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O F F E R I N G M E M O R A N D U M
Bakersf ie ld , CA 93306
EAST HILLS PLAZA2611-2673 FASHION PLAZA
NOT INCLUDED
Executive Vice President Retail Capital MarketsLic. 01890271Mobile +1 858 752 3078Direct +1 949 724 5690 [email protected]
Senior Vice President Retail Capital MarketsLic. 01302079Mobile +1 949 275 8807Direct +1 949 724 [email protected]
Associate Vice President Retail Capital MarketsLic. 01987844Mobile +1 760 685 6873Direct +1 949 724 [email protected]
Associate Vice President Retail Capital MarketsLic. 02008809Mobile +1 951 264 5994Direct +1 949 724 [email protected]
Associate Vice President Retail Capital MarketsLic. 10401244229 NYMobile +1 917 515 9975Direct +1 949 724 [email protected]
El Warner Charley Simpson Caitlin Zirpolo Jordan Gomez David Maloy
Bakersfield OverviewRetail Market Overview
Area Overview12
Offering SummaryInvestment Highlights
Executive Summary2Local Area Map Site Plan Physical Description
Property Description6
Rent RollInvestment Summary
Financial Overview16
Table of Contents
Exclusively Listed By
2611-2673 Fash ion P laza | Bakersf ie ld , CA 1Col l iers In ternat iona l
2 Co l l iers In ternat iona l
EXECUTIVEsummary
Colliers Retail Capital Market Team is pleased to present the sale of East Hills Plaza, a 37,160 square foot neighborhood retail center centrally located in Bakersfield, California just southeast of the 178 Freeway and the Mt. Vernon Avenue exit.
The shopping center is shadow anchored by a Walmart Supercenter and is 100% occupied by 11 quality tenants including Big Lots, Sally Beauty, Metro PCS and Baskin Robbins.
East Hills Plaza is an exceptional opportunity to acquire a stable cash flow with attractive growth in the revenue from fixed annual increases and below market rent. Combine this with historically low interest rates and double digit leveraged return are achievable.
Asking Price $8,000,000
Total GLA 37,160 SF
Occupancy 100%
Number of Tenants 11
Price PSF $215 PSF
In-Place Cap-Rate 7.14%
Leveraged Return 12.97%
Total Land Area 4.01 Acres (1 Parcel)
Financing No Existing Debt – Loan Quotes Available
Offering Summary
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Investment Highlights
New financing projected to provide a return of 12.97%.
Desirable demographic profile with over 120,000 people living within a three-mile radius with an average household income of $51,049 annually.
Strategically located within one of the dominant retail corridors in Bakersfield that includes Walmart, Target, Home Depot, Lowes Home Improvement, Albertsons and FoodsCo.
Attractive projected NOI growth rate of 3.7% annually over the next 10 years.
Conveniently located in northeast Bakersfield just south of the 178 freeway at the Mt. Vernon Avenue exit.
Adjacent to the former East Hills Mall, a future mixed-use redevelopment that will transform the submarket.
37,160 SF retail center that is 100% leased to a synergistic mix of national, regional and local tenants including Big Lots, Sally Beauty, GameStop, Metro PCS, Maggie’s Coffee Shop and Baskin Robbins.
Shadow Anchored by a Walmart Supercenter since 1992. Walmart expanded to 125,000 SF in 2010 to include a grocery department within the store.
Anchored by an 18,660 SF Big Lots! store that is only paying $0.75 PSF/Month in rent. Significant upside exists in leasing this space at a market rent.
2611-2673 Fash ion P laza | Bakersf ie ld , CA 4Col l iers In ternat iona l
Impressive historical occupancy with seven of the eleven tenants occupying their space for over 10 years including Big Lots (27 years), Sally Beauty (18 years) and Baskin Robbins (21 years).
+10YEARS
Multiple buildings provides the future owner with the flexibility to separately parcel each building and sell off portions of the Property in order to lower basis and increase returns.
Anchored by Big Lots, a publicly traded company (symbol “BIG” Nasdaq) with over 1,400 stores in 47 states, $5 billion in revenue and an S&P debt rating of B2.
