DAIRYLAND SQUARE SHOPPING CENTER · 2017. 11. 15. · DAIRYLAND SQUARE SHOPPING CENTER # EXECUTIVE...

DAIRYLAND SQUARE SHOPPING CENTER10 Dairyland Sq • Red Lion, PA 17356

Offering Memorandum

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to

be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other

person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to

provide summary, unverified 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, PCB's or asbestos, the compliance with 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 Marketing Brochure

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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â© 2017

Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in

this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply

affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or

subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for

the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

DAIRYLAND SQUARE SHOPPING CENTER

Red Lion, PA

ACT ID Y0360228

2

TABLE OF CONTENTS


3

INVESTMENT OVERVIEWSection 1

•

FINANCIAL ANALYSISSection 2

•

MARKET OVERVIEWSection 3

•


4

INVESTMENT

OVERVIEW

#

OFFERING SUMMARY

▪ Value Add Grocery Anchored Neighborhood Center

▪ 53 Percent or 76,500-Square Feet of Vacancy Upside

▪ Anchored by Jerry’s Great Valu for More than Twenty-Years | Eight Years Remaining

▪ 60 Percent of Current Income from National and Regional Tenants

▪ 21 Percent Growth with 65,000 Residents and Average Incomes Exceeding $77,000

▪ Priced Well Below Replacement Cost at $21 per Square Foot

INVESTMENT HIGHLIGHTS

The Dumes Falk Group of Marcus & Millichap is pleased to bring to market, Dairyland Square, a 144,780-square foot grocery anchored neighborhood

shopping center in the Red Lion submarket of York, Pennsylvania. Dairyland Square is currently 47 percent occupied and has been anchored by Jerry's Great

Valu for more than twenty-years. The property is situated on approximately 19 acres with multiple points of ingress and egress.

Dairyland Square is a typical neighborhood center with internet resistant retailers that include a mixture of eight local and national tenants including Family

Dollar, a medical office, three restaurants, a church, liquor store and an outdoor sporting goods store. All of these tenants are under triple-net leases and

have excellent historical occupancy with the majority of leases dating back ten, twenty and even thirty-years. Jerry's Great Valu occupies 24 percent of the

gross leasable area with nearly eight years remaining on a triple-net lease. Jerry's Great Valu, a York based discount grocery store that has been in business

for over 30 years and is most well known for their homemade products, fresh produce and smoked meats.

Red Lion is a residential borough of the city of York, located approximately 50-miles north of Baltimore and 100-miles west of Philadelphia. Dairyland Square

is strategically positioned just off of State-Route 74, an east/west commuter corridor. Dairyland Square has a stable presence in the local market and a new

housing development broke ground on a contiguous parcel in 2008. Today the community, and built-in customer base, has grown to encompass 92

townhomes that are 98 percent occupied along with another 50 single family homes. The surrounding population has seen nearly 16 percent population

increase since 2000 within three-miles of the center. Within five-miles, the population has seen over 21 percent growth with 65,000 residents and average

household incomes of more than $77,000. There are also more than 26,000 employees in three-miles and 51,000 in five-miles.

Dairyland Square provides an incoming investor the ability to acquire a value-add grocery anchored center located off of a commuter corridor within a

growing market. The local demographics provides a strong and stable economic base for an investor to create tremendous upside though leasing up the

76,500-square feet of vacant space. An investor can begin to attract new tenants by infusing capital to renovate the center such as increasing signage and

visibility along State-Route 74, a new façade and exterior paint would bring this dated center back to a dominate retail hub it once was. Attracting a national

tenant to occupy the 50,000-square foot box at $3 per foot gross lease, and leasing up the eight inline spaces totaling 26,500-square feet at $6 to $9 under

triple-net leases could potentially add an additional $350,000 to the NOI. Dairyland Square should remain an integral part of the community and will continue

to serve as an invaluable shopping destination for local residents and travelers alike.

