Offering Memorandum KRISPY KREME Freddy’s...

Freddy’s Frozen CustardLakewood, CO

REPRESENTATICE

Offering Memorandum

KRISPY KREME6626 E. SUPERSTITION SPRINGS BLVD

MESA (PHOENIX), AZ 85206

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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. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap ACT ID Y0070102


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PICTURE SHOW

MOVIES

145,900 CPD

SUPERSTITION SPRINGS BLVD - 21,300 CPD

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KRISPY KREME



240 UNITS

Burger King

SUPER

STITION

SPRING

S B LVD - 21,300 CPD




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PICTURE SHOW

MOVIES

Burger King

145,900 CPD


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KRISPY KREME GROUND LEASE6626 E. Superstition Springs Blvd.

Mesa (Phoenix), AZ 85206

FINANCIAL SUMMARY

Price $4,195,800

Down Payment 100% $4,195,800

Cap Rate 5.75%

Building SF 5,500 SF

Net Cash Flow 5.75% $241,258.92

Year Built 2004

Lot Size 1.1 Acres

LEASE SUMMARY

Lease Type Absolute Triple-Net (NNN) Lease

Tenant Krispy Kreme Doughnut Corporation

Lease Guarantor Corporate

Roof & Structure Tenant Responsible

Rent Commencement Date November 24, 2004

Lease Expiration Date October 31, 2024

Approximate Lease Term Remaining 7 Years

Renewal Options 4, 5 Year Options

Rental Increases 10% Every 5 Years

BASE RENT $241,258.92

Net Operating Income $241,258.92

Total Return 5.75% $241,258.92

ANNUALIZED OPERATING DATA

LEASE YEARS ANNUAL RENT CAP RATE

Current - 10/31/2019 $241,258.92 5.75%

11/1/2019 - 10/31/2024 $265,384.81 6.32%

OPTIONS ANNUAL RENT CAP RATE

Option 1 $291,923.29 6.95%

Option 2 $321,115.62 7.65%

Option 3 $353,227.18 8.41%

Option 4 $388,549.90 9.26%




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TENANT OVERVIEW

OVERVIEWKRISPY KREME

Krispy Kreme is an international retailer of premium-quality sweet treats, including its signature hot Original Glazed® doughnut. Headquartered in Winston-Salem, NC, the company has offered the highest-quality doughnuts and great-tasting coffee since it was founded in 1937. Today, Krispy Kreme and its one-of-a-kind Hot Light can be found in over 1,300 shops around the world. Currently, Krispy Kreme can be found in 31 countries, including the United States, Australia, Bahrain, Canada, Colombia, Dominican Republic, India, Indonesia, Japan, Kuwait, Malaysia, Mexico, the Philippines, Puerto Rico, the Republic of Korea, Russia, Qatar, the Kingdom of Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, Turkey, the United Arab Emirates, and the United Kingdom.

JAB HOLDING COMPANY

JAB is a privately held business group headquartered in Luxembourg, focused on long term investments in companies with premium brands in the consumer goods category.

JAB became the world’s largest pure-play coffee maker by volume after a $13.9 Billion agreement with Keurig Green Mountain to take over the publicly traded coffee business. Other successful acquisitions include Peet’s Coffee & Tea, Caribou Coffee Co, Einstein Noah Restaurant Group, Jacobs Douwe Egberts, Espresso House, Baresso Coffee, Stumptown Coffee Roasters and Mighty Leaf Whole Leaf Tea.

On April 5, 2017 JAB reached an agreement to buy the US bakery Panera Bread for $7.5 Billion. Panera has about 2,000 bakery Café’s in the United States.

* Krispy Kreme is a wholly owned subsidiary of “JAB Holidng Company”, the World’s largest pure-play coffee maker by volume.

Headquarters Winston-Salem, NC

Stock Symbol NYSE: KKD

Founded 1937

Locations 1,300+

Website www.krispykreme.com

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LOCATION OVERVIEWINVESTMENT HIGHLIGHTSThe subject property sits between E. Superstition Springs Blvd (21,000 cars per day) and U.S. Highway 60 (140,000 cars per day). The store is ideally situated within a densely populated area, surrounded by rooftops with more than 271,600 residents and 107,000 households within a 5-mile radius. Krispy Kreme is located in a prime retail corridor, across from Superstition Springs Center, a 1,082,000-square-foot shopping mall. It is surrounded by countless national tenants including Home Depot, Target, Walmart Supercenter, KMart, Staples, WinCo Foods and numerous others. The property benefits from the additional customer base in the winter when the “Snowbirds” settle in the area.