DOWNTOWNBAKERSFIELD
PARK SORRENTO APTS258 UNITS
EAST BAKERSFIELDHIGH SCHOOL
BERNARD STREET
MALL VIEW ROAD
NEW MARKET WAY
NOT INCLUDED
2611-2673 Fash ion P laza | Bakersf ie ld , CA 5Col l iers In ternat iona l
6 Co l l iers In ternat iona l
PROPERTYdescr ip t i on
2611-2673 Fash ion P laza | Bakersf ie ld , CA 7Col l iers In ternat iona l
Local Area Map
DOWNTOWNBAKERSFIELD
BAKERSFIELD COLLEGE
BAKERSFIELD MEMORIAL HOSPITAL
BAKERFIELD MUNICIPAL AIRPORT
KERN MEDICAL CENTER
KERN RIVER
EAST BAKERSFIELD HIGH SCHOOL
Site Plan
65,231 SF
2673
2665
2661
2657
2653
2647
2641
2631-C
2631-B
2631-A
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SUITE TENANT SF
2621 Big Lots, Inc. - Store 18,660
2631-A Dr. Sae kyu Oh 3,136
2631-B Star Beauty Sales Inc. 1,170
2631-C Vatos Tacos Grill 2,194
2641 Sacramento Auto Insurance Center 2,000
2647 Sally Beauty Company 1,500
2653 Metro PCS 1,480
2657 GameStop Inc. 1,500
2661 Nails Spa 1,500
2665 Maggie's Coffee Shop 2,220
2673 Baskin Robbins 1,800
NEW MARKET WAY
BERNARD STREET
2611-2673 Fash ion P laza | Bakersf ie ld , CA 9Col l iers In ternat iona l
NOT INCLUDED
Physical DescriptionTotal GLA 37,160 SF
Year Built 1992
Address 2611–2673 Fashion Plaza, Bakersfield, CA 93306
County Kern County
Number of Buildings Three (One single tenant, two multi-tenant)
Total Land Area 4.01 Acres (174,675 sq. ft.)
Type of Ownership Fee Simple
Parcels One Parcel (130-161-85-009)
Zoning C-2; General Commercial
Cross Streets Bernard Street - 12,799 VPDMt. Vernon Ave. - 26,331 VPDOswell Street - 33,355 VPDState Route 178 - 36,027 VPD
North The former 350,000-square-foot East Hills Mall is located north of the Subject Property. Owned by the Save Mart Cos. Inc., discussions are actively ongoing regarding the highest and best use for this prominent re-development site.
South The Subject is bordered to the South by multi-family apartment communities and single-family residential subdivisions.
East Additional retail including Target, Big 5 Sporting Goods and PetSmart are all located east of the Subject Property. Oswell Street, a primary north/south arterial that connects with the 178 freeway is just east of the Subject Property.
West Additional retail including Home Depot, Office Max, Albertsons, Lowes Home Improvement and Rite -Aid are all located west of the Subject Property. Mt. Vernon Avenue, a primary north/south arterial that connects with the 178 freeway is just west of the Subject Property.
The Subject is located just south of State Route 178 between the Mt. Vernon and Oswell Street freeway exits in northeast Bakersfield, California.
2611-2673 Fash ion P laza | Bakersf ie ld , CA 1 0Col l iers In ternat iona l
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12 Co l l iers In ternat iona l
AREAoverv iew
Bakersfield OverviewSituated within Kern County, Bakersfield cover
about 151-square-miles of land and is one of the
Central Valley’s largest metros, with more than
380,000 residents. Nestled between the southern
end of the San Joaquin Valley and the Central
Valley region, Bakersfield is known as a hub for
both agriculture and energy production.
Employment is growing at around 2.3% year-over-
year and has marginally outperformed the national
benchmark over the past two years. Moreover,
income growth, after steadily falling in conjunction
with oil prices, rose to almost 3% in 2018. Median
household income is roughly $57,000 per year.
Bakersfield transportation is easily accessible and
includes two of California’s main logistics routes,
Interstate 5 and Highway 99. The community
has proximity to the state’s biggest ports in Los
Angeles and Oakland, as well as more than 40
million consumers within a four-hour drive.
