INVESTMENT OPPORTUNITY OFFERING Alpine Animal Hospital ...€¦ · investment opportunity alpine animal hospital. 888 nw sammamish road issaquah, wa 98027. offering memorandum

INVESTMENT OPPORTUNITY

Alpine Animal Hospital888 NW SAMMAMISH ROADISSAQUAH, WA 98027

O F F E R I N G M E M O R A N D U M

1Executive Summary 2 Market

Overview 3 Investment Overview 4Offering

Terms

Pickering Place

Headquarters

1Executive Summary

The information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied, as to its accuracy. Prospective Buyer or Tenant should conduct an independent investigation and verification of all matters

deemed to be material, including, but not limited to, statements of income and expenses. CONSULT YOUR ATTORNEY, ACCOUNTANT OR OTHER PROFESSIONAL ADVISOR. 2019\Bellevue\Offering Memorandums\Alpine Animal Hospital

Bellevue | Seattle | Tacoma

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Executive SummaryNAI Puget Sound properties is pleased to offer the sale of Alpine Animal Hospital, a single-tenant NNN investment property located in the heart of Issaquah, Washington. The facility was built in 1996 and has been occupied by the same tenant ever since. The lease is in the second of three five-year option periods with 3% annual rent increases. The property consists of a 6,866 square-foot building situated on a 57,400 square-foot lot.

Located on NW Sammamish Road across from Pickering Place Square retail center, this site benefits from high traffic counts, street frontage and visibility, flexible zoning, and superior income demographics. The site is surrounded by dense retail and office developments featuring Costco’s International Headquarters, Microsoft, Costco Wholesale, Lowe’s, Trader Joe’s, Pier One, Barnes and Noble, and Office Depot.

The offering provides a strong credit single tenant investment property with future upside as a vertical redevelopment supported by attractive and flexible zoning. Current zoning includes medium dense commercial, residential or mixed use projects with an 85 foot maximum height limit.

ADDRESS888 NW Sammamish RoadIssaquah, WA 98027

OFFERING PRICE $6,200,000

NET OPERATING INCOME $331,987

CAP RATE 5.25%

OCCUPANCY 100%

YEAR BUILT 1996

BUILDING AREA 6,866 SF




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Alpine Animal Hospital888 NW Sammamish RoadIssaquah, Washington 98027

For Sale

BUILDING SIZE6,866 SF

LOT SIZE57,400 SF

ZONINGMU-CI

LEASE TYPENNN with 3% annual increases

ADDITIONAL FEATURESTraffic controlled entrance

ISSAQUAH

SAMMAMISH

LAKE SAMMAMISH STATE PARK




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HighlightsSuperior LocationThe subject is located adjacent to Pickering Place Square which is home to Costco’s International headquarters and one of Costco’s busiest retail stores.

Excellent Visibility & AccessThe subject benefits from a dedicated traffic signal at the intersection of NW Sammamish Road and Pickering Place. This signal provides exclusive ingress and egress from the north side of NW Sammamish Road.

Flexible ZoningThe current zoning allows for multi-family, office, and mixed-use buildings up to 85 feet. The highest and best use for the site in the future may be for multi-family development or a corporate office location.

Passive InvestmentPassive NNN investment opportunity backed by a credit, recession resistant tenant.

Rent IncreasesThe tenant pays 3% annual increases throughout the options periods providing a hedge against inflation.

Strength of TenantThe tenant has a 23 year tenure at the location and is very happy with the performance of the site. Since inception, Pathway has rapidly grown into 200+ locations across 38 states.




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Zoning OverviewMixed Use - Central Issaquah (MU-CI)The intent of the Mixed Use district is to provide mixed use neighborhoods with Class A office buildings, retail uses, high quality, medium density residential development and existing service businesses.

