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RARE 9% CAP GROCERY-ANCHORED CENTER OFFERING MEMORANDUM 7813 BEULAH CHURCH ROAD, LOUISVILLE KY 40228
RARE 9% CAP GROCERY-ANCHORED CENTER
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7813 BEULAH CHURCH ROAD, LOUISVILLE KY 40228
The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and itshould not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees thatrecipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property, please promptly return this offering memorandum to Marcus &Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level ofinterest 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 withrespect 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 presenceor absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or financial condition orbusiness prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe reliable; however, Marcus & Millichap has not verified, and will not verify, any of theinformation contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy orcompleteness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for theircosts and expenses of investigating the subject property.
Rare 9% Cap Grocery-Anchored Center in Louisville Confidentiality and Disclaimer | 02
CONFIDENTIALITY AND DISCLAIMER:
PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONTACT MARCUS & MILLICHAP FOR MORE DETAILS.Copyright © 2019 CREOP, LLC. All Rights Reserved.
Rare 9% Cap Grocery-Anchored Center in Louisville Investment Summary | 03
OFFERING SUMMARYADDRESS 7813 Beulah Church Road
Louisville KY 40228
COUNTY Jefferson
MARKET Louisville
SUBMARKET South Central
GLA (SF) 71,750
LAND SF 304,920 SF
YEAR BUILT 1981
YEAR RENOVATED 2007-2017
APN 064602560000
OWNERSHIP TYPE Fee Simple
FINANCIAL SUMMARYOFFERING PRICE $7,650,000
PRICE PSF $106.62
OCCUPANCY 100 %
NOI (CURRENT) $692,987
CAP RATE (CURRENT) 9.06 %
PROPOSED FINANCINGLOAN TYPE Fully Amortized
DOWN PAYMENT $1,912,500
LOAN AMOUNT $5,737,500
INTEREST RATE 5.00 %
ANNUAL DEBT SERVICE $369,589
LOAN TO VALUE 75 %
AMORTIZATION PERIOD 30 Years
NOTES Loan is assumed to be a 75% LTVinstrument with a 10-year term and a 30-year amortization, with a fixed rate of 5%
DEMOGRAPHICS 1 MILE 3 MILE 5 MILE2018 Population 9,233 67,403 177,469
2018 Median HH Income $67,017 $62,905 $57,222
2018 Average HH Income $78,084 $75,700 $71,304
Grocery-anchored neighborhood center
Growing market area in the nation's 44th largest MSA
Cash-on-cash return of just under 17% in Year 1
Strong e-commerce resistant tenancy
Brand new day care facility with 10-year lease term
Rare opportunity to acquire grocery-anchored center inLouisville MSA
Marcus & Millichap is pleased to present Beulah Church ShoppingCenter, a 72,250 sf grocery-anchored shopping center located insoutheast Louisville, Kentucky. The property is a former KMart which thecurrent owner converted to a multi-tenant property in 2007. Today it ishome to Price Less Foods (a division of Houchens, Inc.), Dollar Tree, theLouisville Department of Motor Vehicles, and two popular localrestaurants, Puerto Vallarta Mexican Restaurant, and Bungalow Joe's.
Houchens, Inc. (based in Bowling Green, KY) is one of the top 100employee-owned companies in the country, with over $3.3B in annualrevenues. In addition to Price Less, Houchens also operates the IGA andSave-a-Lot grocery brands.
The center is considered to be part of the South Central submarket, one ofthe MSA's strongest. There are approximatyely 1,100 retail propertiestotaling 15.3M sf, of which only 2.7% is currently vacant, making it one ofthe strongest submarkets in the Louisville MSA.
The property is well-located only 1/2 mile off the I-265 Beltway, enablingit to serve a large trade area (the three-mile population is 67,403) with anaverage household income of $75,700.
