Towne Square OFFERING MEMORANDUM

Transcription

1 NOT A PART Towne Square OFFERING MEMORANDUM Broker: Eric Treibatch Agent:Edward Chapman Broker Corp ID No (818) x123 Eric@ophirmgt.com License No. CA (818) x128 Edward@ophirmgt.com

2 Table of Contents Executive Summary Investment Data...2 Investment Overview...4 Property Description Area Maps...6 & 7 Site Plan...8 Parcel Map...9 Financial Overview Rent Roll...11 & Projected Income & Expense...13 Tenant Summaries...14 Market Overview Demographic Summary...16 The information contained in this Marketing Brochure is strictly confidential and is intended to be reviewed only by the party receiving it from Ophir Management Services. This information should not be made available to any other person without the written consent of Ophir Management Services. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers and to establish only a preliminary interest in the subject property. The information in this Marketing Brochure is not a substitute for a thorough due diligence investigation. Ophir Management Services 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, the compliance with State and Federal regulations, the physical condition of the improvements, or the financial condition or business prospects of any tenants, including tenants plans or intentions to continue occupancy at the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Ophir Management Services has not verified, and will not verify, any of the information contained herein. Ophir Management Services 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 contained herein.

3 76,000 Vehicles per Day combined

4 Executive Summary - Investment Data Towne Square Shopping Center East Palmdale Blvd Palmdale, CA Price $21,000,000 CAP Current 7.8% CAP Pro Forma 12.3% Occupancy Current 77% Gross Leasable Area 147,688 SF Price/SF $142 Year Built 1987 & 1989 Zoning C-3, R1, RP APNs , 039, 031, 055 Lot Size Parking 21 AC 906 spaces Down Payment $8,750,000 Financing Annual Debt Service Existing CMBS $777,036 Loan APNs: , % Interest Due 2025 Annual Payment: $420,636 Balance: $6,750,000 Financing APNs: , 039 Existing Traditional Loan 4.0% Interest Due 2022 Annual Payment: $356,400 Balance: $5,500,000 See Notes on Page 13 Totals Loan Balances: $12,250,000 Annual Payments: $777,036 Down Payments: $$8,750,000 AS IS Cash Flow: $914,526 AS IS Cash-on-Cash: 10.45% 2

5 Executive Summary - Investment Data Towne Square West East Palmdale Blvd Palmdale, CA Price $9,600,000 CAP Current 7.9% Occupancy Current 83% Gross Leasable Area 56,309 SF Price/SF $170 Lot Size 346,033 SF Year Built 1989 Zoning C-3, R1 APNs & 039 Parking 306 Financing Existing Loan $5,500, % Interest Only Due 2022 Annual Payment: $356,400 Towne Square East East Palmdale Blvd Palmdale, CA Price $11,400,000 CAP Current 7.7% Occupancy Current 71% Gross Leasable Area 91,379 SF Price/SF $125 Lot Size 603,333 SF Year Built 1987 Zoning RP, C-3 APNs & 055 Parking Financing 600 spaces Existing Loan Assumption $6,750, % Interest Due 2025 Annual Payment: $420,636 See Notes on Page 15 Blended Figures East Palmdale Blvd Palmdale, CA Price $21,000,000 CAP Current 7.8% CAP Pro Forma 12.3% Occupancy Current 77% Gross Leasable Area 147,688 SF Price/SF $142 Lot Size Acres Parking 906 spaces Down Payment $8,750,000 Annual Debt Service $777,036 3

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7 Executive Summary - Investment Overview Ophir Management Services has been selected to exclusively market for sale the Towne Square Shopping Center, a 147,612 square foot multi-tenant shopping center located on a major commercial thoroughfare in Palmdale, California. Towne Square Shopping Center sits on nearly 22 acres of land, including over five acres of raw, buildable land. Located just two miles from the Antelope Valley Freeway (California State Route 14), Towne Square features seven points of ingress and egress from Palmdale Boulevard, including 22 nd Street, a signalized intersection feeding into the center. The population in a five mile radius of Towne Square is estimated at 137,301 (2014) and the average household income is $65,457 (2014). Combined Traffic Counts along this busy stretch of Palmdale Boulevard and 20 th Street exceed 76,000 vehicles per day. Towne Square has a diversified mix of tenants including the United States Post Office, Goodwill, Universal Fitness, Aaron s Rent to Own, IHOP, Tokyo Steak, dentist, nail salon, insurance offices and more. The Shopping Center is shadow anchored by a 99 Cents Only Store and Superior Grocers, two major anchors providing additional vehicle traffic through shared parking lots. Towne Square is a truly exceptional investment providing the new Owner the rare opportunity to acquire a beautifully renovated and well-managed shopping center at a high CAP rate, with vacant square footage to lease for additional cash flow. Diversity of risk with over 30 tenants, including restaurants, stores, service and medical Major tenants include United States Post Office, Goodwill Thrift Store, Universal Fitness, and IHOP Shadow anchored by 99 Cents Only Store and Superior Grocers Newly constructed Antelope Valley College Campus located immediately across the street on E. Palmdale Blvd Harbor Freight recently opened a new retail store directly across from Towne Square on E. Palmdale Blvd Nearly $500,000 in major capital improvements and $2,000,000 in tenant improvements in the last three years Tremendous upside through leasing vacant square footage Three-tenths of a mile of street frontage and a signalized intersection feeding directly into the middle of the shopping center Seven points of ingress and egress allow for a desirable flow of traffic Universal Fitness Club is on a new 30 year lease with annual 3.50% increases Two miles from California State Route 14, a major freeway running north and south through the Antelope Valley Service and restaurant tenants are resistant to internet retail effects Recognized locally as the major center on Palmdale Boulevard East for dining and services Additional foot traffic from United States Post Office and Shadow Anchors 4

