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D E L T A C O | G A L L U P, N M | P. 1
REPRESENTATIVE PHOTO
Single Tenant Absolute NNN Leasehold Interest
DEL TACO510 Munoz Blvd., Gallup, New Mexico 87301
REPRESENTATIVE PHOTO
D E L T A C O | G A L L U P, N M | P. 2
Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to,
warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and /or its licensor(s) 2015. All rights reservedColliers International
3 Park Plaza, Suite 1200 | Irvine, CA 92814
For More Information Contact:
Jereme SnyderExecutive Vice President
License No. 01360233949.724.5552
Eric CarltonSenior Vice PresidentLicense No. 01809955
John SharpeSenior Associate
License No. 01800769949.724.5546
Spencer O’DonnellSales Associate
License No. 01954051949.724.5536
Tom JonesSenior Vice President & Principal
License # 37218505.880.7063
Table of Contents
Property Summary
Lease Abstract
Investment Highlights
Property Information
Site Plan
Property Aerial
Tenant Overview
City of Gallup
Demographics
Maps
Confidentiality Agreement
Pg. 3
Pg. 4
Pg. 5
Pg. 6
Pg. 7
Pg. 8-9
Pg. 10
Pg. 11
Pg. 12-13
Pg. 14
Pg. 15
D E L T A C O | G A L L U P, N M | P. 3
We are pleased to offer to qualified investors an opportunity to purchase an absolute NNN single-tenant leasehold interest asset that is 100% leased to Del Taco– the tenants, QK Holdings, LLC, are a top performing franchisee operator with over 100 restaurant locations in 6 states. They are rapidly expanding and are also the largest franchisee of Denny’s in the world. The property is ideally located directly across the street from Rio West Mall, Walmart Supercenter, and The Home Depot on Munoz Blvd. right off the I-40 Freeway exit in Gallup, New Mexico. This pride of ownership property and iconic brand features a newly constructed prototype building and the tenant is set to open for business in November of 2016.
There are 30 years remaining on a brand new lease with tenant, which runs concurrently with a 60 year lease with the ground lessor. In addition, Del Taco (QK Holdings) has six 5-year options to extend their lease. There are substantial 10% rental escalations every 5 years during the 30-year primary and at the commencement of each option period. This is a true NNN lease, with zero landlord responsibilities - the tenant pays directly for the CAM’s, insurance, taxes, building maintenance, and ground rent. Furthermore, this is a 100% depreciable asset and if the tenant decides not to exercise their options after the 30-year primary term, the leasehold interest retains the right to lease the improvements to a new tenant for another 30 years.
Gallup, New Mexico is the county seat of McKinley County and the most populous city between Albuquerque and Flagstaff along the historic US Route 66. This is a “main & main” location with strong traffic counts. The nearby Walmart Supercenter is a top 10 performing store in the nation and the local Ford and Chevy dealerships are top performers as well. Much of this disposable income can be attributed to the adjacent Navajo, Hopi, and Zuni Indian reservations (Bureau of Indian Affairs subsidies).
This is an excellent opportunity to purchase a band new Del Taco restaurant (strong tenant financials) on a long-term, absolute NNN leasehold interest with substantial rental increases within a dense retail corridor of an established market with a regional draw of traffic and customers.
Property Summary
List Price $1,710,800
NOI $102,650
CAP Rate 6.00%
Annual Rent $102,650
Operating Expense
Taxes NNN
Insurance NNN
CAM NNN
Net Operating Income $102,650
Pricing
Operating Expense Data
D E L T A C O | G A L L U P, N M | P. 4
30 Year Lease - Strong Franchisee Guaranteed Lease – QK Holdings, LLC
• Proven & Growing Operator - QK Holdings, LLC – 100+ Locations in Six States - Successful Tenant
• Strong Tenant Financials - Largest Franchisee of Denny’s in the World – High Net Worth Guaranty
on the Lease
• Brand New Prototype Building – Pride of Ownership Asset – 60 Year Ground Lease -
Iconic Brand Recognition
Strong Location in Established Regional Hub - County Seat - Drive-Thru Included
• Across the Street From Top Performing Walmart Supercenter in the Country -
• Major Adjacent Retail Includes American Heritage Plaza, Rio West Mall and The Home Depot
• Dense Retail Corridor - I-40 Freeway Exit on Munoz Blvd, Main Commercial Thoroughfare
• Surrounded by 3 Indian Reservations (Navajo, Hopi, Zuni) - Bureau of Indian Affairs Subsidies -
Large Disposable Income
• Adjacent Walmart Supercenter is a Top 10 Performing Store in the Nation - Local Ford and Chevy
dealerships are Top Truck Sellers in the Country
• Other Nearby Retailers Include Big 5 Sporting Goods, McDonald’s, AutoZone, US Bank, Applebee’s,
and other National Chains
Absolute NNN Asset – Zero Management Responsibilities - 100% Depreciable Asset
• Excellent Access & Visibility Access on Main Retail Corridor Zero Landlord Responsibilities
• Fee Simple Asset – Brand New Construction - Coupon Clipper Asset
• No Existing Loan in Place – Excellent Financing Options Available – Historic Rates
• Main Retail Trade Corridor for City – Close proximity to Walmart Supercenter and National Retailers
Investment Highlights
Del Taco
D E L T A C O | G A L L U P, N M | P. 5
MUNOZ DRIVE
W MALONEY AVE
491
602
609
AMERICAN HERITAGE
PLAZA
TROY’S AUTO SALES
GALLUP FIRE
DEPT.
