SHAKE SHACK 1950 Spring Road | Oak Brook, Illinois 60523

SHAKE SHACK

1950 Spring Road | Oak Brook, Illinois 60523

NET LEASE PROPERTY GROUP

AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT

AFFILIATED BUSINESS DISCLOSURE

Memorandum solely for your limited use and

benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii)you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc. describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK.
Affiliated Business Disclosure CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (eachan“Affiliate”)engaginginabroadrangeof commercialrealestatebusinessesincluding,but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgment of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s).
DISCLAIMER This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates
The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/ or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.

based

on

forward-looking

assumptions

ALL PARCEL LINES ON SITE PLAN AND

AERIALS ARE APPROXIMATE. relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements
CONFIDENTIALITY AGREEMENT Your receipt of this Memorandum constitutes

your acknowledgment that (i) it is a conﬁdential

are

approximations.

This

Memorandum

SHAKE SHACK — OAK BROOK, IL

2

TABLE OF CONTENTS

0 4

Executive Summary

The Offering Financial Overview Investment Highlights Aerial

FOR MORE INFORMATION PLEASE CONTACT:

P R I M A RY C O N TAC T S

Regional Map

MICHAEL KAIDER

CBRE

Property Description

NNN Specialist/First Vice President +1 630 573 7015 [email protected]
700 Commerce Drive Suite 450 Oak Brook, IL 60523

0 9
1 3

Tenant Overview Site Plan Oakbrook Center Site Plan Property Highlights

D E B T & S T R U C T U R E D F I N A N C E

GEOFFREY HARRIS Senior Vice President +1 602 735 5615
CBRE 2575 East Camelback Road Suite 500 Phoenix, AZ 85016

Market Overview

Oak Brook, Illinois Overview Trade Area Overview Chicago MSA

geoﬀ[email protected]

Aerials Demographic Maps

TEHNEAONFTFEPROINFGILE

The CBRE Net Lease Property Group is pleased to exclusively oﬀer a 3,657-square foot freestanding Shake Shack restaurant on a 34,203-square foot site located in Oak Brook, Illinois. Shake Shack’s ground lease has a base term of 15 years and includes ﬁve 5-year renewal options and strong 10% rental increases.

Oak Brook is an aﬄuent west suburb, approximately 20 miles from Chicago’s Central Business District. Oak Brook is surrounded by some of the most desirable residential communities in suburban Chicago, including Oak Brook itself, Elmhurst, Oakbrook Terrace, Hinsdale, LaGrange, Western Springs, and Clarendon Hills. The Oak Brook area has long been recognized as one of the most prestigious areas to live, work, and recreate within Suburban Chicago due to its proximity to downtown, wide variety of restaurant and shopping options, quick access to Chicago’s highly developed expressway system, top ranked school system, and outstanding quality of life.

This investment provides qualified investors with the opportunity to acquire a high-quality ground lease located in the heart of a dominant retail corridor. The site is highly sought-after due to its location along the Oakbrook Center ring drive at the corner of Harger and Spring Roads – at one of the Mall’s main entrances. Oakbrook Center is a 2.2 million square foot upscale, open-air mall anchored by Lord & Taylor, Macy’s, Neiman Marcus, Nordstrom, and Sears as well as a brand-new luxury AMC Theater. Shake Shack’s high-profile location next to one of the ten highest grossing malls in the country (Average sales exceed $900/SF), provides unmatched convenience and visibility. Shake Shack also benefits from a strategic Oak Brook location near the intersection of two of the Chicagoland area’s expressways, providing convenient access to and from all directions for consumers.

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FINANCIAL OVERVIEW

Tenant shall maintain commercial general liability insurance, umbrella/excess coverage, causes of loss special form property insurance, contractor’s insurance, worker’s compensation. By separate PIN, Landlord will pay the taxes and to be reimbursed by tenant upon proof of payment.

