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5825 Glenridge Drive ♦ Building 1 Suite 206 ♦ Atlanta, GA 30328
Telephone: 404.812.8910 ♦ Fax: 678.916.4149 ♦ skylineseven.com
Mercedes Place4835 Kingston Pike
Knoxville, TN
Investment Offering
Statement of Confidentiality & Disclaimer
skylineseven.com
The information contained herein is subject to change without notice and the recipient of these
materials shall not look to the Owner or Skyline Seven Real Estate, nor any of their officers,
employees, representatives, independent contractors or affiliates, for the accuracy or
completeness thereof. Recipients of this Investment Offering Brochure are advised and
encouraged to conduct their own comprehensive review and analysis of the Property.
This Investment Offering Brochure is a solicitation of interest only and is not an offer to sell the
Property. The Owner expressly reserves the right, at its sole discretion, to reject any or all
expressions of interest to purchase the Property and expressly reserves the right, at its sole
discretion, to terminate discussions with any entity at any time with or without notice. The Owner
shall have no legal commitment or obligation to any entity reviewing the Investment Offering
Brochure or making an offer to purchase the Property unless and until the Owner executes and
delivers a signed Purchase Agreement on terms acceptable to the Owner, at Owner’s sole
discretion. By submitting an offer, a prospective purchaser will be deemed to have
acknowledged the foregoing and agrees to release the Owner from any liability with respect
hereto.
Neither Skyline Seven Real Estate nor the Owner make any representation or warranty, express
or implied, as to the accuracy or completeness of the information contained herein, and nothing
contained herein shall be relied upon as a promise or representation as to the future performance
of the Property. This Investment Offering Brochure may include certain statements and
estimates by Skyline Seven Real Estate with respect to the projected future performance of the
Property. These assumptions may or may not be proven to be correct, and there can be no
assurance that such estimates will be achieved. Further, Skyline Seven Real Estate and the
Owner disclaim any and all liability for representations or warranties, expressed or implied,
contained in or omitted from this Investment Offering Brochure, or any other written or oral
communication transmitted or made available to the recipient. The recipient shall be entitled to
rely solely on those representations and warranties that may be made to it in any final, fully
executed and delivered Purchase Agreement between it and the Owner.
Skyline Seven Real Estate has been engaged as the exclusive agent and representative of the
Owner. No contacts shall be made by any prospective purchaser or agents to the Owner, its
executives, personnel or related entities.
The enclosed materials are being provided solely to facilitate the prospective purchaser’s own
due diligence for which the purchaser shall be fully and solely responsible.
Mercedes PlaceKnoxville, TN
Investment Overview
$296,311 GLA 26,228 SF
$3,385,000 Occupied 26,208 SF
8.75% Vacant 20 ATM
Panera Bread
Jersey Mike's
Westwood Antiques
H&R Block
Prestige Cleaners
Persian Galleries
Lilly's Bead Box
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
Mercedes Place is situated in an affluent area of Knoxville, with many of the tenants catering to the design and needs of
the area residents. When driving in the area, it is easy to see why retail tenants are drawn to Mercedes Place. Located
close to downtown and the University of Tennessee, this is where retailers want to be.
