7-Eleven Corporate Store | Pittsburgh, PA · PDF file7-Eleven Corporate Store | Pittsburgh, PA Offering Memorandum EXCLUSIVE LISTING Offering Memorandum 2% Annual Rent Increases 7-Eleven

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7-Eleven Corporate Store | Pittsburgh, PAOffering MemorandumEXCLUSIVE LISTINGOffering Memorandum

2% Annual Rent

Increases

7-Eleven Corporate Store | Pittsburgh, PA

ANDREW FALLON EXECUTIVE MANAGING DIRECTOR

(703) 787-4733 [email protected]

C A L K A I N .C O MC A L K A I N .C O MJONATHAN W HIPP PRESIDENT & CEO

PA LIC.#RMR001738

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7-Eleven Corporate Store | Pittsburgh, PAOffering Memorandum

Why buy this 7-Eleven?

Rare 2% Annual Rent Bumps7-Eleven’s rent increases annually by 2%, bumping up every September 1st. This is a unique lease structure, which is more favorable and economically stronger than the typical 10% bumps every 5 years.

Compounding InterestThe benefit of the 2% annual bumps, results in a higher yield over the life of the investment, and should allow for better re-sale value based on the increasing rents. By way of example, the average cap rate for this lease over a 10-year period would be 24 bps higher than a lease with 10% bumps every 5 years.

Absolute NNN Lease (Fee Simple)A key characteristic to this investment is the NNN lease, whereby 7-Eleven is responsible for all maintenance, and operating expenses. Additionally, the fee simple ownership allows for depreciation of the improvements and could qualify for accelerated depreciation.

Investment Grade Credit7-Eleven Inc. (NYSE:SE) is an investment grade tenant based on a AA- rating by S&P. Valued at $7.49 billion with over 58,300 stores worldwide.

Major MSA LocationPittsburgh has the 26th largest MSA in the United States with population close to 2.4 million. Population counts within a 5-mile radius are 150,000 and traffic counts exceed 35,000 VPD. This 7-Eleven is located on a hard-corner, with 3 points of ingress/egress at two separate traffic lights. Its access and visibility are key for commuters on Pittsburgh’s Green Belt thoroughfare - home to some of the area’s wealthier suburbs of Pittsburgh. Nearby redevelopments include high-end tenants like Saks Off Fifth, Nordstrom Rack and The Container Store.

Long Lease & Operating HistoryThis location has been operating as a gas station & convenient store for 37 years. 7-Eleven has been operating the site since 2012, and has 13 years remaining on the lease. The total rent collected during the remaining primary term of the lease will be in excess of $1,420,000.

It offers more than most 7-Eleven on the market...

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1102 Perry Hwy | Pittsburgh, PA 15237

Asking Price $1,795,000 | Cap Rate 5.40%

Net Operating Income (NOI) $96,927

Rent/Month $8,077

Rentable Square Feet 1,908+/- SF

Land Area 0.74+/- Acres

Tenant Name 7-Eleven

Credit Rating S&P: AA-

Guarantor Corporate

Ownership Type Fee Simple

Lease Type NNN

Landlord Responsibilities None

Store Open/Remodel 1980/2012

Lease Term Remaining 13 Years

Rent Commencement September 2, 2010

Lease Expiration August 31, 2030

Increases 2% Annually

Options One (1), Five (5) Year / One (1), 4.9 Year

Investment Highlights

• Rare 2% annual rent increases

• 13 years remaining on the primary lease term

• Absolute NNN lease

• Fee simple ownership of improvements; potential for accelerated

depreciation (consult your accountant)

