Walmart Neighborhood Market Ground Lease · The information contained in this marketing brochure (“Materials”) is proprietary and conﬁ dential. It is intended to be reviewed

Walmart Neighborhood Market Ground Lease

3302 Summerhill Road, Texarkana, Texas

OFFERING MEMORANDUM

In association with:

Ed Colson Jr., CCIM+1 858 546 5423

[email protected]

TX Lic #635820

Christopher Sheldon+1 415 677 0441

[email protected]

Lic #01806345

Andrew Bogardus+1 415 677 0421

[email protected]

Lic #00913825

Net Lease Investment Services


Walmart Neighborhood Market i

Disclaimer

The information contained in this marketing brochure (“Materials”) is proprietary

and confi dential. It is intended to be reviewed only by the person or entity receiving

the Materials from DTZ (“Agent”). The Materials are intended to be used for

the sole purpose of preliminary evaluation of the subject property/properties

(“Property”) for potential purchase.

The Materials have been prepared to provide unverifi ed summary fi nancial,

property, and market information to a prospective purchaser to enable it to

establish a preliminary level of interest in potential purchase of the Property. The

Materials are not to be considered fact. The information contained in the Materials

is not a substitute for thorough investigation of the fi nancial, physical, and market

conditions relating to the Property.

The information contained in the Materials has been obtained by Agent from

sources believed to be reliable; however, no representation or warranty is made

regarding the accuracy or completeness of the Materials. Agent makes no

representation or warranty regarding the Property, including but not limited to

income, expenses, or fi nancial performance (past, present, or future); size, square

footage, condition, or quality of the land and improvements; presence or absence

of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws

and regulations (local, state, and federal); or, fi nancial condition or business

prospects of any tenant (tenants’ intentions regarding continued occupancy,

payment of rent, etc). A prospective purchaser must independently investigate

and verify all of the information set forth in the Materials. A prospective purchaser

is solely responsible for any and all costs and expenses incurred in reviewing the

Materials and/or investigating and evaluating the Property.

By receiving the Materials you are agreeing to the Confi dentiality and Disclaimer

set forth herein.


Walmart Neighborhood Market ii

The Off ering

• Approximately 5.84 acres of land, ground leased to Walmart Neighborhood Market

for 20 years and guaranteed by Wal-mart Stores, Inc., beneath a brand new 42,452

square foot supermarket and 176 square foot fuel station built in 2014/2015.

The improvements were constructed and owned by the tenant.

• Price: $6,070,000 – 4.15% Cap Rate

Tenant / Lease

• Walmart Stores, Inc. is ranked #1 on the Fortune 500

• Walmart had revenues of $476 billion, net income of $16 billion and a total stockholders’

equity of $76 billion for the fi scal year ending January 2014

• S&P rated “AA” investment grade credit

• New 20 year ground lease with no landlord maintenance responsibilities

• Extremely attractive 10% rental increase in Year 11 and 5% rental increases every 5 years

starting in the options

Real Estate / Area Strengths

• Brand new construction

• Located at the northeast corner of Summerhill Road and College Drive

• Solid real estate intrinsics at $24 per square foot (land)

• Large lot size

• Summerhill Road is a major retail corridor in central Texarkana with solid traffi c counts

Investment Off ering & Highlights

SKF USA, Inc. 2Walmart Neighborhood Market ii

Disclaimer i

Investment Off ering & Highlights ii

Investment Overview 1

Walmart Neighborhood Market 2

Site Plan 3

Aerials 4

Location Map 6

Texarkana Area Map 7 Economy 8 Education 8 Transportation 9

Demographics 10

Table of Contents

In association with:

Ed Colson Jr., CCIM+1 858 546 5423

[email protected]

TX Lic #635820

Christopher Sheldon+1 415 677 0441

[email protected]

Lic #01806345

Andrew Bogardus+1 415 677 0421

[email protected]

Lic #00913825



Location 3302 Summerhill Road, Texarkana, Texas

Lot Size Approximately 5.84 acres – 254,390± square feet

Improvements Completed in 2014/2015, a 42,452± square foot single story retail building and

176 square foot fuel station for WALMART NEIGHBORHOOD MARKET.

• The improvements are built and owned by the tenant. The improvements are

not for sale.

Lease Leased to WAL-MART REAL ESTATE BUSINESS TRUST dba WALMART

NEIGHBORHOOD MARKET, and guaranteed by WAL-MART STORES, INC., for

20 years from January 2015 until January 2035. The annual net rent of $251,889

increases by 10% in Year 11. The lease is triple net with the tenant responsible

for all taxes, insurance and maintenance, including roof and structure. There are

fi fteen 5-year options to renew with 5% increases in each option.

