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OFFERING MEMORANDUM
115 Plaza, PA-611 Stroudsburg, PA NEW CONSTRUCTION | 20-YEAR GROUND LEASE
Marcus & Millichap2005 Market Street #1510
Philadelphia, PA 19103
P: 215.531.7000
www.marcusmillichap.com
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 substitute for a thorough due
diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, 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
Broker of Record: Sean BeucheLicense: PA RM424190
Chick-Fil-A
TABLE OF CONTENTSSection 1: Executive SummaryProperty Overview......................................................5Investment Highlights & Overview................................6Section 2: Tenant ProfileChick-FIl-A..............................................................7-8
Section 3: Market OverviewRegional Map............................................................9 Demographics..........................................................10In The News.......................................................11-12Location Overview....................................................13
Derrick DoughertyFirst Vice PresidentPhiladelphia, [email protected] License: PA RS305854
Scott WoodardNational Retail Group Philadelphia, PAPA RS329242
Mark KrantzNational Retail GroupPhiladelphia, [email protected]: NJ 1537786 | PA RS336064
Steven GarthwaiteNational Retail GroupPhiladelphia, [email protected] RS332182
OFFERED EXCLUSIVELY BY
Lead Agents:
2019-2020 NEW DEVELOPMENT
Crossroads Mall of the Poconos
ROUTE 611 (19K+ VPD)
St. Lukes HospitalMonroe Campus
NEW 180,000sf CampusCritical care, emergency room, helipad,
operating rooms, & cardiac catheterization lab
Shops at Crossroads
ROUTE 611 (19K+ VPD) PLAZA 611 LANESt. Lukes HospitalMonroe Campus
NEW 180,000sf CampusCritical care, emergency room, helipad,
operating rooms, & cardiac catheterization lab
2019-2020 NEW DEVELOPMENT
Crossroads Mall of the Poconos
Shops at Crossroads
2019-2020 NEW DEVELOPMENT
115 Plaza, PA-611Stroudsburg, PA
Rent ScheduleLease Summary
Chick-FIl-A
PROPERTY OVERVIEW
List Price:$3,246,753
$
3.85%
%Cap Rate:
NNN GLLease Type
.93 AcresLot Size:
*Loan information is subject to change.
LOAN INFORMATION:• 50% LTV• 3.50% - 3.75% or 10 Years Fixed• 30 Year Amortization• Non-Recourse
Tenant Chick Fil A
Guarantor Corporate
Lease Type NNN Ground Lease
Lot Size .93 Acre Condo
Year Build 2019
Base Lease Term 20 Years
Rent Commencement April 4th, 2019
Lease/ Rent Expiration April 2039
Rent Increases *See Rent Schedule
ROFR None
Estoppel 30 Days
Option Notice 6 months
Term Years Annual Rent Monthly Rent % Increase
Primary 1 - 10 $125,000 $10,416
Primary 11 - 15 $135,000 $11,250 8.00%
Primary 16 - 20 $145,000 $12,083 7.41%
Option Periods
Option 1 21 - 25 $159,500 $13,291 10.00%
Option 2 26 - 30 $175,450 $14,620 10.00%
Option 3 31 - 35 $192,995 $16,082 10.00%
Option 4 36 -40 $212,295 $17,691 10.00%
Option 5 41 - 45 $233,525 $19,460 10.00%
Option 6 46 - 50 $256,878 $21,406 10.00%
FINANCING CONTACT:Stephen FilippoDirector - Capital Markets(212) [email protected]
Marcus & Millichap, on behalf of ownership, is pleased to exclusively offer a brand-new construction Chick-Fil-A ground lease in Stroudsburg, PA. Chick-Fil-A benefits from the newly built St. Luke’s Hospital directly across PA-611 as well as the outstanding traffic counts. At less than a mile from the I-80 on ramp, the tenant benefits from the substantial traffic counts of I-80 and 611 commuter traffic. Surrounding retailers include Taco Bell, Sonic, Ulta, Dick’s Sporting Goods, Lowe’s Home Improvement, & Advance Auto Parts.
Chick-Fil-A enjoys some of the highest average sales volumes per store in the QSR industry. Average Chick-Fil-A sales grew to $4.55 million in 2019 from $4.15 million in 2018, as reported by National Restaurant News. Chicken as a segment of QSR, had the biggest market share gain of any segment, adding more than 0.4 percentage points, to reach nearly 8.8% of all Top 200 restaurant sales.
