Offering Memorandum - LoopNet...BurgerKing, Taco Bell, KFC, and many others. The subject is also in close proximity to The Mansions at Hockanum Crossing, a 700unit luxury apartment

STARBUCKS ANCHORED CENTER - VERNON, CT135 Talcottville Rd • Vernon, CT 06066

Offering Memorandum

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 tobe reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any otherperson or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared toprovide summary, unverified information to prospective purchasers, and to establish only a preliminary level ofinterest in the subject property. The information contained herein is not a substitute for a thorough due diligenceinvestigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, withrespect to the income or expenses for the subject property, the future projected financial performance of theproperty, the size and square footage of the property and improvements, the presence or absence of contaminatingsubstances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of theimprovements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans orintentions to continue its occupancy of the subject property. The information contained in this Marketing Brochurehas been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will notverify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regardingthese matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of theinformation provided. All potential buyers must take appropriate measures to verify all of the information set forthherein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â© 2017Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified inthis marketing package. The presence of any corporation's logo or name is not intended to indicate or implyaffiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates orsubsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included forthe 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.

STARBUCKS ANCHORED CENTER - VERNON, CTVernon, CTACT ID Y0560294

Laurie Ann (LA) Drinkwater, CCIM First Vice President InvestmentsDirector, National Retail Group | Net Leased Properties Group BOSTON OFFICEOffice: (617) 896-7230 Cell: (860) [email protected] License: CT: REB.0751880, MA: 147511, RI: B 16787

Seth J. RichardFirst Vice President Investments Director, National Retail Group | Net Leased Properties Group MANHATTAN OFFICEOffice: (212) 430-5164 Cell: (860) [email protected] License: CT: 0764595, NY 10401275108, MA 149700

TABLE OF CONTENTS

SECTION

INVESTMENT OVERVIEW 01Offering Summary

Location Overview

Regional Map

Local Map

Aerial Photo

FINANCIAL ANALYSIS 02

Tenant Summary

Pricing Detail

MARKET COMPARABLES 03Sales Comparables

MARKET OVERVIEW 04Market Analysis

Demographic Analysis

STARBUCKS ANCHORED CENTER - VERNON, CT

Property Photo


4

INVESTMENT

OVERVIEW


#

EXECUTIVE SUMMARY

OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES

Echn 3,605

Manchester School District 1,100

Manchester Memorial Hospital 1,000

Journal Inquirer 840

Paradigm Precision 791

Town of Vernon 701

Rockville General Hospital Inc 580

US Post Office 526

Manchester Healthcare Inc 500

Medco Health Services Inc 430

Manchester Community College 406

Osram Sylvania Inc 377

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 4,899 47,242 110,566

2016 Census Pop 4,883 47,231 110,490

2016 Estimate HH 2,134 20,162 46,658

2016 Census HH 2,126 20,113 46,499

Median HH Income $78,113 $73,179 $68,326

Per Capita Income $42,684 $40,172 $37,253

Average HH Income $97,936 $93,920 $88,066

VITAL DATA

YEAR 1

$4,650,500 CAP Rate 5.50%

100% / $4,650,500Net Operating Income

$255,780

Net Cash Flow After Debt Service

5.50% / $255,780

Total Return 5.50% / $255,780

5,286 SF

$879.78

100.0%

2016

Price

Down Payment

Gross Leasable Area (GLA)

Price/SF

Current Occupancy

Year Built / Renovated

Lot Size 2.4 acre(s)

5

MAJOR TENANTS

TENANT GLA LEASE EXPIRATION LEASE TYPE

Starbucks 1,950 6/30/2026 NNN

Spring Mobile 1,800 6/30/2026 NNN

Farmington Bank 1,536 6/30/2036 NNN Ground


#

▪ NNN Starbucks Anchored Center | New Construction with 10 & 20 Year Lease Terms

▪ Strong Tenant Mix | Starbucks – Over 25,000 Locations | Spring Mobile – GameStop Subsidiary | Farmington Bank –$2.8 Billion in Assets, Deposits Increased Nearly 300% Year Over Year.

