OM - La-Z-Boy Portfolio · 2-UNIT LA-Z-BOY PORTFOLIO Coastal Carolinas OFFERING SUMMARY Corporate Guaranteed Leases by La-Z-Boy Incorporated 1% & 2% annual increases Strategically

Offering Memorandum

LA-Z-BOY MYRTLE BEACH565 Market Ct • Myrtle Beach, SC 29577

Offering Memorandum

LA-Z-BOY WILMINGTON4116 Oleander Dr • Wilmington, NC 28403

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 andshould 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, unverifiedinformation 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 duediligence 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, thefuture 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 orasbestos, 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 anytenant'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 mattersand 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 ofthe information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 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 nameis 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, orcommercial 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.

LA-Z-BOY MYRTLE BEACHMyrtle Beach, SCACT ID ZAA0390348

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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 notverify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warrantyor 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 beforecompleting 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 ofthis 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 toyour 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 legaland 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 aguarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on atenant’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 guarantorsmay 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 tomarket, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her owninvestigation 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 tenantif the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenantconsidering 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.

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2-UNIT LA-Z-BOY PORTFOLIOCoastal Carolinas

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INVESTMENT

OVERVIEW

PORTFOLIO OFFERING SUMMARYPrice $8,110,000Net Operating Income $578,014Capitalization Rate – Current 7.13%Price / SF $172.32Rent / SF $12.28Lease Type NNGross Leasable Area 47,063 SFYear Built / Renovated 2007 / 2003Gross Lot Size 4.33 acre(s)

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EXECUTIVE SUMMARYOFFERING SUMMARY

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FINANCINGDown Payment All CashNet Cash Flow 7.13% / $578,014Cash on Cash Return 7.13%Total Return 7.13% / $578,014

LA-Z-BOY WILMINGTON

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OFFERING SUMMARY

1. LA-Z-BOY – MYRTLE BEACH, SC

2. LA-Z-BOY – WILMINGTON, NC


OFFERING SUMMARY

Corporate Guaranteed Leases by La-Z-Boy Incorporated

1% & 2% annual increases

Strategically located along the Carolina coast

High performing stores

La-Z-Boy (NYSE:LZB) has over 350 locations and a market cap of $1.36 billion

Over the past 5 years, La-Z-Boy has seen a sales increase of $310 million

INVESTMENT HIGHLIGHTS

The Chetek Group of Marcus & Millichap, as exclusive advisor, is pleased to present the opportunity to acquire a two-unit portfolio of single tenant net leased La-Z-BoyFurniture Galleries (the Properties) strategically located 77 miles apart in Myrtle Beach, South Carolina and Wilmington, North Carolina. The Properties are directly up thecoast from one another, and both properties reflect recent corporate buyback stores which were completed simultaneously in 2015 as part of a company initiative to identifyand acquire top performing franchise locations and convert them to the growing La-Z-Boy Furniture Galleries Network. These stores are part of the growing future for the La-Z-Boy company.

The Myrtle Beach, South Carolina property is situated on 2.2 acres of land in excellent retail location and totals 23,079 square feet. The lease expires 8/31/227 and is NN.The rent increases 2% per year and is corporately guaranteed by La-Z-Boy Incorporated (LZB).

The Wilmington, North Carolina property is situated on 2.1 acres of land and is also located in the major retail corridor in the city and totals 23,984 square feet. The leaseexpires 8/31/22 and is also NN. The rent increases 1% per year and is corporately guaranteed by La-Z-Boy Incorporated (LZB).

The subject properties are strategically located throughout on the Coasts of South and North Carolina in highgrowth submarkets which were identified and carefully vetted assignificant areas of opportunity for La-Z-Boy to achieve long term success. In addition, both properties maintain similar geographic profiles and possess strong real estatefundamentals; ideal positioning with direct street frontage off primary thoroughfares serving the surrounding communities, ample parking, and prominent visibility. The MyrtleBeach store also benefits from consistent tourism throughout the year, resulting in a very high volume store.