OFFERING PRICE CAP RATE
$6,111,000 4.50%

Insurance:

Annual Rent:

$275,000

Real Estate Taxes:
Lease Structure:

Lot Size:
Ground Lease
34,203 Square Feet
3,657 Square Feet Shake Shack
So long as Tenant is operating a Shake Shack restaurant (or other restaurant under a different trade name but offering substantially similar items as a Shake Shack restaurant) at the Premises, Landlord agrees that it shall not grant the right or otherwise permit, or consent to a sublease or assignment of space in the Project (Outlined in Exhibit M of Lease), to any other tenant or occupant in the Project (or such other property) to a tenant, at least thirty-five percent (35%) of whose gross sales are derived from any of the following: (i) hamburgers, (ii) hot dogs, (iii) chicken sandwiches, (iv) french fries, and/or (v) frozen custard, (including, but not limited, tenants operating under the following tradenames: 5 Napkin Burger, BLT Burger, Bobby’s Burger Palace, Burger Joint, The Habit, Umami Burger, Five Guys, In-N Out, Johnny Rockets, Hopdoddy, Burger Fi, Smashburger, The Stand, Tasty Made, Better Burger, Bareburger, Zinberger, The Counter) (the “Restricted Use”). The Restricted Use shall not apply to the sale of frozen yogurt and/or gelato.
Building Size: Tenant:

Guarantor:

SSE Holdings, LLC

15 Years

Initial Lease Term:

Lease Commencement: Renewal Options: Rental Increases: Percentage Rent:
Exclusive Use:
November 2018

Five, 5-Year Options 10% in year 6 and 11 of base term and in each option period.

None Landlord at its sole cost and expense (Tenant’s portion of such expenses shall be included in the REA Charges) shall be responsible for maintaining all parking and drive pursuant to, and in accordance with, the REA. Landlord shall maintain the Common Area in accordance with the REA.
Parking: CAM:
Per the REA Section 3-Lot 3 (Office), shall control the REA, operate, repair, clean, remove snow, and ice from, supervise, and adequately light. This would include any Capital Repairs to maintain the common area. This shall include repaving, repairing, striping the surface lot and roadway areas. Prior to offering the Premises or the Premises and the Neighboring Retail Parcel for sale to any third party, Landlord shall offer to sell the Purchase Option Property to Tenant by giving written notice thereof to Tenant. The Purchase Offer Notice shall state the proposed price upon which Landlord desires to sell the Purchase Option Property and the property that comprises the Purchase Option Property. Within twenty (20) business days after Landlord delivers the Purchase Offer Notice to Tenant Tenant shall notify Landlord in writing whether Tenant elects to purchase the Purchase Option Property at the price set forth in the Purchase Offer Notice and on the terms set forth herein.

RENT SCHEDULE

Lease Year

Maintenance and Repairs:

Monthly Rent

$22,916.67 $25,208.33
$27,729.17

Annual Rent

$275,000.00 $302,500.00 $332,750.00 $366,025.00 $402,627.50 $442,890.25
$487,179.27
1 - 5 6 - 10 11 - 15 Option 1: 16 - 20 Option 2: 21 - 25 Option 3: 26 - 30 Option 4: 31 - 35 Option 5: 36 - 40
$30,502.08 $33,552.29 $36,907.52 $40,598.27 $44,658.10

Purchase Option:

$535,897.20

Utilities

Tenant

EXECUTIVE SUMMARY

5

INVESTMENT HIGHLIGHTS

TREMENDOUS OPPORTUNITY: Shake Shack recently signed a long-term ground lease on a 34,203-square foot site in the affluent western suburb of Oak Brook, Illinois. The lease includes 15 years of base term, five 5-year renewal options, strong 10% rental increases, and minimal landlord responsibilities as the REA will be managed by the office owner and manager.

IRREPLACEABLE LOCATION: Shake Shack is located along the Oakbrook Center ring drive at one of the mall’s main entrances. Oakbrook Center, which anchors the surrounding retail corridor, is a 2.2 million square foot upscale, open-air regional mall owned and operated by GGP. The mall is anchored by Lord & Taylor, Macy’s, Neiman Marcus, Nordstrom, and Sears as well as a brand-new luxury AMC Theater. The mall features 40 restaurants and more than 160 high-end, specialty shops and includes top retailers such as Crate & Barrel, Louis Vuitton, Michael Kors, Peloton, and Tiﬀany & Co. among others.

DOMINANT RETAIL CORRIDOR: Shake Shack is located in the heart of the coveted Oak Brook retail corridor. The corridor encompasses over 4.1 million square feet of retail GLA including the mall. National retailers in this corridor along 22nd Street include Costco, DSW, Nordstrom Rack, Ulta, Old Navy, TJ Maxx, Home Depot, Party City, and REI.

