Coldwell Banker Commercial Southwest
www.coldwellbusiness.com
Property ID: 46814
Property Type: Retail
Property Address:
8775 A US Higway 290 East
Chappell Hill, TX 77426
County: Washington
Price: $276,476
Property Size: 5,440 Sq. Ft.
Lot Size: 43,560 Sq. Ft. |
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Property Description
PRICE REDUCED TO $276,476!!
The Retail Commercial Division and Investment Division of Coldwell Banker Commercial Properties Unlimited (CBC Brenham) are pleased to present this outstanding opportunity to acquire a 1-acre tract in the Chappell Hill area on US Highway 290. Competitively priced at $276,476(the “Chappell Hill Antique Mall”), we believe this is a compelling offering. Also offering 4% buyer broker commision or 1% cash back to buyer at closing.
HIGHLIGHTS
(1) Compelling investment opportunity to acquire one acre of US Highway 290 frontage in the Chappell Hill area with an existing curb cut in an excellent location combined with 5,440 of immediately rentable SF support a broad range of potential investment strategies
(2) 6.05% proforma 2008 capitalization rate with $17,367 estimated 2008 net operating income and $10,757 estimated net cash flow
(3) At an assumed land cost of $5.50 per SF, calculated improvement valuation $8.73 is per SF
(4) Top 3 local retail “gap” opportunities represent potential 2008 revenues exceeding $2M and top 8 opportunities represent potential 2008 revenues exceeding $1M (both within a 3-mile radius)
(5) Top 4 retail categories of annual projected increases in consumer spending from 2007 to 2012 exceed $1.35M within a 3-mile radius
(6) Top 8 retail categories of annual projected percent increases in consumer spending from 2007 to 2012 exceed 40% annual growth rates within a 3-mile radius
LISTING TEAM
You can contact Richard O'Malley, Chris DeAlmeida or George Alexander, the listing team on the Chappell Hill Antique Mall at 979.421.9996. You can also email them at ChappellHillAntiqueMallTeam@ColdwellBusiness.com.
PROPERTY
A 5,440 SF metal building constructed in 1994 that appears to be in very good condition anchors the Chappell Hill Antique Mall property. A separate metal storage building completes the improvements. The owner is removing two Rental Homes located on the premises prior to the close.
MAIN BUILDING. The Main Building is a 5,440 SF metal building constructed in 1994. Approximately 80% of Main Building space is an open floor plan providing maximum flexibility to new owners for reconfiguration and improvements.
Fully insulated and serviced by central air and heat, the Main Building appears to offer very good utility efficiency. The Main Building appears to be in excellent condition. The remaining estimated 20% of space combines restrooms and storage areas.
SEPARATE METAL STORAGE BUILDING. A freestanding metal Storage Building is located behind the Main Building. Constructed in 1996, the Storage Building appears to be in excellent condition.
BUSINESS OVERVIEW
The Chappell Hill Antique Mall has been in business for over 20 years. The business has an excellent reputation among customer and vendors according to the owner and informal market feedback.
The owner represents the Chappell Hill Antique Mall is the only full-time antique retailer that offers tenants a no-commission, rental only alternative in the greater Chappell Hill-Round Top-Brenham market area.
The owner indicates currently 32 of 34 spaces currently rented, just added four dealers, and several tenants have been in place for over 15 years.
LOCATION
Chappell Hill is a small Texas town but literally only minutes from Houston. It is literally booming with activity as growth continues to migrate from Houston along the US 290 Houston-Austin corridor.
Chappell Hill has the most compelling demographics of any Washington County community.
The Chappell Hill Antique Mall affords a great highway location on US Highway 290. For traffic out-bound from Houston, it is the first business with a curb cut available after the Chappell Hill Main Street (FM 1155 Road) /US 290 red light.
The current estimated average daily-two way traffic count is 28,100 and growing at an average of about 10% per year. Based on a conservative traffic trend model, the average daily-two way traffic count will exceed 40,000 in approximately four years.