INVESTMENT OVERVIEW

5


PROPERTY PHOTOS

6


PROPERTY PHOTOS

7


PROPERTY PHOTOS

8


PROPERTY PHOTOS

9


(50,000-Square Foot Vacant Box)

(Covered Access to Units 16-19)

SITE PLAN

10

Units 1 2 3 4 5 6 7 8 9 10

TenantJerry's Great

ValueVACANT

Dairyland Square Medical Center

Dairyland Restaurant

VACANT Domino's Lucky 7

RestaurantGift Rite

Family Dollar

Beer & Soda Mart

SF 35,046 6,000 2,925 2,500 3,500 2,500 2,000 2,950 8,619 7,940

Units 11 12 13 14 15 16 17 18/19 20

Tenant VACANT VACANT VACANT VACANT VACANT VACANT VACANTCornerstone Fellowship

ChurchVACANT

SF 6,000 1,680 1,680 1,920 1,920 1,900 1,900 3,800 50,000

1291011

20

34567812131415

*Site plan is a representation of the property with the number of units, parking spots and relative size of both. It does not show the absolute exact size of the units relative to the other spaces or the exact number of parking spots.


16

17

18

19

Covered Access to Units 16-19

LOCAL PHOTO

11


12


51

Mile

s

REGIONAL PHOTO

13

FINANCIAL

ANALYSIS



#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER# OF

EMPLOYEES

C H R Corp 884

Honeywell 673

Oss Health 392

Glatfelter Insurance Group 377

Weis Markets 347

Dominion Systems Group LLC 334

Dallastown Area School Dst 332

Acco Material Hdlg Solutions 300

Community Services Group Inc 296

Envirobusiness Inc 292

Gichner Shelter Systems 277

York II 276

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 8,326 32,698 64,924

2010 Census Pop 8,298 32,337 63,868

2016 Estimate HH 3,560 12,755 25,959

2010 Census HH 3,565 12,662 25,609

Daytime Employees 7,160 26,102 51,723

Average HH Income $67,644 $73,599 $77,156

14

THE OFFERING

Property Dairyland Square Shopping Center

Property Address 10 Dairyland Square, Red Lion, PA 17356

SITE DESCRIPTION

Built / Renovated 1970 / 2004

Gross Leasable Area 144,780 SF

Current Occupancy 47.16%

Lot Size +/- 19.13 Acre(s)

Ownership Fee Simple

MAJOR TENANTS

TENANT GLA LEASE EXPIRATION LEASE TYPE

Jerry’s Great Valu 24.21% 08/31/2025 NNN

Family Dollar 5.95% 12/31/2019 NNN

JERRY’S GREAT VALU LEASE ABSTRACT

Lease is by and between Landlord & Jerry’s Great Valu with a guaranty from Jerry

Smith & Super Rite Foods Inc.

• In 1995 Super Right Foods was acquired by Richfood Holdings Inc.

• In 1999 Richfood Holdings Inc. was acquired by SuperValu Inc.

• SuperValu Inc, is a publicly traded fortune 100 food retailing company that

supplies over 2,000 grocery stores with $20 Billion in annual revenue.

Website: http://www.supervalu.com

FINANCIAL ANALYSIS

15

TENANT SUMMARY

Tenant Name Square

Feet

%

Bldg

Share

Lease DatesAnnual

Rent per

Sq. Ft.

Total Rent

Per Month

Total Rent

Per Year

Changes

on

Changes

to

Lease

TypeRenewal Options

Comm. Exp.

Jerry’s Great Valu Supermarket 35,046 24.21% 03/01/1995 08/31/2025 $5.16 $15,079 $180,945 09/01/2025 $203,391 NNN Two, Five-Year

Dairyland Center Medical 2,925 2.02% 04/01/1996 05/31/2018 $10.33 $2,519 $30,226 None None NNN None

Dairyland Family Restaurant 2,500 1.73% 07/23/1987 07/31/2019 $17.25 $3,593 $43,114 08/01/2018 $44,407 NNN None

Domino’s Pizza 2,500 1.73% 02/01/1986 MTM $9.94 $2,071 $24,847 None None NNN None

Lucky 7 Chinese Restaurant 2,000 1.38% 02/05/2002 01/31/2020 $8.57 $1,429 $17,150 02/01/2019 $17,848 NNN One, Five-Year

Gift RiteWay Sporting Goods 2,950 2.04% 02/27/2015 02/28/2020 $7.00 $1,721 $20,650 09/01/2018 $21,683 NNN One, Five-Year

Family Dollar* 8,619 5.95% 08/07/1987 12/31/2019 $4.64 $3,333 $40,000 TBD TBD NNN One, Five-Year

Beer & Soda Mart 7,940 5.48% 10/28/2014 09/30/2019 $5.77 $3,817 $45,804 10/01/2018 $46,524 NNN Two, Five-Year

