OFFERING MEMORANDUM. Carl s Jr. 728 North Bisbee Avenue Willcox, AZ. Carl s Jr. Willcox, AZ 1

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1 OFFERING MEMORANDUM Carl s Jr. 728 North Bisbee Avenue Willcox, AZ Carl s Jr. Willcox, AZ 1

2 2 Offering Memorandum

3 contents 04 EXECUTIVE SUMMARY financials tenant overview area OVERVIEW exclusively listed by andrew ivankovich Associate DIR MOB LIC # (TX) Braden Crockett AVP & Director braden.crockett@matthews.com DIR MOB LIC # (CA) Don Mortensen BROKER OF RECORD LIC # lc (AZ) Carl s Jr. Willcox, AZ 3

4 executive summary investment highlights 20-year lease with StarCorp, LLC (145 Units) Low price point under $1.5MM Absolute NNN investment No landlord responsibilities 20-year lease will commence upon the close of escrow Tenant showing Strong Commitment Site by extending the lease for a total of 20 years Rare 1.25% annual rent increases Great hedge against inflation Building was renovated in 2013 Out-positions competitors Located directly off Interstate-10, this Carl s Jr. offers the best access out of all competitors Prime positioning as the only restaurant and Safeway outparcel Relatively Little Competition Surrounded by national retailers such as Safeway, McDonald s, Texaco, Burger King, Circle K and AutoZone as well as Days Inn, Travelodge and Rodeway Inn West Coast Real Estate Carl Karcher Enterprises (CKE) is one of the largest national QSR concepts in the world and has over 3,100 Carl s Jr and Hardee s locations combined 4 Offering Memorandum

5 Subject Property North Brisbee Avenue West Rex Allen Drive Carl s Jr. Willcox, AZ 5

6 6 Offering Memorandum

7 Financials Carl s Jr. 728 North Bisbee Avenue Willcox, AZ List Price... $1,415,000 CAP Rate - Current % Gross Leasable Area... ± 2,655 SF Lot Size...± 0.59 Acres Year Built / Renovated / 2013 Tenant Summary Tenant Trade Name Type of Ownership Lease Guarantor Lease Type Roof and Structure Original Lease Term Lease Commencement Date Rent Commencement Date Lease Expiration Date Term Remaining on Lease Increases Options Carl s Jr. Fee Simple Franchisee - Star Corp (145 Units) NNN Tenant Responsible 20 Years Close of Escrow Close of Escrow Close of Escrow 20 Years 1.25% Annual Increases Four, 5-Year Options Annualized Operating Data NOI Increase Cap Rate Year 1 $84, % 6.00% Year 2 $85, % 6.08% Year 3 $87, % 6.15% Year 4 $88, % 6.23% Year 5 $89, % 6.31% Year 6 $90, % 6.38% Year 7 $91, % 6.46% Year 8 $92, % 6.55% Year 9 $93, % 6.63% Year 10 $94, % 6.71% Year 11 $96, % 6.79% Year 12 $97, % 6.88% Year 13 $98, % 6.96% Year 14 $99, % 7.05% Year 15 $101, % 7.14% Year 16 $102, % 7.23% Year 17 $103, % 7.32% Year 18 $104, % 7.41% Year 19 $106, % 7.50% Year 20 $107, % 7.60% Carl s Jr. Willcox, AZ 7

8 tena nt ov e rv i e w Company Name Parent Company Trade Name Carl s Jr. CKE Restaurants Holdings, Inc. Ownership Private No. of Locations ± 1,500 No. of Employees (All) Headquartered Website Year Founded ± 23,000 Carpinteria, California C a r l s Jr. Carl s Jr. is an American-based fast food restaurant chain operated by CKE Restaurants Holdings, Inc., with locations primarily in the Western and Southwestern United States. In the spirit of the company s founder, Carl Karcher, CKE believes it can best share in its success by offering support to its neighbors through its scholarship and charitable giving programs, including the Stars for Heroes campaign which raised $1 Million in CKE is also working toward greater sustainability with the help of company-wide initiatives, including the corporate Green Team. STRATEGY With over 3,600 total CKE franchised and company owned restaurants, and more than 1,500 Carl s Jr. specific, CKE Restaurants Holdings, Inc. is dedicated to helping franchisees build growing restaurant operations that are sustainable for the long term. To this end, the strategy and core positioning of the Carl s Jr. banner is oriented to building top-line sales that support franchise profitability via premium product strategy, strong restaurant fundamentals, and cutting-edge advertising. With best-in-class menus, innovative systems, and outstanding brand recognition, the company is poised for sustained growth around the world. GEOGRAPHIC REACH As of March 2016, CKE has a total of 3,664 franchised or company-operated restaurants in 44 states and 38 foreign countries and U.S. territories. Carl s Jr. has announced plans to expand in Ontario, Canada s Golden Horseshoe, a territory that includes Toronto, Mississauga, Oakville, Burlington, Hamilton, Brantford and London. 8 Offering Memorandum