Allowable Uses: » Multi-family » Office » Hotels

» Day Care » Grocery Store » General Retail

» Restaurant (w/ Drive Thru) » Recreation » Hospital » and many more

District Standards Summary Table

Zoning Districts

Floor Area Ratio (FAR)

Height Setbacks

Build-To-Line

(Maximum Setback)

Maximum Impervious

Surface

Min Base Max

Res

iden

tial

Com

mer

cial

Res

iden

tial

Com

mer

cial

Res

iden

tial

Com

mer

cial

Base Max Side Rear

Village Residential N/A N/A 1.25 1.0 3.0 3.0 48’ 65’ 0’ 0’ 0’-15’ 80%

Mixed Use Residential N/A N/A 1.25 1.0 2.0 2.0 40’ 65’ 7’ 7’ 0’-10’ 80%

Urban Core .75 .55 3.0 1.25 5.0 5.0 60’ 125’ 0’ 0’ 0’-10’ 95%

Mixed Use N/A N/A 2.5 1.25 3.5 3.5 60’ 85’ 0’ 0’ 0’-10’ 90%

Intensive Commercial N/A N/A .5 .5 .5 .5 48’ 65’ 0’ 0’ 0’-10’ 90%

Single Family - Suburban See IMC 18.07, Required Development and Design Standards

Community Facilities (except Public Schools and Public Buildings)

Determined by most restrictive contiguous zoning.

Urban Village No Changes




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Building Plan

*Not to any scale

2Market Overview




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Issaquah Market OverviewThe Puget Sound Region is considered one of the fastest growing markets in the United States. Home to innovative industry leaders Amazon, Microsoft, Costco, Starbucks, Boeing, Nordstrom, Expedia, Concur Technologies, Nintendo, and T-Mobile. The presence of these global leaders has attracted companies from all over the country including tech giants Facebook, Google, Apple, Uber, and Salesforce. Exponential growth from these companies has allowed many cities within the Seattle submarket to flourish.

Issaquah is a rapidly growing city within the Puget Sound Region. Home to 37,110 residents, the former coal mining town has transformed into one of the most affluent areas in the region. The city’s close proximity to Seattle (17 miles) and Bellevue (9 miles) factor into being such a desirable location for office tenants. The two biggest employers in the area are Costco and Microsoft. Microsoft has a long-term commitment for nearly 600,000 sf at Sammamish Park Place. Costco currently occupies 400,000 sf in the area, with plans to expand their headquarters by an additional 1.5 million square feet over the next 30 years per an agreement with the City. Currently, a nine story 620,000 SF building is under construction.

Issaquah has 4 distinct shopping districts each providing unique characteristics. The Issaquah Commons is a community shopping center with 377,169 SF and is anchored by Target, Safeway, Trader Joe’s, REI, Bed Bath and Beyond and Ross. Grand Ridge Plaza located in the new Highlands neighborhood is a popular shopping and entertainment district with more than 35 shops and more than 14 restaurants. Gilman Village is a charming mixed use center featuring 40 plus shops, restaurants and personal services. It is one of Puget Sound’s best known and most distinctive shopping destinations. Pickering Place, home of Costco’s World Headquarters and one of their busiest stores provides a nice corporate campus setting amongst big box retailers. Retailers include Costco, Barnes & Noble, PCC Grocery, Lowes, Michael’s, PetSmart, Office Depot, Pier 1 Imports and Red Robin.

Issaquah commercial development is constrained by Lake Sammamish and the three mountains that surround the city – Tiger, Squak and Cougar. Available developable commercial land is in short supply, much of which is controlled by one family with no intentions on selling. Scarcity helps keeps the market tight with rare fluctuations in the market.




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Retailer Map

Subject Property




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Nearby Employers




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Demographics1

Mile

Rad

ius

3 M

ile R

adiu

s5

Mile

Rad

ius

KEY FACTS

4,569Population

38.0

Median Age

2,0792018 Total Households (Esri)

