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Cooper Commercial Investment Group
6120 Parkland Blvd., Suite 206
Cleveland, OH 44124
www.coopergrp.com
Bob Havasi [email protected]
(888) 525-5695 x10
Dan Cooper [email protected]
(888) 525-5695 x12
In Cooperation with Licensed MI Broker
2
INVESTMENT SUMMARY
Investment Highlights ………...…….. 4
Investment Overview ……………….. 5
Location Overview …………………... 6
Offering Summary …………………… 7
FINANCIAL ANALYSIS
Rent Roll …………...…………….…… 9
Financial Analysis ….………….…….. 10
PROPERTY ANALYSIS
Site Plan ...…...……………………….. 12
Aerial Map …...……………………….. 13
Location Maps ….……………………. 14
Demographics ..……………………… 15
TENANT ANALYSIS
Tenant Profiles ..……….…………….. 17-19
Disclosure & Confidentiality …...… 20
3
INVESTMENT HIGHLIGHTS
4
Adrian Plaza
• 100% Occupied NNN Center, Shadow Anchored by Corp.
Owned, Kohl’s (Includes ~1.5 Acres of Buildable Land)
• Anchor, ProMedica Home Medical Equipment, Subsidiary
of ProMedica Health System/Partners: System of 17,000+
Employees and 600 Employed Providers Serving Nearly 4
Million Patient Encounters Annually at More Than 300
Sites, Including 13 Hospitals
• Diverse Mix of Tenants Offering Recession Proof
Retailers As Well As Alternative Retail Users, Providing
Long-Term Stability
• Long-Term Leases In Place with New 10-Yr. Leases and a
Recent 5-Yr. Renewal, Proving Commitment and Desire
to Be Located at the Property
• NNN Leases: Includes Either Admin. or Management
Reimbursements
• Ideal Position Surrounded by Students: Siena Heights
University (3 Miles, 2,630 Students), Jackson College
(4 Miles, 6,988 Students) and Adrian College (4 Miles,
1,654 Students)
• High Traffic Corner Location (US-223/Treat Street) with
34,000 VPD Surrounding the Center: Multiple Points of
Ingress and Egress Creating Ease of Access
• County Seat Positioned as Suburb to Ann Arbor (Approx.
30 Miles Northeast) and Toledo, Ohio (Approx. 30 Miles
Southeast)
• Surrounded by Complimentary Retail Trade Area: Adrian
Mall, Lowe’s, Marshall’s, Walmart Supercenter, Verizon,
Starbuck’s, Meijer, Hobby Lobby, Chipotle, Ulta, & More
• Surrounded by Large Employment Base: ProMedica’s
Bixby Medical Center with 1,300 Employees (3.5 Miles),
Adrian Public Schools/Lenawee Intermediate Schools
(815 Employees), Lenawee County (500 Employees),
Adrian Steel Company (345 Employees), Inergy (325
Employees) and Others
ADDITIONAL HIGHLIGHTS
5
The Cooper Commercial Investment Group has been exclusively retained by
ownership to sell the 100% fee simple interest in the 8,000 S.F., Kohl’s shadow
anchored, Adrian Plaza, located in Adrian, Michigan. The plaza is being offered
for $1,520,000 (includes ~1.5 buildable acres of land adjacent to the plaza),
representing an 8.35% CAP and high 12.65% projected year-1 cash-on-cash
return, which provides an investor the opportunity to acquire a stable center that
includes recession proof users. Additionally, the property offers long-term
stability with ProMedica Home Medical Equipment (a division of the ProMedica
Health System/Partners) and Jed’s BBQ on new 10-year leases as well as Sally
Beauty (NYSE: SBH/S&P ’BB+”) on a recent 5-year extension. ProMedica has a
system of 17,000 employees and 600 employed providers serving nearly 4 million
patient encounters annually at more than 300 sites, including 13 hospitals. Jed’s
is a new fast-causal concept that is rapidly expanding and now has 8 locations
and is in the process of opening 3 more locations in the Michigan/Ohio markets.
The current tenant roster includes all Triple Net (NNN) lease structures and
reimbursement of either administrative or management fees.
