OFFERING MEMORANDUM 7 - ELEVEN VIRGINIA BEACH, VA

OFFERING MEMORANDUM 7 - ELEVEN VIRGINIA BEACH, VA

2 INVESTMENT OVERVIEW INVESTMENT OVERVIEW Marcus & Millichap is pleased to present this recently extended 7-Eleven in Virginia Beach, the largest city in Virginia. The tenant recently signed a 10-year absolute-net lease extension with zero landlord responsibilities. 7-Eleven has demonstrated their commitment to this location as they have been operating here since 1975. There are 10 percent rent bumps every five years over the base term and in all three, five year extension options. The lease is backed by a corporate guaranty from 7-Eleven, Incorporated (Inc); who is consistently ranked number one on CSP Magazine s Top 202 Convenience Stores. The subject property is nearby the intersection of Providence Road and Indian River Road. This heavily trafficked, 20 lane thoroughfare, sees more than 50,000 vehicles per day (VPD). 7-Eleven is located in the dense infill neighborhood of Woodhaven. There are more than 104,000 residents within three miles. Regent University is located one mile southwest of this asset. There are more than 3,800 students enrolled here. This asset is also in close proximity to Interstate-64. This highway sees more than 140,000 vehicles per day (VPD). 7-Eleven benefits from strong demographics. There are more than 293,000 residents within five miles, an increase of 5 percent from 2010. Additional tenants in the immediate vicinity: CVS/ pharmacy, BB&T, Dunkin Donuts, Walgreens, Burlington Coat Factory, Speedway, BP, Cook Out, Waffle House, Hardee s, SunTrust, Goodwill, Advance Auto Parts, Dollar Tree, AutoZone, O Reilly Auto Parts, and many more.

3 INVESTMENT OVERVIEW 7-Eleven in Virginia Beach Recent 10-Year Extension 43-Year Operating History Absolute Net Lease With 10 Years of Term Remaining Zero Landlord Responsibilities Strong Rent Increases 10 Percent Every Five Years Corporate Guaranty 7-Eleven, Incorporated (Inc) Standard & Poor (S&P): AA- Consistently Number One on CSP Magazine s Top 202 Convenience Stores More Than 8,000 Locations in North America Nearby Intersection of Providence Road and Indian River Road Heavily Trafficked, 20 Lane Thoroughfare With More Than 50,000 Vehicles Per Day (VPD) Dense Infill Location in Virginia Beach s Woodhaven Neighborhood More Than 104,000 Residents Within Three Miles Located One Mile Northwest of Regent University More Than 3,800 Students Enrolled Close Proximity to Interstate-64 More Than 147,000 Vehicles Per Day (VPD) Growing Population Population Rose 5 Percent to 293,685 From 2010 to 2017 Within Five Miles Development Within Immediate Vicinity New Construction Lidl Completed Last Year $6 Million Project Additional Tenants in the Immediate Vicinity: CVS/pharmacy, BB&T, Dunkin Donuts, Walgreens, Burlington Coat Factory, Speedway, BP, Cook Out, Waffle House, Hardee s, SunTrust, Goodwill, Advance Auto Parts, Dollar Tree, AutoZone, O Reilly Auto Parts, and Many More

4 FINANCIAL OVERVIEW FINANCIAL OVERVIEW PRICE $1,260,000 CAP RATE 5.00% NOI $63,000 PRICE PER SQUARE FOOT $477.27 RENT PER SQUARE FOOT $23.86 YEAR BUILT 1975 APPROXIMATE LOT SIZE 0.63 Acres GROSS LEASEABLE AREA 2,640 TYPE OF OWNERSHIP Fee Simple LEASE GUARANTOR 7-Eleven, Incorporated (Inc.) LEASE TYPE ROOF AND STRUCTURE Absolute-Net Tenant Responsible

5 LEASE SUMMARY LEASE SUMMARY LEASE COMMENCEMENT DATE 1/25/1975 LEASE EXPIRATION DATE 12/31/2027 LEASE TERM 10 Years TERM REMAINING 10 Years Annualized Operating Data BASE RENT ANNUAL RENT MONTHLY RENT 11/1/2017 12/31/2022 $63,000 $5,250 INCREASES 1/1/2023 12/31/2027 $69,300 $5,775 10% OPTIONS INCREASES OPTIONS TO RENEW FIRST RIGHT OF REFUSAL 10% Every 5 Years 3, 5-Year Yes 1/1/2028 12/31/2032 $76,230 $6,353 10% 1/1/2033 12/31/2037 $83,853 $6,988 10% 1/1/2038 12/31/2042 $92,238 $7,687 10%

