Otsego Marketplace 9175 Quaday Ave NE, Otsego, MN 55330
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NON-ENDORSEMENT AND DISCLAIMER NOTICE CONFIDENTIALITY AND DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved. NON-ENDORSEMENT NOTICE 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 DETAILS. SPECIAL COVID-19 NOTICE All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. Marcus & Millichap and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making.) OFFICES THROUGH THE U.S. AND CANADA WWW.MARCUSMILLICHAP.COM
04 FINANCIAL OVERVIEW Investment Summary Investment Highlights Offering Summary Offering Statement TABLE OF Rent Roll 10 CONTENTS PROPERTY OVERVIEW Tenant Profiles Aerial Photos Local Map Regional Map 19 MARKET OVERVIEW Demographic Summary
INVESTMENT SUMMARY INVESTMENT OVERVIEW Marcus and Millichap is pleased to present for your acquisition review Otsego Marketplace in Otsego, Minnesota. Otsego Marketplace has excellent exposure and frontage just off of Highway 101 at the intersection of Parish Avenue and 90th Street. The property is positioned directly in the middle of the growth that Otsego is currently experiencing and sits adjacent to Target, Holiday Inn, Rockwood, and Cowboy Jacks. The center sits in the middle of the fastest growing thoroughfare in Minnesota that connects Elk River to Rogers. The strip center is over 91 percent occupied, providing an investor with stability in the leases that are in-place, but also the opportunity for upside in leasing the remaining 878 square feet of vacant space. In addition to the stability in the occupancy and the long-term nature of most leases, the property also offers minimal deferred maintenance. LED Lighting was installed in 2016, the roof and HVACs units were all replaced in 2018, the parking lot was chip-sealed in 2020, and the cement sidewalks and pavers were also replaced. Otsego Marketplace is anchored by several national tenants including Edward Jones, American Family Insurance, and Sarpino’s Pizza. There are several leases that are currently well below market rent, offering additional upside for an investor to capture in a market with high population growth (25% since 2010). This growth has translated into retail demand as demonstrated by the new Coburn’s (regional grocer). 5
o 31,186 Square Foot Multi-Tenant Retail Building Situated on 2.40 Acres o 91% Occupied | Stabilized Investment with Upside in Leasing the Vacant Suite & in Converting the Gross Leases to Triple Net o Adjacent to Target, Holiday Inn, Rockwood & Cowboy Jacks o Long-Term Leases in Place | Minimal Near-Term Lease Rollover Risk o Minimal Deferred Maintenance | New Roof, HVACs in 2018 | Chip-Seal Parking Lot and Cement Sidewalk Replacement in 2020 | LED Lighting 2016 o Otsego is just 32 Miles Outside of Minneapolis o Otsego is Ranked #7 Safest City in Minnesota o 25% Population Growth since 2010 | 2nd Fastest Growing Suburb of Minneapolis
OFFERING SUMMARY EXECUTIVE SUMMARY OTSEGO MARKETPLACE Click to View Map: 9175 Quaday Ave NE, Otsego, MN 55330 Pricing Price $3,425,000 Cap Rate 8.31% Building Square Footage 31,186 Avg. HH Income Population Rentable Square Footage Price Per SF $109.82 $101,646 within 1 Miles 46,373 within 5 Miles 31,186 Current Occupancy 91.5% Year 1 NOI $284,461 Lot Size 2.40 Acres Year Built 2003 Net Operating Income Cap Rate Year Built $284,461 8.31% 2003 Annualized Operating Data (Year 1) OPERATIONS (YEAR 1) Scheduled Gross Income $449,045 CTI Reimbursements $36,314 Vacancy Factor (5%) $24,268 Operating Expenses $176,630 Financing Options Net Operating Income $284,461 Approximate Rate 4.00% Capital Reserves $4,678 Loan To Value 75% Loan Payments $162,706 Fixed Term 5 Years Cash Flow After Debt Service $117,077 Amortization 25 Years Multiple financing options are available based on buyer requirements. Please contact listing agents Cash On Cash Return 13.67% to discuss options in detail. Major Tenants MAJOR TENANTS GLA LEASE TYPE Three Rivers Fitness 9,785 Gross Edward Jones 1,118 Gross American Family Insurance 685 Gross 7 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 Services, Inc. © 2015 Marcus & Millichap