▪ Exposure to Over 30,000 Vehicles Per Day Along Route 83 | Nearby I-84 Traffic Counts Over 98,000 Vehicles Per Day on Average

▪ Area Retailers Include Stop & Shop, Price Chopper, CVS Pharmacy, HomeGoods, TJ Maxx, Staples, Harbor Freight Tools, GNC, Bank of America, Sally Beauty Supply, AutoZone, Goodyear, Mobil, Dunkin Donuts, McDonald’s, Burger King, Taco Bell, KFC, and Many Others

▪ Close Proximity to The Mansions at Hockanum Crossing | 700 Unit Luxury Apartment Community

▪ Population Over 110,000 and AHHI Over $86,000 in Five-Mile Radius | AHHI Over$96,000 in One-Mile Radius

INVESTMENT HIGHLIGHTS

OFFERING SUMMARY

INVESTMENT OVERVIEW

Marcus and Millichap is pleased to present the Starbucks Anchored Center located at 135 Talcottville Road, Vernon CT. The subject property is a 5,286 square-foot

shopping center comprised of two buildings on a 2.4 acre lot. The newly constructed center is anchored by Starbucks, and also features Spring Mobile and a

freestanding Farmington Bank branch. Starbucks has signed a new 10-year NNN lease, with 10% increases every five years. Spring Mobile, a GameStop subsidiary and

AT&T Authorized Retailer, is also on a new 10-year NNN lease and features 2% annual increases. Farmington Bank has over $2.8 Billion in assets and 26 locations

throughout Connecticut and Massachusetts. The Bank is on a new 20-year NNN Ground Lease with $3,000 annual increases in the first five years, and 10% increases

every five years thereafter. Bank deposits at this location have increased nearly 300% year over year. Starbucks is equipped with a full service drive-thru, and Farmington

Bank features two drive-thru banking lanes. The subject property benefits from its location in a dense trade area along Route 83, which provides exposure to over 30,000

vehicles per day. The subject is also just off I-84 which sees traffic counts over 98,000 vehicles per day on average.

The subject property sits at a traffic signal directly across from a CVS Pharmacy and a Stop & Shop supermarket anchored center, and is up the street from Tri-City

Plaza; a Price Chopper supermarket anchored center also housing such retail giants as HomeGoods, TJ Maxx, Staples, Harbor Freight Tools, GNC, and more. Additional area

retailers include Bank of America, United Bank, Kmart, Sally Beauty Supply, AutoZone, Goodyear, Meineke, Town Fair Tire, Citgo, Mobil, Dunkin Donuts, McDonalds,

Burger King, Taco Bell, KFC, and many others. The subject is also in close proximity to The Mansions at Hockanum Crossing, a 700 unit luxury apartment community.

The surrounding area shows excellent demographics, with a population over 110,000 and an average household income over $86,000 within a five-mile radius. Average

household income is even stronger in the immediate one-mile radius at over $96,000. The offering presents the rare opportunity to acquire a newly constructed, long-term retail

asset with a strong tenant mix and minimal landlord responsibility.

6

PROPERTY OVERVIEW


#

OFFERING SUMMARY

7

Vernon is a celebrated place to live and work. From its beautiful parks and lakes, to its vast trails and historic homes and buildings, Vernon has it all. With a resident population of nearly 30,000 and occupying only 18.03 square miles, Vernon combines a balanced appreciation of history and a strong economic base for growth, both residential and commercial.

Located 15 minutes east of the Connecticut capital of Hartford, and 25 miles from the city of Springfield, Massachusetts, the Town of Vernon is strategically placed in “New England's Knowledge Corridor” with close proximity to some of the top colleges and universities in the county, including University of Connecticut and Trinity College.

With its easy access to several state routes as well as Interstate 84, Vernon is a diversified community. Because of its locale, Vernon provides homeowners the opportunity to enjoy suburbia, while enjoying a short commute to either Hartford or Springfield business districts.

Vernon is a full service local government, offering a wide range of benefits for its residents including public education, extensive parks and recreational opportunities, police, fire, emergency medical services to name a few. The Town of Vernon government seeks to practice a management philosophy of continuous improvements.

#

LOCATION OVERVIEW

CLOSE PROXIMITY TO:

135 Talcottville Rd, Vernon, CT 06066

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMESTARBUCKS ANCHORED CENTER - VERNON, CT

PRICING AND VALUATION MATRIX


LOCATION OVERVIEW

8

REGIONAL MAP


9

LOCAL MAP


10

AERIAL PHOTO


11


12

PROPERTY PHOTO


13

FINANCIAL

ANALYSIS

FINANCIAL ANALYSIS


PRICING DETAIL

14

NNN Ground

Comments(1) 10% Increases Every Five Years. Tenant has Right to Terminate starting End of Year 6. Requires 120 Day Notice. Results in $131,658 in

breakup fees to landlord.

