19
KENTUCKY FRIED CHICKEN OFFERED AT: $1,864,400 | 5.90% CAP INVESTMENT OPPORTUNITY 180 N WHITE MOUNTAIN RD SHOW LOW, AZ
KENTUCKY FRIED CHICKEN
OFFERED AT:$1,864,400 | 5.90% CAP
INVESTMENT OPPORTUNITY
180 N WHITE MOUNTAIN RDSHOW LOW, AZ
Ryan Barr Ryan Bennett Al ApuzzoPrincipal Principal Principal760.448.2446 760.448.2449 [email protected] [email protected] [email protected]
This property is listed in conjunction with Lee & Associates Arizona Commercial RE Services, LLC (AZ BR017922000) for out of state licensing purposes.
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• TABLE OF CONTENTS ••
PAGE 2
EXECUTIVE SUMMARY4 Executive Summary5 Investment Highlights6 Rent Roll7 Lease Abstract8 PROPERTY INFORMATION9 Location Maps10 Overhead View11 Looking North12 Looking East13 Looking South14 Looking West
TENANT OVERVIEW16 Tenant Profile
AREA INFORMATION18 About Show Low19 Demographics Map
Confidentiality & DisclaimerLee & Associates hereby advises all prospective purchasers of Net-Leased Investment property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Lee & Associateshas not and will not verify any of this information, nor has Lee & Associates conducted any investigation regarding these matters. Lee &Associates makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of an investment property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of allmaterial information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligenceinvestigation of this investment opportunity. Lee & Associates expressly denies any obligation to conduct a due diligence examination of thisProperty for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do notrepresent the current or future performance of this property. The value of an investment property to you depends on factors that should beevaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct acareful, independent investigation of any investment property to determine to your satisfaction with the suitability of the property for yourneeds.
Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request andcarefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or otherlocations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, includingnewly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actualperformance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent orproperty 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/herown investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood oflocating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able tonegotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of theproperty.
By accepting this Marketing Brochure you agree to release Lee & Associates and hold it harmless from any kind of claim, cost, expense, orliability arising out of your investigation and/or purchase of this investment property.
Arizona Market ExpertSean Bishop, CCIM [email protected]
EXECUTIVESUMMARY
Sale Price: $1,864,400
Cap Rate: 5.90%
NOI: $110,000
Tenant: Stewart & Bros. Properties LLC(See Pg 16)
Guarantor: Personal
Price / SF: $730
Lease Term: 20 Yrs (19 Remaining)
Year Built: 1985
Building Size: 2,554 SF
Lot Size: 24,394 SF
Lease Type: Absolute Triple-Net (NNN)
LL Responsibilities: None
-- OFFERING SUMMARY -- -- PROPERTY OVERVIEW --
Lee & Associates is pleased to exclusively offer for sale to qualified investors the opportunity to purchase a 100% fee-simple interest in a Kentucky Fried Chicken (“KFC”) property located at 180 N. White Mountain Rd in Show Low, Arizona. There are 19 years remaining on the on KFC’s 20-year triple-net (NNN) lease with (4) five-year renewal options. The lease features annual rent increases of 1.5% throughout the Primary term and the Option Periods.
Built in 1985, the Property consists of a 2,554 square foot retail building that sits on an approximately 24,394 square foot parcel and is leased to KFC on a long-term triple-net (NNN) lease. KFC is owned by Yum! Brands, Inc., and is the world’s most popular chicken restaurant chain with over 20,500 KFC outlets in more than 125 countries and territories around the world. Headquartered in Louisville, Kentucky, YUM! Brands, Inc. reported a company revenue of $6 billion in 2016.
The subject property is located along White Mountain Rd/SR 260, which is the main corridor in/out of Show Low. The site offers excellent visibility to 19,000 cars per day and offers a hard corner location for easy in/out access. The site offers excellent retail synergy with neighboring tenants including McDonald’s, Jiffy Lube, Chase Bank, Washington Federal Bank, Cattlemen’s Steakhouse, White Mountain Donuts, Domino’s Pizza, and more.
The property is located in Show Low, which is the largest city in the White Mountains of northeastern Arizona and one of the fastest growing cities in northern Arizona. It is the gateway to Arizona’s White Mountains, which is a year-round destination for Arizona’s desert residents as well as visitors from around the country. Show Low is also the business hub and marketing center of the area, and is recognized for its abundant water supply, dynamic workforce, competitive power rates and modern telecommunications infrastructure.
