New Walgreens Ground Lease
Alameda, California (San Francisco Bay Area)
OFFERING MEMORANDUM
www.thinknnn.com
Christopher Sheldon415-677-0441
Lic #01806345
Andrew Bogardus415-677-0421
Lic #00913825
Net Lease Investment Services
Net Lease Investment Services
Disclaimer
The information contained in this marketing brochure (“Materials”) is proprietary
and confi dential. It is intended to be reviewed only by the person or entity receiving
the Materials from DTZ (“Agent”). The Materials are intended to be used for
the sole purpose of preliminary evaluation of the subject property/properties
(“Property”) for potential purchase.
The Materials have been prepared to provide unverifi ed summary fi nancial,
property, and market information to a prospective purchaser to enable it to
establish a preliminary level of interest in potential purchase of the Property. The
Materials are not to be considered fact. The information contained in the Materials
is not a substitute for thorough investigation of the fi nancial, physical, and market
conditions relating to the Property.
The information contained in the Materials has been obtained by Agent from
sources believed to be reliable; however, no representation or warranty is made
regarding the accuracy or completeness of the Materials. Agent makes no
representation or warranty regarding the Property, including but not limited to
income, expenses, or fi nancial performance (past, present, or future); size, square
footage, condition, or quality of the land and improvements; presence or absence
of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws
and regulations (local, state, and federal); or, fi nancial condition or business
prospects of any tenant (tenants’ intentions regarding continued occupancy,
payment of rent, etc). A prospective purchaser must independently investigate
and verify all of the information set forth in the Materials. A prospective purchaser
is solely responsible for any and all costs and expenses incurred in reviewing the
Materials and/or investigating and evaluating the Property.
By receiving the Materials you are agreeing to the Confi dentiality and Disclaimer
set forth herein.
Walgreens i
Net Lease Investment Services
The Off ering• Approximately 1.18 acres of land, ground leased to Walgreens for 25 years, beneath a brand
new 16,788 square foot retail pharmacy building and drive-thru completed in September 2014.
The improvements were constructed and owned by the tenant.
• Price: $6,750,000 – 4.00% Return
Lease / Tenant• Walgreens is ranked #37 on the Fortune 100 with a total stockholder’s equity of $21.4 billion
• S&P rated “BBB” investment grade credit
• New 25 year ground lease with no landlord maintenance responsibilities
• Extremely attractive 10% rent increases every 5 years starting in the options
Real Estate / Area Strengths• Rare Core SF Bay Area Walgreens ground lease investment opportunity
• Hard corner location on high traffi c intersection of Park Street and Tilden Way with combined
traffi c counts of 27,089 VPD
• Park Street and Tilden Way (Fruitvale Avenue) are two major access thoroughfares to
Alameda from Oakland and Interstate 880
• Located within the historic Park Street Business District – Park Street is the primary retail and
traffi c corridor in downtown Alameda
• High barriers to entry market
• Strong demographics with average household incomes of over $87,000 and more than
30,000 people within 1 mile of the property
• Aesthetically pleasing brick façade exterior
• Co-anchor of Alameda Station shopping center along with the Alameda Marketplace – an
extremely popular open air market featuring 10 local and independent vendors of quality
foods, produce, goods and services
Investment Off ering & Highlights
SKF USA, Inc. 2FedEx Ground iWalgreens ii
Disclaimer i
Investment Off ering & Highlights ii
Investment Overview 1
Walgreen Co. 2
Alameda Area Map 3
Aerials 4
Location Map 7 The Marketplace 8
Site Plan 9
Economy 10
Alameda Landing / Alameda Point 11
Demographics 12
Walgreens
Ground Lease
Table of Contents
www.thinknnn.com
Christopher Sheldon415-677-0441
Lic #01806345
Andrew Bogardus415-677-0421
Lic #00913825
Net Lease Investment Services
Location 1600 Park Street, Alameda, California, in the Alameda Station retail center
Lot Size Approximately 1.18 acres – 51,512± square feet
• Only the land is for sale.