The properties can be purchased together or on an individual basis. The Portfolio is being offered free and clear of debt for a total purchase price of $8,110,000 at a 7.13%cap rate.

INVESTMENT OVERVIEW

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LA-Z-BOY MYRTLE BEACH

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FINANCIAL

ANALYSIS

OFFERING SUMMARYPrice $5,400,000Net Operating Income $360,171Capitalization Rate – Current 6.67%Price / SF $233.98Rent / SF $15.61Lease Type NNGross Leasable Area 23,079 SFYear Built / Renovated 2007Lot Size 2.2 acre(s)

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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

Legacy Business Solutions LLC 1,300

Red Robin Gourmet Burgers Inc 885

World Tour Golf Links 866

Walmart 783

AVX Corporation 745

Blue Cross and Blue Shield 443

Regenerating Pbs Band LLC 400

Compass Cove Resort 350

Crown Reef 350

City of Myrtle Beach 333

Family Kingdom Warehouse 300

Jackson Companies 290

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2018 Estimate Pop 787 42,340 88,747

2010 Census Pop 684 34,334 72,476

2018 Estimate HH 460 16,863 36,659

2010 Census HH 394 13,488 29,665

Median HH Income $42,498 $42,774 $46,920

Per Capita Income $33,104 $22,547 $26,159

Average HH Income $56,625 $56,478 $63,195

* # of Employees based on 5 mile radius

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PROPERTY SUMMARYOFFERING SUMMARY

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NOTES


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OFFERING SUMMARY

LA-Z-BOY WILMINGTON

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FINANCIAL

ANALYSIS

OFFERING SUMMARYPrice $2,710,000Net Operating Income $220,154Capitalization Rate – Current 8.12%Price / SF $112.99Rent / SF $9.18Lease Type NNGross Leasable Area 23,984 SFYear Built / Renovated 2003Lot Size 2.13 acre(s)

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LA-Z-BOY WILMINGTON

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LA-Z-BOY WILMINGTON

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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

Jaguar Holding LLC 15,000

GE 4,504

A B I 3,665

Liberty Homecare Group LLC 3,500

Nhrmc Physician Group 2,975

Guilford Performance Textiles 2,602

University NC Wilmington 1,659

Verizon Wireless 1,421

Ppd 1,340

City Hall Mayors Office 980

Walmart 750

Wilmington Health Assoc PA 750

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2018 Estimate Pop 7,000 80,288 140,885

2010 Census Pop 6,297 74,217 126,782

2018 Estimate HH 3,704 35,231 61,302

2010 Census HH 3,343 32,389 54,879

Median HH Income $36,000 $36,535 $43,092

Per Capita Income $27,878 $26,731 $29,704

Average HH Income $52,619 $59,242 $67,203

* # of Employees based on 5 mile radius

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PROPERTY SUMMARYOFFERING SUMMARY

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NOTES

LA-Z-BOY WILMINGTON

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OFFERING SUMMARY

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

SUBJECT PROPERTY

Asking Price $8,110,000

Price/SF $172.32

CAP Rate 7.13%

GLA 47,063 SF

Lot Size 4.33 acre(s)

Year Built 2007 / 2003

Lease Term Remaining 8.2 / 3.2 Years

LA-Z-BOY565 Market Ct, Myrtle Beach, SC 29577

4116 Oleander Dr, Wilmington, NC 28403

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

1

NOTESThis property was part of a portfolio of 4 La-Z-Boys that sold together for a total of $26,500,000 with a cap rate of 6.7% in February 2019. The seller was a private investor and the buyer was a public REIT, VEREIT.

Close Of Escrow 2/14/2019

Sales Price $26,500,000

Price/SF $1,483.18

CAP Rate 6.7%

GLA 17,867 SF


Year Built 2007

LA-Z-BOY2040 W Ina Rd, Tucson, AZ, 85704

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NOTESThis property was part of a portfolio of 4 La-Z-Boys that sold together for a total of $26,500,000 with a cap rate of 6.7%. The seller was a private investor and the buyer was a public REIT, VEREIT.