(2) 2% Annual Increases Through Base and Options. Rent for last year of each Option shown.

(3) $3,000 Annual Increases in the First Five Years, and 10% Increases Every Five Years Thereafter. Farmington Bank on NNN Ground Lease.Ground Lease Total SF is 3,468.

(1)

(2)

(3)

Fiscal Year Ended October 02, 2016

Starbucks Corporation

CREDIT RATING: A2 www.fdreports.com | www.creditntell.com | April 02, 2017

Wake up and smell the coffee -- Starbucks is everywhere. The world's #1 specialty coffee

retailer, Starbucks has more than 25,000 coffee shops in 75 countries. The outlets offer coffee

drinks and food items, as well as roasted beans, coffee accessories, and teas. Starbucks

operates more than 12,700 of its own shops, which are located mostly in the US, while licensees

and franchisees operate roughly 12,375 units worldwide (including many locations in shopping

centers and airports). In addition, Starbucks markets its coffee through grocery stores, food

service customers, and licenses its brand for other food and beverage products.

PROPERTY NAMESTARBUCKS ANCHORED CENTER - VERNON, CTPROPERTY NAMESTARBUCKS ANCHORED CENTER - VERNON, CT

15

General Information

Address 2401 Utah Avenue, South , Seattle, Washington, 98134, United States

Phone 206-447-1575

Website www.starbucks.com

Store BaseStore Count 26,161

TTM Sales $21,976,100,000

Key PersonnelPresident & Chief Executive Officer Kevin R. Johnson

Chief Financial Officer Scott H. Maw

Chairman Howard schultz

Financial MarketsStock Ticker SBUX

Current Price $53.49 as of 8/9/17

52 Week High/Low $64.87 / $50.84

TENANT PROFILE

TENANT PROFILE


16

Spring Mobile

General Information

Tenant Name Spring Mobile

Website www.springmobile.com

Parent Company GameStop Corp.

Headquartered Salt Lake City, UT

Rentable Square Feet 1,800 SF

Lease Expiration 6/30/2026

No. of Locations 1,500+

GameStop Corp., a Fortune 500 company, is a global family of specialty retail

brands that makes the most popular technologies affordable and simple. GameStop

operates more than 7,000 stores across 14 countries. The company’s consumer

product network includes Spring Mobile, the largest authorized dealer of AT&T

wireless services. Spring Mobile was founded in 2001 in Salt Lake City, Utah.

Farmington Bank

General Information

Tenant Name Farmington Bank

Website www.farmingtonbankct.com

Headquartered Farmington, CT

Rentable Square Feet 1,535 SF

Lease Expiration 6/30/2036

No. of Locations 26

First Connecticut Bancorp, Inc. is the holding company for Farmington Bank, a well-

regarded community bank in Connecticut and western Massachusetts. Farmington

Bank, established in 1851, is known for its personalized customer service,

diversified consumer and commercial product offerings and strong ties to the

communities it serves throughout central Connecticut. The Farmington Bank

Community Foundation, the charitable arm of First Connecticut Bancorp, Inc.,

provides ongoing financial support fo


17

MARKET

COMPARABLES

8


SALES COMPARABLES MAP

18

STARBUCKS ANCHORED CENTER -VERNON, CT(SUBJECT)

Starbucks Anchored Center - Old Saybrook, MA

Starbucks Anchored Center - Latham, NY

Starbucks Anchored Center - Hopkington, MA

Starbucks - Broomall, PA

Bank of America - Windsor,

CT

SALES COMPARABLES

1

2

3

4

5

19

Avg. 5.48%

0.0

0.6

1.2

1.8

2.4

3.0

3.6

4.2

4.8

5.4

6.0

Starbucks Anchored Center - Vernon, CT

Starbucks Anchored Center - Old Saybrook, MA

Starbucks Anchored Center - Latham, NY

Starbucks Anchored Center - Hopkington, MA

Starbucks - Broomall, PA

Bank of America - Windsor, CT

Average Cap Rate


SALES COMPARABLESSALES COMPARABLES SALES COMPS AVG

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


20

SALES COMPARABLES

Annual Per SF

Income $255,780 $48.39

NOI $255,780 $48.39

Occupancy 100.0%

Tenants Lease Type

Asking Price: $4,650,500 Starbucks NNN

Price/SF: $879.78 Spring Mobile NNN

CAP Rate: 5.50% Farmington Bank NNN Ground

Year Built: 2016

STARBUCKS ANCHORED CENTER - VERNON, CT135 Talcottville Rd, Vernon, CT, 06066

1

NOTESNNN Starbucks Anchored Center. Exact Lease Terms Unknown. Population and AHHI in 1 / 5 Mile Radius - 2,400+ / 25,000+ and $74,000+ / $87,000+