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• EXECUTIVE SUMMARY ••
PAGE 4
KENTUCKY FRIED CHICKEN (S&P: BB) • GLOBALLY RECOGNIZED TENANTKentucky Fried Chicken (“KFC”), is the world’s most popular chicken restaurant chain with over 20,500 KFC outlets in more than 125 countries and territories around the world. Headquartered in Louisville, Kentucky, KFC is owned by Yum! Brands, Inc., which also owns Pizza Hut and Taco Bell and reported a company revenue of $6 billion in 2016.The Franchisee is a successful KFC Operator with over 86 KFC locations in 12 states. The Franchisee has been in the KFC System for over 23 years and is recognized as a Preferred Growth Partner with KFC Corporate (see Tenant Profile p. 16).
LONG TERM ABSOLUTE NNN LEASE • 1.5% RENT INCREASESThe original 20 year lease has 19 years remaining and features 1.5% annual rent increases in the Primary term as well as throughout the (4) 5 year Option Periods. In addition, the triple-net (NNN) lease provides an investor with zero landlord responsibilities.
EXCELLENT VISIBILITY & SIGNAGE ALONG WHITE MOUNTAIN RD/SR 260The subject property is located along White Mountain Rd/SR 260, which is the main corridor carrying travelers/commuters through Show Low to the White Mountains and beyond to Phoenix and Flagstaff and offers excellent visibility & signage to 19,000 cars per day.
STRONG RETAIL SYNERGY WITH NEARBY RETAILERS/BUSINESSESThe subject property has excellent retail synergy with neighboring retailers including McDonald’s, Pizza Factory, Chase Bank, Cattlemen’s Steakhouse, White Mountain Donuts, Domino’s Pizza, Little Caesar’s, Jiffy Lube and more.
LOCATED IN SHOW LOW, ONE OF THE FASTEST GROWING CITIES IN NORTHERN ARIZONAThe subject property is located in the town of Show Low, which is the largest city in the White Mountains of northeastern Arizona and one of the fastest growing cities in northern Arizona. Show Low is the business hub and marketing center of the area, and is recognized for its abundant water supply, dynamic workforce, competitive power rates and modern telecommunications infrastructure.
PROXIMITY TO WHITE MOUNTAINS AND APACHE/SITGREAVES NATIONAL FORESTShow Low is the gateway to Arizona’s White Mountains, the Apache/Sitgreaves National Forest, and the Fort Apache Reservation. The area offers hiking and biking and is world famous for its world class hunting and fishing opportunities. Ski buffs trek to Arizona’s premier skiing destination, Sunrise Park Resort, located just 36 miles from town.
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• INVESTMENT HIGHLIGHTS ••
PAGE 5
PRIMARY TERM - 8% Increases Every 5 Years
TENANT SIZE (SF) LEASE START LEASE END ANNUAL RENT RENT/MO $/SF/YR $/SF/MO
KFC 2,554 11/1/2017 10/31/2022 $110,000.00 $9,166.67 $43.06 $3.59
11/1/2022 10/31/2027 $118,800.00 $9,900.00 $46.51 $3.87
11/1/2027 10/31/2032 $128,304.00 $10,692.00 $50.23 $4.18
11/1/2032 10/31/2037 $138,568.32 $11,547.36 $54.25 $4.52
OPTION PERIODS - (4) 5-YEAR OPTIONS - 8% Increases Every 5 Years
OPTION PERIOD LEASE START LEASE END ANNUAL RENT RENT/MO $/SF/YR $/SF/MO
Option 1 11/1/2037 10/31/2042 $149,653.78 $12,471.15 $58.60 $4.88
Option 2 11/1/2042 10/31/2047 $161,626.08 $13,468.84 $63.28 $5.27
Option 3 11/1/2047 10/31/2052 $174,556.16 $14,546.35 $68.34 $5.70
Option 4 11/1/2052 10/31/2057 $188,520.65 $15,710.05 $73.81 $6.15
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• RENT ROLL ••
PAGE 6
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• LEASE ABSTRACT ••
PAGE 7
Property Taxes Lessee shall promptly pay when due all real property taxes assess or levied against the Leased Premises and shall provide written notice of such payment to Lessor.
Insurance Lessee shall be responsible for payment of all insurance coverage on the Property.
Utilities Lessee shall be responsible for payment of all utility bills used on the Leased Premises.
Landlord Repairs/Maintenance None
Tenant Repairs/Maintenance Lessee shall be responsible for all costs and operating expenses on the Leased Premises and, except as otherwise provided herein, each and every obligation that may arise or be related to the Leased Premises shall be performed by Lessee at its sole cost and expense.
Termination Right N/A
Right of First Offer/Right of First Refusal N/A
Estoppel Certificate Upon the request by Lessor, Lessee will execute, acknowledge, and deliver to Lessor an estoppel certificate or other statement in writing certifying the terms of the Lease.
