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P R E S E N T E D B Y
Juan Bustamante
Agent Candidate
Bakersfield Office
Tel: (661) 377-1866
Fax: (661) 377-1848
License: CA 01880908
Market Positioning and Pricing Analysis
H&R BLOCK 10209 Main St • Lamont, CA 93241
H&R BLOCK
Lamont, CA
ACT ID Z0890049
N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E
Non-EndorsementsMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any
corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or
subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information
about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
DisclaimerTHIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has
been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References
to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus &
Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.
2
10209 Main St, Lamont, CA 93241
PRICING AND VALUATION MATRIX
NOTES
PROPERTY NAMEH&R BLOCK
PRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
3
PRICING AND VALUATION MATRIXPRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
PRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
3
PRICING AND VALUATION MATRIX
3
#
PROPERTY SUMMARY
OFFERING SUMMARY
#
NOTES
H&R BLOCK
4
OFFERING SUMMARY
PROPERTY OVERVIEW
H&R BLOCK
PROPERTY OVERVIEW
Marcus & Millichap is pleased to present the exclusive listing for a 2,956-square foot H&R Block located in Lamont, CA. This is an Absolute triple NNN Lease with a corporate
guarantee and no landlord responsibilities. This investment offers long term stability of H&R Block Corporate Guarantee with attractive returns (6.23 percent Cap rate). H&R
Block (NYSE:HRB) is a publicly traded company with a current BBB investment grade credit rating by Standard & Poor' s that operates over 12,000 stores across 50 states.
Lamont is Located in Kern County, about 9 Miles South-Southeast of downtown Bakersfield, California and 89 Miles Northwest of Los Angeles. Lamont is Part of the
Bakersfield Metropolitan Statistical Area.
PROPERTY OVERVIEW
New 5 year NNN lease
Building has been renovated
Strong Brand
Corporate guarantee wRecognitionith H&R Block
5
12
TENANT PROFILES
H&R BLOCK
6
H&R Block
H&R Block is a global consumer tax services provider, having prepared more than 720 million tax
returns by and through retail locations and digital solutions since 1955. There are approximately
12,000 company-owned and franchise retail locations in all 50 states, Puerto Rico and other U.S.
territories, on U.S. military bases around the world, and in Canada, Australia and India. An H&R
Block branded retail office is located within five miles
of 95 percent of Americans – covering all demographics
General Information
Tenant Name H&R Block
Website www.hrblock.com
Headquartered Kansas City, MO
Rentable Square Feet 2,956 SF
Percentage of RBA 100.00%
Lease Commencement 5/1/2018
Lease Expiration 4/30/2022
No. of Locations 12000
#
CLOSE PROXIMITY TO:
10209 Main St, Lamont, CA 93241
New 5 year NNN lease
Building has been renovated
Strong Brand Recognition
Corporate guarantee with H&R Block
LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
PRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
7
LOCATION OVERVIEW
#
10209 Main St, Lamont, CA 93241
LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
PRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
8
REGIONAL AND LOCAL MAP
AERIAL PHOTO
H&R BLOCK
9
PROPERTY PHOTO
H&R BLOCK
10
PROPERTY PHOTO
H&R BLOCK
11
H&R BLOCK
COMPARABLES MAP
12
H&R BLOCK
(SUBJECT)
Mission Bank NNN
Starbucks Coffee
Wienerschnitze NNN
Indian Bistro NNN
SALES COMPARABLES
1
2
3
4
13
PROPERTY NAMEH&R BLOCK
SALES COMPARABLES
Avg. 5.92%
0.0
0.7
1.4
2.1
2.8
3.5
4.2
4.9
5.6
6.3
7.0
H&R Block Mission
Bank NNN
Starbucks
Coffee
Wienerschnitze
NNN
Indian
Bistro NNN
Average Cap Rate
Avg. $860.41
$0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
$1,400.00
$1,600.00
$1,800.00
$2,000.00
H&R Block Mission
Bank NNN
Starbucks
Coffee
Wienerschnitze
NNN
Indian
Bistro NNN
Average Price Per Square Foot
SALES COMPARABLES SALES COMPS AVG
PROPERTY NAME
MARKETING TEAM
H&R BLOCK
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
14
SALES COMPARABLES
SUBJECT PROPERTY
Asking Price $598,000
Price/SF $202.30
CAP Rate 6.23%
GLA 2,956 SF
Lot Size
Year Built 1946
Lease Term Remaining 3.7 Years
H&R BLOCK10209 Main St, Lamont, CA, 93241
1
Close Of Escrow 3/13/2017
Days On Market 45
Sales Price $495,000
Price/SF $128.60
CAP Rate 6.40%
GLA 3,849 SF
Lot Size 21,344 acre(s)
Year Built 1972
Lease Term Remaining 5 Years
MISSION BANK NNN101 Panama Rd, Bakersfield, CA, 93307
2
NOTES
The subject property is a new build-to-suit for Starbucks with a drive-thru
and was just completed in Q1 2016. The property sold for $2.225M with
triple net lease terms. The new 10-year lease offers features 10%
increases every 5 years in both the primary term and (4) 5-year option
periods.
