San Diege, CA 92110

3777 MIDWAY DRIVE A SINGLE TENANT NET LEASED ARBY’S IN A PRIME AND Drive-thru AFFLUENT SAN DIEGO LOCATION WITH OVER FIFTEEN YEARS OF OUTSTANDING OPERATING HISTORY INVESTMENT ADVISORS BRANDON MICHAELS STEVEN SCHECHTER Senior Managing Director of Investments First Vice President Investments Senior Director, National Retail Group National Retail Group Tel: (818) 212-2794 Tel: (818) 212-2793 Fax: (818) 212-2710 Fax: (818) 212-2710 [email protected] [email protected] License: CA #01434685 License: CA #01089464 www.BrandonMichaelsGroup.com www.BrandonMichaelsGroup.com

SPECIAL COVID-19 NOTICE All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. Marcus & Millichap and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making.

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 foot- age 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 TABLE OF CONTENTS 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. 1 2 3 4 PROPERTY OVERVIEW FINANCIAL ANALYSIS COMPARABLES ANALYSIS AREA OVERVIEW

SOUTHERN CALIFORNIA'S PREMIER SALES TEAM 1 PROPERTY OVERVIEW SEAWORLD UNIVERSITY OF SAN DIEGO SAN DIEGO

W MISSION BAY DR PECHANGASPORTS CENTER

SEA WORLD DR

MIDWAY TEMECULA DISTRICT HEIGHTS MIDWAY DR

OCEAN MISSON HILLS BEACH HILLCREST

ROBB FIELD SKATE PARK COLUMBIA COLLEGE - SAN DIEGO

LOMA PORTAL

SAN DIEGO LIBERTY INTERNATIONAL SAN DIEGO • CA STATION AIRPORT The Brandon Michaels Group of Marcus & Millichap is pleased to present for sale a single tenant Arby’s, located at 3777 Midway Drive in San Diego, California. Arby’s has successfully operated at this location for over fifteen years, and recently signed a brand new 15 year absolute triple net lease in April 2020 with three 5 year options and eight percent increases every five years. The lease is backed by a 30+ unit Arby’s franchisee, and also has a personal guarantee in place for five years from the commencement of the lease.

San Diege, CA 92110 Strategically located on a signalized corner, less than a mile from the 8 Freeway, Arby’s is ideally located in the 3777 MIDWAY DRIVE affluent Point Loma sub-market of San Diego, a ensed and affluent highly-amenities sub-market known as one of Drive-thru the strongest locations throughout San Diego. Centrally located in the heart of the Midway District, the subject property is within close proximity to Sea World, the Pechanga Arena of San Diego, University of San Diego, as well as a plethora of high-end national retailers, restaurants, banks, grocers, pharmacies, and hotels.

The 1,793 square foot building is situated on 12,095 square feet of land and benefits from high daily traffic counts A SINGLE TENANT NET north of 20,000 vehicles per day.. Lodging options within half mile radius include the Wyndham, Holiday Inn, LEASED ARBY’S IN A PRIME Heritage Inn, Bay inn, and Green World Inn. AND AFFLUENT SAN DIEGO Arby’s benefits from close proximity to dense single family residential and nearby freeway access to the I-8. The LOCATION WITH OVER FIFTEEN subject property benefits from a dense and affluent local demographic, with a three mile population in excess of YEARS OF OUTSTANDING 113,289 and an average household income of over $91,000 within one mile and over $109,000 within three miles. OPERATING HISTORY Beyond local density, the location sees frequent tourist and visitor traffic. 3777 Midway Drive creates a unique and rare opportunity to purchase a single tenant net leased asset in Southern California’s fast growing residential community of San Diego. The Midway District provides strong daytime vehicle activity as well as nightlife activity from nearby venues such as the Pechango Arena, which seats 12,000 for indoor football, 12,920 for ice hockey and box lacrosse, 14,500 for basketball and tennis, 5,450 for amphitheater concerts and stage shows, 8,900–14,800 for arena concerts, 13,000 for ice shows and the circus, and 16,100 for boxing and mixed martial arts.

Arby’s Inc. is a leading global fast-food restaurant chain founded in 1964 with more than 3,500 restaurants worldwide. They currently have franchises in 48 states and 8 countries, and are headquartered in Georgia. Annual total sales for 2019 equal 3.9 Billion. They are currently ranked as the third highest sandwich chain in sales.

