PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA EXCLUSIVE INVESTMENT OFFERING
FEATURES: •
Irreplaceable Location in the Heart of Broadway Retail Corridor (Across from Park Place: Macy’s, Sears, Dillard’s, Century Theaters, Borders, Old Navy)
•
Fronting Major Retail Thoroughfare / Bookended by Tucson’s Busiest Intersections (Broadway & Wilmot: 93,500 Cars Per Day; Broadway & Craycroft: 92,000 Cars Per Day)
•
Attractive Below Market Assumable Financing (5.51% Fixed Interest, 30 Year Amortization, 62% LTV)
•
Dense, In‐Fill Demographics (572,930 People in Immediate Trade Area)
•
2004 Pride of Ownership Construction
Chris Rodriguez | Adam Indihar Pacific Commercial Investments, Inc. 3700 Campus Drive, Suite 201A Newport Beach, California 92660 Phone (949) 723‐5800 | Fax (949) 723‐5801
[email protected] |
[email protected]
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA CONFIDENTIALITY This is a confidential marketing profile (the "Profile") intended solely for your limited use and benefit in determining whether you desire to express further interest in purchasing the "Property", located in Tucson, Arizona. This Profile has been prepared by Pacific Commercial Investments, Inc. ("PCI") on behalf of the owner of the Property (the "Owner") and has been reviewed by representatives of the Owner. It contains select information pertaining to the Property and does not purport to be an all‐inclusive representation of the state of affairs of the Property, or to contain all the information, which prospective investors may require. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and PCI. The information contained herein was obtained from third parties, and it has not been independently verified by PCI. Prospective investors should have the experts of their choice inspect the Property and verify all information. PCI is not qualified to act as or select experts with respect to legal, tax, environmental, building construction, soils‐drainage or other such matters. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. Neither the Owner nor PCI, nor any of their respective directors, officers, affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy of completeness of this Profile or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Profile or use of its contents. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers on the subject Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Profile. The Owner shall have no legal commitment or obligation to any entity reviewing this Profile or making an offer on the Property unless and until written agreement(s) for 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 Profile, you agree that this Profile 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 Profile or any of its contents to any other entity without prior written authorization of the Owner or PCI. You also agree that you will not use this Profile or any of its contents in any manner detrimental to the interest of the Owner or PCI. PCI reserves the right to submit the Property to additional clients on terms that may or may not be identical to the terms contained herein. By receipt of this Profile, you acknowledge that competing interests may develop in connection with offers on the Property, and waive any conflict of interest that might arise as a result thereof. In such case, PCI expressly disclaims any obligation to advance the interest of any client at the expense of any other client who may receive this Profile. Dealings with each client shall remain strictly confidential and in no case will PCI disclose the terms of any actual or potential offer to any competing client.
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA LOCATION – BROADWAY BOULEVARD RETAIL TRADE AREA The subject property is strategically positioned on the heavily‐traveled arterial of Broadway Boulevard, bookended by two of Tucson’s busiest intersections. One‐half mile east of the subject property, the intersection of Broadway Boulevard & Wilmot Road boasts a stunning traffic count of 93,500 cars per day. One‐half mile west of the subject property, the intersection of Broadway Boulevard & Craycroft Road boasts an equally impressive traffic count of 92,000 cars per day. Broadway Boulevard is one of the busiest thoroughfares in Tucson with a two‐way daily traffic count of 53,000 cars passing directly in front of the subject property. The subject property is easily accessible from multiple points of ingress/egress on Broadway Boulevard with a signalized left turn for customers traveling eastbound on Broadway Boulevard. This centralized location in the heart of Tucson’s best commercial corridor provides the subject property with unmatched exposure to retail consumers, helping to ensure the long‐ term stability and success of Pier 1 Imports. Directly across Broadway Boulevard from the subject property is Park Place Mall, which has been completely redeveloped and boasts 1.1 million square feet with 120 stores, 22 restaurants, and a 20‐ screen movie theater. Major tenants within Park Place Mall include Macy’s, Sears, Dillard’s, Century Theaters, Borders, Old Navy, Gap, Gap Kids, Banana Republic, Z Gallerie, Pac Sun, The Children’s Place, KB Toys, Applebee’s, McDonald’s, Red Lobster, Starbucks, Sears Auto Center and Jiffy Lube, all of which provide an unrivaled retail consumer draw to the immediate area. Nearby there are numerous national tenants such as Best Buy, Cost Plus, BevMo, OfficeMax, Circuit City, TJ Maxx, Famous Footwear, Linens & Things, LA Fitness, Target, Petco, Toys R Us, Barnes & Noble and Mervyn’s. This dense retail trade area provides a highly synergistic shopping environment for retailers as evidenced by the “A‐List” retailers which have chosen to operate on Broadway Boulevard. With its exceptional location on one of Tucson’s busiest thoroughfares, a strong retail trade area, affluent East Tucson consumer base and high daytime population, Pier 1 Imports at Broadway Parc offers even the most demanding and location‐sensitive investors an opportunity to own a pride‐of‐ ownership property in one of the most coveted locations in Tucson.