CAP
Mercedes Place is a high-end shopping center, consisting of 7 tenants, in an affluent area of Knoxville. The property
consist of a 22,735 square foot inline shopping center, anchored by Panera Bread, which recently renewed for 5 years,
and a free standing building leased to Westwood Antiques & Design Market. The other tenants are an excellent fit for
the area, and includes: Jersey Mike's Subs, H&R Block, Persian Rug Galleries, Prestige Cleaners and Lilly's Beads,
which is a new tenant that recently re-located from another center in the area. The location is superb, which can be seen
as Mercedes Place is surrounded by Kroger, Fresh Market, and Earth Fare, in addition to Starbucks, Chick-fil-a, several
banks, and many other retailers. Another good indicator of the area is the close proximity to Cherokee Country Club,
which is across the street, and lined with many impressive homes. Downtown Knoxville is a short drive, and then there is
also the University of Tennessee nearby, with all of their faculty and students
Current NOI
Price
With only 7 tenants, this center provides ease of management and excellent returns to investors, with additional upside
obtained through leasing the ATM on the property. Mercedes Place is well located on Kingston Pike, which is the main
corridor in this part of Knoxville, with 16,568 cars passing per day. The property is in very good condition, and the
parking lot was recently re-sealed and re-stripped, giving the property a fresh look. There is limited competition in the
area, with minimal vacancy. The building was constructed in 1999, and is located on 3.68 acres. The property is located
on a ground lease, where the options run through 2058 - see the lease abstract for more details.
CSC Investments operates 25 Panera Bread restaurants in 4 states
Over 12,000 locations; Fiscal 2014 Revenues over $3 Billion
While Knoxville has a rich history, going back to the French and Indian War, the city really took off following the 1982
Worlds Fair. This was seen as one of the most popular World's Fair in U.S. history, with over 11 million visitors.
Knoxville has continued to thrive, and is evident by the downtown re-development, which includes museums, a new
convention center, and many redeveloped residential condos. Knoxville is also known for being the home to the
University of Tennessee, with over 27,000 students, plus faculty and staff.
Highlights
● Anchored by Panera Bread - New 5 Year Extension
● Fully Leased Center with an excellent tenant mix, with upside by leasing the ATM
● Excellent Location: surrounded by Kroger, The Fresh Market, and Earth Fare
● 7 Tenants = Ease of Management
● Limited Competition, in a tight market with minimal vacancy
● Strong Demographics: Nearly 142,000 people living within 5 miles
Tenants
High end design and antique store, in business since 1998
Chesapeake Bay Subs operates 4 Jersey Mike's Subs and growing
One of 11 drop off locations in the Knoxville area (not a plant)
High end oriental and middle eastern rug gallery
Area Information
Experienced operator, with a focus on jewelry and beads
Mercedes PlaceKnoxville, TN
Aerial View
Main
Building
Westwood Antiques
Please Note: Lot Lines are approximate
Mercedes PlaceKnoxville, TN
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
Aerial Map
Subject
Mercedes PlaceKnoxville, TN
Aerial View
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
Subject
Mercedes PlaceKnoxville, TN
Photographs
Front View - Panera Bread On The Left / Recently Re-Sealed Parking Lot
Mercedes PlaceKnoxville, TN
Photographs
Below - Drive Thru For The Dry Cleaners & Rear Access
Mercedes PlaceKnoxville, TN
Photographs
Right Side Tenants / Below - Patio For Panera & ATM That Can Be Leased
Mercedes PlaceKnoxville, TN
Photographs
Nice & Large Pylon Sign / Front View Of Mercedes Place Below
Mercedes PlaceKnoxville, TN
Photographs
View Of Panera Bread Side / Center View From The Parking Lot Below
Mercedes PlaceKnoxville, TN
Photographs
Free Standing Westwood Antiques Building With Large Pylon Sign
Mercedes PlaceKnoxville, TN
Rent Roll Summary
Start Expiration
Prestige Cleaners 4,000 15.25% 02/08/98 08/31/15 $67,884 $16.97 $21,806
Jersey Mike's Subs 1,980 7.55% 12/16/13 12/31/18 $36,175 $18.27 $9,523
H&R Block 2,011 7.67% 04/22/14 04/30/18 $36,198 $18.00 $9,673
Persian Rug Galleries 6,750 25.74% 01/01/10 01/31/17 $108,000 $16.00 $36,804
Lilly's Bead Box / Lucky Staar Jewelry 1,354 5.16% 01/01/15 01/01/20 $29,788 $22.00 $6,513
Panera Bread - CSC Investments 6,640 25.32% 05/21/99 08/01/19 $130,971 $19.72 $47,938
Westwood Antiques - Free Standing 3,473 13.24% 10/04/13 10/31/18 $58,451 $16.83 $16,705
Vacant 20 0.08% $12,000
26,228 $479,467 $148,962
99.92% 26,208 97.50% $467,467 $17.84 $148,962
0.08% 20 2.50% $12,000
Estimated
Recapture
4839
4841
4845
Annual
Rent/ Sq.Ft.
