walmart neighborhood market
walmart neighborhood market new construction in dense retail corridor 1018 N. Cleveland, Enid, OK 73703 For more info on this opportunity please contact: Zandy smith ZEB RIPPLE zsmith@capitalpacific.com | (415) 274-2707 CA BRE# 01734525 zripple@capitalpacific.com | (415) 274-2702 CA BRE# 01242540 chris kostanecki chris peters ck@capitalpacific.com | (415) 274-2701 CA BRE# 01002010 Capital Pacific collaborates. Click here to meet the rest of our San Francisco team. cpeters@capitalpacific.com | (415) 274-2703 CA BRE# 01339983 In conjunction with OK Licensed Broker: Robert Sullivan, NAI Sullivan Group 405-840-0600 ext. 304 | rsullivan@ccim.net walmart neighborhood market, currently under construction in Enid, oklahoma The Neighborhood Market is Walmart’s small grocery concept, which launched in 1998, giving customers a more convenient shopping experience than the typical Walmart Supercenter. Investment Highlights The Supercenter is on average 160,000 square feet. In contrast, the Neighborhood Market is approximately 40,000 square feet and has a fuel center and a drive-thru pharmacy for increased convenience. Walmart’s strategy is to open another 270 of these small-format stores and have a total of 500 operating by early 2016. PRICE: $12,203,520 CAP: 5.00% RENTABLE SF. . . . 41,117 SF LEASE TYPE. . . . . . Modified NNN PRICE PER SF. . . . $257.80 YEAR BUILT. . . . . . 2015 LAND AREA. . . . . . 5.54 Acres lease highlights Delivery to Walmart will be April 6th, 2015. Rent is estimated to commence May 6th, 2015. Walmart has signed a 20-year net lease, with the tenant responsible for all triple net reimbursements except for capital replacement items. Please see Lease Summary page for details. 10% increases in the option periods for the first two five-year option terms and 5% for the second two five-year option terms. location highlights Located on the Northwest corner of Cleveland Avenue and Chestnut Street. Heavily trafficked Cleveland Street connects the dense retail corridors of Garriott Road and Willow Road. The city plans to improve and enlarge the intersection at Cleveland and Chestnut by 2016 and they plan to convert Cleveland Street from a 2 lane to a 4 lane boulevard by 2017. Subject property is part of a new 50-acre residential and retail development called Stonebridge Village. The Walmart property will be surrounded by 71 single family residential lots, a 200-unit apartment complex, and an additional 35,000 SF of multi-use tenants. (See page 10) Within one mile of the property are Starbucks, Ross, Hobby Lobby, Oakwood Mall, Neilson Square, DeWitt Waller Middle School, Hoover Elementary, and Willow Plaza. Situated in a dense residential market with over 40,000 people in a 3-mile radius and over 50,000 people within a 5-mile radius. Vance Air Force Base is also located within 5 miles of the subject property, which the Air Force uses for specialized undergraduate pilot training Investment summary The combination of the strong demographics and the new residential and retail synergy of Stonebridge Village will make Enid a successful location for Walmart and its Neighborhood Market concept. The location, the rare credit rating of AA-rated corporate guaranty from Walmart Stores, and the long-term net lease should make this a successful investment. Representative Photo walmart neighborhood market | 2 In the News Why Walmart Suddenly Thinks Smaller Is Better Walter loeb - forbes - june 16, 2014 At the end of the 2014 fiscal year (January 2014), Walmart had 3285 Supercenters in the United States that vary in size from 180,000 square feet to 230,000 square feet. They also had 508 discount stores that were around 140,000 square feet, smaller than the supercenters because they sell very little food. There were also, according to Walmart’s annual report, 407 even smaller units of which 359 are the Walmart Neighborhood Market concept. These stores average around 43,000 square foot in size and have been around since 1998. A previous Walmart management team assured me that, while they liked the concept, Walmart customers preferred the larger assortment in the superstores and discount stores. Despite management’s lukewarm endorsement at that time, every year a few more units were added. Well, things have changed. The convenience of quick shopping has become front and center. Today there is a real focus at Walmart on smaller stores. Two hundred new Neighborhood Market units will open this year. That is a tremendous ramp-up in the expansion plans–and the new Walmart management team is suggesting there could be thousands in five years. Yikes! Thousands! What has happened? Why now? Two hundred new Neighborhood Market units will open this year. Certainly Doug McMillon, Walmart’s new CEO, wants to show domestic growth. He is stressing that the customer wants the convenience of a quick shopping trip to a Market Place. I can add that he probably has learned from the omnipresence of small stores and bodegas throughout the US, and the world, as well as the rapid expansion of Nordstrom’s Rack, that the consumer likes small stores and it is easier to find locations for these compact