BURGER KING 1300 CENTRAL BLVD, BROWNSVILLE, TX 78520 OFFERING MEMORANDUM
CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Burger King located at 1300 Central Blvd, Brownsville, TX 78520 ( Property ). It has been prepared by Matthews Retail Group. 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 Group. 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 Group 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 Group 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. Matthews Retail Group
Table of Contents PRICING & FINANCIAL ANALYSIS Investment Highlights... 2 Executive Summary... 3 Company Overview... 4 PROPERTY DESCRIPTION Physical Description... 7 Tenant Map... 8 Regional Map... 9 Bird s Eye... 10 DEMOGRAPHICS City Overview Brownsville, TX... 12 Demographics Report... 13 EXCLUSIVELY LISTED BY: Kevin Chang Associate DIRECT +1.310.919.5828 MOBILE +1.951.616.8918 kevin.chang@matthews.com License No. 01976724 Gary Chou Director Restaurant Practice Group DIRECT +1.310.919.5827 MOBILE +1.714.928.8016 gary.chou@matthews.com License No. 01911222 Jay Ceitlin Broker of Record License No. 510276
Matthews Retail Group
Pricing & Financial Analysis
Investment Highlights STABILIZED CASH FLOW 1% annual increases or 8.5% of gross sales Great hedge against inflation Four (4) five (5) year options with additional rent increases Nationally and internationally recognized quick-serve restaurant tenant Burger King Second largest Burger King Franchisee Sun Holdings Inc. operates over 250 unique Burger King units and has over 550 units of franchised businesses in total ECONOMIC GROWTH VIA TECH MIGRATION SpaceX, the leading privately funded space exploration company, is currently constructing a private launch site in Brownsville, projected to bring $85M to the Local Economy in contracted jobs and $51M in Annual Salaries thereafter by 2024. STARGATE (Spacecraft Tracking and Astronomical Research into Gigahertz Astrophysical Transient Emission) has also started construction and has received over $10M in Funding to provide support for spaceflight operations via radio-frequency technology. IDEAL 1031 EXCHANGE PROPERTY Absolute NNN lease with zero landlord obligations Ideal for out-of-state cash flow investors STRONG RETAIL LOCATION Located in the right off US-77 BUS which leads straight to Brownsville City Hall and the Gladys Porter Zoo Dominant Retail Corridor - surrounding national retailers in the immediate area include Walgreens, Whataburger, Dairy Queen, Dollar General, CVS Pharmacy, H-E-B, Cash America Pawn, McDonald s, Subway among others. Over 81,000 people within a 3-mile radius, with Average Household Income of $44,911 Over 169,025 people within a 5-mile radius, with Average Household Income of $46,212 P. 2 Matthews Retail Group OFFERING MEMORANDUM Burger King
Executive Summary BURGER KING 1300 CENTRAL BLVD BROWNSVILLE, TX 78520 List Price... $1,222,000* CAP Rate - Current... 9.00% Gross Leasable Area... 4,437 SF Lot Size... ±1.14 Acres Year Built...2003 Annualized Operating Data Monthly Rent Annual Rent Rent/SF CAP Rate Current - 1/31/2016 $7,000.00 $84,000 $18.93 6.87% 2/1/2016-1/31/2017 $9,166.67 $110,000 $24.79 9.00% 2/1/2017-1/31/2018 $9,258.33 $111,100 $25.04 9.09% 2/1/2018-1/31/2019 $9,350.92 $112,211 $25.29 9.18% 2/1/2019-1/31/2020 $9,444.43 $113,333 $25.54 9.27% *Priced reflects upcoming rental increase in January 2016 at an increase of 1% annually thereafter Tenant Summary Tenant Trade Name Burger King Type of Ownership Fee Simple Lease Guarantor Franchisee Lease Type NNN Roof and Structure Tenant Responsible Original Lease Term 17 Years, 4 Months Years Lease Commencement Date 9/26/2002 Rent Commencement Date 10/1/2002 Lease Expiration Date 6/30/2020 Term Remaining on Lease 4.83 Increases 1% Increases Annually OR 8.5% of Gross Sales Options Four (4) 5-Year Options Burger King OFFERING MEMORANDUM Matthews Retail Group P. 3
Company Overview Property Name Burger King Property Type Net Leased Quick Service Restaurant Parent Company Trade Name Restaurant Brands International Inc. Ownership Public Credit Rating B+ Rating Agency Standard & Poor s Revenue $1.97 B Net Income $117.7 M Stock Symbol QSR Board NYSE No. of Locations ±13,000 No. of Employees ±34,000 Headquartered Miami, FL Web Site http://www.bk.com/ Year Founded 1953 Burger King is a global chain of hamburger fast food restaurants headquartered in Miami, Florida. The company began in 1953 as Insta-Burger King. but after financial difficulties in 1954, two large franchisees in Miami, purchased the company and renamed it Burger King. In 2002, a third set of owners, a partnership of TPG Capital, Bain Capital, and Goldman Sachs Capital Partners, took it public. Eight years later, 3G Capital of Brazil acquired a majority stake in BK and the new owners promptly initiated a restructuring of the company to reverse its declining market share. 3G, along with partner Berkshire Hathaway, merged the company with Canadian-based doughnut chain Tim Hortons under a new Canadian-based parent company, Restaurant Brands International which was founded on August 25, 2014. The multinational giant currently serves customers in US and Canada, Europe, Middle East and Africa, Latin America, the Caribbean, and Asia Pacific. P. 4 Matthews Retail Group OFFERING MEMORANDUM Burger King