Rent Per Square Foot $5.93 net per year – $0.49 net per month (as applied to building)

Financing The property will be delivered free and clear of permanent fi nancing.

Annual Rent

Price: $6,070,000 – 4.15% Cap Rate

Years Annual Rent Return

1 - 10 $251,889 4.15%

11 - 20 $277,078 4.56%

21 - 25 (Option 1) $290,932 4.79%

26 - 30 (Option 2) $305,478 5.03%

31 - 35 (Option 3) $320,752 5.28%

36 - 40 (Option 4) $336,790 5.55%

41 - 45 (Option 5) $353,629 5.83%

46 - 50 (Option 6) $371,311 6.12%

51 - 55 (Option 7) $389,876 6.42%

56 - 60 (Option 8) $409,370 6.74%

61 - 65 (Option 9) $429,839 7.08%

66 - 70 (Option 10) $451,331 7.44%

71 - 75 (Option 11) $473,897 7.81%

76 - 80 (Option 12) $497,592 8.20%

81 - 85 (Option 13) $522,472 8.61%

86 - 90 (Option 14) $548,595 9.04%

91 - 95 (Option 15) $576,025 9.49%

Investment Overview


Walmart Neighborhood Market

WALMART NEIGHBORHOOD MARKET, a subsidiary of WAL-MART STORES, INC., (NYSE: WMT), is a chain of grocery stores launched by Walmart in 1998. With

over 286 Neighborhood Markets in the United States, they feature a wide variety of

products, including fresh produce, deli foods, fresh meat and dairy items, health and

beauty aids, one-hour photo and traditional photo developing services, drive-through

pharmacies, stationery and paper goods, pet supplies, and household chemicals. The

Neighborhood Market is Walmart’s smaller grocery concept which gives customers

a more convenient shopping experience than the typical Walmart Supercenter. The

Supercenter is typically 160,000 square feet and in contrast the Neighborhood Market

is approximately 40,000 square feet and has a fuel center for increased convenience.

Walmart’s strategy is to open another 270 of these small-format stores and have a

total of 500 operating by early 2015.

For the fi scal year ended January 31, 2014, Wal-Mart Stores, Inc., reported total

revenue of $476 billion, net income of $16.02 billion and stockholder’s equity of

$76.25 billion.

Additional information can be found at www.walmart.com.

WAL-MART STORES INC., GUARANTEES THE LEASE.



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ELLIS POTTERYELLIS POTTERY



TEXARKANATEXARKANACOLLEGECOLLEGE

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The property is located at 3302 Summerhill Road

at College Drive, 1½ miles southeast of Interstate

30, 1.2 miles north of New Boston Road (Highway

82), and 3.3 miles east of Interstate 369.

National and regional tenants in the local area

include CVS, Subway, McDonald’s, Arby’s,

Walgreens, Hobby Lobby, Albertsons, Ross Dress

for Less, Golden Corral, Wells Fargo, Lowe’s,

Walmart Supercenter, Academy Sports, Ashley

Furniture HomeStore, GameStop, Dollar General,

Olive Garden, Home Depot, Starbucks, Kohl’s,

Best Buy, Big Lots, AutoZone, Whataburger, Sonic

Drive-In, and Books-A-Million.

Location

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TEXARKANA303000303030


Location



Texarkana

Texarkana (population 36,411) is located in Bowie County at the Texas-Arkansas state

border. Together with neighboring Texarkana, Arkansas, it forms the Texarkana, TX-

Texarkana, AR MSA with a total population of 143,486.

Texarkana is approximately 72 miles north of Shreveport, LA, 145 miles west of Little

Rock, AR, and 178 miles east of Dallas.

Economy

Texarkana has a diversifi ed economy based in regional agricultural processing, retail, wholesale and service center.

Major employers in the area include:

• Red River Army Depot • Wal-Mart

• Christus St. Michael Health Care • International Paper

• Cooper Tire & Rubber Company • Wadley Regional Medical Center

• Domtar

RetailTexarkana is home to a retail shopping area that services over 300,000 people. Shopping centers are located along State Line Avenue, in historic Downtown Texarkana, and the central business district of Texarkana.

Central Mall, located on Richmond Road, features many stores and restaurants including JCPenney, Sears, Dillard’s, Hibbett Sports, Bath & Body Works, Aeropostale, Bealls, Brick House Burgers, Claire’s, and Chuck E. Cheese’s.

