OFFERING MEMORANDUM
NET LEASED DISCLAIMER Marcus & Millichap hereby advises all prospective purchasers of Single-Tenant 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 single-tenant 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 singletenant 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 single-tenant 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 single-tenant 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 Checkers Drive-In
PRICING AND FINANCIAL ANALYSIS FINANCIAL OVERVIEW Location 2223 Whiskey Road Aiken, SC 29803 Price $1,028,947 Down Payment 100% / $1,028,947 Rentable Square Feet 1,600 Price/SF $643.09 CAP Rate 9.40% Year Built 2010 Lot Size 14,723 +/- Type of Ownership Tenant Summary Tenant Trade Name Ownership Fee Simple Checkers Drive-In Restaurants Private Annualized Operating Data Rent Increases Annual Rent Monthly Rent Years 1-5 $97,749.96 $8,145.83 Years 6-10 $103,614.96 $8,634.58 Year 11 $109,831.86 $9,152.66 Year 12 $113,126.82 $9,427.24 Year 13 $116,520.62 $9,710.05 Year 14 $120,016.24 $10,001.35 Year 15 $123,616.73 $10,301.39 Year 16 $127,325.23 $10,610.44 Year 17 $131,144.99 $10,928.75 Year 18 $135,079.33 $11,256.61 Year 19 $139,131.71 $11,594.31 Year 20 $143,305.66 $11,942.14 Base Rent ($60.44/SF) $96,705 Net Operating Income $96,705 Total Return 9.40% / $96,705 Tenant Lease Guarantor Lease Type Roof and Structure Augusta Burgers Express, Inc. Personal Guarantee Triple Net (NNN) Tenant Responsible Lease Term 20 Lease Commencement 8/23/2010 Rent Commencement 8/23/2010 Lease Expiration Date 8/22/2030 Term Remaining on 18+ Increases 6% in Yr 11, 3% annually 1
PRICING AND FINANCIAL ANALYSIS TENANT OVERVIEW Property Name Checkers Drive-In Property Address 2223 Whiskey Road Aiken, SC 29803 Property Type Net Leased Restaurant Fast Food Rentable Square Feet 1,600 Tenant Trade Name Ownership Tenant Corporate Sales Net Worth Lease Guarantor Credit Rating Valueline Financial Strength Rating Agency Stock Symbol Board Rank Checkers Drive-In Restaurants Private Augusta Burgers Express, Inc. $620 Million Personal Guarantee Lease Commencement Date 8/23/2010 Rent Commencement Date 8/23/2010 Lease Expiration Date 8/22/2030 Term Remaining on Lease 18+ Lease Type Triple Net (NNN) Roof and Structure Tenant Responsible Lease Term 20 Year 1 Net Operating Income $96,705 Increases 6% in Yr 11, 3% annually thereafter Options to Renew Options to Terminate Options to Purchase First Right of Refusal None None None No. of Locations 815 Headquartered Web Site Franchisee Profile Years in the Business Other Concepts Owned Corporate Information on Checker's Drive-In: Tampa, Florida www.checkers.com 26 Years After successfully opening and maintaining 200+ restaurant chain businesses in several Midwestern and Southeastern states, in 1999 Checkers & Rally's would bring their passion for big flavor together. This successful merger would make Checkers & Rally's the largest double drive thru restaurant chain in the country. Which in turn would only help bolster both the Checkers & Rally's brands on all fronts. Today Checkers & Rally's have more than 800 restaurants open in the United States. And with the hard working, can-do attitude that every Checkers & Rally's employee and Rally's 2
PROPERTY DESCRIPTION Checkers Drive-In
