OFFERING MEMORANDUM - LoopNet...OFFERING MEMORANDUM. NON- E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E ... already resulted in other national tenants expressing interest

SHOPPES OF WALDEN RIDGERockwood, TN

OFFERING MEMORANDUM

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to

be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other

person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to

provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of

interest in the subject property. The information contained herein is not a substitute for a thorough due diligence

investigation. Marcus & Millichap has not made any investigation, and 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, PCB's or asbestos, the compliance with State and Federal regulations, 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. The information contained in this Marketing Brochure

has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not

verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding

these matters and 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 set forth

herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â© 2017

Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in

this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply

affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or

subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for

the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01

FINANCIAL ANALYSIS 02

MARKET OVERVIEW 03

SHOPPES OF WALDEN RIDGE

4

INVESTMENT

OVERVIEW


#

OFFERING SUMMARY

INVESTMENT HIGHLIGHTS

INVESTMENT OVERVIEW

5


▪ Harbor Freight Tools Just Signed a New Ten-Year Lease

▪ 25 Percent Under Market Rents for the Majority of Tenants

▪ Recent Completion of Major Roof & Parking Lot Repairs

▪ Multiple Ingress/ Egress | Abundant Parking and Excellent Visibility

▪ Located Forty-Miles West of Knoxville, Tennessee

The Dumes Falk Group of Marcus and Millichap is pleased to bring to market the Shoppes of Walden Ridge, a

neighborhood shopping center anchored by Harbor Freight Tools and located in Rockwood, Tennessee – forty

miles west of Knoxville. The subject property is comprised of approximately 70,180-square-feet and situated on

approximately 7.72 acres. The Shoppes of Walden Ridge is positioned just south of Interstate 40 along U.S. Route

27, a four-lane commuter thoroughfare with designated turn lanes into the subject property.

The Shoppes of Walden Ridge offers a good mix of retail and medical tenants with the majority of the tenants rents

are twenty-five percent below market. The newest tenant, Harbor Freight, anchors the center and the tenancy has

already resulted in other national tenants expressing interest in leasing space. With flexibility to replace several

occupants, the center is primed to enjoy such influx of national tenant interest. The center has recently been

updated with 50 percent of the roofs replaced in 2012 and 2014. Roughly 30 percent of the parking lot was

recapped in 2012 and the seller has plans to stripe and seal the entire parking lot this summer.

The city of Harriman is part of the Roane County Alliance, an economic development alliance aimed at bringing

industrial and economic development to the area. Considered an “open secret” the area touts a strong presence of

innovation as well as research and development in the field of science and technology.

The new lease with Harbor Freight provides this center the ability to remain an integral part of the community and

should continue to serve as an invaluable shopping destination for residents and travelers alike.

6


PROPERTY PHOTOS

7


PROPERTY PHOTOS

8


PROPERTY PHOTOS

SITE PLAN

9


A – Fuel N Fitness D – Champion Physical Therapy G – Carriage Hill Insurance J - Event Center

B - Valor Healthcare (VA Clinic) E – Vacant H1 & H2 – Mid-East Community Action Agency K – Jake’s Tavern & Grill

C1 & C2 – Express Health F – Body Works Beauty Salon I – East Tenn. State Univ.

