BRAND NEW Freddy s. 15-year absolute net lease huge sales volume store/low rent to sales ratio Below 8% 7036 W. Adams, Temple, TX 76502

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1 BRAND NEW Freddy s 15-year absolute net lease huge sales volume store/low rent to sales ratio Below 8% 7036 W. Adams, Temple, TX [ ]

2 PROperty Summary 15-year absolute net sale/leaseback in a booming submarket. PRICE: $2,400,000 CAP: 6.00% Rentable SF...3,550 SF Price per SF...$ land area Acres YEAR BUILT Lease Expiration...12/31/2031 Listing Team Contact Info John Andreini jandreini@capitalpacific.com (415) CA BRE# In Conjunction with TX Licensed Broker: Steve Sieling, Azur Commercial Capital, LLC steve@azurcc.com (214) Capital Pacific collaborates. Click Here to meet the rest of our San Francisco team. freddy s 2

3 core characteristics booming trade area Much of the new construction in West Temple is centered near the intersection of W. Adams and Old Waco Road. Immediate area retailers include Walmart Supercenter, Whataburger, Texas Partners Federal Credit Union & many others. Starbucks, Jersey Mike s Subs, Fuzzy s Taco Shop, Small Cakes Cupcakes, Little Caesars and First National Bank will open on West Adams Avenue in huge sales volume store - low rent to sales drive-thru building with excellent visibility & access Over 21,000 vehicles per day on West Adams Avenue explosive growth area The subject property corridor is becoming littered with new retailers, housing starts and medical users. Population growth in 1, 3 & 5 mile radii is projected to increase by double digits. population growth projected in 1, 3 & 5 mile radii There are over 76,000 people within a 5-mile radius. 15-Year NNN lease Lease features 10% rental increases every five years throughout the primary term and the four 5-year option periods. Tenant is responsible for direct payment of taxes, insurance, utilities, repairs, replacements and maintenance of the roof and all structural elements of the building average household incomes of over $79,000 within a 1-mile radius freddy s 3

4 aerial over 21,000 vehicles per day on w. adams avenue 36 North Belton Middle School ,600 DAILY FORT HOOD 35 Airp ort 363 Roa d iard Hill oad R Tarver Elementary State Highway 317 Holy Trinity Catholic High School Temple High School 53 W Adams Avenue W Adams Avenue SAMMONS GOLF LINKS 21,920 DAILY TEMPLE MALL W. Adams Avenue 190 Bonham Middle School MARKET PLACE SHOPPING CENTER Belton High School 35 Sparta Elementary AUSTIN 317 freddy s 4

5 income & expense PRICE $2,400,000 Price Per Square Foot: $ Capitalization Rate: 6.00% Total Rentable Area (SF): 3,550 Lot Size (AC): 0.89 STABILIZED INCOME Per Square Foot Scheduled Rent $40.56 $144,000 Effective Gross Income $40.56 $144,000 LESS Per Square Foot Taxes NNN $0.00 Insurance NNN $0.00 Total Operating Expenses NNN $0.00 EQUALS NET OPERATING INCOME $144,000 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. freddy s 5

6 rent roll RENTAL INCREASES TENANT INFO LEASE TERMS RENT SUMMARY Tenant Name Sq. Ft. Term Current Rent Monthly Rent Yearly Rent Monthly Rent/FT Yearly Rent/FT Freddy s 3,550 2/8/ /31/2021 $144,000 $12,000 $144,000 $3.38 $ /1/ /31/2026 $13,200 $158,400 $3.72 $ /1/ /31/2031 $14,520 $174,240 $4.09 $49.08 Option 1 1/1/ /31/2036 $15,972 $191,664 $4.50 $53.99 Option 2 1/1/ /31/2041 $17,569 $210,830 $4.95 $59.39 Option 3 1/1/ /31/2046 $19,326 $231,913 $5.44 $65.33 Option 4 1/1/ /31/2051 $21,259 $255,105 $5.99 $71.86 Totals: 3,550 $144,000 $12,000 $144,000 $3.38 $40.56 This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. [ surrounding area retail ] freddy s 6

7 site plan Crape Myrtle Lane Site Plan Key Parcel outline: Land Area: 0.89 acres Building Area: 3,550 sf Ingress/Egress: West Adams Avenue Honeysuckle Drive 21,920 DAILY SIGN This site plan is a rendering that has been created based on sources we believe to be reliable, however we make no representations or warranties, expressed or implied, as to the accuracy of the rendering. Buyer must verify the information and bears all risk for any inaccuracies. freddy s 7

