MARSHALL PLAZA MARSHALL, TX
PRICING & FINANCIAL ANALYSIS
M AR SH ALL P LAZ A
Marshall Plaza 620 East End Blvd South Marshall, TX 75670
OFFERING SUMMARY Price
$2,255,000
Assumable Loan
$1,500,000
Equity Down Net Operating Income
$755,000 $191,580
Cap Rate
8.50%
Cash on Cash Return
11.44%
Price PSF
$49.37
Occupancy
100.0%
Year Built Gross Leasable Area Lot Size
1985 45,680 SF 4.842 AC
Loan details on Page 4
F I N A N C I A L A N A LY S I S
2
PRICING & FINANCIAL ANALYSIS
PROJECTED INCOME & EXPENSES Base Rent - Occupied Space Percentage Rent (Citi Trends 2017) GROSS POTENTIAL RENT
M AR SH ALL P LAZ A
CURRENT
PSF
EXPENSES
CURRENT
PSF
Real Estate Taxes
$45,910
$1.01
$15,748
$0.34
Landscaping & Groundskeeping
$4,500
$0.10
Repairs & Maintenance
$4,203
$0.09
Sprinkler Inspection
$1,245
$0.03
$226,592
$4.96
$9,366
$0.21
Insurance
$235,958
$5.17
CAM
Expense Reimbursements CAM Recoveries
$4,461
$0.10
Management Fee Recoveries
$2,602
$0.06
Insurance Recoveries
$6,164
$0.13
Utilities
$1,448
$0.03
Real Estate Tax Recoveries
$22,097
$0.48
Total CAM
$11,397
$0.25
Total Expense Reimbursements
$35,324
$0.77
Management Fee
$6,648
$0.15
$271,282
$5.94
Total Expenses
$79,702
$1.74
Total CAM
$11,397
$0.25
Management Fee
$6,648
$0.15
Total Insurance
$15,748
$0.34
Total Real Estate Taxes
$45,910
$1.01
Total Recoverable Expenses
$79,702
$1.74
Net Operating Income
$191,580
$4.19
EFFECTIVE GROSS REVENUE Operating Expenses
Capitalization Rate Capital Reserves at $0.15 PSF Cash Flow before Debt Service Market Loan Cash Flow after Debt Service Cash-on-Cash Return
8.50% $6,852 $184,728 $105,226 $79,501 11.44%
Notes: Citi Trends - Pays percentage rent of 5% of Gross Sales above $1.1M for the remainder of the term and option periods
F I N A N C I A L A N A LY S I S
3
LOAN DETAILS
M AR SH ALL P LAZ A
EXISTING ASSUMABLE LOAN Purchase Price
$2,255,000
Loan Amount
$1,500,000
Equity to the Note Loan to Purchase Price Interest Rate Amortization Schedule Loan Constant Call Residual Percentage
$755,000 67% 5.00% 25 Years 7.02% 25 Years 0.00%
NOI
$191,580
Annual Debt Service
$105,226
Clear Cash after DS
$86,353
Debt Service Coverage Ratio
1.82
Cap Rate
8.50%
Cash on Cash Return
11.44%
Estimated Loan Balance on 1/1/2019 Loan to Purchase Price 1/1/2019 Assumable Loan Start Date
$1,484,729 66% 8/1/2018
Note: A 2% assumption fee must be paid by the buyer
F I N A N C I A L A N A LY S I S
4
RE NT RO L L
Tenant
M AR SH ALL P LAZ A
Suite
SQ FT
% of SQFT
Lease Dates
Minimum Rent
Recoveries
Total
Start
Current
End
Annual
Monthly
PSF
Annual
PSF
Revenue
% of Revenue
Planet Fitness
A
17,881
39.14%
07/15
-
12/25
$70,988
$5,916
$3.97
$31,199
$1.74
$102,186
39.01%
Citi Trends
B
10,675
23.37%
01/07
-
12/21
$80,004
$6,667
$7.49
$0
$0.00
$80,004
30.55%
Save-A-Lot
C
17,124
37.49%
05/07
07/17
06/22
$75,600
$6,300
$4.41
$4,126
$0.24
$79,726
30.44%
Total Count/GLA
3
45,680
100%
Occupied
3
45,680
100.0%
Available
0
0
0.0%
$4.96
45,680
100.0%
Total Avg Rent
F I N A N C I A L A N A LY S I S
5
ESTIMATED REIMBURSEMENT REVENUE Tenant
Suite
SQ FT
M AR SH ALL P LAZ A
% of SQFT
CAM
Management Fee
Insurance
Real Estate Taxes
Total Recovery
Monthly
PSF
Monthly
PSF
Monthly
PSF
Monthly
PSF
Monthly
PSF
Planet Fitness
A
17,881
39.14%
$372
$0.25
$217
$0.15
$514
$0.34
$1,498
$1.01
$2,600
$1.74
Citi Trends
B
10,675
23.37%
$0
$0.00
$0
$0.00
$0
$0.00
$0
$0.00
$0
$0.00
Save-A-Lot
C
17,124
37.49%
$0
$0.00
$0
$0.00
$0
$0.00
$344
$0.02
$344
$0.24
45,680
100%
$372
TOTALS
$217
$514
$1,841
$2,944
Lease Notes: [1] Planet Fitness - 5% Cap on Controllable CAM expenses. [2] CIti Trends - has a gross lease and does not contribute to CAM, management fee, insurance or real estate taxes. LL responsible for HVAC repairs over $500 or replacement.
