Investment Details
  • Location Middlebury, Vermont
  • Investment Type Equity 506(b)
  • Property Type Retail / Shopping Center
  • Distribution Schedule Quarterly
  • Targeted Hold 7 - 10 Years
  • Targeted IRR 11.00 - 14.00%
  • Targeted Cash on Cash 9.00 - 12.00%
  • Total Transaction Size $7,800,000
  • Minimum Investment $10,000

Middlebury Commons Middlebury, Vermont

 Confidential Private Placement Memorandum - July, 2014

 This property is no longer open for investment. In the future, shares may appear on the exchange.

Photos

Middlebury Commons Middlebury Wide View Strip Corner View Strip Shaw's Distance View Strip Distance Shaw's at Middlebury Commons

About This Investment

Middlebury Commons is a +/- 38,690 square foot retail center that is 100% master leased and occupied by Shaw’s Supermarkets. Middlebury Commons is one of two grocery anchored shopping centers located within a 10 mile radius that service Middlebury and its surrounding communities. Middlebury Commons is strategically located at the intersection of Route 7 and Washington Street truly in the geographic center of Middlebury and the closest shopping center to Middlebury College, one of the United States’ elite liberal arts colleges founded in 1800. In the summer, the town plays host to the annual Middlebury College Language Schools, as well as the college’s Bread Loaf Writers’ Conference, the oldest surviving conference of its kind in the nation.

Today, as the largest town by population in Addison County, Middlebury serves as the commercial and business center for the region. Downtown hosts a movie theater, the post office, and two historic inns, as well as many shops and restaurants. There is considerable development along U.S. Route 7 heading south of town, including Shaw’s and Hannaford supermarkets, two drugstores, gas stations, and several fast-food restaurants. Of note is Middlebury’s A&W, Vermont’s only remaining car-hop restaurant and a popular spot with both locals and Middlebury College students. Along with A&W, Middlebury also has a McDonald’s, a Dunkin’ Donuts, and a Subway for fast food restaurants. Middlebury Commons consists of a 33,690 square foot Shaw’s Supermarket and a 5,000 square foot outparcel leased to Green Pepper’s Restaurant, Joe’s Barbershop, Mountain Fresh Cleaning, and a small vacancy. All of the small tenants have been longstanding tenants in the community and are popular destinations for the Middlebury students and faculty. Shaw’s Supermarkets currently master leases the entire 38,690 square feet. The lease is an absolute net lease which requires no obligation on the landlord to maintain or replace anything in the shopping center. Shaw’s currently has annual sales of $416 per square foot.

Constructed in 1993, Middlebury Commons was originally built and tenanted by Grand Union Markets and the lease was assigned to Shaw’s Supermarkets in March of 2001. The +/- 38,690 square foot shopping center sits on 3.69 acres of land at the major intersection in Middlebury.

Middlebury Commons offers investors the ability to acquire a 100% absolute net leased asset occupied by a strong regional credit tenant at $196.43 PSF which is below replacement cost. Crosspoint also sees future value-add opportunities as Shaw’s may be willing to give back the 5,000 square foot outparcel building that Crosspoint would retenant with National tenants at current market rents.

Highlights

  • 100% Absolute Net Lease to one of New England’s dominant grocers.
  • Limited new supply due to Vermont’s extremely high barriers to entry.
  • Future upside potential with the recapture and retenanting of the master leased pad.
  • Closest grocery store to Middlebury College.
  • Purchase price below replacement cost.

Investor Returns

This calculator predicts your cash flow based on your initial investment and the targeted returns for the property. The output is based on an investment made on day one of the offering.

Returns
Total Proceeds
Total Profit
Average Cash On Cash
Internal Rate of Return
Equity Multiple
Ownership
Total Basis
Legal Fees
Percent Ownership
* The return of capital fee is only processed once the investor receives a full return of initial capital, excluding operating distributions.

Property Description

Property Description

Address 8-10 Washington Street, Middlebury, VT 05753
Site Area +/- 3.69 Acres
Year Built 1993
Total GLA 38,690 Square Feet
Parking Ratio +/-170 (4.39 per 1,000 SF)
Foundation Concrete slab
Structure Steel frame with concrete block and vinyl siding
Roof Flat rubber membrane
Interior Construction Standard improvements for units include commercial-grade carpeting and/or vinyl floor covering, painted sheet rock walls, and dropped celotex and sheet rock ceilings.
Lighting Fluorescent ceiling units, recessed in most  finished areas, track lighting in several suites
HVAC Rooftop, gas-fired heat and electric cooling
Electric Green Mountain Power
Water/Sewer Municipal
Heat Gas

Property Aerial

Middlebury Aerial

Site Plan

Middlebury Site Plan

Tenant Roster

Tenant Name Square Footage Base Rent PSF Base Rent Annual
Shaw's Supermarket  38,690 $15.07 $583,058
Totals 38,690 $15.07 $583,058

Lease Expiration Chart

Middlebury Lease Expiration Chart

Major Tenant Profiles

shaw-stars-logo

Shaw's and Star Market are two American grocery store chains based in West Bridgewater, Massachusetts,employing about 30,000 associates in 155 stores. 137stores are operated under the Shaw's banner in Maine, Massachusetts,New Hampshire, Rhode Island,and Vermont, while Star Market operates 18 stores in Massachusetts. Until 2010, Shaw's operated stores in all six New England states and as of 2011 Shaw's remained the only supermarket chain with stores in five of the six after it sold its Connecticut operations. The chain's largest competitors are Hannaford, Market Basket, and Stop & Shop. Star Market is a companion store to Shaw's; Shaw's having purchased the competing chain in1999. Shaw's Supermarkets, which traces its roots to 1860, is owned by New Albertson's Inc., an entity controlled by the private equity firm Cerberus Capital Management. Shaw's Supermarkets was one of five grocery chains sold by former parent SUPERVALU in March 2013 for an aggregate price of $3.3 billion to Cerberus CapitalManagement.

