Confidential Offering Memorandum WALMART … · Confidential Offering Memorandum. WALMART. ......

Confidential Offering Memorandum

WALMARTNEIGHBORHOOD MARKETSimpsonville, SC$14,194,589 | 4.75% Cap Rate

EXCLUSIVELY PRESENTED BY

EXCLUSIVELY PRESENTED BY

Confidential Offering Memorandum

WALMARTNEIGHBORHOOD MARKETAnderson, SC

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FOR MORE INFORMATION, CONTACT:

Kyle Stonis, CCIMSenior Vice President, Investment Sales678.420.1393 | [email protected] Lic.# - 73438

Pierce MaysonVice President, Investment Sales404.231.4696 | [email protected]

John ToppingAssociate, Investment Sales678.420.1384 | [email protected]

Robert Drake Analyst, Investment Sales678.420.1386 | [email protected]

SRS Real Estate Partners - Atlanta3400 Peachtree Road NE, Suite 1100Atlanta, Georgia 30326404.231.2232

SRSRE.COM/WalmartNMAnderson

WALMART NEIGHBORHOOD MARKET2003 East Greenville StreetAnderson, SC 29625

mailto:[email protected]




srsre.com/WalmartNMAnderson

EXECUTIVE SUMMARY • Investment Summary• Property and Lease Overview

PROPERTY DETAILS• Property Aerial • Tenant Overview• Tenant Profile and Strategy• Submarket Aerial• Site Location Map

MARKET OVERVIEW• Anderson At A Glance• Demographic Summary• Location Highlights

SUMMARY OF MAJOR DOCUMENTS• Confidentiality and Conditions of Sale

TABLE OF CONTENTS

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6Exclusively Presented By SRS Real Estate Partners

INVESTMENT SUMMARY

Investment SummarySRS Real Estate Partners, as exclusive agent, is pleased to offer a single-tenant-net-lease investment opportunity occupied by Walmart Neighborhood Market and located in Anderson, SC. Walmart Neighborhood Market is a chain of grocery stores launched by Walmart Stores, Inc. in 1998 with locations strategically positioned between Walmart Supercenters and Walmart Discount Stores; the intent of which being to maximize Walmart’s consumer reach. With stores typically built to approximately 40,000 SF and offering a variety of products including a full line of groceries, pharmaceuticals, health and beauty products, photography development services, and a selected line of general merchandise at affordable Walmart prices, Walmart Neighborhood Markets are meant to streamline shopping for its consumers.

The construction on the subject site is nearly complete and will feature a Walmart Neighborhood Market with a drive through pharmacy and a fuel center. The store has a projected opening date of May 6, 2015.

Anderson is a part of the Greenville-Anderson-Mauldin MSA and is home to roughly 851,000 residents, making it the largest MSA in South Carolina. Known as “The Electric City”, Anderson lies midway between Atlanta, GA and Charlotte, NC along Interstate 85, one of the heaviest traveled highways in the southeast and one of the nation’s hottest growth areas. The construction is underway for the 41,369+/- square foot Neighborhood Market and fuel center situated directly across from AnMed Health Medical Center, South Carolina’s largest independent, not-for-profit health system, characterized by highly favorable demographics, presenting an excellent opportunity to capitalize on Walmart’s rapidly expanding Neighborhood Market concept.

The 6.454 +/- AC subject site is extremely well-located with points of access along highly trafficked Reed Road and Greenville Highway, and will cater to the surrounding residential communities, commuters traveling along Greenville Highway, as well as patients and employees of AnMed Health located directly across the street. The premier Walmart credit, new construction, attractive long-term net-lease, and strategic location provide buyers with an opportunity to acquire an asset with unmatched investment parameters.

Investment Highlights• Attractive Lease Terms: Brand new construction with a 20-year primary term and four 5-year options with rent increases.

• Walmart Credit: The site is guaranteed by Walmart Stores Inc. which carries an S&P rating of AA and a Moody’s rating of Aa2.

• Established Customer Base: Walmart has an established loyal customer base which will be well-served by the Anderson Neighborhood Market Location.

• Fuel Center Outparcel: The site features a fuel center which creates an added layer of consumer draw at all times of day.

• Excellent Location: The Property is supremely located directly across the street from the AnMed Health Medical Center, Anderson County’s top employer.



