STARBUCKS MIXED-USE 2 West Gay Street - West Chester, PA OFFERING MEMORANDUM
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STARBUCKS MIXED-USE2 West Gay Street - West Chester, PA
OFFERING MEMORANDUM
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Scott WoodardNational Retail Group Philadelphia, PACell: 215.595.6214Office: 215.531.7058Email: [email protected] License: PA RS329242
TABLE OF CONTENTSSection 1: Investment SummaryThe Offering............................................................4Investment Highlights................................................5Retail Analysis..........................................................6Rent Schedule...........................................................7Income Breakdown...................................................8Section 2: Retail & Mixed Use OverviewStarbucks................................................................10Apartment Interior..............................................11-12
Section 3: Location OverviewRegional Map.......................................................14Aerial Map...........................................................16Location Overview............................................17-19OFFERED
EXCLUSIVELY BY
Derrick DoughertyFirst Vice PresidentPhiladelphia, PACell: 610.329.5886 Office: 215.531.7026Email: [email protected] License: PA RS305854
Philip SharrowNational Multi Housing GroupPhiladelphia, PA Cell: 856.701.3259Office: 215.531.7052Email: [email protected] License: PA RSR002048
Mark KrantzNational Retail GroupPhiladelphia, PALicense: PA RS336064
Steve GarthwaiteNational Retail GroupPhiladelphia, PALicense: PA RS332182
Marcus & Millichap2005 Market Street #1510
Philadelphia, PA 19103
P: 215.531.7000
www.marcusmillichap.com
Broker of Record: Mark TaylorLicense: PA RM423708
NON-ENDORSEMENT AND DISCLAIMER NOTICENON-ENDORSEMENTSMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this
marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship
or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial
listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee
information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE
DETAILS.
DISCLAIMERThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only
by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written
consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective
purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substi-
tute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or represen-
tation, with respect 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 presence or absence of contaminating substances, PCB’s or asbestos,
the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or
business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information
contained in this Marketing Brochure has 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 matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided.
All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark
of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.
Marcus & Millichap Real Estate Investment Services of Seattle, Inc. License: RB062197C
South High Street West Gay Street
PROPERTY ANALYSIS
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PRICE CAP RATE PRICE PER SF
5.27% $337.20
LEASE SUMMARY
Parcel Number ZoningNumber of
UnitsYear Built/Renovated
Building SizeRetail - Gross
Leaseable AreaType of
OwnershipLot Size Parking
01-009-0108.000 C-10 Commercial 4 Units 1980 8,452 SF 1,950 SF Fee Simple .07 Acres Street Parking
2 WEST GAY STREET - WEST CHESTER, PA
MULTIFAMILY SUMMARY
Unit Type Two Bed/Two Bath
# of Units 4 Units
Avg. Sq. Feet 1225 SF
Rental Range $1,675 - $1,800
Average Rent $1,768.75
Average Rent PSF (Scheduled) $1.44
Average Monthly Income $7,075.00
Average Rent (Potential) $1,800.00
Average Rent PSF (Potential) $1.47
Monthly Income (Potential) $7,200.00
MULTIFAMILY RENT ROLL
Unit A Unit B Unit C Unit D Total
Unit TypeTwo Bed/
Two Bath
Two Bed/
Two Bath
Two Bed/
Two Bath
Two Bed/
Two Bath-
Sq.Ft. 1,225 1,225 1,225 1,225 4,900
Current Rent/ Month $1,800.00 $1,800.00 $1,675.00 $1,800.00 $7,075.00
Current Rent PSF/Month $1.47 $1.47 $1.37 $1.47 $1.41
Scheduled Rent/ Month $1,800.00 $1,800.00 $1,675.00 $1,800.00 $7,075.00
Scheduled Rent PSF/Month $1.47 $1.47 $1.37 $1.47 $1.41
Potential Rent/ Month $1,800.00 $1,800.00 $1,800.00 $1,800.00 $7,200.00
Potential Rent PSF/Month $1.47 $1.47 $1.47 $1.47
$2,850,000NET OPERATING INCOME
$150,123
INVESTMENT HIGHLIGHTS:IRREPLACEABLE TROPHY CORNER
CENTER OF DOWNTOWN WEST CHESTER
APPROXIMATELY 5 YRS REMAINING ON RECENT RENEWAL CORPORATE NN LEASE
FOUR MARKET RATE LUXURY APARTMENTS RENTAL UPSIDE
HIGHLY VISIBLE AT SIGNALIZED CORNER 14,000 VPD WITH WALK SCORE OF 97
AFFLUENT TRADE AREA AVERAGE HHI EXCEEDS $113,000 WITHIN 3 MI.