Cornerstone Fellowship Church 3,800 2.62% 12/01/2010 MTM $4.77 $1,510 $18,120 None None NNN None

Vacant 6,000 4.14%

Vacant 3,500 2.42%

Vacant 6,000 4.14%

Vacant 1,680 1.16%

Vacant 1,680 1.16%

Vacant 1,920 1.33%

Vacant 1,920 1.33%

Vacant 1,900 1.31%

Vacant 1,900 1.31%

Vacant 50,000 34.54%

Total Occupied 68,280 47.16%

Total Vacant 76,500 52.84%

Total 144,780 100.00% $35,071 $420,855


*Right to Terminate Lease anytime after 01/01/2018

FINANCIAL ANALYSIS

16

PRICING DETAIL & OPERATING DATA

Operating Data Current

Scheduled Base Rental Income $420,855

Expense Reimbursement Income

CAM $22,719

Insurance $14,964

Real Estate Taxes $40,748

Management Fees $5,821

Total Reimbursement Income $84,253

Effective Gross Income $505,108

Less: Operating Expenses ($228,759)

Net Operating Income $276,349

Debt Service ($143,670)

Net Cash Flow After Debt Service 14.74% $132,680

Principal Reduction $44,888

Total Return 19.73% $177,568

Operating Expenses Current Per/SF

Co

mm

on

Are

a

Main

tenance (C

AM

)