Documents
Close Of Escrow 3/3/1917
Sales Price $2,225,000
Price/SF $1,236.11
CAP Rate 4.90%
GLA 1,800 SF
Lot Size 0.44 acre(s)
Year Built 2016
Lease Term Remaining 8 Years
STARBUCKS COFFEE2500 White Ln, Bakersfield, CA, 93304
PROPERTY NAME
MARKETING TEAM
H&R BLOCK
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
15
SALES COMPARABLES
3
NOTES
Founded in 1961 by John Galardi with a single hot dog stand in
Wilmington, California,Wienerschnitzel has grown to be the worlds
largest hot dog chain serving more than 120 million hot dogs a year; and
the chain is famous for their delicious secret-recipe
chili used to smother on fries, hot dogs and burgers.
Close Of Escrow 12/8/2017
Days On Market 69
Sales Price $2,425,000
Price/SF $1,796.30
CAP Rate 5.44%
GLA 1,350 SF
Lot Size 16,552 acre(s)
Year Built 2004
Lease Term Remaining 15 Years
WIENERSCHNITZE NNN 3748 Coffee Rd, Bakersfield, CA, 93308
4
Close Of Escrow 5/1/2018
Sales Price $1,375,000
Price/SF $280.61
CAP Rate 6.94%
GLA 4,900 SF
Lot Size 0.53 acre(s)
Year Built 1974
Lease Term Remaining 9 Years
INDIAN BISTRO NNN3939 Ming Ave, Bakersfield, CA, 93309
1,819MARCUS & MILLICHAP
PREMIER INVESTMENT SERVICES
Marcus & Millichap is the premier commercial real estate investment services firm in the United States. Founded in 1971 on a unique model that matches each property with the largest pool of pre-qualified investors, we leverage four decades worth of experience and relationships to handle all of your commercial real estate needs. Our team of more than 1,819 professionals in the U.S. and Canada focuses exclusively on real estate investment sales, financing, research, and advisory services.
H&R BLOCK
Founded in
1971 on a
unique
methodology
Largest pool of
pre-qualified
investors in
the industry
Moves capital
across our
network of
investment
professionals
More than 1,819
investment
professionals in
the U.S. and
Canada
WITH AN EXCLUSIVE FOCUS ONreal estate investment sales, financing, research, and advisory services
16
MARCUS & MILLICHAP ADVANTAGE
M O R E T H A N
WIDE RANGE OF CAPABILITIES,
PROVEN EXECUTION PROCESS
Our proprietary platform and wide range of capabilities maximize our client results. As an industry leader in closed transactions with a history of repeat business, you can trust in our decades of process-driven success.
MARCUS & MILLICHAP
CAPABILITIES
PERFECTED
PROCESS-DRIVEN
EXECUTION
H&R BLOCK
Investment Sales and Product
Specialization
Largest Collaborative Investment
Sales Force
Local Submarket Client Coverage
Industry Leading Technology Platform
Real-Time Access to Transaction Data
Access to Competitive Financing
Largest Pool of Exclusive Inventory
Pricing, Marketing, and
Positioning Strategy to
Drive Competitive Bidding
Timeline-Driven Escrow
Management to Mitigate Risk
Transaction Execution for
1031 Exchange Candidates
8,979
47%
4.5
T R A N S A C T I O N S
CLOSED IN 2017
T R A N S A C T I O N S
C L O S E D E V E R Y
B U S I N E S S H O U R
CLOSED WITH
OUT-OF-STATECAPITAL IN 2017
T R A N S A C T I O N S
17
MARCUS & MILLICHAP ADVANTAGE
THE MARCUS & MILLICHAP
ADVANTAGE
REAL ESTATE
INVESTMENT
SALES
FINANCING RESEARCHADVISORY
SERVICES
MARCUS & MILLICHAP ADVANTAGE
H&R BLOCK
Largest commercial real
estate brokerage firm in the
country, with specialization in
all major property types and
more than 1,819 professionals
collaborating at every stage
Access to the industry’s
largest inventory of quality
investment opportunities
Superior capital market
expertise, precisely managed
financing, and unparalleled
access to the most competitive
rates, terms, and capital
sources through MMCC
Prominent capital market
relationships with commercial
banks, secured lenders,
debt and equity funds,
life insurance companies,
private and public funds, etc.
