Red Lobster 7607 Day Drive, Parma, OH 44129

OFFERING MEMORANDUM EXCLUSIVE NET – LEASE OFFERING Table of Contents

Investment Overview Investment Highlights Financial Overview Lease Summary Tenant Overview Private Equity Sponsor Property Overview Location Overview Surrounding Area Map Local Map Regional Map Property Photos Surrounding Area Photos

Demographics Population Income Employment 7067 Day Drive, Parma, Ohio 44129 FINANCIAL OVERVIEW PRICE: $4,412,625 | 6.15%CAP | RENT: $271,376

PROPERTY DESCRIPTION HIGHLIGHTS Property Red Lobster Property Address 7067 Day Drive ➢ Property is Subject to a 25 Year Triple-Net (NNN) Lease City, State, ZIP Parma, OH 44129 With 20 Years Remaining Building Size (SF) 7,608 ➢ Lot Size (Acres) +/- 1.67 Corporate Guaranty | 704 Locations in the US & Canada THE OFFERING ➢ Strong Inflation Hedge | Attractive 2.0% Annual Net Operating Income1 $271,376 Increases CAP Rate 6.15% ➢ Four (4), Five (5)-Year Tenant Renewal Options Purchase Price $4,412,625 Price / SF $580 ➢ World’s Largest Seafood Restaurant | Serving Customers Year Opened 1975 in 11 Countries Year Remodeled 2011 LEASE SUMMARY Property Name Red Lobster Property Type Net Leased Casual Dining Ownership Private Tenant Red Lobster Restaurants, LLC Guarantor Red Lobster Intermediate Holdings, LLC Lease Term 25 Years Lease Expiration July 31, 2039 Lease Term Remaining 20 Years Lease Type Triple-Net (NNN) Lease Roof & Structure Tenant Responsible Rental Increases 2.00% Annually Options to Renew Four (4), Five (5) Year Option Periods Rental Increases in Options 2.00% Annually 1Rent Based on August 2019 Increase

This information has been securedThisfrominformationsources wehasbelievebeentosecuredbe reliable,frombutsourceswe makeweno representationsbelieve to be reliable,or warranties,but weexpressedmake noorrepresentationsimplied, as to the accuracyor warranties,of the informationexpressed. Referencesor implied,to squareas to thefootageaccuracyor ageofaretheapproximateinformation. Buyer. Referencesmust verifytothesquareinformationfootage or and bears all risk for any inaccuraciesage are. Anyapproximateprojections,. Buyeropinions,mustassumptionsverify theorinformationestimates usedandhereinbearsareallforriskexamplefor anypurposesinaccuraciesonly and. Anydo notprojections,represent opinions,the currentassumptionsor future performanceor estimatesof theusedpropertyherein. Marcusare for& MillichapexampleRealpurposesEstate Investmentonly and doServicesnot representis a 3 service mark of Marcus & Millichapthe currentReal Estateor Investmentfuture performanceServices, Incof. ©the2013propertyMarcus. &MarcusMillichap& Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap 3 INVESTMENT SUMMARY FINANCIAL OVERVIEW Marcus & Millichap is pleased to present the exclusive listing for a Red ANNUALIZED OPERATING DATA Lobster property located in Parma, Ohio. The property consists of 7,608 square feet of building space and is situated on approximately 1.67 acres of Current Annual Rent $271,376 land. The property is subject to a 25-year Triple-Net (NNN) lease with 20 Base Term Rental Escalations 2.00% Annually years remaining on the base term. The current rent is $271,376 and will RENT SCHEDULE continue to increase by 2.00% annually. The increases will continue through the four, five-year tenant renewal options. Lease Year Annual Rent Monthly Rent Year 6 $271,376 $22,615 TENANT SUMMARY Year 7 $276,804 $23,067 Year 8 $282,340 $23,528 Red Lobster is the largest seafood restaurant concept in the world and is an iconic full service brand with broad demographic appeal and significant Year 9 $287,987 $23,999 advertising budget. Red Lobster is led by an experienced management team Year 10 $293,747 $24,479 with a history of success leading the brand(average 27+ years experience Year 11 $299,622 $24,968 across executive team). The company generates $2.5 billion in revenue and Year 12 $305,614 $25,468 is the 5th largest casual dining concept in North America. Red Lobster was recently acquired by Golden Gate Capital. Year 13 $311,726 $25,977 Year 14 $317,961 $26,497 Year 15 $324,320 $27,027 Year 16 $330,806 $27,567 Year 17 $337,423 $28,119 Year 18 $344,171 $28,681 Year 19 $351,054 $29,255 Year 20 $358,075 $29,840 Year 21 $365,237 $30,436 Year 22 $372,542 $31,045 Year 23 $379,993 $31,666 Year 24 $387,592 $32,299 Year 25 $395,344 $32,945 CAP Rate 6.15% Purchase Price $4,412,625

