Two Tenant Retail Center - 2019 Construction

72306 Highway 111, Palm Desert, CA 92260
Brand New Retail Strip

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Activity ID: ZAA0100018
Palm Desert, CA|
Exclusively Listed
Confidentiality & Disclaimer
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 now, 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 the
information set forth herein. Prospective buyers shall be responsible
for their costs and expenses of investigating the subject property.
Joseph Lising
Vice President Investments
Newport Beach Office
(949) 419-3227 Direct
(949) 419-3210 Fax
Joseph.Lising@marcusmillichap.com
CA License: 01248258
Mitchell Neff
Team Manager
(949) 419-3296 Direct
(949) 419-3210 Fax
Mitchell.Neff@marcusmillichap.com
Richard Salinas
Team Marketing, Support
(949) 419-3236 Direct
(949) 419-3210 Fax
Richard Salinas@marcusmillichap.com
Pablo Rodriguez
Senior Vice President
Coldwell Banker Commercial
(760) 772-6400 Direct
(760 ) 772-6499 Fax
Pablo@cbclyle.net

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Palm Desert, CA|

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Palm Desert, CA|
Executive Summary
•
6,800 SF commercial building is 2019 construction, and is positioned ideally
in front of a Walmart Neighborhood Market.
•
Mattress Firm emerged last year with excellent store financials, and will
continue it’s focus on growth and development.
•
Champion Golf is the largest, premier club fitting retailer in the U.S, and has
chosen this submarket due to the thriving golf community
Brand New Construction with Excellent Tenant-mix
Prime Location Along a High Traffic Corridor, in the
Heart of Coachella Valley
List Price $5,531,429
CAP Rate 5.25%
NOI $290,400
Excellent Density and Affluent Demographics
•
Great location along Fred Waring Dr and Highway 111, which is a
premier intersection in Palm Desert.
•
Pad-postion to a Walmart Neighborhood Market - the subject property
located at entrance into shopping center.
•
Several national tenants surround the property including Walmart, Target,
Nordstrom Rack, Whole Foods, and numerous restaurants.
•
Multiple developments occurring in Palm Desert, optimizing future outlook
for Palm Desert and neighboring cities.
• Monterey Crossing - 18-acre planned development near I-10
• Plaza Ruiz - Three-story mixed-use development on El Paseo
• Millinium - a 152-acre mixed-use development near I-10
•
Subject Property is found in Coachella Valley, one of Southern California’s
affluent submarkets.
•
Households within three miles of the property average an income
exceeding $95,000 annually.
•
Healthy 8% population growth within three miles of the property, in the last
7 years.
72306 Highway 111
Palm Desert, CA 92260
Representative Photo
Representative Photo
Rendering 2019
Subject Property

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Palm Desert, CA|

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Palm Desert, CA|
Investment Summary
Property Address
72306 Highway 111
Palm Desert, CA 92260
Assessor’s Parcel Number 640-110-046
Gross Leasable Area (GLA) 6,800 SF
Current Occupancy 100%
Year Built 2019
Lot Size 7,897 SF (0.18+ AC)
Plus Common AreaBase Rent (Fully Occupied) $290,400
Gross Potential Rent $290,400
Total Expense Reimbursements* $57,800
Effective Gross Income $348,200
Less Estimated Expenses $57,800
Net Operating Income $290,400
Property Summary
Annualized Operating Data
Expenses - 2018 Estimated
Real Estate Taxes $30,600 $4.50 PSF
Property Insurance $3,400 $0.50 PSF
CAM $23,800 $3.50 PSF
Total $57,800 $8.50 PSF
Price $5,531,429
CAP Rate 5.25%
Pricing
*Expense Reimbursements Estimated, Year One
Marcus & Millichap & Coldwell Banker Commercial have been
selected to exclusively market for sale the Two Tenant Retail Strip
located at 72306 Highway 111, Palm Desert, CA. The 6,800± square
foot retail center will be occupied by Mattress Firm, a high quality
mattress store, and Club Champion, a golf club fitting location. The
listing presents the opportunity to purchase a retail center along one
of Palm Desert’s busiest corridors, Highway 111, at the entrance to
one of the major anchored shopping centers found in Palm Desert.
~ Brand New 2019 Design & Construction
~ Passive Investment - Two New NNN Leases
~ Ideal Location in Heart of the Desert Cities
~ Notable Southern California Demographics
582,529±Estimated Population within 5-mile Radius
$104,838± Average Household Income within 5-miles

