TEXAS ROADHOUSE OFFERING MEMORANDUM - CLICK FOR PROPERTY VIDEO - LoopNet
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OFFERING MEMORANDUM
TEXAS ROADHOUSE
20280 I-30 N, Benton, AR 72019
CLICK FOR PROPERTY VIDEO ™
E X C L U S I V E LY L I S T E D B Y
CH A D KUR Z A R O N CLI NE J ES S I CA D EA RNLEY
L I C # 0 19 0 4 3 71 (CA ) BROKER OF RECORD
LI C # PB0 0 0 6 884 7
SVP & National Director CA LV I N S HORT
chad. kurz@matthews.co m L I C # 0 19 2721 6 (CA )
DIR (214) 692-2927
MOB (562) 480 -2937 J O S H BI S HOP
LIC # 019 1 119 8 (CA) L I C # 68881 0 (T X)
™
2 | Offering Memorandum
EXECUTIVE SUMMARY
INVESTMENT HIGHLIGHTS
Brand New Ground Lease 2016 Average Capital Investment
The property was completed in 2017 and offers an initial 10-year lease term with three, 5-year options. The for New Restaurant:
current rent of $105,500 increases 10% every 5 years, including within the option period. The tenant invested LAND
a substantial amount of money into the improvements which allows an investor to purchase it at an extremely $1,220,000
low price point under $2M.
BUILDING
Dynamic Retail Area with Significant Retail Growth $1,940,000
Property sits in front of a newly constructed, 150,000 SF neighborhood center anchored by Hobby Lobby,
PetSmart, TJ Maxx, HomeGoods, and Ulta Beauty. In 2015, Hurricane Village Creek was constructed next door; FURNITURE & EQUIPMENT
a ± 200,000 SF center anchored by Kroger Marketplace and Academy Sports. Across from the property is a $1,155,000
± 250,000 SF Target-anchored center. Other new developments in the area include: Verizon, Buffalo Wild
Wings, Freddy’s Frozen Custard, Zaxby’s, Infiniti of Central Arkansas, Slim Chickens, and others. PRE-OPENING COSTS
$615,000
Great Store Sales and Still Growing
OTHER
Texas Roadhouse has extremely strong store sales; average store sales is $4,802,000, up 17.50% over the past
$30,000
5 years. If this site performs at average, it will have an incredibly low 2.20% rent-to-sales ratio.
TOTAL
Strong Corporate Guaranty
Texas Roadhouse is a publicly traded company with a market cap of ± $4B. The stock price sits at ± $55 per $4,960,000
share which is up nearly 270% over the past 5 years. In 2016, Texas Roadhouse, Inc. had revenue of ± $2B with
net operating income of $171,900,000. VS
Price of Subject Property:
Capital Investment for new Texas Roadhouse is $5M
According to the 2016 10-K, Texas Roadhouse estimates that the average capital investment for Texas Road- TOTAL
house restaurant in 2017 to be $5,100,000. For 2016, the average capital investment for just the land and build- $1,918,180
ing of a new Texas Roadhouse is $3,160,000, well below the current asking price.*
*Texas Roadhouse data taken from their 10-K report and Yahoo Finance.
