REAL ESTATE SALE CASE STUDY

Background

SALES INFORMATION

Property Location:

1424-1450 N FEDERAL HWY,

BOCA RATON, FL 33432

Price $5,990,000

Sale Type Investment

Cap Rate 7.01%

Sale Conditions Lease Option

Property Type Retail

Property Sub-type Restaurant

Less

 General Retail
Freestanding

 General Retail
Storefront
Retail/Office

 Office Medical

Building Class C

Lot Size 1.36 AC

Gross Leasable Area 7,615 SF

No. Stories 1

Year Built 1970

Tenancy Single

Parking Ratio 10/1,000 SF

Zoning Description B4

APN / Parcel ID 06-43-47-20-15-001-

0011

Date Created 5/29/2019

ID#: 16181065
Last

Updated: 6/18/2019

DESCRIPTION

Total 7615 Sq. Feet 6,000 Square foot Under Air, with a 1,615 square foot Outdoor
Covered Patio and deck for outside dining.

HIGHLIGHTS

 Local 24-Hour always open 30 year old diner chain currently in three locations

 Walking distance to Downtown and Mizner Park and the Museum. Additionally, the IPIC
Theater is just within half mile

 Property can seat 259 combined inside and outside, 93 Parking spaces and a covered
patio seating with a full bar and wine case set up

 Located on the FAU (Florida Atlantic University) corridor on Federal Hwy just north of
Glades Road with a B-4 Zoning

 Current tenant in building is relocating by August 31st, 2019 meaning this is a wonderful
owner/user OR investment opportunity

 Strategically positioned along heavily trafficked North Federal Highway with a Vehicle
Per Day count of over 34,000 cars

SALE NOTES

Free-Standing Restaurant Building, For SALE at $5,995,000 OR NNN Lease for $35,000

monthly, plus $4,200 in property taxes monthly Current Tenant Relocating by July 2019 or

August 2019. The property is offered for Sale or Lease By the Owner. Half A Mile North of

Mizner Park, Boca Downtown Museum, and IPIC Theater. Free Standing Luxury Building

recently renovated in 2013, In and Out. The current tenant operates 7 Days a Week, 24 Hours.

Tenant scheduled to vacate in July or August of this year, per request. Exterior covered Patio

and partially uncovered with Fire torches and Water Fountain. Full Bar and Wine Cabinet

Display area. Dining room Kitchen with Hood, separate Chef’s Kitchen with Hood and Main Line

Kitchen with On Demand Hood.

Brokers Representation of Property owners position

1) The Owners position: What do they want? Why?

The Seller would like to capitalize on his most profitable real estate holdings. Selling the

property at maximum return is the Owner’s ultimate goal, and she realizes that the age

of the building is eventually going to present problems in any future sale, even though

the building was recently completely renovated. The building owners’ interest is to sell,

preferably within the next two months, before or on the date of the current lease

terminates. If not, the Owner’s carrying cost increases since the building may go vacant

until she identifies a new leaseholder. A sale solves all of the Owner’s issues because

the price includes the Amortization of the building renovation costs in the asking price,

including a six-month lease recovery premium in the event the building was to remain

vacant until a sale. The Broker has stated that that the Owner would consider a lease

arrangement either a straight term or a Triple Net lease. There is also the option for any

variation such as a Net or Net-Net Lease with terms such as taxes, utilities,

Amortization of the renovation costs, and rent-plus percentage based on Gross income

from the Restaurant.

The property owner believes that the property fits well within Sally’s plan to establish a

new Restaurant. Great location, floor setup, lots of parking. The current tenant has had

an exceptional long-term reputation in the area, and the customer base should help

establish and carry over to the new Restaurant.

The though is that If the purchase price is too top-heavy, maybe they will consider the

NNN Lease options. There may be some room for negotiation on the purchase price,

but that depends on Sally’s costs model. There may be a slight margin based on the

carryover of the tenant or discounting the lease price if Sally assumes the final lease

period any holdover pass the lease period. Also, the cleanout costs are high, and

maybe if there was an assumption of that responsibility, there could be adjustments

made.

An assumption probably would make sense if Sally wants to get in early to renovate to

the floor plan and set up the kitchen and dining floor and start ordering and stocking

foodstuff.

