™3710 MCFARLAND BLVD, TUSCALOOSA, AL 35405

KRYSTAL

OFFERING MEMORANDUM

2 | Krystal

CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Krystal located at 3710 McFarland Blvd, Tuscaloosa, AL 35405 (“Property”) . I t has been prepared by Matthews Retai l Advisors . This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property. I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Retai l Advisors . The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completweness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion or manner detr imental to the interest of the Sel ler.

Owner and Matthews Retai l Advisors expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Retai l Advisors or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

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TABLE OF CONTENTS

04. Execut ive Summary

06. Property Overv iew

13. Tenant Overv iew

14. Area Overv iew

15. Demographics

3710 MCFARLAND BLVD, TUSCALOOSA, AL 35405

KRYSTAL

Kyle MatthewsBroker of Record

License No. 00109289

™

Gary ChouVP & Director

License No. 01911222O 310.919.5827M 714.928.8016gary.chou@matthews.com

EXECUTIVE SUMMARY Investment Highlights

LONG-TERM STABILIZED DEAL - GREAT STORE SALES

• 16 years remaining on the original 20 year lease

• Investment includes six (6) additional 5-year options with 1.25% annual rental increases

• Great Store Sales – Well above National Average

• Healthy Rent to Sales Ratio

• Absolute NNN Lease – Zero landlord responsibilities

STRONG RETAIL CORRIDOR - EASY HIGHWAY ACCESS

• Easy Access to Interstate 20/59 (46,000 VPD), which connects Tuscaloosa with Birmingham, the largest city in Alabama

• Strong National Tenants in immediate area include Office Depot, Walmart, Sam’s Club, Popeye’s, Burger King, T.J Maxx, Hardee’s, Taco Bell, Sonic, KFC, Checkers, and Pizza Hut

• Tuscaloosa is home to the University of Alabama, which is a NCAA Division I school home to over 36,000 students

• Under a mile south of University Mall serves as a shopping destination for University of Alabama students, as well as the surrounding region

• Projected growing population within a one, three, and five mile radius in the next five years

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Executive Summary

KRYSTAL3710 McFarland BlvdTuscaloosa, AL 35405

List Price ............................................................................................$1,987,000

CAP Rate - Current .................................................................................. 6.50%Gross Leasable Area ..........................................................................2,398 SF Lot Size ...................................................................± 0.52 Acres (22,599 SF) Year Built ........................................................................................................1976

Annualized Operating DataMonthly Rent Annual Rent Rent/SF

9/1/15-8/31/16 $10,898.69 $130,784.30 $54.54

9/1/16-8/31/17 $11,034.93 $132,419.10 $55.22

9/1/17-8/31/18 $11,172.86 $134,074.34 $55.91

9/1/18-8/31/19 $11,312.52 $135,750.27 $56.61

9/1/19-8/31/20 $11,453.93 $137,447.15 $57.32

9/1/20-8/31/21 $11,597.10 $139,165.24 $58.03*1.25% Annual increases continue until 2032 and in option periods

Tenant Summary

Tenant Trade Name Krystal

Type of Ownership Fee Simple

Lease Guarantor Corporate

Lease Type NNN

Landlord Responsibility Tenant Responsible

Original Lease Term 20 Years

Lease Commencement Date 9/21/2012

Lease Expiration Date 8/31/2032

Term Remaining on Lease 16 Years

Increases 1.25% Annually

Options Six (6) Five (5) Year

6 | Krystal

PROPERTY OVERVIEW

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Physical Description

Property Name Krystal

Property Address 3710 McFarland Blvd

Tuscaloosa, AL 35405

Assessor’s Parcel Number 30-09-31-3-002-005.002

Zoning BN

Site Description

Number of Stories One

Year Built 1976

Gross Leasable Area (GLA) 2,398 SF

Lot Size ± 0.52 Acres (22,599 SF)

Type of Ownership Fee Simple

Parking ± 34 Surface Spaces

Parking Ratio 14.18 : 1,000 SF

Landscaping Professional

Topography Generally Level

Construction

Foundation Concrete Slab

Framing Wood

Exterior Painted Stucco

Parking Surface Asphalt

Roof Flat

8 | Krystal

AerialAerial

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Regional Map

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Tenant Map

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Bird’s EyeBird’s EyeBird’s Eye

37th St E James I Harrison Jr Pkwy ± 51,000 ADT

McFarland B

lvd E

TENANT OVERVIEW

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The Krystal Company is a fast-food gem of the South. The company’s chain of more than 360 restaurants are known for their petite, square hamburgers. In addition, Krystal’s menu features a larger-sized ham-burger, chicken wings and sandwiches, chili dogs, and breakfast items. The company also sells its frozen burgers through grocery stores. The chain got its start in 1932 when R.B. Davenport Jr. and J. Glenn Sherrill opened up shop in Chattanooga, Tennessee. Private investment firm Argonne Capital Group acquired the chain in 2012.