PROPERTY DESCRIPTION INVESTMENT OVERVIEW Investment Highlights 18+ Years Remaining on Absolute NNN Lease Out Parcel to Publix Anchored Center and Aiken Mall Rent Escalations 38,000+ Traffic counts on Whiskey Rd (2008 Data) Ground Lease for Water Retention Area High Gross Sales Personal Guaranty from the Operator We re excited to open our 20th Checkers restaurant and anticipate a great turn out from Sumter residents, said Andy Pye, Checkers Franchisee and Partner of Augusta Burger Express, Inc. With more than 14 years of restaurant experience, this milestone is one our group is extremely proud of and has been anxiously waiting to celebrate. We look forward to serving great tasting, bold flavored food at an affordable price to families in the community. Marcus & Millichap is proud to present a 1,600 +/- square foot Checker s Drive-In located at 1293 Broad Street in Sumter, Sumter County, South Carolina. This investment is strategically located on an out parcel to a Wall*Mart Supercenter shopping center and adjacent to a Lowe s Home Improvement shopping center. Checker's benefits both from direct access off of Broad Street as well as exposure which comes from an estimated daily traffic count on Broad Street of 29,100 +/- vehicles per day. The population density within a 3- mile radius of the subject property is 25,199 and 56,088 within a 5 mile radius. Some of the nearby traffic generators within close proximity to the subject property are: Wal-Mart, Lowe's, Michaels, Petco, Dollar Tree, Golden Corral, IHOP, Chili s, T.J. Max, Anytime Fitness, Five Guys, Game Stop, GNC, Chuck-E- Cheese, Staples, Chick-Fil-a, Holiday-Inn, Quality-Inn, Hampton Inn, Comfort Suites, Sleep Inn, Country Inn & Suites, Wells Fargo, Bank of America, BB&T, Citi-Trends, JC Penny, Radio Shack, and Belk. The Checker's investment is accompanied by a 20 year absolute NNN lease with 19 years remaining on the base term. The initial lease term commenced in 2011. The lease contains rent escalations in both the base term and all the options periods. Rent is scheduled to escalate by 6% in lease year 6 and then escalates by 3% on an annual basis starting in lease year 11, and continues through the option periods. Also included in the lease are three (3), five (5) year renewal options. The lease is both personally guaranteed by the operator as well as Augusta Burgers Express, Inc. Checkers Drive-In Restaurants, Inc. is the largest double drive-thru restaurant chain in the United States. The company develops, owns, operates and franchises both Checkers and Rally s restaurants. Based in Tampa, Florida, it has more than 800 restaurants open across the U.S. In recent years, the brand has been awarded several of the industry s most prestigious awards including: Best Drive-Thru in America by QSR Magazine and the Hot! Again Award from Nation s Restaurant News. Checkers is known for providing great tasting, fresh food for today s on-the-go guest. Items include the classic Big Buford, Champ Burger, loaded fries and classic bone-in wings tossed in one of five flavors. 4
PROPERTY SUMMARY The Offering Property Property Address PROPERTY DESCRIPTION Checkers Drive-In 2223 Whiskey Road Aiken, SC 29803 Site Description Year Built 2010 Rentable Square Feet 1,600 Lot Size 14,723 +/- Type of Ownership Fee Simple 5
PROPERTY DESCRIPTION NEARBY TRAFFIC GENERATORS 6
PROPERTY DESCRIPTION NEARBY TRAFFIC GENERATORS 7
PROPERTY DESCRIPTION AREA MAPS Local Map Regional Map 8
Map & CoStar Traffic Report PROPERTY DESCRIPTION implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real 9
RECENT SALES Checkers Drive-In
RECENT SALES RECENT SALES MAP 1) 2) 3) 4) 5) 6) 7) 8) Checkers Drive-In Checkers Drive-In Restaurant Jack in the Box Wendy's Sonic Sonic Starbucks Sonic Drive-In - Corporate Guarantee Rally's 11
