7250-7290 BOLLINGER ROAD| SAN JOSE,CA - … · TRADER JOE'S/ WELLS FARGO RETAIL CENTER BOLLINGER...

TRADER JOE ' S / WELLS FARGO RETAIL CENTER FOR SALE

7250-7290 BOLLINGER ROAD | SAN JOSE,CA

FOR SALE LEASEHOLD INTEREST| $7,950,000 7.56%

RICHARD HUELSMAN MATTHEW MAY

Managing Director President

310-463-3102 818.528.3999

[email protected] [email protected]

BRE #01956167 BRE#00912472

Trader Joe’s Exercised Early Lease Extension

mailto:[email protected]


TABLE OF CONTENTS

SECTION 1 PROPERTY INFORMATION

SECTION 2 LOCATION INFORMATION

SECTION 3 FINANCIAL ANALYSIS

SECTION 4 TENANT PROFILES

SECTION 5 SALES COMPARABLES

SECTION 6 RENT COMPARABLES

SECTION 7 DEMOGRAPHICS

01 PROPERTY INFORMATION

01S i l i c o n Va l l e yW e l l s F a r g o / S t a r b u c k s / P o p e y e ’ s in t h e H e a r t o f

7250-7290 B o l l i n g e r R d , S a n Jose, C A , S a n Jose, C A 95129

TRADER JOE'S/ WELLS FARGO RETAIL CENTER

BOLLINGER PLAZA SAN JOSE,CA

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

STRONG ECONOMIC FOUNDATION

Nearby national tech companies, such as Seagate Technology (.7 miles), Hewlett-Packard (7.9 miles), Google (10.8), and

the NASA Ames Research Center (9 miles), among many other companies in the general vicinity and the Silicon Valley area

provide a strong economic foundation and demographic base for BollingerPlaza.

EXCEPTIONAL PROPERTY LOCATION• The property is situated in San Jose, the heart of SiliconValley

• It sits less than 1.6 miles from the existing Apple Headquarters at 1 Infinite Loop and approximately 3.6 miles from

the new headquarters, Apple Park

• Apple has approximately 12,000 employees in its headquarters

• The property is surrounded by residences, schools, apartment buildings, retail stores, banks, and other consumer

sources in the immediate area

• Excellent exposure with approximately 89,884 vehicles per day

• Easy access to major highways--Interstate 280 and Highway 85

STRONG TENANT MIX

All three tenants, and Trader Joe’s, are nationally recognized brands that complement the center and area mix

EXCELLENT LOW MANAGEMENT OPPORTUNITY

• 100% Leased Retail Center

• NNN Leases in recently-constructed buildings (2008)

• Leasehold interest with approximately 40 years remaining

MATTHEW MAY // President // 818.528.3999 // [email protected] // BRE #00912472

RICHARD HUELSMAN // Managing Director // 310-463-3102 // [email protected] // BRE #01956167

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Located at 7250-7290 Bollinger Road at South De Anza Boulevard in San Jose, California,

Bollinger Plaza offers investors the opportunity to purchase the leasehold interest in a 100%

leased, grocery-anchored retail center in a high-visibility location in one of the top 10 markets in

the United States -- San Jose. The San Jose/Santa Clara area is the epicenter of Silicon Valley and

home to an affluent population with demand exceeding supply, and rents well above the

nationalaverage.

The property enjoys an urban infill location near the city's border with Cupertino, less than five

minutes from Apple's existing headquarters at 1 Infiniti Loop, and less than 10 minutes from its

new headquarters at 1 Apple Park Way, Cupertino, CA 95014. Apple has 12,000+ HQ

employees. The quality of the location is reflected in the tenant mix which includes Trader Joe's,

Wells Fargo, TPumps, and Popeyes, all national companies.

The property is easily accessible via Interstate 280 and State Highway 85, both within a half

mile.

Bollinger Plaza sits in the heavily-trafficked, signalized intersection of South De Anza Boulevard

and Bollinger Road at the city's border with Cupertino. The corner site is situated directly across

the street from The Home Depot on South De Anza, with Bank of the West and Burger King on

pads in front of the home improvement retailer. Additional tenants at the intersection include

Carl's Jr., HSBC Bank, and Taco Bell, as well as numerous other local retailers and restaurants.

A•lso within close proximity of the property, are De Anza Community College, Lucky

Supermarket, and CVSPharmacy.

