SAND LAKE CORNERS NORTH

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1 SAND LAKE CORNERS NORTH S John Young Pkwy, Orlando, FL Dominant Community Center in South Orlando Florida s Famous Retail Tourist Corridor Serves all of South Orlando Well Leased % Executive Summary Prepared by PRIMARY CONTACT John F. Bell Managing Director D: M: John.Bell@transwestern.com

2 EXECUTIVE SUMMARY The Opportunity Sand Lakes Corners North is the dominant community center in its market, shadow anchored by best in class retailers Walmart Supercenter and Lowe s Home Improvement Store, as well as the owned anchors Old Time Pottery, PetSmart, and Dollar Tree. The high profile, intensely travelled, intersection is surrounded by one of Orlando s greatest concentration of class A office parks and distribution parks, providing a captive daytime demand base for retail and restaurants. The Property is at the center of a deep and expanding residential region that is the focus of residential growth for Orlando, serving as a solid foundation of demand for retail services and goods. Moreover, Sand Lakes Corners North is at the center of the World famous Tourist Corridor and benefits from consistent and growing retail demand from free spending affluent tourists that are attracted to the Property s familiar brands and one stop shopping options for necessity and convenience retail offered at Sand Lakes Corners North. The exceptional triple deep demand base of established and growing residential, office and tourism clients ensures the Property s long term success and cash flow growth as a market leading center in its community. Excellent Cash on Cash returns due to existing loan at favorable rates and terms. Universal Studios Expansion Site Value Effect Sand Lake Corners North is ideally located at the doorstep of Universal Studio s 474 acre expansion site that will inevitably be developed with entertainment and lodging creating a sea change of explosive employment drivers and growth spiking values for nearby properties. The Property stands squarely at the gateway to this important site, and can expect value increases beyond its existing successful shopping center economics. Class A Institutional Quality Shopping Center Major Tenants Address Sand Lake Corners North Old Time Pottery 66,700 SF PetSmart 26,020 SF Walmart Shadow Anchor Lowe s Shadow Anchor S. John Young Parkway City, State Orlando, FL Year Built 1999, renovated 2005 Rentable Area Total Land Area 151,487 SF Acres Occupancy 95.3% Classification Community Center In-Place NOI Year 1 $1,286,078 Proforma NOI YR 1 (Lease Up Vacancy) $1,325,029 Center of Employment Residential Growth Minimal Rollover Best Center in its Trade Area Outparcels (Shadow) Financing to be assumed (9/2017 balance):. Yes Yes Yes Yes 7-Eleven, Burger King, Goodyear, Denny s. Bead Time, McDonald s, Discount Tires, Logan s Roadhouse, Wendy s Dunkin Donuts/Five Guys, Speedway $11,753,154 CMBS SAND LAKE CORNERS NORTH 2

3 Anchors - Demand Drivers Part of Offering Part of Offering Shadow Anchor Shadow Anchor EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 3

4 Financing to Assume Sand Lake Corners North Loan Information Borrower T North Sand Lake FL, LLC Lender CMBS Securitized The Bank of New York Mellon Loan Type CMBS / Special Servicer LNR Origination Date February 25, 2015 Principal Balance $11,850,000 Current Balance 9/15/2017 $11,753,154 Maturity Date March 6, 2025 Term 10 Year Amortization Period 30 Year Annual Debt Service March 6, 2017 Interest Rate [1] 4.06% Debt Service $56,984.38/ Month - $683,812.56/YR 1- Interest calculation is based on an Actual/360 Basis Advantageous Interest Rate. Superior to today s available terms. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 4

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6 Major Owned Anchors Sand Lakes Corners North Old Time Pottery is a huge success drawing shoppers from throughout South Orlando. Attracts in-line tenants to draft off its success and impressive customer reach. Old Time Pottery Expands the Property s trade area. 66,700 SF 26,020 SF EXECUTIVE SUMMARY WINTER SPRINGS TOWN CENTER 6

