CVS Pharmacy - Poughkeepsie, NY - 722 Dutches Turnpike Poughkeepsie, NY 12603 Offering Memorandum
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CVS Pharmacy - Poughkeepsie, NY
722 Dutches Turnpike
Poughkeepsie, NY 12603
Offering Memorandum
presented by
Presented by:
2
CVS Pharmacy Investment Overview
Marcus & Millichap is pleased to present a CVS Pharmacy in Poughkeepsie,
New York. The subject property is a freestanding 10,125 square-foot building
sitting on a 1.75 acre lot. There are eleven years currently remaining on the
amended base term with four options to renew. This asset provides and investor
the rare ability to acquire a top performing CVS drug store with 5.75% increas-
es built in through the remainder of the base term. The lease is backed by CVS
Caremark Corporation which operates over 7,000 stores and is publicly traded
on the New York Stock Exchange under the symbol “CVS.” CVS Caremark
currently has a BBB+ credit rating by Standard & Poor’s.
CVS provides integrated pharmacy health care services in the United States for
convenience and value. It is the second largest pharmacy chain in the United
States with more than 7,600 stores. CVS sells prescription drugs and a wide as-
sortment of general merchandise, greeting cards, and convenience foods through
their CVS Pharmacy retail stores and online through CVS.com. It also provides
• Investment Grade Tenant, Rated BBB+ by Standard & Poor’s healthcare services through its more than 600 MinuteClinic medical clinics as
well as their Diabetes Care Centers.
• Just Under $11,000,000 in Gross Sales for 2013, Tenant Reports on an An-
nual Basis
• Rare 5.75% Increase in Less than One Year
• 5.75% Increases Every 5 Years During the Base Term
• 11 Years Remain on the Original Lease
• Corporate Guarantee from CVS Corporation
• Nearby Retailers Include Starbucks, AT&T, Panera Bread, Rhinebeck Bank,
Dollar General, Big Lots, Kmart, Burger King, and Walgreens
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. © 2011 Marcus & Millichap
4
CVS Pharmacy Tenant Overview
CVS Caremark Corporation, together with its subsidiaries, provides integrated pharma-
cy health care services in the United States. The company operates through Pharmacy
Services and Retail Pharmacy segments. The Pharmacy Services segment offers phar-
macy benefit management services, such as plan design and administration, formulary
management, discounted drug purchase arrangements, Medicare Part D services, mail
order and specialty pharmacy services, retail pharmacy network management services,
prescription management systems, clinical services, disease management, and medical
spend management services. It serves employers, insurance companies, unions, govern-
ment employee groups, managed care organizations and other sponsors of health benefit
plans, and individuals under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/
pharmacy, RxAmerica, Accordant, SilverScript, and Novologix names. The Retail Pharmacy segment sells prescrip-
tion drugs, over-the-counter drugs, beauty products and cosmetics, seasonal merchandise, greeting cards, and con-
venience foods, as well as provides photo finishing services. The company also offers infusion and enteral nutrition
services. As of December 31, 2013, it operated 7,660 retail drugstores, 800 MinuteClinic retail health care clinics,
792 CVS/pharmacy stores, 25 retail specialty pharmacy stores, 11 specialty mail order pharmacies, and 4 mail order
pharmacies, as well as online retail pharmacy Websites, CVS.com and Onofre.com.br. The company was founded in
1892 and is headquartered in Woonsocket, Rhode Island.
