OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading...

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R A OFFERING MEMORANDUM MCKEESPORT, PA (PITTSBURGH MSA) RITE AID ACTUAL SITE

Transcript of OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading...

Page 1: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

RAOFFERING MEMORANDUM

M C K E E S P O R T , P A ( P I T T S B U R G H M S A )

RITE AID

ACTUAL SITE

Page 2: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

CRAIG FULLERSenior Vice President Investments

Executive Director, National Retail GroupCLEVELAND

Phone: (216) 264-2043 Fax: (216) 264-2010

[email protected]: OH SAL.2008001551

ERIN PATTONSenior Vice President Investments

Executive Director, National Retail GroupCOLUMBUS

Phone: (614) 360-9035 Fax: (614) 474-1696

[email protected]: OH SAL.2004010274

O F F I C E S N A T I O N W I D E A N D T H R O U G H O U T C A N A D A

WWW.MARCUSMILLICHAP.COM

SCOTT WILESSenior Vice President Investments

Executive Director, National Retail GroupCLEVELAND

Phone: (216) 264-2026 Fax: (216) 264-2010

[email protected]: OH SAL.2005013197

EXCLUSIVELY LISTED BY

RITE AIDM C K E E S P O R T , P A ( P I T T S B U R G H M S A )

DUSTIN JAVITCHSenior Associate

National Retail GroupCLEVELAND

Phone: (216) 264-2025Fax: (216) 264-2010

[email protected]: OH SAL.2012000193

Page 3: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

OFFERING HIGHLIGHTS

3700 Walnut Street, McKeesport, PA 15132

OFFERING PRICE

$3,917,000CAP RATE

7.75%

VITAL DATA

Price $3,917,000

Cap Price 7.75%

Price/SF $351.08

Gross Leasable Area (GLA) 11,157 SF

Term Remaining 8+ Years

RITE AID

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Page 4: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

Marcus & Millichap is pleased to present the Rite Aid located at 3700 Walnut Street in McKeesport, Pennsylvania. The property consists of approximately 11,157 square feet of building space and situated on a large 2.98-acre parcel. Rite Aid has been operating at this site since 2007 and has over eight years remaining on their lease. The lease includes Six, Five-Year renewal options which each include rental increases of over six percent. The lease is a double net structure with the Landlord only responsible for the roof and structure while the Tenant is responsible for the parking lot, common area maintenance, HVAC, real estate taxes, insurance and utilities.

The property has great access and visibility at the intersection of Walnut Street and Eden Park Boulevard with a combined traffic count of 15,200 vehicles per day. This is the only national drug store within 2.5 miles, with no Walgreens stores within an 8 mile drive. Surrounding national tenants include Shop-N-Save, Ollies Bargain Outlet, ALDI, O’Reilly Auto Parts, Dollar General, AutoZone, Dollar Tree, McDonald’s and KFC. Located 16 miles from Pittsburgh, McKeesport is a city in Allegheny County Pennsylvania and part of the Pittsburgh MSA. By population, it is Allegheny County’s second largest city, after Pittsburgh.

Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong presence on both the East and West Coasts, employing more than 51,000 associates. The company is publicly traded on the New York Stock Exchange under the ticker symbol RAD.

INVESTMENT HIGHLIGHTSINVESTMENT OVERVIEW ► Newer Concept Rite Aid with 8+ Years Remaining on Initial

20-Year Term

► Limited Pharmacy Competition | Closest Walgreens is Over 8 Miles Away

► Renovations in 2017 of Approximately $500,000 at Tenant’s Expense

► Strong Visibility at Signalized Intersection with Over 15,200 Vehicles Per Day

► 2007 Built-to-Suit Prototypical Masonry Construction with Drive-Thru

► Surrounding tenants include Shop-N-Save, Ollies Bargain Outlet, ALDI, O’Reilly Auto Parts, Dollar General, AutoZone, Dollar Tree, McDonald’s and KFC

► Corporate Guaranty from Rite Aid | Ranked #94 on Fortune 500 List | S&P Credit Rating of “B”

► Large 2.98 Acre Parcel

► Rite Aid is the Dominant Pharmacy in Western PA

► McKeesport is Allegheny County’s Second Largest City After Pittsburgh

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Page 5: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

