Prime South Carolina Beachfront Location€¦ · Prime South Carolina Beachfront Location Mary Alam, MBA Senior Vice President O: 415.358.2111 M: 415.297.5586 [email protected]

Offering Memorandum presented by the Alam Team

Pawleys Island, SCPrime South Carolina Beachfront Location

Mary Alam, MBASenior Vice PresidentO: 415.358.2111M: [email protected]#01927340

Joshua BallesterosInvestment AdvisorO: 415.480.0214M: [email protected] #02010271

Ganga Balebail Investment AdvisorO: 415.534.0110M: [email protected] #02015344

Oleg Verbitski Market Analyst O: 415.480.0213M: [email protected]

CJ Brill Market Analyst O: 415.349.0147M: [email protected]

Broker of Record Walter McElveen Pawleys Island Realty O: 843.237.2000License Number 19357

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Section 1

Location Overview

Section 2

Property Overview

Section 3

Financial Analysis

Section 4

Area Economic Development Section 5

Demographics

Table ofContents

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Confidentiality & Disclosure

The information contained in the following Investment Summary is proprietary and

strictly confidential. It is intended to be reviewed only by the party receiving it from

NAI Northern California and should not be made available to any other person or

entity without the written consent of Broker. This Investment Summary 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. Broker

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

improvements thereon, or the financial condition or business prospects of any tenant,

or any tenant’s plans or intentions to continue occupancy of the subject property.

The information contained in the Marketing Brochure has been obtained from sources

we believe to be reliable; however, Broker has not verified, and will not verify, any of the

information contained herein, nor has Broker conducted any investigation regarding

these matters and makes no warranty or representation whatsoever regarding the

accuracy or completeness of the information provided. All potential purchasers must

take appropriate measures to verify all the information set forth herein.

Section 1

Location Overview

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Pawley’s Island

Location Overview

Atlanta

Augusta

Columbia

Greenville

Charlotte

Chapel Hill Raleigh

Greenville

Wilmington

Myrtle Beach

Georgetown

Charleston

Hilton Head IslandSavannah

Spartanburg

Location Description

The “Pearl of Carolina’s Grand Strand”, Pawley’s Island is a popular beach community located on the southern end of the Grand Strand between Georgetown and Myrtle Beach. It is a part of Georgetown County whichwas founded in 1769 and is named for George III of the United Kingdom. Itboasts a population of 62,000 people and enjoys a low unemployemnt rate of 5.4%. This location is commonly referred to as the Waccamaw Neck — a long narrow peninsula between the Waccamaw River and the Atlantic Ocean.

Situated on the south end of the Grand Strand, this picturesque and highly sought after seaside community offers a tranquil and welcoming atmosphere to vacationing visitors throughout the year. Famous for its “arrogantly shabby” Cypress cottages, the vibe on the island is a reflection of the feel of these old, classic homes – grandiose, but uninterested in putting up a facade. This area just 30 minutes south of Myrtle Beach, South Carolina, is a perfect destination for outdoors-enthusiasts and those who appreciate the beauty of the Lowcountry landscape. It is a popular destination in all four seasons due to its beautiful beaches and mild weather.

The area is home to world-class golf courses like Caledonia Golf and Fish Club, which has been listed as one of the country’s Top 100 tracks by Golf Digest, Golfweek, and Golf Magazine. Other notable courses include the treacherous Jack Nicklaus-designed Pawleys Plantation, and True Blue Golf Club, which has also landed several times on Golf Digest’s list “Top 100 Public Courses in America.”

Myrtle Beach located only 22 miles North of Pawleys Island is a very famous and popular city and vacation resort on South Carolina’s Atlantic coast. It is the hub of the Grand Strand, a 60-mile string of beaches. It’s also known for its celebrity-designed golf courses. Along its beachfront boardwalk are arcades, souvenir stands and restaurants, as well as the old-fashioned Family Kingdom amusement park and the SkyWheel, one of the country’s tallest Ferris wheels.

It has a population of 32,240 (2016) and is the second fastest growing metropolitan area in America between 2016 and 2017 according to census data.