Tenant Trade Name CVS Caremark Corporation
Property Type Net Leased Drug Store
Net Income (2013) $4.60 Billion
Total Revenue (2013) $126.76 Billion
Credit Rating BBB+
Rating Agency Standard & Poor’s
Stock Symbol CVS
Board NYSE
Number of Locations 7,660+
Headquarters Woonsocket, RI
Website www.cvs.com/
Years in the Business 122 Years
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. © 2011 Marcus & Millichap
5
CVS Pharmacy Pricing and Financial Analysis
Offering Summary
Purchase Price $3,345,000
CAP Rate 5.79%
GLA 10,125 SF
Lot Size 1.75 Acres
Price/SF (Suggested) $330.43 / SF
Year Built 2000*
Vital Data
Current Rent $193,893
Reserves ($0.15 / Sq. Ft) $1,518.75
Net Operating Income $192,375
Lease Type Double-Net
Lease Term (Amended) 25 Years
Lease Commencement 7/24/2000
Lease Expiration 1/31/2026
Lease Term Remaining 11 Years
Increases Yes
Options Four Five-Year Options
Annualized Operating Data Annual Rent Monthly Rent
Current Rent $193,893.75 $16,157.81
Lease Years 16-20 $205,031.25 $17,085.94
Lease Years 21-25 $216,776.25 $18,064.69
1st Option $201,749.70 $16,812.48
2nd Option $207,866.25 $17,322.19
3rd Option $214,102.24 $17,841.85
4th Option $220,522.50 $18,376.88
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. © 2011 Marcus & Millichap
6
CVS Pharmacy Retail Aerial
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. © 2011 Marcus & Millichap
7
8
CVS Pharmacy Recent Sales Comparables
Property: 1605 Telegraph Rd, Wilmington, DE Property: 1080 Falmouth Rd, Centerville, MA
Close of Escrow: 2/28/2014 Close of Escrow: 2/26/2014
Sale Price: $6,995,000 Sale Price: $5,860,000
CAP Rate: 5.58% CAP Rate: 5.84%
GLA: 13,509 SF GLA: 9,750 SF
Year Built: 2012 Year Built: 2004
Property: 16 Boston Rd, Chelmsford, MA Property: 1980 East Big Beaver Rd, Troy, MI
Close of Escrow: 1/31/2014 Close of Escrow: 6/19/2013
Sale Price: $4,346,000 Sale Price: $5,185,000
CAP Rate: 5.75% CAP Rate: 5.75%
GLA: 13,013 SF GLA: 12,900 SF
Year Built: 2012 Year Built: 2008
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. © 2014 Marcus & Millichap
9
CVS Pharmacy Recent Sales Comparables
Property: 599 Bell Tavern Boulevard, Downington, PA Property: 800 Main Avenue, De Pere, WI
Close of Escrow: 2/7/2014 Close of Escrow: 12/27/2013
Sale Price: $7,322,321 Sale Price: $4,545,000
CAP Rate: 5.60% CAP Rate: 5.60%
GLA: 13,160 SF GLA: 13,222 SF
Year Built: 2012 Year Built: 2012
Recent Sales Map: Average CAP Rate: 5.69%
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. © 2014 Marcus & Millichap
1011
CVS Pharmacy Area Overview
About Poughkeepsie
the City of Poughkeepsie, is a city in the state of New York,
United States, which serves as the county seat of Dutchess
County. Poughkeepsie is located in the Hudson Valley
midway between New York City and Albany. The name
derives from a word in the Wappinger language, roughly
U-puku-ipi-sing, meaning “the reed-covered lodge by the
little-water place,” referring to a spring or stream feeding
into the Hudson River south of the present downtown
area.
Poughkeepsie is known as “The Queen City of the Hudson.” Poughkeepsie is the principal
city of the Poughkeepsie–Newburgh–Middletown metropolitan area, which includes all of
Dutchess and Orange counties. It was originally settled in the 17th century by the Dutch
and became New York’s second capital shortly after the American Revolution. It was char-
tered as a city in 1854. Major bridges in the city include the Poughkeepsie Bridge, a former
railroad bridge now serving as a public walkway, which opened on October 3, 2009, and
the Mid-Hudson Bridge, a major thoroughfare built in 1930 that carries U.S. Route 44 over
the Hudson.
Economy
IBM has a large campus in Town of Poughkeepsie, once referred to as IBM’s “Main Plant,”
although much of the workforce has been moved elsewhere in the company. The site once
built the IBM 700/7000 series of computers as well as the IBM 7030 Stretch computer
and later IBM mainframes. The RS/6000 SP2 family of computers, which came to fame
after one of them won a chess match against world chess master Garry Kasparov, were also
manufactured by IBM Poughkeepsie. In October 2008, IBM’s Poughkeepsie facility was
named “Assembly Plant of the Year 2008” by the editors of Assembly Magazine. Poughkeep-
sie remains IBM’s primary design and manufacturing center for its newest mainframes and
high-end Power Architecture servers, and it is also one of IBM’s major software development
centers for z/OS and for other products.
Until 1972, Poughkeepsie was home to the Smith Brothers cough drop factory. The Smith
Brothers’ grave site is in Poughkeepsie Rural Cemetery.
The Poughkeepsie Journal is the third-oldest active newspaper in the United States.