OPERATING SUMMARY FINANCIAL ANALYSIS Annualized Operating Data (Year 1) SUMMARY STATEMENT PROPOSED FINANCING Price: $3,425,000 First Loan Amount: $2,568,750 Terms: 4.00% Interest Current Cap Rate: 8.31% 25 Year Amortization 5 Year Term Square Feet: 31,186 Monthly Payment: $13,558.81 Price Per Square Foot: $109.82 Annual Payment $162,705.71 Year Built: 2003 OPERATING DATA OPERATING EXPENSES (Year 1) Scheduled Gross Income: $449,045 Taxes (2020): $1.86/psf $58,012 Insurance (Actual): $0.30/psf $9,200 CAM/Tax/Insurance $36,314 CAM (17-19 Avg.): $2.23/psf $69,695 Reimbursements: Management: 4.00% $18,334 Total Income: $485,359 Non-Reimbursable Utilities: $0.69/psf $21,389 Vacancy Factor: $24,268 5.00% Total Expenses $5.66 $176,630 Effective Gross Income: $461,091 Less Expenses: $176,630 Net Operating Income: $284,461 8.31% 8 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 Services, Inc. © 2015 Marcus & Millichap
RENT ROLL RENT ROLL TENANT APPROX. RENT LEASE APPORX. BASE ANNUAL LEASE RENT RENEWAL SUITE OCCUPANCY REIMB. NAME SF COMMENCE EXPIRATION RENT/SF RENT/MONTH RENT TYPE INCREASES OPTIONS 101-9175 Turbo Nails 1,520 4.87% 6/1/2010 5/31/2020 $16.96 $2,148.00 $25,776.00 NNN $7,566 Three Rivers 101-9201 9,785 31.38% 10/1/2018 12/31/2023 $11.04 $9,000.00 $108,000.00 Gross Option I-$12.26psf (1) 5-Year Fitness 6/1/21-$11.67psf 102 SC Realty 852 2.73% 6/1/2019 5/31/2022 $11.32 $804.00 $9,648.00 NNN Option I-$12.02psf $4,241 (2) 1-Year Option II-$12.38psf 104 The Fresh Squeeze 706 2.26% 10/1/2014 9/30/2024 $23.00 $1,353.17 $16,238.04 Gross 10/1/2021-$24.00psf Options I&II – 2% 105 National Guard 1,925 6.17% 10/1/2020 9/30/2025 $23.23 $3,726.00 $44,712.00 Gross (2) 5-Year Annual Increases 106 Vacant 878 2.82% $16.25 $2,021.77 $24,261.25 Gross 8/1/2021-$22.64psf 108 Sarpino's Pizza 1,289 4.13% 8/1/2014 7/31/2024 $22.31 $2,361.06 $28,757.74 Gross 8/1/2022-$22.98psf 8/1/2023-$23.33psf 11/1/2021-$16.65psf 109 Edward Jones 1,118 3.58% 11/1/2014 10/31/2024 $16.32 $1,520.48 $18,245.76 Gross 11/1/2022-$16.98psf 11/1/2023-$17.32psf Emmer for 1/1/2021-$18.75psf 112 1,718 5.51% 7/1/2013 12/31/2024 $18.38 $2,631.47 $31,577.64 Gross Congress 1/1/2023-$19.12psf American Family 201 685 2.20% 11/25/2009 12/31/2022 $16.80 $958.98 $11,507.76 Gross Insurance 202 Artistic Salon 1,251 4.01% 11/1/2017 10/31/2022 $9.83 $1,025.25 $12,303.00 NNN 11/1/2021-$10.13psf $6,227 1/1/2022-$14.07psf 203-204 ChiroFix 892 2.86% 1/1/2018 12/31/2023 $19.24 $1,430.00 $17,160.00 Gross 1/1/2023-$14.68psf 2/1/2021-$11.83psf 2/1/2022-$12.00psf Parasol Wellness 205 2,295 7.36% 2/1/2019 1/31/2036 $11.67 $2,232.59 $26,791.08 NNN 2/1/2023-$12.17psf $11,424 Collaborative *Tenant also pays $671.99/mo for TI 2/1/2024-$12.34psf 2/1/2025-$12.52psf Emmer 206 2,490 7.98% 1/3/2015 1/2/2021 $22.48 $4,663.70 $55,964.40 Gross Congressional 207 GBR Interpreting 1,352 4.34% 8/1/2016 7/31/2021 $9.13 $1,028.65 $12,343.80 Fixed NNN $6,855 Option I-$16.48psf First American 209 669 2.15% 4/15/2020 4/30/2021 $16.00 $892.00 $10,704.00 Gross Option II-$16.97psf (3) 1-Year Title Insurance Option III-$17.48psf Common Area 1,761 5.65% (Vacant) TOTAL SQUARE FEET: 31,186 100% MONTHLY INCOME: $37,385 TOTAL OCCUPIED SQUARE 28,547 91.54% ANNUAL INCOME: $449,045 FEET: TOTAL AVAILABLE SQUARE 2,639 8.46% AVERAGE RENT PSF: $14.40 FEET:
TENANT OVERVIEW TENANT OVERVIEW Three Rivers Fitness has one goal in mind, to provide members with a First American Financial Corporation is a United States financial services friendly, affordable, and fun place to workout. At Three Rivers Fitness, company which provides title insurance and settlement services to the their staff knows you buy name and welcomes you with a friendly smile, real estate mortgage industries. Their core business lines include title showering you with the community spirit that the gym embodies. Three insurance and closing/settlement services. First American is publicly Rivers Fitness was started in 2012 and caters to all ages and fitness levels. traded on the New York Stock Exchange under the ticker symbol “FAF” Their fully-certified personal trainers will make sure that you reach your and are an S&P 400 Component. Founded in 1889, they now have goals. From Spin to Zumba to Pump and Yoga-they have it all! In grown to having more than 18,705 employees and reporting annual additional, they also have a fully equipped Pilates studio and a highly revenue in excess of $6.2 Billion. experienced Pilates trainer. OWNERSHIP: Private OWNERSHIP: Public TENANT: Corporate TENANT: Corporate LOCATIONS: 1 EMPLOYEES: 18,705 COMPANY REVENUE: Unknown COMPANY REVENUE: Unknown YEAR FOUNDED: 2012 YEAR FOUNDED: 1889 HEADQUARTERED: Otsego, Minnesota HEADQUARTERED: Santa Ana, California WEBSITE: www.threeriversfitness.com WEBSITE: www.firstam.com 11 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 Services, Inc. © 2015 Marcus & Millichap
TENANT OVERVIEW TENANT OVERVIEW When it comes to crafting mouth-wateringly delicious gormet pizza, Edward Jones is a financial services firm headquartered in Des Peres, there is no doubt that Sarpino’s reigns supreme. We stand by our mission Missouri and serves investment clients in the U.S. and Canada, through to serve excellent food and offer exceptional experience for our customers its branch network of more than 14,000 locations and currently have every time they place an order. At Sarpino’s, there’s no need to sacrifice relationships with nearly 7 million clients and $1 trillion assets under convenience for a truly gourmet meal. Their specialty pizzas come management worldwide. The firm focuses solely on individual investors topped with only the highest-quality ingredients, including rich tomato and small-business owners. Edwards Jones is a subsidiary of The Jones sauce, savory meats, tangy mozzarella cheese, and the freshest vegetables Financial Companies, L.L.L.P., owned only by its employees and retired to compliment it all. Sarpino’s is headquartered in Lincolnshire, Illinois employees and therefore is not publically traded. and now operates over 250 locations. OWNERSHIP: Private OWNERSHIP: Private TENANT: Corporate TENANT: Corporate LOCATIONS: 250+ LOCATIONS: 14,000+ COMPANY REVENUE: Unknown COMPANY REVENUE: $8.594 Billion YEAR FOUNDED: 2012 YEAR FOUNDED: 1922 HEADQUARTERED: Lincolnshire, Illinois HEADQUARTERED: Des Peres, Missouri WEBSITE: www.gosarpinos.com WEBSITE: www.edwardjones.com 12 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 Services, Inc. © 2015 Marcus & Millichap
TENANT OVERVIEW TENANT OVERVIEW American Family Insurance is a private mutual company that focuses on GBR Interpreting & Translation Services provides spoken and sign property, casualty, and auto insurance while also offering commercial language interpreting services to a diverse spectrum of clients, including insurance, life, health, and homeowners coverage as well as investment MN State Courts, US Immigration Courts, Medical Providers, Insurance and retirement-planning products. Abbreviated as “AmFam”, Amercian companies, Law Firms, Immigration applicants, and Schools. Our goal is Family Insurance was founded in 1927 and is