W. Lacey Boulevard

A new construction Starbucks Drive-Thru (2015) located in the South-Central San Joaquin Valley sub-market of Hanford, CA

W. Lacey Boulevard

STARBUCKS

Hanford, CA 93230

@ 550

INVESTMENT ADVISORS

Brandon MichaelsSenior Managing Director of InvestmentsSenior Director, National Retail GroupTel: [email protected] License: 01434685

Matthew LuchsFirst Vice President InvestmentsCOO of The Brandon Michaels GroupTel: [email protected] License: 01948233

Steven SchechterFirst Vice President InvestmentsDirector, National Retail GroupTel: [email protected] License: 01089464

brandonmichaelsgroup.com

Contents

06ExecutiveSummary

12PropertyOverview

18

26Area

Overview

FINANCIALANALYSIS

N 11TH AVEW LACEY BLVD

4 550 W Lacey Boulevard

N 11TH AVE

5Executive Summary

Executive Summary6 550 W Lacey Boulevard

The Brandon Michaels Group of Marcus & Millichap has been selected to exclusively represent for sale 550 West Lacey Boulevard, an approximately 2,020 square foot Starbucks drive thru located on 24,450 square feet of land in the South-Central San Joaquin Valley sub-market of Hanford, CA. The subject property is located on West Lacey Boulevard just east of signalized corner of West Lacey Bouelvard and North 11th Avenue, an intersection that benefits from daily traffic counts north of 15,000 vehicles per day. The property is surrounded by national retailers and is directly adjacent to a new CVS Pharmacy (built in 2014).

550 West Lacey Boulevard is home to Starbucks, the world’s largest coffeehouse chain. Founded in 1971, the company has over 31,000 locations throughout more than 70 countries and employs over 346,000 people. The restaurant serves coffee beverages, baked goods, tea, and smoothies. Starbucks has a number of popular subsidiaries, such as Ethos Water, La Boulange Bakery, Seattle’s Best Coffee, and Teavana. Starbucks annual revenue exceeds $26 billion. 2020 net sales were reported at $6.2 billion, with total assets north of $19 billion. Starbucks trades on the NASDAQ under the trading symbol SBUX.

Starbucks began operating at this location in 2015 on what was originally a ten-year corporate guaranteed NNN lease. Starbucks negotiated an early extension to their original term which now goes through July 31, 2031, with four-5-year options to extend. Starbucks

is currently paying $93,600 annually, with a 2.56% increase in 2025, and approximately 10% increases in each option period. This opportunity offers minimal landlord responsibility, the tenant is responsible for all expenses except for the increase in property taxes from the close of escrow until the end of their initial term (July 31, 2025). Seller will credit Buyer the difference in taxes from the close of escrow until July 31, 2025.

The surrounding national retailers provide ample products and services to the surrounding area, including 99 Cents Only, Staples, Rite Aid, 7-Eleven, Grocery Outlet, and Baskin Robbins. The property is located less than one half mile from the 86 freeway which sees north of 33,000 vehicles per day, and is located less than one half of a mile from the Hanford Community Medical Center, and one mile from Adventist Health Hanford.

The OfferingA new construction Starbucks Drive-Thru (2015) located in the South-Central San Joaquin Valley sub-market of Hanford, CA

7Executive Summary

HANFORD CARNEGIE MUSEUM

550 W LACEY BOULEVARD

BRAND NEW 2015 CONSTRUCTION STARBUCKS DRIVE-THRU WITH TEN YEARS REMAINING ON THE CORPORATE GUARANTEED LEASE

• Brand new 2015 construction

• Corporate guaranteed lease

• Property includes a drive-thru

• Starbucks began operating at this location in 2015 on what was originally a ten-year corporate guaranteed NN lease. Starbucks negotiated an early extension to their original term which now goes through July 31, 2031, with four-5-year options to extend

• NNN lease

STARBUCKS IS THE WORLD’S LARGEST COFFEE CHAIN

• Starbucks features over 31,000 locations throughout more than 70 countries

• Starbucks employees over 346,000 people

• Starbucks trades on the NASDAQ under the trading symbol SBUX

• Starbucks has a number of popular subsidiaries, such as Ethos Water, La Boulange Bakery, Seattle’s Best Coffee, and Teavana

