MATTHEWS€¦ · matthews retail advisors exclusively listed by el warner svp, national director...

D E L A M OM E T R O S H O P P I N G C E N T E R

O F F E R I N G M E M O R A N D U M

5 9 1 0 D e l A m o B o u l e v a r d L a k e w o o d , C A 9 0 7 1 3

M AT T H E W SR E TA I L A D V I S O R S

Del Amo Metro Shopping Center

2 Mathews Retail Advisors


EXCLUSIVELY L ISTED BY

EL WARNERSVP, NATIONAL D IRECTOR

SHOPPING CENTERS

DIRECT +1 .3 10.579.9690MOBILE + 1 .858 .752 .3078

E l .Warner@mat thews .com

KYLE MATTHEWSCHAIRMAN AND CEO

DIRECT +1 .9 19.5757MOBILE + 1 .3 10.622 .3161

Ky le .Mat thews@mat thews .com

L INDSAY TSUMPESAVP, D IRECTOR

SHOPPING CENTERS

DIRECT +1 .3 10.579.9691 MOBILE + 1 .3 10.880.8418

L indsay.Tsumpes@mat thews .com

Offer ing Memorandum

3Mathews Retail Advisors

TABLE OF CONTENTS

4

16

6

18

EXECUTIVE SUMMARY

OFFERING SUMMARY

INVESTMENT HIGHLIGHTS

FINANCIAL SUMMARY

10 AREA OVERVIEW

LAKEWOOD, CAL IFORNIA

DEMOGRAPHICS

LOCAL ATTRACTIONS

LOS ANGELES COUNTY

REGIONAL MAP

TRADE-AREA AERIAL

FINANCIAL OVERVIEW

RENT ROLL

INCOME & EXPENSES

TENANT OVERVIEW

STARBUCKS OVERVIEW

SPRINT OVERVIEW

THE BUFFALO SPOT

WONDERLAND SMOKE SHOP OVERVIEW

PROPERTY OVERVIEW

PHYSICAL DESCRIPT ION

PARCEL MAP

SITE PLAN

AERIAL



Matthews Retail Advisors is pleased to present the fee simple sale of Del Amo Metro Shopping Center, located in the city of Lakewood, California on the south-east corner of Del Amo Boulevard and Woodruff Boulevard (“Property”).

Del Amo Shopping Center offers an investor an excellent opportunity to buy a Starbucks anchored shopping center with upside potential in a trade area poised for growth. Featuring an easily accessible drive-thru, the property is located in a dense suburban neighborhood and is well known throughout the community as a quick stop for food and specialty products.

OFFERING SUMMARY

EXECUTIVE SUMMARY



• Great opportunity to purchase a Starbucks anchored shopping center that offers the stability of a successful tenant with excellent credit

• Starbucks concurrently extending its options and has a 10-year commitment to the market and shopping center.

• Located on a high traffic intersection along the major thoroughfare of Del Amo Blvd with a traffic count of ±54,000 cars per day

• Ease of accessibility and a convenient drive-through amenity

• Strong rent increases provide an excellent hedge against inflation

• Provided free and clear of debt with the ability to take advantage of historically low financing costs

• Upward trending demographics and an average household income of over $101,555 within a 1-mile radius

• Long average remaining lease term provides stability of income

INVESTMENT HIGHLIGHTS

FINANCIAL SUMMARY

Price $4,800,000

Propery Size (NRA) 4,814

Year Built 2005

Occupancy 100%

Operating Data

Net Operating Income $228,009

Cap Rate 4.75%

Traffic Count

Del Amo Blvd. 31,463 CPD

Woodruff Ave. 23,126 CPD



PROPERTY OVERVIEW



PARCEL MAPPHYSICAL DESCRIPTION

• PROPERTY NAME Del Amo Metro Shopping Center

• PROPERTY ADDRESS 5910 Del Amo Blvd., Lakewood, CA 90713

• LOCATION Southeast Corner of Del Amo Blvd. & Woodruff Ave.

