Offering Memorandum · Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any...
Transcript of Offering Memorandum · Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any...
Offering Memorandum
MR. HERO13720 Lorain Ave • Cleveland, OH 44111
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. © 2018 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.
MR. HERO
Cleveland, OH
ACT ID ZAA0280565
Broker of Record: Michael Glass
District Manager, Lic. # BRK.2007005898230 West St., Suite 100, Columbus, OH 43215
TEL: 614-360-9800
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N E T L E A S E D D I S C L A I M E R
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:
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 careful, 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 financial 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 facilities 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 interrupted 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.
By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost,
expense, or liability arising out of your investigation and/or purchase of this net leased property.
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TABLE OF CONTENTS
SECTION
INVESTMENT OVERVIEW 01Offering Summary
Location Overview
Regional and Local Map
Aerial Photo
FINANCIAL ANALYSIS 02Acquisition Financing
MARKET OVERVIEW 03Market Analysis
Demographic Analysis
MR. HERO
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MR. HERO
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INVESTMENT
OVERVIEW
#
EXECUTIVE SUMMARY
OFFERING SUMMARY
#
MR. HERO
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MR. HERO
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OFFERING SUMMARY
MAJOR EMPLOYERS
EMPLOYER# OF EMPLOYEES
*
Metrohealth System The 6,000
METROHEALTH 4,000
Ford 2,832
Clevelan Clinic Hlth Sys W Reg 2,800
General Motors 2,028
Area Temps Inc 1,405
Police Dept- District 1 1,400
Cleveland Water Department 1,200
FAIRVIEW WEST PHYSICIAN CENTER
1,187
Fairview Hlth Sys Fderal Cr Un 1,038
Windsor Construction 1,000
Plain Dealer Publishing Co 900
DEMOGRAPHICS
1-Miles 3-Miles 5-Miles
2018 Estimate Pop 21,425 160,250 316,779
2010 Census Pop 21,678 162,129 321,409
2018 Estimate HH 9,173 71,059 135,856
2010 Census HH 9,378 72,739 139,348
Median HH Income $43,329 $42,397 $43,991
Per Capita Income $22,745 $26,410 $26,451
Average HH Income $53,122 $59,280 $61,348
* # of Employees based on 5 mile radius
NOTES: Tenant Annual Tax Expenses: $5,341.50
Landlord Annual Tax Expenses: $5,341.50
CPI Increases Every 2 Years Starting 8/1/2023
OFFERING SUMMARY
Price $450,000
Net Operating Income $38,659
Capitalization Rate – Current 8.59%
Price / SF $169.36
Rent / SF $14.55
Lease Type NN
Gross Leasable Area 2,657 SF
Year Built / Renovated 1970
Lot Size 0.04 acre(s)
FINANCING
Down Payment All Cash
Net Cash Flow 8.59% / $38,659
Cash on Cash Return 8.59%
Total Return 8.59% / $38,659
MR. HERO
OFFERING SUMMARY
Out-parcel to $14 Million New Development (Self Storage Facility)
13,600 Cars Per Day on Lorain Ave
Less Than 1 Mile From West Park Transit Rail
316,000 People in a 5 Mile Radius
INVESTMENT HIGHLIGHTS
Marcus & Millichap is pleased to exclusively list a NN Single Tenant 2,657 square foot Restaurant located in Cleveland, (Cuyahoga County), Ohio.
The subject property is located at 13720 Lorain Avenue and is within proximity to multiple national retailers and multifamily housing. The property is
an out-parcel to a brand new $14,000,000 storage development.
Cleveland is a major city in the U.S. state of Ohio, and the county seat of Cuyahoga County. The city proper has a population of 385,525, making it
the 51st-largest city in the United States, and the second-largest city in Ohio. The city is located on the southern shore of Lake Erie, approximately
60 miles (100 kilometers) west of the Ohio-Pennsylvania state border. It was founded in 1796 near the mouth of the Cuyahoga River. It became a
manufacturing center due to its location on both the river and the lake shore, as well as being connected to numerous canals and railroad lines.
Cleveland's economy relies on diversified sectors such as manufacturing, financial services, healthcare, and biomedicals. Cleveland is also home
to the Rock and Roll Hall of Fame.
INVESTMENT OVERVIEW
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TENANT PROFILES
MR. HERO
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Mr. Hero
Since the company’s inception in 1965, Mr. Hero has expanded
its brand into Toledo, Columbus, Akron, and all throughout
Northeast Ohio. The Corporate Headquarters, Restaurant
Developers Corporation of Cleveland, Ohio, is the franchising
company behind Mr. Hero restaurants.
