THREE PROPERTY PORTFOLIO - images1.loopnet.comimages1.loopnet.com/d2/h8L6EMz45n4SBu2bqdCgwcWzkgOYbXORK… · sells prescription drugs and a wide assortment of general merchandise,

MARYLAND

PA

WASHINGTON, D.C.

VIRGINIA

NJ

DE

NY

70 Mi les

Lorem ipsum

50 Mi les

ALEXANDRIA

DOVER

WILMINGTON

FREDERICK

HAGERSTOWN

BALTIMORE

TOWSON

ATLANTIC CITY

CAPE MAY

LONG ISLANDNEW YORK

KING OF PRUSSIA

YORK

HARRISBURG

WILKES-BARRE BRIDGEPORT

YONKERS

REHOBOTH BEACH

STATE COLLEGE

GETTYSBURG

PHILADELPHIA

LEHIGH VALLEY

OFFERING MEMORANDUMNET LEASE ADVISORY

THREE PROPERTY PORTFOLIO

LEHIGH VALLEY, PA

Holliday Fenoglio Fowler, L.P. (“HFF”) has been engaged by the owner of Lehigh Valley CVS Portfolio to market for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

P H I L A D E L P H I A | 1700 Market Street | Suite 3232 | Philadelphia, PA 19103

MARC MANDELManaging Director

[email protected] Investment Advisory

MICHAEL PAGNIUCCI Director

[email protected]

Financing Advisor

STEVE SCHRENKDirector

[email protected] Advisory

MICHAEL DICOSIMO Director

[email protected]

Investment Advisory

EXCLUSIVE MARKETING ADVISORS

mailto:[email protected]




INVESTMENT SUMMARY 01

PORTFOLIO HIGHLIGHTS 02

ALLENTOWN CVS

HELLERTOWN CVS

BETHLEHEM CENTER

04

08

12LOCATION OVERVIEW 18

CVS TENANT PROFILE 03

1C V S Po r t fo l i o · L e h i g h Va l l e y, PA

Holliday Fenoglio Fowler, L.P. (“HFF”) Net Lease Advisory is pleased to exclusively offer a premier net lease opportunity to acquire three long term CVS Pharmacy locations (the “Properties”), located in The Lehigh Valley, Pennsylvania. These Properties may be purchased as a portfolio or on an individual basis. Positioned approximately 75 miles to the West of New York City and approximately 50 miles to the Northwest of Philadelphia, the Lehigh Valley is the fastest growing and third most populous region in the State of Pennsylvania.

Located in Allentown, Bethlehem and Hellertown respectively, the properties are irreplaceable real estate that will have long term value growth with base rents for CVS that are set to current market rental rates at an average of $17.98 PSF. CVS Pharmacy is a stable investment grade (BBB+ by Standard and Poor’s/ BAA1 by Moody’s) tenant with a market cap of over $74 billion. Recently, CVS Health and Aetna announced a merger between the two companies which will strengthen their competitive positions in the market.

INVESTMENT SUMMARY

ADDRESS PRICE CAP RATE SIZE (SF)TOTAL ANNUAL

RENT/ NOIRENT/SF SITE AREA

CVS LEASE EXPIRATION

1802 Lehigh Street Allentown, PA

$3,140,000 5.00% 10,000 $157,000 $15.70 1.02 Acres 12/31/2037

1332 Main Street Hellertown, PA

$3,440,000 5.00% 10,000 $172,000 $17.20 0.56 Acres 12/31/2037

327 Woodlawn Ave Bethlehem, PA

$5,739,872 5.50% 18,365 $315,693 $17.19 1.10 Acres 12/31/2037

Portfolio Total $12,319,872 5.23% 38,365 $644,693

A c t u a l Pro p e r t y P h o to

47678

145

145

946

33

22

78

222

378

78

22

22

78

LEHIGH UNIVERSITY

PENN STATE LEHIGH VALLEY

MORAVIAN COLLEGE

MUHLENBERG COLLEGE

LEHIGH VALLEYINTERNATIONAL

AIRPORT

Allentown

Hellertown

Bethlehem

PARKPARKBETHLEHEM

ALLENTOWN

HELLERTOWN

WHITEHALL


PORTFOLIO INVESTMENT HIGHLIGHTS

P O RT FO L I O H I G H L I G H T S

• CVS Pharmacy has been a long term tenant at each location and recently executed 20 year lease extensions showing their commitment to each location