EXCEPTIONAL VISIBILITY AND HIGH TRAFFIC COUNTS: Shake Shack is well situated at the corner of Harger and Spring Roads (12,900 VPD). The site also beneﬁts from a strategic Oak Brook location near the intersection of two of the Chicagoland area’s expressways, I-88 and I-294, providing convenient access to and from all directions for consumers. Traﬃc counts on I-88 and I-294 near the site are 179,400 and 182,000 VPD, respectively. Additional east-west thoroughfares in the vicinity of the Property include Roosevelt Road/Route 38 (49,500 VPD), 22nd Street (33,800 VPD), and Kingery Highway/Route 83 (57,300 VPD).

SIGNIFICANT DAYTIME POPULATION: Shake Shack is located in the dominant East-West Tollway office corridor (41 million square feet of office space) that creates a surge in its daytime population with 234,662 workers within a five-mile radius of the Property. Shake Shack is well located just south of an institutional quality, five-story, 107,780 square foot office tower which will significantly benefit the restaurants traffic.

AFFLUENT TRADE AREA DEMOGRAPHICS: The primary three-mile trade area has an excellent, dense, and affluent demographic profile, with a population of 79,281 residents. The trade area is surrounded by some of the most desirable residential communities in suburban Chicago including Oak Brook, Oak Brook Terrace, Downers Grove, Elmhurst, Hinsdale, LaGrange, Western Springs, and Clarendon Hills. This affluent area has an average household income of $120,364 – 1.49 times higher than the U.S. national average.

CHICAGO MSA ADVANTAGE: Chicago is home to the third largest economy and is the third most populous MSA in the nation (Chicago MSA Population: 9.68 million). The city’s vibrant business climate, central geographic location, diversiﬁed economy, and available human resources have helped Chicago achieve a prominent position as a world class city in ﬁnance, international trade, manufacturing, transportation, culture, and the arts.

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AERIAL VIEW LOOKING WEST

EXECUTIVE SUMMARY

7

REGIONAL MAP

8

TENANT PROFILE

Shake Shack is a modern day “roadside” burger stand serving a classic American menu. The restaurant’s menu is known for its premium food and beverages which includes 100% all-natural Angus beef burgers, ﬂat-top beef dogs, 100% all-natural cage-free chicken, frozen custard, crinkle cut fries, craft beer, and wine among other items. Shake Shack began in 2004 in New York City’s Madison Square Park. The company has quickly grown and currently there are 174 restaurants across 22 states, the District of Columbia and 12 countries internationally. Shake Shack (NYSE: SHAK) became a public company on January 30, 2015 and is headquartered in New York, NY. The company had ﬁscal year ending December 27, 2017 revenues of $358.8 million.

Shake Shack’s CEO Randy Garutti has focused on expanding stores in the Midwest. Since 2014, Shake Shack has opened locations in Cleveland, Detroit, Milwaukee, Minneapolis (Mall of America), St. Louis, and Chicago. Their rapid growth has been impressive, opening 26 locations in 2017, and plans to open up another 45 locations in 2018. At the end of 2018, Shake Shack will have grown their number of locations over the last 2 years by over 50%.

PROPERTY DESCRIPTION

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SITE PLAN

3,657 square feet

OF RETAIL SPACE

±34,203 square feet

OF L AND AREA

41 parking stalls

TO ACCOMODATE RESTAUR ANT GUESTS

2018

YEAR BUILT

06-23-302-003

PROPERT Y INDEX NUMBER

AVERAGE DAILY VEHICLES

12,900

HARGER & SPRING ROAD

33,800

WEST 22ND STREET

57,300

KINGERY HIGHWAY

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Oꢀce

The Great Escape
Binny’s

Oakbrook Center

Shake Shack is located adjacent to Oakbrook Center, an upscale super-regional shopping mall consisting of over two million

Walter E. Smithe

square feet of retail space.

Pinstripes

Nordstrom H&M

Oꢀce

2.2 million square feet

RETAIL GROSS LEASABLE AREA

Sur La Table
AMC Theaters
Loft Columbia Pandora J. Jill

Double Tree Hotel

Retail

Lucky Brand Evereve
Paper Source Express
Fabletics
Lilly Pulitzer Vera Bradley West Elm
Pattery Barn Kids
Gap Chico’s Free People Ann Taylor Athleta Forever 21

Oꢀce

98.3% leased

CURRENT RETAIL SPACE

Oꢀce
Oꢀce

Eddie Bauer
Build-A-Bear

Z Gallerie Lovesac
Bose L’Occitane Microsoft
Teavanna Francescas Bath & Body Tesla

