Burger King Lee Victory Parkway, Smyrna, TN OFFERING MEMORANDUM Net Leased Restaurant

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1 OFFERING MEMORANDUM Net Leased Restaurant Burger King 1763 Lee Victory Parkway, Smyrna, TN Brand New 14-Year Absolute Triple Net Lease Four Five-Year Renewal Options Zero Landlord Responsibility 7.5 Percent Increases Every Five Years Excellent Performing Restaurants Awarded Franchisee Developer of The Year 2015

2 NON- ENDORSEMENT AND DISCLAIMER NOTICE CONFIDENTIALITY AND DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. NON-ENDORSEMENT NOTICE Marcus & Millichap Real Estate Investment Services, Inc. ( M&M ) is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of M&M, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. 2

3 SONIC PORTFOLIO SECTION TABLE OF CONTENTS Financial Overview Investment Summary Retail Aerial Company Overview In the News Market Overview Location Overview Location Map Comparable Map Average Cap Rate Graph Comparable Sales

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5 BURGER KING SMYRNA, TN FINANCIAL OVERVIEW PRICE: $2,451, % Rent: $135,139 Property Address 1763 Lee Victory Parkway City, State, Zip Smyrna, TN Lot Size SF/Acres 54,450/1.25 Year Built 2015 LEASE SUMMARY Property Type Net Leased Restaurant Ownership Private Tenant Burger King Franchisee Rent Schedule Annual Rent Monthly Rent Cap Rate Guarantor 12-Unit Franchisee YEAR 1-5 $135,139 $11, % Initial Lease Commencement Date COE YEAR 6-10 $145,274 $12, % Lease Expiration 14 Years There After YEAR $156,169 $13, % Lease Term Remaining 14 Years YEAR $167,882 $13, % Lease Type Roof & Structure Option To Renew Rental Escalations NNN Tenant Responsible Four 5-Year Options 7.5 Percent Every Five Years OPTION #1 $180,473 $15, % OPTION #2 $194,008 $16, % OPTION #3 $208,558 $17, % OPTION #4 $224,200 $18, % PRICING & FINANCIALS

6 BURGER KING SMYRNA, TN INVESTMENT SUMMARY Marcus & Millichap is pleased to present this middle Tennessee sale-leaseback Burger King restaurant located in Smyrna, TN. This region in the middle part of Tennessee, which is just southeast Nashville right off I-24. Situated between Nashville and Murfreesboro, the subject property is located off of one of the two exits for Smyrna, TN. This Burger King is the first restaurant off the north side of the exit and is located near a large industrial complex that is surrounded by residential neighborhoods. There is also a Publix shopping center and a Starbucks a half mile from the property. Other retailers include: McDonald s, Sonic Drive-In, Taco Bell, Little Caesars Pizza, Speedway and Bojangles. The franchisee is an experienced operator, currently operating 12 Burger King restaurants throughout Kentucky and Tennessee with sales approaching $17 million. At close of escrow, the franchisee will sign a brand new 14-year absolute triple-net lease agreement with 7.5 percent Increases every five years and four five-year options to renew. This operator received Burger King s coveted Developer of the Year award in INVESTMENT HIGHLIGHTS Located On Main Retail Corridor Located Near Two Schools 22,780 Vehicles Per Day Attractive Rent Increases Every 5 Years Brand New 14-Year Absolute Triple Net Lease Four Five-Year Renewal Options Zero Landlord Responsibility 7.5 Percent Increases Every Five Years Excellent Performing Restaurants 12-Unit Franchisee Strong Long-Term Franchisee 6 INVESTMENT OVERVIEW

7 98,747 VPD SURROUNDING RETAIL AERIAL

8 SURROUNDING RETAIL AERIAL

9 LOCATION MAP Population: 680,000 Population: 131,947 Population: 177,571 REGIONAL MAP or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services,Inc. 2017Marcus&Millichap Activity ID: Y