PROPERTY SUMMARY

Sale Price: $7,950,000

Cap Rate: 7.56%

NOI: $601,160

Building Size: 19,804 SF

Year Built: 2008

Daily Traffic Count: @84,000

Zoning: C1, SanJose

Market: San Jose / Cupertino

Cross Streets: De Anza &Bollinger



PROPERTY INFORMATION



5

Cross Streets: 1.265 acres





TRADE AREA MARKET OVERVIEW

Landlords of retail properties in San Jose, Cupertino, and the surrounding areas up to Southern San

Francisco, otherwise known as Silicon Valley, have plenty to feel good about. While most retail

markets across the U.S. are slowly expanding and struggling to adapt to the rise in online retailing,

the sheer strength of the area's economic foundation, population, and income growth provides

investors an environment where demand for space outweighs supply pushing retail rents to rise faster

thaninflation.

According to CoStar, the vacancy rate for West San Jose, where the subject property is located, and

Cupertino, which has over 1,000,000 square feet of retail space, is less than 1%. Investors have

taken note with sales volume in 2016 surpassing its 2015 levels and property prices continuing to

increase.

As the chart on page 33 reflects, demand is far greater than the supply and land available leaving

tenants with limitedalternatives.

Moreover, it is important to note that Apple dominates the area with multiple facilities, including their

new 175-acre, $5B corporate headquarters. In addition to Apple and its 12,000+ employees, the

area is home to a broad spectrum of vendors, and their employees, that support Apple and the other

tech companies in the immediate trade zone such as Seagate Technology, HP, and De Anza College,

among many others. The Trader Joe's, TPumps, and Popeyes brands, all center tenants, are loved by

the area's residents and employees.



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RENTAL MARKET & SUPPLY

Few markets have seen stronger retail rent growth than San Jose this cycle, with neighbor San Francisco leading the nation. Landlords took a cautious stance

here coming out of the Great Recession and were slow to raise rents during the recession. However, by 2014, vacancies began to inch back down to 2007

levels, and rent growth accelerated rapidly. With steady demand and the lack of new supply in the market, growth averaged almost 6% year-over-year from

2014-2016 and althoughgrowthslowed in '17 Q1, year-over-year growthremained secondin thenation.

Construction remains in check despite tight fundamentals. Even with vacancies in the mid-single digits, supply underway remains at just 1% of inventory with a

little more than one million SF under construction as of June 2017. Today's low level of retail construction, despite the market’s current strength, reflects the

prevailing supply constraints that typically keep a lid on retail supply risk here. Since most of the metro is packed with relatively affluent suburban homes,

proposed projects often meet with community resistance, and given the shrinking number of developable parcels, most developers that are able to build today

are focused on apartmentor office projectssincedemand is strongerfor thesepropertytypes. (Source: CoStar 6/30/17 MarketReport.)

Source: MarketBeat, Retail Snapshot Q1 2016, San Jose Metro Shopping Centers, Cushman & Wakefield,



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TRADER J O E ' S / WELLS FARGO RETAIL CENTER FOR S ALE


PROPERTY PHOTOS



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PROPERTY PHOTOS



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TpumpsCOMING SOON





PROPERTY PHOTOS



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SITEPLAN



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PARCELPLAN



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02 LOCATION INFORMATION

02S i l i c o n Va l l e yT r a d e r J o e ’ s / W e l l s F a r g o / S t a r b u c k s / P o p e y e ’ s in t h e H e a r t o f




Bollinger Center

Other National Retailers within 2 miles:

LOCATION MAPS



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Bollinger Plaza

San Jose Airport

Upscale Mall

Highway 85

I-280

Santa ClaraUniversity



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LOCATION MAPS





NewAppleHQ

LOCATION MAPS

1.5 MILES



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Access from & frontageon Bollinger Road

Access from & frontage on S De AnzaRoad with signaled intersection



17

LOCATION MAPS





LOCATION MAPS



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03 FINANCIAL ANALYSIS





RENTROLL



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PROFORMA/PROPOSED2018 OPERATING BUDGET

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04 TENANT PROFILES





TRADERJOE'S

Trader Joe's Market

Originally called Pronto Markets, the iconic grocery retailer got its start as a chain of convenience

stores in 1958, changing its name to Trader Joe’s in 1967. Founded by Joseph Columbo, Trader Joe’s

enjoys a cult-likefollowingby itscustomersand boaststhehighestaverage of per-storesalesforany grocery

chain and ranksin thetop5% of all retailers.Althoughlittlehaschangedon theinsideof thestores,a lothas

changed on the ownership side. Today Trader Joe’s is owned by the Albrecht Family of Germany which

coincidentlyowns theAldi Grocery Store Chain, one of thelargestgrocerystoreoperatorsin theworld.

