Pizza Hut 15-Year Absolute Net (Nnn) 1201 W

STRONG ECONOMIC PROFILE

ACROSS KNOXVILLE RACEWAY

HEALTHY RENT-TO-SALES

Representative Photo

PIZZA HUT 15-YEAR ABSOLUTE NET (NNN) 1201 W. Larson St., Knoxville, Iowa 50138 1 OFFERING MEMORANDUM PIZZA HUT 15-YEAR ABSOLUTE NET (NNN) 1201 W. Larson St., Knoxville, Iowa 50138 2 OFFERING MEMORANDUM CONFIDENTIALITY & DISCLAIMER STATEMENT

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

PIZZA HUT 15-YEAR ABSOLUTE NET (NNN) 1201 W. Larson St., Knoxville, Iowa 50138 3 OFFERING MEMORANDUM OFFERING INCLUDES

PRICING & FINANCIAL ANALYSIS  Investment Highlights  Executive Summary COMPANY OVERVIEW

TENANT OVERVIEW

PROPERTY OVERVIEW  Aerial Maps

LOCATION OVERVIEW  City Overview  Economic Overview  Demographic Analysis

4 Largest Pizza Company in the World Over 16,500 Locations in 106 Countries Established 1958

6 • BRAND NEW 15-YEAR LEASE • ABSOLUTE TRIPLE-NET • ZERO LANDLORD RESPONSIBILITIES • VERY HEALTHY RENT-TO-SALES RATIO – CONSERVATIVE • FIVE PERCENT BUMPS EVERY FIVE YEARS • OPEN & OPERATING SINCE 1972 • DIRECTLY ACROSS KNOXVILLE RACEWAY – SPRINT CAR CAPITAL OF THE WORLD, OVER 24,000 SEATS • MINUTES FROM 3M (NYSE: MMM) PLANT - FORTUNE 500 • MINUTES FROM HORMEL FOODS (NYSE:HRL) - FORTUNE 500 • ACROSS HY VEE • MINUTES FROM LOCAL AIRPORT • MINUTES FROM IA5 • MINUTES FROM HOSPITAL & CLINICS • CLOSE TO MILITARY BASE • MINUTES FROM YOUNG'S PARK • SINGLE TENANT NET LEASED ASSET • GLOBALLY RECOGNIZED BRAND LOCATED IN 106 COUNTRIES

Marcus & Millichap is pleased to offer this Pizza Hut property paired with an absolute net long term lease with zero landlord responsibilities. Pizza Hut, is the largest pizza company in the world. Representative Photo

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. © 2018 Marcus & Millichap Activity ID Z0390709 RENT SCHEDULE ANNUAL RENT MONTHLY RENT RENT PER SF LIST PRICE $901,581 YEAR 1 $54,095 $4,508 $20.65 CAP RATE 6.00% YEAR 2 $54,095 $4,508 $20.65 YEAR 3 $54,095 $4,508 $20.65 YEAR 4 $54,095 $4,508 $20.65 INCREASES 5% Every 5 Years YEAR 5 $54,095 $4,508 $20.65 LEASE TERM 15 Years YEAR 6 $56,800 $4,733 $21.68 OPTIONS Four 5-Year Options YEAR 7 $56,800 $4,733 $21.68 LOT SIZE 0.75 Acres YEAR 8 $56,800 $4,733 $21.68 BUILDING SIZE 2,620 SF YEAR 9 $56,800 $4,733 $21.68 PRICE PER FOOT $344 YEAR 10 $56,800 $4,733 $21.68 YEAR BUILT 1972 $4,970 $22.76 TYPE OF OWNERSHIP Fee Simple YEAR 11 $59,640 GUARANTY Franchisee YEAR 12 $59,640 $4,970 $22.76 YEAR 13 $59,640 $4,970 $22.76 YEAR 14 $59,640 $4,970 $22.76 YEAR 15 $59,640 $4,970 $22.76 OPTION 1 $62,622 $5,218 $23.90 OPTION 2 $65,753 $5,479 $25.10 OPTION 3 $69,040 $5,753 $26.35 OPTION 4 $72,492 $6,041 $27.67