[3] Save-A-Lot pays taxes above base year 2011. BY2011 taxes are $27,131.00
F I N A N C I A L A N A LY S I S
6
LEASE PROVISIONS
Tenant
Suite
M AR SH ALL P LAZ A
SQ FT
Base Rental Increases
Renewal Options
Date
PSF
Options
Date
PSF
User Restrictions & Exclusive Rights
Termination Rights
Sales Reporting
Planet Fitness
A
17,881
01/01/21
$4.41
2x5
1/1/2026 1/1/2031
$4.85 $5.33
-
-
-
Citi Trends
B
10,675
-
-
-
-
-
-
-
Yes
Save-A-Lot
C
17,124
-
-
1x5
7/1/2022
$5.29
-
-
-
TOTAL
45,680
F I N A N C I A L A N A LY S I S
7
TE NA NT INF ORMAT I ON
M AR SH ALL P LAZ A
DBA
Planet Fitness
Entity on Lease
PF-Mar, LLC
Corporate/Franchise
Franchise
Locations
1,300+
Credit Rating
Moody’s: B1
Public/Private
NYSE: PLNT
Line of Business
Planet Fitness is a low price fitness center with brand name equipment, fitness training, and exercise classes. It has more than 1,300 clubs, making it one of the largest fitness club franchises by number of members and locations. It markets itself as a “Judgement Free Zone” that caters to novice and casual gym users and is reported to be the nation’s fastest growing fitness center franchise.
DBA
Save-A-Lot
Entity on Lease
SEP Incorporated, LLC
Corporate/Franchise
Corporate
Locations
1,200+
Credit Rating
Not Rated
Public/Private
Private
Line of Business
American hard discount supermarket chain that specializes in discount groceries at prices up to 40% lower than conventional grocery stores. Save-A-Lots are typically located in urban, suburban, and rural areas. While stores carry most typical grocery products, they feature less variety than conventional supermarkets. A typical Save-A-Lot is 15,000 square feet with items displayed in their cardboard shipping boxes.
DBA
Citi Trends
Entity on Lease
Citi Trends, Inc
Corporate/Franchise
Corporate
Locations
500+
Credit Rating
Not Rated
Public/Private
NASDAQ: CTRN
Line of Business
A value-priced retailer of urban fashion apparel, shoes, accessories and home décor for the entire family. Their goal is to provide merchandise at discounts to department and specialty stores’ regular prices of 20% to 70%. Citi Trends’ buyers source merchandise from over 1,800 vendors to deliver quality fashion product at outstanding value for their customers.
PROPERTY DESCRIPTION
8
I N VE S TMENT HI GHLI GHT S •
Attractive, Assumable Loan: The property currently has a $1,500,000 loan in place that needs to be assumed. The interest rate is 5.00% and it creates a leveraged return of 11.44% on current cash flow. Please see page 4 of OM for details.
•
New Roof: The Owner has made considerable capital improvements to the Property most notably a full roof replacement in April of 2012.
•
National Credit Tenants: The Property is currently 100% occupied by national tenants including Save-a-Lot, Citi Trends, and Planet Fitness. Citi Trends has hit their percentage rent clause every year since 2013, and has recently renewed their lease for an additional five years. Save-a-lot is an original tenant in Marshall Plaza and has been located on the Property since 1985.Planet Fitness, the national gym sponsor of NBC’s reality show, The Biggest Loser, has more than eight years remaining on their lease.
•
Marshall’s Main Retail Corridor: Marshall Plaza is located on East End Boulevard South (US Highway 59), the main north-south thoroughfare in East Texas stretching south through Carthage, and north to Texarkana. Additionally, US Hwy 59 serves as the major retail corridor in Marshall with retailers including, Kroger, Walmart, Lowe’s Home Improvement, Tractor Supply, CVS, and Walgreens, to name a few.