LONG‐TERM OPERATING HISTORY Further adding to the appeal of this investment opportunity is the fact that Pier 1 Imports has been successfully operating at the subject location for over 20 years. Pier 1 Imports was previously located in the building immediately adjacent to the subject property (one parcel to the west). In 2004, they jumped at the opportunity to open a prototype store without having to relocate to an inferior location. This commitment to the subject location underscores the desirability and tenant demand for retail space throughout the Broadway Boulevard retail corridor. * Traffic count information obtained from report of 2007 Traffic Volumes in Metropolitan Tucson and Eastern Pima County, prepared by Pima Association of Governments, November 2007.
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA TRADE AREA DEMOGRAPHICS The City of Tucson is located just east of the 10, 19 and 210 Freeways within Pima County, one of the top twenty‐five fastest growing counties in the Nation. The metropolitan Tucson population is expected to grow from approximately 1,000,000 people in 2005 to over 1,592,533 people in 2030, an increase of 59% compared to 23% nationally during that same period. Retail sales in Tucson were $10.982 billion in 2005 with $2.657 billion of that generated within a 5 mile radius of the subject property. Retail sales are expected to grow to over $13.7 billion by 2010. There are approximately 127,289 residents within a 3 mile radius of the subject property with an average household income of $45,790. The combination of a dense residential population base and a large daytime population of over 160,867 people within a 5 mile radius (91,000 of whom are employed in executive and professional positions or support) further solidify the in‐fill nature of the subject property location. Tucson’s multiple consumer groups supporting the subject property include over 1,000,000 year‐round residents, 300,000 affluent seasonal residents, 2.5 million tourists annually, including a growing number of affluent Mexican visitors, 38,000 students at the University of Arizona, 8,200 military personnel and an affluent retired population. Ten miles south of the subject property is the Tucson International Airport where passenger traffic exceeded 4.2 million in 2006. The Airport’s estimated economic impact on local payrolls and expenditures was nearly $1 billion dollars in 2007. Tourism is a key growing component to the Tucson economy with visitors spending $2.3 billion dollars in 2006, a 20% increase since 2000. Retail sales accounted for 23% of that amount, totaling over $450 million dollars. With the relative closeness of the Mexican border, Mexican visitors are a valued market segment for the tourism industry. It is estimated that over 22 million visitors cross the border each year to shop and play in Tucson. The Metropolitan Tucson Convention & Visitors Bureau estimates that Mexican visitors create $360 million in economic impact in Tucson annually. According to The Economic Impacts of Mexican Visitors to Arizona conducted by the Economic and Business Research Program at the University of Arizona, 72% of Mexican visitors cite shopping as their reason for visiting Tucson. TRADE AREA PROFILE 5‐MILE RADIUS PROFILE 2007 Population:
572,930
2007 Population:
267,158
2012 Projected Population:
620,443
2012 Projected Population:
282,605
2007 Households:
222,957
2007 Households:
118,229
2012 Projected Households:
242,741
2012 Projected Households:
126,782
2007 Median Age:
34.0
2007 Median Age:
36.7
2007 Avg HH Income:
$54,202
2007 Avg HH Income:
$51,717
2012 Projected Avg HH Income:
$60,117
2012 Projected Avg HH Income:
$56,985
DAYTIME EMPLOYMENT 3‐Mile Radius
86,758
5‐Mile Radius
160,867
* Demographic information obtained from multiple sources. Please contact PCI to obtain detailed information.
