OFFERING MEMORANDUM ROADHOUSE 740 NW Blue Pkwy, Lee’s Summit, MO 64086

™ ACTUAL PROPERTY ™

EXCLUSIVELY LISTED BY ARON CLINE JOSH BISHOP CHAD KURZ SVP & Senior Director VP & Director SVP & National Director LIC # 01904371 (CA) LIC # 688810 (TX) [email protected] DIR (214) 692-2927 CALVIN SHORT KYLE MATTHEWS MOB (562) 480-2937 SVP & Senior Director BROKER OF RECORD LIC # 01911198 (CA) LIC # 01927216 (CA) LIC # 2017010164 (MO) 2 | Offering Memorandum INVESTMENT HIGHLIGHTS

Brand New Texas Roadhouse Ground Lease: The property was completed in 2018 and offers a15-year initial lease term with 3, 5-year options. The current rent is just $150,000 with increases of 10% every 5 years including the option period.

Out-Parcel to Lifestyle Center: Property is an out-parcel to newer lifestyle center with nearly 1 Million square feet of retail in the immediate vicinity anchored by Target and Lowe’s Home Improvement. There are nearly 100 national and regional retail tenants in the immediate vicinity.

Over 120,000 Vehicles Per Day: The property is located on U.S. Route 50 which is a major east-west route in the state of Missouri and sees over 120,000 vehicles per day near the property.

Wealthy Suburb of Kansas City: ™ The property is located in a wealthy suburb of Kansas City with nearly 100,000 residents and an average household income of ±$100,000 in the 5-mile radius.

University of Central Missouri: University of Central Missouri just built their innovation campus which will have 550 high school students and 3,000 college students. The $100M project was paid for by a $40M bond issuance and the rest by University of Central Missouri.

Great Store Sales and Still Growing: Texas Roadhouse has extremely strong store sales, average store sales for 2017 is $4,973,000 which is up 18.80% over the past 4 years. If this site performs at average, it is an incredibly low 3.02% rent to sales ratio.

Strong Corporate Guaranty: Texas Roadhouse is a publicly traded company with a market cap of ±$5B. The stock price sits at ±$70 per share which is up nearly 270% over the past 5 years. Texas Roadhouse, Inc. had revenue of ±$2B in 2016 with net operating income of $28,618,000.

Capital Investment for new Texas Roadhouse is $5M: According to the 2016 10-K, Texas Roadhouse estimates that the average capital investment for Texas Roadhouse restaurant in 2017 to be $5,250,000. For 2016, the average capital investment for just the land and building of a new Texas Roadhouse is $3,435,000, well below the current asking price.

Upgraded Construction: The property is state-of-the-art construction with the majority of the building materials stone and brick with wood accents.

Texas Roadhouse - Lee’s Summit, MO | 3 ™

4 | Offering Memorandum FINANCIAL OVERVIEW

FINANCIAL INFORMATION 2017 Average Capital Investment for New Texas Roadhouse: Price $3,000,000 LAND Cap Rate 5.00% $1,265,000 Gross Leaseable Area 7,420 SF Lot Size ± 1.54 Acres (67,097 SF) ™ BUILDING Year Built 2018 $2,170,000 ANNUALIZED OPERATING DATA Lease Commencement Monthly Rent Annual Rent Cap Rate FURNITURE & EQUIPMENT Year 1-5 $12,500.00 $150,000.00 5.00% $1,155,000 Year 6-10 $13,750.00 $165,000.00 5.50%

PRE-OPENING COSTS Year 11-15 $15,125.00 $181,500.00 6.05% $660,000 Option 1 $16,637.50 $199,650.00 6.66% Option 2 $18,301.25 $219,615.00 7.32% OTHER Option 3 $20,131.33 $241,576.00 8.05% $5,000 TENANT SUMMARY

TOTAL Tenant Name Texas Roadhouse $5,250,000 Lease Guarantor Corporate Lease Type Ground Lease VS Type of Ownership Fee Simple Roof and Structure Tenant Responsibility Price of Subject Property: Original Lease Term 15 Years Rent Commencement Date July 19, 2018 TOTAL Lease Expiration Date July 31, 2033 $3,000,000 Term Remaining on Lease ± 15 Years Increases 10% Increases *Texas Roadhouse data taken from their 10-K report and Ya- Options Three, 5-Year Options hoo Finance. Texas Roadhouse - Lee’s Summit, MO | 5 TENANT OVERVIEW

Tenant Name Texas Roadhouse Ownership Public (NASDAQ: TXRH) Market Cap $5.025 B Revenue $2.219B (2017) Locations ± 550 Employees ± 47,900 Headquartered Louisville, KY Year Founded 1993 Website www.texasroadhouse.com

TENANT OVERVIEW Texas Roadhouse was founded on February 17, 1993 in Clarksville, Indiana. Since then the chain has opened over 450 locations in 49 United States, and in Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Philippines, and Taiwan. Texas Roadhouse Corporation is headquartered in Louisville, Kentucky.