NET OPERATING INCOME $54,095

11 Corporate Headquarters | Plano, TX

Pizza Hut is an American restaurant chain and international franchise that offers different OWNERSHIP SUBSIDIARY OF YUM! BRANDS, INC. styles of pizza along with side dishes including salad, pasta, buffalo wings, breadsticks, garlic bread and desserts. Corporately known as Pizza Hut, Inc., it is a subsidiary of Yum! Brands, Inc., SYMBOL NASDAQ: YUM the world's largest restaurant company. As of 2012, there were more than 6,000 Pizza Hut S & P RATING BB (YUM! BRANDS) restaurants in the United States, and more than 5,139 store locations in 94 other countries and FOUNDED JUNE 15, 1958 (PIZZA HUT) territories around the world. Pizza Hut was Founded in Wichita, Kansas in 1958. NUMBER OF LOCATIONS 13,000+ EADQUARTERED PLANO, TEXAS Yum! Brands, Inc, is an American fast food company. A Fortune 500 corporation, Yum operates H the licensed brands Taco Bell, KFC, Pizza Hut, and WingStreet worldwide. Based in Louisville, WEBSITE WWW.PIZZAHUT.COM Kentucky, it is one of the world's largest fast food restaurant companies in terms of system CEO OF YUM! DAVID W GIBBS units—with 42,692 restaurants (including 8,927 that are company-owned, 796 that are unconsolidated affiliates, 30,930 that are franchised, and 2,039 that are licensed) around the world in over 130 countries. In 2015, Yum!'s global sales totaled US$13.105 billion.

14 1201 W. Larson Knoxville, Iowa 50138

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. © 2018 Marcus & Millichap Activity ID Z0390709 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. © 2018 Marcus & Millichap Activity ID Z0390709 16 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. © 2018 Marcus & Millichap Activity ID Z0390709 17 Representative Photos

19 MARKET OVERVIEW

OWNERSHIP PRIVATE FOUNDED NUMBER OF LOCATIONS HEADQUARTERED WEBSITE CEO KNOXVILLE IOWA Knoxville is a city in Marion County, Iowa, United States. The population was 7,313 at the 2010 census. It is the county seat of Marion County. Knoxville is home of the National Sprint Car Hall of Fame & Museum, located next to the famous Knoxville Raceway dirt track. Knoxville is located in south-central Iowa, some 25 miles southeast of Des Moines. The area was originally inhabited by Native Americans of the Sac and Fox tribes. Knoxville was founded in 1845 when Joseph Robinson and James Montgomery, Commissioners from Scott and Wapello County, selected the site for Knoxville and designated it as the county seat. They named Knoxville in honor of General Henry Knox, hero of the Revolutionary War. The City’s main streets are named after Robinson and Montgomery.

Systematic coal mining in Marion County began with the Union Coal Company's mine in Flagler, 4 miles (6.4 km) east of Knoxville in around 1874 or 1875. For several years, the Number 5 mine in Flagler was one of the most productive in Iowa, employing around 150 men and working a coal vein over 8 feet (2.5 m) thick. The Oak Hill coal company also had mines in Flagler.

TOP EMPLOYERS ARE: Pella Corporation Vermeer Corporation Pella Regional Health Center 3M Company (NYSE: MMM) Fortune 500 Central College Pella Community Schools Knoxville Community School District Knoxville Hospitals & Clinics Precision Pulley & Idler Knoxville Raceway Hormel Foods (NYSE: HRL) Fortune 500 Pleasantville Community Schools Christian Opportunity Center Smokey Row Coffee Co. LLC

Knoxville Raceway is a semi-banked 1/2 mile dirt oval raceway located at LOCATION: 1000 N LINCOLN ST KNOXVILLE IA the Marion County Fairgrounds in Knoxville, Iowa, United States. Races at the "Sprint Car Capital of the World" are held on Saturday nights from CAPACITY: 24,172 April through September each year. Some special events may start as OWNER: MARION COUNTY FAIR ASSOCIATION early as Wednesday and build up to Saturday. Regular events include 305 OPENED: LATE 1800’S AS HORSE RACING TRACK cubic inch, 360 cubic inch and 410 cubic inch sprint car racing. MAJOR EVENTS: GOODYEAR KNOXVILLE NATIONALS Each August, the Raceway holds the paramount sprint car event in the LUCAS OIL LATE MODEL NATIONALS United States, the Knoxville Nationals. The track is governed by the 24- ARNOLD MOTOR SUPPLY 360 NATIONALS member fair board elected by Marion County residents. USAC NON-WING KNOXVILLE NATIONALS

