Dollar General NNN WITH INCREASES

Transcription

1 File Photograph NNN WITH INCREASES ARKANSAS ONE OF THE WORLD S MOST SUCCESSFUL RETAILERS Sales and Profits are Increasing Strongly. Record Earnings Just Announced Credit Rating Increased Four Times in Recent Years, Now Investment Grade Now in the S&P 500 Price: $1,204, % Cap Rate New 15-Year NNN Lease With Increases For more information, please contact: Robert C. Sanner Partner/Broker bsanner@ctbt.com LIC # Cassidy Turley Northern California Rick Sanner Vice President rsanner@ctbt.com LIC # In Association with: Sean E. Glancy Irwin Partners An Arkansas Licensed Broker LIC #EB

2 LOCATION 6403 Highway 5 N, LOT SIZE Approximately 1.00 acre 43,560+/ square feet IMPROVEMENTS Completed in December 2012, a 9,000+/ square foot DOLLAR GENERAL retail store. LEASE Leased to a wholly-owned subsidiary of, and guaranteed by, DOLLAR GENERAL CORPORATION for 15 years from December 2012 until December The annual rent of $84,321 increases by 3% to $86,851 in Year 11. The lease is absolute net with the tenant responsible for all taxes, insurance and general maintenance including roof, structure and parking lot. The tenant has five 5-year options to renew with 10% rental increases each option period. See New Lease Form. ANNUAL INCOME YEARS ANNUAL RENT RETURN 1-10 $ 84, % $ 86, % Option 1 $ 95, % Option 2 $105, % Option 3 $115, % Option 4 $127, % Option 5 $139, % PRICE $1,204, % Cap Rate PRICE PER SQUARE FOOT $133 RENT PER SQUARE FOOT $9.37 net per year $0.78 net per month

3 NEW LEASE FORM This is the new lease form. By comparison, here is the lease on another property elsewhere. SUBJECT OTHER PROPERTY Location Midway, Arkansas Metro Area? Yes No Lease Term 15 years 10 years Rent Increase in basic term? Yes No NNN? Yes No Landlord Responsibility None Roof; structure; exterior of the property except plate glass. None of this is reimbursed. Landlord handles parking lot and landscape maintenance but is reimbursed.

4 ABOUT THE TENANT (QUANTITATIVE INFORMATION) DOLLAR GENERAL CORPORATION (NYSE: DG ) has been in business since Headquartered in a suburb of Nashville, the company is a national discount variety chain operating 10,371 stores in 40 states as of November 2, Formerly privately held, the chain went public in November is ranked #183 among the 2012 Fortune 500 companies. is rated BBB by Standard & Poor s. When it went public in late 2009, it was upgraded by S&P to BB. It was upgraded for the second time in eight months, in June 2010, to BB. Thirteen months later, in July 2011, was upgraded yet again, to BB+. Then, in April, 2012, it was upgraded to BBB, which is an investment grade rating. DG HAS MORE STORES THAN ANY OTHER RETAILER IN AMERICA. DG JOINED THE S&P 500 INDEX ON NOVEMBER 30, For the nine months ending November 2, 2012, reported sales of $11.8 billion (a 11.2% increase compared to the same period in 2012), net income of $635.2 million (33.8% increase) and stockholder s equity of $4.7 billion. For the fiscal year ended February 3, 2012, reported annual revenues of nearly $14.81 billion with net income of $766.7 million. For that fiscal year, compared to the previous fiscal year, DG reported the following % increases: Total Sales 13.6% Same-Store Sales 6.00% Net Income 22.1% Net Worth 15.1% In December 2012, DG announced it would add 635 new stores in 2013.

5 ABOUT THE TENANT (GENERAL BACKGROUND) The following is paraphrased from a company press release: Corporation has been delivering value to shoppers for more than 70 years. helps shoppers Save time. Save money. Every day! by offering products that are frequently used and replenished, such as food, snacks, health and beauty aids, cleaning supplies, basic apparel, housewares and seasonal items at low everyday prices in convenient neighborhood locations...in addition to high-quality private brands, is among the largest retailers of topquality products from America s most-trusted manufacturers such as Proctor & Gamble, Kimberly Clark, Unilever, Kellogg s, General Mills, Nabisco, PepsiCo and Coca-Cola. Learn more about at DOLLAR STORES BEATING UP ON WAL-MART The three largest dollar store chains, by market cap and annual sales are: APPROXIMATE MARKET CAP ANNUAL SALES * (tenant) DG $14.14 Billion $14.81 Billion Dollar Tree DLTR $ 8.64 Billion $ 6.63 Billion Family Dollar FDO $ 6.56 Billion $ 8.5 Billion * As of mid-january, From a recent internet article: {The dollar stores} have been revamping up service efforts and offerings {such as } Kraft brands. [An advantage of dollar stores compared to Wal-Mart]...is location and operating cost. While Wal-Mart is mostly suburban and rural based, {dollar stores] can be tucked into strip malls with low rent and overhead, {while Wal- Mart} requires giants swaths of land. The CEO said, Our difference is our low price in a convenient location.