$911 per square foot

Le Meridian Hotel

MAC
Urban Outﬁtters
The Land of Nod Crate & Barrel

Oꢀce

AVER AGE SALES IN THE CENTER

lululemon Aritzia
Warby Parker Peloton
Pottery Barn

Cheesecake Factory

Anthropologie
Restoration Hardware MIchell Gold + Bob Williams
Season52
Apple
Louis Vuitton

Burberry
Madewell Banana Republic Sephora

Illinois’ largest mall

Oꢀce

vineyard vines

Williams Sonoma

ZARA
Wildﬁre
Tallbots

Henri Bendel Bonobos
Michael Kors
Lord & Taylor
TUMI J. Crew Tiany & Co

ONE OF THE 10 HIGHEST
GROSSING MALLS IN THE US

Macy’s
Neiman Marcus

Gibsons

NOTABLE CO -TENANTS

OAKBROOK MALL RING DRIVE

Oꢀce
Oꢀce

Oꢀce

Marriot Hotel
Tuscany

Oꢀce

PROPERTY DESCRIPTION

11

PROPERTY HIGHLIGHTS

OUTSTANDING ACCESSIBILITY

Shake Shack benefits from a strategic Oak Brook location near the intersection of two of the Chicagoland area’s expressways, providing convenient access to and from all directions for consumers.

The I-88 Tollway located just south of the mall provides east-west access connecting the far reaching suburbs of Naperville and Aurora to the Chicago CBD, while the I-294 Tri-State connects the area to the affluent North Shore and O’Hare International Airport to the north and I-80 south of Chicago.

Additional east-west thoroughfares in the vicinity of the Property include Roosevelt Road (Route 38) to the north and 22nd Street to the south, while Kingery Highway (Route 83) immediately west of the mall provides local access to the north and south.

SURROUNDING AREA

NORTH

SOUTH

A number of luxury condominiums known as the Oak Brook Club are located just across 16th Street from the site.
Two office buildings owned by mall owner General Growth Properties as well as a large parking facility and the Le Meridien Hotel are directly to the South.

EAST

The DoubleTree Hotel is located across Spring Road to the East. Commerce Plaza, one of suburban Chicago’s premier office environments, is located southeast of the Property also across Spring Road.

WEST

The 2.2 million-square-foot Oakbrook Center is located adjacent to the opportunity.

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OAK BROOK, ILLINOIS OVERVIEW

OAK BROOK, ILLINOIS

Shake Shack is located in the Village of Oak Brook in Illinois. Located approximately 20 miles west of the Chicago Central Business District (“CBD”), Oak Brook is surrounded by some of the most desirable residential communities in suburban Chicago, including Oak Brook Terrace, Downers Grove, Elmhurst, Hinsdale, LaGrange, Western Springs, and Clarendon Hills. The Village of Oak Brook is situated directly along Interstate 88, one of metropolitan Chicago’s main interstates connecting the western suburbs of Chicago to downtown.

Incorporated in 1958, the Village of Oak Brook is located in eastern DuPage County. The Oak Brook area is recognized as home to Fortune 500 corporate headquarters as well as regional and district headquarters for corporations based out-of-state. The area’s dynamic mix of retail venues, residential communities and recreational facilities has exhibited strong growth since the 1960s. The Oak Brook area and surrounding DuPage County are also known for exceptional public-school systems, an abundance of community services, and an overall excellent quality of life.

RESIDENTIAL AND DEMOGRAPHICS

The municipalities of Oak Brook and Hinsdale, both located within the Oak Brook market, are two of the Chicago metropolitan area’s most affluent and desirable residential communities. Other upper-middle class municipalities located in the surrounding area include Clarendon Hills, Downers Grove, Elmhurst, LaGrange, Lombard and Western Springs. These communities offer a wide variety of housing options that cater to each segment of the population, including single-family homes, townhomes, and condominiums. The high concentration of executive housing in the area draws many of Chicago’s corporate executives and decision makers to the area, leading to a population with significant buyer power and well above average income levels.

COMPANY

EMPLOYEES

BUSINESS

The Oak Brook area enjoys outstanding access to Chicago’s highly developed expressway system with quick access to O’Hare International Airport and Midway International Airport, the city of Chicago, and the broader metropolitan Chicago region. The area’s strategic geographic location in the center of the western suburbs of Chicago makes it an optimal location for businesses due to its excellent accessibility from all directions. Furthermore, a positive business environment prevails in the Oak Brook area with village oﬃcials proactively pursuing new business and seeking to promote the interests and long-term viability of their local businesses. Several national and international companies are headquartered in the Oak Brook market. A list of the Village of Oak Brook’s top employers is provided to the left.