Rogue Valley Mall - Sale
1600 N Riverside Ave, Medford, OR, 97501-4652, US
59,860 m²
JLL is pleased to offer for sale the JCPenney box located in Columbia, MD (referred to as the "Property" or the "Asset"). With a NNN lease in place, the Tenant, JCPenney, enjoys 16 years remaining on the lease term, featuring 2% annual rent increases, 5 renewal options, and a corporate guaranty. The Asset is strategically positioned within The Mall in Columbia, which is owned and operated by Brookfield Properties, the second-largest retail shopping center property management company in the U.S. The mall consists of 203 stores with a total retail space of 1.4 million SF, boasting a wide array of national brands such as Apple, Tesla, Macy's, Nordstrom, Chick-Fil-A, Chipotle, and McDonald’s.
Benefiting from its association with Brookfield Properties, The Mall in Columbia, under its operational expertise, has successfully attracted 9 million annual shoppers, positioning the mall in the 83rd percentile among the most frequented super-regional malls in the U.S. As a result, The mall boasts an “A” grade from Green Street and generates $882/SF in annual sales. Additionally, a 472-unit Class A apartment complex was recently delivered down the street and a state-of-the-art medical office is under construction one-block from the Property.
The Asset’s coveted location at heart of the densely populated, planned urban development in Columbia, Maryland — one of the wealthiest cities in the nation with annual household incomes exceeding $170,000 and substantial population growth in the last decade. It is also recognized as one of the safest and one of the healthiest cities in the nation. The strong demographics and proximity to Washington DC (20 miles) and Baltimore (14 miles) provide proximity to major corporations, government facilities, and medical institutions.
The lease is guaranteed by several restructured JCPenney corporate entities (implicitly backed via a Brookfield & Simon joint venture), which are required to maintain a $925M tangible net worth value and 12 months of liquidity. JCPenney is also in a very favorable liquidity position today, with current cash on-hand of $205M and total available liquidity of approximately $1.6B. Further, JCPenney has less than $500M of outstanding long-term debt and no outstanding borrowings on its line of credit.
This offering presents a passive income opportunity to an investor seeking growing long-term cash flow, 2% annual rent growth at below market rent, and an absolute NNN lease with zero landlord responsibilities in the 2nd highest ranked regional mall in Maryland (per PlacerAI).
EXCEPTIONAL CORRIDOR IN A PREMIER MARKET
•The Asset is situated within the Columbia Mall, Maryland’s second busiest shopping center with more than 9 million annual visits, per Placer.ai.
•The Columbia mall is graded “A” by Green Street and achieves exceptional annual sales of $882/SF.
•Prominent retailers and restaurant brands surround the Asset including Apple, Chick-fil-A, Lululemon, Maggiano’s, Whole Foods, Cheesecake Factory, and more.
•The center is positioned adjacent to Hwy 29 with exposure to 84,206 vehicles per day.
•In 2013 the mall completed a significant renovation & expansion project which added more than 70,000 square feet of space as well as an outdoor lifestyle component.
•The Property is across the street from the South Lake Medical Office building, an 80,000 SF state-of-the-art facility currently under development.
•Johns Hopkins Howard County Medical Center is less than 1.5-miles from the Asset and services 225-beds.
•The surrounding city of Columbia is centrally located between downtown Baltimore and Washington D.C and is widely recognized as one of the wealthiest, safest, and most educated cities in the United States. Average household incomes within the greater Howard County exceed $170,000.
•Since 2010, the Asset’s surrounding 1-mile population has grown by more than 20%, spurring economic development in the area through new residential units, office, retail, and recreation space.
OUTSTANDING LOCAL RETAIL FUNDAMENTALS
•Columbia is one of the most sought-after retail markets in the Baltimore metro. Average rents command nearly $30/SF, the highest of any submarket in the Baltimore MSA.
•Retail vacancy within Columbia currently sits at 4.4% and is considerably below vacancy in surrounding markets.
•Currently, 17,000 square feet of retail space is under construction in Columbia and additional developments are in proposal.
LONG-TERM SITE COMMITMENT WITH FAVORABLE LEASE ECONOMICS
•The Tenant operates on a 20-year lease with over 16-years of guaranteed remaining term, a testament to JCPenney’s long-term commitment to this location.
•The Tenant’s rent cost of $3.65/SF is substantially below market rents of $29.61 and offers a significant mark-to-market opportunity for ownership in the future.
•The lease features annual rent growth and a NNN structure, leaving Landlord with zero financial obligations.
•The lease is guaranteed by several restructured JCPenney corporate entities (implicitly backed via a Brookfield & Simon joint venture) which are required to maintain a $925M tangible net worth value and 12 months of liquidity.
•In the trailing twelve months, the collective guarantor entities have reported cumulative four-wall EBITDA of $60.2M across 127 total locations.
•Significant EBITDA growth is expected in 2024 – 2025 following $52M of capital expenditures projects to help drive long-term growth.
•Very healthy balance sheet with significant cash on-hand of approximately $205M, total available liquidity of approximately $1.6B, and less than $500M of outstanding long-term debt, and no outstanding borrowings on its line of credit.