OFFERING MEMORANDUM
Single Tenant NNN KFC
2528 Eastern Boulevard
Montgomery, AL
EXCLUSIVELY OFFERED BY:
LOCAL MARKET EXPERT:
LINDSEY SNIDER
TAYLOR WOLFES
lindsey.snider@colliers.com
408.282.3987
taylor.wolfes@colliers.com
404.574.1071
Lic. 01443387
Lic. 322018
KFC - Montgomery, AL
Investment Summary
Property Highlights
>> Brand new 20-year absolute NNN lease
>> NNN with zero landlord obligations - Tenant pays all expenses direct
>> Experienced KFC operator with over 160 locations and 40 years in the
business
>> 7.00% rent increases every five years with four 5-year renewal options
>> Ideal 1031 exchange property - can accommodate tight closing time
frames
>> Property will be delivered free & clear of existing debt
>> Over $1M in annual store sales as of April 30, 2015 (7% Rent to Sales
Ratio)
>> Located immediately adjacent to Winn-Dixie and hhgregg-anchored
Shopping Center
Property Information
Lease Abstract
Address
2528 Eastern Blvd, Montgomery, AL
Tenant
160 Unit Operator
Offering Price
$1,283,478
Lease Commencement
June 2015
Price/SF
$531.02
Lease Expiration Date
June 2035
Cap Rate
5.75%
Term Remaining on Lease
20 Years
Net Operating Income
$73,800.00
Renewal Options
Four (5) Year Options
Rentable Square Feet
±2,417
Current Rent
$73,800.00
Land Area
±0.771 acres
Rent Increases
7.00% every 5 years
Year Built / Renovated
1992
Landlord Expenses
None
Type of Ownership
Fee Simple
Roof & Structure
Tenant Responsible
Parking
32
Lease Type
NNN
Drive Thru
Yes
Option to Terminate
No
P. 2
KFC - Montgomery, AL
Property Overview
Construction
Foundation
Concrete
Framing
Block / Wood Truss
Exterior
Painted Block / Stucco
Parking Surface
Asphalt
Roof
Single Ply Membrane; Wood Decking
Number of Stories
1
Mechanical
HVAC
Rooftop Package Units
Fire Protection
Hood System
Utilities
Standard: Water, Sewer, Gas, Electric
Interior Details
Walls
Drywall / FRP / tile
Ceilings
Suspended
Floor Coverings
Tile
Rest Rooms
2
Seating
48
Buffet
No
P. 3
KFC - Montgomery, AL
Rent Schedule
Lease Years
NOI
Annual Rent / Sq. Ft.
Monthly Rent
Monthly Rent / Sq. Ft.
Cap Rate
Bldg SF
Years 1-5
$73,800.00
$30.53
$6,150.00
$2.54
5.75%
2,417
Years 6-10
$78,966.00
$32.67
$6,580.50
$2.72
6.15%
2,417
Years 11-15
$84,493.62
$34.96
$7,041.14
$2.91
6.58%
2,417
Years 16-20
$90,408.17
$37.41
$7,534.01
$3.12
7.04%
2.417
Option 1
$96,736.75
$40.02
$8,061.40
$3.34
7.54%
2,417
Option 2
$103,508.32
$42.83
$8,625.69
$3.57
8.06%
2,417
Option 3
$110,753.90
$45.82
$9,229.49
$3.82
8.63%
2,417
Option 4
$118,506.67
$49.03
$9,875.56
$4.09
9.23%
2,417
P. 4
KFC - Montgomery, AL
Location Overview
Strategically located at the intersection of I-65 and I-85, Montgomery is the capital city
Demographics
1-Mile
3-Mile
5-Mile
2014 Population
10,386
70,437
154,118
A region of vast economic diversity, Montgomery is home to state and regional
2014 Households
5,090
30,122
62,832
governments, a major military installation, the USAF Air University, an extensive service
2014 Avg. HH Income
$61,153
$67,798
$68,459
industry, wholesale and retail trade, tourism, and an industrial base. This unique
Total Daytime Population
15,472
78,006
182,381
of Alabama and the second largest city in the state. The metropolitan area, comprised
of Autauga, Elmore, Lowndes and Montgomery counties, has a population of 374,000±.
diversity provides a well-balanced economic environment.
