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SunOptaOMAK, WASHINGTON
THE OFFERING provides an opportunity to purchase a 92,000 square foot warehouse production facility leased to publicly traded SunOpta, Inc (NASDAQ: STKL). SunOpta has leased the production and cold storage facility on a NNN basis since 2007 and recently extended their term for an additional 10 years expiring in 2027. In 2018, the Tenant expanded their footprint in this location with the addition of 14,000 square feet to accommodate their production demand. The leased premises also includes a smaller building and a parking area on the adjacent parcel, which is on a perpetual ground lease to the ownership group.
LEASEABLE SF92,294 SF
LAND AREA151,200 SF
LEASE TYPENNN
PRICE PER SF$31
YEAR BUILT1967-2018
LEASE EXPIRATIONMay 31, 2027
Investment Summary
10.50%CAP
$2,861,000PRICE
PAGE 3
Overview
PUBLICLY TRADED SUNOPTA, INC. (NASDAQ: STKL) HAS
AN 12-YEAR TENURE IN THIS LOCATION AND IS THE
SECOND LARGEST EMPLOYER IN OMAK.
NNN LEASE TERMS PROVIDE FOR MINIMAL MANAGEMENT
RESPONSIBILITY.
TENANT RECENTLY EXPANDED THEIR FOOTPRINT, ADDING
14,000 SQUARE FEET TO THE MAIN BUILDING IN 2018.
EQUIPPED WITH AMPLE COLD STORAGE SPACE AS FOOD
PRODUCTION IS DOMINANT IN NORTH CENTRAL
WASHINGTON AND THE OKANOGAN VALLEY.
LOCATED WITH EASY ACCESS TO HIGHWAY 97, LESS THAN
ONE HOUR FROM THE OROVILLE-OSOYOOS CANADIAN
BORDER CROSSING.
Investment Highlights
PUBLICLY-TRADED INTERNATIONAL TENANT WITH 12-YEAR TENURE
About theTenant
SunOpta is a leading global organic food company specializing in sourcing, processing and packaging of natural and certified organic food products. The company’s core organic and Non-GMO food operations focus on value-added grains and fruit based product offerings.
US HEADQUARTERS: EDINA, MN
EMPLOYEES
1,8001973YEAR FOUNDED
STKLNASDAQ
Investment Highlights
PAGE 5
MAJOR RETAILArby’s Big 5 Sporting Goods Burger King Dairy Queen Dollar Tree
GameStopHome Depot JC Penney KFC McDonald’s O’Reilly Auto Parts
Payless ShoeSource Rent-A-Center Rite Aid Safeway Subway Walmart Supercenter
TOTAL 1-MILE 3-MILES 5-MILES
Businesses 245 456 616
Employees 2,015 4,333 5,702
Population 2,776 8,578 12,116
KEY 1-MILE 3-MILES 5-MILES
Businesssummary
Surrounding Retail
4,600 VPD
6,200 VPD
SUNOPTA
OMAK HIGH
SCHOOL
WENATCHEEVALLEY
COLLEGE - OMAK
OMAK CITY HALL
DEPARTMENTOF SOCIAL & HEALTH SERVICES
OMAK VISITORCENTER
EAST OMAKELEMENTARY
SCHOOL
NORTH OMAK
ELEMENTARYSCHOOL
97
155
Surrounding Retail
PAGE 7
5TH AVE EAST 3.47ACRES
92,294LEASEABLE SF
PARCEL GROUND
LEASED FROM BURLINGTON NORTHERN RAILROAD MAY 31, 2027
LEASE EXPIRATION
Site Plan
5TH AVE EAST
SITE PLAN NOT TO SCALE
GROUND LEASEDPARCEL
BUILDING SF: 12,104LAND SF: 70,200
MAIN BUILDING80,190 SF
Site Plan
PAGE 9
Q: DOES THE TENANT HAVE A TERMINATION OPTION?
A: Yes, SunOpta has three separate termination opportunities starting on May 31, 2020 and then running every two years. Termination options require six (6) months’ notice and a large termination fee payable by the tenant upon termination. The fee is $600,000 for the first option, $360,000 for the second and $170,000 for the final option.
Q: CAN THE ADJACENT GROUND LEASE BE TERMINATED?
A: Yes, either party can terminate the ground lease with thirty (30) days’ notice, however the lease of the site has been in place since 1989.
Q: WHAT HAPPENS IF THE ADJACENT GROUND LEASE IS TERMINATED BY THE RAILROAD?
A: If the railroad were to terminate the lease, the Landlord is required to improve the Property to make additional parking and warehouse space available to the Tenant on the leased premises.
Q: IS RENT PAYABLE FROM THE OWNERSHIP TO THE RAILROAD COMPANY FOR THE GROUND LEASE OF THE ADJACENT PARCEL?
A: Yes, rent is currently $18,010 per year and increases 5% annually. 100% of the ground rent and expenses is paid by the tenant.
Q &
AQuestions & Answers
120 FT241 FT
102 FT
44 FT
114 FT
95 FT95 FT
275 FT
105 FT
SHIPPING DECK
ENTRANCE
COLDSTORAGE
STORAGEWAREHOUSE
COLDSTORAGE
COLDSTORAGE
COLDSTORAGE
STORAGEWAREHOUSE
Floor PlanMain Building
Floor Plan
PAGE 11
This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.
