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Confidential Offering Memorandum
565 WAKARUSA DRIVELAWRENCE, KS (UNIVERSITY OF KANSAS)
A 10,850 SF NET-LEASED RETAIL CENTER
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The Offering: Blue West Capital is pleased to present the sale of a new construction Class A multi-tenant retail property located in Lawrence, Kansas. The property is 100% leased to national e-commerce resistant tenants – AT&T, Pacific Dental, SportClips, Orangetheory Fitness, and Smoothie King. All of the leases are triple net (NNN) and feature rental increases in the primary term. This investment offers a future owner a passive investment with minimal landlord responsibilities.
Lawrence, KS is located 45 minutes west of Kansas City, and 30 minutes east of Topeka, the state capital. Lawrence is home to the University of Kansas, the local demand driver of the region. Lawrence offers a rich and fascinating history, a wide range of exciting cultural experiences, nationally recognized educational institutions, and some of the most unique and enjoyable shopping opportunities in the Midwest.
The University of Kansas (KU), located just over 3 miles from the property, is a public research university and the largest university in the state of Kansas. KU has a total enrollment of 27,000+ students.
INVESTMENT CONTACTS:
Tom Ethington - LeadManaging Partner
Investment Sales
Brandon Gayeski - LeadAssociate
Investment Sales
Robert Edwards Managing Partner
Investment Sales
Zach WrightDirector
Net Lease Investment Sales
Shawn DickmannAnalyst
Investment Sales
720.828.8310
Investment Overview
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Executive Summary6TH & WAKARUSA
PRICE
10,850 SF
$498.99
$324,831
2018
100%
84 SPACES
LEASABLE SF
PRICE PSF
NOI
YEAR BUILT
OCCUPANCY
SURFACE PARKING
CAP RATE$5,414,000 6.00%
565 Wakarusa Drive, Lawrence, KS 66049
• New construction Class-A multi-tenant property leased to nationale-commerce resistant tenants (AT&T, Pacific Dental, SportsClips, Orangetheory Fitness, and Smoothie King)
• Long term triple net leases give the simplicity of passive ownership with fixed rental increases
• Outparcel to a Walmart Supercenter, increasing foot and vehicle traffic to the property and tenants
• Close proximity to the University of Kansas, the largest university in Kansas (27,000+ Students)
• Located at the signalized intersection of 6th Street & Wakarusa Drive, the primary intersection of the trade area
• Over 49,000 people living within three miles with average annual household incomes in excess of $92,000
• Adjacent to Lawrence Free State High School (1,800+ Students)
• National retailers in the immediate trade area include Sprouts Farmers Market, Dillons Food Store, McDonald’s, Starbucks, T-Mobile, CVS, Taco Bell, Discount Tire, Big O Tires, Old Chicago, Burger King, Arby’s, Slim Chickens, Zaxby’s and numerous others
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Aerial - North Facing
WAKARUSA DR (6,380 VPD)
W 6TH ST (14,989 VPD)
FREE STATEHIGH SCHOOL
565 WAKARUSA DRIVE
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Aerial - South East Facing
W 6TH ST (14,989 VPD)
WAKARUSA DR (6,380 VPD)
565 WAKARUSA DRIVE
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Aerial
AVERAGE HH INCOMEPOPULATION RESIDENTIAL COUNT AVERAGE HH INCOME
1 mile $130,4123 miles $92,4365 miles $75,757
TOTAL HOUSEHOLDSPOPULATION RESIDENTIAL COUNT AVERAGE HH INCOME
1 mile 4,3913 miles 20,3675 miles 37,641
TOTAL POPULATIONPOPULATION RESIDENTIAL COUNT AVERAGE HH INCOME
1 mile 10,7883 miles 49,2375 miles 92,472
W 6TH ST
FREE STATEHIGH SCHOOL(1,867 Students)
WA
KA
RU
SA
DR
14,989 VPD
565 WAKARUSA DRIVE
6,38
0 V
PD
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Map
565 Wakarusa Dr.Lawrence, KS
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Map
565 Wakarusa Dr.Lawrence, KS 40 MILES
680 Employees
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Lawrence Lawrence is just 45 minutes west of Kansas City and 30 minutes east of the state capital of Topeka. Lawrence is the seat of Douglas County, which is also home to Baldwin City, Eudora, and Lecompton, three excellent communities that contribute greatly to our region. Downtown Lawrence features the most visited tourist attraction in the state in 2018, Massachusetts Street, lined with locally owned shops, restaurants, music venues, and plenty of history. Lawrence Public Schools maintains neighborhood elementary schools around the city. No matter your style, Lawrence and Douglas County has a place for you.