• Investment Grade Credit Tenant- rated BBB+ by Standard & Poor’s• Lower price point for CVS Pharmacies allows for a rare opportunity to purchase well-located

net leased assets at or below replacement costs

O F F E RS E N CO U R AG E D FO R I N D I V I D UA L O F F E RS A S W E L L A S P O RT FO L I O B I D S

C V S Po r t fo l i o · L e h i g h Va l l e y, PA 3

TENANT PROFILE

C V S O V E R V I E W

CVS is the largest healthcare provider in the U.S.

with more than 250,000 employees and over 9,700

stores. CVS Pharmacy serves over 5 million customers

a day and has a market cap of over $74 billion. CVS

sells prescription drugs and a wide assortment of

general merchandise, including over-the-counter

drugs, beauty products and cosmetics, film and photo

finishing services, seasonal merchandise, greeting

cards, and convenience foods through their CVS

Pharmacy and Longs Drugs retail stores and online

through CVS.com. It also provides healthcare services

through its more than 1,100 Minute Clinic medical

clinics as well as their Diabetes Care Centers. Most of

these clinics are located within CVS stores. The Minute

Clinic boasts 34,000,000 patient visits annually and

records $40 billion in specialty drug revenue. CVS

operates through the following segments: Pharmacy

Services, Retail or Long Term Care, and Corporate.

The company was founded by Stanley P. Goldstein

and Ralph Hoagland in 1963 and is headquartered in

Woonsocket, RI.

Rating Agency Rating

M O O DY’S BA A1

STA N DA R D & P O O R'S B B B+

Market Cap. (B) $

M A R K E T C A P. (B) $ $74.006

In December CVS Health announced that its merger

with Aetna. Aetna is one of the nation’s leading

diversified health care benefits companies. This

transaction fills an unmet need in the current health

care system and presents a unique opportunity to

redefine access to high-quality care in lower cost,

local settings whether in the community, at home,

or through digital tools. “This is the next step in

our journey, positioning the combined company to

dramatically further empower consumers. Together

with CVS Health, we will better understand our

members’ health goals, guide them through the

health care system and help them achieve their best

health,” said Mark T. Bertolini, Aetna chairman and

CEO.

Together, CVS Health and Aetna will be a trusted

community partner who will help consumers better

manage the cost of the health care they need. The

combined company will also be well positioned to

more effectively meet the health needs of many more

people.

T O L E A R N M O R E A B O U T T H E M E R G E R , S E E A R T I C L E S I N T H E L I N K B E L O W :

• F O R T U N E .C O M : C V S - A E T N A M E R G E R

• N Y T I M E S : C V S - A E T N A M E R G E R

• C N N : C V S - A E T N A M E R G E R

http://CVS.com

http://fortune.com/2017/12/03/the-cvs-aetna-merger-who-wins-and-who-loses/

https://www.nytimes.com/2017/12/04/health/cvs-aetna-merger.html

http://www.cnn.com/2017/12/05/health/cvs-aetna-merger-health-care/index.html


ALLENTOWN CVS INVESTMENT HIGHLIGHTS

P RO P E RT Y H I G H L I G H T S

• Located at a signalized intersection on Lehigh St with traffic counts over 15,000 VPD, and less than 1 mile to Highway I-78

• Dense Population with over 125,000 people in 3-Mile Radius and continued projected population growth

• Strong surrounding retailers include: Home Depot, Wawa, IHOP, Arby’s, Dollar Tree, Family Dollar, and Enterprise Rent-A-Car

• Drive-thru location

CLICK HERE TO VIEW

PROPERTY VIDEO

https://vimeo.com/249396099

5C V S Po r t fo l i o · L e h i g h Va l l e y, PA 5

CVS ALLENTOWN1802 LEHIGH STREET ALLENTOWN, PA

Lessee Pennsylvania CVS Pharmacy LLC, a wholly owned CVS subsidiary

Branded As CVS Pharmacy

Size 10,000

Lot Area 1.02 Acres

Current Rent $157,000

Rent/SF $15.70

Lease Type NN

Lease Commencement 4/3/1996

Remaining Lease Term 20 years

Lease Expiration 12/31/2037

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

Landlord Responsibility

Roof and Structure (New roof installed Oct, 2012 with a 15 year roof warranty)


CVS ALLENTOWN LEASE ABSTRACT

TENANT RESPONSIBILITY DETAIL

Maintenance

The tenant at its sole cost and expense shall take good care of the premises, shall replace all broken glass, and shall do the work required to maintain the premises and the fixtures and equipment including the plumbing, electrical, HVAC, and fire sprinkler systems located in the building. Tenant shall also be responsible for any necessary painting and cleaning of the exterior, cleaning and maintaining the parking areas and sidewalks (including resealing and restriping) , removing ice and snow and for landscaping.

Utilities Tenant is responsible at its own cost for all utilities furnished to the premises.

