CVS Pharmacy (Zero Cash Flow)

Transcription

1 Subject Property Photo Offering Memorandum CVS Pharmacy (Zero Cash Flow) 5902 Read Blvd New Orleans, LA 70127

2 Purchase Price: $5,846,876 27% Over Debt The Offering Equity Amount: $1,243,036 Property Summary Address: 5902 Read Blvd New Orleans, LA MSA: New Orleans Building Size (SF): 13,225 SF Land Area (Acres): 2.40 Acres Expenses: Absolute NNN NOI: $363,039 Encumbrances: Zero Cash Flow Self Amortizing debt with 22.5 years remaining CVS Pharmacy is operating under a Twenty Five (25) year Absolute NNN lease with under Twenty Three (23) remaining. The lease features Ten (10), Five (5) year renewal options with 10% rental increases in the option periods. For over 50 years, CVS Pharmacy has served millions of customers products and services geared towards a healthy lifestyle. In addition to pharmacies, their stores feature on-trend beauty departments, photo labs and general merchandise. CVS Pharmacy has more than 9,655 retail drug stores in 49 states, the District of Columbia, Puerto Rico and Brazil and is currently located in 98 of the top 100 drugstore markets. CVS currently holds a Standard & Poor s credit rating of BBB+/Stable. Investment Highlights Zero Cash Flow Financing - Assumable self-amortizing financing with fixed interest rate. Paydown/Readvance - Structure allows for low equity contributions with high long-term return on initial investment. Structure allows withdrawal of money over and above percentage over the debt. Absolute NNN Lease - No landlord Responsibilities. Strong Location for Ideal 1031 Exchange Property - Located along I-10 on an outparcel to a newer Lowe s property. Strong Credit Tenant - CVS has investment-grade credit and strong financials. As of June 2015, CVS reached an agreement with Target to acquire N all 1,660 in-store pharmacies for $1.9 Billion and will operate them through a store-within-a-store format. Long Lease Term - More than 22.5 years remaining on this deal. CVS Pharmacy New Orleans, LA 3

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4 Tenant Overview CVS Health Corporation (NYSE: CVS) operates retail pharmacy and pharmacy benefit management businesses in the United States. The company offers prescription drugs, general merchandise, including over-the-counter drugs, beauty products and cosmetics, seasonal merchandise, greeting cards, convenience foods, and film and photofinishing services. It sells its products through CVS or CVS Pharmacy retail stores, as well as through online retail website CVS.com. The company also offers pharmacy benefit management services, including mail order pharmacy, specialty pharmacy, plan, design, and administration, formulary management, and claims processing services. As of December 31, 2015, it operated 9,655 retail drugstores, 1,020 health care clinics, 33 onsite pharmacies, 24 retail specialty pharmacy stores, 11 specialty mail order pharmacies, 5 mail service dispensing pharmacies, and 83 branches for infusion and enteral services, including approximately 73 ambulatory infusion suites and 6 centers of excellence. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September CVS Health Corporation was founded in 1892 and is headquartered in Woonsocket, Rhode Island. For FY2015, ended December 31, 2015, CVS Health Corporation had total revenue of $153.3 billion and net income of $5.2 billion. As of December 31, 2015, CVS had total assets of $93.65 billion, EBITDA of $11.86 billion and a net worth in excess of $37.19 billion. CVS currently holds a Standard & Poor s credit rating of BBB+/ Stable. TENANT PROFILE Company: CVS Health Corporation No. of CVS Retail Drugstores: 9,655 (as of 9/30/2015) Credit Rating: S&P: BBB+ Stock Symbol: CVS (NYSE) Total Revenue (FY2015): $153.3 billion EBITDA (FY2015): $11.86 billion Market Capitalization (FY2015): $ billion Net Worth (FY2015): $37.19 billion Total Assets (FY2015): $93.65 billion No. of Employees: 155,000 Tenant Business: Retail/Pharmacy Founded: 1892 CVS MinuteClinics In 2006, CVS began opening MinuteClinic health care centers within CVS Pharmacy locations. MinuteClinics are staffed by board-certified nurse practitioners and physician assistants who are trained to diagnose and treat common family illnesses such as throat, ear, eye, sinus, bladder, and bronchial infections, and provide both prescriptions and common vaccinations. There were approximately 860 MinuteClinics in 2014 and by 2017, CVS anticipates operating a total 1,500 MinuteClinic locations in 35+ states. Headquarters: Website: Woonsocket, RI

