Pizza Hut - NPC International

Pizza Hut - NPC International OFFERING MEMORANDUM SITE PHOTO

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. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

NET LEASED DISCLAIMER 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.

TABLE OF CONTENTS Section 1 PRICING AND FINANCIAL ANALYSIS Section 2 PROPERTY DESCRIPTION Section 3 RECENT SALES Section 4 DEMOGRAPHIC ANALYSIS

PRICING AND FINANCIAL ANALYSIS Pizza Hut - NPC International

PRICING AND FINANCIAL ANALYSIS FINANCIAL OVERVIEW Location 1639 Dakota Avenue South Huron, SD 57350 Price $312,500 Down Payment 100% / $312,500 Annualized Operating Data Rent Increases Annual Rent Monthly Rent 2012-2017 $28,906.00 $2,408.83 Base Rent ($17.71/SF) $28,906 Net Operating Income $28,906 Total Return 9.25% / $28,906 Rentable Square Feet 1,632 Price/SF $191.48 CAP Rate 9.25% Year Built 1997 Lot Size 16,000 SF Type of Ownership Fee Simple Tenant exercised its second option. The location also pays out regularly on percentage rents. 2011 = $106.04 additional rent paid to landlord 2012 = $462.31 additional rent paid to landlord Tenant Summary Tenant Trade Name Ownership Tenant Lease Guarantor Lease Type Roof and Structure Lease Term Pizza Hut Public Franchisee Franchisee Guarantee Absolute Net Tenant Responsible 5 Years Lease Commencement Date 06/05/2012 Rent Commencement Date 06/05/2012 Lease Expiration Date 06/04/2017 Term Remaining on Lease Increases Options 3.8 Years Percentage Rents None 1

PRICING AND FINANCIAL ANALYSIS TENANT OVERVIEW Property Name Pizza Hut - NPC International Property Address 1639 Dakota Avenue South Huron, SD 57350 Property Type Net Leased Restaurant - Other Rentable Square Feet 1,632 Tenant Trade Name Pizza Hut Ownership Public Tenant Franchisee Sales Volume $11.8 Billion - YUM! Net Worth $2.2 Billion - YUM! Lease Guarantor Franchisee Guarantee Credit Rating BBB (Stable) Rating Agency Standard & Poor's Stock Symbol YUM Board NYSE Rank 213 on Fortune 500 (May 2012) Lease Commencement Date 06/05/2012 Rent Commencement Date 06/05/2012 Lease Expiration Date 06/04/2017 Term Remaining on Lease 3.8 Years Lease Type Absolute Net Roof and Structure Tenant Responsible Lease Term 5 Years Increases Percentage Rents Options to Renew First Right of Refusal None None No. of Locations 7200+ In US Headquartered Louisville, KY Web Site www.yum.com Years in the Business 54 Other Concepts Owned KFC & Taco Bell NPC International is the franchisee of the site: The world's largest Pizza Hut franchisee. Headquartered out of Overland Park, KS, NPC International is the prince of pepperoni in the pizza empire. NPC owns and operates more than 1,230 pizza restaurants and delivery kitchens in about 30 states. The quick-service eateries, located mostly in such southern states as Alabama, Florida, Georgia, and Tennessee, serve a variety of pizza styles, as well as such items as buffalo wings and pasta. The pizza parlors are franchised from YUM! Brands, the world's largest fast-food restaurant company. NPC was founded in 1962 by former chairman Gene Bicknell, who was one of the first Pizza Hut franchisees. The company was acquired by private equity group NPC International Holdings in late 2011. 2

PROPERTY DESCRIPTION Pizza Hut - NPC International

PROPERTY DESCRIPTION INVESTMENT OVERVIEW Investment Highlights Franchised by the World's Largest Pizza Hut Franchisee Franchisee 2012 Sales $1.05 Billion 2012 Franchisee Net Income Totaling $15.02 Million Total Assets of Franchisee is $1.17 Billion Site Regularly Makes Percentage Rents Tenant Exercised Their Second Option in 2012, Seasoned in the Region Fast Growing Region, Population Has Grown 6.5 Percent Since 2000 [Terrific suburban location surrounded by established residential neighborhoods. Located directly adjacent to Advance Auto Parts, and across the street from Super Splash car wash. Also in the immediate area is the Huron Visitors Bureau, a Clark gas station, Lewis Department store, McDonald's and a Burger King, as well as many regional retailers. Being suburban in nature, the area is also surrounded by several elementary and high schools, both private and public. See aerial for more information. Huron is the largest city in Beadle County, South Dakota and the ninth largest in South Dakota. Huron is noted as the home of both the South Dakota State Fair and of the world s largest pheasant (28 ft. high, 22 tons), affirming Huron as a prime pheasant hunting location. Huron is located at the intersection of US Highway 14 and State Highway 37, 116 miles east of the state capital, Pierre, and 125 northwest of Sioux Falls, SD. The region is known for its outstanding school system, state of the art medical center, the Nordby Center for Recreation, the Huron Event Center, and Huron Arena. The region is also home to three golf courses, and several parks and walking trails. 4

PROPERTY DESCRIPTION AREA MAPS Local Map Regional Map 5

PROPERTY DESCRIPTION SITE PLAN the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any 6

PROPERTY DESCRIPTION AERIAL PHOTO the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any 7

