Net Lease Advance Auto For Sale


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Net Lease Advance Auto For Sale

  1. 1. NET LEASED INVESTMENT OFFERING Advance Auto Parts 600 Baldwin StreetJenison, MI 49428 (Grand Rapids MSA) CONFIDENTIAL OFFERING MEMORANDUM
  2. 2. TABLE OF CONTENTS NET LEASED INVESTMENT OFFERING TABLE OF CONTENTS1) Confidentiality & Disclaimer2) Executive Summary3) Property Overview4) Assumable Financing Overview5) Aerials6) Site Plan7) Maps8) Tenant Profile9) Demographic Comparison Report10) Location Overview11) Contact Information
  3. 3. CONFIDENTIALITY & DISCLAIMER NET LEASED INVESTMENT OFFERING CONFIDENTIALITY CONFIDENTIALITY & DISCLAIMERThe information contained in the following Offering Memorandum is proprietary and strictly confidential. It isintended to be reviewed only by the party receiving it from The Boulder Group and should not be made available toany other person or entity without the written consent of The Boulder Group. This Offering Memorandum has beenprepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminarylevel of interest in the subject property. The information contained herein is not a substitute for a thorough duediligence investigation. The Boulder Group has not made any investigation, and makes no warranty orrepresentation. The information contained in this Offering Memorandum has been obtained from sources webelieve to be reliable; however, The Boulder Group has not verified, and will not verify, any of the informationcontained herein, nor has The Boulder Group conducted any investigation regarding these matters and makes nowarranty or representation whatsoever regarding the accuracy or completeness of the information provided. Allpotential buyers must take appropriate measures to verify all of the information set forth herein.
  4. 4. EXECUTIVE SUMMARY NET LEASED INVESTMENT OFFERING EXECUTIVE SUMMARYThe Boulder Group is pleased to exclusively market for sale a single tenant net leased Advance Auto Parts propertylocated in the Grand Rapids MSA. Grand Rapids is the second largest city in Michigan and the largest city in WesternMichigan. Grand Rapids has an unemployment rate of 7.4%, as compared to Detroit’s unemployment rate of 10.8% andthe United States’ unemployment rate of 8.3%. Grand Rapids is home to Spectrum Health (the area’s largest employer),Meijer (#19 on America’s largest private companies list) and Johnson Controls (Fortune 500 Company).The 7,000 square foot Advance Auto Parts was built in 2005 and is benefitted by its location in the primary retail tradearea of Jenison as an outparcel to a Meijer. Advance Auto Parts is located along Baldwin Street, a major retailthoroughfare within the trade area. Baldwin Street has traffic volumes in excess of 28,000 vehicles per day and hasdirect access to the Interstate 196 Interchange (less than one mile away). The property is situated on a hard corner andat the entrance to a Meijer, which creates constant traffic flow at the site. Other nearby retailers include Target, GFSMarketplace, Walgreens, Aldi, Chase, McDonald’s and Fifth Third Bank.Advance Auto Parts’ original lease term was for 15 years with three 5-year renewal options and the lease expires inDecember 2020. The base rent increases 10% in 2015 and 5% in each option period. Advance Auto Parts is a publiclytraded company on the New York Stock Exchange (AAP), with a market capitalization of $6 Billion. Advance Auto Parts isan investment grade company with a Standard & Poor’s rating of BBB-.The subject property must be purchased with existing non-recourse financing. The loan matures March 2017 with aremaining balance of $890,276. The equity requirement at the estimated time of purchase is $594,645. The loanbalance at maturity equates to a 15.90% cap rate.INVESTMENT HIGHLIGHTS• Located within the Grand Rapids MSA (7.4% unemployment)• Standard & Poor’s investment grade rating of BBB-• 10% rental escalation in 2015• Traffic volumes in excess of 28,000 vehicles per day along Baldwin Street• Less than one mile from I-196 Interchange• Outparcel to a Meijer• Positioned on a hard corner• Nearby retailers include Target, Meijer, Walgreens, Chase, Fifth Third Bank McDonald’s and Aldi