The center boasts a welcoming curb appeal with great visibility, excellent
frontage and prominent pylon signage. The property also has easy access with
multiple points of ingress and egress being positioned on the hard corner of
US-223 and Treat Street (34,000 VPD surrounding the center). Adrian Plaza is
positioned in a college town surrounded by students of Siena Heights University
(3 miles, 2,630 students), Jackson College (4 miles, 6,988 students) and Adrian
College (4 miles, 1,654 students). The plaza is also positioned in the heart of the
retail corridor and surrounded by other complimentary retailers, including Adrian
Mall, Lowe’s, Marshall’s, Walmart Supercenter, Verizon, Starbuck’s, Meijer,
Chipotle, Ulta, and more. Furthermore, the property is within just a couple of
miles from some of the area’s largest employers. ProMedica’s Bixby Medical
Center has diligently served the health care needs of the greater Adrian, Michigan
community for more than 100 years and has over 1,300 employees. The hospital
provides full-service acute care, 88-beds and more than 120 doctors.
Additionally, Adrian is home to Lenawee County with 500 employees, Adrian
Mall, which anchors Dunham’s Sports, Hobby Lobby, Bath & Body Works, GNC,
Pearl Vision, Bob Evans and Buffalo Wild Wings with 487 employees, Adrian
Public Schools/Lenawee Intermediate Schools (815 total employees), Adrian
Steel Company (345 employees), Inergy (325 employees) and many more.
The center also benefits from being located as a suburb to densely populated
cities, such as Ann Arbor (approximately 30 miles northeast) and Toledo, Ohio
(approximately 30 miles southeast). Some of the residential base in Adrian also
commutes to the larger cities via US-223, passing the center on their route.
Being positioned amidst the college/university students with the diverse mix of
uses, services and long-term lease terms; the asset is well insulated for possible
shifts in consumer retail demands and trends and will be a quality asset for many
years to come.
INVESTMENT OVERVIEW
6
Adrian is the county seat of Lenawee County, Michigan and located
within convenient driving distance of Ann Arbor (approx. 30 miles
northeast) and Toledo, Ohio (approx. 30 miles southeast). The featured
property is positioned at the corner of US-223 and Treat Street. US
Route 223 is one of the most heavily traveled roadways in Adrian and is a
diagonal (northwest–southeast) highway lying in Michigan and Ohio. The
southernmost section is completely concurrent with the US-23 freeway,
including all of the Ohio segment. It connects US-23 in the south near
Toledo, Ohio, with US-127 south of Jackson, Michigan. The center is
also just east of Business US Highway 223, which runs north-south
through Downtown Adrian. The city offers easy connections to Toledo
Express Airport, Detroit Metro Airport, Willow Run Airport and just two
miles from downtown is the Lenawee County Airport, with runway and
service to handle large business jets.
Adrian is an all-around great place for adults to live and children to grow
with its elite schools and its thriving cultural scene. The cultural scene is
driven by Siena Heights University (3 miles, 2,630 students), Jackson
College (4 miles, 6,988 students) and Adrian College (4 miles, 1,654
students). Additionally, the city recently received approval of a grant
application that will help build 3 new apartment buildings and renovate
one existing apartment building in the downtown area and will offer some
spectacular new places to live.
Adrian is home to ProMedica’s Bixby Medical Center, whom has
diligently served the health care needs of the greater Adrian, Michigan
community for more than 100 years and has over 1,300 employees. The
hospital provides full-service acute care, 88-beds and more than 120
doctors. The hospital is part of ProMedica’s system of 17,000 employees
and 600 employed providers serving nearly 4 million patient encounters
annually at more than 300 sites, including 13 hospitals. Additionally,
Adrian is home to many other large employers including Lenawee County
with 500 employees, Adrian Mall, which anchors Dunham’s Sports,
Hobby Lobby, Bath & Body Works, GNC, Pearl Vision, Bob Evans and
Buffalo Wild Wings with 487 employees, Adrian Public Schools/Lenawee
Intermediate Schools (815 total employees), Adrian Steel Company (345
employees), Inergy (325 employees) and many more. The city is also in
the process of expanding Adrian Industrial Park, who is currently home to
Adrian Precision, Custom Machines, Kapnick Insurance, All Metals Inc.,
Venchurs Packaging (220) employees), Evergreen Grease Service, Inc,
and Metcan Industries.
