Sonic Drive-In. Bend, OR ABSOLUTE NET SONIC DRIVE-IN WITHIN PRIMARY RETAIL CORRIDOR N Highway 97, Bend, OR 97701

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1 Sonic Drive-In Bend, OR Bend, or ABSOLUTE NET SONIC DRIVE-IN WITHIN PRIMARY RETAIL CORRIDOR N Highway 97, Bend, OR 97701

2 Sonic Drive-In PRICE: $3,650,000 CAP: 5.25% The offering provides an opportunity to acquire an absolute net Sonic Drive-In with more than 15 years remaining. The long remaining term and an experienced franchisee, with several Sonic Drive-In operations, create significant stability. The Property is located along the main commercial corridor in Bend, Oregon, with major shopping centers in close proximity to both the north and south that drive traffic to the area. Sonic also benefits from close proximity to the on and off ramps to Highway 97, the primary highway running through the city. The city of Bend has been widely noticed for its substantial growth, having recognized a 60% increase in population since LEASABLE SF....±1,779 SF LAND AREA....±35,284 SF LEASE TYPE Absolute NNN YEAR BUILT PARKING.....±32 Spaces or 18/1,000 SF ADDRESS: N Highway 97, Bend, OR 97701

3 > More than 15 years remaining on Initial Lease Term. > Absolute Net structure provides investor zero management responsibility. > Two major shopping centers, Bend River Promenade and Cascade Village, create a strong retail draw to the immediate area. > Located along the business route of main North-South Highway 97. > Experienced Franchisee operates large portfolio of Sonic Drive-In s. > Close Proximity to Highway 97 on and off ramps. > Growing demographic area recognizing a 60% increase in population since > Strong Traffic Counts surrounding the Property, with exposure to over 20,000 vehicles per day. > RESIDENTS WITHIN A ONE-MILE RADIUS OF THE PROPERTY RECOGNIZE ANNUAL HOUSEHOLD INCOMES OF NEARLY $100,000. SONIC-DRIVE-IN - BEND, OR 3

4 Quick Stats Americas D r iv e In SM OWNERSHIP 90% % OF STORES OWNED BY SONIC FRANCHISEE* CORPORATE OWNED 345 FRANCHISE OWNED 3,212 *Richard Ervin, a Texas-based Sonic franchise owner for over thirty years, operates 14 Sonic locations throughout the U.S. including the Subject. 3,557 + TOTAL LOCATIONS SONIC DRIVE-IN Headquartered in Oklahoma City, Sonic Drive-In is the nation s largest drive-in fast-food chain. The company s slogan is America s Drive-In and is known for its use of carhops on roller skates. With over 3,557 restaurants throughout 45 US states, Sonic Drive-In serves approximately 3 million customers per day. The company is owned and operated by Sonic Restaurants Inc., a wholly owned subsidiary which operates and franchises its drive-in restaurants. A public company, Sonic stock trades on NASDAQ with the symbol SONC. AMERICA S #1 BURGER QUICK-SERVICE RESTAURANT 2014 TEMKIN EXPERIENCE RATINGS SONIC-DRIVE-IN - BEND, OR 4

5 Retail Corridor CASCADE VILLAGE SHOPPING CENTER Bed Bath & Beyond Best Buy Dick s Sporting Goods Food 4 Less JCPenney PetSmart Ross Dress for Less Starbucks Trader Joe s 33,700 DAILY OTHER SURROUNDING RETAIL Burger King Dollar Tree Home Depot Knecht s Auto Parts Lowe s Michael s Panda Express Shopko Sportman s Warehouse Staples Target BEND RIVER PROMENADE Hobby Lobby Kohl s Macy s Natural Grocers Round Table Pizza Shari s Cafe & Pies T.J. Maxx 21,000 DAILY SONIC DRIVE-IN BUS BUS

6 Site Plan SITE PLAN KEY PARCEL OUTLINE: LEASABLE AREA: LAND AREA: MONUMENT SIGN: INGRESS/EGRESS: Site Plan Not To Scale ±1,779 SF ±35,284 SF 20 The Dalles California Hwy 21,000 DAILY DRIVE-THRU A Nels Anderson Rd Bus 97 SONIC-DRIVE-IN - BEND, OR 6

7 Financial Summary PRICE $3,650,000 Capitalization Rate: 5.25% NET OPERATING INCOME SUMMARY SCHEDULED INCOME Per SF Scheduled Rent: 7/1/2017 $ $191,744 Equals: Effective Gross Income $ $191,744 Less: OPERATING EXPENSES Per SF CAMS NNN Property Taxes NNN Insurance NNN Total Operating Expenses NNN - Equals: NET OPERATING INCOME $191,744 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. SONIC-DRIVE-IN - BEND, OR 7