EXECUTIVE SUMMARY

RITE AID3700 Walnut Street

McKeesport, PA 15132

Offering Price $3,917,000

Cap Rate 7.75%

Current Annual Rent $303,358

Gross Leasable Area (GLA) 11,157 SF

Price/SF $351.08

Year Built/Renovated 2007/2017

Lot Size 2.98 Acres

OFFERING SUMMARY

Legal Tenant Rite Aid Corporation

Lease Type Double Net (Roof & Structure Only)

Roof & Structure Landlord Responsible

Parking Lot Tenant Responsible

Ownership Interest Fee Simple

Lease Guaranty Type Corporate Guaranty

Originial Lease Term 20 Years

Lease Commencement Date 12/1/2005

Rent Commencement Date 3/20/2007

Lease Expiration Date 3/31/2027

Remaining Lease Term 8+ Years

Renewal Options Six, 5-Year

Rent Increases In the Options

Option to Terminate None

Option to Purchase None

LEASE SUMMARY

RENT SCHEDULEBase Term Annual Rent Monthly Rent CAP Rate

Current - 3/31/2027 $303,582.00 $25,298.50 7.75%

Option Terms Annual Rent Monthly Rent CAP Rate

Option 1 (5 Years) $321,096.00 $26,758.00 8.20%

Option 2 (5 Years) $340,399.92 $28,366.66 8.69%

Option 3 (5 Years) $360,823.92 $30,068.66 9.21%

Option 4 (5 Years) $382,473.00 $31,872.75 9.76%

Option 5 (5 Years) $405,444.00 $33,787.00 10.35%

Option 6 (5 Years) $429,771.96 $35,814.33 10.97%

DEMOGRAPHIC SUMMARY1 Mile 3 Miles 5 Miles

2018 Population 9,414 52,029 115,560

2023 Population Projection 9,163 49,897 112,730

2018 Households 4,151 22,720 50,615

2023 Households Projection 4,083 22,054 49,927

Average Household Income $53,411 $52,577 $58,938

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TENANT OVERVIEW & PROPERTY DETAILS

SITE DESCRIPTION

Parking 59 Spaces Available

Parking Ratio 5.29 : 1,000 SF

Topography Level

PARCELS

Number of Tax Parcels One

Parcel Number(s) 0464-R-00376-0000-00

CONSTRUCTION

Foundation Concrete Slab

Framing Steel

Exterior Masonry

Parking Surface Asphalt

Roof Flat Rubber Composite

MECHANICAL

HVAC Roof Mounted

Fire Protection To Code

Utilities All Local Providers

ZONING

PUD Commercial

ACCESS POINTS

The property is accessed by one entrance from Walnut Street.

THE OFFERING

Tenant Rite Aid

Property Address 3700 Walnut Street

McKeesport, PA 15132

TENANT OVERVIEW

Ownership Public

Estimated Sales Volume $21.5 Billion

Headquartered E. Penndboro Township, PA

Number of Locations 2,500+

NYSE RAD

Rite Aid Corporation is a drugstore chain in the United States and a Fortune 500 company. It is headquartered in Camp Hill, East Pennsboro Township, Cumberland County, Pennsylvania, near Harrisburg. Rite Aid is the largest drugstore chain on the East Coast and the third largest in the U.S.

Rite Aid began in 1962, opening its first store in Scranton, Pennsylvania; it was called Thrift D Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. As of 2017, Rite Aid is publicly traded on the New York Stock Exchange under the symbol RAD. Its major competitors are CVS and Walgreens. In late 2015, Walgreens announced that it would acquire Rite Aid for $9.4 billion pending approval. However, on June 29, 2017, over fear of antitrust regulations, Walgreens Boots Alliance announced it would buy roughly half of Rite Aid’s stores for $5.18 billion. On September 19, 2017, the Federal Trade Commission (FTC) approved a fourth deal agreement to purchase Rite Aid with 1,932 stores for $4.38 billion total.