• Annual revenue exceeds $26 billion

• 2020 net sales were reported at $6.2 billion, with total assets north of $19 billion

investment highlights


CIVIC CENTER PARK

HIDDEN VALLEY PARK

EXCELLENT HANFORD, CA LOCATION

• Ideally located on Lacey Boulevard, just east of 11th Avenue

• Located less than one half of a mile from the Hanford Community Medical Center, and one mile from Adventist Health Hanford

• Ideally located amongst a sea of national retailers including McDonalds, Rite-Aid, 7-Eleven, Arby’s, Staples, CVS Pharmacy, and 99 Cents Only

• Strong daily traffic counts exceeding 15,000 vehicles per day

AFFLUENT IMMEDIATE DEMOGRAPHICS

• There are over 12,400 people located within one mile of the property, 64,900 within three miles of the property, and 70,600 within five miles of the property

• There are over 4,000 households within one mile of the property, 20,900 within three miles of the property, and 22,700 within five miles of the property

• Average household income eclipses $51,100 within one mile of the property, $65,400 within three miles of the property, and $65,500 within five miles of the property

investment highlights

9Executive Summary

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NEARBY AMENITIES

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property summaryAddress 550 W. Lacey Boulevard

Hanford, CA 93230

Price $2,463,000

Building Size 2,020 SF

Lot Size 24,450 SF

Price/SF (Building) $1,219.31

Price/SF (Land) $100.74

Current CAP Rate 3.80%

2025 CAP Rate 3.90%

Guarantor Starbucks Corporation

Monthly Rent $7,800

Annual Rent $93,600

Rent Per SF $3.86 Per Month

Lease Type NNN

Lease Start 8/1/2015

Lease Expiration 7/31/2031

Options Four - 5 Year

Year Built 2015

APN 010-510-002-000

11Property Overview

Property Overview12 550 W Lacey Boulevard

property descriptionLOCATION

550 W. Lacey Boulevard Hanford, CA 93230

SITE

The property is located on the intersection of W Lacey Boulevard and N 11th Avenue.

BUILDING SIZE

2,020 SF

LOT SIZE

24,450 SF

PARKING

20 parking spaces; a parking ratio of 9.90 parking spaces per 1,000 SF.

YEAR BUILT

The property was built in 2015.

TRAFFIC COUNTS

Over 17,000 vehicles per day.

HANFORD CENTER

WALMART SUPERCENTER

13Property Overview

parcel map


15Property Overview

STARBUCKSStarbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. As the world’s largest coffeehouse chain, Starbucks is seen to be the main representation of the United States’ third wave of coffee culture. As of September 2020, the company had 32,660 stores in 83 countries, including 16,637 company operated stores and 16,023 licensed stores. Of these 32,660 stores, 18,354 were in the United States, Canada, and Latin America. Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products, Evolution Fresh juices, Frappuccino beverages, La Boulange pastries, and snacks including items such as chips and crackers; some offerings (including the annual fall launch of the Pumpkin Spice Latte) are seasonal or specific to the locality of the store.

Many stores sell pre-packaged food items, pastries, hot and cold sandwiches, and drinkware including mugs and tumblers. There are also several select “Starbucks Evenings” locations which offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream, and bottled cold coffee drinks are also sold at grocery stores in the United States and other countries. The latest roastery location opened on Chicago’s Magnificent Mile in November 2019, and is the world’s largest Starbucks. The company has received significant and sustained criticism about its business practices, corporate affairs, and role in society. Conversely, its franchise has commanded substantial brand loyalty, market share, and company value.The company is ranked 114th on the Fortune 500 and 288th on the Forbes Global 2000.

THE WORLD’S LARGEST COFFEEHOUSE CHAIN


lease abstractTenant Starbucks


Square Footage 2,020 SF

Monthly Rent $7,800

Annual Rent $93,600


Lease Type NNN




tenant profileTenant Starbucks Corporation

Type Public

Traded As Nasdaq: SBUXNASDAQ-100 componentS&P 100 componentS&P 500 component

No. of Locations 32,660 (2020)

Revenue US$26.50 billion (2019)Net income US$3.59 billion (2019)No. of Employees 349,000 (September 2020)Website Starbucks.com

17Property Overview

AREA Overview18 550 W Lacey Boulevard

Hanford is a commercial and cultural center in the south-central San Joaquin Valley and the county seat of Kings County, California, United States. It is the principal city of the Hanford-Corcoran metropolitan area (MSA Code 25260), which encompasses all of Kings County, including the cities of Hanford and Corcoran. The ZIP Code is 93230 (with 93232 used for post office boxes). The city of Hanford is surrounded by communities that do not fall within the city limits but share the same ZIP Code. These communities include Grangeville, Hardwick and Home Garden.