PROPERTY AND LEASE OVERVIEW

Property Overview Price: $14,320,000

Cap Rate: 5.00%

NOI: $716,000

Address: 2003 East Greenville Street, Anderson, SC 29625

Building Area: 41,369 SF +/-

Land Area: 6.454 +/- Acres

Year Built: 2015 (Under Construction)

Projected Opening Date: May 6, 2015

Occupancy: 100%

County: Anderson County

Walmart Neighborhood Market Lease OverviewTenant Name: Walmart Neighborhood Market

Guarantor: Walmart Stores, Inc.

Lease Type: Modified NNN Lease

Roof: Landlord Responsibility (15 year warranty)

Structure: Landlord Responsibility (1 year construction warranty)

Primary Lease Term: 20 Years

Rent Commencement: Upon store opening

Lease Expiration: 20 years from opening date

Options: Four (4), Five (5) year options

Rental Increases: Ten Percent (10%) increases in options 1 & 2 and Five Percent (5%) increases in options 3 & 4

Current Rent: $716,000

Investment Summary Rent Schedule

Rent Schedule Annual Rent Monthly Rent Primary Term (Yrs. 1-20) $716,000.00 $59,666.67Years 21-25 $787,600.00 $65,633.33Years 26-30 $866,360.00 $72,196.67Years 31-35 $909,678.00 $75,806.50

Years 36-40 $955,161.90 $79,596.83

PROP

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PROPERTY AERIAL


Walmart Stores Inc. (Guarantor)Walmart is an American multinational retail corporation which operates discount stores, supermarkets,

supercenters, hypermarkets, warehouse clubs, restaurants, apparel stores, drug stores, and convenience stores, as well as various retail websites. The company also provides financial services and related products such as money orders, prepaid cards, wire transfers, check cashing, and bill payment while also conducting banking operations that provide consumer financing programs. Walmart is headquartered in Bentonville, Arkansas, and was founded by Sam Walton in 1962 and incorporated in October of 1969. The company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club. Currently Walmart operates more than 11,000 stores under 71 banners in 27 countries as well as ecommerce websites in 10 countries. It is the world’s largest public corporation, according to the Fortune Global 500 list in 2014, the biggest private employer in the world with over 2.2 million employees, the world’s largest retailer, and the largest grocery retailer in the U.S.

Walmart became a publicly traded company under the symbol WMT on the New York Stock Exchange in 1972. By 1988 Walmart was the most profitable retailer in the U.S. and by October 1989 it had become the largest in terms of revenue. Walmart is known as one of the most valuable companies in the world in terms of market value with reported revenue of $476.29 Billion and a market cap of $244.12 Billion.

Walmart Neighborhood Market (Tenant)Walmart Neighborhood Market is a chain of grocery stores introduced in 1998 as a subsidiary of Walmart Stores, Inc. Ranging around 40,000 square feet and approximately

one-fourth the size of a typical Walmart Supercenter, stores are meant to streamline shopping for consumers. Neighborhood Markets are positioned between Walmart Supercenters and Discount Stores offering a variety of products including a full line of groceries, pharmaceuticals, health and beauty products, photography development services, and a selected line of general merchandise- all at Walmart’s affordable prices. Typically Neighborhood Markets employ a workforce of between 80-100 employees and many of the stores include a fuel center.

According to the latest earnings report for the 13-week period ending Aug. 1, 2014 Walmart Neighborhood Market sales jumped 5.6% among other stores of similar size in the country. During Q2 2014 comparable sales at Walmart Neighborhood Market stores increased by 5.1% and traffic increased by 4% across the U.S. Walmart is scheduled to open between 180-200 Neighborhood Market locations this year.

TENANT OVERVIEW

Tenant ProfileCompany: Walmart Stores, Inc.No. of Locations: 11,088 (As of 4/1/2014)Credit Rating: AA (S&P) / Aa2 (Moody’s)Stock Symbol: WMTTotal Revenue: $476.29 Billion*

Net Income: $15.9 Billion*

Market Cap.: $244.12 Billion**Tenant Business: RetailFounded: 1962Headquarters: Bentonville, ARWebsite: www.walmart.comSources: *Walmart 5 year Financial Summary **Morgan Stanley


www.walmart.com


TENANT PROFILE AND STRATEGY

Tenant StrategyWalmart’s Neighborhood Markets are designed to facilitate shopping for consumers providing easier parking, less crowded aisles, and a quicker checkout process. Stores are unique in that the manager of each individual store is responsible for stocking the shelves with what he or she sees fit for the market. By stocking the shelves with crops grown in the surrounding areas an added incentive is created for consumers to support their local community. Offering affordable prices in strategic locations with an emphasis on local goods, these stores are meant to be convenient and quick one-stop shopping destinations.

