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DOLLAR GENERAL WITH CORPORATE LEASE
Dollar General
4449 US-62
Mountain Home, Arkansas 72653
Click To View Property Tour
The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any
other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The
recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap.
This offering memorandum has been prepared to provide summary, unverified financial and physical 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, PCBs
or asbestos, the compliance with local, 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 offering memorandum 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. Prospective buyers shall be responsible for their costs and expenses of investigating the
subject property.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any
investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your
thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors
that should be evaluated by you and your tax, financial and legal advisors.
Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.
Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s
past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based
on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply
with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/
her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and
the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.
By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this
net leased property.
Confidentiality Agreement
Net Leased Disclaimer
Kevin Boeve
Senior Vice President Investments
ONTARIO OFFICE
Tel: (909) 456-3450
kevin.boeve@marcusmillichap.com
CA License: 01247016
Pablo Rodriguez
Senior Associate
ONTARIO OFFICE
Tel: (909) 456-7032
pablo.rodriguez@marcusmillichap.com
CA License: 01870757
NV License: NV S. 0175422
Kyle Blatt
Associate
ONTARIO OFFICE
Tel: (909) 456-3475
kyle.blatt@marcusmillichap.com
CA License: 02017976
PRESENTED BY
TABLE OF CONTENTS
EXECUTIVE SUMMARY
Executive Overview  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
Tenant Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
Dollar General in the News  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
FINANCIAL OVERVIEW
Financial Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PROPERTY DESCRIPTION
Parcel Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9
Aerial Maps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11
MARKET OVERVIEW
Mountain Home, Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
COMPARABLES
Sold and On Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-17
COMPARABLES
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
executive summary
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 2
Marcus & Millichap is pleased to exclusively market for sale a Dollar General store located in
Mountain Home, Arkansas.
The Dollar General is currently operating under a 15-year triple net lease with 10 years remain-
ing. The lease includes 10 percent rent increases in each of the five, five-year renewal options.
The lease is guaranteed by Dollar General Corporation, which is publicly traded on the New York
Stock Exchange under the ticker “DG” and has a current “BBB” credit rating by Standard & Poors.
Mountain Home is a city in Baxter County, Arkansas, United States, in the southern Ozark Moun-
tains near the northern state border with Missouri. As of the 2010 census, the city had a popula-
tion of 12,448. A total of 41,307 persons lived within the city and micropolitan combined, which
encompasses the majority of Baxter County.
overview
10-Year Triple Net Investment Opportunity With Zero Landlord Responsibilities
Frontage Along Highway 62 East | Traffic Counts of Over 8,500 Cars Per Day
Dollar General is Nation’s Largest Small-Box Discount Retailer With Over 13,000 Locations
in 40 States
Standard & Poor’s Investment Grade (S&P. “BBB”) Tenant | The Only Small-Box Retailer With
Investment Grade Credit
Dollar General Has $17.5 Billion in Sales Volume and is Ranked #139 in Fortune 500
Rare Three Percent Increase in Year 11
Five, Five-Year Options With 10 Percent Rent Increases
investment highlights
tenant overview
47
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
Dollar General (NYSE: DG) is a chain of more than 13,000 discount stores in 43 states, primarily in
the South, East, Midwest, and Southwest, offering basic household items, such as cleaning supplies,
health, and beauty aids, apparel, and food. The target is low, middle, and fixed-income shoppers.
The company has grown into the country’s largest small-box discount retailer. Stores are often
located in small towns off the radar of giant discounters. One of Dollar General’s main advantages
is that it offers prices as low or lower than Walmart but in more convenient locations. Dollar General
has more stores than other retailers and is easily the largest dollar store chain.
The company ranks 139th on the Fortune 500 list. Fiscal 2016 revenues exceed $20.3 billion with
a net income of $1.17 billion, and net worth of $5.3 billion.
In July 2015, Family Dollar was acquired by Dollar Tree and ceased to be a public company.
Dollar Tree took on billions of dollars of debt to acquire Family Dollar, and that negatively impacted
the credit rating of both companies. Moreover, Family Dollar, as a subsidiary of Dollar Tree, no
longer issues separate financial statements.
