Wendy's 5070 Northland Drive NE, Grand Rapids, MI

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OFFERING MEMORANDUM Wendy’s Grand Rapids, MI ™

TABLE OF CONTENTS 10 PROPERTY FEATURES 4 ASSET PRECIS 12 TENANT REPORT 6 AREA OVERVIEW 13 INVESTMENT SUMMARY EXCLUSIVE LISTING AGENTS PROPERTY FEATURES GARY CHOU KEVIN CHANG FVP & Senior Director ASSOCIATE KYLE MATTHEWS [email protected] [email protected] BROKER OF RECORD DIR 310.919.5827 DIR 310.919.5828 LIC # 6505399495 (MI) MOB 714.928.8016 MOB 951.616.8918 LIC # 01911222 (CA) LIC # 01976724 (CA) ASSET PRECIS

Wendy’s 5070 Northland Drive NE Grand Rapids, MI 49525 List Price...... $1,990,992 CAP Rate - Current ��6.25% Gross Leasable Area ��± 3,378 SF Lot Size ��± 1.36 Acres Year Built / Renovated �� 2002

INVESTMENT HIGHLIGHTS

PASSIVE, SECURE INVESTMENT STRONG OPERATOR IN AN EXCELLENT BRAND

• Long term lease: 7.5 Years remaining on the original 20-year lease with two • Seasoned operator: Meritage Hospitality Group is one of the largest operators (2), ten (10) year options to extend in the Wendy’s system operating over 180 units in over 8 states

• Absolute NNN lease: Zero landlord responsibilities • Strong commitment: Meritage Hospitality continues to expand their Wendy’s operations and Image Activating existing stores • Hedge against inflation: 5% rent increases every 5 years • Iconic brand: Wendy’s has over 6,500 units worldwide and an annual revenue EXCELLENT LOCATION of $1.9B

• High visibility: Located off of Northland Drive NE, this site benefits from GRAND RAPIDS, MICHIGAN ±25,000 ADT • Grand Rapids is the second largest city in the state of Michigan • Healthy demographics: Over 75,000 people within a 5-mile radius with average household incomes of $89,597 • The city is the primary business center of Western Michigan

• Other National Tenants in the area include: Anytime Fitness, Walgreens, Cricket, Starbucks and Chase Bank

4 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ Annualized Operating Data Monthly Rent Annual Rent Rent/SF Cap Rate Current $10,369.17 $124,437 $36.84 6.25% 12/18/2019 $10,888.25 $130,659 $38.68 6.56% Option 1 $11,432.58 $137,191 $40.61 6.89% Option 1 - Increase $12,004.25 $144,051 $42.64 7.24% Option 2 $12,604.50 $151,254 $44.78 7.60% Option 2 - Increase $13,234.67 $158,816 $47.01 7.98%

Tenant Summary

Tenant Trade Name Wendy’s Type of Ownership Fee Simple Lease Guarantor Meritage Hospitality Group Lease Type NNN Roof and Structure Tenant Responsible Original Lease Term 20 Years Lease Commencement Date 12/18/2004 Rent Commencement Date 12/18/2004 Lease Expiration Date 12/18/2024 Term Remaining on Lease ± 7.8 Years Increases 5% Increases Every 5 Years Options Two (2), Ten (10) Year Options

~ Matthews Real Estate Investment Services ~ 5 AREA OVERVIEW

Grand Rapids, Michigan Known for having the most vibrant downtown between Chicago and Cleveland, Grand Rapids is the primary cultural and business hub of Western Michigan. It located along the Grand River, just thirty minutes away from Lake Michigan’s golden beaches and captivating sunsets. As Michigan’s second largest city, Grand Rapids has long been a mecca for creators and admirers of craftsmanship. Artistic creativity became an integral part of the city’s identity in the 20th century, encompassing everything from visual and performing arts to brewery and cuisine.

With high incomes and low living costs, Grand Rapids offers big city amenities and a high quality of life to its residents. Grand Rapids’ well-maintained and traditionally Midwestern downtown area has a European appearance where the Grand River flows through it. Bustling with numerous restaurants, clubs, theaters and museums, downtown’s walkable neighborhoods host a number of festivals. Many of these events take place at the Vandenberg Plaza, namely the Celebration on the Grand and Festival of the Arts.