TaxesTenant agrees to reimburse the landlord for all real estate taxes and assessments levied against the premises land and building for each tax fiscal year of the term of this lease.

InsuranceTenant agrees to reimburse the landlord for costs incurred to maintain the insurance policies.

RENT SCHEDULE

DESCRIPTION DATES ANNUAL RENT

Base Term Years 1-20 1/1/2018-12/31/2037 $157,000

First Option Years 21-25 1/1/2038-12/31/2043 $164,850

Second Option Years 26-30 1/1/2044-12/31/2049 $173,093

* Lease Extension executed on 11/28/2017 with a new 20 year term to commence on 1/1/2018 and expire on 12/31/2037


CVS ALLENTOWN IMMEDIATE MARKET


ALLENTOWN DEMOGRAPHICS

POPULATION BY RACE1 MILE 3 MILE 5 MILE

White 54.39% 56.23% 65.55%Black/African American

12.25% 12.63% 9.98%

American Indian/Alaskan Native

0.41% 0.78% 0.56%

Asian 1.78% 1.90% 3.07%Native Hawaiian/Pacific Islander

0.05% 0.05% 0.05%

Some Other Race 26.56% 23.18% 16.48%Two or More Races 4.57% 5.22% 4.30%

POPULATION 1 MILE 3 MILE 5 MILE

2010 Census 9,959 125,217 211,8562018 Estimate 10,358 128,357 219,1262023 Projection 10,602 130,116 223,154

HOUSEHOLDS1 MILE 3 MILE 5 MILE


POPULATION GROWTH1 MILE 3 MILE 5 MILE

Historical Growth: 2010 to 2018

4.01% 2.51% 3.43%

Projected Growth: 2018 to 2023

2.36% 1.37% 1.84%

HOUSEHOLD INCOME1 MILE 3 MILE 5 MILE

2018 Average Household Income

$55,598 $61,091 $75,447

2018 Median Household Income

$44,297 $45,189 $54,495

AGE BY GENDER1 MILE 3 MILE 5 MILE

Male 5,010 62,401 106,286Female 5,348 65,955 112,840

HOUSEHOLD GROWTH1 MILE 3 MILE 5 MILE


0.95% 1.41% 2.38%


1.41% 1.03% 1.51%




HELLERTOWN CVS INVESTMENT HIGHLIGHTS

CLICK HERE TO VIEW

PROPERTY VIDEO


• Attractive demographics with Above Average Household Income over $81,000 in the 1-Mile Radius.

• Entrenched neighborhood location on Main St, less than 0.5 Miles to Highway I-78 Interchange.

• Recent roof replacement providing next owner a new roof with long term warranty.


9C V S Po r t fo l i o · L e h i g h Va l l e y, PA 9

HELLERTOWN LEASE ABSTRACT



Maintenance

The tenant at its sole cost and expense shall take good care of the premises, shall replace all broken glass, and shall do the work required to maintain the premises and the fixtures and equipment including the plumbing, electrical, HVAC, and fire sprinkler systems located in the building. Tenant shall also be responsible for any necessary painting and cleaning of the exterior, cleaning and maintaining the parking areas and sidewalks (including resealing and restriping) , removing ice and snow and for landscaping.


TaxesTenant agrees to reimburse the landlord for all real estate taxes and assessments levied against the premises land and building for each tax fiscal year of the term of this lease.

InsuranceTenant agrees to reimburse the landlord for costs incurred to maintain the insurance policies.

RENT SCHEDULE


Base Term Years 1-20 1/1/2018-12/31/2037 $172,000


Second Option Years 26-30 1/1/2044-12/31/2049 $189,630 * Lease Extension executed on 11/28/2017 with a new 20 year term to commence on 1/1/2018 and expire on 12/31/2037

CVS HELLERTOWN1332 MAIN STREET HELLERTOWN, PA



Size 10,000

Lot Area 0.56 Acres


Rent/SF $17.20

Lease Type NN




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


Roof and Structure (New roof installed June, 2012 with a 15 year roof warranty)

1 0C V S Po r t fo l i o · L e h i g h Va l l e y, PA

CVS HELLERTOWN IMMEDIATE MARKET


HELLERTOWN DEMOGRAPHICS



3.19% 8.05% 6.82%


0.12% 0.38% 0.32%


0.00% 0.04% 0.06%








4.38% 1.75% 1.45%


2.45% 1.23% 1.05%



$81,748 $74,325 $82,370


$64,297 $52,097 $61,060


Male 3,692 23,460 58,068Female 4,031 23,759 60,536



4.25% 1.89% 1.55%


2.36% 1.25% 1.06%




BETHLEHEM STRIP CENTER INVESTMENT HIGHLIGHTS


• Strong demographics with 97,000 people in a 3 mile radius with $78,000 in Average Household Income.

