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KASE [email protected]
Exclusive Advisors
NNN LEASED10410 S. Memorial Drive, Tulsa, OK
COSTCO-ANCHOREDR E T A I L C E N T E R
ANDY BURNETT, [email protected]
Disclaimer | ConfidentialityNewmark Grubb Levy Strange Beffort, LLC (“Agent”) has been engaged as the exclusive agent for the sale of 10410 S. Memorial Drive, Tulsa, Oklahoma (the “Property”), by Building 103 LLC (“Seller”).
The Property is being offered for sale in an “as-is, where-is” condition and Seller and Agent make no representations or warranties as to the accuracy of the information contained in this Offering Memorandum. The enclosed materials include highly confidential information and are being furnished solely for the purpose of review by prospective purchasers of the interest described herein. Neither the enclosed materials nor any information contained herein is to be used for any other purpose or made available to any other person without the express written consent of the Seller. Each recipient, as a prerequisite to receiving the enclosed, should be registered with Agent as a “Potential Purchaser” or as “Purchaser’s Agent”. The use of this Offering Memorandum and the information provided herein is subject to the terms, provisions and limitations of the confidentiality agreement furnished by Agent prior to delivery of this Offering Memorandum.
The enclosed materials are being provided solely to facilitate the prospective investor’s own due diligence for which it shall be fully and solely responsible. The material contained herein is based on information and sources deemed to be reliable, but no representation or warranty, express or implied, is being made by Agent or Seller or any of their respective representatives, affiliates, officers, employees, shareholders, partners and directors, as to the accuracy or completeness of the information contained herein. Summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of some of the principal provisions contained therein. Neither the Agent or the Seller shall have any liability whatsoever for the accuracy or completeness of the information contained herein or any other written or oral communication or information transmitted or made available or any action taken or decision made by the recipient with respect to the Property. Interested parties are to make their own investigations, projections and conclusions without reliance upon the material contained herein.
Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. Seller and Agent each expressly reserves the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time, with or without notice. This offering is made subject to omissions, correction of errors, change of price or other terms, prior sale or withdrawal from the market without notice. Agent is not authorized to make any representations or agreements on behalf of Seller.
Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing additional investigation and/or making an offer to purchase the Property unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered, and approved by Seller and any conditions to Seller’s obligations thereunder have been satisfied or waived.
By taking possession of and reviewing the information contained herein, the recipient agrees that (a) the enclosed materials and their contents are of a highly confidential nature and will be held and treated in the strictest confidence and shall be returned to Agent or Seller promptly upon request; and (b) the recipient shall not contact employees or tenants of the Property directly or indirectly regarding any aspect of the enclosed materials or the Property without the prior written approval of the Seller or Agent; and (c) no portion of the enclosed materials may be copied or otherwise reproduced without the prior written authorization of Seller or Agent or as otherwise provided in the Confidentiality Agreement executed and delivered by the recipient(s) to Agent.
2Executive Summary
3Lease Analysis
4Property Summary
5Location
6Tenant Overview
7City Overview
8Advisor Profile
OFFERING MEMORANDUM
Offering Memorandum2
Executive Summary
The subject property offers investors an attractive multi-tenant retail center located in Tulsa, Oklahoma. The current tenants, Chipotle Mexican Grill, Mattress Firm, and Cox Communications, all have a national presence and have signed leases of more than ten years. The tenants each have at least two 5-year renewal options following the initial lease term. As such, the property boasts an impressive 6.5% cap rate.
Built in 2017, the building sits on 1.5 acres and has 8,709 rentable square feet. It is located in front of the only Costco store in Oklahoma - opened in April of 2016 - and along the west side of Memorial Drive, one of Tulsa’s strongest and fastest growing retail corridors. Nearby retailers include multiple auto dealerships, ETX Energy - a large, Oklahoma-based oil and gas company, B&B Theatres, Target, Walmart, Lowes, Sprouts, Lifetime Fitness, Reasor’s Foods, as well as many national restaurants.
