MemorandumOffering
Brand New Observation Tower & Public Pay Parking Lot30 Year NNN Sale/Leaseback
Myrtle Beach, SC
Observation Tower
Public Pay Parking Lot
1406 Withers Dr, Myrtle Beach, SC 29577
Marcus & Millichap hereby advises all prospective purchasers ofNet Leased property as follows:
The information contained in this Marketing Brochure has beenobtained from sources we believe to be reliable. However,Marcus & Millichap has not and will not verify any of thisinformation, nor has Marcus & Millichap conducted anyinvestigation regarding these matters. Marcus & Millichap makesno guarantee, warranty or representation whatsoever about theaccuracy or completeness of any information provided.
As the Buyer of a net leased property, it is the Buyer’sresponsibility to independently confirm the accuracy andcompleteness of all material information before completing anypurchase. This Marketing Brochure is not a substitute for yourthorough due diligence investigation of this investmentopportunity. Marcus & Millichap expressly denies any obligationto conduct a due diligence examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used in thisMarketing Brochure are for example only and do not representthe current or future performance of this property. The value of anet leased 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 advisorsshould conduct a careful, independent investigation of any netleased property to determine to your satisfaction with thesuitability of the property for your needs.
Like all real estate investments, this investment carries significantrisks. Buyer and Buyer’s legal and financial advisors must requestand carefully review all legal and financial documents related tothe property and tenant. While the tenant’s past performance atthis or other locations is an important consideration, it is not aguarantee of future success. Similarly, the lease rate for some
properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projectedsales with little or no record of actual performance, orcomparable rents for the area. Returns are not guaranteed; thetenant and any guarantors may fail to pay the lease rent orproperty taxes, or may fail to comply with other material terms ofthe lease; cash flow may be interrupted in part or in whole due tomarket, economic, environmental or other conditions. Regardlessof tenant history and lease guarantees, Buyer is responsible forconducting his/her own investigation of all matters affecting theintrinsic value of the property and the value of any long-termlease, including the likelihood of locating a replacement tenant ifthe current tenant should default or abandon the property, andthe lease terms that Buyer may be able to negotiate with apotential replacement tenant considering the location of theproperty, and Buyer’s legal ability to make alternate use of theproperty.By accepting this Marketing Brochure you agree to releaseMarcus & Millichap Real Estate Investment Services and hold itharmless from any kind of claim, cost, expense, or liability arisingout of your investigation and/or purchase of this net leasedproperty.
CONFIDENTIALITY AND DISCLAIMER
The information contained in the following Marketing Brochure isproprietary and strictly confidential. It is intended to be reviewedonly by the party receiving it from Marcus & Millichap and shouldnot be made available to any other person or entity without thewritten consent of Marcus & Millichap. This Marketing Brochurehas been prepared to provide summary, unverified informationto prospective purchasers, and to establish only a preliminarylevel of interest in the subject property. The informationcontained herein is not a substitute for a thorough due diligenceinvestigation. 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 projectedfinancial performance of the property, the size and squarefootage of the property and improvements, the presence orabsence of contaminating substances, PCB’s or asbestos, thecompliance with State and Federal regulations, the physicalcondition of the improvements thereon, or the financialcondition or business prospects of any tenant, or any tenant’splans or intentions to continue its occupancy of the subjectproperty. The information contained in this Marketing Brochurehas 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 mattersand makes no warranty or representation whatsoever regardingthe accuracy or completeness of the information provided. Allpotential buyers must take appropriate measures to verify all ofthe information set forth herein.
NON-ENDORSEMENT NOTICE
Marcus & Millichap Real Estate Investment Services, Inc.(“M&M”) is not affiliated with, sponsored by, or endorsed by anycommercial tenant or lessee identified in this marketing package.The presence of any corporation’s logo or name is not intendedto indicate or imply affiliation with, or sponsorship orendorsement by, said corporation of M&M, its affiliates orsubsidiaries, or any agent, product, service, or commercial listingof M&M, and is solely included for the purpose of providingtenant lessee information about this listing to prospectivecustomers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASECONSULT YOUR MARCUS & MILLICHAP AGENT FOR MOREDETAILS.