units. I could visualize entry into urban centers like New York City, Chicago, Los Angeles or Dallas, as well as expansion into new suburban areas. The stores will be close to where customers live and want to shop. The stores carry food, full pharmacies, fuel, and some general merchandise. Right now there are also twenty-one 12,000 square foot Walmart Express stores with fresh produce, meats and dairy as well as a pharmacy. Management has indicated that they will add 100 of these pint-size units this year. This is a fast growing chain, and I suspect that, like rabbits these units will multiply very quickly this decade. They are even easier to find locations for around the United States than the larger (but still small) Neighborhood Markets. Walmart To Go is the newest test store and that is in Bentonville, Arkansas, Walmart’s HQ town. It is only 5,000 square feet in size and features coffee and cold refreshments as well as snacks. It is a modified convenience store selling fresh food, some prepared meals, some grocery, and a few general merchandise items such as movies and seasonal items for Easter, Mother’s or Father’s Day. The store will carry only 3,500 SKU’s (stock keeping units). Judith McKenna former COO of ASDA is now in charge of small store rollout. She will lead the introduction of yet another innovative idea for Walmart–a 15,000 square foot Internet grocery pick-up center. This new concept will also be tested in Bentonville, AR and is modeled after an ASDA concept in the United Kingdom. This drive through concept will assemble grocery orders placed online and deliver them to cars in as many as 30 drive-up lanes. I think the news of these new initiatives is exciting and at the same time challenging. They will certainly create a greater competitive environment throughout the United States. However, they will only be successful if new supply chains are created. The new concepts have to be watched closely in order to assure profitable growth. Walmart’s customer service in large stores has been uneven and the rapid growth of these new concepts demand a cadre of dedicated associates that are ready to serve customers on less bureaucratic terms. When I saw the first Neighborhood Market stores they were truly entrepreneurial enterprises. That has to come back. This year, Walmart will add 115 supercenters, 35 to 40 units will be renovations and expansions, while 75 to 80 will be new stores. That is about 17 Million square feet of additional selling space. This is still the engine that will drive total sales for this behemoth. It will still be the focus of the company. However, as I analyze the competitive retail scene – the addition of 300 new small Walmart units that will add about 1 million additional square footage of selling space. However, Walmart is not the only retailer adding capacity to the US market. The strength of Internet sales will be a factor pressuring stores. With the opening of Alibaba’s 11Main.com and the announced opening of Primark in Boston in late 2015, there is much to worry about. Walmart will continue to be a competitive leader defending its share of market, but the new competitors will create a worrisome war-like environment in the second half of this decade. walmart neighborhood market | 3 BUS 64 81 N Grand Avenue N Cleveland Street Enid Soccer Complex STONEBRIDGE VILLAGE W Chestnut Avenue Oklahoma Bible Academy Emerson Middle School NEILSON SQUARE DeWitt Waller Middle School Garfield Elementary Hoover Elementary 412 27,400 DAILY 412 64 Enid High School SUNSET PLAZA VANCE AIR FORCE BASE S Van Buren Street S Cleveland Street S Oakwood Road S Garland Road OAKWOOD MALL 81 OKLAHOMA CITY walmart neighborhood market | 4 Income & Expense PRICE $12,203,520 Capitalization Rate: 5.00% Price Per Square Foot: $296.80 Total Rentable Area (SF): 41,117 Lot Size (Acres): STABILIZED INCOME 5.54 Per Square Foot Scheduled Rent $14.84 $610,176 Effective Gross Income $14.84 $610,176 LESS Per Square Foot Taxes $0.00 Insurance $0.00 Total Operating Expenses $0.00 EQUALS NET OPERATING INCOME $610,176 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. walmart neighborhood market | 5 Rent Roll TENANT INFO LEASE TERMS Tenant Name Sq. Ft. Walmart Neighborhood Market 41,117 Totals: 41,117 Term RENT SUMMARY Current Rent Monthly Rent Yearly Rent Monthly Rent / FT Yearly Rent / FT 5/6/15 5/5/35 $610,176 $50,848 $610,176 $1.24 $14.84 5/6/35 5/5/40 Option 1 $55,933 $671,194 $1.36 $16.32 5/6/40 5/5/45 Option 2 $61,526 $738,313 $1.50 $17.96 5/6/45 5/5/50 Option 3 $64,602 $775,229 $1.57 $18.85 5/6/50 5/5/55 Option 4 $67,833 $813,990 $1.65 $19.80 $610,176 $50,848 $610,176 $1.24 $14.84 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. walmart neighborhood market | 6 Lease Abstract & Critical Dates Tenant Wal-Mart Stores East, LP guarantor Wal-Mart Stores, Inc. date of lease November 12, 2014 delivered to Tenant April 6, 2015 estimated rent commencement May 6, 2015 landlord responsibilities Landlord shall be responsible for the cost and expense of maintenance, repair, and replacement of structural components first right of refusal 15 Business Days walmart neighborhood market | 7 