CAR QUESTAUTO PARTS
PAWN SHOP
RUSSELLCENTER
40
DOWNTOWN GALLUP
86,000 CPDAerial Overview
Excellent Retail Location Main Retail Trade Corridor
• Located Next to Mall, Major Shopping Center,
Walmart Supercenter and Other National Retailers –
Regional Traffic Draw
• Brand New 30 Year Leasehold Interest – 6-Five Year
Option Periods
• Strong 10% Rent Bumps Every 5 Years
Including All Options – Effective Inflation Hedge
86,000 CPD
D E L T A C O | G A L L U P, N M | P. 6
Lease Abstract
Tenant Trade Name: Del Taco
Projected Lease Commencement March 1, 2017
Projected Lease Expiration February 28, 2047
Lease Term Brand New 30 Years with Options
Ground Lease 60 Years
Base Rent $102,650
Rent PSF $46.62
Rental Adjustments
10% Fixed Escalation Every 5 Years
2021: $112,915.002026: $124,206.502031: $136,627.15
2036: $150,289.96
2041: $165,318.84
Options
6 - 5 Yr. Options: 2046: $181,850.722051: $200,035.792056: $220,039.362061: $242,043.292066: $266,247.612071: $292,872.37
Lease Type Absolute NNN Leasehold Interest
Roof And Structure Tenant Responsible Lessor
Ground Rent Tenant Pays Directly to Ground Lease
Lease Summary
D E L T A C O | G A L L U P, N M | P. 7
Property Information
Address: 510 Munoz Blvd., Gallup, New Mexico 87301
Price: $1,710,800
Cap Rate: 6.00%
Current NOI: $102,650
Building Area: 2,202 SF
Land Area: 16,954 SF (.39 Acres)
Access: Access from Munoz Blvd.
Freeway Exit (I-40) 86,000 CPD
Parcel: 2-106-088-504-327
Year Built2016 Construction
Brand New Prototype Construction
D E L T A C O | G A L L U P, N M | P. 8
PAWN SHOP
RUSSELLCENTER
TROY’S AUTO SALES
GALLUP FIRE
DEPT.
CAR QUESTAUTO PARTS
GALLUP HIGH
SCHOOL
NAVAHO INDIAN RESERVATION
W MALONEY AVE
602
609
40
AMERICAN HERITAGE
PLAZA
491
HOPI RESERVATION
MUNOZ DRIVE
ZUNI INDIANRESERVATION
86,000 CPD
Del Taco Site
86,000 CPD
D E L T A C O | G A L L U P, N M | P. 9
Tenant Overview
Del Taco
Del Taco is an American quick service restaurant chain which specializes in American-style Mexican cuisine as well as American foods such as
burgers, fries, and shakes. The company offers Mexican and American styled dishes, including tacos, burritos, American grill, quesadillas
and nachos, desserts and shakes, sides and salads, combos and fiesta packs, kid’s meals, and drinks. Del Taco was purchased by Levy Acquisition
Corporation and became a public company on June 30, 2015.
New Mexico Locations
D E L T A C O | G A L L U P, N M | P. 1 0
Gallup, NM
About Gallup
Gallup lies on Interstate 40 (Historic Route 66), 139 miles west of Albuquerque and 25 miles east of the Arizona border. The city is the tour hub for the popular Four Corners Region, and it is the mercantile, transportation and banking center for the entire area. Gallup is a major Amtrak stop and is also served by America West Airlines.
Gallup is also the largest Indian center in the Southwest and the ceremonial capital of Native America.There are many American peoples in the Gallup/Four Corners region. By far the most numerous are the Navajo, who are today widely regarded for their achievements in wool, with original Navajo rugs and blankets (both new and antique) sought by private collectors and museums throughout the world.
A second major Native American settlement in the region, Zuni Pueblo, is centered approximately 35 miles south of town. Zuni is the largest of New Mexico’s 19 Indian pueblos.The Zuni are best known for their intricate jewelry made from delicately cut turquoise or coral set in sterling silver.
Economy
McKinley County, New Mexico which includes the City of Gallup has a population nearing
75,000 residents, a labor force in excess of 25,000 workers and is projected to continue
increases in overall population growth.
