LAKEWOOD SQUARE SUM - RETAIL CENTERMARY · 2018. 9. 26. · This Marketing Brochure has been...

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SUM-MARY

LAKEWOOD SQUARE RETAIL CENTER

OFFERING MEMORANDUM

6010 Mount Tacoma Drive SW Lakewood, WA 98499

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N O N - E N D O R S E M E N T & D I S C L A I M E R N O T I C E

C O N F I D E N T I A L I T Y & D I S C L A I M E RThe 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 and should 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, unverified information 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 due diligence 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, the future 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 or asbestos, 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 any tenant'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 matters and 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 of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate

Investment Services, Inc.

© 2018 Marcus & Millichap. All rights reserved.

N O N - E N D O R S E M E N T N O T I C EMarcus & 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 name is 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, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information

about this listing to prospective customers.

A L L P R O P E R T Y S H O W I N G S A R E B Y A P P O I N T M E N T O N L Y.

OFFICES THROUGHOUT THE U.S. AND CANADAwww.marcusmillichap.com

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CHRISTOPHER R. SECRETO MARY KATE TORMEYSenior Vice President Investments Marketing Coordinator

Office: (206) 826-5748 Office: (206) 826-5760Cell: (206) 612-4399 Cell: (509) 954-6179

[email protected] [email protected]: WA 24660, ID SP 38004


O F F E R E D B Y:

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EXECUTIVESUMMARY

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INVESTMENTOVERVIEW

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EXECUTIVE SUMMARY

6010 Mount Tacoma Drive SWLakewood, WA 98499

Rentable Square Feet 53,717

Number of Suites 12

Lot Size (Approximately) 4.05 AC

Year Built / Renovated / Expanded 1957 / 1964 / 1976 / 1978

PRICE: $4,750,000CAP RATE: 6.75%

Net Operating Income $320,843

Price per NRSF $88.43

Cash-on-Cash Return 6.15%

Cap Rate @ 90% Occupancy 8.46%

Cash-on-Cash Return @ 90% Occupancy 11.84%

Vital Data

Loan Amount $3,325,000

Interest Rate 5.00%

Amortization (Yrs) 25

Monthly Payment $19,437.62

DCSR 1.38

Financing Summary

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SUMMARY OF TERMS Fee simple interest in Lakewood Square Retail Center, a 53,717 square-foot retail center located in Lakewood, WA.

TERMS OF THE SALELakewood Square Retail Center is offered at $4,750,000

based on a capitalization rate of 6.75%. The net operating income figures for the Property assume a fiscal year

starting September 1, 2018. Seller will respond to offers on a first-come, first-serve basis.

PROPERTY TOURS Seller desires to limit property tours. Property tours must be arranged with the Marcus & Millichap listing agents.

Please do not contact the tenants, on-site management or staff without prior approval.

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Marcus & Millichap is pleased to offer for sale Lakewood Square Retail Center located in Lakewood, WA. The Property is offered at $4,750,000.

The Property is offered at a 6.75% cap rate against current income and expenses. At $88.43 per square foot, the Property is offered below replacement cost.

The Property consists of 53,717 square feet of leasable area of retail, office and warehouse space combined. It is comprised of three retail buildings, one flex warehouse/office building and one coffee kiosk building and is currently configured into 12 tenant suites.

The site is 4.05 acres and is accessible from Bridgeport Way, 59th Avenue SW, Mt Tacoma Drive SW and Lake Grove Street SW. It is in the Central Business District zoning district of Lakewood which is the primary retail, office, social, urban residential and government center of the City.

Current tenants include Goodwill Industries with a retail store and donation center who has been a tenant since 2004. The remaining tenants are primarily local small retail businesses.

The Property is 72% occupied by square feet. Tenants pay monthly rent plus reimbursements to the landlord for common area expenses including pro rata real estate taxes, insurance, utilities, landscaping, maintenance, HVAC and property

management.

