Dairy Queen Grill & Chill

Offering Memorandum

PRESENTED BY Armond Aivazyan, Senior Associate DAIRY QUEEN GRILL & CHILL Associate Director, Net Leased Properties Group 2301 South Telephone Road, Moore, OK 73160 Palo Alto Office Direct: (650) 391-1828 Mobile: (818) 632-9542 [email protected] License: CA 01954384 NON - ENDORSEMENT AND DISCLAIMER NOTICE

Confidentiality and Disclaimer 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 a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement Notice 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.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

DAIRY QUEEN GRILL & CHILL Moore, OK ACT ID ZAB0010237

Mark McCoy Broker of Record Fort Worth Office Tel: (817) 932-6148 Fax: (817) 932-6110 [email protected] License: OK 181981

2 NET LEASED DISCLAIMER

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.

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OFFERINGOFFERING SUMMARY SUMMARY EXECUTIVE SUMMARY

OFFERING SUMMARY Price $2,200,000 MAJOR EMPLOYERS Net Operating Income $132,000 Capitalization Rate – Current 6% # OF EMPLOYEES Price / SF $693.79 EMPLOYER * Rent / SF $41.63 Tinker Afb Oklahoma 552nd 4,000 Lease Type Absolute Net Johnson Controls Inc 1,000 Gross Leasable Area 3,171 SF Jci 600 Year Built / Renovated 2013 Fresh Creative Foods 507 Lot Size 0.85 acre(s) Norman Moore Technology Center 500 Walmart 487

FINANCING Alorica Customer Care Inc 400 Loan Amount $1,430,000 Tinker Air Force Base 350 Loan Type Financed - New Loan Moore Branch 300 Loan to Value 65.00% Taco Mayo Franchise Systems 283 Down Payment 35% / $770,000 Sysco Oklahoma LLC 270 Interest Rate / Amortization 4.1% / 30 Years Air Force US Dept of 262 Annual Loan Payment $82,917 Net Cash Flow After Debt Service 6.37% / $49,083 Cash on Cash Return 6.37% DEMOGRAPHICS Total Return 9.59% / $73,831

1-Miles 3-Miles 5-Miles 2018 Estimate Pop 7,523 68,296 124,209 2010 Census Pop 6,561 61,390 110,629 2018 Estimate HH 3,047 25,553 47,522 2010 Census HH 2,633 22,870 42,208 Median HH Income $65,382 $66,982 $70,172 Per Capita Income $31,840 $29,829 $33,298 Average HH Income $78,269 $79,553 $86,844

* # of Employees based on 5 mile radius

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OFFERING SUMMARY INVESTMENT OVERVIEW

Marcus & Millichap is pleased to present the opportunity to acquire a Dairy Queen in Moore, Oklahoma. The property consists of a 3,171-square foot, freestanding building, that sits on approximately 0.85 acres of land. The lease includes 10 percent rental escalations every five years throughout the primary term, as well as the option periods. The franchisee at this location currently operates 21 Dairy Queen units in Oklahoma, Colorado, Oregon, and Washington.

The property has excellent visibility and access on South Telephone Road and close proximity to Interstate 35, where traffic Counts exceed 126,249 vehicles per day. Surrounding retailers in the immediate area include Walmart, Lowes, The Home Depot, Target, Sams Club, Dicks Sporting Goods, McDonalds, Taco Bell, and many more.

American Dairy Queen Corporation is a subsidiary of Berkshire Hathaway, Inc. DQ operators have been providing consumers with crave-satisfying treats and food since 1940. Texas is home to the largest number of Dairy Queens in the U.S. All Texas Dairy Queen restaurants are owned and operated by franchisees. The DQ Grill and Chill is the preferred concept for new and renovated full-service restaurants. Stores are larger than older-style DQ Brazier locations and feature a completely new store design. In most cases, they offer an expanded menu including breakfast, grill burgers, and grilled sandwiches, as well as limited table service (customers still place orders at the counter). They also contain self-serve soft drink fountains.

INVESTMENT HIGHLIGHTS

. 18 Years Remaining on Triple Net (NNN) Lease with Zero Landlord Responsibilities . 10% Rental Escalations Every Five Years Throughout the Primary Term . Excellent Visibility and Access on South Telephone Road

. Area Retailers Include Walmart, Lowes, The Home Depot, and Chick-fil-A . 21 Unit Franchisee with Units in Oklahoma, Colorado, Oregon, and Washington

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PRICINGPRICING ANDANDLOCATIONLOCATION VALUATIONVALUATIONTENANT SUMMARYOVERVIEWOVERVIEW MATRIXMATRIX

2301 S Telephone Rd, Moore, OK 73160

. Excellent Visibility and Access . 3,171 Square Foot Prototype . Oversized 0.85-Acre Parcel . Close Proximity to Interstate 35

The property has excellent visibility and access on South Telephone Road and close proximity to Interstate 35, where traffic Counts exceed 126,249 vehicles per day.

