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1 8 6 0 1 H U B B A R D D R I V ED E A R B O R N, M I C H I G A N
Bill O’Connor Senior Vice President +1 248 351 2045 [email protected]
David Hesano First Vice President +1 248 351 2014 [email protected]
O F F E R I N G M E M O R A N D U M
AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT
CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibil-ity and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affili-ates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s).
Confidentiality Agreement
Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc.
If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc.
Disclaimer
This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.
The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.
© 2018 CBRE, Inc. All Rights Reserved.
EXECUTIVE SUMMARY01
18601 Hubbard Drive | Dearborn, MI4
EXECUTIVE SUMMARY01
Investment Highlights
This is a great opportunity for an investor looking to purchase a passiveincome opportunity with absolutely zero management responsibilities. The upside on buying a ground lease is that you have the assurance ofBenihana’s strength as a tenant, while not owning the improvements onthe land. It is a much less risky position verses paying for all of the improvements on the land. In addition, Benihana recently constructed their new building consisting of 8,250-square feet that opened in the fall of 2008, after the completion of their new building, they razed the original and constructed a new parking lot on site as well.
Dearborn is the World Headquarters to Ford Motor Company. The Ford Motor Company’s HQ Building is visibly located approximately one mile to the southeast of Benihana. This ensures an investor that Benihana’s “neigh-borhood” will remain in Class “A” condition. Moreover, Ford Motor has deed covenants in place on all of the properties, which they have either devel-oped or owned in order to ensure that the surrounding neighborhood re-mains in outstanding condition. Many of Benihana’s neighboring properties also have these deed restrictions (CCR will be made available upon request).
Investment Overview
• Traffic Count of Over 30,000 Per Day on Hubbard Drive• In the Shadow of Ford Motor Company’s World Headquarters• A Population of Over 380,000 Within a Five-Mile Radius• Corporate Guaranty with Rental Increase Every Five Years• New Construction on a Ground Lease with 17+ Years Remaining• Benihana Had Total Sales Over the Past Four Quarters of $5,375,059. Additionally, the Q1 2018 Sales Exceeded Q1 2017 Sales.• Out Parcel to Fairlane Town Center - Consisting of 1.465 Million Square Feet Anchored by Macy’s, JCPenney, Sears, and AMC Star Theaters• Excellent Location with Access to M-39 (Southfield Freeway)• 30,000 College Students at University of Michigan - Dearborn and Henry Ford College within One Mile
18601 Hubbard Drive | Dearborn, MI5
EXECUTIVE SUMMARY01
CBRE, Inc. has been retained by the property owner as the exclusive marketing advisor for the disposition of the Benihana Ground Lease (the “Property”) located at 18601 Hubbard Drive in Dearborn, Michigan 48126.
CBRE is pleased to announce the assignment to exclusively market this Benihana Ground Lease located at 18601 Hubbard Drive in Dearborn, Michigan.
Benihana has been operating at the current location since 1976. The restau-rant is on a 38-year corporate ground lease which will expire on November 30, 2035. There are then just over 17 years remaining on the lease term. The current annual rent is $21.50 per square foot which will increase to $24.00 per square foot on December 1, 2018. Subsequent lease increases occur every five years throughout the remainder of the lease term at roughly $2.50 per square foot. The lease is on absolute net ground lease basis, the tenant is responsible for all real estate taxes, insurance and common area maintenance attributable to the property. The tenant also pays a quarterly percentage rent.
