Academy Sports + Outdoors

OFFERING
MEMORANDUM
Academy Sports + Outdoors
1351 Highway 35, Round Rock, TX 78664
Looking North
Offering Statement/Disclaimer
S.
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OFFERING
MEMORANDUM
Academy Sports + Outdoors
1351 Highway 35, Round Rock, TX 78664
Exclusively Offered By:
NET LEASE INVESTMENT SERVICES
Chuck Klein
Kevin Held
858.546.5473
858.546.5428
[email protected]
CA Lic. 01522766
[email protected]
CA Lic. 01240358
John Orlando
[email protected]
760.431.4220
CA Lic. 01248992
In Cooperation With:
Bret Bunnett
[email protected]
4350 La Jolla Village Drive, Suite 500, San Diego, CA 92122
T 858.546.5400 F 858.630.6320
cassidyturley.com/sandiego
Offering Statement/Disclaimer
Cassidy Turley San Diego (hereinafter “CTSD”) has
been retained as exclusive advisor to the Seller for
the sale of the Academy Sports + Outdoors (the
“Property”), approximately 67,522 square feet on
7.38 acres located at 1351 South Interstate 35,
Round Rock, Texas.
This Offering has been prepared by CTSD for use
by a limited number of parties and does not purport
to provide a necessarily complete summary of the
Property or any of the documents related thereto,
nor does it purport to be all-inclusive or to contain
all of the information which prospective investors
may need or desire. All projections have been
developed by CTSD, the Owner, and designated
sources and are based upon assumptions relating
to the general economy, competition, and other
factors beyond the control of the Owner and CTSD,
therefore, are subject to variation. No representation
is made by CTSD or Owner as to the accuracy
or completeness of the information contained
herein, and nothing contained herein is, or shall
be relied on as, a promise or representation as to
the future performance of the Property. Although
the information contained herein is believed to
be correct, Owner and its employees disclaim
any responsibility for inaccuracies and expect
prospective purchasers to exercise independent
due diligence in verifying all such information.
Further, CTSD, Owner, and its employees disclaim
any and all liability for representations and
warranties, expressed and implied, contained in, or
for omitted from, this Investment Offering or any
other written or oral communication transmitted
or made available to the recipient. This Offering
does not constitute a representation that there has
been no change in the business or affairs of the
Property or the Owner since the date of preparation
of the package. Analysis and verification of the
information contained in this package is solely the
responsibility of the prospective purchaser.
Additional information and an opportunity to inspect
the Property will be made available upon written
request to interested and qualified prospective
investors.
Owner and CTSD each expressly reserve the
right, at their sole discretion, to reject any and
all expressions of interest or offers regarding the
Property and/or terminate discussions with any
entity at any time with or without notice. Owner
shall have no legal commitment or obligation to any
entity reviewing this Offering or making an offer to
purchase the Property unless and until a written
agreement for the purchase of the Property has
been fully executed, delivered, and approved by
Owner and its legal counsel, and any conditions to
Owner’s obligations thereunder have been satisfied
or waived. CTSD is not authorized to make any
representations or agreements on behalf of Owner.
This Offering and the contents, except such
information which is a matter of public record
or is provided in sources available to the public
(such contents as so limited herein are called
the “Contents”), are of a confidential nature.
By accepting the package, you agree (i) to hold
and treat it in the strictest confidence, (ii) not
to photocopy or duplicate it, (iii) not to disclose
the package or any of the contents to any other
entity (except to outside advisors retained by you,
if necessary, for your determination of whether or
not to make a proposal and from whom you have
obtained an agreement of confidentiality) without
the prior written authorization of Owner or CTSD,
(iv) not use the package or any of the contents in
any fashion or manner detrimental to the interest
of Owner or CTSD, and (v) to return it to CTSD
immediately upon request of CTSD or Owner.
If you have no further interest in the Property,
please return this Investment Offering forthwith.
4350 La Jolla Village Drive, Suite 500
San Diego, CA 92122
T 858.546.5400 F 858.630.6320
cassidyturley.com/sandiego
Executive Summary
OFFERING SUMMARY
Tenant:
Academy, Ltd.
