Freddy s Drive Thru. Native Grill. 15-year absolute net lease to Freddy s in Tucson, Arizona E. Old Vail Road, Tucson, AZ 85747

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1 Freddy s Drive Thru Native Grill [ REPRESENTATIVE PHOTO ] [ REPRESENTATIVE PHOTO ] 15-year absolute net lease to Freddy s in Tucson, Arizona E. Old Vail Road, Tucson, AZ John Andreini jandreini@capitalpacific.com (415) CA BRE# In Conjunction with AZ Licensed Broker: Jessica Zahn Gibson, CIA Brokerage Company (619) jzahn@ciadvisor.com [ ]

2 core characteristics 15-year absolute net lease Freddy s in Tucson, Arizona Located within the tucson tech corridor - 70 companies are located from wilmot road to houghton road along interstate 10 property highlights Pad to brand new Walmart Supercenter-anchored Houghton Town Center, which includes Panda Express, Taco Bell, Verizon, McDonald s, Dunkin Donuts, AutoZone, Freddy s, and Northwest Emergency Room Hospital. Five minute drive from UA Tech Park, which has 6,500 employees and 2 million square feet of office, laboratory, and production including Raytheon, CitiGroup, and IBM. Within the Vail School District (the state s top performing district). $85,000+ is the average household income within one and three-mile radii Brand new construction The subject property is on a hard corner signalized intersection that connects numerous communities in southeast Tucson, both old and new, where a variety of top tier retailers have signed leases. The Las Plazas at Old Vail development will cater to residents of Rita Ranch, Vail, and Corona de Tucson, as well as the 6,500 professionals working at the nearby UA Tech Park. Large lot with over 75 parking spaces Freddy s Over 160 stores in 18 states Voted #1 of America s Fastest Growing Restaurants - CNBC operator/guarantor (see page 6 for more details) Operator/Guarantor has a 50-unit franchise agreement with Freddy s covering seven western states and currently operates his twelve open stores below a 7% rent-to-sales ratio Operator/Guarantor of this location recently purchased a majority interest in NativeGrill & Wings corporate, which currently has 32 operating units Tenant currently operates 12 restaurants and combined with Native has approximately 50 under management Lease 15-year lease; rental increases of 10% every 5 years and in option periods Zero landlord responsibilities - all expenses are administered directly by tenant Two separate personal guarantees with a net worth in excess of $15 million [ representative photo ] Freddy s 2

3 aerial the subject property is located at a hard corner, signalized intersection E Valencia Road Mesquite Elementary E Old Vail Road E Rita Road RITA RANCH Desert Sky Middle School Vail Academy and High School LAS PLAZAS SHOPPING CENTER 21,000 DAILY S Rita Road 4,000 DAILY Cottonwood Elementary E Old Vail Road HOUGHTON TOWN CENTER Empire High School 10 E Mary Ann Cleveland Way 10 TUcsON CITY CENTER 51,994 DAILY S Houghton Road Freddy s 3

4 income & expense PRICE $2,300,000 Price Per Square Foot: $ Capitalization Rate: 6.00% Total Rentable Area (SF): 3,300 Lot Size (AC): 1.00 STABILIZED INCOME Per Square Foot Scheduled Rent $41.82 $138,000 Effective Gross Income $41.82 $138,000 LESS Per Square Foot Taxes NNN $0.00 Insurance NNN $0.00 Total Operating Expenses NNN $0.00 EQUALS NET OPERATING INCOME $138,000 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. [ REPRESENTATIVE PHOTO ] Freddy s 4

5 rent roll 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, $138,000 $11,500 $138,000 $3.48 $ $12,650 $151,800 $3.83 $ $13,915 $166,980 $4.22 $50.60 Option $15,307 $183,678 $4.64 $55.66 Option $16,837 $202,046 $5.10 $61.23 Option $18,521 $222,250 $5.61 $67.35 Option $20,373 $244,475 $6.17 $74.08 Totals: 3,300 $138,000 $11,500 $138,000 $3.48 $41.82 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 ] Freddy s 5

6 site plan Site Plan Key Parcel outline: Land Area: 1.0 Acres Building Area: 3,300 sf Ingress/Egress: Old Vail Road 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 6

7 tenant overview [ REPRESENTATIVE PHOTO ] [ REPRESENTATIVE PHOTO ] About Freddy s frozen custard 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 currently has over 150 Freddy s restaurants across more than 23 states. From sandwiches to sundaes, Freddy s makes food fresh to order. Freddy s Frozen Custard has again been recognized by Franchise Times Magazine, this time on 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. Freddy s has gain several recognitions for its excellence in 2013, including being named in the Franchise 500 in Entrepreneurs Magazine, one of four Rising Stars in QSR magazine, Next 300 Franchise Chains in Times Magazine, 500/5000 list of Fastest Growing Private Companies in Inc. Magazine, and finally, in 2012, one of 8 Best Burger Chains Poised to Conquer America by Business Inside. About franchisee The franchisee is an investor group of very strong guarantors (ask agent for more details) who have a 50-unit franchise agreement with Freddy s covering seven western states. They have been operating on behalf of this franchise for over three years. They have twelve open locations in Arizona, Utah, Montana, and Idaho with leases signed to have over ten total stores next year, and intend to open a total of twenty stores within three years. There are three separate personal guaranty s on the lease. Freddy s 7

8 area photos Subject property is adjacent to houghton Town Center with walmart supercenter, panda express & more Freddy s 8

9 area Development Houghton Road LAS PLAZAS SHOPPING CENTER HOUGHTON TOWN CENTER Old Vail Road Old Vail Road 10 TUCSON CITY CENTER Freddy s 9

10 location & demographics Tucson, AZ Overview Tucson is the county seat of Pima County and is the second largest city in Arizona. The Greater Tucson area is home to approximately 1.02 million residents and serves as the anchor of all business in the Southern Arizona corridor. Much of Tucson s economic development has been centered on the evolution of the University of Arizona. Currently home to over 42,000 students, the university is among the top 20 U.S. public research institutions and located in the center of metropolitan Tucson. The private sector has made commitments to create a growing, healthy economy with advanced technology industry sectors as its foundation. Raytheon Missile Systems, Texas Instruments, IMB, Intuit Inc., and Universal Avonics and just some of the technology companies that have a significant presence in Tucson. Roughly 150 Tucson companies are involved in the design and manufacture of optics and optoelectronics systems, earning the city the nickname Optics Valley. Population 3-Mile 5-Mile 7-Mile ,519 35,083 69, ,666 38,139 73, ,978 40,403 76, Household incomes 1-Mile 3-Mile 5-Mile Average $86,756 $86,335 $78,242 Median $77,565 $75,850 $65,119 Top Employers Raytheon University of Arizona Davis - Montahn Air Force Base Walmart Stores Pima County tucson 23 MIN 17 Miles 21,000 DAILY Freddy s 10

11 A unique HUMAN RESULTS-DRIVEN client experience The capital pacific experience - our daily commitment to our clients [ ] [ REPRESENTATIVE PHOTO ] John Andreini jandreini@capitalpacific.com (415) CA BRE# Bob Sanner CA BRE# [ Copyright 2015 Capital Pacific ] Rick Sanner CA BRE# In Conjunction with AZ Licensed Broker: Jessica Zahn Gibson, CIA Brokerage Company (619) jzahn@ciadvisor.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 joe caccamo gregg steele karla zens Freddy s 11