OWNERSHIP PRIVATE FOUNDED NUMBER OF LOCATIONS HEADQUARTERED WEBSITE CEO

Knoxville Hospital & Clinics’ proud tradition of providing high-quality, progressive, and compassionate healthcare started in 1935. Over the years, our healthcare system has grown, adding new locations and services, medical staff and modern technology, but you’ll still find the same family-oriented, friendly service that’s been the cornerstone of this organization since the day we opened. KHC staff are dedicated to delivering exceptional, patient-centered services. So, it’s not surprising that surgery patients reported 100% patient satisfaction scores month after month for 12 consecutive months (March 2017- February 2018) for smooth check-in, cleanliness, courtesy and respect, and for being given clear written instructions. Surveys are conducted by a national, third-party survey firm Press Ganey. Knoxville Hospital & Clinics is a full-service healthcare organization, caring for individuals throughout central and south central Iowa. From its busy family practice clinics in Knoxville, Melcher-Dallas, Pella, and Pleasantville, to its specialty clinics, hospital, emergency and imaging departments, physical rehab facility, and surgical suites at Knoxville, we offer a broad spectrum of services. Over the years, Knoxville Hospital & Clinics has been a leader in bringing the latest technological innovations, from its advanced imaging services and surgical technologies to the latest robotics-assisted partial and total knee replacement system.

OWNERSHIP PRIVATE FOUNDED NUMBER OF LOCATIONS HEADQUARTERED WEBSITE CEO

3M is a global innovation company that never stops inventing. Over the years, we have worked to improve daily life for hundreds of millions of people all over the world. We have made driving at night easier, made buildings safer, and made consumer electronics lighter, less energy-intensive and less harmful to the environment. We even helped put a man on the moon. Every day at 3M, one idea always leads to the next, igniting momentum to make progress possible around the world. We are a world-class operation with a central place in 3M's worldwide tape and adhesive manufacturing. We offer diverse opportunities in many roles across this complex plant. Our Mission is to focus our technologies, platforms, resources, and people on delivering our promises to our customers.

The construction of 3M Knoxville began in 1973. Production operations started in 1974 in a temporary facility on the south side of Knoxville and moved to the present site in 1975. The facility has expanded several times since 1975 with the last expansion occurring in 2007. Currently the plant occupies over a half a million sq. ft. of manufacturing and warehouse space. 3M Knoxville manufactures pressure sensitive tapes that are sold worldwide into the industrial, automotive, and construction markets. Knoxville, one of three 3M facilities in the state of Iowa, is a high-tech, multidivisional facility serving five major divisions.

OWNERSHIP PRIVATE FOUNDED NUMBER OF LOCATIONS HEADQUARTERED WEBSITE CEO

Hormel Foods Corporation is an American food products company founded 1891 in Austin, Minnesota by George A. Hormel. Originally focusing on the packaging and selling of ham, SPAM, sausage and other pork, chicken, beef and lamb products to consumers, by the 1980s Hormel began offering a wider range of packaged and refrigerated food brands. The company changed its name to Hormel Foods in 1995. Hormel serves 80 countries with brands such as Applegate, Columbus Craft Meats, Dinty Moore, Jennie-O and Skippy. In 2018, the company reported annual revenues of 4.6 billion dollars.

The Knoxville, Iowa, plant is located just 40 minutes southeast of Des Moines. The plant currently produces a million pounds of dry sausage a week. There are approximately 150 production professionals working various shifts within the plant. The plant produces both retail and foodservice products for a variety of customers. Some of the products produced include Homeland® hard salami, Rosa Grande® pepperoni and Hormel®Pillow Pack® pepperoni. The city of Knoxville has a population of 7,300. It is the home of the National Sprint Car Museum and that, along with a half-mile dirt racetrack, brings people from all over the country to watch sprint car racing. It is also minutes away from Lake Red Rock, Iowa’s largest lake.