The future of Mr. Hero is dedicated to providing outstanding
quality products, and fast, efficient, friendly customer service in
an environment where cleanliness and organization are of the
highest caliber.
General Information
Tenant Name Mr. Hero
Website www.mrhero.com
Parent Company N/A
Headquartered Cleveland, OH
Rentable Square Feet 2,657 SF
Percentage of RBA 100%
Lease Commencement 8/1/2018
Lease Expiration 7/31/2028
No. of Locations 100+
#
CLOSE PROXIMITY TO:
13720 Lorain Ave, Cleveland, OH 44111
Out-parcel to $14 Million New Development
(Self Storage Facility)
13,600 Cars Per Day on Lorain Ave
Less Than 1 Mile From West Park Transit Rail
316,000 People in a 5 Mile Radius
Cleveland is a major city in the U.S. state of
Ohio, and the county seat of Cuyahoga County.
The city proper has a population of 385,525,
making it the 51st-largest city in the United
States, and the second-largest city in Ohio. The
city is located on the southern shore of Lake
Erie, approximately 60 miles (100 kilometers)
west of the Ohio-Pennsylvania state border. It
was founded in 1796 near the mouth of
the Cuyahoga River. It became a manufacturing
center due to its location on both the river and
the lake shore, as well as being connected to
numerous canals and railroad lines. Cleveland's
economy relies on diversified sectors such as
manufacturing, financial services, healthcare,
and biomedicals. Cleveland is also home to
the Rock and Roll Hall of Fame.
LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX
PROPERTY NAMEMR. HERO
PRICING AND VALUATION MATRIX
PROPERTY NAMEMR. HERO
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LOCATION OVERVIEW
#
13720 Lorain Ave, Cleveland, OH 44111
LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX
PROPERTY NAMEMR. HERO
PRICING AND VALUATION MATRIX
PROPERTY NAMEMR. HERO
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REGIONAL AND LOCAL MAP
AERIAL PHOTO
MR. HERO
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MR. HERO
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FINANCIAL
ANALYSIS
#
PROPERTY SUMMARY
OFFERING SUMMARY
#
NOTES: Tenant Annual Tax Expenses: $5,341.50
Landlord Annual Tax Expenses: $5,341.50
CPI Increases Every 2 Years Starting 8/1/2023
MR. HERO
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OFFERING SUMMARY
0.68 Acres
MARCUS & MILLICHAP CAPITAL CORPORATION
CAPABILITIES
MMCC—our fully integrated, dedicated financing arm—is committed to
providing superior capital market expertise, precisely managed execution, and
unparalleled access to capital sources providing the most competitive rates and
terms.
We leverage our prominent capital market relationships with commercial banks,
life insurance companies, CMBS, private and public debt/equity funds, Fannie
Mae, Freddie Mac and HUD to provide our clients with the greatest range of
financing options.
Our dedicated, knowledgeable experts understand the challenges of financing
and work tirelessly to resolve all potential issues to the benefit of our clients.
National platform
operating
within the firm’s
brokerage
offices
$6.24 billion
billion total
national
volume in 2018
Access to
more capital
sources than
any other firm
in the industry
Optimum financing solutions
to enhance value
Our ability to enhance
buyer pool by expanding
finance options
Our ability to enhance
seller control
• Through buyer
qualification support
• Our ability to manage buyers
finance expectations
• Ability to monitor and
manage buyer/lender
progress, insuring timely,
predictable closings
• By relying on a world class
set of debt/equity sources
and presenting a tightly
underwritten credit file
WHY MMCC?
Closed 1,678
debt and equity
financings
in 2018
ACQUISITION FINANCING
MR. HERO
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MR. HERO
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MARKET
OVERVIEW
MARKET OVERVIEW
CLEVELANDOVERVIEW
1
The Cleveland metro is situated in the northeastern corner of Ohio,
west of the Pennsylvania state border, and extends 100 miles along
the Lake Erie shore and more than 40 miles inland. It is composed of
Cuyahoga, Geauga, Lake, Lorain and Medina counties and contains
nearly 2.1 million residents, approximately a fifth of the Ohio
population. The eastern part of the region lies on the Appalachian
Plateau, while the western portion sits upon the Lake Plain, hemming
the area in to development. Economic growth and development are
diversifying the region’s industries to include medical and technology
as well as various corporate headquarters. Telecommunications are
also a growing sector, attracting additional tech companies.
