BURGER KING - 20 YR GROUND LEASE - RELOCATION OF A …

Freddy’s Frozen CustardLakewood, CO

REPRESENTATICE

BURGER KING - 20 YR GROUND LEASE - RELOCATION OF A HIGHLY SUCCESSFUL SITE21070 N. CAVE CREEK RD

PHOENIX, AZ 85024

Offering Memorandum

REPRESENTATIVE PHOTO

AERIAL PHOTO BURGER KING GROUND LEASE

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap ACT ID Z0070004


2

M c D o n a l d ’s

1 4 , 0 0 0 S T U D E N T S

Walgreens

S U N S E T C A N Y O N E L E M E N TA R Y S C H O O L

N C

AV

E C

RE

EK

RO

AD

E U N I O N H I L L S D R I V E

Q U A I L R U N E L E M E N TA R Y S C H O O L

43

, 85

0+

CP

D

1 5 4 , 6 7 0 + C P D

PA R A D I S E VA L L E Y G O L F C O U R S E

P I N N A C L E H I G H S C H O O L

( 2 , 5 0 0 S T U D E N T S )

83

,76

0 C

PD

J i m m y J o h n ’s

O F F I C E / I N D U S T R I A L

D E E R VA L L E Y S P O R T S C O M P L E X


AERIAL PHOTO

3

BURGER KING GROUND LEASE



Starbucks

1 5 4 , 6 7 0 + C P D

N C

AV

E C

RE

EK

RO

AD

43

, 85

0+

CP

D


J i m m y J o h n ’s

P U D

O F F I C E / I N D U S T R I A L

EXECUTIVE SUMMARY


4


BURGER KING GROUND LEASE21070 N Cave Creek RdPhoenix, AZ 85024

FINANCIAL SUMMARY

Price $1,765,000

Down Payment 100% $1,765,000

Cap Rate 4.25%

Building SF +/- 4,000 SF

Net Cash Flow 4.25% $75,000

Year Built 2017

Lot Size .94 Acre

LEASE SUMMARY

Lease Type Absolute Triple-Net (NNN) Ground Lease

Tenant Barnett Management Company dba Burger King

Roof & Structure Tenant Responsible

Est. Lease Commencement April 1, 2018

Est. Lease Expiration March 31, 2038

Lease Term 20 Years

Rental Increases 10% Increases Every 5 Years

Renewal Options 4, 5 Year Options

BASE RENT $75,000.00

Net Operating Income $75,000.00

Total Return 4.25% $75,000.00

ANNUALIZED OPERATING DATA

LEASE YEARS ANNUAL RENT CAP RATE

1 - 5 $75,000 4.25%

6 - 10 $82,500 4.67%

11 - 15 $90,750 5.14%

16 - 20 $99,825 5.65%

EXECUTIVE SUMMARY

AERIAL PHOTO

5




Starbucks

This Burger King franchisee currently has 34 stores under the operating entity Barnett Management Company (“BMC”) --Tom Barnett, Shelley Krispin, Shane Jacobs (principals). BMC was named the Burger King Franchisee of the Year in 2014 by Burger King Corporate. BMC operates 34 stores in Arizona, with 8 stores currently under development, making them the largest franchisee in Arizona with a total of 42 stores by year end 2018.

Tom Barnett is a graduate of the Air Force Academy, received his MBA from UCLA and served as a fighter pilot in Vietnam. He is married to Georgia, and they have 2 children. Tom opened his first Burger King restaurant in 1980 and has never looked back. Tom is proud to be part of the Burger King system. Tom and his partners were responsible for the development and growth of the twenty-four Good Egg and Eggery Restaurants in Arizona until that concept was sold to First Watch in 2014. Tom surrounds himself with great people in order to run operationally superior restaurants profitably. Tom enjoys traveling with his family, piloting his own airplane, and snow skiing.

Shelley Krispin joined the organization in 1984 and became a partner in 1991. She oversees Operations, Development, and Finance. Shelley serves on Burger King Corporation’s Market-ing Council. Her past service includes Burger King Corporation’s Excellence Council, President of the Southwest Franchise Association, and a Board Member of the National Franchise Association. Shelley earned a B.S. in Accounting and an M.B.A. from Arizona State University. She enjoys the families of her 6 children (including 17 grandkids!) as well as reading, walking, and birding.

