California State Lottery Building - LoopNet...San Francisco, CA 94105 BRYAN WEBB Senior Vice President 415.288.7873 [email protected] Lic. 01826546 P. 3 CALIFORNIA STATE LOTTERY

Distribution Facility

industrial parkway west

hesperian blvd

California State Lottery Building2489 Industrial Parkway West | Hayward, CA 94545

ContentsInvestment Summary ........................... 3

Investment Highlights ........................... 3

Property Overview............................... 5

Lease Abstract ...................................10

Valuation ...........................................12

Tenant Overview ................................13

Location Overview ..............................14

Demographics ....................................16

Purchase Price:

$1,850,000

NOI:

$94,552

Price/SF:

$288 (not including ±4,000 sq. ft. of fenced-in yard space)

CAP Rate:

5.11% (6.6% average Cap rate over lease term)

Rentable Sq. Ft.:

6,406 (±4,000 sq. ft. yard space)

The Lottery has no competition and has been at this location for nearly 18 years.

EXCLUSIVELY OFFERED BY:

Capital Markets | Colliers Investment Services Group

COLLIERS INTERNATIONAL101 Second Street, 11th FloorSan Francisco, CA 94105

BRYAN WEBBSenior Vice President

415.288.7873

[email protected]

Lic. 01826546

P. 3

CALIFORNIA STATE LOTTERY BUILDING

P. 3

1-Mile 3-Mile 5-Mile

2016 Population 19,486 152,560 338,539

2016 Households 5,323 43,294 101,259

2016 Median HH Income $79,254 $72,855 $77,943

Demographics

Location Traffic Count

Hesperian Blvd & Industrial Pkwy W 34,392

Industrial Pkwy W & Satellite St 21,030

Traffic Counts

Property InformationAddress 2489 Industrial Parkway West, Hayward, CA

Offering Price $1,850,000

Cap Rate 5.11% (6.6% average Cap rate over lease term)

Price/SF $288 (not including ±4,000 sq. ft. fenced-in yard)

Net Operating Income $94,552

Rentable Square Feet 6,406 (±4,000 sq. ft. yard space)

Land Area 12,158 sq. ft.

Original Lease Term 10 years

Lease Expiration 9/30/2027

Renewal Options None

Lease Type Full Service

Year Built 1987

Investment Summary Investment HighlightsColliers International, as Exclusive Advisor, is pleased to present the opportunity to

acquire the fee-simple interest in a single-tenant building occupied by the California

State Lottery, (the “Property”) in Hayward, California. The Property is located in the

Pacific Business Park, which encompasses 31 separately owned buildings and maintains

the grounds and landscaping.

The Property consists of an approximate 6,406 square foot building on 12,158 square

feet of land. There is an additional + 4,000 sq. ft. of secured yard with a grade-level roll

up door on the first floor. The tenant, California State Lottery, currently occupies the

entire building and has been a tenant since November 2000. In 2010 they extended

their lease for an additional seven years, and recently renewed for an additional ten

years.

■ 4% ANNUAL INCREASES

■ 100% occupied by the California State Lottery

■ Zero competition; at current location for 17+ years

■ Current lease is below current market net rents within similar business parks

■ The only district office serving the East Bay

■ Lease guarantor is the California State Lottery (Moody’s A1 credit rating)

■ Well maintained by Pacific Business Park and current ownership

Tenant / Lease ■ For FY2015-16 lottery sales were nearly $6.3B

■ Tenant has option to cancel the lease with 180 days prior written notice

■ After 2019, Landlord can cancel the lease with 180 days prior written notice

■ Lease guarantor is the California State Lottery

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Property Overview

The Offering

The California State Lottery building is a 6,406 sq. ft. two-story building located within

the Pacific Business Park, which maintains the grounds and landscaping. There is an

additional ±4,000 square feet of secured yard with a grade level roll-up door on the

first floor. The California State Lottery currently occupies the entire building and has

been a tenant since November 2000. The building is well maintained, and the owner

has recently completed interior renovations. This location serves as the California State

Lottery East Bay District Office, and houses the scratcher machines and lottery kiosks

for the several nearby retailers within the East Bay.

Location 2489 Industrial Parkway West, Hayward, CA

Year Built 1987

Assessor’s Parcel Number 463-0097-019

Rentable Square Feet 6,406

Site Area 12,158 sq. ft.

