unique new dollar general unemployment rate of approximately 2.0%!! High growth msa The only dollar store in town Now open in a tax-free state rent increases in base term 131 N. Nebraska, Salem, SD 57058 [ www.capitalpacific.com ]
PROperty Summary NEW NNN DOLLAR GENERAL IN SALEM, SOUTH DAKOTA. LOCATED IN THE SIOUX FALLS MSA (POPULATION OF 250,000) IN A STATE WITH NO INCOME TAX. Sioux Falls has been one of the fastest-growing MSA s for decades and has had one of the lowest unemployment rates in the country. PRICE: $1,245,333 CAP: 6.75% RENTABLE SF... 9,100 SF LOT SIZE... 1.0 Acres LEASE TYPE... NNN YEAR BUILT... 2016 (Store is Open) EXPIRATION... 2/28/2031 Listing Team Contact Info John Andreini jandreini@capitalpacific.com (415) 274-2715 CA BRE# 01440360 RICK SANNER rsanner@capitalpacific.com (415) 274-2709 CA BRE# 01792433 Capital Pacific collaborates. Click here to meet the rest of our San Francisco team. DOLLAR GENERAL 2
core characteristics PROPERTY HIGHLIGHTS The site is in the growing town of Salem, located in the high growth Sioux Falls MSA. Salem is the county seat of McCook County, and is located at the crossroads of US Highway 81 and Highway 38. Salem is 40 miles northwest of Sioux Falls. LOW UNEMPLOYMENT As reported for the month of November, (www.homefacts.com) unemployment in Salem is just 2.0% (see page 11). For comparison, a sampling of other unemployment rates: Sioux Falls, 2.3%; South Dakota, 2.7%, USA, 5.0%. INVESTMENT GRADE CREDIT Dollar General s credit is BBB and the company s credit rating has been raised five times since 2009 most recently in October, 2015. Dollar General has a better credit rating than both of its large competitors. Dollar General is the only investment grade dollar store STRONG TENANT During fiscal 2014, Dollar General opened about 700 new stores and will open about the same in fiscal year 2015. Dollar General has more stores (12,198+) than any other dollar store in the country and is currently the largest dollar store chain. In the six+ years since going public in late 2009, the Dollar General stock price has more than tripled (from $21 to $73) LEASE HIGHLIGHTS A new 15 year NNN lease with four 5-year options with increases in the base term and options Brand new construction Corporate guaranteed lease Store is open DOLLAR GENERAL 3
income & expense PRICE $1,245,333 Price Per Square Foot: $136.85 Capitalization Rate: 6.75% Total Rentable Area (SF): 9,100 Lot Size (AC): 1.00 STABILIZED INCOME Per Square Foot Scheduled Rent $9.24 $84,060 Effective Gross Income $9.24 $84,060 LESS Per Square Foot Taxes NNN $0.00 Insurance NNN $0.00 Total Operating Expenses NNN $0.00 EQUALS NET OPERATING INCOME $84,060 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. DOLLAR GENERAL 4
Site plan SITE PLAN KEY PARCEL OUTLINE: LAND AREA: BUILDING AREA: INGRESS/EGRESS: 1.0 AC 9,100 SF W Norton Avenue LIGHTED SIGN SIOUX FALLS 81 Nebraska Street 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. DOLLAR GENERAL 5
Aerial 38 SIOUX FALLS 81 MCCOOK INSURANCE N Main Street McCook Central School K-12 SALEM ARMORY Gene Danielsen Field Richard Avenue EICH S MEAT MARKET HERITAGE TREASURES CUTTING EDGE FLORAL BOKAY CHEESEMAN FINANCIAL DAVE S BARBER SHOP B BREWERY SHOPWISE END ZONE TAVERN KATHY S COFFEE CREAMERY St. Mary s Catholic School AMISH OAK GALLERY JRG GUNS JOHN ADAM COLLECTION THUNDER ALLEY BOWLING & CAFE MOM & POP S PASTRY SHOP SALEM COMMUNITY DRUG E Norton Avenue UNIQUELY YOU SOUTHEASTERN ELECTRIC COOP. SHEAR DESIGN BRICKHOUSE FLOWERS Nebraska Street IRON WHEEL HEATING & COOLING SALEM LUMBER SALEM FARMERS MARKET THE SALEM SPECIAL MC COOK COUNTRY CLUB Douglas Street HOME MOTEL Main Street TONE N TAN AUTO EX SERVICE FIRST FEDERAL CREDIT UNION BRICKHOUSE GARDENS STURDEVANT S AUTO PARTS MCCORMICK S HAIR CARE SALEM CHIROPRACTIC CLINIC SALEM FAMILY MEDICINE MCGREEVY CLINIC SALEM EYE CLINIC OUTSKIRTS STEAKHOUSE AND LOUNGE 38 253rd Street SALEM VETERINARY SERVICE 38 253rd Street SALEM TRACTOR PARTS 81 DOLLAR GENERAL 6
Rent roll TENANT INFO LEASE TERMS RENT SUMMARY Tenant Name Sq. Ft. Term Current Rent Monthly Rent Yearly Rent Monthly Rent/FT Yearly Rent/FT Dollar General 9,100 2/7/2016 2/28/2026 $84,060 $7,005 $84,060 $0.77 $9.24 3/1/2026 2/28/2031 $7,215 $86,582 $0.79 $9.51 Option 1 3/1/2031 2/28/2036 $7,937 $95,240 $0.87 $10.47 Option 2 3/1/2036 2/28/2041 $8,731 $104,772 $0.96 $11.51 Option 3 3/1/2041 2/28/2046 $9,604 $115,249 $1.06 $12.66 Option 4 3/1/2046 2/28/2051 $10,564 $126,768 $1.16 $13.93 Totals: 9,100 $84,060 $7,005 $84,060 $0.77 $9.24 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. DOLLAR GENERAL 7