The University of Kansas (KU) is a public research university and the largest university in the state of Kansas. KU campuses are located in Lawrence, Wichita, Overland Park, Salina and Kansas City, with the main campus located in Lawrence on Mount Oread, the highest point in Lawrence. The university was established in 1866, under a charter granted by the Kansas Legislature in 1864. The University’s enrollment has grown for the fifth straight year, according to data released in 2018 by the Kansas Board of Regents. Additionally, KU has recruited the most talented freshman class in history and set all-time highs in retention and graduation rates. KU has 27,000+ students enrolled across all campuses, an increase of 63 students from last year. It is KU’s highest enrollment since 2011. Additionally, the freshman class grew to 4,164 students, marking the sixth time in seven years the freshman class has grown. KU also set records for retention and graduation this year.
LocationOverview
10,116 Employees
680 Employees
2,100 Employees
900 Employees
TOP PRIVATE EMPLOYERS (BY # OF EMPLOYEES)
1,450 Employees
800 Employees
849 Employees
750 Employees
500 Employees
260 Employees
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ACADEMIC SCHOOLS
350,000+ ALUMNI
WORLDWIDE
400+ DEGREE &
CERTIFICATEPROGRAMS
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Site Plan
WA
KA
RU
SA
DR
(6,38
0 V
PD
)
W 6TH ST (14,989 VPD)
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Property Photos
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Income & Expense
CURRENT
Price $5,414,000
Capitalization Rate 6.00%
Price Per Square Foot $498.99
Total Leased (SF) 100% 10,850 SF
Total Vacant (SF) 0% 0 SF
Total Rentable Area (SF) 10,850 SF
INCOME PER SF AS-IS
Scheduled Rent $29.94 $324,830
Expense Reimbursement $13.62 $147,783
POTENTIAL GROSS REVENUE $43.56 $472,613
General Vacancy - -
EFFECTIVE GROSS INCOME $472,613
EXPENSES PER SF AS-IS
CAM ($1.00) ($10,850)
Management Fee ($1.23) ($13,346)
Insurance ($0.94) ($10,199)
Property Taxes ($10.45) ($113,388)
TOTAL OPERATING EXPENSES ($13.62) ($147,783)
NET OPERATING INCOME $324,830
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Rent Roll
Tenant Name Lease Lease Annual Changes Changes To MonthlyTerm Unit Sq Ft PRS Commencement Expiration Rent Rent/SF On Annual Rent/SF Increase NNN Guarantor
A 3,000 27.6% 1/1/19 12/31/28 $90,000 $30.00 1/1/24 $99,000 $33.00 10% $1,875 Corporate Lease
B 1,280 11.8% 5/7/19 5/6/29 $37,120 $29.00 5/7/24 $40,832 $31.90 10% $800 Franchisee - Wildcat Investments, LLC(18 Locations)
C 2,870 26.5% 1/15/20(Estimate)
1/14/30 $80,360 $28.00 1/15/25 $88,396 $30.80 10% $1,794 Franchisee - BOTK1, LLC (20 locations)
D 1,200 11.1% 8/8/18 8/7/25 $33,600 $28.00 8/8/21 $34,800 $29.00 $1.00/sfincrease
$750 Franchisee - The Nichols Brand, Inc.(10 Locations)
E 2,500 23.0% 11/1/18 10/31/28 $83,750 $33.50 11/1/23 $92,125 $36.85 10% $1,563 Largest Franchisee in the country - Prime Communications
Total Square Feet:
10,850 100% $324,830 $29.94 $355,153 $32.73 $6,782
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Tenant MixPACIFIC DENTALFounded in 1994 Pacific Dental Services (PDS) is one of the country’s leading dental support organizations, providing supported autonomy that enables dentists to concentrate on clinical excellence and the highest levels of cost-effective comprehensive patient care. PDS pioneered the concept of Modern Dentistry so that dentists are equipped to combine advances in the latest technology with the best operational practices and procedures, highly skilled support staff and a commitment to ongoing training and education. PDS continues to grow, with over 700 supported dental offices across the United States and plans to expand into several new markets.www.pacificdentalservices.com Lease Guarantor: Corporate
