Capital Markets | Net Lease Properties · & Career Center DALLAS T) anes. N T) T) Highland Meadows...

1701 STATE HIGHWAY 276 | ROCKWALL, TEXAS (DALLAS MSA)

OFFERING MEMORANDUM

Capital Markets | Net Lease Properties

REPRESENTATIVE PHOTO

MARKETED BY:

N

HIG

HW

AY 2

76 (

18,9

70 A

ADT

)

I-30 (115,728 AADT)

John King Boulevard

DALLAS

Rockwall High School

Rockwall County Court At Law

Galaxy Ranch School

Highland MeadowsHealth and Rehab

ShenaniganzEntertainment

Center

WalmartSupercenter

Rockwall Harbor

Herman E. Utley Middle School

Baylor Emergency Medical Center

Wilkerson -Sanders Memorial Stadium

MARK DRAZEKSenior Vice President Capital Markets | Net Lease Properties

+1 407 404 [email protected]

CBRE, Inc. | Licensed Real Estate Broker

RAY ROMANOFirst Vice President Capital Markets | Net Lease Properties

© 2018 CBRE, Inc. All Rights Reserved.

LOCAL LICENSEE:BRAD BENJAMINAssociateCapital Markets | Net Lease Properties

WILLIAM STRAUSSWCL Properties

+1 561 389 5979 [email protected]

1INVESTMENT SUMMARY

Investment HighlightsProperty Description

2AERIAL PHOTOS

Aerial PhotosSite Plan

6AREA OVERVIEW

Market OverviewLocal & Regional Maps

Tenant Description

11TENANT SUMMARY

N

HIGHWAY 276

(18,970 AADT)John King Boulevard


Wilkerson -Sanders Memorial Stadium

1

7-ELEVEN | ROCKWALL TX

1

investment highlights• Corporate 7-Eleven, Investment grade credit (S&P AA-)

• 9.5 years of term remaining

• Located in Rockwall, a thriving suburb of Dallas, TX and a part of the Dallas/Fort Worth Metroplex

• Located at the signalized intersection of State Highway 276 & State Highway 205 Bypass (John King Blvd.)

• Construction has begun on a $30.2 million project to widen State Highway 276 from 2 lanes to 4 lanes between Highway 205 and FM549/Corporate Crossing.Less than a mile away from Interstate 30 (115,728 VPD)

• Just east of a major retail corridor home to Costco, Belk, Dick’s Sporting Goods, Best Buy, Walmart, Home Depot and Hobby Lobby

• Upper income area with average household incomes of over $93k within 1-mile and $113k within 5-miles

• High growth area that has a projected annual population growth rate of over 3% within 3-miles

• Delivered free and clear of debt

INVESTMENT SUMMARY

investment summaryPRICE: $2,840,000

ANNUAL RENT: $146,300

CAP RATE: 5.15%

TENANT: 7-Eleven, Inc. (S&P AA-)

RENTAL INCREASES: 10% every 5 years throughout initial term and options

REMAINING TERM: 9.5 years remaining on the initial 15 year lease

OPTIONS: (4) 5-year renewal options

LEASE COMMENCEMENT: March 1, 2013

LEASE EXPIRATION: February 29, 2028

LANDLORD OBLIGATIONS: None – Absolute NNN

BUILDING SIZE: ± 3,010 SF

LAND SIZE: 1.01± acres

PARKING SPACES: 16

YEAR BUILT: 2013

CBRE and WCL Properties are pleased to present this absolute NNN, corporate 7-Eleven located in Rockwall, Texas just outside of Dallas. This is a newer building constructed in 2013 with 9.5 years of term remaining on the initial 15-year lease. The lease requires no landlord management obligations and offers above average fixed

rental rate increases. 7-Eleven is a highly sought after investment grade national tenant that is is the world’s largest convenience store chain operating, franchising and licensing stores in 18 countries. Approximately 10,700 of the 60,000 7-Eleven stores worldwide are in North America.


7-ELEVEN | ROCKWALL TXN

(115,728 AADT) Rockwall HS

WalmartSupercenter

Rockwall Harbor

Springer Elementary

School

Jones Elementary

School


Rockwall ISD College & Career Center

DALLAS

HIGHWAY 276 (18,970 AADT)

Being expanded from 2-lanes to 4-lanes

N


(115,728 AADT)


Herman E. Utley Middle School


Wilkerson -Sanders Memorial StadiumRockwall County Court At Law

ShenaniganzEntertainment

Center

N


DALLAS

(115,728 AADT)

Galaxy Ranch School


WalmartSupercenter

Rockwall Harbor

5


SITE PLAN

6


AREA OVERVIEW

Dallas/Fort Worth Retail, Q4 2017

OCCUPANCY AT ALL-TIME HIGHS; MAINTAINING 94.6%; POSITIVE OUTLOOK FOR 2018

Within Dallas/Fort Worth’s tightening retail market, strong net absorption and heavily preleased deliveries caused occupancy to measure an all-time high. The year has proven to be a strong one for retail landlords and tenants alike, with an expectation of positive sales growth continuing into 2018.