Provides clients with the latest
local and national market trends
based on real-time data to
create optimal positioning,
pricing, and marketing strategies
Industry’s most in-depth
understanding of a variety of
property types in numerous
local and national markets,
with over 1,000 research
products produced annually
Comprehensive advisory
and consulting services to
give you buy-sell-hold
decisions based on real-time
market knowledge and research
Maximizes value for our clients
in each transaction and shapes
long-term portfolio strategies
Marcus & Millichap tailors our investment strategies to meet the unique needs and goals of each client. To best serve our clients and to maximize value, we combine our collaborative culture with the world’s most advanced technology to create the industry’s most powerful proprietary marketing system.
18
H&R BLOCK
19
MARCUS & MILLICHAP ADVANTAGE
Because we cover a wide variety of property types, Marcus & Millichap gives you access to the industry’s largest investment inventory. Through property specialization and information sharing, our investment professionals cultivate relationships across the U.S. and Canada. We leverage these relationships to provide our clients with the insight and opportunities to maximize their investments.
SPECIALTY
DIVISIONS
MULTIFAMILY RETAILSINGLE TENANT
NET-LEASE
OFFICEFINANCING HOSPITALITY AFFORDABLE
HOUSING
LAND HEALTHCAREINDUSTRIAL MANUFACTURED
HOUSING
SELF-STORAGE SENIORS
HOUSING
STUDENT
HOUSING
When a client hires a local agent, the entire Marcus & Millichap team stands behind that agent. Each investment professional can leverage Marcus & Millichap’s carefully cultivated network of local, regional, and national contacts in order to provide clients with access to our unsurpassed product inventory, large client base that is sourced both internally and externally, and excellent product capital sourcing. Through maximum controlled exposure, our local agents create a maximum result for each client.
MARCUS & MILLICHAP
NETWORK
MARCUS & MILLICHAP ADVANTAGE
H&R BLOCK
20
INDUSTRY’S LARGEST SELECTION OF
QUALITY INVESTMENT INVENTORY
H&R BLOCK
INVESTMENT OPTIONS
AND OPPORTUNITIES
The success of Marcus & Millichap is based on our collaborative culture of information sharing across our network of more than 1,819 investment professionals, which maximizes value for each of our clients.
Working with a unique platform that is antithetical to the concept of “pocket listings,” our investment professionals share all listings with the entire Marcus & Millichap team. Each professional specializes in a property type and has a database of local properties and owners, which is leveraged in every client assignment. Because each local agent specializes in a single product type in a specific geographic region, our clients are completely covered across the U.S. and Canada with every investment.
Our foundation of information sharing maximizes pricing for our clients and gives us the largest inventory of any firm in the industry.
THE SIZE AND ACCESSIBILITY OF OUR
INVENTORY ENABLES YOU TO SELL YOUR
PROPERTY AND QUICKLY MOVE INTO
ANOTHER PROFITABLE INVESTMENT.I N 2 0 1 7
T R A N S A C T I O N S C L O S E D
WITH 1031 EXCHANGE BUYERS
1031 EXCHANGES
C U R R E N T LY
$21.2BEXCLUSIVELY LISTED
1 ,819C O L L A B O R A T I V EA G E N T D A T A B A S E S
21
MARCUS & MILLICHAP ADVANTAGE
42%
4,760EXCLUSIVE
LISTINGS
Exclusive Listings as of 3/29/2018
* Financing summary not included in Exclusive Listings total
H&R BLOCK
GAIN ACCESS TO THE NATION’S LARGEST EXCLUSIVE
INVENTORY OF PROPERTIES FOR ALL PRODUCT TYPES
797 MULTIFAMILY
1,162 SINGLE TENANT
NET-LEASE
413 FINANCING*
1,665 RETAIL
286 OFFICE
189 HOSPITALITY
59 AFFORDABLE HOUSING
240 LAND
131 INDUSTRIAL
66 SELF-STORAGE
53 HEALTHCARE
30 MANUFACTURED HOUSING
71 SENIORS HOUSING
11 STUDENT HOUSING
22
MARCUS & MILLICHAP ADVANTAGE
MARCUS & MILLICHAP ADVANTAGE
Whether you’re looking to buy, sell, refinance, or hold, Marcus & Millichap leverages real-time market research to assess local and national trends, with specialized focus on individual property types. Backed by the collaborative culture of industry experts, your local investment professional will walk you through each phase of your investment strategy.
