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Offering Memorandum
(GROUND LEASE)
HOLIDAY INN ANNEX
OFFERING MEMORANDUM
HOLIDAY INN ANNEX(Ground Lease)
San Francisco, CA
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
Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to
be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other
person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to
provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of
interest in the subject property. The information contained herein is not a substitute for a thorough due diligence
investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with
respect to the income or expenses for the subject property, the future projected financial performance of the
property, the size and square footage of the property and improvements, the presence or absence of contaminating
substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the
improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or
intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure
has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not
verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding
these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the
information provided. All potential buyers must take appropriate measures to verify all of the information set forth
herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017
Marcus & Millichap. All rights reserved.
Non-Endorsement NoticeMarcus & 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.
HOLIDAY INN ANNEX
San Francisco, CA
ACT ID Y0020344
N E T L E A S E D D I S C L A I M E R
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will
not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee,
warranty or representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before
completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus &
Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance
of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.
Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to
your satisfaction with the suitability of the property for your needs.
Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal
and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not
a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based
on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any
guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in
whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting
his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a
replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential
replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.
By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost,
expense, or liability arising out of your investigation and/or purchase of this net leased property.
OFFERING SUMMARY
Price Request for Offer
Net Operating Income $332,959
Lease Type Ground Lease
Year Built / Renovated 1984
Lot Size 0.87 acre(s)
#
EXECUTIVE SUMMARY
OFFERING SUMMARY
#
HOLIDAY INN ANNEX
4
HOLIDAY INN ANNEX
4
OFFERING SUMMARY
MAJOR EMPLOYERS
COMPANY# OF EMPLOYEES
*
Fire Dept. 21,050
Wells Fargo 6,980
Public Health Dept. 5,885
San Francisco General Hospital 5,098
American Loss Preventions Svsc 5,000
Assembly Member Ammaiano 5,000
San Francisco City & County 4,872
American Building Main Co NY 4,530
Bechtel 3,973
P.G.&E. 3,000
Gap 2,985
California Pacific Medical Ctr. 2,682
DEMOGRAPHICS
1-Miles 3-Miles 5-Miles
2016 Estimate Pop 63,463 319,325 576,470
2010 Census Pop 59,442 292,012 534,078
2016 Estimate HH 34,875 170,999 283,121
2010 Census HH 32,552 155,023 260,416
Median HH Income $83,120 $73,395 $85,861
Per Capita Income $70,254 $64,783 $64,566
Average HH Income $127,726 $119,315 $130,187
* # of Employees based on 5 mile radius
HOLIDAY INN ANNEX
#
OFFERING SUMMARY
Triple Net (NNN) Investment
Irreplaceable Location in Fisherman’s Wharf
Well Below Replacement Cost
10-Years Remaining on Ground Lease
IHG Operator
INVESTMENT HIGHLIGHTS
Offered for sale is a valuable and desirable 0.87-acre parcel of land, which is leased to the Holiday Inn Annex, in San Francisco's Fisherman's
Wharf. The lot is irregularly shaped and totals 37,812 square feet. The property has approximately 180 feet of street frontage on Jones Street and
137.5 feet of frontage on Beach Street.
The leasehold improvements on the land consists of 148 rooms of the 243 room Holiday Inn Annex Hotel operated by InterContinental Hotels
Group PLC. The Holiday Inn is a full-service hotel and one of the most recognized hotel brands in the world.
The Lease itself has an origination date of August 1980 and original expiration date of June 30, 1995 with two consecutive option periods: the first
option expires on October 31, 2018; the second option expires October 31, 2028. This offering does not include the improvements, but the
leasehold improvements will then revert to the land owner, at the end of the second option.
Lease Financial Summary:
Annual Base Rent: $142,080
Additional Rent: 0.87152% of gross room sales per annum after base rent; with statements and payments made quarterly.
Percentage Rent: The greater of $15,000 or .75% of gross food & beverage sales per annum, net of sales taxes and credit card costs.
Lessee pays all expenses including Property Taxes, Insurance and Property Maintenance.