6 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ AREA

OVERVIEW Grand Rapids is home to one of the world’s most visited art museums, the Frederik Meijer Gardens & Sculpture Park, along with several other cultural assets including the Grand Rapids Subject Property Art Museum, the Van Andel Museum Center, the Gerald R. Ford Presidential Museum and the Roger B. Chaffee Planetarium. A myriad of theaters and stages further enhance Grand Rapids’ culture scene, offering live theater and performances by the city’s Grammy-nominated symphony. Economic Snapshot Upon its establishment, Grand Rapids emerged as a notable furniture-producing center due to nearby hardwood forests. Today, that industry has transitioned towards high-tech office furniture with the headquarters for such names as Steelcase and Herman Miller in the city, two of the world’s leading office furniture REGIONAL MAP companies.

The surrounding area is agricultural, where greater agricultural variety than otherwise found in many Midwestern locations is promoted by the tempering effect of Lake Michigan. Michigan is second only to California in agricultural diversity; the area is responsible for producing 85% of all crops harvested in Michigan. In part because of the agricultural environment, the area was attractive to settlers who started large, successful businesses such as the Meijer, Van Andel and De Vos families, all of whom left large endowments to the city. Consequently, Meijer and Alticor are both headquartered in Grand Rapids along with other national and multi-national companies, such as Haworth, Wolverine World Wide and Zondervan.

MAJOR EMPLOYERS

7 Development Interest in rebuilding Grand Rapids’ downtown core has been an ongoing theme since the late 1990’s with eleven LEED projects, new construction and renovations on historic buildings. An estimated $3 billion of generated investment has brought countless jobs to the active, high-energy urban center of a growing region of more than one million people. Moreover, the redevelopment of historic buildings into urban condominiums and apartments have brought over 4,000 young professionals into the walkable downtown area.

Grand Rapids has demonstrated an innate ability to forge a dynamic public-private partnership between businesses and community leaders, setting a multi-billion-dollar development boom in motion. The city’s revitalization initiatives are viewed as a template for generating innovative public-private partnerships and a catalyst for world-class life sciences and biotechnology research.

DEMOGRAPHICS 198,701 2017 Estimate 2.95% Projected Growth 2017 - 2022 POPULATION

80,660 2017 Estimate

3.82% # of Employees Projected Growth 2017 - 2022 HOUSEHOLDS $57,813 2017 Est. Average Household Income

Western Michigan is the fastest growing region in the upper Midwest as start-ups, software firms and high-tech corporations continue to move into Grand Rapids, which surpasses eleven of its peer communities in manufacturing and job and wealth creation. Businesses find the city to be a great place to do business; Grand Rapids’ infrastructure is ready-made for business, offering facilities that range from incubator space for startups to industrial parks for manufacturing and centers for research development. It offers lower business taxes and opportunities for companies of any size and type. 8 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ UNIQUELY GRAND RAPIDS Beer City Ale Trail Voted Beer City USA in national polls, the city also attracts beer lovers to its Beer City Ale Trail, which boasts more than 40 breweries. A booming craft brewery industry has garnered Grand Rapids a lot of attention. The Beer City Ale Trail takes visitors through a self-guided craft beer tour, allowing them to experience local craft breweries. Many of the area’s most notable breweries offer an insider look at the creation of their product. Grand Rapids is home to Founders, the third best brewery in the world, and HopCat, which was voted as the number one brewpub in the United States and the third best beer bar in the world: Two places certainly worth checking out!

ArtPrize ArtPrize is Grand Rapids’ independent international art competition held every summer. The nineteen day-long event is unlike traditional competitions in that contestants are judged by the public and a jury of professional artists; It is the largest art competition decided by public vote. During the competition, art from all over the world can be seen on every corner of downtown. An approximate 200 venues open their doors for this event as the city serves as an opent platform for those wanting to share their artistic opinion, knowledge, and skills.

Frederik Meijer Gardens & Sculpture Park As an emerging worldwide cultural destination, Meijer Gardens is the state’s second-largest tourist attraction as well as a feature venue in ArtPrize. Located on a 158-acre campus, Meijer Gardens features Michigan’s largest tropical conservatory, sculpture galleries and permanent sculpture collection, outdoor gardens, nature trails and outdoor gardens. This attraction is one of the nation’s most significant sculpture and botanic experiences, drawing more than ten million visitors since its opening in 1995. GETTING AROUND Gerald R. Ford International Airport Situated twenty-five miles southeast of Grand Rapids, Gerald R. Ford International Airport is the largest commercial airport in the West Michigan region and the second largest airport in the state. The airport provides commercial air service to the city with eight passenger airlines operating over 150 daily flights to 23 nonstop destination across the country.