CLOSE PROXIMITY TO:

6# PROPERTYDAIRY QUEENNAME GRILL & CHILL

PRICINGPRICINGREGIONAL ANDANDLOCATION VALUATIONVALUATIONTENANT AND LOCAL SUMMARYOVERVIEW MATRIXMATRIX MAP 2301 S Telephone Rd, Moore, OK 73160

7# DAIRY QUEEN GRILL & CHILL

AERIAL PHOTO

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PARCEL OUTLINE

9 DAIRY QUEEN GRILL & CHILL

OFFERINGOFFERING SUMMARY SUMMARY PROPERTY SUMMARY

10# DAIRY QUEEN GRILL & CHILL

ACQUISITION FINANCING

MARCUS & MILLICHAP CAPITAL CORPORATION WHY MMCC?

CAPABILITIES Optimum financing solutions to enhance value MMCC—our fully integrated, dedicated financing arm—is committed to providing superior capital market expertise, precisely managed execution, and unparalleled access to capital sources providing the most competitive rates and Our ability to enhance terms. buyer pool by expanding finance options We leverage our prominent capital market relationships with commercial banks, life insurance companies, CMBS, private and public debt/equity funds, Fannie Mae, Freddie Mac and HUD to provide our clients with the greatest range of Our ability to enhance financing options. seller control • Through buyer Our dedicated, knowledgeable experts understand the challenges of financing qualification support and work tirelessly to resolve all potential issues to the benefit of our clients. • Our ability to manage buyers finance expectations • Ability to monitor and manage buyer/lender progress, insuring timely, predictable closings • By relying on a world class Closed 1,678 National platform $6.24 billion Access to set of debt/equity sources debt and equity operating total national more capital financings within the firm’s volume in 2018 sources than and presenting a tightly in 2018 brokerage any other firm underwritten credit file offices in the industry

11 DAIRY QUEEN GRILL & CHILL

MARKET OVERVIEW OKLAHOMA CITY OVERVIEW

Situated in central Oklahoma, the Oklahoma City metro is composed of seven counties: Oklahoma, Grady, Canadian, Cleveland, Logan, McClain and Lincoln. METRO HIGHLIGHTS Containing 1.4 million residents, the metro is expected to add 76,000 people over the next five years, resulting in the addition of 33,000 households. Oklahoma City GROWING ENERGY AND ALTERNATIVE-ENERGY INDUSTRY is the state’s capital city and is the most populous city in the state with 647,000 The region is home to two Fortune 500 companies in the energy industry and million residents. The metro is home to the Oklahoma City Thunder NBA team, as ranks among the nation’s top 10 in compressed natural gas and wind energy. well as a number of triple-A and semi-professional sports teams. DIVERSE EMPLOYMENT OPPORTUNITIES Oklahoma City’s economic base is diversifying beyond energy. Medical, government, healthcare and information technology are generating new jobs.

POPULATION GROWTH Over the next five years, population and household growth will outpace the national rate, enhancing demand for goods and services such as healthcare and education. ECONOMY

. The energy industry continues to be a major economic driver. Chesapeake Energy and Devon Energy are based locally. Other large regional employers in the energy sector include OG&E Energy, Continental Resources and SandRidge Energy. . Major retailers with back-office operations including Hobby Lobby, AT&T, Dell, Love’s Travel Stops & Country Stores, and Williams-Sonoma. . A large number of jobs are attributed to the government segment. Employers include the state of Oklahoma, Tinker Air Force Base and the FAA Mike Monroney Aeronautical Center.

DEMOGRAPHICS

2019 2019 2019 2019 MEDIAN POPULATION: HOUSEHOLDS: MEDIAN AGE: HOUSEHOLD INCOME: 1.4M 545K 35.2 $59,300 Growth Growth U.S. Median: U.S. Median: 2019-2024*: 2019-2024*: 5.5% 6.2% 38.1 $60,800

