river landing shopping center

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1 river landing shopping center LARGEST 1,000,000 military base in the world located in fayetteville fayetteville metro area population 5,500+ fayetteville state university student population 95% occupied neighborhood shopping center anchored by three nationally branded tenants 3646 Ramsey St., Fayetteville, NC Click for Map [ ]

2 investment highlights Stabilized retail shopping center anchored by: dollar tree, it s fashion metro, & badcock home furniture. property is priced below replacement cost. PRICE: $4,735,000 CAP: 7.40% noi: $350,523 Rentable SF...52,200 SF Price per SF...$90.71 Occupancy % Year built Year renovated /2012 Land area AC The subject property is located in Fayetteville, NC, best known as the home of Fort Bragg, a major U.S. Army installation. The center is 95% leased to a strong roster of mostly nationally-branded tenants and is anchored by Dollar Tree, It s Fashion Metro, and Badcock Furniture. All three anchors are corporate tenants with significant term left. The center went through a multi-million dollar renovation at the end of 2011, which included a complete re-facing, new paint, HVAC replacement, and one-inch asphalt overlay of the entire parking lot. This was a complete renovation of the property inside and out. Listing Team Contact Info dave lucas dlucas@capitalpacific.com (415) CA BRE# joe caccamo jcaccamo@capitalpacific.com (415) CA BRE# Capital Pacific collaborates. Click Here to meet the rest of our San Francisco team. In Conjunction with NC Licensed Broker: Stuart Mullen, Commercial Real Estate Carolina, LLC Stuart@rangeds.com (704) River Landing Shopping Center 3

3 core characteristics Strong corporate anchor tenants The subject property is anchored by Dollar Tree, It s Fashion Metro, and Badcock Furniture, all on corporate leases. Ramsey Street is a Growing retail corridor Over the last decade Ramsey s northern stretch has seen increased residential growth, expansion at Methodist University, numerous commercial developments, and the introduction of the Outer Loop. The Outer Loop, also known as Interstate 295, will connect I-95 to Fort Bragg. In 2007, Walmart spurred the growth in the corridor when they opened a large, freestanding Supercenter to replace their old store. Strong area retailers Other tenants in the center are Little Caesars Pizza, First Citizens Bank and Brickoven Pizzeria. Surrounding high-traffic retailers include Lowe s Home Improvement, KFC, CVS Pharmacy, Dunkin Donuts, Ollie s Bargain Outlet (large grocery store), Starbucks and Walmart Supercenter. upside in buildable pad There is an out-lot pad that has the potential to be developed in the future allowing for the possibility of long-term upside. Excellent signage There was a new, large pylon sign installed in 2012 in the front of the center that benefits from excellent visibility from Ramsey Street with ADT of 41,000. Recent renovations to the center The subject property underwent a multi-million dollar renovation that began in August 2011 and was completed in February The renovation included a complete interior demo down to the shell, re-facing of the façade, and a subdivision of the property. There was also new, front split, faced block, stucco, sheetrock, electrical, plumbing, HVAC, ceilings, lighting, flooring, etc. There was also a complete renovation of the sprinkler system with the addition of a full alarm system with pull stations, horns, strobes, backflow preventer, etc. The roof was upgraded with new gutters, downspouts, parapets and flashing. There was a complete 1-inch asphalt overlay of the entire parking lot (front, sides and rear). The parking area was upgraded with all new parking lot lighting, and landscaping. below replacement cost The subject property is priced well below replacement cost. Subject property is 10 miles from fort bragg: the largest military base in the world. River Landing Shopping Center 4

4 photos high volume dollar tree store is #472 out of 14,000 total dollar tree stores. this is a relocation of a smaller store from across the street that had been in operation since the early 90 s. River Landing Shopping Center 5

5 surrounding retailers subject property is surrounded by many high-volume retailers. Subject property Subject property 41,000 DAILY Ramsey Street River Landing Shopping Center 6

6 In the News: Ramsey Street developments Growth goes to north fayetteville, transforms ramsey street FO Fayobserver july 23, 2014 BY andrew craft A confluence of factors - steadily climbing population, the ongoing construction of the Outer Loop, growth at Methodist University - have combined to make north Ramsey Street a destination. For years, it was overshadowed by booming western Fayetteville, the expanding Cross Creek Mall area along Skibo Road and explosive growth in Hope Mills. The Cape Fear River blocks growth to the area east of Fayetteville. The subject property is strategically located along Ramsey street in Fayetteville. Ramsey street has seen explosive growth over the last decade. This is an area of Fayetteville that is going to see continued growth and development in the years to come. That only leaves north to go, said developer Cam Stout. It s a natural development flow, in my opinion. 95, has been huge for businesses. view The open section of the Outer Loop, which connects Ramsey to Interstate full article RAMSEY STREET PROJECT WILL EXTEND GROWTH SPURT FO FAyobserver January 23, 2016 BY Steve devane Engineers are working on plans for a 252-acre development that will expand growth along Ramsey Street even further north. The project being developed by Broadwell Land Co. will include more than 300 single-family homes on land off Ramsey Street and Elliot Bridge and Elliot Farm roads. Commercial property and multi-family homes are expected to be added later, said Dohn Broadwell Jr., president of the company. Greg West, president of Westan Homes, said he expects development to continue growing to the north. view full article River Landing Shopping Center 7