Improvements Completed September 2014, a 16,788± square foot freestanding WALGREENS
PHARMACY with drive-thru.
• The improvements were built and owned by the tenant. The improvements are
not for sale.
Ground Lease Ground lease to WALGREEN CO. (“Walgreens”) for 60 years from October 2013
until January 31, 2074 at an annual net rent of $270,000. The lease is triple net
with the tenant responsible for all taxes, insurance and maintenance, including the
parking lot, roof and structure.
Walgreens has the ability to terminate the lease every 5 years starting at the end
of the 25th lease year, with 12 months termination notice to the landlord. The rent
increases by 10% every 5 years starting at the beginning of the 26th lease year.
Financing The property will be delivered free and clear of permanent fi nancing.
Annual Rent
Price: $6,750,000 – 4.00% Return
Price Per Square Foot $131 – Land Only
Investment Overview
Lease Years Annual Rent Return
1 – 25 $270,000 4.00%
26 – 30 $297,000 4.40%
31 – 35 $326,700 4.84%
36 – 40 $359,370 5.32%
41 – 45 $395,307 5.86%
46 – 50 $434,838 6.44%
51 – 55 $478,321 7.09%
56 – 60 $526,154 7.79%
Walgreens 1
Net Lease Investment Services
Walgreen Co.
Incorporated in 1909, WALGREEN CO. (NYSE: “WAG”) operates 8,683 locations in
50 states and the District of Columbia (as of May 31, 2014).
For the nine months ended May 31, 2014, sales increased 5.6 percent to $57.3 billion
and net earnings increased 24.7 percent to $2.2 billion. Stockholder’s equity was
$21.4 billion.
For the fiscal year ended August 31, 2013, Walgreen had sales of $72.2 billon with
net income of $2.45 billion.
Walgreen enjoys a Standard & Poor’s rating of “BBB” and is ranked 37th in the 2013
Fortune 100. In the last three fi scal years combined, Walgreen has generated nearly
$11.8 billion from operations. With the slow-down in new stores, Walgreen has
“excess cash,” and bought back nearly $5.0 billion of stock in those years. It also
increased its dividend rate and paid out $2.1 billion in dividends during that time.
In fi scal year 2009, Walgreen added 554 net new stores. In the fiscal year ending
August 2010, Walgreen added about 291 newly constructed stores and in fi scal year
2011 it had a net gain of 199 new drugstores including 32 acquisitions. In the most
recent fi scal year, it had 175 net new locations. The company has a goal of 2.5% to
3% store growth. This reduction in new store additions seems to have had the eff ect
of increasing the value of existing stores.
For additional information, see www.walgreens.com
Walgreens 3Walgreens 2
Alameda
The City of Alameda is located seven miles east of San
Francisco, less than a mile west of Oakland, CA in the San
Francisco Bay. In 2014 the city had a total population of
75,467.
Vehicle access to Alameda Island is via three bridges
from Oakland (Park Street, Fruitvale Avenue, and High
Street Bridges), as well as the two one-way Posey and
Webster Street tunnels, called tubes, leading into Oakland’s
Chinatown.
The island is served by international airports in Oakland, San
Francisco and San Jose. It is also accessible from San Francisco
via the Bay Bridge and from the east, north and south by
major highways. Alameda is also served by the Alameda
Oakland Ferry Service (AOFS) and the Alameda/Harbor
Bay Ferry Service (AHBFS).