Rare 9% Cap Grocery-Anchored Center in Louisville Location Summary | 04
Louisville, KY is situated on the south side of the OhioRiver, which separates Kentucky and Indiana. It is home tothe Kentucky Derby (known as "the fastest two minutes insports"). Every May Churchill Downs hosts the first leg ofthe Triple Crown of horse racing. Louisville is also home tothe Louisville Slugger Museum and Factory, and the famousLouisville Slugger bats are still manufactured here. The cityis also home to the air hub for UPS, the corporateheadquarters for Papa John's Pizza, YUM! Brands (KFC,Taco Bell, and Pizza Hut), and Humana and is also home totwo large Ford manufacturing plants for both light andheavy trucks.
Given the MSA (which includes a total of just under 1.3million in population) covers parts of both Kentucky andIndiana, it is often referred to as "Kentuckiana" and is alsooften called "The Gateway to the South". It is the home ofsuch famous athletes as Muhammad Ali, Paul Hornung,Ulysses "Junior" Bridgeman, Darrell Griffith, and manyothers, and is also the home of the current Senate MajorityLeader Mitch McConnell and Oscar-winning movie starJennifer Lawrence.
Louisville today is home to dozens of companies andorganizations across several industrial classifications.However, the underpinning of the city's economy since itsearliest days has been the shipping and cargo industries. Itsstrategic location at the Falls of the Ohio, as well as itsunique position in the central United States (within oneday's road travel to 60% of the cities in the continental U.S.)make it a practical location for the transfer of cargo alongits route to other destinations. The Louisville and PortlandCanal and the Louisville and Nashville Railroad wereimportant links in water and rail transportation.
Louisville's importance to the shipping industry continuestoday with the presence of the Worldport global air-freighthub for UPS at Louisville International Airport. Louisville'slocation at the crossroads of three major interstatehighways (I-64, I-65, and I-71) also contributes to itsmodern-day strategic importance to the shipping and cargoindustry. In addition, the Port of Louisville continuesLouisville's river shipping presence at Jefferson RiverportInternational. As of 2003, Louisville ranks as the seventh-largest inland port in the United States.
Regional Map
Locator Map
Rare 9% Cap Grocery-Anchored Center in Louisville Property Features | 05
PROPERTY FEATURESNUMBER OF TENANTS 14
GLA (SF) 71,750
LAND SF 304,920
LAND ACRES 7.0
YEAR BUILT 1981
YEAR RENOVATED 2007-2017
# OF PARCELS 1
NUMBER OF BUILDINGS 1
TRAFFIC COUNTS 18340
NUMBER OF INGRESSES 3
NUMBER OF EGRESSES 3
TENANT INFORMATIONMAJOR TENANT/S Price Less Foods, Dollar Tree
LEASE TYPE NNN
Rare 9% Cap Grocery-Anchored Center in Louisville Aerial Map | 06
Rare 9% Cap Grocery-Anchored Center in Louisville Property Images | 07
Rare 9% Cap Grocery-Anchored Center in Louisville Property Images | 08
Rare 9% Cap Grocery-Anchored Center in Louisville Property Images | 09