Rent Schedule:
Location:
1351 South Interstate 35
Round Rock, TX 78664
Term
APN:
R-16-4432-000A-0002
Building Size:
~67,522 square feet
Land Size:
~7.38 acres
Year Built:
2006
Rent Commencement:
March 8, 2002
Primary
Primary
Option 1
Option 2
Option 3
Option 4
Lease Expiration:
December 31, 2022
Lease Term:
Twenty (20) years
(~9 years remaining)
Options:
Four (4) five (5) year options
Rent Increases:
7.50% every 5 years
Lease Type:
Triple Net (NNN)
Landlord Responsibilities:
Roof, structure and foundation
Net Operating Income:
$634,707
Offering Price:
$10,578,450
Cap Rate:
6%
Financing:
Buyer to either pre-pay the existing
loan or obtain new financing with
Wells Fargo per the terms in the
following financial analysis
Years
11
16
21
26
31
36
-
15
20
25
30
35
40
Annual
Rent
$634,707
$681,972
$733,289
$787,982
$847,401
$910,872
Date of
Increase
4/1/17
4/1/22
4/1/27
4/1/32
4/1/37
%
Increase
7.55%
7.45%
7.52%
7.46%
7.54%
7.49%
Unleveraged
Return
6.00%
6.45%
6.93%
7.45%
8.01%
8.61%
Academy Sports + Outdoors / San Antonio TX / 1
Executive Summary
CASH FLOW ANALYSIS
Loan Amount:
LTV:
Interest Rate:
Term:
Amortization:
Equity Required:
Purchase Price:
Cap:
9 Yr Average Total Return:
For more information regarding the available
financing options from Wells Fargo please contact:
$ 6,875,993
65%
4.60%
9
25
$ 3,702,458
$ 10,578,450
6.0%
10.46%
Paul Phillips
Wells Fargo Bank N A
Business Banking Specialist
Office: (760) 479-2727
Cell: (951) 239-7150
#########
[email protected]
$
Holding Year
Year
Annual Base Rent
Debt Service
Cash Flow
$
$
$
Cash Flow After Debt B.T.
C/C Return B.T.
Principal Reduction
Principal Balance
Total Return B.T.
$
Total Return B.T. (%)
$
$
$
1
2014
634,707 $
(463,324) $
171,383 $
2
2015
634,707 $
(463,324) $
171,383 $
$
3
2016
634,707 $
(463,324) $
171,383 $
$
511,479
4
2017
670,156 $
(463,324) $
206,832 $
$
5
2018
681,972 $
(463,324) $
218,648 $
$
6
2019
681,972 $
(463,324) $
218,648 $
$
7
2020
681,972 $
(463,324) $
218,648 $
$
8
2021
681,972 $
(463,324) $
218,648 $
171,383
4.63%
153,348
6,722,644
324,731
171,383
4.63%
$ 160,553
$ 6,562,091
$ 331,936
171,383
4.63%
$ 168,096
$ 6,393,995
$ 339,479
206,832
5.59%
$ 175,994
$ 6,218,002
$ 382,825
218,648
5.91%
$ 184,262
$ 6,033,740
$ 402,910
218,648
5.91%
$ 192,919
$ 5,840,821
$ 411,567
218,648
5.91%
$ 201,983
$ 5,638,838
$ 420,631
$
218,648
5.91%
$ 211,473
$ 5,427,365
$ 430,121
8.77%
8.97%
9.17%
10.34%
10.88%
11.12%
11.36%
11.62%
9
2022
681,973
(463,324)
218,649
$
218,649
5.91%
$ 221,408
$ 5,205,957
$ 440,057 $
11.89%
Although Cassidy Turley believes the information contained herein to be accurate and reliable, we do not guarantee its
accuracy or completeness. Therefore you should make your own independent assessments, investigations and projections
regarding the properties and their suitability as investments. You should always confer with your own consultants, including
legal counsel, accountants and other advisors and should not rely upon material provided by Cassidy Turley.