• On July 28th, 2014, Golden Gate Capital (“GGC”) acquired Red Lobster from Darden Restaurants. • Red Lobster is now an independently owned company, completely separate from Darden Restaurants. • Red Lobster is well capitalized with >$200M of liquidity. • Golden Gate Capital has a long, successful track record and significant experience with multi-unit restaurant and retail businesses.

OUR HISTORY

FRESH IS IN OUR FOOD FRESH IS IN OUR DEDICATION Each day, you’ll find an updated selection of fresh fish on We hold ourselves to the highest standards for service, our Today’s Fresh Fish menu, not to mention live Maine quality and a welcoming atmosphere. And we’re focused lobster, freshly baked Cheddar Bay Biscuits™, crisp salads on doing what’s right – for our employees, in our and a host of fresh seafood recipes waiting to be communities and in the world. explored.

FRESH IS IN OUR KNOWLEDGE FRESH IS IN OUR COMMITMENT No one knows seafood better than we do. As global You deserve the freshest food and thinking. So every time seafood buyers, we have employees stationed you visit one of our seafood restaurants or our online throughout the world who inspect our seafood the seafood store, you’ll find an uncommon commitment to moment it comes out of the water. They ensure it meets deliver the best of the sea with fresh energy and fresh standards that are second to none. Then, the renowned ideas that we hope will make you want to come back chefs at our culinary center deliver the fresh expertise again and again. that turns it all into something truly special.

We invite you to come in and experience our commitment to quality for yourself. Whether it’s choosing your favorite fresh fish from our “Today’s Fresh Fish” menu, or selecting your favorite seafood to be prepared over our wood-fired grill, Red Lobster is the place you can enjoy fresh, delicious seafood now and for generations.

This information has been securedThisfrominformationsources wehasbelievebeentosecuredbe reliable,frombutsourceswe makeweno representationsbelieve to be reliable,or warranties,but weexpressedmake noorrepresentationsimplied, as to the accuracyor warranties,of the informationexpressed. Referencesor implied,to squareas to thefootageaccuracyor ageofaretheapproximateinformation. Buyer. Referencesmust verifytothesquareinformationfootage or and bears all risk for any inaccuraciesage are. Anyapproximateprojections,. Buyeropinions,mustassumptionsverify theorinformationestimates usedandhereinbearsareallforriskexamplefor anypurposesinaccuraciesonly and. Anydo notprojections,represent opinions,the currentassumptionsor future performanceor estimatesof theusedpropertyherein. Marcusare for& MillichapexampleRealpurposesEstate Investmentonly and doServicesnot representis a 6 service mark of Marcus & Millichapthe currentReal Estateor Investmentfuture performanceServices, Incof. ©the2013propertyMarcus. &MarcusMillichap& Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap 6 RED LOBSTER EXECUTIVE SUMMARY 1968 TIMELINE Bill Darden opens the first Red 1970 Lobster in Lakeland, Florida General Mills acquires Red Lobster and rapidly expands nationally 1983 Our 1st Canadian restaurant 1984 opens in Ontario Out Lobsterfest® promotion begins, giving guests the best variety of lobster anywhere 1988 We introduce our famous and 1989 delicious Cheddar Bay Biscuits® We operate 450 US and 55 Canadian restaurants 1996 We introduce "Walt's Favorite Shrimp", named after one of our 2003 earliest employees We celebrate our 35th anniversary of serving fresh, delicious seafood 2004 Endless Shrimp® is introduced, and becomes an annual guest-favorite 2006 promotion "Today's Fresh Fish" gives guests a daily selection of national and local fresh fish favorites 2008 We introduce Wood-Fire Grills and Certified Grill Masters in every 2013 restaurant We celebrate our 45th anniversary and operate more than 700 locations 2014 worldwide Acquisition by Golden Gate Capital (“GGC”)