A

B

C1

D E F G H2I J K

Sto

rage

H1

C2

CLOSE UP AERIAL PHOTO

10


AERIAL PHOTO

11

Bowers Elementary 336

Students

Residential Communities

Projected 3 Mile Median Household Income

Growth of 12% in 5 Years10% Growth Since 2000

Roane Medical Center 425 Employees

Harriman

Rockwood

Emory Golf & Country Club

Rockwood Golf & Country Club

TVA Kingston Steam Plant

10B Kilowatt-Hours/YRPowers 700,000 Homes

Roane State Community College

4,302 Students

Harriman High & Middle Schools 672 Students

Midtown Elementary 372

Students

Proton Power | Toho Tenax America | Kimble Chase (862 Employees) | Roane

Metals | Netshape Technologies


Rockwood Middle & High Schools

LOCAL MAP

12

Cookeville

Knoxville

N

Subject Property


Harriman

Crossville

Oak Ridge

Sevierville

Maryville

Farragut

REGIONAL MAP

13

N

Chattanooga

Nashville

Charlotte

Greensboro


Knoxville

14

FINANCIAL

ANALYSIS


#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Roane County Schools 1,020

Kimble Chase 862

Roane County 585

Roane Medical Center 425

Albahealth LLC 325

National Scientific 307

Kingston Steam Plant 300

Michael Dunn Center 300

Seg Westinghouse 300

Walmart 261

Roane State Community College 250

Tennessee Baptist Chld Homes 210

DEMOGRAPHICS

3-Miles 5-Miles 10-Miles

2016 Estimate Pop 6,207 15,577 41,698

2010 Census Pop 6,375 15,936 42,635

2016 Estimate HH 2,639 6,357 17,158

2010 Census HH 2,717 6,514 17,552

Average HH Income $41,714 $48,504 $53,446

15

THE OFFERING

Property The Shoppes of Walden Ridge

Property Address 2305 North Gateway Avenue, Rockwood, TN 37748

SITE DESCRIPTION

Built 1981

Gross Leasable Area 70,180 SF

Current Occupancy 97.44%

Lot Size +/- 7.72 Acre(s)

Ownership Fee Simple

MAJOR TENANTS

TENANT GLA LEASE EXPIRATION LEASE TYPE

Harbor Freight Tools 15,792 08/31/2027 NNN

Valor Healthcare (VA Clinic) 9,788 11/30/2018 NNN

Jake’s Tavern & Grill 3,600 11/31/2021 Gross


FINANCIAL ANALYSIS

16

TENANT SUMMARY


% Monthly

Square Bldg Lease Dates Rent per Total Rent Total Rent Changes Changes Lease

Tenant Name Feet Share Comm. Exp. Sq. Ft. Per Month Per Year on to Type Renewal Options

Harbor Freight Tools 15,792 22.50% 08/25/2017 08/31/2027 $5.50 $7,238 $86,856 Year 6 $94,752 NNN Three, Five-Year

Fuel-N-Fitness 9,200 13.11% 05/01/2016 05/31/2019 $3.91 $3,000 $36,000 N/A N/A Gross One, Two-Year

Event Center 4,920 7.01% 06/01/2016 05/31/2019 $2.44 $1,000 $12,000 N/A N/A Gross One, Two-Year

Storage 8,100 11.54% MTM MTM $0.26 $175 $2,100 N/A N/A Gross None

Valor Healthcare (VA Clinic) 9,788 13.95% 12/01/2013 11/30/2018 $5.25 $4,282 $51,387 Dec. 2018 $56,569 NNN Two, Five-Year

Express Healthcare 6,880 9.80% 05/01/2013 09/30/2020 $12.00 $6,880 $82,560 Oct. 2020 $96,320 NNN Two, Three-Year

Champion Physical Therapy 1,800 2.56% 10/01/2012 MTM $8.00 $1,200 $14,400 N/A N/A N None

Carriage Hill Insurance 1,200 1.71% 04/15/2014 04/01/2018 $9.68 $968 $11,616 N/A N/A N One-One-Year

East Tennessee State University 1,200 1.71% 10/01/2015 09/30/2018 $7.00 $700 $8,400 N/A N/A Gross Two, One-Year

Jake's Tavern & Grill 3,600 5.13% 07/25/2012 11/31/2021 $7.67 $2,300 $27,600 Dec. 2019 $30,360 Gross None

Mid-East Community Action Agency 4,700 6.70% 10/01/2016 09/30/2019 $5.62 $2,200 $26,400 Oct. 2019 TBD Gross Two, Three-Year

Body Works Beauty Salon 1,200 1.71% 04/01/2017 03/31/2018 $7.00 $700 $8,400 N/A N/A NN None

Vacant 1,800 2.56%

Total Vacant 1,800 2.56%

Total Occupied 68,380 97.44%

Total 70,180 100.00% $30,643 $367,719

TENANT SUMMARY

#

Harbor Freight Tools

Harbor Freight Tools USA, Inc. retails discounted tools in the United States.

Its products include automotive, air, and power tools, shop equipment, and

hand tools. The company offers its products through 700 stores retail stores

and online. It serves automotive and truck repair shops, government

agencies, schools, manufacturers, contractors, and tool enthusiasts. The

company was founded in 1977 and is based in Calabasas, California.