The St. Luke's Monroe Campus is the first new hospital built in Monroe County in a century. The county's only other hospital is Pocono Medical Center in East Stroudsburg, which plans to merge with Lehigh Valley Health Network. A recent economic report from East Stroudsburg University that found Monroe County had fewer hospital beds per capita — 1.4 beds per 1,000 people — than either Pennsylvania, with 2.4 beds per 1,000 people, or most surrounding counties. This economic driver will greatly benefit the new Chick-Fil-A and surrounding developments.
INVESTMENT HIGHLIGHTS:BRAND NEW CONSTRUCTION 20-YEAR NNN GROUND LEASE CHICK-FIL-A
• Largest average sales per restaurant within the QSR Industry• 2,200 restaurants throughout the US
STRONG LOCAL ECONOMIC DRIVERS• Brand New St. Luke’s Hospital (total campus over 40 acres)• Kalahari, Great Wolf, and Camel Back Waterparks
STRONGEST GROSS SALES• Chick-Fil-A grosses an average of 4.55 million in each restaurant in 2018
EXCELLENT VISIBILITY FROM HIGHLY TRAVELED I-80 AND ROUTE 611 CORRIDOR• 19,493 VPD • Less than 20 miles from Pocono Mountains’ ski resorts• Less than 5 miles from East Stroudsburg university and Lehigh Valley Hospital-Pocono• Only Chick-Fil-A within a 10-mile radius
INFLATION HEDGE | RENTAL INCREASES IN BASE TERM & OPTIONS (See Rent Schedule)• Six subsequent 5-year options with 10% rent bump after base term
Chick-FIl-A
INVESTMENT SUMMARY
Chick-FIl-A
TENANT OVERVIEW
REPRESENTATIVE PHOTO
OWNERSHIP:Privately Owned
INDUSTRYQuick Service Food
WEBSITEwww.chick-fil-a.com
HEADQUARTERSCollege Park, GA
STORE TYPEFast Food
TOP FAST FOOD CHAINS
COMPANY SCORE
Chick-Fil-A 87
Panera Bread 81
Papa John's 80
Pizza Hut 80
Subway 80
Arby's 79
Chipotle 79
Domino's 79
Dunkin' 78
Starbucks 78
American Consumer Satisfaction Index 2018
1967Year Founded
2,360+Total Locations
$10.5BTotal Revenue
48States Located
Chick-fil-A is an American fast food restaurant chain headquartered in the city of
College Park, Georgia, specializing in chicken sandwiches. The first Chick-fil-A opened
in 1967, in the food court of the Greenbriar Mall, in a suburb of Atlanta. During the
1970s and early 1980s, the chain expanded by opening new franchises in suburban
malls’ food courts. The first freestanding franchise was opened in 1986 in Atlanta,
Georgia, and the company began to focus more on this type of franchise than on the
food court type. Today it operates more than 2,200 restaurants, primarily in the Unit-
ed States. The restaurant serves breakfast before transitioning to its lunch and dinner
menu.
The Company has the 8th largest revenue of all quick service restaurants ($10.5B in
2018 with 49 consecutive years of sales growth) despite having about 3000 less stores
than the smallest competitor in the top-7. Chick-Fil-A is able to maintain the highest
revenue per restaurant amongst fast food chains due to customer loyalty, a unique
menu, and a friendly staff providing an enjoyable dining experience.
• Named “Best Franchise Brand” in 2018 by Airport Revenue News.
• The Temkin Report found that fast food chains had the 4th highest loyalty rating of 20 industries, only trailing supermarkets, hotels, and retailers
• Ranked #1 quick service restaurant for “Consumers Choice – Best Overall” category by the Technomic 2018 Consumers’ Choice Awards
• Only restaurant brand named to the Top 10 “Best Companies to Work For” by 24/7 Wall Street
Chick-FIl-A
TENANT OVERVIEW
Chick-Fil-A OverviewChick-fil-A is one of the largest family-owned businesses in the country, best known for its original chicken sand-wich and for being a leader in customer service satisfaction.
Brand History1946 - Chick-fil-A is founded.1995 - The “EAT MOR CHICKIN” advertising campaign was introduced.2006 - The company surpasses $2 billion in sales.2016 - Chick-fil-A opens its 2,000th restaurant.
Projected GrowthChick-fil-A has had rising sales for 50 consecutive years and is expected to become the third-largest fast-food chain in terms of sales by 2020.
AwardsChick-fil-A received the American Customer Satisfaction Index No. 1 Rating in 2017 and secured a top spot in theConsumer Choice Awards®. The company also ranked on Forbes Best Employers in 2018.