Confidentiality and Disclaimer
Table of ContentsInvestment Highlights 4
Financial Analysis 5
Depreciation Analysis 6
Opportunity Zone 7
Amusement Zoning 8
Tenant Overview 9
Observation Tower 10
Property Photos 11-14
Local Area – New Developments 15
Demographics 16
Maps 17-19
Market Overview 20
Investment Highlights
About the Investment Brand New 30 Year Triple-Net (NNN) Lease Highly Desirable and Permissive “Amusement” Zoning Sublease with Lazarus Entertainment Group
Developing Family-Oriented Amusement Attraction | 200+ ft. Observation Tower
Projected to Open June 2020 Attractive Rental Increases One (1) Year Revolving Letter of Credit from JPMorgan Chase & Co. Designated Opportunity Zone | Potential for Parking Garage Development Qualifies for 7 Year Accelerated or One-Time Bonus Depreciation Located Outside of FEMA Flood Zones Largest Public Parking Operation in the Downtown Myrtle Beach Area Non-Recourse, Interest-Only Financing Available
About the Location One of the Nations’ Fastest Growing Vacation Destinations 19 Million Visitors in 2018 | 17 Million Arrive by Car Exceptional Real Estate Fundamentals | Located across the street from: Starbucks,
Tin Roof, Banditos Mexican Cantina, EPIC Arcade, The General Store, Burger Fi, First Citizens Bank ATM, RipTydz, The Boardwalk, and Multiple Hotels
Prime Public Pay Parking for Attraction, Beach, and Pier Access Robust Demographics | Myrtle Beach Ranked One of the Fastest Growing Areas in
the Country
About the Tenant / Brand The Lazarus Entertainment Group has operated parks on the Grand Strand for more
than 40 years Current Operations Include: Myrtle Waves Water Park, Wild Water and Wheels,
Broadway Grand Prix Racing Myrtle Beach Entertainment Parking LLC is a Myrtle Beach based parking lot
operator and developer with a 9-year operating history at this location
4Myrtle Beach Parking Lot and Observation Tower
PRICE: $21,000,000 | CAP: 5.00% | RENT: $1,050,000
Representative PhotoRepresentative Photo
Public Pay Parking Lot
Financial Analysis
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Property DescriptionProperty Myrtle Beach Parking Lot and Observation TowerProperty Address 1406 Withers DrCity, State, ZIP Myrtle Beach, SC 29577Year Built 2020Lot Size +/- 2.19 AcresType of Ownership Fee SimpleZoning Amusement
The OfferingPurchase Price $21,000,000CAP Rate 5.00%Annual Rent $1,050,000
Parking LotNumber of Parking Spaces 164 + 6 HandicapZoning for Garage Expansion Yes
Lease SummaryProperty Type Net Lease Parking Lot and Amusement ParkLease Guarantor Myrtle Beach Entertainment Parking, LLCOne Year Revolving Letter of Credit JPMorgan Chase & Co.Ownership Type PrivateOriginal Lease Term 30 YearsLease Commencement Upon Close of EscrowLease Expiration 30 Years from Close of EscrowLease Term Remaining 30 YearsLease Type Triple-Net (NNN)Roof & Structure Tenant ResponsibleRent Increases 2.00% Annual
RENT SCHEDULELease Year(s) Monthly Amount Annual Amount Escalation (%)
Year 1 $87,500 $1,050,000 -Year 2 $89,250 $1,071,000 2.00%Year 3 $91,035 $1,092,420 2.00%Year 4 $92,856 $1,114,268 2.00%Year 5 $94,713 $1,136,554 2.00%Year 6 $96,607 $1,159,285 2.00%Year 7 $98,539 $1,182,471 2.00%Year 8 $100,510 $1,206,120 2.00%Year 9 $102,520 $1,230,242 2.00%
Year 10 $104,571 $1,254,847 2.00%Year 11 $106,662 $1,279,944 2.00%Year 12 $108,795 $1,305,543 2.00%Year 13 $110,971 $1,331,654 2.00%Year 14 $113,191 $1,358,287 2.00%Year 15 $115,454 $1,385,453 2.00%Year 16 $117,763 $1,413,162 2.00%Year 17 $120,119 $1,441,425 2.00%Year 18 $122,521 $1,470,253 2.00%Year 19 $124,972 $1,499,659 2.00%Year 20 $127,471 $1,529,652 2.00%Year 21 $130,020 $1,560,245 2.00%Year 22 $132,621 $1,591,450 2.00%Year 23 $135,273 $1,623,279 2.00%Year 24 $137,979 $1,655,744 2.00%Year 25 $140,738 $1,688,859 2.00%Year 26 $143,553 $1,722,636 2.00%Year 27 $146,424 $1,757,089 2.00%Year 28 $149,353 $1,792,231 2.00%Year 29 $152,340 $1,828,075 2.00%Year 30 $155,386 $1,864,637 2.00%