• Located two miles from Lehigh University, recently ranked #46 in the 2018 Ranking of Best Colleges in the Nation by US News.

• Long term tenancy- both CVS and Portal Games and Comics have successful businesses at the location, Portal Games has a strong local following proven by their recent expansion of gaming space.

CLICK HERE TO VIEW

PROPERTY VIDEO



BETHLEHEM CASH FLOW

NOTES:[1] All pricing is based on rent beginning July 2018

For the Year Ending Year 1

Jul-18 [1]

Rental Revenue

CVS $284,000

Portal Comics $36,000

KN Nail Spa $18,000

Total Rental Revenue $338,000

CVS Expense Reimbursement Revenue $40,133

Effective Gross Revenue $378,133

Insurance $9,030

Taxes $42,164

Utilities $136

Snow Removal $3,260

Lot Maintenance $2,850

Miscellaneous Repairs $5,000

Total Operating Expenses $62,440

Net Operating Income $315,693

1 4C V S Po r t fo l i o · L e h i g h Va l l e y, PA 1 4

BETHLEHEM CVS LEASE ABSTRACT



Maintenance

The tenant at its sole cost and expense shall take good care of the premises, shall replace all broken glass, and shall do the work required to maintain the premises and the fixtures and equipment including the plumbing, electrical, HVAC, and fire sprinkler systems located in the building.

CAM Pro rata share


TaxesTenant agrees to reimburse the landlord its pro rata share of real estate taxes and assessments levied against the premises land and building for each tax fiscal year of the term of this lease.

InsuranceTenant agrees to reimburse the landlord for its pro rata share of costs incurred to maintain the insurance policies.

RENT SCHEDULE


Base Term Years 1-20 1/1/2018-12/31/2037 $284,000



CVS BETHLEHEM327 WOODLAWN AVE BETHLEHEM, PA



Size 13,500

Lot Area 1.10 Acres


Rent/SF $21.03

Lease Type NN




Remaining Options One (1), Four (4) Year Option


Roof and Structure (New roof installed June, 2012 with a 15 year roof warranty)

All outlined Parcels are included in the sale


BETHLEHEM LEASE ABSTRACTS

THE PORTAL COMICS AND GAMING

Lessee The Portal Comics and GamingBranded As Portal Comics and GamingSize 2,965Current Rent $36,000Lease Type GrossLease Commencement 7/1/2013Remaining Lease Term 5.5 YearsLease Expiration 6/31/2023


Maintenance

Lessee shall keep all non-structural elements in the interior of the premises and all fixtures in good order and repair and will make all replacements thereto at its sole cost and expense. Lessee shall also obtain and maintenance contract for HVAC unit and perform routine maintance which shall not exceed $300 per lease year.

RENT SCHEDULEDESCRIPTION DATES ANNUAL RENTCurrent Term Years 6-10 7/1/2018- 6/31/2023 $36,000


RENT SCHEDULEDESCRIPTION DATES ANNUAL RENTBase Term Year 1 3/1/2017-2/28/2018 $12,000

Base Term Years 2-5 3/1/2018-2/28/2022 $18,000 Option Years 6-10 3/1/2022-2/28/2027 $19,800

KN NAIL SPA

Lessee Khoa D. Pham

Branded As KN Nail Spa

Size 1,900Current Rent $12,000 Lease Type Gross


Remaining Lease Term 5 YearsLease Expiration 2/28/2022Remaining Options One (1), Five (5) Year Option

Portal Comics and Gaming aims to provide the best and most complete experience for their patrons to partake in gaming events and to enjoy comics. They have created an atmosphere for like minded people to share ideas. Their knowledgeable and welcoming staff know the comic and gaming industry in-depth, providing information about a product beyond its sale. For more information please see link below to their website: The Portal Comics and Gaming

