SPROUTS | JUMPSTREET NET LEASED INVESTMENT · 2019. 8. 13. · THE OFFERING Newmark Knight Frank (NKF), as exclusive advisor, is pleased to present the opportunity to acquire the

OFFERING MEMORANDUM

SPROUTS | JUMPSTREET NET LEASED INVESTMENT5665 WEST BELL ROAD | GLENDALE, AR IZONA 85308

AFFILIATED BUSINESS DISCLOSURE

Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of 5665 West Bell Road, Glendale, Arizona (the ”Property”) by ‘Ownership’ (the “Seller”).

This Memorandum does not constitute a representation that the business or affairs of the Property or Seller since the date of preparation (July 24, 2019) of this Memorandum have remained the same. Analysis and verification of the information contained in this Memorandum are solely the responsibility of the prospective purchaser.

Additional information and an opportunity to inspect the Property will be made available upon written request of interested and qualified prospective purchasers. Seller and Agent each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the Property, and/or terminate discussions with any party at any time with or without notice. Seller reserves the right to change the timing and procedures for the Offering process at any time in Seller’s sole discretion. Seller shall have no legal commitment or obligations to any party reviewing this Memorandum, or making an offer to purchase the Property, unless and until such offer is approved by Seller, and a written agreement for the purchase of the Property has been fully executed and delivered by Seller and the Purchaser thereunder.

This Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not forward, photocopy or duplicate it, that you will not disclose this Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller or Agent, and that you will not use this Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller or Agent.

EXECUTIVE SUMMARY01

PROPERTY DESCRIPTION02

03

AREA OVERVIEW

04

TENANT PROFILES

05

FINANCIAL ANALYSIS

TABLE OF CONTENTS

DAVID GUIDO

Managing Director+1 602 952 [email protected]

EXCLUSIVELY LISTED BY:

TIM WESTFALL


RYAN MORONEY

Associate Director+1 602 952 [email protected]

THE OFFERINGNewmark Knight Frank (NKF), as exclusive advisor, is pleased to present the opportunity to acquire the Sprouts | Jumpstreet Center (the Property), a 61,302-square-foot retail project in Phoenix, Arizona.

This single-story two-tenant Property is located in an extremely dense Glendale submarket and is currently 100% leased. Built in 1994, the Property is situated ±5.68 acres with ample surface parking and tremendous visibility from Phoenix's busiest arterial, Bell Road.

The Property offers an opportunity for an investor to capitalize on the increasing market fundamentals fueled by the continued development in the submarket. Located less than 3 miles east of the community of Arrowhead and Arrowhead Towne Center, the site offers exceptional regional access with close proximity to several of Phoenix's most important arterials, the Loop 101 Freeway and Interstate 17.

01

EXECUTIVE SUMMARY

3 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE

OFFERING PRICE $11,900,000

TENANT LEASED SF % OF PROPERTY CREDIT RATING LEASE EXPIRATION

Sprouts 30,000 49% National 2/28/2023

Jumpstreet 31,302 51% Regional 6/30/2020

PROPERTY SUMMARY OFFERING SUMMARY

MAJOR TENANT SUMMARY

SPROUTS | JUMPSTREET CENTER5665 WEST BELL ROAD, GLENDALE 85308

61,302 GLA Total Building Area

1994Year Built

5.68 ACLand Area

200-50-204APN

4.75/1,000Overall Parking Ratio

100%Leased

NNNLease Structure

EXECUTIVE SUMMARY

SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE 4

INVESTMENT OPPORTUNITY

The Property provides tenants a stable environment with close access to multiple major freeways, significant local thoroughfares and extensive amenities. Opportunities to acquire superior quality retail projects of this nature are highly sought after.

