Morton SC - McAllen, TX

MORTON SHOPPING CENTER MCALLEN, TX

PRICING & FINANCIAL ANALYSIS

M O R TO N SH O P P ING C E NT E R

Morton Shopping Center 2003 N 10th St & 1101 Upas Ave McAllen, TX 78501

OFFERING SUMMARY Price Cap Rate Net Operating Income Price PSF Occupancy Year Built Gross Leasable Area Lot Size

$2,450,000 7.75% $189,866 $86.32 90.8% 1975 & 1985 28,383 SF 2.02 Acres

F I N A N C I A L A N A LY S I S

2

PRICING & FINANCIAL ANALYSIS

M O R TO N SH O P P ING C E NT E R

PROJECTED INCOME & EXPENSES Base Rent - Occupied Space

CURRENT 100%

GROSS POTENTIAL RENT

PSF

CURRENT

PSF

$256,924

$9.05

Real Estate Taxes

$43,341

$1.53

$256,924

$9.05

Insurance

$27,397

$0.97

Office Supplies

$595

$0.02

Supplies

$504

$0.02

Postage

$188

$0.01

Utilities

$4,739.33

$0.17

Contract Labor

$11,286.50

$0.40

$17,313

$0.61

$11,580

$0.41

$99,631

$3.51

Expense Reimbursements

CAM

Real Estate Taxes

$16,034

$0.56

Insurance

$10,135

$0.36

CAM

$6,405

$0.23

$0.00

$0.00

$32,574

$1.15

$289,497

$10.20

Real Estate Taxes

($43,341)

($1.53)

Insurance

($27,397)

($0.97)

($17,313)

($0.61)

($11,580)

($0.41)

Total Recoverable Expenses

($99,631)

($3.51)

Net Operating Income

$189,866

$6.69

Mgmt. Fee Total Expense Reimbursements GROSS POTENTIAL INCOME Operating Expenses

CAM Mgmt. Fee

EXPENSES

4.00%

Total CAM Management Fee Total Expenses

4.00%

F I N A N C I A L A N A LY S I S

3

RE NT RO L L

Suite

2001

Tenant

M O R TO N SH O P P ING C E NT E R

SQ FT

% of SQFT

Lease Dates

Rent

Escalation

Start

End

Annual

PSF

Date

Amount

Options

Lease Type

Karma Consignment

4,000

14.1%

10/1/2015

MTM

$34,800

$8.70

-

-

-

Gross

2003A

Vacant

2,600

9.2%

-

-

$0.00

$0.00

-

-

-

-

2003B

Adam & Eve

2,900

10.2%

10/1/2010

7/31/2019

$30,000

$10.34

8/1/2019

$10.86

1x3

NNN (Excl MGT)

Metro PCS

2,500

8.8%

11/1/2017

10/31/2018

$24,000

$9.60

-

-

-

NNN (Excl MGT)

2005 2011

Valley Nail Supply

2,011

7.1%

8/1/2009

7/31/2021

$31,800

$15.81

-

-

-

Gross

2013

Redwing Shoes

3,157

11.1%

10/1/2004

9/30/2019

$33,405

$10.58

10/1/2018

$10.90

-

Gross

2025

Cash America

5,100

18.0%

3/26/2008

5/31/2023

$72,000

$14.12

6/1/2023

$15.53

2x5

NNN (Excl MGT)

New & Again Thrift

6,115

21.5%

1/1/2012

MTM

$30,000

$4.91

-

-

-

Gross

Occupied

25,783

90.8%

$256,005

$9.02

Available

2,600

9.2%

Total

28,383

100.0%

1101

F I N A N C I A L A N A LY S I S

4

ESTIMATED REIMBURSEMENT REVENUE Prorata

Annual

Share

Taxes

4,000

14.1%

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

-

-

Vacant

2,600

9.2%

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

-

-

Adam & Eve

2,900

10.2%

$4,428

$1.53

$2,799

$0.97

$1,769

$0.61

$0.00

$0.00

$8,997

$3.10

Metro PCS

2,500

8.8%

$3,818

$1.53

$2,413

$0.97

$1,525

$0.61

$0.00

$0.00

$7,756

$3.10

Suite

Tenant

SQ FT

2001

Karma Consignment

2003A 2003B 2005

1 0 7 P LAZ A C E NT E R

PSF

Annual Insurance

PSF

Annual CAM

PSF

Annual Mgmt Fee

PSF

Annual Total

PSF

2011

Valley Nail Supply

2,011

7.1%

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

-

-

2013

Redwing Shoes

3,157

11.1%

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

-

-

2025

Cash America

5,100

18.0%

$7,788

$1.53

$4,923

$0.97

$3,111

$0.61

$0.00

$0.00

$15,822

$3.10

New & Again Thrift

6,115

21.5%

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

-

-

$16,034

$0.56

$10,135

$0.36

$6,405

$0.23

$0.00

$0.00

$32,574

$1.15

1101

TOTALS

F I N A N C I A L A N A LY S I S

5

TE NA NT INF ORMAT I ON

M O R TO N SH O P P ING C E NT E R

DBA

MetroPCS

Entity on Lease

Wireless Ventures LLC

Corporate/Franchise

Franchise

Locations

15,000+ across the United States

Credit Rating

Not Rated

Public/Private

NYSE: PCS

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

Cash America

Entity on Lease

Cash America Pawn L.P.