Te x a s R o a d h o u s e - B e n t o n , A R | 3
™ 4 | Offering Memorandum
FINANCIAL OVERVIEW
FINANCIAL HIGHLIGHTS A N N UA L I Z E D O P E R AT I N G DATA
Lease Commencement Monthly Rent Annual Rent Rent/SF Cap Rate
Price $1,918,180 Current - 6/30/2022 $8,791.67 $105,500.00 $14.73 5.50%
Cap Rate 5.50% 7/1/2022 - 6/30/2027 $9,670.83 $116,050.00 $16.20 6.05%
Gross Leaseable Area 7,163 SF
Extension 1 $10,637.92 $127,655.00 $17.82 6.66%
Lot Size ± 1.68 Acres (73,093 SF)
Extension 2 $11,701.71 $140,420.50 $19.60 7.32%
Year Built 2017
Extension 3 $12,871.88 $154,462.55 $21.56 8.05%
TENANT SUMMARY
Tenant Name Texas Roadhouse
Lease Guarantor Corporate
Lease Type Ground Lease
Type of Ownership Fee Simple
Roof and Structure Tenant Responsibility
Original Lease Term 10 Years
Rent Commencement Date 6/12/2017
Lease Expiration Date 6/30/2027
Term Remaining on Lease ± 9.25 Years
Increases 10% After 5 Years
Options Three, 5-Year Options
Te x a s R o a d h o u s e - B e n t o n , A R | 5
™ 6 | Offering Memorandum
TENANT OVERVIEW
Tenant Name Texas Roadhouse
Ownership Public (NASDAQ: TXRH)
Market Cap $4.029B
Revenue $1.99B (2016)
Locations ± 525
Employees ± 47,900
Headquartered Clarksville, IN
Year Founded 1993
Website www.texasroadhouse.com
TENANT OVERVIEW
Texas Roadhouse was founded on February 17, 1993 in Clarksville,
Indiana. Since then the chain has opened over 450 locations in 49
United States, and in Saudi Arabia, Kuwait, United Arab Emirates,
Qatar, Philippines, and Taiwan. Texas Roadhouse Corporation is
headquartered in Louisville, Kentucky.
Texas Roadhouse serves American cuisine, including steak, ribs,
chicken, and seafood. Their steaks are hand-cut and are never frozen.
They are also known for their free buckets of peanuts at each table
along with free yeast rolls. Texas Roadhouse’s slogan is “Legendary
Food, Legendary Service”.
2015
2016
2018
2017
Te x a s R o a d h o u s e - B e n t o n , A R | 7
Texas Roadhouse Sizzles on Huge Comps Gains
madison.com (Dan Caplinger) Feb 21, 2018
Restaurant chains across the industry have faced tough conditions for a long costs, although weaker food costs helped to contain overall expense increases
time, with rising competition and structural challenges combining to put pres- and left restaurant margin figures down just a tenth of a percentage point to 17%.
sure on revenue and profits for many companies in the space. Texas Roadhouse
(NASDAQ: TXRH) has found a way to avoid the restaurant downturn, and its Texas Roadhouse kept on opening new locations at a similar pace to previous
consistent performance has produced big gains for long-term shareholders over quarters. The company opened seven new corporate-owned restaurants and
the past several years. two international franchise restaurants during the quarter. That brought the total
number of stores to 550 systemwide.
Coming into Tuesday’s fourth-quarter financial report, Texas Roadhouse inves-
tors wanted to see the steakhouse chain continue to show its strength. Texas CEO Kent Taylor celebrated 2017. “We delivered another strong year of results,”
Roadhouse once again managed to produce impressive financial performance, Taylor said, “with double-digit revenue and diluted earnings-per-share growth
and even though some investors were still hungry for more, the long-term pros- for both the fourth quarter and the full year.” The CEO also pointed to the 32nd
pects for the chain look good. Let’s take a closer look at Texas Roadhouse and consecutive quarter of positive comparable restaurant sales as a milestone in
what its latest results say about its future. Texas Roadhouse’s history.
Order up for Texas Roadhouse What’s next for Texas Roadhouse?
Texas Roadhouse’s fourth-quarter results marked a great finish to a strong year. Texas Roadhouse has carried its good performance into 2018. Taylor said that
Total revenue came in at $545.1 million, up 12.5% from a year ago and match- comps for the first 55 days of the first quarter were up 4.7%, as the company got
ing expectations among those following the stock. Net income jumped 38% to a boost from the move of the New Year’s holiday to Monday as well.