Number of Floors 2

Occupancy 100%

Parking 12 spaces

Ownership Fee Simple

1 San Francisco 820 Dubuque Ave, South San Francisco

2 Sacramento 4106 E. Commerce Way, Sacramento

3 East Bay 2489 Industrial Pkwy W, Hayward

4 Fresno 7620 N Del Mar Ave, Fresno

5 Van Nuys 16525 Sherman Way, #C10, Van Nuys

6 Inland Empire 1840 Commercenter Cir, San Bernardino

7 Santa Fe Springs 9807 Bell Ranch Dr, Santa Fe Springs

8 Santa Ana 3400 W Warner Ave, Ste F, Santa Ana

9 San Diego 5656 Ruffin Rd, San Diego

Site Description California Lottery District Offices

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Property Photos

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FENCED-IN YARD

Floorplans

P. 8


Pacific Business Park

Average Sales Price for Vacant Buildings

Median Months Vacant

Vacancy Rate for Pacific Business Park

Average Rents per Square Foot (NNN) Lottery Rent

This information is comprised for all ±24 buildings within the Pacific Business Park

•

•

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Parcel Map

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EARLY TERMINATION CLAUSE

Tenant California State Lottery

Type Full Service

Commencement Date 10/1/2017

Base Lease Term 10 Years

Lease Expiration 9/30/2027

Options None

Current Annual Gross Rent $165,750

Taxes, Utilities & Insurance Landlord Obligation

Annual Increase 4% Annual Rent increase

Roof & Structure Landlord Obligation

HOA ResponsibilitiesExterior Paint, Irrigation, Parking Lot Repairs,

Landscaping, Common Area, Cleaning, Sewer

Lines, Liability Coverage

Credit Rating Moody’s A1

Lease Abstract Cap Rate Growth Chart

A) The Lessee may terminate this lease at any time by giving written notice to the Lessor at least 180

days prior to the date when such termination shall become effective. (Most state leases have this clause)

B) The Lessor may terminate this lease at any time after April 1, 2019 by giving written noice to the

Lessee at least 180 days prior to the date when such termination shall become effective.

5.1%5.4%

5.6%5.9%

6.2%6.4%

6.7%7.1%

7.4%7.7%

8.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10/1/2017 10/1/2018 10/1/2019 10/1/2020 10/1/2021 10/1/2022 10/1/2023 10/1/2024 10/1/2025 10/1/2026 10/1/2027

NOI growth assumes 3% increase in expenses.

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hesperian blvdindustrial parkway

distribution center

P. 12


TENANT SF $/Mo $/SF/Mo Annual Rent

California State Lottery 6,406 $13,812 $2.16 $165,744

Effective Gross Income $165,744

Operating Expenses Total Amount

Property Tax (1.332% +640) $5.29 $27,213

Management (2%) $0.86 $3,314

Repairs and Maintanace $0.86 $1,250

Insurance $0.29 $871

PG&E $0.42 $14,051

HVAC Maintenance $0.17 $650

Park Maintenance Dues $0.38 $3,264

Elevator $0.38 $800

Janitorial $0.30 $9,960

Alhambra Water Service + Janitorial Supplies $0.30 $1,924

Water $0.44 $1,133

Waste Mgmt $1.58 $6,372

Pest Control $0.31 $390

Total Operating Expenses $0.97 $71,192

Current NOI $94,552

Current Cap Rate 5.11%

Purchase Price $288 $1,850,000

Valuation

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California State Lottery

FY 2015-2016 Total Sales $6.3 Billion

Total to Education $1.59 Billion

Number of Retailers 22,000

Formation November 6, 1984

Type Lottery System

Headquarters Sacramento, California

District Offices 9

Website www.calottery.com

Tenant OverviewThe California State Lottery began on November 6, 1984, when

a majority (58%) of California voters passed Proposition 37, the

California State Lottery Act of 1984, authorizing the creation

of a lottery. The Lottery Act mandated an extremely tight time

line for establishing the Lottery and bringing it to operational

status. To comply, the state government immediately built the

Lottery’s original headquarters in only three months in the Richards neighborhood of

Sacramento (just north of downtown), where it has been located ever since. The first

lottery games were Scratchers; sales began on October 3, 1985. A weekly Lotto game

began on October 14, 1986.

California joined Mega Millions on June 22, 2005; it became the 12th jurisdiction to offer

the game, and the last to join before the 2010 cross-sell expansion with MUSL. A Mega

Millions drawing was held in Hollywood to commemorate the event.