Square
Footage
Current
Annual Base
Rent
% of
Center
Lease TermTenantSuite
ATM
4837
TOTALS
Vacant
Occupied
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
* Panera - pays CAM/T/I + $942.83 per month for parking lot fees on the west side parking lot - they just renewed thru 2019
* Lilly's Beads is an experience operator, and recently relocated to Mercedes Place from a center in the area
4851/53
4861
4849
* The ATM is part of the property, where this could be leased to a bank or credit union, estimated at $1,000 per month
Mercedes PlaceKnoxville, TN
CURRENT
SCHEDULED LEASED INCOME $479,467
Add Scheduled Tenant Reimbursements:
CAM/Tax/Insurance 148,962
TOTAL SCHEDULED INCOME $628,429
31,421 5%
GROSS OPERATING INCOME $597,008
EXPENSES (2014 Budget)
Property Taxes $55,700
Property Insurance $3,119
Ground Lease Payments $177,132
CAM
● Security System, Contract & Phone Line $6,822
● Electricity (General) $6,572
● Trash $8,453
● Landscaping $14,610
● Parking Lot Sweeping $3,444
● Maintenance / Repairs (Estimate $250 / month) $3,000
Reserves ($.15/SF) $3,934
Management (3% x Gross Operating Income) $17,910
$300,696
NET OPERATING INCOME $296,311
NOTES
Supplemental Information:
Annual Expenses per Square Foot $11.46
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
* The property is situated on land owned by others, thus the monthly payment of $14,761 per month
* The ground lease payment is a non-CAM expense
VACANCY RESERVE
Net Operating Income
Mercedes PlaceKnoxville, TN
About
6,640 Annual Base Rent $130,971
May 21, 1999 Annual Rent PSF $19.72
August 1, 2019 Security Deposit None
About
2,011 Annual Base Rent $36,198
April 22, 2014 Annual Rent PSF $18.00
April 30, 2018 Security Deposit None
Termination Date
Lease Abstract
Tenant Panera Bread - operated by CSC Investments LLC
CSC Investments operates 25 Panera Bread Cafes in
Tennessee, Georgia, North Carolina, an Alabama
Square Feet
Commencement Date
Landlord Responsibility Landlord shall use good faith efforts to maintain the public and common
areas of the shopping center, including…windows, plumbing and electrical
serving the building, and the structure itself…Tenant is responsible for
maintaining the HVAC. Landlord agrees to be reasonable for replacement of
HVAC, plumbing or other mechanicals servicing the Premises
Increases / Renewals Just renewed the second option for 5 years - 3% annual increases
Percentage Rent
Website www.hrblock.com
Tenant H&R Block Eastern Enterprises, Inc., a Missouri Corporation
Square Feet
Commencement Date
H&R Block is the world's largest tax service provider, with
approximately 12,000 locations across the country. In
fiscal 2014, revenues exceed $3 billion.
Increases / Renewals
Landlord Responsibility Landlord will keep in good repair…roof, foundations, sprinkler system,
exterior walls, excluding interior walls, plate glass and other windows.
Landlord shall warrant the HVAC for the first year of the lease.
Tenant Responsibility Tenant pays its own utilities, plus pro-rata share of Operating Costs, Taxes,
Insurance, and reimburses the pro-rata share of cost Landlord incurred in
performing repair and maintenance obligations with respect to the Shopping
Center. Tenant shall be responsible for a HVAC service contract and repairs
not to exceed $2,000 per year.