• APN 7176-025-013

• LAND AREA 22,008 SF

• BUILDING SIZE 4,814 SF

• PARKING SPACES 38

• ZONING LKC3YY

DEL AMO BLVD

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PARCEL MAP

5906 5908 5910 5912

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STARBUCKS DRIVE THRU


9



The City of Lakewood is located in southern Los Angeles County, about 23 miles southeast of Los Angeles. Estimated by the State Department of Finance, the population of Lakewood was 81,601 as of January 2015. Lakewood, a 9.5 square mile city, is bordered by Long Beach on both the west and south, Bellflower on the north and Cerritos and Cypress on the east and northeast as well as Hawaiian Gardens on the southeast. Major freeways such as the 91 and 405 border the south and north ends of Lakewood, while the 605 runs straight through allowing for easy accessibility.

Home to almost 3,000 businesses, the economic base for the City of Lakewood is primarily commercial and retail. It is a very business-friendly city known to always welcome new business. Built as the largest planned community in America during the early 1950’s, Lakewood made it a priority to attract new business, a priority that still remains with them today.

A strong sense of community is felt throughout Lakewood as residents give their full support to their city and local business. The city is known for having a large number of volunteer organizations, a strong support for its public safety officers and the “Shop Lakewood…Stay Lakewood Loyal” effort to promote business within their city.

LAKEWOOD, CA

EMPLOYERS EMPLOYEES

1 Long Beach Unified School District 909

2 Lakewood Regional Medical Center 791

3 City of Lakewood 594

4 Los Angeles County Department of Children and Family Services 435

5 Bellflower Unified School District 402

6 Walmart 349

7 Los Angeles County Sheriff’s Department 321

8 ABD Unified School District 320

TOP EMPLOYERS

AREA OVERVIEW



POPULATION 1 Mile 3 Miles 5 Miles

2021 Projection 27,633 235,114 698,266

2016 Estimate 26,901 227,877 675,213

Growth 2016 - 2021 2.72% 3.18% 3.41%

HOUSEHOLDS

2021 Projection 9,433 77,105 221,235

2016 Estimate 9,196 74,655 213,570

2010 Census 9,025 72,486 206,605

Growth 2016 - 2021 2.58% 3.28% 3.59%

Growth 2010 - 2016 1.90% 2.99% 3.37%

INCOME

2016 Est. Average Household Income

$101,155 $87,748 $86,159

2016 Est. Median Household Income

$89,961 $69,991 $66,476

DEMOGRAPHICS



The Lakewood Center mall is a super-regional mall located in Lakewood. Currently anchored by national tenants named such as Macy's, JCPenney, Forever 21 and Target, the mall is ranked among the largest retail shopping malls by gross leasable area in the United States. Lakewood Center brings in an approximate 11.2 million shoppers annually.

LAKEWOOD CENTER MALL

The RMS Queen Mary is a retired ocean liner that sailed primarily through the North Atlantic between 1936 and 1967. The ship started out as a British express service and was later used as a troopship during World War II ferrying allied soldiers throughout the war. Today, the ship serves as a tourist attraction permanently moored in the port of Long Beach and is a museum that offers restaurants, hotel rooms, events and even haunted tours.

THE QUEEN MARY

The StubHub Center is a multiple-use sports complex in Carson, California. It is located approximately 10 miles (16 km) south of Downtown Los Angeles. The $150 million complex has a set capacity of 27,000, and in addition to the soccer stadium, it features a 2,450-seat velodrome, an 8,000-seat tennis stadium and an outdoor track and field facility that has 2,000 permanent seats.

STUBHUB CENTER

Situated on a 5-acre site, the Aquarium of the Pacific is home to over 11,000 animals including a shark lagoon, a lorikeet forest, penguins and sea lions. Visited by over 1.5 million people per year, the diverse marine center offers shows, petting areas, dining and more.

AQUARIUM OF THE PACIFIC

Located just 15 miles east of the Del Amo Metro Shopping Center in Anaheim, Disneyland first opened July 17, 1955, and was the world’s first Disney park. In its more than 55 year history, the park has entertained more than 650 million guests. One of California’s biggest tourism draws, Disneyland generates an estimated $5.7 billion annually in economic activity for the Southern California economy, and since 2009, employment at the resort has grown considerably.

DISNEYLAND

Located in downtown Long Beach, The Pike Outlets is a vibrant dining and entertainment district linking the Long Beach Convention Center to Rainbow Harbor’s waterfront and the Aquarium of the Pacific. The tourist oriented development has a large number of restaurants, a movie theater, artwork, beach attractions, arcades and even a large Ferris wheel.

