New Walgreens Ground Lease - ctbt. · PDF fileDisclaimer i Investment Off ering & Highlights...

New Walgreens Ground Lease

Alameda, California (San Francisco Bay Area)

OFFERING MEMORANDUM

www.thinknnn.com

Christopher Sheldon415-677-0441

[email protected]

Lic #01806345

Andrew Bogardus415-677-0421

[email protected]

Lic #00913825

Net Lease Investment Services


Disclaimer

The information contained in this marketing brochure (“Materials”) is proprietary

and confi dential. It is intended to be reviewed only by the person or entity receiving

the Materials from DTZ (“Agent”). The Materials are intended to be used for

the sole purpose of preliminary evaluation of the subject property/properties

(“Property”) for potential purchase.

The Materials have been prepared to provide unverifi ed summary fi nancial,

property, and market information to a prospective purchaser to enable it to

establish a preliminary level of interest in potential purchase of the Property. The

Materials are not to be considered fact. The information contained in the Materials

is not a substitute for thorough investigation of the fi nancial, physical, and market

conditions relating to the Property.

The information contained in the Materials has been obtained by Agent from

sources believed to be reliable; however, no representation or warranty is made

regarding the accuracy or completeness of the Materials. Agent makes no

representation or warranty regarding the Property, including but not limited to

income, expenses, or fi nancial performance (past, present, or future); size, square

footage, condition, or quality of the land and improvements; presence or absence

of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws

and regulations (local, state, and federal); or, fi nancial condition or business

prospects of any tenant (tenants’ intentions regarding continued occupancy,

payment of rent, etc). A prospective purchaser must independently investigate

and verify all of the information set forth in the Materials. A prospective purchaser

is solely responsible for any and all costs and expenses incurred in reviewing the

Materials and/or investigating and evaluating the Property.

By receiving the Materials you are agreeing to the Confi dentiality and Disclaimer

set forth herein.

Walgreens i


The Off ering• Approximately 1.18 acres of land, ground leased to Walgreens for 25 years, beneath a brand

new 16,788 square foot retail pharmacy building and drive-thru completed in September 2014.

The improvements were constructed and owned by the tenant.

• Price: $6,750,000 – 4.00% Return

Lease / Tenant• Walgreens is ranked #37 on the Fortune 100 with a total stockholder’s equity of $21.4 billion

• S&P rated “BBB” investment grade credit

• New 25 year ground lease with no landlord maintenance responsibilities

• Extremely attractive 10% rent increases every 5 years starting in the options

Real Estate / Area Strengths• Rare Core SF Bay Area Walgreens ground lease investment opportunity

• Hard corner location on high traffi c intersection of Park Street and Tilden Way with combined

traffi c counts of 27,089 VPD

• Park Street and Tilden Way (Fruitvale Avenue) are two major access thoroughfares to

Alameda from Oakland and Interstate 880

• Located within the historic Park Street Business District – Park Street is the primary retail and

traffi c corridor in downtown Alameda

• High barriers to entry market

• Strong demographics with average household incomes of over $87,000 and more than

30,000 people within 1 mile of the property

• Aesthetically pleasing brick façade exterior

• Co-anchor of Alameda Station shopping center along with the Alameda Marketplace – an

extremely popular open air market featuring 10 local and independent vendors of quality

foods, produce, goods and services

Investment Off ering & Highlights

SKF USA, Inc. 2FedEx Ground iWalgreens ii

Disclaimer i

Investment Off ering & Highlights ii

Investment Overview 1

Walgreen Co. 2

Alameda Area Map 3

Aerials 4

Location Map 7 The Marketplace 8

Site Plan 9

Economy 10

Alameda Landing / Alameda Point 11

Demographics 12

Walgreens

Ground Lease

Table of Contents

www.thinknnn.com


[email protected]

Lic #01806345


[email protected]

Lic #00913825


Location 1600 Park Street, Alameda, California, in the Alameda Station retail center

Lot Size Approximately 1.18 acres – 51,512± square feet

• Only the land is for sale.

