BUCA DI BEPPO RESTAURANT 2728 GANNON ROAD, SAINT PAUL, MINNESOTA 55116

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1 For those with HIGHER EXPECTATIONS TM BUCA DI BEPPO RESTAURANT 2728 GANNON ROAD, SAINT PAUL, MINNESOTA Zeb Ripple [415] CA DRE#: Chris Peters [415] CA DRE#: Chris Kostanecki [415] CA DRE#: [

2 ADDRESS: 2728 Gannon Road, Saint Paul, Minnesota PURCHASE PRICE...$5,185,000 CAP RATE % PRICE PER SQ FT...$ APPROX. BUILDING SIZE...11,864 SF LOT SIZE AC The Story INVESTMENT HIGHLIGHTS PAGE SUMMARY NAME LONG TERM NNN CORPORATE RESTAURANT WITHIN A DENSE INFILL MARKET IN A LANDMARK BUILDING. This well known, historic single tenant building is currently occupied by Buca di Beppo and features an absolute NNN corporate lease with annual increases, and over 20 years of primary term remaining. The first Buca di Beppo opened in a Minneapolis apartment building basement in The St. Paul location was the second Buca di Beppo in the popular chain and played an integral role in the development of the concept, such as the 18 person Pope table. INVESTMENT HIGHLIGHTS > Buca di Beppo has 100 locations in 27 states, D.C., England and Mexico, with additional units in the pipeline > In 2008, Buca, Inc. was purchased and is currently owned by Planet Hollywood International Inc. > Current financing options allow for 10+% cash on cash return LOCATION HIGHLIGHTS > Tenant has successfully operated in this market since 1994 > Excellent gross sales and unit level profitability > Strong demographics with nearly 75,000 people living in a three mile radius with average incomes over $78,000 > The site is less than two miles from the Minneapolis-St. Paul International Airport, and only 6 miles from the world famous Mall of America > The roof was fully replaced in 2007 LEASE HIGHLIGHTS > Tenant recently extended through 2033 > Corporate guaranty by Buca, Inc. > 20 years of remaining lease term > Absolute NNN lease with no Landlord responsibilities > Rare annual rent escalations COPYRIGHT ALL USE, DISCLOSURE AND/OR REPRODUCTION NOT SPECIFICALLY AUTHORIZED IS PROHIBITED. ALL RIGHTS RESERVED. Capital Pacific Real Estate Brokerage Firm ( Agent ) has presented this confidential Investment Memorandum to assist the recipient in evaluating the Property and it is intended for your use only. This confidential material contains brief, selected information pertaining to the Property and shall not be considered all-inclusive or unchanged since the date of preparation. No warranty as to the accuracy or completeness is expressed or implied. The information has been received from sources believed to be reliable but is not guaranteed. Agent disclaims all liabilities in connection with any inaccuracies or incompleteness. The Buyer should independently verify each item of information and have the same reviewed by its tax advisor and/or legal counsel. The Buyer agrees that (a) the materials are of a highly confidential nature and will be held in the strictest confidence or shall be returned to Agent upon request; (b) the Buyer shall not contact any property manager, employee or tenant of the Property regarding the enclosed materials or the Property, without prior approval of Agent; and (c) the Buyer understands and agrees that Agent represents the seller and not the Buyer. Neither the seller nor Agent shall have any obligation to pay any commission, finder s fee, or other compensation to any broker or other person dealing with the Buyer. The Buyer may provide information to persons retained for the purpose of evaluating the Property after first obtaining a signed confidentiality agreement from such persons to keep such information confidential. The Buyer shall defend, indemnify and hold harmless the seller, Agent and its affiliates from and against any claims, demands, damages, liabilities, costs or expenses, including reasonable attorneys fees, relating to any claim for a commission, finder s fee or other compensation by any broker or other person dealing with the Buyer. The Property is being sold on an as-is, where-is and with all faults basis

