Section 1 · 2020. 2. 25. · 14 INVESTMENT OVERVIEW CURRENT PRO FORMA Price $12,995,000...
Transcript of Section 1 · 2020. 2. 25. · 14 INVESTMENT OVERVIEW CURRENT PRO FORMA Price $12,995,000...
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PROPERTY INFORMATION 3
LOCATION INFORMATION 9
FINANCIAL ANALYSIS 13
DEMOGRAPHICS 23
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Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant orlessee identified in this marketing package. The presence of any corporation’s logo or name is notintended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporationof Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commerciallisting of Marcus & Millichap, and is solely included for the purpose of providing tenant lesseeinformation about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
TABLE OF CONTENTS
Section 1 PROPERTY INFORMATION
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PROPERTY OVERVIEWZecca Plaza Shopping Center is a 110,593-square foot, multi-tenant regional grocery-anchored retail center in Gallup, NewMexico. Anchored by a high-volume Albertsons grocery store that has been in the center for over 46 years, the center has astrong tenant base with a complementary mix of national and local credit tenants. The subject property benefits from closeproximity to three of the largest Native American Reservations in the country with a cumulative population exceeding370,000 residents.
MAJOR TENANTS• Albertsons
• Goodwill Industries
• O'Reilly Auto Parts
• Aaron's
• H&R Block
OFFERING SUMMARY
Sale Price: $12,995,000
Building Size: 110,593 SF
Lot Size: 6.453 Acres
Price / SF: $117.50
Cap Rate: 8.46%
NOI: $1,099,969
Pro Forma Cap Rate: 9.59%
Pro Forma NOI: $1,246,119
Year Built: 1974
County: McKinley
Ownership Type: Fee Simple
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
PROPERTY INFORMATION | EXECUTIVE SUMMARY
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PROPERTY DESCRIPTIONZecca Plaza Shopping Center is a 110,593-square foot multi-tenant regional retail center in Gallup, New Mexico. Anchored by Albertsons grocery store, the center has a strong tenant basewith a complementary mix of national and local credit tenants, including O’Reilly Auto Parts, Goodwill Industries, Aaron’s, H&R Block, Oasis Laundromat, Metro PCS, Domino’s Pizza, SunLoan, TBK Bank, and others. Albertsons reports strong sales and pays percentage rent in addition to base rent. The center is currently 93 percent occupied with the majority of the tenantshaving triple-net leases. Albertsons and Sun Loan reimburse for taxes only. Originally constructed in 1974, the building is situated on 6.45 acres.
LOCATION DESCRIPTIONThe subject property is located on East Historic U.S. Highway 66, one of the major east/west thoroughfares running parallel to Interstate 40. The center has excellent exposure and access,with ingress and egress points from Highway 66, Verdi Street, East Aztec, and Mollica Drive. Cumulative traffic counts exceed 19,300 vehicles per day. Walgreens pharmacy is adjacent tothe property, and other neighboring retailers include Pro Cuts, Dairy Queen, Long John Silver’s, Pizza Hut, U-Haul, Pinnacle Bank, Subway, McDonald’s, Sonic Drive-In, Wendy’s, DollarGeneral, The UPS Store, and more. The one-mile average household income is $69,754, and the five-mile population is over 22,600.
The City of Gallup is the county seat of McKinley County, which serves a population nearing 75,000 residents. Gallup is the most populous city between Flagstaff and Albuquerque along thehistoric U.S. Route 66 and serves as the primary commercial and tourist hub for a wide area of northwestern New Mexico. Gallup has the only enclosed mall (Rio West Mall) within a125-mile radius, serving 3.6 million customers per year. The city swells from a population of 22,000 Monday through Thursday to 150,000 on the weekends. Serving over a 15,000-squaremile territory, the large geographical trade area makes Gallup a uniquely strong retail market for its size.