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9 Property Description Area Maps 6

10 Property Description Area Maps 7

11 Property Description Site Plan A B C A J L K I H G F E NAP NAP 2140 A B C M N O PQ RST A B C 2220 D E F 2260 A B C F D J C A D B UNIT# 2140B 2140M 2140PQ 2260B 2260D 2260F VACANCIES UNIT SIZE UNIT# 5,265 SF 2270A Available 1,731 SF 2270C 2,302 Occupied SF 2270D 1,627 SF 2270E 4,435 SF 2270F 4,882 SF 2270H 2270L UNIT SIZE 1,105 SF 1,582 SF 1,475 SF 1,025 SF 1,589 SF 964 SF 1,037 SF

12 Property Description Parcel Map

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14 Financial Overview Rent Roll Towne Square West APNs: , 039 Accelerated through April 2018 TOWNE SQUARE WEST 4/2018 Unit Tenant Sq. Ft. Lease From Lease Expire curity Depo Rent/SqFt Rent NNN/SqFt NNN Total/SqFt Total Rent Increase Date Increases Options 2042 Aarons Rent 5,400 5/21/2009 8/31/ , , ,046 9/1/2018 3% ann 1 x ABC Tokyo Steak Restaurant 5,337 1/1/ /31/2026 5, , , ,768 1/1/2019 3% ann ANTENNA Sprint 6/11/1999 6/10/ , ,021 6/10/2018 3% ann 3 x O Acceptance Insurance 1,187 1/28/2008 1/31/ , ,850 fixed 2140RSTU Goodwill Industries of S. California 8,000 2/1/2014 1/31/ , , ,305 CPI 2%-5% ann 2140N Star Nails Spa 1,187 3/1/2013 2/28/2023 5, , ,922 3/1/2019 CPI >4% ann RECYCLIN Green Cloud Recycling 1,000 6/1/2013 5/31/2018 2, , ,850 fixed $250 ann 2140E1 Access Dental Services 3,000 8/15/2015 8/14/ , , ,662 11/15/2018 3% ann 2 X C-J Opportunities for Learning 8,800 3/1/2016 2/28/ , , , ,387 3/1/2019 CPI >3% ann 2072 LA County Health Organization 7,000 7/27/ /26/ , , ,035 7/27/2018 CPI >3% ann 2 x LaPalma Restaurant 6,100 3/10/2017 9/30/ , , , ,500 3/1/2019 fixed 2 x M VACANT 1, P VACANT 2, VACANT 5, TOTAL 100% 56,309 51, , , ,346 11