• 7-Eleven strategically acquired the site in 2012, part of EZ Energy

portfolio

• Strong investment grade credit S&P: AA-

• Located on a hard corner signalized intersection with traffic counts of

16,000+ VPD

• High population counts of 150,000 within 5 miles & average HH income of

$88,000 within 3 miles

Compounding Rent Growth w/ 2% Annual Increases

Years Increases

AVG CAP Next 5 Years 5.62%

AVG CAP Over 10 Years 5.91%

AVG CAP Over Term (13 yrs) 6.10%

Total Rent Over Primary Term $1.42M+

Financial Summary

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Rent Roll

Term Annual Increases Annual Rent Monthly Rent Cap

Rate

9/2015 - 8/2016 2% $93,163.44 $7,763.62

9/2016 - 8/2017 2% $95,026.71 $7,918.89

9/2017 - 8/2018 2% $96,927.24 $8,077.27 5.40%

9/2018 - 8/2019 2% $98,865.79 $8,238.82 5.51%

9/2019 - 8/2020 2% $100,843.10 $8,403.59 5.62%

9/2020 - 8/2021 2% $102,859.97 $8,571.66 5.73%

9/2021 - 8/2022 2% $104,917.16 $8,743.10 5.84%

9/2022 - 8/2023 2% $107,015.51 $8,917.96 5.96%

9/2023 - 8/2024 2% $109,155.82 $9,096.32 6.08%

9/2024 - 8/2025 2% $111,338.93 $9,278.24 6.20%

9/2025 - 8/2026 2% $113,565.71 $9,463.81 6.33%

9/2026 - 8/2027 2% $115,837.03 $9,653.09 6.45%

9/2027 - 8/2028 2% $118,153.77 $9,846.15 6.58%

9/2028 - 8/2029 2% $120,156.84 $10,013.07 6.69%

9/2029 - 8/2030 2% $122,927.18 $10,243.93 6.85%

Total Rent To Be Collected $1,422,564

Lease Summary

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Demographics 5 Mile Radius

2016 Population 149,949

2016 Average HH Income $86,247

Combined Traffic Count 35K VPD

Pittsburgh, PA

Baltimore, MD

Columbus, OH

Location Overview

Washington, DC

Morgantown, WV

Canton, OH

Philadelphia, PA

Subject Site

1102 Perry Hwy | Pittsburgh, PA

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Three Degree Rd 19,176 VPDPerry Hw

y 16,237 VPD

Pines Plaza

Subject Site


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Ross Park Mall

Pines Plaza

North Hills Village Mall

Shopping Center

Ross Towne Center

McIntyre Square

The Block Northway

Downtown Pittsburgh 10 Miles

McDonald’s

Subject Site


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Subject Site

Subject SiteAllegheny County belt system The Allegheny County Belt System color codes miscellaneous county roads to form a unique system of routes in Allegheny County, Pennsylvania, and around the city of Pittsburgh.

Unlike many major American cities that utilize number-coded limited-access roads to form belt systems, the belts in the Allegheny County Belt System are not intended to be used as high-speed routes. Rather, the belt system is to be used as a navigational aid for motorists in unfamiliar portions of the county. Roads that make up the Belt System retain their previous names. The five original routes are, from outermost to innermost, the Red, Orange, Yellow, Green, and Blue Belts. The Purple Belt was not part of the original system and was added later.

Pittsburgh’s Green BeltThis semi-circle arcs through the northern and eastern Pittsurgh’s Green Belt suburbs. The 39-mile belt begins in the northwestern portion of Allegheny County in Emsworth and ends in McKeesport on the Yellow Belt. It is the only belt that has a terminus on another belt. Travelers along this belt will find a contrast in the communities it visits. The swank suburb of Fox Chapel, home to many of the area’s wealthiest individuals, differs greatly from the older industrial towns of the Mon Valley such as Duquesne and McKeesport. Along its course, attractions such as Kennywood Park and the Pittsburgh Zoo are found.

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Site Photos

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Site PhotosSurrounding Retail

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World’s Largest Convenience RetailerWhat started out as an icehouse in Dallas, Texas,

back in 1927 has grown and evolved into the

world’s largest operator, franchisor and licensor of

convenience stores.

7-Eleven (7-11) is an international chain of

convenience stores that operates, franchises and

licenses some 58,300 stores (as of January 2016) in

18 countries.

For the first time, 7-Eleven, Inc. joined BrandZ’s

10th annual list of the most valuable global brands

for 2015, the only convenience-store chain to make

the list. 7-Eleven claimed the No. 17 spot on the

retail category list, valued at $7.49 billion.