MANAGE AND OPERATE
DISPOSITION AND EXCHANGE ACQUISITION
INVESTOR CONCERNS
Is holding my asset the most
profitable choice in this market?
How can I best take advantage
of the capital markets to
maximize my returns?
Based on my investment risk
tolerance and objectives, what
opportunities should I consider?
How should I position my
portfolio for potential changes
in market conditions?
INVESTOR CONCERNS
Is now the right time to sell?
How can I leverage the capital
markets to maximize my results?
How do I optimize my position
via a disposition?
What alternatives and
associated investment returns
would I have in the event of a
sale?
INVESTOR CONCERNS
When is the right time to buy?
What investment opportunities
are available for my
consideration?
What are the risks in the
current market?
What are my financing options?
How will an acquisition impact
my portfolio’s returns?
MARCUS & MILLICHAP’S
SOLUTIONS
Value and market
positioning analysis
Disposition buyer financing
New acquisition financing
1031 exchange investment
alternatives analysis
MARCUS & MILLICHAP’S
SOLUTIONS
Strategic “hold” analysis
Refinance strategic analysis
Quarterly investment
return analysis
Ongoing market and
submarket research
Ongoing product-specific
research
MARCUS & MILLICHAP’S
SOLUTIONS
Pre-acquisition analysis
Financial investment analysis
Market and submarket research
Product-specific research
ADVISORY
SERVICES
ACROSS THE
OWNERSHIP
LIFECYCLE
H&R BLOCK
23
MARCUS & MILLICHAP ADVANTAGE
MARCUS & MILLICHAP CAPITAL
CORPORATION CAPABILITIES
MMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and terms.
We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of financing options.
Our dedicated, knowledgeable experts understand the challenges of financingand work tirelessly to resolve all potential issues for the benefit of our clients.
Optimum financing solutions to
enhance value
Enhanced control through
investor qualification support
Enhanced control through
MMCC’s ability to qualify
investor finance contingencies
Enhanced control through
MMCC’s ability to monitor
investor/due diligence and
underwriting to ensure timely,
predictable closings
Enhanced control through
quickly identifying potential
debt/equity sources,
processing, and closing
buyer’s finance alternatives
WHY MMCC?
National platform
operating
within the firm’s
brokerage offices
$5.63 billion
total national
volume in 2017
Access to
more capital
sources than
any other firm
in the industry
Closed 1,707
debt and equity
financings
in 2017
H&R BLOCK
24
#
PROPERTY NAMEH&R BLOCK
NET LEASED PROPERTIES GROUP
25
Number of Net Leased Properties Sold—
% of 1031 Exchange
Down-Leg Property Type Migration
Source: Marcus & Millichap 12 quarters ending June 30, 2018
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
-
100
200
300
400
500
600
700
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
# Sold % 1031x
APARTME
NTS
53%
NET
LEASED
21%
RETAIL
CENTERS
13%
OTHER
7%
LAND
2%OFFICE
2%
INDUSTRI
AL
1%
MIXED-
USE
1%
#
PROPERTY NAMEH&R BLOCK
26
Investors Choose Marcus & Millichap
More than Any Other Firm
NET LEASED PROPERTIES GROUP
The largest team of retail specialists in the
industry
A successful track record with more than
2,800 transactions closed in 2017
7 YEARSIN A ROW
#
PROPERTY NAMEH&R BLOCK
27
NET LEASED PROPERTIES GROUP
MOVING CAPITAL, MAXIMIZING VALUE
SOURCES OF CAPITAL
4%NJ
8%FL
6%TX
2%AZ
33%CA
2%IL
25%OTHER
14%NY
2%CO
2%MI
Source: Marcus & Millichap, : 01/01/2017 to 12/31/2017
3%NC
2%PA
#
The Retail Real Estate Investment LeaderA Successful Track Record with More Than 3,550 Transactions Closed in 2017
The data for net-leased categories is for transactions dated approximately from 1986 through December 2016.