5 News Release News Release: CVS Health and Target Sign Agreement Source: A Bullseye View (Company Website Health Announcement) Posted: June 15, 2015 Transaction will expand CVS Health s retail presence in new markets and enhance Target s wellness offerings CVS Health and Target to offer best-in-class pharmacy and medical clinic services to Target guests and plan to develop Target stores that include CVS/pharmacy. Woonsocket, RI and Minneapolis, MN, June 15, 2015 CVS Health Corporation (NYSE:CVS) and Target Corporation (NYSE:TGT) announced today that they have entered into a definitive agreement for CVS Health to acquire Target s pharmacy and clinic businesses for approximately $1.9 billion. Through this agreement, CVS Health will acquire Target s more than 1,660 pharmacies across 47 states and operate them through a store-within-a-store format, branded as CVS/ pharmacy. In addition, a CVS/pharmacy will be included in all new Target stores that offer pharmacy services. Target s nearly 80 clinic locations will be rebranded as MinuteClinic, and CVS Health will open up to 20 new clinics in Target stores within three years of the close of the transaction. The new clinics will be part of CVS/ minuteclinic s plan to operate 1,500 clinics by In addition, CVS Health and Target plan to develop five to 10 small, flexible format stores over a two-year period following the deal close, which will each be branded as TargetExpress and include a CVS/pharmacy. This strategic relationship brings together two leading retailers with complementary strengths, brands and cultures to enhance the health care experience for Target guests while expanding CVS Health s retail presence in new markets, such as Seattle, Denver, Portland and Salt Lake City. The transaction enables CVS Health to reach more patients, adding a new retail channel for its offerings, and expanding convenient options for consumers. Given CVS Health s proven success in growing its business, the relationship is expected to benefit Target s long-term traffic and sales growth. It also enables Target to strengthen its focus on wellness as a signature category. Moving forward, enhanced efforts by Target will center on continuing to deliver products and experiences to help guests eat well, be active and find natural and clean label products. This strategic relationship with Target supports the highly complementary customer base, brand and culture we share, said Larry Merlo, CVS Health President and CEO. When we introduced the new name for our company, CVS Health, we began a new era of growth with a broader health care focus and an appreciation of the rise of health care consumerism with consumer choice and accountability growing. This relationship with Target will provide consumers with expanded options and access to our unique health care services that lead to better health outcomes and lower overall health care costs. At Target, we ve talked a lot about the evolving preferences of our guests and this partnership demonstrates that we re committed to putting them at the forefront of everything we do, said Brian Cornell, Target Chairman and CEO. By partnering with CVS Health, we will offer our guests industry leading health care services, and at the same time, sharpen our focus on elevating the way we deliver wellness products and experiences to our guests. Following completion of the transaction, Target guests will have access to CVS Health s leading pharmacy care programs and medical clinic services. Pharmacy programs, including Pharmacy Advisor, Specialty Connect and Maintenance Choice, will help consumers achieve better medication adherence through both improved convenience as well as enhanced pharmacy care counseling. CVS Health has also committed to having a low-cost generic drug option available to Target s cash-paying guests. In addition, with MinuteClinic at Target locations, Target guests will have enhanced access to high-quality affordable medical care. CVS Health customers will gain the option of an expanded, one-stop Target shopping experience, including apparel, home, fresh food and more, when seeking health care services. Read More>>

6 Harrahs Casino - New Orleans, LA Location Overview New Orleans is a city located on the Mississippi River, near the Gulf of Mexico. The region consists of Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Tammany, Tangipahoa, and Washington parishes. The 10 parishes composing the Greater New Orleans region are unique each enjoying its own character, attractions, and strategic business advantages. New Orleans is home to the largest port complex in the Western Hemisphere. That, combined with extensive port, rail, air, and highway access, gives the region unparalleled infrastructure for international trade. 88% of the nation s oil rigs are off its coast, and New Orleans is in the top three in the country in oil and gas production. The region boasts a civilian labor force of over 650,000 and there are over 65,000 students enrolled in the region s nine universities and eight community/technical colleges. The variety of the region offers a lifestyle that suits anyone. The common thread throughout the region is the availability of good fun, good friends, and good food. The region provides a unique quality of life, access to unparalleled infrastructure, and a comprehensive, innovative incentives package. The region is experiencing a level of civic and business engagement that hasn t been seen in decades. From the only NASA-owned manufacturing facility in the country to one of the world s largest port systems, the region provides a compelling platform to compete on a global scale. The cost of doing business in Greater New Orleans is less expensive than major markets. Louisiana offers a wide variety of targeted incentive programs to lessen the tax burden and lower the overall operation costs, helping companies who are locating and doing business in our state to thrive. Combined with the low cost of doing business in Greater New Orleans, compared to other major cities, these incentives build a solid case for relocating, expanding operations, or starting a business in the area. Read More>> CVS Pharmacy New Orleans, LA 7

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8 Lake Pontcharain New Orleans Lakefront Airport (4 miles from subject property) Bishop McManus Academy I-510 (31,813 VPD) Dolores T. Aaron Academy I-10 (125,697 VPD) Lake Forest Blvd Market Square Shopping Center New Orleans East Hospital (New Construction) Joe Brown Park (Nike Project) Fannie C. Williams Charter School Read Blvd (28,305 VPD) Chef Menteur Blvd (25,802 VPD) N Louisiana Voting Machine Warehouse Dash Lumber & Supply CVS Pharmacy New Orleans, LA 9

9 Demographics 5902 Read Blvd New Orleans, LA 0-1 mi. 0-3 mi. 0-5 mi. Population 2015 Population 14,792 64,639 87, Population 17,604 74, , Annual Rate 3.86% 2.85% 2.79% Annual Rate 3.54% 2.98% 2.95% Households 2015 Total Households 5,596 23,679 31, Total Households 6,751 27,803 37, Annual Rate 4.25% 3.24% 3.18% Annual Rate 3.82% 3.26% 3.23% 2015 Average Household Income $47,278 $51,406 $50,217 N CVS Pharmacy New Orleans, LA 10