PRICE: $21,000,000 | CAP: 5.00% | RENT: $1,050,000
Depreciation
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Asset Class Description of Assets Included General Depreciation System
80.0
Theme & Amusement ParksIncludes assets used in the provision of rides, attractions, and amusements in activities defined as theme and amusement parks, and includes appurtenances associated with a ride, attraction, amusement or theme setting within the park such as ticket booths, facades, shop interiors, and props, special purpose structures, and buildings other than warehouses, administration buildings, hotels, and motels. Includes all land improvements for or in support of park activities, (e.g., parking lots, sidewalks, waterways, bridges, fences, landscaping, etc.) and support functions (e.g., food and beverage retailing, souvenir vending and other nonlodging accommodations) if owned by the park and provided exclusively for the benefit of park patrons. Theme and amusement parks are defined as combinations of amusements, rides, and attractions which are permanently situated on park land and open to the public for the price of admission. This guideline class is a composite of all assets used in this industry except transportation equipment (general purpose trucks, cars, airplanes, etc., which are included in asset guideline classes with the prefix 00.2), assets used in the provision of administrative services (asset classes with the prefix 00.1), and warehouses, administration buildings, hotels and motels.
7 Years
Depreciation Accelerated Depreciation Bonus Depreciation
A reduction in the value of an asset with the passage of time,
due in particular to wear and tear. Typical Commercial Property:
39 Year Schedule
Modified Accelerated Cost Recovery System (Theme &
Amusement Parks) 7 Year Schedule
Eligible for properties with a useful life of under 20 years.
New Law: 100% Of The Property in Year One. – 1 Year Schedule Phase Out Beginning
on January 1, 2023
Opportunity Zone Map
Myrtle Beach Parking Lot and Observation Tower
The Tax Cuts and Jobs Act included a new federal incentive—Opportunity Zones—meant to spur investment in undercapitalized communities. Any corporation or individual with capital gains can qualify. The program provides three tax benefits for investing unrealized capital gains in Opportunity Zones:1.Temporary deferral of taxes on previously earned capital gains. Investors can place existing assets with accumulated capital gains into Opportunity Funds. Those existing capital gains are not taxed until the end of 2026 or when the asset is disposed of.2.Basis step-up of previously earned capital gains invested. For capital gains placed in Opportunity Funds for at least 5 years, investors’ basis on the original investment increases by 10 percent. If invested for at least 7 years, investors’ basis on the original investment increases by 15 percent.3.Permanent exclusion of taxable income on new gains. For investments held for at least 10 years, investors pay no taxes on any capital gains produced through their investment in Opportunity Funds (the investment vehicle that invests in Opportunity Zones).
Qualified Opportunity Zone
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Amusement Zoning
Myrtle Beach Parking Lot and Observation Tower 8
About Amusement Zoning
Encompassing the heart of the Myrtle Beach entertainment area, the Amusement Zone is the most permissive and most coveted zoning district in the City of Myrtle Beach.