Texas Roadhouse serves , including , ribs, chicken, and seafood. Their are hand-cut and are never frozen. They are also known for their free buckets of peanuts at each table along with free yeast rolls. Texas Roadhouse’s slogan is “Legendary Food, Legendary Service”.

6 | Offering Memorandum Texas Roadhouse Sizzles on Huge Comps Gains madison.com (Dan Caplinger) Feb 21, 2018

Restaurant chains across the industry have faced tough conditions for a long costs, although weaker food costs helped to contain overall expense increases time, with rising competition and structural challenges combining to put pres- and left restaurant margin figures down just a tenth of a percentage point to 17%. sure on revenue and profits for many companies in the space. Texas Roadhouse (NASDAQ: TXRH) has found a way to avoid the restaurant downturn, and its Texas Roadhouse kept on opening new locations at a similar pace to previous consistent performance has produced big gains for long-term shareholders over quarters. The company opened seven new corporate-owned restaurants and the past several years. two international franchise restaurants during the quarter. That brought the total number of stores to 550 systemwide. Coming into Tuesday’s fourth-quarter financial report, Texas Roadhouse inves- tors wanted to see the steakhouse chain continue to show its strength. Texas CEO Kent Taylor celebrated 2017. “We delivered another strong year of results,” Roadhouse once again managed to produce impressive financial performance, Taylor said, “with double-digit revenue and diluted earnings-per-share growth and even though some investors were still hungry for more, the long-term pros- for both the fourth quarter and the full year.” The CEO also pointed to the 32nd pects for the chain look good. Let’s take a closer look at Texas Roadhouse and consecutive quarter of positive comparable restaurant sales as a milestone in what its latest results say about its future. Texas Roadhouse’s history.

Order up for Texas Roadhouse What’s next for Texas Roadhouse? Texas Roadhouse’s fourth-quarter results marked a great finish to a strong year. Texas Roadhouse has carried its good performance into 2018. Taylor said that Total revenue came in at $545.1 million, up 12.5% from a year ago and match- comps for the first 55 days of the first quarter were up 4.7%, as the company got ing expectations among those following the stock. Net income jumped 38% to a boost from the move of the New Year’s holiday to Monday as well. $28.6 million, and that translated to earnings of $0.40 per share, $0.03 higher than the consensus forecast among investors. In terms of official guidance, Texas Roadhouse didn’t change much in terms of what it sees ahead for 2018. The company adjusted its tax rate expectations In several recent quarters, Texas Roadhouse has managed to build business at downward to 15% to 16%, but it still sees positive comparable-restaurant sales, its existing locations, making it stand out from the crowd. That happened again 30 new restaurant openings, flat food costs, and mid-single digit percentage this quarter, with a 5.8% rise in comparable-restaurant sales at company-owned gains in labor costs. locations and a 4.7% gain in comps for franchise restaurants domestically. That the Christmas holiday fell on a Monday this year had a positive impact that Texas The restaurant chain also delivered more dividend income to shareholders. The Roadhouse estimated to be 0.4 percentage points, but the comps gains overall company declared a $0.25 per share payout for the quarter, up 19% from the reflected even faster growth than the company has seen recently. $0.21 it had paid previously. The new payout puts Texas Roadhouse’s yield at about 1.75%. However, some investors weren’t entirely pleased with the way that Texas Road- house achieved its results. Income tax rates fell by nine percentage points to just Texas Roadhouse investors seemed to have wanted an even better quarter than below 20% during the quarter, and that added $0.04 per share to the bottom the steakhouse chain had, as the stock fell 4% in after-hours trading following line. It’s unclear to what extent investors had incorporated tax-related changes the announcement. Yet as long as the company can buck adverse trends that into their expectations, but some could argue that looking at earnings on an ad- are hurting its competitors a lot more, Texas Roadhouse should be in a good justed basis would have left Texas Roadhouse just shy of what they had wanted position to keep expanding and being successful in the future. to see. On the margin front, Texas Roadhouse kept struggling with higher labor

Texas Roadhouse - Lee’s Summit, MO | 7 Downtown Kansas City

±84,000 Vehicles Per Day

±120,000 Vehicles Per Day

±33,000 Vehicles Per Day

™ 8 | Offering Memorandum ™

Lee’s Summit High School

Texas Roadhouse - Lee’s Summit, MO | 9 ™

10 | Offering Memorandum ™ ™

Texas Roadhouse - Lee’s Summit, MO | 11 PROPERTY OVERVIEW

THE OFFERING

Property Name Texas Roadhouse 740 NW Blue Pkwy Property Address Lee’s Summit, MO 64086 Site Description Number of Stories One Year Built 2018 Gross Leasable Area (GLA) ±7,420 SF Lot Size ± 1.54 Acres (67,097 SF) Type of Ownership Fee Simple Parking Spots 118 Parking Surface Asphalt Parking Ratio ±15 per 1,000 SF Landscaping Professional Topography Elevated Construction Exterior Brick / Stone / Wood Foundation Concrete Framing Steel Roof Pitched