The Offering
Headquartered in Miami, Benihana is the nation’s leading operator of Japanese theme and sushi restaurants with 95 restaurants nationwide, includ-ing 62 Benihana restaurants, 25 RA Sushi restaurants and eight Haru sushi restaurants. In addition, 16 franchised Benihana restaurants are operating in the United States, Latin America and the Caribbean. In 2012 the company was acquired by Angelo, Gordon & Co. L.P., a privately-held registered investment advisory dedicated to alternative investing. Benihana is one of the largest Asian restaurant chains in the United States by revenue and restaurant loca-tions. Benihana Inc. is a Florida-based American restaurant company founded in 1964. It is headquartered in Doral, Florida but owns and franchises over 70 Japanese cuisine restaurants around the world. The concept of this restaurant includes the meals being theatrically prepared by a knife-wielding, joke-telling chef who keeps the experience lively and entertaining. The first restaurant was opened in 1968 in Chicago and the company has grown tremendously since. Benihana Inc. expanded by purchasing the Haru and RA Sushi restaurants after 1995. Today it thrives because of its exciting atmosphere and scrump-tious Japanese cuisine.
Tenant and Company Overview
PROPERTY DESCRIPTION02
18601 Hubbard Drive | Dearborn, MI7
Address 18601 Hubbard Drive Dearborn, MI
County Wayne
Tenant Benihana
Property Type Single Tenant Retail Restaurant
Parcel Number 32-09-144-01-004
Building Size 8,250 SF
Year Built/Renovated 2008
Parcel Size 2.31 Acres
Frontage 196’ on Hubbard Drive
Curb CutsOne via Hubbard Drive, One via North-wood Drive, and One via Town Center Drive
Number of Floors One
Parking Adequate Surface Spaces
SITE SUMMARY
PROPERTY DESCRIPTION02
18601 Hubbard Drive | Dearborn, MI8
PROPERTY DESCRIPTION02Micro Aerial
Hubbard Drive
Nor
thw
ood
Driv
e
Town Center Drive
Fairlane Plaza
SITE
FINANCIAL ANALYSIS03
Price $7,803,414Down Payment All Cash Rentable Square Feet 8,250Price per Square Foot $946CAP Rate 5.75%
IncomeYear One 10/18 -
9/19Per Month Per SF
Base Rent
100.0% 8,250 SF $193,383 $16,115 $23.44Total Base Rent $193,383 $16,115 $23.44
Annual Percentage Rent $255,313 $21,276 $30.95
Potential Gross Income $448,696 $37,391 $54.39
Expense Reimbursement RevenueInsurance $2,063 $172 $0.25Common Area Maintenance $28,875 $2,406 $3.50Real Estate Taxes $56,297 $4,691 $6.82
Total Expense Reimbursement Revenue $87,235 $7,270 $10.57
Gross Potential Income $535,931 $44,661 $64.96
Vacancy/Collection Allowance 0.00% $0 $0 $0.00
Effective Gross Income $535,931 $44,661 $64.96
Operating Expense Estimates Insurance $2,063 $172 $0.25Common Area Maintenance $28,875 $2,406 $3.50Real Estate Taxes $56,297 $4,691 $6.82Total Common Area Expenses $87,235 $7,270 $10.57
Management Fee 0.0% $0 $0 $0.00
Replacement Reserve $0.00 $0 $0 $0.00Total Expenses $87,235 $7,270 $10.57
Net Operating Income $448,696 $37,391 $54.39
BenihanaYear One Cash Flow Estimates
Benihana38 Year Lease 12/2003 - 11/2035
OPERATING EXPENSE ESTIMATES
INCOME YEAR ONE 10/2018-9/2019 Per Month
NET OPERATING INCOME $448,696 $37,391 $54.39
Benihana - DearbornYear One Cash Flow Estimates
18601 Hubbard Drive | Dearborn, MI10
FINANCIAL ANALYSIS03Year One Cash Flow Estimate
RIGHT OF FIRST REFUSAL None
EARLY TERMINATION
Landlord has the option to terminate lease if it’s Gross Sales do not exceed $8,658,000 during the period from December 1, 2027 to November 30, 2028 with 6 months notice.
OPERATINGEXPENSES
Tenant is responsible for 100% of operating expenses attributable to the property.
TAXES Tenant responsible for 100% of real estate taxes attributale to the property.