CONSTRUCTION PIPELINE TIGHTENS

Multiple construction projects across North Texas have been sidelined as labor and borrowing costs remain elevated, specifically for those in the early stages. An increase in equity requirements and cost of capital may result in a delay to bring these projects to market, as well as increased tenant sales volume expectations to appease lenders.

CLASS A BIG BOX SUPPLY REMAINS ELEVATED AS MARKET STABILIZES

As forecasted, the pace of absorption in big box space slowed throughout 2017 when compared to years past – even within Class A product. As seen in other major U.S. retail markets, elevated supply, at 813,572-sq.-ft., is due to a smaller pool of big box retailers.

TANGER FACTORY OUTLETS, LEGACY FOOD HALL IN PLANO, AND IKEA IN GRAND PRAIRIE ALL CELEBRATE GRAND OPENINGS IN Q4 2017

Three major local developments celebrated their grand openings recently, accounting for 702,000- sq.-ft. of delivery and absorption in the Metroplex. Tanger Factory Outlets on October 27, Legacy Food Hall on December 6, and IKEA in Grand Prairie on December 13.

MARKETVIEW

Metroplex retail sector marks

record year of occupancy growth

Dallas / Fort Worth Retail, Q4 2017

Q4 2017 CBRE Research © 2018 CBRE, Inc. | 1

Completions888,874 SF

Net Absorption1,023,290 SF

Under Construction5,829,433 SF

Source: CBRE Research, Q4 2016.

*Arrows indicate trend from previous quarter.Figure 1: Net Absorption and Market Occupancy

89

90

91

92

93

94

95

(1)

0

1

2

3

4

5

6

7

8

9

10

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Occupancy Rate (%)Net Absorption (MSF)

Q1 Q2 Q3 Q4 Total Annual Net Absorption Occupancy Rate


OCCUPANCY AT ALL-TIME HIGHS; MAINTAINING 94.6%; POSITIVE OUTLOOK FOR 2018

Within Dallas/Fort Worth’s tightening retail market, strong net absorption and heavily pre-leased deliveries caused occupancy to measure an all-time high. The year has proven to be a strong one for retail landlords and tenants alike, with an expectation of positive sales growth continuing into 2018.

CONSTRUCTION PIPELINE TIGHTENSMultiple construction projects across North Texas have been sidelined as labor and borrowing costs remain elevated, specifically for those in the early stages. An increase in equity requirements and cost of capital may result in a delay to bring these projects to market, as well as increased tenant sales volume expectations to appease lenders.

CLASS A BIG BOX SUPPLY REMAINS ELEVATED AS MARKET STABILIZES

As forecasted, the pace of absorption in big box space slowed throughout 2017 when compared to years past – even within Class A product. As seen in other major U.S. retail markets, elevated supply, at 813,572-sq.-ft., is due to a smaller pool of big box retailers.

TANGER FACTORY OUTLETS, LEGACY FOOD HALL IN PLANO, AND IKEA IN GRAND PRAIRIE ALL CELEBRATE GRAND OPENINGS IN Q4 2017

Three major local developments celebrated their grand openings recently, accounting for 702,000-sq.-ft. of delivery and absorption in the Metroplex. Tanger Factory Outlets on October 27, Legacy Food Hall on December 6, and IKEA in Grand Prairie on December 13.

Occupancy94.6%

Net Absorption and Market Occupancy MARKETVIEW

Q4 2017 CBRE Research © 2018 CBRE, Inc. | 4

Figure 8: Top 10 Largest Available Class A Big Box Spaces


Submarket Address City Former Use Available (SF)

North Central Dallas 4268 Legacy Drive Frisco Neighborhood Grocer 62,802

Mid-Cities 459 E Interstate 20 Arlington Gander Mountain 52,000

Near North Dallas 9100 N Central Expy Dallas Sports Authority 52,000

North Central Dallas 12277 Dallas Pkwy Frisco Gander Mountain 50,000

Near North Dallas Mockingbird & Abrams Dallas SunFresh 50,000

Far North Dallas 3300 N Central Expy Plano Sports Authority 42,487

North Central Dallas 2930 Preston Rd Frisco Sports Authority 41,240

Mid-Cities 1551 Highway 287 N Mansfield Sports Authority 40,527

Central Fort Worth 4610 SW Loop 820 Fort Worth Goody Goody 40,000

North Central Dallas 1701 Preston Rd Plano Babies R Us 37,296

Total Market Class A Space 813,572

DALLAS / FORT WORTH RETAIL

12.50

13.00

13.50

14.00

14.50

15.00

15.50

16.00

16.50

Q2 20

12

Q4 20

12

Q2 20

13

Q4 20

13

Q2 20

14

Q4 20

14

Q2 20

15

Q4 20

15

Q2 20

16

Q4 20

16

Q2 20

17

Q4 20

17

Asking Rates ($/SF)

Figure 5: Asking Annual Rents, NNN Avg.