SPORTCLIPSSportClips was founded in 1993 by Gordon Logan in Austin, TX and today is one of the fastest-growing franchise systems with over 1,600 locations in the US and Canada. SportClips aims to provide men and boys with haircuts that fit their everyday needs all while making them feel comfortable doing so. The MVP Haircut is the franchise’s most popular haircut giving customers a complete salon experience featuring a precision haircut, plus a legendary hot steamed towel, massaging shampoo, and a relaxing neck and shoulder treatment. www.sportsclips.comLease Guarantor: Franchisee (18 locations)
ORANGETHEORY FITNESSOrangetheory Fitness (OTF) offers group personal training workouts based on High Intensity Interval Training (HIIT) that blend cardiovascular and strength training. OTF originated with a single studio in Florida nine years ago, and is now the fastest growing fitness business in the world with over 825 locations in the United States and 1,260 worldwide. www.orangetheoryfitness.comLease Guarantor: Franchisee (20 locations)
SMOOTHIE KINGFrom the beginning, founder Steve Kuhnau started blending for a purpose – solving his chronic food allergies. Handcrafted by our blendologists, every one of our Smoothies is still blended with a purpose – yours. Among our 900+ locations worldwide, power a workout, lose weight or make food choices you feel good about with the right nutritious Smoothie for your goals and Healthy Rewards tailored just for you.www.smoothieking.comLease Guarantor: Franchisee (10 locations)
AT&T (PRIME COMMUNICATIONS)AT&T is an American multinational telecommunications corporation and is the second largest provider of cell phones, while also providing data plans, tab-lets, and broadband subscription television services. As of 2018, AT&T serves over 150.2 million mobile customers worldwide.
Prime Communications has more than 2,000 locations in 28 states. Prime is the largest privately held AT&T Authorized Retailer in the US. Established in 1999 and takes great pride in being one of AT&T’s premier partners. Prime Communications create simple, easy-to-understand solutions for customers who are eager to connect with AT&T’s latest technologies for personal and business communication, home entertainment and home automation.www.primecomms.comLease Guarantor: Franchisee (2,000+ locations)
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10-Year Cash Flow
Fiscal Year Ending As-Is As-Is PSF Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
Jan-2021
Jan-2022
Jan-2023
Jan-2024
Jan-2025
Jan-2026
Jan-2027
Jan-2028
Jan-2029
Jan-2030
Jan-2031
BASE RENTAL REVENUE $324,830 $29.94 $324,830 $325,430 $326,030 $328,874 $346,789 $356,853 $357,553 $357,553 $360,685 $379,400 $380,761
Expense Reimbursement Revenue
$147,783 $13.62 $147,783 $151,476 $155,265 $159,145 $163,125 $167,201 $171,381 $175,667 $180,061 $184,562 $189,174
POTENTIAL GROSS REVENUE $472,613 $43.56 $472,613 $476,906 $481,295 $488,019 $509,914 $524,054 $528,934 $533,220 $540,746 $563,962 $569,935
General Vacancy $0 $0.00 $0 $0 $0 $0 ($12,748) ($13,101) ($13,223) ($13,331) ($13,519) ($14,099) ($14,248)
