JACK IN THE BOX/KRISPY KREME...Property Name Jack in the Box Property Address 12505 Aurora Avenue...

JACK IN THE BOX/KRISPY KREME

12505 & 12515 Aurora Avenue N., Seattle, WA 98133

Scott Clements

206.445.7664

206.793.1074

[email protected]

P

C

E

David Butler

206.445.7665

425.890.7919

[email protected]

P

C

E

www.orioncp.com

Ground Lease Investment

Jack in the Box/Krispy Kreme | ORION Commercial Partners | 2

12505 & 12515 Aurora Ave N., Seattle, WA 98133

1 EXECUTIVE SUMMARY/INVESTMENT hIghlIghTS

2 SITE OVERVIEw

TENANT OVERVIEw

VAlUATION ANAlYSIS

MARkET OVERVIEw

6 DEMOgRAPhICS

4

5

tAbLe of coNteNtS

3

The information contained herein was obtained from sources believed reliable, however, ORION Commercial Partners LLC makes no guarantees, warranties, or representations as to the completeness or accuracy thereof. The presentation of this property is submitted subject to errors, omissions, change of price or conditions prior to sale or lease, or withdrawal without notice.


EXECUTIVE SUMMARY

INVESTMENT hIghlIghTS

Offering Price $4,650,000

Cap Rate 5.44%

NOI $253,125

Total Building Area 6,974 SF

Total land Area 61,195 SF

Price Per Square Foot $75.98

Year Built 2003

ORION Commercial Partners is excited to offer for sale the Jack in the Box and krispy kreme Absolute NNN ground lease Investment located at 12505 Aurora Avenue N. in Seattle, wA.

Built in 2003 on a corner pad site fronting lowe’s, this 2-tenant ground lease benefits from strong traffic counts and high density just minutes from downtown Seattle.

This rare “in-city” opportunity provides the passive investor with stabilized upside via rental increases every five years with no landlord responsibilities.

krispy kreme is midway through its first of three renewal options while Jack in the Box has approximately eight years remaining in their initial 20-year lease term.

ThE OFFERINg


INVESTMENT hIghlIghTS

Absolute NNN Ground Lease

Both Jack in the Box and krispy kreme are responsible for any and all expenses associated with the property. Buildings shall become the property of the owner upon expiration of the leases and all subsequent options.

»

» Tenant Strength

Founded in 1951, Jack in the Box, Inc. operates over 2,200 quick serve restaurants in 21 states and guam. In 2014 the sales were over $1.49 billion.

krispy kreme Doughnuts, Inc. operates over 1,000 stores in the U.S. and Canada. In 2014 the sales were over $460 million. kremeworks washington, llC operates 10 locations in washington, Oregon, hawaii and British Columbia.

» Strong Demographics

located within the Seattle city limits, there are over 27,000 people living within 1 mile of the subject property and over 148,000 people within a 3 mile radius. Additionally this property falls within a major retail corridor with over 45,000 VPD passing by the subject property.


SITE OVERVIEw: PhOTOS


SITE OVERVIEw: PARCEl MAP

Parcel # 192604-9432

Aurora A

ve N

N 125th St

36,869 VP

D

9,046 VPD


SITE OVERVIEw: RETAIl AERIAl

SUBJECTPROPERTY

N 1

30th

St

IngrahamHigh School

9,0

46

VP

D

LakeWashington

Aurora Ave N

HallerLake

N 1

25th

St

N 115th St

Stone Ave N

NorthgateMall

Jackson Park Golf Course

NorthwestHospital

Linden Ave NLinden Ave N 17,461 VPD

BitterLake

36,869 VPD


TENANT OVERVIEw

ABOUT JACk IN ThE BOX

Founded in 1951, Jack in the Box Inc. is a restaurant company that operates and franchises Jack in the Box® restaurants and—through a wholly owned subsidiary—Qdoba Mexican grill® restaurants in a combined 47 states plus the District of Columbia and Canada.

Jack in the Box is among the nation’s leading fast-food hamburger chains, with more than 2,200 quick-serve restaurants in 21 states and guam. As the first major hamburger chain to develop and expand the concept of drive-thru dining, Jack in the Box has always emphasized on-the-go convenience, with approximately 85 percent of the half-billion guests served annually buying food at the drive-thru or for take-out. In addition to drive-thru windows, most restaurants have indoor dining areas and are open 18-24 hours a day.