Other Loan Terms:
· Loan Term to be co-terminous with lease expiration subject to loan extension and rate re-set upon tenant exercising option
· Loan is full recourse to the Borrower
· Borrower must meet the underwriting requirements of Wells Fargo (contact broker for details)
Academy Sports + Outdoors / San Antonio TX / 2
3,484,2
Executive Summary
PROJECT HIGHLIGHTS
Rare Austin MSA single tenant offering
• Austin ranked #1 “Fastest Growing Cities” 2012 by Forbes
• Austin economy #1 for US for 2013-2014 growth projections
Prime freeway off-ramp location along Interstate 35, which is the main
north south corridor through the Austin MSA
This is a well-seasoned store for Academy Sports + Outdoors, as they
have been at this location for over 11 years
Annual Base Rent increases of 7.50% every 5 years, provides for a
growing income stream
Round Rock is a major center for economic growth in Central Texas
• Dell’s international headquarters, employing over 16,000 people,
are located in Round Rock, which is in close proximity to the
subject property
• Round Rock has one of the lowest property tax rates and utility
costs in the region
Strong Credit Tenant
• Academy Sports had revenues of $2.7 Billion (2011)
• 170 + locations with strong presence in Texas and the Southeast
Looking South
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Academy Sports + Outdoors / San Antonio TX / 4
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Academy Sports + Outdoors / San Antonio TX / 5
Tenant Information
2011 Revenue ($ Bil):
$2.70
# of locations (2013):
170+
# of employees (2011):
17,000+
Company Profile:
Academy Sports + Outdoors is a premier sports, outdoor and
lifestyle retailer with a broad assortment of quality hunting,
fishing, and camping equipment and gear along with sports and
leisure products, footwear, apparel and much more. The Texasbased company operates over 170 stores. The Academy Sports
+ Outdoors philosophy is to deliver an unparalleled shopping
experience by providing convenience, offering a broad selection
of quality products, delivering exceptional customer service and
selling the right stuff at everyday low prices.
The Company seeks to meet the recreational, athletic and lifestyle
needs of the entire family. Academy has a value-based, unique,
diverse assortment of recognized brand names and private label
merchandise tailored to the taste of the local markets they serve.
Academy adheres to an Every Day Low Price strategy, which
drives significant customer traffic to the retail stores and has
insulated them during turbulent economic times. The Company
has a “never out” philosophy on core merchandise. As a result
of these qualities, they have successfully built strong customer
loyalty and brand awareness.
Source: Hoovers, a D&B Company & Yahoo Biz
Academy Sports + Outdoors / San Antonio TX / 6
Looking West
MCN
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. 17,0
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CPD
175,000
S. MAYS ST. - 18,100 CPD
Academy Sports + Outdoors / San Antonio TX / 7
Looking Southeast
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Academy Sports + Outdoors / San Antonio TX / 8
Area Description
ROUND ROCK - AUSTIN
Round Rock is a city in the state of Texas, within the Austin–Round
Rock metropolitan area and Williamson County. The city is located in the
Central Texas Hill Country - 15 miles north of Austin, and 10 miles south
of Georgetown. The 2010 census places the population at 99,887.
Cisco Systems, eBay/PayPal, Intel Corporation, National Instruments,
Samsung Group and many more.
The City of Round Rock has maintained a high quality of life while
becoming a major center for economic growth in Central Texas, with
industry clusters in clean energy, advanced manufacturing, life sciences
and computer/software development.
In August 2008, Money magazine named Round Rock as the seventhbest American small city in which to live. Round Rock was the only Texas
1¬
174
«
city to make the Top 10. In a CNN article dated July 1, 2009, Round
Rock was listed as the second-fastest growing city in the country, with a
population growth of 8.2% in the preceding year. Finally, the CQ Press
recently released its City Crime Rankings of 2011-2012, and Round
Rock ranks 11th safest among US cities with a population greater than
100,000, and 2nd safest in the state.
Austin was voted “America’s No.1 College Town” by the Travel Channel.
Over 43 percent of Austin residents age 25 and over hold a bachelor’s
degree, while 16 percent hold a graduate degree. As of 2009, greater
Austin ranks eighth among metropolitan areas in the United States for
bachelor’s degree attainment with nearly 39 percent of area residents
971
over 25 holding a bachelor’s degree.
