Valuation Considerations
STRIVE generated a static analysis valuation to complete our Broker Opinion of Value for Red Tail Acquisitions based on the rent roll and expenses provided. Please note, loan details are based on market debt assumptions, and with the current occupancy at 94.7%, we did not factor in a vacancy reserve. Finally, as our normal course of business we will fully review the leases and other additional property documents prior to a formal marketing campaign.
Valuation
Considering the current NOI of $458,611 and the in-place occupancy of 94.7%, we priced the asset at an unleveraged go-in return of 7.00%, equating to a price of $6,550,000 or $202 PSF.
Projected Value Range
Based on the scenarios above, below are our trade range expectations:
Buyer Profile
We are confident Country Square will generate considerable interest. Considering the Property’s size and tenant line-up, we expect the buyer pool will consist of private investors. As a result of our unparalleled national reach to investors we expect multiple offers which will create competition for the asset and ultimately maximize pricing.
High Growth Area with Outstanding Demographics: Country Square benefits from its location within the affluent, high growth South Jordan trade area. Currently, within a five mile radius of the Property there are 288,792 residents. Additionally, the population base has average annual incomes of $120,041 within a one mile radius.
Stabilized Asset with Value-Add Opportunity: The Property is currently 94.7% occupied providing investors with a stable current cash flow while offering potential upside through the lease-up of the remaining 3,900 square feet of available former restaurant space.
Tenant Longevity: Nearly 55% of the tenants have been located in the Property for over 5 years, while 42% of the tenants have been located in the Property for over 10 years.
Tenant Line-up: The Property is currently 94.7% occupied to sixteen tenants including Sherwin Williams Paint, Metro PCS, South Valley Eye Care, Not Just Copies, Wellness Foot Spa, Creative Wigs & Hair, Soccer Post, and many more.
Area Traffic Generators: The Property has an ideal position adjacent to Smith’s grocery store. Other traffic generators in the immediate trade area include McDonald’s, Dollar Tree, AutoZone, FedEx Office, Subway, Panda Express, and more.
Access & Traffic Counts: Positioned along Redwood Road, the Property has ample access with a direct access from both Redwood Road and South Jordan Parkway. Furthermore, the Property benefits from more than 36,000 vehicles daily on S Jordan Road and in excess of 26,000 cars along Redwood Road.
DBA metroPCS
Locations 15,000+
Website www.metropcs.com
Ownership TBD
Credit Rating B+ (S&P) (T-Mobile, Parent Company)
Annual Revenue
$37.2 Billion in 2016, (T-Mobile, Parent Company)
Public/ Private Public; TMUS (T-Mobile, Parent Company)
Line of Business
MetroPCS is a prepaid wireless service in the United States that is part of T-Mobile US, Inc. MetroPCS provides nationwide talk, text, and data depending on the plan services using T-Mobile US’ GSM, HSPA, HSPA+ and 4G LTE networks.
DBA Sherwin Williams
Locations 4,500+
Website www.sherwinwilliams.com
Ownership TBD
Credit Rating BBB (S&P)
Annual Revenue $15.5 billion in 2015
Public/ Private Public; Ticker Symbol: SHW
Line of Business
The Sherwin-Williams Company is an American Fortune 500 company in the general building materials industry. The company, which is headquartered in Cleveland, Ohio, primarily engages in the manufacture, distribution, and sale of paints, coatings, and related products to professional, industrial, commercial, and retail customers all around the world.
Net Operating Income [2]: Free Cash Flow [3]:
$458,611 $453,753
[1] This number does not take the roof into consideration, could be a re-trade item if the roof is old. [2] This NOI is before a structural reserve. For this analysis, the Cap Rate is based on the NOI (no structural reserve)
