Red Robin. New NNN Single Tenant Ground Lease Investment W Nob Hill Boulevard, Yakima, WA [ ]

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1 Red Robin Yakima, WA New NNN Single Tenant Ground Lease Investment 2702 W Nob Hill Boulevard, Yakima, WA [ ]

2 RED ROBIN IS AN ABSOLUTE NNN CORPORATE- BACKED GROUND LEASE IN YAKIMA, WASHINGTON. Investment Highlights Red Robin signed a new, 15-year absolute NNN ground lease in September 2014 with 10% rent escalations every five years. The tenant has options to extend the lease up to 30 years. Red Robin has been a long-time, successful tenant in this location, having operated out of an adjacent building since This investment is ideally suited for an investor seeking a passive investment with no landlord responsibilities. Red Robin was newly-constructed in 2014 and is situated on a pad site of a neighborhood shopping center, The Shops at Rainier Square. Notable retailers within the shopping center include Starbucks, Jimmy John s, Dickey s BBQ, and MOD Pizza. A grocery anchor is also planned within the center. PRICE: $1,960,000 CAP: 4.50% YEAR BUILT ANNUAL RENT... $88,000 LEASABLE SF...5,800 SF LAND AREA... 46,609 SF PRICE PER SF...$338 LEASE TYPE... PARKING*... Absolute NNN Ground Lease ±70 Spaces or 12.1/1,000 SF *Does not include reciprocal parking ADDRESS: 2702 W Nob Hill Boulevard, Yakima, WA RED ROBIN - YAKIMA 2

3 Investment Highlights NEW CONSTRUCTION ABSOLUTE NNN LEASE NO LANDLORD RESPONSIBILITY Red Robin is responsible for all operating expenses for the duration of the lease. The tenant will pay operating expenses direct, as the premises is separately parceled and metered from the balance of the shopping center. LONG-TERM GROUND LEASE WITH RENT GROWTH The tenant signed a 15-year lease with 10% rent bumps every five years. Red Robin has three, five-year options to extend with additional escalations. CORPORATE-BACKED LEASE Red Robin was founded in 1969 and has 514 restaurants across the United States and Canada. The company is publicly traded under NASDAQ stock exchange symbol RRGB. Fiscal 2014 revenues were over $1.1 Billion. STRONG HISTORICAL PERFORMANCE Red Robin formerly operated out of an existing building (now Dickey s BBQ) adjacent to the west; this was Red Robin's first franchisee location and 2nd store open in the chain, over 36 years in the same location. The long-term commitment and investment in the new building demonstrates the tenant s strength in this particular location. PAD SITE TO NEIGHBORHOOD SHOPPING CENTER The Subject is situated on a pad site of The Shops at Rainier Square, a redeveloped neighborhood shopping center that recently added several national tenants such as Starbucks, Jimmy John s, Sprint, and Dickey s BBQ. A grocery store anchor is planned for the center, along with other potential junior anchors. The tenant has exclusives within the existing shopping center to prohibit future competition. RED ROBIN - YAKIMA 3

4 Quick Stats RED ROBIN ANNUAL REVENUE $1,150,000 $1,100,000 TOTAL REVENUES $1,050, LOCATIONS IN US & CANADA NASDAQ RRGB REVENUE (IN THOUSANDS) $1,000,000 $950,000 $900,000 CORPORATE OWNED $850, $800,000 FRANCHISE OPERATED 99 DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER FISCAL YEAR ENDED RED ROBIN - YAKIMA 4

5 Aerial RETAIL CORRIDOR 82 Albertsons Safeway Arby s Burger King Shari s Restaurant Shopko MEMORIAL HOSPITAL Costco Sonic Denny s Subway Dollar Tree Home Depot Jiffy Lube Kmart Lowe s T.J. Maxx Taco Bell Taco Del Mar Target Value Village RED ROBIN YAKIMA VALLEY COMMUNITY COLLEGE 21,582 DAILY Office Depot Walgreens Olive Garden Walmart E NOB HILL BLVD PetSmart Quiznos Wendy s WinCo 24,690 DAILY S 1 ST ST as Rite Aid WASHINGTON STATE COLLEGE OF NURSING VALLEY MALL Bed Bath & Beyond Gap Kohl s Macy s Michaels Old Navy Pier 1 Imports Quiznos Rite Aid Ross Dress for Less Sears Shari s Restaurant Starbucks T.J. Maxx Value Village VALLEY MALL RED ROBIN - YAKIMA 5

6 The Shops at Rainier Square THE SHOPS AT RAINIER SQUARE Current owner Hogback Development is in pre-development and planning stages of a grocery-anchored Shops at Rainier Square Phase II redevelopment. Approximately 75,000 SF of new retail is planned immediately to the east of the Property. Phase I included the 2014 construction of Red Robin and an adjacent strip retail building, refresh of the building occupied by Dickey's Barbecue, and a high-profile national chain QSR planned for Fall Additional buildings are planned upon securing tenant commitments. RAINIER SQUARE TENANTS: Elite Academy Cosmo School Roxy s Shoes Ted Brown Music Lee Nails Sage Photography Zumba Studio Charter College Allstate JH Ins. World Bistro Mail N More Pride Jiu Jitsu Green Door Home Furnishings NIC + Mel Salon RED ROBIN 24,690 DAILY << W NOB HILL BLVD >> CHECK OUT THE SHOPS AT RAINIER SQUARE FACEBOOK PAGE RED ROBIN - YAKIMA 6

