Pollo Tropical Ground Lease

offering memorandum.
Pollo Tropical Ground Lease |
San Marcos, TX (Austin MSA)
Adjacent to In-N-Out
$3,383,000
5.00% CAP Rate
20-Year Absolute NNN
••New
Ground Lease
••
•Adjacent
• to Brand New In-N-Out
••Burger
New 2016 Construction
••Brand
in One of the Fastest
••Located
Growing Cities in the Nation
Proximity to Texas State
••Close
University – 38,000+ Students
Corner Location with
••Excellent
Great Visibility & Easy Access
••
Fixed 10% Increases Every Five Years
No Landlord Responsibilities
Interstate 35 & Aquarena Springs –
Collective 139,000 AADT
FILE PHOTO
This property is listed in conjunction with Texas-licensed real estate broker Delta Commercial.
www.maffiateam.com
Disclaimer
Newmark Cornish & Carey (“Broker”) has been retained on an exclusive basis to
market the property described herein (“Property”). Broker has been authorized
by the Seller of the Property (“Seller”) to prepare and distribute the enclosed
information (“Material”) for the purpose of soliciting offers to purchase from
interested parties. More detailed financial, title and tenant lease information may
be made available upon request following the mutual execution of a letter of intent
or contract to purchase between the Seller and a prospective purchaser. You are
invited to review this opportunity and make an offer to purchase based upon your
analysis. If your offer results in the Seller choosing to open negotiations with you,
you will be asked to provide financial references. The eventual purchaser will be
chosen based upon an assessment of price, terms, ability to close the transaction
and such other matters as the Seller deems appropriate.
The Material is intended solely for the purpose of soliciting expressions of interest
from qualified investors for the acquisition of the Property. The Material is not to be
copied and/or used for any other purpose or made available to any other person
without the express written consent of Broker or Seller. The Material does not
purport to be all-inclusive or to contain all of the information that a prospective
buyer may require. The information contained in the Material has been obtained from
the Seller and other sources and has not been verified by the Seller or its affiliates.
The pro forma is delivered only as an accommodation and neither the Seller, Broker,
nor any of their respective affiliates, agents, representatives, employees, parents,
subsidiaries, members, managers, partners, shareholders, directors, or officers,
makes any representation or warranty regarding such pro forma. Purchaser must
make its own investigation of the Property and any existing or available financing,
and must independently confirm the accuracy of the projections contained in the
pro forma.
Seller reserves the right, for any reason, to withdraw the Property from the market.
Seller has no obligation, express or implied, to accept any offer. Further, Seller has
no obligation to sell the Property unless and until the Seller executes and delivers
a signed agreement of purchase and sale on terms acceptable to the Seller, in
its sole discretion. By submitting an offer, a purchaser will be deemed to have
acknowledged the foregoing and agreed to release Seller and Broker from any
liability with respect thereto.
Table of Contents
Property Information
1
Tenant Information
2
Site Plan
3
Aerials
4
About the Area
7
Demographics
9
Property walk-throughs are to be conducted by appointment only. Contact Broker
for additional information.
Michael Maffia
Executive Vice President
415.445.5144
[email protected]
CA RE License #01340853
Putnam Daily
Vice President
415.445.5107
[email protected]
CA RE License #01750064
www.maffiateam.com
Property Information
Location
Net Operating Income
The property is located at the southwest corner of Interstate 35 and
Aquarena Springs Drive in San Marcos, Texas.
Year
Annual Rent
Return
1-5
$169,147
5.00%
Lot Size
6-10
$186,062
5.50%
Approximately 1.13 acres, or 49,375 square feet. Only the land is for
sale.
11-15
$204,668
6.05%
16-20
$225,135
6.65%
Improvements
21-25
(Option 1)
$247,648
7.32%
Construction will be completed in June 2016 of an approximately
3,548 square foot quick-service restaurant building with drive thru
component for Pollo Tropical. The improvements are being built and
will be owned by the tenant. Upon expiration or termination of the
lease, title to all such improvements shall become vested in landlord.
The improvements are not for sale.