7 aerial located ON ramsey street, BENEFITTING FROM TRAFFIC COUNTS IN EXCESS OF 41,000 VPD housing 401 (72,547 residents within 3 miles) 295 Warrenwood Elementary y Countriv e Club Dr c Mur 210 oad nr hiso EE Smith High School BUS 401 Ramsey Street Alternative School BUS eet Ramsey Str 401 Ram sey Luther Nick Jeralds Middle School Stre et Lucie Souders Elementary 41,000 DAILY Reid Ross Classical School 401 Northwood Temple Academy Rams College Lakes Christian Academy ey Str RIVER LANDING RALEIGH River Landing Shopping Center 8 eet

8 income & expense Actual Price: $4,735,000 PROPOSED LOAN SCENARIO: Capitalization Rate: 7.40% Loan Amount $3,077,750 Price Per Square Foot: $90.71 Interest Rate 4.35% Down Payment 35% $1,657,250 Amortization 25 Year Loan Amount 65% $3,077,750 Term 7 Year Total Leased (SF): 95.38% 49,788 Debt Service $202,154 Total Vacant (SF): 4.62% 2,412 Monthly Debt Service $16,846 Total Rentable Area (SF): 52,200 Pre-Tax Cash Flow $148,369 INCOME PSF Debt Coverage Ratio 1.73 Scheduled Rent $7.31 $381,779 Cash on Cash 8.95% Estimated Recovery $1.35 $70,699 Principal Paydown (Year 1) $69,649 Recycling $0.05 $2,400 Total Return $218,018 EFFECTIVE GROSS INCOME $452,478 Yield 13.16% Market Vacancy Reserve (5%) ($22,624) ADJUSTED GROSS INCOME $429,854 EXPENSES (CY2015) PSF Property Taxes -$0.83 ($43,321) Insurance -$0.11 ($5,570) Common Area Lighting -$0.25 ($12,845) Fife/Life/Safety -$0.02 ($918) Drain Stoppage Removal -$0.01 ($493) Repairs and Maintenance -$0.05 ($2,610) Property Management (3% of EGI) -$0.26 ($13,574) TOTAL OPERATING EXPENSES -$1.52 ($79,332) NET OPERATING INCOME $350,523 CASH FLOW & PROPOSED LOAN TERMS 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. River Landing Shopping Center 9

9 rent roll 95% Leased Remaining Lease term 5 + Years - 57% 2-5 Years - 35% <2 Years - 8% Trade Name Sq. Ft. Percent of GLA Lease Start Lease Expiration Monthly Base Rent Monthly Rent/SF Annual Rent/SF Annual Base Rent TICAM/sf Annual TICAM Total Annual Rent Income It's Fashion Metro (Cato Corp.) 13, % 2/12/2012 1/31/2019 $5, $0.42 $5.03 $66, $1.42 $18, $84, Option 1 2/1/2019 1/31/2024 $6, $0.46 $5.53 $72, Option 2 2/1/2024 1/31/2029 $6, $0.50 $6.03 $79, Option 3 2/1/2029 1/31/2034 $7, $0.54 $6.53 $86, Dollar Tree (Dollar Tree Stores, Inc.) 10, % 3/1/2012 2/28/2022 $9, $0.86 $10.33 $108, $1.42 $14, $123, Dollar Tree exercised their upcoming 5-year Option 2 3/1/2022 2/28/2027 $9, $0.90 $10.83 $113, option without any negotiation Option 3 3/1/2027 2/28/2032 $9, $0.94 $11.33 $118, Badcock Furniture & More (corp.)* 17, % 7/1/2014 6/30/2024 $7, $0.44 $5.25 $92, $1.42 $25, $117, Increase 7/1/2019 6/30/2024 $8, $0.48 $5.75 $101, Option 1 7/1/2024 6/30/2029 $9, $0.52 $6.25 $110, Option 2 7/1/2029 6/30/2034 $9, $0.56 $6.75 $119, Rear Storage Space 2, % $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Jackson Hewitt 1, % 11/9/ /31/2017 $1, $1.09 $13.03 $17, $1.42 $1, $19, Jackson Hewitt exercised both of their 5-year No Options options Luxury Nails 1, % 11/18/ /18/2017 $1, $1.06 $12.72 $17, $1.42 $1, $19, No Options Avail Vapor 2, % 3/1/2015 2/29/2020 $2, $0.96 $11.50 $32, $1.42 $3, $36, Option 1 3/1/2020 2/29/2025 $3, $1.10 $13.23 $37, Vacant 1, % M T M $2, $1.50 $18.00 $25, $1.42 $1, $27, Boars Head Deli 1, % 8/1/2015 7/31/2020 $1, $1.21 $14.50 $21, $1.42 $2, $23, Option 1 8/1/2020 7/31/2025 $2, $1.36 $16.31 $24, Option 2 8/1/2025 7/31/2030 $2, $1.53 $18.35 $27, Current Totals: 52, % Monthly Rent $31, Annual Rent $381, TICAM $70, $452, Occupied 49, % Vacant 2, % *Badcock is a modified gross lease. Tenant pays all increases over base year expenses. 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. River Landing Shopping Center 10

