Blinds To Go | "Trophy" King of Prussia Mall-Oriented Offering

Listing Blinds To Go | “Trophy” King of Prussia Mall-Oriented Offering Price:$3,205,000 Status:For Sale is pleased to offer for sale 651 DeKalb Pike, a rarely available single-tenant net lease opportunity in the highly desirable King of Prussia Mall submarket. Presently the building is under lease agreement to Blinds To Go, an international retailer selling window coverings. This high traffic and immensely visible location was constructed in 1999 and operated as a furniture store for the tenant Bellini. The building is approximately 5,184 square feet, according to public record, which partially consists of a mezzanine level. In 2006, Blinds To Go assumed from Bellini and guaranteed the lease assignment and extended the lease term through April of 2023. The lease stipulates that the rent will increase annually based upon the trailing years Consumer Price Index (CPI). An investor will immensely benefit from this rental increase structure as most net leases today only provide increases every five years and with a cap of 10% cumulatively. Additionally, while this is a unique location and space for the tenant, one can justify this rental rate is at or below market rental rates today. Nearby owners are seeking $50 PSF in rent for similar spaces and the Bank of America and Jared’s pads are leased at a rate of over $80 PSF. Furthermore, the current lease has a base year tax expense paid by the landlord meaning that the landlord must first contribute $12,179 annually towards the real estate taxes. A new national retailer would likely execute a triple net lease which in turn would allow the ownership to fully recapture this cost and further increase the income of the property. Lastly, purchasers will receive the benefit of approximately ten years of lease term remaining. The tenant has one option remaining of five years, and the lease stipulates that the option is the greater of the base rent the year proceeding or the prevailing market rental rate within a one mile radius of the property. This should provide the landlord a favorable negotiating position upon expiration of the lease with the rent growth that is historically occurred in this submarket. The lease is guaranteed by Blinds To Go, Incorporated, a privately held, Montreal, Canada-based company with more than 100 locations including seven in the Philadelphia region. Pursuant to the lease, the tenant must retain a $175,000 letter of credit with HSBC which provides the investor additional security. Without question, furniture and home design retailers are attracted to this “mall oriented” location as in just a half-mile of the subject Porcelanosa (high-end tile show room), Pier One, Crate and Barrel, and many other high margin retailers occupy space. The King of Prussia Mall opened in 1963 and today had amassed more than 2,396,000 square feet of retail space making it the largest mall in the United States. High land costs and the maturity of this corridor should make this an excellent long term hold for any investor.

Blinds To Go | "Trophy" King of Prussia Mall-Oriented Offering