$100,619Median Household Income

EDUCATION

2%

No HighSchool

Diploma 11%High School

Graduate

25%Some College 63%

Bachelor's/Grad/ProfDegree

BUSINESS

947Total Businesses

16,711Total Employees

EMPLOYMENT

86%White Collar

6%Blue Collar

7%Services

5.0%

UnemploymentRate

INCOME

$100,619Median Household

Income

$62,046Per Capita Income

$139,745Median Net Worth

KEY FACTS

62,436Population

38.6

Median Age



EDUCATION

3%

No HighSchool


Graduate

21%Some College 68%


BUSINESS

2,279Total Businesses


EMPLOYMENT

83%White Collar

8%Blue Collar

9%Services

4.0%

UnemploymentRate

INCOME


Income



KEY FACTS

127,696Population

39.4

Median Age



EDUCATION

3%

No HighSchool


Graduate

20%Some College 69%


BUSINESS



EMPLOYMENT

83%White Collar

8%Blue Collar

9%Services

3.9%

UnemploymentRate

INCOME


Income



KEY FACTS

4,569Population

38.0

Median Age



EDUCATION

2%

No HighSchool


Graduate

25%Some College 63%


BUSINESS

947Total Businesses


EMPLOYMENT

86%White Collar

6%Blue Collar

7%Services

5.0%

UnemploymentRate

INCOME


Income



KEY FACTS

62,436Population

38.6

Median Age



EDUCATION

3%

No HighSchool


Graduate

21%Some College 68%


BUSINESS



EMPLOYMENT

83%White Collar

8%Blue Collar

9%Services

4.0%

UnemploymentRate

INCOME


Income



KEY FACTS

127,696Population

39.4

Median Age



EDUCATION

3%

No HighSchool


Graduate

20%Some College 69%


BUSINESS



EMPLOYMENT

83%White Collar

8%Blue Collar

9%Services

3.9%

UnemploymentRate

INCOME


Income



KEY FACTS

4,569Population

38.0

Median Age



EDUCATION

2%

No HighSchool


Graduate

25%Some College 63%


BUSINESS

947Total Businesses


EMPLOYMENT

86%White Collar

6%Blue Collar

7%Services

5.0%

UnemploymentRate

INCOME


Income



KEY FACTS

62,436Population

38.6

Median Age



EDUCATION

3%

No HighSchool


Graduate

21%Some College 68%


BUSINESS



EMPLOYMENT

83%White Collar

8%Blue Collar

9%Services

4.0%

UnemploymentRate

INCOME


Income



KEY FACTS

127,696Population

39.4

Median Age



EDUCATION

3%

No HighSchool


Graduate

20%Some College 69%


BUSINESS



EMPLOYMENT

83%White Collar

8%Blue Collar

9%Services

3.9%

UnemploymentRate

INCOME


Income






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Demographics Map

Alpine Animal Hospital Map

Source: ©2018 Esri.

June 25, 2019

©2019 Esri Page 1 of 1

4,569Population

62,436Population

127,696Population

38.0Median Age

39.4Median Age

38.6Median Age

$133,801Avg HH Income



3Investment Overview




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Pathway Vet Alliance is a leading national veterinary management company that provides operational support, tools, and resources to existing practices. Founded in 2003, Pathway has grown from a single veterinary clinic into the fourth largest corporate owner of veterinary medical clinics with over 4,000 employees. Their focus is on partnership with local veterinarians, adding value by providing back office functions, payroll management, accounting, consulting and marketing to alleviate the administrative obstacles holding them back.

In 2016, Morgan Stanley Private Equity bought a majority stake in the rapidly expanding company to help fuel their growth through acquisition. Since then, Pathway has expanded to more than 200 locations across 38 states. It is estimated that there are 30,000 vet clinics nationally with 3,200 of those corporately owned.

Pathway Vet Alliance has been ranked No. 1,094 on INC. magazines 37th annual Inc. 5000, the most prestigious ranking of the nation’s fastest-growing private companies, joining notable companies such as Microsoft, Dell, Domino’s Pizza, LinkedIn, Yelp, Zillow and many others who gained their first national exposure as honorees on the Inc. 5000.

Tenant ProfilePathway Vet Alliancepathwayvets.com

ADDRESS888 NW Sammamish RdIssaquah, WA 98027

BUILDING AREA 6,866 sf

LAND AREA 57,400

LEASE COMMENCEMENT November 4, 1996

LEASE TERMINATION July 31, 2024

MONTHLY BASE RENT $27,165.66

YEARLY BASE RENT $325,988

RENEWAL OPTION One 5-year option

INCREASES 3% Annually

Company Snapshot

CEO Employees Industry Location Year Founded Locations Status

ShawnMcVey

More than4,000

Pet Care

Austin, Texas

2003 More than 200 locations across 38 states

Private, Independent Company




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Lease Abstract

Year Monthly Rent Annual Rent Increase Cap Rate

1 $27,165.66 $325,987.92 3% 5.26%

2 $27,980.63 $335,767.56 3% 5.42%

3 $28,820.05 $345,840.58 3% 5.58%

4 $29,684.65 $356,215.80 3% 5.75%

5 $30,575.19 $366,902.28 3% 5.92%

Assuming exercise of third option

6 $31,492.45 $377,909.34 3% 6.10%

7 $32,437.22 $389,246.62 3% 6.28%

8 $33,410.34 $400,924.02 3% 6.47%

9 $34,412.65 $412,951.74 3% 6.66%

10 $35,445.02 $425,340.30 3% 6.86%

This Lease Abstract does not include Coffee Stand Income.

