Thursday, February 2, 2012

01-19: Taco Bell, Burger King, AutoZone, Strip centers, KinderCare, Marsh, Imagine Schoo



Advisory: The 10 yrs US Treasury is now below 1.9%.  The upside is interest rate is in record-low territory while the down side is the cap rate is also inching down.  This week, there is a  Walgreens built in 2009 in Pacifica, CA on the market.  It’s listed at $8.6M and offers 4.71% cap!  The last time prior to this property, the below 5% cap rate for Walgreens was around 2006 when it was the seller’s market. Transmercial also sees restaurant properties on long term ground lease offering 5.5% cap.   


  • AHI: Avg. Household Income.  National average is about $50+K/yr.
  • NOI: Net Operating Income.  It’s the income after all expenses (prop taxes, ins., maintenance) paid.
  • NNN: Triple net lease in which tenants pay taxes, insurance and maintenance expenses.
  • NNN-: Triple net lease with landlord responsible for roof and structure.  Used by Transmercial only.
  1.  Taco Bell in Folsom, CA: 2600 SF new Taco Bell on a parcel near Hwy 50 exit in Sacramento suburbs.  Excellent demographics: expanding (73% since 2000) & affluent (AHI $130K/yr).  Long term NNN lease.  NOI $114K/yr. $1.825M. 6.25% cap. 
  2. Burger King in Prairieville, LA: 3000 SF Burger King on .8 ac lot on Airline Hwy in an affluent (AHI $124K/yr in 1 mile) Barton Rouge suburbs.  New 20 yrs absolute NNN lease to the 2nd largest Burge King franchisee with over 250 restaurants and $300M in revenue.  NOI $124K/yr. $1.72M. 7.25% cap. 
  3. AutoZone is Irmo, SC: 7370 SF AutoZone built in 2005 on .8 ac outparcel to Publix anchored shopping center in upper middle class Columbia suburbs. 20 yrs NNN- lease.  NOI $108K/yr. $1.58M. 6.86% cap.  Buyer to assume $1.11M loan at 5.5% interest. 
  4. Strip Mall in Gilbert, AZ: 7200 SF attractive retail center built in 2003 on 1.41 acres lot in high income (AHI $107K/yr in 1 mile) Phoenix metro.  100% NNN lease to 3 tenants.  NOI $114K/yr. $1.366M. 8.4% cap. 
  5. Walmart Shadow Center in Rock Hill, SC: 50,000 SF 4-building retail center built in 2008 on 8+ acres in high income Charlotte suburbs.  Shadow anchored by Wal-mart Supercenter.  100% NNN leased to 19 tenants.  NOI $754K/yr. $8.38M. 9% cap. 
  6. KinderCare Learning Center in Rancho Santa Margarita, CA: 8309 SF childcare center built in 2002 on .79 acre lot in an affluent (AHI $135K/yr in 1 mile) master planned community in  Southern CA.  15 yrs NNN corp lease with 5 yrs left to KinderCare Learning Center, a national childcare provider. NOI $207K/yr. with 10% rent bump in 7/2012. $2.956M. 7% cap now and 7.7% in July 2012.  
  7. Marsh Supermarket in Lafayette, IN: 84,064 SF supermarket built in 1995 on 12 acres lot next to Sam’s Club and across from Lowes  30 minutes NW of Indianapolis.  20 yrs absolute NNN lease with 15 yrs left to Marsh Supermarket, a regional supermarket chain.  NOI $600K/yr. $6.2M. 9.7% cap.  Buyer to assume $4.39M loan at 5.88% interest.
  8. Charter School in Phoenix, AZ: 52,800 SF single-tenant charter school on 3.27 ac corner lot.  10 yrs NNN- extension (tenant has been here since 2001) to Imagine Schools, a charter school with 72 schools in 12 states. NOI $443K/yr with generous 3% annual rent bump.  $5.4M. 8.45% cap.  Award winning Imagine School location.

© Transmercial 2012.
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