OFFERING MEMORANDUM Burger King 1738 W. Tilghman Street Allentown, PA Burger King, Allentown, PA 1
Gary Chou FVP & Senior Director Gary.Chou@matthews.com DIR (310) 919-5827 MOB (714) 928-8016 LIC # 01911222 (CA) Kevin Chang Associate Kevin.Chang@matthews.com DIR (310) 919-5828 MOB (951) 616-8918 LIC # 01976724 (CA) Scott Burdett BROKER OF RECORD LIC # 10301213057 (PA)
Investment Highlights LONG-TERM, WORRY-FREE INVESTMENT Brand New Development The store will be completed in late 2017 to match the latest Burger King prototype Long-Term Lease Tenant to sign brand new 20-year lease with Four (4), 5-Year options to extend at close of escrow Absolute NNN Lease Tenant takes care of all landlord responsibilities including tax, insurance, maintenance, roof and structure Growing Cash Flow There are 8% increases every 5 years Excellent hedge against inflation EXCELLENT TENANT WITH STRONG GROWTH MODEL AND BALANCE SHEET GPS Hospitality Corporate guarantee from one of the three largest Burger King operators in the country High Growth Operator GPS Hospitality has over 430+ Burger King & Popeyes restaurants across Alabama, Arkansas, Florida, Georgia, Louisiana, Maryland, Mississippi, New Jersey, Pennsylvania and West Virginia Tenant with Long-Term Outlook GPS plans to remodel 30-40 stores each year and has consistently seen year-over-year revenue growth Healthy Cash Flow Franchise Times reports that GPS Hospitality has revenues over $500 million and is halfway to its 10-year goal of $1 billion in annual revenue IDEAL RETAIL LOCATION Main Retail Corridor Nearby national tenants include Walgreens, Dollar General, CVS, Wingstop, Advance Auto Parts, TD Bank, McDonald s and Dunkin Donuts, amongst many others Healthy Traffic Counts The property can be easily accessed from both directions of traffic on Tilghman St and benefit from over 18,500 VPD Burger King, Allentown, PA 3
Financial Overview ADDRESS 1738 W. Tilghman St. Allentown, PA 18104 LIST PRICE $2,318,000 Annualized Operating Data Monthly Rent Annual Rent Rent/SF Cap Rate Year 1-5 $10,625.00 $127,500 $38.03 5.50% Year 6-10 $11,475.00 $137,700 $41.07 5.94% Year 11-15 $12,393.00 $148,716 $44.35 6.42% Year 16-20 $13,384.44 $160,613 $47.90 6.93% Option 1: Year 21-25 $14,455.20 $173,462 $51.73 7.48% Option 2: Year 26-30 $15,611.61 $187,339 $55.87 8.08% Option 3: Year 31-35 $16,860.54 $202,326 $60.34 8.73% Option 4: Year 36-40 $18,209.38 $218,513 $65.17 9.43% CAP RATE 5.50% GLA ± 3,353 SF Tenant Summary Tenant Trade Name Type of Ownership Lease Guarantor Lease Type Original Lease Term Rent Commencement Date Lease Expiration Date Term Remaining on Lease Increases Extensions Burger King Fee Simple GPS Hospitality NNN 20 Years COE TBD ± 20 Years 8.00% Increases Four, 5-Year Options LOT SIZE ± 0.98 Acres YEAR BUILT 2017
Tenant Overview Property Name Parent Company Trade Name Ownership Burger King Restaurant Brands International, Inc. (NYSE: QSR) Public Credit Rating (Standard & Poor s) B+ Revenue Net Income $1.15 B $233.70 M No. of Locations ± 15,000 No. of Employees ± 34,248 Headquartered Miami, FL Website www.bk.com Year Founded 1953 TENANT OVERVIEW Burger King Worldwide operates the world s #3 hamburger chain by sales with almost 15,000 restaurants in the US and more than 100 other countries. In addition to its popular Whopper sandwich, the chain offers a selection of burgers, chicken sandwiches, salads, and breakfast items, along with beverages, desserts, and sides. Many of the eateries are stand-alone locations offering dine-in seating and drive-through services; the chain also includes units in high-traffic locations such as airports and shopping malls. Burger King Worldwide is owned and operated by Restaurant Brands International. GEOGRAPHIC OUTREACH Burger King has restaurant locations throughout the US and more than 100 other countries. The US and Canada are responsible for about 65% of revenues. Like most other giants of the fast-food industry, Burger King has expanded its nationwide and international presence primarily through franchising. But the company has reduced its domestic expansion efforts recently. Burger King has used joint ventures to expand in countries like China, Mexico, Russia, and Singapore. STRATEGY Burger King has been remodeling outdated restaurant interiors and modernizing obsolete technology, thus positioning the company for future growth. Its goal is to have 40% of Burger King restaurants in the US and Canada on a modern image by the end of 2015. The company has also been steadily refranchising locations with the goal of getting to a 100% franchised business model eventually. Burger King, Allentown, PA 5