Hanford is a major trading center serving the surrounding agricultural area. According to the California Employment Development Department, as of September 2012, most residents of the Hanford-Corcoran Metropolitan Statistical Area were employed in

services (31,000 employees), government (14,400 employees) and farming (6,400 employees) as well as in some manufacturing enterprises (5,700 employees).

Hanford has 15 elementary schools, three junior high schools, four high schools with a total of 8,464 Kindergarten through 8th grade students and 3,522 high schoolers. The United States Census of 2000 reported that 74.5% of Hanford residents aged 25 and over were high school graduates and 14.4% had bachelor’s degrees or higher.

The San Joaquin Valley is the area of the Central Valley of the U.S. state of California that lies south of the Sacramento–San Joaquin River Delta and is drained by the San Joaquin River.

Hanford is a commercial and cultural center in the south-central San Joaquin Valley and the county seat of Kings County, California. Hanford is proud of its small-town charm and rich history, and offers its residents a high quality of living along with larger-city amenities.

hanford, california

19Area Overview

LOCATION OVERVIEW550 West Lacey Boulevard is ideally located in a

strong retail corridor of Hanford, CA, less than one mile from Adventist Health Hanford and less than one

half mile from the Hanford Community Medical Center.

550 West Lacey Boulevard is located on West Lacey Boulevard just East of North 11th Avenue in Hanford, CA.

Hanford is known for its culture, popular cultural destinations include the Hanford Carnegie Museum, Civic Center

Auditorium, and the Hanford Fox Theater.

The Hanford Carnegie Museum was built in 1905 in a Romanesque Revival style, and was one of the many Carnegie libraries funded

by Andrew Carnegie, the steel magnate. The library operated out of the Carnegie building until 1968, when the library was moved into a

new building. The building itself was restored and converted into the Hanford Carnegie Museum in 1974, and serves as a history museum

which displays Victorian furniture, antiques and photographs to illustrate the history of the surrounding area.

The Hanford Civic Center Auditorium was built in 1924. The Civic Center is still available to host events 97 years after its establishment.

The Hanford Fox Theater was built by William Fox of Fox Theaters in 1929, and is one of over 900 Fox Theaters across the United States. The building

was purchased by a historic preservationist in 1979, who re-opened the theater for movies in 1982. The theater still features live performances, as well as the

occasional silent film and movie.

The property is located along a dense retail corridor, and is walking distance from a number of national retailers including CVS Pharmacy, Rite Aid, 7-Eleven, Staples,

Arby’s, McDonalds, Grocery Outlet, and 99 Cents Only.

There are over 12,400 people located within one mile of the property, 64,900 within three miles of the property, and 70,600 within five miles of the property. There are over 4,000

households within one mile of the property, 20,900 within three miles of the property, and 22,700 within five miles of the property. Average household income eclipses $51,100 within

one mile of the property, $65,400 within three miles of the property, and $65,500 within five miles of the property.

DOWNTOWN HANFORD

HANFORD AUDITORIUM


NEARBY ATTRACTIONS

Hanford Carnegie MuseumThe Hanford Carnegie Museum was built in 1905 as one of the many Carnegie libraries that were funded by the steel industry magnate, Andrew Carnegie. The building is of Romanesque architecture with displays of furniture and photos describing the history of the Hanford area.

Hanford Historic DowntownDowntown Hanford is one of Hanford’s hidden treasure. This historic, award winning downtown is a joy to explore. Architectural treasures like the Civic Auditorium, Hanford Fox Theater, and Carnegie Museum and Museum at China Alley make our downtown a wander to explore.

Hanford MallThe Hanford Mall is the only regional mall in Hanford. Hanford Mall is located just minutes from downtown Hanford and in the heart of a new retail and commercial development. The mall is just minutes away from Highway 99 and conveniently located off Exit Highway 198 at 12th Avenue and Lacey Boulevard on Mall Drive.

Kings Art CenterThe Kings Art Center was opened in 1989 to be the premier visual arts gallery and art training center of Kings County. Gallery shows are changed approximately every four weeks. Typical shows include photography, pottery, water color, mixed media, prints, textiles and fibers.