Walgreens 3
CHUCK CORICA CHUCK CORICA GOLF COMPLEXGOLF COMPLEX
OAKLAND INTERNATIONAL AIRPORT INTERNATIONAL AIRPORT
COAST GUARD COAST GUARD ISLANDISLAND
ALAMEDA ALAMEDA COLLEGECOLLEGE
MARINA VILLAGE MARINA VILLAGE 1.2M SF BUSINESS 1.2M SF BUSINESS
SAN FRANCISCO BAYSAN FRANCISCO BAY
OAKLAND INNER HARBOROAKLAND INNER HARBOR
AIRPORT CHANNELAIRPORT CHANNEL
OAKLANOAKLAND
Print & Ship SerivcesSM
ALAMEDA SOUTH SHORE
PHASE II82 ACRES
5.5 M SF OFFICE
PHASE I68 ACRES
1,425 APTS
SEAPLANE LA-SEAPLANE LA-GOONGOON
ALAMEDA NATURAL GROCERY
BARON’S EATS
BARON’S MEAT & SEAFOOD
THE BEANERY COFFEE CO.
EAST END PIZZA
FARMSTEAD CHEESE & WINES
FEEL GOOD BAKERY
GREENS & GRAINS
THE PANTRY
SUSSUSHIHI KINKINGG
FAMILY & COSMETIC DENTISTRYFAMILY & COSMETIC DENTISTRYFAMILY & RESTORATIVE DENTISTRYFAMILY & RESTORATIVE DENTISTRY
Park Street
Park Stre
Park Street
Park Street
Lincoln Avenue
Lincoln Avenue
Lincoln A
venue
Ti
lden
Way
Lincoln A
venue
Ti
lden
Way
MCGEE’SMCGEE’S
LINGUINI’SLINGUINI’S
SANDWICH SANDWICH BOARDBOARD
ALAMEDA ALAMEDA GRILLGRILL
HABANASHABANAS
FORT KNOX COINFORT KNOX COINBEAD INSPIRATIONBEAD INSPIRATION
JIM’S COFFEE JIM’S COFFEE
ALAMEDA PUBLIC ALAMEDA PUBLIC LIBRARYLIBRARY
ALAMEDAALAMEDA LAUNDERLAND LAUNDERLAND
GIM’S CHINESE GIM’S CHINESE ST. VINCENT ST. VINCENT
DE PAULDE PAUL
PROVIDENCE PROVIDENCE VETERINARYVETERINARY
Park Street
Park Street
Park Street
Park Street
C
1,454 SF
PENDING
LEASE
PENDING
PENDING
PENDING
JIM’S COFFEE JIM’S COFFEE
ALAMEDAALAMEDA LAUNDERLAND LAUNDERLAND
PROVIDENCE PROVIDENCE
Lincoln Avenue
Tilden Way
Lincoln Avenue
Tilden Way
ALAMEDA PUBLIC ALAMEDA PUBLIC
ALAMEDA ALAMEDA
ALAMEDA ALAMEDA
LINGUINI’SLINGUINI’S
HABANASHABANAS
Lincoln Avenue
Lincoln AvenueSanta Clara Avenue
Santa Clara Avenue
Santa Clara Avenue
Santa Clara Avenue
Oak Street
Oak Street
88 SPORTS BAR88 SPORTS BAR
THE PARK ALAMEDATHE PARK ALAMEDA62 UNIT APT.62 UNIT APT.
ALAMEDA THEATER ALAMEDA THEATER & CINEPLEX& CINEPLEX
ALAMEDA FAMILY
CAPONE’S CAPONE’S SPEAKEASYSPEAKEASY
PARK CENTRE PARK CENTRE
ALAMEDA ORTHOPEDIC ALAMEDA ORTHOPEDIC
LAUREN’S CLOSET LAUREN’S CLOSET CONSIGNMENTCONSIGNMENT
BAYSIDE MEDICAL BAYSIDE MEDICAL
Central Avenue
Central Avenue
Park Street
Park Street
Park Street
Park Street
LocationAlameda Station is a new Walgreens anchored development located
at the gateway to the historic Park Street shopping district in downtown
Alameda. It joins the 19,430 square foot Alameda Marketplace, which
houses a collection of locally owned and independently operated
food purveyors. Along with sharing its 85-spot parking lot, the new
pharmacy has a brick facade to match the Marketplace. While the
16,788 square foot Walgreens is complete, construction continues on
a 7,788 square foot multi-tenant retail building at the site.