Strong Market Position Significant Scale With Broad Geographic Reach

• Red Lobster is the largest seafood restaurant concept in the world and the 6th largest casual dining concept in the United States with over $2.5 billion in annual sales and 704 restaurants. • The Company is the category killer in the seafood casual dining space, holding almost 50% market share. • Largest share of any restaurant concept in any segment. • 6th largest overall casual dining concept in the US.

6th Largest Casual Dining Concept in the US ~50% Share in Seafood Casual Dining

Iconic Brand With Unparalleled Customer Healthy and Recently Remodeled Restaurant Loyalty Base

• Red Lobster has strong consumer appeal and broad usage • Over $320 million invested in remodels covering >90% of across multiple dining out occasions, including high-crave, restaurants over the past 8 years. healthier “good for you” and special meal occasions. • $1.4 billion in overall capital expenditure investment over • The brand has a strong foundation of loyal guests, who visit 1- the past 10 years. 2 times per month and account for more than 50% of sales. • New Bar Harbor format has strong appeal across customer • Red Lobster is the clear leader in casual dining seafood, and base. the most indispensable brand among major casual dining • 100% of restaurants are cash flow positive. concepts, further indicating strong consumer loyalty.

Indispensability vs. Peers New Bar Harbor Format Before After

Indispensability (How difficult it would be for me to ‘give up’ ever going there again ) - % very difficult (10 out of 10) shown

• Salli was named President of Red Lobster in July of 2013 • Prior to her promotion to President, Salli served as Red Lobster’s EVP of Marketing, before which she Salli Setta held numerous roles in Marketing and Culinary at Olive Garden during its turnaround, including VP President Marketing and SVP Culinary and Beverage (28 years in Restaurant • 24 years of experience in restaurant marketing, advertising and menu development; named “Menu Industry) Strategist of the Year” in 2003; recipient of three Menu Masters’ Awards and a Silver Effie for her work on the “Hospitaliano” ad campaign • BA, University of Central Florida; MBA, Florida Institute of Technology

• Bill served as CFO of Red Lobster from FY2006 to FY2010 Bill Lambert • Prior to his return to Red Lobster, Bill served as CFO of LongHorn Steakhouse CFO • Prior to joining Darden and Red Lobster, Bill spent 21 years with Federated Department Stores in various (12 years in Restaurant roles including CFO of Macy’s Central Industry) • BS, Duke University; MBA, University of Michigan

• Chip Wade Darryl “Chip” Wade is EVP of Operations at Red Lobster EVP • Previously, Chip held positions in Enterprise Operations at Darden and as SVP of its Smokey Bones brand Operations • Outside of Darden, Chip previously served as COO of Legal Sea Foods and in various operations (30 years in Restaurant management roles at TGI Friday’s Industry) • BA, Widener University; MBA, University of Texas

• Golden Gate Capital (GGC) is a San Francisco-based Private Equity firm with over $15 billion of capital under management. • GGC has been one of the most active acquirers of multi-unit restaurant and retail companies. • Over the past 10 years, GGC has invested in restaurant and retail companies with annual revenues in excess of $15 billion. • GGC’s investors include leading educational endowments, non-profit foundations, and selected entrepreneurs and managers. • Investment approach is to partner with strong management teams to acquire strong, established brands with an opportunity to grow earnings through better execution, productivity improvements and unit growth. • Excellent track record with acquiring and growing divisions of corporations.