Built in the 1960s, the buildings are single-story, wood-frame structures on

concrete slabs. Roofs are flat with primarily hot-tar protective membrane roofing

system. The three retail buildings are serviced by roof-top HVAC packs.

INVESTMENT OVERVIEW The site is fully-paved with asphalt. There are approximately 150

striped parking stalls making 3 stalls per 1,000 square feet of space.

The main retail building occupied by Goodwill is fire protected with

a fire sprinkler system as is the vacant suite adjacent to it. The

remaining buildings are protected with fire extinguishers.

The Property would appeal to an experienced retail investor who could

rehab, re-position and re-lease the space at higher average rents.

It would also appeal to a developer seeking a TOD opportunity. The

Property is located along main transit corridors near bus lines. It is

also within short walking distance to other residential and commercial

development and employment centers making it an attractive potential

mixed-use development.

• Multi-Tenant Retail Offering• Potential Transit Oriented Development (TOD)• Located in the Central Business District within the City of

Lakewood• Over 4 Acres Near the Intersection of Bridgeport Way and

Gravelly Lake Drive• Goodwill is the Anchor Tenant• 72% Occupied by GLA• Offered at $88 per SF• Value-Add Opportunity for Rehab, Re-Positioning, Re-Leasing • Seattle/Tacoma is the 14th Largest MSA with 3.8 Million Area

Residents

Highlights

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PROPERTY INFRASTRUCTURE

FOUNDATIONCONCRETE

FRAMINGWOOD

EXTERIOR WALLS

WOOD PARKING

APPROX. 150 ROOF

FLAT, HOT TAR

Property Lakewood Square Retail Center

Property Address 6010 Mount Tacoma Drive SW, Lakewood, WA, 98499

Assessor’s Parcel #(s) 0219022226, 0219022077

Zoning

GLA 53,717

Type of Ownership Fee Simple

Number of Buildings 3 Retail, 1 Warehouse and 1 Coffee Kiosk

Number of Suites 12

Number of Stories 1

Street Frontage Bridgeport Way

Cross Street Mount Tacoma Dr

Land for Additional Development No

Climate Control HVAC

Fire Protection Main Bldg - Sprinklered, Other Bldgs - Fire Extinguishers

Elevators None

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MT TACOMA DR SW

GRAVELLY LAKE DR SW

2017 5-MILE POPULATIONOVER 220,000

AERIAL MAP

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S U B J E CTTOTAL SITE SF : 176,221

18,276 CARS PER DAY

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TENANT MAP

G = Goodwill

P = Life Northwest

V = Vacant

Warehouse = Classic Reflection Coachworks

Balloon Masters

A / B = Musead Gaid

C / D = Issac Ethers

Coffee = Anna Eskins

E = Vacant

F = Issac Ethers

Vacant

A / B / C / D / E / F

(Apartment Building Coming Soon)

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PROPERTY PHOTOS

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FINANCIALANALYSIS

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RENT ROLL

UNIT TENANT UNIT SIZE

PRO RATA SHARE

BASE RENT RENT/SF ESTATE TAXES

INSURANCE CAM TOTAL REIMB.

REIMB. / SF

EFFECTIVE TOTAL RENT

MONTHLY RENT/SF

ANNUAL RENT/SF

RENT ESCALATION

START DATE

EXPIRATION DATE

A / B Musaed Gaid2,400 4.47% $1,950.00 $0.81 $0.00 $0.00 $364.50 $364.50 $0.15 $2,314.50 $0.96 $11.57 W 2/1/2017 2/28/2022

C / D Salon Mairead2,340 4.36% $1,867.00 $0.80 $0.00 $0.00 $496.67 $496.67 $0.21 $2,363.67 $1.01 $12.12 11/1/2018 11/1/2017 11/30/2022

Coffee Anna Eskins250 0.47% $1,750.00 $7.00 $0.00 $0.00 $0.00 $0.00 $0.00 $1,750.00 $7.00 $84.00 7/5/2016 7/31/2021