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 Checkers Drive-In Restaurant Jack in the Box Wendy's Sonic Sonic Starbucks Sonic Drive-In - Corporate Guarantee Rally's Average Price per Square Foot 1,400.00 1,200.00 1,000.00 800.00 600.00 400.00 200.00 0.00 Subject Checkers Drive-In Restaurant Jack in the Box Wendy's Sonic Sonic Starbucks Sonic Drive-In - Corporate Guarantee Rally's 12
RECENT SALES RECENT SALES Checkers Drive-In 2223 Whiskey Road Aiken, SC 29803 Rentable Square Feet: 1,600 Sales Price: $1,028,947 Year Built: 2010 Down Payment: $1,028,947 CAP Rate: 9.40% Subject Property Price/SF: $643.09 1 Checkers Drive-In Restaurant 382 US Highway 27 South Avon Park, FL 33825 Close of Escrow: 9/11/2009 Sales Price: $879,260 Rentable SF: 1,600 Down Payment: N/A Year Built: 1993 CAP Rate: 9.10% Price/SF: $549.54 2 Jack in the Box 14011 East Wade Hampton Boulevard Greer, SC 29651 Close of Escrow: 6/9/2011 Sales Price: $1,995,000 Rentable SF: 2,867 Down Payment: N/A Year Built: 2001 CAP Rate: 8.49% Price/SF: $695.85 13
RECENT SALES RECENT SALES 3 Wendy's 2110 Saxon Boulevard Deltona, FL 32725 Close of Escrow: 1/24/2011 Sales Price: $1,830,000 Rentable SF: 2,761 Down Payment: 100% Year Built: 1998 CAP Rate: 8.26% Price/SF: $662.80 4 Sonic 2425 NE 8th Street Homestead, FL 33033 Close of Escrow: 9/12/2011 Sales Price: $2,262,961 Rentable SF: 1,645 Down Payment: N/A Year Built: 2011 CAP Rate: 7.10% Price/SF: $1,375.66 5 Sonic 1511 Wirt Road Houston, TX 77055 Close of Escrow: 6/24/2011 Sales Price: N/A Rentable SF: 1,526 Down Payment: N/A Year Built: 2006 CAP Rate: 7.13% Price/SF: $708.19 14
RECENT SALES RECENT SALES 6 Starbucks 1186 Lenoir Rhyne Boulevard Hickory, NC 28602 Close of Escrow: 2/3/2011 Sales Price: $1,050,000 Rentable SF: 1,870 Down Payment: 100% Year Built: 2008 CAP Rate: 8.54% Price/SF: $561.50 7 Sonic Drive-In - Corporate Guarantee 10831 Potranco Road San Antonio, TX 78251 Close of Escrow: 10/20/2010 Sales Price: N/A Rentable SF: 1,392 Down Payment: Year Built: 1998 CAP Rate: 7.47% Price/SF: $826.15 8 Rally's 3855 North Post Road Indianapolis, IN 46226 Close of Escrow: 5/16/2011 Sales Price: $640,000 Rentable SF: 844 Down Payment: 50% Year Built: 1987 CAP Rate: 8.17% Price/SF: $758.29 15
DEMOGRAPHIC ANALYSIS Checkers Drive-In
DEMOGRAPHIC ANALYSIS DEMOGRAPHIC REPORT 1 Mile 3 Miles 5 Miles 1990 Population 2,909 17,926 30,979 2000 Population 4,289 22,929 36,376 2010 Population 5,173 27,400 47,380 2011 Population 5,447 28,097 48,258 2016 Population 6,300 30,656 52,523 1990 Households 1,177 7,056 11,869 2000 Households 1,754 9,403 14,753 2010 Households 2,404 12,149 20,084 2011 Households 2,542 12,507 20,722 2016 Households 2,996 13,855 22,919 2011 Average Household Size 2.12 2.24 2.29 2011 Daytime Population 5,455 12,118 26,760 1990 Median Housing Value $80,842 $86,904 $76,588 2000 Median Housing Value $99,632 $114,339 $103,271 2000 Owner Occupied Housing Units 55.46% 67.93% 64.78% 2000 Renter Occupied Housing Units 35.26% 24.14% 25.98% 2000 Vacant 9.28% 7.93% 9.24% 2011 Owner Occupied Housing Units 56.97% 68.69% 65.15% 2011 Renter Occupied Housing Units 34.87% 22.83% 25.20% 2011 Vacant 8.16% 8.47% 9.65% 2016 Owner Occupied Housing Units 57.44% 68.89% 65.11% 2016 Renter Occupied Housing Units 34.69% 22.90% 25.47% 2016 Vacant 7.87% 8.21% 9.41% $ 0 - $14,999 9.0% 9.7% 14.4% $ 15,000 - $24,999 10.6% 7.1% 9.2% $ 25,000 - $34,999 15.3% 11.4% 11.9% $ 35,000 - $49,999 12.2% 10.6% 11.0% $ 50,000 - $74,999 16.5% 14.7% 15.1% $ 75,000 - $99,999 13.6% 13.1% 11.6% $100,000 - $124,999 8.7% 11.9% 10.2% $125,000 - $149,999 6.3% 8.0% 6.2% $150,000 - $199,999 5.2% 6.9% 5.4% $200,000 - $249,999 1.2% 2.3% 1.7% $250,000 + 1.5% 4.3% 3.4% 2011 Median Household Income $54,459 $68,326 $55,039 2011 Per Capita Income $33,302 $40,258 $34,121 2011 Average Household Income $69,355 $90,212 $78,392 Demographic data 2010 by Experian/Applied Geographic Solutions. 17
