Dominant Retail Shopping Center Location

Transcription

1 Chula Vista Bayfront 4.95 Miles to Pacific Ocean Dominant Retail Shopping Center Location

2 H 877 EAST H STREET H 877 EAST H STREET ADJACENT TO WALMART New Lease - Trophy Asset

3 TABLE OF CONTENTS Executive Summary Investment Summary 4 Site Plan 8 Tenant Overviews PetSmart 9 Location Overviews Eastlake Overview 11 San Diego Overview 14 Chula Vista Overview 19 Competitive Set 21 Sale Comps 24 H 877 EAST H STREET

4 INVESTMENT SUMMARY We are pleased to offer to qualified investors a rare opportunity to acquire a fee simple (land and building) property leased to PetSmart (NASDAQ: PETM). The brand new property is located in an exceptional area of San Diego, California with a brand new 10-year lease and another 20-years worth of options including 10% increases every 5-years. The subject tenant, PetSmart, is the top American retail pet chain with a market cap of $8.25 billion. Headquarted in Phoenix, AZ, and with over 1,352 locations in the US, Canada, and Puerto Rico this retail chain specializes in the sale of pet supplies and services such as grooming and dog boarding facilities. This San Diego, CA asset is superbly located just 4.95 miles from the Pacific Ocean in the affluent community of Eastlake. This asset is part of a larger shopping center anchored by Walmart (Walmart opening in June 2017), and is not subject to use restrictions other than grocery and typical obnoxious uses, and is adjacent to a top producing Costco and Home Depot (NAP part of the same shopping center). The site is situated on an elevated position off of East H Street and surrounded by 443,284 residents and 144,158 households in a 5-mile radius. The center is ideally located on the main arterial street of East H Street in close proximity to two major highways with easy access to Interstate 805 and Interstate 5. The surrounding trade area is home to numerous national retailers and home to a mix of middle to upper class single and multi-family homes. PRICING LIST PRICE $10,250,000 NET OPERATING INCOME $434,650 OPERATING EXPENSE DATA ANNUAL RENT $434,650 TAXES NNN INSURANCE NNN CAM NNN NET OPERATING INCOME $434,650 BUILDING SIZE: 17,386 SF LEASE COMMENCEMENT: Estimated December 2016 LEASE EXPIRATION: Estimated December 2026 GRAND OPENING: Estimated December 2016 INITIAL TERM: 10 Years BASE RENT: $434,650 (Yrs 1-5) INCREASES: $478,115 (Yrs 6-10) (10% Rental Bump) CREDIT RATING: B+ S&P Rating OPTIONS: 4 Options of 5 Yrs Each (10% Every 5 Yrs) SALE PRICE: $10,250,000 (4.24% Cap) *May be purchased with adjacent Walmart INVESTMENT SUMMARY / 4

5 H 877 EAST H STREET H Street Traffic Count 48,000 ADT H 877 EAST H STREET / 5

6 PROPERTY DETAILS Address 877 East H Street Chula Vista, CA PARCEL MAP 6 Market/Submarket Chula Vista Price $10,250,000 Total NOI $434,650 Cap Rate 4.24% Building Area 17,386 SF Land Area Acres Access High traffic counts in excess of 48,000 cars per day with signalized driveway into the property. Dense in-fill location made up of an affluent population. Parcel Numbers Year Built 1994 Parking 660 Parking Spaces INVESTMENT SUMMARY / 6

7 H Bonita Vista High School 877 EAST H STREET Southwestern College Terra Nova Plaza 805 Sharp Chula Vista Medical Center

8 SITE PLAN6 LAZO CT NOT A PART *Ground lease under negotiation. Call for details. H STREET SITE PLAN / 8

9 OPTIONS TO RENEW Four (4) Consecutive Periods of Five (5) Years *Rent Shall Increase by Ten Percent (10%) for each renewal term thereafter. First Renewal Term (Year 11-15) Second Renewal Term (Year 16-20) Third Renewal Term (Year 21-25) Fourth Renewal Term (Year 26-30) $525, per annum $578, per annum $636, per annum $699, per annum H 877 EAST H STREET / 9

