H&R BLOCK - Market Positioning and Pricing Analysis - 10209 Main St Lamont, CA 93241 - LoopNet
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Market Positioning and Pricing Analysis
PRESENTED BY
Juan Bustamante
Agent Candidate
Bakersfield Office
Tel: (661) 377-1866
Fax: (661) 377-1848
juan.bustamante@marcusmillichap.com
H&R BLOCK
License: CA 01880908 10209 Main St • Lamont, CA 93241
NON-ENDORSEMENT AND DISCLAIMER NOTICE
Non-Endorsements
Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any
corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or
subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information
about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
Disclaimer
THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has
been secured from sources we believe to be reliable, but we make no representations or warranties, express 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. Marcus & Millichap is a service mark of Marcus &
Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.
H&R BLOCK
Lamont, CA
ACT ID Z0890049
2
PROPERTY
H&R BLOCKNAME
PRICING
PRICING AND
AND VALUATION
VALUATION MATRIX
MATRIX
10209 Main St, Lamont, CA 93241
NOTES
3
H&R BLOCK
OFFERINGSUMMARY
OFFERING SUMMARY
PROPERTY SUMMARY
NOTES
#
4
H&R BLOCK
PROPERTY OVERVIEW
PROPERTY OVERVIEW
Marcus & Millichap is pleased to present the exclusive listing for a 2,956-square foot H&R Block located in Lamont, CA. This is an Absolute triple NNN Lease with a corporate
guarantee and no landlord responsibilities. This investment offers long term stability of H&R Block Corporate Guarantee with attractive returns (6.23 percent Cap rate). H&R
Block (NYSE:HRB) is a publicly traded company with a current BBB investment grade credit rating by Standard & Poor' s that operates over 12,000 stores across 50 states.
Lamont is Located in Kern County, about 9 Miles South-Southeast of downtown Bakersfield, California and 89 Miles Northwest of Los Angeles. Lamont is Part of the
Bakersfield Metropolitan Statistical Area.
PROPERTY OVERVIEW
New 5 year NNN lease
Building has been renovated
Strong Brand
Corporate guarantee wRecognitionith H&R Block
5
H&R BLOCK
TENANT PROFILES
H&R Block
H&R Block is a global consumer tax services provider, having prepared more than 720 million tax
General Information
returns by and through retail locations and digital solutions since 1955. There are approximately
Tenant Name H&R Block
12,000 company-owned and franchise retail locations in all 50 states, Puerto Rico and other U.S.
territories, on U.S. military bases around the world, and in Canada, Australia and India. An H&R Website www.hrblock.com
Block branded retail office is located within five miles
Headquartered Kansas City, MO
of 95 percent of Americans – covering all demographics
Rentable Square Feet 2,956 SF
Percentage of RBA 100.00%
Lease Commencement 5/1/2018
Lease Expiration 4/30/2022
No. of Locations 12000
126
H&R BLOCKNAME
PROPERTY
PRICING LOCATION
PRICING AND
AND TENANT SUMMARY
OVERVIEW
VALUATION
VALUATION MATRIX
MATRIX
10209 Main St, Lamont, CA 93241
New 5 year NNN lease
Building has been renovated
Strong Brand Recognition
Corporate guarantee with H&R Block
CLOSE PROXIMITY TO:
7#
H&R BLOCKNAME
PROPERTY
PRICING
PRICING LOCATION
AND TENANT
REGIONAL
AND SUMMARY
OVERVIEW
VALUATION
VALUATION MATRIX
AND LOCAL
MATRIX
MAP
10209 Main St, Lamont, CA 93241
8#
H&R BLOCK
AERIAL PHOTO
9
H&R BLOCK
PROPERTY PHOTO
10H&R BLOCK
PROPERTY PHOTO
11H&R BLOCK
COMPARABLES MAP
H&R BLOCK
(SUBJECT)
1 Mission Bank NNN
2 Starbucks Coffee
3 Wienerschnitze NNN
4 Indian Bistro NNN
SALES COMPARABLES
12PROPERTY
H&R BLOCKNAME
SALES COMPARABLES
SALES COMPARABLES SALES COMPS AVG
Average Cap Rate Average Price Per Square Foot
7.0 $2,000.00
6.3 Avg. 5.92% $1,800.00
5.6 $1,600.00
4.9 $1,400.00
4.2 $1,200.00
3.5 $1,000.00 Avg. $860.41
2.8 $800.00
2.1 $600.00
1.4 $400.00
0.7 $200.00
0.0 $0.00
H&R Block Mission Starbucks Wienerschnitze Indian H&R Block Mission Starbucks Wienerschnitze Indian
Bank NNN Coffee NNN Bistro NNN Bank NNN Coffee NNN Bistro NNN
13PROPERTY
H&R BLOCKNAME
SALES COMPARABLES
MARKETING TEAM
SALES COMPARABLES
MISSION BANK NNN STARBUCKS COFFEE
H&R BLOCK 101 Panama Rd, Bakersfield, CA, 93307 2500 White Ln, Bakersfield, CA, 93304