POPULATION 3 Miles 5 Miles 7 Miles HOUSEHOLDS BY EXPENDITURE 3 Miles 5 Miles 7 Miles . Total Average Household Retail 2022 Projection $63,292 $66,274 $67,901 Total Population 8,152 9,929 11,574 Expenditure . 2017 Estimate . Consumer Expenditure Top 10 Total Population 8,136 9,790 11,359 Categories Housing $16,017 $16,704 $17,086 . 2010 Census Transportation $11,033 $11,580 $11,892 Total Population 8,191 9,856 11,397 Shelter $9,215 $9,595 $9,805 . 2000 Census Food $6,539 $6,828 $6,998 Total Population 8,584 9,934 11,319 Personal Insurance and Pensions $5,536 $5,988 $6,254 . Current Daytime Population Health Care $4,528 $4,732 $4,837 2017 Estimate 8,485 9,646 10,513 Utilities $3,460 $3,587 $3,663 HOUSEHOLDS 3 Miles 5 Miles 7 Miles Entertainment $2,670 $2,803 $2,881 . 2022 Projection Household Furnishings and $1,683 $1,785 $1,837 Total Households 3,484 4,136 4,738 Equipment . 2017 Estimate Apparel $1,460 $1,541 $1,590 Total Households 3,447 4,048 4,617 POPULATION PROFILE 3 Miles 5 Miles 7 Miles Average (Mean) Household Size 2.33 2.38 2.41 . Population By Age . 2010 Census 2017 Estimate Total Population 8,136 9,790 11,359 Total Households 3,467 4,072 4,628 Under 20 26.50% 26.45% 26.46% . 2000 Census 20 to 34 Years 17.24% 16.65% 16.30% Total Households 3,493 3,990 4,481 35 to 39 Years 5.63% 5.81% 5.86% . Occupied Units 40 to 49 Years 11.04% 11.31% 11.59% 2022 Projection 3,484 4,136 4,738 50 to 64 Years 20.98% 21.40% 21.75% 2017 Estimate 3,806 4,449 5,057 Age 65+ 18.58% 18.37% 18.04% HOUSEHOLDS BY INCOME 3 Miles 5 Miles 7 Miles Median Age 40.56 40.97 41.22 . 2017 Estimate . Population 25+ by Education Level $150,000 or More 2.23% 2.45% 2.62% 2017 Estimate Population Age 25+ 5,519 6,665 7,746 $100,000 - $149,000 10.11% 11.45% 12.37% Elementary (0-8) 3.20% 2.88% 2.73% $75,000 - $99,999 12.79% 14.25% 14.76% Some High School (9-11) 6.08% 5.48% 5.25% $50,000 - $74,999 24.12% 24.04% 24.08% High School Graduate (12) 40.39% 40.20% 40.31% $35,000 - $49,999 14.37% 13.87% 13.83% Some College (13-15) 23.28% 23.59% 23.54% Under $35,000 36.39% 33.94% 32.35% Associate Degree Only 9.81% 10.19% 10.44% Average Household Income $57,317 $59,893 $61,588 Bachelors Degree Only 13.01% 13.05% 12.94% Median Household Income $48,925 $52,468 $54,120 Graduate Degree 3.83% 4.21% 4.41% Per Capita Income $24,526 $25,010 $25,256

Population Race and Ethnicity In 2017, the population in your selected geography is 9,790. It is The current year racial makeup of your selected area is as follows: estimated that the population in your area will be 9,929.00 five 96.27% White, 1.50% Black, 0.02% Native American and 0.43% years from now, which represents a change of 1.42% from the Asian/Pacific Islander. Compare these to US averages which are: current year. The current population is 49.75% male and 50.25% 70.42% White, 12.85% Black, 0.19% Native American and 5.53% female. The median age of the population in your area is 40.97, Asian/Pacific Islander. People of Hispanic origin are counted compare this to the US average which is 37.83. The population independently of race. density in your area is 124.42 people per square mile. People of Hispanic origin make up 2.14% of the current year population in your selected area. Compare this to the US average of 17.88%. Households Housing There are currently 4,048 households in your selected geography. The median housing value in your area was $104,289 in 2017, The number of households has changed by 1.45% since 2000. It is compare this to the US average of $193,953. In 2000, there were estimated that the number of households in your area will be 2,902 owner occupied housing units in your area and there were 4,136 five years from now, which represents a change of 2.17% 1,088 renter occupied housing units in your area. The median from the current year. The average household size in your area is rent at the time was $362. 2.38 persons.

Income Employment In 2017, the median household income for your selected In 2017, there are 5,375 employees in your selected area, this is geography is $52,468, compare this to the US average which is also known as the daytime population. The 2000 Census revealed currently $56,286. The median household income for your area that 51.79% of employees are employed in white-collar has changed by 39.49% since 2000. It is estimated that the occupations in this geography, and 48.58% are employed in blue- median household income in your area will be $63,513 five years collar occupations. In 2017, unemployment in this area is 5.06%. from now, which represents a change of 21.05% from the current In 2000, the average time traveled to work was 24.00 minutes. year. The current year per capita income in your area is $25,010, compare this to the US average, which is $30,982. The current year average household income in your area is $59,893, compare this to the US average which is $81,217.

PIZZA HUT 15-YEAR ABSOLUTE NET (NNN) 1201 W. Larson St., Knoxville, Iowa 50138 31 OFFERING MEMORANDUM