Gallup is in close proximity to Navajo Nation, Hopi Reservation, and Zuni Indian Reservation, all of which are subsidiaries of The Bureau of Indian Affairs. The Bureau of Indian Affairs is anagency of the federal government responsible for the administration and management of over 55 million acres of land with the purpose of enhancing quality of life, promoting economicopportunity, and protecting the trust assets of the American Indians. Collectively, the reservations are home to more than 370,000 residents.
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
PROPERTY INFORMATION | PROPERTY DESCRIPTION
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BUILDING INFORMATION
Occupancy % 93%
Tenancy Multiple
Year Built 1974
County McKinley
PROPERTY HIGHLIGHTS
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
PROPERTY INFORMATION | COMPLETE HIGHLIGHTS
• 110,593-Square Foot, Grocery-Anchored Retail Center
• 93% Occupied | Upside Potential in Leasing Vacant Space
• Anchored by Albertsons Grocery Store | Tenant in the Center for 46 Years | Tenant Reports Strong Sales and Pays Percentage Rent | Lease has a Cap on Percentage Rent, and Store Revenue Well Exceeds the Cap | Rent is Below Market, and the Rent-to-Sales Ratio is 1.38% | Tenant has One Renewal Option Remaining
• Complementary Mix of Tenants | 68% of the Gross Leasable Area has Credit Tenants
• Proposed Partial Recourse Life Insurance Financing with Attractive Terms | 3.5% Interest Rate on 25-Year Amortization Schedule | Cash on Cash Return is Over 13% | Total Return is over 17.50%
• Majority of the Leases are Triple-Net
• Situated on a Large 6.45-Acre Lot with Ample Paved Parking
• Recent Improvements Include Parking Lot Striping and Repairs and a New Roof on O’Reilly Auto Parts
• Priced at Approximately $117 per Square Foot
• Adjacent to Walgreens Pharmacy
• Located on East Historic U.S. Highway 66 | Major East/West Thoroughfare | Runs Parallel to Interstate 40
• Multiple Ingress and Egress Points from all Surrounding Streets | Cumulative Traffic Counts Exceed 19,300 Vehicles per Day
• Gallup Serves as a Regional Shopping Hub | The City's Population Swells from 22,000 During Week Days to 150,000 on the Weekends
• Primary Commercial Hub to Navajo Nation, Hopi, and Zuni Indian Reservations with a Cumulative Population Exceeding 370,000
• Subject Property Provides an Established Grocery-Anchored Retail Center that Services a Growing and Stable Population Base
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
LOCATION INFORMATION | RESERVATION MAP
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
PROPERTY INFORMATION | ADDITIONAL PHOTOS
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Section 2 LOCATION INFORMATION
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Zecca Plaza Shopping Center
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
LOCATION INFORMATION | REGIONAL MAP
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
LOCATION INFORMATION | AERIAL MAP
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
LOCATION INFORMATION | AERIAL MAPS
Section 3 FINANCIAL ANALYSIS
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INVESTMENT OVERVIEW CURRENT PRO FORMA
Price $12,995,000 $12,995,000
Price per SF $117.50 $117.50
CAP Rate 8.46 % 9.59 %
Total Return (yr 1) $1,099,969 $1,246,119
OPERATING DATA CURRENT PRO FORMA
Gross Income $1,298,293 $1,450,043
Operating Expenses $198,324 $203,924
Net Operating Income $1,099,969 $1,246,119
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | FINANCIAL SUMMARY
PRICING WITH PROPOSED FINANCING LIST PRICE
Price $12,995,000
Down Payment 35% / $4,548,250
First Trust Deed/Mortgage $8,446,750
Interest Rate/Amortization 3.5% / 25 Yrs.