EFFECTIVE GROSS REVENUE $472,613 $43.56 $472,613 $476,906 $481,295 $488,019 $497,166 $510,953 $515,711 $519,889 $527,227 $549,863 $555,687
Common Area Maintenance ($10,850) ($1.00) ($10,850) ($11,121) ($11,399) ($11,684) ($11,976) ($12,276) ($12,583) ($12,897) ($13,220) ($13,550) ($13,889)
Management Fee ($13,346) ($1.23) ($13,346) ($13,679) ($14,021) ($14,372) ($14,731) ($15,099) ($15,477) ($15,864) ($16,260) ($16,667) ($17,083)
Property Insurance ($10,199) ($0.94) ($10,199) ($10,454) ($10,715) ($10,983) ($11,258) ($11,539) ($11,828) ($12,123) ($12,426) ($12,737) ($13,056)
Property Taxes ($113,388) ($10.45) ($113,388) ($116,223) ($119,128) ($122,106) ($125,159) ($128,288) ($131,495) ($134,783) ($138,152) ($141,606) ($145,146)
Total Operating Expenses ($147,783) ($13.62) ($147,783) ($151,477) ($155,263) ($159,145) ($163,124) ($167,202) ($171,383) ($175,667) ($180,058) ($184,560) ($189,174)
NET OPERATING INCOME $324,830 $29.94 $324,830 $325,429 $326,032 $328,874 $334,042 $343,751 $344,328 $344,222 $347,169 $365,303 $366,513
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10-Year Cash Flow
Fiscal Year Ending As-Is As-Is PSF Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Jan-2021
Jan-2022
Jan-2023
Jan-2024
Jan-2025
Jan-2026
Jan-2027
Jan-2028
Jan-2029
Jan-2030
NET OPERATING INCOME $324,830 $29.94 $324,830 $325,429 $326,032 $328,874 $334,042 $343,751 $344,328 $344,222 $347,169 $365,303
Cap Rate (based on Acquisition Price)
6.00% 6.00% 6.01% 6.02% 6.07% 6.17% 6.35% 6.36% 6.36% 6.41% 6.75%
Annual Debt Service ($223,722) ($223,722) ($223,722) ($223,722) ($223,722) ($223,722) ($223,722) ($223,722) ($223,722) ($223,722)
Tenant Improvements $0 $0 $0 $0 $0 ($6,000) $0 $0 ($27,500) ($6,400)
Leasing Commissions $0 $0 $0 $0 $0 ($5,580) $0 $0 ($31,537) ($6,737)
Capital Reserves ($2,170) ($2,224) ($2,280) ($2,337) ($2,395) ($2,455) ($2,517) ($2,579) ($2,644) ($2,710)
Total Leasing & Capital Costs ($2,170) ($2,224) ($2,280) ($2,337) ($2,395) ($14,035) ($2,517) ($2,579) ($61,681) ($15,847)
Net Returns
Cash Flow After Cap Ex & Debt $1,038,690 Total $98,938 $99,483 $100,030 $102,815 $107,925 $105,994 $118,089 $117,921 $61,766 $125,734
Cash On Cash 6.40% Average 6.09% 6.13% 6.16% 6.33% 6.64% 6.53% 7.27% 7.26% 3.80% 7.74%
Principal Reduction $779,060 Total $63,891 $66,660 $69,549 $72,563 $75,708 $78,989 $82,412 $85,983 $89,710 $93,597
Total Return $1,817,751 Total $162,829 $166,142 $169,578 $175,377 $183,632 $184,982 $200,500 $203,904 $151,475 $219,331
Total Return (percentage) 11.19% Average 10.03% 10.23% 10.44% 10.80% 11.31% 11.39% 12.34% 12.55% 9.33% 13.50%
ACQUISITION:
Acquisition Price: $5,414,000 $498.99 psf
Loan Amount: $3,789,800 70.0% LTV
Initial Equity: $1,624,200 30.0%
Interest Rate/Amortization: 4.25% 30 Years
Monthly/Annual Amortization Payments: $18,644 $223,722
Property Square Feet: 10,850 SF
Leveraged IRR 5 Year: 11.09%
Cash-on-Cash 5 Year Average: 6.27%
Total Return 5 Year Average: 10.56%
Residual Value: 5th Year
Cap 6th Year's NOI @ 6.00% $5,729,183
Residual Value PSF $528.04 psf
Selling Expense @ 3.00% ($171,876)
Ending Loan Balance: ($3,441,430)
Net Residual In Year 5: $2,115,878
Initial Equity: ($1,624,200)
Disposition Proceeds: $491,678
Leveraged IRR 10 Year: 11.09%
Cash-on-Cash 10 Year Average: 6.40%
Total Return 10 Year Average: 11.19%
Residual Value: 10th Year
Cap 11th Year's NOI @ 6.00% $6,108,550
Residual Value PSF $563.00 psf
Less Selling Expense @ 3.00% ($183,257)