10 ABOUT PETSMART PetSmart, is an American retail chain operating in the United States, Canada, and Puerto Rico engaged in the sale of specialty pet supplies and services such as grooming and dog training, cat and dog boarding facilities, and daycare. Petsmart also offers a varied selection of animals for sale and adoption We love pets and we believe pets make us better people. Petsmart will be the trusted partner to pet parents and pets in every moment of their lives. PetSmart was founded in 1986 and opened its first two stores in August 1987 under the name PetFood Warehouse in the Phoenix area. In 1989, the name and logo changed from PetFood Warehouse to PetSmart. PetSmart continued to grow and in 1993 went public. In 1994, PetSmart formed Petsmart Charities, Inc., a nonprofit organization dedicated to ending euthanasia and finding homes for homeless pets. PetSmart.com made its debut in July In early 2000, Petsmart remodeled most of its stores in a plan they called Eagle, which changed many stores from a front-half storefront/backhalf warehouse feel to an all-over standard retail market. In August 2005, the company announced that it was re-branding its name from PetSmart to PetSmart. This move, which stressed Smart over Mart, was designed to announce its evolution from a pet supply store to a solutions-oriented company. As of October 2014, PetSmart operated approximately 1,352 stores and various locations with PetSmart s PetsHotels, and Doggie Day Camps. Certain locations also share space with their corporate partner, Banfield Pet Hospital. In December 2014, PetSmart was fully acquired by BC Partners for a price of $8.7 billion. TENANT OVERVIEWS / 10

11 LOCATION Overview

12 H 877 EAST H STREET

13 EASTLAKE OVERVIEW Between the H.G. Fenton Company hired Cadillac Fairview Homes West of Newport Beach to plan, zone, and develop 3,200 acres of land just south of San Diego in the City of Chula Vista. Later, Cadillac Fairview Homes West transferred the project to employees Ron Lane and Dave Kuhn, who formed the Eastlake company and gathered a team to develop the land East H Street is located within the Rancho Del Rey Master Planned Community about one mile East from Interstate 805. H Street is the primary corridor and the gateway arterial connecting the upperclass Eastlake neighborhoods to coastal Chula Vista and the greater downtown San Diego neighborhoods. Rancho Del Rey is one of Chula Vista s premier neighborhoods and is adjacent to Southwestern College and surrounding residential areas. Eastlake Quick Stats $ 3,299,521 82,943 $63,996 $95,513 1,083,811 24,057 Population Income Households Eastlake has been voted San Diego s best new home community in The San Diego Union Tribune reader s poll every year since H 877 EAST H STREET / 13

14 SAN DIEGO OVERVIEW San Diego Quick Stats $ 3,299,521 $63,996 1,083,811 Population Income Households San Diego County, one of the most populous and diverse economic regions in the country. San Diego is home to a thriving, dynamic economy, fueled by high technology, defense & aerospace, biotechnology, tourism & entertainment, professional services and foreign trade and a host of other industries that have helped this region continue to grow and broaden its already deep economic base. San Diego offers industry-leading companies, beautiful year round weather, unmatched quality of life, and access to one of the most skilled and highly educated work forces in the country. The region s unique and unparalleled demographic and economic base make San Diego County a top-tier market positioned for continued long term economic growth. Today, San Diego is a key regional hub for the Southwestern United States, with an estimated 2014 Gross Domestic Product (GDP) of $206 billion, a record high. + I n 2010 San Diego was named an Innovation Hub (ihub) by the State of California due to the region s thriving Innovation Economy. This cluster employs a workforce of more than 143,400. This includes 30,000 from 82 research institutions in the San Diego region. San Diego s research institutions bring in roughly $5.3 billion a year. + San Diego is home to the largest concentration of defense assets in the world, hosting 60% of the U.S. Navy Pacific Fleet and 30% of United States Marine Corps operations. The U.S. military presence provides an economic stabilizer for the regional economy with military related expenditures producing a total economic impact of more than $25.2 billion in The Space and Naval Warfare Systems Center (SPAWAR) is also located in San Diego along with industry leading defense companies such as Northrop Grumman, General Atomics, Lockheed Martin, & Booz-Allen Hamilton. + San Diego s beautiful Mediterranean-like climate entices year-round business visitors and tourists from around the world. The San Diego Convention Center is projected to hold 111 events this year bringing a total economic impact of $1.4 billion to San Diego. Long considered one of the most desirable vacation destinations in the country, San Diego County draws over 33 million visitors annually to unique cultural and entertainment attractions, including the San Diego Zoo, Wild Animal Park, SeaWorld, Torrey Pines Golf Course, LegoLand, La Costa Resort & Spa and the Park Hyatt Aviara. + The Port of San Diego is a world-class port facility and natural harbor that is a conduit to virtually every key industry in the region. Total port-related activity currently comprises the single largest generator of economic activity for the region, accounting for one-sixth of the county s total economic production. + San Diego s agricultural industry provides a considerable contribution to the continued growth of the County s economy as the fourth largest industry sector. The region will see further growth in the production of avocados, nursery products, and decorative plants. SAN DIEGO OVERVIEW / 14