10209 Main St, Lamont, CA, 93241
1 2
rentpropertyname1 rentpropertyname1 rentpropertyname1
SUBJECT PROPERTY Close Of Escrow 3/13/2017 Close Of Escrow 3/3/1917
Asking Price $598,000 Days On Market 45 Sales Price $2,225,000
Price/SF $202.30 Sales Price $495,000 Price/SF $1,236.11
CAP Rate 6.23% Price/SF $128.60 CAP Rate 4.90%
GLA 2,956 SF CAP Rate 6.40% GLA 1,800 SF
Lot Size GLA 3,849 SF Lot Size 0.44 acre(s)
Year Built 1946 Lot Size 21,344 acre(s) Year Built 2016
Lease Term Remaining 3.7 Years Year Built 1972 Lease Term Remaining 8 Years
Lease Term Remaining 5 Years
rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1
NOTES
The subject property is a new build-to-suit for Starbucks with a drive-thru
and was just completed in Q1 2016. The property sold for $2.225M with
triple net lease terms. The new 10-year lease offers features 10%
increases every 5 years in both the primary term and (4) 5-year option
periods.
Documents
14PROPERTY
H&R BLOCKNAME
SALES COMPARABLES
MARKETING TEAM
SALES COMPARABLES
WIENERSCHNITZE NNN INDIAN BISTRO NNN
3748 Coffee Rd, Bakersfield, CA, 93308 3939 Ming Ave, Bakersfield, CA, 93309
3 4
rentpropertyname1 rentpropertyname1 rentpropertyname1
Close Of Escrow 12/8/2017 Close Of Escrow 5/1/2018
Days On Market 69 Sales Price $1,375,000
Sales Price $2,425,000 Price/SF $280.61
Price/SF $1,796.30 CAP Rate 6.94%
CAP Rate 5.44% GLA 4,900 SF
GLA 1,350 SF Lot Size 0.53 acre(s)
Lot Size 16,552 acre(s) Year Built 1974
Year Built 2004 Lease Term Remaining 9 Years
Lease Term Remaining 15 Years
rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1
NOTES
Founded in 1961 by John Galardi with a single hot dog stand in
Wilmington, California,Wienerschnitzel has grown to be the worlds
largest hot dog chain serving more than 120 million hot dogs a year; and
the chain is famous for their delicious secret-recipe
chili used to smother on fries, hot dogs and burgers.
15H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
MARCUS & MILLICHAP MORE THAN
PREMIER INVESTMENT SERVICES
Marcus & Millichap is the premier commercial real estate investment services
1,819
firm in the United States. Founded in 1971 on a unique model that matches
each property with the largest pool of pre-qualified investors, we leverage four
decades worth of experience and relationships to handle all of your commercial
real estate needs. Our team of more than 1,819 professionals in the U.S. and
Canada focuses exclusively on real estate investment sales, financing, research,
and advisory services.
Founded in Largest pool of Moves capital More than 1,819
1971 on a pre-qualified across our investment
unique investors in network of professionals in
methodology the industry investment the U.S. and
professionals Canada
WITH AN EXCLUSIVE FOCUS ON
real estate investment sales, financing, research, and advisory services
16H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
WIDE RANGE OF CAPABILITIES,
PROVEN EXECUTION PROCESS
Our proprietary platform and wide range of capabilities maximize our client results.
As an industry leader in closed transactions with a history of repeat business, you
8,979
TRANSACTIONS
can trust in our decades of process-driven success. CLOSED IN 2017
4.5
MARCUS & MILLICHAP PERFECTED TRANSACTIONS
CAPABILITIES PROCESS-DRIVEN CLOSED EVERY
Investment Sales and Product EXECUTION BUSINESS HOUR
Specialization
Pricing, Marketing, and
Largest Collaborative Investment
Sales Force
Local Submarket Client Coverage
Positioning Strategy to
Drive Competitive Bidding
Timeline-Driven Escrow
47%
Management to Mitigate Risk TRANSACTIONS
Industry Leading Technology Platform
Real-Time Access to Transaction Data
Transaction Execution for CLOSED WITH
1031 Exchange Candidates
Access to Competitive Financing OUT-OF-STATE
Largest Pool of Exclusive Inventory CAPITAL IN 2017
17H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
Marcus & Millichap tailors our investment strategies to meet the unique needs
THE MARCUS & MILLICHAP and goals of each client. To best serve our clients and to maximize value, we
ADVANTAGE combine our collaborative culture with the world’s most advanced technology
to create the industry’s most powerful proprietary marketing system.