3% annual increases, and One x 3 year option to renew with 3% increases
5% times the gross receipts in excess of $2,539,295.64
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
Tenant Responsibility Tenant pays its own electricity, plus pro-rata share of CAM, Taxes,
Insurance, HVAC repair (all landlord operating expenses) - also $942.83 per
month for parking lot fees in the west parking lot.
Termination Date
Mercedes PlaceKnoxville, TN
Website
About
3,473 Annual Base Rent $58,451
August 1, 2009 Annual Rent PSF $16.83
October 31, 2018 Security Deposit $4,775.38
About
1,980 Annual Base Rent $36,175
December 13, 2013 Annual Rent PSF $18.27
December 31, 2018 Security Deposit $3,000.00
Landlord Responsibility Landlord will keep in good repair…foundations and exterior walls, excluding
interior walls, plate glass and other windows.
Tenant Responsibility Tenant pays its own utilities, plus pro-rata share of Operating Costs, Taxes,
Insurance, and reimburses the pro-rata share of cost Landlord incurred in
performing repair and maintenance obligations with respect to the Shopping
Center. Tenant shall be responsible for a HVAC with a service twice a year.
Termination Date
Increases / Renewals
Website www.jerseymikes.com
Increases / Renewals 2% annual increases, and 3 x 5 year option to renew with 2% increases
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
Landlord Responsibility Landlord will keep in good repair…foundation, roof, and exterior walls,
excluding interior walls, plate glass and other windows.
Square Feet
Commencement Date
Termination Date
Jersey Mike's Subs started in 1957, and now has 1,300
locations. The operator of this location is Chesapeake
Bay Subs out of Charleston, which currently operates 4
locations, with plans to open another 20 restaurants in
Maryland and Tennessee.
Tenant Jersey Mike's Subs - Chesapeake Bay Subs, LLC as operator
Tenant Responsibility Tenant pays its own utilities, plus pro-rata share of Operating Costs, Taxes,
Insurance, and reimburses the pro-rata share of cost Landlord incurred in
performing repair and maintenance obligations with respect to the Shopping
Center. Tenant shall be responsible for a HVAC service contract and repairs
not to exceed $2,000 per year.
http://westwoodantiquemarket.com
Square Feet
Commencement Date
Lease Abstract
Tenant Westwood Antiques & Design Market
2% Annual Increases, and 2 x 5 year option to renew with 2% increases.
Westwood Antique & Design Market was founded in 1998 as a source of
quality antiques of a wide variety and as a place where the emphasis on
good design and style is equal to the emphasis on antique
Mercedes PlaceKnoxville, TN
About
6,750 Annual Base Rent $108,000
January 1, 2010 Annual Rent PSF $16.00
January 31, 2017 Security Deposit None
About
4,000 Annual Base Rent $67,884
February 8, 1998 Annual Rent PSF $16.97
August 31, 2015 Security Deposit NA
Landlord Responsibility Landlord will keep in good repair…foundation, roof, and exterior walls,
excluding doors, windows and window frames in the exterior walls.
Termination Date
Increases / Renewals In their second/last option now. $5,657/month base + $1,817.20 CAM
Tenant Responsibility Tenant pays its own utilities, plus pro-rata share of Operating Costs, Taxes,
Insurance, and reimburses the pro-rata share of cost Landlord incurred in
performing repair and maintenance obligations with respect to the Shopping
Center. Tenant shall be responsible for doors, windows, plumbing, heating
and air conditioning, and electrical systems.
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
Square Feet
Commencement Date
This is one of 11 drop off dry cleaner locations owned by Prestige Cleaners,
with the dry cleaning plant located at their Emory Road facility.
Website www.prestigecleanersinc.net
Tenant Prestige Cleaners
Landlord Responsibility Landlord will keep in good repair…foundations and exterior walls, excluding
interior walls, plate glass and other windows.