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REGIONAL MAP

RITE AID

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PARCEL MAP & TAX SUMMARY

PARCEL ACREAGE PARCEL NUMBER (APN) APPRAISED VALUE 2017 TAXES (PAYABLE 2018) EFFECTIVE TAX RATE

Rite Aid 2.98 0464-R-00376-0000-00 $2,400,000 $11,124.96 0.46%

*All Data Per Allegheny County Auditor

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Page 11: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

DEMOGRAPHIC HIGHLIGHTS

115,560POPULATION WITHIN 5 MILES

$58,938AVERAGE HOUSEHOLD INCOME

IN 5-MILE RADIUS

50,615HOUSEHOLDS WITHIN 5 MILES

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Page 12: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

POPULATION 1 MILE 3 MILES 5 MILES

2018 EstimateTotal Population

9,414 52,029 115,560

2023 ProjectionTotal Population

9,163 49,897 112,730

2010 CensusTotal Population

9,517 52,310 116,199

HOUSEHOLDS 1 MILE 3 MILES 5 MILES

2018 EstimateTotal Households

4,151 22,720 50,615

2023 ProjectionTotal Households

4,083 22,054 49,927

2010 CensusTotal Households

4,209 22,966 51,102

Owner OccupiedTotal Households

2,818 14,319 34,152

Renter OccupiedTotal Households

1,333 8,401 16,463

HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES

2018 Estimate

$150,000 or More 2.9% 2.9% 4.2%

$125,000 - $149,999 2.7% 2.5% 3.1%

$100,000 - $124,999 4.4% 5.5% 7.0%

$75,000 - $99,999 11.8% 11.3% 12.7%

$50,000 - $74,999 18.7% 18.2% 19.3%

$35,000 - $49,999 14.8% 14.2% 13.3%

$25,000 - $34,999 11.2% 11.9% 11.0%

Under - $25,000 33.4% 33.6% 29.4%

Average Household Income $53,411 $52,577 $58,938

Median Household Income $40,201 $39,328 $45,460

HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES

Population By Age

2018 Estimate Total Population 9,414 52,029 115,560

Under 20 Years 21.5% 22.2% 21.5%

20 - 24 Years 5.1% 5.3% 5.1%

25 - 34 Years 12.5% 12.9% 12.7%

35 - 44 Years 10.9% 10.5% 10.6%

45 - 54 Years 13.0% 12.5% 12.9%

55 - 64 Years 15.8% 15.8% 15.9%

65+ Years 21.3% 20.8% 21.1%

Median Age 45.1 44.2 45.0

Population 25+ by Education Level

2018 Estimate Population Age 25+ 6,919 37,768 84,687

Elementary (0-8) 1.9% 1.6% 1.3%

Some High School (9-11) 6.3% 6.9% 5.8%

High School Graduate (12) 45.6% 43.8% 41.6%

Associates Degree Only 10.2% 10.6% 11.2%

Bachelors Degree Only 8.8% 11.2% 13.2%

Graduate Degree 5.7% 5.3% 6.4%

Some College, No Degree 21.0% 20.1% 20.0%

Population by Gender

2018 Estimate Total Population 9,414 52,029 115,560

Female Population 4,965 27,439 60,629

Male Population 4,450 24,589 54,931

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MARKET OVERVIEW

PITTSBURGHOVERVIEW

The Pittsburgh metro area rests at the foothills of the Allegheny

Mountains in the southeastern corner of Pennsylvania, outside thecongested East Coast corridor. Consisting of Armstrong, Butler,

Fayette, Westmoreland, Washington, Allegheny and Beaver counties,

the metro contains nearly 2.4 million residents, with nearly halfconcentrated in Allegheny county. The region’s economy, which was

once dominated by the steel industry, has diversified with the help of

the area’s many colleges and universities. The city of Pittsburgh islocated where the Allegheny and Monongahela rivers join to form the

Ohio River. Pittsburgh is the most populous city in the metro and the

second-largest in Pennsylvania, with approximately 310,000 residents.

METRO HIGHLIGHTS

POSITIVE EMPLOYMENT TRENDSAn estimated 36,500 jobs are expected through 2022. Growth will be driven by professional services, education and healthcare.

QUALITY HIGHER EDUCATIONThe local economy benefits from university-related startup companies. Carnegie Mellon, Duquesne and the University of Pittsburgh are among the local higher-educational institutions.

POPULATION GROWTHAfter years of decline, job seekers moving to the metro contribute to a rising population.

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MARKET OVERVIEW

ECONOMY Once centered on the steel industry, Pittsburgh’s economy has become much more diversified

over the past 20 years and continues to change.