0

200

400

600

800

1,000

1,200

1,400

Q2 20

12

Q4 20

12

Q2 20

13

Q4 20

13

Q2 20

14

Q4 20

14

Q2 20

15

Q4 20

15

Q2 20

16

Q4 20

16

Q2 20

17

Q4 20

17

SF (000s)


Figure 6: Deliveries

Figure 7: Asking Annual Rents by Center Type, NNN Avg.

5.00

10.00

15.00

20.00

25.00

30.00

Q2 2015 Q4 2015 Q2 2016 Q4 2016 Q2 2017 Q4 2017

Asking Rates ($/SF)

Community Neighborhood Strip Power Lifestyle


Asking Annual Rents, NNN Avg. Deliveries

Source: CBRE Research, Q4 2017; CBRE Research

7


RockwallRockwall, Texas Market News:

The New Horizon: Projects coming to Rockwall County in 2018Blue Ribbon News, January 5, 2018

Rockwall County continues to be among the fastest growing counties not only in the state of Texas, but across the nation. And why not? Rockwall bolsters a top-notch school district, unique places to shop and eat, and a vast open space system featuring 990 total acres of park land with 20 developed parks and seven greenbelts. As the new year approaches, folks can expect to see even more exciting developments popping up in and around the county. Here’s a look at some of the projects making headway in 2018.

City of ROckwall

Dirt continues to be turned in areas all around Rockwall, bringing even more places to eat, shop, work and play to the community. Currently under construction is a 7,420-square-foot Texas Roadhouse located adjacent to the new Rooms to Go on the I-30 Frontage Road. The restaurant will seat approximately 280 patrons with 162 parking spaces. On Dec. 12, the Rockwall Planning and Zoning Commission unanimously approved the site plan for a new drive through only Chick-fil-A restaurant at the corner of Yellow Jacket Lane and State Highway 205 where the old EZ Mart and Pizza Hut buildings sit. The 2,200 square-foot restaurant would have no inside seating available, with the applicant proposing a walk-up window with around five tables on the patio to accommodate seating for 20 people. The proposed drive through would be able to queue 19 total vehicles, with exits available on both Yellow Jacket and 205.

More condos and residential units are currently in the works for The Harbor, including the new Harbor Urban Center Apartments – a four-story luxury community with 228 total units located on a 2.14-acre tract on the southeast corner of Summer Lee Drive and Horizon Road. According to a recent article in Dallas Business Journal, amenities to the community include a rooftop garden with views of Lake Ray Hubbard, a fitness center, business center with an internet café and coffee bar, a couple of courtyards with outdoor kitchens, and cabana-style seating with fire pits and televisions. Construction is slated to begin at the end of December, with an estimated completion in October 2019.

The Cinemark 12 Rockwall at The Harbor is also slated for an expansion of 7,430 square feet to accommodate two additional screens, including the new XD Digital Cinema. A new lobby bar and lounge area are also in the works, along with a remodel of the existing theaters to include leather recliner-type seating.

With the substantial population and tax base growth the city has seen in the last decade, Rockwall Mayor Jim Pruitt said the challenge will be in continuing to bring in new commercial businesses to Rockwall to lessen the tax burden on citizens.