From the West Sam Houston Beltway and the US 290 interchange the Chappell Hill Antique Mall, it is only 46 miles and just 44 minutes (as per Google Maps) unless you are driving during “rush hour”.
PROFORMA NET OPERATING INCOME AND CAP RATE
While actual investment income information is not available, ANALYSIS provided the following proforma financial model (“Proforma Model”). The Proforma Model projects 2008 net operating income and proforma 2008 “cap rate” for the Chappell Hill Antique Mall based on the assumptions stated.
The Proforma Model projects $26,704 in gross operating income:
(1) $28,560 POTENTIAL RENTAL INCOME. The Proforma Model assumes rental of the Main Building at $5.50 per SF per year or $2,380 per month.
(2)$1,856 ADJUSTMENT FOR VACANCY AND CREDIT LOSSES. The Proforma Model assumes a 6.5% loss of potential rental income. The owner reports no significant historical issues with either vacancy or credit losses.
(3) $26,704 GROSS OPERATING INCOME. The Proforma Model calculates gross operating income as $28,560 potential rental income less $1,856 adjustment for vacancy and credit losses.
The Proforma Model Projects $9,337 in operating expenses:
(4) $3,000 REPAIRS AND MAINTENANCE. The Proforma Model assumes $250 per month.
(5) $1,602 MANAGEMENT FEES. The Proforma Model assumes a six percent fee of gross operating income ($26,704 times 6%).
(6) $2,234 real estate property TAXES. The Proforma Model assumes 2006 actual taxes of $2,026.74 increased by 5% for 2007 estimated. 2008 projection based on 2007 estimated and increased by 5%. Note that no reduction made for removal of the two Rental Homes.
(7) $1,000 in PROPERTY INSURANCE. The Proforma Model assumes high deductible property insurance and $100K/$300K liability coverage.
(8) $1,500 in UTILITIES AND MISCELLANEOUS. The Proforma Model assumes $125 per month.
PROFORMA 2008 NET OPERATING INCOME: The Proforma Model projects $17,367 estimated net operating income in 2008 based on $26,704 gross operating income less $9,337 operating expenses.
PROFORMA 2008 CAP RATE: The Proforma Model projects a 6.05% capitalization rate based on $17,367 net operating income divided by $287,056 purchase price.
CALCULATED IMPROVEMENT COST PER SF BASED ON ALTERNATIVE LAND VALUATIONS PER SQUARE FOOT
Based on the Comparative Model described below, available properties and the comparative considerations indicated for the Chappell Hill Antique Mall, the following model estimates the calculated cost per SF of improvements based on your valuation of the land “Existing Improvement Cost Model”.
Assumptions: (1) $287,056 sales price and (2) 5,440 SF of improvements (5,440 SF in the Main Building and no square feet allocated to the Storage Building).
Model overview: (1) Input land investment cost basis, (2) Deduct land investment cost basis from sales price to estimate improvement cost; and (3) Convert improvement cost to a cost per SF.
Example: The 8770 US Highway 290 East property pricing is $5.34 per SF. You decide that is a reasonable price for that property. Based on your comparative considerations, you decide to value the Chappell Hill Antique Mall land at $5.50 per SF and you purchase the Chappell Hill Antique Mall at $287,056. Your resulting improvement cost is $8.73 per SF.
Calculation:
(1) Land valuation of $5.50 per SF = $239,580 ($5.50 per SF * 43,560 SF in an acre)
(2) Improvement valuation = $47,476 ($287,056 less $239,580)
(3) Improvement valuation per SF = $8.73 ($47,476 improvement valuation / 5,440 SF of improvements)
The following summarizes the calculated improvement valuation per SF at different land valuations per SF:
(1) $4.00 per SF for land = $20.74 improvement valuation per SF
(2) $5.00 per SF for land = $12.73 improvement valuation per SF
(3) $6.00 per SF for land = $4.72 improvement valuation per SF
(4) $6.59 per SF for land = $0.00 improvement valuation per SF
ALTERNATIVE PROPERTIES AVAILABLE
We identified three alternative properties currently available on or immediately adjacent to US 290 in the Chappell Hill market. The following summarizes the properties.