6 TENANT OVERVIEW TENANT OVERVIEW - 7 - ELEVEN 7-Eleven is among the world s largest and most widely recognized and iconic retailers, both inside and outside the c-store channel. The company s iconic Slurpee, Big Gulp soft drinks and fresh-made coffees have helped 7-Eleven grow throughout North America and in several countries overseas. Convenience items range from cigarettes and magazines, to sweet and salty snacks, beer and wine. 7-Eleven distinguishes itself from the competition with its many proprietary and private-label items. On the foodservice front, the chain has recently rolled out its fresh initiative, adding more fresh food items across the chain. Technology meanwhile plays a major role in the brand s evolution, including its 7Rewards loyalty app, a new BillPay app, third-party delivery and even a promotional play around drone delivery. For management purposes, corporate/franchised stores are organized into geographical zones. 7-Eleven, Incorporated is wholly owned subsidiary of Tokyobased Seven & I Holdings Co., Limited; which is publicly-traded on the Tokyo Stock Exchange. Its Retailer Initiative allows an operator to align product assortment with the store s customer preferences, it offers many proprietary and private-label items, and it has assembled a restaurant-quality team that is introducing more fresh foods to the chain. TENANT PROFILE TENANT TRADE NAME OWNERSHIP TENANT LEASE GUARANTOR NUMBER OF LOCATIONS HEADQUARTERED CREDIT RATING 7-Eleven Wholly Owned Subsidiary of Seven & I Holdings Co., Limited 7-Eleven, Incorporated 7-Eleven, Incorporated 8,000 Plus Irving, Texas AA- RANK #1 CSP Daily News, #7 Franchise 500

7 DEMOGRAPHICS DEMOGRAPHICS 1-Mile 3-Mile 5-Mile POPULATION 2000 Population 13,602 97,457 267,928 2010 Population 13,160 100,384 279,549 2017 Population 14,339 104,710 293,685 2022 Population 14,800 107,626 301,583 1-Mile 3-Mile 5-Mile HOUSEHOLDS 2000 Households 4,981 34,986 96,698 2010 Households 5,064 37,861 104,416 2017 Households 5,595 39,642 109,988 2022 Households 5,789 40,805 113,104 1-Mile 3-Mile 5-Mile HOUSEHOLD (HH) INCOMES 2017 Average HH Income $64,549 $73,717 $71,282 2017 Median HH Income $55,860 $64,596 $60,322 2017 Per Capita Income $25,187 $27,908 $26,696

8 VIRGINIA BEACH, VIRGINIA ABOUT VIRGINIA BEACH Virginia Beach, located in southeastern Virginia on the Atlantic coast, is the largest city in the state. Once railroads covered the 18 miles between it and Norfolk in the 1880s, Virginia Beach was established as a resort and top tourist destination. The fast-growing metro area, including Norfolk, is driven by four military bases, a booming tourism industry, and blossoming high-tech industries. Virginia Beach is best known for its tourism, but the military and agribusiness sectors are also material contributors to the city s economy. The city s economy also contains a large retail component at places such as Lynnhaven Mall. Major companies headquartered in Virginia Beach include Amerigroup, the Christian Broadcasting Network, Operation Blessing International, and Stihl (American headquarters). Other major employers include GEICO, VT and Navy Exchange Service Command. Virginia Beach was ranked at number 45 on Forbes list of best places for business and careers. Virginia Beach has a large agribusiness sector which produces $80 million for the city economy. 172 farms exist in Virginia Beach, mostly below the greenline in the southern portion of the city. Farmers are able to sell their goods and products at the city s Farmer s Market. Also known as a party town, Virginia Beach has its share of cultural attractions too, with museums that focus on art, marine science and the area s military history. The 20,000- seat Virginia Beach Amphitheater hosts performances of the Virginia Symphony as well as concerts by some of pop music s biggest acts throughout the year. Hip-hop s Chad Hugo and Pharrell Williams, known as The Neptunes, are natives of Virginia Beach who run a recording studio in the city. For history buffs, America s colonial past comes alive at nearby Williamsburg and Jamestown, the colonies first settlement in 1607.

MARCUS & MILLICHAP HEREBY ADVISES ALL PROSPECTIVE PURCHASERS OF NET LEASED PROPERTY AS FOLLOWS: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

7 - ELEVEN VIRGINIA BEACH, VA 920 LEVEL GREEN BOULEVARD VIRGINIA BEACH, VIRGINIA 23464 BROKER OF RECORD: BRYN MERREY MARCUS & MILLICHAP LICENSE: 0225215804