INSURANCE Tenant responsible for 100% of insurance expense attributable to the property.
COMMON AREAMAINTENANCE
The tenant is responsible for 100% of CAM expenses attributable to the property.
UTILITIES Tenant pays for all utilities directly.
MANAGEMENTFEE None
LANDLORD RESPONSIBILITES None
ASSIGNMENT AND SUBLEASE
Tenant may not assign or sublet withouth prior written consent of the Landlord.
TENANT/GUARANTOR Benihana
SIZE (SF) 8,250 SF
LEASE TYPE Net
START DATE 12/1/2003
YEAR ONE RENT $193,383
ANNUAL AVERAGEPERCENTAGE RENT $255,313
LEASE TERM 38 years/17+ years remaining
ESCALATIONS Generally $2.50/SF increases every five years, however some years are more.
ADDITIONAL RENT
Annual Percentage Rent equal to the difference between the rent payable during the immediately preceding calendar quarter and 8% of the gross sales during the preceding calendar quarter or partial calendar quarter provided that the total amount of rent and percentage rent payable by tenant during any calendar year shall not be more than 8% of gross receipts.
RENEWAL OPTIONS
Two, 5-year renewal options at the prevailing market rent, with six months notice.
OPTION TO PURCHASE None
18601 Hubbard Drive | Dearborn, MI11
FINANCIAL ANALYSIS03Lease Abstract
MARKET OVERVIEW04
18601 Hubbard Drive | Dearborn, MI13
The Benihana Restaurant is located in the heart of Dearborn, less than one mile from Ford Motor Company’s World Headquarters. Benihana is an outparcel to Fairlane Town Center; located between Interstates 94 and 96 adjacent to one of Southeast Michigan’s primary north-south corridors, the Southfield Freeway.
Dearborn is a city in the State of Michigan. It is located in Wayne County and is part of the Detroit metropolitan area. Dearborn is the eighth largest city in the State of Michigan. As of the 2010 census, it had a population of 98,153. The city currently has 7,523,002 SF of exisiting retail space and a vacancy rate of 2.4%.
First settled in the late 18th century by French farmers in a series of ribbon farms along the Rouge River and the Sauk Trail, the community grew with the establishment of the Detroit Arsenal on the Chicago Road linking Detroit and Chicago. It later grew into a manufacturing hub for the automotive industry. The city was the home of Henry Ford and is the world headquarters of the Ford Motor Company. It has a campus of the University of Michigan as well as Henry Ford College. Dearborn has The Henry Ford, the United States’ largest indoor-outdoor museum complex and Metro Detroit’s leading tourist attraction with over 1.7 million visitors annually.
Ford Motor Company has its world headquarters in Dearborn. In addition its Dearborn campus contains many research, testing, finance and some production facilities. Ford Land controls the numerous properties owned by Ford, including sales and leasing to auto suppliers and unrelated businesses. DFCU Financial, the largest credit union in Michigan, was created for Ford and related companies’ employees.
One of the largest employers in Dearborn is Beaumont Healthcare System. Other major employers include auto material manufacturers like Wolverine Advanced Materials, education facilities such as University of Michigan - Dearborn, Henry Ford College, and museums such as The Henry Ford. Other businesses which are headquartered in Dearborn include Carhartt (clothing), Eppinger (fishing lures), and AAA Michigan (insurance).