Financially, Trader Joe’s is considered a credittenantby Lenders.Theirability tosecurestrongreal estateand a

staticstoresize platformhasallowed it tomaintainthemostenviable ratioof continuouslyoperatingstoresin the

grocery industry. Trader Joe’s average sales per square foot of $1,750 exceeds those of Safeway, Kroger,

Whole Foods, and all other national grocery stores. The only retailer whose sales are close to Trader Joe's is

Apple.

Business Week reported that Trader Joe's quintupled the number of its stores between 1990 and 2001, and

multiplied its profits by ten.[Source: Bloomberg https://www.bloomberg.com/news/articles/2004-04-

25/trader-joes-the-trendy-american-cousin] Supermarket News estimatedTrader Joe's sales for 2015 at

$13 billion, and placed TraderJoe's 21ston thelistof "SN's Top 75 Retailersfor2016".

TENANT HIGHLIGHTS

• National CreditTenant

• Strong Co-Tenant to drive traffic

• History of Consistent Occupancy

• Efficient Store Size

• Loyal Customer Base



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http://www.bloomberg.com/news/articles/2004-04-





WELLS FARGOBANK

Wells Fargo Bank

Headquartered in San Francisco, California, Wells Fargo & Company is the world's second-largest bank by

market capitalization, the third largest bank in the U.S. by assets, and the second-largest bank in deposits,

home mortgage servicing, and debit cards. The bank is investment grade credit with an AA Standard &

Poor’s rating.

Wells Fargo has a strong foothold in the area and according to the FDIC, the deposit base of this branch is

over $129,500,000.00. Wells recentlyagreed toan early lease extensionfor this location.

TENANT HIGHLIGHTS

• World's Second Largest Bank

• Executed early lease extension

• Strong deposit base exceeding $129M

• Stable tenant

• Light parking use



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TPumps

TPumps

Tpumps is a fresh tea shop known for their many flavorful combinations — and their enormous lines.

They specialize in preparing Taiwanese iced drinks in a variety of flavors. Tpumps has locations

throughout the Bay area and Los Angeles.

TENANT HIGHLIGHTS

• Locations in Bay Area and Los Angeles

• Very popular with loyal following that leads to long lines

• Good and compatible customer base



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POPEYE'S

Popeye's Chicken

The Popeyes® brand was founded in New Orleans, Louisiana in 1972 and is the world's second largest quick-

service chicken concept (based on the number of units). Within the QSR industry, Popeyes distinguishes itself

witha unique "NewOrleans"stylemenu.

On February 21, 2017, Restaurant Brands International purchased Popeye’s Chicken. Restaurant Brands is a

Canadian multinational fast food company that was formed in 2014 by the $12.5 billion merger between

American fast food restaurant chain Burger King and the Canadian coffee shop and restaurant chain Tim

Hortons. Restaurant Brands is the third largest operator of fast food restaurants in the world. The merger

provided financial and operational efficiencies for both companies and validated the strength of both the

Popeye’s brandand RestaurantBrands’forward-looking prospectsfor their organization.

.

TENANT HIGHLIGHTS

• Long-Tern Lease

• Strong sales

• Multi-unit operator

• End-cap position with great exposure

• Loyal and diverse customer base



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05 SALESCOMPARABLES





DeerValleyCenterisa multi-tenantstripcenterwhich isofferedforsaleon

a 42-year groundlease.The Walgreens lease expiresin2019 and has

an occupancy costof13% ofsales.Thereisa RightofFirstRefusalon the

contractandtheground lease isprepaid.

1 DEER VALLEY RETAIL CENTER

3450 Deer Valley Road | Antioch, CA94531

1

Forever 21 and Gold's Gym are being offered for sale on a 33-year

ground lease as part of the larger Del Monte Shopping Center. The

parkingratioisonly 1.84/1,000 and the propertyisbeingofferedfor

salevia TexX inan Auction.