Net Operating Income $1,099,969
CASH FLOW ANALYSIS
Debt Service ($507,437)
Debt Coverage Ratio 2.17
Net Cash Flow After Debt Service $592,532
Cash-on-Cash Return % 13.03%
Principal Reduction $215,232
Total Return $807,764
Total Return % 17.76%
VALUE INDICATORS
CAP Rate 8.46%
Price/SF $117.50
PROPOSED FINANCING
Lender Life Company
Loan to Value 65%
Interest Rate 3.50%
Amortization Period 25 Years
Loan Term 25 Years
Origination Fee 1%
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | PROPOSED FINANCING
INCOME SUMMARY CURRENT PER SF PRO FORMA PER SF
Base Rent $997,835 $9.72 $997,835 $9.72
Vacant Space at Market Rents $0 $0.00 $103,580 $13.03
Percentage Rent (Albertsons) $144,704 $1.31 $144,704 $1.31
Real Estate Taxes Reimbursements $51,429 $0.47 $55,980 $0.51
Insurance Reimbursements $10,452 $0.09 $17,244 $0.16
CAM Reimbursements $76,660 $0.69 $96,700 $0.87
Management Fee Reimbursement $17,213 $0.16 $34,000 $0.31
Gross Income $1,298,293 $11.74 $1,450,043 $13.11
EXPENSE SUMMARY CURRENT PER SF PRO FORMA PER SF
Real Estate Taxes $55,980 $0.51 $55,980 $0.51
Insurance $17,244 $0.16 $17,244 $0.16
Utilities $18,600 $0.17 $18,600 $0.17
Power Sweeping/Power Washing $20,400 $0.18 $20,400 $0.18
Sidewalk Cleaning $7,100 $0.06 $7,100 $0.06
Snow Removal $2,000 $0.02 $2,000 $0.02
Parking Lot Striping $3,500 $0.03 $3,500 $0.03
Common Area/Lighting Repairs $9,800 $0.09 $9,800 $0.09
Supplies $4,100 $0.04 $4,100 $0.04
Security Guard Service $31,200 $0.28 $31,200 $0.28
Management Fee $28,400 $0.26 $34,000 $0.31
Gross Expenses $198,324 $1.79 $203,924 $1.84
Net Operating Income $1,099,969 $9.95 $1,246,119 $11.27
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | INCOME & EXPENSES
*Total Annual Rent of $997,835 includes future base rent for Goodwill Industries and O'Reilly Auto Parts as of 7/01/2021. Seller shall credit Buyer the monthly rent differential on a pro rata basis, at closing.
SUITE TENANT NAME
UNIT SIZE (SF)
% OF GLA LEASE START
LEASEEND ANNUAL RENT RENT/SF
CHANGES ON
CHANGES TO
EXPENSE REIMBURSEMENT OPTIONS
LEASETYPE
1 Gallup Quick Clinic 2,065 1.87% 6/01/2014 12/31/2024 $35,240.27 $17.07 $3,708.66 (2) 5-Yr NNN
2 Dragon Express 2,017 1.82% 6/16/2005 7/31/2022 $36,592.45 $18.14 7/01/2021 $18.60 $3,609.50 (2) 5-Yr NNN
3 Chili Factory 1,761 1.59% 12/01/2005 11/30/2021 $30,282.00 $17.20 Annual *CPI $3,153.35 (1) 5-Yr NNN
4 Goodwill Industries 13,214 11.95% 6/06/2005 5/31/2026 $129,026.50 $9.76 Annual *CPI $23,699.72 (1) 5-Yr NNN
5 Oasis Laundromat 7,530 6.81% 8/01/2009 MTM $82,800.00 $11.00 $13,505.86 (2) 5-Yr NNN
6 Aaron's Rents 8,400 7.60% 4/01/2006 3/31/2021 $97,565.64 $11.61 $15,072.62 NNN
7 Metro PCS 1,680 1.52% 5/01/2018 4/30/2021 $26,734.68 $15.91 $3,014.52 (2) 3-Yr NNN
8 Community Financial 1,560 1.41% 8/01/2002 7/31/2020 $35,570.82 $22.80 $2,796.37 (1) 3-Yr NNN
9 Nails & Spa 1,400 1.27% 5/01/2006 7/31/2021 $26,225.45 $18.73 Annual *CPI $2,518.71 NNN