Corporate/Franchise

Corporate

Locations

850+

Credit Rating

Not Rated

Public/Private

NYSE: CSH

Line of Business

Cash America International, Inc. provides specialty financial services to individuals in the United States at more than 900 locations in 20 states. They are the largest provider of secured non-recourse loans, commonly referred to as pawn loans, and operate under the brand names Cash America Pawn, Cashland and Cash America SuperPawn.

DBA

Red Wing Shoes

Entity on Lease

Red Wing Brands of America, Inc

Corporate/Franchise

Corporate

Locations

4,000+ in 110 countries

Credit Rating

Not Rated

Public/Private

Private

Line of Business

Red Wing Shoes is known primarily for their leather boots intended for heavy work. In recent years the company has expanded its line-up to include athletic-styled work shoes and footwear designed for specific job applications (such as slip-resistant shoes designed for the service industry and boots ideal for the mining industry that utilize a metatarsal guard).

PROPERTY DESCRIPTION

6

I N VE S TMENT HI GHLI GHT S

• Rare Value-Add Opportunity Off 10th St in McAllen, TX

M O R TO N SH O P P ING C E NT E R

SNAPSHOT

• More Than Half of The Tenants are on Gross Lease and 35% of The Center is on Month to Month Term • Well Below Replacement Cost of $86/PSF to the Building • Under Market Rents of $5-15/PSF Where Other Retail Space is Leasing at $15-$20/PSF

Estimated Vehicles Per Day

Average Household Income

35,600

$69,013

Projected Population Growth 2010-2017

Population: 5 Mile Radius

6.46%

245,306

• Benefits From Cross-Border Consumer Traffic • 5 Mile Population Exceeds 245,306 People - a 11.22% increase in the Past 5 Years and a Projected Growth of 6.46% in the Next 5 Years • Traffic Counts Exceed 35,600 Vehicles Per Day Along N 10th St • Surrounding National Retailers Include Dollar Tree, Aaron’s, H&R Block, Schlotzsky’s, State Farm, Frost Bank, Harbor Freight Tools, O’Reilly Auto Parts, Dollar General and Many More

PROPERTY DESCRIPTION

7

S I T E PL A N

N

TENANT

SUITE

New & Again Thrift

Karma Consignment

2003A

Vacant

2003B

Adam & Eve

2005

Metro PCS

2011

Valley Nail Supply

2013

Redwing Shoes

2025

Cash America

1101

New & Again Thrift

1101

2003A

Upas Ave

Vacant

2001

Valley Nail Supply

Karma Consignment

Tamarack Ave

2001

M O R TO N SH O P P ING C E NT E R

2003B

2005

2011

2013

2025

N 10th St PROPERTY DESCRIPTION

8

A E R I AL MA P

M O R TO N SH O P P ING C E NT E R

JACKSON ELEMENTARY SCHOOL

N 10TH

ST

35,600 VPD

MCALLEN HIGH SCHOOL

PROPERTY DESCRIPTION

9

A E R I AL MA P

N

M O R TO N SH O P P ING C E NT E R

N

10

TH

ST

(35

,60

0V

PD

)

PROPERTY DESCRIPTION

10

LO C AL MA P

M O R TO N SH O P P ING C E NT E R

PROPERTY DESCRIPTION

11

REG IONA L MA P

M O R TO N SH O P P ING C E NT E R

Gulf of Mexico

PROPERTY DESCRIPTION

12

M A R KET S U MMARY

M O R TO N SH O P P ING C E NT E R

McAllen, TX

OVERVIEW McAllen is the twenty-first most populous city in Texas and the largest city in Hidalgo County, Texas, United States. It is located at the southern tip of Texas in the Rio Grande Valley and is part of the Southern United States. It is on the Rio Grande, across from the Mexican city of Reynosa, and is approximately 70 miles (110 km) west of South Padre Island and the Gulf of Mexico. McAllen is often referred to as the retail center of Southern Texas and Northern Mexico. In fact, the region’s La Plaza Mall makes the most sales per square foot than any other shopping mall in the country.

The 2010 United States census put the city’s population at 129,877 and the McAllen–Edinburg– Mission metropolitan area at 774,773. It is ranked the fifth most populated metropolitan area in the state of Texas. The Reynosa–McAllen Metropolitan Area counts a population of nearly 1.5 million. The McAllen– Edinburg–Mission metropolitan area is also one of the fastest growing metropolitan areas in the United States.

