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OFFERING MEMORANDUM 2802 13TH AVE S | FARGO, ND 58103 Applebee's
Applebee's | Fargo, ND
O F F E R I N G M E M O R A N D U M
2 8 0 2 1 3 T H AV E S | FA R G O, N D 5 8 1 0 3
Applebee's
Matthews Real Estate Investment Services
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Applebee's | Fargo, ND
Contents4 EXECUTIVE SUMMARY
Investment Highl ightsFinancia l Overview
6 PROPERTY OVERVIEWPhysical Descr ipt ionParcel Map
1 2 AREA OVERVIEWFargo, ND
8 TENANT OVERVIEWApplebees
BRIANNA BURGESSASSOCIATE
[email protected] (310) 919-5825MOB (858) 603-0532LIC # 01980639
CALVIN SHORTFVP & SENIOR DIRECTOR
calv [email protected] (949) 432-4506MOB (310) 567-3525LIC # 01927216
BROKE R OF RECORD
BLAKE A KRABSETH
[email protected] N Broadway, Minot , ND 58073DIR (701 ) 852-1156MOB (701 ) 720-1786LIC # 7047
WATNE REALTORSBROKER/PRESIDENT/CO-OWNER
FOR MORE INFORMATION CONTACT
Matthews Real Estate Investment Services N
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EXECUTIVESUMMARY
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Applebee's | Fargo, ND
Investment HighlightsLong Term Security & Passive Cash Flow
• 15+ Years remaining on an Absolute NNN Lease --- Zero landlord responsibility
• The lease features two (2) five (5) year options and 7.50% rent increases every 5 years; strong hedge against inflation
• The tenant is currently paying rent about 30% below the average rate for an Applebee's, adding additional long term security to the investment
Healthy Rent-to-Sales & Strong Operator
• Apple Core Enterprises, Inc. guarantees the lease
• Apple Core Enterprises, Inc. operates 24 Applebee’s locations in ND (11), CA (9), MN (1), and AZ (3)
• Strong sales and Healthy Rent:Sales --- see broker for details
• 100% leased to a national tenant, Applebee’s is the largest casual dining restaurant chain in the world with over 2,000 locations across the globe
• Applebee’s is a subsidiary of DineEquity, Inc. (NYSE: DIN)
Dense Retail Corridor
• The site benefits from strong surrounding demographics with over 166,100 residents and AHHI of $77,937 in a 5-mile radius
• Fargo is experiencing steady growth, with a population increase of just under 12% expected over the next several years
• 13th Avenue and Page Dr. sees an estimated ±30,000 vehicles per day
• Located just 3 miles from North Dakota State University which had enrollment of over 14,500 students in 2015
Matthews Real Estate Investment Services
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FINANCIALOVERVIEW
Applebee's | Fargo, ND
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Annualized Operating DataMonthly Rent Annual Rent Rent/SF Cap Rate
Current $11,000.00 $132,000.00 $22.86 5.81%
01/01/2018 – 12/31/2022 $11,825.00 $141,900.00 $24.58 6.25%
01/01/2023 – 12/31/2027 $12,711.88 $152,542.50 $26.42 6.72%
01/01/2028 – 12/31/2032 $13,665.27 $163,983.19 $28.40 7.22%
Option 1 $14,690.16 $176,281.93 $30.53 7.76%
Option 2 $15,791.92 $189,503.07 $32.82 8.35%
APPLEBEE'S2802 13th Ave SFargo, ND 58103
List Price ..................................................................................................................$2,270,400
CAP Rate............................................................................................................................6.25%
Gross Leasable Area .............................................................................................. ± 5,774 SF
Lot Size .................................................................................................................. ± 1.23 Acres
Year Built ...............................................................................................................................1994
Tenant Summary
Tenant Trade Name Apple Core Enterprises, Inc
Type of Ownership Fee Simple
Lease Guarantor Apple Core Enterprises, Inc.
Lease Type Absolute NNN
Roof and Structure Tenant Responsible
Original Lease Term 20 years
Lease Commencement 01/01/2013
Lease Expiration Date 12/31/2032
Term Remaining 15+ years
Increases 7.5% increases every 5 Years
Options Two (2), Five (5) year options
Right Of First Refusal (ROFR) 30 days
* Offering price and cap rate is based on upcoming rent increase on 01/01/2018. Seller is to credit the buyer the difference at the close of escrow
Matthews Real Estate Investment Services
TENANTOVERVIEW
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Applebee's | Fargo, ND
T e n a n t o v e r v i e w
Tenant Applebee's Neighborhood Grill and Bar
Company Name Applebee's International, Inc.
Parent Company Trade Name DineEquity, Inc.
Ownership Public
Revenue $681.10 M
Net Income $104.92 M
Stock Symbol DIN
Board NYSE
No. of Locations ± 2,000
No. of Employees ± 33,543
Headquartered Kansas City, Missouri
Year Founded 1987
Website www.applebees.com
Apple Core Enterprises, Inc. operates as a franchisee of Applebee’s International, which owns and operates Applebee’s restaurants in North Dakota, Minnesota, Arizona and California. The company is based in Minot, North Dakota. Apple Core Enterprises, Inc operates as a subsidiary of Food Management Investors, Inc. This organization primarily operates in the Restaurant, Family: Chain business / industry within the Eating and Drinking Places sector. This organization has been operating for approximately 19 years. Apple Core Enterprises is estimated to generate $66.1 million in annual revenues.