REAL ESTATE
ADVISORY
INVESTMENT FINANCING RESEARCH SERVICES
SALES
Largest commercial real Superior capital market Provides clients with the latest Comprehensive advisory
estate brokerage firm in the expertise, precisely managed local and national market trends and consulting services to
country, with specialization in financing, and unparalleled based on real-time data to give you buy-sell-hold
all major property types and access to the most competitive create optimal positioning, decisions based on real-time
more than 1,819 professionals rates, terms, and capital pricing, and marketing strategies market knowledge and research
collaborating at every stage sources through MMCC
Industry’s most in-depth Maximizes value for our clients
Access to the industry’s Prominent capital market understanding of a variety of in each transaction and shapes
largest inventory of quality relationships with commercial property types in numerous long-term portfolio strategies
investment opportunities banks, secured lenders, local and national markets,
debt and equity funds, with over 1,000 research
life insurance companies, products produced annually
private and public funds, etc.
18H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
MULTIFAMILY SINGLE TENANT FINANCING RETAIL OFFICE HOSPITALITY AFFORDABLE
NET-LEASE HOUSING
LAND INDUSTRIAL SELF-STORAGE HEALTHCARE MANUFACTURED SENIORS STUDENT
HOUSING HOUSING HOUSING
Because we cover a wide variety of property types, Marcus & Millichap gives you
access to the industry’s largest investment inventory. Through property specialization
SPECIALTY and information sharing, our investment professionals cultivate relationships across
DIVISIONS the U.S. and Canada. We leverage these relationships to provide our clients with the
insight and opportunities to maximize their investments.
19H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
When a client hires a local agent, the entire Marcus & Millichap team stands behind
that agent. Each investment professional can leverage Marcus & Millichap’s carefully
MARCUS & MILLICHAP cultivated network of local, regional, and national contacts in order to provide clients
NETWORK with access to our unsurpassed product inventory, large client base that is sourced both
internally and externally, and excellent product capital sourcing. Through maximum
controlled exposure, our local agents create a maximum result for each client.
20H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
INVESTMENT OPTIONS
AND OPPORTUNITIES
The success of Marcus & Millichap is based on our collaborative culture
of information sharing across our network of more than 1,819 investment
1,819
COLLABORATIVE
A G E N T D A T A B A S E S
professionals, which maximizes value for each of our clients.
Working with a unique platform that is antithetical to the concept of
“pocket listings,” our investment professionals share all listings with the
entire Marcus & Millichap team. Each professional specializes in a
property type and has a database of local properties and owners, which is
$21.2B
leveraged in every client assignment. Because each local agent specializes C U R R E N T LY
in a single product type in a specific geographic region, our clients are EXCLUSIVELY LISTED
completely covered across the U.S. and Canada with every investment. INDUSTRY’S LARGEST SELECTION OF
QUALITY INVESTMENT INVENTORY
Our foundation of information sharing maximizes pricing for our clients
and gives us the largest inventory of any firm in the industry.
1031 EXCHANGES
THE SIZE AND ACCESSIBILITY OF OUR
42%
TRANSACTIONS CLOSED
INVENTORY ENABLES YOU TO SELL YOUR WITH 1031 EXCHANGE BUYERS
PROPERTY AND QUICKLY MOVE INTO I N 2 0 1 7
ANOTHER PROFITABLE INVESTMENT.
21H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
GAIN ACCESS TO THE NATION’S LARGEST EXCLUSIVE
INVENTORY OF PROPERTIES FOR ALL PRODUCT TYPES
797 MULTIFAMILY
1,162 SINGLE TENANT
NET-LEASE
413 FINANCING*
1,665 RETAIL
286 OFFICE
189 HOSPITALITY
4,760 59 AFFORDABLE HOUSING
EXCLUSIVE
LISTINGS 240 LAND
131 INDUSTRIAL
66 SELF-STORAGE
53 HEALTHCARE
30 MANUFACTURED HOUSING
71 SENIORS HOUSING
Exclusive Listings as of 3/29/2018
* Financing summary not included 11 STUDENT HOUSING
in Exclusive Listings total
22H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
ADVISORY MANAGE AND DISPOSITION
OPERATE AND EXCHANGE ACQUISITION
SERVICES
ACROSS THE INVESTOR CONCERNS INVESTOR CONCERNS INVESTOR CONCERNS
OWNERSHIP Is holding my asset the most Is now the right time to sell? When is the right time to buy?
profitable choice in this market?