Upcoming Expansion Into International MarketsThe first international Chick-fil-A location will open in Toronto, Canada in 2019 and kick-off the franchise’s expan-sion outside of the United States.
Top-Ranked Sales by QSRThe Chick-fil-A chain made more money per restaurant than any other fast-food chain competitor in 2016 and beat the sales of its fried-chicken competitor, KFC, by four times.
LOCATIONS NATIONWIDE
2,360+STATES
472018 SALES
$10.5B
RECENT NEWS:
Chick-FIl-A
REGIONAL MAP
N
ew York
100 Miles to New York
SUBJECT PROPERTY
P
hi
ladelphia
115 Miles to Philadelphia
A
llentown
40 Miles to Allentown
STROUDSBURG, PA 3 MILE 5 MILES 10 MILES
Population 16,544 50,273 120,200
Households 5,951 17,770 43,635
Household Income $86,254 $77,822 $80,770
Traffic Counts 19,493 VPD
1 MILE RADIUS
Stroudsburg, PA
MSA OVERVIEW
EMPLOYERS # OF EMPLOYEES
Tobyhanna Army Depot 5,090
Aventis Pasteur 2,400
Pocono Medical Center 1,850
Kalahari Resorts LLC 1,850
WalMart Associates Inc 1,200
POPULATION 3 MILE 5 MILES 10 MILES
2024 Projection 16,597 50,509 120,862
2019 Estimate 16,544 50,273 120,200
2010 Census 16,736 50,469 120,676
HOUSEHOLDS 3 MILE 5 MILES 10 MILES
2024 Projection 5,977 17,832 43,894
2019 Estimate 5,951 17,770 43,635
2010 Census 6,009 18,025 43,879
INCOME 3 MILE 5 MILES 10 MILES
Avg. Household Income $86,254 $77,822 $80,770
Med. Household Income $71,498 $57,772 $62,533
DEMOGRAPHICS:
TOP EMPLOYERS
3 MILE RADIUS
5 MILE RADIUS
The big "St. Luke's" signs have yet to be installed out front, but the St. Luke's Monroe Campus is open indeed.
The seventh St. Luke's University Health Network hospital, located in Bartonsville in Stroud Township, accepted its first patient last week.
By midweek, the emergency room was doing a brisk business, admitting 61 patients on Wednesday alone. Also Wednesday was the first surgery.
”We’ve exceeded all of our expectations and projections,” Monroe Campus President Donald Seiple said.
The campus comprises 41 acres, including 20 acres of woods that will feature a walking path.
The hospital itself is four stories with 180,000 square feet of space. An adjacent 37,500squarefoot office building is still under construction.
The total cost, including the tab for multiple improvements to Route 611, will be more than $120 million, according to Seiple.
Patient No. 1 was Ernest Smith. The 71 year old Jackson Township resident, suffering from congestive heart failure and retaining fluid in his legs, arrived at the emergency room just before 8 a.m. last Monday.
“Before I even had him registered, they had him on heart monitors,” daughter Debora Loch said. “The care was phenomenal. The staff there went above and beyond.”
The St. Luke’s Monroe Campus is the first new hospital built in Monroe County in a century. The county’s only other hospital is Pocono Medical Center in East Stroudsburg, which plans to merge with Lehigh Valley Health Network.
Seiple said the addition of a new hospital will benefit the Pocono region in more than one way: It will inject a measure of competition into local health care services. But even more fundamentally, it will help meet growing demand for those services.
He cited a recent economic report from East Stroudsburg University that found Monroe County had fewer hospital beds per capita — 1.4 beds per 1,000 people — than either Pennsylvania, with 2.4 beds per 1,000 people, or most surrounding counties. (Though Northampton County, with 1 bed per 1,000 people, had less than Monroe County, residents of Northampton enjoy easy access to Lehigh County, which had a robust 4.8 beds per 1,000 people.)
New St. Luke's Hospital Opens In The PoconosSam Kennedy | OCT 2016 | The Morning Call
Chick-FIl-A
IN THE NEWS
Monroe County also lagged in terms of doctors and nurses per capita. Monroe had 1.4 doctors and 12.1 nurses per 1,000 people, or roughly half the state averages.
“This will take the load off the other hospital,” said Loch, who said she has had to get used to hours long wait times for her father’s care. “I’m not saying the other facilities are bad, they’re just overwhelmed.”