Ranked #1 City in the world by Travel+Leisure readers, Charleston is known as the Crown Jewel of the Deep South. With a rich 300-year heritage, history can be found around every corner. However, Charleston is a modern city which, along with its suburbs , has experienced major growth due to a friendly business environment that resulted in attracting major companies such as Boeing, BMW, Mercedes Benz, Samsung and Google among others including many start-ups.

The housing and restaurant scene are just some of the indication of this growth. Mount Pleasant, a suburb of Charleston just across the Ravenel Bridge has experienced population growth that is making it rethink its housing expansion and city planning

Pawley’s Island, “America’s Oldest Seaside Community”

Myrtle Beach: 22 miles North of Pawley’s Island

Charleston: 77 Miles South of Pawley’s Island

Section 2

Property Overview

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Location

Offering SummaryPRICE $6,975,000

SIZE 14,799 SF

YEAR BUILT 2006

NET OPERATING INCOME $366,000

CAP RATE 5.25%

PRICE/SF $471

LEASE TYPE Absolute NNN

APN04-0162-075-00-00 04-0162-078-00-00

LOT SIZE 1.91 AC

STORE # 07956

11 & 69 N Causeway Road Pawley’s Island, SC 29585

Key FactsLocation-Location-Location This store is located at the northeastern corner of Ocean Highway and the main causeway to the Island--the best corner location in town--on an extremely valuable 2 acres overlooking the ocean and the island--which will only increase in value from year to year. Traffic count on Ocean Highway/Highway 17 is very high at 32,000 cars per day

Rare Walgreens for sale in South Carolina

A 24 Hour Store with a drive-thru pharmacy and liquor license

Limited competition with no Rite Aid stores within 15 miles

Enjoys the current economic boom in South Carolina especially in Myrtle Beach, 22 miles to the South, the adjacent shore area and Charleston.Myrtle Beach was ranked the second fastest growing metropolitan area in America.

Sharing the current population growth in the area is the fact that pharmacy sales grew a whopping 21.5% in the past year.

Major Retail trade corridor includes retailers such as Publix supermarket, CVS, Fresh Market, Petco, IHOP, McDonald’s, Hardee’s, Dollar General and many more.

Population growth between 2010 and 2017 approximately 5% in a one mile radius and 6.6% within five miles.

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Investment HighlightsInvestment Highlights LONG-TERM TRIPLE NET LEASE: Approximately 63 years remaining with a right to terminate in approximately 13 years and every five years thereafter.

INVESTMENT GRADE TENANT: Walgreen’s carries one of the highest credit ratings with a Standard & Poor’s rating of BBB.

STRONG DEMOGRAPHICS:• Over 1million visitors per year• High end location with multi-million dollar homes and an affluent population

with an average annual income of $78,000 a year

HIGH TRAFFIC LOCATION:• Historic Beachfront community only 70 miles North of Charleston and 25 miles

South of Myrtle Beach• Located at a prominent signalized intersection along the heavily traveled Ocean

Highway (Highway 17), at the intersection with N. Causeway which leads into the town of Pawley’s Island.

LIMITED COMPETITION: A 24 hour store, the subject Walgreen’s with a drive-thru is only one of 2 large drugstores serving the area which serves retirees and beachgoers with high drugstore and prescription related needs.

BEACHFRONT PROPERTY WITH INTRINSIC REAL ESTATE VALUE: Two large (almost 2 acres) beachfront lots with major upside and future potential for development

STRATEGIC LOCATION: • Pawley’s Island and Georgetown County boast a very coveted location focused on

Tourism which is the “No. 1 industry in both Horry and Georgetown counties….. (and) generates $7 billion annually for the local market and supports more than 83,000 jobs, an impressive 80 percent of which are maintained year-round.”

• Coveted destination for Northeastern retirees in the winter and beachgoing vacationers in the summer.