Ending Loan Balance: ($3,010,740)
Net Residual In Year 10: $2,914,554
Initial Equity: ($1,624,200)
Disposition Proceeds: $1,290,354
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Ten Year Cash Flow Summary & AssumptionsCASH FLOW ANALYSIS
Purchase Price: $5,414,000
Purchase Price (PSF): $498.99 psf
As-Is Net Operating Income Year 1:
$324,830
As-Is Cap Rate: 6.00%
Analysis Start Date: February 1, 2020
Analysis Period: 10 Years
Property Square Feet: 10,850
Current Occupancy: 100.0%
RESIDUAL
Year 11 Net Operating Income: $366,513
Residual Capitalization Rate: 6.00%
Year 11 Gross Resale Price: $6,108,550
Year 11 Gross Resale Price PSF: $563.00 psf
Cost of Resale: 3.00%
Resale Costs: ($183,257)
Unleveraged Proceeds Before Debt:
$5,925,294
PROPERTY INFLATION & GENERAL VACANCY
Property Tax - Annual Escalator 2.50%
Operating Expense - Annual Escalator
2.50%
General Vacancy (Starting Year 6) 2.50%
SECOND GENERATION TENANTS
Tenant Improvements: $5.00/sf
Leasing Commissions: 3.00%
Lease Term: 5 Years
Lease Rate: 10.0% Increase From Previous Rate
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Ten Year Lease Roll Over Summary
TENANT UNIT # EXPIRATION SQ FT % OF TOTAL
YEARS 1-5
None 0.0%
Year End - January-25 Tenants Expiring: 0 0 0.0%
YEAR 6
Smoothie King D 8/7/25 1,200 11.1%
Year End - January-26 Tenants Expiring: 1 1,200 11.1%%
YEAR 7
None 0.0%
Year End - January-28 Tenants Expiring: 0 0 0
YEAR 8
None 0.0%
Year End - January-28 Tenants Expiring: 0 0 0
TENANT UNIT # EXPIRATION SQ FT % OF TOTAL
YEAR 9
AT&T E 10/31/28 2,500 23.0%
Pacific Dental A 12/31/28 3,000 27.6%
Year End - January-29 Tenants Expiring: 2 5,500 50.7%
YEAR 10
SportClips B 10/31/28 1,280 11.8%
OrangeTheory Fitness C 12/31/28 2,870 26.5%
Year End - January-30 Tenants Expiring: 2 4,150 38.2%
Total Occupied 10,850 100.0%
Total Vacant 0 0.0%
Total Square Feet 10,850 100.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0
1
2
3
4
5
6
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Tenants Expiring % of Total SF
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LeaseComparables
SUBJECT PROPERTY
Property: 6th & Wakarusa Drive
Address: 565 Wakarusa Dr,Lawrence, KS
Year Built: 2018
High Low
NNN Rent Range:: $33.50 $28.00
Lease Size Range: 3,000 SF 1,200 SF
Tenants: AT&T, Smoothie King, Sports Clips, Orange Theory
PROPERTY 3:
Property: 4801 W Bauer Farm Dr
Address: 4801 W Bauer Farm Dr, Lawrence, KS
Year Built: 2010
High Low
NNN Rent Range::
$25.00 $25.00
Lease Size Range:
1,865 SF 1967 SF
Tenants: Great Clips, Sprint, & Burger by Briggs
PROPERTY 2:
Property: 525 Wakarusa Dr
Address: 525 Wakarusa Dr, Lawrence, KS
Year Built: 2016
High Low
NNN Rent Range::
$26.00 $26.00
Lease Size Range:
1,222 SF 1,150 SF
Tenants: Blue Moose, Spin Pizza, Eat Fit, & Uniquely Ku
PROPERTY 1:
Property: 4701 Bauer Farm Dr
Address: 4701 Bauer Farm Dr, Lawrence, KS
Year Built: 2013
High Low
NNN Rent Range::
$29.50
Lease Size Range:
1,593 SF
Tenants: Starbucks Coffee & Earthwise Pet SupplySportCLips
SUBJECT 3
2
1
W 6TH ST
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Disclaimer
