CIRCLE K - Matthews · 2019. 5. 16. · Asia. Since 2003, Circle K Stores, Inc. operates as a subsidiary of Alimentation Couche-Tard Inc. The Circle K brand re-entered the Canadian

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R E T A I L A D V I S O R SOFFERING MEMORANDUM

CIRCLE K 5850 S 19TH AVE, PHOENIX, AZ 85041

Representative Photo

Matthews Retail Advisors

CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Circle K located at 5850 S 19th Ave, Phoenix, AZ 85041 (“Property”) . I t has been prepared by Matthews Retai l Advisors . This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors . The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

EXCLUSIVELY LISTED BY:

Table of ContentsPRICING & FINANCIAL ANALYSIS

Investment Highlights.................................................................... 2Executive Summary.........................................................................3Company Overview .......................................................................4Company Overview ...................................................................... 5

PROPERTY DESCRIPTIONPhysical Description .......................................................................7Bird’s Eye .......................................................................................... 8Regional Map ................................................................................... 9Tenant Map......................................................................................10

DEMOGRAPHICSCity Overview | Phoenix, AZ ....................................................... 12Demographics Report .................................................................. 13

Ryan O’ConnellBroker of Record License No. BR575729000

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R E T A I L A D V I S O R S

Aron ClineVP & Sr. Director

License No. 01904371O 310.919.5816M [email protected]

Rahul ChhajedAssociate


Representative Photo

Pricing & Financial Analysis

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OFFERING MEMORANDUM | Circle KP. 2 Matthews Retail Advisors

PRICING AND FINANCIAL ANALYSIS PROPERTY DESCRIPTION DEMOGRAPHICS


Investment Highlights

• Circle K has been operating at this location since 1972, displaying a strong, 46-year commitment to the location

• Extremely low replacement cost due to low base rent• Base rental rate is lower than the market rental rate in the area• Extremely strong store sales and high-performing site indicates a desire to continue operating at the location• One of few Circle K sites paying a percentage rent of 2% of Gross Sales• Immense volume of store sales suggests that this is one of Circle K’s top performing locations• Extremely dense demographics that support long-term success, 10-mile population of +210,000 and average

household income of ±$54,000• Excellent access and visibility, located on a hard signalized corner off of 19th street with a traffic count in excess

of ±27,000 vehicles per day• Circle K has strong investment grade credit with an S&P rating of BBB, with more than +10,000 stores across

the globe• The ±23 acre parcel of land situated behind the site is a highly desirable infill location that is zoned for large

commercial/ and residential development• 5 schools located within a 2.5 mile radius of the site, suggesting that the site receives tremendous traffic• Located less than 5 miles from Downtown Phoenix, the Phoenix Convention Center, and Chase Field which is

home to the Arizona Diamondbacks

Matthews Retail Advisors P. 3Circle K | OFFERING MEMORANDUM



Executive Summary

CIRCLE K5850 S 19TH AVE PHOENIX, AZ 85041

List Price ..............................................................................................$685,000CAP Rate - Current ...................................................................................5.00%Gross Leasable Area ....................................................................... ±2,577 SFLot Size ................................................................... ±0.73 Acres (±31,799 SF)Year Built ........................................................................................................1972

2015 Percentage Rent (2% Gross Sales less Insurance & Property Tax)

Gross Sales (Grocery + Gas) Percentage Rent (2%) NOI 2015 CAP Rate

2015 $2,406,931.90 $48,138.64 $34,110.13 5.00%

Tenant Summary

Tenant Trade Name Circle K - Alimentation Couche-Tard, Inc

Type of Ownership Fee Simple

Lease Guarantor Corporate

Lease Type NNN

Roof and Structure Tenant Responsible

Original Lease Term 20 Years

Lease Commencement Date 11/9/1972

Rent Commencement Date 11/9/1972

Lease Expiration Date 11/8/2017

Term Remaining on Lease ±1.70 Years Remaining

Options (2) Two, (5) Five Year Options

Annualized Operating Data - Base RentMonthly Rent Annual Rent Rent/SF

Current - 11/8/2017 $2,000 $24,000 $9.31/SF

11/9/2017 - 11/8/2022 $2,340 $28,080 $10.90/SF

11/9/2022 - 11/8/2027 $2,800 $33,600 $13.04/SF

*Circle K pays 2% percentage rent at this site, meaning that they pay a total of 2% of Gross Sales if it is in excess of the base rental rate + insurance +property tax.