The Amusement Zone has: No set back requirements Height restrictions up to 240 ft. The most permissive noise ordinances Virtually no restrictions on the types of uses that can be located on the real
estate.
The amusement zone will never be allowed to expand north beyond the brand new Hilton Ocean Enclave located at 15th avenue north - this area is reserved for the roughly 6,000 units of lodging located between 9th avenue north and 29th avenue north.
The extraordinarily permissive Amusement zoning has attracted a multitude of Ripley’s Entertainment attractions and the renowned Myrtle Beach Skywheel, a development funded in part by Koch Industries. Jimmy Buffet’s LandShark Bar and Grill located next to the Skywheel to take advantage of the Amusement Zoning, as well as multiple Bluegreen, Hilton, and Wyndham timeshare properties. Pedestrian counters monitored by the Myrtle Beach Downtown Redevelopment Corporation show that roughly 5,000,000 people per year enjoy the restaurants and attractions located in the Amusement Zone.
Myrtle Beach, SC
Myrtle Beach, SC
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Tenant and Subtenant Overview Myrtle Beach Entertainment Parking LLC Myrtle Beach Based Developer and Operator with 9 Year Operating
History at this Location Management Team Founded in 1992 as a professional asset
management company and has aligned itself with some of the mostrespected names in the industry. Over the years, the company has builta reputation based on proven methods of success and transparent, solidrelationships with investors and affiliates.
About Lazarus Entertainment Group The Lazarus Entertainment Group has operated parks on the Grand
Strand for more than 40 years beginning with the Myrtle Beach GrandPrix, the North Myrtle Beach Grand Prix, Wild Water & Wheels, and nowBroadway Grand Prix and Myrtle Waves Water Park. With the parksoperating as sister parks we are able to offer perks to season passholders, week pass holders and day ticket holders.
Current Operations Myrtle Waves Water Park Wild Water and Wheels Broadway Grand Prix Racing
Super Gyro Tower 200ft Observation Deck Expecting 300,000 Annual Visitors
Myrtle Beach Parking Lot and Observation Tower
Myrtle Waves Water Park
Representative Photo
Broadway Grand Prix Racing
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Observation Tower
Myrtle Beach Parking Lot and Observation Tower
Representative Photo
Representative PhotoRepresentative Photo
Property Photos
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Public Pay Parking Lot
Observation Tower
Property Photos
12Myrtle Beach Parking Lot and Observation Tower
Observation Tower
Public Pay Parking Lot
Property Photos
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Observation Tower
Public Pay Parking Lot
Private Parking for ResortsPrivate Parkingfor Resorts
Private Parkingfor Resorts
Property Photos
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Observation Tower
Private Parkingfor Resorts
Private Parkingfor Resorts
Public Pay Parking Lot
Private Parkingfor Resorts
Private Parkingfor Resorts
Local Area – New Developments
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Myrtle Beach, SC continues to rank as one of the fastest-growing family andvacation destinations in the nation, attracting roughly 19 million visitors annually.Given the accessibility and multitude of attractions for families, the Myrtle Beacharea received several new accolades in 2018 including being ranked by Google asthe "Third Most Searched Travel Destination in the World", one of the TravelChannel's "Best East Coast Beaches" and a "Top 10 Beach Town with the HighestQuality of Life" by Coastal Living.
Project Investment
THE BLVD
A new 55,000-square-foot complex along the Myrtle BeachBoardwalk at 14th Avenue North called THEBlvd was completedin October 2018. The new beach club brings several newrestaurants, retail stores, an arcade and a live music venue.
Ocean Enclave by HiltonNew hotel featuring 330 luxury oceanfront units reaching 27stories high. Now under construction with a projected completiondate in the summer of 2019.