(1) 8780 US Highway 290 East. 2.90 acres priced at $674,570 ($5.34 per SF). This tract is on the south side (traffic moving toward Houston). It has an existing curb cut. It has no structures but appears to have significant pavement/cement from prior improvements.
(2) 5480 Main Street. 20 acres priced at $3,274,440 ($3.76 per SF). Pad sites available. Multiple access points from frontage on two streets. There is extensive frontage on the north side of US 290. There are no known significant improvements on the property. There is no known existing curb cut to 290.
(3) US Highway 290 East and West Graham Lane. 9.62 acres priced at $1.25 per SF. 830’ of frontage on south side of US 290. There is no existing curb cut to 290.
If you would like to discuss these or other properties with CBC Brenham, please let us know by phone or email.
AVAILABLE PROPERTY SUGGESTED COMPARATIVE CONSIDERATIONS
Comparative available property ANALYSIS performed on the Immediate Area may assist you in evaluating alternative properties available in the immediate vicinity (“Comparative Property Model”).
The Comparative Property Model suggest the 8780 US 290 property may be good property for your use in pricing comparison. It is on US 290, is immediately across US 290 from the Chappell Hill Antique Mall and is the smallest of the competitive properties.
(1) CURB CUT. It does have an existing curb cut. As a result, Comparative Property Model suggests no pricing adjustment per SF suggested.
(2) SIZE. It is 2.9 times larger. As a much smaller parcel, the Comparative Property Model Chappell Hill suggests the Antique Mall may substantiate a higher price per SF.
(3) NORTH OR SOUTH SIDE OF HIGHWAY. It is on the south side or traffic going to Houston. Located on the north side the Chappell Hill Antique Mall, the Comparative Property Model suggests the Chappell Hill Antique Mall may substantiate a higher price per SF.
(4) IMMEDIATE NET OPERATING INCOME POTENTIAL. It does not have any improvements that can used to generate immediate net operating income. Having a significant immediate opportunity to generate rental income, the Comparative Property Model suggests the Chappell Hill Antique Mall may substantiate a higher price per SF.
CURRENT UNMET LOCAL RETAIL DEMAND
ANALYSIS performed identified key “gaps” between current local retail supply and current local retail demand at 1-mile, 2-mile and 3-mile radiuses from the Chappell Hill Antique Mall and the unincorporated area currently defined by demographers as “Chappell Hill” (“Retail Gap Model”). The Retail Gap Model identified the top three, five and eight retail opportunities at each Immediate Area radius and included comparative statistical ANALYSIS and category summaries or roll-ups.
TOP OPPORTUNITIES AT THREE-MILE RADIUS. The Retail Gap Model identified the top eight specific retail opportunities where potential 2008 revenues exceed $1M:
(1) $4.50M+ in BUILDING MATERIALS AND GARDEN RELATED sales
(2) $3.75M+ in GROCERY STORE sales (specifically excluding convenience store sales)
(3) $2.00M+ in DEPARTMENT STORE sales (specifically excluding leased department sales)
(4) $1.75M+ in PHARMACY AND DRUG STORE sales
(5) $1.60M+ in FULL SERVICE RESTAURANT sales
(6) $1.60M+ in CLOTHING AND ACCESSORY sales
(7) $1.00M+ in LIMITED-SERVICE EATING sales
(8) $1.00M+ in FURNITURE AND HOME FURNISHING sales
LOCAL UNMET CONSUMER DEMAND. The following summarizes Retail Gap Model findings for the top three, top five and top eight retail opportunities at 1-mile, 2-mile and 3-mile radiuses:
(1) 1-MILE RADIUS: Top three average $550K+, top five average $500K+ and top eight average $400K+
(2) 2-MILE RADIUS: Top three average $1.175M+, top five average $1.050M+ and top eight average $875K+
(3) 3-MILE RADIUS: Top three average $2.775M+, top five average $2.45M+ and top eight average $2.05M+
THIS IS LOCAL DEMAND ONLY. Please note that the above demand ANALYSIS estimates represent LOCAL DEMAND ONLY. Local demand is demand from “local residents”. This ANALYSIS does NOT include any demand generated by travelers or commuters (residing further than 3-miles away) on US Highway 290.