The Owner believes that his walk-away alternative is that he will not go over a 20%

discount on all pricing terms. He is willing to carry the property until a buyer comes

along within, at least the end of the current tenant lease expires.

The Owner will discount the price of the sale by as much 30% net thirty-days if offered a

cash buyout and not have to wait for financing to take place.

The Owner realizes that the best solutions for both parties would be to reach a

reasonable price reduction with incentives to close early and turn lease period revenue

over to the buyer.

FINANCIAL SUMMARY (PRO FORMA – 2019)

Gross Rental Income

Annual $420,000

Annual Per SF 55.15

Other Income

Annual –

Annual Per SF –

Vacancy Loss

Annual –

Annual Per SF –

Effective Gross Income

Annual $420,000

Effective Gross Income

Annual Per SF 55.15

Net Operating Income

Annual –

Annual Per SF –

DEMOGRAPHICS

[1 Mile /]

HOUSEHOLD INCOME

$0K – $35K 32% $35K – $75K 34.4% $75K – $100K 10.2% $100K+23.4%

Income Thousand

$0K – $35K 1,775

$35K – $75K 1,910

$75K – $100K 564

$100K+ 1,299

$96,376

Average

AGE DISTRIBUTION

0 – 1920.1%20 – 2913.6%30 – 3914.8%40 – 4912.4%50 – 6420.8%65+18.4%

Age Year

0 – 19 2,869

20 – 29 1,934

30 – 39 2,113

40 – 49 1,763

50 – 64 2,962

65+ 2,618

41.4

Average

TRADE AREAS

1 mi 3 mi 5 mi

[15 Min Drive /]

Total Population

1 Mile 14,259

3 Mile 74,783

5 Mile 177,827

2010 Population

1 Mile 9,942

3 Mile 57,482

5 Mile 153,525

2024 Population

1 Mile 15,710

3 Mile 81,307

5 Mile 190,006

Employees

1 Mile 15,760

3 Mile 84,516

5 Mile 171,639

Total Businesses

1 Mile 2,191

3 Mile 8,493

5 Mile 15,527

Average Household Income

1 Mile $96,376

3 Mile $110,391

5 Mile $98,696

Median Household Income

1 Mile $59,231

3 Mile $74,611

5 Mile $65,969

Total Consumer Spending

1 Mile $163.57M

3 Mile $936.46M

5 Mile $2.2B

Median Age

1 Mile 41.2

3 Mile 47.1

5 Mile 48.7

Households

1 Mile 6,325

3 Mile 32,447

5 Mile 81,325

Percent College Degree or Above

1 Mile 25%

3 Mile 27%

5 Mile 26%

Average Housing Unit Value

1 Mile $498,302

3 Mile $547,651

5 Mile $460,971

MAJOR TENANT INFORMATION

FLASHBACK DINER

SF Occupied 7,615

Lease End Date July 2019

AMENITIES

 Signage
 Monument Signage

TRAFFIC

Collection Street: N Federal Hwy

Cross Street NE 15th Ter, SW

Traffic Vol 34,622

Year 2018

Distance 0.14 mi

Collection Street: NE 5th Ave

Cross Street NE 16th St, N

Traffic Vol 6,578

Year 2018

Distance 0.18 mi

Collection Street: Glades Rd

Cross Street N Federal Hwy, E

Traffic Vol 22,699

Year 2018

Distance 0.24 mi

Collection Street: Glades Rd

Cross Street N Federal Hwy, E

Traffic Vol 22,744

Year 2018

Distance 0.28 mi

Collection Street: NE 20th St

Cross Street NE 4th Way, NE

Traffic Vol 15,308

Year 2018

Distance 0.28 mi

PUBLIC TRANSPORTATION

COMMUTER RAIL

Boca Raton Commuter Rail (Tri-County

Commuter)

Drive 9 min

Distance 4.1 mi

Deerfield Beach Commuter Rail (Tri-County

Commuter)

Drive 13 min

Distance 5.5 mi

AIRPORT

Palm Beach International Airport

Drive 37 min

Distance 25.7 mi

Fort Lauderdale–Hollywood International

Airport

Drive 38 min

Distance 26.7 mi

WALK SCORE ®

85

Very Walkable

TRANSIT SCORE ®