OFFERING MEMORANDUM CBRE CAPITAL MARKETS …...The industrial and logistics community also benefits...

OFFER ING MEMORANDUM

410 D IX I E LAND ROAD | HARL INGEN, TX 78552

C H I P OT L EC B R E C A P I TA L M A R K E T S

410 DIXIELAND ROAD | HARLINGEN, TX 78552

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CHIPOTLE

JARED AUBREYSENIOR V ICE PRES IDENT+1 214 252 1031ja red .aub rey@cbre . com

M ICHAEL AUSTRYVICE PRES IDENT+1 214 252 1115michae l .aus t r y@cbre . com

OFFERING SUMMARY

EXCLUSIVE MARKETING ADVISORS:

NET OPERATING INCOME $117,000

INCREASES 10% EVERY 5 YEARS

LEASE TYPE NNN

CURRENT TERM 15 YEARS

LEASE COMMENCEMENT SEPTEMBER 2016

LEASE EXPIRATION SEPTEMBER 2031

REMAINING TERM 13.5 YEARS

OPTIONS 4 - 5 YEAR

YEAR BUILT 2016

GROSS LEASABLE AREA 2,340 SF

LAND AREA .42 ACRES

ROOF TENANT

STRUCTURE LANDLORD

GUARANTOR CORPORATE

$Offering Price:$2,340,000

%Cap Rate:

5.00%

ANNUALIZED OPERATING DATA

YEAR(S) COMMENCEMENT ANNUAL INCREASE

1 - 5 SEPTEMBER 2016 $117,000 -

6 - 10 OCTOBER 2021 $128,700 10.00%

11 - 15 OCTOBER 2026 $141,570 10.00%

16 - 20 (OPTION 1) OCTOBER 2031 $155,727 10.00%

21 - 25 (OPTION 2) OCTOBER 2036 $171,300 10.00%

26 - 30 (OPTION 3) OCTOBER 2041 $188,430 10.00%

31 - 35( OPTION 4) OCTOBER 2046 $207,273 10.00%

NET OPERATING INCOME $117,000


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INVESTMENT HIGHLIGHTS

+ Long Term NNN Lease - Over 13.5 Years Remaining

+ Strong Corporate Guarantee – Chipotle (NYSE: CMG) has become an international leader in fast-casual dining, reporting a revenue of $3.9 billion in 2016

+ True Billion Dollar Economy with Cross-Border Spending - Harlingen has outstanding retail and restaurant spending with over $1 BILLION in taxable sales

+ 2016 Construction - Latest Chipotle Prototype Store

+ Densely Developed Residential Market with Ideal Consumer Base

+ Remarkable Growth – Chipotle has more than 2,250 locations (180+ in Texas) and continues to expand, opening 234 new restaurants over the last fiscal year, with plans to open another 103 over the next two quarters

+ Ideal 1031 Exchange Opportunity

+ Strong Traffic Counts, Excellent Visibility – Located on Dixieland Road, just off of US Expressway 83 with over 80,000 vehicles per day

+ Dense Retail Corridor – Surrounding national retailers include Target, Kohl’s, Marshalls, JCPenney, Office Depot, IHOP, Chuck E. Cheese’s, Panda Express and many more

+ Texas has No State Income Tax


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CHIPOTLE

TENANT OVERVIEW

Chipotle Mexican Grill is a fast casual restaurant specializing in tacos, burritos, and burrito bowls. First founded in Denver, Colorado, Chipotle has since expanded to over 2,250 locations across the world. The publicly traded company has grown to have over 65,000 employees worldwide. The company focuses on providing quality to its customers by serving the very best ingredients found. With an overarching goal of showing integrity, Chipotle serves responsibly raised meats and sustainable farm raised ingredients. The restaurant also offers gluten free and vegetarian options, allowing for maximum optionality for their customers. With lines nearly out of the building daily, the fast casual restaurant is taking the world by storm.

When Chipotle opened its first restaurant in 1993, the idea was simple: show that food served fast didn’t have to be a “fast-food” experience. Using high-quality raw ingredients, classic cooking techniques, and distinctive interior design, they brought features from the realm of fine dining to the world of quick-service restaurants. Over 24 years later, their devotion to seeking out the very best ingredients they can--raised with respect for animals, farmers, and the environment--remains at the core of their commitment to Food With Integrity. And as they’ve grown, their mission has expanded to ensuring that better food is accessible to everyone.

