IHOP 4725 Showcase Boulevard Memphis, TN 38118 IHOP, Memphis, TN 1 OFFERING MEMORANDUM
2 Matthews Real Estate Investment Services
contents 04 Investment Highlights 06 08 12 financial OVERVIEW tenant overview area OVERVIEW exclusively listed by Gary chou FVP & Director Gary.Chou@matthews.com DIR (310) 919-5827 MOB (714) 928-8016 LIC # 01911222 (CA) Jim Holleman BROKER OF RECORD LIC # 235328 IHOP, Memphis, TN 3
investment highlights SECURED LONG-TERM LEASE Strong Commitment to Location Tenant has been here since 1998 and recently executed a 10-year extension IHOP has Three (3), 5-Year Options to extend the current lease with 10% rental increases every 5 years Zero landlord responsibility making this investment great for out of state investors looking for passive income ATTRACTIVE CORPORATE SIGNATURE Corporately Guaranteed - DineEquity, Inc. is one of the largest full-service restaurant companies in the world with revenues in excess of $650 million and locations in approximately 17 countries 100% leased to national tenant, IHOP, a subsidiary of DineEquity, Inc. (NYSE: DIN) FANTASTIC RETAIL LOCATION Strong Corridor of National Tenants - National tenants in area include Boost Mobile, Dollar Tree, ALDI, Taco Bell, Orion Federal Credit Union, Captain D s, Popeye s, Sonic Drive Thru Right Off the Highway - IHOP is located just off Interstate 240 which traffics over 168,000 vehicles per day The property is less than 3 miles away from Memphis International Airport which is the busiest cargo airport in the United States 4 Matthews Real Estate Investment Services
IHOP, Memphis, TN 5
financial overview 6 Matthews Real Estate Investment Services
IHOP 4725 Showcase Boulevard Memphis, TN 38118 List Price...$2,143,000 CAP Rate...7.00% Gross Leasable Area...± 4,694 SF Lot Size...± 1.08 Acres Year Built...1996 Annualized Operating Data Monthly Rent Annual Rent Rent/SF Cap Rate Current - 1/12/2018 $16,956.32 $203,475.79 $43.35 9.49% 1/13/2018-1/12/2023 $12,500.00 $150,000.00 $31.96 7.00% 1/13/2023-1/12/2028 $13,750.00 $165,000.00 $35.15 7.70% Option 1: 1/13/2028-1/12/2033 $15,125.00 $181,500.00 $38.67 8.47% Option 2: 1/13/2033-1/12/2038 $16,637.50 $199,650.00 $42.53 9.32% Option 3: 1/13/2038-1/12/2043 $18,301.25 $219,615.00 $46.79 10.25% Option 4: 1/13/2043-1/12/2048 $20,131.38 $241,576.50 $51.46 11.27% *List price based off rent adjustment on 1/13/2018 Tenant Summary Tenant Trade Name IHOP Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NNN Roof and Structure Tenant Responsible Original Lease Term 20 Years Lease Commencement Date 1/13/1998 Lease Expiration Date 1/12/2028 Term Remaining on Lease ± 10 years Increases 10% Increases Every 5 Years Options Four (4), Five (5) Year Options IHOP, Memphis, TN 7
tenant overview 8 Matthews Real Estate Investment Services
Property Name Company Trade Name Parent Company Trade Name Ownership Credit Rating (S&P) IHOP International House of Pancakes, LLC DineEquity, Inc. Public B No. of Locations ± 1,700 No. of Employees ± 40,000 Headquartered Website Glendale, California www.ihop.com Year Founded 1958 OVERVIEW Since 1958, IHOP has been the place where people connect over breakfast, enjoy study breaks, grab a bite before or after sporting events and so much more. The IHOP family restaurant chain continues to serve their world-famous pancakes and a wide variety of breakfast, lunch and dinner items that are loved by people of all ages. The casual dining restaurant offers pancakes, omelets, French toasts and waffles, crepes, burgers, sandwiches, soups, salads, hash brown stacks, desserts and beverages. International House of Pancakes, LLC also provides a line of syrups through retail stores, mass merchandisers and grocery outlets in the United States. Offering an affordable, everyday dining experience with warm and friendly service, IHOP restaurants are franchised and operated by Glendale, California-based International House of Pancakes, LLC, a wholly-owned subsidiary of DineEquity, Inc., and its affiliates. DineEquity, Inc. is one of the largest fullservice restaurant companies in the world with more than 400 franchisee partners. STRATEGY As the leader in Family Dining, IHOP s 99%-franchised system delivers strong free cash flow results that have been the hallmark of the brand s financial performance for more than half a century. IHOP relies primarily on discounted value pricing and limited-time offers, such as its Free Pancake Giveaway, to drive traffic to its restaurants. The company operates in four segments: franchise operations, company restaurant operations, rental operations, and financing operations. With mostly franchised locations, the IHOP chain includes a dozen corporate-run locations used mostly for testing and training. Focused on providing strategic, visionary leadership for their franchisees, DineEquity successfully brought Applebee s and IHOP together in 2007 to revitalize the brands. The company s dedicated focus combined with an expertise in brand revitalization and franchising have been the basis of their financial success in recent years. GEOGRAPHIC REACH DineEquity operates in more than 20 countries. International House of Pancakes, LLC operates and franchises a chain of restaurants in all 50 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico. Internationally, the company has locations in Canada, Bahrain, Dubai, Guam, Guatemala, Kuwait, Qatar, Saudi Arabia, The Philippines and Mexico. As of 2015, there were 1,700 IHOP restaurants in 50 states. IHOP, Memphis, TN 9