15 San Diego... Known as America's finest city. H 877 EAST H STREET / 15

16 SAN DIEGO AMENITIES To live, work and play in San Diego is to experience geography as destiny. The region s diversity includes a wide range of options for lifestyle, career, education, and recreation. The city s geographic diversity allows people to choose a lifestyle from urban highdistinct personalities and small town centers, even wide-open spaces with rural charm. All within easy reach of major employment and transportation centers. San Diego s diverse economy provides a wide range of career options, encompassing everything from sports, entertainment, and tourism, to highly technical and scientific positions in the region s biotech and technology companies. These industries are both broad and deep, offering upward career growth and mobility. It s a great place for two-career couples because of the diversity in employment sectors. Education in San Diego is as innovative as many of its industries. In addition to the nationally recognized universities that educate and train San Diego s leaders, there are opportunities for lifelong learning that keep San Diegans at the leading edge of technology and entrepreneurship. Quality of life in San Diego is influenced by the year-round sunshine and temperate weather which encourages an active lifestyle with lots of outdoor activities. Outstanding healthcare organizations with state-of-the art clinical and research facilities keep San Diegans healthy. The quality of our healthcare attracts non-residents to San Diego for specialized treatments and world-class care. San Diego s many amenities are the source of its attraction for visitors but residents get to enjoy them every day, including the World Famous San Diego Zoo, Safari Park, SeaWorld, Legoland, and Balboa Park. Nature gave us miles of beaches, mild weather, and natural beauty, but our people have created a wide variety of cultural, arts, and entertainment choices for all ages and interests. You can enjoy concerts, theatre both inside and outside, art festivals, and art walks year-round. Dinner on the harbor or brunch on the beach will likely feature locally sourced ingredients from one of San Diego s many small farms. The growing local craft beer industry is winning awards and attracting attention from national media as well. SAN DIEGO OVERVIEW / 16

17 Up two spots from last year, San Diego beat out startup hubs like Dallas & San Francisco. Source: Inc s RANKED #5 Top 10 Cities for Fast Growth Companies How We Compare Number of unhealthy air quality days for older adults & children. Selected countries of California, 2012 Average Daily Temperature Riverside Sacramento San Diego Santa Clara Los Angeles Imperial Orange 3,055 SUNSHINE HOURS $ $9.2B 34M 16.9M 9.4M $323M TOURISM VISITORS ANNUALLY HOSPITALITY STAYS AIRLINE PASSENGERS VEHICLE TRANSPORATION H 877 EAST H STREET / MI 66 MI 110 MI Distance Laguna Beach Palm Springs 251 MI 465 MI 453 MI Los Angeles Las Vegas San Francisco Sacramento

18 SAN DIEGO BY THE NUMBERS Because of San Diego s proximity to Mexico, the region is becoming increasingly bi-cultural, and the city is one of the most ethnically and culturally diverse places in the nation. More than 1,000 languages are spoken by San Diego residents who have come from all parts of the world to live here. The median age of San Diego s population is 35.6, with over ¼ under the age of 20 and only 11% over 65. SAN DIEGO OVERVIEW/ 18

19 CHULA VISTA OVERVIEW The City of Chula Vista is at the center of one of the richest economic and culturally diverse zones in the United States. The city encompasses over 50 square miles in south San Diego County and is located 7 miles south of downtown San Diego and 3 miles north of the International Border with Mexico. Chula Vista prides itself in a business atmosphere that encourages growth and development. Housing & Population Growth Chula Vista is the second largest city in the San Diego metropolitan area, the seventh largest city in Southern California, the fourteenth largest city in the State of California and the 77th largest city in the United States.. Chula Vista is one of the most active markets for residential real estate development in San Diego County. Numerous apartment and single family residential developments have been completed in the last five years and several are in the planning states. Education The Sweetwater Union High School District, headquartered in Chula Vista and their largest employer, serves as the primary secondary school district. The Chula Vista Elementary School District, the city s second largest employer, is the largest K-6 district in the State of California with 44 campuses and serves publicly educated kindergarten through sixth grade students. Chula Vista is home to one of four private colleges in San Diego County and is host to Southwestern College; a community college founded in 1961, serves approximately 19,000 students annually. Retail In the City of Chula Vista, the small business sector amounts for the majority of Chula Vista s retail business populous. The small business community is attributed to the city s growth and serves as a stable base for its economic engine. Due to its high residential density, Chula Vista s retail market is thriving with neighborhood shopping centers. Larger retail chains expanding nationwide are in the Chula Vista market looking for available locations to add to their internal or franchise portfolio. Economic Factors Major local employment includes trade, manufacturing, education, government, and finance. Chula Vista has experienced continued growth in local trade. Taxable sales have consistently increased over the past 10 years. A significant influence in the local area is the labor force and economic synergism created in Tijuana, Mexico. Bordering Otay Mesa to the south, at the International Border, Tijuana is a major industrial center where 450 Maquiladora plants employ approximately 70,000 people. Multinational Companies in Tijuana include Honeywell, Colgate Palmolive, Hughes Aircraft, Mattel, Sanyo, and Sony. The dynamics of utilizing both inexpensive labor costs in Mexico and drawing skilled labor from the U.S. creates a very efficient business platform. The finished products are shipped to Otay Mesa for processing which is very advantageous for growth and stability in the South Bay area including Chula Vista. Tourism /Entertainment Tourism serves as an economic engine for Chula Vista. The city has numerous dining, shopping and cinema experiences. As with many California cities, Chula Vista features many golf courses. Some of the city s notable attractions included the Chula Vista Nature Center, Otay Valley Regional Park, Cricket Wireless Amphitheater, Busch Gardens Water Park, OnStage Playhouse, the Chula Vista Marina and the U.S. Olympic Training Center. H 877 EAST H STREET / 19