Rich in history, Southern hospitality and exciting attractions, downtown Montgomery
Traffic Counts
and its riverfront have become one of the South’s must-see travel destinations.
Location
Revitalization of the area began in the late 1990s, leading to more than $1.5 billion of
Eastern Blvd & Carriage Hills Dr
42,430
public and private investment in downtown redevelopment. As a result, old commercial
Vaughn Rd & Carriage Brook Rd
29,320
spaces have transformed into swanky residential lofts, and the cornerstone of the
Vaughn Rd & Young Farm Rd
21,670
entertainment district, The Alley, is home to vibrant nightlife, eateries, galleries and
more. Numerous historic sites such as the Dexter Avenue King Memorial Baptist Church
are found near modern amenities like the four-star Renaissance Montgomery Hotel and
Spa, the 1,800-seat Montgomery Performing Arts Centre and a new $12 million multi-
Traffic Count
Largest Montgomery Employers
Employer
Employees
sport facility. Also taking root in the area are innovative initiatives like an urban farm that
Maxwell-Gunter Air Force Base
supplies produce to local restaurants. Every year fans flock to Riverwalk Stadium to see
State of Alabama
9,500
the Montgomery Biscuits baseball team. Tourists and locals alike also enjoy downtown’s
Montgomery Public Schools
4,524
unique establishments such as Aviator Bar, which pays tribute to the city’s aviation ties
Baptist Health
4,300
Hyundai Motor Manufacturing Alabama
3,000
Source: Southern Business & Development (sb-d.com), 2015
Alfa Insurance
2,568
Source: Montgomery Chamber of Commerce – Economic Development
City of Montgomery
2,500
Jackson Hospital & Clinic
1,300
Rheem Water Heaters
1,147
(the Wright Brothers’ first School for Powered Flight).
Regions
12,280
977
P. 5
KFC - Montgomery, AL
HOUSEHO L DS
POP UL ATIO N
Demographics
2000 POPULATION
2010 POPULATION
2014 POPULATION
2019 POPULATION
% POPULATION CHANGE 2000 TO 2010
% POPULATION CHANGE 2000 TO 2014
% POPULATION CHANGE 2014 TO 2019
2000 HOUSEHOLDS
2010 HOUSEHOLDS
2014 HOUSEHOLDS
2019 HOUSEHOLDS
% HOUSEHOLD CHANGE 2010 TO 2019
INCOME
$20,000 to $24,999
$25,000 to $29,999
$30,000 to $34,999
$35,000 to $39,999
$40,000 to $44,999
$45,000 to $49,999
$50,000 to $59,999
$60,000 to $74,999
$75,000 to $99,999
$100,000 to $124,999
$125,000 to $149,999
$150,000 to $199,999
$200,000 or more
2014 AVERAGE HH INCOME
2014 MEDIAN HH INCOME
2014 PER CAPITA INCOME
1 Mile
3 Mile
5 Mile
8,507
10,527
10,386
10,084
23.75%
22.09%
-2.91%
63,725
71,174
70,437
67,113
11.69%
10.53%
-4.72%
140,942
153,776
154,118
147,790
9.11%
9.35%
-4.11%
1 Mile
3 Mile
5 Mile
4,195
5,159
5,090
5,070
-1.73%
27,582
30,399
30,122
29,384
-3.34%
57,555
62,636
62,832
61,516
-1.79%
1 Mile
3 Mile
5 Mile
3.36%
8.09%
5.14%
4.87%
5.07%
4.40%
3.89%
8.25%
5.03%
5.66%
7.27%
11.20%
12.30%
7.35%
4.11%
3.10%
2.10%
$61,153
$47,716
$30,086
4.14%
5.49%
5.11%
5.36%
7.72%
11.72%
13.67%
7.60%
4.52%
4.31%
3.56%
$67,798
$53,999
$29,146
4.19%
4.67%
5.04%
5.46%
8.44%
11.53%
13.94%
7.62%
4.68%
4.13%
3.82%
$68,459
$54,940
$28,583
P. 7
KFC - Montgomery, AL
KFC Overview
KFC
YUM! Brands Inc
KFC (Kentucky Fried Chicken) is a global chain of fried chicken fast
YUM! Brands, Inc., together with its subsidiaries, operates quick