MARKET OVERVIEW04
Dearborn Overview
18601 Hubbard Drive | Dearborn, MI14
MARKET OVERVIEW04Regional Map
© 2018 CBRE Limited. Data © TeleAtlas, Google, AerialExpress, DigitalGlobe, Landiscor, USGS, i-cubed. The information contained herein (the “Information”) is intended for informational purposes only and should not be relied upon by recipients hereof. Although the Information is believed to be correct, its accuracy, correctness or completeness cannot be guaranteed and has not been verified byeither CBRE Limited or any of its affiliates (CBRE Limited and its affiliates are collectively referred to herein as “CBRE”). CBRE neither guarantees, warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, or suitability of, or decisions based upon or in connection with, the Information. The recipient of the Information should take such stepsas the recipient may deem appropriate with respect to using the Information. The Information may change and any property described herein may be withdrawn from the market at any time without notice or obligation of any kind on the part of CBRE. The Information is protected by copyright and shall be fully enforced. Layout ID: L09 MapId: 5424419
LANSING
DETROITANN ARBOR
Benihana 18601 Hubbard Drive
18601 Hubbard Drive | Dearborn, MI15
MARKET OVERVIEW 04Location Aerial
Hubbard Drive
Michigan Avenue
Fairlane Plaza
Ford Road
Walmart
Ford Motor CompanyWorld Headquarters
DEMOGRAPHIC BRIEF
18601 HUBBARD DR
1 MILE 3 MILES 5 MILES
2017 Population - Current Year Estimate 3,885 121,730 346,446
2022 Population - Five Year Projection 3,979 120,054 338,415
2010 Population - Census 3,139 121,657 358,502
2000 Population - Census 2,835 127,971 401,361
2010-2017 Annual Population Growth Rate 2.98% 0.01% -0.47%
2017-2022 Annual Population Growth Rate 0.48% -0.28% -0.47%
2017 Households - Current Year Estimate 1,741 42,864 126,191
2022 Households - Five Year Projection 1,786 42,209 123,360
2010 Households - Census 1,447 43,334 130,753
2000 Households - Census 1,305 48,683 148,464
2010-2017 Annual Household Growth Rate 2.58% -0.15% -0.49%
2017-2022 Annual Household Growth Rate 0.51% -0.31% -0.45%
2017 Average Household Size 2.23 2.83 2.73
2017 Average Household Income $59,885 $59,017 $54,337
2022 Average Household Income $68,487 $66,624 $61,249
2017 Median Household Income $39,351 $42,370 $40,030
2022 Median Household Income $43,442 $46,272 $42,972
2017 Per Capita Income $26,346 $20,890 $19,880
2022 Per Capita Income $30,165 $23,534 $22,416
2017 Housing Units 1 ,949 50 ,870 152 ,474
2017 Vacant Housing Units 208 10.7% 8,006 15.7% 26,283 17.2%
2017 Occupied Housing Units 1,741 89.3% 42,863 84.3% 126,191 82.8%
2017 Owner Occupied Housing Units 702 36.0% 26,940 53.0% 81,301 53.3%
2017 Renter Occupied Housing Units 1,039 53.3% 15,923 31.3% 44,890 29.4%
2017 Population 25 and Over 2 ,627 75 ,417 222 ,371
HS and Associates Degrees 1,235 47.0% 44,034 58.4% 138,930 62.5%
Bachelor's Degree or Higher 959 36.5% 18,205 24.1% 41,738 18.8%
2017 Businesses 417 3,784 9,049
2017 Employees 22,194 67,820 123,405
©2018 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are forexample only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the propertyfor your needs. Source: Esri Page 1 ProjectID:330876
POPULAT ION
HOUSEHOLDS
HOUSEHOLD INCOME
HOUS ING UN ITS
EDUCAT ION
PLACE OF WORK
DEMOGRAPHIC BRIEF
18601 HUBBARD DR
NAME LATITUDE LONGITUDE
18601 HUBBARD DR 42.320907 -83.220894
©2018 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are forexample only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the propertyfor your needs. Source: Esri ProjectID:330876
5 MILE
3 MILE
1 MILE
18601 Hubbard Drive | Dearborn, MI16
MARKET OVERVIEW04Demographics
18601 HUBBARD DRIVE
DEARBORNMICHIGAN
CAPITAL MARKETS | INVESTMENT PROPERTIES
DAVID HESANO First Vice President
248 351 [email protected]
INVESTMENT CONTACTS
BILL O’CONNORSenior Vice President
248 351 [email protected]