7 Shadow Anchors Sand Lakes Corners North Super Walmart and Lowe s create a regional customer draw for the center, enhancing the destination retail attributes of the center. Quality in-line tenants seek to co-locate next to these successful, best in class retailers. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 7

8 Southeast View Sand Lake Corners North The Offering Southridge Office Park 1.2 MSF Infinity Park Mixed Use 200 Acre Business Park Build to Suit GATEWAY TO UNIVERSAL SouthPark Center 2.9 MSF Office Park GATEWAY TO UNIVERSAL ORLANDO RESORT S 474 ACRE EXPANISON SITE 91 Destination PKWY BEAD TIME Island One Resorts Central Jeep Extended Stay America Hotel 482 One Blood EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 8

9 Widely Recognized National Brands Attract Consumers Core Quality Opportunity KEY VALUE DRIVERS STRONG ANCHORS Widely Recognized National Brands Market leading anchors distinguish the center as the area s dominant destination community center, drawing customers from throughout South Orlando and the Tourist Corridor, as well as from the highly concentrated employment base of nearly 12,000 employees surrounding the Property. There are also 11 outparcels that attract customers to the renowned center. PATH OF GROWTH Universal Studios 474 Acre Expansion Site The Property is at the Gateway to Universal s mixed use site predicted for theme park expansion, entertainment, and residential uses. The development of this site will ultimately transform values at properties like Sand Lake Corners North beyond the economics of existing uses. DEEP DEMAND BASE High Spending Tourists, Workers, Residential A unique triple component demand foundation at the center of an expanding residential base, encompassing one of Orlando s largest concentration of employment, and is also at the epicenter of the World famous Tourist Corridor s 66.1 million visitors that supply an affluent base of free spending shoppers. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 9

10 View to South Key location at entrance to Universal Expansion Site and center of business parks. Darden HQ 6,149 Employees Universal 474 Acre Expansion Site GATEWAY TO UNIVERSAL ORLANDO RESORT S 474 ACRE EXPANISON SITE BEAD TIME EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 10

11 Key Investment Highlights Core Quality - Returns Confidence Sand Lake Corners North is an institutional quality community center with approximately 75% of its rent roll secured by well known brands that create a destination dynamic. Cash flow is extremely strong and predictable. Thriving Market & Growing Demand Base The robust Tourist Corridor s rising rents and tightening 4.2% vacancy rate success is driven by demand from free spending tourists with reported average incomes of $93,000 whose second favorite activity while on vacation is shopping. The deep surrounding residential demand base and daytime employee population of 11,706 within a five mile radius enhances an extraordinarily diverse consumer base. Stable Cash Flow Minimal Rollover Three tenants rolling all highly likely to renew. Eleven Outparcels Significant Draw 7-11, Burger King, Goodyear, Denny s, Bead Time, McDonald s, Discount Tire, Logan s Roadhouse, Dunkin Donuts / Five Guys, Wendy s and Speedway. Gateway to Universal s Expansion Site This game changing prospective development is sure to result in value spikes for nearby Properties. Below Market Rents Most of the Property s rents are below market with upside, or have below market options with a high likelihood of renewal. Old Time Pottery s (66,700 SF / 44% of center) rent is substantially below market with below market options. Substantial upside if tenant unexpectedly vacates. Provides investors underwriting comfort and stability. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 11

12 Sand Lake Corners North TENANT DEMAND DRIVERS Nationally recognized anchors including Walmart, Lowe s, Old Time Pottery, PetSmart, and Dollar Tree draw tenants from throughout South Orlando. Eleven developed outparcels with nationally recognized tenants also draw shoppers. As the Dominant Community Center for its trade area, it is a true One Stop Shopping destination serving the surrounding highly concentrated and diversified demand base of residential, office tenants, and high spending tourists. High Profile Corner/Excellent Traffic Count of 42,885 on Sand Lake Road and 54,901 on S. John Young Parkway. TOURISM: Affluent tourists with incomes of $93,000 rank shopping high on their vacation to do lists. Orlando set a record in 2015 with 66.1 million visitors, and continued to grow in As tourism booms, further growth in spending is expected. The Property has a prominent location on the direct pathway from the Airport to the Tourist District. BUSINESS: Orlando s major surrounding concentration of office and industrial employees provides a consistent daytime consumer base for necessity and restaurant retailers found in abundance at the Property. RESIDENTIAL: Nearby high income residential neighborhoods of Hunter s Creek, Bay Hill/Dr. Phillips, Conroy Chain-of-Lakes, and the expanding Lake Nona area is a diversified and growing residential base. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 12