Improvements Completed September 2014, a 16,788± square foot freestanding WALGREENS

PHARMACY with drive-thru.

• The improvements were built and owned by the tenant. The improvements are

not for sale.

Ground Lease Ground lease to WALGREEN CO. (“Walgreens”) for 60 years from October 2013

until January 31, 2074 at an annual net rent of $270,000. The lease is triple net

with the tenant responsible for all taxes, insurance and maintenance, including the

parking lot, roof and structure.

Walgreens has the ability to terminate the lease every 5 years starting at the end

of the 25th lease year, with 12 months termination notice to the landlord. The rent

increases by 10% every 5 years starting at the beginning of the 26th lease year.

Financing The property will be delivered free and clear of permanent fi nancing.

Annual Rent

Price: $6,750,000 – 4.00% Return

Price Per Square Foot $131 – Land Only

Investment Overview

Lease Years Annual Rent Return

1 – 25 $270,000 4.00%

26 – 30 $297,000 4.40%

31 – 35 $326,700 4.84%

36 – 40 $359,370 5.32%

41 – 45 $395,307 5.86%

46 – 50 $434,838 6.44%

51 – 55 $478,321 7.09%

56 – 60 $526,154 7.79%

Walgreens 1


Walgreen Co.

Incorporated in 1909, WALGREEN CO. (NYSE: “WAG”) operates 8,683 locations in

50 states and the District of Columbia (as of May 31, 2014).

For the nine months ended May 31, 2014, sales increased 5.6 percent to $57.3 billion

and net earnings increased 24.7 percent to $2.2 billion. Stockholder’s equity was

$21.4 billion.

For the fiscal year ended August 31, 2013, Walgreen had sales of $72.2 billon with

net income of $2.45 billion.

Walgreen enjoys a Standard & Poor’s rating of “BBB” and is ranked 37th in the 2013

Fortune 100. In the last three fi scal years combined, Walgreen has generated nearly

$11.8 billion from operations. With the slow-down in new stores, Walgreen has

“excess cash,” and bought back nearly $5.0 billion of stock in those years. It also

increased its dividend rate and paid out $2.1 billion in dividends during that time.

In fi scal year 2009, Walgreen added 554 net new stores. In the fiscal year ending

August 2010, Walgreen added about 291 newly constructed stores and in fi scal year

2011 it had a net gain of 199 new drugstores including 32 acquisitions. In the most

recent fi scal year, it had 175 net new locations. The company has a goal of 2.5% to

3% store growth. This reduction in new store additions seems to have had the eff ect

of increasing the value of existing stores.

For additional information, see www.walgreens.com

Walgreens 3Walgreens 2

Alameda

The City of Alameda is located seven miles east of San

Francisco, less than a mile west of Oakland, CA in the San

Francisco Bay. In 2014 the city had a total population of

75,467.

Vehicle access to Alameda Island is via three bridges

from Oakland (Park Street, Fruitvale Avenue, and High

Street Bridges), as well as the two one-way Posey and

Webster Street tunnels, called tubes, leading into Oakland’s

Chinatown.

The island is served by international airports in Oakland, San

Francisco and San Jose. It is also accessible from San Francisco

via the Bay Bridge and from the east, north and south by

major highways. Alameda is also served by the Alameda

Oakland Ferry Service (AOFS) and the Alameda/Harbor

Bay Ferry Service (AHBFS).

