Port Arthur, TX Offering Memorandum

RARE OFFERING OF A LONG TERM NNN PANDA EXPRESS IN A GROWING TEXAS MARKET

ACTUAL LOCATION

3080 FM 365 | Port Arthur, TX Offering Memorandum Investment Summary 03 Investment Highlights 05 Tenant Overview 06 Financial Analysis 08 Location Overview 10 Market Overview 13 Contacts 15

MARKETING ADVISORS DEBT ADVISOR MARC MANDEL STEVE SCHRENK JOHN INDELLI MATTHEW PUTTERMAN Managing Director Director Director Director 484.532.4212 484.532.4213 713.852.3407 713.852.3524 [email protected] [email protected] [email protected] [email protected]

Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and JLL, its officers, directors, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. Investment Summary Panda Express | Port Arthur, TX © 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 3 Investment Summary Panda Express | Port Arthur, TX

JLL is pleased to exclusively offer the opportunity to acquire the fee simple interest in a single tenant, NNN ground lease p roperty leased to Panda Express, Inc. (the “Property”) in Port Arthur, TX. In December 2018, Panda Express commenced their long-term, 20-year ground lease in their newly constructed building. They are required to pay attractive, 10% rental increases every 5 years throughout the term. The rental escalations shall also continue throughout the six (6), fi ve (5) year options that remain. The Property is situated on a 1.00-acre parcel that sits alongside E Farm to Market Rd (FM) 365 – a main artery in the area that carries more than 31,000 VPD. This strategic location combined with the available drive-thru feature, will bode extremely well for this Panda Express, which is 10 miles away from its next closest location.

Consumer traffic in and around the premises is extremely dense in large part due to the close proximity of US-69. US-69 is a 345-mile corridor that carries more than 58,000 VPD and connects Port Arthur to major cities such as Beaumont, Lufkin, Tyler and Denison. The region is also heav ily supported by I-10, which provides east-west access to Houston, TX and Lake Charles, TX, respectively. These transportation avenues, among others, allow t he Central Mall to draw from a surrounding trade area that consists of more than 330,000 residents within a 20-mile radius and an average household income exceeding $72,000.

Panda Express is America’s favorite Chinese restaurant with more than 1,900 stores and 30,000 associates across the United St ates, Mexico, Puerto Rico, Canada, South Korea and Dubai. Most notably known for their sweet and spicy Orange Chicken, and crispy Beijing Beef, the comp any has reached $2 billion in sales and is now the largest family-owned restaurant in the country.

PROPERTY SUMMARY

Address 3080 FM 365, Port Arthur, TX 77642 Price $1,700,000 Cap Rate 5.00% NOI $85,000 Lease Type NNN Ground Lease Building Size 2,216 SF Parcel Size 1.00 Acres Year Built 2018 Tenant Panda Express, Inc. Remaining Term 19 Years (Expiration 12/31/2038) Renewal Options Six (6), Five (5) Year Options Rental Increases 10.00% Every Five (5) Years Including Options

© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. 4 Panda Express, Inc. has 19 years remaining on its The Property is conveniently situated along FM long term NNN Ground Lease; the Lease features 365, a main artery in the area that features more attractive, 10% rental increases every 5 years, which than 31,000 VPD, which should bode well for are inclusive of the six (6), five (5) year options Panda Express’s drive-thru feature

The Central Mall features an anchor lineup of Target, There is a strong selection of nationally recognized Dillard’s, JCPenney, and Bed Bath & Beyond – all of retailers surrounding the mall such as Lowe’s, Best which demand a large, active consumer base that Buy, McDonald’s and Chick-fil-A, further driving will increase consumer traffic within the mall consumers to the area parking lot and the surrounding roadways

Port Arthur, TX is a member of Jefferson County and the greater Beaumont-Port Arthur MSA; The metro has over 419,000 residents 5 Panda Express | Port Arthur, TX

Panda Express Overview Panda Express was founded in 1983 by Andrew Cherng. Cherng opened the first location in Glendale, CA, in hopes of bringing customers together to share the bold, delicious flavors of Chinese cuisine. The chain has grown nationally since and is now known for their sweet and spicy Orange Chicken and their crispy Beijing Beef. Over the years, Panda Express has continued to adapt and open stores in other niche locations Corporate Overview such as airports, stadiums and theme parks. This growth, coupled with the drive-thru that was introduced in 1997, has enabled the company to promote their product and brand across the Ownership Private country and beyond. Today, Panda Express is home to more than 1,900 stores and 30,000 # of Locations 1,900+ associates across the United States, Mexico, Puerto Rico, Canada, South Korea and Dubai. US Headquarters Rosemead, CA In 2007, Panda Express achieved $1 billion in revenue for the first time and they have not looked back since. According to Nation’s Restaurant News, Panda Express came in at #21 in Company Website pandaexpress.com the 2019 Top 200 Restaurants Countdown with total sales of $3.52 billion. The company is now America’s favorite Chinese restaurant as well as the largest family-owned restaurant in America.

© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. Financial Analysis © 2019 Jones Lang LaSalle IP, Inc. All rights reserved. Panda Express | Port Arthur, TX 8 Financial Analysis Panda Express | Port Arthur, TX $1,700,000 5.00% Lease Abstract Asking Price Cap Rate LEASE DETAIL TENANT RESPONSIBILITY DETAIL Address 3080 FM 365, Port Arthur, TX 77642 Tenant shall maintain and repair the Tenant Improvements, including paving, Tenant Panda Express, Inc. Maintenance slabs, curbs, driveways, perimeter walls, storm drains, sewers, utility lines and & Repairs landscaping on the Premises, in good condition and repair, ordinary wear and Parcel Size 1.00 Acre tear excepted. Building Size 2,216 SF Tenant shall maintain property insurance with endorsements for all perils Year Built 2018 covering all Tenant Improvements on the Premises. Tenant shall maintain Annual Rent $85,000 Insurance commercial general liability insurance against all claims for personal injury, death Rent / SF $38.36 and property damage occurring on the Premises, subject to certain specifications. Landlord shall be named as additional insured on such policies. Lease Type NNN Ground Lease Tenant shall pay to Landlord the Taxes on the Premises. Tenant shall also pay Roof & Structure Tenant Responsibility before due all taxes, assessments, license fees and public charges imposed on Taxes Rent Commencement 12/29/2018 its interest in this Lease, business operation, trade fixtures and other personal Lease Expiration 12/31/2038 property, and tenant improvements on the Premises. Lease Term Remaining 19 Years All fees and charges for electricity, water, sewer, gas and all other utility services Remaining Options Six (6), Five (5) Year Options used or consumed in the Premises or in providing heating and air-conditioning to Utilities the Premises, including all sales and other taxes or fees applicable to the sale or RENT SCHEDULE supply of such utilities, will be paid promptly by Tenant directly to the entity collective the same. Annual Period Start Date End Date % Increase Tenant shall pay Landlord Tenant's share of Operating Costs as additional rent Rent Additional under this Lease. Tenant's initial share will be equal to the product obtained by Current Term (Years 1-5) 12/29/2018 12/31/2023 $85,000 Rent multiplying (a) $2.00 by (b) the number of square feet in the Building. Each year, Current Term (Years 6-10) 1/1/2024 12/31/2028 $93,500 10.00% the Tenant's share of Operating Costs shall be increased by 2.00%. Current Term (Years 11-15) 1/1/2029 12/31/2033 $102,850 10.00% LANDLORD RESPONSIBILITY DETAIL Current Term (Years 16-20) 1/1/2034 12/31/2038 $113,135 10.00% Landlord shall carry: (a) Commercial General Liability Insurance on that portion Option Term 1 (Years 21-25) 1/1/2039 12/31/2043 $124,449 10.00% of the Center which Landlord owns or which Landlord leases as a tenant under a Option Term 2 (Years 26-30) 1/1/2044 12/31/2048 $136,893 10.00% Insurance ground lease or sublease, and (b) "All Risk" property insurance covering the improvements in and to that portion of the Center which Landlord owns or which Option Term 3 (Years 31-35) 1/1/2049 12/31/2053 $150,582 10.00% Landlord leases as a tenant under a ground lease. Option Term 4 (Years 36-40) 1/1/2054 12/31/2058 $165,640 10.00% Option Term 5 (Years 41-45) 1/1/2059 12/31/2063 $182,204 10.00% Option Term 6 (Years 46-50) 1/1/2064 12/31/2068 $200,424 10.00%

* CO-TENANCY REQUIREMENT OUTLINED IN THE LEASE If at least two department stores are not open and at least 75% of all other retail space is not open (excluding tenants other than department stores occupying at least 20,000 SF), then Tenant shall track its sales for 12 months. If sales decrease 20% or more, then Tenant will be entitled to a credit of Summary Minimum Annual Rent. In the event the 20% decrease continues for another 12 months, the Tenant shall have the right to terminate the Lease. NOTE: JCPenney, Dillard’s, TJ Maxx, Bed Bath & Beyond, Target and Bealls are all open as of December 2019.

12 SURROUNDING RETAILERS

13 Panda Express | Port Arthur, TX © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. Market Overview Panda Express | Port Arthur, TX Market Port Arthur, Texas Port Arthur, TX is located in Jefferson County, and is a member of the Beaumont-Port Arthur Metropolitan Statistical Area, which has over 419,700 residents. Together with its neighboring cities, Beaumont and Orange, Port Arthur makes up the southeast Texas’ Golden Triangle. The region has a lower cost of living compared to the rest of the state and country, and residents in the area enjoy a tax-friendly climate (no state nor income taxes).

The metro is home to Lamar university, which has an enrollment of more than 14,000 students. It is one of the fastest growing universities in Texas and is a member of The Texas State University System. The institution offers more than 100 programs of study leading to bachelor’s, master’s, and doctoral degrees. The 270-acre campus in the metro is about 90 miles east of Houston and about 25 miles west of Louisiana. In addition to education, the metro has a balance of recreational and cultural leisure activities. Music fans can attend The Symphony of Southeast Texas and annual Kinsel Lincoln Jazz and Blues Fest, art aficionados have access to various exhibits offered at the Art Museum of Southeast Texas and the Beaumont Art League, and outdoor lovers can enjoy Tyrell Park, a 900-acre Cattail Marsh where visitors can participate in horseback riding, biking, or golfing.

Two of the main drivers of the metro’s economy are the Ports of Port Arthur and Beaumont. These two ports are two of 10 seaports along Texas’ 367-mile coastline on the Gulf of Mexico. The Port of Port Arthur is the ultimate direct transfer facility for international shipping. Trade through the port in 2018 affected about 102,000 net jobs in Texas. Approximately $15.4 billion in gross domestic product is related to trade via the Port of Port Arthur.

PORT OF PORT ARTHUR Demographic Information

1-mile 3-mile 5-mile radius radius radius POPULATION

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ESTIMATED HH INCOME

2020 Average HH Income

2020 Median HH Income

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Contact Information MARKETING ADVISORS DEBT ADVISOR MARC MANDEL STEVE SCHRENK JOHN INDELLI MATTHEW PUTTERMAN Managing Director Director Director Director 484.532.4212 484.532.4213 713.852.3407 713.852.3524 [email protected] [email protected] [email protected] [email protected]

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