10 site plan Site Plan Key STORAGE Parcel outline: MONUMENT SIGN Rentable Area: 52,200 SF Ingress/Egress: Ramsey Street Luxury Nails Jackson Hewitt Avail Vapor 401 Vacant 41,000 DAILY BUILDABLE PAD (estimated 4,000 sf) Boar s Head Deli Complete renovation of the center took place in 2011/2012. See page 3 for details. Law Road ZONED: Limited Commercial (LC) CLICK HERE for zoning information This site plan is a rendering that has been created based on sources we believe to be reliable, however we make no representations or warranties, expressed or implied, as to the accuracy of the rendering. Buyer must verify the information and bears all risk for any inaccuracies. River Landing Shopping Center 11

11 renovation details The subject property underwent a complete renovation that began in August 2011 and finished in February This was a total renovation of the entire property inside and out. parking lot area One inch asphalt overlay of the entire parking lot. New parking lot lighting also installed. HVAC All HVAC units in the anchor spaces were replaced in the renovation. The Jackson Hewitt HVAC system was repalced in 2013 and the Avail HVAC system was replaced in June of Boar s Head Deli replaced their own HVAC system at the end of 2015 as part of their uplift to the space. roofing Roof was last replaced in 2002 with a high grade EPDM white membrane roof. JDM Roofing Co. replaced all falshing, gutters, and downspouts in the 2012 renovation. paint Property was given a new paint job. Pylon sign Enhances the visibility of the center. front split faced block Gives the building an attractive contemporary design. River Landing Shopping Center 12

12 tenant summary It s Fashion Metro is a division of the Cato Corporation that offers the latest trendy fashions for juniors, junior plus sizes, men, boys, girls, infants, and toddlers. Cato Corporation is an American retailer of women s fashions and accessories. In 2015 the company operated 1,346 stores under the names Cato, Cato Plus, It s Fashion, It s Fashion Metro, and Versona. Cato Corporation is publicly traded on the NYSE as CATO. Today there are 115 it s Fashion Metro stores across country. Dollar Tree, Inc. is a value-driven, variety store operating at a one dollar price-point. The company currently operates more than 14,000 stores throughout 48 U.S. states and Canada. Dollar Tree competes in the dollar store and low-end retail markets and is the largest and most successful single price-point retailer in the country. They operate from nine distribution centers, stocking each store with a variety of products including national, regional, and private-label brands. A Fortune 500 Company, Dollar Tree has served North America for more than twenty six years. This is store #472 out of 14,000 total Dollar Tree stores. Badcock Home Furniture began in 1904 when Henry Stanhope Badcock, an immigrant from England, opened his first store in Mulberry Florida. Badcock & more offers customers easy, in-house financing for their furniture purchases. Today, there are over 320 Badcock Home Furniture stores in eight states across the southeastern United States. Approximately one third of the stores are corporately operated and two thirds are dealer-owned stores. River Landing Shopping Center 13