26-30
(Option 2)
$272,413
8.05%
31-35
(Option 3)
$299,654
8.86%
36-40
(Option 4)
$329,620
9.74%
Parking
Price: $3,383,000 (5.00% Return)
Approximately 62 parking spaces are available on site.
Lease
Leased to Pollo Operations, Inc. for 20 years from an estimated
rent commencement date on September 15, 2016, at an initial annual
rent of $169,147. There are four five-year options to renew the lease.
The annual rent increases by 10% every five years throughout the
initial term and option periods. The lease is net, with the tenant
responsible for taxes, insurance, and all maintenance.
Tenant shall not be required to perform any item of maintenance,
repair and/or replacement to the roof, plumbing system, mechanical
systems, electrical system, foundation, HVAC, and structural
portions of the premises, the cost of which may exceed $50,000
during the last two years of the initial term or during the last two
years of any option year.
Right of First Refusal
Tenant shall have the right of first refusal to purchase the property
on the same terms and conditions as those of any bona fide offer
received by the landlord within 15 days after receiving notice of
such offer.
Financing
The property will be delivered free and clear of permanent
financing.
Note
The above income is an estimate and does not provide for all potential
costs and expenses (i.e., maintenance, repair, etc.) that may be required of
the owner. Any reserves set forth herein are merely estimates and not based
on any experience, physical inspection, or prior knowledge. All prospective
purchasers are strongly advised to make an independent investigation to
determine their estimate of costs and expenses prior to entering into an
agreement to purchase.
1
Tenant Information
Pollo Operations, Inc., a subsidiary
of Fiesta Restaurant Group, Inc.,
owns and operates the Pollo
Tropical restaurant chain which
specializes in the cuisine of the
Caribbean. Its restaurants serve
grilled chicken that is marinated with tropical spices and fruit
juices, along with such Caribbean side dishes as fried bananas,
yucca, and black beans and rice. It also offers salads and dessert
items. The chain is headquartered in Kendall, Miami-Dade County,
Florida. It owns and operates more than 160 locations in the United
States (Florida, Georgia, Tennessee, and Texas) plus four licensed
units located on college campuses in Florida. The company has
more than 30 franchised locations in Puerto Rico, the Bahamas,
Costa Rica, Dominican Republic, Ecuador, Honduras, Panama,
Trinidad & Tobago, Venezuela, and Guatemala. The first Pollo
Tropical restaurant opened in 1988 in Miami, Florida and has been
expanding since with a recently new market design for all of its new
restaurants, while existing stores will see a remodel by end of 2018.
Fiesta Restaurant Group, Inc. plans to open a total of 30 to 34 Pollo
Tropical restaurants and up to four Taco Cabana restaurants in 2016.
Fiesta Restaurant Group, Inc. owns, operates and franchises the
Pollo Tropical and Taco Cabana restaurant brands with more than
320 company-owned and operated restaurants and more than 49
franchised restaurants in the U.S., Puerto Rico, the Bahamas, Costa
Rica, Ecuador, Honduras, Panama, Trinidad & Tobago, Venezuela,
and Guatemala. The brands specialize in the operation of fastcasual, ethnic restaurants that offer distinct flavors with broad
appeal at a compelling value. Both brands feature made-fromscratch cooking, fresh salsa bars, drive-thru service and catering.
Fiesta common stock is traded on the NASDAQ Global Select
Market under the symbol FRGI.
For the fiscal year ended January 3, 2016, Fiesta Restaurant Group,
Inc. reported revenue of $687 million with net income of $38.54
million and total stockholder equity of $243.98 million. Year over
year sales from 2014 to 2015 increased by 7.80%.
For additional information, see www.pollotropical.com and
www.frgi.com.