8 tenant overview about Freddy s Freddy s Frozen Custard & Steakburgers is a quick-service restaurant chain based in Wichita, Kansas. The company opened its doors in 2002, franchised in 2004, and now there are 176 Freddy s restaurants across 29 states. From sandwiches to sundaes, Freddy s makes food fresh to order. Freddy s Frozen Custard has again been recognized for the third year in a row by Franchise Times Magazine, this time for its inaugural Fast and Serious list in the March issue. The list uses a 10-point formula to identify fast-growing franchise systems that also have staying power. It is based on three years of impressive unit and sales growth and includes brands in other industries, not just restaurants. In 2015, Freddy s was recognized as one of Entrepreneur magazine s Franchise 500, included on Inc. Magazine s 500/5000 list of Fastest-Growing Private Companies (both for the fourth consecutive year), named one of the five fastest growing chains by Nation s Restaurant News (for the second consecutive year), and identified as one of eight Better Better Burger offerings by Bloomberg Businessweek. In Consumer Reports lists of best burgers, cleanest fast-food restaurants and those with the best service published every three years, Freddy s was included in 2014 and, besides the repeat recognitions shown above, was named a Newsmaker of the Year by the Wichita Business Journal. about the guarantor The franchisee is an investor group of very strong guarantors (ask Agent for more details) who have 6 operating stores that are averaging approximately 15% above the national average within the Freddy s system and have 2 more stores scheduled to break ground. They have an 8-store minimum franchise agreement within the Brazos County region of Texas with plans to grow even more. The day-to-day operations of the store are contracted out to HCI Hospitality, a restaurant management company based in Manhattan that operates stores spanning 5 restaurant concepts. They were one of the first Freddy s franchisees over 10 years ago and they manage Freddy s stores in Texas, Kansas, Nebraska and North Carolina. The backgrounds of the 3 guarantors are quite extensive 2 of them are the CEO & COO (University of Texas-Austin Law Graduate) of Marcus Foods Inc., a diversified food broker and trader of hundreds of millions of dollars in annual sales and a company that has been around for over 35 years. The 3rd guarantor is the retired chairman of Insurance Management Associates, the largest privately-held insurance brokerage in the Mid-West, with gross premium revenue of over a billion annually. He has held roles within the Wichita Chamber of Commerce and several insurance industry organizations. The guarantor entity has an $80 million+ net worth. freddy s 8

9 in the news Business is Booming in west temple December 5, 2015 TEMPLE DAILY TELEGRAM - The drive along West Adams Avenue is dotted with numerous construction projects. Restaurants, banks, companies and stores are suddenly moving to West Temple. Greg Davis, broker for DB Commercial Real Estate, said he s never seen such a local flurry of activity. I ve been doing commercial real estate in Temple since 1986, Davis said. This is the first real boom I ve experienced in Temple. Much of the new construction is centered near new subdivisions and the Walmart, which opened last summer at 6801 W. Adams. Individual restaurant sites are being built nearby, along with strip centers that will house additional businesses. A new building called Westfield Market South was built across the street from the other Westfield Market shops, which include Domino s Pizza and La Riv Italian Cuisine. The new building is 12,000 square feet, Davis said. Almost 5,000 square feet on the east end is being leased to Fuzzy s Taco Shop. Davis said Fuzzy s Taco Shop will include an outdoor dining area with a music stage and a fire pit. It will open midsummer We just leased space to Jersey Mike s Subs on the other end of the strip center, Davis said. Between Fuzzy s Taco Shop and Jersey Mike s, there are three more suites. We are working on negotiations for two of them, Davis said. Davis was unable to disclose details of the upcoming businesses because negotiations are still underway. Kiella Homebuilders have been building the Westfield Market centers, Davis said. They are really close to starting construction on another building behind the latest one to keep up with what we anticipate demands to be. Further down the road is a new Whataburger location in a stand-alone building in front of Walmart. The restaurant s main sign was installed this week. The restaurant will open this winter, James Turcotte, Whataburger senior vice president of real estate, said. We don t have a specific opening date to share yet, but we encourage our fans to stay tuned on social media for updates. Another multi-store shopping center has signs indicating two of the businesses will include a First National Bank and a Starbucks. Small Cakes Cupcakery and Creamery will open soon at 6102 W. Adams Ave. According to the store s Facebook page, Small Cakes hopes to open by the end of December. A Little Caesars is opening next to Small Cakes. Down the road, Wichita, Kan.,-based Freddy s Frozen Custard and Steakburgers is being constructed next to the Cefco store on West Adams. We are currently on track to open in early February, franchise owner Keith Alter said. We look forward to making our Temple debut. Along with construction already underway, many acres of land lining West Adams Avenue are for sale as well, suggesting this may only be the start of continued growth and development in the area. Davis said DB Commercial Real Estate has five other parcels of land currently under contract and the properties are on unimproved pieces of land. They are being purchased by various users. freddy s 9

10 location & demographics About temple Temple is a principal city in the Killeen-Temple- Fort Hood Metropolitan Statistical Area, which has an estimated population of 405,300. It is along the Central Texas technology corridor between San Antonio and Austin to the south and Dallas/Fort Worth to the north, and is easily accessible via road or air. The city is located on Interstate 35, the main north-south interstate through Texas. Direct access to Interstate 35 positions Temple within 180 miles of 80% of Texas population. 21,920 DAILY W. Adams Ave. waco Population 1-Mile 3-Mile 5-Mile 38 miles ,221 20,993 71, ,867 23,605 76, miles ,388 25,734 80, Household incomes killeen TEMPLE 1-Mile 3-Mile 5-Mile Average $79,011 $72,425 $70,193 Median $73,754 $59,905 $53,328 Top Employers Employer # of Employees Scott & White Healthcare 8,290 Fikes Wholesale, Inc. 1,400 Wilsonart International 1,021 Sprint/Nextel Corporation 1,000 Austin freddy s 10

11 A unique HUMAN RESULTS-DRIVEN client experience The capital pacific experience - our daily commitment to our clients [ ] John Andreini jandreini@capitalpacific.com (415) CA BRE# Bob Sanner bsanner@capitalpacific.com (415) CA BRE# Rick Sanner rsanner@capitalpacific.com (415) CA BRE# In conjunction with TX Licensed Broker: Steve Sieling, Azur Commercial Capital, LLC steve@azurcc.com Capital Pacific collaborates. Click Here to meet the rest of our San Francisco team. chris kostanecki chris peters dave lucas zandy smith jack navarra zeb ripple john andreini joe caccamo gregg steele karla zens [ Copyright 2016 Capital Pacific ]