• Pawley’s Island boasts high priced homes in the $1-$2+ mil range and many exclusive golf courses

• Major presence in the Waccamaw Neck commercial corridor with many retailers nearby such as Publix, Fresh Market, Dollar General, Bank of America, IHOP, Tuesday Morning, Dunkin Donuts and more

• Charleston, home to many industries including Boeing (Dreamliner), BMW, Mercedes Benz and many more, is at the forefront of a major area growth and economic strength.

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Tenant Profile

Walgreens Boots Alliance (NYSE: WAG) is the first global pharmacy-led, health and

wellbeing enterprise in the world. It was created through the combination of Walgreens

and Alliance Boots in December 2014. This transaction brought together two leading

companies with iconic brands, complementary geographic footprints, shared values

and a heritage of trusted healthcare services through pharmaceutical wholesaling and

community pharmacy care, dating back more than 100 years.

The new global enterprise combines Walgreens, the largest drugstore chain in the

USA; Boots, the market leader in European retail pharmacy; and Alliance Healthcare,

the leading international wholesaler and distributor. Together, Walgreens Boots Alliance

spans more than 20 countries, with over 12,822 stores, over 345,000 employees

and more than 390 pharmaceutical distribution centers serving more than 230,000

pharmacies and other points of care. The merger also brings together a unique brand

portfolio of outstanding retail, wholesale, service and product brands, alongside the

world’s largest pharmaceutical wholesale and distribution network.

On September 19, 2017, Walgreens announced it had secured regulatory clearance

to purchase 1,932 stores, three distribution centers and related inventory from Rite Aid

for $4.375 billion in cash and other consideration. Ownership of stores is expected to

be transferred in phases, with the goal being to complete the store transfers in spring

2018.

S&P CREDIT RATING: BBB

2017 REVENUE ($BIL): $118.21

2017 NET INCOME ($BIL): $4.07

# OF LOCATIONS (2017): 12,822

# OF EMPLOYEES (2017): 345,000


Lease Abstract

Lease Commencement Date: Dec 1, 2005

Rent Commencement Date: May 9, 2006

Lease Expiration Date: May 31, 2081

Term: 75 years

First Termination Option (300th month): April 30, 2031*

Right of first refusal: Yes (10 business days)

Lessee: Walgreen Co

Rent: $30,500 a month

Rent Increase: N/A

Utilities: Lessee

Structure: Lessee

Interior, Exterior, Roof & Plumbing: Lessee

Liability Insurance: Lessee

CAM: Lessee

Taxes: Lessee

Lease AbstractLease Abstract

* Tenant shall have the right and option, at Tenant’s election, to terminate this Lease effective as of the last day of the three hundredth (300th) full calendar month of the Term, and every 5 years thereafter.


Lease AbstractLease AbstractRent Roll

TENANT Walgreens

SIZE 14,799 SF

MONTHLY RENT $30,500

ANNUAL RENT $366,000

CAM REIMBURSEMENTS NNN

RENT/SF PER MONTH $2.06

RENT/SF PER YEAR $24.72

LEASE START Dec 2005

RENT START May 2006

LEASE EXPIRATION May 2081*

*Tenant shall have the right and option to terminate this lease as of the last day of the 300th full calendar month of the term (25 years) and every 5 years thereafter


Site Plan

SUBJECT PROPERTY

04-0162-075-00-00 04-0162-078-00-00

APN:

PROPERTY PARCELS

• Two large parcels• Prototype size with Drive-Thru• Large sign with digital display

Open 24 hours

Drive-thru Pharmacy

Vaccinations & Immunizations

Beer & Wine Sales

ATM

Western Union Banking

Propane

FedEx Drop Off & Pick Up

Photo Department

WALGREENS SUBJECT PROPERTY

WALGREENS SERVICES


Retailer Map

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EAN

HW

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17

32,000 CARS PER DAY

PAWLEY’S ISLAND PLAZA

ADDITIONAL RETAIL

SUBJECT PROPERTY

Myrtle Beach

Charleston

N

Section 4

Financial Analysis

3


Financial Analysis

Debt and Return Calculations

Loan Quote (subject to change)