Having identified a market where it can capitalize on the need for consumables, Walmart continues to focus on food as an important driver for the frequency of consumer. With an already established customer base, Walmart hopes to draw new and repeat customers to Neighborhood Markets. Given recent sales increases of 5.6% among other stores of similar size in the U.S. in the latest earnings reports, the strategy has thus far been a resounding success.


Estimated Operating Information

Stabilized Income Per Square FootScheduled Rent $17.30 $716,000.00Effective Gross Income $17.30 $716,000.00

Operating Expenses Per Square Foot

CAM $0.00 NNNTaxes $0.00 NNN

Insurance $0.00 NNN

Total Operating Expenses $0.00 NNN

Net Operating Income $716,000.00


SUBMARKET AERIAL


SITE LOCATION MAP

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ANDERSON AT A GLANCE

OverviewAnderson is the principal city and county seat, located in the geographical center of Anderson County, South Carolina. Situated in what is known as the “Upstate Region” of South Carolina, Anderson is a part of the Greenville-Anderson-Mauldin MSA- home to a roughly 851,000 residents and the most populous MSA in the state. Anderson is positioned midway between Atlanta, GA and Charlotte, NC, along I-85, one of the most heavily trafficked highways in the southeast, in a corridor which is now known as one of the nation’s hottest growth areas. Also known as “The Electric City”, Anderson was the first city in the South to have an unlimited supply of electric power, priming the city for growth and opportunity. Anderson is also part of the Greenville-Spartanburg-Anderson CSA which is home to a population of 1,438,550, an increase of 5.61% since 2010, making it the 11th fastest growing CSA in the U.S.

EconomyThe Anderson economy is largely centered on manufacturing, with over 230 companies including 22 international corporations. Top industries in Anderson include manufacturers of automotive products, plastics, industrial machinery, metal products, publishing, and textiles. The Upstate region is recognized internationally as an automotive supplier hub and Anderson County, in particular, has 11 automotive suppliers and 27 plastics companies located inside the county limits. Twenty-seven BMW specific suppliers in the region supply the BMW hub which is part of BMW Group’s global manufacturing network and is the exclusive manufacturing plant for all X5 and X3 Sports Activity Vehicles and X6 and X4 Sports Activity Coupes. Other major employers in the area include Electrolux, Bosch, Michelin, Hubbell Lighting, PerceptIS, Cryovac, GE, 3M, Honeywell, Caterpillar Inc., and Milliken-Cushman.

In addition to manufacturing, healthcare is a burgeoning sector of the Anderson economy. AnMed Health Medical Center, located directly across from the site, is the primary healthcare network for Anderson and is the top employer in the county with over 3,600 employees. AnMed Health consists of three main facilities as well as several smaller facilities throughout the county. The main facility is AnMed Health Medical Center offering a standard hospital, a vascular center, and neurological center. Two and a half miles to the north is the AnMed Health Campus which includes a women’s and children’s hospital, minor care, cancer center, occupation therapy and more, with the third campus, the AnMed Rehabilitation Hospital is located between the two. Anderson is served by the Anderson County School system which is also an integral part of the economy with over 4,100 employees throughout the five districts. The city is located within district five with

Rank Company No. of Employees1 AnMed Health 3,500 2 Anderson County School District 5 2,0283 Electrolux Home Products 1,500 4 State of SC Budget and Control Board 1,344 5 Robert Bosch Corporation 1,2006 Michelin North America Inc. 1,100 7 Anderson County School District 1 899 8 Anderson County Government 772 9 Honeywell Nylon 650

10 Glen Raven Inc 600

Anderson County Top 10 Employers by Facility


ANDERSON AT A GLANCE

over 2,000 employees, eleven elementary schools, five middle schools, two high schools, as well as eleven private schools, two early childhood development schools and two schools offering higher education: Anderson University and Tri-County Technical College.