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7607 Day Drive, Parma, Ohio 44129 AERIAL RIDGE RIDGE ROAD

Parma Medical Center

DAY DRIVE

HIGHLIGHTS ➢ Major National Tenants In Surrounding Area: Walmart, Target, Kohl’s, Dick’s Sporting Goods, McDonald’s, Starbucks, Giant Eagle, Toys R’ Us ➢ Exceptional Demographics | 243,520 Individuals Within a 5-Mile Radius ➢ Strong Traffic Counts| Ridge Road and West ADTC 17,400 Ridgewood Drive| 24,600 and 17,400 Vehicles Per Day ➢ University Hospitals Parma Medical Center | 332-Bed General Medical and Surgical Facility ➢ Parma | Suburb of Cleveland | Second Largest City in Ohio

MAJOR EMPLOYERS

ADTC 24,600 EMPLOYER # OF EMPLOYEES * American Greetings 6,124 Applebees 3,365 Southwest General Health Ctr 2,470 General Motors 2,028 University Hospitals Parma 2,000 SOUTHWEST GENERAL HOSPITAL 1,982 Parma Community General Hosp 1,962 Cleveland Water Department 1,200 UPS 1,082 Western Campus Center 1,000 Windsor Construction 1,000 Mansfield, Ohio Plain Dealer Publishing Co 900

Surrounding Retail and Points of Interest The subject property is well-positioned in a very dense retail corridor, benefitting from the large amount of major national tenants in the nearby area. Walmart, Target, Giant Eagle, Dick’s Sporting Goods, Starbucks, McDonald’s, Circle K, Toys R’ Us, Game Stop, BP, Shell, PNC, Firestone, Pet Smart, and several others are found in the immediate vicinity. Additionally, located across the street from this Red Lobster property is University Hospitals Parma Medical Center, a 322 bed, general medical and surgical facility. Adjacent to the property is the National Premier Soccer Leagues Cleveland Royals’ home: Byers Field. Byers Field is a 12,750 person field that had underwent a $790,000 renovation in 2008.

Traffic Counts and Demographics Parma has approximately 106,265 individuals residing within a three-mile radius of the property and more than 243,520 within a five-mile radius. This Red Lobster property located on Day Drive, intersects with Ridge Road, which experiences average daily traffic counts exceeding 24,600. Intersecting with Ridge Road is West Ridgewood Drive, which brings an additional 17,400 vehicles to the immediate area daily.

Cleveland, Ohio Cleveland is the county seat of Cuyahoga County, Ohio as well as the second largest city in the state. Cleveland is located in northeast Ohio along Lake Erie. Case Western Reserve University and Cleveland State University are found within the city, with a total enrollment of nearly 30,000 students. Additionally the 2016 NBA Champions, the Cleveland Cavaliers, play in the Quicken Loans Arena, found in downtown Cleveland. The Quicken Loans Arena is the second largest arena in the NBA with a seating capacity of over 20,500. Cleveland’s location on the Coyahoga River and Lake Erie has helped establish the city as an important business center. Several headquarters such as Cliffs Natural Resources, NACCO Industries, KeyCorp, and the Sherwin-Williams company are located in Cleveland.

5 Miles 1 Miles 3 Miles 5 Miles POPULATION 2022 Projection 13,069 105,765 242,992 2017 Estimate 13,227 106,265 243,520 2010 Census 13,333 107,338 246,563 3 Miles 2000 Census 13,895 113,012 255,434

INCOME Average $56,878 $62,763 $65,465 Median $44,722 $51,881 $51,228 1 Mile Per Capita $25,905 $26,747 $28,033

HOUSEHOLDS 2022 Projection 5,933 45,297 104,821 2017 Estimate 5,963 45,037 103,850 2010 Census 6,050 45,717 105,742 2000 Census 6,231 46,821 106,246

HOUSING 2017 $130,637 $127,873 $131,073

EMPLOYMENT 2017 Daytime Population 15,532 87,749 233,572 2017 Unemployment 4.68% 4.02% 4.21% 2017 Median Time 27 26 25 Traveled

RACE & ETHNICITY White 90.15% 91.60% 87.84% Native American 0.03% 0.02% 0.02% African American 3.02% 2.50% 4.47% Asian/Pacific Islander 3.56% 2.66% 3.07%