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11 SONIC PORTFOLIO COMPANY SUMMARY #2 Fast Food Hamburger Chain, Globally More than $16 billion in annual system-wide sales, and nearly 350,000 team members, worldwide as of August 22nd, The concept has a market capitalization of roughly $10 billion. Global Brand Presence Fully-Franchised Business Model Nearly 14,000 restaurants in 100+ countries. QSR industry-leading EBITDA margins. Rich Heritage Stable, Reliable Long-Term Ownership Founded in 1954 with deep ties to the Miami Community. Burger King has been actively managed by 3G since Recent Merger with Tim Hortons As of 2014, both concepts will reside under the Restaurant Brands International title. 3G Capital is primarily responsible for the financing that helped the merger to finish. Corporate headquarters will be moved to Ontario, Canada. Creating 3rd Largest Global QSR Value Creation New company will generate $23 billion in system sales with attractive business mix. Leading growth and profitability driving long term value creation for shareholders Great Food Comes First Every day, more than 11 million guests visit BURGER KING restaurants around the world. And they do so because our restaurants are known for serving high-quality, great-tasting, and affordable food. Founded in 1954, BURGER KING is the second largest fast food hamburger chain in the world. The original HOME OF THE WHOPPER, our commitment to premium ingredients, signature recipes, and family-friendly dining experiences is what has defined our brand for more than 50 successful years. 3G CAPITAL 3G Capital is a global investment firm focused on long-term value, with a particular emphasis on maximizing the potential of brands and businesses. The firm and its partners have a strong history of operational excellence, board involvement, deep sector expertise, and an extensive global network. 3G Capital works in close partnership with management teams at its portfolio companies and places a strong emphasis on recruiting, developing and retaining top-tier talent. In October 2010, 3G Capital completed the acquisition of Burger King, one of the most widely recognized consumer brands in the world General Information Tenant Name Burger King Corp. Headquartered Miami, FL Chief Executive Officer Daniel S. Schwartz Website Parent Company Restaurant Brands International, Inc. Credit Rating B1 Financial Markets Stock Ticker QSR 2016 Sales $18,209.2 MM Current Price $66.20 as of 10/12/ Wk High/Low $ $66.54 Financial Markets Store Count 20,351 No. of Employees 30,300 TTM Sales $4,145,800 B 11

12 IN THE NEWS Restaurant Brands International Inc. Announces Pricing and Upsizing of Add-On Offering of 5.0% Second Lien Senior Secured Notes due Sept 18, 2017 Read Full Press Release Restaurant Brands International Inc. Announces Launch of Add- On Offering of 5.0% Second Lien Senior Secured Notes Due Sept 31, 2017 Read Full Press Release Restaurant Brands International Inc. Announces Participation at Upcoming Investor Conference - Sept 12, 2017 Read Full Press Release Restaurant Brands International Inc. Announces Pricing and Upsizing of Second Lien Senior Secured Notes Offering - Aug 8, 2017 Read Full Press Release COMPANY OVERVIEW 12

13 Smyrna, TN Smyrna is a town in Rutherford County, Tennessee and is part of the Nashville MSA. Smyrna was a strategic location for the United States Airforce during World War II. At its peak the military personnel and dependents totaled more than 10,000 persons stationed at the base. After the base was scheduled for closing in 1971 many new industries moved to the area to capture the labor market. The city began a period of growth stimulated by production of such companies as Better Built Aluminum, Cumberland Swan (currently known as Vi-Jon, Inc.), and Square D building plants. In the early 1980s, planning began to build a Nissan Motors manufacturing plant and, in 1983, the first vehicle was produced. The Nissan plant now employs around 8,000 workers, has a production capacity of 500,000 vehicles annually, and covers an area of 5,200,000 square feet. In 2012, Smyrna began manufacturing Nissan s electric car, the Nissan Leaf. In 2007, U.S. News & World Report listed Smyrna as one of the best places in the United States to retire. SMYRNA, TN OVERVIEW 13

14 NASHVILLE METRO Population: 1.8 million Nashville is the largest in the metro with 684, counties including: Davidson (4 th fastest growing metro in the country) and Williamson (16 th wealthiest county in the country) Fastest Growing: 85 people per day LARGEST CITIES BY POPULATION Nashville 684,410 Murfreesboro 120,954 Franklin 70,612 Hendersonville 55,135 Smyrna 42,600 Brentwood 40, % Unemployment (August 2016) 11 Fortune 1,000 Companies Headquartered in Nashville 50% U.S. Population within 650 Miles Of Nashville 85 People Move to Nashville per Day 36,000 new residents per year NASHVILLE, TN OVERVIEW 14

15 Nashville MSA LABOR & INDUSTRIES Geographical location: 50% of US Population lives within 650 miles of Nashville. After outperforming the national rate of employment growth over the past 10 years, the Nashville metro is expected to stabilize slightly through All sectors except for manufacturing are forecast to expand during this period. Jobs in construction are expected to grow by an average 3.1 percent annually in the coming five years. Trade, transportation and utilities sector is the largest provider of regional jobs: 20 percent of Nashville s entire employment base; approximately 165,400 jobs. SKILLED WORKFORCE Nashville is home to more than 118,000 students who attend the region s higher education institutions, with 17,000 graduating each year and 10,000 of those graduates remaining in the Nashville. This provides a strong and consistent pipeline of educated talent annually. Professional and business services sector makes up 16 percent of metro payrolls. While this sector registered impressive annual growth of approximately 7.6 percent throughout the previous five years, jobs in this sector are now forecast to expand by 3.0 annually. Education and health services segment comprises another 15 percent of employment. Other employment segments that will register impressive gains through 2019 are education and health services, leisure and hospitality, information and the financial activities sectors. All of these industries are expected to grow jobs at a pace in excess of 1% annually. MAJOR CITY AREA EMPLOYERS Vanderbilt University & Medical Center Kroger Asurion Saint Thomas Health Services Nissan North America HCA Ryman Hospitality Properties Electrolux Home Products Cracker Barrel Old Country Store, Inc Dell, Inc NASHVILLE, TN OVERVIEW 15