Investment

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Financials

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Market

Overview

Middlebury Vermont was chartered in 1761 and was settled just after the Revolutionary War. Today, the village is listed on the National Register of Historic Places and is home to many shops, businesses and architecturally distinguished churches and public buildings. It is the largest community in the county with a population of approximately 8,200. Passing through the heart of the historic village is the Otter Creek, the longest river in Vermont. You can see its powerful waterfall from the Battell Bridge and through the windows of the art gallery that was once a mill. Middlebury hosts the Henry Sheldon Museum of Vermont History. In Cannon Park, across from the museum, there is an historic marker commemorating John Deere and his invention of the "the plow that broke the plains." From 1821 to 1825 Deere apprenticed at an area blacksmith shop. Deere then moved to Illinois where he built the world's first steel moldboard plow. Middlebury is also home to the internationally recognized Middlebury College which has a Performing Arts Center as well as an excellent Museum of Fine Arts. There is also an extensive sports complex at the college which hosts many nationally ranked and rated sports teams. For example, the men’s and women’s hockey teams have each been the NCAA national champions on numerous occasions and are strongly supported by the Middlebury community. Middlebury and Middlebury College are hosts to numerous events throughout the year. Annual events include the Vermont Symphony Concert and Fireworks (www.henrysheldonmuseum.org), the Festival on the Green (www.festivalonthegreen.com), which is a week-long event, and the After Dark Music Series (www.afterdarkmusicseries.com), which brings some of the best nationally known Folk, Celtic, Blues, and Acoustic performers to the area.

Demographic Data

  3 mile radius 5 mile radius 10 mile radius
Population 2013 7,572 10,351 20,421
Population 2018 Estimated 7,659 10,494 20,631
Population 2010 Census 7,457 10,170 20,115
Households 2013 2,442 3,570 7,644
Households 2018 Estimated 2,512 3,672 7,810
Households 2010 Census 2,369 3,465 7,471
Families 2013 1,304 2,071 4,873
Families 2018 Estimated 1,324 2,104 4,929
Families 2010 Census 1,274 2,022 4,786
Avg. Household Size 2013 2.07 2.19 2.34
Avg. household Size 2018 Estimated 2.05 2.17 2.31
Avg. Household Size 2010 Census 2.08 2.21 2.35
Owner Occupied Housing Units 2013 1,402 2,301 5,487
Owner Occupied Housing Units 2018 Estimated 1,435 2,363 5,617
Owner Occupied Housing Units 2010 Census 1,351 2,221 5,327
Renter Occupied Housing Units 2013 1,041 1,269 2,158
Renter Occupied Housing Units 2018 Estimated 1,077 1,309 2,193
Renter Occupied Housing Units 2010 Census 1,018 1,244 2,144
Median Age 2013 25.50 32.70 40.60
Median Age 2018 Estimated 27.10 33.90 41.50
Median Age 2010 Census 25.00 32.00 39.90
Median Household Income 2013 $42,295 $48,210 $53,114
Median Household Income 2018 Estimated $50,718 $55,174 $60,551
Average Household Income 2013 $58,977 $63,890 $66,910
Average Household Income 2018 Estimated $66,310 $71,793 $74,689

Competitive Set

# Grocer Address Distance from Subject
1 Hannaford 260 Court St #6, Middlebury, VT 05753 1.1 miles
2 Shaw's 7 Prince Ln Bristol, VT 05443 12.5 miles
3 Shaw's 115 Monkton Rd Vergennes, VT 05491 12.6 miles

Competitive Map

Middlebury Competitive Map

Sales Comparisons

Shopping Center Address Sale Date Sales Price Cap Rate Anchor Tenants Total GLA
Shaw's Portfolio Cohasset, Easton, Hanover plus Hannaford in Waltham Under agreement $53,0000,000 7.0% Shaw's, Hannaford 280,000
Durgin Square 1600 Woodbury Ave, Portsmouth, NH May-14 $24,700,000 7.0% Shaw's, Homegoods 138,000
Stop & Shop 1690 Rever Beach Pkwy, Everest, MA Mar-14 $12,800,000  5.50% Stop & Shop 87,834
Summer Street Marketplace 1415 Boston Providence Tpke, Norwood, MA Feb-14 $15,800,000  6.60% Stop & Shop, Home Depot 202,150
Elmwood Plaza 176 Newington Rd, West Hartford, CT Dec-13 $14,250,000  6.50% Stop & Shop, Dollar Tree 80,000
Manchester Shopping Center 263 Depot Street, Manchester, VT Jun-13 $6,885,000  7.60% Price Chopper 65,777

Rent Comparisons

Tenant City State Rent Start GLA Rent (PSF) Type
Shaw's Waterbury VT Mar-06 50,358 $15.60 NNN
Shaw's Berlin Corners VT N/A 65,794 $16.35 NNN
Shaw's Manchester VT Feb-99 39,973 $17.56 NNN
Price Chopper Manchester VT Jun-73 15,686 $14.70 NNN

Management

Crosspoint Associates

Crosspoint Associates, Inc. specializes in the ownership, management and development of supermarket anchored retail properties, community shopping centers, mixed use properties and office properties throughout New England. Crosspoint also provides development and management services to a number of national and local corporations and financial institutions. Our mission is to provide wealth enhancement to our Investors, Partners and Members through real estate investment management and development while providing our employees with a positive and rewarding work environment.


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