The Rapid Pere Marquette Operated by the Interurban Transit Partnership, The Pere Marquette is a passenger train operated by the Rapid is a public transit system that provides Amtrak that is funded by the Michigan Department bus service to the Grand Rapids metropolitan of Transportation. Providing direct train service to area nad its corresponding suburbs. In addition Chicago from Grand Rapids, the Pere Marquette is to its fixed routes, the Rapid also operates part of Amtrak’s Michigan Services, which are three demand response services for people with Amtrak passenger rail routes connecting Chicago disabilities and for those living outside of the with the Michigan cities of Grand Rapids, Detroit, fixed-route service area. and Port Huron. ~ Matthews Real Estate Investment Services ~ 9 PROPERTY FEATURES THE OFFERING

Property Name Wendy’s 5070 Northland Drive NE Property Address Grand Rapids, MI 49525 Assessor’s Parcel Number 41-10-26-201-011 Zoning C1 Site Description Number of Stories One Year Built 2002 Gross Leasable Area (GLA) ± 3,378 SF Lot Size ± 1.36 Acres (59,241 SF) Type of Ownership NNN Parking ± 64 Surface Spaces Parking Ratio 18.9 : 1,000 SF Landscaping Professional Topography Generally Level Construction Foundation Concrete Slab Framing Wood Exterior Masonry Parking Surface Asphalt Roof Flat PARCEL MAP

10 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ AERIAL BIRD’S EYE FEATURES

Rolling Pines Highlands Middle Apartments School Northwood Hills Condiminiums

Subject Property ± 16,000 ADT Plainﬁeld Avenue NE

Northland Drive NE ± 25,000 ADT

Blytheﬁeld Country Club TENANT REPORT

Company Name Wendy’s Parent Company Trade Name The Wendy’s Company (NASDAQ: WEN) Ownership Public Credit Rating (S&P) B+ No. of Locations ± 6,500 No. of Employees ± 21,200 Headquartered Dublin, Ohio Website www.wendys.com Year Founded 1969

Wendy’s

The Wendy’s Company operates the Wendy’s fast food chain. The company is the #2 hamburger chain in the US. The Wendy’s chain consists of nearly 6,500 restaurants in the US and more than 25 other countries. Besides burgers and fries, the restaurants serve chicken sandwiches, wraps, and a variety of salads. Instead of milkshakes, Wendy’s serves its famously thick Frosty. Most of the company’s locations are franchised, and it generates most of its sales in the US.

STRATEGY Wendy’s brand transformation is re-energizing all touch points with consumers. From bold restaurant design to innovative food that consumers’ want, to improved customer service, this exciting evolution of the brand reinforces the mission to position Wendy’s as A Cut Above.

GEOGRAPHIC OUTREACH There are more than 6,500 Wendy’s® restaurants currently in operation in the United States and 29 countries and U.S. territories worldwide. New market expansion and further development within existing markets will continue to be dominant drivers of Wendy’s worldwide strategy over the coming years. Ultimately, we believe that earnings generated from international markets will be a significant component of our ability to generate long-term value for our stockholders.

12 ~ Wendy’s ~ Grand Rapids ~ Michigan ~ INVESTMENT SUMMARY

WHY THIS PROPERTY?

• Site is located near intersection of Northland Drive NE, which see ±25,000 ADT, and Plainfield Avenue NE, which sees ±16,000 ADT

• Rent increases act as a hedge against inflation

• There are zero landlord responsibilities

• Operated by one of the largest Wendy’s operators

• Proximally located to Highlands Middle School

WHY GRAND RAPIDS?

• It is the urban center of a growing region that offers low business taxes

• Grand Rapids has a strong, diversified economy

• 2017 average household income is estimated to be $57,813 throughout the city

• Forbes name it the Best City in the U.S. to invest in housing in 2016

• Area Development Magazine ranked Grand Rapids 3rd in its 2016 Leading Locations Report

~ Matthews Real Estate Investment Services ~ 13 CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offering Memorandum contains select information pertaining to the business and affairs of Wendy’s located at 5070 Northland Drive NE, Grand Rapids, MI 49525 (“Property”). It has been prepared by Matthews Retail Advisors. 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 Retail Advisors. 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 Retail Advisors 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 Retail Advisors 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. EXCLUSIVE LISTING AGENTS

GARY CHOU FVP & Senior Director [email protected] DIR 310.919.5827 MOB 714.928.8016 LIC # 01911222 (CA)

KEVIN CHANG ASSOCIATE [email protected] DIR 310.919.5828 MOB 951.616.8918 LIC # 01976724 (CA)

KYLE MATTHEWS BROKER OF RECORD LIC # 6505399495 (MI)

Wendy’s ™ Grand Rapids, MI ~ Matthews Real Estate Investment Services ~ 15