Arby's - Corporate NNN Lease 1 8 4 0 C h e r o k e e A v e . , S W , C u l l m a n , A L 3 5 0 5 5

Brent L.Hensley | 760-452-2401 | [email protected] 216 N. Coast Hwy 101, Encinitas, CA 92024 investment overview PURCHASE PRICE | $2,144,000 | CAP RATE | 6.1%

Net Operating Income: $130,527.12 Price Per Square Foot: $716.81 Commencement Date: 5/1/2003 Lease Expiration Date: 4/30/2023 Lease Type: NNN Increases: 1% Min./Yr. or CPI* Options: (2) 5 Year Options Guarantor: RTM, Inc. Rentable Square Feet: 2,991 SF Lot Size: 1.01 Acres Year Built: 2003

* Rent Increases: Rent shall be increased by the lesser of: (i) one percent (1 %) of the Annual Rent payable during the immediately preceding Lease Year (the "Fixed Increase"), or (ii) five (5) multiplied by the average annual percentage increase in the Consumer Price Index ("CPI"), as defined below, during the sixty (60) months immediately prior to the date of the increase multiplied by the Annual Rent payable during the immediately preceding Lease Year (the "CPI Increase").

address

1840 Cherokee Ave., SW, Cullman, AL 35055 investment overview overview

The subject property is a 2,991+/- square foot drive through restaurant facility built on 1.01 acres. This is a triple net lease with an unconditional guarantee from RTM, Inc., the corporate parent company for Arby's. This Arby's is located on a state highway (SR 69), ½ mile west of U.S. Highway 31. It is 1½ miles north of the Cullman Central Business District in a newer retail node. Destination-oriented retailers include K-mart, Office Max, Lowe's, Walmart, Winn Dixie, Big Lots, Dollar Tree and the Woodland Medical Center. Complimentary uses include: , , Pap John's, , McDonald's, KFC, Krystal, Sonic and several local restaurateurs. The node generates good traffic flow for the subject's use. Overall, this Arby's has a very good, prominent location.

The property is a level, triangular shaped, corner location adjacent to two streets with Cherokee Avenue SE on the southeast side of the property line and Lee Avenue SW on the southwest border of the property. The location is on primary street leading to the entrance of the Walmart shopping center.

There are a number of retail/mixed-use projects planned and under construction in Cullman. In recent years Cullman County has seen tremendous growth in the retail sector. Steadily increasing population, a healthy housing market and ever-increasing traffic counts all play a major role in driving retail activity in the community. The City of Cullman and Cullman County’s leadership and forward planning has prepared the community for continued development for years to come. rent roll

TENANT INFO lease terms current rent rent increases options lease type

TENANT COMMECEMENT LEASE ANNUAL BASE LEASE SQUARE FEET ANNUALLY NAME DATE EXPIRATION RENT TYPE

Rent shall be increased by the lesser of: (i) one percent (1 %) of the Annual Rent payable during the immediately preceding Lease Year (the "Fixed Increase"), or (ii) five (5) multiplied by the RTM average annual percentage increase in the 2,991 SF 5/1/2003 4/30/2023 $130,527.12 Consumer Price Index ("CPI"), as defined below, (2) 5 Yr NNN , Inc. during the sixty (60) months immediately prior to the date of the increase multiplied by the Annual Rent payable during the immediately preceding Lease Year (the "CPI Increase").

NOTE: Landlord has no responsibilities under the lease for payment of property taxes, insurance nor maintenance for the property. Absolute NNN Lease. Tenant has a 20 day Right of First Refusal. There is no rent abatement as a result of any damage to the property. Tenant is required to report sales annually. highlights investment overview

STRONG GUARANTEE AND ABOVE AVERAGE SALES NNN Lease Backed by a RTM, Inc. with 3,300+ locations; $3.6 billion system-wide sales and $11 Billion Net Worth Parent Company. This store consistently exceeds Arby's national average ($1,106,914/Yr.) with reported 2017 location sales for this Cullman location at $1,706,657. This equates to a healthy rent to sales ratio of 7.65%.

GREAT MSA LOCATION In recent years Cullman County has seen tremendous growth in the retail sector. Steadily increasing population, a healthy housing market and ever-increasing traffic counts all play a major role in driving retail activity in the community. The City of Cullman and Cullman County’s leadership and forward planning has prepared the community for continued development for years to come.

URBAN CORE LOCATION Just off Interstate 65 and halfway between Birmingham and Huntsville, Cullman has an excellent transportation system. The city also has good access to two U.S. routes and two state routes.

PROMINENT LOCATION The property is situated in a highly sought after retail corridor just off I-65 and sits in front of Heritage Point, a 72 acre development including an eighteen hole golf course. Woodland Medical Center is located nearby as well as Wal-Mart Super Center, Aldi’s, AT&T, , Kmart, Chick-Fil-A and many other national retailers and restaurants. Within a 3 mile radius, there are 15,556 persons earning $54,073 annually. The average daily traffic count is 25,570.

