Single Tenant Harbor Freight Tools

Cambridge, MN

Download Offering Memorandum

The Opportunity

Summary

  • Price: $1,529,000
  • Cap Rate: 6.50%
  • NOI: $99,400
  • Lease Type: Fee Simple: NN
  • Building Size: 14,200 SF
  • Parcel Size: 1.4 Acres
  • Year Built/Renovated: 2006/2021
  • Remaining Lease Term: 7+ Years
  • Options: Three (3), Five (5) Year Options
  • Rental Increases: 10% Every Five (5) Years

Forged Real Estate is pleased to exclusively offer the opportunity to acquire the fee simple interest in a single tenant property leased to Harbor Freight Tools, (the “Property”) in Cambridge, Minnesota. Harbor Freight Tools is a privately held, credit-rated discount tool and equipment retailer with over 1,500 locations throughout the country. Harbor Freight has over seven years remaining on their base term with 10% rental increases every 5 years, including in the option periods. Harbor Freight was renovated in 2021. The property received a full interior renovation which included all new restrooms and HVAC units. The exterior received a storefront and façade upgrade to what it is currently, while the parking lot was repaired, sealed and striped. The property benefits from outstanding visibility from MN-95/1st Avenue East (24,700 VPD) and is part of a Target-anchored shopping center that is situated less than one-half (0.5) mile from the entrance to MN-65/Chip A. Imker Memorial Highway (12,800 VPD) which is the major Minnesota Intrastate Highway. The area within a 3-mile radius of the property has seen steady growth in both the population and the number of households since 2020 at 3% and 4% respectively. The growth is projected to continue through 2028 with the population growing another 10% and the number of households growing another 11%. Cambridge is located just over 40 miles from both Minneapolis and St. Paul, two of the principal cities in the Minneapolis-St. Paul-Bloomington MN-WI MSA, the 16th largest metropolitan statistical area in the country with a population of more than 3.6 million people.

Investment Highlights

• Harbor Freight has over seven years remaining on their lease term with 10% rental increases every 5 years, including in the option periods. Harbor Freight Tools USA, Inc. is credit rated B1 (Moody’s) with over 1,500 locations, demonstrating the strength of the tenant.

• Harbor Freight was renovated in 2021. The property received a full interior renovation which included all new restrooms and HVAC units. The exterior received a storefront and façade upgrade to what it is currently, while the parking lot was repaired, sealed and striped.

• The area within a 3-mile radius of the property has seen steady growth in both the population and the number of households since 2020 at 3% and 4% respectively. The growth is projected to continue through 2028 with the population growing another 10% and the number of households growing another 11%.
• Harbor Freight is a part of a Target-anchored shopping center situated less than one-half (0.5) mile from the entrance to MN-65/ Chip A. Imker Memorial Highway (12,800 VPD) which is the major Minnesota Intrastate Highway.

• Harbor Freight Tools benefits from outstanding visibility from 1st Avenue East/MN-95 (24,700 VPD) along which a number of popular retailers sit, such as: Walmart Supercenter, Target, Aldi, Menard’s, Fleet Farm, Cub Foods, Kohl’s, Tractor Supply Co., Dollar Tree, AutoZone, Firestone, Valvoline, O’Reilly Auto Parts, McDonald’s, Starbucks, Popeye's, Applebee’s, Taco Bell, Wendy’s, Arby’s, Jimmy John’s, Culver’s, Kay Jewelers, and Burger King demonstrating the strength of the retail corridor.

Site Plan

map

Tenant

Harbor Freight Tools

Snapshot

Ownership: PRIVATE

Credit Rating: B1 (Moody’s)

Headquarters: CALABASAS, CA

# of Locations: 1,500+

Harbor Freight Tools (commonly known as Harbor Freight) is a privately held discount tool and equipment retailer founded in 1977 by Eric Smidt and his father in Los Angeles, California. Harbor Freight operates a chain of retail stores throughout the country selling a range of items from home repair tools such as plumbing, electrical, and hardware items to lawn and garden tools for all your landscaping needs. In addition to their over 1,500 stores across the country, Harbor Freight operates an e-commerce business where you can find an array of coupons, shop online or even just check to see if your local store has the item you need in stock. The Inside Track Club is a membership program that offers even bigger savings for a low annual price. Cutting out the middleman, Harbor Freight continues to deliver an extensive assortment of quality tools to both professionals and those DIYers alike at prices up to 80% less than their competitors. Additionally, they invest millions in their own test labs and factories to make sure their tools are up to standards and can compete with the best in market. S&P gives Harbor Freight Tools a credit rating of “BB-“ and Forbes reports them having a revenue of $6.5 billion as of the end of Fiscal 2023. In 2023, the company was also named to Forbes list of best large employers for the third consecutive year.

Team

Brokerage Team

Marc Mandel

Managing Principal
Forged Real Estate
(610) 608-2621, ext. 1

James Yi

Director
Forged Real Estate
(215) 460-2603

Greg Zimmerman

Partner
Forged Real Estate
(610) 608-2621 ext. 3

Steve Schrenk

Principal
Forged Real Estate
(610) 608-2621, ext. 2

Marco DiPrinzio

Senior Director
Forged Real Estate
(610) 608-2621, ext. 5