KN Nail Spa For more information please see link below to their website: KN Nail Spa Reviews

http://theportalcomicsandgaming.com/main/

https://www.yelp.com/biz/kn-nail-spa-bethlehem


BETHLEHEM IMMEDIATE MARKET


BETHLEHEM DEMOGRAPHICS



7.06% 8.13% 7.42%


0.29% 0.35% 0.31%


0.06% 0.07% 0.07%








-1.72% 0.54% 1.49%


-0.39% 0.65% 1.07%



$73,712 $78,461 $82,818


$55,907 $58,489 $61,486


Male 9,354 47,779 78,614Female 10,550 50,594 82,916



-1.50% 0.80% 1.49%


-0.38% 0.73% 1.06%




LOCATION OVERVIEWALLENTOWN, BETHLEHEM AND HELLERTOWN DEMOGRAPHICS

2010 Population Census 198,912

2018 Population Estimate 202,178

2018 Average Household Income $62,745

2018 Median Household Income $47,011


LOCATION OVERVIEW

Lehigh Valley is a leading economic marketplace in Pennsylvania, and covers a two-county region in eastern Pennsylvania consisting of 62 distinct municipalities and three cities; Allentown, Bethlehem, and Easton. The amazing PA economy had an impressive 2015 GDP of over $35.4 billion, a growth of over $1 billion dollar over its 2014 GDP of $34.4 billion. The region’s GDP eclipses that of over 94 countries in the world and has become the fastest growing area in the state of Pennsylvania and third most populous. The Lehigh Valley area has a population of 662,153 people, with average household incomes of $78,000. With the recent job growth, a unique northeast location, and continued investment into its largest city of Allentown, the Lehigh Valley is poised for continued economic and population growth, strengthening the retail markets throughout the region.

Lehigh Valley Market Overview

E XC E L L E N T J O B G A I N S I N A M A R K E T P O I S E D FO R I N C R E D I B L E ECO N O M I C G ROW T HFrom 2015-2020 the Lehigh Valley is expected to generate 22,150 jobs, with the largest growth through health care and social assistance (10,100), transportation and warehousing (3,150) and professional, scientific and technical services (2,450). Healthcare and education sectors dominate the top 20 employers within the Lehigh Valley Market, with retail being the next largest industry. When considering the full Lehigh Valley economy, Healthcare (18.9%), Business Services (15.2%), and Retail Trade (12.8%), are the top ranking industries for employment. Particularly notable is the dominant healthcare segment, which according to the US Bureau of Labor Statistics “…are expected to have the fastest employment growth and to add the most jobs between 2014 and 2024.” Not only is the Lehigh Valley poised to reap the benefits of a growing economy, it has been increasing employment consistently since the recession, and through Q2 2015 had a greater percentage of jobs than its post-recession levels than any other region in Pennsylvania. From 2010-2014, the Lehigh Valley added 22,100 new jobs between with specific industries such as transportation and warehousing experiencing growth of 10%-40%.

L E H I G H VA L L E Y T O P E M P L OY E R S

I M P R ES S I V E D E V E LO P M E N T I N A L L E N TOW N, L E H I G H VA L L E Y ’S L A RG EST C I T Y, T H RO U G H B U S I N ES S F R I E N D LY P O L I C I ESAllentown is located only 3 miles south of the Property and is the third largest city in Pennsylvania and the leading city within the Lehigh Valley. Through its special taxing district, the Neighborhood Improvement Zone, which consists of over 128 acres in downtown Allentown and the Riverfront District, Allentown has taken a strong initiative to improve the attractiveness of its city. Through the Neighborhood Improvement Zone (NIZ), there has already been $1 billion worth of development in downtown, and newly approved tax incentives. The incentives will be used to help build the $200 million Five City Center office and apartment complex, the $20 million Strata II apartment building, the $17.7 million Butz office building, and the relocation of a cigarette warehouse.

50 MILES50 MILES 60 MILES60 MILES40 MILES40 MILES

MARYLAND

PA

WASHINGTON, D.C.

VIRGINIA

NJ

DE

NY

ALEXANDRIA

DOVER

WILMINGTON

FREDERICK

HAGERSTOWN

BALTIMORE

TOWSON

ATLANTIC CITY

CAPE MAY

LONG ISLANDMANHATTAN

KING OF PRUSSIA

YORK

HARRISBURG

WILKES-BARRE BRIDGEPORT

YONKERS

REHOBOTH BEACH

STATE COLLEGE

GETTYSBURG

PHILADELPHIA

LEHIGH VALLEY

Lehigh Valley Portfolio

EXCLUSIVE MARKETING ADVISORS

P H I L A D E L P H I A | 1700 Market Street | Suite 3232 | Philadelphia, PA 19103

MARC MANDELManaging Director

[email protected] Investment Advisory

MICHAEL PAGNIUCCI Director

[email protected]

Financing Advisor

STEVE SCHRENKDirector

[email protected] Advisory

MICHAEL DICOSIMO Director

[email protected]

Investment Advisory





Documents

THREE PROPERTY PORTFOLIO - images1.loopnet.comimages1.loopnet.com/d2/h8L6EMz45n4SBu2bqdCgwcWzkgOYbXORK… · sells prescription drugs and a wide assortment of general merchandise,