$28.6 million, and that translated to earnings of $0.40 per share, $0.03 higher
than the consensus forecast among investors. In terms of official guidance, Texas Roadhouse didn’t change much in terms of
what it sees ahead for 2018. The company adjusted its tax rate expectations
In several recent quarters, Texas Roadhouse has managed to build business at downward to 15% to 16%, but it still sees positive comparable-restaurant sales,
its existing locations, making it stand out from the crowd. That happened again 30 new restaurant openings, flat food costs, and mid-single digit percentage
this quarter, with a 5.8% rise in comparable-restaurant sales at company-owned gains in labor costs.
locations and a 4.7% gain in comps for franchise restaurants domestically. That
the Christmas holiday fell on a Monday this year had a positive impact that Texas The restaurant chain also delivered more dividend income to shareholders. The
Roadhouse estimated to be 0.4 percentage points, but the comps gains overall company declared a $0.25 per share payout for the quarter, up 19% from the
reflected even faster growth than the company has seen recently. $0.21 it had paid previously. The new payout puts Texas Roadhouse’s yield at
about 1.75%.
However, some investors weren’t entirely pleased with the way that Texas Road-
house achieved its results. Income tax rates fell by nine percentage points to just Texas Roadhouse investors seemed to have wanted an even better quarter than
below 20% during the quarter, and that added $0.04 per share to the bottom the steakhouse chain had, as the stock fell 4% in after-hours trading following
line. It’s unclear to what extent investors had incorporated tax-related changes the announcement. Yet as long as the company can buck adverse trends that
into their expectations, but some could argue that looking at earnings on an ad- are hurting its competitors a lot more, Texas Roadhouse should be in a good
justed basis would have left Texas Roadhouse just shy of what they had wanted position to keep expanding and being successful in the future.
to see. On the margin front, Texas Roadhouse kept struggling with higher labor
8 | Offering Memorandum
™ Te x a s R o a d h o u s e - B e n t o n , A R | 9
PROPERTY OVERVIEW
SITE PLAN
THE OFFERING
Property Name Texas Roadhouse
20280 I-30 N
Property Address
Benton, AR 72019
Site Description
Number of Stories One
Year Built 2017
Gross Leasable Area (GLA) 7,163 SF
Lot Size ± 1.68 Acres (73,093 SF)
Type of Ownership Fee Simple
Parking ± 129 Surface Spaces
Parking Surface Asphalt
Parking Ratio 18.01 : 1000 SF
Landscaping Professional
Topography Generally Level
Construction
Exterior Cedar and Brick
Foundation Concrete Slab
Framing Steel
Roof Pitched
10 | Offering MemorandumSURROUNDING TENANTS
Te x a s R o a d h o u s e - B e n t o n , A R | 1 112 | Offering Memorandum
Te x a s R o a d h o u s e - B e n t o n , A R | 1 3
SUBJECT PROPERTY 14 | Offering Memorandum
AREA OVERVIEW BENTON, AR Benton, known as the heart of Arkansas, is a suburb of Little Rock and the county seat of Saline County. Established in 1837, it is part of the Little Rock–North Little Rock–Conway Metropolitan Statistical Area. Located halfway between Little Rock and Hot Springs along I-30, Benton makes a perfect home base for those traveling to both communities while also seeking the small-town charm Benton has to offer. DEMOGRAPHICS POPULATION 1-Mile 3-Mile 5-Mile 2000 Census 3,068 19,833 42,227 2010 Census 4,365 29,810 56,326 2018 Estimate 5,061 34,649 63,821 2023 Projection 5,390 36,961 67,396 Percent Growth: 2000 to 2010 42.27% 50.30% 33.39% Percent Growth: 2010 to 2018 15.95% 16.23% 13.31% Percent Growth: 2018 to 2023 6.50% 6.67% 5.60% HOUSEHOLDS 1-Mile 3-Mile 5-Mile 2000 Census 1,179 7,493 16,094 2010 Census 1,829 11,672 21,806 2018 Estimate 2,142 13,546 24,790 2023 Projection 2,292 14,439 26,204 Percent Growth: 2000 to 2010 55.13% 55.77% 35.49% Percent Growth: 2010 to 2018 17.11% 16.06% 13.68% Percent Growth: 2018 to 2023 7.00% 6.59% 5.70% INCOME 1-Mile 3-Mile 5-Mile Average Household Income $62,753.94 $70,329.63 $71,750.30
LITTLE ROCK, AR
Located along the south bank of the Arkansas River in Pulaski County,
Arkansas, the city of Little Rock is the capital and most populous city in
the state. It is close to the geographic center of the state, at the crossroad
of Interstate 30 and the most heavily traveled Interstate in the country,
Interstate 40.