20 LOCATION OVERVIEW / 20

21 EASTLAKE COMPETITIVE SET SUBJECT ANCHORS SIZE/SF SF VACANT OCCUPANCY ASKING RATES NNN S Eastlake Village Marketplace 2225 Otay Lakes Rd. Chula Vista, CA Target, Lowe s Office Depot 423, % $3.50 $0.80 Eastlake Terraces 1360 Eastlake Pkwy. Chula Vista, CA Village Walk at Eastlake 878 Eastlake Pkwy. Chula Vista, CA Super Wal-Mart, Home Depot, Walgreens, Panda Express, Chick Fil-A Trader Joe s, Petco, Henry s, Border s, Pier One 393,000 1, % $3.50 $ ,000 4, % $3.50 $0.80 Notes: Vacancy includes 1,502 SF 2nd floor office/retail space. Eastlake Village Center 2250 Otay Lakes Rd. Chula Vista, CA Vons, Rite Aid, McDonald s 143,481 2, % $3.50 $0.87 Notes: Additional 1,835 SF occupied but available. Eastlake Village Center East 2352 Otay Lakes Rd. Chula Vista, CA Kohl s 106,977 2, % $3.50 $0.87 Bonita Point Plaza Otay Lakes Rd. Chula Vista, CA Ralphs, Rite Aid, Carl s Jr., Wells Fargo 106,445 8, % $ $3.00 $0.80 The Marketplace at Windingwalk 1745 Eastlake Pkwy. Chula Vista, CA Vons, In & Out Burger 104, % $ $2.75 $0.75 The Shops at San Miguel Ranch 2310 Proctor Valley Rd. Chula Vista, CA Albertsons, First Bank 103,000 8, % $ $1.75 $0.86 College Marketplace Otay Lakes Rd. Chula Vista, CA (none) 55,768 1, % $2.25 $0.35 TOTALS & AVERAGES 1,591,971 29, % $2.99 $0.74

22 EASTLAKE 118,231 ADT 121,800 ADT BONITA Otay Lakes Road OTAY RANCH RANCHO DEL REY H 877 EAST H STREET East H Street 35,771 ADT COMPETITIVE SET / 22

23 H 877 EAST H STREET / 23

24 EASTLAKE SALE COMPARABLES SUBJECT TYPE SF BUYER / SELLER DATE, PRICE, PRICE/SF BUILT Westfield Plaza Bonita Plaza Bonita Rd. National City, CA Retail 442,411 Canada Pension Plan Investment Board / Westfield Corporation 03/29/2012 $76,260,571 $ Westfield Plaza Bonita 3050 Plaza Bonita Rd. National City, CA Retail 360,964 Canada Pension Plan Investment Board / Westfield Corporation 03/29/2012 $62,221,149 $ NATIONAL PETSMART WALMART SALES COMPARABLES SUBJECT PURCHASE PRICE TOTAL SF SALE DATE CAP RATE Aliso Creek Road Aliso Viejo, CA $18,093,726 25,952 SF April % 2568 West Commonwealth Ave. Alhambra, CA $9,675,625 39,530 SF May % SALE COMPS / 24

25 Our VISION H 877 EAST H STREET / 25 YOUR FUTURE

26 MARKET EXPERTS Kipp Gstettenbauer, CCIM Senior Vice President Lic. # H 877 EAST H STREET Ryan King Vice President rking@voitco.com Lic. # VOIT REAL ESTATE SERVICES 4747 Executive Drive, Suite 800, San Diego, CA fax Lic: # Licensed as Real Estate Brokers by the CA Bur of Real Estate. The information contained herein has been obtained from sources we deem reliable. While we have no reason to doubt its accuracy, we do not guarantee it Voit Real Estate Services, Inc. All Rights Reserved. Real People. Real Solutions. is a registered trademark of Voit Real Estate Services. H STREET / 26