POPULATION
2019 Estimate 18,817 120,332 386,009
2024 Projection 19,037 123,446 404,082
Growth 2019-2024 1.17% 2.59% 4.68%
HOUSEHOLDS
2019 Estimate 5,929 35,431 121,504
2019 Average Household Income $56,843 $51,049 $79,444
2019 Household Size 3.09 3.34 3.16
Hispanic or Latino 69% 73% 52%
Daytime Employees 6,759 40,810 158,055
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1
MILE
3
MILES BAKERFIELD
The retail vacancy rate dropped -0.1% to 9.1% in the second quarter of 2019
and has fluctuated in the 8.5% to 10.0% range over the last five years.
Retail asking rates have steadily increased over 11% in the last five years
from $16.20 PSF in the second quarter of 2014 to $18.00 PSF as of
Q2-2019.
The Subject Property is located just south of the former 350,000 SF
East Hills Mall. Owned by the Save Mart Cos. Inc., discussions are actively
ongoing regarding the highest and best use for this prominent
re-development site.
2611-2673 Fash ion P laza | Bakersf ie ld , CA 1 4Col l iers In ternat iona l
Retail Market Overview
Submarket
Bakersfield, CA
Total Retail Inventory
11,200,000 SF
Vacancy Rate
9.1% as of Q2-2019
Average Asking Rate
$18.00 PSF/Yr. as of Q2-2019
2611-2673 Fash ion P laza | Bakersf ie ld , CA 1 5Col l iers In ternat iona l
FUTURE REDEVELOPMENTOF THE FORMER
EAST HILLS MALL178
178
COLUMBUS STREET
VERN
ON A
VENU
E
OSW
ELL
STRE
ET
FASHION PLAZA
MALL VIEW ROAD
BERNARD STREET
MARKET WAY
NOT INCLUDED
STATE ROUTE 178
16 Co l l iers In ternat iona l
FINANCIALoverv iew
Unit # Tenant Square Feet Contract Rental Term # of Years
ExpensesTotal % GLA PSF/Mo $/Year PSF/Yr $/Year Increases From To Tenant
2621 Big Lots, Inc. - Store 18,660 50.2% $0.75 $14,071 $9.05 $168,852 Opt. 1: $9.54 10/01/92 01/31/23 27 Years NNN
Comments Tenant has one 5-year option remaining. Tenant currently pays $1,000 per month for two containers parked in the back of their store ($500 each) and is assumed to continue paying that amount until their lease expires.
2631-A Dr. Sae kyu Oh 3,136 8.4% $1.64 $5,143 $19.68 $61,716 None 05/01/04 04/30/22 15 Years NNN
Comments Tenant has one 5-year option remaining. Tenant is assumed to vacate at the end of their lease.
2631-B Star Beauty Sales Inc. 1,170 3.1% $1.24 $1,449 $14.86 $17,388 9/20: 3% Annual 10/01/15 09/30/20 4 Years NNN
Comments Tenant has one 5-year option remaining.
2631-C Vatos Tacos Grill 2,194 5.9% $1.40 $3,080 $16.85 $36,96010/20: 3% Annual Opt. 1: 3% Annual Opt. 2: 3% Annual
10/01/19 09/30/24 New Tenant NNN
Comments Tenant has one remaining 5-year option.
2641 Sacramento Auto Insurance Center 2,000 5.4% $2.00 $4,000 $24.00 $48,000 Opt. 1: $25.50 06/01/10 06/30/22 9 Years NNN
Comments Tenant has one remaining 3-year option.
2647 Sally Beauty Company 1,500 4.0% $1.83 $2,750 $22.00 $33,000 None 05/19/01 05/31/21 18 years NNN
Comments Tenant has no remaining options. Tenant is paying percentage rent of 4% over $700,000. 2018 sales were $1,024,302.
Rent Roll (as of 01/01/2020)
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Unit # Tenant Square Feet Contract Rental Term # of Years
ExpensesTotal % GLA PSF/Mo $/Year PSF/Yr $/Year Increases From To Tenant
2653 Metro PCS 1,480 4.0% $1.76 $2,610 $21.16 $31,320 2/20: 3 Annual 03/08/10 01/31/22 9 Years NNN
Comments Tenant has no remaining options.