LIFECYCLE How can I best take advantage
How can I leverage the capital
markets to maximize my results?
What investment opportunities
are available for my
of the capital markets to consideration?
maximize my returns? How do I optimize my position
via a disposition? What are the risks in the
Whether you’re looking to Based on my investment risk
What alternatives and
current market?
tolerance and objectives, what
buy, sell, refinance, or hold, opportunities should I consider? associated investment returns What are my financing options?
Marcus & Millichap would I have in the event of a
How will an acquisition impact
How should I position my sale?
leverages real-time market portfolio for potential changes my portfolio’s returns?
research to assess local and in market conditions?
national trends, with
specialized focus on
individual property types.
MARCUS & MILLICHAP’S MARCUS & MILLICHAP’S MARCUS & MILLICHAP’S
Backed by the collaborative
SOLUTIONS SOLUTIONS SOLUTIONS
culture of industry experts,
Strategic “hold” analysis Value and market Pre-acquisition analysis
your local investment positioning analysis
professional will walk you Refinance strategic analysis Financial investment analysis
Disposition buyer financing
through each phase of your Quarterly investment Market and submarket research
investment strategy. return analysis New acquisition financing
Product-specific research
Ongoing market and 1031 exchange investment
submarket research alternatives analysis
Ongoing product-specific
research
23H&R BLOCK
MARCUS & MILLICHAP ADVANTAGE
MARCUS & MILLICHAP CAPITAL WHY MMCC?
CORPORATION CAPABILITIES Optimum financing solutions to
enhance value
MMCC—our fully integrated, dedicated financing arm—is committed to providing
superior capital market expertise, precisely managed execution, and unparalleled
access to capital sources providing the most competitive rates and terms. Enhanced control through
investor qualification support
We leverage our prominent capital market relationships with commercial banks,
life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae,
Freddie Mac and HUD to provide our clients with the greatest range of Enhanced control through
financing options. MMCC’s ability to qualify
investor finance contingencies
Our dedicated, knowledgeable experts understand the challenges of financing
and work tirelessly to resolve all potential issues for the benefit of our clients.
Enhanced control through
quickly identifying potential
debt/equity sources,
processing, and closing
buyer’s finance alternatives
Enhanced control through
Closed 1,707 National platform $5.63 billion Access to MMCC’s ability to monitor
debt and equity operating total national more capital investor/due diligence and
financings within the firm’s volume in 2017 sources than underwriting to ensure timely,
in 2017 brokerage offices any other firm
predictable closings
in the industry
24PROPERTY
H&R BLOCKNAME
NET LEASED PROPERTIES GROUP
Number of Net Leased Properties Sold— Down-Leg Property Type Migration
% of 1031 Exchange
OTHER LAND
OFFICE
700 50% RETAIL 7% 2%
2%
CENTERS
45%
600 13% INDUSTRI
40%
AL
500 35% 1%
400 30%
MIXED-
25%
300 USE
20% 1%
200 15% NET
10% LEASED
100 21%
5%
- 0%
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
2Q17
3Q17
4Q17
1Q18
2Q18
APARTME
# Sold % 1031x NTS
53%
Source: Marcus & Millichap 12 quarters ending June 30, 2018
25
#PROPERTY
H&R BLOCKNAME
NET LEASED PROPERTIES GROUP
Investors Choose Marcus & Millichap
More than Any Other Firm
7 YEARS
IN A ROW
The largest team of retail specialists in the
industry
A successful track record with more than
2,800 transactions closed in 2017
26
#H&R BLOCKNAME
PROPERTY
NET LEASED PROPERTIES GROUP
MOVING CAPITAL, MAXIMIZING VALUE
SOURCES OF CAPITAL
2% 14%
MI 4% NY
2% NJ
IL
2%
33%
CO
CA
2%
PA
2%
AZ 3%
NC
6%
TX
8%
FL
25%
OTHER
Source: Marcus & Millichap, : 01/01/2017 to 12/31/2017
27
#PROPERTY
H&R BLOCKNAME
NET LEASED PROPERTIES GROUP
The Retail Real Estate Investment Leader
A Successful Track Record with More Than 3,550 Transactions Closed in 2017
Net-Leased Drugstores Net-Leased Restaurants Net-Leased Banks Net-Leased C-Stores Net-Leased Discount Stores
2,550 Properties Sold 8,297 Properties Sold 871 Properties Sold 1,827 Properties Sold 2,075 Properties Sold
$12,069,900,000 $16,503,830,000 $2,326,458,000 $3,676,363,000 $3,065,022,000
The data for net-leased categories is for transactions dated approximately from 1986 through December 2016.