Price/SF $1,112.74

CAP Rate 6.7%

GLA 23,815 SF


Year Built 2005

LA-Z-BOY 3055 W Chandler Blvd, Chandler, AZ, 85226

PROPERTY NAME

MARKETING TEAM


SALES COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

3




Price/SF $1,039.46

CAP Rate 6.7%

GLA 25,494 SF


Year Built 2008

LA-Z-BOY 15320 W McDowell Rd, Goodyear, AZ, 85395

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Price/SF $1,853.80

CAP Rate 6.7%

GLA 14,295 SF


Year Built 2016

LA-Z-BOY5584 E State Route 69, Prescott Valley, AZ, 86314

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PROPERTY NAME2-UNIT LA-Z-BOY PORTFOLIOCoastal Carolinas

SALES COMPARABLES

Avg. 6.70%

0.0

0.7

1.4

2.1

2.8

3.5

4.2

4.9

5.6

6.3

7.0

7.7

La-Z-Boy La-Z-Boy La-Z-Boy-2 La-Z-Boy-3 La-Z-Boy-4

Average Cap Rate

Avg. $325.27

$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

La-Z-Boy La-Z-Boy La-Z-Boy-2 La-Z-Boy-3 La-Z-Boy-4

Average Price Per Square Foot

SALES COMPARABLES SALES COMPS AVG

TENANT SUMMARY

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Fiscal Year Ended April 28, 2018

La-Z-Boy Inc.CREDIT RATING: B1 www.fdreports.com | www.creditntell.com | January 26, 2019

La-Z-Boy works so that its customers can kick back and relax. A top US maker of upholstered

and wood furniture, La-Z-Boy sells its ubiquitous recliners, as well as chairs, sofas, tables,

bedroom and dining room sets, and modular seating units. Its brands include La-Z-Boy, England,

Hammary, American Drew, and Kincaid. La-Z-Boy sells its products through about 150 company-

owned and 735 independent locations under the La-Z-Boy Furniture Galleries and La-Z-Boy

Comfort Studio names. It also sells furniture to retailers across the US, Canada, and some 60

other countries. The US is the company's largest market.

PRICING AND VALUATION MATRIX

PROPERTY NAMELA-Z-BOY WILMINGTON



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TENANT SUMMARY

General Information

Address One La-Z-Boy Drive , Monroe, Michigan, 48162, United States

Phone 855-802-6636Website www.la-z-boy.com

Store BaseStore Count 352TTM Sales $1,711,635,000

Key PersonnelChairman, CEO & President Kurt L. DarrowExecutive Chairman & CFO & SVP Melinda D. Whittington

Financial MarketsStock Ticker LZBCurrent Price $32.20 as of 4/26/1952 Week High/Low $39.15 / $25.30

TENANT SUMMARY

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La-Z-Boy Inc.

Company Financial Stats





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TENANT SUMMARY

TENANT SUMMARY

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La-Z-Boy Inc.

Company Financial Stats





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TENANT SUMMARY


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MARKET

OVERVIEW

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CLOSE PROXIMITY TO:

565 Market Ct, Myrtle Beach, SC 29577

Myrtle Beach, S.C., is not only a world-recognized travel destination, but also a premierlocation for business growth and developmentthat’s becoming increasingly recognized. Thisemerging hub for global business is strategicallylocated in the northeastern corner of coastalSouth Carolina, between the port cities ofCharleston, S.C., and Wilmington, N.C., andhalfway between New York and Miami, Fla.With nationally low tax rates, competitive laborcosts, affordable real estate and overall cost ofdoing business, Myrtle Beach offers aninvaluable community for businesses. Areabusinesses also benefit from an abundance ofrecent graduates entering the workforce fromnearby Coastal Carolina University and HorryGeorgetown Technical College.Horry County is home to a diverse mix ofbusinesses and industries ranging fromadvanced manufacturing to technology andcorporate headquarters. Area employers includeConbraco Industries, Inc., FrontierCommunications, PPG, Inc., Canfor SouthernPine, Metglas, Precision Southeast, Inc.,BauschLinnemann, B3C Fuel Solutions.