E Vacant5,054 9.41% $3,850.00 $0.76 $0.00 $0.00 $0.00 $0.00 $0.00 $3,850.00 $0.76 $9.14

F Isaac Gethers4,200 7.82% $4,200.00 $1.00 $0.00 $0.00 $1,088.75 $1,088.75 $0.26 $5,288.75 $1.26 $15.11 6/7/2016 6/30/2019

G Goodwill20,817 38.75% $21,888.14 $1.05 $0.00 $0.00 $4,900.00 $4,900.00 $0.24 $26,788.14 $1.29 $15.44 7/1/2004 6/30/2019

P Life Northwest1,696 3.16% $1,200.00 $0.71 $0.00 $0.00 $342.00 $342.00 $0.20 $1,542.00 $0.91 $10.91 12/31/2018

V Vacant9,760 18.17% $5,500.00 $0.56 $0.00 $0.00 $0.00 $0.00 $0.00 $5,500.00 $0.56 $6.76

Warehouse Classic 3,600 6.70% $750.00 $0.21 $0.00 $0.00 $0.00 $0.00 $0.00 $750.00 $0.21 $2.50 4/1/2009 MTM

Balloon Masters3,600 6.70% $935.43 $0.26 $0.00 $0.00 $280.00 $280.00 $0.08 $1,215.43 $0.34 $4.05 8/1/2014 MTM

12 53,717 100% $43,890.57 $0.00 $0.00 $7,471.92 $7,471.92 $0.14 $51,362.49 $0.96 $11.47

Expense (CAM) Recapture

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OPERATING STATEMENTS

Income Current Analysis Pro Forma Analysis

Gross Potential Rent $526,687 $526,687

Less Vacancy Deductions $112,184 $52,669

Other Income $95,000 $120,000

Effective Gross Income $509,503 $594,018

Operating Expenses $188,660 $192,040

Net Operating Income $320,843 $401,978

Annualized Operating Data

Expenses Current Analysis Pro Forma Analysis

General & Administrative $5,000 $5,000

Insurance $17,000 $17,000

Management/Legal/Accounting $20,380 $23,761

Repairs & Maintenance / Supplies $53,717 $53,717

Property Taxes $60,563 $60,563

Utilities $32,000 $32,000

Total Operating Expenses $188,660 $192,040

Operating Expenses

Income

1. Current Effective Gross Income (EGI) based on 21% actual economic vacancy as of July 1, 2018. Gross Potential Rent based on Unit Mix and Asking Rents Effective July 1, 2018.

3. Pro Forma rental income based on 12-month forward lease flow.

4. Pro Forma rental income based on 10% economic vacancy.

Expenses

1. G&A budgeted at $5,000 per year.

2. Insurance based on 2017 actuals.

3. Management fee = 4% of EGI.

4. R&M and supplies budgeted at $1.00 per NRSF.

5. 2019 Assessed Value = $4,564,300. Real estate taxes adjusted upon sale to 85% of list

price x 1.5%.

6. Utilities based on 2016-2018 actuals.

2. 2017 Actual EGI = $503,861

2016 Actual EGI = $429,924

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SALES COMPARABLES

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I N S E R T R E N T C O M PA R A B L E S M A P H E R E

L A K E W O O D S Q U A R E

R E T A I L C E N T E R

SALES COMPARABLES MAP

L A K E W O O D S Q U A R E R E T A I L C E N T E R 6010 Mount Tacoma Drive // Lakewood, WA 98499

OUTBACK PLAZA 3121 S 38th St reet - Bu i ld ing B / / Tacoma, WA 98409

JAMES CENTER NORTH 1610 - 1618 S Mi ldred St reet / / Tacoma, WA 98465

PACIFIC AVENUE CENTER9820 - 9830 Pac i f ic Avenue / / Tacoma, WA 98444

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L A K E W O O D S Q U A R E R E T A I L C E N T E R 6010 Mount Tacoma Drive // Lakewood, WA 98499