28
#H&R BLOCK
MARKETING TEAM
Juan Bustamante
Agent Candidate
Tel: (661) 377-1866
Fax: (661) 377-1879
juan.bustamante@marcusmillichap.com
License: CA 01880908
Bio
2,775
NET-LEASED
NET-LEASED
SPECIALISTS SALES
TRANSACTIONS
CLOSED IN 2016
29H&R BLOCK
MARKETING PLAN
Foreign and International Buyers
PREMIER Foreign investors seeking domestic
opportunities and technology enablers
ACCESS TO that direct foreign demand
INVESTOR
1031 Exchange Capital
PROFILES
Investors seeking acquisition opportunities
for capital gains tax deferral
Our comprehensive
marketing plan gives you Cross-Product Capital
access to the full spectrum Opportunistic investors seeking diversification in
other real estate property types
of investment profiles,
with a special emphasis
on cross-product and 1st Tier Investors
1031 exchange capital. Pension funds, advisors, banks, REITs,
and life insurance companies
2nd Tier Investors
Syndicators, developers, merchant builders,
general partnerships, and professional investors
3rd Tier Investors
Private, individual investors who account for
the majority of transactions in the marketplace
30H&R BLOCK
KEARNEYAPARTMENTS
MARKETING PLAN
MARCUS & MILLICHAP ADVANTAGE
MAXIMUM EXPOSURE CREATES MAXIMUM VALUE
Our comprehensive marketing plan provides strategic exposure for your asset. Whether the optimal strategy requires
maximum exposure within a single profile, broad exposure across all investor profiles, or a hybrid approach, our
platform ensures maximum value across every client profile. FOREIGN AND INTERNATIONAL BUYERS
As the leader in investment sales transactions annually, Foreign
capital is drawn to our firm as the conduit to the nation’s largest
exclusively listed inventory. Foreign investors seek our advice,
market reach and long-standing client relationships with the
industry’s largest pool of buyers and sellers.
1031 EXCHANGE CAPITAL
Access the Industry’s largest pool of 1031 exchange
buyers, as a result of closing more transactions annually
than any other commercial real estate brokerage firm.
CROSS-PRODUCT CAPITAL
Our collaborative culture across product types,
enabled through MNet, ensures access to the broadest
pool of qualified investors.
1ST TIER INVESTORS
Marcus & Millichap maintains long-term relationships with
MARKETING these investors via our IPA divisions, national product
PLAN specialty groups, and over 700 senior investment
professionals.
STRATEGY 2ND TIER INVESTORS
We access via our highly organized national product
specialty groups and the regional and national marketing
opportunities they present.
3RD TIER INVESTORS
Specializing exclusively in investment sales, our network of
more than 1,819 investment professionals throughout the
U.S. and Canada guarantees your property is exposed to the
largest pool of qualified buyers.
31H&R BLOCK
MARKETING PLAN
Our comprehensive marketing plan leverages all channels of communication to
COMPREHENSIVE maximize property exposure, both internally and externally. We provide and produce
offering memorandums, conduct internal and external email marketing, and initiate
INTERNAL AND
internal and external telephone contact.
EXTERNAL
EXPOSURE Exposure to the market ultimately determines the final outcome of a sale, and we
work to create the best exposure in the industry for your property.
OFFERING I NTE R NAL & E XTER NAL INTERNAL & EXTERNAL
MEMORANDUM EMAIL MARKETING P H O N E C O N TA C T
30-DAY LEAD: Finalize financial 30-DAY LEAD: Draft of email 30-DAY LEAD: Probable buyer
analysis, property overview, and campaign presented for client list created from team’s database,
photographs. approval. including probable exchange buyers
from prior 30-day sales comps.