Walgreens 3

CHUCK CORICA CHUCK CORICA GOLF COMPLEXGOLF COMPLEX

OAKLAND INTERNATIONAL AIRPORT INTERNATIONAL AIRPORT

COAST GUARD COAST GUARD ISLANDISLAND

ALAMEDA ALAMEDA COLLEGECOLLEGE

MARINA VILLAGE MARINA VILLAGE 1.2M SF BUSINESS 1.2M SF BUSINESS

SAN FRANCISCO BAYSAN FRANCISCO BAY

OAKLAND INNER HARBOROAKLAND INNER HARBOR

AIRPORT CHANNELAIRPORT CHANNEL

OAKLANOAKLAND

Print & Ship SerivcesSM

ALAMEDA SOUTH SHORE

PHASE II82 ACRES

5.5 M SF OFFICE

PHASE I68 ACRES

1,425 APTS

SEAPLANE LA-SEAPLANE LA-GOONGOON

ALAMEDA NATURAL GROCERY

BARON’S EATS

BARON’S MEAT & SEAFOOD

THE BEANERY COFFEE CO.

EAST END PIZZA

FARMSTEAD CHEESE & WINES

FEEL GOOD BAKERY

GREENS & GRAINS

THE PANTRY

SUSSUSHIHI KINKINGG

FAMILY & COSMETIC DENTISTRYFAMILY & COSMETIC DENTISTRYFAMILY & RESTORATIVE DENTISTRYFAMILY & RESTORATIVE DENTISTRY

Park Street

Park Stre

Park Street

Park Street

Lincoln Avenue

Lincoln Avenue

Lincoln A

venue

Ti

lden

Way

Lincoln A

venue

Ti

lden

Way

MCGEE’SMCGEE’S

LINGUINI’SLINGUINI’S

SANDWICH SANDWICH BOARDBOARD

ALAMEDA ALAMEDA GRILLGRILL

HABANASHABANAS

FORT KNOX COINFORT KNOX COINBEAD INSPIRATIONBEAD INSPIRATION

JIM’S COFFEE JIM’S COFFEE

ALAMEDA PUBLIC ALAMEDA PUBLIC LIBRARYLIBRARY

ALAMEDAALAMEDA LAUNDERLAND LAUNDERLAND

GIM’S CHINESE GIM’S CHINESE ST. VINCENT ST. VINCENT

DE PAULDE PAUL

PROVIDENCE PROVIDENCE VETERINARYVETERINARY

Park Street

Park Street

Park Street

Park Street

C

1,454 SF

PENDING

LEASE

PENDING

PENDING

PENDING

JIM’S COFFEE JIM’S COFFEE

ALAMEDAALAMEDA LAUNDERLAND LAUNDERLAND

PROVIDENCE PROVIDENCE

Lincoln Avenue

Tilden Way

Lincoln Avenue

Tilden Way

ALAMEDA PUBLIC ALAMEDA PUBLIC

ALAMEDA ALAMEDA

ALAMEDA ALAMEDA

LINGUINI’SLINGUINI’S

HABANASHABANAS

Lincoln Avenue

Lincoln AvenueSanta Clara Avenue

Santa Clara Avenue

Santa Clara Avenue

Santa Clara Avenue

Oak Street

Oak Street

88 SPORTS BAR88 SPORTS BAR

THE PARK ALAMEDATHE PARK ALAMEDA62 UNIT APT.62 UNIT APT.

ALAMEDA THEATER ALAMEDA THEATER & CINEPLEX& CINEPLEX

ALAMEDA FAMILY

CAPONE’S CAPONE’S SPEAKEASYSPEAKEASY

PARK CENTRE PARK CENTRE

ALAMEDA ORTHOPEDIC ALAMEDA ORTHOPEDIC

LAUREN’S CLOSET LAUREN’S CLOSET CONSIGNMENTCONSIGNMENT

BAYSIDE MEDICAL BAYSIDE MEDICAL

Central Avenue

Central Avenue

Park Street

Park Street

Park Street

Park Street

LocationAlameda Station is a new Walgreens anchored development located

at the gateway to the historic Park Street shopping district in downtown

Alameda. It joins the 19,430 square foot Alameda Marketplace, which

houses a collection of locally owned and independently operated

food purveyors. Along with sharing its 85-spot parking lot, the new

pharmacy has a brick facade to match the Marketplace. While the

16,788 square foot Walgreens is complete, construction continues on

a 7,788 square foot multi-tenant retail building at the site.