Net-Leased Drugstores
2,550 Properties Sold
$12,069,900,000
Net-Leased Restaurants
8,297 Properties Sold
$16,503,830,000
Net-Leased Banks
871 Properties Sold
$2,326,458,000
Net-Leased C-Stores
1,827 Properties Sold
$3,676,363,000
Net-Leased Discount Stores
2,075 Properties Sold
$3,065,022,000
PROPERTY NAMEH&R BLOCK
28
NET LEASED PROPERTIES GROUP
Bio
Agent Candidate
Tel: (661) 377-1866
Fax: (661) 377-1879
License: CA 01880908
Juan Bustamante
H&R BLOCK
29
2,775
CLOSED IN 2016
NET-LEASED
TRANSACTIONS
SALESSPECIALISTSNET-LEASED
MARKETING TEAM
PREMIER
ACCESS TO
INVESTOR
PROFILES
Our comprehensive marketing plan gives you access to the full spectrum of investment profiles, with a special emphasison cross-product and 1031 exchange capital.
Foreign and International Buyers
2nd Tier Investors
3rd Tier Investors
1st Tier Investors
Cross-Product Capital
1031 Exchange Capital
Pension funds, advisors, banks, REITs,
and life insurance companies
Opportunistic investors seeking diversification in
other real estate property types
Investors seeking acquisition opportunities
for capital gains tax deferral
Foreign investors seeking domestic
opportunities and technology enablers
that direct foreign demand
Private, individual investors who account for
the majority of transactions in the marketplace
Syndicators, developers, merchant builders,
general partnerships, and professional investors
30
MARKETING PLAN
H&R BLOCK
MAXIMUM EXPOSURE CREATES MAXIMUM VALUE
Our comprehensive marketing plan provides strategic exposure for your asset. Whether the optimal strategy requires maximum exposure within a single profile, broad exposure across all investor profiles, or a hybrid approach, our platform ensures maximum value across every client profile.
Specializing exclusively in investment sales, our network of
more than 1,819 investment professionals throughout the
U.S. and Canada guarantees your property is exposed to the
largest pool of qualified buyers.
We access via our highly organized national product
specialty groups and the regional and national marketing
opportunities they present.
Our collaborative culture across product types,
enabled through MNet, ensures access to the broadest
pool of qualified investors.
Access the Industry’s largest pool of 1031 exchange
buyers, as a result of closing more transactions annually
than any other commercial real estate brokerage firm.
As the leader in investment sales transactions annually, Foreign
capital is drawn to our firm as the conduit to the nation’s largest
exclusively listed inventory. Foreign investors seek our advice,
market reach and long-standing client relationships with the
industry’s largest pool of buyers and sellers.
Marcus & Millichap maintains long-term relationships with
these investors via our IPA divisions, national product
specialty groups, and over 700 senior investment
professionals.STRATEGY
MARKETING
PLAN
FOREIGN AND INTERNATIONAL BUYERS
2ND TIER INVESTORS
3RD TIER INVESTORS
1ST TIER INVESTORS
CROSS-PRODUCT CAPITAL
1031 EXCHANGE CAPITAL
KEARNEYAPARTMENTS
MARCUS & MILLICHAP ADVANTAGEMARKETING PLAN
H&R BLOCK
31
MARKETING PLAN
H&R BLOCK
COMPREHENSIVE
INTERNAL AND
EXTERNAL
EXPOSURE
Our comprehensive marketing plan leverages all channels of communication to maximize property exposure, both internally and externally. We provide and produce offering memorandums, conduct internal and external email marketing, and initiate internal and external telephone contact.
Exposure to the market ultimately determines the final outcome of a sale, and we work to create the best exposure in the industry for your property.
30-DAY LEAD: Finalize financial
analysis, property overview, and
photographs.
DAY 4: Deliver a draft of the offering
memorandum for client approval.
DAY 6: Begin active marketing,
using the offering memorandum
as the focal point. In particular,
highlight the property’s future value.
Once active, the offering
memorandum is available to all
Marcus & Millichap sales
professionals to present to our large
pool of pre-qualified buyers.
30-DAY LEAD: Draft of email
campaign presented for client
approval.
DAY 6: First wave of internal and
external email campaign sent with
tracking capability for “opens.”
Commence follow-up via telephone to
sell the opportunity, gauge
interest,and overcome buyer
objections.