Home to a thriving New South culture that offers a vibrant nightlife, world-
class attractions and a notable dining scene, Little Rock is one of the
top Arkansas vacation spots. Cultural assets around the city include The
Arkansas Arts Center, the Arkansas Repertory Theatre and the Arkansas
Symphony Orchestra. Meanwhile, recreational opportunities such as
running or biking the 15-mile Arkansas River Trail and boating on the river
trail are available for outdoor enthusiasts.
Little Rock’s residents enjoy low housing costs, competitive wages and
relatively high incomes, especially considering that Little Rock is a capital
city. Furthermore, there is ample availability of healthcare resources through
the University of Arkansas for Medical Sciences and its healthcare partners.
These medical facilities provide an efficient, wide-range of services to
more than two million people throughout Arkansas. As the only academic
health center in the state, the University of Arkansas for Medical Sciences
integrates education, research, and clinical programs, thereby bringing a
unique approach to lead healthcare improvement in Arkansas. Cutting-
edge medical research and procedures at the University of Arkansas for ECONOMY
Medical Sciences continues to capture international attention.
Little Rock is a major cultural, economic, government and transportation
center within the state of Arkansas and throughout the South; It is a center
for several major employers in a variety of industries including healthcare,
aerospace, banking, and finance, technology, advanced manufacturing,
government, education, and agriculture.
The economy is supported by the state government, fostering a growing,
business-friendly environment. Furthermore, the city’s central location
provides convenient access to forty percent of the nation’s buying
power within a 550-mile radius. Attracted by these advantages, Dillard’s,
Windstream Communications, Acxiom, Stephens Inc., University of
Arkansas for Medical Sciences, Heifer International, the Clinton Foundation
and the Rose Law Firm have established their headquarters in Little Rock.
There are numerous city departments working with other public sector
agencies and private developers to expand existing businesses and attract
new businesses in order to promote job creation. As a city that looks to the
future, Little Rock is strongly committed to developing economic growth.
16 | Offering MemorandumC O N F I D E N T I A L I T Y & D I S C L A I M E R S TAT E M E N T
This Of f er ing Me m o r a n du m co n t a i n s s e l e ct i nform ati on pertai ni ng to the busi ness and affai rs of Tex a s Roa dhouse locat ed at 2028 0 I-30 N, Benton,
AR 7 20 1 9 ( “ P r o p e rt y ” ) . It h a s be e n p r e p a r ed by Matthews Real E state Investm ent Servi c es. Thi s Offerin g M emoran d u m may n ot b e all-in clu s ive
o r co nt a in a ll o f t h e i n f o r m a t i o n a p r o s p e ct i ve purc haser m ay desi re. The i nform ati on c ontai ned in t h is Offerin g M emoran d u m is con fid en t ial an d
f urnished so le ly f o r t h e p u r p o s e o f a r e v i e w b y a prospec ti ve purc haser of the Property. It i s not to b e u s ed for an y ot h er pu rpos e or mad e availab le
to any o t he r p er so n w i t h o u t t h e w r i t t e n co n s ent of Sel l er or Matthews Real E state Investm ent Servi ces . Th e mat erial is b as ed in part u pon in format ion
su p p lie d b y t he S e l l e r a n d i n p a r t u p o n f i n a n ci al i nform ati on obtai ned from sourc es i t deem s rel i able. Own er, n or t h eir officers , employees , or agen t s
makes a ny r e p r es e n t a t i o n o r w a r r a n t y, e x p r ess or i m pl i ed, as to the ac c urac y or c om pl eteness of t h is Offerin g M emoran d u m or an y of it s con t en t s
and no leg a l lia b il i t y i s a s s u m e d o r s h a l l be im pl i ed wi th respec t thereto. Prospec ti ve purc hasers s h ou ld make t h eir own project ion s an d form t h eir
o wn c o nc lusio ns wi t h o u t r e l i a n ce u p o n t h e materi al c ontai ned herei n and c onduc t thei r own due diligen ce.