Electric $5,791 $0.04

Lot Sweeping $5,700 $0.04

Trash Removal $853 $0.01

Snow Removal $15,476 $0.11

Landscaping $2,236 $0.02

Water & Sewer $6,881 $0.05

Lot Repairs $11,400 $0.08

Cleaning $936 $0.01

Lighting Repairs $451 $0.00

Miscellaneous $1,695 $0.01

Total CAM $51,419 $0.36

2016 Insurance Premiums $33,742 $0.23

2017 Real Estate Taxes $93,826 $0.65

Management Fee (4% of EGI) $19,971 $0.14

Owner Expenses for Vacant Utilities $15,300 $0.11

Reserves $14,500 $0.10

Total Expenses $228,759 $1.58

PRICING & FINANCING

Price $3,000,000

Cap Rate | Price/SF 9.21% | $20.72

Net Operating Income $276,349

Loan Type Proposed New

Down Payment 30% / $900,000

Loan Amount $2,100,000

Interest Rate / Amortization 4.75% / 25 Years

Debt Coverage Ratio 1.92



17

MARKET

OVERVIEW

8


DEMOGRAPHICS

18

Dairyland Square Shopping Center

1-Mile

3-Mile

5-Mile

PROPERTY NAME

MARKETING TEAM


DEMOGRAPHICS

Source: © 2016 Experian

Created on September 2017

POPULATION 1 Miles 3 Miles 5 Miles

▪ 2021 Projection

Total Population 8,634 34,279 68,837

▪ 2016 Estimate


▪ 2010 Census


▪ 2000 Census


▪ Current Daytime Population

2016 Estimate 7,160 26,102 51,723

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

▪ 2021 Projection

Total Households 3,725 13,420 27,594

▪ 2016 Estimate


Average (Mean) Household Size 2.43 2.54 2.48

▪ 2010 Census


▪ 2000 Census


▪ Occupied Units

2021 Projection 3,725 13,420 27,594

2016 Estimate 3,783 13,372 27,036

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

▪ 2016 Estimate

$150,000 or More 4.74% 5.56% 6.39%

$100,000 - $149,000 11.03% 14.47% 15.19%

$75,000 - $99,999 12.31% 14.31% 14.22%

$50,000 - $74,999 22.35% 21.78% 21.82%

$35,000 - $49,999 16.46% 15.46% 14.88%

Under $35,000 31.76% 27.13% 26.09%

Average Household Income $67,644 $73,599 $77,156

Median Household Income $52,464 $58,133 $60,059

Per Capita Income $28,974 $28,836 $30,955

HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles

Total Average Household Retail Expenditure

$65,670 $69,319 $70,095

▪ Consumer Expenditure Top 10 Categories

Housing $17,757 $18,462 $18,673

Transportation $12,554 $13,255 $13,466

Shelter $9,980 $10,351 $10,472

Food $6,541 $6,845 $6,859

Personal Insurance and Pensions $5,180 $5,761 $5,795

Health Care $4,532 $4,760 $4,885

Utilities $4,418 $4,550 $4,572

Entertainment $2,603 $2,778 $2,802

Household Furnishings and Equipment

$1,711 $1,826 $1,845

Cash Contributions $1,563 $1,670 $1,794

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

▪ Population By Age

2016 Estimate Total Population 8,326 32,698 64,924

Under 20 26.41% 25.73% 24.50%

20 to 34 Years 20.96% 18.35% 17.63%

35 to 39 Years 6.10% 5.92% 5.87%

40 to 49 Years 13.10% 14.03% 13.98%

50 to 64 Years 18.72% 20.15% 20.60%

Age 65+ 14.71% 15.83% 17.44%

Median Age 37.12 40.00 41.51

▪ Population 25+ by Education Level

2016 Estimate Population Age 25+ 5,595 22,432 45,457

Elementary (0-8) 2.15% 2.27% 2.24%

Some High School (9-11) 7.02% 6.73% 6.32%

High School Graduate (12) 41.57% 42.15% 39.04%

Some College (13-15) 20.43% 18.48% 18.69%

Associate Degree Only 8.63% 9.38% 9.18%

Bachelors Degree Only 12.44% 13.11% 15.67%

Graduate Degree 6.75% 6.95% 8.12%

19

Income

In 2016, the median household income for your selected geography is

$60,059, compare this to the US average which is currently $54,505.

The median household income for your area has changed by 29.70%

since 2000. It is estimated that the median household income in your

area will be $71,610 five years from now, which represents a change

of 19.23% from the current year.

The current year per capita income in your area is $30,955, compare

this to the US average, which is $29,962. The current year average

household income in your area is $77,156, compare this to the US

average which is $78,425.

Population

In 2016, the population in your selected geography is 64,924. The

population has changed by 21.33% since 2000. It is estimated that

the population in your area will be 68,837.00 five years from now,

which represents a change of 6.03% from the current year. The

current population is 48.82% male and 51.18% female. The median

age of the population in your area is 41.51, compare this to the US

average which is 37.68. The population density in your area is 825.42

people per square mile.

Households

There are currently 25,959 households in your selected geography.

The number of households has changed by 20.46% since 2000. It is

estimated that the number of households in your area will be 27,594

five years from now, which represents a change of 6.30% from the

current year. The average household size in your area is 2.48 persons.

Employment

In 2016, there are 51,723 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

56.77% of employees are employed in white-collar occupations in

this geography, and 43.26% are employed in blue-collar occupations.

In 2016, unemployment in this area is 4.77%. In 2000, the average

time traveled to work was 30.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

91.48% White, 3.86% Black, 0.03% Native American and 1.80%

Asian/Pacific Islander. Compare these to US averages which are:

70.77% White, 12.80% Black, 0.19% Native American and 5.36%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 3.27% of the current year

population in your selected area. Compare this to the US average of

17.65%.

PROPERTY NAME

MARKETING TEAM


Housing

The median housing value in your area was $176,502 in 2016,

compare this to the US average of $187,181. In 2000, there were

15,956 owner occupied housing units in your area and there were

5,594 renter occupied housing units in your area. The median rent at

the time was $481.

Source: © 2016 Experian

DEMOGRAPHICS

20

www.MarcusMillichap.com

Joel Dumes

Senior Vice President Investments

Senior Director - National Retail Group

Cincinnati Office

Tel: (513) 878-7720

Fax: (513) 878-7710

[email protected]

Licenses: OH SAL.2003013045, KY 63818

Frank Simcic

Associate

Associate Member - National Retail Group

Cincinnati Office

Tel: (513) 878-7745

Fax: (513) 878-7710

[email protected]

License: OH SAL.2015005386

E X C L U S I V E LY L I S T E D B Y

Stan Falk

First Vice President Investments

Senior Director - National Retail Group

Cincinnati Office

Tel: (513) 878-7721

Fax: (513) 878-7710

[email protected]

License: OH SAL.2012001364

BOR: Mark Taylor

DAIRYLAND SQUARE SHOPPING CENTER · 2017. 11. 15. · DAIRYLAND SQUARE SHOPPING CENTER # EXECUTIVE...

Documents

Transcript of DAIRYLAND SQUARE SHOPPING CENTER · 2017. 11. 15. · DAIRYLAND SQUARE SHOPPING CENTER # EXECUTIVE...