•
Excellent Access & Visibility: The Property is configured in a straight-line configuration and with frontage on US Hwy 59 each tenant benefits from direct exposure to more than 30,000 vehicles per day. Furthermore, there is ample access for Marshall Plaza with three points of entry into the Property and convenient cross-access with the neighboring properties.
•
Trade Area: Marshall, Texas is part of a larger metropolitan area of Longview, Texas, and Shreveport, Louisiana, and is located 150 miles east of Dallas, on Interstate 20. Marshall Plaza, positioned just seven miles north of Interstate 20, serves an expanded trade area to include surrounding cities of Scottsville, Jasper Heights, Crossroads, Woodlawn, and Nesbitt. Additionally, the asset benefits from its close proximity to four colleges including East Texas Baptist University, Wiley College, Texas State Tech and Panola College-Marshall with more than 4,400 students, faculty, and employees combined.
M AR SH ALL P LAZ A
PROPERTY DESCRIPTION
9
S I T E PL A N
M AR SH ALL P LAZ A
PROPERTY DESCRIPTION
10
A E R I AL MA P
M AR SH ALL P LAZ A
Marshall Plaza
PROPERTY DESCRIPTION
11
L E A SE COMPA RABLES
Property
M AR SH ALL P LAZ A
GLA
Yr Built/ Renovated Occupancy
Major Tenants
Available SF
Rental Rates
NNN
Marshall Plaza ï‚« 620 South East End Boulevard Marshall, TX
45,680
1985 / 2006
100.0%
Save-A-Lot, Citi Trends, Planet Fitness
0
$4.00 - $7.50
$1.60
Crossroads Centre 1 105 East End Boulevard Marshall, TX
90,133
1985
85.7%
Big Lots, Tractor Supply, Aaron's
12,868
$4.50 - $7.00
$1.62
Eastpark Shopping Center 2 200 East End Boulevard Marshall, TX
99,178
1971/ 1998
95.4%
4,571
$7.00 - $10.00
$3.10
Marshall Valley Shopping Center 3 900 East End Boulevard Marshall, TX
13,995
2005
89.3%
Cici's Pizza, GameXChange, Check 'N Go, Choice Dental
1,500
$14.00-$22.00
$3.25
Walmart Shadow Shopping Center 4 1711 N. East End Boulevard Marshall, TX
15,040
1998
100.0%
Cato, Dollar Tree, GameStop, Sally Beauty, GNC
0
$10.00 - $14.00
$2.95
Kroger, Radio Shack, China Garden, PetSense
PROPERTY DESCRIPTION
12
L E A SE COMPA RABLES
M AR SH ALL P LAZ A
Marshall Plaza 1
Crossroads Centre
2
Eastpark Shopping Center
3
Marshall Valley Shopping Center
4
Walmart Shadow Shopping Center
4
1
2
3
PROPERTY DESCRIPTION
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REG IONA L MA P
M AR SH ALL P LAZ A
PROPERTY DESCRIPTION
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LO C AL MA P
M AR SH ALL P LAZ A
PROPERTY DESCRIPTION
15
M A R KET S U MMARY
M AR SH ALL P LAZ A
OVERVIEW Marshall is located in the northeastern corner of Texas, on Interstate 20. The city is just 40 miles from Shreveport to the east, just over two hours from Dallas to the west, and three hours from Houston to the south. Marshall is the county seat of Harrison County. Gregg, Harrison, and Upshur Counties comprise the Longview-Marshall-Gilmer Metropolitan Statistical Area. It is the largest MSA in the eastern part of Texas. With a population of 110,832, the Longview-MarshallGilmer MSA ranks 228 out of 390 MSAs. Marshall alone has a population of 33,979 in a 10-mile radius. Marshall’s geographic location is ideal for business with easy access from Interstate 20, U.S. Highway 59, and the Harrison County Airport. The city’s AmTrak terminal is conveniently located just north of downtown’s Peter Whetstone Square. Employment data shows a strong concentration of employees in the construction, mining, public administration, and financing industries. Marshall pulls much of its employment from manufacturing, medical, oil and gas, and construction companies. The two largest are
Eastman Chemical Company with approximately 1,520 employees and Trinity Industries 1,020 employees. INC Magazine ranked Longview-Marshall area as one of the best places for doing business in America (May 2005). ACCRA Cost of Living Study (2005) indicated that the cost of living in the Longview-Marshall region is approximately 15% below the national average. Downtown Marshall is going through a renaissance period as many buildings have been restored, including the former Hotel Marshall as well as the Harrison County Courthouse. The addition of restaurants and multi-housing developments have helped to boost the town’s economy which was previously in decline. The town’s location has also made it an ideal tourist stop, with nearly one million tourists visiting each year. Tourists can find an ultimate shopping experience at the famous Marshall Pottery, one of the oldest potteries in the nation. Visitors are able to experience East Texas culture and Marshall’s distinguished “red clay” pottery and sculpture production. Opportunity for antique shopping is also abundant throughout the Washington Square.