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29
Taylor
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Creek
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Cedar
Park
1431
Austin is the capital city of the state of Texas and the seat of Travis
County. Located in Central Texas on the eastern edge of the American
Southwest, it is the fourth-largest city in Texas and the 13th most
populous city in the United States.
Jollyville
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734
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1
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95
Round
) Rock
45
620
2244
79
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Austin is the largest component of the Austin Round Rock MSA. Austin
is considered to be a major center for high tech. Thousands of graduates
each year from the engineering and computer science programs at The
University of Texas at Austin provides a steady source of employees
that help to fuel Austin’s technology and defense industry sectors. The
metro Austin area has much lower housing costs than Silicon Valley, but
much higher than many parts of rural Texas. Austin’s largest employers
include the Austin Independent School District, the City of Austin, Dell,
the U.S. Federal Government, IBM, St. David’s Healthcare Partnership,
Seton Family of Hospitals, the State of Texas, Texas State University–San
Marcos, and The University of Texas. Other high-tech companies with
12
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operations in Austin include 3M, Apple Inc., Hewlett-Packard, Google,
0 1.252.5
Pflugerville
Wells
Branch
¬
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973
¬
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130
§
¦
¨
£
¤
35
290
Austin
£
¤
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183
Austin-Bergstrom
International
Airport
¬
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1826
5
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133
Georgetown
7.5
10
Miles
1704
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969
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71
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967
Copyright:© 2009 ESRI, Sources: Esri, GEBCO, NOAA, National Geographic, DeLor
Geonames.org, and other contributors
Area Description
DEMOGRAPHICS 2012
1 mi
3 mi
5 mi
Summary
Population
Households
Families
Average Household Size
Owner Occupied Housing Units
Renter Occupied Housing Units
Median Age
12,884
4,735
2,889
2.72
2,037
2,699
31.1
81,561
30,269
19,908
2.68
15,919
14,350
31.8
206,167
74,385
51,722
2.76
45,283
29,102
32.5
Trends: 2012-2017 Annual Rate
Population
Households
Families
Owner Occupied Housing
Median Household Income
2.98%
3.14%
3.36%
3.85%
1.97%
2.60%
2.71%
2.90%
3.24%
1.70%
2.75%
2.79%
3.03%
3.22%
1.42%
Households by Income
<$15,000
$15,000 - $24,999
$25,000 - $34,999
$35,000 - $49,999
$50,000 - $74,999
$75,000 - $99,999
$100,000 - $149,999
$150,000 - $199,999
$200,000+
Median Household Income
Average Household Income
Per Capita Income
495
486
563
783
1,211
568
441
121
67
1,872
1,791
2,515
4,620
7,839
4,872
4,844
1,157
760
3,343
3,503
4,889
9,645
17,963
12,516
14,698
4,577
3,251
$50,494
$60,353
$23,005
$60,968
$75,245
$28,017
$70,749
$87,374
$31,602
1 mi
3 mi
5 mi
Population by Age
Age 0 - 4
Age 5 - 9
Age 10 - 14
Age 15 - 19
Age 20 - 24
Age 25 - 34
Age 35 - 44
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85+
1,053
966
886
904
1,070
2,492
1,778
1,585
1,205
569
255
121
6,814
6,640
6,136
5,484
5,662
14,988
12,950
10,533
7,321
3,074
1,384
571
17,203
18,235
16,623
13,453
11,967
34,992
35,640
27,977
17,867
7,592
3,160
1,459
Race and Ethnicity
White Alone
Black Alone
American Indian Alone
Asian Alone
Pacific Islander Alone
Some Other Race Alone
Two or More Races
8,043
1,451
138
308
17
2,391
536
53,829
9,125
661
4,589
96
9,951
3,310
137,200
23,652
1,445
17,128
262
18,368
8,112
Data Note: Income is expressed in current dollars
Source: U.S. Census Bureau, Census 2010 Summary File 1.
Esri forecasts for 2012 and 2017.