LOCATION OVERVIEW
# Employer # of Employees
1 (ProMedica) Bixby Medical Center 1,300
2 Lenawee County 500
3 Adrian Mall 487
4 Adrian Public Schools 435
5 Meijer 400
6 Lenawee Intermediate School District 380
7 Adrian Steel Company 345
8 Adrian Dominican Sisters 344
9 Inergy 325
10 Adrian College 275
11 Venchurs 220
12 Siena Heights University 215
7
Loan Amount:
Loan Type:
Interest Rate:
Amortization:
Term:
Loan-to-Value (LTV):
Monthly Debt Payment:
$1,078,730
New Loan
4.75%
25 Years
5 Years
75.00%
$6,150
Rental Income:
Tenant Reimbursements:
Potential Gross Income:
Vacancy (Actual):
Effective Gross Income:
Expenses:
NOI:
Annual Debt Service:
Structural Reserve ($0.10/S.F.):
Cash Flow After Reserves:
Cash-on-Cash Return:
$108,736
$53,041
$161,777
($0)
$161,777
$41,678
$120,099
$73,800
$800
$45,498
12.65%
Operating Data
$1,520,000
$359,577
8,000 S.F.
$190.00
$120,099
8.35%
2006
Approx. 2.516 Acres
Approx. 1.5 Acres
Concrete
112 Spaces
Warranty: 8/20/2026
Price*:
Down Payment:
Gross Leasable Area:
Price/SF:
NOI:
CAP Rate:
Renovated/Built:
Lot Size:
Additional Buildable Land (Included):
Foundation:
Parking:
Roof:
SUMMARY
Anticipated New Financing
* Includes NPV of ProMedica’s TI Repayment at an 8% discount rate, which equates to
$81,518 (assuming an October, 2018 sale).
8
9
% of Tenant Lease Lease Rent/ Annual Lease Rental Option
Tenant GLA Total Since Start Expiration S.F. Rent Type Bumps Rate
Shadow Anchor: NAP
Corporately Owned
4,360 54.50% 2018 5/1/2018 4/30/2028 $12.39 $54,008 NNN 5/1/2023
$13.90/SF (2) 5-Yr.
CPI
(Rent commences 12/2018)
1,905 23.81% 2018 3/1/2018 2/28/2028 $15.50 $29,528 NNN 3/1/2023
$16.50/SF (2) 5-Yr.
CPI
1,600 20.00% 2007 11/1/2017 10/31/2022 $15.75 $25,200
NNN (5% Cap)
See Tenant Profile Page
N/A (1) 5-Yr.
$17.33/SF
Storage Room 135 1.69% $ - $ -
Total Building 8,000 100.00% $13.59 $108,736
Vacancy - 0.00% $ - $ -
10
Pro Forma
2018-2019 $/SF
INCOME:
Potential Rental Income
Rental Income $ 108,736 $ 13.59
Tenant Reimbursements
Common Area Maintenance 18,589 2.32
Real Estate Taxes 17,177 2.15
Insurance 2,650 0.33
Management/Admin. 1,655 0.21
Outlot Contribution, REA & Farmer's Market CAM Contribution 12,970 1.62
Gross Potential Rental Income $ 161,777 $ 20.22
Vacancy (Actual) 0.00% $ -
Effective Gross Income $ 161,777 $ 20.22
OPERATING EXPENSES:
Management Fee 3% $ 3,262 $ 0.41
Real Estate Taxes 17,177 2.15
Insurance 2,650 0.33
Utilities 6,299 0.79
Snow Removal 1,725 0.22
Landscaping 2,500 0.31
Trash Removal 2,354 0.29
Parking Lot Sweeping & Maintenance 3,510 0.44
Repairs & Maintenance 500 0.06
Signage Expense 200 0.03
HVAC Maintenance 750 0.09
Alarm/Security 750 0.09
Utilities (Non-CAM) - -
Total Expenses $ 41,678 $ 5.21
Net Operating Income $ 120,099 $ 15.01
Loan Analysis
Cash Flow Available Before Debt Service $ 120,099 $ 15.01
NPV of ProMedica's TI Repayment (Assuming Oct, 2018 Sale) $ 81,518 $ 10.19
