Property Type: Retail
Status: In Contract
Address: 51382 Gratiot Avenue
Chesterfield, MI 48051
|CAP Rate: 8.47%|
Square Feet: 155,958
Tenancy Type: National
Lease Type: NNN
The Cooper Commercial Investment Group has been exclusively retained by ownership to sell Chesterfield Village, a regional power center shadow anchored by Target. The corporately owned Target location is known as one of the top five stores in the region and top performer in sales on a per square foot basis. Other tenants that report sales have all demonstrated continued success and high performance with reports well above the chain averages and many with approximately double the sales volume of the national average!
The featured center is located in up and coming, Chesterfield Township, a suburb just north of Detroit, Michigan, which has been in the midst of a substantial residential boom over the last several years. The asset has been significantly reduced to $15,250,000, representing an 8.47% CAP, $97/S.F. and high expected year-1 cash-on-cash return of 12.68%, yet still offers upside through lease-up of the remaining vacancy (8%), which is below current market occupancy rates of 97%. Additionally, ownership has just executed a new lease with nationally tenant Label Shopper. The lease is far below market rental rates but gives a Buyer the unique ability to increase rents for the space by $40,000/year, which is potentially huge upside. If a replacement tenant LOI is presented to the tenant within two years of their lease date, the tenant has the option to either increase their rent from $60k per year to $100k per year or will need to vacate the space for the replacement tenant.
The entire development was built in phases between 1995-2003 and renovated 2007-2009. The 155,958 S.F. center has a fantastic corner location with high visibility and prominent signage. The asset is occupied with strong, highly recognizable, national tenants, including: Applebee’s (Ground Lease), Panera Bread (NASDAQ: PNRA), Buffalo Wild Wings, Harbor Freight Tools, Famous Footwear (NYSE: BWS), Dunham’s, Sally Beauty Supply (NYSE: SBH), GNC (NYSE: GNC), CATO (NYSE: CATO), Advance America, Payless Shoesource Superstore, Little Caesar’s, Staples (NASDAQ: SPLS), Anytime Fitness and several other well-known users. A number of the tenants have been at the center since original development and have consistently exercised renewals. In fact, many just recently executed lease extensions demonstrating their success at the center and in the Chesterfield market. Most of the tenants at Chesterfield Village are on NNN lease structures, reimburse for administrative/management fees and have rental increases during their current lease term, providing future income growth. The development, coupled with its strong shadow anchor Target, has created a very stable asset.
Located at the hard corner of Gratiot Avenue and 23 Mile Road, Chesterfield Village is strategically positioned along I-94, the direct route to Downtown Detroit. The center is situated in the heart of the retail corridor, which boasts 2.2 million square feet of retail with 97% occupancy and is directly across from or surrounded by numerous complimentary retailers including: Meijer, Home Depot, Lowe’s, Michael’s, Dollar Tree, PetSmart, Chipotle, Kohl’s, Best Buy, Five Below, Old Navy, T.J. Maxx, AutoZone, Qdoba, Starbucks, Hobby Lobby, Kohl’s and many more. Due to the tremendous amount of retail, the area draws from a minimum of 15-20 miles to the north as the next closest Target is over 34 miles away. Chesterfield has become a main shopping destination for most of the northern suburbs, and Macomb County boasts 3 of the top 10 most populated communities in all of Michigan.
Positioned along the I-94 corridor, the retail destination is located in a strong residential community with average household incomes over $91,000 within 5-miles. Directly adjacent to the property a brand-new senior living community, StoryPoint, which is currently under development is set to open in the spring of 2019, offering an additional 204 apartments. Traffic counts surrounding the center are over 54,000 vehicles per day, while traffic counts along I-94 are 57,000 VPD. Additionally, the property sits just 5 miles north of the Selfridge Air National Guard Base, which hosts over 6,000 personnel, 1,000 daily employees and has recently invested $32.6 million into the base to further enhance operations. Furthermore, Chesterfield is part of Metro Detroit approximately 31 miles north of the city and many people from the suburb commute to Detroit, along I-94 for work and recreational activities. About 80,500 people work in Downtown Detroit, comprising one-fifth of the city's employment base. With this property’s strategic placement, along with its proximity to employees and residents; this asset is positioned as a high-quality investment that is poised to generate substantial returns for years to come.
Full Offering Memorandum