List Price $4,750,000

Year Built / Expanded / Renovated 1957 / 1964 / 1976 / 1978

NRSF 53,717

Price per SF $88.43

Cap Rate 6.75%


OUTBACK PLAZA 3121 S 38th St reet - Bu i ld ing B / / Tacoma, WA 98409

Sale Price $5,250,000

Sale Date June 2018

Year Built 1972

NRSF 46,246

Price per SF $113.52

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JAMES CENTER NORTH 1610 - 1618 S Mi ldred St reet / / Tacoma, WA 98465


Sale Date October 2017

Year Built 1986

NRSF 61,033

Price per SF $97.49

2 PACIFIC AVENUE CENTER9820 - 9830 Pac i f ic Avenue / / Tacoma, WA 98444


Sale Date February 2018

Year Built 1966

NRSF 40,546

Price per SF $138.11

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MARKETOVERVIEW

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DEMOGRAPHICS

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The Property is located in Lakewood, WA, which had a population of approximately 58,163 at the 2010 U.S. Census.

Lakewood is located just 9 miles southwest of Tacoma, 22 miles northeast of the state capitol Olympia and 40 miles southwest of Seattle. It is also 34 miles southwest of the Seattle-Tacoma International Airport.

Lakewood is in Pierce County and a part of the Seattle-Tacoma-Bellevue Metropolitan Statistical Area, which is the 14th largest MSA in the United States, with slightly more than half of Washington’s population. Pierce County is the second-most populous county in Washington behind King County. Pierce County is notable for being home to Mount Rainier, the tallest mountain peak in the Cascade Range.

Education, healthcare and government are the biggest industries in Pierce County, which also benefits from its economic ties to King County. For instance, Amazon recently opened fulfillment centers in Pierce County cities Dupont and Sumner, creating hundreds of jobs for the area.

Lakewood’s economy is dependent on the military bases in the area. Joint Base Lewis-McChord, a U.S. military installation, sits just 3.6 miles outside of Lakewood. JBLM is the largest joint base on the West Coast and one of the largest in the U.S. It has also remained the largest employer in Pierce County for several years.

The city of Lakewood was only just officially incorporated in 1996. Throughout the 20th century, Lakewood took on an identity of its own, with the addition of Joint Base Lewis-McChord, hospitals, its own fire district and other amenities. When the city was officially incorporated in the late 1990s, it was the seventh largest city in the state and the second largest in Pierce County. A rich history and historic treasures, several beautiful lakes, proximity to other major Washington cities and a diverse community make Lakewood stand out as an attractive place to visit and live.

Throughout the 20th century, Lakewood continued to take on an identity of its

LOCATION OVERVIEW

Historic Lakewood Treasure: Famous Thornewood Castle

Tacoma Golf & Country Club | 1st Golf Club West of the Mississippi

Joint Base Lewis McChord - Largest Employer in Pierce County

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The Seattle-Tacoma MSA is ranked in the top 14 by size with over 3.8 million residents. It is home to the world headquarters of Fortune 500 companies such as Amazon, Microsoft, Costco, Starbucks, Nordstrom, Weyerhaeuser, Paccar and Expeditors International. The majority of The Boeing Company’s operations are still based in Seattle even though its HQ was moved to Chicago in 2001.

Seattle is benefiting from surging economic and employment growth, a highly-educated workforce, growing population and increasing international trade. As a key international shipping and transportation hub, Seattle plays an important role in world trade.

Throughout the 20th century, Lakewood continued to take on an identity of its own, with the addition of Joint Base Lewis-McChord, hospitals, its own fire district and other amenities. The subject property sits in an area that was incorporated in 1958 as the Villa Plaza Shopping Center. It was later redeveloped in 1989, and again in 2001 to make way for the Lakewood Towne Center as it is today. When the city was officially incorporated in the late 1990s, it was the seventh largest city in the state and the second largest in Pierce County. A rich history and historic treasures, several beautiful lakes, proximity to other major Washington cities and a diverse community make Lakewood stand out as an attractive place to visit and live.