8 Rent Roll TENANT INFO TERM RENT SUMMARY Tenant Name Size Date Monthly Rent Percent Increase Annual Rent Cap Rate Sonic 1,779 1/1/2015 $15,979 $191, % 1/1/2019 $17, % $205, % Occupancy Date : 12/26/2008 1/1/2024 $18, % $225, % Lease Expiration : 12/31/2033 1/1/2029 $20, % $248, % Option 1 1/1/2034 $22, % $273, % Option 2 1/1/2039 $25, % $300, % Option 3 1/1/2044 $27, % $330, % Lease Notes Option 4 1/1/2049 $30, % $363, % Comments: 25-Year Absolute NNN lease with Personal Guaranty. Tenant is responsible for 100% of all operating expenses, including reimbursement of all property taxes and direct payment and maintenance and repair of the following: utilities, insurance, building structure, roof, and parking lot. Landlord has zero responsibilities except to bill Tenant for Property Taxes. Base rent amended effective 1/1/2015 with a 7% increase on 1/1/2019 and 10% increases every five years thereafter. 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. SONIC-DRIVE-IN - BEND, OR 8

9 SM Lease Abstract Americas D r iv e In PREMISES/TERM TENANT Bend Oregon SDI, LLC dba Sonic Drive-In GUARANTEE Lease is personally guaranteed by Richard L. Ervin, a Texas-based seasoned Sonic franchisee with over 30 years experience and 14 Sonic locations. BUILDING SF 1,779 SF LEASE TYPE Absolute Net TERM 25 Years RENT COMMENCEMENT December 26, 2008 EXPIRATION December 31, 2033 OPTIONS 4, 5-year Options; 180 Days Notice TAXES Tenant is responsible for reimbursement of all real property taxes and assessments levied against the Premises. Tenant agrees to reimburse within fifteen (15) days of written notice from Landlord. INSURANCE Tenant is responsible for maintaining a liability policy as well as a fire and other risk insurance policy. UTILITIES Tenant is responsible for heat, electricity, water, sewer, garbage, and all other utilities charged against the premises. TENANT S OBLIGATIONS Tenant is responsible for all maintenance, repairs and replacements to the Premises. LANDLORD S OBLIGATIONS Zero responsibilities. RENT/EXPENSES BASE RENT DATE RANGE MONTHLY RENT ANNUAL RENT 1/1/ /31/2019 $15,979 $191,744 1/1/ /31/2024 $17,097 $205,166 1/1/ /31/2029 $18,807 $225,683 1/1/ /31/2033 $20,688 $248,251 OPTIONS Four (4), five-year options with 10% Increases Every Five Years SONIC-DRIVE-IN - BEND, OR 9

10 Area Intel & Demos POPULATION 1-Mile 3-Miles 5-Miles ,566 43,141 75, ,975 47,267 83, ,351 51,596 91, HOUSEHOLD INCOMES 1-Mile 3-Miles 5-Miles Average $97,200 $73,086 $74,011 Median $70,686 $51,777 $53,092 Portland SONIC DRIVE-IN 163 miles 3hr 22min 1 Mile 3 Miles Eugene 129 miles 2hr 34min Bend 5 Miles

11 About Bend, OR BEND - CENTRAL OREGON S LARGEST CITY Bend is located on the eastern edge of the Cascade Range along the Deschutes River. The city s rapid growth over recent years is due to its desirable recreational offerings. Tourism is one of Bend s largest economic drivers. The Mount Bachelor ski resort and nearby Cascade Lakes bring in tourists from Oregon, Washington, and California. In addition, Bend is identified as a gateway for many outdoor sports, including mountain biking, fishing, hiking, camping, rock climbing, white-water rafting, skiing, and golf. EMPLOYMENT GROWTH Employment in Central Oregon is projected to grow by 16% between 2012 and The region s average wage is 18.8% lower than the statewide average. Nonetheless, the region has high paying, competitive industries in beverage manufacturing (primarily beer), software publishing, and electrical equipment and component manufacturing. A GOOD PLACE FOR STARTUPS According to the Oregon Employment Department, over 75% of Oregon firms have nine or fewer employees and the average firm employs 15 people. Central Oregon s business environment is typified by innovative, small companies, producing niche-market products and services. Top 5 Employers in Central Oregon # OF EMPLOYER EMPLOYEES ST. CHARLES MEDICAL CENTER REGIONWIDE 2,830 SUNRIVER RESORT 900 LES SCHWAB REGIONWIDE (HQ & CO STORES) 880 BRIGHT WOOD CORPORATION REGIONWIDE 870 MT. BACHELOR ,268 DESCHUTES COUNTY POPULATION (ESTIMATED) 1st FASTEST-GROWING COUNTY IN OREGON $68,919 AVERAGE HH INCOME SONIC-DRIVE-IN - BEND, OR 11

12 SEAN MACK (503) MICHAEL HORWITZ (503) KEVIN ADATTO (503) SCOTT FRANK (503) PETER DUNN (503) SEAN TUFTS (206) DAVID GELLNER (206) [ Copyright 2017 Capital Pacific LLC ]