Formerly known as the Southland Corporation, privately owned 7-Eleven, Inc., is now a wholly-owned subsidiary of Seven-Eleven Japan Co., Ltd in Tokyo, Japan. Headquartered in downtown Dallas, Texas, 7-Eleven, Inc., is now the world’s largest operator, franchisor, and licensor of convenience stores. Operating globally, 7-Eleven stores meet the everyday needs of the convenience-oriented customers with excellent store locations, speedy transactions and a consumer friendly shopping environment.

7-Eleven stores offer a selection of approximately 2,500 different products and services, including beverages, groceries, tobacco items, lottery tickets and more. Of all its proprietary products, 7-Eleven sells more fresh-brewed coffee than anything else – 1.1 million cups each day. That’s more than 10,000 pots of coffee an hour every hour of every day of the year.

Operating as extended hour retail stores, 7-Eleven is best known for their signature brands, Slurpee® and Big Gulp® beverages, and Big Bite® hot dogs. In addition, many 7-Elevens provide fueling stations, making it one of North America’s largest independent gasoline retailers. 7-Eleven has the largest ATM network of any retailer in United States.

A world leader7-Eleven doors are always open, and their friendly store teams are ready to serve you. Come in to any 7-Eleven® store and you’ll find a broad selection of fresh, high-quality products at an everyday fair price, along with speedy transactions in a clean and friendly shopping environment.

Tenant Snapshot

# of Locations 58,300+

Stock Symbol

NYSE: SE

Credit Rating S&P: AA-

About 7-Eleven

Tenant Overview

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7-Eleven News

7-Eleven buys 125 Pittsburgh, Cleveland area stores

International convenience store operator 7-Eleven Inc. is expanding its footprint in the Pittsburgh and Cleveland markets as it goes head-to-head with Canada’s largest convenience store chain for dominance in the United States.

Dallas-based 7-Eleven said Friday that it had acquired 125 convenience stores in the two markets from two companies, Handee Marts Inc. of Gibsonia and EZ Energy USA Inc. of Seven Hills, Ohio.

“There’s a real horse race going on, in terms of the top two stores,” said Jeff Lenard, a spokesman for the National Association of Convenience Stores, a trade group based in Alexandria, Va.

Seven-Eleven is squaring off against Quebec-based Alimentation Couche-Tard Inc., which owns and franchises about 3,500 Circle K stores in the United States, Lenard said. Seven-Eleven owns or franchises about 6,925 stores in the United States.

“They’re continuing to grow for similar reasons,” he said. “The convenience store business has proven to be recession-resistant.”

The cost of the acquisitions was not disclosed.

In the Handee Marts deal, 7-Eleven acquired the company and its 58 7-Eleven-branded stores in the Pittsburgh and Cleveland markets. Handee Marts was owned by Turner Dairy Farms Inc. of Penn Hills.

“One of the key drivers of 7-Eleven’s business is to have fresh foods delivered daily,” said Mike Triantafellou, Handee Marts CEO. “We didn’t have the numbers to put that kind of distribution in place.”

Triantafellou said he expects 7-Eleven to build a distribution center, with bakery and fresh food commissary, accessible to the Pittsburgh and Cleveland markets to supply the stores “because now they have enough stores to make that work.”

In a statement announcing the deals, 7-Eleven’s chief financial officer, Stan Reynolds, said, the acquisitions give the company “a strong presence immediately in both the Cleveland and Pittsburgh areas. We also are interested in looking at other locations in these markets to further expand our presence there.”

The deal with EZ Energy includes the company’s 67 Easy Trip and BP branded convenience stores and EZ Energy’s wholesale fuel distribution business, 7-Eleven said.

EZ Energy USA was owned by EZ Energy Ltd., of Israel, which had been looking to unload its U.S. operations since earlier this year when it missed a bond payment.

Officials with EZ Energy USA could not be reached for comment.

The two deals announced Friday follow an acquisition in September by 7-Eleven in which the company bought 74 7-Eleven branded stores, mostly in West Virginia, from Prima Marketing LLC, of Fairmont, W.Va.