DAY 4: Deliver a draft of the offering DAY 6: First wave of internal and
memorandum for client approval. external email campaign sent with DAY 6: Direct outreach to Marcus &
tracking capability for “opens.” Millichap sales professionals via
DAY 6: Begin active marketing, Commence follow-up via telephone to office presentations and telephone
using the offering memorandum sell the opportunity, gauge conferences.
as the focal point. In particular, interest,and overcome buyer
highlight the property’s future value. objections. DAY 8: Marketing team makes
direct telephone contact with list
Once active, the offering DAY 20: Begin second wave of email of all probable buyers.
memorandum is available to all campaign and telephone follow-ups.
Marcus & Millichap sales Note: Telephone campaigns continue
professionals to present to our large Note: Email campaigns continue throughout the listing period.
pool of pre-qualified buyers. throughout the listing period.
32H&R BLOCKNAME
PROPERTY
PRICING LOCATION
PRICING AND
AND TENANT SUMMARY
OVERVIEW
VALUATION
MARKETING
VALUATION MATRIX
PLAN
MATRIX
MARKETING TIMELINE
10-DAY LEAD DAYS 1–10 DAYS 11–20 DAYS 21–45 DAYS 46–90
Produce Offering Activate Listing in MNet, Execute E-Campaign Aggregate, Field Coordinate Escrow Process
Memorandum Our Proprietary Marketing to Qualified Private and Present All Offers
System, to Instantly Match Buyer Pool Conduct Property
Produce Flyers Prospective Buyers and Qualify and Refine Inspection
Investment Professionals Present Property on Buyer Pool
Finalize Underwriting with Your Property National Product Specialty Leverage Buyer to Open
and Lease Abstract Group Investor Call and Provide Access to All Escrow Non-Contingent
Present Property at Local Regional Calls Due Diligence to Mitigate
Client Review of All Sales Meetings Retrade, Legal Delays, etc. Close Escrow
Materials Actively Advertise Across
Personally Contact Target Multiple Platforms
Creation of Targeted Buyers: Private Hybrid and
Buyer List Institutional Execute Targeted Print
Campaign
Lender Evaluation Source Term Sheets in
Capital Markets
Source Term Sheets
in Capital Market Send Strategic Property
E-Campaign to Prospective
Client Review and Buyers and Promote 1031
Approval of All Materials Exchange Parameters
Expose Listing to
www.MarcusMillichap.com:
3,288 Hits Daily
PRIOR TO
ON MARKET
MARKETING
33
#H&R BLOCK
MARKETING PLAN
WHY MARCUS & MILLICHAP?
01 YOUR LOCAL AGENT
Specialists in product type and geographic location MARCUS &
Creates buyer competition to maximize price and increase probability
of a successful closing
MILLICHAP
Access to information sharing throughout the largest network of
IS A
investment professionals in U.S. and Canada as part of our
collaborative culture LEADING
Proactively promotes your property to local, regional, and national
Marcus & Millichap professionals
COMMERCIAL
02 THE MARCUS & MILLICHAP PLATFORM R E A L E S TAT E
INVESTMENT
Largest database of qualified investors in the industry
Unparalleled access to potential buyers, including one of the
SERVICES
largest databases of 1031 exchange buyers FIRM IN THE
More than 1,819 investment professionals working collaboratively
to achieve client results
U.S.
03 A HISTORY OF CLIENT RESULTS AND CANADA
Repeat clients Collaborative culture built on
information sharing
Decades worth of experience
Industry-leading technology platform
Highly-focused specialization
34H&R BLOCK
NATIONAL NET-LEASED RETAIL REPORT
Strong Tailwinds Continue to Propel Healthy Economy;
New Tax Law May Encourage Investors to Refine Strategies Investment Highlights
Tax reform powers economic acceleration. The new tax law has invigorated Over the past year, transaction velocity eased modestly as investors
economic growth, boosting consumption and business investment. With optimism awaited details on the new tax law. With much of that uncertainty now
running high, many companies have generated new jobs, dropping the national relieved, sales activity could accelerate. Furthermore, decreased taxes on
unemployment rate below 4 percent. A tightening job market has supported pass-through entities could lead to repositioning efforts, bringing more
increased wage growth, expanding personal disposable income more than 2 assets online and elevating market liquidity.
percentage points above the 10-year average to 5.4 percent. Because of this, core
The 1031 exchange was retained in the new tax law, remaining a
retail sales have benefited, rising by an average of 5.6 percent in May and June. The
commonly used practice for single-tenant net-leased investors. Investors
convergence of these factors has resulted in accelerated economic growth that
favor this tax provision to swap out management-intensive assets for
climbed above 4 percent.