AREA OVERVIEW

distance to

25DALLAS

miles258HOUSTON

miles 60FORT WORTH

miles

226AUSTIN

miles

355MIDLAND

miles

298SAM ANTONIO

miles

8


DEMOGRAPHIC BRIEF

1701 STATE HIGHWAY 276 1 MILE 3 MILES 5 MILES

2017 Population - Current Year Estimate 5,106 31,564 73,142

2022 Population - Five Year Projection 5,668 36,711 89,816

2010 Population - Census 4,491 27,809 59,991

2000 Population - Census 71 15,362 33,764

2010-2017 Annual Population Growth Rate 1.79% 1.76% 2.77%

2017-2022 Annual Population Growth Rate 2.11% 3.07% 4.19%

2017 Households - Current Year Estimate 1,435 10,788 24,627

2022 Households - Five Year Projection 1,583 12,560 30,115

2010 Households - Census 1,313 9,562 20,441

2000 Households - Census 24 5,342 11,471

2010-2017 Annual Household Growth Rate 1.23% 1.68% 2.60%

2017-2022 Annual Household Growth Rate 1.98% 3.09% 4.11%

2017 Average Household Size 3.56 2.89 2.94

2017 Average Household Income $93,924 $98,012 $113,361

2022 Average Household Income $107,331 $109,457 $124,659

2017 Median Household Income $78,213 $76,971 $90,638

2022 Median Household Income $85,557 $83,025 $97,219

2017 Per Capita Income $26,548 $33,663 $38,508

2022 Per Capita Income $30,152 $37,519 $42,052

2017 Housing Units 1 ,470 11 ,333 25 ,920

2017 Vacant Housing Units 35 2.4% 545 4.8% 1,293 5.0%

2017 Occupied Housing Units 1,434 97.6% 10,788 95.2% 24,627 95.0%

2017 Owner Occupied Housing Units 1,171 79.7% 7,720 68.1% 19,653 75.8%

2017 Renter Occupied Housing Units 263 17.9% 3,068 27.1% 4,974 19.2%

2017 Population 25 and Over 2 ,921 20 ,389 47 ,898

HS and Associates Degrees 1,720 58.9% 10,904 53.5% 24,742 51.7%

Bachelor's Degree or Higher 1,174 40.2% 7,356 36.1% 19,384 40.5%

2017 Businesses 145 1,904 2,559

2017 Employees 1,865 19,936 26,208

©2018 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are forexample only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the propertyfor your needs. Source: Esri Page 1 ProjectID:283743

POPULAT ION

HOUSEHOLDS

HOUSEHOLD INCOME

HOUS ING UN ITS

EDUCAT ION

PLACE OF WORK

DEMOGRAPHIC COMPREHENSIVE

1701 STATE HIGHWAY 276

NAME LATITUDE LONGITUDE

1701 STATE HIGHWAY 276 32.907204 -96.4306125

©2018 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are forexample only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the propertyfor your needs. Source: Esri ProjectID:285526

AREA OVERVIEW

9


AREA OVERVIEW

10


AREA OVERVIEW

(115,728 AADT)

HIGHWAY 276 (18,970 AADT)Hw y 276 expansion from 2-lanes to 4-lanes

11


Welcome to 7-Eleven - A World Leader

Our doors are always open, and our friendly store teams are ready to serve you. Come in to any 7-Eleven® store and you’ll find a broad selection of fresh, high-quality products at an everyday fair price, along with speedy transactions in a clean and friendly shopping environment.

World’s Largest Convenience Retailer

What started out as an ice house in Dallas, Texas, back in 1927 has grown and evolved into the world’s largest operator, franchisor and licensor of convenience stores.

The company operates, franchises and licenses approximately 10,700 convenience stores in North America. Of the close to 8,500 stores the company operates and franchises in the United States, more than 6,700 are franchised.

Outside of the U.S. and Canada, there are more than 60,000 7-Eleven and other convenience stores in Japan, Taiwan, Thailand, South Korea, China, Malaysia, Mexico, Singapore, Australia, the Philippines, Indonesia, Norway, Sweden, Denmark and United Arab Emirates. 7-Eleven has announced plans to open stores in Vietnam.

7-Eleven is the world’s largest convenience store chain operating, franchising and licensing stores in 18 countries. Approximately 10,700 of the 60,000 7-Eleven stores worldwide are in North America.

• No. 35 on Stores Magazine’s Top 100 Retailers list, the top c-store on the list

• 7-Eleven won three awards – two golds and a silver – in the 2016 Brand Packaging Awards

• Among GI Jobs magazine’s Top 100 Military Friendly Employers

• 7-Eleven won a Private Label Manufacturers Association (PLMA) 2016 Salute to Excellence Award for the 7-Select Pure Water in the Soda and Flavored Water Category


Seven & I Holdings Co., SEVEN-ELEVEN JAPAN CO., LTD.www.7-eleven.com

TENANT DESCRIPTION

http://www.wawa.com

12


Affiliated Business Disclosure

CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s).

Confidentiality Agreement

Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc.

Disclaimer

This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.

The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.

CONFIDENTIAL MEMORANDUM & DISCLAIMER

MARK DRAZEKSenior Vice President Capital Markets | Net Lease Properties

+1 407 404 [email protected]

CBRE, Inc. | Licensed Real Estate Broker

RAY ROMANOFirst Vice President Capital Markets | Net Lease Properties

LOCAL LICENSEE:BRAD BENJAMINAssociateCapital Markets | Net Lease Properties

WILLIAM STRAUSSWCL Properties

+1 561 389 5979 [email protected]

© 2018 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk.

CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners.

MARKETED BY

DALLAS

ROCKWALL

Capital Markets | Net Lease Properties · & Career Center DALLAS T) anes. N T) T) Highland Meadows...

Documents

Transcript of Capital Markets | Net Lease Properties · & Career Center DALLAS T) anes. N T) T) Highland Meadows...