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMELA-Z-BOY MYRTLE BEACH



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LOCATION OVERVIEW

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565 Market Ct, Myrtle Beach, SC 29577LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX




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REGIONAL AND LOCAL MAP

AERIAL PHOTO


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La-Z-Boy is the most recognized

brand in a $110 billion dollar

industry.

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PROPERTY PHOTOS

MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

#

CREATED ON APRIL 26, 2019





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DEMOGRAPHICS

1 Miles 3 Miles 5 MilesPOPULATION

2023 Projection 841 48,358 104,1862018 Estimate 787 42,340 88,7472010 Census 684 34,334 72,4762000 Census 638 22,619 44,218

INCOMEAverage $56,625 $56,478 $63,195Median $42,498 $42,774 $46,920Per Capita $33,104 $22,547 $26,159

HOUSEHOLDS2023 Projection 525 19,509 43,2322018 Estimate 460 16,863 36,6592010 Census 394 13,488 29,6652000 Census 320 9,102 18,528

HOUSING2018 $146,966 $161,444 $178,440

EMPLOYMENT2018 Daytime Population 814 53,283 106,864

2018 Unemployment 5.13% 4.95% 4.66%2018 Median Time Traveled 19 20 20

RACE & ETHNICITYWhite 73.22% 71.21% 77.87%Native American 0.07% 0.18% 0.14%African American 5.03% 13.66% 10.27%Asian/Pacific Islander 2.65% 1.97% 2.27%

LA-Z-BOY WILMINGTON

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MARKET

OVERVIEW

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CLOSE PROXIMITY TO:

4116 Oleander Dr, Wilmington, NC 28403





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LOCATION OVERVIEW

Wilmington is located between the Cape Fear River and Atlantic Ocean. The city retains a charming, small town atmosphere despite being the largest city in southeastern North Carolina and the eighth largest city in the state. Wilmington’s thriving business climate has attracted corporations such as GE Hitachi Nuclear Energy, Corning, Verizon Wireless, and PPD. Visitors are drawn to the city by the charming historic district, lively arts scene, a major seaport, the University of North Carolina Wilmington, the Battleship North Carolina, Gothic churches, and riverfront shops. Wilmington’s natural attributes shine with miles of unspoiled beaches and outstanding seafood restaurants along the coast. In 2016, Wilmington experienced a 6.3% increase in visitor spending.

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4116 Oleander Dr, Wilmington, NC 28403LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX




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REGIONAL AND LOCAL MAP

AERIAL PHOTO

LA-Z-BOY WILMINGTON

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MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

#

CREATED ON APRIL 26, 2019





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DEMOGRAPHICS

1 Miles 3 Miles 5 MilesPOPULATION

2023 Projection 7,332 84,873 149,6922018 Estimate 7,000 80,288 140,8852010 Census 6,297 74,217 126,7822000 Census 5,719 64,029 107,252

INCOMEAverage $52,619 $59,242 $67,203Median $36,000 $36,535 $43,092Per Capita $27,878 $26,731 $29,704

HOUSEHOLDS2023 Projection 3,914 37,705 65,9082018 Estimate 3,704 35,231 61,3022010 Census 3,343 32,389 54,8792000 Census 3,006 28,182 46,209

HOUSING2018 $191,629 $217,804 $220,917

EMPLOYMENT2018 Daytime Population 16,690 114,090 186,808

2018 Unemployment 4.89% 5.99% 5.40%2018 Median Time Traveled 17 19 20

RACE & ETHNICITYWhite 85.50% 71.96% 75.05%Native American 0.47% 0.12% 0.10%African American 7.72% 20.39% 17.28%Asian/Pacific Islander 1.44% 1.54% 1.53%

Documents

OM - La-Z-Boy Portfolio · 2-UNIT LA-Z-BOY PORTFOLIO Coastal Carolinas OFFERING SUMMARY Corporate Guaranteed Leases by La-Z-Boy Incorporated 1% & 2% annual increases Strategically