2657 GameStop Inc. 1,500 4.0% $1.86 $2,786 $22.29 $33,432 Opt. 1: $23.64 05/01/08 05/31/22 11 Years NNN
Comments Tenant has one 3-year option remaining.
2661 Nails Spa 1,500 4.0% $2.17 $3,252 $26.02 $39,024 6/20: 3% Annual 06/01/18 06/01/06 13 Years NNN
Comments Tenant has no remaining options.
2665 Maggie's Coffee Shop 2,220 6.0% $1.40 $3,108 $16.80 $37,2967/20: 3% Annual Opt. 1: 3% Annual Opt. 2: 3% Annual
06/01/19 06/30/24 New Tenant NNN
Comments Tenant has two remaining 5-year options.
2673 Baskin Robbins 1,800 4.8% $1.74 $3,131 $20.87 $37,572 11/20: 2.5% Annual Opt. 1: 2.5% Annual 10/22/98 10/31/23 21 Years NNN
Comments Tenant has one remaining 5-year option.
Total GLA 37,160 $45,380 $544,560
Rent Roll (as of 01/01/2020)
As Of 01/01/2020 SF % of Area
Area Occupied 37,160 100.00%
Area Vacant 0 0.00%
Total GLA 37,160 100.00%
2611-2673 Fash ion P laza | Bakersf ie ld , CA 1 8Col l iers In ternat iona l
DEBT SUMMARY NEW LOAN
Loan Amount: $5,200,000
LTV (Initial DCF Valuation): 65.0%
Additional Funded Cap: $0
Interest Rate: 4.00%
Fixed or Floating: Fixed
Loan Term: 10 Yrs
Funding Month: Month 1
Amort Term: 360 Months
I/O Period: 48 Months
Loan Fee: 0.5%
PURCHASE SUMMARY
Purchase Price: $8,000,000
Purchase Price $/SF: $215.29
Net Rentable Area: 37,160
In Place NOI 571,044
In Place Cap Rate 7.14%
Cash on Cash 363,044
Cash on Cash Return 12.97%
Investment Summary
2611-2673 Fash ion P laza | Bakersf ie ld , CA 1 9Col l iers In ternat iona l
IN PLACE INCOME & EXPENSE SUMMARY
Income Total
Base Rental Revenue $544,560
Percentage Rent $15,504
Net Rental Income $560,064
Expense Reimbursements $283,980
Effective Gross Income $844,044
Expenses Total Total
Real Estate Taxes $2.58 $95,781
Property Insurance $0.20 $7,270
CAM/R&M/Utilities $3.69 $137,177
Management 3.88% $32,772
Operating Expenses $273,000
Net Operating Income $571,044
Asking Price $8,000,000
In Place Cap Rate 7.14%
New Debt $5,200,000
Required Equity $2,800,000
Debt Service $208,000
In Place Cash Flow 363,044
Cash on Cash Return 12.97%
178
BAKERSFIELD COUNTRY CLUB
FASHION PLACE
BERNARD STREETMALL VIEW ROAD
FUTURE REDEVELOPMENTOF THE FORMER
EAST HILLS MALL
NOT INCLUDED
2611-2673 Fash ion P laza | Bakersf ie ld , CA 2 0Col l iers In ternat iona l
Colliers International 3 Park Plaza | Suite 1200
Irvine, CA 92614 | United States colliers.com/greaterlosangeles
This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2019. All rights reserved.
Executive Vice President Retail Capital MarketsLic. 01890271Mobile +1 858 752 3078Direct +1 949 724 5690 [email protected]
Senior Vice President Retail Capital MarketsLic. 01302079Mobile +1 949 275 8807Direct +1 949 724 [email protected]
Associate Vice President Retail Capital MarketsLic. 01987844Mobile +1 760 685 6873Direct +1 949 724 [email protected]
Associate Vice President Retail Capital MarketsLic. 02008809Mobile +1 951 264 5994Direct +1 949 724 [email protected]
Associate Vice President Retail Capital MarketsLic. 10401244229 NYMobile +1 917 515 9975Direct +1 949 724 [email protected]
El Warner Charley Simpson Caitlin Zirpolo Jordan Gomez David Maloy