PROPERTY DESCRIPTION
16
D E M OG RA PHIC STAT I ST I CS
M AR SH ALL P LAZ A
5 MILE
10 MILE
Marshall/Longview/ Gilmer MSA
26,623 26,576 26,248 0.18% 1.25% 5,110
34,043 33,979 33,542 0.19% 1.30% 5,768
111,220 110,832 108,844 0.35% 1.82% 7,758
15,990 9,494 426 256 24 386 0
21,526 11,101 509 300 43 501 0
83,013 19,950 776 887 56 2,271 0
9,792 9,776 9,668 0.16% 1.12% 6,169 3,607 $50,856 $35,021
12,663 12,640 12,490 0.18% 1.20% 8,507 4,133 $53,525 $37,552
47,813 47,712 44,591 0.21% 1.70% 28,627 15,601 $42,123 $23,035
3,299 3,073 1,311 946 516 250 229 153
3,990 3,930 1,702 1,359 756 341 365 197
15,061 14,835 6,425 5,130 2,854 1,287 1,378 744
Population: 2023 Projection 2018 Estimate 2010 Census Growth 2018-2023 Growth 2010-2018 2018 Population Hispanic Origin
2018 Population by Race: White Black Am. Indian & Alaskan Asian Hawaiian & Pacific Island Other U.S. Armed Forces:
Households: 2023 Projection 2018 Estimate 2010 Census Growth 2018 - 2023 Growth 2010 - 2018 Owner Occupied Renter Occupied 2018 Avg Household Income 2018 Med Household Income
2018 Households by Household Inc: <$25,000 $25,000 - $50,000 $50,000 - $75,000 $75,000 - $100,000 $100,000 - $125,000 $125,000 - $150,000 $150,000 - $200,000 $200,000+ Demographic data © CoStar 2017
PROPERTY DESCRIPTION
17
CONFIDENTIALITY AGREEMENT 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 STRIVE and it should not be made available to any other person or entity without the written consent of STRIVE. 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 STRIVE. 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. STRIVE 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 tenantâ&#x20AC;&#x2122;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, STRIVE has not verified, and will not verify, any of the information contained herein, nor has STRIVE 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 STRIVE AGENT FOR MORE DETAILS.
Commercial Disclaimer STRIVE hereby advises all prospective purchasers of commercial property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, STRIVE has not and will not verify any of this information, nor has STRIVE conducted any investigation regarding these matters. STRIVE makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a commercial 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. STRIVE 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 commercial 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 commercial 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 tenants 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 tenants 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 leases, including the likelihood of locating replacement tenants if any of the current tenants should default or abandon the property, and the lease terms that Buyer may be able to negotiate with any potential replacement tenants 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 STRIVE and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this commercial property.
Information About Brokerage Services
Texas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords. TYPES OF REAL ESTATE LICENSE HOLDERS: • A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker. • A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker. A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): • Put the interests of the client above all others, including the broker’s own interests; • Inform the client of any material information about the property or transaction received by the broker; • Answer the client’s questions and present any offer to or counter-offer from the client; and • Treat all parties to a real estate transaction honestly and fairly. A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION: AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner’s agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner’s agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent. AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant’s agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer’s agent must perform the broker’s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by th e seller or seller’s agent. AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. A broker who acts as an intermediary: • Must treat all parties to the transaction impartially and fairly; • May, with the parties’ written consent, appoint a different license holder associated with the broker to each party (owner and • buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction. • Must not, unless specifically authorized in writing to do so by the party, disclose: ӽӽ that the owner will accept a price less than the written asking price; ӽӽ that the buyer/tenant will pay a price greater than the price submitted in a written offer; and ӽӽ any confidential information or any other information that a party specifically instructs the broker in writing not to disclose, unless required to do so by law. AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH: • The broker’s duties and responsibilities to you, and your obligations under the representation agreement. • Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated. LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.
Regulated by the Texas Real Estate Commission
Information available at www.trec.texas.gov IABS 1-0
exclusively listed 469.844.8880 | STRIVERE.COM