* Forecast Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

12 PROPERTYDAIRY QUEENNAME GRILL & CHILL

MARKETINGDEMOGRAPHICS TEAM

POPULATION 1 Miles 3 Miles 5 Miles HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles Total Average Household Retail . 2023 Projection $68,943 $70,543 $72,211 Expenditure Total Population 8,322 76,175 137,110 . Consumer Expenditure Top 10 . 2018 Estimate Categories Total Population 7,523 68,296 124,209 Housing $16,386 $16,718 $17,033 . 2010 Census Transportation $14,860 $15,367 $15,898 Total Population 6,561 61,390 110,629 Shelter $8,971 $9,062 $9,193 . 2000 Census Food $6,743 $6,891 $7,014 Total Population 4,867 42,922 80,825 Personal Insurance and Pensions $6,014 $6,156 $6,361 . Current Daytime Population Health Care $4,102 $4,457 $4,685 2018 Estimate 5,628 52,597 95,814 Utilities $4,078 $4,177 $4,262 HOUSEHOLDS 1 Miles 3 Miles 5 Miles Entertainment $2,791 $2,933 $3,051 . 2023 Projection Apparel $1,638 $1,660 $1,685 Total Households 3,464 28,913 53,061 Cash Contributions $1,632 $1,807 $1,919 . 2018 Estimate POPULATION PROFILE 1 Miles 3 Miles 5 Miles Total Households 3,047 25,553 47,522 . Population By Age Average (Mean) Household Size 2.55 2.65 2.60 2018 Estimate Total Population 7,523 68,296 124,209 . 2010 Census Under 20 29.18% 29.24% 27.76% Total Households 2,633 22,870 42,208 20 to 34 Years 28.82% 24.05% 22.41% . 2000 Census 35 to 39 Years 7.77% 8.13% 7.62% Total Households 1,855 15,346 30,178 40 to 49 Years 11.84% 12.35% 12.53% . Occupied Units 50 to 64 Years 13.97% 15.61% 17.24% 2023 Projection 3,464 28,913 53,061 Age 65+ 8.41% 10.62% 12.44% 2018 Estimate 3,175 26,356 49,340 Median Age 30.82 33.17 34.89 HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles . Population 25+ by Education Level . 2018 Estimate 2018 Estimate Population Age 25+ 4,623 43,318 80,745 $150,000 or More 5.93% 6.53% 9.11% Elementary (0-8) 1.42% 1.63% 1.63% $100,000 - $149,000 15.90% 16.36% 17.76% Some High School (9-11) 6.67% 5.91% 5.47% $75,000 - $99,999 18.31% 18.93% 18.69% High School Graduate (12) 29.10% 29.11% 25.99% $50,000 - $74,999 25.24% 25.83% 23.52% Some College (13-15) 28.01% 28.91% 28.76% $35,000 - $49,999 13.53% 13.03% 11.93% Associate Degree Only 11.13% 9.64% 9.17% Under $35,000 21.07% 19.29% 18.99% Bachelors Degree Only 16.96% 17.70% 19.94% Average Household Income $78,269 $79,553 $86,844 Graduate Degree 6.02% 6.50% 8.41% Median Household Income $65,382 $66,982 $70,172 Per Capita Income $31,840 $29,829 $33,298

13 PROPERTYDAIRY QUEEN NAME GRILL & CHILL

MARKETINGDEMOGRAPHICS TEAM

Population Race and Ethnicity In 2019, the population in your selected geography is 68,296. The The current year racial makeup of your selected area is as follows: population has changed by 59.12% since 2000. It is estimated that 76.06% White, 5.12% Black, 0.11% Native American and 3.59% the population in your area will be 76,175.00 five years from now, Asian/Pacific Islander. Compare these to US averages which are: which represents a change of 11.54% from the current year. The 70.20% White, 12.89% Black, 0.19% Native American and 5.59% current population is 48.63% male and 51.37% female. The median Asian/Pacific Islander. People of Hispanic origin are counted age of the population in your area is 33.17, compare this to the US independently of race. average which is 37.95. The population density in your area is 2,414.46 people per square mile. People of Hispanic origin make up 10.22% of the current year population in your selected area. Compare this to the US average of 18.01%.

Households Housing There are currently 25,553 households in your selected geography. The median housing value in your area was $152,732 in 2019, The number of households has changed by 66.51% since 2000. It is compare this to the US average of $201,842. In 2000, there were estimated that the number of households in your area will be 28,913 12,217 owner occupied housing units in your area and there were five years from now, which represents a change of 13.15% from the 3,129 renter occupied housing units in your area. The median rent at current year. The average household size in your area is 2.65 persons. the time was $488.

Income Employment In 2019, the median household income for your selected geography is In 2019, there are 14,608 employees in your selected area, this is also $66,982, compare this to the US average which is currently $58,754. known as the daytime population. The 2000 Census revealed that The median household income for your area has changed by 44.08% 60.86% of employees are employed in white-collar occupations in since 2000. It is estimated that the median household income in your this geography, and 39.32% are employed in blue-collar occupations. area will be $79,860 five years from now, which represents a change In 2019, unemployment in this area is 3.18%. In 2000, the average of 19.23% from the current year. time traveled to work was 24.00 minutes.

The current year per capita income in your area is $29,829, compare this to the US average, which is $32,356. The current year average household income in your area is $79,553, compare this to the US average which is $84,609.

14 PHOTO Exclusively listed by: Investment Sales: Armond Aivazyan exclusivelyMark McCoy listed Senior Associate Vincent Knipp Broker of Record Associate Director, Net Leased Properties Group Senior Vice President Investments Fort Worth Office Palo Alto Office DALLAS OFFICE Tel: (817) 932-6148 Tel: (650)Tel: 391-1828 (972) 755-5205 Fax: (817) 932-6110 Mobile:Fax: (818) (817) 632-9542 484-0111 [email protected] [email protected] .Knipp@marcusmillichap .com OFFICES NATIONWIDE License: TX 0579633 License: OK 181981 www.marcusmillichap.com License: CA 01954384