Investment Highlights
• The tenants are Chipotle Mexican Grill, a national fast food chain with more than 2,000 locations internationally; Mattress Firm, one of the largest chains of mattress suppliers nationally; and Cox Communications, the third largest cable provider in the U.S.
• This brand new retail center is anchored by the recently opened Costco Wholesale
• Each tenant has signed a 10+ year base lease, and each has multiple 5-year options to extend their lease
• Rental increases within initial lease term
Executive Summary
6.5% Cap RateNNN Lease with 10+ Years Remaining
Multiple 5-Year Renewal Options
Net Leased Property: Multi-Tenant Retail Center
Sale Price: $5,131,600
Net Operating Income:
$333,554
Cap Rate: 6.5%
Price per SF: $589
Square Footage: 8,709
Lease Type:NNN with minimal
Landlord Responsibilities
Lease Rate:$38/SF, average, with
rental increases
Remaining Lease Term:
10 - 11 Years+
Lease Options:Chipotle Four 5-Year Renewals
Mattress Firm Two 5-Year RenewalsCox Two 5-Year Renewals
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Lease Analysis
Annual Summary
Base Rent $333,554
Expenses*
Taxes -$39,195
Insurance -$5,909
CAM -$11,368
Admin / Management Fee -$1,569
Total Expenses -$58,041
Expenses Reimbursed by Tenants $58,041
Net Operating Income $333,554
* Estimated expenses based on leases.
1 Tenant to pay 10% administrative fee based on CAM. Guarantor: Corporate. CAM Cap is lesser of actual increases in costs or 5% (excluding taxes, insurance, and snow removal).
2 Tenant to pay 10% administrative fee based on CAM excluding utilities. 5% CAM Cap excluding taxes, insurance, snow removal, and utilities.
3 Tenant to pay 10% administrative fee based on CAM. Initial 6 months rent is abated. Guarantor: 2 personal guarantees.
Tenant SF % of GLA Lease Term Current Rent Rent/SF Rent Increase Future Rent Options Lease Type
Chipotle Mexican Restaurant 1 2,286 26.25 11 Years $93,726 $41 Year 8 $100,744 Four 5-Year NNN
Cox Communications 2 2,816 32.33 10 Years $118,272 $42 Year 6 $126,720 Two 5-Year NNN
Mattress Firm (Franchise) 3 3,607 41.42 11.5 Years $121,556 $34 Year 4 $128,770 Two 5-Year NNN
8,709 $333,554 $38
Creek Turnpike
E 101st Street
E 111th Street
S Mem
orial Drive
SITE
Offering Memorandum4
E 101st Street
Address: 10410 S. Memorial Drive Tulsa, OK
Property Type: One Story Multi-Tenant Retail Center
Rentable SF: 8,709 SF ±
Lot Size: 1.5 Acres ±
Year Built: 2017
Ownership: Fee Simple
Zoning Commercial
Property Details
Property Summary
SITE
SITE
S Mem
orial Drive
E 103rd Street
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Tulsa, OK
Location
LegendEducation Community Government Retail
E 111th Street
E 91st Street
E 81st Street
E 121st Street
S 129th Street
W G
arnet Rd
S Mem
orial Drive
S Sheridan Road
S Lewis Avenue
SITESoutheast
Elementary
Jenks Middle
East Elementary Jenks East
Intermediate
Jenks High
Darnaby Elementary Jefferson
ElementaryAndersen
Elementary
Wolf Creek ElementaryOliver
ElementaryE 101st Street
Cedar Ridge Elementary
Tulsa CC
Hunter Park
Haikey Creek Park
Meadow Brook Country Club
S Mingo Road
Metro Tulsa Soccer Club
S Harvard Avenue
S Yale Avenue
Creek Turnpike
Cedar Ridge Country Club
Bixby Elementary
S Mem
orial Drive
Offering Memorandum6
Chipotle Mexican Grill is a chain of fast casual restaurants in the United States and parts of Europe, specializing in tacos, burritos, and salads. Known for its Food with Integrity campaign, Chipotle focuses on attaining high-quality ingredients from local farmers recognized for their respect animals and the environment. Started in 1993, Chipotle has grown from a single location in Denver, Colorado, to a national and international quick-service chain.