16 Nashville MSA QUALITY OF LIFE While music may be in Nashville s blood, Music City has a lot more to offer, including performing arts, history, cuisine, professional sports, education institutions, natural beauty and Southern charm. Music is alive not only at the Grand Ole Opry, but also at the Ryman Auditorium, Fontanel Mansion, Schermerhorn Symphony Center and The Tennessee Performing Arts Center. For country music fans, there is the Country Music Hall of Fame and Museum. Performing arts include the Nashville Ballet, Nashville Symphony, Nashville Opera Association, Tennessee Repertory Theatre, Nashville Children s Theatre, and the ACT 1, Artists Cooperative Theatre. Museums in the metro include the Tennessee State Museum, the Vanderbilt University Fine Arts Gallery, Frist Center for the Visual Arts, Cheekwood Botanical Garden & Museum of Art, and the Carl Van Vechten Gallery at Fisk University. Sports enthusiasts can watch the Tennessee Titans of the NFL, the NHL Nashville Predators and the Nashville Sounds, which are a member of baseball s AAA Minor League. For those who want to spend an afternoon outdoors, one can take in the Parthenon, the world s only replica of the ancient Greek temple, which is located only 2 miles from downtown Nashville or Nashville Shores Water Park and Marina. NASHVILLE, TN OVERVIEW 16

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18 Subject Property 101 Boling Street, Clayton, NC Highway W, Hoschton, GA Newbern Avenue, Raleigh, NC Goodwin Drive, Locust Grove, VA Jefferson Davis Hwy, Fredericksburg, VA Capital Boulevard, Raleigh, NC or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services,Inc. 2017Marcus&Millichap Activity ID: Y COMPARABLES MAP

19 AVERAGE CAP RATE GRAPH 5.80% 5.70% 5.60% 5.50% 5.40% 5.30% Average Cap Rate 5.51% 5.20% 5.10% 5.00% Burger King Clayton, NC Burger King Hoschton, GA Burger King Raleeigh, NC Burger King Locust Grove, VA Burger King Fredericksburg, VA Burger King Raleigh, NC AVERAGE CAP & PURCHASE PRICE 19

20 SALES COMPARABLES COMPARABLES Burger King (Sold) 101 Boling Street, Clayton, NC Burger King (Sold) 6095 Highway W, Hoschton, GA Burger King (Sold) 3955 Newbern Avenue, Raleigh, NC Close Of Escrow 9/25/2017 Sales Price $2,050,000 CAP Rate 5.71% Price/SF $ GLA 4,160 Year Built 1988 Lot Size (Acres) 1.04 Close Of Escrow 7/31/2017 Sales Price $1,375,200 CAP Rate 5.24% Price/SF $342 GLA 4,021 Year Built 2008 Lot Size (Acres) 1.01 Close Of Escrow 6/29/2017 Sales Price $1,880,000 CAP Rate 5.59% Price/SF $ GLA 3,540 Year Built 1987 Lot Size (Acres) Burger King (Sold) Goodwin Drive, Locust Grove, VA Burger King (Sold) 5430 Jefferson Davis Hwy, Fredericksburg, VA Burger King (Sold) 6300 Capital Boulevard, Raleigh, NC Close Of Escrow 2/01/2017 Sales Price $1,475,200 CAP Rate 5.59% Price/SF $396 GLA 3,725 Year Built 1975 Lot Size (Acres) 0.93 Close Of Escrow 12/28/2016 Sales Price $1,472,800 CAP Rate 5.50% Price/SF $376 GLA 3,914 Year Built 1999 Lot Size (Acres) 0.98 Close Of Escrow 12/09/2016 Sales Price $2,025,000 CAP Rate 5.43% Price/SF $585 GLA 3,461 Year Built 1987 Lot Size (Acres) 0.74 SALE COMPARABLE DETAILS or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services,Inc. 2017Marcus&Millichap Activity ID: Y

21 EXCLUSIVE LISTING OFFICES NATIONWIDE