Capitalization Rate 8.35% 8.35%
Valuation $ 1,438,307 $ 179.79
Total Sale Price $ 1,520,000 $ 190.00
Loan to Value 75.00% 75.00%
Loan Amount $ 1,078,730 $ 134.84
Rate 4.75% 4.75%
Term 5 5
Amortization 25 25
Annual Debt Service $ 73,800 9.23
Debt Service Coverage Ratio 1.63 1.63
11
12
13
14
15
2070 US-223 1 mi radius 3 mi radius 5 mi radius 10 mi radius
Adrian, MI 49221
POPULATION
2018 Estimated Population 3,314 26,726 36,641 60,136
2023 Projected Population 3,323 27,432 37,349 60,720
2000 Census Population 3,308 27,475 36,969 59,967
Projected Annual Growth 2018 to 2023 0.1% 0.5% 0.4% 0.2%
2018 Median Age 35.1 35.5 37.6 38.9
HOUSEHOLDS
2018 Estimated Households 1,318 9,490 13,445 22,949
2023 Projected Households 1,339 9,909 13,906 23,462
2010 Census Households 1,303 9,349 13,071 22,174
2000 Census Households 1,233 9,301 12,728 21,268
Projected Annual Growth 2018 to 2023 0.3% 0.9% 0.7% 0.4%
Historical Annual Growth 2000 to 2018 0.4% 0.1% 0.3% 0.4%
RACE AND
ETHNICITY
2018 Estimated White 81.6% 80.4% 83.7% 88.1%
2018 Estimated Black or African American 4.5% 8.9% 7.1% 4.6%
2018 Estimated Asian or Pacific Islander 0.8% 0.8% 0.9% 0.8%
2018 Estimated American Indian or Native Alaskan 0.9% 0.6% 0.5% 0.5%
2018 Estimated Other Races 12.2% 9.3% 7.8% 6.1%
INCOME
2018 Estimated Average Household Income $52,523 $56,970 $61,922 $67,472
2018 Estimated Median Household Income $37,587 $41,237 $45,009 $51,157
2018 Estimated Per Capita Income $20,985 $22,793 $24,652 $26,939
EDUCATION
(AGE 25+)
2018 Estimated Elementary (Grade Level 0 to 8) 8.4% 6.4% 5.4% 4.0%
2018 Estimated Some High School (Grade Level 9 to 11) 7.5% 9.0% 7.8% 6.6%
2018 Estimated High School Graduate 43.3% 37.9% 37.2% 36.4%
2018 Estimated Some College 26.6% 23.3% 23.4% 24.5%
2018 Estimated Associates Degree Only 6.0% 6.4% 7.0% 8.0%
2018 Estimated Bachelors Degree Only 6.8% 11.0% 12.2% 13.3%
2018 Estimated Graduate Degree 1.3% 6.0% 7.0% 7.3%
BUSINESS
2018 Estimated Total Businesses 169 1,373 1,654 2,562
2018 Estimated Total Employees 3,743 15,965 18,639 26,678
2018 Estimated Employee Population per Business 22.2 11.6 11.3 10.4
2018 Estimated Residential Population per Business 19.6 19.5 22.1 23.5
CENSUS FIGURES DO NOT INCLUDE STUDENTS RESIDING IN ADRIAN
Siena Heights University (2,630 students), Jackson College (6,988 students) and Adrian College (1,654 students)
16
17
To help recover safely and comfortably at home, ProMedica’s
patient-oriented team at the Adrian location provides medical
equipment and supplies. One of the pharmacists will meet with the
patient, review and discuss how long and what supplies are needed
for recovery or on-going daily use. Additionally, the site provides
diabetes supplies, respiratory services, weight loss and nutrition
care and wound care, along with incontinence, ostomy/urological
supplies.