properties that involve a more passive approach while deferring the
Elevated Treasury rates placing upward pressure on yields. A booming economy capital gains tax.
brings with it inflationary risk, prompting the Federal Reserve to tighten monetary
Under the new tax law, sale-leasebacks have become an increasingly
policy. The single-tenant net-leased retail sector may be substantively impacted by a
popular tactic. With new restrictions on business interest deductibility,
more disciplined monetary approach as assets are typically responsive to the 10-
some retailers are selling the real estate in which they operate to
year Treasury due to their bondlike parallels. This will coalesce with other
investors, then leasing it back to maximize deductions. This process
components such as brand, location and lease terms when determining going-in cap
opens the door for reinvestment into existing assets and investment into
rates. For example, dollar store yields can vastly differ as a number of these assets
future plans as more capital would be available.
are in rural locations, providing potential for higher returns. Conversely, yields for
convenience stores and quick-service restaurants typically maintain a much smaller
range due to their tempered sensitivity to key determinants of cap rates.
* Forecast
** Through June
35H&R BLOCK
NATIONAL NET-LEASED RETAIL REPORT
New Tax Law Provides Spark to Investors;
Sale-Leaseback Opportunities Could Increase
New provisions, preservation of old ones may boost investor sentiment. Changes to the tax code, as well as the
retention key provisions like tax-deferred exchanges, real estate depreciation and mortgage interest deduction should
keep investor sentiment high for single-tenant net-leased retail assets. Additionally, new pieces to the tax code should
further boost the appeal of these relatively passive investments. For example, the new 20 percent pass-through
deduction enables some active investors using an entity such as an LLC to boost after-tax yields. However, this
deduction comes with restrictions based on income and asset base but offers strong potential for those who qualify.
Additionally, bonus depreciation is a temporary provision allowing investors to increase their current cash flow by
immediately expensing personal property in real estate assets acquired after Sept. 27, 2017.
Changes to tax law could inspire owner/users to seek sale-leasebacks. The most influential change to the tax
code on the single-tenant net-leased retail sector may be new restrictions on business interest deductions. This
provision could encourage companies to utilize sale-leasebacks as they shape their real estate strategies around
lease expenses that remain fully deductible. For owner/users, selling the real estate in which they operate to investors
and then leasing it back from them could maximize profitability, as well as unlock equity for reinvestment into current
operations and funds for potential expansion plans. Also, the previous tax law allowed companies to deduct all of their
interest expenses on their taxes, but the new provisions restrict the deductibility of business interest for companies
with gross receipts in excess of $25 million. Now, interest totaling just 30 percent of earnings before taxes,
depreciation and amortization can be deducted on taxes, further incentivizing companies to pursue sale-leasebacks.
* Through July
** Forecast
36H&R BLOCK
NATIONAL NET-LEASED RETAIL REPORT
Solid Fundamentals Aided by New Concepts
Rents benefit from thinned construction pipeline. Available space in the single-tenant net-leased sector will
contract for the ninth consecutive year, pushing national vacancy down to 4.3 percent in 2018. Even though demand
remains strong, construction will continue to taper this year, completing 36 million square feet. The percentage of
single-tenant construction is reduced for the second year in a row as developers step back construction. With limited
retail property completions, rent gains should be strong this year, advancing 4.2 percent to $21.18 per square foot.
This increase well exceeds the previous five-year average of 3.2 percent.
Retailer strategies change to match consumer needs. Convenience continues to emerge as a common theme in
the single-tenant net-leased retail sector as several types of retailers have adopted this concept to drive foot traffic
and sales. For example, drugstores have improved their product selection by including items historically purchased at
convenience stores and grocery stores. This strategy has also helped these retailers improve front-store sales and
hold a greater edge over online pharmacies. Additionally, dollar stores have added convenience to their affordable
product mix by offering instant-consumption items, such as grab-and-go sandwiches and beverage bars.
** Forecast
37NATIONAL NET-LEASED RETAIL REPORT
Brand Locations
Auto Parts
Bridgestone/Firestone 2,200
O'Reilly Auto Parts 5,019
AutoZone 6,003
Advance Auto Parts 5,183
Pep Boys 980
Dollar Stores
Dollar General 14,534
Dollar Tree/Family Dollar 14,835
General Retail
Walmart 11,718
Sherwin-Williams 4,620
AT&T 16,000
Verizon Wireless 2,330
Office Depot/Max 1,378
Convenience Stores
7-Eleven 8,707
Circle K 1,481
QuikTrip 762
Wawa 780
Pharmacies
CVS 10,091
Walgreens 8,100
Quick-Service Restaurants
Dairy Queen 6,400
Starbucks 27,339
McDonald's 37,241
Yum Brands 45,084
Burger King 24,707
Wendy's 6,634
Cap rates shown above are representative of transactions that
Fast Casual closed in the past year ending in June. Actual yields will vary
Chili's 1,674 by locations, tenant, lease terms and other considerations.