26K+ UNIT GLOBAL BRAND NASDAQ: SBUX
STARBUCKS OPERATING ON SITE SINCE 2007 THREE 5 YEAR OPTIONS REMAINING WITH 10% INCREASES
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RETAIL ANALYSISTenant Starbucks
Guarantor Corporate
Address 2 West Gay Street, West Chester, PA
Retail Area 1,950 SF
Lot Size .07 Acres
Year Built / Renovated 1980
Lease/ Rent Commencement 8/29/2007
Lease/ Rent Expiration 2/28/2023
Base Lease Term *Option Term Started 03/1/18
Lease Term Remaining 5 Years
Annual Base Rent $94,380.00
Rent Increases None
Renewal Options Three(5)year options
Option Increases 10% Increase each option
Lease Type NN
Tenants Pro Rata Share 45%
Insurance Tenant
Taxes Tenant
CAM Tenant
Utilities Tenant
Financials/Sales Reporting None
Estoppel 30 Days
Ownership Interest Fee Simple
Early TerminationIn order to exercise early termination
tenants most give 270 day notice
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PROPERTYBUILDING
SFLOT SIZE(ACRES)
LEASE TERM REMAINING
YEARS ANNUAL RENT
MONTHLY RENT RENT PSF INCREASE
LEASE TYPE
RENEWAL OPTIONS
2 West Gay StreetWest Chester, PA
9,000 +/- .07 +/- 5 Years
$48.40
$48.40
$48.40
$48.40
$48.40
Option 2
$53.24
$53.24
$53.24
$53.24
Option 3
$58.56
$58.56
$58.56
$58.56
Option 4
$64.42
$64.42
$64.42
$64.42
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Year 14
Year 15
Year 16
Year 17
Year 18
Year 19
Year 20
$94,380.00
$94,380.00
$94,380.00
$94,380.00
$94,380.00
$103,818.00
$103,818.00
$103,818.00
$103,818.00
$103,818.00
$114,200.00
$114,200.00
$114,200.00
$114,200.00
$114,200.00
$125,620.00
$125,620.00
$125,620.00
$125,620.00
$125,620.00
$7,865.00
$7,865.00
$7,865.00
$7,865.00
$7,865.00
$8,651.50
$8,651.50
$8,651.50
$8,651.50
$8,651.50
$9,516.67
$9,516.67
$9,516.67
$9,516.67
$9,516.67
$10,468.33
$10,468.33
$10,468.33
$10,468.33
$10,468.33
$48.40
$48.40
$48.40
$48.40
$48.40
$53.24
$53.24
$53.24
$53.24
$53.24
$58.56
$58.56
$58.56
$58.56
$58.56
$64.42
$64.42
$64.42
$64.42
$64.42
$48.40
$48.40
$48.40
$48.40
$48.40
10.00%
$53.24
$53.24
$53.24
$53.24
10.00%
$58.56
$58.56
$58.56
$58.56
10.00%
$64.42
$64.42
$64.42
$64.42
NNThree 5-YearOptions
RENT SCHEDULE ( r e ta i l )
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pMulti Family Scheduled Base Rental Revenue $84,900.00
Vacancy $(2,547.00)
Multi Family EGI $82,353.00
Retail Scheduled Base Rental Revenue $94,380.00
Total Rental Revenue $176,733.00
EXPENSE REIMBURSEMENT REVENUE (RETAIL)
Real Estate Taxes $5,095.95
Insurance $3,748.95
Property Management $970.69
CAM $9,706.85
Total Expense Reimbursement Revenue $19,522.44
Effective Gross Revenue $196,255.44
OPERATING EXPENSES
Real Estate Taxes $11,324.33
Insurance $8,331.00
Management Fee $4,848.19
CAM
Fire Alarm $1,954.05
Water Service $-
Sanitary $3,217.00
Electric $2,336.04
Gas $-
West Chester Dues $1,464.04
Inspection $502.00
Trash $2,928.80
Cleaning $5,200.00
Landscape/snow Removal $1,468.75
Repairs and Maintenance $2,500.00
Total CAM $21,570.68
Total Operating Expenses $46,132.40
NET OPERATING INCOME $150,123.04
INCOME BREAKDOWN
60% RETAIL(STARBUCKS)
40% MULTIFAMILY(APARTMENTS)
Notes:*Multi Family vacancy based on 3% of Base Rent*Starbucks pays 10% property management fee*Management fee is 2.5% of EGR*Starbucks Reimburses their pro-rata share (45%) of Real Estate Taxes, Insurance, and CAM*CAM, Real Estate Taxes, Insurance Expenses based on 2017 numbers*Tenants pay Water and Gas direct
• $1,500,000 (limited by the cash flow)• 30 Year Amortization• 5 year fixed 4.75%• Non Recourse
Debt Quote:
*Loan information is subject to change. Contact Stephen Filippo, Director of Captial Markets, throughcontact information below.