SEATTLE-TACOMA MSA

TOTAL MSA POPULATION

3,867,046

14th LARGEST MSA IN

THE UNITED STATES

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AREA TRADE MAP

L A K E W O O D T O W N E C E N T E R

GRAVELLY LAKE DR SW

S T E I L A C O O M L A K E

S U B J E C T

L A K E W O O D H I S T O R I C A L S O C I E T Y

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DEMOGRAPHICS

LAKEWOOD, WA

5-MILE LOCAL DEMOGRAPHIC HIGHLIGHTS

POPULATION GROWTHSINCE 2000

9.1%

TOTAL POPULATION

221,652 $66,911

AVG. HOUSEHOLD INCOME

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DEMOGRAPHICS

DEMOGRAPHICSPOPULATION PROFILE 1 M i le 3 M i les 5 M i les

Population By Age

12.70 to 4 Years 8.7% 8.1% 7.7%

5 to 14 Years 11.5% 12.7% 12.7%

15 to 19 Years 4.9% 5.4% 5.8%

20 to 24 Years 8.6% 8.5% 8.8%

25 to 34 Years 18.5% 17.5% 17.2%

35 to 44 Years 11.0% 11.1% 11.6%

45 to 54 Years 11.6% 11.6% 11.9%

55 to 64 Years 11.7% 11.6% 11.4%

65 to 74 Years 7.2% 7.5% 7.2%

75 to 84 Years 4.6% 4.3% 4.0%

Age 85+ 1.7% 1.7% 1.7%

Median Age 33.5 33.5 33.5

Population 25+ by Education Level

2017 Estimate Population Age 25+ 7,841 62,321 144,005

Elementary (0-8) 1.0% 2.8% 2.6%

Some High School (9-11) 7.0% 7.5% 7.9%

High School Graduate (12) 26.4% 28.4% 29.5%

Some College (13-15) 32.5% 26.8% 26.9%

Associate Degree Only 10.1% 10.6% 10.5%

Bachelors Degree Only 14.6% 15.2% 14.4%

Graduate Degree 6.9% 7.2% 7.0%

No Schooling Completed 1.5% 1.4% 1.2%

POPULATION 1 M i le 3 M i les 5 M i les

2022 Projection 11,306 95,291 223,530

2017 Estimate 11,282 95,387 221,652

2010 Census 10,718 91,309 211,224

2000 Census 10,757 90,723 203,052

TOTAL HOUSEHOLDS 1 M i le 3 M i les 5 M i les

2022 Projection 4,925 38,824 88,765

2017 Estimate 4,837 38,045 85,205

2010 Census 4,587 36,429 82,139

2000 Census 4,639 35,739 78,835

HOUSEHOLDS BY INCOME 1 M i le 3 M i les 5 M i les

2017 Estimate

$0 - $15,000 13.1% 12.8% 12.4%

$15,000 - $24,999 9.6% 10.9% 10.5%

$25,000 - $34,999 14.1% 11.6% 11.3%

$35,000 - $49,999 16.4% 14.8% 15.1%

$50,000 - $74,999 23.1% 19.8% 20.4%

$75,000 - $99,999 12.1% 12.8% 12.9%

$100,000 - $149,999 8.1% 11.0% 11.6%

$150,000 + 3.7% 6.3% 5.8%

Average Household Income $60,855 $67,623 $66,911

Median Household Income $45,957 $49,961 $50,797

Per Capita Income $26,169 $27,266 $26,372

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CHRISTOPHER R. SECRETO MARY KATE TORMEYSenior Vice President Investments Marketing Coordinator

Office: (206) 826-5748 Office: (206) 826-5760Cell: (206) 612-4399 Cell: (509) 954-6179

[email protected] [email protected]: WA 24660, ID SP 38004

O F F E R E D B Y:


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