3 Snelling Avenue S Ford Parkway S Mi ssiss ippi 35E 5 S Highland Park Middle School Highland Park Senior High School Highland Park Elementary School Bush Highland School Montreal Avenue Rive p he ar o dr ad 51 SIBLEY PLAZA r Bo a rd u l ev a th wa ue HiaAven 5 d (ADT: 12,8 Highland Homecroft Elementary School 00) 55 MINNEAPOLIS VA MEDICAL CENTER Cretin High School 51 HIGHLAND CENTER Fairview Avenue S Cleveland Avenue S MAPS AERIAL MAP T: 3 (A D ) Sh G a n n o n Ro a ,00 ep a rd Ro a AD d( T:, ) Si y ble Me m a ori lh ig 13 N ay hw Mendota Elementary School FORT SNELLING GOLF COURSE 13 35E 35E BUCA DI BEPPO 3

4 FINANCIALS INCOME & EXPENSE PRICE $5,185,000 Price Per Square Foot: $ Capitalization Rate: 8.0% Total Rentable Area (SF): 11,864 Lot Size (AC): 0.72 STABILIZED INCOME Per Square Foot Scheduled Rent $34.62 $414,825 Effective Gross Income $34.62 $414,825 LESS Per Square Foot Taxes NNN $0.00 Insurance NNN $0.00 Total Operating Expenses $0.00 EQUALS NET OPERATING INCOME $414,825 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. BUCA DI BEPPO 4

5 FINANCIALS RENT ROLL TENANT INFO LEASE TERMS Tenant Name Sq. Ft. Term Current Rent Monthly Rent Yearly Rent Monthly Rent/FT Yearly Rent/FT Buca di Beppo 11,864 Current 06/30/14 $414,825 $34,569 $414,825 $2.47 $29.63 Rent Increase 07/01/14 06/30/15 $34,914 $418,973 $2.49 $ % 07/01/15 06/30/16 $35,264 $423,163 $2.52 $ % 07/01/16 06/30/17 $35,616 $427,395 $2.54 $ % 07/01/17 06/30/18 $35,972 $431,669 $2.57 $ % 07/01/18 06/30/19 $36,692 $440,302 $2.62 $ % 07/01/19 06/30/20 $37,426 $449,108 $2.67 $ % 07/01/20 06/30/21 $38,174 $458,090 $2.73 $ % 07/01/21 06/30/22 $38,938 $467,252 $2.78 $ % 07/01/22 06/30/23 $39,716 $476,597 $2.84 $ % 07/01/23 06/30/24 $40,511 $486,129 $2.89 $ % 07/01/24 06/30/25 $41,321 $495,851 $2.95 $ % 07/01/25 06/30/26 $42,147 $505,769 $3.01 $ % 07/01/26 06/30/27 $42,990 $515,884 $3.07 $ % 07/01/27 06/30/28 $43,850 $526,202 $3.13 $ % 07/01/28 06/30/29 $44,727 $536,726 $3.19 $ % 07/01/29 06/30/30 $45,622 $547,460 $3.26 $ % 07/01/30 06/30/31 $46,534 $558,409 $3.32 $ % 07/01/31 06/30/32 $47,465 $569,577 $3.39 $ % 07/01/32 06/30/33 $48,414 $580,969 $3.46 $ % Option 1 07/01/33 06/30/38 $49,382 $592,588 $3.53 $42.33 * Option 2 07/01/38 06/30/43 $54,522 $654,266 $3.89 $46.73 * Option 3 07/01/43 06/30/48 $60,197 $722,362 $4.30 $51.60 * Option 4 07/01/48 06/30/53 $66,462 $797,546 $4.75 $56.97 * Totals: 11,864 $414,825 $34,569 $9,730,349** $2.47 $29.63 * 2% annual rent increase in each option. ** Aggregate income from primary lease term. 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. BUCA DI BEPPO 5