Company Overview

Property Name Circle K

Property Type Net Leased Convenience Store

Parent Company Trade Name Alimentation Couche-Tard

Ownership Private

Credit Rating BBB-

Rating Agency Standard & Poor’s

Revenue ±1 Billion

Stock Symbol ATD

Board TSX

No. of Locations 10,000±

Headquartered Tempe, Arizona

Web Site www.circlek.com

Year Founded 1951

Since the 1980s, Circle K has been the largest company-owned convenience-store chain (i.e.of non-franchised stores) in the U.S. Circle K stores feature award-winning Premium Circle K Coffee,® the Polar Pop® cup, beer, snacks, candy, ATMs, Circle K Gift Cards, money orders, and much more. Some Circle K stores operate gasoline pumps selling Union 76-branded motor fuels; others sell Mobil, Marathon, ConocoPhillips, Irving, BP, Sunoco or Shell-branded fuel. The chain operates internationally, branching into Mexico and continents such as Asia. Since 2003, Circle K Stores, Inc. operates as a subsidiary of Alimentation Couche-Tard Inc. The Circle K brand re-entered the Canadian market in 2008, in connection with Couche-Tard’s acquisition of the Circle K convenience store network. The chain is primarily located in the Southern, Western, Southwestern, and Midwestern United States.




Company Overview

For the sixth year in a row Couche-Tard’s net earnings have increased amounting to $812.2 million for fiscal 2014, up 41.8% over fiscal 2013.Excluding non-recurring gains and costs,net earnings for fiscal 2014 would have been approximately $766.0 million or $1.35 per share on adi-luted basis, an increase of 23.3% compared to 2013. EBITDA for fiscal 2014 was $1,640.2million, an increase of $264.6 million or 19.2% com-pared with fiscal 2013, including a contribution from acquisitions (net of acquisition costs recorded to earnings)of $153.0 million.The strong results for fiscal year 2014 can be attributed to the performance of both the convenience and fuel aspects of our business.Couche-Tard saw strong growthin same-store sales from merchandise this year.North American operation delivered an increase in same-store merchandise revenues of 3.8% in the U.S.and1.9% in Canada.This is attributable to effective merchandising strategies, investments in the enhancement of services and product offerings,and pricing strategies aimed at boosting in-store traffic,as well as food service in several markets.

Alimentation Couche-Tard Inc.’s shares are listed on theToronto Stock Exchange (TSX) under the ticker symbols ATD.A and ATD.B. Couche-Tard Inc. has two classes of common shares: Class A Multiple VotingShares and Class B Subordinate Voting Shares.Class A is mainly held by founders and certain institutional investors.Class B is normally the most traded since it is held by a greater number of shareholders.Each Class A carries 10 votes and each Class B carries one vote.

Alimentation Couche-Tard Inc. or simply Couche-Tard is one of the largest company-owned convenience store operators in the world with more than 13,000 stores across Canada, the United States, Europe, Mexico, Japan, China, and Indonesia.The corporation is based in Laval, Quebec, Canada, asuburb of Montreal. The company has over 6,000 stores in the United States, which are located in 41 states.The simple and ongoing renovations carried out in the stores make them easy to identify and they offer a broad selection of merchandise, as well as other services designed to appeal to the convenience needs of their customers.