The best-known rating agency, Standard & Poor’s, downgraded Family Dollar in July, alongside
Dollar Tree having already been downgraded.
The combined Dollar Tree-Family Dollar entity will have approximately the same amount of
revenue as Dollar General, but more debt, hence the lower credit rating.
Dollar General is now the only dollar store chain with an investment grade rating. Dollar General
has been credit-upgraded five times since going public in 2009, most recently in October 2015.
It is now “BBB.”
DOLLAR GENERAL IS THE COUNTRY’S LARGEST
SMALL-BOX DISCOUNT RETAILER
Prototype Dollar Generals have a standard box structure with a flat roof.
Company Type:
PUBLIC (NYSE: DG)
Fiscal 2015 Sales
$20.4 BILLION
S&P 500 Credit Rating
“BBB”
2015 Fortune 500
#139
Number of Stores
12,483
The Three Largest Discount Store Chains, Ranked by 2015 Revenue Are:
Ranking Store Chain Revenue # 0f Stores
1 Dollar General $20.3 Billion 13,000+
2 Family Dollar $10.5 Billion 8,000+
3 Dollar Tree $8.6 Billion 13,600+
8
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
dollar general in the news
5
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
dollar general in the news
Dollar General is Starting to Look a Lot Like Wal-Mart
Doling Out Pay Increases to Managers
It’s no longer enough for retailers to compete on price alone. To improve the cleanliness and availability of products in its
stores, Dollar General will take a 16 cents per share hit to boost compensation for its managers and ramp up their training.
In the stores where it’s already rolled out these changes, Dollar General has seen lower turnover among managers and
hourly employees, CEO Todd Vasos said on the company’s earnings call. It’s also seen higher sales in those locations. This
decision follows Wal-Mart’s $2.7 billion investment into better training and pay for its employees, which it has credited for
higher customer service scores.
Investing in Lower Prices
There’s an all-out price war happening across retail. That includes both Dollar General and Wal-Mart. Shortly after Wal-
Mart said it would move faster to lower prices, Dollar General rolled out price cuts on hundreds of items across 17 percent
of its stores. “These locations have performed better than the chain average ever since,” Vasos said. While the company will
continue monitoring prices, it doesn’t anticipate further price cuts at this time, the CEO said.
Bringing in Fresh Produce
Dollar General’s food offering has traditionally skewed toward packaged goods. But as its customers ask for healthier
options, the retailer sees more opportunity in perishable items. The company is already testing fresh produce in some of its
stores, including the 41 locations it purchased from Wal-Mart last year after it shuttered the Express format. Dollar General
will now expand that pilot to some of its smaller shops. Wal-Mart has made fresh produce a key piece of its turnaround
plan, as it drives more frequent visits from shoppers. While Vasos acknowledged there’s stiff competition in fresh food, he
said the company’s massive fleet and small shops give it a competitive advantage.
Going Smaller
Dollar stores are already a fraction the size of a Wal-Mart Supercenter. But as Dollar General peppers the U.S. with
new shops, it’s making those locations smaller. The company plans to open an additional 160 small shops this year. At
6,000-square feet, these locations cater to central metropolitan and rural areas. That will bring the total number of these
shops to 250. Meanwhile, Dollar General is testing an even smaller 3,600-square-foot store that serves millennials living in
urban areas. The expansion of these stores comes as Wal-Mart grows its Neighborhood Market footprint.
Making a Bigger Bet on Digital
Dollar General lags much of the retail industry when it comes to digital commerce, but the chain is putting a bigger em-
phasis on technology. Though Vasos was mum on specifics, the decision comes as more low-income consumers purchase
mobile devices, the CEO said. Becoming more digitally savvy should also help Dollar General attract millennial shoppers,
whom Vasos says are playing a bigger role in its sales. Wal-Mart has also been rolling out upgrades to its website and
mobile technologies, including the ability for shoppers to pay directly from its app.