Sale Price $6,975,000Loan Amount $4,185,000Loan To Value 60%Down payment $2,790,000Interest Rate 4.80%Amortization 30

Return Calculations

Net Operating Income: $366,000Debt Service: $21,957 $263,487Pre-Tax Cash Flow: (Cash on Cash return) 3.7% $102,513Principal Reduction: $62,607Total Return: 6.0% $165,120

Principal Interest

$62,607 $200,880 Year 1

Section 3

Area Economic Development

4


Area Economic Development

South Carolina has become a destination of choice for many international firms looking to expand operations in North America. More than 1200 operations of foreign-affiliated companies are located in the State, employing around 132,000 South Carolinians with more growth to come with the recent investments by BMW, Volvo and Samsung, to name a few. Nephron Pharmaceutical Corporation: ships 1 billion+ doses of generic respiratory medication annually.

Major Local employers include Boeing. Others are Black and Decker, and more. The Schaeffler Group in York county in the northern part of the state has been named among the country’s top two counties for job growth. The 4 counties in the North of state around highway 77 are flourishing and benefit from their proximity to Charlotte. Other employers include Kimberly-Clark and Michelin which attest to a diversified economy and a solid workforce that as the ability to weather economic downturns.

Both port access and location are critical to global business. Having multiple world class deepwater ports located on the Atlantic Ocean is a distinct advantage for Charleston and South Carolina. Today, one in 11 state jobs is tied to the Port of Charleston which contributes $53 billion in state economic activity. The Port’s 10 year plan includes $2 billion in capital investments and harbor deepening projects to accommodate larger ships made more prevalent following the expansion of the Panama Canal.

The ReadySC workforce program has trained more than 289,000 people since its inception in 1961.

Agribusiness in SC has grown by 23% over the last decade with a current impact in excess of $41 billion annually.More than 1,200 foreign owned operations exist across the state, helping rank South Carolina among the leading states in the US for jobs tied to foreign investment, leading the nation in 4 out of 7 years in FDI (Foreign Direct Investment) per capita.South Carolina has been labeled a ‘brand state’ due to its welcoming business environment, the deepwater Port of Charleston and one of the oldest customized training programs in the US.

International Appeal

Global Impact


Major Industries

Between 2011 and 2016, capital investments worth $6 billion were announced by South Carolina’s auto industry.

BMW built its first US manufacturing plant in Spartansburg, SC in 1994 that has resulted in the German giant investing over $8 bilion in the state, producing over 4 million cars and creating over 9,000 jobs. Today there are over 400 automotive manufacturing related companies in the State. South Carolina’s automotive sector is critical with an annual impact of $27 billion with the state ranking first in the in the US in export sales of both tires and completed passenger vehicles. The industry employs over 158,000 South Carolinians and spans from parts suppliers and raw material producers, many of which come from overseas, to other OEMs such as Honda and Mercedes Benz.

Mercedes Benz broke ground in 2016 on a $500 million expansion of its Charleston area site, upgrading it from a reassembly facility to a full-scale production plant in order to produce cars in the same market where the vehicles are sold. This new facility is set to open in 2018 and is expected to create more jobs over the next decade.

Volvo’s push to strengthen its position in the North American Market has led to the company opening its first US factory, near Charleston, with production set to launch later in 2018, with the company committing to more than $1 billion in investment and 3,900 jobs.

Supporting Infrastrucure: Santee Cooper, a state owned electric and water utility, was instrumental in attracting the Volvo deal as well as others with Samsung and Google via its industrial rates that are 15% below the national average and innovative strategies which allowed then to be a facilitator in economic development (unlike a privately held utility). Projects such as in the case of Volvo, include buying land and developing an adjacent commerce center that features the amenities that workers need.

Education: The goal of creating an ecosystem that combines academics and research in technology to partnering with industries in the automotive arena has been enhanced with the opening in 2007 of the Clemson University International Center for Automotive Research (CU-ICAR), a state of the art advanced technology campus highly coveted by many local and outside companies for R&D support and Leadership. Among its key projects is exploring how new composite technologies can reduce vehicle weight and improve fuel economy and it Deep Orange flagship graduate program founded to meet the industry’s growing workforce needs.

