FLAGSTAFF, AZ DOMINANT COMMUNITY CENTER INVESTMENT OFFERING
4751 E. MARKETPLACE DRIVE, FLAGSTAFF, AZ 86004 INVESTMENT SUMMARY CBC Advisors ( Exclusive Broker ) and Faris Lee Investments ( Investment Advisor ) are pleased to offer for sale the leasehold interest in The Marketplace (the Property ), 268,022-square-foot community center in a highly growing area of Flagstaff. The center features a synergistic mix of leading daily-needs, home improvement and discount retailers including Home Depot, Petco, Cost Plus World Market, Best Buy, Marshall s, Bealls, Tuesday Morning, Old Navy. About 85% of these tenants have been in the center for 10 years, demonstrating retailer commitment and strength of the trade area. Besides the existing center, there are also three (3) developable outparcels included in the offering, which provides value-add opportunity. From a tax perspective, the favorable long-term ground lease with the state of Arizona allows the investor 100% depreciation on the investment. LOCATION SUMMARY Flagstaff, AZ features a highly educated population (45% have Bachelor degrees or higher); strong forecasted job growth (39% over the next 10 years); strong science and technology industries; new high-density residential developments; and an exceptionally robust tourism industry with over 4.6 million annual visitors to attractions such as nearby Grand Canyon, Snowbowl ski resort and Lowell Observatory. The subject property is located in the most dynamic submarket of Flagstaff, close to the relocated Harkins Theater (only movie theater in city), Flagstaff Regional Mall (undergoing redevelopment with new institutional ownership), new Hampton Inn/Fairfield Hotel and the Flagstaff auto center, including soon-to-be opened Mercedes-Benz. With all these nearby developments, The Marketplace is ideally positioned to benefit from new destination traffic, cross-traffic and tourism in this growing retail corridor. 18301 Von Karman Avenue, Suite 800 Irvine, CA 92612 Phone: (949) 221-1800 Fax: (949) 221-1830 www.farislee.com EXCLUSIVE INVESTMENT ADVISOR: Donald MacLellan Senior Managing Partner dmaclellan@farislee.com (949) 221-1821 R.E. License No. 0897784 BROKER OF RECORD: Kalen Rickard Senior Vice President CBC Advisors kalen.rickard@cbcadvisors.com (602) 910-6486 AZ Broker License No. LC659198000 2
INVESTMENT HIGHLIGHTS FUNDAMENTALLY STRONG MARKET AREA FLAGSTAFF Highly educated population (45% have Bachelor degrees or higher) and strong forecasted job growth (39% over the next 10 years) Science and technology employers including Flagstaff Medical Center (#5 Best Hospital in Arizona - U.S. News & World Report), US Geological Survey (sole science agency for Department of the Interior), Lowell Observatory (world-class astronomical facility) and W.L. Gore (leading biomedical firm & #3 on World s Best Multinational Workplaces list) Growing Northern Arizona University (3,000 new students over next 3 years) and new high-density residential developments will drive population growth Robust tourism industry (over 4.6 million annual visitors) for attractions including The Grand Canyon, Snowball ski resort and Lowell Observatory AWARD-WINNING TRADE AREA FOR BOTH YOUNG PROFESSIONALS AND FAMILIES Ranked #1 Most Up-and-Coming City (America Unraveled 2016) Ranked #1 Best Place for Millennials in Arizona (Niche 2017) Ranked #1 Small College Town with Great Quality of Life (BestChoiceSchools.com 2016) Ranked #3 for Best College Town - Northern Arizona University (American Institute of Economic Research, 2017) LOCATED IN MOST DYNAMIC SUBMARKET IN FLAGSTAFF Next to newly Relocated State-of-the-Art Harkins Multiplex Theater - Highly Successful Opening Adjacent to Flagstaff Auto Center including the new Mercedes-Benz dealership (opening 2nd Quarter 2018) Nearby Flagstaff Regional Mall undergoing redevelopment with new institutional ownership New Hampton Inn and Fairfield Hotel across the highway with easy access via Country Club Drive DOMINANT COMMUNITY CENTER IN FLAGSTAFF STRONG INDUSTRY LEADING RETAILERS Synergistic mix of leading daily-needs, home improvement and discount retailers Daily-needs tenants include Petco, Cost Plus World Market and Best Buy Home improvement leader Home Depot Discount retailers include Marshall s, Bealls, Tuesday Morning and Old Navy LONG-TERM OCCUPANCY WITH RECENT RENEWALS & LEASING Long-term occupancy, recent renewals and new leasing demonstrate retailer commitment Recent renewals of 43% of GLA including Petco, Best Buy and Tuesday Morning Approximately 85% of tenants have been in the center for at least 10 years New 10-year lease with Bealls - Recent Grand Opening INSTITUTIONAL QUALITY CONSTRUCTION PRIDE OF OWNERSHIP Institutional quality construction with modern brick facade Investment-grade community center with nationally recognized retailers EXCELLENT CASH-ON-CASH RETURNS & OPEN TO HISTORICALLY LOW RATE FINANCING Potential to achieve double-digit, cash-on-cash returns Interest rates still at historic lows VALUE-ADD OPPORTUNITY Three (3) developable outparcels included in the offering Ability for new owner to create value and help energize retail corridor by developing pads that feed off of Harkins Theater destination traffic and Flagstaff Regional Mall redevelopment cross-traffic 100% DEPRECIATION AVAILABLE Favorable long-term ground lease with the state of Arizona Leasehold position allows the investor 100% depreciation on the investment 3
SITE PLAN 101 The Home Depot 121,001 104 Old Navy 14,910 107 Tuesday Morning 102 Cost Plus World Market 18,289 105 Best Buy 30,000 PAD05 Petco 103 Bealls Outlet 25,037 106 Marshalls 28,000 Total E. Railhead Avenue 15,251 15,534 268,022 Flagstaff Auto Center PAD 5 Opening 1Q 2018 Test Drive S. Mall Way FLAGSTAFF MALL E. Marketplace Drive 107 106 105 104 103 Garden Center 102 101 US HIGHWAY 66 280 Emplo yees SITE PLAN NOT TO SCALE 4
FLAGSTAFF FACTS 53.35% POPULATION GROWTH SINCE 2000 45.37% FLAGSTAFF POPULATION WITH COLLEGE DEGREES 200,000 PEOPLE WITHIN TRADE AREA 4,600,000 ANNUAL VISITORS 39.26% PREDICTED JOB GROWTH OVER THE NEXT 10 YEARS 22 Minutes AVERAGE COMMUTE TIME 5