Richmond Ranch Shopping Center, located directly west of Richmond Road, is conveniently located on the north side of I-30. Anchor stores include Kohls, Target, PetSmart, Home Depot. Other tenants include Starbucks Coff ee, Smashburger, and Chick-Fil-A.

Town West Shopping Center, located off Richmond Road, across from Central Mall, Town West Shopping Center has several local specialty shops and stores. Other stores located in Town West Shopping Center include Ross, Hobby Lobby, Albertsons, and Wally’s Party Factory, a party supply store.

Texarkana Pavilion, located at the northeast corner of I-30 and US-59. Tenants include TJ MAXX, Shoe Carnival, Old Navy, Bed Bath & Beyond, Lane Bryant, Staples, Best Buy, and Cinemark.

West Park Plaza, located along North I-30 frontage, features several stores/shops, along with a steakhouse. Businesses include Laff erty’s Home Center, Dogpatch Pet Shop, Golf USA, and Osaka Japanese Steakhouse.

Education

Texarkana is home to Texas A&M University-Texarkana (also known as Texarkana A&M) and Texarkana College.

Texarkana A&M is a four-year branch of the Texas A&M University System off ering career-oriented studies, awarding undergraduate, graduate and doctoral degrees in the areas of business administration, arts and sciences, technology, engineering, mathematics and education.

Texarkana College is a community college off ering over 60 degrees and certifi cates in Health Sciences, Liberal and Performing Arts and Workforce Education, among many other areas of study.


Texarkana (continued)

Transportation

HighwaysTexarkana is bisected by Interstate 30 (I-30) which runs east to west connecting Little Rock, AR (at I-40) with Fort Worth Texas (at I-20). The Loop consists of Interstate 49 (I-49) and US Highway 151 (Hwy 151) in Arkansas and Interstate 369 (I-369) and US Highway 59 (Hwy 59) in Texas. I-30 completes the north portion of the Texarkana Loop, a beltway around the Texarkana area connecting Arkansas and Texas.

RailThe Texarkana area is serviced by the Texarkana Union (Amtrak) Station located in downtown Texarkana along the state line. Amtrak provides daily service to the Texarkana area connecting it west to Los Angeles via Dallas, San Antonio, and El Paso and east to Chicago via Little Rock and St. Louis.

Public TransportationThe Texarkana Urban Transit District (T-Line) is the primary provider of mass transportation in Texarkana metropolitan area. The T-Line provides bus transportation to major areas of town along nine diff erent routes in Texarkana, Texas and Arkansas.

AirThe Texarkana area is serviced by the Texarkana Regional Airport (TXK) located just off E. Broad Street (US Hwy 67) in Texarkana, Arkansas. TXK off ers daily fl ights connecting to Dallas-Fort Worth International Airport through American Airlines.

Dallas-Fort Worth International Airport (DFW) is the nearest international airport, located 200 miles west of Texarkana. DFW is the largest hub and headquarters for American Airlines. It is the largest airport in Texas and the second largest in the United

States. DFW off ers services to over 200 destinations worldwide.

Amtrak Texas Eagle



Demographics

2014 Summary 1 miles 3 miles 5 miles

Population 8,842 47,072 77,011

Households 3,616 19,246 30,131

Families 2,116 11,611 19,187

Average Household Size 2.43 2.32 2.41

Owner Occupied Housing Units 1,394 9,169 15,697

Renter Occupied Housing Units 2,222 10,077 14,434

Median Age 32.7 35.8 36.5

Median Household Income $33,511 $37,806 $39,618

Average Household Income $46,244 $52,713 $55,497

2019 Summary

Population 8,947 47,698 78,137

Households 3,649 19,512 30,619

Families 2,125 11,705 19,405

Average Household Size 2.43 2.32 2.41

Owner Occupied Housing Units 1,395 9,204 15,883

Renter Occupied Housing Units 2,254 10,308 14,736

Median Age 33.3 36.5 37.2

Median Household Income $37,553 $42,776 $45,344

Average Household Income $53,073 $60,523 $64,112

Trends: 2014-2019 Annual Rate

Population 0.24% 0.26% 0.29%

Households 0.18% 0.27% 0.32%

Families 0.08% 0.16% 0.23%

Owner Households 0.01% 0.08% 0.24%

Median Household Income 2.30% 2.50% 2.74%


Documents

Walmart Neighborhood Market Ground Lease · The information contained in this marketing brochure (“Materials”) is proprietary and conﬁ dential. It is intended to be reviewed