Culture & RecreationAnderson has a rich southern history which it strives to preserve primarily through the creation of seven historic districts throughout the city. Several renowned locations include Caldwell-Johnson-Morris Cottage, Denver Downs Farmstead, Kennedy Street School, North Anderson Historic District, Dr. Samuel Marshall Orr House, and the Ralph John Ramer House. Anderson also features a wide array of recreational opportunities through its many parks and recreational centers including Anderson Memorial Stadium, Beatrice Thompson Park, Carter’s Lake, D.B Walker Park, Darwin Wright Park, Jim Ed Rice Center, Linley Park, Southwood Park, Westside Community Center, and the Anderson Sports and Entertainment Center; a 300 acre area including the Anderson Civic Center as well as one of South Carolina’s largest amphitheaters.


DEMOGRAPHIC SUMMARY

Walmart Neighborhood Market | Anderson, SC1 Mile Radius

3 Mile Radius

Current Estimated Population 5,516 31,656 62,0152019 Projected Population 5,801 32,848 64,0342010 Census Population 5,238 30,587 60,3812000 Census Population 3,561 25,608 52,856 Historical Annual Growth 2000 to 2010 3.93% 1.79% 1.34%Estimated Annual Growth 2010 to 2014 1.22% 0.81% 0.63%Projected Annual Growth 2014 to 2019 1.01% 0.74% 0.64%Median Age 41.60 38.80 38.90Current Estimated Households 2,442 12,964 25,0852019 Estimated Households 2,577 13,463 25,9122010 Census Households 2,309 12,503 24,3902000 Census Households 1,468 10,512 21,407Historical Annual Growth 2000 to 2010 4.63% 1.75% 1.31%Estimated Annual Growth 2010 to 2014 1.33% 0.86% 0.66%Projected Annual Growth 2014 to 2019 1.08% 0.76% 0.65%Population per Household 2.16 2.31 2.38White 81.47% 74.37% 66.49%Black or African American 13.02% 20.31% 27.68%Asian & Pacific Islander 2.34% 1.74% 1.47%Other Races 1.36% 1.49% 2.10%Non Hispanic or Latino Population 96.27% 95.90% 95.30%Hispanic or Latino Population 3.73% 4.10% 4.70%Average Household Income $65,317 $59,917 $53,596Median Household Income $51,405 $42,962 $37,158Per Capita Income $27,698 $24,697 $21,793Elementary 3.31% 4.29%Some High School 4.48% 8.35%High School Graduate 22.41% 21.67%Some College 21.16% 21.19%Associates Degree Only 10.56% 10.67%Bachelors Degree Only 23.29% 19.43%Graduate Degree 10.94% 10.35%Number of Businesses 345 2,445Total Number of Employees (FTE) 2181 15,775Employees per Business 6.32 6.45Residential Population per Business 15.99 12.95

Business

4,48630,041

8.08%

24.56%20.18%

9.98%

6.7013.82

Population

5 Mile Radius

Populationby R

aceH

ouseholdsEducation(Age 25+)

6.51%11.15%

Income

14.87%

SRS Real Estate Partners 1 of 1 Data Source: ESRI


LOCATION HIGHLIGHTS

Anderson Accolades• “Hottest American Cities for Business Location” – Expansion Management

• “All America City “ – National Civic League

Educated WorkforceAnderson prides itself on its quality educational system which is also one of the top employers in the area.

• Anderson is home to eleven elementary schools, five middle schools, two high schools, eleven private schools, two early childhood development schools, and two schools for higher education including Anderson University and Tri-County Technical College.

• Anderson County is home to 10 public high schools, 10 middle schools, and 22 elementary schools as well as numerous primary schools, specialty schools, and private schools.

Healthcare HubThe AnMed Health System serves as Anderson County’s largest employer with the main facility located across the street from Walmart Neighborhood Market.

• AnMed Health System includes three main facilities with nearly 60 locations throughout its multidisciplinary hospital system.

• The AnMed Health System is fully accredited by The Joint Commission and is one of only about 400 health care organizations nationwide recognized as a part of the American Nurses Credentialing Center’s (ANCC) Magnet Recognition Program for its superior quality nursing care.