PROJECTED GROWTH IN CONSUMER SPENDING
ANALYSIS identified projected growth in consumer spending in the Immediate Area. This ANALYSIS compared estimated 2007 local consumer spending in specific categories to projected 2012 spending levels. 2012 spending levels take into account income growth, population growth, inflation and other key econometric and demographic factor for the Immediate Area (“Consumer Spending Model”).
ANNUAL GROWTH IN REVENUE DOLLARS IN LOCAL AREA CONSUMER SPENDING. The following Consumer Spending Model summary identifies the top ten areas of growth in consumer spending by dollar amount in rank order:
(1) APPAREL – $2M+
(2) FOOD AT HOME – $1.9M+
(3) PRESCRIPTION DRUGS – $1.7M+
(4) HOUSEHOLD TEXTILES – $1.35M+
(5) FURNITURE – $600K+
(6) MAJOR APPLIANCES – $500K
(7) HOUSEWARES AND SMALL APPLIANCES – $350K+
(8) HOUSEHOLD EQUIPMENT – $325K+
(9) PERSONAL CARE PRODUCTS AND SERVICES – $225K
(10) PERSONAL EXPENSES AND SERVICES – $225K+
ANNUAL PERCENT GROWTH IN REVENUE DOLLARS IN LOCAL AREA CONSUMER SPENDING. The following Consumer Spending Model summary identifies the top ten areas of growth in consumer spending by percentage point increase in rank order:
(1) PRESCRIPTION DRUGS – 84%
(2) MAJOR APPLIANCES – 47%+
(3) APPAREL – 46%+
(4) HOUSEWARES AND SMALL APPLIANCES – 45%+
(5) HOUSEHOLD EQUIPMENT – 45%+
(6) FURNITURE – 44%+
(7) FOOD AT HOME – 43%+
(8) PERSONAL CARE PRODUCTS AND SERVICES – 40%+
(9) PERSONAL EXPENSES AND SERVICES – 37%+
(10) HOUSEHOLD TEXTILES – 32%+
THIS IS LOCAL CONSUMER SPENDING ONLY. Please note that the above Consumer Spending Model estimates represent LOCAL CONSUMER SPENDING ONLY. Local consumer spending is consumer spending by “local residents”. Consumer Spending Model does NOT include any consumer spending by travelers or commuters (residing further than 3-miles away) on US Highway 290.
INVESTMENT STRATEGIES
The Chappell Hill Antique Mall provides flexibility potentially unmatched in the market place today for US Highway 290 property in the Chappell Hill area. The Chappell Hill Antique Mall is the only currently available property that offers immediately usable improvements to generate a cash flow. You can purchase the Chappell Hill Antique Mall without the two Rental Homes as described in this listing or you can purchase WITH the Rental Homes for $335,933.
While the following ANALYSIS is not exhaustive and do not take into account your personal investment criteria or goals, or capital gains or 1031 implications, the ANALYSIS provides an overview of the unique flexibility provided by the Chappell Hill Antique Mall (“Investment Strategy Model”).
(1) BUY AND HOLD “AS IS” SHORT-TERM INVESTMENT WITH RENTALS. Buy and hold as short-term investment property “as is” with both rental homes. Purchase with two rental homes for $335,933 as in investment property with a 6.99% estimated rate. This strategy increases your investment cost and increases your net operating income. This Investment Strategy Model incorporates a potential divestment within two years.
(2) BUY AND HOLD “AS IS” SHORT-TERM INVESTMENT WITHOUT RENTALS. Short-term investment property “as is” without the rental homes. Purchase without the two rental homes with a 6.05% estimated rate. This strategy lowers your investment cost but also lowers your net operating income. Investment Strategy Model incorporates a potential divestment expected within two years.