Locations sourced from CreditNtell for public companies and
Darden Restaurants 1,769 company websites for private companies.
Red Lobster 705
Bloomin’ Brands 1,489 * For transactions closed in past year ending in June
Sources: CoStar Group, Inc.; CreditNtell; company sources
Applebee's 1,756
Ruby Tuesday 560
38H&R BLOCK
NATIONAL NET-LEASED RETAIL REPORT
Capital Markets
Lenders Pursue Deals as Capital Plentiful;
Caution Enforcing Underwriting
Fed watchful as economic surge raises inflationary pressure. Strengthened hiring amid exceptionally low unemployment levels have boosted wage growth, placing upward
pressure on inflation. Amid this trend coupled with rising trade protectionism and tariffs, the Federal Reserve appears determined to head off inflation risk by continuing its
quarterly increases of the overnight rate. These actions are lifting short-term interest rates while the 10-year Treasury rate remain range bound near 3.0 percent. Should the 10-
year remain steadfast, Fed tightening could create an inverted yield curve in which short-term rates rise above long-term rates. Although this event has preceded every
recession of the past 50 years, many economists suggest such an inversion this year could be an exception to the rule. Because of distortions caused by regulatory changes
and quantitative easing, this inversion could be different. Nonetheless, the Fed’s stated path does raise recessionary risk levels because it could weigh on confidence levels and
restrain spending by consumers and businesses, thus slowing economic growth.
2018 Capital Markets Outlook
10-Year Treasury still “sticky” at 3 percent. After surging at the beginning of the year, the 10-year Treasury has been range bound near 3.0 percent. To create some headroom
for its escalation of short-term rates, the Fed has tried to exert upward pressure on long-term interest rates by unwinding its balance sheet. This quantitative tightening has had
little influence, particularly as foreign investors have enjoyed a yield premium relative to their native 10-year rates.
Potential rapid interest rate escalation a downside risk. Although capital remains plentiful, lending could tighten quickly for a short period if interest rates rise rapidly. As
experienced in late 2016 when the 10-year rose by more than 80 basis points in 60 days, and again at the beginning of 2018 when there was a 60-basis-point surge, market
liquidity could tighten if rates jump. Considering this has happened twice in the last two years, borrowers will likely benefit by taking a cautious approach with their lenders and
lock in financing quickly.
* Through July 20
** As of Aug. 17
39PROPERTY
H&R BLOCKNAME
PRICING LOCATION
PRICING AND
AND TENANT SUMMARY
OVERVIEW
VALUATION
VALUATION MATRIX
DEMOGRAPHICS
MARKETINGMATRIX
TEAM
CREATED ON OCTOBER 9, 2018
1 Miles 3 Miles 5 Miles
POPULATION
2022 Projection 15,335 21,097 25,450
2017 Estimate 14,813 20,757 24,674
2010 Census 14,371 20,083 23,652
2000 Census 12,602 17,904 20,066
INCOME
Average $43,499 $43,490 $45,425
Median $31,676 $31,312 $32,368
Per Capita $9,708 $9,984 $10,584
HOUSEHOLDS
2022 Projection 3,471 4,955 6,071
2017 Estimate 3,306 4,754 5,733
2010 Census 3,238 4,638 5,535
2000 Census 2,959 4,316 4,890
HOUSING
2017 $110,450 $114,115 $123,104
EMPLOYMENT
2017 Daytime
10,924 16,635 20,980
Population
2017
14.16% 14.02% 13.82%
Unemployment
2017 Median Time
28 27 27
Traveled
RACE & ETHNICITY
White 43.62% 45.17% 46.37%
Native American 0.06% 0.05% 0.05%
African American 0.85% 0.90% 1.21%
Asian/Pacific
0.51% 0.63% 0.92%
Islander
Source: © 2015 Experian
40#PRESENTED BY
Juan Bustamante
Agent Candidate
Bakersfield Office
Tel: (661) 377-1866
Fax: (661) 377-1848
juan.bustamante@marcusmillichap.com
License: CA 01880908
www.MarcusMillichap.com
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