TYPE Public

YEARS IN BUSINESS 24

NO. OF LOCATIONS 2,250

HEADQUARTERS Denver, CO

WEBSITE www.chipotle.com


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PROPERTY AERIAL


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PROPERTY AERIAL | 3 MILE VIEW


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PROPERTY AERIAL | 1 MILE VIEW


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SITE DEMOGRAPHICS

7 MI

3 MI

1 MI

5 MI

60,000 30,000 090,000

US HIGHWAY 83

POPULATION

122,498 39,384

80,860

5,020

31,233

18,589

2,253

$49,600

$55,092

$59,325

$57,872

95,320

57,538

6,954

30,000 10,00060,000 20,00090,000 30,000

55,000

120,000 40,0000 0

0

HOUSEHOLDS

AVERAGE HOUSEHOLD INCOME TRAFFIC COUNTS (2016)

DIXIELAND ROAD

7 MI

3 MI

1 MI

5 MI

7 MI

3 MI

1 MI

5 MI

50,000 60,000

US HIGHWAY 7773,958


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WHY HARLINGEN?

LOCATIONHarlingen, Texas is located at the crossroads of the Rio Grande Valley in South Texas, along the U.S./Mexico border. Harlin-gen’s central location in the Rio Grande Valley (with a population of 1.3 million) has allowed it to share in the area’s growth and prosperity. It is also uniquely positioned to reach all major points of the Valley, and 1.1 million of the population, within a 45-minute drive.

Whether it is personal travel or importing and exporting goods and equipment, is much easier when there are plenty of options. Water access from the Port of Harlingen, personal and commercial air service from the Valley International Airport and the NAFTA CargoPort hub, or direct rail service with the Union Pacific Railroad makes the transportation for business or pleasure in Harlingen a breeze.

The Free Trade International Bridge at Los Indios is a state-of-the-art international bridge located just 10 miles South of Har-lingen.

The industrial and logistics community also benefits greatly from the Durango-Mazatlan Highway that traverses east-west across Northern Mexico. The highway is just 20 miles south of Harlingen in Matamoros, MX.

No other region in America offers such an advantageous array of resources at the strategic crossroads of the U.S./Mexico trade corridor.

UNITED STATESALBUQUERQUE 944ATLANTA 1,118BOSTON 2,185CHICAGO 1,422KANSAS CITY 998LOS ANGELES 1,583NEW YORK 1,962SAN FRANCISCO 1,968SEATTLE 2,413

TEXASAUSTIN 283BROWNSVILLE 23DALLAS 458EL PASO 772HOUSTON 283MCALLEN 34SAN ANTONIO 230

MEXICOMATAMOROS 37REYNOSA 79MONTERREY 165MEXICO CITY 478PORT CITY OF TAMPICO 275

DISTANCE FROM HARLINGEN TO OTHER MAJOR CITIES

SOURCE: HARLINGEN ECONOMIC DEVELOPMENT CORPORATION


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WHY HARLINGEN?

BUSINESS CLIMATEThe City of Harlingen, nestled near the U.S.-Mexico border in the Rio Grande Valley, has been enjoying steady growth over the years, as more and more busi-nesses realize the benefits of doing businesses near Mexico. Maquiladoras and many tax benefits in South Texas make Harlingen, located at the Crossroads of the Rio Grande Valley, a city poised for an economic boom.

Harlingen and the State of Texas also have gained much recognition for treating its businesses right. Among the awards and recognition are:

• Chief Executive Magazine Ranks Texas Best State For Business in 2016• Texas Wins Area Development’s Shovel Award for 11th Consecutive Year in 2016• Harlingen #2 Least Expensive Urban Area in the United States in 2015• Texas Wins Site Selection Magazine’s Governors Cup Award in 2016• Harlingen #1 in Lowest Cost of Living in the United States from 2010 to 2014• Business Facilities Magazine names Texas Top Ranted State for Business in 2015

TAX STRUCTURETexas - and particularly Harlingen has many benefits for prospective businesses. One major consideration for any employer is the cost of doing business and the State of Texas boasts great benefits for taxpayers.

• Texas has one of the lowest tax burdens in the U.S.• Texas has no personal or corporate income tax.• There is no state tax on property used for pollution control.• There is no state tax on goods in transit.• There is no state tax on machinery and equipment utilized in manufacturing

KEY INDUSTRIES

• Aerospace• Logistics & Distribution• Industrial & Automotive Supply• Healthcare Industry