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Palm Desert, CA|
TENANT GLA
% OF
GLA
ANNUAL
RENT
RENT/SF
RENT
COMMENCE
LEASE
EXPIRATION
OPTIONS
CHANGES
ON
CHANGES
TO
Mattress Firm 3,800 SF 55.88% $182,400 $ 48.00 5/1/2019 12/31/2028 Two, Five-Year
Year 6-10
Option 1
Option 2
$200,640
$220,704
$242,744
Club Champion 3,016 SF 44.12% $108,000 $35.81 5/1/2019 2/1/2025 Two, Five-Year
Option 1
Option 2
$120,000
$132,000
TOTAL 6,816 SF 100.00% $290,400
Rent Roll
As of January 2019

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Palm Desert, CA|
Site Plan

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Palm Desert, CA|
After filing for Chapter 11 bankruptcy protection in October 2018, the company
successfully shut down 900 of its 3,500 locations, and shed billions in M&A debt,
to emerge from bankruptcy in November 2018. The focus of the company was
to close non-performing locations in already saturated markets. Mattress Firm will
move forward with an optimized store footprint across the country, with $525 million
of committed financing to support operations and future grown.
The company’s CEO, Steve Stagner, said, “This is an exciting day for Mattress Firm
as we emerge a stronger and more competitive company. With an optimized
store footprint, stronger balance sheet and significant liquidity, we will be able to
more efficiently focus on our strength – delivering the best beds at the best value to
millions of customers across the country.“
Mr. Stagner continued, “Our successful emergence from Chapter 11 is a testament
to the hard work of our associates. It was their tremendous loyalty, effort and
dedication that allowed us to efficiently complete this restructuring process in
just 48 days. I am honored to lead this incredible team forward as we continue to
provide customers with unmatched value and service.”
BedTimes Magazine
December 10, 2018
Mattress Firm is one of the nation’s premier specialty bedding retailers, offering a
broad selection of mattresses, bedding accessories and related products. Locations
typically feature a 4,000 - 10,000 square foot building, and are usually situated on
0.80 acres of land. Older Mattress Firm net leases properties tend to have a 12-year
primary term NN lease, while newly constructed Mattress Firm sites usually offer a
NNN lease. The lease terms typically call for 10% increases in rent every five (5) years.
Mattress Firm’s retail locations are either company-owned and operated or operated
by corporately guaranteed franchisees. Founded in Houston, TX in 1986, Mattress Firm
has the largest geographic footprint in the US among multi-brand mattress specialty
retailers, Mattress Firm not only provides sleep solutions, but opportunities in hundreds
of communities.
Effective Date: 1/29/18
Tenant The Sleep Train, Inc.
Guarantor: Mattress Firm, Inc
Lease Type NNN
Original Term 10 Years
Lease Commence 1/1/2019
Rent Commence 5/1/2019
Lease Expire 12/31/2028
Rent Increases 10% Every Five Years
Options to Extend (2) Five-Year Options
Number of Locations 2,600+
Headquartered Houston, TX
Website www.mattressfirm.com
Landlord
Responsibilities
Landlord shall maintain the roof structure, foundation,
and other structural items at landlord’s sole expense;
Tenant
Responsibilities
Tenant maintains the premises including the roof
membrane and HVAC;
Common Area
Maintenance Pro Rata Share; Estimated $1.75/PSF/Annum
Taxes Pro Rata Share; Estimated $3.30/PSF/Annum;
Insurance Pro Rata Share; Estimated $0.35/PSF/Annum;
Assignment
& Sublet
Tenant permitted to assign the lease or sublet the
premises to licensed franchise or related entity;
Notes 2019 NNN Estimate $5.40/psf/Annum;
Tenant Summary
Lease Summary
MATTRESS FIRM ROSE FROM THE ASHES
November 2018