headquartered in Madison, to provide complete and precise communication, where all parties to the Wisconsin. In it’s 90th year, American Family Insurance became the 4th conversation would feel as close as possible to as if they spoke the same largest Wisconsin-based company and ranks #315 on the Fortune 500 language. list nationally with revenues of $8.8 Billion. AmFam has more than 10,000 employees and nearly 3,000 agents. OWNERSHIP: Private OWNERSHIP: Private TENANT: Corporate TENANT: Corporate # OF EMPLOYEES: 10,000 LOCATIONS: 1 COMPANY REVENUE: $10.3 Billion COMPANY REVENUE: Unknown YEAR FOUNDED: 1927 YEAR FOUNDED: Unknown HEADQUARTERED: Madison, Wisconsin HEADQUARTERED: Otsego, Minnesota WEBSITE: www.amfam.com WEBSITE: www.gbrinterpreting.com 13 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 Services, Inc. © 2015 Marcus & Millichap
MARKET AERIAL
LOCAL MAP 4.4 MILES 11.0 MILES 12.4 MILES Elk River, Big Lake, Monticello, Minnesota Minnesota Minnesota
REGIONAL MAP 30.5 MILES 307.2 MILES 365.9 MILES Minneapolis, Green Bay, Milwaukee, Minnesota Wisconsin Wisconsin
DEMOGRAPHIC SUMMARY MARKET OVERVIEW POPULATION 1 Miles 3 Miles 5 Miles HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles ▪ 2023 Projection Total Average Household Retail Expenditure $87,987 $84,399 $87,717 Total Population 1,972 26,448 49,095 ▪ Consumer Expenditure Top 10 Categories ▪ 2018 Estimate Housing $24,056 $22,286 $23,410 Total Population 1,830 25,140 46,373 Transportation $13,648 $12,645 $13,273 ▪ 2010 Census Shelter $12,415 $13,912 $13,980 Total Population 1,638 23,192 42,214 Personal Insurance and Pensions $9,965 $8,712 $9,376 ▪ 2000 Census Food $9,680 $8,939 $9,361 Total Population 1,266 15,653 28,539 Health Care $8,016 $7,168 $7,602 ▪ Current Daytime Population Entertainment $4,536 $4,195 $4,371 2018 Estimate 666 25,560 39,146 Utilities $4,150 $3,777 $3,976 HOUSEHOLDS 1 Miles 3 Miles 5 Miles Household Furnishings and Equipment $3,141 $2,838 $3,030 ▪ 2023 Projection Cash Contributions $2,505 $2,337 $2,480 Total Households 691 9,956 17,785 POPULATION PROFILE 1 Miles 3 Miles 5 Miles ▪ 2018 Estimate ▪ Population By Age Total Households 635 9,347 16,598 2018 Estimate Total Population 1,830 25,140 46,373 Average (Mean) Household Size 2.78 2.63 2.75 Under 20 28.45% 28.59% 29.10% ▪ 2010 Census 20 to 34 Years 17.18% 19.27% 18.39% Total Households 550 8,328 14,688 35 to 39 Years 7.31% 7.78% 7.52% ▪ 2000 Census 40 to 49 Years 15.51% 14.12% 14.34% Total Households 387 5,373 9,488 50 to 64 Years 23.04% 18.79% 19.77% ▪ Occupied Units Age 65+ 8.50% 11.45% 10.90% 2023 Projection 691 9,956 17,785 Median Age 38.00 36.36 36.67 2018 Estimate 649 9,675 17,010 ▪ Population 25+ by Education Level HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2018 Estimate Population Age 25+ 1,215 16,628 30,473 ▪ 2018 Estimate Elementary (0-8) 0.29% 0.74% 0.57% $150,000 or More 15.43% 13.88% 16.52% Some High School (9-11) 3.12% 3.77% 3.45% 25.39% 26.61% 29.45% High School Graduate (12) 31.37% 25.88% 25.13% $100,000 - $149,000 21.06% 17.15% 17.00% Some College (13-15) 25.57% 26.61% 25.85% $75,000 - $99,999 19.17% 17.16% 15.75% Associate Degree Only 15.47% 13.25% 13.36% $50,000 - $74,999 10.53% 10.72% 9.36% Bachelors Degree Only 18.49% 22.39% 23.25% $35,000 - $49,999 8.40% 14.47% 11.93% Graduate Degree 5.65% 6.83% 7.82% Under $35,000 $101,646 $99,969 $109,664 Average Household Income $88,722 $86,039 $94,178 Median Household Income $35,319 $37,487 $39,454 18 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 Services, Inc. © 2015 Marcus & Millichap
OTSEGO MARKETPLACE OTSE GO, MN Minnesota BOR: Jon Ruzicka License: 40583288 EXCLUSIVE OFFERING PRESENTED BY: OFFICES NATIONWIDE www.marcusmillichap.com
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