THE PIKE

LOCAL ATTRACTIONS



INDUSTRY JOBS

1 Trade 163,600

2 Entertainment 162,850

3 Business Services 162,850

4 Education 91,700

5 Fashion 65,500

The Los Angeles metropolitan area is the 18th largest metropolitan area in the world and second largest in the United States. Defined by the Office of Management and Budget, the metropolitan area is made up of the Los Angeles, Long Beach and Anaheim California Metropolitan Statistical Area consisting of both Los Angeles and Orange counties. Together, the land area covers an all of 4,850 square miles. The two counties are the first and third most populous in the state with Los Angeles placing 1st most populous in the country. The metro area has at its core the Los Angeles-Long Beach-Anaheim corridor, determined by the Census Bureau to have a population of 12,150,996 as of the 2010 Census.

Businesses thrive in Los Angeles due to the county’s large and skilled workforce,extensive educational system, and access to world markets. Known around the world as the “movie capital”, the economy of the Los Angeles metropolitan area is heavily based around the entertainment

industry. The entertainment industry is primarily focused on television, motion pictures, interactive games and recorded music. Other significant sectors of the metropolitan’s economy include aerospace, technology, petroleum, fashion and apparel, tourism and the shipping and international trade business. The Port of Los Angeles and the Port of Long Beach together happen to make up the country’s busiest sea port and stands as the fifth busiest in the world.

Together, the Los Angeles-Orange County metro area has an enormous economy that is roughly estimated to make up almost $900 billion. The City of Los Angeles is home to five Fortune 500 companies such as Occidental Petroleum, Health Net, AECOM and CBRE. Other companies headquartered in Los Angeles include Century Fox, City National Bank, Gibson, Dunn & Crutcher, Paramount Pictures, The Coffee Bean & Tea Leaf, Korean Air and a numerous amount of apparel companies such as American Apparel and Guess.

LOS ANGELES COUNTY

TOP INDUSTRIES IN LOS ANGELES



Regiona l Map

SUBJECT PROPERTY



AERIAL OVERVIEW

DEL AMO BLVD

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DEL AMO BLVD

LAKEWOOD CENTER

CERRITOS CENTER

SUBJECT PROPERTY



FINANCIAL OVERVIEW

SUBJECT PROPERTY



Unit TenantLease Start

Lease End

SF% of GLA

Contract Rental Rate Rent Per SF Rent IncreasesOptions

Yearly Monthly Year Month Date Increases

10100 Starbucks Jan-06 Feb-26 1,500 31.2% $119,700 $9,975 $79.80 $6.65 Mar-21 $131,580 2 x 5 yr

10200 Sprint Oct-15 Sep-20 1,140 23.7% $38,714 $3,226 $33.96 $2.83 Oct-17 Oct-18 Oct-19

$39,946 $41,040 $42,408

2 x 5 yr

10300 The Buffalo Spot Sep-16 Sep-21 1,200 24.9% $46,800 $3,900 $39.00 $3.25

Oct-17 Oct-18 Oct-19 Oct-20

$48,240 $49,680 $51,120 $52,704

1 x 5 yr

10400 Wonderland Smoke Shop Sep-13 Sep-18 974 20.2% $22,351 $1,863 $22.95 $1.91 Oct-17 $23,021 1 x 5 yr

Totals 4,814 100.0% $227,565 $18,964 $47.27 $3.94

YearYear 1

Total $/SF

Income

Rental Income $227,565 $47.27

Expense Reimbursements $107,000 $22.23

Effective Gross Income $334,565 $69.50

Expenses

Real Estate Taxes $52,668 $10.94

Property Insurance $2,575 $0.53

CAM/R&M $41,276 $8.57

Management Fee $10,037 $2.08

EGI (3%) 3.00%

Operating Expenses $106,556 $22.13

Net Operating Income $228,009 $47.36

Operating Expense Ratio 32%

RENT ROLL

INCOME AND EXPENSES



TENANT OVERVIEW

SUBJECT PROPERTY



The world’s #1 specialty coffee retailer, Starbucks has more than 23,570 coffee shops in about 70 countries. The outlets offer coffee drinks and food items, as well as roasted beans, coffee accessories, and teas. Starbucks operates more than 12,000 of its own shops, which are located mostly in the US, while licensees and franchisees operate roughly 11, 000 units worldwide (including many locations in shopping centers and airports). In addition, Starbucks markets its coffee through grocery stores, food service customers, and licenses its brand for other food and beverage products.