Email: [email protected]: (212) 430-5288
RETAIL & MIXED-USEOVERVIEW
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OWNERSHIP:StarbuckS corporation
NO. OF LOCATIONS26,000 +/-
WEBSITE:www.starbuckscom
REPRESENTATIVE PHOTO
TENANT OVERVIEW
Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee
in the world, with more than 26,000 locations in North America, Latin America,
Europe, the Middle East and the Pacific Rim. Starbucks purchases and roasts
high-quality whole bean coffees and sells them along with fresh, rich-brewed,
Italian style espresso beverages, a variety of pastries and confections, and cof-
fee-related accessories and equipment -- primarily through its company operated
retail stores.
In addition to sales through our company-operated retail stores, Starbucks sells
whole bean coffees through a specialty sales group and supermarkets. Addition-
ally, Starbucks produces and sells bottled Frappuccino® coffee drink and a line
of premium ice creams through its joint venture partnerships and offers a line of
innovative premium teas produced by its wholly owned subsidiary, Tazo Tea Com-
pany. The Company’s objective is to establish Starbucks as the most recognized
and respected brand in the world.
To achieve this goal, the Company plans to continue to rapidly expand its retail
operations, grow its specialty sales and other operations, and selectively pursue
opportunities to leverage the Starbucks brand through the introduction of new
products and the development of new distribution channels.
TENANT OVERVIEW
Tenant Name Starbucks
Company Revenues $22.38B +/-
No. Of Locations 26,700 +/-
Headquartered Seattle, WA
Web Site www.starbucks.com
MARKET OVERVIEW
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REGIONAL MAP
STARBUCKS 1 MILE 3 MILES 5 MILES
Population 21,617 57,373 114,263
Households 7,819 20,695 42,380
Household Income $77,954 $113,662 $129,504
120 Miles to
New York
Baltimore
Phila
delphia
New York
100 Mile
s to B
altim
ore
35 Miles to Philadelphia
Within 35 MilesMAJOR COLLEGES/UNIVERSITIES AND CENTER CITY PHILADELPHIA
14,015 VPDIN CLOSE PROXIMITY TO TWO MAJOR ROADS
7.58%POSITIVE POPULATION GROWTH SINCE 2000
S High St
E G
ay S
t
West ChesterHenderson High School(1,200 +/- Total Enrolled)
Market St.
Subject Property
WEST CHESTERU N I V E R S I T Y
Fourth Largest University in the Philadelphia Region
406 Acres Primarily in the Borough of West Chester
1 of 4 PA Schools in the top 100 Kiplinger "best buys"
17,306 Total Enrolled with 19:1 Student to faculty Ratio
Subject Property
West ChesterUniversity
(17,306 Total Enrolled)
S. High Street
.8 Miles to W
est
Chester University
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West Chester, Pennsylvania, in Chester county, is 15 miles north of Wilmington, Delaware and
23 miles west of Philadelphia, Pennsylvania. West Chester University of Pennsylvania and the
Chester County government are located within the borough. The center of town is located at
the intersection of Market Street and High Street.
West Chester’s downtown area is pretty unbeatable. It combines the history and quaintness of a small country town with the restaurants
and nightlife of a major city. It’s walkable, diverse, and it’s only getting bigger. The borough has recently been nominated as one of ten
semifinalists in the 2017 Great American Main Street Award by the National Main Street Center. The Center also noted West Chester
borough’s creation of 241 new businesses over the last 16 years. They also noted West Chester’s winning of the Best New Shopping
District award from Philadelphia Magazine and the Distinctive Destination award from the National Trust for Historic Preservation.
QVC, the well-known shopping network, is headquartered in West Chester, and the city is home to several other major corporations.
Mars, Incorporated’s MARS DRINKS segment has a manufacturing facility in West Chester. Mars, Incorporated was ranked the sixth
largest privately held company by Forbes in 2015, generating $33-billion in revenue in that year.