(3) BUY AND HOLD “AS IS” INTERMEDIATE TERM INVESTMENT. Buy and hold as intermediate-term investment property “as-is”. Compatible with (1) or (2) above. Exit strategy timing dependent on market but could be a five-year window to capture potential appreciation from anticipated population migration following the 290 corridor. Investment Strategy Model incorporates a potential divestment within two to four years.
(4) LONG TERM BUY AND HOLD WITH NEW IMPROVEMENTS. Buy and hold as long-term investment property with new improvements to maximize cap rate. Compatible with (1) or (2) above. In this scenario, you may consider significant improvements to improve the rental rate on the 5,440 square foot main building. In this strategy, you may build out four to six units that for professional, retail or mixed use. Investment Strategy Model incorporates a potential divestment within five years.
(5) TRADITIONAL “BUY AND RESELL”. Compatible with (1) or (2) above. Traditional approach is to put it back on market and let the market come to you. Investment Strategy Model incorporates a potential divestment within two years.
(6) FOCUSED “BUY AND RESELL”. Compatible with (1) or (2) above. It incorporates a focused approach targeting most likely buyers. We are the masters of the market and have sophisticated techniques to target, communicate with and follow-up with very refined buyers and sellers. We will discuss our approaches and ideas with you under an exclusive right to sell listing agreement or an exclusive buyer’s representation agreement. This Investment Strategy Model incorporates a potential divestment within one year.
COMPARATIVE DEMOGRAPHIC AND ECONOMETRIC ANALYSIS
Comparative statistical ANALYSIS confirmed that Immediate Area’s demographic and economic growth is significantly greater in most key areas based on the following key statistical comparisons:
(1) The Immediate Area has a 3.60% to 3.96% projected annual percent increase in POPULATION from 2007 to 2012 compared to 1.28% for Harris County, 0.89% for Washington County, 0.54% for Houston and 0.37% for Brenham.
(2) The Immediate Area has a range from 2.18% to 2.35% projected annual percent increase in HOUSEHOLD EFFECTIVE BUYING INCOME from 2007 to 2012 compared to 1.74% for Harris County, 1.87% for Washington County, 1.51% for Houston and 1.71% for Brenham.
(3) The Immediate Area has a range from 8.68% to 9.01% projected annual percent increase in CONSUMER SPENDING from 2007 to 2012 compared to 5.23% for Harris County, 5.29% for Washington County, 4.27% for Houston and 5.29% for Brenham.
(4) The Immediate Area has a range from 2.27% to 2.39% projected annual percent increase in EFFECTIVE HOUSEHOLD INCOME from 2007 to 2012 compared to 1.80% for Harris County, 5.04% for Washington County, 1.54% for Houston and 1.86% for Brenham.
(5) The Immediate Area has a range from 16.86% to 18.64% estimated annual FAMILY INCOMES OF AT LEAST $100,000 in 2007 compared to 19.20% for Harris County, 11.49% for Washington County, 14.77% for Houston and 8.09% for Brenham. Note this is the only key indicator analyzed with ANY Benchmark areas having a comparative statistical indicator higher than any of the Immediate Areas analyzed.
(6) The Immediate Area has a range from 9.60% to 10.07% projected annual percent increase in FAMILY INCOMES OF AT LEAST $150,000 from 2007 to 2012 compared to 4.84% for Harris County, 6.54% for Washington County, 3.88% for Houston and 5.64% for Brenham.
AVAILABLE REPORTS
All demographic and econometric reports utilized for the above ANALYSIS based on data provided under license from Claritas, Inc.
All utilized reports are available at http://www.coldwellbusiness.com/ListingReports.6203CommerceStreet.html .
DISCLOSURES & COPYRIGHTS
CBC is a wholly owned franchise of Alexander Tiffany Southwest, LLC. Analysis is preliminary, based on proprietary systems and models, is time sensitive and based on assumptions- stated and unstated. Graphics are only renderings. Measurements are only estimates. No warranties are expressed or implied. All content is protected by copyright laws, is only for prospects or legal representatives, and should not replace buyers own due diligence and analysis. Any other use is prohibited. |
Financial Summary
Income: $26,704 Expenses: $9,337 CAP Rate: 6.28%
PROFORMA NET OPERATING INCOME AND CAP RATE
While actual investment income information is not available, ANALYSIS provided the following proforma financial model (“Proforma Model”). The Proforma Model projects 2008 net operating income and proforma 2008 “cap rate” for the Chappell Hill Antique Mall based on the assumptions stated.