21Area Overview

HANFORD, CA DEMOGRAPHICS

18%Less Than

High School

19%High School

orGED

37%Some College or

Associates Degree

24%Bachelor’s Degree

or Higher

HANFORD’STOTAL POPULATION

55,893

MEDIAN AGE

33 49%MALE

51%FEMALE

EDUCATION


ECONOMYMedian household income in Hanford, CA is $61,647. In 2018, the place with the highest Median Household Income in Hanford, CA was Census Tract 6.01 with a value of $98,575, followed by Census Tract 6.02 and Census Tract 7.01, with respective values of $81,451 and $79,106.

The economy of Hanford, CA employs 23.5k people. The largest industries in Hanford, CA are Health Care & Social Assistance (3,678 people), Public Administration (3,129 people), and Retail Trade (2,538 people), and the highest paying industries are Mining, Quarrying, & Oil & Gas Extraction ($86,824), Public Administration ($64,977), and Finance & Insurance ($55,139).

TOP EMPLOYMENT BY INDUSTRIES

Health Care & Social Assistance Public Administration Retail Trade

15.6% 13.3% 10.8%

Educational ServicesAgriculture, Forestry,

Fishing & Hunting

9.9% 9.4%

23Area Overview

1-MILE 3-MILE 5-MILE2021 Population 12,415 66,586 71,997

2021 Households 4,051 21,436 23,127

2021 Average Household Size 2.9 3.1 3.1

Annual Growth 2021-2026 0.7% 0.8% 0.8%

2021 Median Age 29.8 30.8 30.9

2021 Owner Occupied Households 1,496 13,337 14,406

2021 Renter Occupied Households 2,689 8,997 9,637

2021 Average Household Income $55,513 $79,916 $80,282

2021 Median Household Income $46,426 $63,473 $63,166

Businesses 1,455 2,215 2,462

DEMOGRAPHICS BY RADIUS

$80,282Average HH income within a 5-mile radius

14,406Owner Occupied Housing

within a 5-mile radius

9,637Renter Occupied Housing

within 5-mile radius

2,462Businesses


71,997Population


23,127Households



N 11TH AVE

W LACEY BLVD

25Area Overview

FINANCIAL ANALYSIS

TENANT SF SF% LEASE START LEASE EXPIRATION OPTIONS RENT RENT/SF 2025 RENT

INCREASE LEASE TYPE

Starbucks 2,020 100% 8/1/15 7/31/31 Four - 5 Year $7,800.00 $3.86 $8,000.00 NNNTotal 2,020 100% $7,800.00 $3.86 $8,000.00

RENT ROLL

OPTION SCHEDULE

8/1/2031-7/31/2036 $105,875.00 8/1/2036-7/31/2041 $116,462.00 8/1/2041-7/31/2046 $128,108.00 8/1/2046-7/31/2051 $140,919.00

INCOME AND EXPENSE CURRENT 8/1/2025

Effective Gross Income $93,600 $96,000

Expenses * NNN NNN

Net Operating Income $93,600 $96,000

ANNUALIZED OPERATING DATA

Note: Tenant doesn’t pay increase in property taxes from COE until 7/31/2025 (End of Initial Term). Seller will credit Buyer the difference in the increase in taxes from COE until 7/31/25.

* NNN lease with minimal landlord responsibility


PRICINGAddress 550 W. Lacey Boulevard

Hanford, CA 93230

Price $2,463,000

Building Size 2,020 SF

Lot Size 24,450 SF

Price/SF (Building) $1,219.31

Price/SF (Land) $100.74

Current CAP Rate 3.80%

2025 CAP Rate 3.90%


Monthly Rent $7,800

Annual Rent $93,600


Lease Type NNN




Year Built 2015

APN 010-510-002-000

27Financial Analysis

INVESTMENT ADVISORS

Brandon MichaelsSenior Managing Director of InvestmentsSenior Director, National Retail GroupTel: [email protected] License: 01434685

Matthew LuchsFirst Vice President InvestmentsCOO of The Brandon Michaels GroupTel: [email protected] License: 01948233

Steven SchechterFirst Vice President InvestmentsDirector, National Retail GroupTel: [email protected] License: 01089464

brandonmichaelsgroup.com

W. Lacey Boulevard

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