Union Bank – La Habra, CA · Union Bank - 1970 W. Whittier. 7.96% CAGR. o The subject Union Bank...

1970 W. WhittierLa Habra, CA 80631

Union Bank – La Habra, CAConfidential Offering Memorandum A-Rated Investment Grade Tenancy | Affluent Orange County Market | Recently Exercised 5-Year Lease

Dense Infill Market Rental Increases of 7.5% every 2.5 years $144MM in Branch Deposits Outparcel to an Albertsons Anchored Center Dual Lane Drive-thru ATM

© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 2

Table of ContentsInvestment Summary 03

Location Overview 06

Tenant Overview 12

Photography 14

JLL Contacts 16


Investment SummaryUnion Bank – La Habra, CA

Summary

Union Bank

Union Bank | La Habra, CA


Investment Summary

JLL is pleased to offer for sale the fee-simple interest in a freestanding Union Bank (the “Property” or “Asset”) located in La Habra, California. Union Bank (the “Tenant”) isbacked by A-rated investment grade credit while the subject location ranks in the top 30% of all Union Banks within Orange County by total deposits with significantgrowth over the past five years. The Tenant has approximately 5.7 years remaining on the lease after extending their 5-year option, with attractive rental increases whenthe option term begins in August 2020 and an additional rent bump halfway through the term. The Property is located in the affluent Orange County market in the city of LaHabra, with over 61,000 residents in the immediate area. Situated in an Albertsons anchored center, the Property sits at the primary retail intersection in La Habra seeingover 71,000 VPD. The Tenant is under an ideal absolute triple-net (“NNN”) lease with no landlord responsibilities. This attractive Asset presents investors with anopportunity for secure, growing cash flows with immediate upside backed by investment grade credit in the affluent Southern California market.

PROPERTY SUMMARYINVESTMENT HIGHLIGHTS• The Asset is subject to a NNN lease with a recently extended 5-year option for a

total of 5.7 years remaining. There is an approaching 2.5% rent increase in August2020 resulting in an NOI of $231,650, with an additional 7.5% increase 2.5 yearsthereafter, providing immediate yield upside.

• The Tenant is backed by investment-grade credit (Moody’s: A2). The subject branchlocation’s total deposits rank in the top 30% for Union Banks in Orange County,growing at a healthy CAGR over the past five years.

• The Property sits at one of the most attractive retail corners within the La Habrasubmarket at the intersection of Whittier and Beach Boulevards (71,000+ VPD) andis situated as an outparcel to an Albertsons anchored center.

• The Property provides ease-of-access to customers via its dual lane drive thru-ATMat a highly trafficked intersection.

• The surrounding market features dense demographics with over 145,000 residentsand over 44% of households boasting average incomes of over $100,000 within a 3-mile radius,

• The Brea/La Habra submarket has seen declining retail vacancy withstable/increasing rents, indicating the strong tenant demand in the area. Newdeliveries include the brand new Starbucks and In-N-Out directly across the streetfrom Union Bank, highlighting the attractiveness of the Property’s location withinthe area.

Address 1970 W. Whittier BoulevardLa Habra, California

Tenant* MUFG Union Bank, N.A.(Moody’s: A2)

Price $5,580,000Cap Rate 4.15%

NOI1 | Rent PSF $231,650 | $41.00

Lease Type Absolute NNNLease Term1 ±5.7 years

Lease Expiration 8/5/2025Square Footage 5,650 SF

Site Size 0.59 acresYear Built 2000

Guaranty CorporateOwner Interest Fee Simple

Parking 51 spacesRental Increases2 7.5% Every 2.5 years*Renewal Options One 5-year option (7.5% rent increase)

*Backed by MUFG U.S. with A2 credit rating(1) Option Rent commences August 6, 2020 - $231,650(2) Rent adjusts by 7.5% on February 7, 2023 - $249,023.75

$5,580,000Asking Price

4.15%Cap Rate



Property Overview

o Union Bank is located on an outparcel to the Albertsons anchored mall at the corner ofWhittier and Beach Boulevards. The intersection sees over 71,000 VPD in aggregate andserves as the primary retail strip within La Habra.

o In addition to benefitting from the visibility at the highly trafficked intersection in LaHabra’s downtown, the bank’s location also benefits from neighboring credit tenants likeStarbucks, Walgreens, In-N-Out and more…making this bank a convenient location forresidents within the area.

Bank Deposits

$0

$50

$100

$150

$200

$250

$300

$350

$400

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43

Dep

osits

($m

illion

s)

Orange County Union BanksRanked by Deposits ($millions)

1970 W. Whittier

$98

$121 $124 $128 $128$144

$0

$20

$40

$60

$80

$100

$120

$140

$160

2014 2015 2016 2017 2018 2019

Deposits ($millions)Union Bank - 1970 W. Whittier

7.96% CAGR

o The subject Union Bank ranks in the top 30% as measured by deposits relative to other Union Banks in Orange County. Deposits have grown at a 7.96% CAGRsince 2014, a healthy figure indicating that the local customer base continues to find value in the subject branch location.


Market OverviewUnion Bank – La Habra, CA

Location

6

Union Bank



Location Overview – Orange County, CA

Orange County, CA

3.2MPOPULATION

6thLARGESTCOUNTY

IN THE U.S.