6 DOLLAR STORES BEATING UP ON WAL-MART (CONTINUED) From a page one article in the NY Times, September 22, 2010, entitled In Hard Times, $1 Items Lure Shoppers, and Retailers Scramble : Dollar stores have best been able to capitalize on the downmarket trend because of the strategies they embraced during the recession, when the stores kept things cheap and expanded their merchandise...shoppers often could not afford regular-size detergent [so] the [dollar] stores worked with manufacturers to create smaller packages which cost less...[a certain shopper said the reason she goes to dollar stores instead of Wal-Mart is] you don t have the big crowds and it is cheap...same store sales at the dollar stores have increased 10 straight quarters and declined at Wal-Mart five straight quarters...dollar stores have switched out merchandise like trinkets for necessities like food and detergent because consumers have really curtailed discretionary spending out of necessity. According to an item in the Wall Street Journal, December 5, 2011, Dollar stores have been doing well in part because they are winning market share from Wal-Mart Stores, as lower-income shoppers switch to smaller, more frequent shopping trips from bigger, more time-consuming ones. This trend is likely to continue given that wage and employment gains remain generally subpar. So budget pressures [of families] are likely to persist. And bargain-hunting clearly gives dollar stores the edge. Recent surveys...show prices at run 9% to 10% below Wal-Mart s, on average. The Wall Street Journal had a very recent article on this same topic. This article, from June 4, 2012, is part of this offering package.

7 MIDWAY (BAXTER COUNTY), ARKANSAS Midway is located in north central Arkansas about 12 miles south of the Arkansas- Missouri state line in the Ozark Mountains on north-south Arkansas Highway 5. Nearest interstate highways are Interstate 44 (135 miles north) and Interstate 40 (125 miles south). A nearby north-south, highly-traveled route is U.S. Highway 65 from Des Moines, Iowa, to Natchez, Miss., through Little Rock, Ark., Branson and Springfield, Mo. U.S. Highway 65 is 35 miles west of Midway. Midway is the home of the Baxter County Industrial Park and the Ozark Regional Airport. DEMOGRAPHICS DEMOGRAPHICS 3-MILE 5-MILE 7-MILE Population (2011) 3,344 10,957 24,760 Average HH Income $52,964 $51,457 $50,543 Growth % 8.22% 9.31% NOTE The information set forth herein has been received by us from sources we believe to be reliable, but we have made no independent investigation of the accuracy or completeness of the information and make no representations with respect thereto. The above is submitted subject to errors, prior sale or lease, change in status, or withdrawal without notice. ARKANSAS

8

9 MAP The information set forth herein has been received by us from sources we believe to be reliable. We do not warrant its accuracy or completeness

10 MAP The information set forth herein has been received by us from sources we believe to be reliable. We do not warrant its accuracy or completeness

11 MAP The information set forth herein has been received by us from sources we believe to be reliable. We do not warrant its accuracy or completeness

12 Updated Summary Report (%) November 12, 2012 Longitude: Latitude: mi Ring 5 mi Ring 7 mi Ring POPULATION 1990 Total Population 2,288 7,819 18, Total Population 3,131 10,125 22, Total Population 3,344 10,957 24, Total Population 3,466 11,220 25,071 % Population Change % 29.49% 23.71% % Population Change % 8.22% 9.31% % Population Change % 2.40% 1.25% HOUSEHOLDS 1990 Total Households 924 3,368 8, Total Households 1,289 4,378 10, Total Households 1,452 4,956 11, Total Households 1,500 5,057 11,409 % Households Change % 29.99% 25.22% % Households Change % 13.20% 10.82% % Households Change % 2.04%.94% 2011 RACE % 2011 White Population 96.95% 96.86% 96.83% % 2011 Black Population.09%.08%.17% % 2011 American Indian/Alaska Native.69%.58%.56% % 2011 Asian/Hawaiian/Pacific Islander.33%.49%.51% % 2011 Other Population (Incl 2+ Races) 1.94% 1.98% 1.93% % 2011 Hispanic Population 1.73% 1.96% 1.85% % 2011 Non-Hispanic Population 98.27% 98.04% 98.15%

13 Updated Summary Report (%) November 12, 2012 Longitude: Latitude: mi Ring 5 mi Ring 7 mi Ring INCOME 2011 Per Capita Income $22,990 $23,275 $23, Median Household Income $36,031 $32,894 $31, Average Household Income $52,964 $51,457 $50,543 % 2011 Household Income < $10, % 7.77% 8.31% % 2011 Household Income $10,000-$14, % 7.69% 9.46% % 2011 Household Income $15,000-$19, % 11.50% 10.32% % 2011 Household Income $20,000-$24, % 10.29% 9.12% % 2011 Household Income $25,000-$29, % 7.65% 9.76% % 2011 Household Income $30,000-$34, % 8.82% 8.62% % 2011 Household Income $35,000-$39, % 7.85% 8.12% % 2011 Household Income $40,000-$44, % 5.13% 4.52% % 2011 Household Income $45,000-$49, % 4.78% 4.86% % 2011 Household Income $50,000-$59, % 9.87% 8.48% % 2011 Household Income $60,000-$74, % 5.79% 6.47% % 2011 Household Income $75,000-$99, % 6.44% 5.02% % 2011 Household Income $100,000-$124, % 2.50% 2.94% % 2011 Household Income $125,000-$149, % 1.92% 1.78% % 2011 Household Income $150,000-$199,999.21%.22%.82% % 2011 Household Income $200,000-$249,999.14%.50%.44% % 2011 Household Income $250,000-$499, % 1.29%.96% % 2011 Household Income $500, %.00%.00% 2011 Average Household Size % 2011 Total Owner Occupied Housing Units 83.36% 74.34% 72.99% % 2011 Total Renter Occupied Housing Units 16.64% 25.66% 27.01% 2011 Total Daytime Population 2,895 11,054 29, Total Daytime Work Population 956 5,088 14, Total Establishments ,681