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. © 2017 Marcus & Millichap 17 Marcus & Millichap hereby advises all prospective purchasers be set based on a tenant’s projected sales with little or no asbestos, the compliance with State and Federal regulations, of Net Leased property as follows: record of actual performance, or comparable rents for the the physical condition of the improvements thereon, or the area. Returns are not guaranteed; the tenant and any financial condition or business prospects of any tenant, or any The information contained in this Marketing Brochure has guarantors may fail to pay the lease rent or property taxes, or tenant’s plans or intentions to continue its occupancy of the been obtained from sources we believe to be reliable. may fail to comply with other material terms of the lease; cash subject property. The information contained in this Marketing However, Marcus & Millichap has not and will not verify any of flow may be interrupted in part or in whole due to market, Brochure has been obtained from sources we believe to be this information, nor has Marcus & Millichap conducted any economic, environmental or other conditions. Regardless of reliable; however, Marcus & Millichap has not verified, and investigation regarding these matters. Marcus & Millichap tenant history and lease guarantees, Buyer is responsible for will not verify, any of the information contained herein, nor makes no guarantee, warranty or representation whatsoever conducting his/her own investigation of all matters affecting has Marcus & Millichap conducted any investigation regarding about the accuracy or completeness of any information the intrinsic value of the property and the value of any long- these matters and makes no warranty or representation provided. term lease, including the likelihood of locating a replacement whatsoever regarding the accuracy or completeness of the tenant if the current tenant should default or abandon the information provided. All potential buyers must take As the Buyer of a net leased property, it is the Buyer’s property, and the lease terms that Buyer may be able to appropriate measures to verify all of the information set forth responsibility to independently confirm the accuracy and negotiate with a potential replacement tenant considering the herein. completeness of all material information before completing location of the property, and Buyer’s legal ability to make any purchase. This Marketing Brochure is not a substitute for alternate use of the property. NON-ENDORSEMENT NOTICE your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services, Inc. obligation to conduct a due diligence examination of this Marcus & Millichap Real Estate Investment Services and hold it (“M&M”) is not affiliated with, sponsored by, or endorsed by Property for Buyer. harmless from any kind of claim, cost, expense, or liability any commercial tenant or lessee identified in this marketing arising out of your investigation and/or purchase of this net package. The presence of any corporation’s logo or name is Any projections, opinions, assumptions or estimates used in leased property. not intended to indicate or imply affiliation with, or this Marketing Brochure are for example only and do not sponsorship or endorsement by, said corporation of M&M, its represent the current or future performance of this property. CONFIDENTIALITY AND DISCLAIMER affiliates or subsidiaries, or any agent, product, service, or The value of a net leased property to you depends on factors commercial listing of M&M, and is solely included for the that should be evaluated by you and your tax, financial and The information contained in the following Marketing purpose of providing tenant lessee information about this legal advisors. Brochure is proprietary and strictly confidential. It is intended listing to prospective customers. to be reviewed only by the party receiving it from Marcus & Buyer and Buyer’s tax, financial, legal, and construction Millichap and should not be made available to any other ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. advisors should conduct a careful, independent investigation person or entity without the written consent of Marcus & PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR of any net leased property to determine to your satisfaction Millichap. This Marketing Brochure has been prepared to MORE DETAILS. with the suitability of the property for your needs. provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest Like all real estate investments, this investment carries in the subject property. The information contained herein is significant risks. Buyer and Buyer’s legal and financial advisors not a substitute for a thorough due diligence investigation. must request and carefully review all legal and financial Marcus & Millichap has not made any investigation, and documents related to the property and tenant. While the makes no warranty or representation, with respect to the tenant’s past performance at this or other locations is an income or expenses for the subject property, the future important consideration, it is not a guarantee of future projected financial performance of the property, the size and success. Similarly, the lease rate for some properties, including square footage of the property and improvements, the newly-constructed facilities or newly-acquired locations, may presence or absence of contaminating substances, PCB’s or Glen Kunofsky Matthew Anuszkiewicz OH BOR: Michael Glass [email protected] [email protected] 216-264-2000 212.430.5115 212.430.5129 OH: BRK.2007005898 NY: 49KU1129178 NY: 10401285141