the offering Property Name Property Address IHOP 4725 Showcase Boulevard Memphis, TN 38118 Assessor s Parcel Number 074-001- - -00236 Site Description Number of Stories One Year Built 1996 Gross Leasable Area (GLA) Lot Size Type of Ownership Parking Parking Ratio Landscaping Topography ± 4,694 SF ± 1.08 Acres (47,044 SF) Free Simple ± 100 Surface Spaces 21.3 : 1,000 SF Professional Generally Level parcel map Perkins Road ± 39,000 ADT Oceanside Blvd ± 31,792 College Blvd ± 40,116 10 Matthews Real Estate Investment Services
Tenant Map IHOP, Memphis, TN 11
Area overview Memphis, TN Memphis, Tennessee is the largest city on the Mississippi River. Located within Shelby County, Memphis is a vibrant and historic city. It is the second largest city within Tennessee, and brings in a large amount of tourists because of its famous, historical landmarks. Being only 3 miles from Memphis, Arkansas, it is only a hop, skip, and a jump from the Arkansas/Tennessee border. Known as the Birthplace of Rock and Roll, the city holds a significant amount of musical history within it s borders. The residents of Memphis take pride of their city, and are usually known as Memphians, and they know how to have a good time. The sports fans of the area love to cheer on the University of Memphis Tigers. As for professional teams, many support the Memphis Grizzlies. The animal lovers enjoy the Memphis Zoo, which has been the zoo s home for over 100 years and has over 3,500 animals. 12 Matthews Real Estate Investment Services
Memphis Residents Many of Memphis s residents are blue-collar, hard workers. The most common industries within this area are Transportation and Warehousing, Construction, and Manufacturing. Within those, the most common occupations are Material Moving, Construction and Extraction. The unemployment rate has started to decrease with the overall household income increasing since the early 2000s. Memphis demographics POPULATION 1 Mile 3 Mile 5 Mile 2022 Projection 12,268 89,676 210,710 2017 Estimate 12,075 89,446 209,876 2010 Census 11,890 90,766 212,363 2000 Census 10,980 96,631 224,503 Growth 2017-2021 1.59% 0.26% 0.40% HOUSEHOLDS 1 Mile 3 Mile 5 Mile 2022 Projection 4,166 34,153 84,463 2017 Estimate 4,089 33,889 83,668 2010 Census 4,000 34,000 83,675 2000 Census 4,056 37,631 90,212 Growth 2017-2022 1.90% 0.78% 0.95% INCOME 1 Mile 3 Mile 5 Mile 2017 Est. Average Household Income $44,989 $53,557 $66,252 IHOP, Memphis, TN 13
Points of interest GRACELAND 3764 Elvis Presley Blvd is the home to Graceland, the mansion of the late Elvis Presley. His home is open to the public and brings in 650,000 visitors a year and is the second most visited house in the United States. Rock and Roll fans can pay their respects to the King while exploring his lavish home. The house sits on 13.8 acres and is the burial to Presley and his family. Inside there are 23 rooms. Each room has a different theme which allows fans to see Presley s unique decorating taste. NATIONAL CIVIL RIGHTS MUSEUM The National Civil Rights Museum holds a significant chapter of our country s history. The museum holds several powerful exhibits that shows the growth of Civil Rights from the 17th century to present. It was created around the Lorraine Motel, where Martin Luther King, Jr was assassinated. The museum has recently grown within other buildings around the Lorraine Motel. The main mission is to share the civil rights movement and make sure that equality keeps growing today. SUN STUDIO For true music fans, Sun Studio is a must-see. The recording studio was originally opened by Sam Phillips in 1950. Throughout the 50 s, Phillips would go on to create careers for Johnny Cash, Elvis Presley, Jerry Lee Lewis, and so many others. Sun Studios contributed immensely to the Birthplace of Rock and Roll. You can take a tour and see where it all started or join in on the action! There are still active recording sessions and singing competitions. 14 Matthews Real Estate Investment Services
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of IHOP located at 4725 Showcase Boulevard, Memphis, TN 38118 ( Property ). It has been prepared by Matthews Retail Advisors. 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 Retail Advisors. 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 Retail Advisors 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 Retail Advisors 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 indicaation that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. IHOP, Memphis, TN 15
exclusively listed by Gary chou FVP & Director Gary.Chou@matthews.com DIR (310) 919-5827 MOB (714) 928-8016 LIC # 01911222 Jim Holleman BROKER OF RECORD LIC # 235328 IHOP 4725 Showcase Boulevard Memphis, TN 16 Matthews Real Estate Investment Services