Residence Inn by Marriott Myrtle Beach Oceanfront 305,964-square-foot hotel will be 17 stories high and include itsown parking structure and pool
Intracoastal Waterway Development
The development is proposed to include 1,600 units of homesand apartments as well as 370,000 square-feet of space for retailand dining. The development would include event space, docksfor boats, boat rentals and tours. Plans approved in Spring 2018
Caravelle Resort Undergoes Extensive Room Renovations 14 oceanfront properties and nearly 4,000 accommodation units,recently completed extensive renovation
South Bay Inn & Suites
A new oceanfront resort property, South Bay Inn & Suites,recently opened in Myrtle Beach along the boardwalk. The resorttotals 237,000-square-feet, is 19-stories high and includes 242guest rooms
Topgolf A new Topgolf opened in early 2019 in Myrtle Beach
Gateway Galleria Mixed-Use Complex Coming to Ocean Boulevard
20M, Four-story, 75,000-square-foot complex that will house over40 visitor condos and a bottom floor filled with restaurants,fitness and retail.
POPULATION2023 Projection 28,226 65,524 175,6882018 Estimate 25,701 56,439 151,9302010 Census 22,108 47,032 125,3382000 Census 18,844 32,054 83,632
INCOMEAverage $59,007 $63,276 $66,131Median $37,336 $44,084 $49,101Per Capita $26,146 $27,630 $28,212
HOUSEHOLDS2023 Projection 12,545 28,572 75,0462018 Estimate 11,331 24,582 64,6192010 Census 9,689 20,270 52,9452000 Census 8,635 14,436 36,365
HOUSING2018 $158,284 $180,842 $187,153
EMPLOYMENT2018 Daytime Population 60,142 86,262 176,4102018 Unemployment 5.00% 4.62% 4.88%2018 Median Time Traveled 19min 19min 21min
RACE & ETHNICITYWhite 65.66% 76.18% 82.01%Native American 0.31% 0.20% 0.15%African American 17.62% 11.48% 8.28%Asian/Pacific Islander 1.99% 2.01% 1.94%
Demographics
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Local Map
Myrtle Beach International Airport
Myrtle Beach Parking Lot and Observation Tower
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Regional Map
Myrtle Beach Parking Lot and Observation Tower
FEMA 2020 Proposed Flood Map
Myrtle Beach Parking Lot and Observation Tower
Zone AE: Areas subject to inundation by the 1-percent-annual-chance flood event determined by detailed methods.
Zone VE: Areas subject to inundation by the 1-percent-annual-chance flood event with additional hazards due to storm-induced velocity wave action.
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Myrtle Beach provides miles of shoreline, beachfront hotels,family-friendly attractions and a vibrant nightlife attracting visitors andresidents. The market is home to a variety of industries including technologyand tourism, and it is composed of Brunswick County in North Carolina andHorry County in South Carolina. The area’s five-year population growth andhousehold formation will far outpace the national rate of growth.
Employer Estimated # of Employees*Conway Medical Center 2,300Walmart 1,433Legacy Business Solutions LLC 1,300Grand Stand Regional Med Ctr 1,000Red Robin Gourmet Burgers Inc 885World Tour Golf Links 866Sands Resorts Holding LLC 750AVX Corporation 745Blue Cross 525Legends Real Estate 500Lowes 450
Major Employers
Market OverviewCity: Myrtle Beach | County: Horry | State: South Carolina
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Myrtle Beach, SC
Myrtle Beach Parking Lot and Observation Tower
METRO HIGHLIGHTS
GROWING TECHNOLOGY CENTERThe metro has become a technology startup hub as several higher-education institutions prepare and expand the workforce.
HIGHER EDUCATIONSeveral postsecondary schools are located in the metro, including Coastal Carolina University and Horry-Georgetown Technical College.
TOURISM AND GOLFMyrtle Beach is home to approximately 100 golf courses, offering a wide selection for both professional players and amateur golfers.
* # of Employees based on 10 mile radius
Broker of RecordBen YelmMarcus & MillichapRegional Manager, CharlestonTel: (843) 952-2300Lic.# 86628
EXCLUSIVE NET LEASE OFFERING
1406 Withers Dr, Myrtle Beach, SC 29577
