ABSOLUTE NNN MCDONALD'S GROUND LEASE - 286 57TH AVENUE NE | FRIDLEY (MINNEAPOLIS MSA), MN 55432 OFFERING MEMORANDUM
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ABSOLUTE NNN MCDONALD'S GROUND LEASE 286 57TH AVENUE NE | FRIDLEY (MINNEAPOLIS MSA), MN 55432 OFFERING MEMORANDUM NET LEASE PROPERTY GROUP | SINGLE TENANT INVESTMENT OFFERING
AFFILIATED BUSINESS DISCLOSURE & CONFIDENTIALITY AGREEMENT
CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related to acreages, square footages, and other measurements are approximations. Additional
entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses information and an opportunity to inspect the Property will be made available to interested and
including, but not limited to, brokerage services, property and facilities management, qualified prospective purchasers. In this Memorandum, certain documents, including leases
valuation, investment fund management and development. At times different Affiliates may and other materials, are described in summary form. These summaries do not purport to be
represent various clients with competing interests in the same transaction. For example, this complete nor necessarily accurate descriptions of the full agreements referenced. Interested
Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell parties are expected to review all such summaries and other documents of whatever nature
Crow Company. Those, or other, Affiliates may express an interest in the property described independently and not rely on the contents of this Memorandum in any manner.
in this Memorandum (the “Property”) may submit an offer to purchase the Property and may
Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or
be the successful bidder for the Property. You hereby acknowledge that possibility and agree
representatives make any representation or warranty, expressed or implied, as to the accuracy
that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the
or completeness of this Memorandum or any of its contents, and no legal commitment or
involvement of any Affiliate in the sale or purchase of the Property. In all instances, however,
obligation shall arise by reason of your receipt of this Memorandum or use of its contents;
CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described
and you are to rely solely on your investigations and inspections of the Property in evaluating
in this Memorandum and will not act in concert with or otherwise conduct its business in a
a possible purchase of the real property.
way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but
rather will conduct its business in a manner consistent with the law and any fiduciary duties The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions
owed to the client(s) it represents in the transaction described in this Memorandum. of interest or offers to purchase the Property, and/or to terminate discussions with any entity at
any time with or without notice which may arise as a result of review of this Memorandum. The
This is a confidential Memorandum intended solely for your limited use and benefit in Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum
determining whether you desire to express further interest in the acquisition of the Property. or making an offer to purchase the Property unless and until written agreement(s) for the
purchase of the Property have been fully executed, delivered and approved by the Owner and
This Memorandum contains selected information pertaining to the Property and does not
any conditions to the Owner’s obligations therein have been satisfied or waived.
purport to be a representation of the state of affairs of the Property or the owner of the Property
(the “Owner”), to be all-inclusive or to contain all or part of the information which prospective By receipt of this Memorandum, you agree that this Memorandum and its contents are of
investors may require to evaluate a purchase of real property. All financial projections and a confidential nature, that you will hold and treat it in the strictest confidence and that you
information are provided for general reference purposes only and are based on assumptions will not disclose this Memorandum or any of its contents to any other entity without the prior
relating to the general economy, market conditions, competition and other factors beyond written authorization of the Owner or CBRE, Inc. You also agree that you will not use this
the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other Memorandum or any of its contents in any manner detrimental to the interest of the Owner
information provided and made herein are subject to material variation. All references or CBRE, Inc.
© 2017 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes
no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for
example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial
and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Photos herein
are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its
affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.
2 | MCDONALD'S :: FRIDLEY, IL
ABSOLUTE NNN MCDONALD'S GROUND LEASE
286 57TH AVENUE NE | FRIDLEY, MN 55432 OFFERING MEMORANDUM
PRIMARY CONTACTS:
MICHAEL KAIDER
NNN Specialist
First Vice President
+1 630 573 7015
michael.kaider@cbre.com
ERIC SHEAFFER
Local Licensee
+1 612 336 4251
eric.sheaffer@cbre.com
FINANCING CONTACT:
GEOFFREY HARRIS
+1 602 735 5615
geoffrey.harris@cbre.com
TABLE OF CONTENTS
Investment Overview.....................................4
Property Overview.........................................8
Market Overview.........................................14
INVESTMENT OVERVIEW | 3
THE OFFERING
CBRE is pleased to exclusively present the tremendous opportunity to acquire fee NE). Traffic counts are 149,000 and 41,500 along Interstate 694 and Highway
interest in a new, modern prototype absolute NNN McDonald’s ground lease 47, respectively. The property also benefits from a strategic neighborhood
located in Fridley, a north suburb of Minneapolis, MN. The lease has 16 years location in proximity to the area housing stock which features a growing and
and 6 months of term remaining, zero landlord responsibilities, and strong 10% affluent population base.