food restaurants with its operational headquarters in Louisville,
service restaurants. It operates in five segments: YUM China, YUM
Kentucky in the United States. It was developed and built by
India, the KFC Division, the Pizza Hut Division, and the Taco Bell
Colonel Harland Sanders, who began selling fried chicken from
Division. The company develops, operates, franchises, and licenses
his roadside restaurant in Corbin, Kentucky in 1930. Sanders
a system of restaurants, which prepare, package, and sell various food items. As of
was an early pioneer of the restaurant franchise concept, with the first “Kentucky Fried
February 4, 2015, it operated approximately 41,000 restaurants in approximately 120
Chicken” franchise opening in Utah in 1952. The company’s rapid expansion meant that
countries and territories primarily under the KFC, Pizza Hut, and Taco Bell brands,
it grew too large for the aging Sanders to manage, and he sold the company to a group
which specialize in chicken, pizza, and Mexican-style food categories. The company
of investors in 1964. Sanders continued to act as the chain’s goodwill ambassador until
was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM!
his death in 1980, and his image remains an important part of the company’s branding
Brands, Inc. in May 2002. YUM! Brands, Inc. was founded in 1997 and is headquartered
and advertisements, where he is often known simply as “The Colonel”.
in Louisville, Kentucky.
In 1971, Kentucky Fried Chicken was sold to Heublein for $285 million, who were
subsequently taken over by R.J. Reynolds in 1982, who then sold the chain to PepsiCo
Public Company
NYSE:YUM
for $850 million in 1986. PepsiCo spun off its restaurant division as Tricon Global
S&P Credit Rating:
BBB Stable
Locations:
41,000
Revenue (TTM):
$13.18B
Employees:
69,810
the KFC is the world’s second largest restaurant chain (as measured by sales) after
EBITDA (TTM):
$2.71B
Website:
www.yum.com
McDonald’s, with 18,875 outlets in 118 countries and territories as of December 2013.
Market Capitalization:
$39.06B
Restaurants in 1997 and changed its name to Yum! Brands in 2002. As a Yum!
subsidiary, KFC is a core component of one of the largest restaurant companies in
The company is a subsidiary of Yum! Brands, a restaurant company that also owns the
Pizza Hut and Taco Bell chains. Its two major single markets are in its home country
Source: Yahoo! Finance - June 2015
and China, which together contain around half of all KFC outlets.
P. 8
KFC - Montgomery, AL
Financing Options
Loan Options Available as of June 4, 2015
Option 1
Option 2
Option 3
5-Yr. Fixed: 3.75%
5-Yr. Fixed 4.25%
15-Yr. Fixed: 4.375% - 4.625%
7-Yr Fixed: 4.15%
7-Yr. Fixed: 4.625%
15-25-Yr. Amortization
10-Yr Fixed: 4.375%
30-Yr. Amortization
25-Yr. Amortization
65% LTV
60% LTV
65% LTV
Mark One Capital is a nationwide full service mortgage company with expertise and tenure in all types of loans.
They specialize in financing net leased assets in the retail, office and industrial sectors. They have established relationships nationally
with capital sources capable of understanding a broad array of property types, tenants and client needs, as well as 1031 like-kind
exchange transactions.
Rates and terms represent preliminary quote only.