PROPERTYINFORMATION
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• LOCATION MAPS ••
PAGE 9
PAGE 10
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• OVERHEAD VIEW ••
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• LOOKING NORTH ••
PAGE 5
* Est Opening October 2018
Proposed Future Retail Development
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• LOOKING EAST ••
PAGE 5
* Est Opening October 2018
Proposed Future Retail Development
PAGE 13
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• LOOKING SOUTH ••
PAGE 14
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• LOOKING WEST ••
TENANTOVERVIEW
ABOUT THE OPERATORThe subject property is operated by an experienced franchisee (operated under multiple store entities), with locations in AZ, CA, OR, MT, NM, MN, SD, ID, WY, ND, CO, and WA. The subject property is leased to Stewart Bros. Properties, LLC, dba Kentucky Fried Chicken on a long-term absolute triple-net (NNN) lease.
• 86 Total Stores Operated by Franchisee in 12 States• Preferred Growth Partner with KFC Corporate• Franchisee has 23+ Years Experience with YUM! Brands• 7 KFC Stores Total with Stewart Bros Properties, LLC
(McMinnville OR, Alamogordo NM, Clovis NM, Hobbs NM, Pinetop AZ, Show Low AZ, Nogales AZ)• #1 Franchisee - Large Operator in KFC System in 2016
KFC / YUM! BRANDS, INC. OVERVIEWKFC is a subsidiary of YUM! Brands, Inc. (NYSE: YUM), the largest restaurant company in the world with KFC, Pizza Hut, Taco Bell, and WingStreet under its umbrella of fast-food and fast-casual brands. Yum! Brands, Inc., based in Louisville, Kentucky, has over 43,500 restaurants in more than 135 countries and territories and is one of the Aon Hewitt Top Companies for Leaders in North America. In 2017, Yum! Brands was named among the top 100 Best Corporate Citizens by Corporate Responsibility Magazine. The Company’s restaurant brands – KFC, Pizza Hut and Taco Bell – are the global leaders of the chicken, pizza and Mexican-style food categories. Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development.
Yum! Brands is ranked number 218 on the Fortune 500 list, with revenues exceeding $6 billion in 2016.
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• TENANT PROFILE ••
PAGE 16
AREAINFORMATION
ABOUT SHOW LOWShow Low was named after a marathon poker game played between two early settlers. They decidedthere wasn’t enough room for both of them in the community and agreed to let a game of cardsdecide who was to get the 100,000 acre ranch and who was to move on. According to the story, oneof them said, “If you can show low, you win.” The other one turned up the deuce of clubs and replied,“show low it is.” Show Low got its name from that card game and Show Low’s main street is named“Deuce of Clubs” in remembrance.
Show Low is now the largest city in the White Mountains of northeastern Arizona and is one of thefastest growing cities in northern Arizona. Show Low is also the business hub and marketing centerof the area. The city proper has a population of about 11,000 residents, but, Show Low’s trade areapopulation numbers over 130,000. Seasonal spikes in the population from tourism activity and thesecond home market causes the trade area population to swell to well over 150,000. Show Low isexperiencing dynamic growth as its population has increased over 41% since 2000.
Show Low's economy is diverse, with major industries consisting of healthcare, retail, distribution,telecommunications, energy, and aeronautics. Major employers include Summit Healthcare RegionalMedical Center, the State of Arizona, Northland Pioneer College, Show Low Unified School District,Walmart, and Frontier Communications.
Show Low is the gateway to Arizona’s White Mountains and the recreational activities it has to offer.The area is famous for its world class hunting and fishing opportunities. Skiing buffs can takeadvantage of Arizona’s premier skiing destination, Sunrise Park Resort, located a short 36 miles fromShow Low and offering 65 runs and 10 chair lifts.
Show Low is rich in natural resources and is primed for investment. Because it is surrounded by2 million acres of National Forests, Show Low is very proactive in forest management and has avirtually endless supply of available biomass for manufacturing of value-added forest products. ShowLow is also located in close proximity to one of the largest potash deposits in North America and sitsatop one of the largest aquifers in the western United States. The lands around Show Low arealso favorable to solar and wind power generation.
PAGE 18
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• ABOUT SHOW LOW ••
PAGE 19
POPULATION 1 MILE 5 MILES 10 MILES
Total population 1,621 14,377 27,021
Median age 40.1 41.0 41.9
Median age (male) 39.9 40.9 40.7
Median age (Female) 40.4 41.3 42.4
HOUSEHOLDS & INCOME 1 MILE 5 MILES 10 MILES
Total households 668 5,968 11,032
# of persons per HH 2.4 2.4 2.4
Average HH income $49,666 $50,588 $54,874
Average house value $174,309 $174,225 $197,771
* Demographic data derived from 2010 US Census
KFC180 N White Mountain Rd, Show Low, AZ 85901
•• DEMOGRAPHICS MAP ••