ProMedica is a locally-owned, nonprofit health system providing
quality health care services to 28 counties in northwest Ohio and
southern Michigan. The organization is a network of hospitals,
physicians, health care professionals, researchers, and specialty
clinics and facilities. The healthy system offers a full range of
diagnostic, medical, and surgical specialties in areas such as
emergency medicine and trauma, heart and vascular, oncology,
orthopaedics, neurology, women’s services, and children’s
services. ProMedica has a system of 17,000 employees and 600
employed providers serving nearly 4 million patient encounters
annually at more than 300 sites, including 13 hospitals.
www.promedica.org/pharmacy-counter
Source: www.promedica.org/pharmacy-counter
Tenant Base Rent Schedule
Current:
Bump 2023:
Option 1:
Option 2:
Monthly
$2,460.67
$2,619.37
CPI
CPI
PSF
$15.50
$16.50
CPI
CPI
Annual
$29,528.00
$31,432.50
CPI
CPI
Tenant Recapture
Common Area Maintenance:
Insurance:
Real Estate Taxes:
Admin. Fee:
Mgmt. Fee:
Sylvania, OH
12 in Home Medical Equipment Group
4,360
2018
01/01/2018
04/30/2028
05/01/2023
(2) 5-Yr.
Medical Equipment or Healthcare user
Kohl’s
One-time Right Between Years 5-6 with
90 days notice. Must pay unamortized
balance of the Tenant Improvements
Rents and leasing commissions.
($102,000)
Headquarter:
# of Locations:
GLA:
Tenant Since:
Current Term Start*:
Lease Expiration:
Rental Bumps:
Options:
Exclusive:
Co-Tenancy:
Termination Clause:
Tenant Lease Abstract
Pro Rata Share
Pro Rata Share
Pro Rata Share
5% on CAM Expenses
None
Common Area Maintenance:
CAM Cap:
Insurance:
Real Estate Taxes:
Admin. Fee:
Mgmt. Fee:
Pro Rata Share
5% on CAM Expenses,
Excluding Snow & Utilities
Pro Rata Share
Pro Rata Share
10% on CAM Expenses
None
18
Sally Beauty (NYSE: SBH/S&P “BB+”) sells to both consumer and
professional customers. The company sells hair color and care,
skin and nail care, beauty sundries, and styling tools for retail
customers and salon professionals. This segment also provides
products under third-party brands, such as Clairol, CHI, China
Glaze, OPI, and Conair, as well as exclusive-label merchandise
Every Sally store carries more than 5,000 professional salon
products for hair, nails and skin, plus the latest in beauty trends
and accessories. There are also complete ethnic offerings in
every store, and expanded ethnic sections in appropriate areas.
Sally Beauty’s store associates are trained professionals, many
of whom are licensed hair stylists.
www.sallybeauty.com Source: www.sallybeauty.com
Tenant Base Rent Schedule
Current:
Option 1:
Monthly
$2,460.67
$2,619.37
PSF
$15.75
$17.33
Annual
$25,200.00
$31,432.50
Edina, MN
3,700+
Sally Beauty Corp.
1,600
2007
11/01/2017
10/31/2022
None
(1) 5-Yr.
Beauty Products
Kohl’s
None
Headquarter:
# of Locations:
Corporate:
GLA:
Tenant Since:
Current Term Start*:
Lease Expiration:
Rental Bumps:
Options:
Exclusive:
Co-Tenancy:
Termination Clause:
Tenant Lease Abstract
Tenant Recapture
19
Jed’s strives to maintain its reputation as the premiere casual
restaurant. The restaurant’s customers a unique menu of items
while being entertained by the fun atmosphere. The signature
item at Jed’s are the Fireballs, which come in a variety of flavors.
The restaurant’s menu also includes appetizers, wraps, gyros,
burgers, sandwiches, pizza, flatbreads, salads, soups and many
other delicious items. Jed’s offers daily drink and menu specials. www.maumee.jedsbarbequeandbrew.com
Source: www.maumee.jedsbarbequeandbrew.com
Tenant Base Rent Schedule
Current:
Bump 2023:
Option 1:
Option 2:
Monthly
$2,460.67
$2,619.37
CPI
CPI
PSF
$15.50
$16.50
CPI
CPI
Annual
$29,528.00
$31,432.50
CPI
CPI
Tenant Recapture
Common Area Maintenance:
Insurance:
Real Estate Taxes:
Admin. Fee:
Mgmt. Fee:
Pro Rata Share
Pro Rata Share
Pro Rata Share
None
Pro Rata Share
Maumee, OH
8+
1,905
2018
03/01/2018
02/28/2028
03/01/2023
(2) 5-Yr.
