. Jonesboro’s industrial community includes major U.S. firms such
as Nestlé, Nicepak, Crane Composites, Nordex USA, Butterball, Frito-Lay,
Hytrol, Post Cereals, Riceland Foods, Thomas & Betts, Great Dane Trailers,
Quebecor World, and Alberto-Culver. Growth from existing industries accounts
for 80% of all new jobs. A strong business retention strategy and support
system is key to the success of existing industry. Jonesboro was ranked by
No. 49 by Forbes Magazine in their ranking of “Best Small Places For
Businesses and Careers.” Additionally, Jonesboro has the 14th lowest cost of
living amongst cities used in this poll.
JONESBORO-PARAGOULD COMBINED STATISTICAL AREA
The Jonesboro-Paragould Combined Statistical Area (CSA) is made up of 3
counties in northeastern Arkansas and has a population of 163,116. The CSA
is a regional center for manufacturing, agriculture, medicine, education, and
trade. The Jonesboro CSA has been recognized as the 7th strongest region in
the nation for manufacturing. Due in part to local manufacturing growth the
CSA population grew by 12.4% over the 2000s. The prominence of education,
particularly Arkansas State University, in the regional economy provides the
CSA with economic stability.
Paragould is located 21.7-miles north of Jonesboro, AR and has a population
of 26,113. As the host to Arkansas Methodist Medical Center (127 Beds),
Paragould plays a significant role in the healthcare sector of the regional
economy. Paragould also contributes significantly to the education industry
and its local economic impact. The city is home to Arkansas State University
Paragould, Arkansas Northeastern College, Black River Technical College, and
Crowley’s Ridge College.
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Location map
ulta
East highland road & stadium boulevard, jonesboro, ar
Nashville
Jonesboro
Memphis
Little Rock
9
Location map
ulta
East highland road & stadium boulevard, jonesboro, ar
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Demographics
ulta
East highland road & stadium boulevard, jonesboro, ar
Demographic snapshot
Radius
1 Mile
3 Mile
5 Mile
2016 Projection
5,656
44,241
70,937
2011 Estimate
5,335
41,072
65,781
2010 Census
5,329
40,309
64,573
Growth 2011-2016
6.00%
7.70%
7.80%
Growth 2010-2011
0.10%
1.90%
1.90%
2016 Projection
2,246
17,933
27,579
2011 Estimate
2,149
16,629
25,601
2010 Census
2,150
16,304
25,114
Growth 2011-2016
4.50%
7.80%
7.70%
Growth 2010-2011
0.00%
2.00%
1.90%
742
7,206
13,578
Population:
Households:
Owner Occupied
1,407
9,423
12,024
2011 Avg Household Income
Renter Occupied
$39,509
$46,808
$52,616
2011 Med Household Income
$27,683
$32,251
$36,456
2011 Per Capita Income
$15,989
$20,776
$21,934
Income Less than $15,000
484
3,851
5,183
Income $15,000 - $24,999
465
2,737
3,953
Income $25,000 - $34,999
368
2,216
3,192
Income $35,000 - $49,999
325
2,370
3,608
Income $50,000 - $74,999
214
2,468
4,113
Income $75,000 - $99,999
154
1,414
2,461
Income $100,000 - $149,999
107
1,076
2,009
Income $150,000 - $199,999
23
279
558
Income $200,000+
10
219
524
Arkansas State University, Jonesboro, AR
2011 Households by Household Inc:
Dell World
The Mall
Headquarters
at Turtle Creek,
in Round
Jonesboro,
Rock, Texas
AR
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