SALESCOMPS

2 FOREVER 21 & GOLDS GYM DEL MONTE CENTER

1500 Del Monte Center | Monterey, CA 93940

Sale Price:



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No Asking Price/Auction Sale Lot Size: 1 AC

Year Built: 1967 Building SF: 80,723

Price PSF: TBD Occupancy: 100%

NOI: $765,224

Sale Price: $11,000,000 Lot Size: 5.2 AC

Year Built: 1999 CAP: 7.75%

Occupancy: 96.5%%





SALESCOMPS

The Shops at Oak Creek is a 31,000 square foot retail center anchored

by TraderJoe's, Panda Express,and TheHabit. TheCenterisbeingoffered

on a Feebasis.

3 SHOPS AT OAK CREEK

28941 Canwood Street| AgouraHills, CA91301

Sale Price: $35,000,000 LotSize: 5.71 AC SalePrice: $22,650,000 LotSize: 1.8 AC

YearBuilt: 2007 BuildingSF: 36,186 SF YearBuilt: 1976 CAP: 5.53%

3

17th Street Retail is comprisedof two properties which can be purchased

separately ($15,075 and $22,625,000). Tenantsare all local operators.

The Ground leasehas62 years remainingwitha Right ofFirst Refusal.

4 WESTPORT PLAZA

369 E 17thStreet| NewportBeach, CA92627

Price PSF: $967.22 CAP: 4.4% Building Size: 39,022 SF

Occupancy: 80.0% Price per SF: $579.00



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SALE COMPS SUMMARY

7250-7290 Bollinger Rd,San Jose,CA

2

Antioch, CA 94531

Forever 21 & Golds Gym Del MonteCenter

1500 Del MonteCenter

No Asking Price.

Auction Sale. 80,723SF TBD TBD 2 OnMarket

Monterey, CA93940

3Shops at Oak Creek28941 CanwoodStreet $35,000,000 36,186SF $967.22 4.4% 11 OnMarket

Agoura Hills, CA 91301

4WestportPlaza369 E 17thStreet $22,650,000 39,022 SF $579.00 5.5% 17+ OnMarket

Newport Beach, CA 92627

PRICE BLDG SF PRICE/SF CAP

TOTALS/AVERAGES $17,162,500 18,133SF $946.48 5.9%

SUBJECT PROPERTY PRICE BLDG SF PRICE/SF CAP # OF UNITS CLOSE

Bollinger Plaza | Trader Joe's-AnchoredRetail Center

$7,950,000

San Jose, CA95129

19,804 SF $401.43 7.56% 4On Market

SALE COMPS PRICE BLDG SF PRICE/SF CAP # OF UNITS CLOSE

Deer Valley Retail Center1 3450 DeerValley Road $11,000,000 31,406 $350.25 7.8% 7 On Market



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SALE COMPS MAP

SUBJECT PROPERTY7250-7290 Bollinger Rd,San Jose, CA | San Jose,CA95129

1

DEER VALLEY RETAIL CENTER

3450 DeerValleyRoad

Antioch, CA 945312

FOREVER 21 & GOLDS GYM DEL MONTE CENTER

1500DelMonteCenter

Monterey, CA93940

3

SHOPS AT OAK CREEK

28941 Canwood Street

AgouraHills, CA 91301

4

WESTPORT PLAZA

369 E 17thStreet

Newport Beach, CA92627



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06 RENT COMPARABLES





RENTAL MARKET STATISTICS



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RENTCOMPS

SUBJECT PROPERTY

7250-7290 Bollinger Rd,San Jose, CA | San Jose,CA95129

LeaseRate: N/A LeaseRate: $4.50 SF/MO

SpaceSize: 0 SF SpaceSize: 3000 SF

YearBuilt: 2008 YearBuilt: 1974

BldgSize: 19,804 SF BldgSize: 68 SF

LotSize: 1.265 AC LotSize: 7 AC

No. Units: 4 Occupancy: 97%

Occupancy: 100.0%

1 MCCLELLAN SQUARE

10425 S De Anza Blvd | Cupertino, CA 95015

$4.50 SF/MO

NNN

1,600 SF

1965

31,412 SF

4.43 AC

88%

2 DE ANZA/85 SHOPPING CENTER

1131-1173 De Anza Blvd | San Jose, CA95129

Lease Rate:

Lease Type:

Space Size:

Year Built:

Bldg Size:

LotSize:

Occupancy:

De Anza/85 Shopping Center is anchored by H Market.

The tenant mix is comprised of local business such as a beauty spa, Swell Vipes and Maraja Tandoori. NNN =

$0.90 psf/mo. There are two spaces of 1,600 sf each - office or retail

McClellan Square is an older neighborhoodcenter constructed in 1974. TheCenteris anchored by Ranch 99

AsianMarket.