The metro area is also a haven for those crossing the border from Mexico to Texas. As of August 2015, Catholic Charities of the Rio Grande Valley, along with the Sacred Heart Church in McAllen, have helped more than 23,000 people looking to make a new life for themselves in the U.S. As a result, Hispanic culture is strong in the area, with numerous Mexican restaurants found throughout the region and Mexican festivals taking place during the year.

McAllen has seen year-over-year job growth of around 2.5 percent, but the area’s unemployment rate is higher than the national average.Education and health services make up two of the largest employment sectors in McAllen thanks to top employers like the McAllen Independent School District, South Texas College, the University of Texas-Rio Grande Valley, McAllen Medical Center and Rio Grande Regional Hospital. There are also opportunities in the public sector, including with the City of McAllen. Other major employers include BBVA Compass Bank, IBC Bank and GE Engines.

PROPERTY DESCRIPTION

13

D E M OG RA PHIC STAT I ST I CS

M O R TO N SH O P P ING C E NT E R

1 MILE

3 MILE

5 MILE

15,893 15,105 14,610 5.22% 3.39% 13,069

121,462 114,553 105,697 6.03% 8.38% 99,533

261,165 245,306 220,568 6.46% 11.22% 213,497

14,536 189 104 176 4 96 0

108,422 1,630 723 2,948 70 761 25

233,270 3,059 1,411 5,948 136 1,483 104

5,399 5,143 5,046 4.98% 1.92% 2,713 2,430 $57,322 $38,844

39,427 37,248 34,789 5.85% 7.07% 20,877 16,371 $66,646 $41,363

80,888 76,080 69,108 6.32% 10.09% 48,829 27,251 $69,013 $45,214

1,944 1,277 827 225 276 202 229 161

12,341 8,949 5,300 3,212 2,331 1,293 1,791 2,032

22,102 18,988 11,480 7,162 5,718 3,317 3,323 3,991

Population: 2022 Projection 2017 Estimate 2010 Census Growth 2017-2022 Growth 2010-2017 2017 Population Hispanic Origin

2017 Population by Race: White Black Am. Indian & Alaskan Asian Hawaiian & Pacific Island Other U.S. Armed Forces:

Households: 2022 Projection 2017 Estimate 2010 Census Growth 2017 - 2022 Growth 2010 - 2017 Owner Occupied Renter Occupied 2017 Avg Household Income 2017 Med Household Income

2017 Households by Household Inc: <$25,000 $25,000 - $50,000 $50,000 - $75,000 $75,000 - $100,000 $100,000 - $125,000 $125,000 - $150,000 $150,000 - $200,000 $200,000+ Demographic data © CoStar 2017

PROPERTY DESCRIPTION

14

CONFIDENTIALITY AGREEMENT The information contained in the following offering memorandum is proprietary and strictly confidential.

It is intended to be reviewed only by the party receiving it from STRIVE and it should not be made available to any other person or entity without the written consent of STRIVE. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to STRIVE. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. STRIVE has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenantâ&#x20AC;&#x2122;s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe to be reliable; however, STRIVE has not verified, and will not verify, any of the information contained herein, nor has STRIVE conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT STRIVE AGENT FOR MORE DETAILS.

Commercial Disclaimer STRIVE hereby advises all prospective purchasers of commercial property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, STRIVE has not and will not verify any of this information, nor has STRIVE conducted any investigation regarding these matters. STRIVE makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a commercial property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. STRIVE expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a commercial property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any commercial property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenants and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenants history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term leases, including the likelihood of locating replacement tenants if any of the current tenants should default or abandon the property, and the lease terms that Buyer may be able to negotiate with any potential replacement tenants considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release STRIVE and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this commercial property.

Information About Brokerage Services

Texas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

TYPES OF REAL ESTATE LICENSE HOLDERS: • A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker.

• A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.

A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): • Put the interests of the client above all others, including the broker’s own interests; • Inform the client of any material information about the property or transaction received by the broker; • Answer the client’s questions and present any offer to or counter-offer from the client; and • Treat all parties to a real estate transaction honestly and fairly.

A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION: AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner’s agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner’s agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent.

AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant’s agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer’s agent must perform the broker’s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by th e seller or seller’s agent.

AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. A broker who acts as an intermediary: • Must treat all parties to the transaction impartially and fairly; • May, with the parties’ written consent, appoint a different license holder associated with the broker to each party (owner and • buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction.

• Must not, unless specifically authorized in writing to do so by the party, disclose: ӽӽ that the owner will accept a price less than the written asking price; ӽӽ that the buyer/tenant will pay a price greater than the price submitted in a written offer; and ӽӽ any confidential information or any other information that a party specifically instructs the broker in writing not to disclose, unless required to do so by law.

AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.

TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH: • The broker’s duties and responsibilities to you, and your obligations under the representation agreement.

• Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.

LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.

Regulated by the Texas Real Estate Commission

Information available at www.trec.texas.gov IABS 1-0

exclusively listed 469.844.8880 | STRIVERE.COM