Locations: 2,250
Employees: 64,570
Founded: 1993
Headquarters: Denver, CO
Annual Revenue: $3.9 Billion
Tenant Overview
*Locations: 3,500
*Employees: 3,861
Founded: 1986
*Headquarters: Houston, TX
*Annual Revenue: $2.541 Billion
*Corporate stores
Mattress Firm Inc. is a mattress retail chain with both company-operated and franchised stores across 49 states. Existing tenant is a franchisee that includes both co-founders of the original Mattress Firm company.
Locations: Unknown
Employees: 20,000
Founded: 1962
Headquarters: Atlanta, GA
Annual Revenue: $10.4 Billion
Cox Communications is a subsidiary of Cox Enterprises, a privately owned communi-cations, mass media, and automotive con-glomerate based out of Atlanta, GA. Found-ed in 1898, Cox Enterprises additionally has the subsidiaries Cox Media Group and Cox Automotive.
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Demographics
Demographic Summary
DESCRIPTION 1 MILE RADIUS % 3 MILE
RADIUS % 5 MILE RADIUS %
Population2000 Population 5,323 47,730 138,9282010 Population 8,087 60,354 155,9512017 Population 8,887 66,721 172,8722022 Population Est. 9,513 71,427 185,1002017-2022 Annual Rate 1.37% 1.37% 1.38%2017 Median Age 39.7 40.1 39.3
Households2000 Households 1,957 17,617 52,8812010 Households 3,037 23,378 61,7732017 Total Households 3,287 25,537 67,5272022 Total Households Est. 3,498 27,199 71,9192017 Average Household Size 2.70 2.61 2.52
Household Income2017 Median Household Income $95,285 $87,064 $72,9962022 Median Household Income Est. $101,938 $94,163 $79,7912017-2022 Annual Rate 1.36% 1.58% 1.80%
Tenure of Occupied Housing Units 2010 Owner Occupied Housing Units 2,433 16,980 42,009 2010 Renter Occupied Housing Units 604 6,398 19,764 2017 Owner Occupied Housing Units 2,588 18,096 44,890 2017 Renter Occupied Housing Units 699 7,441 22,637 2022 Owner Occupied Housing Units Est. 2,777 19,303 47,915 2022 Renter Occupied Housing Units Est. 721 7,896 24,005
2017 All Owner-Occupied Housing Units by Value 2,589 18,097 44,887Value Less than $50,000 14 119 542Value $50,000 - $99,999 13 189 2,008Value $100,000 - $149,999 165 1,931 8,527Value $150,000 - $199,999 384 3,647 10,620Value $200,000 - $249,999 271 2,732 7,368Value $250,000 - $299,999 434 2,500 4,528Value $300,000 - $399,999 789 3,337 5,569Value $400,000 - $499,999 301 1,499 2,305Value $500,000 - $749,999 158 1,435 2,267Value $750,000 - $999,999 35 361 554Value $1,000,000 or more 25 347 599
2014 Median All Owner-Occupied Housing Value $301,711 $258,610 $205,066Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2017 and 2022. Esri converted Census 2000 data into 2010 geography.
Offering Memorandum8
The Tulsa MSA consists of seven counties: Creek, Okmulgee, Osage, Pawnee, Rogers, Tulsa and Wagoner. The MSA population in 2014 was 969,224 or one-quarter of the population in the state of Oklahoma. The gross product of all the goods and services produced in the Tulsa MSA is estimated to be $42.6 billion or 30 percent of the Oklahoma economy. Tulsa is centrally located in the United States and its highway and port access make it connected to the rest of the world. Downtown Tulsa is in the northwest quadrant of the city and is home to many of the oldest and largest office towers.