FINANCIAL SUMMARY

100% Leased

$11,900,000Price

$858,593In-Place NOI

7.22%In-Place Cap Rate

$194.12Price Per Building SF

INVESTMENT HIGHLIGHTS

• 100% Occupied Stable Cash Flow Asset

• Credit Tenant Mix – Sprouts: one of the fastest growing supermarket chains in the country

Jumpstreet: 15 locations and expanding

• High Demand/Extremely Low Vacancy Submarket

• Irreplaceable Location – 57th Avenue & Bell Road is a heavily trafficked

intersection that sees 72,000 vehicles per day

• Low Price Per Square Foot

• Low Management investment for an out-of-state passive investor

• Long-Term Tenancy – Sprouts has been a tenant here since 2002

• Excellent Long-Term Value within an established trade area and affluent

customer base

$48.13Price Per Land SF

5 PROPERTY NAME

N 57TH AVENUE

W BELL ROAD

• 100% Occupied Stable Cash Flow Asset

• Credit Tenant Mix – Sprouts: one of the fastest growing supermarket chains in the country

Jumpstreet: 15 locations and expanding

• High Demand/Extremely Low Vacancy Submarket

• Irreplaceable Location – 57th Avenue & Bell Road is a heavily trafficked

intersection that sees 72,000 vehicles per day

• Low Price Per Square Foot

• Low Management investment for an out-of-state passive investor

• Long-Term Tenancy – Sprouts has been a tenant here since 2002

• Excellent Long-Term Value within an established trade area and affluent

customer base

±72,703 VPD


© 2008, ALL RIGHTS RESERVED. Reprinted with permission.

© 2008, ALL RIGHTS RESERVED. Reprinted with permission.

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( 8 7 7 ) C A L L - P H X118 OFFICIAL VISITORS GUIDE V I S I T P H O E N I X . C O M OFFICIAL VISITORS GUIDE 119

Sprouts | Jumpstreet DEER VALLEY AIRPORT

TURF PARADISE

BELL ROAD

UNION HILLS DRIVE

CORPORATE CAMPUS4,500 EMPLOYEES

NORTERRA &HAPPY VALLEY TOWNE CENTER

3,200 EMPLOYEES

350 EMPLOYEES

UNIVERSITY OF PHOENIXSTADIUM

TANGER OUTLETSWESTGATE

GILA RIVER ARENA

DESERT DIAMONDCASINO

ASU WEST

ARIZONACHRISTIANUNIVERSITY

ARROWHEADTOWNE CENTER MALL

PEORIA SPORTS COMPLEX

ARROWHEAD TOWNE CENTER & SURROUNDING RETAIL

GLENDALECOMMUNITY

COLLEGE

METROCENTERMALL

MIDWESTERNUNIVERSITY

5665 WEST BELL GLENDALE | AZ

SPROUTSJUMPSTREET

CENTER


ASSET OVERVIEW

1994Year Built

100%Occupancy

61,302 SFGLA

4.75/1,000Parking Ratio

72,703VPD

WALMARTSUPERCENTER,

WINCO, STEINMART Neighbors

This single-story two-building Property is located in an extremely dense Glendale submarket and is currently 100% leased. Built in 1994, the Property is situated on a ±5.68 parcel with ample surface parking and tremendous visibility from Phoenix's busiest arterial, Bell Road.

The Property offers an opportunity for an investor to capitalize on the increasing market fundamentals fueled by the continued development in the submarket.

Located less than 3 miles east of the community of Arrowhead and Arrowhead Towne Center, the site offers exceptional regional access with close proximity to several of Phoenix's most important arterials, the Loop 101 Freeway and Interstate 17.

The Property benefits from excellent visibility, ingress and egress, ample parking and a large monument sign.

02

PROPERTYDESCRIPTION

NNNLease Type


SITE PLANPROPERTY

DESCRIPTION

NOT A PART




N 57TH AVENUE

W BELL ROAD


W BELL ROAD


Lease Expiration 2/28/2023

SF Leased 30,000

% of Total SF 49%

Ticker Symbol SFM

Website www.sprouts.com

Sprouts Farmers Market, Inc., is a publicly-traded health and wellness oriented grocery chain headquartered in Phoenix, Arizona with 321 stores diversified across 19 states. The company currently employees over 30,000 employees and plans to open 30 additional stores in 2019, including penetrating 3 new states, in addition to the 30 stores opened in 2018. Sprouts claims that 90% of products sold are minimally processed and free of artificial, preservative, and synthetic ingredients.