In September 2011, the California Lottery moved into a new $58 million headquarters at

700 North 10th Street across the street from the old one, which it promptly demolished.

Because it was built in a frantic 90-day rush to comply with the Lottery Act, the original

headquarters had numerous construction defects in the roof, foundation, and elevator,

as well as a mold problem.

In February 2012 the California Lottery initiated an impact analysis of the Powerball

game, in preparation for a recommendation in July 2012. Subsequently, the Fiscal Year

2012–2013 Business Plan included funding for a launch of Powerball within the fiscal

year, with Powerball launching in California on April 8, 2013. As a result of the California

Supreme Court’s decision, California is the only state with variable payouts for both

games.

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P. 14

EAST BAY OVERVIEW

The East Bay is located on the eastern shore of the San Francisco Bay and covers approximately 1,540 square miles. The East Bay encompasses 33 cities or towns and nearly 2.5 million residents, about 34.8% of the Bay Area’s population and labor force, 34.6% of its employed workers and 29% of the Bay Area’s jobs.

The East Bay is connected by eight bridges to San Francisco; the Peninsula and the venture capital center of the nation; Sacramento, the State Capital, 45 minutes to the North East; and the Napa Valley “Wine Country” just to the north. The Central Valley lies to the east and San Jose to the South.

The East Bay has been the fastest growing region in the San Francisco Bay Area since the mid-1980’s. It will continue to do this for the next decade and beyond because of its key location and available land for new residential, commercial and industrial uses. But it is the diversity of the East Bay cities – economic base, ethnicity, climate, lifestyles, housing and business location opportunities that provide the region’s exceptional strength.

THE CITY OF HAYWARD

The City of Hayward was incorporated in 1876 and is centrally located in Alameda County about 25 miles southeast of San Francisco, 14 miles south of Oakland, 26 miles north of San Jose and 10 miles west of the Tri-Valley communities surrounding Pleasanton. Hayward covers approximately 61 square miles and is bordered to the north by the City of San Leandro and unincorporated are of Castro Valley, to the south by the cities of Fremont and Union City, to the west by the City of Pleasanton and the Hayward Mountain Ridge and to the west by the San Francisco Bay shoreline.

Hayward is generally considered a “bedroom community” for the larger metropolitan areas of Oakland and San Francisco. Hayward is centrally located within Alameda County and transportation network adjoining communities, recreational areas and employment centers are good.

California State University East Bay

Location Overview

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Hayward is served by Interstate 880 (also known as the Nimitz Freeway), State Route 92 (Jackson Street) and State Route 238 (Mission Boulevard/Foothill Boulevard). State Route 92 continues west as the San Mateo-Hayward Bridge. The intersection of 880 and 92 was reconstructed over a four-year period, with completion of the project in October 2011. Mission Boulevard has been long known for chronic traffic congestion. Past proposals to convert Mission Boulevard to a freeway or build a 238 bypass have been controversial. One proposal, to build a freeway parallel to Mission Boulevard, extending a freeway south from 580 where it turns east towards Castro Valley, and connecting to Industrial Boulevard, had land purchased, but was cancelled after years of debate. The land is now scheduled for sale and zoning. Mission, Jackson, and Foothill all converge at one congested intersection south of downtown, known historically as “Five Flags” for a line of flagpoles located there. To alleviate congestion in the downtown area, the city has converted the A Street, Mission and Foothill triangle to one-way thoroughfares (counterclockwise), and is adding road improvements, landscaping, and telephone/ cable underground to Mission Boulevard south to Industrial Boulevard, and to Foothill Boulevard north to 580. The plan, the Route 238 Corridor Improvement Project, broke ground July 2010, completed rerouting in 2013, and was completed in 2013.

Bay Area Rapid Transit (BART), the regional rapid transit system, has two stations in Hayward: the Hayward station, in downtown; and the South Hayward station, near the Hayward-Union City border. BART operates a repair yard in Hayward. The AC Transit bus system, which provides bus service for Alameda County and Contra Costa County, operates in Hayward, and has a repair/training center located there. Amtrak, the national rail passenger system, provides daily service at its Hayward station for the Capitol Corridor train, which runs between San Jose in the South Bay, and Auburn in the Greater Sacramento area.