Jack in the Box pioneered a number of firsts in the quick-serve industry, including menu items that are now staples on most fast-food menu boards, like the breakfast sandwich and portable salads. Today, Jack in the Box offers a selection of distinctive, innovative products targeted at the fast-food consumer, including hamburgers, specialty sandwiches, salads and real ice cream shakes. hamburgers represent the core of the menu, including the signature Jumbo Jack®, Sourdough Jack®, Ultimate Cheeseburger and the 100% Sirloin Burger. And, because value is important to fast-food customers, the company also offers value-priced products on “Jack’s Value Menu,” including tacos, chicken nuggets, a chicken sandwich and the Breakfast Jack®.

In addition to offering high-quality products, Jack in the Box recognizes that an increasing number of quick-serve customers also want the ability to customize their meals. whether that means forgoing the bun and sauce in favor of a low-carb burger, or substituting ingredients to create the exact mix of flavors to suit an individual’s personal tastes, customers have that flexibility at Jack in the Box. “we don’t make it ‘til you order it®.” So, regardless of the order, each meal is served hot and fresh to customers.

Based in San Diego, Jack in the Box Inc. has more than 22,000 employees.

Property Name Jack in the Box

Property Address 12505 Aurora Avenue N., Seattle, wA

Property Type ground lease Quick Serve Restaurant

Rentable Square Feet 2,674 SF

Tenant Trade Name Jack in the Box, Inc.

Ownership Public

Tenant Corporate Store

2014 Annual Revenue 1.49 Billion

Stock Symbol JACk

Board NASDAQ

Rank QSR Top 50 16


TENANT OVERVIEw

krispy kreme Doughnuts, Inc. is an American global doughnut company and coffeehouse chain based in winston-Salem, North Carolina. In 1937 krispy kreme founder Vernon Rudolph bought a yeast-raised recipe from a New Orleans chef, rented a building in what is now historic Old Salem in winston-Salem, NC, and began selling to local grocery stores. The delicious scent of cooking doughnuts drifted into the streets, and passers-by stopped to ask if they could buy hot doughnuts. So, he cut a hole in an outside wall and started selling hot Original glazed doughnuts directly to customers on the sidewalk. Special business ordering from churches, schools, clubs and other organizations took an upswing in 1955, and has grown steadily. Using the Fund Raising Plan to sell doughnuts has enabled many schools to buy uniforms and take school trips. The Plan has also helped organizations buy air conditioners, pianos, and libraries for schools. It has helped to fund scholarship programs.

krispy kreme began a phase of rapid expansion in the 1990s, opening stores outside the southeastern United States where most of their stores were located. Then, in December 2001, krispy kreme opened its first store outside the U.S. in Mississauga, Ontario, Canada, just outside Toronto. Since 2004, krispy kreme has rapidly expanded its international operations, now including almost 100 stores in Mexico alone.

krispy kreme proudly announced the launch of its krispy kreme Signature Coffee Blends at participating U.S. and Canada locations. Three specially crafted coffee blends “wORThY” of its one-of-a-kind doughnuts. This also opened the door for speciality coffee blends. In September 25, 2013, krispy kreme announced their expansion into Colombia, the first South American country that krispy kreme will have presence at.

Products are sold in krispy kreme stores, grocery stores, convenience stores, gas stations, wal-Mart, Target and Shaws stores in the United States. Internationally, doughnuts are sold in loblaws supermarkets, Petro-Canada gas stations, and as freestanding stores in Canada, along with BP Service Stations and BP Travel Centres and 7-Eleven stores in Australia. In the United kingdom, Tesco supermarkets, Tesco Extra, and most Tesco service stations carry krispy kreme products. Service stations Moto, welcome Break & Road Chef also carry self-service cabinets.

On February 24, 2015, krispy kreme opened its 1,000th shop in kansas City, kansas. The first customer received one dozen of free donuts per week for a year.