12 | Offering Memorandum SURROUNDING TENANTS

Summit Fair Shopping Center Summit Woods Crossing

I-470 ± 84,000 VPD

Hwy 50 ± 120,000 VPD

NW Chipman Rd ± 33,000 VPD

Texas Roadhouse - Lee’s Summit, MO | 13 Lee’s Summit, MO Demographics 103,717 - 2023 Projection

$94,887 Average Household Income Raciai Racial Composition

83.67% White 9.76% Black African American

2.10% - Asian

1.18% - Other 2.87% - Two or more races 1 2 3 4 5 6 7

SUBJECT PROPERTY

14 | Offering Memorandum AREA OVERVIEW

LEE’S SUMMIT, MO Lee’s Summit, sitting just southeast of Kansas City, is in both Jackson and Cass counties. Conveniently located just off Interstate 470, Lee’s Summit has access to Kansas City and other large cities in the area. As of the 2010 census its population was about 91,364, making it the sixth-largest city in both the state and in the Kansas City Metropolitan Area. In 2010, Lee’s Summit was ranked #27 on CNNMoney’s list of “100 Best Cities to Live in the United States.”

Known for its family-friendliness, Lee’s Summit is a great place for families due to its top-notch public schools. In 2018, Lee’s Summit was named the #26 Best Places to Raise a Family in Missouri and the #23 Best Suburbs to Buy a House in Missouri. The city also has ample diversity and a great job market.

With median household income and median home values well above and unemployment rates well below the state average, Lee’s Summit has a strong economy bolstered by the tech industry. The University of Central Missouri also makes a sizable impact on the Lee’s Summit economy. Plans are also being drawn up for a $230 Million mixed-use development in west Lee’s Summit, which will include a soccer complex as well as 300 upscale apartments and an entertainment district. DEMOGRAPHICS

POPULATION 1-Mile 3-Mile 5-Mile 2010 Census 4,347 42,374 93,178 2018 Estimate 4,367 44,523 98,474 2023 Projection 4,416 45,917 101,832 HOUSEHOLDS 1-Mile 3-Mile 5-Mile 2010 Census 2,216 17,077 35,688 2018 Estimate 2,212 17,740 37,249 2023 Projection 2,228 18,216 38,359 INCOME 1-Mile 3-Mile 5-Mile Average Household $68,831 $94,040 $94,887 Income

Texas Roadhouse - Lee’s Summit, MO | 15 KANSAS CITY, MO

Kansas City, Missouri lies on the western edge of Missouri. Among the 100 largest cities in the United States, it is the most centrally located in the lower 48 states. This central location makes it very competitive for employment involving transportation, communication, and distribution.

Kansas City covers 319 square miles and is home to approximately 481,360 residents, making it the largest city in Missouri, both in area and in population. Its area is the 11th largest among United States cities that are not consolidated with counties. Its population is the 37th largest in the United States.

Kansas City is a regional headquarters of the Federal Reserve Bank and contains the headquarters for Hallmark Cards, DST, Russell Stover Candies, Kansas City Southern Railway, H&R Block, Boulevard Brewing, and American Century Investments.

Kansas City has the most freeway lanes per capita of any United States city. It is one of only six cities in the nation with four primary interstate highways within its City limits (I-70, I-35, I-29, and I-49).

Kansas City is a large, prosperous, self-sufficient and culturally rich city located astride the Missouri River. The attractive downtown boasts museums and architectural attractions, including modern buildings and restorations of older sites such as the 1914 Union Station.

More recently, a major urban redevelopment and renewal effort has taken hold, anchored by a new Federal Reserve and IRS complex expected to employ 7,000 and a new headquarters for financial services giant H&R Block, plus a new entertainment district. These developments and more renovations of attractive older buildings are adding life to the area, and there is also a significant push towards residential units in the city.

16 | Offering Memorandum CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offering Memorandum contains select information pertaining to the business and affairs of Texas Roadhouse located at 740 NW Blue Pkwy, Lee’s Summit, MO 64086 (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1. The Offering Memorandum and its contents are confidential;

2. You will hold it and treat it in the strictest of confidence; and

3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. OFFERING MEMORANDUM TEXAS ROADHOUSE 740 NW Blue Pkwy, Lee’s Summit, MO 64086

EXCLUSIVELY LISTED BY

ARON CLINE JOSH BISHOP CHAD KURZ SVP & Senior Director VP & Director SVP & National Director LIC # 01904371 (CA) LIC # 688810 (TX) [email protected] DIR (214) 692-2927 CALVIN SHORT KYLE MATTHEWS MOB (562) 480-2937 SVP & Senior Director BROKER OF RECORD ™ LIC # 01911198 (CA) LIC # 01927216 (CA) LIC # 2017010164 (MO)