6 PROPERTY DESCRIPTION BUCA PAGE NAME Buca di Beppo is an American restaurant chain specializing in immigrant Southern Italian food. The food at Buca di Beppo is served family style, each item served à la carte and shared among the dining party. Some locations, including the subject property, also have a lunch menu, featuring individual-sized portions. Each room at Buca is themed, and all restaurants have a Pope table the largest single table, round, in a room by itself, with a bust of the Pope as centerpiece. Also, most locations have a table, usually inset to the wall, directly across from the main kitchen, at which the waiter and chefs will converse with you and allow you to sample many dishes. In September 2008 Buca, Inc. was acquired by Planet Hollywood International Inc. Buca di Beppo is partnering with GGP to open new stores in malls across the US. In the last 18 months, Buca has opened 4 new stores and currently have six more in the pipeline. Planet Hollywood International, Inc. is a guest-driven company committed to providing our guests with an exciting inside look at Hollywood, combined with exceptional food, outstanding merchandise and uncompromising service in every one of our restaurants. A world-renowned trademark, Planet Hollywood was established in 1991, continues to expand its brand into a wide array of dynamic ventures such as the new Planet Hollywood Resort & Casino in Las Vegas. The Resort & Casino was unveiled and has positioned Planet Hollywood as the premier entertainment authority and destination. Founder, Robert Earl, along with original partners and stockholders Bruce Willis and Sylvester Stallone, continue to steer Planet Hollywood toward exciting and new endeavors while enlisting the star power of Hollywood s brightest celebrities. With world-class gaming, live entertainment, distinctive dining and outof-this-world shopping, Planet Hollywood provides guests of every age an unrivaled and unforgettable entertainment experience. BUCA DI BEPPO 6

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10 SAINT PAUL, MN MARKET INTELIGENCE INTELLIGENCE PAGE AREA NAME OVERVIEW Saint Paul is the capital and second most populous city in the state of Minnesota. The city s population as of 2010 was 285,068. Located along Interstate 95 in the greater Minneapolis area, St. Paul is just west of Milwaukee, Wisconsin, and Chicago, Illinois. Known as the Twin Cities, these two cities form the core of Minneapolis Saint Paul, the 16thlargest metropolitan area in the United States, with about 3.3 million residents. The Minneapolis Saint Paul area is home to 18 of Minnesota s 19 Fortune 500 headquarters - UnitedHealth Group, Target, Best Buy, CHS, 3M, US Bancorp, Medtronic, General Mills, Land O Lakes, Xcel Energy, Ameriprise Financial, CH Robinson Worldwide, Mosaic, Ecolab, St. Jude Medical and Nash Finch. Large private companies include Cargill, Carlson, Andersen, Erickson Companies and Schwan Foods. Currently, the Twin Cities is the second largest medical device manufacture center in North America. Saint Paul is second in the United States in the number of higher education institutions per capita. Higher education institutions that call Saint Paul home include three public and eight private colleges and universities and five post-secondary institutions. Well-known colleges and universities include the Saint Catherine University, Concordia University, Hamline University, Macalester College, Metropolitan State University, Northwestern College and Saint Paul College. TOP EMPLOYERS IN SAINT PAUL-MINNEAPOLIS Industry Type # of Employees (Approx.) DEMOGRAPHICS Population 1 Mile 3 Miles 5 Miles 2010 Population 9,216 74, , Population 9,284 74, , Population (Projection) 9,528 76, , Income 2012 Average Household Income $62,027 $78,353 $68,571 State of Minnesota 53,824 Target Corporation 30,773 University of Minnesota 25,166 Allina Hospital & Clinics 23,869 FOR MORE INFORMATION Zeb Ripple zripple@capitalpacific.com [415] CA DRE#: Chris Peters cpeters@capitalpacific.com [415] CA DRE#: Chris Kostanecki ck@capitalpacific.com [415] CA DRE#: Copyright 2013 [Capital Pacific Real Estate Brokerage Company]