15 APNs: , 031 Financial Overview Rent Roll Towne Square East TOWNE SQUARE EAST 4/2018 Unit Tenant Sq. Ft. Lease From Lease ExpireSecurity Deposi Rent/SqFt Rent NNN/SqFt NNN Total/SqFt Total Rentncrease Dat Increases Options 2220A Dry Clean Express 1,500 7/22/2008 9/30/2018 2, , ,444 CPI 3%-7% ann 1 X D Best Barber's Shop 1,550 6/10/2010 7/31/2020 2, , ,752 9/1/2018 CPI >4% ann 1 x E IHOP #749 4,560 11/1/ /31/2018 6, , , , E Typicos Martha/ att. Carlos Mejia 1,329 4/19/2011 4/30/2021 4, , ,167 4/1/2019 CPI 4% ann 2220F United States Post Office 7,612 3/1/2010 2/28/ , ,185 CPI 3% ann 1 x F Double's Burgers 1,630 7/20/2009 4/30/2028 5, , ,087 5/1/2018 CPI 2%-6% ann 1 x B Wigs and Accessories 800 9/1/2002 8/31/2020 1, , ,421 9/1/2018 CPI 3% ann 2250C Sheng Zhan Chinese Restaurant 2,986 7/15/2013 7/31/2018 3, , ,600 CPI 5% ann 1 X C Pan de Vida Bakery 1,976 8/18/ /31/2021 5, , ,428 11/1/2018 CPI 3% ann 1 X A Clear Water Discount Store 1,105 10/1/2012 9/30/2019 1, , ,291 10/1/2018 CPI 3% ann 2270G Mt.Everest Ins-Art Iriana Insurance /1/2013 9/30/ , ,596 10/1/2018 CPI >3% ann 2270H VACANT I Palmdale Liquor/Jr. Market 1,965 9/26/ /31/2022 2, , ,413 CPI >3% ann 2 x J Yummy Donuts 1,000 12/29/2008 3/31/2019 5, , ,989 4/1/2019 3% ann ANTENA Pacific Bell Wireless c/o T-Mobile USA 1/1/ /30/ , ,521 2/1/ % every 5 yr 4 X E VACANT 1, FI-B VACANT A Pedro's Seafood 1,816 8/1/2014 8/31/2019 8, , ,411 8/1/2018 CPI >4% ann 2220C Maribel Estrada 844 9/1/2014 8/31/ , ,650 9/1/2018 CPI >6% ann 2220B RS Wireless LLC 910 6/1/2015 8/31/2020 1, , ,525 6/1/2018 CPI >4% ann 2210D Universal Fitness Club 30,000 9/9/2015 9/8/ , ,101 10/8/2018 CPI >3% ann 2 x A Cris S. Araula DBA Raizel Ramen 1,100 1/2/2017 1/1/ , , ,806 1/1/2019 CPI >5% ann 2270B Mitchell Tax Professionals 1,100 9/1/2017 8/31/2022 1, , , CPI >5% ann 2270D VACANT 1, C VACANT 1, F VACANT 1, B Select Staffing 1,627 11/1/ /31/2022 2, , , K-a VACANT 1, K Gladstone Insurance Services 1,100 6/1/2016 3/31/ , ,400 4/1/2019 fixed 2260J-1 VACANT 2, J VACANT 3, D VACANT 4, FI VACANT 4, TOTAL 100% 91,379 74, , , , Accelerated through April 2018

16 Financial Overview 10 Year Pro Forma-Towne Square East Schecduled Base Rental Revenue Base Rental Revenue 1,943,730 2,044,561 2,122,067 2,183,534 2,246,964 2,315,169 2,411,828 2,500,323 2,572,370 2,646,778 Lease Up 90,000 96, , , ,000 35,445 37,195 38,966 40,737 0 Schecduled Base Rental Revenue 2,033,730 2,140,561 2,224,067 2,291,534 2,360,964 2,467,238 2,578,450 2,694,770 2,816,350 2,900,840 Expense Reimbursement Revenue Real Estate Taxes 230, , , , , , , , , ,526 Insurance 12,976 13,106 13,237 13,369 13,503 13,638 13,774 13,912 14,051 14,192 CAM 195, , , , , , , , , ,157 Expense Reimbursement Revenue 438, , , , , , , , , ,875 Total Effective Gross Revenue 2,472,696 2,585,868 2,675,817 2,749,831 2,825,914 2,938,949 3,057,033 3,180,335 3,309,012 3,400,715 Vacancy % 19.6% 16.2% 12.8% 9.4% 6.0% 5.0% 5.0% 5.0% 5.0% 5.0% Operating Expenses Real Estate Taxes 315, , , , , , , , , ,511 CAM (incl. 3% Mgt Fee) 409, , , , , , , , , ,333 Total Operating Expense 724, , , , , , , , , ,843 Net Operating Income 1,748,682 1,854,613 1,937,250 2,003,879 2,072,502 2,178,003 2,288,477 2,404,094 2,525,008 2,608,871 Debt Service Principal & Interest 777, , , , , , , , , ,036 Pre Tax Cash Flow 971,646 1,077,577 1,160,214 1,226,843 1,295,466 1,400,967 1,511,441 1,627,058 1,747,972 1,831,835 Cash on Cash Return 11.10% 12.32% 13.26% 14.02% 14.81% 16.01% 17.27% 18.59% 19.98% 20.94% Principal Reduction (est.) 240, , , , , , , , , ,319 Total Return 13.85% 15.20% 16.28% 17.20% 18.14% 19.51% 20.95% 22.45% 24.03% 25.19%

17 Financial Overview 2018 Projected Income & Expense Notes on Current Revenue and Expenses Base Rents Reflect April 2018 and all NNN Tenants Paying Property Tax Increase Management 3% Property Tax Reflects 1.5% of Asking Price Other expenses includes security alarm, postage, bank charges, dues & fees, licenses & permits, and other taxes Excludes capital expenses and one time/discretionary expenses like architectural services, legal services and accounting services Assumptions on Pro Forma Base Rent Annual Increase 3% Property Tax Annual Increase 1% Insurance Annual Increase 1% CAM Annual Increase 2% 13