NNN = $1.25 psf/mo

$4.50 SF/MO

NNN

1560-7000 SF

2017

13,000 SF

.44

DE ANZA - RAINBOW PLAZA

1191-1195 S De Anza Blvd | San Jose, CA 95129

Lease Rate:

LeaseType:

SpaceSize:

Year Built:

Bldg Size:

LotSize:

3

Thepropertyis locatedby thefreeway entrance,however,thepropertyismid-blockand thereisa

medianonDeAnza so the access ischallenged.Availablespacesrange from 1,560-7,082 SF.



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$5.83 SF/MO

NNN

7,798 SF

1979

13,000 SF

9.08 AC

4 CUPERTINO MARKETPLACE

19780 Stevens Creek Blvd | Cupertino, CA 95014

Lease Rate:

LeaseType:

SpaceSize:

Year Built:

Bldg Size:

LotSize:

Thesubjectspace forlease ispartofthelarger CupertinoMarketplace. Thepriortenantwas Elephant

Bar Restaurant.Parkingratiofor the space is3.5/1,000 NNN = $1.30 psf/mo

$5.80 SF/MO

NNN

1,880 SF

2017

27,000 SF

Part ofmuch

largerparcel

Lease Rate:

LeaseType:

SpaceSize:

Year Built:

Bldg Size:

LotSize:

RENTCOMPS

5 MAIN STREET CUPERTINO TOWN SQUARE

20745 Stevens Creek Blvd Shop 6 | Cupertino, CA 95014

Redevelopment of the former Vallco Mall by Sandhill Partners. Upon completion Town Square will be comprised of

260,000 SF of office space, 130,000 SF of retail, 120 unit apartment complex and an 180 room hotel. The vacant

space has use restrictions. Food is not allowed.

$4.75 SF/MO

NNN

1,463 SF

1979

94,000 SF

10.63 AC


19640 Stevens Creek Blvd. | Cupertino, CA95014

Lease Rate:

LeaseType:

SpaceSize:

Year Built:

Dev Size:

LotSize:

Cupertino Marketplace is a 94,000 SF retail center constructed between 1978-1979in 1978. The center's interior

oriented design does notprovide exposure tothestreet.Theavailable space is built-outas retail, butcan be used for

take outfood



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SUBJECT PROPERTY

7250-7290 Bollinger Rd,San Jose, CA | San Jose, CA95129

1 MCCLELLAN SQUARE10425S De AnzaBlvd

2 DE ANZA/85 SHOPPING CENTER1131-1173 DeAnza Blvd

3 DE ANZA - RAINBOW PLAZA1191-1195 S De AnzaBlvd

Cupertino, CA 95015 San Jose,CA 95129 San Jose,CA 95129

4 CUPERINO MARKETPLACE

19780 StevensCreekBlvd

5 MAIN STREE CUPERTINO TOWN SQUARE

20745 StevensCreekBlvdShop 6


19640 StevensCreekBlvd.

Cupertino, CA 95014 Cupertino, CA 95014 Cupertino, CA 95014



RENT COMPS MAP



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07 DEMOGRAPHICS





POPULATION GROWTH



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POPULATION GROWTH



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EMPLOYMENT BY OCCUPATION



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HOUSEHOLD BY INCOME



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TRAFFICCOUNTS



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Who We Are

At May Realty Advisors (MRA) we are passionate about what we do. Our team of commercial real

estate advisors averages over 30 years of experience and a diversity of skills that range from asset

management tosales, leasing, due diligence, developmentand finance. Research and strong local and

national relationships drive our business. Our recommendations are driven by quantitative and

qualitative data on retaileroperations, finances, street-levelmarketintelligence,and retailing trends.

MRA is thefoundingmemberof two national brokerassociations:RetailBrokersNetwork and Capital

MarketsReal EstateNetworks. With over 60 officesin theUS and Canada, theyprovide MRA and our

clientsaccess toreal-timemarketdata, buyers and sellers from across the country, and national and

international opportunities.Collectively, MRA has closedover $3 Billion in transactions nationwide.

Our Mission

Ourmissionisto provide our clients with institutional level service with an entrepreneurial approach. We

focusentirelyontheneedsand concernsofourclient and on providing value. We recognize thatour

business comes from within our community and we have an opportunity and obligation to give back.

We acknowledge ourfiduciary obligationtoourclientsand respectthetrust theyhave bestowed upon

us. Our success is measured by thesuccess of our clients.



ABOUT MAY REALTY



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