FILE PHOTO
2
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Site Plan
AQUARENA SPRINGS DRIVE
BURGER
3
Aerial | South View
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Middle School
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4
Aerial | Southwest View
Hernandez
Elementary
Dezavala
Elementary Owen Goodnight
Middle School
Hays County
Government Center
/(107,000 AA
DT
)
Texas State
University
Bobcat
Stadium
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Texas State
Track and Field
Texas State- San Marcos
Golf Course
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Aerial | West View
Hernandez
Elementary
Texas State
University
Hays County
Government Center
Strahan
Coliseum
Bobcat
Stadium
n
Aquare
Texas State
Track and Field
Texas State- San Marcos
Golf Course
Post
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6
About the Area
General Overview
San Marcos is situated roughly 30 miles southwest of Austin
and 45 miles northeast of San Antonio on Interstate 35. In
2014, the population was estimated to be 58,892, a 7.9%
increase from 2013. San Marcos is considered to be one of
the fastest growing cities in the nation – the U.S. Census
Bureau named San Marcos the fastest growing city in the
United States in 2013 and 2014. Although the majority of San
Marcos lies in Hays County (and San Marcos is the county
seat), small portions of the city extend into neighboring
Caldwell and Guadalupe counties. While the Hays and
Caldwell county portions are part of the Austin-Round Rock
Metropolitan Statistical Area (MSA), the small portion in
Guadalupe County is part of the San Antonio MSA. The 2014
U.S. Census Estimate placed the population of the AustinRound Rock MSA at over 2 million people, making it the 35th
largest metropolitan area in the nation while boasting the
16th largest GDP per Capita. The greater Austin area is well
known for its concentration of high-tech companies.
Interstate 35 connects San Antonio with Austin and is also
the major transportation corridor connecting Mexico, the
United States, and Canada. Furthermore, San Marcos is
only minutes away from Interstate Highway 10, the vital
transportation link between the east and west coasts. As a
result of its proximity to both major interstates, three motor
freight carrier terminals are located in San Marcos serving
several motor freight lines. San Marcos has expansive rail
service offering both cargo and passenger service. Union
Pacific Railroad operates one of the nation’s major railfreight systems, linking the Pacific Coast and the Texas Gulf
Coast with other major U. S. cities. San Marcos has two rail
sidings for shipping and receiving cargo and piggyback and
switching services are available in nearby San Antonio.
San Marcos is a thriving city that fosters a business-friendly
environment and implements lower taxes than nearby cities.
The city has partnered with new and existing businesses
to help facilitate the expansion or renovation of existing
structures and to build new facilities. The city offers various
types of incentives that are designed to help fill a financial
gap associated with a small business development or to help
attract a large employee-intensive development to expand
or locate in San Marcos. The City remains committed to
working with private development on projects that will
generate economic growth and jobs for the region.
About the Area
Site Information
The subject property is ideally located at the southwest
corner of Aquarena Springs Drive (32,000 AADT) and
Interstate 35 (107,000 AADT) approximately two miles
west of downtown San Marcos. The property is easily
accessible at this signalized intersection, as it benefits
from its ingress/egress from both Aquarena Springs
Drive and Interstate 35 Frontage Road (26,000 AADT),
with its highly visible signage viewed by more than a
collective average of 165,000 vehicles per day from
the intersection. The property’s excellent location in a
highly travelled node provides substantive consumer
draw to the immediate area, as is evident by the several
national food users in proximity, such as McDonald’s,
Wendy’s, Sonic Drive-In, Subway, Popeyes, IHOP, and
Logan’s Roadhouse, among others. Additionally, In-NOut is set to open its first location in Hays County at
the parcel directly adjacent to Pollo Tropical, further
contributing to the traffic flow to the area. Two blocks
south of the property is Springtown Center, which
is currently undergoing renovations; the center will
include new tenants such as Gold’s Gym and The Spot,
a dine-in movie theater. Endeavor Real Estate Group
has invested more than $27 million to renovate the
entire Springtown Center, with the project expected for
completion in late 2017.
Prominent educational institutions in the area include
Texas State University, which is located approximately
one mile west of the property along Aquarena Springs
Drive. The university has over 36,000 students
enrolled, with over 30,000 students living off campus,
which is a strong generator of business for surrounding
businesses. Since its establishment in 1899, Texas State
University has grown to become the largest institution
in the Texas State University System and the fourthlargest university in Texas. The campus consists of
245 buildings on 492 acres of land. The university
consistently supplies local employers with an ample,
and well-educated workforce.
Near Texas State University are a number of residential
projects lined up for development, such as Paso Robles
(3,450 dwellings), La Cima (2,000 dwellings), Highpoint
Communities (1,845 dwellings), South End (750
dwellings). Other recent new development includes the
230,000 square foot Hays County Government Center
approximately four miles southwest of the property.