rent bumps every 5 years, at below market rent.
McDonald's (NYSE: MCD) is the world's leading fast-food retailer by sales with
The property is an outparcel to Fridley Market, a 146,367 SF shopping center more than 36,000 restaurants in over 100 countries serving 46 million customers
anchored by Cub Foods, which drives a very high volume of traffic to the area. each day. McDonald's is rated BBB+/Stable by Standard & Poor's and had 2015
The center is highly visible from Interstate 694 and Highway 47 (University Avenue sales of more than $25.4 billion; the US accounts for some 30% of total sales.
4 | MCDONALD'S :: FRIDLEY, IL
FINANCIAL OVERVIEW
Offering Price $2,000,000
Cap Rate 4.0%
Rent $80,012.04
MCDONALD'S RENT SCHEDULE
Lease Structure Absolute NNN Ground Lease
LEASE YEARS ANNUAL MONTHLY
Land Area +/- 0.72 Acres
Current to 11/30/2023 $80,012.04 $6,667.67
Building Size 4,361 SF
12/1/2023 to 11/30/2028 $87,999.96 $7,333.33
Year Built 2013
12/1/2028 to 11/21/2033 $96,800.04 $8,066.67
Tenant McDonald's USA, LLC Option 1: Year 21 to 25 $106,479.96 $8,873.33
Original Lease Term 20 Years Option 2: Year 26 to 30 $117,128.04 $9,760.67
Option 3: Year 31 to 35 $128,840.76 $10,736.73
Term Remaining 16 Years 6 Months
Option 4: Year 36 to 40 $141,724.92 $11,810.41
Lease Commencement August 12, 2013
Option 5: Year 41 to 45 $155,897.40 $12,991.45
Rent Commencement November 22, 2013
Option 6: Year 46 to 50 $171,487.08 $14,290.59
Lease Expiration November 21, 2033
Rental Increases 10% in base term and renewal options
Renewal Options Six 5-Year options
Landlord Responsibilities None
INVESTMENT OVERVIEW | 5
INVESTMENT HIGHLIGHTS
• Exceptional Opportunity: The opportunity to acquire fee interest in a long term absolute NNN McDonald’s ground lease. The property is
located in Fridley, Minnesota, approximately 6.5 miles north of the Minneapolis Central Business District.
• Investment Grade Tenant: Rated BBB+/Stable by Standard & Poor’s, McDonald’s is one of the most well-known and valuable brands in the
world.
• Long Term Commitment: The 20 year ground lease has 16 years and 6 months of term remaining with zero landlord responsibilities and
10% rental increases in both the base term and all six option periods.
• Strong Grocery Anchored Center: McDonald’s is located on an outparcel within Fridley Market, a 145,121 SF shopping center that was
redeveloped in 2014. The center is anchored by a 62,592 SF Cub Foods which is owned by SuperValu (NYSE: SVU; B+ Rating) and holds the number
one grocer market share position in the Minneapolis MSA. Tenants within Fridley Market include Duluth Trading Company, Teppanyaki Grill, Fridley
Liquors, Caribou Coffee, Pancheros Mexican Grill, Sprint, and Great Clips.
• Irreplaceable Location: The property has excellent visibility from Interstate 694. The interstate has a full interchange with Highway 47
(University Avenue NE) facilitating convenient access to the center. Traffic counts are 149,000 and 41,500 along Interstate 694 and Highway 47,
respectively. The Property is also located in an established trade area and includes national retailers such as Target, Menard’s, The Home Depot, CVS
Pharmacy, Petco, and Goodwill. Additionally, a 124 room WoodSpring Suites Hotel is currently being constructed between Cub Foods and Interstate
694.