  5. 5. PROPERTY OVERVIEW NET LEASED INVESTMENT OFFERING PROPERTY OVERVIEWPrice: $1,640,000Cap Rate: 7.84%Rent Schedule: NOI Escalation Date $128,647 $141,512 12/13/2015 $148,588 12/13/2020 (Option 1) $163,446 12/13/2025 (Option 2) $179,791 12/13/2030 (Option 3)Renewal Options: Three 5-year optionsLease Commencement Date: December 13, 2005Lease Expiration Date: December 12, 2020Tenant: Advance Auto PartsCredit Rating: BBB- (Standard and Poor’s)Year Built 2005Lease Type: NN (Roof, Structure & Parking Lot)Rentable Square Feet: 7,000 SFLand Size: 1.03 acres
  6. 6. ASSUMABLE FINANCING OVERVIEW NET LEASED INVESTMENT OFFERING ASSUMABLE FINANCING OVERVIEW Assumable Financing Overview The purchaser must assume the in place financing detailed below. Loan Balance (June 2012): $1,046,261 Maturity Date: March 1, 2017 Interest Rate: 5.72% Term: 10 year Amortization: 25 year Loan to Value: 63% Equity Investment: $594,645 Loan Balance at Maturity: $890,276 Cash on Cash Return: 6.76% (Full Year 1) Assumption Fee: 1% of Outstanding Balance Recourse: None 2017 Cash on Cash Return: January 2012 – December 2017 2012 2013 2014 2015 2016 2017Net Operating Income $ 128,647 $ 128,647 $ 128,647 $ 129,719 $ 141,512 $ 141,512Mortgage Payments $ (88,449) $ (88,449) $ (88,449) $ (88,449) $ (88,449) $(88,449)Cash Flow $ 40,198 $ 40,198 $ 40,198 $ 41,271 $ 53,063 $ 53,063Cash on Cash Return 6.76% 6.76% 6.76% 6.94% 8.92% 8.92%The above are shown on a full year basis.
  11. 11. TENANT PROFILE NET LEASED INVESTMENT OFFERING TENANT PROFILEAdvance Auto Parts (NYSE: AAP) is a leading automotive aftermarket retailer in the United States based off bothsales and store count. Advance Auto Parts sells automotive parts, accessories, batteries and other maintenanceitems. Currently, Advance Auto Parts is a Fortune 500 Company and is ranked #387. Advance Auto Parts isheadquartered in Roanoke, Virginia and operates more than 3,600 stores across 39 states, Puerto Rico and theVirgin Islands. Advance As of October 2011, Auto Parts occupies over 26 million square feet of space on a retailbasis. Advance Auto Parts Autopart International unit operates more than 190 locations and primarily servescommercial customers, including garages, service stations, and auto dealers. Commercial customers account forabout 30% of AAPs revenues while do-it-yourselfers generate the balance.Website: www.advanceautoparts.comNumber of Locations: 3,645Stock Symbol: AAP : NYSEStandard & Poor’s Rating: BBB-Market Capitalization: $6 BillionEmployees: 55,0002011 Net Income: $393 Million
  12. 12. DEMOGRAPHIC COMPARISON REPORT NET LEASED INVESTMENT OFFERING DEMOGRAPHIC COMPARISON REPORTPopulation 3-mi. 5-mi. 7-miTotal Population 46,626 114,924 223,473Total Households 17,277 42,969 78,886IncomeMedian Household Income $65,642 $62,901 $59,536Average Household Income $73,430 $70,220 $65,773
  13. 13. LOCATION OVERVIEW NET LEASED INVESTMENT OFFERING LOCATION OVERVIEW Jenison is an unincorporated community in Ottawa County in Michigan. Jenison is governed by Georgetown Charter Township. The 2010 population of the Georgetown Township was approximately 47,000. As of July 2011, Ottawa County had a population of 264,910. Grand Rapids is located in Kent County, Michigan. At the time of the 2010 US Census, Grand Rapid’s population was 188,040. The Grand Rapids metropolitan area had a population of 774,160 in 2010. Grand Rapids is the second largest city in Michigan and the largest city in Western Michigan. Grand Rapids is home to five of the worlds leading office furniture companies and is nicknamed the "Furniture City". The city and surrounding communities are economically diverse, and contribute heavily to the health care, information technology, automotive, aviation, and consumer goods manufacturing industries, among others. The largest employers in Grand Rapids include Spectrum Health (16,000), Meijer (9,785), Steelcase (5,400) and Johnson Controls (5,000).Spectrum Health is headquartered in Grand Rapids and is the largest employer in West Michigan with 16,000 staffand 1,500 physicians. Spectrum Healths Meijer Heart Center, Lemmen-Holton Cancer Pavilion, and ButterworthHospital are located on the Grand Rapids Medical Mile which has world-class facilities focusing on the healthsciences.
  14. 14. CONTACT INFORMATION NET LEASED INVESTMENT OFFERING CONTACT INFORMATION 666 Dundee Road Suite 1801 Northbrook, IL 60062Randy Blankstein Jimmy GoodmanPresident Partner847.562.0003