D E L T A C O | G A L L U P, N M | P. 1 1
Demographics
Median Household Income
Population 1-MILE 3-MILE 5-MILE
Estimated Population (2016) 4,663 16,810 27,792
Projected Population (2021) 4,722 17,015 28,212
Households 1-MILE 3-MILE 5-MILE
Estimated Households (2016) 1,507 6,119 9,401
Projected Households (2021) 1,524 6,184 9,528
Income 1-MILE 3-MILE 5-MILE
Avg. Household Income (2016) $50,071 $63,639 $59,969
Median Household Income (2016) $23,299 $45,991 $38,843
Business Facts 1-MILE 3-MILE 5-MILE
Total # of Businesses (2016) 491 1,371 1,548
Total # of Employees (2016) 5,146 14,240 16,840
$$$
CHARLIE LEE MEM
ORIAL RELIEF ROUTE
D E L T A C O | G A L L U P, N M | P. 1 2
~ Approximately 16,810 Residents Within a 3-Mile Radius ~
D E L T A C O | G A L L U P, N M | P. 1 3
LINCOLN AVE.
HWY. 491
ELEVENTH ST.
EXIST.S/W
EXIST.S/W
EXIST.S/W
PROPERTY LINE
PROPERTY LINE
PROPERTY LINE
ACCESS
ACCESS DRIVE
EXIST.
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LS.
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LS.
SIDE W
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NO
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SITE PLAN
& D
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2. MIN
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WITH
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3. SEE CIV
IL SHEETS FO
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4. EXTER
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SHA
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17. ALL SIG
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21. GEN
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IN TH
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OTIC
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IN W
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THA
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23. ALL R
AM
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AV
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X. SLO
PE OF 1:12 (8.33%
GR
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LAN
DIN
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TTOM
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. WID
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GTH
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BE M
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.1:48 (2%
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8'-0" 9'-0" TYP. 99'-0" 9'-0"13'-6"
2'-2" 12'-0"
66'-8"
36'-3 12 "
20'-0" 44'-112"
CU
RB
GA
S METER
OV
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PAR
KIN
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DEL TACO13 PARKING
SPACES
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6'-6"6'-6 12 "
20'-0" TYP.
4'-9"
CU
RB
5'-312"
STRIPIN
G FO
RA
CC
ESS AISLE.
13'-0"
LS.
LS.
2,202 SQ.FT.
86 SEATS
WH
EEL STOPS
12'-0"
3'-5 12 "
5' SETBA
CK
5' SETBA
CK
10' SETBA
CK
CU
RB
DU
MPSTER
ENC
LOSU
RE
SEE SHEET A
003
R20'-0"
R5'-0"
R32'-0"
R2'-0"
R1'-0"
PRO
PERTY
LINE
6" BO
LLAR
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6" BO
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U SIG
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CA
NO
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DR
IVE
THR
USIG
N
POLE
SIGN
1C
ON
CR
ETELA
ND
ING
5'-812"
1
SHEET N
UM
BER
CH
ECK
ED:
DR
AW
N:
JOB
NO
:
DA
TE:
REV
ISION
S
711 N. FIELD
ER R
D.
AR
LING
TON
, TX 76012
FAX
: (817) 635-5699PH
: (817) 635-5696
GALLUP, NM. 87301
06/15/2016
1 07/20/2016
SITE PLAN
A002 550 U.S. HIGHWAY 491
SITE PLAN
SCA
LE: 1"=20'-0"
Site Plan
D E L T A C O | G A L L U P, N M | P. 1 4
This Offering Memorandum contains select information pertaining to the business and affairs of Del Taco, Gallup, NM It has been prepared by Colliers International. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Colliers International. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness or this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.
By acknowledging your receipt of this Offering Memorandum from Colliers, you agree:
1. The Offering Memorandum and its contents are confidential;
2. You will hold it and treat it in the strictest of confidence; and
3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.
Owner and Colliers International expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.
If you wish not to pursue negotiations leading to the acquisition of Del Taco, Gallup, NM or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.
A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Colliers International or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.
This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.
Colliers International | 3 Park Plaza, Suite 1200 | Irvine, CA 92814 | Snyder/Carlton Team
Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. This publication is the copyrighted property of Colliers International and /or its licensor(s) 2015. All rights reserved
D E L T A C O | G A L L U P, N M | P. 1 5
INVESTMENT CONTACTS
T H E S N Y D E R C A R L T O N T E A M | W W W. T H E N N N E T W O R K . C O M
REPRESENTATIVE PHOTO
Jereme SnyderExecutive Vice President
License No. 01360233949.724.5552
Eric CarltonSenior Vice PresidentLicense No. 01809955
John SharpeSenior Associate
License No. 01800769949.724.5546
REPRESENTATIVE PHOTO
Spencer O’DonnellSales Associate
License No. 01954051949.724.5536
Tom JonesSenior Vice President & Principal
License # 37218505.880.7063