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA TENANT SUMMARY
Headquartered in Fort Worth, Texas, Pier 1 Imports, Inc. (NYSE: PIR) is a publicly traded retailer specializing in imported home furnishings and décor. Founded in 1962 in San Mateo, California, the Company currently operates 1,034 stores in the United States and 83 stores in Canada. During fiscal 2008, the Company supplied merchandise and licensed the Pier 1 Imports name to Grupo Sanborns and Sears Puerto Rico, which sold Pier 1 Imports merchandise primarily in a “store within a store” format in 31 Sears Mexico stores and in 7 Sears Puerto Rico stores. Pier 1 Imports operates in all major U.S. metropolitan areas and many of the primary smaller markets. Company‐wide sales totaled over $1.5 billion in fiscal 2008. Pier 1 Imports offers a unique selection of merchandise consisting of more than 4,000 items imported from over 50 countries around the world. Merchandise largely consists of items that feature a significant degree of handcraftsmanship and are mostly imported directly from foreign suppliers. While the broad categories of Pier 1 Imports’ merchandise remain fairly constant, individual items within these product categories change frequently in order to meet the changing demands and preferences of customers. The principal categories of merchandise include the following: DECORATIVE ACCESSORIES: This product group constitutes the broadest category of merchandise in Pier 1 Imports’ sales mix and are imported primarily from Asian and European countries, as well as some domestic sources. This category includes decorative wood accessories, lamps, vases, dried and artificial flowers, baskets, wall decorations, ceramics, dinnerware, bath and fragrance products, candles, bedding, epicurean products and seasonal and gift items. FURNITURE: This product group consists of furniture and furniture cushions to be used in living, dining, kitchen and bedroom areas, sunrooms and on patios. These goods are imported from a variety of countries such as Italy, Malaysia, Brazil, Mexico, China, the Philippines and Indonesia, as well as some domestic sources. The furniture is made of metal or handcrafted natural materials, including rattan, pine, beech, rubberwood and selected hardwoods with either natural, stained, painted or upholstered finishes. PIER 1 IMPORTS HIGHLIGHTS • 1,117 Locations in 49 States and Canada • Total 2008 Revenue: $1.511 Billion • Assets: $821.9 Million • Shareholder’s Equity (Net Worth): $267.1 Million * Financial information obtained from Pier 1 Imports, Inc. Annual Report – FYE March 1, 2008 The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA INVESTMENT INFORMATION Property Information: Address:
5919 East Broadway, Tucson, Arizona 85711 (Broadway Boulevard between Wilmot Road & Craycroft Road) View Map
Tenant: Occupancy: Year Built: Land: Improvements: Construction: APN:
Pier 1 Imports (U.S.), Inc. 100% 2004 (Approx.) 65,890 Square Feet (Approx.) 11,287 Square Feet Concrete Block 127‐13‐051C
Financial Information: Price: Capitalization Rate: Terms: Original Amount: Current Balance: Interest Rate: Amortization: Term: Equity Required:
$4,250,000 7.01% Cash to Existing Assumable Financing $2,800,000 (Approx.) $2,655,000 (62%) 5.51% (Fixed for Term) 30 Years 10 Years (Due February 2015) (Approx.) $1,595,000 (38%)
Annual Operating Information:
Scheduled Gross Income: Plus Expense Recapture: Gross Operating Income: Less Operating Expenses: Net Operating Income: Less Debt Service: Net Cash Flow: Plus Principal Reduction: Pre‐Tax Income: Less Mortgage Interest: Less Depreciation:
Refinance Scenario 1 Refinance Scenario 2 @ 1st Option @ 1st Option Current $297,977 $327,775 $327,775 NNN NNN NNN $297,977 $327,775 $327,775 (NNN) (NNN) (NNN) $327,775 (7.71%) $327,775 (7.71%) $297,977 (7.01%) ($190,988) ($220,786) ($175,346) $106,989 (10.74%) $152,429 (9.56%) $106,989 (6.71%) $45,844 $32,536 $25,840 $139,525 (14.01%) $178,268 (11.18%) $152,833 (9.58%) ($145,144) ($188,250) ($149,506) ($75,316) ($75,316) ($75,316)
(70% of Purchase Price @ 39.5 Years)
After Tax Income:
($67,628)
($124,042)
($46,555)
* See 10 Year Projection pages for financial assumptions for refinancing scenarios. NO REPRESENTATION IS MADE BY PCI AS TO THE LEGAL OR TAX EFFECT OR VALIDITY OF ANY PROJECTIONS, FINANCIAL OR OTHERWISE, CONTAINED HEREIN. A REAL ESTATE BROKER IS QUALIFIED TO GIVE ADVICE ON REAL ESTATE MATTERS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT YOUR ATTORNEY OR TAX ADVISOR. The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA RENT ROLL Tenant
Suite Sq. Ft.
Lease Start
Pier 1 Imports (U.S.), Inc.
11,287
11/1/2004
Totals
11,287
Lease End
Monthly Rent
Annual Rent
2/28/2015 $24,831.41 $297,977
$24,831.41 $297,977
Rental Increases
Renewal Options
Lease Type
10% Every 5 Years
2 (5 Year) @ 10%
NNN
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA 10 YEAR PROJECTION & AFTER‐TAX RETURN ANALYSIS – REFINANCE SCENARIO 1 Building SF Pier 1 11,287 Totals Purchase Price $4,250,000 CAP Rate Cash Down $1,595,054 Current Loan Balance $2,654,946 Original Loan Balance $2,800,000 Interest Rate 5.51% Amortization 30 Annual Payment $190,988 Net Cash Flow Principal Reduction Total Return (Pre‐Tax Income) Tax Shelter Analysis Depreciation $2,975,000 70% of Purchase Price (39.5 Yrs.) Loan Interest Net Taxable Income
Year 1
Year 2
$297,977
$297,977
$297,977 7.01% 37.5% ($190,988) $106,989 6.71% $45,847 $152,836 9.58% ($75,316) ($145,141) ($67,622)
Year 3 $297,977
$297,977
($190,988)
($190,988)
$106,989 6.71%
$106,989 6.71%
$48,438 $155,427 9.74%
$158,164 9.92%
($75,316) ($142,550)
($75,316)
($139,813)
($75,316)
($136,921)
($133,865)
($130,637) ($38,614)
$146,509 14.71%
($75,316)
($186,071)
($75,316)
($183,746)
($119,684)
$39,520
($124,042)
$144,028 14.46%
($75,316)
($188,250)
$106,989 10.74%
$37,040
$106,989 10.74%
$141,704 14.23%
($75,316)
($220,786)
($45,070)
$139,525 14.01%
($75,316)
($220,786)
$34,715
($51,181)
$167,340 10.49%
($56,965)
$164,112 10.29%
7.71%
$106,989 10.74%
$32,536
($62,440)
$60,351
7.71%
($220,786)
$106,989 10.74%
$327,775
$327,775
7.71%
($220,786)
$327,775
$106,989 6.71%
$57,123
$161,056 10.10%
($75,316)
($190,988)
$327,775
$327,775
7.71%
Year 10
$106,989 6.71%
$54,067
($190,988)
$327,775
$327,775
7.01%
Year 9
$106,989 6.71%
$51,175
($190,988)
$327,775
$297,977
7.01%
Year 8
$297,977
$297,977
7.01%
Year 7
$297,977
$297,977
7.01%