Rare 9% Cap Grocery-Anchored Center in Louisville Income & Expense Analysis | 10
INCOME CURRENT YEAR 2
Gross Potential Rent $695,151 $698,354
CAM Revenue $227,955 $232,514
Effective Gross Income $923,106 $930,868
Less: Expenses $230,119 $234,347
Net Operating Income $692,987 $696,522
Annual Debt Service $369,589 $369,589
Debt Coverage Ratio 1.88 1.88
Cash Flow After Debt Service $323,398 $326,932
Principal Reduction $82,719 $82,719
Total Return 21.2 % $406,117 21.4 % $409,651
EXPENSES CURRENT YEAR 2
Real Estate Taxes $75,781 $77,297
Insurance $22,840 $23,297
Management Fee $32,309 $32,580
Repairs & Maintenance $47,401 $48,349
Utilities $47,169 $48,112
Other Expenses $4,619 $4,711
Total Operating Expense $230,119 $234,347
Expense / SF $3.20 $3.26
% of EGI 24.93 % 25.18 %
REVENUE ALLOCATION
DISTRIBUTION OF EXPENSES
Rare 9% Cap Grocery-Anchored Center in Louisville Multiyear Cash Flow Assumptions | 11
GLOBALSale Price $7,650,000
Analysis Period 2 year(s)
Commencement Date Dec. 1, 2019
INCOMECAM Revenue 2.00 %
EXPENSESReal Estate Taxes 2.00 %
Insurance 2.00 %
Repairs & Maintenance 2.00 %
Utilities 2.00 %
Other Expenses 2.00 %
PROPOSED FINANCINGLoan Type Fully Amortized
Down Payment $1,912,500
Loan Amount $5,737,500
Interest Rate 5.00 %
Annual Debt Service $369,589
Loan to Value 75 %
Amortization Period 30 Years
Notes Loan is assumed to be a 75%LTV instrument with a 10-yearterm and a 30-yearamortization, with a fixed rate of5%
Effective Gross Income vs Operating Expenses
Rare 9% Cap Grocery-Anchored Center in Louisville Cash Flow Analysis | 12
CASH FLOWCalendar Year Year1 Year 2Gross Potential RevenueGross Rental Income $695,151 $698,354CAM Revenue $227,955 $232,514Gross Potential Income $923,106 $930,868
Effective Gross Income $923,106 $930,868Operating ExpensesReal Estate Taxes $75,781 $77,297Insurance $22,840 $23,297Management Fee $32,309 $32,580Repairs & Maintenance $47,401 $48,349Utilities $47,169 $48,112Other Expenses $4,619 $4,711Total Operating Expense $230,119 $234,347
Net Operating Income $692,987 $696,522Annual Debt Service $369,589 $369,589Cash Flow $323,398 $326,932
Calendar Year Year1 Year 2Financial MetricsCash on Cash Return b/t 16.91 % 17.09 %CAP Rate 9.06 % 9.10 %Debt Coverage Ratio 1.88 1.88Operating Expense Ratio 24.92 % 25.17 %Gross Multiplier (GRM) 8.29 8.22Loan to Value 75.01 % 73.86 %Breakeven Ratio 64.97 % 64.88 %Price / SF $106.62 $106.62Expense / SF $3.20 $3.26Income / SF $12.86 $12.97
Rare 9% Cap Grocery-Anchored Center in Louisville Rent Roll Details | 14
Lease Term Rental Rates
Suite Tenant Name SquareFeet
% of NRA Lease Start Lease End Begin Date MonthlyBase Rent
MonthlyPSF
Annual BaseRent
AnnualPSF
CAM Fee(Annual)
Lease Type Options/Notes
120-121 Price Less Foods 26,155 36.45% 03/20/13 03/19/23 CURRENT $13,078 $0.50 $156,930 $6.00 $91,542.50 NNN Tenant has three (3) five-yearrenewal options; rent increases10% in each option period
116-118 Dollar Tree 10,500 14.63% 09/15/14 03/14/25 CURRENT $9,625 $0.92 $115,500 $11.00 $36,750.00 NNN Tenant has two (2) additionalrenewal options; base rent willincrease $.50 psf in each optionperiod