DEMOGRAPHIC ANALYSIS SUMMARY REPORT Geography: 5 Miles Population In 2011, the population in your selected geography was 48,258. The population has changed by 32.66% since 2000. It is estimated that the population in your area will be 52,523 five years from now, which represents a change of 8.84% from the current year. The current population is 46.7% male and 53.3% female. The median age of the population in your area is 39.8, compare this to the U.S. average which is 36.9. The population density in your area is 614.42 people per square mile. Households There are currently 20,722 households in your selected geography. The number of households has changed by 40.47% since 2000. It is estimated that the number of households in your area will be 22,919 five years from now, which represents a change of 10.60% from the current year. The average household size in your area is 2.29 persons. Income In 2011, the median household income for your selected geography is $55,039, compare this to the U.S. average which is currently $53,620. The median household income for your area has changed by 20.39% since 2000. It is estimated that the median household income in your area will be $61,747 five years from now, which represents a change of 12.19% from the current year. The current year per capita income in your area is $34,121, compare this to the U.S. average, which is $28,713. The current year average household income in your area is $78,392, compare this to the U.S. average which is $73,458. Race & Ethnicity The current year racial makeup of your selected area is as follows: 70.87% White, 24.49% African American, 0.40% Native American and 1.13% Asian/Pacific Islander. Compare these to U.S. averages which are: 72.40% White, 12.60% African American, 0.95% Native American and 4.93% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 3.35% of the current year population in your selected area. Compare this to the U.S. average of 16.90%. Housing The median housing value in your area was $103,271 in 2000, compare this to the U.S. average of $110,796 for the same year. In 2000, there were 10,529 owner occupied housing units in your area and there were 4,223 renter occupied housing units in your area. The median rent at the time was $428. Employment In 2011, there are 26,760 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 66.0% of employees are employed in white-collar occupations in this geography, and 34.0% are employed in blue-collar occupations. In 2011, unemployment in this area is 10.63%. In 2000, the median time traveled to work was 19.6 minutes. Demographic data 2010 by Experian/Applied Geographic Solutions. 18
DEMOGRAPHIC ANALYSIS POPULATION DENSITY Demographic data 2010 by Experian/Applied Geographic Solutions. Number of people living in a given area per square mile. 19
DEMOGRAPHIC ANALYSIS EMPLOYMENT DENSITY Demographic data 2010 by Experian/Applied Geographic Solutions. The number of people employed in a given area per square mile. 20
DEMOGRAPHIC ANALYSIS AVERAGE HOUSEHOLD INCOME Demographic data 2010 by Experian/Applied Geographic Solutions. Average income of all the people 15 years and older occupying a single housing unit. 21
DEMOGRAPHIC ANALYSIS TRAFFIC COUNTS Traffic Count data 2010 by TrafficMetrix. All rights reserved. Two-way, average daily traffic volumes. 22
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