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. © 2011 Marcus & Millichap
12CVS Pharmacy Demographic Report
Population 1-Mile 5-Miles 10-Miles Population 1-Mile 5-Miles 10-Miles
2000 Population 7,862 54,481 94,167 $0 - $14,999 9.4% 15.8% 11.8%
2010 Population 5,372 57,971 99,579 $15,000 - $24,999 9.3% 10.1% 8.4%
2013 Population 5,359 57,894 99,667 $25,000 - $34,999 8.4% 9.6% 9.0%
2018 Population 5,618 59,437 101,478 $35,000 - $49,999 11.2% 11.4% 11.1%
Household 1-Mile 5-Miles 10-Miles $50,000 - $74,999 22.9% 16.4% 16.7%
2000 Households 2,027 20,769 34,118 $75,000 - $99,999 23.2% 15.9% 16.5%
2010 Households 2,213 21,839 35,821 $100,000 - $124,999 7.6% 8.5% 10.4%
2013 Households 2,202 21,802 35,850 $125,000 - $149,999 2.9% 5.2% 6.6%
2018 Households 2,291 22,511 36,804 $150,000 - $199,999 3.4% 4.6% 6.1%
2012 Average Household Size 2.37 2.46 2.52 $200,000 - $249,999 0.8% 1.2% 1.5%
2012 Daytime Population 4,846 31,708 49,710 $250,000 + 1.2% 1.4% 1.9%
2000 Median Housing Value $126,226 $116,312 $140,807 2012 Median Household Income $62,398 $54,161 $63,736
2000 Owner Occupied Housing Units 51.41% 45.91% 56.25% 2012 Per Capita Income $34,375 $27,534 $29,611
2000 Renter Occupied Housing Units 53.02% 47.39% 38.36% 2012 Average Household Income $70,975 $69,809 $79,489
2000 Vacant 5.20% 6.68% 5.34%
2013 Owner Occupied Housing Units 46.53% 49.32% 59.16%
2013 Renter Occupied Housing Units 53.47% 50.68% 40.84%
2013 Vacant 6.55% 9.00% 7.81%
2018 Owner Occupied Housing Units 45.53% 49.39% 59.21%
2018 Renter Occupied Housing Units 54.47% 50.61% 40.79%
2018 Vacant 6.50% 9.31% 8.16%
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. © 2014 Marcus & Millichap
14CVS Pharmacy Demographic Report
Population: Race & Ethnicity:
In 2013, the population in your selected geography was 99,667. The popu- The current year racial makeup of your selected area is as follows: 69.87%
lation has changed by 5.84% since 2000. It is estimated that the population White, 17.17% African American, 0.45% Native American and 4.32%
in your area will be 101,478 five years from now, which represents a change Asian/Pacific Islander. Compare these to U.S. averages which are: 72.20%
of 1.81% from the current year. The current population is 48.2% male and White, 12.65% African American, 0.96% Native American and 5.01%
51.7% female. The median age of the population in your area is 35.8, com- Asian/Pacific Islander.
pare this to the U.S. average which is 37. The population density in your area
is 1,261.85 people per square mile. People of Hispanic origin are counted independently of race. People of His-
panic origin make up 12.78% of the current year population in your selected
Households: area. Compare this to the U.S. average of 16.55%.
There are currently 35,850 households in your selected geography. The num-
ber of households has changed by 5.07% since 2000. It is estimated that the Housing:
number of households in your area will be 36,804 five years from now, which The median housing value in your area was $140,807 in 2000, compare
represents a change of 2.66% from the current year. The average household this to the U.S. average of $110,781 for the same year. In 2000, there were
size in your area is 2.52 persons. 20,276 owner occupied housing units in your area and there were 13,829
renter occupied housing units in your area. The median rent at the time was
Income: $610.
In 2013, the median household income for your selected geography is
$63,736, compare this to the U.S. average which is currently $53,535. Employment:
The median household income for your area has changed by 33.84% since In 2013, there are 49,710 employees in your selected area, this is also known
2000. It is estimated that the median household income in your area will be as the daytime population. The 2000 Census revealed that 63.4% of employ-
$74,209 five years from now, which represents a change of 16.43% from the ees are employed in white-collar occupations in this geography, and 36.5%
current year. are employed in blue-collar occupations. In 2013, unemployment in this area
is 7.20%. In 2000, the median time traveled to work was 18.8 minutes.
The current year per capita income in your area is $29,611, compare this
to the U.S. average, which is $28,888. The current year average household
income in your area is $79,489, compare this to the U.S. average which is
$75,373.
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. © 2014 Marcus & Millichap
15presented by Mike James
Presented by:
Associate Vice President
Investments
p: 818.212.2755
f: 818.212.2710
mike.james@marcusmillichap.com
License: CA 01869890
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