Lessee has two options to purchase in 2017 and 2027 at "fair market value"
Current Annual Rent: $332,959 as of 5/04/17
INVESTMENT OVERVIEW
5
475 BEACH STREET
PROPERTY PHOTOS
OFFERING SUMMARY
6
12
TENANT PROFILES
HOLIDAY INN ANNEX
7
Holiday Inn Annex
General Information
Tenant Name Holiday Inn Annex
Website www.holidayinn.com
Rentable Square Feet 152,000 SF
Percentage of RBA 100.00%
Lease Commencement 8/11/1980
Lease Expiration 06/30/1995
Term Remaining on Lease Option Period
No. of Locations 4,700
#
475 Beach Street, San Francisco, CA 94133
LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX
PROPERTY NAMEHOLIDAY INN ANNEX
PRICING AND VALUATION MATRIX
PROPERTY NAMEHOLIDAY INN ANNEX
8
REGIONAL AND LOCAL MAP
AERIAL PHOTO
HOLIDAY INN ANNEX
9
Subject PropertyHoliday Inn Annex 475 Beach Street
Holiday Inn Fisherman’s Wharf
#
PROPERTY SUMMARY
OFFERING SUMMARY
#
HOLIDAY INN ANNEX
10
OFFERING SUMMARY
THE OFFERING
Property Holiday Inn Annex
Property Address 475 Beach Street
San Francisco, CA 94133
Price Request of Offer
PROPERTY DESCRIPTION
Year Built / Renovated 1984
Gross Leasable Area 152,000
Zoning Commercial
Type of Ownership Leased Fee/Ground Lease
LEASE SUMMARY
Property Subtype Net Leased Miscellaneous
TenantIntercontinental Hotel
Group
Guarantor Corporate Guarantee
Lease Type Ground Lease
Lease Commencement 8/11/1980
Lease Expiration 06/30/1995
Lease Term 11 years
Term Remaining on
Lease (Years)Option Period
Renewal Options 1- 10 Year Option
Landlord Responsibility None
Tenant Responsibility Yes
Right of First
Refusal/OfferNo
ANNUALIZED OPERATING INFORMATION
INCOME
Net Operating Income $332,959
RENT SCHEDULE
YEAR ANNUAL RENT MONTHLY RENT RENT/SF
Current $332,959 $27,747 $4.56
PROPERTY NAME
MARKETING TEAM
HOLIDAY INN ANNEX
COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
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SALES COMPARABLES
HOLIDAY INN ANNEX
475 BEACH STREET, SAN FRANCISCO, CA, 94133
SUBJECT PROPERTY
Asking Price Request of Offer
Year Built 1984
Lease Term Remaining 11 Years
HOLIDAY INN
1300 COLUMBUS AVE, SAN FRANCISCO, CA, 94133
1
Close Of Escrow 1/12/2017
Sales Price $120,000,000
Price/SF $342.86
GLA 350,000 SF
Year Built 1995
PROPERTY NAME
MARKETING TEAM
HOLIDAY INN ANNEX
DEMOGRAPHICS
Source: © 2016 Experian
Created on May 2017
POPULATION 1 Miles 3 Miles 5 Miles
2021 Projection
Total Population 63,990 331,183 591,533
2016 Estimate
Total Population 63,463 319,325 576,470
2010 Census
Total Population 59,442 292,012 534,078
2000 Census
Total Population 60,522 267,996 515,674
Current Daytime Population
2016 Estimate 84,454 664,871 874,864
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
2021 Projection
Total Households 35,265 178,340 292,051
2016 Estimate
Total Households 34,875 170,999 283,121
Average (Mean) Household Size 1.81 1.77 1.95
2010 Census
Total Households 32,552 155,023 260,416
2000 Census
Total Households 33,176 142,598 247,648
Occupied Units
2021 Projection 35,265 178,340 292,051
2016 Estimate 37,342 181,417 296,324
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
2016 Estimate
$150,000 or More 18.86% 17.67% 19.82%
$100,000 - $149,000 17.58% 16.19% 17.61%
$75,000 - $99,999 11.13% 9.86% 10.92%
$50,000 - $74,999 11.11% 11.08% 11.53%
$35,000 - $49,999 6.96% 8.02% 7.95%
Under $35,000 28.31% 31.53% 25.76%
Average Household Income $127,726 $119,315 $130,187
Median Household Income $83,120 $73,395 $85,861
Per Capita Income $70,254 $64,783 $64,566
HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles
Total Average Household Retail Expenditure
$69,489 $67,800 $72,104
Consumer Expenditure Top 10 Categories
Housing $21,331 $21,027 $22,112
Shelter $14,539 $14,428 $15,054