MARKET OVERVIEW
METRO HIGHLIGHTS
EXCELLENT INFRASTRUCTURE
Cleveland’s transportation facilities strengthen its
position as a leading center of business, generating
access to other large metros nationwide.
DIVERSIFYING ECONOMY
Education and health services is the largest
employment sector; manufacturing also is
prominent.
REVITALIZING DOWNTOWN
Cleveland’s downtown is experiencing a
metropolitan rebirth as revitalized buildings attract
new businesses, residents and visitors.
MR. HERO
MARKET OVERVIEW
ECONOMY Historically a durable-goods manufacturing area, the metro has recently taken great strides
toward boosting its medical and biotech sectors.
Cleveland is recognized as a global leader in healthcare and medical services. The world-
renowned Cleveland Clinic is one of the area’s largest employers.
Fortune 500 firms located in Cleveland include Parker-Hannifin, Sherwin-Williams,
Progressive, Keycorp, and TravelCenters of America.
Insurance is also a leading industry locally, partly because of the presence of Progressive.
SHARE OF 2018 TOTAL EMPLOYMENT
MAJOR AREA EMPLOYERS
Progressive Corp.
Cleveland Clinic
University Hospitals
Sherwin-Williams Co.
MetroHealth System
KeyCorp
Case Western Reserve University
Parker Hannifin Corp.
Swagelok Co.
Lincoln Electric Holdings, Inc.* Forecast
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MANUFACTURING
12%GOVERNMENT
HEALTH SERVICES
EDUCATION AND
+OTHER SERVICES
4%
LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES
18%
AND UTILITIES
TRADE, TRANSPORTATION CONSTRUCTION
PROFESSIONAL AND
BUSINESS SERVICES
1%INFORMATION
15%
3%
13% 10% 6%
19%
MR. HERO
MARKET OVERVIEW
DEMOGRAPHICS
SPORTS
EDUCATION
ARTS & ENTERTAINMENT
The metro is expected to add nearly 19,000 people through 2023, which will result in
the formation of approximately 16,200 households, generating demand for housing.
Relatively affordable home prices have produced a homeownership rate of 66 percent,
slightly above the national rate of 64 percent.
Roughly 29 percent of residents age 25 and older have received a bachelor’s degree;
of those residents, 11 percent also have obtained a graduate or professional degree.
Cleveland’s downtown district continues to undergo economic revitalization as buildings
such as the medical mart and convention center and major renovations reshape the city’s
historical centers. Cultural opportunities include the Rock and Roll Hall of Fame and the
Theater District in downtown Cleveland where Playhouse Square is located. The facility
has four theaters that house Opera Cleveland and stage Broadway musicals. Cedar Point
Amusement Park is a short drive away. Only one park in the world has more roller
coasters than Cedar Point. Cleveland is home to several highly ranked institutions of
higher learning, including Case Western Reserve University, Cleveland State University
and John Carroll University in University Heights.
QUALITY OF LIFE
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* Forecast
Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s
Analytics; U.S. Census Bureau
MR. HERO
41.2
2018MEDIAN AGE:
U.S. Median:
38.0
$53,800
2018 MEDIAN HOUSEHOLD INCOME:
U.S. Median:
$58,800
2.1M
2018POPULATION:
Growth2018-2023*:
0.9%
848K
2018HOUSEHOLDS:
1.9%
Growth2018-2023*:
2018 Population by Age
0-4 YEARS
6%5-19 YEARS
18%20-24 YEARS
6%25-44 YEARS
24%45-64 YEARS
28%65+ YEARS
17%
PROPERTY NAME
MARKETING TEAM
MR. HERO
DEMOGRAPHICS
Source: © 2018 Experian
Created on June 2019
POPULATION 1 Miles 3 Miles 5 Miles
2023 Projection
Total Population 21,013 157,437 310,965
2018 Estimate
Total Population 21,425 160,250 316,779
2010 Census
Total Population 21,678 162,129 321,409
2000 Census
Total Population 23,479 175,194 347,766
Current Daytime Population
2018 Estimate 15,953 139,263 293,116
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
2023 Projection
Total Households 9,070 70,455 134,739
2018 Estimate
Total Households 9,173 71,059 135,856
Average (Mean) Household Size 2.35 2.24 2.30
2010 Census
Total Households 9,378 72,739 139,348
2000 Census
Total Households 10,049 77,333 147,525
Occupied Units
2023 Projection 9,070 70,455 134,739
2018 Estimate 10,391 81,707 155,727
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
2018 Estimate
$150,000 or More 2.22% 4.98% 5.24%