In 1943, Henry Boney began Sprouts' longstanding legacy of providing fresh, natural food available to anyone interested in eating well and spending less when he opened a San Diego fruit stand. Our company was founded by members of the Boney family, long-time San Diego grocers with a focus on making fresh foods affordable. Our founders opened the first Sprouts store in Chandler, Ariz. in 2002

with abundant produce and thousands of natural, organic and great-tasting foods at remarkably low prices. Our story continued with a period of rapid growth through acquisitions and new store development. In 2011, Sprouts joined with Henry's Holdings, which ran 35 Henry's Farmers Markets stores and eight Sun Harvest Market stores. A year later, Sprouts bought Sunflower Farmers Market, which ran 37 stores. Sprouts became a public company traded on the NASDAQ Stock Market in August, 2013. In recent years, we expanded into the Southeast by adding new stores in Georgia, Missouri, Alabama and Tennessee. Today, Sprouts is one of the fastest growing retailers in the country. Sprouts (New York Stock Exchange under “SFM”) employs more than 22,000 team members and operates more than 224 stores in 13 states from coast to coast. For more information, visit sprouts.com.

Please also view Bloomberg’s story on Sprout’s market growth: www.bloomberg.com/news/videos/b/fdbca187-47db-48ce-ba9a-76bf28804240

HIGHLIGHTS

1.4% Same Store Sales Growth (1Q 2019)

8.9% YOY Increase in Gross Profit ($444.6M in 1Q 2018 to $484.4M in 1Q 2019)

11.6% YOY Increase in Net Sales ($4.67B in FY 2017 to $5.21B in FY 2018)

03

TENANT PROFILES

TENANT OVERVIEW

AWARD ORGANIZATION YEAR

#3 Most Admired Companies (Food & Drug) Forbes 2019

#16 Most Popular Grocery Store YouGov.com 2019

#20 Hottest Retailers STORES / Kantar Consulting 2018

#40 Largest Employer in AZ Arizona Republic 2018


Lease Expiration 6/30/2020

SF Leased 31,302

% of Total SF 51%

Ticker Symbol n/a

Website www.gotjump.com

Tim Crawford, owner and designer, envisioned a place where everybody in the family can have fun. “I grew up never knowing of a place where kids could bounce off the walls without driving their parents crazy. Now they have that place, and the parents can even join them!”

In 2007, the dream became a reality with the opening of our first location in Thornton, CO. Since that time, we have expanded to locations across the country with more locations bouncing up everywhere! Jumpstreet has 15 locations in 7 states.

Jumpstreet offers you the chance to bond while bouncing around a 20,000 + square foot indoor trampoline park! Owner Tim Crawford’s concept has taken such hold that there are now sixteen

locations across Colorado, Arizona, Texas, Tennessee, and Georgia. Whether you’re a first-timer or an old pro, everyone is welcome to bounce around Jumpstreet’s trampoline wonderland. And there’s more than just standard trampolines. “My personal favorite activity at Jumpstreet is our trampoline dodge ball court,” says Kint. “It gives the game a new twist and encourages guests to work together as a team. No matter if your skill is throwing, dodging, or catching the balls, there is a chance for everyone involved to participate and have a good time” According to Kint, the dodgeball court is a favorite activity for corporate team-building events. As one might imagine, Jumpstreet frequently hosts birthday parties, with packages that even include cake and pizza. For adults, Jumpstreet’s late hours on Fridays and Saturdays mean that you can plan a unique date night or night out with friends.

Jumpstreet's gross sales at the subject location are extremely strong and have been steady since they opened for business. Please see agent for sale volume details and feel free to visit Jumpstreet’s company website for additional company information: www.gotjump.com

TENANT PROFILES


BUILDING ADDRESS 5665 West Bell Road, Glendale, AZ 85308

PRICE $11,900,000

CAP RATE 7.22%

NOI / ANNUALLY $858,593 (as of 7/24/2019)

TOTAL BUILDING AREA ±61,302

LAND AREA ±5.68 AC

YEAR BUILT 1994

FINANCING Free & Clear

04

FINANCIALSUMMARY

TENANT NAME RSF RENT ACTUAL

(MONTHLY)RENT ACTUAL

(ANNUAL)RENT PSF (PSF/YR)