112-115 Department of MotorVehicles
6,420 8.95% 09/01/18 08/31/23 CURRENT $7,902 $1.23 $94,823 $14.77 Gross Lease renews annually as part ofthe city of Louisville's budgetprocess
102 Bungalow Joe's 3,442 4.80% 05/01/10 10/31/21 CURRENT $5,137 $1.49 $61,646 $17.91 $12,047.00 NNN Tenant has two (2) five-yearoptions; rent increases 3% iin eachoption period
102S Bungalow Joe's Storage 100 0.14% 05/01/16 10/31/21 CURRENT $150 $1.50 $1,800 $18.00 Gross M-T-M storage area
107 Serenity Grace 1,000 1.39% 01/01/18 02/28/23 CURRENT $1,350 $1.35 $16,200 $16.20 $3,500.00 NNN One (1) five-year renewal optionwith a 3% rental increase
107S Serenity Grace Storage 100 0.14% 01/01/18 02/28/23 CURRENT $150 $1.50 $1,800 $18.00 Gross
108-111 Puerto Vallarta 4,080 5.69% 07/01/08 09/30/23 CURRENT $4,597 $1.13 $55,162 $13.52 $14,280.00 NNN
07/01/2019 $4,689 $1.15 $56,265 $13.80
07/01/2020 $4,783 $1.17 $57,390 $14.04
07/01/2021 $4,878 $1.20 $58,538 $14.40
07/01/2022 $4,976 $1.22 $59,709 $14.64
105 Elegant Nails 1,480 2.06% 05/01/12 03/31/21 CURRENT $2,543 $1.72 $30,518 $20.62 $5,180.00 NNN
05/01/2020 $2,619 $1.77 $31,433 $21.24
106 Genesis Hair Salon 2,000 2.79% 08/01/06 07/31/20 CURRENT $2,730 $1.37 $32,760 $16.38 $7,000.00 NNN
08/01/2019 $2,839 $1.42 $34,070 $17.04
103 Vitamin Store 1,194 1.66% 09/01/17 08/31/22 CURRENT $1,589 $1.33 $19,068 $15.97 $4,179.00 NNN One (1) five-year renewal optionwith 3% annual increases
09/01/2019 $1,637 $1.37 $19,640 $16.44
09/01/2020 $1,686 $1.41 $20,229 $16.92
09/01/2021 $1,736 $1.45 $20,836 $17.40
104 Liquor Store 1,838 2.56% 04/01/17 12/31/21 CURRENT $2,440 $1.33 $29,279 $15.93 $6,433.00 NNN One (1) five-year renewal optionwith 3% annual increases
119 China Chef 1,441 2.01% 07/01/14 06/20/20 CURRENT $2,032 $1.41 $24,382 $16.92 $5,043.50 NNN Two (2) five-year renewal options
122 Day Care Facility 12,000 16.72% 12/01/19 11/30/29 CURRENT $4,500 $0.38 $54,000 $4.50 $42,000.00 NNN Tenant will also have two (2) five-year renewal options at then-market rents
12/01/2020 $4,635 $0.39 $55,620 $4.68
12/01/2021 $4,774 $0.40 $57,289 $4.80
12/01/2022 $4,917 $0.41 $59,007 $4.92
12/01/2023 $5,065 $0.42 $60,777 $5.04
Totals 71,750 $57,822 $693,868 $227,955.00
Rare 9% Cap Grocery-Anchored Center in Louisville Tenant Profile | 15
Name ValueTrade Name Price Less FoodsHeadquartered Bowling Green, KYWebsite www.mypricelessfoods.com# of Locations 28
DescriptionPrice Less Foods, a division of Houchens, Inc., is a chain of supermarkets operating in Kentucky,Alabama, Indiana, Illinois, Tennessee, and Virginia. They operate on a cost-plus format. Their goodsare priced at a 10% premium to their costs, and they do not have weekly sales as a result.
Name ValueTrade Name Dollar TreeHeadquartered Chesapeake, VAWebsite www.dollartree.com# of Locations 4900
DescriptionDollar Tree is the largest and most successful single-price-point retailer in North America, operatingthousands of stores across 48 contiguous U.S. states and five Canadian provinces, supported by asolid and scalable logistics network.