Automotive


Major Industries

South Carolina has proven that it can expand beyond its traditional roots to support a broad advanced manufacturing industry that also includes chemicals, plastics and consumer products.

Boeing chose Charleston in 2009 for its new 787 Dreamliner final assemply and delivery line. Since then, the company has continued to grow, employing 7,000 people and investing around $2 bn in land, facilities, infrastructure and tools in two locations.

The Aerospace Industry in South Carolina now encompasses around 400 private firms as further proof of the state’s expanded reach and attributes as an attractive business environment.

Advanced Materials has evolved from South Carolina’s textile industry to support the automotive and aerospace industries. This is the case of many supporting industries as well that have continued to grow in order to meet demand.

Traditional manufacturing such as Georgetown Paper Mill and Large Arcellor Mittal steel factory plan also contribute to the local manufacturing economy.

South Carolina benefits from a thriving life sciences industry, from biotechnology to pharmaceuticals, which contributes $11.4 bn to the state economy annually with forward thinking research and medical institutions such as the Medical University of South Carolina (MUSC).

The Medical University of South Carolina MUSC is not only a leading University attracting over $250 mil in annual research funding and training over 3,000 students and residents, it is also one of two institutions in the nation recognized for its telehealth capabilities needed to advance care for patients in general and in rural areas in particular.

Gibbs Cancer Center & Research Institute, a part of the Spartanburg Regional Healthcare System, is not only a community cancer center, but pushes the envelope and is at the forefront of cancer treatment and innovation. For example, it was the first site in the country to combine the CyperKnife M6 Robotic Radiosurgery System and Space OAR, two high tech cancer technologies, to improve the experience of patients with prostate cancer by reducing the side effects from radiation therapy and potentially reducing the number of treatments needed.

Advanced Manufacturing

Life Sciences


Major Industries

The educational system in South Carolina has taken notice of the incredible increase in economic development and has geared up to meet the new demands of cutting edge companies. Institutions such as the College of Charleston follows a holistic approach to ensure that its students are globally focused. Founded in 1770, it is South Carolina’s oldest university but is making a large impact with innovative strategies such as a new computer science innovation center with rapid prototyping makerspace and a colocation space that encourages the interaction of students with employees from companies such as Boeing and Mercedes Bens Vans.

The Citadel is a military college that has been named Top Public college in the South for institutions granting up to a master’s degree for seven straight years by US News and World Report. Established in 1842, it has been a Charleston landmark for 175 years. Besides its Civil and electrical engineering majors, it has expanded its programs to mechanical engineering for example in order to better serve the growing workforce needs of such major employers as Boeing and others.

Clemson University is ranked among the top-25 national public universities by US World & News Report and has been for 10 years, an indication of Clemson’s entrepreneurship and innovation in diverse areas such as advanced materials, cyberinfrastrucure, big data science, energy, transportation and advanced manufacturing plus health innovation and sustainable environment. A land-grant institution had a research enterprise that topped $90 mil in expenditures in FY2017 and focuses on collaboration with industry partners. For instance, Clemson announced the creation of Center for Advanced Manufacturing that aligns with the states’ innovation and workforce needs and which has already let to an R&D partnership with the global companies such as the state newcomer Samsung.

The University of South Carolina is one of the oldest public institutions in the US but is also on the cutting edge of innovation and a major contributor to the economic success and growth of the state of South Carolina. It is harnessing innovation and works closely with global companies using the Port of Charleston through its nationally leading international business program. It is ranked in the top 1% of patent producing universities in the world with more than $250 million in annual research awards.

Other colleges such as the Riley Insitute of Furman University and Wofford College, continue to develop programs that integrate diversity, entrepreneurship and skills for lifelong success such as adaptability to a changing world, problem solving and more.

Higher Education


Major Industries

Charleston, besides its dominant automotive and aerospace industries, is becoming a nationally relevant tech hub, ranking first among mid-size metros for IT jobs, according to the BLS. Nearly 300 related companies are housed here, causing it to be named by the Kaufman Foundation as one of the country’s best-performing entrepreneurial hotspots in 2017.