• Other recent recognitions include: named “one of the Best Regional Hospitals in the Upstate” for 2014 by U.S. News and World Report, recognized for the fifth consecutive year as “one of the nation’s Most Wired hospitals and health systems” by Hospitals and Health Networks magazine, and recognized as “100 Hospitals with Great Heart Programs” by Becker’s Hospital Review.

Big BusinessFavorable wages and tax benefits have lured foreign and domestic companies to the Anderson area.

• The region is home to North American headquarters for Hubbell Lighting, PerceptIS, Michelin, and a large manufacturing hub for BMW.

• Home to the International Center for Automotive Research-created in 2003.

• Caterpillar Inc. and GE have major engineering operations located in the Greenville-Anderson-Mauldin MSA.

• 3M and Honeywell operate facilities on the land that was the former Donaldson Air Force Base which is also home to the South Carolina Technology and Aviation Center and the Lockheed Martin aircraft and logistics center.


Airports• Anderson County Regional Airport- Serving the area regionally, the airport has two runways, helipads, and is able to accommodate regional jet aircraft.

• Greenville-Spartanburg International Airport- GSP serves more than 1.8 million passengers per year with six major airlines offering 52 non-stop daily departures to 17 major cities and 21 major airports across the U.S.

Major Highways• Interstate 85

• US Routes 29, 76, 178

LOCATION HIGHLIGHTS

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CONFIDENTIALITY AND CONDITIONS OF SALE

This Offering Memorandum is not intended to constitute an offer, but is merely a solicitation of interest with respect to a possible sale of the Walmart Neighborhood Market located at 2003 East Greenville Street in Anderson, South Carolina.

This Offering Memorandum has been prepared by SRS Real Estate Partners - Southeast, LLC and has been approved for distribution by the owner. Although effort has been made to provide accurate information, neither owner nor SRS can warrant or represent accuracy or completeness of the materials presented herein or in any other written or oral communications transmitted or made available to the purchaser. Many documents have been referred to in summary form and these summaries do not purport to represent or constitute a legal analysis of the contents of the applicable documents. Neither owner nor SRS represents that this offering summary is all inclusive or contains all of the information a purchaser may require.All of the financial projections and/or conclusions presented herein are provided strictly for reference purposes and have been developed based upon assumptions and conditions in effect at the time the evaluations were undertaken. They do not purport to reflect changes in the economic performance of the property or the business activities of the owner since the date of preparation of this Offering Memorandum. The projected economic performance of the property, competitivesubmarket conditions, and selected economic and demographic statistics may have changed subsequent to the preparation of the package. Qualified purchasers are urged to inspect the property and undertake their own independent evaluation of the property, the market and the surrounding competitive environment.

Environmental matters can and do have dramatic impact not only on the physical conditions of a property but also on its economic performance and underlying value. If such substances exist, special governmental approvals and permits may be required. Purchasers are encouraged to engage qualified professionals to determine whether

hazardous or toxic substances or wastes, including asbestos, PCB’s, petrochemicals or other contaminants or conditions are present at the property. Neither SRS nor the owner performs or conducts investigations or analyses of environmental matters. It is the sole responsibility of qualified purchasers to review all applicable laws and regulations applying to either the existence, transportation or removal of hazardous materials and to prudently have an on site investigation and inspection of the property conducted. The cost and removal of hazardous materials may be substantial; therefore, SRS strongly encourages qualified purchasers to engage legal counsel and appropriate technical professionals if any of these conditions are discovered during the inspection. No person, firm or entity is authorized to make or submit offers on behalf of anyone or divulge or reproduce the contents of this executive summary or discuss the availability or the purchase of the property without first having registered in writing the name of the party receiving the material and received written authorization to proceed from SRS. The owner and SRS reserve the right, at their discretion, to reject any or all expressions of interest with any party at any time with or without notice. The Recipient is strictly prohibited from contacting the tenant or any affiliate regarding this offering without prior written authorization of Owner or SRS. The terms and conditions stated herein apply to all sections of the executive summary.

SRS is acting as exclusive disposition agent, and the owner reserves the right to withdraw the property from the market, to change the price and terms or sell the property at any time without notice being given.

Kyle Stonis, CCIM Pierce Mayson John A. Topping Robert DrakeSenior Vice President Vice President Associate Analyst [email protected] [email protected] [email protected] [email protected] 404.231.4696 678.420.1384 678.420.1386





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