13 View to East EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 13

14 Strong Economic Demographics 5 Mile Residents 1 / 3 MILE AHHI 191,377 $46,370 / $62,083 DEEP TRADE AREA. UPWARD TRENDING HOUSEHOLD INCOMES. Dynamic / Diversified Retail Demand Base 66.1 Million Tourists A New Record $93,000 Tourist Income 96,089 Employees 3 Miles Average Household Income Area 2016 % over $100k 2021 % over $100k ann. growth 1-mi Radius $41, % $48, % 3.19% 3-mi Radius $46, % $49, % 1.48% 5-mi Radius $62, % $67, % 1.80% Orange County $70, % $78, % 2.07% Orla ndo MS A $70, % $77, % 2.01% Florida $69, % $76, % 1.95% Key Retail Demographics Demand Type 3 Miles 5 Miles Residential Population 55, ,377 Residential Household Income $46,370 $62,083 Number of Businesses 5,516 11,706 Employees 96, ,530 Tourist Income $93,000 $93,000 Orlando Tourists 66.1 million 66.1 million Diversified triple deep demand base of a dense surrounding full time residential population, free spending tourists, and adjacent major office and industrial employment centers significantly boost daytime shopping demand. Population Area ann. growth 1-mi Radius % 3-mi Radius 50,486 55,292 60, % 5-mi Radius 175, , , % Orange County 1,145,956 1,279,744 1,405, % Orla ndo MS A 2,134,411 2,371,879 2,597, % Florida 18,801,310 20,108,440 21,436, % EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 14

15 Major Employment Center Employees serve as a significant daytime retail demand base. Sand Lake Corners North is ideally situated at the epicenter of an expanding employee demand base. Employee purchasing power creates diversified demand beyond the solid base of full time residential and high spending tourists. Many of Orlando s Top Employers are located in the Property s Trade Area. Business & Tourism Demos Demand Type 3 Miles 5 Miles Businesses 5,516 11,706 Employees 96, ,530 Tourist Income $93,000 $93,000 Orlando Tourists 66.1 million 66.1 million Infinity Park Mixed Use 200 Acre Business Park Build to Suit SouthPark Center 2.9 MSF Office Park SeaWorld 6,032 Employees Darden HQ 6,149 Employees Rosen Creek Resort Sand Lake Corners North The Offering Universal 474 Acre Expansion Site Lockheed Martin 7,000 Employees I-Drive Tourist Corridor 21,000 Employees 19 million visitors GATEWAY TO UNIVERSAL ORLANDO RESORT S 474 ACRE EXPANISON SITE 91 EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 15

16 Sand Lake Corners North EMPOLOYEES ARE RETAIL DEMAND DRIVERS Orlando's Top 75 Employers in Trade Area Rank Company Employees 1 Walt Disney World Resort 74,000 2 Universal Orlando (Comcast) 21,000 5 Orlando International Airport 18,000 8 Lockheed Martin 7,000 9 Darden Restaurants 6, SeaWorld Parks & Entertainment 6, Rosen Hotels & Resorts 4, Westgate Resorts 3, Wyndham Vacation Ownership 3, Hilton Grand Vacations Club 3, Mears Transportation 2, Loews Hotels 2, Marriott Vacations Worldwide 2, Starwood Hotels & Resorts 2, Southwest Airlines 2,200 EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 16