DAY 20: Begin second wave of email
campaign and telephone follow-ups.
Note: Email campaigns continue
throughout the listing period.
30-DAY LEAD: Probable buyer
list created from team’s database,
including probable exchange buyers
from prior 30-day sales comps.
DAY 6: Direct outreach to Marcus &
Millichap sales professionals via
office presentations and telephone
conferences.
DAY 8: Marketing team makes
direct telephone contact with list
of all probable buyers.
Note: Telephone campaigns continue
throughout the listing period.
O F F E R I N GM E M O R A N D U M
I N T E R N A L & E X T E R N A L
E M A I L M A R K E T I N G
I N T E R N A L & E X T E R N A L
P H O N E C O N T A C T
32
PRIOR TO
MARKETINGON MARKET
MARKETING TIMELINEDAYS 11–20 DAYS 21–45 DAYS 46–90
Produce Offering
Memorandum
Produce Flyers
Finalize Underwriting
and Lease Abstract
Client Review of All
Materials
Creation of Targeted
Buyer List
Lender Evaluation
Source Term Sheets
in Capital Market
Client Review and
Approval of All Materials
Activate Listing in MNet,
Our Proprietary Marketing
System, to Instantly Match
Prospective Buyers and
Investment Professionals
with Your Property
Present Property at Local
Sales Meetings
Personally Contact Target
Buyers: Private Hybrid and
Institutional
Source Term Sheets in
Capital Markets
Send Strategic Property
E-Campaign to Prospective
Buyers and Promote 1031
Exchange Parameters
Expose Listing to
www.MarcusMillichap.com:
3,288 Hits Daily
Execute E-Campaign
to Qualified Private
Buyer Pool
Present Property on
National Product Specialty
Group Investor Call and
Regional Calls
Actively Advertise Across
Multiple Platforms
Execute Targeted Print
Campaign
Aggregate, Field
and Present All Offers
Qualify and Refine
Buyer Pool
Provide Access to All
Due Diligence to Mitigate
Retrade, Legal Delays, etc.
Coordinate Escrow Process
Conduct Property
Inspection
Leverage Buyer to Open
Escrow Non-Contingent
Close Escrow
DAYS 1–1010-DAY LEAD
MARKETING PLAN
#
LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
PRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
33
MARKETING PLAN
33
MARKETING PLAN
H&R BLOCK
03
02
01
WHY MARCUS & MILLICHAP?
Specialists in product type and geographic location
Creates buyer competition to maximize price and increase probability
of a successful closing
Access to information sharing throughout the largest network of
investment professionals in U.S. and Canada as part of our
collaborative culture
Proactively promotes your property to local, regional, and national
Marcus & Millichap professionals
YOUR LOCAL AGENT
THE MARCUS & MILLICHAP PLATFORM
Repeat clients
Decades worth of experience
Highly-focused specialization
Collaborative culture built on information sharing
Industry-leading technology platform
A HISTORY OF CLIENT RESULTS
Largest database of qualified investors in the industry
Unparalleled access to potential buyers, including one of the
largest databases of 1031 exchange buyers
More than 1,819 investment professionals working collaboratively
to achieve client results
M A R C U S &
M I L L I C H A P
IS A
LEADING
COMMERCIAL
REAL ESTATE
I N V E S T M E N T
S E R V I C E S
FIRM IN THE
AND CANADA
U.S.
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NATIONAL NET-LEASED RETAIL REPORT
H&R BLOCK
35
Strong Tailwinds Continue to Propel Healthy Economy;
New Tax Law May Encourage Investors to Refine Strategies
Tax reform powers economic acceleration. The new tax law has invigorated
economic growth, boosting consumption and business investment. With optimism
running high, many companies have generated new jobs, dropping the national
unemployment rate below 4 percent. A tightening job market has supported
increased wage growth, expanding personal disposable income more than 2
percentage points above the 10-year average to 5.4 percent. Because of this, core
retail sales have benefited, rising by an average of 5.6 percent in May and June. The
convergence of these factors has resulted in accelerated economic growth that
climbed above 4 percent.
Elevated Treasury rates placing upward pressure on yields. A booming economy
brings with it inflationary risk, prompting the Federal Reserve to tighten monetary
policy. The single-tenant net-leased retail sector may be substantively impacted by a
more disciplined monetary approach as assets are typically responsive to the 10-
year Treasury due to their bondlike parallels. This will coalesce with other
components such as brand, location and lease terms when determining going-in cap
rates. For example, dollar store yields can vastly differ as a number of these assets
are in rural locations, providing potential for higher returns. Conversely, yields for
convenience stores and quick-service restaurants typically maintain a much smaller
range due to their tempered sensitivity to key determinants of cap rates.
