KRISPY KREME DOUGHNUTS - 9 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP Krispy Kreme...

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Transcript of KRISPY KREME DOUGHNUTS - 9 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP Krispy Kreme...

  • KRISPY KREME DOUGHNUTS OFFERING MEMORANDUM 8018 CONCORD MILLS BOULEVARD | CONCORD, NORTH CAROLINA

  • 2 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    AFFILIATED BUSINESS DISCLOSURE & CONFIDENTIALITY AGREEMENT This Offering Memorandum has been prepared by NKF Capital Markets and has been obtained from sources believed reliable. While we do not doubt its accuracy we make no guarantee, warranty or representation about it. It is your responsibility to confirm, independently, its accuracy and completeness. No representation is made by NKF or Owner as to the accuracy or completeness of the information contained herein, and nothing contained herein is or shall be relied on as a promise or representation as to the future performance of the property. Although the information contained herein is believed to be correct, Owner and its employees disclaim any responsibility for inac- curacies and expect prospective purchasers to exercise independent due diligence in verifying all such information. Further, NKF, Owner and their employees disclaim any and all liability for representations and warranties, expressed and implied, contained in, or for omissions from, the Offering Memorandum or any other written or oral com- munication transmitted or made available to the recipient.

    This Offering Memorandum and the contents, except such information, which is a matter of public record or is provided in sources available to the public, are of a con- fidential nature. By accepting this Offering Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not photocopy or duplicate it, that you will not disclose this Offering Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agree- ment of confidentiality) without the prior written authorization of Owner or NKF and that you will use the information in this Offering Memorandum for the sole purpose of evaluating your interest in the property and you will not use the Offering Memorandum or any of the contents in any fashion or manner detrimental to the interest of Owner or NKF. If you have no interest in the property, please return the Offering Memorandum forthwith.

    The Offering Memorandum does not constitute a representation that there has been no change in the business or affairs of the property or Owner since the date of prepa- ration of the Offering Memorandum. Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser. Additional information and an opportunity to inspect the property will be made available upon written request to interested and qualified prospective investors. Owner and NKF each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligations to any entity reviewing this Offering Memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

    OFFERED EXCLUSIVELY BY NEWMARK KNIGHT FRANK NET LEASE PRACTICE GROUP

    KEN HEDRICK Executive Managing Director 918.878.9540 ken.hedrick@ngkf.com

    JERRY HOPKINS Senior Managing Director 918.878.9536 jerry.hopkins@ngkf.com

    D. ANDREW RAGSDALE, Esq. Senior Managing Director 918.878.9535 andrew.ragsdale@ngkf.com

    In association with: BERT SANDERS Vice Chairman North Carolina Licensee

    Net Lease Practice Group 11122 South Yale Avenue | Suite A Tulsa, OK 74137 P: 918.878.9542

    KRISPY KREME DOUGHNUTS 8018 CONCORD MILLS BOULEVARD | CONCORD, NORTH CAROLINA

    THE TEAM 2 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    mailto:ken.hedrick@ngkf.com mailto:jerry.hopkins@ngkf.com mailto:andrew.ragsdale@ngkf.com

  • 3 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    EXECUTIVE SUMMARY Address 8018 Concord Mills BoulevardConcord, North Carolina

    Tenant/Guarantor Krispy Kreme Doughnut Corporation

    Use Retail/Restaurant

    Acreage 1.442 Acres

    Rentable Building Area 4,945 SF

    Expense Structure Absolute NNN Ground Lease

    Rent Increases 10% Every 5 Years, and in each Option Period Rent Commencement Date Estimated July, 2019

    Primary Term Expiration Estimated July, 2039

    Initial Term 20 Years

    Current Annual NOI $275,000

    Lease Efffective Date April 4, 2018

    Interest Ground Lease

    Year Built 2019

    INVESTMENT HIGHLIGHTS 20 YEAR GROUND LEASE (ABSOLUTE NNN) The Property is 100% leased to Krispy Kreme under a brand new 20 year Absolute NNN

    Ground Lease.

    BRAND NEW PROTOTYPE CONSTRUCTION The Subject Property is a newly developed Krispy Kreme prototype design.

    I-85 LOCATION – ADJACENT TO CHARLOTTE MOTOR SPEEDWAY the Subject Property boasts a pride of ownership location, just of I-85 and adjacent to Charlotte Motor Speedway.