Tenant overview DOLLAR GENERAL IS THE COUNTRY S LARGEST SMALL-BOX DISCOUNT RETAILER ABOUT DOLLAR GENERAL Dollar General (NYSE: DG) is a chain of more than 12,396 discount stores in 43 states, primarily in the South, East, Midwest, and Southwest. Offering basic household items, such as cleaning supplies, health and beauty aids, apparel, and food, it targets low, middle, and fixed-income shoppers. The company has grown into the country s largest small-box discount retailer. Stores are often located in small towns off the radar of giant discounters. One of Dollar General s main advantages is that it offers prices as low or lower than Walmart but in more convenient locations. Dollar General has more stores than any other retailer and is easily the largest dollar store chain. The company ranks 164th within the Fortune 500 list. Fiscal 2014 revenues exceeded $18.9 billion with a net income of $1.07 billion, and net worth of $5.7 billion. In early December, 2015, the company reported the results for its third fiscal quarter ending October 30th. The report was quite good and the stock price rose on the news. Dollar General enjoys a strong credit rating, see next page. COMPANY TYPE: PUBLIC (NYSE: DG) FISCAL 2014 SALES $18.9 BILLION S&P 500 CREDIT RATING BBB (See next page) 2014 FORTUNE 500 #164 NUMBER OF STORES 12,396+ DOLLAR GENERAL 8
tenant credit rating THE THREE LARGEST DOLLAR STORE CHAINS, RANKED BY 2014 REVENUE, ARE: 1 2 DOLLAR GENERAL FAMILY DOLLAR ABOUT THE STRONG DOLLAR GENERAL CREDIT RATING In July, 2015, Family Dollar was acquired by Dollar Tree and ceased to be a public company. Dollar Tree took on billions of dollars of debt to acquire Family Dollar, and that negatively impacted the credit rating of both of these companies. Moreover, Family Dollar, as a subsidiary of Dollar Tree, will no longer issue separate financial statements. The best known rating agency, Standard & Poor s, downgraded Family Dollar in July, with Dollar Tree having already been downgraded. 3 DOLLAR TREE The combined Dollar Tree-Family Dollar entity will have approximately the same amount of revenue as Dollar General, but more debt, hence the lower credit rating. Dollar General is now the only dollar store chain with an investment grade rating. Dollar General has been credit-upgraded five times since going public in 2009, most recently in October, 2015. It is now BBB. DOLLAR GENERAL 9
location & demographics SALEM, SD OVERVIEW The growing town of Salem is the county seat of McCook County, which is located in the Sioux Falls MSA (see the next page about Sioux Falls). The population was 1,327 according to the 2010 census. Salem is located in the eastern part of South Dakota only 40 miles northwest of Sioux Falls. Salem is located at the crossroads of US Highway 81 and Highway 38. Buhler Industries in Salem, SD In 2010 Buhler industries established a 24 acre manufacturing facility in Salem, instituting a long term presence within the Salem community. The Winnipeg-headquartered company, publicly listed on the Toronto stock exchange, builds and distributes agricultural equipment. TOP EMPLOYERS PRIVATE EMPLOYERS IN SALEM Buhler McCook Central School District McCook County POPULATION 1-Mile 3-Mile 5-Mile 2010 1,327 1,535 1,743 2015 1,404 1,613 1,813 2020 1,477 1,689 1,886 2015 HOUSEHOLD INCOMES 1-Mile 3-Mile 5-Mile Average $56,731 $57,350 $58,127 SALEM 46 MIN 40 MILES SIOUX FALLS DOLLAR GENERAL 10
sioux falls, sd ABOUT SIOUX FALLS, SD As Reported for the Month of November Unemployment Rates are Quite Low: Salem (site): 2.0% Sioux Falls: 2.3% South Dakota: 2.7% USA: 5.0% Sioux Falls is the strongest and largest area economically in the state. State law is favorable for financial companies, in particular credit card operations. Major Sioux Falls employers include: Wells Fargo, Citibank, Capital One, Cigna, and Esurance. There are also four significant hospitals, which serve a wide area around the city. The airport offers non-stop service to about ten destinations, the busiest routes being to Minneapolis, Chicago, and Denver. Sioux Falls has a population of 160,000+ within the city limits, and an MSA of about 250,000. Sioux Falls is the largest city in the state, and population growth has always been outstanding. The growth rate here is among the highest in the country. DECADE ENDING GROWTH 1910 37% 1920 79% 1930 32% 1940 22% 1950 30% 1960 24% 1970 11% 1980 12% 1990 24% 2000 23% 2010 24% 2011-2014 10%
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