offering memorandum ARBY S 3200 W MERCURY BLVD HAMPTON, VA

offering memorandum ARBY S 3200 W MERCURY BLVD HAMPTON, VA

CONTENTS 03 04 05 09 EXECUTIVE SUMMARY FINANCIAL OVERVIEW TENANT OVERVIEW AREA OVERVIEW LISTED BY Conrad Sarreal Capital Markets CONRAD.SARREAL@MATTHEWS.COM DIR 310.919.5760 MOB 626.230.1006 LIC # 01982875 (CA) Chad Kurz SVP & National Director CHAD.KURZ@MATTHEWS.COM DIR 214.692.2927 MOB 562.480.2937 LIC # 01911198 (CA) BROKER OF RECORD Kyle Matthews BROKER OF RECORD LIC # 022602771

3 EXECUTIVE SUMMARY Nostalgic Prototype Subject property is one of the first couple hundred stores to open and still carries the original exterior design Rent Increases Landlords benefit from COLA (similar to CPI) increases in Base Rent every 2 years Percentage Rent Lease includes an Overage clause that offers landlords a portion of the tenant s success LEASE/ PROPERTY DETAILS Renovated Interior The interior has been renovated within the last few years Drive-thru Subject property features a drive-thru that helps improve the performance of this store Healthy Sales Arby s has strong store sales at this location which have been increasing by an average of nearly 6% each year since 2014 (contact broker for details) Passive Investment Investors from across the country can own this asset due to NNN lease structure that calls for structure only responsibility Dense Market Over 188,000 residents within a 5-mile radius Improving Trade Area The Peninsula Town Center is working on the arrival of Kroger and an upscale Marriott hotel concept on the property Excellent Retail Synergy Ample amount of strong tenants nearby including Walmart Supercenter, Target, Food Lion, AutoZone, CVS, Big Lots, Walmart Neighborhood Market, Lowe s, BJ s Wholesale, Bass Pro Shops, Lidl, and more LOCATION Freeway Accessible Onramps and offramps of the I-64 (±164,000 average VPD) connect to Mercury Blvd Premier Retail Corridor Mercury Blvd aka Highway 258 transitions into Highway 17, therefore, features a robust average traffic count of 50,000+ VPD and is the main retail corridor in Hampton, VA with 50+ retailers Reputable Brand Arby s was founded in 1964 and is the 2nd largest quick-service sandwich chain in the United States Growing Sales Arby s reports same-store sales grew by 3.8% in 2016 to $3.6 Billion in revenue system-wide TENANT Long Operating History Arby s has been operating at this location for 30+ years which attests to their success in this market

4 FINANCIAL OVERVIEW FINANCIAL HIGHLIGHTS EXECUTIVE SUMMARY Property Name Arby s LIST PRICE $1,079,000 CAP RATE 7.00% TERM REMAINING ± 5.20 YEARS Property Street 3200 W Mercury Blvd City, State, Zip Hampton, VA 23666 GLA ± 1,995 SF Year Built 1968 Lot Size ± 0.57 Acres ANNUALIZED OPERATING DATA Monthly Rent Annual Rent $/SF 1/1/2018-12/31/2018 $6,296 $75,556* $9.33 1/1/2019-12/31/2019 1/1/2020-12/31/2020 1/1/2021-12/31/2021 Base + COLA + Overage Base + Overage Base + COLA + Overage - - - - - - 1/1/2022-12/31/2022 Base + Overage - - *Calculated using $41,654 Base Rent plus Overage of average sales for 2015, 2016, and 2017 annualized **COLA is calculated by using the CPI for All Urban Wage Earners and Clerical Workers TENANT SUMMARY Tenant Trade Name Arby s Type of Ownership Fee Simple Lease Guarantor Franchisee Lease Type NNN Roof / Parking Lot / HVAC Tenant Responsible Original Lease Term 5 years Rent Commencement Date 1/1/2013 Lease Expiration Date 12/31/2022 Term Remaining ± 5.20 Years Increases COLA Increases Options One, 5-Year

Tenant overview 5 5

6 ARBY S Arby s Fast Crafted restaurant services feature a unique blend of quickserve speed combined with the quality and made-for-you care of fast casual. Arby s Restaurant Group, Inc. is the franchisor of the Arby s Brand and is headquartered in Atlanta, GA. Arby s Restaurant Group (ARG) operates the Arby s fast food chain popular for its hot roast beef sandwiches. In addition to roast beef sandwiches, its menu features chicken sandwiches, salads, and some dessert items. More than 1,100 Arby s locations are company-owned, while the rest are franchised. COMPANY TRADE NAME Arby s Restaurant Group, Inc. HEADQUARTERED Atlanta, GA Arby s record year Arby s had a record year in 2016 and pushed sales over $3.6 billion according to QSR magazine. Arby s outperformed the quick service industry by 2.3 percentage points and marked 25 consecutive quarters of SSS growth. The fourth quarter of 2016, marked 11 consecutive quarters of transaction growth and 16 consecutive quarters of industry performance for the brand. Arby s plans to continue high volume sales by inking deals with new and exciting Arby s franchisees for the development of 167 new restaurants system-wide. Rebranding and remodeling STRATEGY Arby s is looking to revitalize its guest experience by remodeling 229 restaurants systemwide in the Inspire design. Arby s has re-engineered its restaurants to reduce development costs, expand site selection options, and deliver an upgraded guest experience. Arby s has improved ROI by stripping out some of the costs of opening or remodeling a restaurant. The Inspire design reduces development and remodeling costs, increases restaurant efficiency, and is highly adaptable to a wide range of site opportunities. NO. OF EMPLOYEES ± 130,000 WEBSITE www.arby s.com # OF LOCATIONS ± 3,500 YEAR FOUNDED 1964