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Palm Desert, CA|
Tenant Summary
Club Champion is a professional fitting company for premier golf
clubs - the largest of their kind in the United States. The company
serves as a retailer for premium golf brands and offers services
to fit custom golf clubs, while educating their customers during
the process. The company has 85 locations nationwide, and has
continued it’s expansion into new markets. Each location is company
owned, with identical equipment, inventory, and experience level
with staff - offering a consistent service around the United States.
Effective Date: 6/13/18
Tenant Club Champion, LLC
Guarantor: None
Lease Type NNN
Original Term 5 Years, 9 Months
Lease Commence 5/1/2019
Rent Commence 2/1/2019
Lease Expire 12/31/2024
Rent Increases Fixed - $12,000 Increases Every Five Years
Options to Extend (2) Five-Year Options
Number of Locations 85
Headquartered Willowbrook, IL
Website www.clubchampiongolf.com
Landlord
Responsibilities Roof & structure, foundation, plumbing
Tenant
Responsibilities
Interior, plumbing & utilities installed by tenant, store-
front, roof membrane and HVAC;
Common Area
Maintenance Pro Rata Share; 2019 Estimated $3.00/PSF/Annum;
Taxes Pro Rata Share; 2019 Estimated $4.00/PSF/Annum;
Insurance Pro Rata Share; 2019 Estimated $0.50/PSF/Annum:
Assignment
& Sublet
Tenant shall be permitted to assign this lease or sublet
the premises to licensed franchise or a related entity;
Notes 2019 NNN Estimate $7.50/psf/Annum;
Lease Summary
Our financials continue to improve, the business is doing fantastic and we
are expanding like crazy. We will have 62 locations from coast to coast by
the end of Q1.”
Message to Landlord from the CEO
“
Joe Lee
CEO / Co-Founder

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Palm Desert, CA|
Market Overview
The City of Palm Desert, California, incorporated November
26, 1973, is centered in the heart of the Coachella Valley.
Palm Desert is known as the cultural and retail center of the
desert communities.
A major center of growth in the Coachella Valley, Palm
Desert is a popular retreat for “snowbirds” from colder
climates (the Eastern and Northern United States, and
Canada), who swell its population by an estimated 31,000
each winter. In the past couple of years Palm Desert has seen
more residents become “full-timers”, mainly from the coasts
and urban centers of California, who have come for both
affordable and high-valued home price
The City has been consistantly rated as one of the safest cities
in Southern California. The Police Department is contracted
through the Riverside County Sheriff’s Department. The fire
and paramedic service is similarly contracted.
The City of Palm Desert, California, incorporated November
26, 1973, is centered in the heart of the Coachella Valley.
Palm Desert is known as the cultural and retail center of the
desert communities.
A major center of growth in the Coachella Valley, Palm
Desert is a popular retreat for “snowbirds” from colder
climates (the Eastern and Northern United States, and
Canada), who swell its population by an estimated 31,000
each winter. In the past couple of years Palm Desert has seen
more residents become “full-timers”, mainly from the coasts
and urban centers of California, who have come for both
affordable and high-valued home price
The City has been consistantly rated as one of the safest cities
in Southern California. The Police Department is contracted
through the Riverside County Sheriff’s Department. The fire
and paramedic service is similarly contracted.
Riverside County, CA
Palm Desert, CA
Incorporated November 26, 1973
Government Council-Manager
Population 52,932 ± (2017)
Major Employers JW Marriot, Universal Protection,
Various Golf Courses, Desert Arc
Website www.cityofpalmdesert.org