PRICING AND VALUATION MATRIX

PROPERTY NAMEOAKLEY STATION BUILDING

PRICING AND VALUATION MATRIX

PROPERTY NAME

17

TENANT SUMMARY

General Information

Tenant Name Harbor Freight Tools

Lease Commencement August 25, 2017

Gross Leasable Area (GLA) 15,790

Original Term Ten Years

Option Term Three, Five-Year Terms

Pro Rata Share of Project 22.50%

Headquarters Calabasas, California

Website www.harborfreight.com

Lease Years Annual Rent Monthly RentAnnual

Rent/SF

08/25/2017-08/31/2022 $86,856 $7,238 $5.50

09/01/2022-08/31/2027 $94,752 $7,896 $6.00

Base Rent

Lease Years Annual Rent Monthly RentAnnual

Rent/SF

09/01/2027 – 08/31/2032 $102,648 $8,554 $6.50

09/01/2032 – 08/31/2037 $110,544 $9,212 $7.00

09/01/2037 – 08/31/2042 $118,440 $9,870 $7.50

Option RentExpense Lease Summary

C.A.M. Tenant reimburses pro-rata share, 5% cap from prior year

Real Estate Tax

Tenant reimburses pro-rata share. Does not reimburse for fftax increase due to sale

Insurance Tenant reimburses pro-rata share, 5% cap from prior year

Management Tenant does not reimburse pro-rata share

Co-TenancyTenant has co-tenancy with 60% GLA occupancy

ffrequirement

Other Early Termination option after 5 years


FINANCIAL ANALYSISPRICING DETAIL

18


Operating Data Current

Scheduled Base Rental Income $367,719

Expense Reimbursement Income

CAM $16,666

Insurance $4,437

Real Estate Taxes $7,998

Management Fees $0

Total Reimbursement Income $29,101

Effective Gross Revenue $396,820

Less: Operating Expenses ($95,656)

Net Operating Income $301,164

Debt Service ($140,062)