Transportation $10,844 $10,562 $11,425
Food $7,429 $7,246 $7,663
Personal Insurance and Pensions $6,936 $6,640 $7,371
Health Care $3,979 $3,715 $4,066
Utilities $3,172 $3,121 $3,318
Entertainment $2,669 $2,624 $2,821
Cash Contributions $1,993 $1,736 $1,855
Apparel $1,835 $1,800 $1,882
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
Population By Age
2016 Estimate Total Population 63,463 319,325 576,470
Under 20 9.07% 10.20% 12.36%
20 to 34 Years 34.24% 35.13% 31.66%
35 to 39 Years 8.18% 9.28% 9.46%
40 to 49 Years 12.32% 14.05% 15.20%
50 to 64 Years 17.22% 16.50% 17.38%
Age 65+ 18.98% 14.84% 13.93%
Median Age 38.97 37.31 38.03
Population 25+ by Education Level
2016 Estimate Population Age 25+ 54,231 266,140 472,088
Elementary (0-8) 9.69% 5.12% 4.39%
Some High School (9-11) 4.67% 4.34% 4.01%
High School Graduate (12) 9.73% 10.87% 10.54%
Some College (13-15) 10.73% 14.71% 14.19%
Associate Degree Only 2.59% 4.12% 4.50%
Bachelors Degree Only 38.37% 36.28% 35.77%
Graduate Degree 20.34% 22.04% 24.31%
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Income
In 2016, the median household income for your selected geography is
$83,120, compare this to the US average which is currently $54,505.
The median household income for your area has changed by 54.58%
since 2000. It is estimated that the median household income in your
area will be $105,753 five years from now, which represents a change
of 27.23% from the current year.
The current year per capita income in your area is $70,254, compare
this to the US average, which is $29,962. The current year average
household income in your area is $127,726, compare this to the US
average which is $78,425.
Population
In 2016, the population in your selected geography is 63,463. The
population has changed by 4.86% since 2000. It is estimated that the
population in your area will be 63,990.00 five years from now, which
represents a change of 0.83% from the current year. The current
population is 47.75% male and 52.25% female. The median age of
the population in your area is 38.97, compare this to the US average
which is 37.68. The population density in your area is 20,181.06
people per square mile.
Households
There are currently 34,875 households in your selected geography.
The number of households has changed by 5.12% since 2000. It is
estimated that the number of households in your area will be 35,265
five years from now, which represents a change of 1.12% from the
current year. The average household size in your area is 1.81 persons.
Employment
In 2016, there are 35,234 employees in your selected area, this is also
known as the daytime population. The 2000 Census revealed that
79.16% of employees are employed in white-collar occupations in
this geography, and 20.99% are employed in blue-collar occupations.
In 2016, unemployment in this area is 3.26%. In 2000, the average
time traveled to work was 30.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
53.73% White, 1.46% Black, 0.12% Native American and 40.08%
Asian/Pacific Islander. Compare these to US averages which are:
70.77% White, 12.80% Black, 0.19% Native American and 5.36%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 5.25% of the current year
population in your selected area. Compare this to the US average of
17.65%.
PROPERTY NAME
MARKETING TEAM
HOLIDAY INN ANNEX
Housing
The median housing value in your area was $1,000,000 in 2016,
compare this to the US average of $187,181. In 2000, there were
6,099 owner occupied housing units in your area and there were
27,077 renter occupied housing units in your area. The median rent at
the time was $876.
Source: © 2016 Experian
DEMOGRAPHICS
13
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