This location is a “gateway” for the Island because of its proximity to

Interstate 880, and the Fruitvale Avenue and Park Street bridges.

The Historic Park Street Business District is known for its many

buildings that date back to the 1800s and is a designated National

Historic Landmark. This main thoroughfare of downtown Alameda

is fi lled with local shops, restaurants, drinking establishments, and

services. The renovated 1932 Alameda Theatre & Cineplex is the

cultural centerpiece of the commercial district. In addition, popular

attractions include High Scores Arcade Museum (a retro video game

arcade) and Subpar Miniature Golf (an indoor miniature golf complex

that features Bay Area landmarks such as the Golden Gate Bridge and

Coit Tower at each hole).

Walgreens 7


Location (continued)

The Marketplace The Alameda Marketplace, directly to the east of Walgreens’ parking lot, is home to ten

locally owned and independently operated businesses that focus on gourmet, all-natural,

sustainable, handmade, artisan and organic foods.

Located in a large brick building at the gateway to the historic Park Street shopping district

in downtown Alameda, just across from Oakland, the Marketplace provides an open air,

European market shopping experience.

The award winning vendors off er quality foods and services in a clean, friendly and

welcoming setting. Here one can get locally sourced foods, organic produce, green

household goods, natural supplements and more. Also available is a vast selection of

artisanal cheeses and wines, clean, grass fed beef, hand-made pastries, fresh gourmet to-

go, house-roasted coff ees, made to order sushi, upscale dining and more. The Marketplace

is a modern celebration of great food and sustainable living, all under one roof.

Because the Marketplace is a community of locally owned independent businesses, all of

its vendors and staff can concentrate their knowledge and expertise to provide patrons

with the richest culinary shopping experience available.

It is these qualities that have allowed the Marketplace to become a regional destination

for food lovers throughout the Bay Area, and to be named the East Bay’s “Best One-Stop

Shop for Foodies” by the East Bay Express.

Vendors

• Alameda Natural Grocery

• Baron’s Eats

• Baron’s Meat & Seafood

• The Beanery Coff ee Co.

• East End Pizza

• Farmstead Cheeses & Wines

• Feel Good Bakery

• Greens & Grains

• The Pantry

• Sushi King

www.alamedamarketplace.comWalgreens 3Walgreens 8


DRIVE-THRU

PARK STREET

TILD

EN W

AY

±16,788 SFNew Retail Building

alamedamarketplace

Site Plan


Economy

Major Employers

The North Face, Inc.The North Face, Inc. is an American outdoor product company specializing in outerwear, fl eece,

coats, shirts, footwear, and equipment such as backpacks, tents, and sleeping bags. Its clothing and

equipment lines are catered towards college students, climbers, mountaineers, skiers, snowboarders,

hikers, and endurance athletes. The company sponsors professional athletes from the worlds of

running, climbing, skiing and snowboarding.

The North Face is a wholly owned subsidiary of the VF Corporation. Its headquarters is in Alameda,

co-located with its corporate sibling, JanSport.

Peet’s Coff ee & Tea Peet’s Coff ee & Tea, Inc. is the premier specialty coff ee and tea company in the United States.

The company off ers superior quality coff ees and teas in multiple forms, by sourcing the best

quality coff ee beans and tea leaves in the world, adhering to strict high-quality and taste

standards, and controlling product quality through its unique direct store delivery selling and

merchandising system.

Peet’s Coff ee and Tea Roasting Facility moved from Emeryville to its current location on

Harbor Bay Parkway in Alameda in May 2007. It is currently the only “green” coff ee plant in the

world. The facility consists of a 135,000 square foot building on 10.6 acres. This roasting and

packaging plant was specially designed for their small-batch, roast-to-order business model.