GEOGRAPHIC REACHThe company’s global expansion plans have a particular focus on the growing consumer markets in Asia and South America. Starbucks has its own coffee farm in China. However, almost 75% of Starbucks’ revenue comes from the US.

FINANCIAL PERFORMANCEStarbucks’ annual revenues were $19.16 billion for fiscal 2015. That was an increase of about $2.7 billion (or 17%) compared to fiscal 2014. The revenue increase was primarily due to increased revenue from the China/Asia Pacific segment.

The company’s net income has been increasing for the most part in recent years. In fiscal 2015, its net income increased by 33% (compared to the prior period) up to $2.76 billion.

Starbucks’ operating cash on hand increased by 517% to $3.75 billion in fiscal 2015 compared to just $600 million the previous fiscal year.

STARBUCKS OVERVIEW

STARBUCKS LEASE ABSTRACT

1. 10% Admin Fee exclusive of Landlord’s Insurance and Real Estate Taxes and shall not increase by more than 5% non-cumulative per year.

2. Annual 7% operating expense growth cap for any calendar year excludes Landlord’s Insurance, Real Estate Taxes, Security, and Utilities Administrative Charges

NOTES:

Suite 10100

Landlord Del Amo Metro Partners, LLC

Tenant Starbucks Corporation

Tenant Name Starbucks

Building Size (SF) 1,500

Effective Date July 1, 2005

Rent Commencement Date January 20, 2006

Lease Expiration Date February 28, 2026

Option(s) 2x5 Years

Contract Rental Rate Total $/Yr.

Lease Years 1-5 (1/20/2006-1/31/2011) $99,000

Lease Years 6-10 (2/1/2011-1/31/2026) $108,900

Lease Years 11-15 (3/1/2016-2/28/2021) $119,700

Lease Years 16-20 (3/1/2021-2/28/2026) $131,900

Option Rental Rate

Lease Years 21-25 (3/1/2026-2/28/2031) FMV

Lease Years 26-30 (3/1/2031-2/28/2036) FMV

Lessee Expenses1 NNN + 10% Admin Fee

Expense Growth Cap2 7%

Lessor Expenses Roof and Structure

Go Dark Clause Yes

Tenant Exclusive Yes

Source: Lease



Sprint is an American telecommunications holding company that provides wireless services and is a major global Internet carrier. It is the fourth largest wireless network operator in the United States, and serves 58.4 million customers as of January 2016.

Sprint also provides cellular access to other carriers and resellers on a wholesale basis. The company’s legacy wireline business provides long-distance voice, Internet, and data services primarily to corporate customers and other carriers.

OPERATIONSThe company operates in two main segments: Wireless and Wireless equipment. Wireless primarily includes retail, wholesale, and affiliate revenue from a wide array of wireless voice and data transmission services and accounted for more than three-quarters of revenue in 2015 (ended March).

SALES AND MARKETINGSprint sells its products through direct sales representatives, retail outlets owned and operated by the company, indirect sales agents, and subscriber-convenient channels, including web sales and telesales.

The company focuses on the marketing and sales of wireless services on targeted groups of retail subscribers: businesses, government organizations, and individual clients,

Sprint markets its services using traditional print and television advertising along with online ads and various sponsorships. Its advertising expenses totaled $1.5 billion for each of the past three fiscal years.

SPRINT OVERVIEW

Suite 10200


Tenant Evolution Retail Concepts Inc.

Tenant Name (dba) Sprint


Effective Date June 16, 2015

Rent Commencement Date October 1, 2015

Lease Expiration Date September 30, 2020

Option(s) with 9-12 mos written notice 2x5 Years


Lease Years 1 (10/1/2015-9/30/2016) $37,620

Lease Years 2 (10/1/2016-9/30/2017) $38,714

Lease Years 3 (10/1/2017-9/30/2018) $39,946

Lease Years 4 (10/1/2018-9/30/2019) $41,040

Lease Years 5 (10/1/2019-9/30/2020) $42,408

Option 1 Rental Rate

Lease Years 6 (10/1/2020-9/30/2021) Greater of FMV or $42,408

Lease Years 7 (10/1/2021-9/30/2022) 3% Increase




Option 2 Rental Rate






Lessee Expenses NNN + 15% Admin Fee


Covenant of Continuous Operation Yes

Landlord Right of Relocation Yes


Source: Lease

sprint LEASE ABSTRACT



The Buffalo Spot comes from humble beginnings with a strong desire to succeed and help others. The first restaurant was launched in Long Beach, California and was an immediate success. To keep up with demand, in 2014 more locations were opened in San Diego and Los Angeles.