    SCHEDULED 10% RENT INCREASES The Subject Property boasts scheduled 10% rent increases every 5 years, throughout the primary term and option periods.

    CLOSE PROXIMITY TO KRISPY KREME HEADQUARTERS The Subject Property is located approximately 70 miles/1Hr from Krispy Kreme’s North American Headquarters in Winston-Salem, NC.

    EXTREME HIGH GROWTH AREA The subject property is well positioned in a high growth market. With a 32% growth in population within a 1 mile radius and a 20% growth within 5 miles.

    PURCHASE PRICE $5,789,474 CAP RATE

    4.75%

  • 4 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    AERIAL MAP

    Charlotte Motor Speedway Concord Mills Mall

    132,000 VPD

    Concord Mills Blvd 43,5 00 VP

    D

    Concord-Padgett Regional Airport

    zM AX

    D ra

    gw ay

    AERIAL MAP

    ___ __

    ________

    ____________________

  • THE INVESTMENT

    W

  • 6 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP6 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    Krispy Kreme Doughnuts

    ADDRESS 8018 Concord Mills BoulevardConcord, North Carolina

    TENANT/ GUARANTOR Krispy Kreme Doughnut Corporation

    LEASE EFFECTIVE DATE April 4, 2018

    RENT COMMENCEMENT DATE Estimated July 2019

    PRIMARY TERM EXPIRATION Estimated July 2039

    REMAINING TERM 20 Years

    OPTION PERIODS Three, Five Year Renewal Options

    ANNUAL NOI $275,000

    RENT INCREASES 10% Every 5 Years, and in each Option Period

    LEASE TYPE Absolute NNN Ground Lease

    UTILITIES Tenant Responsibility

    TAXES Tenant Responsibility

    INSURANCE Tenant Responsibility

    ACREAGE 1.442 Acres

    ESTOPPEL 10 Business Day Response Period

    ROFR N/A

    LEASE

  • 7 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    W

    7 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    RENT SCHEDULE

    Year Annual Rent Rent Increase %

    YEARS 1-5 $275,000 10%

    YEARS 6-10 $302,500 10%

    YEARS 11-15 $332,750 10%

    YEARS 16-20 $366,025 10%

    RENEWAL OPTION 1 405,627 10%

    RENEWAL OPTION 2 $442,890 10%

    RENEWAL OPTION 3 $487,179 10%

    PROPERTY DETAILS Krispy Kreme Doughnuts

    RENTABLE BUILDING AREA 4,945 SF

    ACREAGE 1.442 Acres

    YEAR BUILT 2019

  • THE TENANT

    W

  • 9 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    Krispy Kreme Doughnuts, Inc. is an American doughnut company and coffeehouse chain founded in Winston- Salem, North Carolina. Krispy Kreme was founded by Vernon Rudolph in 1937, who rented a building in what is now historic Old Salem in Winston-Salem, North Carolina, and thereafter began selling to local grocery stores. Steady growth preceded an ambitious expansion as a public company in the period 2000-2016.

    On April 5, 2000, the corporation went public on the NASDAQ at $21 a share, using the ticker symbol KREM. On May 17, 2001, Krispy Kreme switched to the New York Stock Exchange, with a ticker symbol of KKD. In 2016, the company returned to private ownership under JAB Holding Company, a private Luxembourg-based firm. JAB Holding is a privately held German conglomerate, who owns a number of other consumer good companies, including; Panera Bread, Caribou Coffee, Einstein Bros. Bagels, Keurig Brands, and Peet’s Coffee.

    Today Krispy Kreme’s US based offices are located in Winston Salem, and the company operates approximately 1,300 locations throughout 31 different countries. Additionally, Krispy Kreme markets its donuts through grocery stores and supermarkets throughout the United States.

    YEAR FOUNDED 1937

    HEADQUARTERS Winston-Salem, North Carolina

    LOCATIONS 1,300+

    2018 Brand of the Year

    REVENUE $518 Million (as of 2016) NET INCOME $32.4 Million (as of 2016)

    WEBSITE www.krispykreme.com/

    http://www.krispykreme.com/

  • CONCORD, NC

  • 11 KRISPY KREME | CONCORD, NC NKF NET LEASE PRACTICE GROUP

    Concord, North Carolina Concord is the county seat and the largest city in Cabarrus County, North Carolin