ABOUT kRISPY kREME

Property Name krispy kreme

Property Address 12505 Aurora Avenue N., Seattle, wA

Property Type ground lease Quick Serve Restaurant

Rentable Square Feet 4,300 SF

Tenant Trade Name kremeworks, llC

Ownership Public

Tenant Franchise

2014 Annual Revenue 460 Million

Stock Symbol kkD

Board NYSE

Rank QSR Top 50 34

This krispy kreme is owned and operated by kremeworks, llC. Today, kremeworks operates 10 krispy kreme doughnut shops in washington, Oregon, hawaii and British Columbia. kremeworks llC was formed in 2001 and established as a joint venture with krispy kreme Doughnuts, Inc. kremeworks, llC’’s franchise opened with record breaking success in Issaquah, washington on October 30, 2001.


FINANCIAlS

RENT ROll

TENANT SIZERENT

COMMENCEMENTDATE

EXPIRATION DATE

MONTHLY RENT ANNUAL RENT OPTIONS RENT INCREASES

Jack in the Box 2,674 SF 06-30-2003 06-30-2023 $8,437.50 $101,250.00(2) 5 year options with

fixed increases (see chart below).

11.2% every 5 years

krispy kreme 4,300 SF 06-01-2003 05-31-2018 $12,656.25 $151,875.00(2) 5 year options with

fixed increases (see chart below).

11.2% every 5 years

Rental Increase 06/30/18 - 06/30/23 $9,492.19/month $113,906.25/year

Option 1 06/30/23 - 06/30/28 $10,678.71/month $128,144.53/year





VAlUATION ANAlYSIS

Price: $4,650,000 Loan Information

Proposed Down Payment: 30.00% $1,395,000 Proposed First Loan Amount: $3,255,000

Current Cap Rate: 5.44% Interest Rate: 4.50%

Approximate Net Rentable SF: 6,974 sf Ammortization: 25

Approximate lot Size: 61,195 sf Annual Debt Service: $ (217,108)

Year Built: 2003 loan Maturity: Ten Years

Cost Per Net Rentable SF: $75.98

Rent Per Net Rentable SF: $4.13 NNN

2015 Annualized Data Estimated 2015 Operating Expenses

Gross Potential Rental Income: $253,125 Real Estate Taxes (2015): Tenant Paid

Plus Recaptured Operating Expenses: $60,000 Insurance: Tenant Paid

less Vacancy and Credit loss: - Repairs: Tenant Paid

Gross Operating Income: $313,125 Maintenance: Tenant Paid

less Operating Expenses: $60,000 Utilities: Tenant Paid

Net Operating Income: $253,125 Management/Admin: Tenant Paid

less Annual Debt Service: $ (217,108)

Pre-Tax Cash Flow: 2.58% $36,017 Total Non-Recaptured Expenses: -

Plus Principal Reduction: $72,108 Total Property Expenses: est. $60,000

Pre-Tax Return: 7.75% $108,125 Property Expenses/Net RSF: $8.60

* as a percent of down payment

*

VAlUATION ANAlYSIS: JACk IN ThE BOX/kRISPY kREME, SEATTlE, wA


MARkET OVERVIEw

ABOUT SEATTlE

Seattle is a coastal seaport city and the seat of king County, in the state of washington. with an estimated 652,405 residents as of 2013, Seattle is the largest city in both the State of washington and the Pacific Northwest region of North America and, as of July 2013, the fastest-growing major city in the United States. The Seattle metropolitan area of around 3.6 million inhabitants is the 15th largest metropolitan area in the United States. The city is situated on a narrow isthmus between Puget Sound (an inlet of the Pacific Ocean) and lake washington, about 100 miles south of the Canada–United States border.

Seattle is the region’s commercial and transportation hub and the center of manufacturing, trade, and finance. Its important diversified industries include aircraft, lumber and forest products, fishing, high technology, food processing, boat building, machinery, fabricated metals, chemicals, pharmaceuticals, and apparel.

Seattle also has a dining scene that features acclaimed local chefs and internationally recognized cuisine. The city is extremely multicultural and is influenced by the Pacific Rim in art and architecture. The city offers residents a pace of life that can be either relaxed or fast paced and entrepreneurial. Seattle is home to many successful startup businesses such as Microsoft, Starbucks, Eddie Bauer, Nintendo, Amazon.com, and REI.