By a c kno w le d g ing y o u r r e ce i p t o f t h i s O f f e r ing Mem orandum for the Property, you agree:
1. T he Of f er in g M e m o r a n du m a n d i t s co ntents are c onfi denti al ;
2. Yo u w ill hol d i t a n d t r e a t i t i n t h e s t r i c test of c onfi denc e; and
3. Yo u w ill no t , di r e ct l y o r i n di r e ct l y, di sc l ose or perm i t anyone el se to di sc l ose thi s O fferi n g M emoran d u m or it s con t en t s in an y fas h ion or
ma nner d e t r i m e n t a l t o t h e i n t e r e s t o f the Sel l er.
Owne r a nd Ma t t h e w s Re a l Es t a t e In v e s t m e nt Servi c es expressl y reserve the ri ght, at thei r sol e d is cret ion , t o reject an y an d all expres s ion s of
inter est o r o f f e r s t o p u r ch a s e t h e P r o p e r t y a n d to term i nate di sc ussi ons wi th any person or enti ty reviewin g t h is Offerin g M emoran d u m or makin g an
o f f er t o p ur c ha s e t h e P r o p e r t y u n l e s s a n d u n ti l a wri tten agreem ent for the purc hase and sal e of the Propert y h as b een fu lly execu t ed an d d elivered .
If y ou w ish no t t o p u r s u e n e g o t i a t i o n s l e a di n g to the ac qui si ti on of the Property or i n the future you d is con t in u e s u ch n egot iat ion s , t h en you agree
to p ur g e a ll ma t e r i a l s r e l a t i n g t o t h i s P r o p e rty i nc l udi ng thi s O fferi ng Mem orandum .
A p r o s p ec t iv e p ur ch a s e r ’s s o l e a n d e xcl u s i v e ri ghts wi th respec t to thi s prospec ti ve transac ti on, th e Propert y, or in format ion provid ed h erein or in
con ne c t io n w it h th e s a l e o f t h e P r o p e r t y s h al l be l i m i ted to those expressl y provi ded i n an exec u t ed Pu rch as e Agreemen t an d s h all b e s u b ject t o
th e t e r ms t her e o f. In n o e v e n t s h a l l a p r o s p ec ti ve purc haser have any other c l ai m s agai nst Sel l er or M at t h ews Real Es t at e I n ves t men t Services or
any o f t heir a f f ilia t e s o r a n y o f t h e i r r e s p e ct ive offi c ers, Di rec tors, sharehol ders, owners, em pl oyee s , or agen t s for an y d amages , liab ilit y, or cau s es
o f act io n r ela t ing t o t h i s s o l i ci t a t i o n p r o ce s s or the m arketi ng or sal e of the Property.
This Of f e r ing Me m o r a n du m s h a l l n o t be de e m ed to represent the state of affai rs of the Property or con s t it u t e an in d icat ion t h at t h ere h as b een n o
ch ang e in t he s t a t e o f a f f a i r s o f t h e P r o p e r t y si nc e the date thi s O fferi ng Mem orandum .OFFERING MEMORANDUM
TEXAS ROADHOUSE 20280 I-30 N, Benton, AR 72019
E X C L U S I V E LY L I S T E D B Y
CH A D KUR Z A R O N CLI NE
L I C # 0 19 0 4 3 71 (CA )
SVP & National Director CA LV IN S HORT J ES S I CA D EA RNLEY
chad. kurz@matthews.co m L I C # 0 1 9 27 21 6 (CA ) BROKER OF RECORD
DIR (214) 692-2927 LI C # PB0 0 0 6 884 7 ™
MOB (562) 480 -2937 J O S H BI S HOP
LIC # 019 1 119 8 (CA) L I C # 68881 0 (T X)You can also read