financial overview
financial overview
7
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
annualized operating data
Lease Years Annual Rent Monthly Rent Increases
Years 1-10 $74,606 $6,217 N/A
Years 11-15 $76,844 $6,404 3%
Years 16-20 (Option 1) $84,048 $7,004 10%
Years 21-25 (Option 2) $92,981 $7,748 10%
Years 26-30 (Option 3) $102,279 $8,523 10%
Years 31-35 (Option 4) $112,507 $9,376 10%
Years 36-40 (Option 5) $123,818 $10,318 10%
Net Operating Income $74,606
offering summary
Property Name Dollar General
Property Address 4449 US-62
Mountain Home, Arkansas 72653
Price $1,065,000
Price/SF $118
Cap Rate 7.00%
Rentable Square Feet 9,026 Square Feet
Year Built 2012
Lot Size 1.30 Acres
tenant overview
Tenant Trade Name Dollar General
Ownership Public
Tenant Corporate Store
Lease Guarantor Corporate Guarantee
Lease Type Absolute Net
Roof and Structure Tenant Responsible
Lease Term 15 Years
Lease Commencement Date 7/29/2012
Rent Commencement Date 9/27/2012
Lease Expiration Date 7/31/2027
Term Remaining on Lease 10 Years
Increases 3% Increase at Year 11, 10% (Each Option)
Options Five, Five-Year Options
vita data
Net Operating Income - Current $74,606
Ownership Fee Simple (Land & Improvements)
Proposed Financing New First Trust Deed
financing options
Multiple financing options are available based on buyer requirements. Please contact listing agents to
discuss options in detail.
3-Year Fixed 3.70%
5-Year Fixed 4.0%
7-Year Fixed 4.25%
10-Year Fixed 4.6%
property description
4
parcel overview
access
Access is from Highway 62 East.
year built
The property was built in 2012.
9
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
location
4449 US-62
Mountain Home, Arizona 72663
site
The subject property has frontage Highway 62 East with traffic counts of 8,500 cars
per day.
square footage
The building square footage is 9,026-square feet and the lot size is +/- 1.30 acres.
Highway 62 East - 8,500 Cars Per Day
10
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
Cherry
Automatic
Transmissions
Royal
66
CRANFIELD JUNCTION
TACKLE SHOP
Ozark
Boat Docks
11
Cherry
Automatic
Transmissions
Driftwood Lanes
31,264
RESIDENTS
$48,437
AVG HOUSEHOLD
INCOME
demographics
within a
10-mile radius:
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
market overview
area overview
Fayetteville, Arkansas
2 Hour, 30 Minute Drive
Harrison, Arkansas
1 Hour Drive
Springfield, Missouri
2 Hour Drive
Mountain Home
The town of Mountain Home sits within the Ozark Mountains, surrounded by Norfork and Bull Shoals lakes,
and the White and North Fork Rivers.
Bull Shoals-White River State Park, just below Bull Shoals Dam, offers 105 campsites along the trout
stream, picnic areas, pavilions, playgrounds, trails and a full-service dock. The park also schedules events,
nature programs, and tours throughout the year. Fishing resorts are located along the White River for sev-
eral miles downstream from the massive dam. Another famous stream, the Buffalo National River, flows
into the White River just a few miles south of Mountain Home. Canoeing is the top activity, but camping,
hiking, and warm-water fishing are also popular activities among visitors.