* Forecast
** Through June
Over the past year, transaction velocity eased modestly as investors
awaited details on the new tax law. With much of that uncertainty now
relieved, sales activity could accelerate. Furthermore, decreased taxes on
pass-through entities could lead to repositioning efforts, bringing more
assets online and elevating market liquidity.
The 1031 exchange was retained in the new tax law, remaining a
commonly used practice for single-tenant net-leased investors. Investors
favor this tax provision to swap out management-intensive assets for
properties that involve a more passive approach while deferring the
capital gains tax.
Under the new tax law, sale-leasebacks have become an increasingly
popular tactic. With new restrictions on business interest deductibility,
some retailers are selling the real estate in which they operate to
investors, then leasing it back to maximize deductions. This process
opens the door for reinvestment into existing assets and investment into
future plans as more capital would be available.
Investment Highlights
NATIONAL NET-LEASED RETAIL REPORT
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New Tax Law Provides Spark to Investors;
Sale-Leaseback Opportunities Could Increase
New provisions, preservation of old ones may boost investor sentiment. Changes to the tax code, as well as the
retention key provisions like tax-deferred exchanges, real estate depreciation and mortgage interest deduction should
keep investor sentiment high for single-tenant net-leased retail assets. Additionally, new pieces to the tax code should
further boost the appeal of these relatively passive investments. For example, the new 20 percent pass-through
deduction enables some active investors using an entity such as an LLC to boost after-tax yields. However, this
deduction comes with restrictions based on income and asset base but offers strong potential for those who qualify.
Additionally, bonus depreciation is a temporary provision allowing investors to increase their current cash flow by
immediately expensing personal property in real estate assets acquired after Sept. 27, 2017.
Changes to tax law could inspire owner/users to seek sale-leasebacks. The most influential change to the tax
code on the single-tenant net-leased retail sector may be new restrictions on business interest deductions. This
provision could encourage companies to utilize sale-leasebacks as they shape their real estate strategies around
lease expenses that remain fully deductible. For owner/users, selling the real estate in which they operate to investors
and then leasing it back from them could maximize profitability, as well as unlock equity for reinvestment into current
operations and funds for potential expansion plans. Also, the previous tax law allowed companies to deduct all of their
interest expenses on their taxes, but the new provisions restrict the deductibility of business interest for companies
with gross receipts in excess of $25 million. Now, interest totaling just 30 percent of earnings before taxes,
depreciation and amortization can be deducted on taxes, further incentivizing companies to pursue sale-leasebacks.
* Through July
** Forecast
NATIONAL NET-LEASED RETAIL REPORT
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Solid Fundamentals Aided by New Concepts
Rents benefit from thinned construction pipeline. Available space in the single-tenant net-leased sector will
contract for the ninth consecutive year, pushing national vacancy down to 4.3 percent in 2018. Even though demand
remains strong, construction will continue to taper this year, completing 36 million square feet. The percentage of
single-tenant construction is reduced for the second year in a row as developers step back construction. With limited
retail property completions, rent gains should be strong this year, advancing 4.2 percent to $21.18 per square foot.
This increase well exceeds the previous five-year average of 3.2 percent.
Retailer strategies change to match consumer needs. Convenience continues to emerge as a common theme in
the single-tenant net-leased retail sector as several types of retailers have adopted this concept to drive foot traffic
and sales. For example, drugstores have improved their product selection by including items historically purchased at
convenience stores and grocery stores. This strategy has also helped these retailers improve front-store sales and
hold a greater edge over online pharmacies. Additionally, dollar stores have added convenience to their affordable
product mix by offering instant-consumption items, such as grab-and-go sandwiches and beverage bars.
** Forecast
NATIONAL NET-LEASED RETAIL REPORT
38
Cap rates shown above are representative of transactions that
closed in the past year ending in June. Actual yields will vary
by locations, tenant, lease terms and other considerations.
Locations sourced from CreditNtell for public companies and
company websites for private companies.