Demographics
I-35 & Aquarena Springs Dr, San Marcos, TX 78666
1 mile
3 miles
5 miles
2010 Total Population
10,717
39,349
56,721
2015 Total Population
11,883
43,610
63,546
2020 Total Population
13,749
49,041
72,048
2015-2020 Annual Rate
2.96%
2.38%
2.54%
2015
$32,943
$38,608
$47,051
2020
$37,632
$43,793
$53,358
2015
$145,370
$152,957
$173,980
2020
$214,103
$208,904
$226,012
Population Summary
Travis
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Texas State University
Golf Course
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Average Household Income
BURGER
SPRINGTOWN CENTER
Median Home Value
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Major Employers in San Marcos, TX
# of Employees
Texas State University
2,780
Prime Outlets San Marcos
2,100
Tanger Factory Outlet Center
1,540
San Marcos CISD
1,114
Hays County
850
Hunter Industries
650
Central Texas Medical Center
650
HEB Distribution Center
578
City of San Marcos
517
Telenetwork Partners, LTD
500
AA
DT
)
9
Approved by the Texas Real Estate Commission for Voluntary Use
Texas law requires all real estate licensees to give the following information
about brokerage services to prospective buyers, tenants, sellers and landlords.
Information About Brokerage Services
B
efore working with a real estate broker, you should
know that the duties of a broker depend on whom
the broker represents. If you are a prospective
seller or landlord (owner) or a prospective buyer or
tenant (buyer), you should know that the broker who lists
the property for sale or lease is the owner’s agent. A
broker who acts as a subagent represents the owner in
cooperation with the listing broker. A broker who acts as
a buyer’s agent represents the buyer. A broker may act as
an intermediary between the parties if the parties
consent in writing. A broker can assist you in locating a
property, preparing a contract or lease, or obtaining
financing without representing you. A broker is obligated
by law to treat you honestly.
IF THE BROKER REPRESENTS THE OWNER:
The broker becomes the owner’s agent by entering into an
agreement with the owner, usually through a written listing agreement, or by agreeing to act as a subagent by
accepting an offer of subagency from the listing broker. A
subagent may work in a different real estate office. A
listing broker or subagent can assist the buyer but does
not represent the buyer and must place the interests of
the owner first. The buyer should not tell the owner’s
agent anything the buyer would not want the owner to
know because an owner’s agent must disclose to the
owner any material information known to the agent.
IF THE BROKER REPRESENTS THE BUYER:
The broker becomes the buyer’s agent by entering into an
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can assist the owner but does not represent the owner
and must place the interests of the buyer first. The owner
should not tell a buyer’s agent anything the owner would
not want the buyer to know because a buyer’s agent must
disclose to the buyer any material information known to the
agent.
IF THE BROKER ACTS AS AN INTERMEDIARY:
A broker may act as an intermediary between the parties
if the broker complies with The Texas Real Estate License
Act. The broker must obtain the written consent of each
party to the transaction to act as an intermediary. The
written consent must state who will pay the broker and, in
conspicuous bold or underlined print, set forth the broker’s
obligations as an intermediary. The broker is required to
treat each party honestly and fairly and to comply with
The Texas Real Estate License Act. A broker who acts
as an intermediary in a transaction:
(1) shall treat all parties honestly;
(2) may not disclose that the owner will accept a
price less than the asking price unless authorized in
writing to do so by the owner;
(3) may not disclose that the buyer will pay a price
greater than the price submitted in a written offer
unless authorized in writing to do so by the buyer; and
(4) may not disclose any confidential information or
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With the parties’ consent, a broker acting as an
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Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records.
Buyer, Seller, Landlord or Tenant
Date
Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question
or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 or 512-465-3960.
01A
EQUAL HOUSING
OP P O RT U N I T Y
TREC No. OP-K
FILE PHOTO
901 Mariners Island Boulevard, Suite 120
San Mateo, CA 94404
Michael Maffia
Executive Vice President
415.445.5144
[email protected]
CA RE License #01340853
Putnam Daily
Vice President
415.445.5107
[email protected]
CA RE License #01750064
www.maffiateam.com