Mountain Home, AR was one of the state’s first water resort and retirement regions with fishing, water
sports, shopping and dining as top draws. Also, local golfing, historic attractions and natural beauty lure
people to the area. Located in north-central Arkansas, the town of Mountain Home is only 52 miles from
Harrison and 129 miles from Fayetteville. Make plans to visit the gem in the Ozarks for some outdoor fun.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
14
Distance To From Property
comparables
Representative Photo
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
16
comparables
Close of Escrow 2/2016
Sales Price $1,045,014
Cap Rate 7.10%
Gross Leasable Area 9,100 SF
Year Built 2015
Asking Price 1,065,000
Price/SF $118
Cap Rate 7.00%
Gross Leasable Area 9,026 SF
Year Built 2012
Subject Property: Dollar General Dollar General of Pearcy
6135 Airport Road, Pearcy, AR 7762 Highway 71 South, Wickes, AR
Dollar General of Wickes
4449 Highway 62 East, Mountain Home, AR
Close of Escrow 7/2016
Sales Price $1,039,007
Cap Rate 6.85%
Gross Leasable Area 9,100 SF
Year Built 2016
1 2
Average Cap Rate 6.83%
Comparables
17
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap ACT ID Y0080277
comparables
Dollar General of Avoca
245 North Highway 62, Avoca, AR 14331 US-67, Malvern, AR
Dollar General of Malvern
16134 State Road 105 North, Hector, AR
Dollar General of Hector
Close of Escrow 9/2016
Sales Price $1,077,000
Cap Rate 6.80%
Gross Leasable Area 9,100 SF
Year Built 2016
Close of Escrow 10/2016
Sales Price $1,038,809
Cap Rate 6.80%
Gross Leasable Area 9,100 SF
Year Built 2014
On Market
List Price $1,037,567
Cap Rate 6.70%
Gross Leasable Area 9,100 SF
Year Built 2014
3 4 5
comparables
5684 Highway 9, Center Ridge, AR
Dollar General of Center Ridge
On Market
List Price $1,037,567
Cap Rate 6.70%
Gross Leasable Area 9,100 SF
Year Built 2014
6
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap ACT ID Y0080277
18
demographics
25
demographics
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future
performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
20
3 Miles 5 Miles 10 Miles
2016 Population 4,485 17,167 31,264
2016 Households 2,078 7,955 14,085
2016 Average Household Size 2.09 2.13 2.17
2016 Daytime Population 1,791 8,023 11,955
2016 Owner Occupied Housing Units 79.65% 73.78% 77.77%
2016 Renter Occupied Housing Units 20.35% 26.22% 22.23%
2016 Average Household Income $51,724 $46,982 $48,437
2016 Median Household Income $35,735 $34,061 $35,103
Subject Property
Kevin Boeve
Senior Vice President Investments
ONTARIO OFFICE
Tel: (909) 456-3450
kevin.boeve@marcusmillichap.com
CA License: 01247016
Pablo Rodriguez
Senior Associate
ONTARIO OFFICE
Tel: (909) 456-7032
pablo.rodriguez@marcusmillichap.com
CA License: 01870757
NV License: NV S. 0175422
Kyle Blatt
Associate
ONTARIO OFFICE
Tel: (909) 456-3475
kyle.blatt@marcusmillichap.com
CA License: 02017976
PRESENTED BY

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Dollar General in Mountain Home, Arkansas

  • 1. DOLLAR GENERAL WITH CORPORATE LEASE Dollar General 4449 US-62 Mountain Home, Arkansas 72653 Click To View Property Tour
  • 2. The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical 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, PCBs or asbestos, the compliance with local, 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 offering memorandum 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS. Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/ her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. Confidentiality Agreement Net Leased Disclaimer
  • 3. Kevin Boeve Senior Vice President Investments ONTARIO OFFICE Tel: (909) 456-3450 kevin.boeve@marcusmillichap.com CA License: 01247016 Pablo Rodriguez Senior Associate ONTARIO OFFICE Tel: (909) 456-7032 pablo.rodriguez@marcusmillichap.com CA License: 01870757 NV License: NV S. 0175422 Kyle Blatt Associate ONTARIO OFFICE Tel: (909) 456-3475 kyle.blatt@marcusmillichap.com CA License: 02017976 PRESENTED BY
  • 4.