13 tenant summary luxury nails & Day Spa Founded in 1982, Jackson Hewitt Tax Service is the second-largest taxpreparation service in the country. They are responsible for preparing over 2.5 million computerized federal, state, and local individual income-tax returns each year. Based in Jersey City, New Jersey, Jackson Hewitt operates 6,800 franchised and company-owned locations throughout the United States, including nearly 3,000 located in Walmart stores nationwide. Luxury Nails is a specialty beauty salon establishment offering skin and nail care services such as manicures, pedicures, acrylic overlays, UV gel overlays, nail art, eyelash extensions, and waxing. Luxury Nails high-end service and accommodations make for an ideal spot for local relaxation and pampering. Avail Vapor is a leading premium e-liquid manufacturer and retail business originating in Richmond, Virginia. Over the last two and a half years, AVAIL has grown to over 70 retail locations within Virginia, North Carolina, Maryland, Tennessee, Kentucky, and Ohio, and also distribute internationally. AVAIL s e-liquids are developed and produced in their state of the art certified ISO Class 7 clean room located at their company headquarters using ingredients sourced from 100% USA suppliers. Boar s Head is a supplier of delicatessen meats, cheeses, and condiments. The company was founded in 1905 in Brooklyn, New York, and now distributes its products throughout the United States. It has been based in Sarasota, Florida, since Boar s Head sells cheeses and many common meats, such as black forest ham, roast beef, and salami. The company also sells a line of condiments including barbecue sauce, horseradish, and mustard. River Landing Shopping Center 14

14 Demographics & map river landing shopping center market location Population 1-Mile 3-Mile 5-Mile ,996 38,690 74, ,134 39,500 77, ,324 40,506 79,557 fort bragg 21,000 DAILY Country Club Drive Subject property 41,000 DAILY Ramsey Street 2016 Household incomes 1-Mile 3-Mile 5-Mile Average $57,250 $53,350 $58,132 Median $38,424 $37,826 $38,959 regional map raleigh 1 hr 64 MILES fayetteville River Landing Shopping Center 15

15 location About fayetteville, nc Fayetteville is the seat of Cumberland County and is best known as the home of Fort Bragg, a major U.S. Army installation northwest of the city. With an estimated population in 2013 of a million people, the Fayetteville metropolitan area is the largest in southeastern North Carolina, and the fifth-largest in the state. Fayetteville serves as the region s hub for shops, restaurants, services, lodging, health care, and entertainment. It boasts a low unemployment rate with a large labor pool of trained professionals. The Fayetteville area has a large and growing defense industry and was ranked in the Top 5 Defense Industry Development areas in US for Eight of the top ten American defense contractors are located in the area, including Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, and L-3 Communications. Fayetteville has received the All-America City Award from the National Civic League three times. Suburban areas of metro Fayetteville include Fort Bragg, Hope Mills, Spring Lake, Raeford, Pope Field, Rockfish, Stedman, and Eastover. Fayetteville is home to Fayetteville State University (FSU), which is a historically black public regional university. FSU is part of the University of North Carolina System and the Thurgood Marshall College Fund. top employers in fayetteville, nc Company 1,000,000 Fayetteville metro area population 204,000 fayetteville, nc population ± Employees U.S. Department of Defense (Civilian) 8,757 Cumberland County Board of Education 6,453 Cape Fear Valley Health System 5,900 Wal-Mart Associates Inc. 2,860 Goodyear Tire & Rubber Company 2,500 Cumberland County Government 2,362 City of Fayetteville 2,120 5,500+ fsu student population [ fayetteville, nc ] River Landing Shopping Center 16

16 fort bragg FORT BRAGG IS THE LARGEST MILITARY BASE IN THE WORLD 57,000 military personnel 11,000 civilian employees Fort Bragg is an installation of the United States Army and is the largest military base in the world (by population). Fort Bragg borders the towns of Fayetteville, Spring Lake, and Southern Pines. It was also a census-designated place in the 2010 Census, during which a population of 39,457 was identified. The base covers over 251 square miles, is the home to the Army s XVIII Airborne Corps, and is the headquarters of the United States Army Special Operations Command. 23,000 Fort Bragg and Pope Field pump about $4.5 family members billion a year into the region s economy, living on base making Fayetteville one of the best retail markets in the country. The base provides a solid foundation that helps the area stay strong regardless of what the nation s economy does, along with 6,000 highly trained and disciplined military retirees every year. Fort Bragg continues to invest to modernize and expand facilities. The 82nd Airborne Division s 1955 barracks complex was replaced with modern buildings. Office buildings and barracks have also been constructed for units recently added to the division. Today Fort Bragg, the Home of the Airborne and Special Operations, with approximately 57,000 military personnel, 11,000 civilian employees, and 23,000 family members, is one of the largest military complexes in the world. River Landing Shopping Center 17

17 A unique HUMAN RESULTS-DRIVEN client experience The capital pacific experience - our daily commitment to our clients [ ] dave lucas dlucas@capitalpacific.com (415) CA BRE# In Conjunction with NC Licensed Broker: Stuart Mullen, Commercial Real Estate Carolina, LLC Stuart@rangeds.com (704) joe caccamo jcaccamo@capitalpacific.com (415) CA BRE# Capital Pacific collaborates. Click Here to meet the rest of our San Francisco team. chris kostanecki chris peters dave lucas zandy smith jack navarra zeb ripple john andreini joe caccamo gregg steele karla zens [ Copyright 2016 Capital Pacific ]