Net Cash Flow After Debt Service 23.01% $161,102

Principal Reduction $46,522

Total Return 29.66% $207,624

Operating Expenses Current Per/SF

Co

mm

on

Are

a

Main

ten

ance (C

AM

) Electric Utilities $7,398 $0.11

Gas Utilities $1,170 $0.02

Trash Removal $3,808 $0.05

Landscaping $1,080 $0.02

Parking Lot Sweeping $1,440 $0.02

Pest Control $2,100 $0.03

General Maintenance $21,600 $0.31

Total CAM $38,596 $0.55

Insurance* $10,825 $0.15

Real Estate Taxes** $20,362 $0.29

Management Fee (4% of EGR) $15,873 $0.23

Reserves*** $10,000 $0.15

Total Expenses $95,656 $1.36

*Insurance Based on 2015 P&L

**Real Estate Taxes are Based on Total Value of $1,456,500

***Reserves are Estimated at $0.15/SF

PRICING & FINANCING

Price $2,800,000

Cap Rate | Price/SF 10.76% | $39.90

Net Operating Income $301,164

Loan Type Proposed New

Down Payment 25% / $700,000

Loan Amount $2,100,000

Interest Rate / Amortization 4.50% / 25 Years

Debt Coverage Ratio 2.00

Representative Harbor Freight Logo

19

MARKET

OVERVIEW


PROPERTY NAME

MARKETING TEAMDEMOGRAPHICS

Source: © 2016 Experian

Created on April 2017

POPULATION 3 Miles 5 Miles 10 Miles

▪ 2021 Projection

Total Population 6,082 15,638 42,420

▪ 2016 Estimate


▪ 2010 Census


▪ 2000 Census


▪ Current Daytime Population

2016 Estimate 5,057 13,033 31,286

HOUSEHOLDS 3 Miles 5 Miles 10 Miles

▪ 2021 Projection

Total Households 2,594 6,418 17,576

▪ 2016 Estimate


Average (Mean) Household Size 2.33 2.40 2.39

▪ 2010 Census


▪ 2000 Census


▪ Occupied Units

2021 Projection 2,594 6,418 17,576

2016 Estimate 3,220 7,522 20,006

HOUSEHOLDS BY INCOME 3 Miles 5 Miles 10 Miles

▪ 2016 Estimate

$150,000 or More 1.72% 2.16% 2.74%

$100,000 - $149,000 3.68% 5.48% 7.13%

$75,000 - $99,999 6.07% 9.03% 11.17%

$50,000 - $74,999 12.95% 17.48% 18.50%

$35,000 - $49,999 15.57% 15.80% 15.54%

Under $35,000 59.62% 49.60% 44.47%

Average Household Income $41,714 $48,504 $53,446

Median Household Income $28,046 $35,348 $39,768

Per Capita Income $17,810 $20,103 $22,167

HOUSEHOLDS BY EXPENDITURE 3 Miles 5 Miles 10 Miles

Total Average Household Retail Expenditure

$46,583 $51,522 $54,906

▪ Consumer Expenditure Top 10 Categories

Housing $12,304 $13,391 $14,075

Transportation $9,078 $9,782 $10,332

Shelter $6,460 $6,976 $7,275

Food $5,346 $5,915 $6,303

Health Care $3,688 $4,017 $4,263

Utilities $3,460 $3,661 $3,782

Personal Insurance and Pensions $3,028 $3,770 $4,205

Entertainment $2,102 $2,320 $2,473

Cash Contributions $1,274 $1,473 $1,624

Household Furnishings and Equipment

$1,223 $1,428 $1,576

POPULATION PROFILE 3 Miles 5 Miles 10 Miles

▪ Population By Age

2016 Estimate Total Population 6,207 15,577 41,698

Under 20 22.45% 22.09% 21.96%

20 to 34 Years 16.67% 16.45% 15.63%

35 to 39 Years 5.31% 5.35% 5.43%

40 to 49 Years 12.88% 13.11% 13.24%

50 to 64 Years 23.22% 22.78% 23.05%

Age 65+ 19.48% 20.21% 20.69%

Median Age 44.58 44.82 45.42

▪ Population 25+ by Education Level

2016 Estimate Population Age 25+ 4,428 11,208 30,237

Elementary (0-8) 7.15% 6.78% 5.36%

Some High School (9-11) 13.11% 11.79% 11.04%

High School Graduate (12) 41.40% 41.32% 39.41%

Some College (13-15) 21.65% 19.97% 20.41%

Associate Degree Only 4.61% 6.47% 7.23%

Bachelors Degree Only 7.05% 8.29% 9.37%

Graduate Degree 3.52% 4.16% 5.54%

20


Income

In 2016, the median household income for your selected geography is

$28,046, compare this to the US average which is currently $54,505.

The median household income for your area has changed by 9.72%

since 2000. It is estimated that the median household income in your

area will be $31,465 five years from now, which represents a change

of 12.19% from the current year.

The current year per capita income in your area is $17,810, compare

this to the US average, which is $29,962. The current year average

household income in your area is $41,714, compare this to the US

average which is $78,425.

Population

In 2016, the population in your selected geography is 6,207. The

current population is 48.58% male and 51.42% female. The median

age of the population in your area is 44.58, compare this to the US

average which is 37.68. The population density in your area is 219.40

people per square mile.

Households

There are currently 2,639 households in your selected geography. The

average household size in your area is 2.33 persons.

Employment

In 2016, there are 31,286 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

38.77% of employees are employed in white-collar occupations in

this geography, and 59.48% are employed in blue-collar occupations.

In 2016, unemployment in this area is 7.94%. In 2000, the average

time traveled to work was 30.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

91.82% White, 5.01% Black, 0.12% Native American and 0.50%

Asian/Pacific Islander. Compare these to US averages which are:

70.77% White, 12.80% Black, 0.19% Native American and 5.36%

Asian/Pacific Islander. People of Hispanic origin are counted

independently of race.

People of Hispanic origin make up 1.89% of the current year

population in your selected area. Compare this to the US average of

17.65%.

PROPERTY NAME

MARKETING TEAM

Housing

The median housing value in your area was $84,298 in 2016, compare

this to the US average of $187,181. In 2000, there were 1,935 owner

occupied housing units in your area and there were 1,057 renter

occupied housing units in your area. The median rent at the time was

$262.

Source: © 2016 Experian

DEMOGRAPHICS

21


MARKETING TEAMDEMOGRAPHICS

22

E X C L U S I V E LY L I S T E D B Y

Joel Dumes

First Vice President Investments

Senior Director – National Retail Group

Cincinnati Office

Tel: (513) 878-7720

Fax: (513) 878-7710

[email protected]

Stan Falk

First Vice President Investments

Senior Director - National Retail Group

Cincinnati Office

Tel: (513) 878-7721

Fax: (513) 878-7710

[email protected]

Ryan Roedersheimer

Associate

National Retail Group

Cincinnati Office

Tel: (513) 878-7796

Fax: (513) 878-7710

[email protected]

Broker of Record: Jody Mckibben

Documents

OFFERING MEMORANDUM - LoopNet...OFFERING MEMORANDUM. NON- E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E ... already resulted in other national tenants expressing interest