  • 5. TABLE OF CONTENTS EXECUTIVE SUMMARY Executive Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Tenant Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Dollar General in the News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 FINANCIAL OVERVIEW Financial Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 PROPERTY DESCRIPTION Parcel Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Aerial Maps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11 MARKET OVERVIEW Mountain Home, Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 COMPARABLES Sold and On Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-17 COMPARABLES Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
  • 7. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 2 Marcus & Millichap is pleased to exclusively market for sale a Dollar General store located in Mountain Home, Arkansas. The Dollar General is currently operating under a 15-year triple net lease with 10 years remain- ing. The lease includes 10 percent rent increases in each of the five, five-year renewal options. The lease is guaranteed by Dollar General Corporation, which is publicly traded on the New York Stock Exchange under the ticker “DG” and has a current “BBB” credit rating by Standard & Poors. Mountain Home is a city in Baxter County, Arkansas, United States, in the southern Ozark Moun- tains near the northern state border with Missouri. As of the 2010 census, the city had a popula- tion of 12,448. A total of 41,307 persons lived within the city and micropolitan combined, which encompasses the majority of Baxter County. overview 10-Year Triple Net Investment Opportunity With Zero Landlord Responsibilities Frontage Along Highway 62 East | Traffic Counts of Over 8,500 Cars Per Day Dollar General is Nation’s Largest Small-Box Discount Retailer With Over 13,000 Locations in 40 States Standard & Poor’s Investment Grade (S&P. “BBB”) Tenant | The Only Small-Box Retailer With Investment Grade Credit Dollar General Has $17.5 Billion in Sales Volume and is Ranked #139 in Fortune 500 Rare Three Percent Increase in Year 11 Five, Five-Year Options With 10 Percent Rent Increases investment highlights
  • 8. tenant overview 47 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 Dollar General (NYSE: DG) is a chain of more than 13,000 discount stores in 43 states, primarily in the South, East, Midwest, and Southwest, offering basic household items, such as cleaning supplies, health, and beauty aids, apparel, and food. The target is low, middle, and fixed-income shoppers. The company has grown into the country’s largest small-box discount retailer. Stores are often located in small towns off the radar of giant discounters. One of Dollar General’s main advantages is that it offers prices as low or lower than Walmart but in more convenient locations. Dollar General has more stores than other retailers and is easily the largest dollar store chain. The company ranks 139th on the Fortune 500 list. Fiscal 2016 revenues exceed $20.3 billion with a net income of $1.17 billion, and net worth of $5.3 billion. In July 2015, Family Dollar was acquired by Dollar Tree and ceased to be a public company. Dollar Tree took on billions of dollars of debt to acquire Family Dollar, and that negatively impacted the credit rating of both companies. Moreover, Family Dollar, as a subsidiary of Dollar Tree, no longer issues separate financial statements. The best-known rating agency, Standard & Poor’s, downgraded Family Dollar in July, alongside Dollar Tree having already been downgraded. The combined Dollar Tree-Family Dollar entity will have approximately the same amount of revenue as Dollar General, but more debt, hence the lower credit rating. Dollar General is now the only dollar store chain with an investment grade rating. Dollar General has been credit-upgraded five times since going public in 2009, most recently in October 2015. It is now “BBB.” DOLLAR GENERAL IS THE COUNTRY’S LARGEST SMALL-BOX DISCOUNT RETAILER Prototype Dollar Generals have a standard box structure with a flat roof. Company Type: PUBLIC (NYSE: DG) Fiscal 2015 Sales $20.4 BILLION S&P 500 Credit Rating “BBB” 2015 Fortune 500 #139 Number of Stores 12,483 The Three Largest Discount Store Chains, Ranked by 2015 Revenue Are: Ranking Store Chain Revenue # 0f Stores 1 Dollar General $20.3 Billion 13,000+ 2 Family Dollar $10.5 Billion 8,000+ 3 Dollar Tree $8.6 Billion 13,600+
  • 9. 8 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 dollar general in the news