3.3%UNEMPLOYMENT

RATE

Known for its high quality of life with its convergence of beautiful beaches, a highquality executive housing stock, thriving economy, and direct access to majortransportation networks, Orange County proves to be an ideal location forcommercial properties due to the perpetual demand for this region and its world-class amenities. In addition, as California has become the world’s fifth largesteconomy, Orange County has developed into an economic powerhouse of its own.

With a total population of 3.2 million people, Orange County is the sixth largestcounty in the nation and has experienced a population growth rate in 2017 that ismore than double the California average of 0.8%. From June 2017 to June 2018,Orange County added 17,000 jobs and lowered its unemployment rate from 3.7%to 3.3%. In fact, Orange County boasts the lowest unemployment rate in all ofSouthern California.

JLL | 11



Location Overview – La Habra, CA

La Habra, CA

61,789POPULATION

21,000Households

3,000Business Located in

La Habra

Located at Orange County’s northernmost corner, La Habra is 7.3 square mileswith a population of 61,789 and approximately 21,000 households. A quietresidential community, it is conveniently located within an hour’s drive of manybeaches, mountains, and desert recreation areas. La Habra is bordered by LaHabra Heights to the north, Brea to the east and Fullerton to the south andsoutheast. The City of La Habra was founded in 1925 and operates as a GeneralLaw city with a Council- Manager form of government. The city actively promotesa friendly business environment and as a result, over 3,000 businesses are locatedwithin the city of La Habra. The community is known for an outstanding schoolsystem and attracting visitors through to its park system and nearly 10 golfcourses within 5 miles of the city.

JLL | 11



Location Overview – La Habra, CA

Market HighlightsDeliveries

New retail supply has been limited in the Brea/La Habra submarket in the last tenyears. Since 2010, there has been only 148,529 SF of new product hitting thesubmarket which represents 1.62% of current supply.

Vacancy

The Brea/La Habra submarket is regarded as a dense infill area where majority ofdeliveries are the result of tear down and rebuild or complete renovation. With increasedtenant demand in the area, this has continued to put downward pressure on vacancyrates while boosting asking rents to their highest level since 2014.

Absorption

Absorption has more than doubled the net absorption in the submarket since 2010 in asubmarket that is currently 97% occupied, which strongly showcases the tenant demand forthe area.

JLL | 11

0.0%

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3.0%

4.0%

5.0%

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

2014 2015 2016 2017 2018 2019YTD

Rent vs. Vacancy

Rent PSF Vacancy %

Deliveries SF Vacancy %

Deliveries vs. Vacancy

Vacancy %

Union Bank | La Habra, CALocation Overview – La Habra, CA

Local Aerial.


Whittier Christian School

La Habra High School

Whittier Blvd.: 39,600 VPD

N B

each

Blv

d.: 3

1,50

0 VP

D

1-mile 3-mile 5-mile2019 Population 23,842 145,566 430,219Households 7,550 46,751 133,403Average HHI $106,716 $111,653 $107,313Median HHI $86,040 $87,386 $83,475

2019 Households by IncomeLess than $35,000 20.6% 17.2% 18.5%$35,000 - $49,999 7.5% 8.9% 9.3%$50,000 - $74,999 15.4% 16.2% 16.4%$75,000 - $99,999 12.8% 13.6% 14.2%More than $100,000 43.7% 44.1% 41.5%

Union Bank is located on an outparcel to the Albertsons anchoredmall at the corner of Whittier and Beach Boulevards. Theintersection sees over 71,000 VPD in aggregate and serves as theprimary retail strip within La Habra.

Union Bank | La Habra, CALocation Overview – La Habra, CA


Immediate Aerial



Tenant Overview

o Union Bank (“The Tenant”) is a part of MUFG U.S., the U.S financial and bank holding company that is backed by the larger Japanese bankingcompany, Mitsubishi UFJ Financial Group (“MUFG”). MUFG is one the largest comprehensive financial groups in the world, with MUFG U.S. as the 11th

largest among U.S. banks with combined total assets of $337 billion as of year-end 2018.

o There are 377 bank branch locations nationwide, with a strong footprint in affluent West Coast markets represented by Union Bank and additionalnational reach via the PurePoint Financial branch locations. Union Bank has 245 branch locations in California and is ranked #4 in in the state bytotal deposit market share with strong brand loyalty through their 150 years of operation.

o MUFG U.S. has diversification across business segments as illustrated by their earnings mix, with a focus on Regional Banking, making up 48% oftheir net income. The Regional Banking segment provides banking products and services to individual and business customers.

48%

38%

7%4%

3%

% of 2018 Net Income by Business Segment

Regional Banking

Investment Banking

Other

Transaction Banking

Securities

$337 Billion in Assets

11th Largest Bankin the U.S.

4th Largest Bankin California

A2Credit Rating


Union Bank – La Habra, CA

Photography


16

JLL Contacts

ADVISOR

4000 MacArthur Blvd, Suite 1500 | Newport Beach, CA 92660www.us.jll.com/capitalmarkets

Copyright © Jones Lang LaSalle IP, Inc. 2019This publication is the sole property of Jones Lang LaSalle and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle.The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information.We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from relianceon this publication. Jones Lang LaSalle Americas, Inc., California license # 01223413. Jones Lang LaSalle Americas, Inc. License # 19262.

Contact Information

Adam FriedlanderVice President+1 949 527 [email protected]

LEASING EXPERT

Blake KaplanVice President+1 909 702 [email protected]

http://www.us.jll.com/capitalmarkets

Union Bank – La Habra, CA · Union Bank - 1970 W. Whittier. 7.96% CAGR. o The subject Union Bank...

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