Single Tenant Net Leased Shopko For Sale

NET LEASED INVESTMENT OFFERING
www.bouldergroup.com
Shopko Hometown
1140 East Fifth Street
Winner, SD 57580

1) Confidentiality & Disclaimer
2) Executive Summary
3) Property Overview
4) Site Plan
5) Map
6) Tenant Profile
7) Demographic Comparison Report
8) Location Overview
9) Contact Information
TABLE OF CONTENTS
TABLE OF CONTENTS

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 The Boulder Group and should not be made available to any other person
or entity without the written consent of The Boulder Group. This Offering Memorandum has been prepared to provide
summary, unverified 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. The
Boulder Group has not made any investigation, and makes no warranty or representation. The information contained
in this Offering Memorandum has been obtained from sources we believe to be reliable; however, The Boulder Group
has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group 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.
CONFIDENTIALITY & DISCLAIMER
CONFIDENTITALITY & DISCLAIMER

The Boulder The Boulder Group is pleased to exclusively market for sale a single tenant net leased Shopko Hometown
property located in Winner, South Dakota. The property is well located along US Route 183 and Shopko has been operating
at this location for over twenty years. This is a successful Shopko Hometown location as evidenced by the percentage rent
that the retailer has historically paid as well as Shopko’s decision to execute an early lease extension in 2007. There are
eight years remaining on this net lease that features a rental escalation in the primary term and in each renewal option
period. Shopko is a privately owned $3 billion retailer with 330 stores in 21 states.
The Shopko Hometown property is located along US Route 183 at the southern entry point to the town of Winner. US
Route 183 is the primary thoroughfare in the region. Shopko Hometown faces limited competition as the closest Walmart
is located over 75 miles away in Pierre, South Dakota. Furthermore, Shopko Hometown is the only national pharmacy in
the community.
The Shopko benefits from a long standing operating history at this location and strong brand recognition within the
community. Shopko has successfully operated at this location since 1991 and executed an early lease extension in 2007
to extend the lease until 2022. This Shopko location has above average store sales and pays percentage rent. Additionally,
this store has a rent-to-sales ratio significantly below five percent, inclusive of percentage rent.
There are eight years remaining on this absolute net lease that expires on November 30, 2022 and features a rental
escalation in the primary term and in each renewal option. The lease has two 5-year renewal options. Shopko is $3 billion
retailer that operates over 330 stores in 21 states.
INVESTMENT HIGHLIGHTS
• Tenant is a privately held $3 billion retailer that operates over 330 locations in 21 states
• Absolute net lease with no landlord responsibilities
• Rental escalation in the primary term and in each renewal option period
• Low rent-to-sales ratio (below 5%)*
• Long standing operating history at this location (1991)
• High-end construction
• Proven location as evidenced by the early lease extension that was
executed in 2007
• Located along the region’s primary thoroughfare
• Only national pharmacy in the community
• Closest Walmart is located over 75 miles away in Pierre, South Dakota
• New roof in 2012
• Located approximately 50 miles to the east of the Rosebud Sioux Indian Reservation which is home to 25,000 Native
Americans. Residents of the reservation go mainly to Valentine, NE and Winner, SD for shopping. Valentine does not
have a Walmart or a Shopko. The residents are an important part of the Winner economy.
*Inclusive of percentage rent
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY

Price: $2,685,000
Current Cap Rate: 8.60%
Rent Schedule: Base Rent Percentage Rent Total NOI Escalation Date
$219,727 $10,900 $230,627
$225,924 $10,900 $236,824 12/1/17
$231,583 $10,900 $242,483 12/1/22 (Option 1)
$237,372 $10,900 $248,272 12/1/27 (Option 2)
Renewal Options: Two 5-Year
Lease Commencement Date: March 14, 1991
Lease Expiration Date: November 30, 2022
Tenant: Shopko Hometown
Year Built: 1991
Lease Type: NNN
Building Size: 41,912 SF
Land Size: 4.02 acres
PROPERTY OVERVIEW
PROPERTY OVERVIEW

SITE PLAN
SITE PLAN
N
E.5THSTREET

MAP
MAP

Shopko is a chain of retail stores based in Green Bay, Wisconsin. Shopko operates approximately 330 stores
located in 21 states and generates annual sales of approximately $3 billion. Shopko provides quality name-brand
merchandise, great values, pharmacy and optical services in small to mid-sized cities. In December 2005, the
company was acquired by an affiliate of Sun Capital Partners.
In 1999, Shopko purchased Pamida, a regional discount chain that operated mainly in smaller communities
of 3,000 to 8,000 people. Shopko operated Pamida as a separate division until 2007, when Pamida was
separated from Shopko and reestablished as a separate company. However in 2012, Shopko and Pamida
merged into one company with most Pamida stores becoming Shopko Hometown stores. The Winner, South
Dakota location was rebranded as a Shopko.
Shopko operates under three different brands; Shopko, Shopko Express and Shopko Hometown. Shopko
Express is a chain of pharmacies that carry a limited selection of general merchandise, groceries, beer, wine,
health and beauty supplies, and over-the-counter medicines. Shopko Hometown is Shopko’s newest concept
which is aimed at smaller communities ranging from 3,000 to 8,000 in population, and carry about 70% of the
merchandise carried at Shopko’s larger stores. In addition to the multiple brands Shopko operates, in 1999,
Shopko signed a contract with Payless Shoes to lease the chain floor space within Shopko stores.
Sun Capital Partners, Inc. is a leading private investment firm focused on leveraged buyouts, equity, debt, and
other investments in market-leading companies that can benefit from its in-house operating professionals and
experience. Sun Capital affiliates have invested in and managed more than 165 companies worldwide with
combined sales in excess of $35.0 billion since Sun Capital’s inception in 1995. Sun Capital has offices in Boca
Raton, Los Angeles, and New York, and affiliates with offices in London, Tokyo, and Shenzhen, China.
Website: www.shopko.com
Number of Locations: 330
State Locations: 21
Standard & Poor’s Rating: Private
Employees: 17,500
TENANT PROFILE
TENANT PROFILE

Population 3-mi 5-mi 7-mi
Total Population 3,271 3,444 3,564
Total Households 1,445 1,519 1,568
Income
Median Household Income $42,232 $42,189 $42,222
Average Household Income $53,959 $53,939 $54,071
DEMOGRAPHIC COMPARISON REPORT
DEMOGRAPHIC COMPARISON REPORT

Winner, South Dakota is a city in Tripp County. It is the county seat of Tripp County and also
serves as the administrative center of neighboring Todd County, which does not have its own
county seat. As of the 2010 census, Winner had a population of 2,897.
Winner is very well known for its pheasant season. Pheasant season runs from October to
December and brings many tourists to the region from all over.
www.winnersd.org
LOCATION OVERVIEW
LOCATION OVERVIEW

CONTACT INFORMATION
CONTACT INFORMATION
666 Dundee Road, Suite 1801
Northbrook, IL 60062
Randy Blankstein
President
847.562.0003
rblank@bouldergroup.com
Jimmy Goodman
Partner
847.562.8500
jimmy@bouldergroup.com

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