Tenant Responsibility Tenant pays its own utilities, plus pro-rata share of Operating Costs, Taxes,
Insurance, and reimburses the pro-rata share of cost Landlord incurred in
performing repair and maintenance obligations with respect to the Shopping
Center. Tenant shall be responsible for a HVAC service contract and repairs
with a service twice a year.
Increases / Renewals 4.7% Annual Increases, and 1 x 3 year option to renew with 3% increases.
Persian Galleries is an high-end oriental and middle eastern rug gallery
Square Feet
Commencement Date
Termination Date
Lease Abstract
Tenant Persian Galleries, Inc.
Mercedes PlaceKnoxville, TN
About
1,354 Annual Base Rent $29,788
January 1, 2015 Annual Rent PSF $22.00
January 1, 2025 Security Deposit
About
September 3, 1998 Termination Date September 9, 2018
Lease Year
16-20 $177,131
21-25 $200,407 26-30 $226,743
31-35 $256,539
36-40 $290,250
41-45 $328,391
46-50 $371,544
51-55 $420,368
56-60 $475,608
Annual RentAnnual Payments
Skyline Seven Real Estate's Statement of Confidentiality & Disclaimer pertains to all data supplied for purposes of this proposal.
First Refusal Lessee has a right of first refusal to acquire the property (land) by matching
any bonafide 3rd party offer to purchase.
Commencement Date
Increases / Renewals Lessee has the right to extend for 8 x 5 year renewal options, with a
termination date of September 9, 2058.
Mercedes Place is situated on a long term ground lease, where the owner
(Tenant) makes monthly payments to the owner of the land, and the Tenant
also pays the property taxes.
Tenant Responsibility Tenant pays its own utilities, plus pro-rata share of Operating Costs, Taxes,
Insurance, and reimburses the pro-rata share of cost Landlord incurred in
performing repair and maintenance obligations with respect to the Shopping
Center. Tenant shall be responsible for a HVAC service.
Ground Lease Lessors Oliver A Smith, IV, Diana Smith Flaherty, and Carol Smith Tombras, as co-
trustees of the Oliver and Evelyn Smith Irrevocable Trust.
Recent re-location to Mercedes Place
Square Feet
Commencement Date
Termination Date
Increases / Renewals 3% annual increases starting year 2
Landlord Responsibility Landlord will keep in good repair…foundations and exterior walls, excluding
interior walls, plate glass and other windows.
Lease Abstract
Tenant Lilly's Bead Box / Lucky Staar Jewelry
Mercedes PlaceKnoxville, TN
Mercedes PlaceKnoxville, TN
Subject
Downtown Knoxville
Mercedes PlaceKnoxville, TN
Location Maps
Subject
Subject
Mercedes PlaceKnoxville, TN
Demographics
One Mile Three Miles Five Miles
2013 Population 5,705 45,441 141,981
2010 Population 5,785 45,030 139,886
5 Year Projected 5,705 46,575 146,508
Growth 2010 to 2013 0.91% 1.50%
Projected Growth 2013 to 2018 2.50% 3.19%
2013 Households 2,887 19,111 60,041
2010 Households 2,936 18,966 59,223
5 Year Projected 2,879 19,609 61,981
Growth 2010 to 2013 0.76% 1.38%
Projected Growth 2013 to 2018 2.61% 3.23%
2013 Average Household Income $63,884 $63,104 $56,602
5 Year Projected $81,493 $79,265 $68,117
Projected Growth 2013 to 2018 27.56% 25.61% 20.34%
White 83.40% 81.40% 80.40%
Black 7.40% 10.40% 11.50%
American Indian/Eskimo 0.30% 0.30% 0.40%
Asian/Pacific Islander 5.00% 3.10% 2.50%
Other Race 4.00% 4.70% 5.20%
Hispanic Ethnicity 7.10% 5.40% 6.00%
Race
Population
Households
Income