LOCATION OVERVIEW
WEST CHESTER, PA
West Chester University is home to more than 16,000 students with an
endowment of more than $20-million, and it is the largest of 14 state universities
of the Pennsylvania State System of Higher Education (PASSHE). The Masters
Universities was recognized by U.S. News & World Report in 2017. Additionally,
the university is an accredited institution by the Middle States Association of
Colleges and Schools.
The school has received a growing recognition as the nation’s center for formal
poetry. Its annual conference on form and narrative in poetry began in 1995 and
is now the nation’s only conference devoted to New Formalism. It has established
a poetry center that sponsors readings and an annual book competition oriented
toward formal poetry. It has also established Iris Spencer awards recognizing
undergraduate achievement in formal poetry.
The West Chester University “Incomparable” Golden Rams Marching Band, which
has over 300 members, performs pre-game, halftime, or post-game at all home
and select away football games in Pennsylvania, New Jersey, and in Delaware.
The Golden Rams have performed in the Macy’s Thanksgiving Day Parade,
Philadelphia Thanksgiving Day parade, Philadelphia Eagles games, Pittsburgh
Steelers games, and the annual Collegiate Marching Band Festival in Allentown,
Pennsylvania. In 2009, the band attended the Bands of America Grand National
Championships in Indianapolis, an honor given to only two college bands in the
United States each year
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LOCATION OVERVIEW
The Philadelphia metro encompasses 11 counties in four states:Philadelphia, Delaware, Bucks, Chester and Montgomery in Philadelphia;Gloucester, Burlington, Camden and Salem counties in New Jersey;New Castle County in Delaware; and Cecil County in Maryland. The DelawareRiver bisects the metropolis from northeast to southwest and serves as the borderbetween Pennsylvania and New Jersey. The Schuylkill River passes through the heart ofPhiladelphia, separating West Philadelphia from Center City. The Philadelphia metro containsapproximately 6.1 million residents. Although the metro has more than 360 municipalities, few havemore than 25,000 citizens. Philadelphia is the largest city with approximately 1.6 million residents.
METRO
ECONOMY
� Drivers of the region’s economy include pharmaceuticals, biotechnology, financial services, education, transportation logistics, advanced manufacturing and telecommunications.
� The Philadelphia area is home to 12 Fortune 500 companies that operate across a broad spectrum of industries. � Philadelphia is headquarters of the Federal Reserve’s Third District, which, along with the U.S. Mint, the Philadelphia
Stock Exchange and companies such as Lincoln Financial Group and Vanguard, helps shape a formidable financial sector.
MANUFACTURING6%
GOVERNMENT
HEALTH SERVICESEDUCATION AND
+OTHER SERVICES
4%
LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES
18%AND UTILITIES
TRADE, TRANSPORTATION CONSTRUCTION
PROFESSIONAL ANDBUSINESS SERVICES
2%INFORMATION
16%
4%
12% 9% 7%
21%
SHARE OF 2016 TOTAL EMPLOYMENT
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LOCATION OVERVIEW
DEMOGRAPHICS
38.52016
MEDIAN AGE:
U.S. Median:
37.7
$61,8002016 MEDIAN
HOUSEHOLD INCOME:
U.S. Median:
$57,200
6.1M2016
POPULATION:
Growth2016-2021*:
2.1%
2.3M2016
HOUSEHOLDS:
2.6%
Growth2016-2021*:
Philadelphia offers its residents an attractive package of economic, educational, cultur-al and recreational advantages. Its transformation from a manufacturing-based economy to one more reliant on information will continue to provide greater economic opportuni-ties. In addition, the cost of living in Philadelphia is much less than in other major East Coast markets. Philadelphia provides both visitors and locals with a wide array of desti-nations. Art and science museums are plentiful, and the restaurant and nightclub scene is alive in the Center City area. The metro houses major professional sports teams, in-cluding the Eagles (NFL), 76ers (NBA), Phillies (MLB), Flyers (NHL) and Union (MLS) in addition to numerous golf courses, bike paths and water-related activities
* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau
QUALITY OF LIFE
� The metro is expected to add nearly 130,000 people through 2021, which will result in the formation of nearly 60,000 households.
� A median home price below the U.S. level has allowed 67 percent of households to afford to own their homes, compared with 64 percent for the nation.
� Roughly 34 percent of people age 25 and older hold a bachelor’s degree; among those residents, 13 percent also have earned a graduate or professional degree.
SPORTS
EDUCATION
ARTS & ENTERTAINMENT
SPORTS
EDUCATION
ARTS & ENTERTAINMENT
SPORTS
EDUCATION
ARTS & ENTERTAINMENT
STARBUCKS MIXED-USE2 West Gay Street - West Chester, PA
OFFERING MEMORANDUM
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