TRANSPORTATION

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1 Mile 3 Mile 5 Mile2000 Total Population 16,332 138,081 298,3172010 Total Population 17,553 139,019 308,7422016 Total Population 19,486 152,560 338,5392021 Total Population 21,069 164,991 367,967Population Change 2000 to 2016 19.3% 10.5% 13.5%Population Change 2010 to 2021 20.0% 18.7% 19.2%Population Change 2016 to 2021 8.1% 8.1% 8.7%

1 Mile 3 Mile 5 Mile2000 Households 4,779 41,218 94,1422010 Households 5,013 41,224 96,6322016 Households 5,323 43,294 101,2592021 Households 5,505 44,780 105,308Household Change 2000 to 2010 4.9% .0% 2.6%Household Change 2000 to 2016 11.4% 5.0% 7.6%Household Change 2010 to 2021 9.8% 8.6% 9.0%Household Change 2016 to 2021 3.4% 3.4% 4.0%

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US

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OLD

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1 Mile 3 Mile 5 Mileup to $24,999 12.9% 13.8% 13.6%$25,000 to $49,999 17.4% 20.4% 17.8%$50,000 to $74,999 17.0% 17.3% 17.1%$75,000 to $124,999 26.7% 25.7% 25.9%$125,000 to $199,999 19.1% 16.0% 17.5%$200,000 or more 6.9% 6.8% 8.2%2000 Median Income $57,006 $57,731 $59,5012010 Median Income $71,434 $68,656 $70,8022016 Median Income $79,254 $72,855 $77,9432021 Median Income $84,080 $78,780 $83,885

INC

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Demographics

MONTEREY BAY

SAN LUISRESERVOIR

SANPABLO

BAY

SUISUNBAY

LAKEBERRYESSA

FOLSOMLAKE

SANFRANCISCO

BAY

PACIFICA

DALYCITY

SAN MATEO

MOUNTAINVIEW

HALF MOONBAY

PALO ALTO

REDWOODCITY

LOS GATOS

CAMPBELL

BOULDERCREEK

LIVERMORE

SAN RAMON

BRENTWOOD

ANTIOCH

MILPITAS

WALNUTCREEK

CONCORD

MILL VALLEY

HAYWARD

FREMONT

ALAMEDA

BERKELEY

MORGAN HILLSCOTTSVALLEY

GILROY

VALLEJONOVATO

PETALUMA

ROHNERTPARK SONOMA

HEALDSBURG

VACAVILLE

FAIRFIELD

YOUNTVILLEDIXON

WINTERS

GALT

ELK GROVE

DAVIS

LODI

TRACY RIVERBANK

MANTECA

TURLOCK

GEYSERVILLE

CLOVERDALE

ST HELENA

CALLISTOGA

COLOMAROSEVILLE

PATTERSON

NEWMAN

GUSTINE

LOS BANOS

WOODLAND

SAN RAFAEL

PACIFICA

DALYCITY

SAN MATEO

MOUNTAINVIEW

HALF MOONBAY

PALO ALTO

REDWOODCITY

LOS GATOS

CAMPBELL

BOULDERCREEK

LIVERMORE

SAN RAMON

BRENTWOOD

ANTIOCH

MILPITAS

WALNUTCREEK

CONCORD

MILL VALLEY

HAYWARD

FREMONT

ALAMEDA

BERKELEY

MORGAN HILLSCOTTSVALLEY

GILROY

VALLEJONOVATO

PETALUMA

ROHNERTPARK SONOMA

HEALDSBURG

VACAVILLE

FAIRFIELD

YOUNTVILLEDIXON

WINTERS

GALT

ELK GROVE

DAVIS

LODI

TRACY RIVERBANK

MANTECA

TURLOCK

GEYSERVILLE

CLOVERDALE

ST HELENA

CALLISTOGA

COLOMAROSEVILLE

PATTERSON

NEWMAN

GUSTINE

LOS BANOS

WOODLAND

SAN RAFAEL

LA HONDALA HONDA

SACRAMENTO

STOCKTON

MODESTO

SAN JOSE

OAKLANDSAN

FRANCISCO

NAPA

SANTAROSA

SANTACRUZ

SACRAMENTO

STOCKTON

MODESTO

SAN JOSE

OAKLANDSAN

FRANCISCO

NAPA

SANTAROSA

SANTACRUZ

505

680

5

5

5

680

680

80

80

280

280880

580

205

80

80

5

780

80

580

128

37

1

1

92

152

132

33

994

16

99

84

160

113

12

12

128

88

116

29121

35

26

84

17

120

165

4

41

1299

99

101

101

50

101

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California State Lottery Building