Shane Jacobs oversees the daily operations of Barnett Management’s 34 Burger King restaurants in Arizona. He began his Burger King career as a 16 year old, working in the kitchen. Shane serves on the Restaurant Council, a national Burger King Corporation committee of 17 franchisees that collaborate with BKC in operational decisions. Shane is married with five children.

www.barnettmgt.com

REPRESENTATIVE PHOTO




6

LOCATION OVERVIEWINVESTMENT HIGHLIGHTSThe subject property sits directly of off N. Cave Creek Road (43,850 cars per day) and just north of Arizona Loop-101 (154,670+ cars per day) - a primary arterial which connects several communities throughout the Phoenix MSA including Scottsdale, Tempe, Tolleson, Glendale, Peoria and Mesa. The store is ideally situated within a densely populated residential area with over 229,000 residents and 93,300 households within a 5-mile radius. The average household income exceeds $71,000 within a 1-mile radius. Burger King is surrounded by numerous tenants including Costco, QuikTrip, Culver’s, Chase Bank, Verizon, McDonald’s, Jack in the Box, Taco Bell, Coffee Bean and more. The property is a short drive from Paradise Valley Community College (14,000 students.)

As one of the primary beneficiaries of the massive shift in the U.S. population from north to south, the Phoenix metro has had little difficulty finding workers. Phoenix claims five Fortune 500 headquarters, including Freeport-McMoRan, Republic Services, Insight Enterprises, Avnet and PetSmart. Construction, high-tech manufacturing, healthcare and tourism dominate the Phoenix economy. The local economy has strengthened since the recession, with retail sales projected above 8 percent this year and hotel occupancy levels rising.

High-tech manufacturing has been a powerful driver in the local economy for two decades. The region’s relatively low cost of doing business has encouraged several manufacturers to remain and expand in the area, while luring others. The strengthening economy has drawn job seekers to the area, boosting the housing market.

Phoenix offers a lower cost of living than other metros its size, a moderate climate, and a wide variety of recreational and cultural activities.

The Phoenix region boasts almost 300 days of sunshine annually, low humidity and mild winters. In addition to hiking, camping and boating, sports enthusiasts can enjoy one of the most complete lineups of major-league teams found in any city, including teams in all four major sports. The Cactus League holds spring training baseball throughout the Valley, and the area has numerous golf courses and tennis courts.

• New 20-Year Absolute Triple Net (NNN) Ground Lease

• 10% Rental Increases Every Five Years

• Lease is Personally Guaranteed by the Operator in Addition to the Franchisee Guaranty

• 2017/2018 Construction - Currently Under Construction with Rent Commencement Expected on April 1, 2018

• Relocation of a highly successful site

• Visible to 41,000+ Cars per Day from N. Cave Creek Road

• Directly off of AZ Loop-101 - Over 224,600 Cars per Day

• Average Household Income Exceeds $86K in a 1-Mile Radius

• Next to Brand New QuikTrip, Salad And Go, Car Wash and 8,500-Square-Foot Retail Center

• Located in metro Phoenix AZ, the 5th largest city in the nation and fastest growing MSA in the country

• Tenant is Largest Burger King Franchisee in Arizona – 42 Locations in total by year end 2018

• Over 164,800 Employees within 5 Miles

PROPERTY DESCRIPTION

Income 1-Mile 3-Miles 5-Miles

2016 Est. Average Household Income $86,459 $76,573 $79,231

2016 Est. Median Household Income $63,807 $55,073 $55,389

2016 Est. Per Capita Income $38,231 $31,500 $32,136

Population 1-Mile 3-Miles 5-Miles

2021 Projection 7,259 87,565 215,632

2016 Estimate 6,420 81,498 206,370

Growth 2016 - 2021 13.08% 7.44% 4.49%

Households 1-Mile 3-Miles 5-Miles

2021 Projections 3,347 36,413 88,132

2016 Estimate 2,839 33,504 83,528

Growth 2016 - 2021 17.91% 8.69% 5.51%

DEMOGRAPHICS

AERIAL PHOTO

7




Starbucks

SITE PLAN

N C

AV

E C

RE

EK

RD




8

Williams-Sonoma

MAP

REGIONAL MAP

AERIAL PHOTO

9




Starbucks

LOCAL MAP

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

By accepting this Marketing Brochure, you agree to treat the information contained herein regarding the lease terms as confidential and proprietary and to only use such information to evaluate a potential purchase of this net leased property.

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a care-ful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and finan-cial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed fa-cilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be inter-rupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

Net Leased Disclaimer

The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap.

This offering memorandum has been prepared to provide summary, unverified financial and physical 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, PCBs or asbestos, the compliance with local, 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 offering memorandum 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Confidentiality Agreement

exclusively listedExclusively listed by:

OFFICES NATIONWIDEwww.marcusmillichap.com

MARK RUBLESenior Managing Director InvestmentsPHOENIX OFFICETel: (602) 687-6766Fax: (602) [email protected]

CHRIS LINDFirst Vice PresidentPHOENIX OFFICETel: (602) 687-6780Fax: (602) [email protected]

JAMIE MEDRESSSenior Managing Director InvestmentsPHOENIX OFFICETel: (602) 687-6778Fax: (602) [email protected]

BURGER KING - 20 YR GROUND LEASE - RELOCATION OF A …

Documents

Transcript of BURGER KING - 20 YR GROUND LEASE - RELOCATION OF A …