7 PARCEL MAP the offering Property Name Property Address Assessor s Parcel Number Site Description Number of Stories Arby s 3200 W Mercury Blvd Hampton, VA 23666 03E002R00 00002H One Year Built 1968 GLA Lot Size Type of Ownership Parking Parking Ratio Landscaping Topography ± 1,995 SF ± 0.57 Acres ( 24,829 SF) Fee Simple ± 31 Surface Spaces 15.53 : 1,000 SF Professional Generally Level Oceanside Blvd ± 31,792 College Blvd ± 40,116

8 surrounding tenants

9 9 AREA OVERVIEW HAMPTON, VA Hampton is an independent city in Virginia. As one of the seven major cities that compose the Hampton Roads metropolitan area, Hampton is graced with miles of shoreline and breathtaking water views. The city is located in the heart of the Hampton Roads region and the center of the East Coast. Established in 1610, Hampton is one of America s oldest cities and is also one of the fastest growing cities in the region. Rich in history with small-town charm, Hampton has been recognized by Money magazine as one of the best places to live, as well as a national model for youth development and civic engagement. DEMOGRAPHICS POPULATION 1 Mile 3 Mile 5 Mile 2022 Projection 12,888 85,851 188,341 2017 Estimate 12,858 84,981 184,899 HOUSEHOLDS 1 Mile 3 Mile 5 Mile 2022 Projection 5,414 36,791 75,980 2017 Estimate 5,374 36,226 74,205 INCOME 1 Mile 3 Mile 5 Mile 2017 Est. Average Household Income $58,992 $60,164 $61,337

10 Business Top Employers For residents and visitors alike, the city features a wide array of business and industrial enterprises, retail and residential areas, and historical sites. Most recently, the new Peninsula The Peninsula Town Center and other developments have re-established Hampton as the premier shopping, dining and entertainment destination of Hampton Roads. Peninsula Town Center features retail, dining, entertainment, office and residential opportunities. Other developments include The Power Plant of Hampton Roads with Bass Pro Shops Outdoor World, the Hampton Roads Convention Center, Embassy Suites hotel and new residential communities. The quality of life is a breath of fresh air and one of the best kept secrets on the East Coast. A waterfront city with a mild climate, Hampton has one of the lowest crime rates in the region. The city has been named one of the most technologyadvanced cities in the nation by the Center for Digital Government for 14 of the past 15 years and one of the top 20 hot spots for young professionals to live and work by Next Generation Consulting.

11 11 Hampton Roads Metropolitan Statistical Area Hampton Roads is the name of both a body of water in Virginia and the surrounding metropolitan region in Southeastern Virginia and Northeastern North Carolina. Hampton Roads is known for its large military presence, ice-free harbor, shipyards, coal piers, and miles of waterfront property and beaches, all of which contribute to the diversity and stability of the region s economy. There s also a wealth of other points of history to explore in the Hampton Roads area. Led by the Historic Triangle area, Hampton Roads consistently rates among the top tourism destinations in the world. Cultural attractions include museums, historical sites, and venues from tiny to massively large for such things as art and musical shows. The region hosts two week-long visits by the Ringling Bros. and Barnum & Bailey Circus each year with multiple performances at Norfolk Scope and the Hampton Coliseum, and even attracts a group of Circus Train Enthusiasts rail fans. The Historic Triangle is located on the Virginia Peninsula and includes the colonial communities of Jamestown, Williamsburg, and Yorktown, with many restored attractions linked by the Colonial Parkway. The National Park Service s Colonial Parkway joins the three popular attractions of Colonial Virginia with a scenic and bucolic roadway carefully shielded from views of commercial development. This helps visitors mentally return to the past, and there are often views of wildlife and waterfowl. Other sites in the Triangle include Busch Gardens, Historic Jamestowne, and Yorktown Battlefield.

CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Arby s located at 3200 W Mercury Blvd Hampton, VA 23666 ( 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 Conrad Sarreal Capital Markets CONRAD.SARREAL@MATTHEWS.COM DIR 310.919.5760 MOB 626.230.1006 LIC # 01982875 (CA) Chad Kurz SVP & National Director CHAD.KURZ@MATTHEWS.COM DIR 214.692.2927 MOB 562.480.2937 LIC # 01911198 (CA) BROKER OF RECORD Kyle Matthews BROKER OF RECORD LIC # 022602771 3200 W MERCURY BLVD HAMPTON, VA 23666