APPLEBEE’S INTERNATIONAL, INC.
Applebee’s International, Inc., is an American company which develops, franchises, and operates the Applebee’s Neighborhood Grill and Bar restaurant chain. The company is headquartered in Kansas City, Missouri, after moving from Lenexa, Kansas, in September 2011. Applebee’s started with the same philosophy they follow today – focused on serving good food to good people. Today, what was once a popular neighborhood restaurant has
grown to become a popular restaurant in neighborhoods all across North America – with almost 2,000 locations and counting.
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Matthews Real Estate Investment Services
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THE OFFERING
Property Name Applebee's
Property Address 2802 13th Ave S,
Fargo, ND 58103
Assessor’s Parcel Number 01-4000-00013-000
Site DescriptionNumber of Stories One
Year Built 1994
Gross Leasable Area (GLA) ± 5,774 SF
Lot Size ± 1.23 Acres (53,579 SF)
Type of Ownership NNN
Parking 94 Surface Spaces
Parking Ratio 16.28 : 1,000 SF
PARCEL MAP
13th Avenue South ±30,000 ADT
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Applebee's | Fargo, ND
West Acres Regional Mall
South Fargo High School
±1,100 Students
Prairiewood Golf Course
Gateway Circle
TENANT MAP
TRAFFIC COUNTS :I-29 ±60,000 ADTI-94 ±64,000 ADT25th Street South ±18,000 ADT13th Avenue South ±30,000 ADT
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Matthews Real Estate Investment Services
AREAOVERVIEW
Demographics
POPULATION 1 Mile 3 Mile 5 Mile
2022 Projection 9,962 103,887 166,010
2017 Estimate 9,099 96,144 155,149
2011 Census 6,160 76,979 129,823
2001 Census 2,491 55,453 103,262
Growth 2017 - 2022 9.49% 8.05% 7.00%
Growth 2011 - 2017 47.71% 24.90% 19.51%
Growth 2001 - 2011 147.31% 38.82% 25.72%
HOUSEHOLDS 1 Mile 3 Mile 5 Mile
2022 Projection 4,231 46,293 72,300
2017 Estimate 3,856 42,606 67,073
Growth 2017 - 2022 9.72% 8.66% 7.79%
Growth 2011 - 2017 46.64% 25.36% 20.90%
INCOME 1 Mile 3 Mile 5 Mile
2017 Est. Average Household Income
$84,793 $81,809 $77,937
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Applebee's | Fargo, ND
Fargo, NDFargo is the most populous city in the state of North Dakota, accounting for over 15% of the state population as well as being the county seat of Cass County. In 2014, Forbes magazine ranked Fargo as the fourth fastest-growing small city in the United States.
Founded in 1871 and located on the Red River of the North floodplain, Fargo is a cultural, retail, health care, educational, and industrial center for eastern North Dakota and northwestern Minnesota. In addition, Fargo is home to North Dakota State University.
ACCOLADES
#1 CITY FOR FINDING A JOBU.S. News and World Report
#1 BEST PERFORMING SMALL CITYMilken Institute
#2 BEST SMALL PLACES FOR BUSINESSES & CAREERS
Forbes Magazine
#3 BEST CITY FOR MILLENNIALSMillennial Personal Finance
#3 MOST SECURE PLACES TO LIVEFarmers' Insurance
#3 BEST PLACE TO RAISE A FAMILYChildren's Health Magazine
EconomyThe economy of the Fargo area has historically been dependent on agriculture. That dominance has decreased substantially in recent decades. Now, the city of Fargo has a growing economy based on food processing, manufacturing, technology, retail trade, higher education, and healthcare. In a study published by Forbes, Fargo was ranked the best small city in the nation to start a business or a career.
# Employer # of Employees
1 Sanford Health 6,020
2 North Dakota State University 4,464
3 Essentia Health 3,381
4 Fargo Public Schools 1,816
5 Noridian 1,371
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Matthews Real Estate Investment Services
This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Sonic located at 2802 13th Ave S, Fargo, ND 58103(“Property”) . I t has been prepared by Matthews Real Estate Investment Services. 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 Real Estate Investment Services. 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 Real Estate Investment Services 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 Real Estate Investment Services 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.
C O N F I D E N T I A L I T Y & D I S C L A I M E R S TAT E M E N T
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BROKE R OF RECORD
BLAKE A KRABSETH
[email protected] N Broadway, Minot , ND 58073DIR (701 ) 852-1156MOB (701 ) 720-1786LIC # 7047
WATNE REALTORSBROKER/PRESIDENT/CO-OWNER
CALVIN SHORTFVP & SENIOR DIRECTOR
calv [email protected] (949) 432-4506MOB (310) 567-3525LIC # 01927216
FOR MORE INFOMATION CONTACT
BRIANNA BURGESSASSOCIATE
[email protected] (310) 919-5825MOB (858) 603-0532LIC # 01980639