This location is a “gateway” for the Island because of its proximity to
Interstate 880, and the Fruitvale Avenue and Park Street bridges.
The Historic Park Street Business District is known for its many
buildings that date back to the 1800s and is a designated National
Historic Landmark. This main thoroughfare of downtown Alameda
is fi lled with local shops, restaurants, drinking establishments, and
services. The renovated 1932 Alameda Theatre & Cineplex is the
cultural centerpiece of the commercial district. In addition, popular
attractions include High Scores Arcade Museum (a retro video game
arcade) and Subpar Miniature Golf (an indoor miniature golf complex
that features Bay Area landmarks such as the Golden Gate Bridge and
Coit Tower at each hole).
Walgreens 7
Net Lease Investment Services
Location (continued)
The Marketplace The Alameda Marketplace, directly to the east of Walgreens’ parking lot, is home to ten
locally owned and independently operated businesses that focus on gourmet, all-natural,
sustainable, handmade, artisan and organic foods.
Located in a large brick building at the gateway to the historic Park Street shopping district
in downtown Alameda, just across from Oakland, the Marketplace provides an open air,
European market shopping experience.
The award winning vendors off er quality foods and services in a clean, friendly and
welcoming setting. Here one can get locally sourced foods, organic produce, green
household goods, natural supplements and more. Also available is a vast selection of
artisanal cheeses and wines, clean, grass fed beef, hand-made pastries, fresh gourmet to-
go, house-roasted coff ees, made to order sushi, upscale dining and more. The Marketplace
is a modern celebration of great food and sustainable living, all under one roof.
Because the Marketplace is a community of locally owned independent businesses, all of
its vendors and staff can concentrate their knowledge and expertise to provide patrons
with the richest culinary shopping experience available.
It is these qualities that have allowed the Marketplace to become a regional destination
for food lovers throughout the Bay Area, and to be named the East Bay’s “Best One-Stop
Shop for Foodies” by the East Bay Express.
Vendors
• Alameda Natural Grocery
• Baron’s Eats
• Baron’s Meat & Seafood
• The Beanery Coff ee Co.
• East End Pizza
• Farmstead Cheeses & Wines
• Feel Good Bakery
• Greens & Grains
• The Pantry
• Sushi King
www.alamedamarketplace.comWalgreens 3Walgreens 8
Net Lease Investment Services
DRIVE-THRU
PARK STREET
TILD
EN W
AY
±16,788 SFNew Retail Building
alamedamarketplace
Site Plan
Net Lease Investment Services
Economy
Major Employers
The North Face, Inc.The North Face, Inc. is an American outdoor product company specializing in outerwear, fl eece,
coats, shirts, footwear, and equipment such as backpacks, tents, and sleeping bags. Its clothing and
equipment lines are catered towards college students, climbers, mountaineers, skiers, snowboarders,
hikers, and endurance athletes. The company sponsors professional athletes from the worlds of
running, climbing, skiing and snowboarding.
The North Face is a wholly owned subsidiary of the VF Corporation. Its headquarters is in Alameda,
co-located with its corporate sibling, JanSport.
Peet’s Coff ee & Tea Peet’s Coff ee & Tea, Inc. is the premier specialty coff ee and tea company in the United States.
The company off ers superior quality coff ees and teas in multiple forms, by sourcing the best
quality coff ee beans and tea leaves in the world, adhering to strict high-quality and taste
standards, and controlling product quality through its unique direct store delivery selling and
merchandising system.
Peet’s Coff ee and Tea Roasting Facility moved from Emeryville to its current location on
Harbor Bay Parkway in Alameda in May 2007. It is currently the only “green” coff ee plant in the
world. The facility consists of a 135,000 square foot building on 10.6 acres. This roasting and
packaging plant was specially designed for their small-batch, roast-to-order business model.