Property Description
P. 6 Matthews Retail Group OFFERING MEMORANDUM Burger King
Physical Description THE OFFERING Property Name...Burger King Property Address... 1300 Central Blvd Brownsville, TX 78520 Assessor s Parcel Number...019356-0010-001000 SITE DESCRIPTION Number of Stories...One Year Built... 2003 Gross Leasable Area (GLA)...4,437 SF Lot Size... ±1.14 Acres Type of Ownership... Fee Simple Parking...±54 Surface Spaces Parking Ratio...12.17 : 1,000 SF Landscaping...Professional Topography...Generally Level CONSTRUCTION Foundation...Concrete Slab Framing... Wood Exterior...Painted Stucco Parking Surface... Asphalt Roof...Flat Burger King OFFERING MEMORANDUM Matthews Retail Group P. 7
Tenant Map P. 8 Matthews Retail Group OFFERING MEMORANDUM Burger King
Regional Map Burger King OFFERING MEMORANDUM Matthews Retail Group P. 9
Bird s Eye P. 10 Matthews Retail Group OFFERING MEMORANDUM Burger King
Demographics
City Overview Brownsville, TX Brownsville is located at the southernmost tip of Texas, on the northern bank of the Rio Grande, directly north and across the border from Matamoros, Tamaulipas, Mexico. The 2014 U.S. Census Bureau estimate placed the Brownsville-Harlingen metropolitan area population at 420,392, making it the ninth most populous metropolitan area in the state of Texas. The Brownsville urban area is one of the fastest growing in the United States. The city's population dramatically increased after it experienced a boom in the steel industry during the first decade of the 1900s, when steel output tripled. In recent times, the Port of Brownsville has become a major economic hub for South Texas, where shipments from Mexico, other parts of the United States and the world arrive. Brownsville's economy is mainly based on its international trade with Mexico through the North American Free Trade Agreement (NAFTA), and is home to one of the fastest growing manufacturing sectors in the nation. Brownsville has often been recognized as having one of the best pro-business climates in the United States, and the city has also been ranked among the least expensive places to live in the U.S. In September 2014, SpaceX, a privately funded space exploration company, begun construction of a private launch site which will bring $85M to the local economy with contractual jobs and $51M in annual salaries there after by 2024. In synergy to the private launch pad, STARGATE (Spacecraft Tracking and Astronomical Research into Gigahertz Astrophysical Transient Emission) begun construction in October 2014 and has received over $10M in funding to provide support for spaceflight operations via radio-frequency technology. Like the rest of the South Texas Coast, Brownsville is an excellent place for visitors. Some common attractions that draw tourists include outdoor activities, museums, art galleries, theaters, and shopping. Boca Chica Beach is a nearby beach known for its pristine conditions and undeveloped state. It offers a wide, sandy beach that is accessible to vehicles and allows visitors to camp, fish, surf, or sunbathe. Source: Wikipedia P. 12 Matthews Retail Group OFFERING MEMORANDUM Burger King
Demographics Report Population 1-Mile 3-Mile 5-Mile 2020 Projection 12,766 83,145 169,025 2015 Estimate 12,890 80,984 162,305 2010 Census 13,248 79,693 156,769 2000 Census 14,286 74,541 133,028 Growth 2015-2020 -0.96% 2.67% 4.14% Growth 2010-2015 -2.70% 1.62% 3.53% Households 2020 Projection 4,230 25,910 48,682 2015 Estimate 4,233 25,172 46,754 2010 Census 4,278 24,636 45,146 2000 Census 4,296 21,782 36,566 Growth 2015-2020 -0.08% 2.93% 4.12% Growth 2010-2015 -1.05% 2.18% 3.56% Income $0 - $15,000 28.49% 28.13% 24.92% $15,000 - $24,999 15.78% 17.49% 17.60% $25,000 - $34,999 11.93% 12.50% 12.94% $35,000 - $49,999 10.58% 12.10% 12.83% $50,000 - $74,999 15.76% 14.22% 14.98% $75,000 - $99,999 6.61% 6.20% 6.80% $100,000 - $124,999 4.39% 4.08% 4.56% $125,000 - $149,999 2.13% 1.70% 1.99% $150,000 - $199,999 1.96% 1.63% 1.66% $200,000 - $249,999 0.80% 0.73% 0.71% $250,000 - $499,999 1.23% 0.87% 0.73% $500,000+ 0.35% 0.36% 0.28% 2015 Est. Average Household Income $47,898 $44,911 $46,212 2015 Est. Median Household Income $29,792 $28,506 $30,776 Burger King OFFERING MEMORANDUM Matthews Retail Group P. 13
BURGER KING 1300 Central Blvd Brownsville, TX 78520 OFFERING MEMORANDUM Kevin Chang Associate DIRECT +1.310.919.5828 MOBILE +1.951.616.8918 kevin.chang@matthews.com License No. 01976724 Gary Chou Director Restaurant Practice Group DIRECT +1.310.919.5827 MOBILE +1.714.928.8016 gary.chou@matthews.com License No. 01911222 Jay Ceitlin Broker of Record License No. 510276 Matthews Retail Group 841 Apollo Street, Suite 150 El Segundo, CA 90245 www.matthewsretailgroup.com