Parcel Map The Offering GLA ± 3,353 SF Oceanside Blvd ± 31,792 LOT SIZE ± 0.98 Acres ( 42,688 SF) College Blvd ± 40,116 YEAR BUILT 2017
Surrounding Tenants - West Bound Trexier Middle School Luis Ramos Elementary School Craft Rug Mills Allentown Car Wash Tilghman St ± 15,000 ADT Bike Line Subject Property Creative Tile Imports Muhlenberg College Burger King, Allentown, PA 7
East Bound Civic Theatre of Allentown AshMor Systems LMS Nails EJ Richmond & Associates Muhlenberg Elementary School JCC of the Lehigh Valley TIP Towing Jack Callaghans s Ale House Ninth Hamilton Le Femme Boutique Dreisbach s Automotive Sales Bella Casa Kitchen & Bath CJ Wagner Bowling Supplies Subject Property 8 Offering Memorandum
South Bound Lehigh Valley Hospital The Fairgrounds Hotel MainGate Night Club Allentown Fairground Creative Tile Imports Dreisbach s Automotive Sales Bike Line Subject Property Bella Casa Kitchen & Bath Burger King, Allentown, PA 9
Area area overview Overview Area Overview Allentown, PA As the county seat of Lehigh County, Pennsylvania, Allentown is the third most populous city in the state. Allentown was cited as a national success story in April 2016 by the Urban Land Institute for its downtown redevelopment and transformation, one of only six communities in the country to have been named as such. Allentown s economy has historically been manufacturing-based, but with a more recent turn to a more service-oriented economy. The city serves as the location of corporate headquarters for several large, global companies, including Air Products & Chemicals, and PPL. Demographics POPULATION 1 Mile 3 Mile 5 Mile 2022 Projection 35,002 140,332 227,428 2017 Estimate 34,697 138,141 223,687 2010 Census 34,250 134,874 218,150 Growth 2017-2021 0.88% 1.59% 1.675 HOUSEHOLDS 1 Mile 3 Mile 5 Mile 2022 Projection 12,688 51,163 86,481 2017 Estimate 12,624 50,535 85,241 Growth 2016-2021 0.51 1.24 1.46 INCOME 1 Mile 3 Mile 5 Mile 2017 Est. Average Household Income $51,405 $61,071 $69,307 10 Offering Memorandum
Redevelopment Projects Allentown Economic Development Corporation (AEDC) has worked with a variety of businesses and projects that help retain, grow and create new jobs and business opportunities in Allentown. The city is the epicenter for development in the Lehigh Valley and has been recognized as the second best performing region of its size for economic development across the U.S. Current redevelopment projects include: Musselman Arts Building at 6th - this property now home to Youth Education in the Arts and the Cadets and Cadets II drum and bugle corps, US Bands and many other youth-oriented music and dance organizations The Donley Center - newly home to the Lehigh Carbon Community College Allentown campus The Butz Building - now home to Alvin H. Butz Co., Discover Lehigh Valley, the Greater Lehigh Valley Chamber of Commerce, Stoudt Financial Services The Allentown Brew Works - a regional microbrewery and restaurant PLL Plaza - home to the energy marketing and energy services offices of PPL Inc. PPL Center - currently under construction and soon to be home to the AHL Lehigh Valley Phantoms, the top major league affiliate of the Philadelphia Flyers ice hockey team National Penn Bank located its corporate headquarters in a new seven-story building across from the arena. Three City Center - 166,000 sf $55MM seven story office and retail building at the former Colonial Theater Four City Center - $40MM project including a five-story building and adjacent three-story building with 168 apartments. The Schoen s building - renovated to house the corporate headquarters of Trifecta Technologies Allentown Metal Works - currently underway with remediation and rehabilitation of the building Burger King, Allentown, PA 11
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Burger King located at 1738 W. Tilghman Street, Allentown, PA 18104 ( 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.
Exclusively Listed By Gary Chou FVP & Senior Director Gary.Chou@matthews.com DIR (310) 919-5827 MOB (714) 928-8016 LIC # 01911222 (CA) Kevin Chang Associate Kevin.Chang@matthews.com DIR (310) 919-5828 MOB (951) 616-8918 LIC # 01976724 (CA) Scott Burdett BROKER OF RECORD LIC # 10301213057 (PA) Burger King 1738 W. Tilghman Street Allentown, PA Burger King, Allentown, PA 13