Tulsa boasts a widely diversified business base with major industries such as aerospace, health care, energy, and manufacturing. Tulsa was classified as one of “America’s Most Livable Communities” by Forbes and is well known for its art collection. Art deco architecture is prevalent in many downtown buildings and churches, the Philbrook Art museum is very highly regarded and the Gilcrease Museum houses the world’s largest and most comprehensive collection of art and
artifacts of the American West. Tulsa MSA is home to ten higher education facilities including The University of Tulsa, Oral Roberts University, and branches of both Oklahoma State University and the University of Oklahoma.
The last decade has produced exciting new developments and opportunities with the revitalization of Downtown Tulsa. In 2003, Tulsa County approved a one-penny, 13-year increase in the Tulsa County Sales Tax for regional economic develop-ment and capital improvements. The result was a group of projects called “Vision 2025”. These projects included building the BOK Center, renovating the existing Convention Center, and creating incentives for American Airlines to retain existing jobs and attract new ones at the company’s Tulsa Maintenance Base by providing funds for capital improvements, equipment, and training.
In January 2015, Tulsa’s unemployment rate was 4.2%, significantly lower than the nation’s 5.7%. Qualities such as sound infrastructure, low cost of doing business,
and strong economic fundamentals attract new companies. In April 2014, Macy’s broke ground on a 1.3 million square-foot $180 million fulfillment center in north Tulsa County. The center is the largest Tulsa-region job an-nouncement in nearly a decade and could result in up to 5,000 new jobs.
Tulsa has earned a number of recent accolades for its economic strength and quality of life, including:
No. 1 most budget-friendly metroApartment Guide 2014
12th in Manufacturing Growth in the Country adding 9,000 new manufacturing jobs from 2010-2014Garner Economics 2014
No. 11 in Best City in Recession Recovery WalletHub 2014
Cost of Living 12% Below National AverageC2ER 2014
No. 2 nationally among Tier II Cities for New and Expanded FacilitiesSite Selection 2013
No. 1 Best City of Young EntrepreneursForbes 2013
Tulsa Market Overview
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Tulsa Market Overview
PopulationThe Tulsa MSA population grew 0.7% in 2014 to 969,224. Tulsa will likely hit the million-popula-tion mark between 2017 and 2018. Tulsa metro’s population is expected to slightly outpace the projected national growth in the next 5 years. Tulsa’s median age is 37.0, with 30% minority ethnicity.
Tulsa MSA Population
Cost of Living Index
Total Employment by Industry
SECTOR 2013 2018Ann. Growth 2014-2018
Construction 20.9% 26.08% 4.6%
Mining 7.7% 8.84% 2.7%
Manufacturing 51.7% 66.54% 5.2%
Wholesale 15.9% 17.16% 1.6%
Retail 46.6% 48.64% 0.9%
Transportation, Warehousing 16.2% 17.31% 1.4%
Air Transportation 6.8% 6.06% -2.2%
Information 7.9% 7.53% -0.9%
Financial Services 22.2% 22.19% 0.0%
Business & Prof. Services 57.3% 67.43% 3.3%
Education & Health Services 67.2% 75.49% 2.4%
Leisure & Hospitality 39.6% 41.23% 0.8%
Government 56.3% 60.59% 1.5%
Tulsa Chamber, 2014 Economic Profile
CITY Cost of LIving IndexTulsa 88.7
Memphis 85.6
Wichita 91.3
Charlotte 95.0
Detroit 95.1
Pittsburgh 96.4
Tucson 97.0
Little Rock 98.5
U.S. 100.0
Denver 107.5
Chicago 116.7
Boston 137.7
Washington DC 141.6
San Francisco 167.5
Manhattan 222.6Source: Cost of Living Index, C2ER 2014 Q4
820,000
840,000
860,000
880,000
900,000
920,000
940,000
960,000
980,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Tulsa Population
Source: Bureau of Labor Statistics
Offering Memorandum10
Advisor Profile