Property Description

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Physical Description

THE OFFERING

Property Name ............................................................................................ Circle K

Property Address .......................................................................5850 S 19th Ave

Phoenix, AZ 85041

Assessor’s Parcel Number .............................................................105-66-031-B

SITE DESCRIPTION

Number of Stories .............................................................................................One

Year Built ............................................................................................................. 1972

Gross Leasable Area (GLA) ................................................................. ±2,557 SF

Lot Size.......................................................................... ±0.73 Acres (±31,799 SF)

Type of Ownership ...............................................................................Fee Simple

Parking ...................................................................................... 13 Surface Spaces

Parking Ratio.................................................................................. 5.08 : 1,000 SF

Landscaping ........................................................................................Professional

Topography ................................................................................... Generally Level



Bird’s Eye



Regional Map



Tenant Map

Demographics

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PRICING AND FINANCIAL ANALYSIS PROPERTY DESCRIPTION DEMOGRAPHICS PRICING AND FINANCIAL ANALYSIS PROPERTY DESCRIPTION DEMOGRAPHICS

City Overview | Phoenix, AZ

Phoenix is the capital, and largest city, of the state of Arizona. With over 4.3 million residents and more than 16 million visi-tors each year, Phoenix is the most populous state capital in the United States, as well as the sixth most populous city nationwide. Phoenix is the anchor of the Phoenix metropolitan area, also known as the Valley of the Sun, which in turn is a part of the Salt River Valley. In addition, Phoenix is the county seat of Maricopa County and is one of the largest cities in the United States by land area. The sun shines on Phoenix during 85 percent of its daylight hours and basks in sunshine more often than any other major metropolitan area in the U.S. Phoenix Sky Harbor International Airport, dubbed as America’s Friendliest Airport, serves more than 40 million passengers a year, and goes to more than 100 domes-tic and international destinations, making it one of the 10 busiest airports in the nation.

Phoenix is home to the largest municipal park, called South Moun-tain Park and Preserve, in North America which covers more than 16,500 acres and has more than 50 miles of hiking, biking and equestrian trails. Arizona State University, one of the largest pub-lic universities in the U.S., and the University of Phoenix, the na-tion’s largest for-profit university & home of Super Bowl XLII and Super Bowl XLIX , have campuses located in this city of sunshine. Phoenix is also one of the few U.S. cities with franchises in all four major professional sports leagues: Phoenix Suns (NBA), Arizona Diamondbacks (MLB), Arizona Cardinals (NFL) and Arizona Coy-otes (NHL).



Demographics ReportPopulation 1-Mile 3-Mile 10-Mile2021 Projection 23,604 112,663 224,7572016 Estimate 21,266 103,560 207,9102010 Census 18,411 91,881 186,7582000 Census 9,870 61,642 143,331Growth 2016 - 2021 11.00% 8.79% 8.10%Growth 2010 - 2016 15.51% 12.71% 11.33%Growth 2000 - 2010 86.54% 49.06% 30.30%

Households2021 Projection 6,253 29,523 64,3102016 Estimate 5,652 26,963 59,1002010 Census 5,006 24,129 53,3212000 Census 2,305 14,871 36,548Growth 2016 - 2021 10.63% 9.49% 8.81%Growth 2010 - 2016 12.89% 11.75% 10.84%Growth 2000 - 2010 117.18% 62.25% 45.89%

Income$0 - $15,000 17.75% 19.48% 21.91%$15,000 - $24,999 13.68% 11.95% 12.56%$25,000 - $34,999 12.37% 13.11% 12.19%$35,000 - $49,999 17.25% 16.08% 14.34%$50,000 - $74,999 20.29% 17.71% 16.12%$75,000 - $99,999 9.28% 9.68% 9.03%$100,000 - $124,999 4.89% 5.65% 5.65%$125,000 - $149,999 2.30% 2.79% 3.29%$150,000 - $199,999 0.99% 2.06% 2.66%$200,000 - $249,999 0.50% 0.69% 0.97%$250,000 - $499,999 0.56% 0.69% 1.07%$500,000+ 0.13% 0.11% 0.22%

2016 Est. Average Household Income $49,839 $52,163 $54,131

2016 Est. Median Household Income $40,393 $40,090 $38,496

Matthews Retail Advisors | 841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.Matthews.com

CIRCLE K5850 S 19th AvePhoenix, AZ 85041OFFERING MEMORANDUM

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Ryan O’ConnellBroker of Record License No. BR575729000

Aron ClineVP & Sr. Director


Rahul ChhajedAssociate


Documents

CIRCLE K - Matthews · 2019. 5. 16. · Asia. Since 2003, Circle K Stores, Inc. operates as a subsidiary of Alimentation Couche-Tard Inc. The Circle K brand re-entered the Canadian