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Palm Desert, CA|
Market Overview
Recent Developments
The Monterey Crossings project will include a 130-room, 4-story
hotel along with 130,000 square feet of single-story commercial,
dining and automotive businesses. The 18-acre site is at the
northeast corner of Monterey Ave and Dinah Shore Drive.
Completion is expected in March 2019.
Monterey Crossing in North Palm Desert
This project will demolish the existing building at 73690 El Paseo
and construct a new 13,526-square-foot, three-story mixed-use
retail and residential building.
Plaza Ruiz in South Palm Desert
The project will construct a 82-room hotel and a 59-unit
residential condominium project with ancillary uses and
amenities on a 5-acre site at 45640 Highway 74.
Residential Mix-use in South Palm Desert
The 152-acre mixed-used development will be on vacant lands
bounded by Gerald Ford Drive on the south, Technology Drive
on the east, Portola Road on the west, and Interstate 10/Union
Pacific Railroad to the north. The master plan project at 74500
Gerald Ford Drive includes 9 individual planning areas consisting
of commercial, residential, business and park land uses.
Millinium Mix-use in North Palm Desert

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Palm Desert, CA|
Population 1 Miles 3 Miles 5 Miles
2022 Population 5,347 44,599 76,027
2017 Population 5,216 42,785 71,064
2010 Population 4,811 39,603 65,121
2000 Population 4,607 36,010 58,380
Households by Income 1 Miles 3 Miles 5 Miles
$150,000 or More 9.28% 15.08% 17.40%
$100,000 - $149,000 9.78% 13.43% 14.08%
$75,000 - $99,999 8.84% 9.98% 10.65%
$50,000 - $74,999 16.18% 16.04% 15.83%
$35,000 - $49,999 13.10% 13.11% 12.15%
Under $35,000 42.81% 32.36% 29.88%
Average Household Income $72,813 $95,564 $104,838
Median Household Income $42,584 $57,560 $62,548
Per Capita Income $32,586 $47,048 $53,283
Households 1 Miles 3 Miles 5 Miles
2022 Households 2,409 22,202 39,179
2017 Households 2,315 21,013 36,061
2010 Households 2,119 19,196 32,621
2000 Households 2,077 17,306 28,430
Market Overview
Demographic Summary
1 MI.
3 MI.
5 MI.

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Palm Desert, CA|
Households
There are currently 7,404 households in your selected
geography. The number of households has changed
by 2.79% since 2000. It is estimated that the number of
households in your area will be 7,469 five years from now,
which represents a change of 0.88% from the current year.
The average household size in your area is 2.75 persons.
Population
In 2017, the population in your selected geography is 20,666.
The population has changed by 6.73% since 2000. It is
estimated that the population in your area will be 20,597.00
five years from now, which represents a change of -0.33%
from the current year. The current population is 47.68% male
and 52.32% female. The median age of the population in
your area is 41.01, compare this to the US average which is
37.83. The population density in your area is 6,577.63 people
per square mile.
Household Income
In 2017, the median household income for your selected
geography is $76,724, compare this to the US average which
is currently $56,286. The median household income for your
area has changed by 31.72% since 2000. It is estimated that
the median household income in your area will be $89,678
five years from now, which represents a change of 16.88%
from the current year. The current year per capita income in
your area is $40,151, compare this to the US average, which
is $30,982. The current year average household income in
your area is $110,932, compare this to the US average which
is $81,217.
Race and Ethnicity
The current year racial makeup of your selected area is as
follows: 69.77% White, 2.00% Black, 0.55% Native American
and 8.68% Asian/Pacific Islander. Compare these to US
averages which are: 70.42% White, 12.85% Black, 0.19%
Native American and 5.53% Asian/Pacific Islander. People
of Hispanic origin are counted independently of race.
People of Hispanic origin make up 35.49% of the current year
population in your selected area. Compare this to the US
average of 17.88%.
Employment
In 2017, there are 18,156 employees in your selected area,
this is also known as the daytime population. The 2000 Census
revealedthat73.51%ofemployeesareemployedinwhite-collar
occupationsinthisgeography,and26.12%areemployedinblue-
collar occupations. In 2017, unemployment in this area is 3.92%.
In 2000, the average time traveled to work was 24.00 minutes.
Market Overview
Demographic Summary (5 Mile Radius)

Offering Memorandum
Coldwell Banker Commercial

Two Tenant Retail Center - 2019 Construction

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