Rare 9% Cap Grocery-Anchored Center in Louisville Sale Comparables Summary | 16
1
Town Center400-632 E. Diamond Ave.Evansville, IN 47711
RSF 143,054
YEAR BUILT 1992
SALE PRICE $8,530,000
PRICE/SF $59.63
CAP RATE 9.00 %
OCCUPANCY 100.00 %
LEASE TYPE NNN
CLOSING DATE 8/31/2017
Cap Rate Range 8.25 % - 9.06 %
LOW HIGH
Price/Square Ft $60 - $108
LOW HIGH
DOM Range
LOW HIGH
2
Stonewall Shopping Center3101 Clays Mill Rd.Lexington, KY 40503
RSF 78,142
YEAR BUILT 1981
SALE PRICE $8,450,000
PRICE/SF $108.14
CAP RATE 8.25 %
OCCUPANCY 96.00 %
LEASE TYPE NNN
CLOSING DATE 7/20/2018
Cap Rate Range 8.25 % - 9.06 %
LOW HIGH
Price/Square Ft $60 - $108
LOW HIGH
DOM Range
LOW HIGH
Rare 9% Cap Grocery-Anchored Center in Louisville Sale Comparables Summary | 17
3
Bitterweet Plaza306 N. Bittersweet RdMishawaka, IN 46544
RSF 90,690
YEAR BUILT 1992
SALE PRICE $7,850,000
PRICE/SF $86.56
CAP RATE 8.80 %
OCCUPANCY 100.00 %
LEASE TYPE NNN
CLOSING DATE 11/7/2018
Cap Rate Range 8.25 % - 9.06 %
LOW HIGH
Price/Square Ft $60 - $108
LOW HIGH
DOM Range
LOW HIGH
S
Rare 9% Cap Grocery-AnchoredCenter in Louisville
7813 Beulah Church RoadLouisville, KY 40228
RSF 71,750
YEAR BUILT 1981
ASKING PRICE $7,650,000
PRICE/SF $106.62
CAP RATE 9.06 %
OCCUPANCY 100.00 %
LEASE TYPE NNN
Cap Rate Range 8.25 % - 9.06 %
LOW HIGH
Price/Square Ft $60 - $108
LOW HIGH
Rare 9% Cap Grocery-Anchored Center in Louisville Demographics | 18
POPULATION 1 MILE 3 MILE 5 MILE
2000 Population 7,387 49,334 140,811
2010 Population 8,713 63,279 167,365
2018 Population 9,233 67,403 177,469
2023 Population 9,554 69,980 183,449
2018 African American 926 9,124 34,182
2018 American Indian 11 122 351
2018 Asian 154 1,487 4,097
2018 Hispanic 371 4,012 12,824
2018 White 7,810 53,240 128,485
2018 Other Race 130 1,535 4,984
2018 Multiracial 199 1,847 5,262
2018-2023: Population: Growth Rate 3.45 % 3.75 % 3.35 %
2018 HOUSEHOLD INCOME 1 MILE 3 MILE 5 MILE
less than $15,000 181 1,727 6,065
$15,000-$24,999 260 1,713 5,699
$25,000-$34,999 294 2,399 7,148
$35,000-$49,999 538 3,930 10,431
$50,000-$74,999 828 6,005 14,893
$75,000-$99,999 807 4,678 10,726
$100,000-$149,999 682 4,675 10,592
$150,000-$199,999 107 1,239 2,932
$200,000 or greater 109 598 1,645
Median HH Income $67,017 $62,905 $57,222
Average HH Income $78,084 $75,700 $71,304
HOUSEHOLDS 1 MILE 3 MILE 5 MILE
2000 Total Housing 2,887 19,924 57,261
2010 Total Households 3,594 25,397 66,315
2018 Total Households 3,805 26,964 70,131
2023 Total Households 3,932 27,930 72,360
2018 Average Household Size 2.43 2.49 2.52
2000 Owner Occupied Housing 2,247 15,033 39,543
2000 Renter Occupied Housing 542 4,031 15,285
2018 Owner Occupied Housing 3,255 20,458 48,208
2018 Renter Occupied Housing 550 6,506 21,923
2018 Vacant Housing 60 1,129 3,921
2018 Total Housing 3,865 28,093 74,052
2023 Owner Occupied Housing 3,393 21,375 50,459
2023 Renter Occupied Housing 539 6,554 21,900
2023 Vacant Housing 58 1,125 3,913
2023 Total Housing 3,990 29,055 76,273
2018-2023: Households: Growth Rate 3.30 % 3.55 % 3.15 %
Source: esri
Rare 9% Cap Grocery-Anchored Center inLouisville
Exclusively Marketed by:
John Beeland Larry HausmanAssociate Director First Vice President(502) 329-5922 (502) 329-5924License # 218528 License # [email protected] [email protected]
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