Property Name Krystal

Property Type Net Leased Quick Service Restaurant

Parent Company Trade Name Krystal Company

Ownership Private

No. of Locations ± 360

No. of Employees ± 7,056

Headquartered Dunwoody, Georgia

Web Site www.krystal.com

Year Founded 1932

14 | Krystal Matthews Retail Advisors | 14

Tuscaloosa, AL Tuscaloosa is a city in and the seat of Tuscaloosa County in west central Alabama. Located on the Black Warrior River, it is the fifth-largest city in Alabama, with an estimated population of 95,334 in 2013. Founded in 1819, the city was named after Tuskaloosa, the chieftain of a Muskogean-speaking people who battled and was defeated by Hernando de Soto in 1540 in the Battle of Mabila, and served as Alabama’s capital city from 1826 to 1846.

Tuscaloosa is the regional center of industry, commerce, healthcare, and education for the area of west-central Alabama known as West Alabama. It is the principal city of the Tuscaloosa Metropolitan Statistical Area, which includes Tuscaloosa, Hale and Pickens counties and has an estimated metro population in 2013 of 235,628. Tuscaloosa is also the home of The University of Alabama, Stillman College and Shelton State Community College. While the city attracted international attention when Mercedes-Benz announced it would build its first automotive assembly plant in North America in Tuscaloosa County, the University of Alabama remains the dominant economic and cultural engine in the city.

Tuscaloosa has been traditionally known as the “Druid City” because of the numerous water oaks planted in its downtown streets since the 1840s. The city has also become well known nationally for the University of Alabama’s success in sports, and particularly in football. City leaders adopted the moniker “The City of Champions” after the Alabama Crimson Tide football team won the BCS National Championship game in 2010, 2012, and again in 2013. In 2008, the City of Tuscaloosa hosted the USA Olympic Triathlon trials for the Beijing Games.

# Employer # of Employees

1 The University of Alabama 10,722

2 DCH Regional Medical Center 3,841

3 Mercedez-Benz U.S. International 3,088

4 County Board of Education 2,034

5 Jim Walter Resources 1,850

6 City Board of Education 1,370

7 City of Tuscaloosa 1,366

8 Phifer Wire Products 1,231

9 Michelin/BF Goodrich Tire Manufacturing 1,200

10 Veterans Administration Hospital 1,080

AREA OVERVIEW

15 | Krystal

DemographicsPopulation 1-Mile 3-Mile 5-Mile

2021 Projection 7,249 60,197 118,2722016 Estimate 7,271 58,171 114,6322010 Census 7,352 55,443 109,7542000 Census 7,235 48,627 95,645Growth 2016 - 2021 -0.30% 3.48% 3.18%Growth 2010 - 2016 -1.11% 4.92% 4.44%Growth 2000 - 2010 1.63% 14.02% 14.75%Households 1-Mile 3-Mile 5-Mile

2021 Projection 3,089 25,949 48,2412016 Estimate 3,092 24,940 46,5392010 Census 3,116 23,560 44,2032000 Census 3,270 20,556 38,553Growth 2016 - 2021 -0.08% 4.04% 3.66%Growth 2010 - 2016 -0.77% 5.86% 5.28%Growth 2000 - 2010 -4.72% 14.62% 14.66%Income 1-Mile 3-Mile 5-Mile

Income < $15,000 22.49% 24.78% 21.52%Income $15,000 - $24,999 11.56% 13.81% 13.84%Income $25,000 - $34,999 14.56% 12.51% 10.77%Income $35,000 - $49,999 17.05% 15.81% 16.18%Income $50,000 - $74,999 19.48% 15.42% 15.97%Income $75,000 - $99,999 7.04% 8.43% 9.56%Income $100,000 - $124,999 3.84% 4.09% 5.43%Income $125,000 - $149,999 1.74% 2.03% 2.50%Income $150,000 - $199,999 1.38% 1.83% 2.39%Income $200,000 - $249,999 0.50% 0.58% 0.77%Income $250,000 - $499,999 0.36% 0.59% 0.87%Income $500,000+ 0.00% 0.11% 0.20%2016 Est. Average Household Income $45,262 $46,320 $52,0412016 Est. Median Household Income $36,226 $34,119 $38,592

™

Kyle MatthewsBroker of Record

License No. 00109289

Gary ChouVP & Director

License No. 01911222O 310.919.5827M 714.928.8016gary.chou@matthews.com