• Attractive Demographics Profile: The primary trade area for McDonald’s reaches approximately two miles to the north, south, and east
and approximately one mile to the Mississippi River to the west. Within a two-mile radius of the property are 44,727 residents with an average household
income of $65,277. The Medtronic world headquarters is less than one mile east of the center.
6 | MCDONALD'S :: FRIDLEY, IL
INVESTMENT OVERVIEW | 7 INVESTMENTOVERVIEW
PROPERTY OVERVIEW
8 | MCDONALD'S
MCDONALD'S::::FRIDLEY,
FRIDLEY,IL IL
TENANT OVERVIEW
McDonald's (NYSE: MCD) is the world's leading fast- CORPORATE OVERVIEW
food retailer by sales with more than 36,000 Tenant Name McDonald's USA, LLC
restaurants in over 100 countries serving 46 million
Tenant Ownership Public
customers each day. Most of its outlets are free-
Stock Symbol MCD
standing units, but McDonald's also has many quick-
service kiosk units located in airports and retail areas. Board NYSE
The company is one of the world's most well-known
S&P Rating BBB+/Stable
and valuable brands and holds a leading share in the
Locations 36,000+
globally branded quick service restaurant segment of
the informal eating-out market in virtually every country in which they do business. Corporate Headquarters Oak Brook, Illinois
McDonald's had 2015 sales of more than $25.4 billion; the U.S. is the largest market in
Website www.mcdonalds.com
the McDonald’s system and accounts for over 30% of global revenue.
PROPERTY DESCRIPTION | 9
REGIONAL MAP
10 | MCDONALD'S
MCDONALD'S::::FRIDLEY,
FRIDLEY,IL ILLOCATOR MAP
PROPERTY DESCRIPTION | 11
PROPERTYDESCRIPTIONSITE PLAN Flood Zone Disclosure: According to flood hazard maps published by the FEMA the site is within Zone C as indicated on Community Map Panel No. 270013004B, dated March 2, 1981, an area determined to be outside the 500-year floodplain determined to be outside the 1% and 0.2% annual chance floodplain. 12 | MCDONALD'S :: FRIDLEY, IL
PROPERTY DESCRIPTION | 13 PROPERTYDESCRIPTION
MARKET OVERVIEW
14 | MCDONALD'S
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MINNEAPOLIS MSA
The Minneapolis/St. Paul/Bloomington MN-WI Metropolitan Area, or simply the Twin Cities, includes 11
counties in Minnesota as well as two counties in Wisconsin, situated in the central–eastern portion of
Minnesota near the Wisconsin border. The total population of the MSA currently exceeds 3.5 million,
making it the 16th most populous MSA in the country.
POPULATION TRENDS
The MSA as a whole has seen consistent growth over the past several years, a trend that is projected
to continue. Population of the MSA has increased from more than 3 million at the 2000 Census, to an
estimated current population of more than 3.5 million. It is projected that the MSA population will top 3.7
million by the year 2021.
EMPLOYMENT BASE
While, at one time, manufacturing was the Twin Cities’ major industry, the services industry currently
accounts for the largest share of employment in the Minneapolis/St. Paul MSA. The diversified labor pool,
drawing from the healthcare, financial, and technology sectors among others, helps to maintain a very
strong level of employment in the Minneapolis area.
The unemployment rate has historically been lower than both the state and national figures. As of December
2016, unemployment rates were 3.6% for the Minneapolis MSA, 3.9% for Minnesota, and 4.7% for the
nation.
The Minneapolis MSA is home to 17 Fortune 500 companies, contributing to the area’s stable employment
level. The large presence of such firms is indicative of the strength of the local support network and general
business climate. Due to its economic diversification, the Minneapolis/St. Paul metropolitan area tends to
be subject to fewer seasonal and cyclical peaks and valleys than many “one-industry” cities.