Wind River Systems, Inc.Wind River Systems, Inc. is a company providing a comprehensive embedded system software
portfolio which comprises run-time software, industry-specifi c software solutions, simulation
technology, development tools and middleware.The company was founded in Berkeley,
California in 1981 by Jerry Fiddler and David Wilner. On June 4, 2009, Wind River announced
that Intel had bought the company for a reported $884 million. Wind River continues to exist
as a wholly owned subsidiary of Intel. Its product portfolio is supported by global professional
services and support, and a broad partner ecosystem.
Wind River’s headquarters is located at 500 Wind River Way, Alameda, California.
Walgreens 10
Peet’s Coff ee & Tea Roasting Facility – Alameda
Alameda Landing / Alameda Point
Alameda Point (former Naval Air Station)The Alameda City Council approved a plan to allow redevelopment of the area
around the Seaplane Lagoon at Alameda Point into a waterfront community with new
residences, businesses, parks and other public spaces along the shore of San Francisco
Bay.
The plan approved July 15, 2014 is the last major planning document necessary for
the heart of the Alameda Point redevelopment, an ambitious reimagining of both the
former military site and also a huge swath of the island-bound city itself.
Decommissioned in 1997, the former Naval Air Station Alameda occupies a prominent
spot on the shore that entices both developers looking to tap prime waterfront land
and conservationists who see a rare chance to restore some of the Bay’s vanishing
wetlands.
The fi rst project is 68 acres along the main thoroughfare and Seaplane Lagoon. It
would include ground-level retail shops, offi ces, hotels and at least 800 apartments
and condominiums. The second project is 82 acres reserved for corporate campuses
or a large regional shopping outlet. That project includes no housing.
Ultimately, Alameda Point will include 1,425 housing units, 250 acres of open space
and a mix of light industry, offi ces and retail. Google recently signed a lease at the point
for a renewable energy lab.
Alameda LandingAlameda Landing is a new 72-acre, mixed-use development located just off the
Webster Street Tube. Target’s opening concluded Phase I construction in October
2013. Alameda Landing’s Phase II construction on the 291,000 square foot shopping
center includes Safeway and Michael’s, among 10 new retail buildings. Other shops
and restaurants include: The Habit Burger Grill, In-N-Out Burger, Famous Dave’s BBQ,
Petco Unleashed, and Sleep Train. Safeway and Michael’s is anticipated to open Fall
2014.
Upon completion, Alameda Landing will consist of:
• Target-anchored 291,000 square foot retail center
• 300,000 square feet of lifestyle retail and restaurants
• 35,000 square foot waterfront district that will include restaurants and entertainment retail
• 400,000 square feet of offi ce and R&D space
• 300 residential units
Net Lease Investment Services
Demographics
2014 Summary 1 mile 3 miles 5 miles
Population 30,912 229,440 445,010
Households 12,750 87,819 173,020
Families 7,463 51,462 97,514
Average Household Size 2.38 2.58 2.52
Owner Occupied Housing Units 5,189 31,067 67,060
Renter Occupied Housing Units 7,561 56,752 105,959
Median Age 41.6 37.3 37.2
Median Household Income $66,415 $48,099 $49,694
Average Household Income $87,328 $71,292 $75,788
2019 Summary
Population 32,612 241,051 468,805
Households 13,462 92,427 182,669
Families 7,873 54,142 102,907
Average Household Size 2.38 2.58 2.52
Owner Occupied Housing Units 5,425 32,287 69,882
Renter Occupied Housing Units 8,037 60,140 112,786
Median Age 41.8 37.6 37.6
Median Household Income $78,653 $55,815 $57,528
Average Household Income $101,849 $82,909 $88,419
Trends: 2014-2019 Annual Rate
Population 1.08% 0.99% 1.05%
Households 1.09% 1.03% 1.09%
Families 1.08% 1.02% 1.08%
Owner Households 0.89% 0.77% 0.83%
Median Household Income 3.44% 3.02% 2.97%
Walgreens 12
DTZ
Net Leased Investment Services
www.thinknnn.com
Christopher Sheldon415-677-0441
Lic #01806345
Andrew Bogardus415-677-0421
Lic #00913825