None
None
None
Headquarter:
# of Locations:
GLA:
Tenant Since:
Current Term Start*:
Lease Expiration:
Rental Bumps:
Options:
Exclusive:
Co-Tenancy:
Termination Clause:
Tenant Lease Abstract
* Rent Commences 12/2018.
20
DISCLOSURE, CONFIDENTIALITY & DISCLAIMER
CONFIDENTIALITY AGREEMENT DISCLOSURE & DISCLAIMER
The information within this Offering Memorandum will set forth an
understanding regarding the relationship between the Recipient of
this package (the “Recipient”) and The Cooper Group and the
confidentiality of the investment information to be supplied to you
and your organization for use in considering, evaluating and/or
purchasing this property (the “Property”). The recipient
acknowledges that all financial, contractual, marketing, and
informational materials including but not limited to lease information,
occupancy information, financial information, projections, data
information and any other similar information provided by The
Cooper Group which relates to the Property (collectively, the
Confidential Information), whether said information was transmitted
orally, in print, in writing or by electronic media is confidential in
nature and is not to be copied or disseminated to any party without
the prior consent of The Cooper Group. The Recipient
acknowledges and agrees that the Confidential Information is of
such a confidential nature that severe monetary damage could result
from dissemination of that information to unauthorized individuals.
The Recipient shall limit access to the Confidential Information to
those individuals in the Recipient’s organization with a “need to
know” and shall take all precautions reasonably necessary to
protect the confidentiality of the Confidential Information. The
Recipient acknowledges and agrees that the Confidential
Information and any copies thereof are the property of The Cooper
Group and that all such information will be returned to The Cooper
Group upon written request. Any offers or inquiries from Recipient in
connection with this investment proposal shall be forwarded,
confidentiality, to The Cooper Group. Other than The Cooper Group,
recipient agrees that neither Recipient nor The Cooper Group shall
be obligated to pay any procuring broker fees in connection with this
investment unless a separate written Brokerage Agreement is
entered into and written acknowledgement of any procuring
Brokerage Agreement is received from all parties to the investment
transaction. Procuring brokers must provide written introductions of
potential investors and receive written acknowledgment from The
Cooper Group for representation to be recognized. This is a
confidential Memorandum intended solely for your limited use and
benefit in determining whether you desire to express further interest
in the acquisition of the Property.
The Memorandum contains selected information pertaining to the
property and does not purport to be a representation of the state of
affairs of the Property or the owner of the Property, to be all-inclusive or
to contain all or part of the information which perspective Recipients
may require to evaluate the purchase of real property. All financial
projections and information are provided for general reference purposes
only and are based on assumptions relating to the general economy,
market conditions, competition and other factors beyond the control of
the owner or The Cooper Group. All references disclosed herein related
to acreage, square footages and/or other measurements may be
approximations and the best information available. The summaries of
information included herein do not purport to be complete nor
necessarily accurate descriptions of the full agreements referenced.
Photos herein are the Property and respective owners and use of these
images without the express written consent of the owner is prohibited.
The owner and the Cooper Group expressly reserve the right, at its sole
discretion, to reject any or all expressions of interest or offers to
purchase the Property, and/or terminate discussions with any entity and
any time with or without notice which may arise as a result of review of
this Memorandum.
Neither the owner or the Cooper Group, nor any of their respective
directors, officers, affiliates or representatives make any representation
or warranty, expressed or implied, as to the accuracy or completeness
of this Memorandum or its contents; and you are to rely solely on your
investigators and inspections of the property in evaluating a possible
purchase of the Property. The information contained in this document
has been obtained from sources to be reliable. While the Cooper Group
does not doubt its accuracy, the Cooper Group has not verified it and
makes no guarantee, warranty or representation about it. It is your
responsibility to independently confirm the accuracy and completeness.
Any projections, opinions, assumptions or estimates used are for
example only and do not represent the current or future performance of
the Property. The value of this transaction to you depends on tax and
other factors which should be evaluated by your tax, financial and legal
advisors.
Cooper Commercial Investment Group
6120 Parkland Blvd., Suite 206
Cleveland, OH 44124
www.coopergrp.com
Bob Havasi [email protected]
(888) 525-5695 x10
Dan Cooper [email protected]
(888) 525-5695 x12