MARKET OVERVIEW | 15MINNEAPOLIS / ST. PAUL MSA
FORTUNE 500 COMPANIES
RANK COMPANY REVENUE ($ BILLIONS)
6 United Health Group $157.1
38 Target $73.8
71 Best Buy $39.8
84 CHS $34.6
93 3M $30.3
131 U.S. Bancorp $21.5
160 Supervalu $17.8
161 General Mills $17.6
206 Ecolab $13.6
208 C.H. Robinson Worldwide $13.5
215 Land O'Lakes $13.2
232 Ameriprise Financial $12.2
257 Xcel Energy $11.0
304 Hormel Foods $9.3
316 Mosaic $8.9
318 Thrivent Financial for Lutherans $8.8
465 St. Jude Medical $5.5
Source: Fortune.com
16 | MCDONALD'S
MCDONALD'S::::FRIDLEY,
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TOP EMPLOYERS—PRIVATE
NUMBER OF NUMBER OF
RANK COMPANY RANK COMPANY
EMPLOYEES EMPLOYEES
PARK NICOLLET HEALTH
1 TARGET 31,035 11 8,342
SERVICES
2 ALLINA HEALTH SYSTEM 27,150 12 HORMEL FOODS CORP. 8,256
3 UNIVERSITY OF MINNESOTA 25,680 13 MEDTRONIC INC. 8,000
4 HEALTH PARTNERS 22,340 14 BEST BUY CO. INC. 8,000
5 FAIRVIEW HEALTH SYSTEM 21,000 15 SUPERVALU INC. 7,900
THOMPSON REUTERS NORTH
6 WELLS FARGO & CO. 20,000 16 7,400
AMERICAN LEGAL
7 3M CO. 15,894 17 HEALTH EAST 7,391
HENNEPIN COUNTY MEDICAL
8 UNITED HEALTH GROUP 13,977 18 6,458
CENTER
9 U.S.BANCORP 11,590 19 CARGILL INC. 5,500
10 DELTA AIRLINES 9,700 20 XCEL ENERGY 5,430
18 | MCDONALD'S
MCDONALD'S::::FRIDLEY,
FRIDLEY,IL ILPROPERTY DESCRIPTION | 19 PROPERTYDESCRIPTION
MCDONALD'S DEMOGRAPHIC MAP 20 | MCDONALD'S :: FRIDLEY, IL
PRIMARY TRADE AREA OVERVIEW
DEMOGRAPHIC HIGHLIGHTS WITHIN 2 MILES
44,727 $65,277 31.3% 17,961
total population avg. HH income income $75K—$500K households
21,173 33.8% 38.6 $186,813
daytime employees college degrees average age avg. home value
MARKET DEMOGRAPHICS
POPULATION 1 MILE 2 MILES 3 MILES
2016 Population 9,613 44,727 98,905
2021 Projection 9,798 45,852 101,797
DAYTIME EMPLOYEES 8,605 21,173 54,761
INCOME
2016 Avg. HH Income $58,983 $65,277 $70,867
2016 Median HH Income $47,565 $51,076 $55,784
Households with Income >$75K 25.0% 31.3% 35.9%
2021 Projected Avg. HH Income $62,890 $70,554 $78,128
AVERAGE AGE 38.0 38.6 38.6
EDUCATIONAL ATTAINMENT
Associate’s Degree 9.0% 8.4% 8.9%
Bachelor’s Degree 13.8% 17.6% 19.0%
Master’s Degree 4.8% 5.5% 6.5%
Professional or Doctorate Degree 1.8% 2.3% 2.5%
Total College Degrees 29.4% 33.8% 36.9%
HOUSEHOLDS 4,090 17,961 39,000
AVG. HOME VALUE $188,359 $186,813 $195,013
MARKET OVERVIEW | 21PRIMARY CONTACTS: FINANCING CONTACT
MICHAEL KAIDER ERIC SHEAFFER GEOFFREY HARRIS
NNN Specialist Local Licensee +1 602 735 5615
First Vice President +1 612 336 4251 geoffrey.harris@cbre.com
+1 630 573 7015 eric.sheaffer@cbre.com
michael.kaider@cbre.com
© 2017 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE,
Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any
projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction
to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent
investigation of the property to determine to your satisfaction the suitability of the property for your needs.
22 | MCDONALD'S
MCDONALD'S::::FRIDLEY,
FRIDLEY,IL ILYou can also read