The Buffalo Spot’s success is largely due to its original world famous buffalo fries created by the owner himself. It has come to be known as not only a place where customers will be served the best wings, ribs, and the World Famous Buffalo Fries, but also as a family friendly “SPOT”. The Buffalo Spot prides themselves in not only serving the best quality food, but also in providing their customers with the utmost service.

SUCCESS AND EXPANSIONThe Buffalo spot first opened its doors in Long Beach. Due to an overwhelming success and a loyal customer following, The Buffalo Spot has since opened 8 new locations. Locations currently span throughout southern California from San Diego to Los Angeles. The Buffalo Spot is an exciting and growing company that continues to seek out new franchise opportunities. The Buffalo Spot will continue its success by opening up in high traffic and strong retail trade areas.

THE BUFFALO SPOT OVERVIEW

THE BUFFALO SPOT LEASE ABSTRACT

Suite 10300


Tenant The Buffalo Spot 7, LLC

Tenant Name The Buffalo Spot


Effective Date June 6, 2016

Rent Commencement Date1 September 4, 2016




Lease Year 1 (9/4/2016-9/30/2017) $46,800

Lease Year 2 (10/1/2017-9/30/2018) $48,240

Lease Year 3 (10/1/2018-9/30/2019) $49,680

Lease Year 4 (10/1/2019-9/30/20120) $51,120

Lease Year 5 (10/1/2020-9/30/2021) $52,704

Option Rental Rate

Lease Year 6 (10/1/2021-9/30/2022) Greater of FMV or 3% min/5% max

Lease Year 7 (10/1/2022-9/30/2023) 3% increase






Covenant of Continous Operation Yes


Source: Lease

1. Rent commencement date is the earlier of the date the tenant opens for business or 90 days after the turn-over-date and is estimated to be September 4, 2016.



WONDERLAND SMOKE SHOP LEASE ABSTRACT

Suite 10400


Tenant Asif Vakil

Tenant Name (dba) Wonderland Smoke Shop

Building Size (SF) 974

Effective Date May 13, 2013

Rent Commencement Date September 4, 2013




Lease Years 1 (9/4/2013-9/30/2014) $20,454

Lease Years 2 (10/1/2014-9/30/2015) $21,068

Lease Years 3 (10/1/2015-9/30/2016) $21,700

Lease Years 4 (10/1/2016-9/30/2017) $22,351

Lease Years 5 (10/1/2017-9/30/2018) $23,021

Option Rental Rate








Radius Restriction 5 miles

Covenant of Continuous Operation Yes

Landlord Right of Relocation Yes

Source: Lease



SUBJECT PROPERTY



CONFIDENTIALITY AND DISCLAIMER STATEMENT

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Del Amo Metro Shopping Center located at 5910 Del Amo Blvd (“Property”) . I t has been prepared by Matthews Retai l Advisors. This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors. The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.


O F F E R I N G M E M O R A N D U M

D E L A M OM E T R O S H O P P I N G C E N T E R5 9 1 0 D e l A m o B o u l e v a r d L a k e w o o d , C A 9 0 7 1 3


EXCLUSIVELY L ISTED BY

EL WARNERSVP, NATIONAL D IRECTOR

SHOPPING CENTERS

DIRECT +1 .3 10.579.9690MOBILE + 1 .858 .752 .3078

E l .Warner@mat thews .com

KYLE MATTHEWSCHAIRMAN AND CEO

DIRECT +1 .9 19.5757MOBILE + 1 .3 10.622 .3161

Ky le .Mat thews@mat thews .com

L INDSAY TSUMPESAVP, D IRECTOR

SHOPPING CENTERS

DIRECT +1 .3 10.579.9691 MOBILE + 1 .3 10.880.8418

L indsay.Tsumpes@mat thews .com

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