Columbia has emerged as a global leader in insurance technology and services contributing close to $7 bn in annual economic impact, largely due to over a century of innovation and development led for the most part by Seibels, founded in 1869, it is the oldest business enterprise operating out of the capital. It now provides business process outsourcing to the property and casualty insurance industry and has invested recently in upgrading its historic headquarters and its technologies.

Information Technology


Georgetown Memorial Hospital

Smith Medical Clinic

VA Medical Center

Tidelands Waccamaw Family Medicine

Tidelands Waccamaw Hospital

Medical Corridor

Pawleys Island and its neighboring Litchfied by the Sea boast a very high presence of medical facilities that range from urgent care, specialty clinics such as spine and surgical centers to cosmetic procedures and surgeries. The area includes multiple full service hospitals.

Medical Corridor


Golf Courses

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Pawley’s Plantation

Founder’s Club

Heritage Golf Club

True Blue Golf Club

Caledonia Golf & Fish Club

River Golf Club

Litchfield Country Club

Tradition Golf Club

Willbrook Plantation


Press

Section 5

Demographics

5


Demographics 29585 ZIP Code


DemographicsPopulation: 1 mile 3 miles 5 miles

2022 Projection 1,634 11,139 15,417

2017 Estimate 1,616 10,849 14,918

2010 Census 1,699 10,546 13,990Growth 2017-2022 1.11% 2.67% 3.34%Growth 2010-2017 4.89% 2.87% 6.63%2017 Population Hispanic Origin

43 178 211

2017 Population by Race: 1 mile 3 miles 5 miles

White 1,212 9,433 13,321

Black 387 1,237 1,363

Am. Indian & Alaskan 3 27 32

Asian 3 35 61

Hawaiian & Pacific Island 0 9 13

Other 11 108 128

U.S. Armed Forces: 0 0 0

Households: 1 mile 3 miles 5 miles

2022 Projection 763 4,956 6,958

2017 Estimate 755 4,831 6,738

2010 Census 792 4,715 6,343

Growth 2017 - 2022 1.06% 2.59% 3.27%

Growth 2010 - 2017 4.67% 2.46% 6.23%

Owner Occupied 543 3,983 5,575

Renter Occupied 211 847 1,163

Avg Household Income: $78,000

Med Family Income: $97,125


Traffic Count

Collection Street Cross Street Cross Street Dist/Dir Traffic Volume Count YearDist from Subject

Type

Ocean Hwy Cedar Grove Ln 0.06 NE 32,000 2016 0.14 MPSI...

Waverly Rd Clearwater Dr 0.85 NW 3,319 2012 0.20 MPSI...

N Causeway Rd Pawleys Creekside Loop 0.01 NW 3,000 2016 0.20 MPSI...

Myrtle Ave 1st St 0.01 NE 2,700 2016 0.43 MPSI...

Pavilion Rd 0.00 767 2011 0.45 MPSI...

Pavilion Rd 0.00 1,093 2012 0.45 MPSI...

Pavilion Rd Waverly Rd 0.07 N 475 2016 0.45 MPSI...

Atlantic Ave Pearce St 0.03 SW 2,457 2012 0.50 MPSI...

South Causeway Rd Minnow Dr 0.06 SE 1,538 2012 0.95 MPSI...

S Causeway Rd Green Cir 0.06 SE 1,850 2016 0.95 MPSI...

Offering Memorandum

Mary Alam, MBASenior Vice President

O: 415.358.2111M: 415.297.5586

[email protected] #01927340

Joshua BallesterosInvestment Advisor

O: 415.480.0214M: 209.518.9025

[email protected] #02010271

Broker of Record Walter McElveen

Pawleys Island Realty O: 843.237.2000

License Number 19357

Documents

Prime South Carolina Beachfront Location€¦ · Prime South Carolina Beachfront Location Mary Alam, MBA Senior Vice President O: 415.358.2111 M: 415.297.5586 [email protected]