Seattle’s economy is driven by a mix of older industrial companies, and “new economy” Internet and technology companies, service, design and clean technology companies. The city’s gross metropolitan product was $231 billion in 2010, making it the 11th largest metropolitan economy in the United States. The Port of Seattle, which also operates Seattle–Tacoma International Airport, is a major gateway for trade with Asia and cruises to Alaska, and is the 8th largest port in the United States in terms of container capacity. Though it was affected by the great Recession, Seattle has retained a comparatively strong economy, and remains a hotbed for start-up businesses, especially in green building and clean technologies: it was ranked as America’s No. 1 “smarter city” based on its government policies and green economy. February 2010, the city government committed Seattle to becoming North America’s first “climate neutral” city, with a goal of reaching zero net per capita greenhouse gas emissions by 2030.

Still, very large companies dominate the business landscape. Four companies on the 2013 Fortune 500 list of the United States’ largest companies, based on total revenue, are headquartered in Seattle: Internet retailer Amazon.com (#49), coffee chain Starbucks (#208), department store Nordstrom (#227), and freight

forwarder Expeditors International of washington (#428). Other Fortune 500 companies popularly associated with Seattle are based in nearby Puget Sound cities. warehouse club chain Costco (#22), the largest retail company in washington, is based in Issaquah. Microsoft (#35) is located in Redmond. weyerhaeuser, the forest products company (#363), is based in Federal way. Finally, Bellevue is home to truck manufacturer Paccar (#168). Other major companies in the area include Nintendo of America in Redmond, T-Mobile US in Bellevue, Expedia Inc. in Bellevue and Providence health & Services — the state’s largest health care system and fifth largest employer — in Renton. The city has a reputation for heavy coffee consumption; coffee companies founded or based in Seattle include Starbucks, Seattle’s Best Coffee, and Tully’s. There are also many successful independent artisanal espresso roasters and cafés.

Prior to moving its headquarters to Chicago, aerospace manufacturer Boeing (#30) was the largest company based in Seattle. Its largest division is still headquartered in nearby Renton, and the company has large aircraft manufacturing plants in Everett and Renton, so it remains the largest private employer in the Seattle metropolitan area.

Major redevelopment of the South lake Union neighborhood is underway, in an effort to attract new and established biotech companies to the city, joining biotech companies Corixa (acquired by glaxoSmithkline), Immunex (now part of Amgen), Trubion, and Zymogenetics. Vulcan Inc., the holding company of billionaire Paul Allen, is behind most of the development projects in the region.


Radius 1 Mile 3 Mile 5 MilePopulation:

2019 Projection 24,370 169,144 391,404

2014 Estimate 22,320 156,455 363,327

2010 Census 20,492 148,796 347,708

growth 2014-2019 9.18% 8.11% 7.73%

growth 2010-2014 8.92% 5.15% 4.49%

2014 Population by hispanic Origin 1,632 10,900 20,952

2014 Population by Race:

white 16,042 118,288 285,678

Black or African American 1,744 8,554 13,847

American Indian and Alaska Native 270 1,642 2,994

Asian 2,982 19,702 42,611

hawaiian and Pacific Islander 96 547 1,024

Other Race 1,187 7,722 17,174

Radius 1 Mile 3 Mile 5 MileHouseholds:

2019 Projection 11,402 74,846 171,112

2014 Estimate 10,490 69,415 158,972

2010 Census 9,826 66,876 153,568

growth 2014-2019 8.69% 7.82% 7.64%

growth 2010-2014 (0.47%) (0.50%) (0.69%)

Owner Occupied 4,937 39,093 87,412

Renter Occupied 5,553 30,322 71,560

2014 Avg Household Income: $68,699 $84,110 $90,428

2014 Med Household Income: $49,487 $64,565 $67,533

2014 Households by Household Inc.:

less than $25,000 2,886 13,313 29,284

$25,000 - $50,000 2,406 14,181 31,443

$50,000 - $75,000 1,953 12,210 26,516

$75,000 - $100,000 955 8,785 19,699

$100,000 - $125,000 872 6,929 15,986

$125,000 - $150,000 543 5,146 11,050

$150,000 - $200,000 457 4,698 12,107

$200,000+ 418 4,154 12,886

DEMOgRAPhICS

SEATTlE DEMOgRAPhICS


DEMOgRAPhICS

DEMOgRAPhIC RINg - 1, 3, 5 MIlES

1 Mile

3 Miles

5 Miles

JACK IN THE BOX/KRISPY KREME...Property Name Jack in the Box Property Address 12505 Aurora Avenue...

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