2017 HARLINGEN MAJOR EMPLOYERS

CompanyNumber of Employees

Product/Service

Harlingen CISD 3,321 School District

Valley Baptist Medical Center 3,234 Health Care

Vicki Roy Home Health 975 Health Care

Advanced Call Center Technologies 889 Service Center

Dish Network 833 Service Center

United HealthCare Services, Inc. 679 Service Center

HEB (3) Harlingen Locations 607 Retail Operations

City of Harlingen 603 City Government

Bee First Primary Home Care 600 Health Care

Texas State Technical College 590 Technical College

Rio Grande State Center 570 Health Care

Harlingen Medical Center 559 Health Care

VA Texas Valley Coastal 487 Health Care

Time Warner Cable / Spectrum 445 Cable/Internet Provider

Wal-Mart Superstore 371 Retail Operations

Cardone Industries 232 Automotive

Su Clinica Familiar 216 Health Care

Bass Pro Shops 210 Retail Operations

Cracker Barrel 200 Retail/RestaurantSOURCE: HARLINGEN ECONOMIC DEVELOPMENT CORPORATION


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CHIPOTLE

WHY HARLINGEN?

INTERNATIONAL OPPORTUNITIESHarlingen’s close proximity to Mexico has created business opportunities that cannot be found in most areas of the United States. The Rio Grande Valley enjoys close economic ties with Mexico, as the growing maquiladora industry shows. Cameron County, of which Harlingen is a part, also has a foreign trade zone, the largest in Texas and one of the largest in the United States.

Foreign Trade Zone #62Foreign Trade Zone #62 is located in Cameron County, Texas and includes sites at the Harlingen Industrial Park and the Airpark at Valley International Airport in Harlingen. FTZ #62 is one of the largest foreign trade zones in the United States and the largest in Texas.

Free Trade International Bridge at Los Indios

• State-of-the-art international bridge• Located just 10 miles south of Harlingen.• Full U.S. Customs inspection facility• Receives a mix of pedestrians, passenger vehicles and commercial vehicles• Can accommodate up to 75 trucks simultaneously.• Acclaimed as the most time-efficient crossing in South Texas• Accesses a 4-lane highway in northern Mexico (Highway 2), offering a fast route to the border cities

of Matamoros, Reynosa as well as the industrial city of Monterrey.• With the completion of Mexico’s State of Tamaulipas new ‘autopista,’ the Free Trade Bridge will provide a seamless highway connection for more efficient

distribution of industrial products to interior Mexico.

INFRASTRUCTURETransportationResidents and businesses covered by road, air, water or railroad. Valley International Airport is the largest airport in the Rio Grande Valley, offering the NAFTA CargoPort. Union Pacific Railroad offers direct rail access through South Texas, and the Port of Harlingen can handle shipping needs over water.

A Choice in ElectricityElectric deregulation in Texas has opened up the market for many different electricity providers, meaning consumers are able to find cheap, affordable power.

Telecommunications ChoicesHarlingen is technologically prepared to handle new businesses and an influx of new residents. Time Warner Cable offers high-speed Internet as well as cable services and digital telephone. AT&T also offers DSL service as well as telephone. VTX provides fiber optic capabilities to the city as well.

SOURCE: HARLINGEN ECONOMIC DEVELOPMENT CORPORATION


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CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Af-filiates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the success-ful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a man-ner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property.

This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the own-er of the Property (the “Owner”), to be all-inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, mar-ket conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qual-ified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not

purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.

Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affil-iates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Mem-orandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property.

The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discus-sions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obli-gation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc.

DISCLAIMERS


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Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly.

IF THE BROKER REPRESENTS THE OWNER:The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written - listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can as-sist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent.

IF THE BROKER REPRESENTS THE BUYER:The broker becomes the buyer’s agent by entering into an agreement to repre-sent the buyer, usually through a written buyer representation agreement. A buy-er’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.

IF THE BROKER ACTS AS AN INTERMEDIARY:A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written con-sent of each party to the transaction to act as an intermediary.

Approved by the Texas Real Estate Commission for Voluntary UseTexas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction:

(1) shall treat all parties honestly;

(2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner;

(3) may not disclose that the buyer will pay a price greater than the price sub-mitted in a written offer unless authorized in writing to do so by the buyer; and

(4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property.

With the parties’ consent, a broker acting as an intermediary between the par-ties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out in-structions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party.

If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.

Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records.

INFORMATION ON BROKERAGE SERVICES

C H I P OT L E

EXCLUSIVE MARKETING ADVISORS

OFFER ING MEMORANDUM

C B R E C A P I TA L M A R K E T SJARED AUBREYSENIOR V ICE PRES IDENT+1 214 252 1031JARED.AUBREY@CBRE .COM

M ICHAEL AUSTRYVICE PRES IDENT+1 214 252 1115MICHAEL .AUSTRY@CBRE .COM

410 D IX I E LAND ROAD | HARL INGEN, TX 78552

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OFFERING MEMORANDUM CBRE CAPITAL MARKETS …...The industrial and logistics community also benefits...

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