TREMENDOUS JOB GROWTH Among the areas maintaining low unemployment numbers, Cullman County is tied for second in Alabama. For the fifth year in a row, Cullman was ranked in top 10 cities with populations between 10,000 and 50,000 for industrial investments, expansion and job growth. Cullman was No. 7 out of 551 cities in the latest ranking. traffic counts | address | 1840 Cherokee Avenue, LOCATION Cullman, AL 35055 25,570 for Cherokee Avenue SW. AERIAL

N w E S location property location

The subject Arby's QSR location is within the southern core area of the City of Cullman, Alabama prime retail area. The location is at the signalized corner of Cherokee Avenue SW and Lee Avemue SW. (25,570 combined daily vehicle traffic). The location benefits from prominent visibility, excellent ingress and egress, strong traffic volumes, a local trade area that provides demand and synergy, population growth, and leads into the Walmart shopping center, amoungst other major retailers.

Ÿ employers major employers

*Sourced from MapNet, Marcus & Millichap Cullman County Schools 1,223 Cullman Regional Medical Center 1,210

Wal-Mart Distribution 1031 State of Alabama 726 Wal-Mart Super Center North/South 700

Topre America Corporation 640 Wallace State Community College 620 Golden Rod Broilers 600 Cullman County Commission 488 Yutaka Technologies 429 household INCOMES |

1 Miles 3Miles 5 Miles

AVERAGE $35,895 $51,197 $55,908 5 MILES

3 MILES

population | 1 MILES

1 Miles 3 Miles 5 Miles ARBY'S

2014 3,940 15,588 25,043

8 8 area overview CULLMAN, ALABAMA

There are a number of retail/mixed-use projects planned and under construction in Cullman. In recent years Cullman County has seen tremendous growth in the retail sector. Steadily increasing population, a healthy housing market and ever- increasing traffic counts all play a major role in driving retail activity in the community. The City of Cullman and Cullman County’s leadership and forward planning has prepared the community for continued development for years to come.

For eight consecutive months since March 2018, the number of people counted as employed in Alabama has reached record highs. Among the areas maintaining low unemployment numbers, Cullman County is tied for second. In January 2019, the number of employed residents of Alabama reached 2,123,398, breaking December 2018’s revised count of 2,120,769. For the fifth hear in a row, Cullman was ranked in top 10 cities with populations between 10,000 and 50,000 for industrial investments, expansion and job growth.

Cullman was No. 7 out of 551 cities in the latest ranking. Another closely watched ranking came from POLICOM, which examines cities for economic growth including retail, government, construction, medical and agriculture. Cullman is 82nd in that ranging, which marked a 147-place rise in two years.

Alabama’s preliminary, seasonally adjusted January 2019 unemployment rate is 3.8 percent, unchanged from December 2018’s rate, and below January 2018’s rate of 3.9 percent. Following end-of-year, wage and salary employment increased 31,500, with gains in the leisure and hospitality sector (7,600), the trade, transportation, and utilities sector (4,400), and the construction sector (4,200), among others.

Source: www.charlottenc.gov

tenant overview

PROPERTY Arby's

TENANT RTM Alabama, Inc.

GUARANTOR RTM, Inc.

REVENUES 2.3 billion (2018 estimate

NET WORTH Private

S&P RATING Non-rated

Lease is signed by RTM Alabama, Inc. Guarantor is RTM, Inc., a corporation

Arby's Restaurant Group (ARG) operates the Arby's chain popular for its hot roast beef . Arby's ranks as the #3 chain behind Subway and with more than 3,300 locations across the US and in a handful of other countries. In addition to roast beef sandwiches, its menu features chicken sandwiches, salads, and some dessert items. More than 1,100 Arby's locations are company-owned, while the rest are franchised. The chain was started in 1964 by brothers Forrest and Leroy Raffel. In mid-2011, The Wendy's Company sold a majority stake in Arby's to Roark Capital Group.

Arby’s menu centers around its signature Roast Beef and Beef ‘n Cheddar sandwiches, which are slow-roasted and thinly sliced in-store daily. The Company is also known for its deli-style Market Fresh® line of sandwiches, Curly Fries and Jamocha Shakes. Arby’s Restaurant Group was acquired by Roark Capital in July 2011. Wendy's/Arby's will retain an 18.5% stake ownership. This is Roark’s 21st franchise investment and 11th investment in the restaurant industry.

Roark Capital Group is an -based private equity firm that specializes in franchise, brand management, environmental services and marketing services companies with attractive growth prospects. Roark focuses on middle-market investment opportunities through family- owned business transfers, management and corporate buyouts, recapitalizations, going-private transactions and corporate divestitures. Roark has now acquired 21 franchise/multi-unit brands that operate in 50 states and 60 countries. Its current franchise/multi-unit portfolio includes Arby’s, Auntie Anne’s, Batteries Plus, Ice Cream, , Corner Bakery, Fast Signs, Il Fornaio, McAlister’s Deli, Moe’s Southwest Grill, Money Mailer, Pet Valu, Primrose Schools, Schlotzsky’s, and the franchisor of Seattle’s Best Coffee on certain military bases and in certain international markets. The firm has more than $3 billion of equity capital under management.

Mergers and Acquisitions In 2017 Arby's agreed to acquire sports bar chain Buffalo Wild Wings for $2.9 billion. The all-cash deal will take Buffalo Wild Wings private and Arby's will assume the debt of Buffalo Wild Wings.