10 NM Credit Corp 2,320 2.10% 3/01/2019 6/30/2022 $33,660.00 $14.51 3/01/2021 $14.80 $4,164.80 (3) 3-Yr NNN
11 - 13 Albertsons (1) 33,005 29.84% 1/30/1974 1/31/2024 $71,432.52 $2.16 $34,754.43 (1) 5-Yr MG
14A Vacant 5,067 4.58% $0.00
14B H&R Block 3,400 3.07% 9/01/2014 4/30/2020 $39,338.17 $11.57 $6,088.55 (1) 5-Yr NNN
14 O'Reilly Auto Parts 13,172 11.91% 6/20/2011 6/30/2026 $136,270.00 $10.35 $23,620.39 (4) 5-Yr NNN
15 - 16 Domino's Pizza 1,320 1.19% 3/01/1996 4/30/2021 $25,200.00 $19.09 $2,360.06 NNN
(1) Tenant shall pay percentage rent in the amount of 2% of Gross Sales in excess of $2,190,126; percentage rent shall not exceed $144,704 during the fifth option and $151,939 during the sixth option. Tenant pays its pro rata share of taxes and a fixed amount for CAM reimbursements.
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | RENT ROLL
SUITE TENANT NAME
UNIT SIZE (SF)
% OF GLA LEASE START
LEASEEND ANNUAL RENT RENT/SF
CHANGES ON
CHANGES TO
EXPENSE REIMBURSEMENT OPTIONS
LEASETYPE
17 Addus HomeCare 1,059 0.96% 1/15/2020 3/31/2023 $18,000.00 $17.00 $1,903.91 (1) 3-Yr NNN
18 - 19 Vacant 1,695 1.53% $0.00
20 Continental Loans 1,200 1.09% 8/01/2007 7/31/2022 $25,349.51 $21.12 Annual *CPI $2,161.73 NNN
21 Walgreens (Storage) 1,060 0.96% 9/15/2006 9/30/2024 $20,188.50 $19.05 (1) 5-Yr Gross
22 Vacant 1,185 1.07% $0.00
23 Sun Loan 1,571 1.42% 4/01/2001 3/31/2022 $36,720.00 $23.37 4/01/2021 $23.91 $794.92 MG
24 Midwest Finance 1,200 1.09% 6/15/2009 10/31/2023 $24,720.00 $20.60 11/01/2021 $21.22 $2,161.73 NNN
0.00% 11/01/2022 $21.85
25 Yogo Mojo 1,080 0.98% 6/01/2014 9/30/2019 $16,686.00 $15.45 $1,943.58 (2) 2-Yr NNN
Pad TBK Bank 2,632 2.38% 9/01/2013 3/31/2022 $43,032.00 $16.35 $4,720.11 (1) 5-Yr NNN
Kiosk CU Anytime LLC 11/01/2016 10/31/2021 $7,200.00 Gross
TOTAL VACANT 7,947 7.00%
TOTAL OCCUPIED 102,646 93.00%
TOTAL 110,593 100.00% $997,834.51 $155,753.52
*Total Annual Rent of $997,835 includes future base rent for Goodwill Industries and O'Reilly Auto Parts as of 7/01/2021. Seller shall credit Buyer the monthly rent differential on a pro rata basis, at closing.
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | RENT ROLL
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | SITE PLAN
Albertsons
Albertsons is an American grocery store founded and headquartered in Boise, Idaho. With morethan 2,260 stores, Albertsons is the second-largest supermarket chain in North America.Albertsons ranked 53rd in the 2018 Fortune 500 list of largest United States corporations by totalrevenue. This location has been in the center for more than 46-years and recently completed interiorremolding improvements. The rent-to-sales ratio is 1.38%.
FOUNDED 1939LOCATIONS 2,260+SQ. FT. 33,005OPTIONS (1) 5-Year
O'Reilly Auto Parts19575,200+
American auto parts retailer that provides automotive aftermarket parts, tools,supplies, equipment, and accessories. Based in Springfield, Missouri, O'Reilly AutoParts is a public company whose stock is traded on the NASDAQ under the symbolORLY.