Located in Maricopa County and just 15 miles east of Phoenix, Mesa covers 132 square miles, is the third largest city in Arizona and the 38th largest city in the nation with a population of 462,300. The City provides the advantages of a metropolitan city while maintaining the feel of a suburban environment.

Mesa is a thriving metropolis in the southwest, with lifestyle and leisure pursuits in high demand by visitors. Surrounded by the Sonoran Desert, Mesa offers numerous opportunities for outdoor recreation, with convenient access to three lakes, two rivers and endless hiking trails. With dynamic recreational, educational and business opportunities, Mesa enjoys the best in a variety of amenities including parks within easy walking distance from home, a variety of sports facilities that cater to athletes young and a diversity of special events and community festivals, and Mesa’s ever-popular Chicago Cubs Spring Training baseball. The city’s downtown is a vibrant epicenter with boutiques, antique shops, museums, studios and cafes – all anchored by Mesa Arts Center. Mesa is home to a large collection of golf courses, superb dining and upscale shopping.

Mesa is a city on the move with an abundance of freeways, highways and state routes strategically located along commerce corridors and current and future population centers. The 101 runs along Mesa’s west border and the Loop 202 circles the interior of Mesa. US 60 and SR 87 intersect in Mesa and minutes away are Interstates 10, 17 and 8, plus state routes 51, 74, 85 and 88 linking Mesa to other Arizona markets, California and Mexico.

Leading employers like Boeing and Banner Medical Centers benefit from Mesa’s well educated workforce. Mesa is home to an impressive array of top-rated educational institutions and collaborative partnerships that focus on producing a workforce that is not only technologically prepared, but also possesses a strong work ethic. Educational facilities in Mesa include Mesa Community College (22,700+ students), ASU Polytechnic Campus (12,000+ students) and East Vally Institute of Technology (3,000 students.)

• Absolute Triple Net (NNN) Corporate Lease

• Drive Thru Location

• Next Rental Increase is in November 2019

• Visible to 140,000+ Cars per Day From U.S. Highway 60, a Vital Connector Between Mesa, Gibert and Tempe

• Large Prototype - Rare Commissary Store

• Densely Populated Phoenix, MSA - Over 280,200+ Residents within a 5-Mile Radius

• Surrounded by Rooftops and Across from San Montego Luxury Apartments (240 Units)

• Excellent Access - Located Direcly off of U.S. Highway 60 and 2.5 Miles from AZ-Loop 202

• Located within Mesa’s Primary Retail Corridor and Adjacent to Superstition Springs Center - a 1,082,000-Square-Foot Shopping Mall

• Mesa, AZ is the 3rd Largest City in Arizona with a Population of 462,300+ Residents

• Krispy Kreme is a Wholly Owned Subsidiary of “JAB Holding Company,” the World’s Largest Pure-Play Coffee Maker by Volume

PROPERTY DESCRIPTION

Income 1-Mile 3-Miles 5-Miles2016 Est. Average Household Income $62,421 $63,133 $70,5952016 Est. Median Household Income $47,909 $47,790 $54,0032016 Est. Per Capita Income $28,225 $26,675 $27,655

Population 1-Mile 3-Miles 5-Miles2021 Projection 7,681 113,321 305,2332016 Estimate 7,396 103,492 280,212Growth 2016 - 2021 3.86% 9.50% 8.93%

Households 1-Mile 3-Miles 5-Miles2021 Projections 3,528 47,592 119,2622016 Estimate 3,342 43,465 109,435Growth 2016 - 2021 5.56% 9.50% 8.98%

DEMOGRAPHICS




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Williams-Sonoma

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Williams-Sonoma

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The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap.

This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Confidentiality Agreement

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

By accepting this Marketing Brochure, you agree to treat the information contained herein regarding the lease terms as confidential and proprietary and to only use such information to evaluate a potential purchase of this net leased property.

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 net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all mate-rial 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 net leased 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 net leased 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 as well as the Property Owner and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

Net Leased Disclaimer

exclusively listedExclusively listed by:

OFFICES NATIONWIDEwww.marcusmillichap.com

Jamie MedressSenior Managing Director InvestmentsPHOENIX OFFICETel: (602) 687-6778Fax: (602) [email protected]

Mark RubleSenior Managing Director InvestmentsPHOENIX OFFICETel: (602) 687-6766Fax: (602) [email protected]

Jake BaratzAssociate Advisor PHOENIX OFFICETel: (602) 687-6781Fax: (602) [email protected]

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