RENT PSF (PSF/MO)

PRORATA SHARE

LEASE FROM

LEASE EXP LEASE TYPE NEXT

INCREASE

Sprouts 30,000 $48,603.33 $585,640.00 $19.52 $1.63 49% 03/01/2013 02/28/2023 NNN

Renewal Option

3/1/2023

Jumpstreet 31,302 $22,746.00 $272,593.00 $8.72 $0.73 51% 07/01/2016 06/30/2020 NNN

Renewal Option

7/1/2020

Total SF 61,302 $71,349.33 $858,593

RENT ROLL


FINANCIALSUMMARY

TENANT NAME RSF RENT ACTUAL

(MONTHLY)RENT ACTUAL

(ANNUAL)RENT PSF (PSF/YR)

RENT PSF (PSF/MO)

PRORATA SHARE

LEASE FROM

LEASE EXP LEASE TYPE NEXT

INCREASE

Sprouts 30,000 $48,603.33 $585,640.00 $19.52 $1.63 49% 03/01/2013 02/28/2023 NNN

Renewal Option

3/1/2023

Jumpstreet 31,302 $22,746.00 $272,593.00 $8.72 $0.73 51% 07/01/2016 06/30/2020 NNN

Renewal Option

7/1/2020

Total SF 61,302 $71,349.33 $858,593

TENANTSprouts Farmers Markets, LLC,an Arizona Limited Liability Company

PRIMARY LEASE TERMThe original 20 year lease commenced on October 29, 2002 and expires on February 28, 2023

PREMISESApproximately 30,000 square feet

MINIMUM ANNUAL RENTAL RATEPRIMARY TERM:

3/1/13 - 2/28/18: $532,4003/1/18 - 2/28/23: $585,640

TENANT’S MAINTENANCE AND REPAIR OBLIGATIONSExcept for the portion and components of the Premises to be maintained by Landlord, Tenant shall keep the Premises and all utility facilities and systems exclusively serving the Premises in good condition and repair and shall make all replacements necessary to keep the Premises and the Tenant utility facilities in such condition. Tenant shall also be obligated to maintain, repair and/or replace the HVAC systems servicing the Premises. Tenant shall also reimburse Landlord 100% of Landlord’s common area costs, including the cost of a property manager.

EXTENTION OPTIONS:Four (4) Five-Year Options Option Periods Rent Schedule:

3/1/23 – 2/28/28: $644,2043/1/33 – 2/28/33: $708,6243/1/38 – 2/28/38: $779,4863/1/38 – 2/28/43: $857,435


TENANTJumpstreet 4, LLCan Arizona Limited Liability Company

PRIMARY LEASE TERMThe original Lease commenced on August 1, 2010 and expires on June 30, 2020

PREMISESApproximately 31,302 square feet

ANNUAL RENTAL RATEPRIMARY TERM:7/1/2016 – 6/30/2017: $249,7907/1/2017 – 6/30/2018: $257,3027/1/2018 – 6/30/2019: $265,1287/1/2019 – 6/30/2020: $272,953

TENANT’S MAINTENANCE AND REPAIR OBLIGATIONSTenant shall at all times keep all portions of the Premises (not specified to be maintained by Landlord) including maintenance of exterior entrances, all glass and show windows and their moldings and all partitions, doors, door jambs, door closures, door hardware, fixtures, equipment and appurtenances thereof (including electrical, lighting, heating and plumbing, and plumbing fixtures, and any air condition systems, including leaks around ducts, pipes, vents, or other parts of the air conditioning, heating or plumbing systems which protrude through the roof) and any replacement thereof, in good order, condition and repair.