Tenants Lease TypeClose Of Escrow:

5/23/2017 Starbucks NNN

Sales Price: $2,030,466 Ben & Jerry's NNN

Price/SF: $313.01

CAP Rate: 5.50%

Year Built: 1940

STARBUCKS ANCHORED CENTER - OLD SAYBROOK, CT15-19 Main Street, Old Saybrook, CT, 06475

2

NOTESNNN Starbucks Anchored Center. Both tenants 10 Years Remaining. Population and AHHI in 1 / 5 Mile Radius - 6,200+ / 153,000+ and $61,000+ / $57,000+



Sales Price: $3,100,000 Mayfield Jewelers NNN

Price/SF: $771.72

CAP Rate: 6.00%

Year Built: 2003

STARBUCKS ANCHORED CENTER -LATHAM, NY549 Troy Schenectady Rd, Latham, NY, 12110

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


21

SALES COMPARABLES

3

NOTESNNN Starbucks Anchored Center. Starbucks 9+ Years Remaining, IM Wireless 4+ Years Remaining, UniBank 15 Years Remaining, Nail Salon 15 Years Remaining. Population and AHHI in 1 / 5 Mile Radius - 1,900+ / 56,000+ and $175,000+ / $141,000+



Sales Price: $5,025,000 IM Wireless NNN

Price/SF: $676.31 Uni Bank NNN

CAP Rate: 5.74% Nail Salon NNN

Year Built: 2015

STARBUCKS ANCHORED CENTER -HOPKINGTON, MA85 W Main St, Hopkinton, MA, 01748

4

NOTESNNN Starbucks. 10 Years Remaining. Population and AHHI in 1 / 5 Mile Radius - 11,600+ / 290,000+ and $102,000+ / $106,000+



Sales Price: $3,360,000

Price/SF: $1,600.00

CAP Rate: 5.00%

Year Built: 2016

STARBUCKS - BROOMALL, PA2200 W Chester Pike, Broomall, PA, 19008

5

NOTESNNN Ground Leased Bank of America. 12 Years Remaining. Population and AHHI in 1 / 5 Mile Radius - 2,200+ / 55,000+ and $96,000+ / $92,000+


4/5/2017 Bank of America NNN

Sales Price: $3,100,000

Price/SF: $666.67

CAP Rate: 5.15%

Year Built: 2007

BANK OF AMERICA - WINDSOR, CT1045 Kennedy Road, Windsor, CT, 06095


22

MARKET

OVERVIEW

MARKET OVERVIEW

OVERVIEWHARTFORD

The Hartford metro is located in the state of Connecticut and houses the

state capitol in Hartford and the University of Connecticut in Storrs. The

area is known nationally for its role as a focal point for the American

insurance industry. Overall, the region has a diverse economic

background including aerospace, hydrogen/fuel cell technology, laser

manufacturing and healthcare industries. Collectively over a half million

people are employed in local industries.

A large number of notable financial services and insurance companies are located in the metro including Aetna, the Hartford, the Phoenix Cos. and Travelers Insurance.

Hartford is a center for medical care, research and education. The city of Hartford includes HartfordHospital, the Institute of Living, Connecticut Children's Medical Center, and Saint Francis Hospital &Medical Center. The University of Connecticut enrolls more than 32,000 students.

Other notable companies with significant operations in the metro include chemical and consumergoods company Henkel, locally headquartered technology firm United Technologies Corp. andmedia giant ESPN, which is also headquartered in the metro.

40.52016

MEDIAN AGE:

$69,300 2016 MEDIAN

HOUSEHOLD INCOME:

DEMOGRAPHICS

U.S. Median:

37.7U.S. Median:

$57,200

1.2M2016

POPULATION:

Growth2016-2021*:

2%

475K2016

HOUSEHOLDS:

2.6%

Growth2016-2021*:

ECONOMY

* ForecastSources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau


EDUCATIONAL ATTAINMENTNearly 36 percent of residents age 25 and older hold a bachelor’s degree, while more than 15 percent also hold a graduate or professional degree

HIGH-INCOME HOUSEHOLDSMore higher-income households compared with the U.S. allow a larger number of people to own a house, resulting in a 67 percent rate of homeownership.