FOUNDEDLOCATIONSSQ. FT.
OPTIONS
13,172
(4) 5-YearTENANT TRADE NAME ORLY (NASDAQ)
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | TENANT INFORMATION
Goodwill
Goodwill Industries is an American nonprofit 501(c)(3) organization that providesjob training, employment placement services, and other community-basedprograms for people who have barriers preventing them from otherwise obtaining ajob. Goodwill is funded by a massive network of retail thrift stores which operate asnonprofits as well.
FOUNDED 1902LOCATIONS 3,300+SQ. FT. 13,214OPTIONS (1) 5-Year
Metro PCS
MetroPCS is a prepaid wireless carrier brand owned by T-Mobile. Based inBellevue, Washington, T-Moblie is a public company whose stock is traded on theNASDAQ under the symbol TMUS.
FOUNDEDLOCATIONSSQ. FT. TENANT TRADE NAMEOPTIONS
H&R Block
H&R Block is an American tax-preparation company. As of 2018, H&R Blockoperates approximately 12,000 retail tax offices staffed by tax professionalsworldwide. Based in Kansas City, Missouri, H&R Block is a public company whosestock is traded on the New York Stock Exchange under the symbol HRB.
FOUNDED 1955LOCATIONS 12,000+SQ. FT. 3,400TENANT TRADE NAME HRB (NYSE)OPTIONS (1) 5-Year
199410,500+1,680TMUS (NASDAQ) | Parent Company(2) 3-Year
Aaron's
Aaron's Inc. is a lease-to-own retailer of furniture, electronics, appliances, andcomputers. Based in Atlanta, Georgia, Aaron's is a public company whose stock istraded on the New York Stock Exchange under the symbol AAN.
FOUNDED 1955LOCATIONS 1,800+SQ. FT. 8,400TENANT TRADE NAME AAN (NYSE)OPTIONS None
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | TENANT INFORMATION
Domino's Pizza
Domino's Pizza is a multinational pizza restaurant chain. Based in Ann Arbor,Michigan, Domino's Pizza is a public company whose stock is traded on the NewYork Stock Exchange under the symbol DPZ.
FOUNDED 1960LOCATIONS 16,000+SQ. FT. 1,320TENANT TRADE NAME DPZ (NYSE)OPTIONS None
Sun Loan
Sun Loan Company offers personal installment loans with manageable paymentplans.
FOUNDEDLOCATIONSSQ. FT. OPTIONS
19862801,571None
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Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
FINANCIAL ANALYSIS | TENANT INFORMATION
Section 4 DEMOGRAPHICS
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POPULATION 1 MILE 3 MILES 5 MILES
Total Population 4,916 19,920 23,500
Median age 37.7 35.8 35.6
Median age (Male) 35.9 34.3 34.1
Median age (Female) 39.5 37.2 37
HOUSEHOLDS & INCOME 1 MILE 3 MILES 5 MILES
Total households 1,779 7,076 8,130
# of persons per HH 2.5 2.7 2.8
Average HH income $62,212 $59,635 $59,357
Average house value $182,304 $118,069 $100,650
ETHNICITY (%) 1 MILE 3 MILES 5 MILES
Hispanic 29.9% 34.1% 33.5%
RACE 1 MILE 3 MILES 5 MILES
% White 47.5% 41.3% 39.0%
% Black 1.4% 1.6% 1.5%
% Asian 3.2% 2.5% 2.3%
% Hawaiian 0.2% 0.1% 0.1%
% American Indian 44.0% 50.1% 52.9%
% Other 3.7% 4.3% 4.2%
* Demographic data derived from CoStar Realty Information Group
Zecca Plaza Shopping Center1600-1850 East Historic Highway 66, Gallup, NM 87301
DEMOGRAPHICS | DEMOGRAPHICS MAP & REPORT