This confidential Offering Memorandum has been prepared by Blue West Capital, LLC (“Blue West Capital”) foruse by a limited number of qualified parties. This Offering Memorandum has been provided to you at your request based upon your assurances that you are a knowledgeable and sophisticated investor in commercial real estate projects and developments. Blue West Capital recommends you, as a potential buyer/investor, should perform your own independent examination and inspection of the property described herein as 6th & Wakarusa (the “Property”) and of all of the information provided herein related to the Property. By accepting this Offering Memorandum, you acknowledge and agree that you shall rely solely upon your own examination and investigation of the Property and you shall not rely on any statements made in this Offering Memorandum or upon any other materials, statements or information provided by Blue West Capital or its brokers.
Blue West Capital makes no guarantee, warranty or representation about the completeness or accuracy of theinformation set forth in this Offering Memorandum. You are responsible to independently verify its accuracyand completeness. Blue West Capital has prepared the information concerning the Property based uponassumptions relating to the general economy, its knowledge of other similar properties in the market, and onother market assumptions including factors beyond the control of the Blue West Capital and the Owner of theProperty. Blue West Capital makes no representation or warranty as to either the accuracy or completeness ofthe information contained herein, and the information set forth in this Offering Memorandum is not intended tobe a promise or representation as to the future performance of the Property. Although the information con-tained herein is believed to be accurate, Blue West Capital and the Property Owner disclaim any responsibility or liability for any inaccuracies. Further, Blue West Capital and the Property Owner disclaim any and all liabilityfor any express or implied representations and warranties contained in, or for any omissions from, the OfferingMemorandum and for any other written or oral communication transmitted or made available to you. Blue WestCapital shall make available to you, as a qualified prospective investor, additional information concerning theProperty and an opportunity to inspect the Property upon written request.
This Offering Memorandum and the contents are intended to remain confidential except for such informationwhich is in the public domain or is otherwise available to the public. By accepting this Offering Memorandum, you agree that you will hold and treat Offering Memorandum in the strictest confidence, that you will not photo-copy or duplicate it, or distribute it. You agree you will not disclose this Offering Memorandum or its contents toany other person or entity, except to outside advisors retained by you and from whom you have obtained anagreement of confidentiality, without the prior written authorization of Blue West Capital. You agree that you willuse the information in this Offering Memorandum for the sole purpose of evaluating your interest in the Property. If you determine you have no interest in the property, kindly return the Offering Memorandum to Blue West Capital at your earliest convenience.
Tom Ethington - LeadManaging PartnerInvestment Sales
720.989.1031400 S Colorado Blvd, Suite 420
Denver, CO 80246 BLUEWESTCAPITAL.COM
21
Tom Ethington - LeadManaging PartnerInvestment Sales
Brandon Gayeski - LeadAssociate
Investment Sales720.966.1627
Robert Edwards Managing PartnerInvestment Sales
Zach WrightDirector
Net Lease Investment Sales720.966.1628
720.989.1031400 S Colorado Blvd, Suite 420
Denver, CO 80246 BLUEWESTCAPITAL.COM
Shawn DickmannAnalyst
Investment Sales720.828.8310