Year 6
$297,977
$297,977
7.01%
Year 5
Year 4
($181,266)
($115,034)
($110,073)
Scenario 1 Debt Refinance Assumptions: Investor desires to keep Net Cash Flow constant and obtain a return of a portion of the initial equity investment. New Loan Terms: $2,910,894; 6.50% Interest; 30 Year Amortization Debt Retirement Amount @ Due Date (Feb. 2015): $2,311,804 | Net Refinance Proceeds (Return of Equity): $599,090 | Remaining Initial Investment: $995,964
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA 10 YEAR PROJECTION & AFTER‐TAX RETURN ANALYSIS – REFINANCE SCENARIO 2 Building SF Pier 1 11,287 Totals Purchase Price $4,250,000 CAP Rate Cash Down $1,595,054 Current Loan Balance $2,654,946 Original Loan Balance $2,800,000 Interest Rate 5.51% Amortization 30 Annual Payment $190,988 Net Cash Flow Principal Reduction Total Return (Pre‐Tax Income) Tax Shelter Analysis Depreciation $2,975,000 70% of Purchase Price (39.5 Yrs.) Loan Interest Net Taxable Income
Year 1
Year 2
$297,977
$297,977
$297,977 7.01% 37.5% ($190,988) $106,989 6.71% $45,847 $152,836 9.58% ($75,316) ($145,141) ($67,622)
Year 3 $297,977
$297,977
($190,988)
($190,988)
$106,989 6.71%
$106,989 6.71%
$48,438 $155,427 9.74%
$158,164 9.92%
($75,316) ($142,550)
($75,316)
($139,813)
($75,316)
($136,921)
($133,865)
($130,637) ($38,614)
$183,815 11.52%
($75,316)
($147,776)
($75,316)
($145,929)
($43,094)
$31,387
($46,555)
$181,845 11.40%
($75,316)
($149,506)
$152,429 9.56%
$29,417
$152,429 9.56%
$179,999 11.28%
($75,316)
($175,346)
($45,070)
$178,268 11.18%
($75,316)
($175,346)
$27,570
($51,181)
$167,340 10.49%
($56,965)
$164,112 10.29%
7.71%
$152,429 9.56%
$25,840
($62,440)
$60,351
7.71%
($175,346)
$152,429 9.56%
$327,775
$327,775
7.71%
($175,346)
$327,775
$106,989 6.71%
$57,123
$161,056 10.10%
($75,316)
($190,988)
$327,775
$327,775
7.71%
Year 10
$106,989 6.71%
$54,067
($190,988)
$327,775
$327,775
7.01%
Year 9
$106,989 6.71%
$51,175
($190,988)
$327,775
$297,977
7.01%
Year 8
$297,977
$297,977
7.01%
Year 7
$297,977
$297,977
7.01%
Year 6
$297,977
$297,977
7.01%
Year 5
Year 4
($143,959)
($39,401)
Scenario 2 Debt Refinance Assumptions: Investor desires to maximize Net Cash Flow and refinance only the remaining principal balance of the existing loan. New Loan Terms: $2,311,804; 6.50% Interest; 30 Year Amortization Debt Retirement Amount @ Due Date (Feb. 2015): $2,311,804 | Net Refinance Proceeds (Return of Equity): $0 | Remaining Initial Investment: $1,595,054
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
($35,461)
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA AERIAL PHOTO – BROADWAY RETAIL CORRIDOR
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA AERIAL PHOTO – BROADWAY RETAIL CORRIDOR
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA SITE PLAN
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA PARCEL MAP
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.
PIER 1 IMPORTS ‐ BROADWAY PARC TUCSON, ARIZONA LOCATION MAPS
The above information is for reference purposes only, is approximate, and is subject to change. It is not guaranteed as to its accuracy or completeness. Buyer should conduct its own independent investigation and consult an attorney. As of September 2008.