18 Financial Overview 2018 Projected Income & Expense Towne Square West East Palmdale Blvd Palmdale, CA Income Base Rents $767,808 NNN $244,347 New Property Tax Recapture $42,234 Total Income $1,054,389 Towne Square East East Palmdale Blvd Palmdale, CA Income Base Rents $1,175,412 NNN $137,700 New Property Tax Recapture $14,688 Total Income $1,054,389 Expenses CAM $110,734 Property Tax $144,000 Insurance $7,035 Utilities $2,600 Repairs & Maintenance $520 Management Fee $22,566 Other $4,153 Total Expense $292,076 Expenses CAM $205,909 Property Tax $171,000 Insurance $10,668 Utilities $4,687 Repairs & Maintenance $5,494 Management Fee $34,808 Other $16,620 Total Expense $450,606 Net Operating Income $762,314 Net Operating Income $878,156 14

19 Financial Overview 2018 Projected Income & Expense Towne Square Shopping Center East Palmdale Blvd Palmdale, CA Income Base Rents $1,943,220 NNN $382,047 New Property Tax Recapture $56,922 Total Income $2,382,189 Expenses CAM $316,643 Property Tax $315,000 Insurance $17,703 Utilities $7,287 Repairs & Maintenance $6,014 Management Fee $57,795 Other $20,773 Total Expense $742,682 Net Operating Income $1,639,507 15

20 Financial Overview Tenant Summaries Universal Fitness Club is a state-of-theart fitness facility including weight training, cardio equipment, spin room, kid s club, and much more. With locations in Palmdale and Panorama City, Universal Fitness recently doubled its size at Towne Square from 15,000 to 30,000 square feet. Tokyo Steak restaurant first opened in Lancaster, California over 30 years ago. Since then it has successfully expanded to Palmdale and Victorville. Tokyo Steak offers teppanyaki style dining on an open grill, with a full sushi menu. This Palmdale location has operated since Since 1958, IHOP has been the place families come to enjoy world famous pancakes and a variety of breakfast and other items. There are over 1,650 IHOP locations worldwide, including all 50 states. This successful IHOP franchise has operated since Goodwill Industries International was founded in 1902 to provide employment, job training, job placement services, and other community-based programs. Funded by a vast network of over 3,000 thrift stores, Goodwill operates in 17 countries. This Palmdale location has operated successfully since In 1775 the United States Post Office was founded to deliver correspondence among Americans. Today the Post Office utilizes modern tools like free Apps and competitive pricing. This Palmdale location has operated since 1989 and is the largest and busiest branch in Palmdale. Aaron s is the North American leader in sales and lease ownership of common household needs. From furniture to appliances, Aaron s provides affordable access to necessary items. Founded in 1955, Aaron s now has over 2,000 locations and went public in This Palmdale location has operated since Doublz Burgers is a chain of fast food restaurants serving breakfast, lunch and dinner in the Los Angeles area. With nine locations in the Greater Los Angeles Area, Doublz Burgers is know locally as Your Favorite Place to Eat. This Palmdale location has operated successfully since Established in 1997, LA Care Health Plan is an independent agency created by the State of California to provide health coverage for low-income Los Angeles County residents. Serving over 2 million members, LA Care is the nation s largest publicly operated health plan. 16

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22 Market Overview Demographic Summary Palmdale is a city in the Antelope Valley of northern Los Angeles County. The San Gabriel Mountains separate Palmdale from the city of Los Angeles, and California State Route 14 is the main artery between Los Angeles and Palmdale. Palmdale is located in the High Desert, where summers are dry and winters are cool and windy. With over 300 days of sunshine per year, Palmdale offers the typical Southern California climate and affordable living within close proximity to Los Angeles proper. The most important industry for Palmdale is the aerospace industry. Referred to as the aerospace capital of the United States, Palmdale is the site of research, development, assembly, flight testing and servicing/modification for the Space Shuttle and other US Air Force and NASA projects. Recently, the tax benefits of the Antelope Valley Enterprise Zone have attracted other businesses as well. Towne Square Shopping Center Demographic Information (2014): 1 Mile 3 Mile 5 Mile Population 14,573 88, ,302 Households 4,248 24,981 38,248 Average Household Income $48,366 $56,137 $65,457 Major Employers Lockheed Martin Northrup Grumman Corporation Boeing Company Kroger Company Cedars-Sinai Medical Center Providence Health & Services Target Bank of America Corporation Walmart Antelope Valley 17

23 Broker: Eric Treibatch Broker Corp ID No (818) x123 Agent:Edward Chapman License No. CA (818) x128