9 Carl s Jr. Willcox, AZ 9

10 the offering Property Name Property Address Assessor s Parcel Number Carl s Jr. 728 North Bisbee Avenue Willcox, AZ F Site Description Number of Stories One Year Built / Renovated 1986 / 2013 Gross Leasable Area (GLA) ± 2,655 SF Lot Size ± 0.59 Acres (25,700 SF) Type of Ownership Fee Simple Parking ± 25 Surface Spaces Parking Ratio 9.42 : 1,000 SF Landscaping Professional Topography Generally Level Oceanside Blvd ± 31,792 College Blvd ± 40,116 Construction Foundation Framing Exterior Parking Surface Roof Concrete Slab Wood Masonry Asphalt Flat parcel map 10 Offering Memorandum

11 bird s eye aerial Northern Cochise Community Hospital West Rex Allen Drive Subject Property North Brisbee Avenue Carl s Jr. Willcox, AZ 11

12 area overview Willcox, AZ Willcox is a city located on Interstate 10 in the northern section of the Sulphur Springs Valley. Halfway between Phoenix and El Paso, Texas, Willcox serves as the major trade and service center for agriculture and tourism within Cochise County. The city specializes in customer satisfaction, taking pride in the quality and reliable services it offers residents and visitors alike. There are numerous opportunities for outdoor recreation such as hiking, biking, camping, bird watching and taking in beautiful sunsets. Wilcox is also part of Arizona s up-and-coming wine country; The Wilcox wine region produces 74% of the wine grapes grown in the entire state. Historic downtown Wilcox is home to some of Willcox wine country tasting rooms, unique shops, restaurants and museums. Property demographics POPULATION 3-Mile 5-Mile 10-Mile 2022 Projection 4,957 5,591 6,335 HOUSEHOLDS 3-Mile 5-Mile 10-Mile 2022 Projection 1,857 2,095 2,380 INCOME 3-Mile 5-Mile 10-Mile 2017 Est. Average Household Income $57,067 $57,693 $58,079 DISTANCE TO: SIERRA VISTA, AZ 69 miles, 1 hour and 11 minutes driving distance TUCSON, AZ 80.9 miles, 1 hour and 17 minutes driving distance 12 Offering Memorandum

13 TOP EMPLOYERS Sierra Vista, AZ Sierra Vista is a city located 75 miles southeast of Tucson, Arizona in Cochise County. As the economic and commercial center for Cochise County and parts of northern Sonora, Mexico, Sierra Vista is the largest of the seven incorporated cities in the county, accounting for one-third of the county s population. Retailers such as Lowe s, Home Depot, Walmart, Target and Sears are located in the community. Fort Huachuca, a U.S. Army installation, sits at the northeast of the city and provides a substantial employment base. It is the community s major employer and primary driving economic force. The city has been nicknamed the Hummingbird Capital of the United States for the abundance of bird species in the nearby Runyon Canyon Preserve and other local canyons. Bird watchers from all over the world are drawn to Sierra Vista to observe and photograph the hundreds of species. There are also numerous outdoor recreational opportunities available nearby at Parker Canyon Lake, the San Pedro Piparian National Conservation Area and the Coronado National Memorial in the Huachuca Mountains. Sierra Vista is also the heart of the up-and-coming Napa-zona wine country. There are nineteen surrounding wineries in the surrounding area as close as a half hour drive. Many of these wineries have festivals and events throughout the year, drawing wine-lovers from all over. Carl s Jr. Willcox, AZ 13

14 TUCSON, AZ Most famously known as the home of the University of Arizona, the city of Tucson is the second-most populated city in Arizona. It is 60 miles north of the U.S.- Mexico border and a major hub for the Union Pacific Railroad s Sunset Route, which links the Los Angeles ports with the Southern regions of the country. In recent years, Tucson has experienced one of the highest growth rates in the United States. Much of Tucson s economic development has been propagated by the development of the University of Arizona, which is currently the second largest employer in the city. Davis-Monthan Air Force Base on the southeastern edge of the city and the US Army Intelligence Center at Fort Huachuca provide many jobs for the region; They have driven the development of a significant number of high-tech industries, including government contractors, in the area. With advanced technology sectors as its foundation, Tucson has earned the nickname Optics Valley because of the significant amount of Tucson companies that are involved in the design and manufacture of optics and optoelectronics systems. 14 Offering Memorandum

15 CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Carl s Jr. located at 728 North Bisbee Avenue, Willcox, AZ ( Property ). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum for the Property, you agree: 1. The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller. Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

16 exclusively listed by ANDREW IVANKOVICH Associate DIR MOB LIC # (TX) BRADEN CROCKETT AVP & Director braden.crockett@matthews.com DIR MOB LIC # (CA) Don Mortensen BROKER OF RECORD LIC # lc (AZ) Carl s Jr. 16 Offering Memorandum 728 North Bisbee Avenue Willcox, AZ