Net Lease Finance Group
Farhan Kabani
Chris Parker
Josh Sciotto
972 755 5301
972 755 5258
602 687 6647
farhan.kabani@markonecapital.com
chris.parker@markonecapital.com
josh.sciotto@markonecapital.com
P. 9
KFC
CONFIDENTIALITY & DISCLAIMER
This Confidential Offering Memorandum (the “Memorandum”) has been prepared and
presented to the recipient (the “Recipient”) by Colliers International (“Colliers”) as part
of Colliers’ efforts to market for sale the real property located at 2528 Eastern Blvd,
Montgomery, AL (the “Property”). Colliers is the exclusive agent and broker for the owner(s) of
the Property (the “Owner”). Colliers is providing this Memorandum and the material contained
in it to the Recipient solely to assist the Recipient in determining whether the Recipient is
interested in potentially purchasing all or part of the Property. Colliers also is providing this
Memorandum and the material in it to the Recipient with the understanding that the Recipient
will independently investigate those matters that it deems necessary and appropriate to
evaluate the Property and that the Recipient will rely only on its own investigation, and not on
Colliers, the Owner or this Memorandum, in determining whether to purchase the Property.
The Recipient’s use of this Memorandum and the material in it is strictly governed by the terms
and conditions of the Registration and Confidentiality Agreement that the Recipient previously
executed and delivered to Colliers.
Please Note the Following:
Colliers, the Owner and their respective agents, employees, representatives, property
managers, officers, directors, shareholders, members, managers, partners, joint venturers,
corporate parents or controlling entities, subsidiaries, affiliates, assigns and predecessors and
successors-in-interest make no representations or warranties about the accuracy, correctness
or completeness of the information contained in this Memorandum. The Recipient is urged
not to rely on the information contained in this Memorandum and to make an independent
investigation of all matters relating to the Property.
This Memorandum includes statements and estimates provided by or to Colliers and/or
the Owner regarding the Property. Those statements and estimates may or may not be
accurate, correct or complete. Nothing contained in this Memorandum should be construed
as a representation or warranty about the accuracy, correctness or completeness of such
statements and estimates. Further, nothing contained in this Memorandum should be construed
as representation or warranty about any aspect of the Property, including, without limitation,
the Property’s (1) past, current or future performance, income, uses or occupancy, (2) past,
current or prospective tenants, (3) physical condition, (4) compliance or non-compliance with
any permit, license, law, regulation, rule, guideline or ordinance, or (5) appropriateness for
any particular purpose, investment, use or occupancy. Again, the Recipient is urged not to
rely on this Memorandum and the statements and estimates in it and to make an independent
investigation regarding the Property and the statements and estimates contained herein.
This Memorandum may include statements regarding, references to, or summaries of, the
nature, scope or content of contracts and/or other documents relating to the Property. Those
statements, references or summaries may or may not be accurate, correct or complete.
Additionally, Colliers may not have referenced or included summaries of each and every contract
and/or other document that the Recipient might determine is relevant to its evaluation of the
Property. Nothing contained in this Memorandum should be construed as a representation or
warranty about the accuracy, correctness or completeness of such statements, representations
or summaries. On request and as available, and subject to the Owner’s consent, Colliers will
provide the Recipient with copies of all referenced contracts and other documents. Colliers
assumes no obligation to supplement or modify the information contained in this Memorandum
to reflect events or conditions occurring on or after the date of its preparation of this
Memorandum.
This Memorandum does not constitute an offer to sell, or a solicitation of an offer to buy, an
interest in the Property. Nothing contained in this Memorandum may be construed to constitute
legal or tax advice to a Recipient concerning the Property.
More detailed information regarding the anticipated terms, conditions and timing of any offering
by the Owner relating to the Property will be provided in due course by separate communication.
Colliers and/or the Owner reserve the right to engage at any time in discussions or negotiations
with one or more recipients of this Memorandum and/or other prospective purchasers of the
Property without notice or other obligation to the Recipient.
The Owner reserves the right to change the terms of any offering relating to the Property or
to terminate without notice that offering. The Owner also reserves the right to operate the
Property in its sole and absolute discretion prior to the completion of any sale of the Property.
Colliers reserves the right to require the return of this Memorandum and the material in it
and any other material provided by Colliers to the Recipient at any time. Acceptance of this
Memorandum by the Recipient constitutes acceptance of the terms and conditions outlined
above.