7 Area Intel & Demos ABOUT YAKIMA Yakima, Washington has been the cultural, business, educational, health services, and governmental focal point of the Central Washington region since it was founded more than 125 years ago. Originally built along the new Northern Pacific Railway company line, Yakima has grown from its agricultural roots to become a vibrant, diverse metropolitan city. With a rich history and a bright future, Yakima is the Heart of Central Washington. Yakima is the largest city in Yakima County with a population of about 92,000. That makes it the 9th largest city in Washington State. The Yakima community enjoys a rich mixture of people from many cultural and ethnic backgrounds. 1, 3, & 5 MILE RADIUS DEMOGRAPHICS POPULATION 1-Mile 3-Mile 5-Mile ,786 84, , ,708 86, , ,716 88, , HOUSEHOLD INCOMES 1-Mile 3-Mile 5-Mile Median $43,891 $36,703 $39,519 Average $55,348 $48,445 $53,224 SEATTLE 5-Mile radius 3-Mile radius 146 miles 2h 11min YAKIMA RED ROBIN 182 miles 3h 6min 1-Mile radius PORTLAND RED ROBIN - YAKIMA 7

8 Yakima Area Intel YAKIMA ECONOMY Yakima s economy has always revolved around agriculture. A wide variety of crops are grown in the Yakima Valley. Yakima County is Washington State s leader in terms of the value of the fruits, vegetables, grains, and other agricultural products produced by the county s farmers. The region has long been known as one of the world s leading producers of apples. While Yakima still relies on agriculture to drive its economy, over 250 manufacturing firms are also located here producing a variety of products including aircraft parts, wood products, plastic products, recreational vehicles, and communications technology. Tourism is the fastest growing segment of the Yakima economy. More than 70 wineries are located in the Yakima Valley and regularly draw visitors to sample and buy the Valley s internationally-renowned varietals. Outdoor recreation, including water and snow skiing, fishing, boating, hiking, horseback riding, and white water rafting, also makes Yakima a favorite destination for people from throughout the Northwest and around the world. TOP EMPLOYERS IN YAKIMA VALLEY EMPLOYER # OF FULL-TIME EMPLOYEES Yakima Valley Memorial Hospital 2,500 Yakima School District, No. 7 1,756 Walmart 1,700 Zirkle Fruit +1,500 Washington Fruit +1,500 JOBS BY INDUSTRY 103,585 TOTAL JOBS Local Government % Health Services % Retail Trade - 9.8% Manufacturing - 7.9% Other than Top % Agriculture, Forestry & Fishing % LABOR FORCE 124,360 UNEMPLOYMENT 8.1% AVERAGE WAGE $33,767 RED ROBIN - YAKIMA 8

9 Site Plan 24,690 DAILY W NOB HILL BLVD SITE PLAN KEY PYLON SIGN PARCEL OUTLINE: LAND AREA: BUILDING AREA: AVAILABLE: INGRESS/EGRESS: 46,609 SF 5,800 SF Site Plan Not To Scale RED ROBIN - YAKIMA 9

10 Financial Analysis Target Price Range PRICE $1,960,000 Capitalization Rate: 4.50% Price Per Foot: $338 NET OPERATING INCOME SUMMARY SCHEDULED INCOME Per SF Scheduled Rent: 8/1/2015 $15.17 $88,000 Equals: Effective Gross Income $15.17 $88,000 Less: OPERATING EXPENSES Per SF CAMS NNN Property Taxes NNN Insurance NNN Total Operating Expenses NNN - Equals: NET OPERATING INCOME $88,000 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. RED ROBIN - YAKIMA 10

11 Rent Roll Rent Roll TENANT INFO TERM RENT SUMMARY Tenant Name Size Date Monthly Rent Percent Increase PSF Annual Rent PSF Cap Rate Red Robin International, Inc. 5,800 9/20/2014 $7,333 $1.26 $88,000 $ % 9/20/2019 $8, % $1.39 $96,800 $ % Occupancy Date : September 20, /20/2024 $8, % $1.53 $106,480 $ % Lease Expiration : September 19, 2029 Comments: Tenant has three, five-year options with 180 days advance notice prior to expiration of primary term or extension. Tenant has exclusive use within shopping center for sit down casual style or fast casual restaurants engaging primarily in the sale of or specializing in the sale of hamburgers. Tenant bears all responsibility of operating expenses. Option 1 9/20/2029 $9, % $1.68 $117,128 $ % Option 2 9/20/2034 $10, % $1.85 $128,841 $ % Option 3 9/20/2039 $11, % $2.04 $141,725 $ % Current Totals: 5,800 $7,333 $1.26 $88,000 $ % This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. RED ROBIN - YAKIMA 11

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