Income & Expense
PRICE $2,861,000CAPITALIZATION RATE 10.50%PRICE PER FOOT $31
CASH FLOW SUMMARYSCHEDULED INCOME PER SFBase Rent for the Period of: 9/1/2019 - 8/31/2020 $3.24 $299,123
Rent Increases Over Base Rent $0.02 $2,056
Total Effective Gross Income (EGI) $3.26 $301,180
OPERATING EXPENSES PPeerr SSFF
CAMS NNN
Property Taxes NNN
Insurance NNN
Total Operating Expenses NNN
NET OPERATING INCOME $301,180
8/26/2019 [ <www.CapitalPacific.com> ]
MINIMAL MANAGEMENT RESPONSIBILITY
Financial Summary
Rent Roll
6/1/2007 - 5/31/202711 00%
92,294
MONTHLY BASE RENT % INCREASE ANNUAL
RENT PSF CAP RATE
6/1/2019 $24,927 $299,123 $3.24 10.50%
6/1/2020 $25,612 2.75% $307,349 $3.33 10.74%
6/1/2021 $26,317 2.75% $315,801 $3.42 11.04%
6/1/2022 $27,040 2.75% $324,486 $3.52 11.34%
6/1/2023 $27,784 2.75% $333,409 $3.61 11.65%
6/1/2024 $28,548 2.75% $342,578 $3.71 11.97%
6/1/2025 $29,333 2.75% $351,999 $3.81 12.30%
6/1/2026 $30,140 2.75% $361,679 $3.92 12.64%
CURRENT $24,927 $299,123 $3.24 10.50%
Comments: Tenant signed a 10-year extension in 2017 that includes a 14,000 SF expansion to include an onsite warehouse. Tenant has a Right of First Offer to purchase the Property, as described in the lease abstract. Tenant will have 10 days upon written notice to make a decision to purchase. Rent increases annually per CPI - Analysis assumes 2.75% increases. A second parcel is ground-leased from Burlington Northern Railroad, and should that be terminated Landlord will be responsible for constructing or improving the property to provide additional parking to meet the needs of the tenant, as well as make warehouse space available to tenant. Tenant has three early-termination options; at the end of year two, four, and six. Each termination option requires six months' notice and a termination fee of $600,000, $360,000, and $170,000, respectively.
SunOpta
Lease Term:
Size (SF):
RENT SUMMARY
DATE
LLeeaassee NNootteess
8/26/2019 [ <www.CapitalPacific.com> ]
RentRoll
Financial Summary
PAGE 13
TENANT SunOpta Inc.BUILDING SF 92,294 SFLEASE TYPE NNNLEASE COMMENCEMENT May 31, 2007EXPIRATION May 31, 2027OPTIONS NoneGUARANTOR SunOpta, Inc.
Premise & Term
LeaseprovisionsRAILROAD LEASE SUBLEASETenant is responsible for the payment of rent required to be paid to Burlington Northern for entirety of the term.
RIGHT OF FIRST OFFERShould Landlord elect to sell the Leased Premises, Landlord shall first offer it to Tenant at the same price as Landlord will later offer the Leased Premises for sale on the open market. Landlord shall notify Tenant of its decision to sell and of its offering price in writing. Tenant shall have a period of ten (10) days from the date of its receipt of Landlord’s offer to sell to reply to said offer. If Tenant rejects said offer or fails to accept the offer within the ten (I0) day period, Landlord may then offer the Premises for sale on the open market at the same price.
Lease Abstract
TAXESTenant is responsible for payment of 100% of taxes directly to billing authority.
INSURANCETenant shall maintain general liability and property insurance policies.
UTILITIESTenant shall pay for the service costs of all water, gas, heat, light, power, telephone service, and other public utilities of every kind furnished to the Premises.
TENANT’S OBLIGATIONSTenant is responsible for all maintenance and repair of the building and the premises excluding the roof and structural elements.
LANDLORD’S OBLIGATIONSLandlord is responsible for maintaining and repairing the roof and structural elements of the building.
Expenses
Lease Abstract
PAGE 15
Omak, Washington
OMAK is a city located in the foothills of the Okanogan Highlands in north-central Washington. Omak is the largest municipality of Okanogan County and the largest municipality in Central Washington north of Wenatchee. With a dry and mild climate Omak is dominated by the primary industries of agriculture and forestry, although economic diversification has occurred with sawmills and recreational tourism. Omak is the commercial center for the rural communities of Okanogan County and other nearby settlements.
Location
KEY 5 MINS 10 MINS 15 MINS
DriveTime
POPULATION
10 MINS 20 MINS 30 MINS
2018 9,705 14,059 16,068
2023 9,990 14,059 16,068
2018 HH INCOME
10 MINS 20 MINS 30 MINS
Average $59,617 $60,137 $59,205
OKANOGAN COUNTY HAS A PROMINENT ECONOMIC DRIVER IN AGRICULTURE, ACCOUNTING FOR NEARLY 33% OF THE WORKFORCE. Agriculture consists primarily of various tree fruits and wheat. The first orchard was planted in 1858 and the area continued to develop tree fruits into the dominant industry it is today. Private land in the county accounts for nearly 500,000 acres of rangeland for cattle and 50,000 acres of irrigated orchards adjacent to the Okanogan River. In the Okanogan Highlands there are also thousands of acres of dryland crops scattered amongst the rangeland. The majority of the land is public with more than three (3) million acres of government and tribal land throughout the County.
OkanoganCounty
OF THE TOTAL WORKFORCE IN THE AGRICULTURE INDUSTRY
32%UNEMPLOYMENT RATE6%
PAGE 17
Contact Us
SEAN [email protected]: 503.675.8378
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The information in this Executive Summary has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. All rights reserved to Capital Pacific, LLC.
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