$100,000 - $149,000 7.14% 8.84% 9.27%
$75,000 - $99,999 10.33% 10.04% 11.00%
$50,000 - $74,999 22.40% 18.65% 18.78%
$35,000 - $49,999 18.27% 15.75% 15.04%
Under $35,000 39.64% 41.72% 40.67%
Average Household Income $53,122 $59,280 $61,348
Median Household Income $43,329 $42,397 $43,991
Per Capita Income $22,745 $26,410 $26,451
HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles
Total Average Household Retail Expenditure
$54,440 $55,116 $56,486
Consumer Expenditure Top 10 Categories
Housing $14,395 $14,542 $14,860
Transportation $9,025 $9,241 $9,512
Shelter $7,972 $8,034 $8,159
Personal Insurance and Pensions $5,835 $6,022 $6,164
Food $5,631 $5,664 $5,780
Health Care $3,892 $3,908 $4,156
Utilities $3,542 $3,529 $3,614
Entertainment $1,993 $2,076 $2,122
Household Furnishings and Equipment
$1,459 $1,494 $1,558
Apparel $1,340 $1,311 $1,319
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
Population By Age
2018 Estimate Total Population 21,425 160,250 316,779
Under 20 25.08% 23.74% 24.09%
20 to 34 Years 21.47% 24.05% 22.58%
35 to 39 Years 8.09% 7.34% 6.87%
40 to 49 Years 13.85% 12.69% 12.60%
50 to 64 Years 20.02% 19.28% 19.67%
Age 65+ 11.50% 12.91% 14.20%
Median Age 37.08 36.42 37.34
Population 25+ by Education Level
2018 Estimate Population Age 25+ 14,767 111,793 219,877
Elementary (0-8) 2.33% 2.66% 2.96%
Some High School (9-11) 12.36% 10.37% 10.76%
High School Graduate (12) 34.94% 29.18% 30.81%
Some College (13-15) 22.27% 21.79% 21.67%
Associate Degree Only 8.90% 7.11% 7.11%
Bachelors Degree Only 11.01% 17.63% 16.40%
Graduate Degree 6.50% 9.96% 8.98%
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Income
In 2018, the median household income for your selected geography is
$43,991, compare this to the US average which is currently $58,754.
The median household income for your area has changed by 19.28%
since 2000. It is estimated that the median household income in your
area will be $50,856 five years from now, which represents a change
of 15.61% from the current year.
The current year per capita income in your area is $26,451, compare
this to the US average, which is $32,356. The current year average
household income in your area is $61,348, compare this to the US
average which is $84,609.
Population
In 2018, the population in your selected geography is 316,779. The
population has changed by -8.91% since 2000. It is estimated that
the population in your area will be 310,965.00 five years from now,
which represents a change of -1.84% from the current year. The
current population is 48.79% male and 51.21% female. The median
age of the population in your area is 37.34, compare this to the US
average which is 37.95. The population density in your area is
4,026.00 people per square mile.
Households
There are currently 135,856 households in your selected geography.
The number of households has changed by -7.91% since 2000. It is
estimated that the number of households in your area will be 134,739
five years from now, which represents a change of -0.82% from the
current year. The average household size in your area is 2.30 persons.
Employment
In 2018, there are 127,450 employees in your selected area, this is
also known as the daytime population. The 2000 Census revealed
that 58.44% of employees are employed in white-collar occupations
in this geography, and 41.49% are employed in blue-collar
occupations. In 2018, unemployment in this area is 6.00%. In 2000,
the average time traveled to work was 25.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
74.88% White, 12.04% Black, 0.03% Native American and 2.31%
Asian/Pacific Islander. Compare these to US averages which are:
70.20% White, 12.89% Black, 0.19% Native American and 5.59%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 15.56% of the current year
population in your selected area. Compare this to the US average of
18.01%.
PROPERTY NAME
MARKETING TEAM
MR. HERO
Housing
The median housing value in your area was $116,468 in 2018,
compare this to the US average of $201,842. In 2000, there were
87,790 owner occupied housing units in your area and there were
59,735 renter occupied housing units in your area. The median rent at
the time was $449.
Source: © 2018 Experian
DEMOGRAPHICS
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