Walmart Neighborhood Market Representative Photo walmart stores, inc. was ranked #1 in fortune 500 (2013 & 2014) and #1 in interbrand’s “most valuable u.s. retail brands” About walmart neighborhood market Walmart Neighborhood Market is a chain of grocery stores launched by Walmart in 1998. With over 350 Neighborhood Markets in the United States, they feature a wide variety of products, including fresh produce, deli foods, fresh meat and dairy items, health and beauty aids, one-hour photo and traditional photo developing services, drive-through pharmacies, stationery and paper goods, pet supplies, and household chemicals. Walmart Neighborhood Markets were originally designed to create easier parking, less crowded aisles, and quicker checkouts than Walmart Supercenters. NUMBER OF locationS 11,000+ FISCAL YEAR 2014 SALES $476 BILLION S&P RATING AA Walmart is the world’s biggest retailer and also the largest employer with over 2.2 million full- and part-time workers worldwide, including more than 1.4 million in the U.S. Walmart is a feared giant for its sheer size and pricing power. With more than $469 billion in total revenues, Walmart is known for its low pricing and wide selection of goods. The company has 11,302 stores under 71 banners in 27 countries, and ecommerce Websites in 10 countries. Walmart has become the undisputed king of retailing and is ranked #1 in Fortune 500 Companies. walmart neighborhood market | 8 Site Plan Site Plan Key Parcel outline: Land Area: 5.54 acres N Cleveland Street Building Area: 41,117 sf NOT A PART W Chestnut Avenue Site Plan Not To Scale walmart neighborhood market | 9 Neighborhood Site Stonebridge Village Walmart Neighborhood market is part of a new 50-acre residential and retail development called Stonebridge Village. Stonebridge Village will be a combination of commercial, single family residential, and upscale multi-family residential properties with a six-acre lake setting in the middle for all to enjoy. These three areas (including the lake) will cover fifty acres in a village setting where people can LIVE-WORK-PLAY. Plans for the lake include a walking trail around it with beautiful landscaping, creating a park-like feel. The 15-acre upscale and gated multi-family apartment complex will have access to the lake from the west side of Cleveland. It will also feature 1-2 and 3 bedroom apartments, a swimming pool, club house, and covered parking. The 16-acre commercial site will provide approximately 75,000 sq. ft. of multi-use tenants including the subject property. Other planned tenants will be a medical facility, a strip center for multiple stores including a meat specialty shop, office complex buildings, and a restaurant on the corner of Chestnut and Cleveland. Access to this area will be from Chestnut and Cleveland entrances and exits with ample parking spaces and landscaping. The 17-acre single family residential area will include 71 lots and 24 lots, which will be a minimum of 10,000 sq. ft. and will have protective covenants including minimum 1,800 sq. ft. homes. The City of Enid has approved plans to enlarge and improve the intersection at Cleveland & Chestnut, this construction will begin around early 2016. The city has also planned to convert Cleveland to 4-lanes from the intersection to the railroad track with a boulevard; this construction should commence closer to 2017. walmart neighborhood market | 10 Photos Drive -thru Pharmacy surrounding retailers walmart neighborhood market | 11 Regional Map Traffic counts in excess of 27,400 vpd on HWY 60 walmart neighborhood market W Chestnut Ave N Cleveland St enid 1 Hour 55 Miles Oklahoma City walmart neighborhood market | 12 Location & Demos Enid, ok Overview Enid is the county seat of Garfield County, Oklahoma. As of the 2010 census, the population was 49,379, making it the ninth largest city in the state. The main highways serving the city are Highway 81 and Highway 412. Enid feeds into Route 66 from the north via Route 64. Enid Woodring Regional Airport is located four miles southeast of Enid. The economy of Enid is diverse but its foundation is the oil and gas industry and agriculture. It holds the nickname “Queen Wheat City” and “Wheat Capital” of Oklahoma and the United States for its immense grain storage capacity (it has the third largest grain capacity in the world). Enid has also been featured in various films, novels, and songs. Enid was ranked the 28th best place in the country to raise a family in a Reader’s Digest poll and was listed as one of the top 25 small cities in the country to do business in. Population 1-Mile 3-Mile 5-Mile 2010 6,048 39,873 50,808 2014 6,110 40,616 51,730 2019 6,320 42,323 53,873 1-Mile 3-Mile 5-Mile Average $59,447 $57,758 $55,486 Median $42,766 $40,647 $39,452 2013 Household incomes Top Employers in enid Employer Advance Pierre Food Company Vance Air Force Base INTEGRIS Bass Baptist Health Ctr Enid Board of Education # of Employees* 4,000 2,600 1,500 1,000 *Approximate walmart neighborhood market | 13 A unique HUMAN RESULTS-DRIVEN client experience Zandy smith The capital pacific experience - our daily commitment to our clients [ www.CapitalPacific.com ] ZEB RIPPLE zsmith@capitalpacific.com | (415) 274-2707 CA BRE# 01734525 zripple@capitalpacific.com | (415) 274-2702 CA BRE# 01242540 chris kostanecki chris peters ck@capitalpacific.com | (415) 274-2701 CA BRE# 01002010 In conjunction with OK Licensed Broker: Bob Sullivan, Urban Commercial Realty, LLC (561) 655-0066 | bobsullivan@urbancommercialrealty.com cpeters@capitalpacific.com | (415) 274-2703 CA BRE# 01339983 Copyright © 2015 [Capital Pacific Real Estate Brokerage Company] OKLAHOMA REAL ESTATE COMMISSION DISCLOSURE TO SELLER OR BUYER OF BROKERAGE DUTIES, RESPONSIBILITIES AND SERVICES This notice may be part of or attached to any of the following: Buyer Brokerage Agreement Listing Brokerage Agreement Sales Agreement Exchange Agreement □ □ □ □ □ □ Option Agreement Other _______________________ 1. Duties and Responsibilities. A Broker who provides Brokerage Services to one or both parties shall describe and disclose in writing the Broker’s duties and responsibilities prior to the party or parties signing a contract to sell, purchase, option, or exchange real estate. A Broker shall have the following duties and responsibilities which are mandatory and may not be abrogated or waived by a Broker, whether working with one party, or working with both parties: A. treat all parties to the transaction with honesty and exercise reasonable skill and care; B. unless specifically waived in writing by a party to the transaction: 1) receive all written offer and counteroffers; 2) reduce offers or counteroffers to a written form upon request of any party to a transaction; and 3) present timely all written offers and counteroffers. C. inform, in writing, the party for whom the Broker is providing Brokerage Services when an offer is made that the party will be expected to pay certain closing costs, Brokerage Service costs and the approximate amount of the costs; D. keep the party for whom the Broker is providing Brokerage Services informed regarding the transaction; E. timely account for all money and property received by the Broker; F. keep confidential information received from a party or prospective party confidential. The confidential information shall not be disclosed by a Broker without the consent of the party disclosing the information unless consent to the disclosure is granted in writing by the party or prospective party disclosing the information, the disclosure is required by law, or the information is made public or becomes public as the result of actions from a source other than the Broker. The following information shall be considered confidential and shall be the only information considered confidential in a transaction: 1) that a party or prospective party is willing to pay more or accept less than what is being offered, 2) that a party or prospective party is willing to agree to financing terms that are different from those offered, 3) the motivating factors of the party or prospective party purchasing, selling, optioning or exchanging the property, and 4) information specifically designated as confidential by a party unless such information is public. G. disclose information pertaining to the Property as required by Residential Property Condition Disclosure Act; H. comply with all requirements of the Oklahoma Real Estate Code and all applicable statutes and rules; I. when working with one party or both parties to a transaction, the duties and responsibilities set forth in this section shall remain in place for both parties. 2. Brokerage Services provided to both parties to the transaction. The Oklahoma broker relationships law (Title 59, Oklahoma Statutes, Section 858-351 – 858-363) allows a real estate Firm to provide brokerage services to both parties to the transaction. This could occur when a Firm has contracted with a Seller to sell their property and a prospective Buyer contacts that same Firm to see the property. If the prospective Buyer wants to make an offer on the property, the Firm must now provide a written notice to both the Buyer and Seller that the Firm is now providing brokerage services to both parties to the transaction. The law states that there are mandatory duties and responsibilities that must be performed by the broker for each party. 3. Broker providing fewer services. If a Broker intends to provide fewer Brokerage Services than those required to complete a transaction, the Broker shall provide written disclosure to the party for whom the Broker is providing services. The disclosure shall include a description of those steps in the transaction that the Broker will not provide and state that the Broker assisting the other party in the transaction is not required to provide assistance with these steps in any manner. 4. Confirmation of disclosure of duties and responsibilities. The duties and responsibilities disclosed by the Broker shall be confirmed in writing by each party in a separate provision, incorporated in or attached to the contract to purchase, option or exchange real estate. I understand and acknowledge that I have received this notice on _________ day of ____________________, 20______. 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