Lenard said convenience stores are increasingly positioning themselves as fresh-food stores, and “7-Eleven is well positioned to deliver upon that.”

But it takes a large company to take on Pittsburgh’s two dominant store operators that specialize in fresh food: Sheetz and Giant Eagle Inc.’s GetGo, which Lenard said “are among the best in the country.”

Handee Marts and EZ Energy probably didn’t have a big enough footprint, he said. But “tying into 7-Eleven will allow the brand to compete head-on with these two chains.”

Alex Nixon is a staff writer for Trib Total Media 412-320-7928 or [email protected]

http://triblive.com/home/2767257-74/eleven-stores-convenience-company-

energy-inc-cleveland-pittsburgh-branded-handee

http://triblive.com/home/2767257-74/eleven-stores-convenience-company-energy-inc-cleveland-pittsburgh-branded-handee



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7-Eleven News

7-Eleven Growing Rapidly in Ohio, Penn7-Eleven Inc. completed two more acquisitions, expanding its U.S. store portfolio. The company has closed deals with EZ Energy USA Inc. to purchase 67 retail locations in the Cleveland, OH , and Pittsburgh, PA , markets; and with its licensee, Handee Marts Inc., to acquire 58 7-Eleven convenience stores in those same markets as well as locations in northern West Virginia and western Maryland.

The EZ Energy purchase includes Easy Trip and BP convenience stores and the wholesale fuel-supply business that supports 20 of EZ Energy’s dealer-operators. EZ Energy locations offer mostly BP- and Marathon-branded gasoline.

Handee Marts has 38 stores offering gasoline under a variety of brands, including Exxon, Gulf, BP, Valero and Sunoco.

EZ Energy USA Inc. in Seven Hills, OH , operates the Easy Trip stores. Its parent company is EZ Energy Ltd. in Israel. The Handee Marts office is in Gibsonia, PA.

“These two acquisitions provide 7-Eleven with an excellent opportunity to have a strong presence immediately in both the Cleveland and Pittsburgh areas,” said Stan Reynolds , 7-Eleven’s executive vice president and CFO. “We also are interested in looking at other locations in these markets to further expand our presence there.”

Last month, 7-Eleven closed a separate deal with another of its domestic licensees, Prima Marketing, which added 74 locations to 7-Eleven’s roster of stores, mostly in West Virginia , but also in Ohio , Pennsylvania and Kentucky . Currently, the company operates and franchises 181 stores in Pennsylvania and 11 in Ohio.

CoStar

http://www.costar.com/News/Article/7-Eleven-Growing-Rapidly-in-Ohio-

Penn/142440

http://www.costar.com/News/Article/7-Eleven-Growing-Rapidly-in-Ohio-Penn/142440

http://www.costar.com/News/Article/7-Eleven-Growing-Rapidly-in-Ohio-Penn/142440

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Pittsburgh, PA

Located at the confluence of the

Allegheny and Monongahela Rivers

at the head of the Ohio River,

Pittsburgh was referred to as the

“Gateway to the West” from its

early days as a frontier village.

Easily navigable waterways with an

abundance of natural resources, (coal, timber, natural gas, iron and limestone)

helped Pittsburgh become the industrial center for a growing nation.

Today Pittsburgh welcomes visitors from around the globe. Its strengths lie in its

authenticity as an all-American city, and its genuine, hard-working and welcoming

sense of community that has transformed it into one of the most surprisingly

beautiful and progressive cities in the USA. To fully relive Pittsburgh’s past, visit

the Senator John Heinz History Center for an immersive historical experience.

Pittsburgh continues rise to the top of cities worth visiting. Recently named

one of the “Best Places to Travel in 2016” by Travel + Leisure, rated the nation’s

“No. 1 Food City” by Zagat and named among the “Top Destinations on the

Rise” by TripAdvisor, it’s easy to see why everyone’s talking about Pittsburgh.

Outstanding attractions and amenities, award-winning restaurants and world-

class accommodations are among the biggest draws. Add to that the friendly

people, affordability and walkability, you’ve got the perfect recipe for an ideal

getaway. Come celebrate Pittsburgh and see for yourself.