Wind River Systems, Inc.Wind River Systems, Inc. is a company providing a comprehensive embedded system software

portfolio which comprises run-time software, industry-specifi c software solutions, simulation

technology, development tools and middleware.The company was founded in Berkeley,

California in 1981 by Jerry Fiddler and David Wilner. On June 4, 2009, Wind River announced

that Intel had bought the company for a reported $884 million. Wind River continues to exist

as a wholly owned subsidiary of Intel. Its product portfolio is supported by global professional

services and support, and a broad partner ecosystem.

Wind River’s headquarters is located at 500 Wind River Way, Alameda, California.

Walgreens 10

Peet’s Coff ee & Tea Roasting Facility – Alameda

Alameda Landing / Alameda Point

Alameda Point (former Naval Air Station)The Alameda City Council approved a plan to allow redevelopment of the area

around the Seaplane Lagoon at Alameda Point into a waterfront community with new

residences, businesses, parks and other public spaces along the shore of San Francisco

Bay.

The plan approved July 15, 2014 is the last major planning document necessary for

the heart of the Alameda Point redevelopment, an ambitious reimagining of both the

former military site and also a huge swath of the island-bound city itself.

Decommissioned in 1997, the former Naval Air Station Alameda occupies a prominent

spot on the shore that entices both developers looking to tap prime waterfront land

and conservationists who see a rare chance to restore some of the Bay’s vanishing

wetlands.

The fi rst project is 68 acres along the main thoroughfare and Seaplane Lagoon. It

would include ground-level retail shops, offi ces, hotels and at least 800 apartments

and condominiums. The second project is 82 acres reserved for corporate campuses

or a large regional shopping outlet. That project includes no housing.

Ultimately, Alameda Point will include 1,425 housing units, 250 acres of open space

and a mix of light industry, offi ces and retail. Google recently signed a lease at the point

for a renewable energy lab.

Alameda LandingAlameda Landing is a new 72-acre, mixed-use development located just off the

Webster Street Tube. Target’s opening concluded Phase I construction in October

2013. Alameda Landing’s Phase II construction on the 291,000 square foot shopping

center includes Safeway and Michael’s, among 10 new retail buildings. Other shops

and restaurants include: The Habit Burger Grill, In-N-Out Burger, Famous Dave’s BBQ,

Petco Unleashed, and Sleep Train. Safeway and Michael’s is anticipated to open Fall

2014.

Upon completion, Alameda Landing will consist of:

• Target-anchored 291,000 square foot retail center

• 300,000 square feet of lifestyle retail and restaurants

• 35,000 square foot waterfront district that will include restaurants and entertainment retail

• 400,000 square feet of offi ce and R&D space

• 300 residential units


Demographics

2014 Summary 1 mile 3 miles 5 miles

Population 30,912 229,440 445,010

Households 12,750 87,819 173,020

Families 7,463 51,462 97,514

Average Household Size 2.38 2.58 2.52

Owner Occupied Housing Units 5,189 31,067 67,060

Renter Occupied Housing Units 7,561 56,752 105,959

Median Age 41.6 37.3 37.2

Median Household Income $66,415 $48,099 $49,694

Average Household Income $87,328 $71,292 $75,788

2019 Summary

Population 32,612 241,051 468,805

Households 13,462 92,427 182,669

Families 7,873 54,142 102,907

Average Household Size 2.38 2.58 2.52

Owner Occupied Housing Units 5,425 32,287 69,882

Renter Occupied Housing Units 8,037 60,140 112,786

Median Age 41.8 37.6 37.6

Median Household Income $78,653 $55,815 $57,528

Average Household Income $101,849 $82,909 $88,419

Trends: 2014-2019 Annual Rate

Population 1.08% 0.99% 1.05%

Households 1.09% 1.03% 1.09%

Families 1.08% 1.02% 1.08%

Owner Households 0.89% 0.77% 0.83%

Median Household Income 3.44% 3.02% 2.97%

Walgreens 12

DTZ

Net Leased Investment Services

www.thinknnn.com


[email protected]

Lic #01806345


[email protected]

Lic #00913825

New Walgreens Ground Lease - ctbt. · PDF fileDisclaimer i Investment Off ering & Highlights...

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