CULTURALLY DIVERSEThe Hartford region is home to more than 150 local arts, cultural and heritage organizations and local athletics including the UConn Huskies and the Travelers Championship PGA Tournament.

METRO HIGHLIGHTS

23

8


DEMOGRAPHICS

24

PROPERTY NAME

MARKETING TEAM


DEMOGRAPHICS

Source: © 2016 Experian

Created on August 2017

POPULATION 1 Miles 3 Miles 5 Miles 2021 Projection

Total Population 5,251 48,923 113,372

2016 Estimate


2010 Census


2000 Census


Current Daytime Population

2016 Estimate 4,221 44,650 101,166

HOUSEHOLDS 1 Miles 3 Miles 5 Miles 2021 Projection

Total Households 2,335 21,164 48,185

2016 Estimate


Average (Mean) Household Size 2.31 2.32 2.35

2010 Census


2000 Census


Occupied Units

2021 Projection 2,335 21,164 48,185

2016 Estimate 2,289 21,332 49,455

HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles 2016 Estimate

$150,000 or More 12.49% 11.20% 9.54%

$100,000 - $149,000 20.86% 19.20% 17.88%

$75,000 - $99,999 17.07% 16.25% 15.88%

$50,000 - $74,999 15.60% 18.32% 18.55%

$35,000 - $49,999 11.36% 12.36% 13.19%

Under $35,000 20.88% 20.58% 23.02%

Average Household Income $97,936 $93,920 $88,066

Median Household Income $78,113 $73,179 $68,326

Per Capita Income $42,684 $40,172 $37,253

HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 MilesTotal Average Household Retail Expenditure $84,982 $84,742 $82,963

Consumer Expenditure Top 10Categories

Housing $23,692 $23,488 $23,066

Transportation $15,338 $15,372 $14,938

Shelter $14,124 $14,113 $13,946

Food $8,710 $8,597 $8,387

Personal Insurance and Pensions $7,301 $7,356 $7,102

Health Care $5,227 $5,049 $4,851

Utilities $4,995 $4,941 $4,834

Entertainment $3,505 $3,432 $3,359

Cash Contributions $3,226 $3,131 $2,967

Education $2,303 $2,330 $2,259

POPULATION PROFILE 1 Miles 3 Miles 5 Miles Population By Age

2016 Estimate Total Population 4,899 47,242 110,566

Under 20 20.08% 21.28% 22.47%

20 to 34 Years 18.36% 21.16% 22.39%

35 to 39 Years 5.65% 5.92% 6.34%

40 to 49 Years 13.16% 12.69% 12.92%

50 to 64 Years 21.90% 21.63% 20.90%

Age 65+ 20.87% 17.32% 14.96%

Median Age 44.63 41.40 39.01

Population 25+ by Education Level

2016 Estimate Population Age 25+ 3,633 34,074 78,106

Elementary (0-8) 1.26% 1.33% 1.86%

Some High School (9-11) 3.91% 4.25% 5.12%

High School Graduate (12) 29.13% 25.66% 26.34%

Some College (13-15) 17.49% 18.89% 19.34%

Associate Degree Only 7.07% 10.13% 9.43%

Bachelors Degree Only 22.62% 22.50% 22.24%

Graduate Degree 17.66% 16.67% 15.05%

25

S T A R B U C K S A N C H O R E D C E N T E R - V E R N O N , C T

Laurie Ann (LA) Drinkwater, CCIM First Vice President InvestmentsDirector, National Retail Group | Net Leased Properties Group BOSTON OFFICEOffice: (617) 896-7230 Cell: (860) [email protected] License: CT: REB.0751880, MA: 147511, RI: B 16787

Seth J. RichardFirst Vice President Investments Director, National Retail Group | Net Leased Properties Group MANHATTAN OFFICEOffice: (212) 430-5164 Cell: (860) [email protected] License: CT: 0764595, NY 10401275108, MA 149700

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Documents

Offering Memorandum - LoopNet...BurgerKing, Taco Bell, KFC, and many others. The subject is also in close proximity to The Mansions at Hockanum Crossing, a 700unit luxury apartment