OPTIONS AND RENT SCHEDULE:One (5) Five-Year OptionOption 1: Rent shall be adjusted based on market rents


ARIZONA QUALITY OF LIFE BY THE NUMBERS5 MILE RADIUSat-a-glance

348,088Population

131,847Households

38.5Median Age

$64,582Median Income

$267,331Average HomeValue

300Residents in Arizona can take advantage of the outdoors thanks to more than 300 days of sunshine

325Improve your golf game at the more than 325 golf courses throughout the region

#1Arizona State University has been ranked the #1 most innovative university in the nation three years in a row

<25Spend more time outdoors, with your family or doing other things you enjoy with a less than 25-minute average commute time

33 public high schools in Arizona are ranked in the top 10 nationally

6The state of Arizona is home to 6 professional sports teams: NFL, MLB, NHL, NBA, WNBA and USL

3 MILE RADIUSat-a-glance

118,278Population

44,903Households

39.1Median Age


1 MILE RADIUSat-a-glance

11,084Population

3,753Households

41.9Median Age


GLENDALE DEMOGRAPHICS

05

AREAOVERVIEW




ARIZONA QUALITY OF LIFE BY THE NUMBERS

AREAOVERVIEW

G L E N D A L E

STATE FARM STADIUM

State Farm StadiumState Farm Stadium, formerly known as University of Phoenix Stadium, is a multi-purpose American football stadium located in Glendale, Arizona, west of Phoe-nix. It is the home of the Arizona Cardinals of the National Football League (NFL) and the annual Fiesta Bowl. It replaced Tempe's Sun Devil Stadium as the Valley of the Sun's main stadium. The stadium is adjacent to the Gila River Arena, home of the Arizona Coyotes NHL team.

Westgate Entertainment DistrictOffering a vibrant outdoor setting with unique water features, Westgate Enter-tainment District delivers an interactive shopping, dining and entertainment ex-perience. It is anchored by Gila River Arena, home of the Arizona Coyotes, and adjacent to the State Farm Stadium, home to the Arizona Cardinals.

WESTGATE ENTERTAINMENT DISTRICT

HERITAGE, ARTS, CULTURE

Glendale is a city with a diverse history that is treasured not only by its residents and community members, but also by the visitors who come and experience the roots of the city. Its his-tory provides the foundation of Glendale but many new cul-tural attractions are thriving, as well.

Glendale Civic CenterThe Glendale Civic Center, located in historic downtown Glen-dale, Arizona is the ideal destination for top-quality meetings and events in the valley. With over 40,000 square feet of flexible event space and on-site catering, the Glendale Civic Center can accommodate day conferences, meetings, tradeshows, gradua-tions and a variety of social events such as proms, weddings, and quinceaneras. Located just minutes away from Glendale’s Sports and Entertainment District and the Bell Road Corridor, it is the per-fect location for those that want to work, then play!

CIVIC CENTER


ARIZONA BILTMORE

DOWNTOWN PHOENIX

CENTRAL CORRIDOR

PHOENIX MOUNTAIN PRESERVE

CHASE FIELD

P H O E N I X

Arizona BiltmoreThis exclusive resort was built in 1929 and is set on 39 lush acres. Amenities in-clude 8 outdoor pools including a 92-ft waterslide and a swim-up bar, 7 tennis courts, 2 golf courses and 5 dining options along with a fitness center, kids camp and splaygound.

Phoenix Mountain PreserveThis park contains Piestewa Peak, the second highest point in the Phoenix moun-tain and third highest in the city of Phoenix. The Summit Trail is climbed thou-sands of times per week by locals and visitors seeking a great workout, great views, or a family outing.

Central Corridor / Downtown PhoenixJust 10 minutes away is the Central Corridor, a thriving restaurant and arts and culture scene with great access on the light rail. Just 15 minutes away is the heart of Phoenix with museums, major league sports, and an active prerforming arts scene.21 SPROUTS | JUMPSTREET • 5665 WEST BELL ROAD | GLENDALE

DAVID GUIDO


EXCLUSIVELY LISTED BY:

CORPORATE LICENSE #01355491

Newmark Knight Frank (the “Agent”) has been engaged as the exclusive sales representative for the sale of 234 East Bell Road (the ”Property”) by ‘Ownership’ (the “Seller”). The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

TIM WESTFALL


RYAN MORONEY

Associate Director+1 602 952 [email protected]

Documents

SPROUTS | JUMPSTREET NET LEASED INVESTMENT · 2019. 8. 13. · THE OFFERING Newmark Knight Frank (NKF), as exclusive advisor, is pleased to present the opportunity to acquire the