* For transactions closed in past year ending in June
Sources: CoStar Group, Inc.; CreditNtell; company sources
Brand Locations
Auto Parts
Bridgestone/Firestone 2,200
O'Reilly Auto Parts 5,019
AutoZone 6,003
Advance Auto Parts 5,183
Pep Boys 980
Dollar Stores
Dollar General 14,534
Dollar Tree/Family Dollar 14,835
General Retail
Walmart 11,718
Sherwin-Williams 4,620
AT&T 16,000
Verizon Wireless 2,330
Office Depot/Max 1,378
Convenience Stores
7-Eleven 8,707
Circle K 1,481
QuikTrip 762
Wawa 780
Pharmacies
CVS 10,091
Walgreens 8,100
Quick-Service Restaurants
Dairy Queen 6,400
Starbucks 27,339
McDonald's 37,241
Yum Brands 45,084
Burger King 24,707
Wendy's 6,634
Fast Casual
Chili's 1,674
Darden Restaurants 1,769
Red Lobster 705
Bloomin’ Brands 1,489
Applebee's 1,756
Ruby Tuesday 560
NATIONAL NET-LEASED RETAIL REPORT
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Fed watchful as economic surge raises inflationary pressure. Strengthened hiring amid exceptionally low unemployment levels have boosted wage growth, placing upward
pressure on inflation. Amid this trend coupled with rising trade protectionism and tariffs, the Federal Reserve appears determined to head off inflation risk by continuing its
quarterly increases of the overnight rate. These actions are lifting short-term interest rates while the 10-year Treasury rate remain range bound near 3.0 percent. Should the 10-
year remain steadfast, Fed tightening could create an inverted yield curve in which short-term rates rise above long-term rates. Although this event has preceded every
recession of the past 50 years, many economists suggest such an inversion this year could be an exception to the rule. Because of distortions caused by regulatory changes
and quantitative easing, this inversion could be different. Nonetheless, the Fed’s stated path does raise recessionary risk levels because it could weigh on confidence levels and
restrain spending by consumers and businesses, thus slowing economic growth.
* Through July 20
** As of Aug. 17
Capital Markets
Lenders Pursue Deals as Capital Plentiful;
Caution Enforcing Underwriting
10-Year Treasury still “sticky” at 3 percent. After surging at the beginning of the year, the 10-year Treasury has been range bound near 3.0 percent. To create some headroom
for its escalation of short-term rates, the Fed has tried to exert upward pressure on long-term interest rates by unwinding its balance sheet. This quantitative tightening has had
little influence, particularly as foreign investors have enjoyed a yield premium relative to their native 10-year rates.
Potential rapid interest rate escalation a downside risk. Although capital remains plentiful, lending could tighten quickly for a short period if interest rates rise rapidly. As
experienced in late 2016 when the 10-year rose by more than 80 basis points in 60 days, and again at the beginning of 2018 when there was a 60-basis-point surge, market
liquidity could tighten if rates jump. Considering this has happened twice in the last two years, borrowers will likely benefit by taking a cautious approach with their lenders and
lock in financing quickly.
2018 Capital Markets Outlook
MARKETING TEAM
Source: © 2015 Experian
PROPERTY NAME
#
CREATED ON OCTOBER 9, 2018
LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
PRICING AND VALUATION MATRIX
PROPERTY NAMEH&R BLOCK
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DEMOGRAPHICS
1 Miles 3 Miles 5 Miles
POPULATION
2022 Projection 15,335 21,097 25,450
2017 Estimate 14,813 20,757 24,674
2010 Census 14,371 20,083 23,652
2000 Census 12,602 17,904 20,066
INCOME
Average $43,499 $43,490 $45,425
Median $31,676 $31,312 $32,368
Per Capita $9,708 $9,984 $10,584
HOUSEHOLDS
2022 Projection 3,471 4,955 6,071
2017 Estimate 3,306 4,754 5,733
2010 Census 3,238 4,638 5,535
2000 Census 2,959 4,316 4,890
HOUSING
2017 $110,450 $114,115 $123,104
EMPLOYMENT2017 Daytime Population
10,924 16,635 20,980
2017 Unemployment
14.16% 14.02% 13.82%
2017 Median Time Traveled
28 27 27
RACE & ETHNICITY
White 43.62% 45.17% 46.37%
Native American 0.06% 0.05% 0.05%
African American 0.85% 0.90% 1.21%
Asian/Pacific Islander
0.51% 0.63% 0.92%
www.MarcusMillichap.com
Juan Bustamante
Agent Candidate
Bakersfield Office
Tel: (661) 377-1866
Fax: (661) 377-1848
License: CA 01880908
P R E S E N T E D B Y
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