Lease Abstract & PricingPricing

Actual Net Operating Income

Scheduled Rent $ 325,987.00

(+) Additional Income $ 6,000.00

(=) Effective Gross Income $ 331,987.00

(-) Operating Expenses $ -

(-) Reserves (2%) $ 6,639.74

Net Operating Income $ 325,347.26

Offering Price $ 6,200,000.00

Cap Rate 5.25%




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Pathway Vet Alliance Locations

1-5 locations

6-10 locations

11-15 locations

16-20 locations

More than 21 locations

WA

OR

CA

NV

ID

UT

AZ NM

CO

TX

OK

KS

NE

SD

NDMT

WY

MN

WI

MI

IL IN

MO

AR

LA

MS ALGA

FL

TN

KY

SC

NC

VA

WV

IA

OHPA

NY

VT

ME

NHMA

CT

RI

NJ

DE

MD




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Issaquah Sales ComparablesSubject Property 1 2 3

ADDRESS Alpine Animal Hospital888 NW Sammamish RoadIssaquah, WA 98027

Pickering Place1455 11th Avenue NWIssaquah, WA 98027

Former Leather’s Home1520 11th Avenue NWIssaquah, WA 98027

Pogacha Restaurant & Bar120 NW Gilman BoulevardIssaquah, WA 98027

PROPERTY TYPE Class C Medical Office Class B Medical Office General Retail/Freestanding Restaurant

SALE PRICE $6,200,000 $3,200,000 $5,750,000 $3,400,000

SALE DATE N/A January 5, 2018 November 9, 2018 November 2, 2018

BUILDING SIZE 6,866 SF 8,660 SF 13,596 SF 6,560 SF

LAND SIZE 57,400 SF 29,751 SF 58,505 SF 31,799 SF

PRICE PER SF (LAND)

$108.01 $124.36 $98.28 $106.92

ZONING MU-CI R, Issaquah D DIS-5 R, Issaquah




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Issaquah Sales Comparables Map




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Issaquah Sales Comparables Price per SF Land

$124.36

$98 .28

$106.92

1 2 3

$109.85Average Per

SF Land

4Offering Terms




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Section 4

O

ffering T

erms

Terms of SaleThe Property is being offered “as is”, “where is” and subject to all faults. Seller makes no representation or warranty with respect thereto. Buyer acknowledges that buyer is not relying on any representation or warranty of Seller or of any agent or representative of Seller. All information furnished regarding property for sale is from sources deemed reliable, but no warranty or representation is made as to the accuracy thereof and the same is subject to errors, omissions, changes of prices, rental or other conditions, prior sale or lease or withdrawal without notice.

No Contact with SellerAll contact with seller shall be conducted through listing agents with prior written approval.

Offering ProcedureNAI Puget Sound Properties hereby solicits offers to purchase Alpine Animal Hospital located at 888 NW Sammamish Road, Issaquah, WA. Owner shall consider all offers to purchase or lease the property as seller receives such offers. Inquiries concerning the procedures outlined in this Offering Memorandum may be directed to:

Steve Balkman +1 425 586 5606 [email protected]

Rick Graff +1 206 332 1493 [email protected]

Kyle Graff +1 206 332 1494 [email protected]

Andrew Graff +1 206 332 1486 [email protected]

Offering Terms & Procedures

Exclusively marketed by:

Steve Balkman+1 425 586 5606

[email protected]

Rick Graff+1 206 332 1493

[email protected]

Kyle Graff+1 206 332 1494

[email protected]

Andrew Graff+1 206 332 1486

[email protected]

Documents

INVESTMENT OPPORTUNITY OFFERING Alpine Animal Hospital ...€¦ · investment opportunity alpine animal hospital. 888 nw sammamish road issaquah, wa 98027. offering memorandum