RECENT SALES Pizza Hut - NPC International

RECENT SALES RECENT SALES MAP 1) 2) 3) Pizza Hut - NPC International Pizza Hut - Port Washington, WI Pizza Hut - Burlington, NC Pizza Hut - Clarkston, WA 9

RECENT SALES CAP RATE AND PRICE PER SQUARE FOOT Average Cap Rate 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Subject Pizza Hut - Port Washington, WI Pizza Hut - Burlington, NC Pizza Hut - Clarkston, WA Average Price per Square Foot 500.00 450.00 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 Subject Pizza Hut - Port Washington, WI Pizza Hut - Burlington, NC Pizza Hut - Clarkston, WA 10

RECENT SALES RECENT SALES Pizza Hut - NPC International 1639 Dakota Avenue South Huron, SD 57350 Rentable Square Feet: 1,632 Sales Price: $312,500 Year Built: 1997 Down Payment: $312,500 CAP Rate: 9.25% Subject Property Price/SF: $191.48 1 Pizza Hut - Port Washington, WI 1021 North Wisconsin Street Port Washington, WI 53074 Close of Escrow: 09/10/2012 Sales Price: $667,500 Rentable SF: 2,520 Down Payment: 100% Year Built: 1975 CAP Rate: 8.21% Price/SF: $265.00 Comments Listed at 8.01 percent cap, with six years remaining on the base term of the lease. Franchisee operates 121 units in Pacific Northwest. 2 Pizza Hut - Burlington, NC 2125 South Church Street Burlington, NC 27215 Close of Escrow: 06/27/2013 Sales Price: $710,000 Rentable SF: 1,459 Down Payment: 100% Year Built: 1969 CAP Rate: 8.20% Price/SF: $487.00 Comments New 10-year, triple net lease. Franchisee operates 76 units (Mid-Atlantic Rest Co). 11

RECENT SALES RECENT SALES 3 Pizza Hut - Clarkston, WA 450 Bridge Street Clarkston, WA 99403 Close of Escrow: 06/03/2013 Sales Price: $460,000 Rentable SF: 2,350 Down Payment: 100% Year Built: 1993 CAP Rate: 7.17% Price/SF: $196.00 Comments Listed at a 7.25 percent cap. Franchisee is a 23-unit operator (Spokane Valley LLC). Tenant exercised their first of two five-year options. 12

DEMOGRAPHIC ANALYSIS Pizza Hut - NPC International

DEMOGRAPHIC ANALYSIS DEMOGRAPHIC REPORT 1 Mile 3 Miles 5 Miles 2000 Population 8,178 12,429 12,954 2010 Population 8,613 13,100 13,657 2012 Population 8,681 13,231 13,800 2017 Population 8,734 13,322 13,898 2000 Households 3,528 5,489 5,655 2010 Households 3,625 5,638 5,814 2012 Households 3,670 5,725 5,906 2017 Households 3,693 5,781 5,967 2012 Average Household Size 2.29 2.27 2.27 2012 Daytime Population 2,297 8,033 8,927 2000 Median Housing Value $57,569 $57,964 $58,159 2000 Owner Occupied Housing Units 59.76% 57.54% 57.75% 2000 Renter Occupied Housing Units 32.62% 32.19% 31.86% 2000 Vacant 9.35% 10.30% 10.40% 2012 Owner Occupied Housing Units 59.41% 56.32% 56.39% 2012 Renter Occupied Housing Units 33.90% 34.71% 34.45% 2012 Vacant 6.69% 8.97% 9.16% 2017 Owner Occupied Housing Units 59.40% 56.29% 56.35% 2017 Renter Occupied Housing Units 34.10% 34.90% 34.63% 2017 Vacant 6.50% 8.81% 9.01% $ 0 - $14,999 16.2% 16.5% 16.4% $ 15,000 - $24,999 15.4% 15.5% 15.6% $ 25,000 - $34,999 11.2% 13.0% 12.8% $ 35,000 - $49,999 13.9% 14.5% 14.5% $ 50,000 - $74,999 18.7% 18.7% 18.8% $ 75,000 - $99,999 15.5% 13.6% 13.7% $100,000 - $124,999 4.7% 4.2% 4.2% $125,000 - $149,999 1.9% 1.8% 1.8% $150,000 - $199,999 0.8% 0.7% 0.7% $200,000 - $249,999 0.6% 0.6% 0.6% $250,000 + 1.0% 0.9% 1.0% 2012 Median Household Income $41,958 $39,586 $39,719 2012 Per Capita Income $23,421 $23,062 $22,873 2012 Average Household Income $54,849 $52,759 $52,873 Demographic data 2012 by Experian. 14

DEMOGRAPHIC ANALYSIS POPULATION DENSITY Demographic data 2012 by Experian. Number of people living in a given area per square mile. 15

DEMOGRAPHIC ANALYSIS EMPLOYMENT DENSITY Demographic data 2012 by Experian. The number of people employed in a given area per square mile. 16

DEMOGRAPHIC ANALYSIS AVERAGE HOUSEHOLD INCOME Demographic data 2012 by Experian. Average income of all the people 15 years and older occupying a single housing unit. 17

OFFERING MEMORANDUM Offices Nationwide www.marcusmillichap.com Exclusively Listed By: Lior Regenstreif First Vice President Investments Encino Office License: CA 01267761 Tel: (818)212-2730 Fax: (818)212-2710 Lior.Regenstreif@marcusmillichap.com www.marcusmillichap.com/liorregenstreif Gil Raben Broker Raben Real Estate, Inc. License: SD 00000-1588