The Proforma Model projects $26,704 in gross operating income:
(1) $28,560 POTENTIAL RENTAL INCOME. The Proforma Model assumes rental of the Main Building at $5.50 per SF per year or $2,380 per month.
(2)$1,856 ADJUSTMENT FOR VACANCY AND CREDIT LOSSES. The Proforma Model assumes a 6.5% loss of potential rental income. The owner reports no significant historical issues with either vacancy or credit losses.
(3) $26,704 GROSS OPERATING INCOME. The Proforma Model calculates gross operating income as $28,560 potential rental income less $1,856 adjustment for vacancy and credit losses.
The Proforma Model Projects $9,337 in operating expenses:
(4) $3,000 REPAIRS AND MAINTENANCE. The Proforma Model assumes $250 per month.
(5) $1,602 MANAGEMENT FEES. The Proforma Model assumes a six percent fee of gross operating income ($26,704 times 6%).
(6) $2,234 real estate property TAXES. The Proforma Model assumes 2006 actual taxes of $2,026.74 increased by 5% for 2007 estimated. 2008 projection based on 2007 estimated and increased by 5%. Note that no reduction made for removal of the two Rental Homes.
(7) $1,000 in PROPERTY INSURANCE. The Proforma Model assumes high deductible property insurance and $100K/$300K liability coverage.
(8) $1,500 in UTILITIES AND MISCELLANEOUS. The Proforma Model assumes $125 per month.
PROFORMA 2008 NET OPERATING INCOME: The Proforma Model projects $17,367 estimated net operating income in 2008 based on $26,704 gross operating income less $9,337 operating expenses.
PROFORMA 2008 CAP RATE: The Proforma Model projects a 6.05% capitalization rate based on $17,367 net operating income divided by $287,056 purchase price.
CALCULATED IMPROVEMENT COST PER SF BASED ON ALTERNATIVE LAND VALUATIONS PER SQUARE FOOT
Based on the Comparative Model described below, available properties and the comparative considerations indicated for the Chappell Hill Antique Mall, the following model estimates the calculated cost per SF of improvements based on your valuation of the land “Existing Improvement Cost Model”.
Assumptions: (1) $287,056 sales price and (2) 5,440 SF of improvements (5,440 SF in the Main Building and no square feet allocated to the Storage Building).
Model overview: (1) Input land investment cost basis, (2) Deduct land investment cost basis from sales price to estimate improvement cost; and (3) Convert improvement cost to a cost per SF.
Example: The 8770 US Highway 290 East property pricing is $5.34 per SF. You decide that is a reasonable price for that property. Based on your comparative considerations, you decide to value the Chappell Hill Antique Mall land at $5.50 per SF and you purchase the Chappell Hill Antique Mall at $287,056. Your resulting improvement cost is $8.73 per SF.
Calculation:
(1) Land valuation of $5.50 per SF = $239,580 ($5.50 per SF * 43,560 SF in an acre)
(2) Improvement valuation = $47,476 ($287,056 less $239,580)
(3) Improvement valuation per SF = $8.73 ($47,476 improvement valuation / 5,440 SF of improvements)
The following summarizes the calculated improvement valuation per SF at different land valuations per SF:
(1) $4.00 per SF for land = $20.74 improvement valuation per SF
(2) $5.00 per SF for land = $12.73 improvement valuation per SF
(3) $6.00 per SF for land = $4.72 improvement valuation per SF
(4) $6.59 per SF for land = $0.00 improvement valuation per SF
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Attached Documents
Document 1
Document 2
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Contact Information
Company: Coldwell Banker Commercial Southwest
Name: Administrator
Email: Click Here to Email
Phone: 979.421.9996
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