There are a multitude of international firms with headquarters or regional offices in the metro. Additionally, six Fortune 500 companies are headquartered in Pittsburgh: U.S. Steel Corp., Kraft Heinz Co., PNC Financial, Wesco International, PPG Industries and Dick’s Sporting Goods.

High-tech is expanding, particularly in automation and manufacturing equipment, software, biotechnology, environmental services, and pharmaceuticals.

SHARE OF 2017 TOTAL EMPLOYMENT

MAJOR AREA EMPLOYERS

UPMC

West Penn Allegheny Health System

University of Pittsburgh

BNY Mellon Corp.

PNC Financial Services

Eat’n Park Hospitality Group

Carnegie Mellon University

Highmark Blue Cross Blue Shield

U.S. Steel

Children's Hospital of Pittsburgh* Forecast

MANUFACTURING7%

GOVERNMENT

HEALTH SERVICESEDUCATION AND

+OTHER SERVICES

4%

LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES

18%AND UTILITIES

TRADE, TRANSPORTATION CONSTRUCTION

PROFESSIONAL ANDBUSINESS SERVICES

2%INFORMATION

16%

5%

10% 11% 6%

21%

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Page 15: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

MARKET OVERVIEW

DEMOGRAPHICS

SPORTS

EDUCATION

ARTS & ENTERTAINMENT

The metro is expected to add nearly 7,000 people through 2022, which will result in the formation of more than 12,000 households.

A median home price below the national level allows 69 percent of households to own their home, which is above the national rate of 64 percent.

Roughly 31 percent of people age 25 and older hold bachelor’s degrees; among those residents, 12 percent also have earned a graduate or professional degree.

Pittsburgh is a relatively affordable place to live compared with many other major East

Coast metros. In addition, the market has one of the lowest crime rates in the country.There are more than 500 organizations serving southwestern Pennsylvania, such as the

Pittsburgh Cultural Trust, which has revitalized downtown. Regional amenities also include

three professional sports teams: the Steelers (NFL), Pirates (MLB) and Penguins (NHL). ThePittsburgh Penguins and the University of Pittsburgh Medical Center (UPMC) built a $72

million sports medical center and practice rinks. UPMC is one of the busiest transplant

centers in the world. In addition, Children’s Hospital of Pittsburgh is one of the highest-ranked children’s hospitals in the nation.

QUALITY OF LIFE

* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Econom ic Analysis; Experian; Fortune; Moody’s Analytics; U.S . Census Bureau

432017

MEDIAN AGE:

U.S. Median:

37.8

$54,400 2017 MEDIAN

HOUSEHOLD INCOME:

U.S. Median:

$56,300

2.4M2017

POPULATION:

Growth2017-2022*:

0.3%

1M2017

HOUSEHOLDS:

1.2%

Growth2017-2022*:

2017 Population by Age

0-4 YEARS

5%5-19 YEARS

17%20-24 YEARS

6%25-44 YEARS

25%45-64 YEARS

29%65+ YEARS

19%

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NON-ENDORSEMENT AND DISCLAIMER NOTICE

NON-ENDORSEMENTMarcus & 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.

CONFIDENTIALITY & 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. © 2019 Marcus & Millichap. All rights reserved.

Page 17: OFFERING MEMORANDUM RITE RA AID - LoopNet...Rite Aid Corporation is one of the nation’s leading drugstore chains. With approximately 2,500 stores in 19 states, they have a strong

RAOFFERING MEMORANDUM

M C K E E S P O R T , P A ( P I T T S B U R G H M S A )

RITE AID

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

CRAIG FULLERSenior Vice President

Executive Director, National Retail GroupCLEVELAND

Phone: (216) 264-2043 Fax: (614) 474-1696

Email: [email protected] License: OH SAL.2008001551

ERIN PATTONSenior Vice President

Executive Director, National Retail GroupCOLUMBUS

Phone: (614) 360-9035 Fax: (614) 474-1696

Email: [email protected] License: OH SAL.2004010274

SCOTT WILESSenior Vice President

Executive Director, National Retail GroupCLEVELAND

Phone: (216) 264-2026 Fax: (614) 474-1696

Email: [email protected] License: OH SAL.2005013197

DUSTIN JAVITCHSenior Associate

National Retail GroupCLEVELAND

Phone: (216) 264-2025 Fax: (216) 264-2010

Email: [email protected] License: OH SAL.2012000193