17 Tourism: Growing & Driving Retail Sales Sand Lake Corners North s trade area is at the center of Orlando s major tourist destinations such as Universal Studios, the International Drive tourist corridor, Sea World and the Florida Mall. In addition, Disney World is located approximately 10 miles to the south by expressway. Tourists are significant shoppers in the trade area contributing to retailer sales growth, diversifying the already broad demand base. A new tourism record of 66.1 million visitors to Orlando occurred in 2015, with the increase in tourism directly related to growth of incomes for the neighboring full time residential population. Affluent tourists rank shopping high on their to do list, are free spenders, and boost retail sales in the market. Tourism continues to boom, expanding retail sales and increasing disposable income in Sand Lake Corners North s retail population base. In addition, Universal invested in a 474 acre expansion site, which the Property is at its doorstep. Expected to be a combination of entertainment and lodging on a dramatic scale, it will transform the value of properties like Sand Lake Corners North significantly beyond justification of current economics. A tremendous redevelopment exit value spike could be anticipated for Sand Lake Corners North Million Tourists 2015: A new Orlando record $93,000 Tourist Income Major Theme Parks Annual Visitors 2015 Attendance Increase Magic Kingdom 20,492,000 9% EPCOT 11,798,000 3% Animal Kingdom 10,922,000 5% Hollywood Studios 10,828,000 5% Disney World Combined 54,040,000 Univeral Studios 9,585,000 16% Islands of Adventure 8,792,000 8% Universal Combined 18,377,000 SeaWorld 4,777,999 2% Two major malls in the immediate area of the Property are significant tourist and local population draws to the market. The Florida Mall at 1.9 Million SF is the largest in Central Florida, with Sand Lake Corners North ideally situated on the direct pathway to the heavily visited mall. Universal Studios is the fastest growing theme park in the USA attendance growing at an impressive 16% during By comparison, average growth for all US parks was 5.9% and Magic Kingdom at 6.0%. Sources: TEA, VisitOrlando.com EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 17

18 Tenant Appeal: Tenants are drawn to the Property s prominent location at the center of South Orlando s major retail trade area, which serves the rapidly expanding South Orlando residential, office, industrial and tourist demand base. An easily accessible and extraordinarily diversified demand base create a recession proof locale highly attractive to retailers. High Profile Location Center of Mega Destinations such as Universal Studios, Islands of Adventure, SeaWorld, the Orlando International Airport, the Florida Mall, and the Mall at Millenia. Purchasing Power of 191,000 residents and nearly 12,000 businesses in a five mile radius, plus 66.1 million tourists visiting a year, result in the market s status as Orlando s retail hub. Major anchors chose the Property s location due to its expressway connectivity confluence of nearby SR 528, I-4 and Florida s Turnpike, expanding the trade area beyond immediate South Orlando. The gateway location at the footstep of the main entrance to Universal Studio s 474 expansion site, upon development will transform valuations beyond current use economics. The demand base of surrounding major employers such as Darden with 6,149 employees and Lockheed Martin with 7,000 employees, and Universal Studios with 21,000 employees in addition to the largest concentration of class A office parks in Orlando attracts retailers. Sand Lake Road is the main connector to both the Orlando International Airport and Central Florida s largest regional mall, the Florida Mall. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 18

19 Development of Universal s Expansion Site Will Spike Nearby Values IMPACT OF UNIVERSAL S EXPANSION SITE DEVELOPMENT An already strong retail market will enjoy amplified returns and rental lift. Purchasing power of the trade area will skyrocket. The Property is at the Main Entrance to site A redevelopment exit strategy option. Sand Lake Corners North is poised for Exponential Value Increase. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 19

20 Sand Lake Corners North Gateway to the 474 Acre Universal Site Massive Unlocked Value Upon Development Universal Acquisition: 475 Acres Purchased Universal Orlando's corporate owner paid $130 million in 2015 and is believed to be the site of a new mega theme park and entertainment and lodging mecca. Sand Lake Corners is located at the doorstep of this transformational site, placing it at the epicenter of one of Orlando s most impactful growth markets, creating potentially exponential long term growth for a new owner. The Universal parcel is reportedly entitled with thousands of hotel rooms, residential units, and a theme park style attraction. This project is certain to yield upward pressure on values of nearby properties such as Sand Lake Corners North. The Property s already high profile location will be significantly enhanced upon development. Development of the 474 acres with entertainment and lodging uses will result in a seismic shift of neighborhood economics, with immediate value upside of owning Sand Lake Corners North well beyond the expectation of retail rent growth the uplift in values for nearby sites such as the Property could be astronomical. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 20