Professional Background Kase Abusharkh, a native of San Francisco, CA, is a graduate of Sacred Heart Cathedral Preparatory in San Francisco, CA, and St. Mary’s College of California. Mr. Abusharkh has 16 years experience in commercial real estate finance, acquisition, disposition and development. In June of 2006, Mr. Abusharkh helped form the real estate firm known as The Kase Group. The Kase Group has completed over 750 transactions for a total consideration exceeding $3 billion since inception. The Kase Group employs 20 real estate professionals across the country. Mr. Abusharkh also helped form Sutter & Pierce EPC, LLC where he serves as a Managing Member. Sutter & Pierce EPC, LLC is a diverse real estate investment group based in Northern California. Its primary area of focus is the acquisition and development of single and multi-tenant net leased retail projects, as well as the acquisition and development of multi family and self-storage projects. Most recently, Mr. Abusharkh has served as the Chief Investment Officer for a publicly registered non-traded REIT, American Realty Capital- Retail Centers of America, Inc. During his 3 year tenure as Chief Investment Officer, he helped successfully complete the $1.2 billion equity raise and over saw the acquisition of over $1 billion worth of multi tenant retail shopping center space. Mr. Abusharkh concluded his time at American Realty Capital- Retail Centers of America, Inc. by successfully seeing through its merger with American Finance Trust Inc. to create a $4 billion diversified REIT. Mr. Abusharkh has been active in many civic and charitable organizations, including the Kase, Jacob and Jeannine Abusharkh Endowment, which provides a 4 year scholarship to a deserving student touched by illness at Sacred Heart Cathedral Preparatory. Mr. Abusharkh supports kidney transplantation research through the Kase, Jeannine and Jacob Abusharkh Endowment in association with Stanford University Hospital’s Department of Surgery in the School of Medicine, which helps to improve clinical outcomes of kidney transplantation. Over the years, Mr. Abusharkh has been recognized for his dedication to his business as well as his community.
KASE ABUSHARKHThe Kase Group - Investment Real Estate
3650 Mt. Diablo Blvd., Suite 210Lafayette, CA 94549
email [email protected] 925-348-1844fax 925-406-0813
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Years of Experience• Twelve Years
Areas of Specialization• Multifamily • Mixed Use Retail
Education• Oklahoma State University,
B.B.A. in International Business
Professional | Community Affiliations
BOARD MEMBER• Urban Neighbors,
(Founding Member)• City Care• Commercial Real Estate Council (CREC)• Bricktown Association
MEMBER• Certified Commercial Investment
Member (CCIM)• International Council of Shopping
Centers (ICSC)
Professional Background Andy Burnett began his commercial real estate career in Oklahoma City in 2005. Burnett, CCIM, serves as Senior Vice President of Newmark Grubb Levy Strange Beffort, specializing in the sale, site selection, and underwriting of institutional multifamily and downtown mixed-use properties in Oklahoma. He graduated from Oklahoma State University with a B.B.A. in International Business with minors in Spanish and Marketing.
Mr. Burnett has brokered over $1.2 billion in commercial real estate transactions including $450 million in HUD multifamily transactions. He has been recognized as a “Forty Under 40” business achiever and has received multiple “Costar Power Broker” awards. Mr. Burnett is a board member of CREC, the Bricktown Association, the founding member of Urban Neighbors and is a member of CCIM and ICSC.
Achievements and Recognition• Sperry Van Ness National Rookie of the Year• Multiple Partners Circle Award Recipient • “Forty Under 40” Business Achiever
ANDY BURNETT, CCIMSenior Vice President
204 North Robinson, Suite 700Oklahoma City, OK 73102
email [email protected] 405-602-2934fax 405-772-7481
Advisor Profile
OKLAHOMA CITY204 North Robinson, Suite 700
Oklahoma City, OK 73102405-840-1500
TULSA2021 S. Lewis, Suite 410
Tulsa, OK 74104918-481-3200
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