  • 10. 5 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 dollar general in the news Dollar General is Starting to Look a Lot Like Wal-Mart Doling Out Pay Increases to Managers It’s no longer enough for retailers to compete on price alone. To improve the cleanliness and availability of products in its stores, Dollar General will take a 16 cents per share hit to boost compensation for its managers and ramp up their training. In the stores where it’s already rolled out these changes, Dollar General has seen lower turnover among managers and hourly employees, CEO Todd Vasos said on the company’s earnings call. It’s also seen higher sales in those locations. This decision follows Wal-Mart’s $2.7 billion investment into better training and pay for its employees, which it has credited for higher customer service scores. Investing in Lower Prices There’s an all-out price war happening across retail. That includes both Dollar General and Wal-Mart. Shortly after Wal- Mart said it would move faster to lower prices, Dollar General rolled out price cuts on hundreds of items across 17 percent of its stores. “These locations have performed better than the chain average ever since,” Vasos said. While the company will continue monitoring prices, it doesn’t anticipate further price cuts at this time, the CEO said. Bringing in Fresh Produce Dollar General’s food offering has traditionally skewed toward packaged goods. But as its customers ask for healthier options, the retailer sees more opportunity in perishable items. The company is already testing fresh produce in some of its stores, including the 41 locations it purchased from Wal-Mart last year after it shuttered the Express format. Dollar General will now expand that pilot to some of its smaller shops. Wal-Mart has made fresh produce a key piece of its turnaround plan, as it drives more frequent visits from shoppers. While Vasos acknowledged there’s stiff competition in fresh food, he said the company’s massive fleet and small shops give it a competitive advantage. Going Smaller Dollar stores are already a fraction the size of a Wal-Mart Supercenter. But as Dollar General peppers the U.S. with new shops, it’s making those locations smaller. The company plans to open an additional 160 small shops this year. At 6,000-square feet, these locations cater to central metropolitan and rural areas. That will bring the total number of these shops to 250. Meanwhile, Dollar General is testing an even smaller 3,600-square-foot store that serves millennials living in urban areas. The expansion of these stores comes as Wal-Mart grows its Neighborhood Market footprint. Making a Bigger Bet on Digital Dollar General lags much of the retail industry when it comes to digital commerce, but the chain is putting a bigger em- phasis on technology. Though Vasos was mum on specifics, the decision comes as more low-income consumers purchase mobile devices, the CEO said. Becoming more digitally savvy should also help Dollar General attract millennial shoppers, whom Vasos says are playing a bigger role in its sales. Wal-Mart has also been rolling out upgrades to its website and mobile technologies, including the ability for shoppers to pay directly from its app.
  • 12. financial overview 7 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 annualized operating data Lease Years Annual Rent Monthly Rent Increases Years 1-10 $74,606 $6,217 N/A Years 11-15 $76,844 $6,404 3% Years 16-20 (Option 1) $84,048 $7,004 10% Years 21-25 (Option 2) $92,981 $7,748 10% Years 26-30 (Option 3) $102,279 $8,523 10% Years 31-35 (Option 4) $112,507 $9,376 10% Years 36-40 (Option 5) $123,818 $10,318 10% Net Operating Income $74,606 offering summary Property Name Dollar General Property Address 4449 US-62 Mountain Home, Arkansas 72653 Price $1,065,000 Price/SF $118 Cap Rate 7.00% Rentable Square Feet 9,026 Square Feet Year Built 2012 Lot Size 1.30 Acres tenant overview Tenant Trade Name Dollar General Ownership Public Tenant Corporate Store Lease Guarantor Corporate Guarantee Lease Type Absolute Net Roof and Structure Tenant Responsible Lease Term 15 Years Lease Commencement Date 7/29/2012 Rent Commencement Date 9/27/2012 Lease Expiration Date 7/31/2027 Term Remaining on Lease 10 Years Increases 3% Increase at Year 11, 10% (Each Option) Options Five, Five-Year Options vita data Net Operating Income - Current $74,606 Ownership Fee Simple (Land & Improvements) Proposed Financing New First Trust Deed financing options Multiple financing options are available based on buyer requirements. Please contact listing agents to discuss options in detail. 3-Year Fixed 3.70% 5-Year Fixed 4.0% 7-Year Fixed 4.25% 10-Year Fixed 4.6%