This Confidential Offering Memorandum (the “Memorandum”) has been prepared and presented to the recipient (the “Recipient”) by Colliers International (“Colliers”) as part of Colliers’ efforts to market for sale the real property located at 2489 Industrial Parkway West, Hayward, CA 94545 (the “Property”). Colliers is the exclusive agent and broker for the owner(s) of the Property (the “Owner”). Colliers is providing this Memorandum and the material contained in it to the Recipient solely to assist the Recipient in determining whether the Recipient is interested in potentially purchasing all or part of the Property. Colliers also is providing this Memorandum and the material in it to the Recipient with the understanding that the Recipient will independently investigate those matters that it deems necessary and appropriate to evaluate the Property and that the Recipient will rely only on its own investigation, and not on Colliers, the Owner or this Memorandum, in determining whether to purchase the Property. The Recipient’s use of this Memorandum and the material in it is strictly governed by the terms and conditions of the Registration and Confidentiality Agreement that the Recipient previously executed and delivered to Colliers.

PLEASE NOTE THE FOLLOWING:

Colliers, the Owner and their respective agents, employees, representatives, property managers, officers, directors, shareholders, members, managers, partners, join venturers, corporate parents or controlling entities, subsidiaries, affiliates, assigns and predecessors and successors-in-interest make no representations or warranties about the accuracy, correctness or completeness of the information contained in this Memorandum. The Recipient is urged not to rely on the information contained in this Memorandum and to make an independent investigation of all matters relating to the Property.

This Memorandum includes statements and estimates provided by or to Colliers and/or the Owner regarding the Property. Those statements and estimates may or may not be accurate, correct or complete. Nothing contained in this Memorandum should be construed as a representation or warranty about the accuracy, correctness or completeness of such statements and estimates. Further, nothing contained in this Memorandum should be construed as representation or warranty about any aspect of the Property, including, without limitation, the Property’s (1) past, current or future performance, income, uses or occupancy, (2) past, current or prospective tenants, (3) physical condition, (4) compliance or non-compliance with any permit, license, law, regulation, rule, guideline or ordinance, or (5) appropriateness for any particular purpose, investment, use or occupancy. Again, the Recipient is urged not to rely on this Memorandum and the statements and estimates in it and to make an independent investigation regarding the Property and the statements and estimates contained herein.

This Memorandum may include statements regarding, references to, or summaries of, the nature, scope or content of contracts and/or other documents relating to the Property. Those statements, references or summaries may or may not be accurate, correct or complete. Additionally, Colliers may not have referenced or included summaries of each and every contract and/or other document that the Recipient might determine is relevant to its evaluation of the Property. Nothing contained in this Memorandum should be construed as a representation or warranty about the accuracy, correctness or completeness of such statements, representations or summaries. On request and as available, and subject to the Owner’s consent, Colliers will provide the Recipient with copies of all referenced contracts and other documents. Colliers assumes no obligation to supplement or modify the information contained in this Memorandum to reflect events or conditions occurring on or after the date of its preparation of this Memorandum.

This Memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, an interest in the Property. Nothing contained in this Memorandum may be construed to constitute legal or tax advice to a Recipient concerning the Property.

More detailed information regarding the anticipated terms, conditions and timing of any offering by the Owner relating to the Property will be provided in due course by separate communication. Colliers and/or the Owner reserve the right to engage at any time in discussions or negotiations with one or more recipients of this Memorandum and/or other prospective purchasers of the Property without notice or other obligation to the Recipient.

The Owner reserves the right to change the terms of any offering relating to the Property or to terminate without notice that offering. The Owner also reserves the right to operate the Property in its sole and absolute discretion prior to the completion of any sale of the Property. Colliers reserves the right to require the return of this Memorandum and the material in it and any other material provided by Colliers to the Recipient at any time. Acceptance of this Memorandum by the Recipient constitutes acceptance of the terms and conditions outlined above.

CONFIDENTIALITY & DISCLAIMER

EXCLUSIVE ADVISOR:

BRYAN WEBBSenior Vice President

415.288.7873 | [email protected]

Lic. 01826546

California State Lottery Building

Documents

California State Lottery Building - LoopNet...San Francisco, CA 94105 BRYAN WEBB Senior Vice President 415.288.7873 [email protected] Lic. 01826546 P. 3 CALIFORNIA STATE LOTTERY