Market Overview

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Radius 1 Mile 3 Miles 5 MilesPopulation2016 Population 9,837 62,228 149,949

2021 Population 9,777 62,717 151,056

2016 Male Population 45.9% 47.6% 47.8%

2016 Female Population 54.1% 52.4% 52.2%

2016 Median Age 50.8 45.2 44.2

Households2016 Total Households 4,915 26,923 64,786

2021 Total Households 4,913 27,255 65,580

2016 Average Household Size 1.94 2.26 2.28

Median Household Income2016 Median Household Income $51,864 $67,744 $63,179

2021 Median Household Income $57,916 $78,098 $73,181

2016-2021 Annual Rate 2.23% 2.89% 2.98%

Average Household Income2016 Average Household Income $67,715 $88,009 $86,247

2021 Average Household Income $75,005 $97,180 $94,473

2016-2021 Annual Rate 2.07% 2.00% 1.84%

Per Capita Income2016 Per Capita Income $34,424 $38,627 $37,757

2021 Per Capita Income $38,279 $42,792 $41,520

2016-2021 Annual Rate 2.15% 2.07% 1.92%

Demographics

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Who Are We? We are a national commercial real estate firm that provides consulting and brokerage services to both private and institutional clientele with an expertise on triple net lease investments. We pride ourselves on being a world class leader by providing our clients a full array of commercial real estate investment brokerage and asset management solutions, including advisory, research, estate planning and wealth management.

We have built solid relationships throughout our decades of experience and innovation, implementing long-term allocation within the context of each client’s particular risk tolerance and identifying how best to acquire and dispose of income producing properties for each entities’ specific set of investment criterion. At Calkain, our foresight and past performance are leading the net lease investment industry.

Our HistoryLike most success stories, Calkain was formulated from humble beginnings. Jonathan W. Hipp, President and CEO, took the initiative to build upon his decades of experience and performance and left a large international brokerage firm to become an independent and innovative leader within the triple net lease investment community. Armed with a sole employee and a single office, the firm has grown exponentially since its infancy in 2005.

With the growth in staff, seasoned professionals have been attracted to Calkain’s model of innovation, entrepreneurship and the fostering of long-lasting and meaningful relationships. Industry experts have joined Calkain in the hopes of implementing the skills they have honed in complementary aspects of real estate investment.

Through a tremendous endeavor, tireless hours have been committed to continually prove that Calkain is America’s Net Lease Company®. Its countless accolades received from the world’s leading business publications, including Forbes™, Fortune™ and the New York Times™ have confirmed that Calkain is a true leader in triple net lease investing services.

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–Jack Genende, Partner | U.S. Realty Advisors, LLC. (USRA)

$11.5 Billion in Closed Transactions

$300 Million

in Active Listings

About Calkain

ANDREW FALLON EXECUTIVE MANAGING DIRECTOR

(703) 787-4733 [email protected]

C A L K A I N .C O MC A L K A I N .C O MJONATHAN W HIPP PRESIDENT & CEO

PA LIC.#RMR001738

DISCLAIMER: The information contained in this document is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Calkain and its subsidiaries, and should not be made available to any other person or entity without the written consent of Calkain. This document has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property(s). The information contained herein is not a substitute for a thorough due diligence investigation. Calkain and its subsidiaries have not made any investigation, and make no warranty or representation, with respect to the income or expenses for the subject property(s), the future projected financial performance of the property, the size and square footage of the property(s) and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regula-tions, 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(s). The information contained in this document has been obtained from sources we believe to be reliable; however neither Calkain and its subsidiaries nor the Seller have verified, and will not verify, any of the information contained herein, nor has Calkain and its subsidiaries or the Seller conducted any investigation regarding these matters and make 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.

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7-Eleven Corporate Store | Pittsburgh, PA · PDF file7-Eleven Corporate Store | Pittsburgh, PA Offering Memorandum EXCLUSIVE LISTING Offering Memorandum 2% Annual Rent Increases 7-Eleven