  • 14. 4 parcel overview access Access is from Highway 62 East. year built The property was built in 2012. 9 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 location 4449 US-62 Mountain Home, Arizona 72663 site The subject property has frontage Highway 62 East with traffic counts of 8,500 cars per day. square footage The building square footage is 9,026-square feet and the lot size is +/- 1.30 acres. Highway 62 East - 8,500 Cars Per Day
  • 15. 10 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 Cherry Automatic Transmissions Royal 66 CRANFIELD JUNCTION TACKLE SHOP Ozark Boat Docks
  • 16. 11 Cherry Automatic Transmissions Driftwood Lanes 31,264 RESIDENTS $48,437 AVG HOUSEHOLD INCOME demographics within a 10-mile radius: This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277
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  • 19. area overview Fayetteville, Arkansas 2 Hour, 30 Minute Drive Harrison, Arkansas 1 Hour Drive Springfield, Missouri 2 Hour Drive Mountain Home The town of Mountain Home sits within the Ozark Mountains, surrounded by Norfork and Bull Shoals lakes, and the White and North Fork Rivers. Bull Shoals-White River State Park, just below Bull Shoals Dam, offers 105 campsites along the trout stream, picnic areas, pavilions, playgrounds, trails and a full-service dock. The park also schedules events, nature programs, and tours throughout the year. Fishing resorts are located along the White River for sev- eral miles downstream from the massive dam. Another famous stream, the Buffalo National River, flows into the White River just a few miles south of Mountain Home. Canoeing is the top activity, but camping, hiking, and warm-water fishing are also popular activities among visitors. Mountain Home, AR was one of the state’s first water resort and retirement regions with fishing, water sports, shopping and dining as top draws. Also, local golfing, historic attractions and natural beauty lure people to the area. Located in north-central Arkansas, the town of Mountain Home is only 52 miles from Harrison and 129 miles from Fayetteville. Make plans to visit the gem in the Ozarks for some outdoor fun. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 14 Distance To From Property
  • 21. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 16 comparables Close of Escrow 2/2016 Sales Price $1,045,014 Cap Rate 7.10% Gross Leasable Area 9,100 SF Year Built 2015 Asking Price 1,065,000 Price/SF $118 Cap Rate 7.00% Gross Leasable Area 9,026 SF Year Built 2012 Subject Property: Dollar General Dollar General of Pearcy 6135 Airport Road, Pearcy, AR 7762 Highway 71 South, Wickes, AR Dollar General of Wickes 4449 Highway 62 East, Mountain Home, AR Close of Escrow 7/2016 Sales Price $1,039,007 Cap Rate 6.85% Gross Leasable Area 9,100 SF Year Built 2016 1 2 Average Cap Rate 6.83% Comparables
  • 22. 17 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap ACT ID Y0080277 comparables Dollar General of Avoca 245 North Highway 62, Avoca, AR 14331 US-67, Malvern, AR Dollar General of Malvern 16134 State Road 105 North, Hector, AR Dollar General of Hector Close of Escrow 9/2016 Sales Price $1,077,000 Cap Rate 6.80% Gross Leasable Area 9,100 SF Year Built 2016 Close of Escrow 10/2016 Sales Price $1,038,809 Cap Rate 6.80% Gross Leasable Area 9,100 SF Year Built 2014 On Market List Price $1,037,567 Cap Rate 6.70% Gross Leasable Area 9,100 SF Year Built 2014 3 4 5
  • 23. comparables 5684 Highway 9, Center Ridge, AR Dollar General of Center Ridge On Market List Price $1,037,567 Cap Rate 6.70% Gross Leasable Area 9,100 SF Year Built 2014 6 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap ACT ID Y0080277 18
  • 25. 25 demographics This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2011 Marcus & Millichap ACT ID Y0080277 20 3 Miles 5 Miles 10 Miles 2016 Population 4,485 17,167 31,264 2016 Households 2,078 7,955 14,085 2016 Average Household Size 2.09 2.13 2.17 2016 Daytime Population 1,791 8,023 11,955 2016 Owner Occupied Housing Units 79.65% 73.78% 77.77% 2016 Renter Occupied Housing Units 20.35% 26.22% 22.23% 2016 Average Household Income $51,724 $46,982 $48,437 2016 Median Household Income $35,735 $34,061 $35,103 Subject Property
  • 26. Kevin Boeve Senior Vice President Investments ONTARIO OFFICE Tel: (909) 456-3450 kevin.boeve@marcusmillichap.com CA License: 01247016 Pablo Rodriguez Senior Associate ONTARIO OFFICE Tel: (909) 456-7032 pablo.rodriguez@marcusmillichap.com CA License: 01870757 NV License: NV S. 0175422 Kyle Blatt Associate ONTARIO OFFICE Tel: (909) 456-3475 kyle.blatt@marcusmillichap.com CA License: 02017976 PRESENTED BY