Much of the planning and design of the Monroe Campus was informed by St. Luke’s recent experience at its Anderson Campus. The $200 million, 100 plus bed hospital on Route 33 in Bethlehem Township opened in 2011.
Take, for example, the emergency room. The Anderson Campus’s ER was overwhelmed from the start and had to be expanded within its first year.
The Monroe Campus, as result, was given an exceptionally large ER for a hospital of its size — 33 bays capable of handing 60,000 visits a year. The extra capacity, Seiple explained, will help meet the spike in demand on many weekends when the Poconos fills with tourists who patronize the re-gion’s ski resorts, water parks and many other offerings.
Generally, individual hospitals tend to have special focuses and strengths. The Monroe Campus was designed with general surgery in mind, Seiple said. The hospital doesn’t include an obstetrics and gynecology department with a delivery room for childbirth, but it does have multiple operating rooms to handle appendectomy and gall bladder surgery and other common surgical procedures.
Another benefit is economic. Once fully staffed, the Monroe Campus will employ about 450 workers, bringing total employment at Fountain Hill-based St. Luke’s just over 10,600.
Michele Levits, the Monroe Campus’s finance director, said most of the new jobs have already been filled about 150 by existing St. Luke’s employees who worked at other network locations, and the rest by people who are new to the network.
About 90 jobs, mostly for nurses, have yet to be filled.
Even so, the halls of the new hospital are filled with far more staff than patients, as the facility is opening in phases.
The emergency room opened first. After a certain number of inpatient admissions, the hospital can request the government inspection that precedes the launch of outpatient services.
The Monroe Campus, whose official ribbon cutting ceremony will be Thursday, is expected to be fully up and running sometime in November.
Chick-FIl-A
IN THE NEWS
STROUDSBURG OVERVIEW
Location is Geographically Desirable
Excellent School District with Growth
Thriving Employment Base In the Area
A VERY DESIRABLE LOCATION WITH AN OUTSTANDING DIVERSIFIED EMPLOYMENT BASE LOCATED IN THE COMMERCIAL HUB OF THE AREA
STROUDSBURG, PENNSYLVANIAStroudsburg, Pennsylvania is geographically desirable because it centrally located approximately 80 miles from New York, 90 miles from Philadelphia, and located less than 20 miles from the Pocono Mountains. Stroudsburg is the county seat of Monroe County and serves as the commercial hub for the surrounding area. The subject property is in close proximity to East Stroudsburg University, Lehigh Valley Medical Center-Pocono, and Stroudsburg’s Middle and High School. The property has approximately 117,000 people residing within a 10 mile radius and 47,000 within a 5 mile radius. Located less than 20 miles from the subject property, the Pocono Mountains has been a popular recreation area where skiing has generated a $230 million a year including: Blue Mountain Ski Area, Camelback Ski Area, Elk Mountain Ski Area, and Jack Frost Mountain amongst others.
SURROUNDING RETAIL AND POINTS OF INTERESTThe subject property is well-positioned in a dense retail corridor within Stroudsburg, surrounded by many national and regional local tenants. Recognized tenants in the area include: BJs, Target, Home Depot(Pocono Commons), Best Buy, Michael’s, PetSmart (Shoppes at Stroud), Sears, JC Penny, Bon-Ton (Stroud Mall), Lowe’ s, Kohl’s (Crossroads Mall) amongst many others. The subject property is less than 5 miles away from East Stroudsburg University and Lehigh Valley Hospital-Pocono.
Derrick DoughertyFirst Vice PresidentPhiladelphia, [email protected] License: PA RS305854
Scott WoodardNational Retail Group Philadelphia, PAPA RS329242
Mark KrantzNational Retail GroupPhiladelphia, [email protected]: NJ 1537786 | PA RS336064
Steven GarthwaiteNational Retail GroupPhiladelphia, [email protected] RS332182
OFFERED EXCLUSIVELY BY
Marcus & Millichap2005 Market Street #1510
Philadelphia, PA 19103
P: 215.531.7000
www.marcusmillichap.com
DISCLAIMER NOTICE:
Marcus & Millichap hereby advises all prospective purchasers of Single Tenant Net Leased property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of a single tenant property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a single tenant property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any single tenant property to determine to your satisfaction with the suitability of the property for your needs.
Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating areplacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.
By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this single tenant property.
Lead Agents:
OFFERING MEMORANDUM
115 Plaza, PA-611 Stroudsburg, PA NEW CONSTRUCTION | 20-YEAR GROUND LEASE