21 Gateway to Universal Site EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 21

22 View Looking North EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 22

23 Orlando Facts: Retail Demand Drivers 66.1 MM 2015 Orlando Tourists Orlando Tourist Visitor Record! 66.1 Million in 2015, a record, double rate of past two decades, and growing Orlando International Airport Growing 41.6 Million passengers, 9/2016 FY Remarkable 9.9% increase YOY Affluent Income of Orlando Visitor $93,000 to $94,800 Average Income of Tourists Free Spending Consumer Non Durable Sales Spiking $1,398.8 Million Orlando Sales 9/2016 FY Dramatic 10.3% increase Orlando Shops! The Florida Mall 1.9 million SF immediately east of Sand Lake Corners North, draws tremendous traffic Remarkable Job Growth: Tops in US Orlando #1 in the U.S. for job growth in 2015 feeding demand for retail services EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 23

24 Sand Lake Corners North EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 24

25 Retail Market Strong Fundamentals VACANCY The Property INVENTORY AVG RENT 4.1% 4.7% Tourist Corridor The Property 9,772,681 SF Tourist Corridor Orlando s Major Retail Cluster $20.56/SF NNN Tourist Corridor Room for Rent Growth UPSIDE Landlord s Market Submarket: The Property is at the center of the Tourist Corridor, Orlando s retail hub which is the region s path of growth for residential and businesses as well as world class entertainment facilities and theme parks. Demand is driven from growing numbers of tourists, full time residents, and the ever expanding office and industrial parks. Rent Growth: Average rents peaked 5.8% higher than today s rents, providing significant rent upside as vacancy continues to strengthen. Tight and Improving Vacancy: Market vacancy has room to tighten further, especially with the growing residential, employee and tourist demand base surrounding the Property. Consumer Spending: Orlando s non-durable sales increased by an impressive 10.3% over last year FY 9/2016 to $1,398.8 Million. OPPORTUNITY Market History Demonstrates proven success thresholds for rents and occupancy. Historical peak and low submarket stats SUBMARKET NET RENT Current Low L ow Date Peak Peak Date Upside (10/17) Touris t Corridor $20.56 $ Q1 $ Q1 5.8% S UBMARKET AVAILABLE VACANCY S HOPPING CENTER RETAIL Current Low L ow Date Peak Peak Date Upside (10/17) Touris t Corridor 4.1% 4.1% QTD 10.5% 2009 Q3 0.0% ACHIEVED BEFORE, CAN BE ACHIEVED AGAIN EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 25

26 S. John Young PKW Outparcels Discount Tire McDonald s Denny s Goodyear Burger King 7-11 Enhance traffic to the Center EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 26

27 Sand Lake Road Outparcels Speedway Wendy s Dunkin Donuts Logan s Roadhouse EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 27

28 View Facing East EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 28

29 Investment Contacts INVESTMENT SALE CONTACT John F. Bell Managing Director D: M: SE 2 nd Street Suite 3100 Miami, Florida, Disclaimer: The information contained in this Offering Memorandum has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guaranty, warranty or representation about it. It is the responsibility of each prospective purchaser to independently verify its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example purposes only and do not represent the current or future performance of the property. Each prospective purchaser is to rely upon its own investigation, evaluation and judgment as to the value and condition of the property, the information contained in the Offering Memorandum, and advisability of purchasing the property. This Offering Memorandum may be rescinded or altered and the property may be sold, leased or withdrawn from the market without notice. Brokers are not authorized to make any representations or agreements on behalf of the property owner or bind the property owner to any agreement for sale of the property. EXECUTIVE SUMMARY SAND LAKE CORNERS NORTH 29

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