8 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 9 INVESTMENT HIGHLIGHTS

EXCELLENT SAN DIEGO LOCATION STABLE AND SECURE INCOME STREAM WITH STRONG GUARANTEE PECHANGA ARENA Prime Point Loma location in the heart of one of San Diego’s SAN DIEGO • • 30+ Unit Arby’s Franchisee with Personal Guaranty for densest and most affluent sub-markets Five Years CAMINO DEL RIO W • Excellent Visibility and Frontage • Arby’s has over 3500 locations Worldwide • High daily traffic counts along a major San Diego thoroughfare • NNN Lease expires 2035 with three – 5 year options • Located on a signalized corner on Midway Drive • Rental increases of 10% every five years Management Free Investment • Within 1-mile of the I-8 Freeway • SPORTS ARENA BLVD • Scheduled to do full renovation by 2023 • Within .5 Miles of the Pechango Arena • Rare opportunity to acquire a drive-thru restaurant site in MIDWAY DR • Walk Score of 73/100, a very walkable area San Diego • Transit score of 43 • Located along Bus Route • National Retailers in Immediate Area Include Home Depot, Marshalls, Bank of America, Wendy’s, McDonald’s, Jack in the Box • Traffic Counts in Excess of 20,000 vehicles per day San Diege, CA 92110 3777 MIDWAY DRIVE Drive-thru STRONG IMMEDIATE DEMOGRAPHICS & ROSECRANS ST POPULATION DENSITY

Average household Income of $91,605 within 1-Mile Radius • PACIFIC HWY • Over 113,289 people within a 3- mile radius • Strong Local Economy with significant job growth over a multitude of diverse sectors

10 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 11 PROPERTY HIGHLIGHTS

PRICE BUILDING SF LEASE TYPE $3,250,000$3,520,000 1,7931,793 SFSF $6.13NNN

CAP RATE LAND SF LEASE TERM 3.75%3.75% 12,09112,091 SFSF 1515 YearsYears

3777 Midway Drive 3777 Midway Drive ADDRESS (CONTINUED) San Diego, CA 92110 San Diego, CA 92110

PRICE $3,520,000 LEASE START DATE 2005

BUILDING SF 1,793 SF LEASE EXPIRATION DATE 3/31/2035

LAND SF 12,091 SF OPTIONS 3 - 5 years

PRICE/SF (BUILDING) $1,963 INCREASES 10% every 5 years

PRICE/SF (LAND) $291 SA Food Services LEASE GUARANTOR (30+ locations; personal guarantee for CAP RATE 3.75% initial five years of new lease term)

APN NUMBER 441-250-21-00 2018 SALES REVENUE $37,289,511 ZONING Commercial * The tenant just signed a new 15 year lease 4/2020.

12 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 13 PROPERTY DETAILS

SITE LOCATION

The subject property is located near the intersection of Midway Drive and Duke Street.

SQUARE FOOTAGES ARBY’S The total building square footage is 1,793 SF. The total land square footage is 12,095 SF. Drive-Through

YEAR BUILT

The property was built in 1970.

TRAFFIC COUNTS

The traffic counts at the intersection of Midway Drive and Duke Street are 19,826 vehicles per day. PARKING 18 spaces PARKING

18 surface parking spaces are available. The parking ratio is 10.03 per 1,000 SF.

ZONING The zoning is Commercial.

APN NUMBER TRAFFIC COUNTS The APN number is 441-250-21-00. 19,826 vehicles

14 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 15 TENANT OVERVIEW

Arby’s is an American fast food sandwich restaurant chain with more than 3,300 restaurants system wide and third in terms of revenue. In October 2017, Food & Wine called Arby’s “America’s second largest sandwich chain (after ARBY’S IS AMERICA’S SECOND Subway)”. Arby’s is owned by Inspire Brands, the renamed Arby’s Restaurant LARGEST SANDWICH CHAIN WITH Group, Inc. (ARG). MORE THAN 3,300 BRANCHES. acquired 81.5% of Arby’s Restaurant Group in July 2011 and now wholly owns Inspire Brands. The Wendy’s Company held a minority stake of 18.5% in Arby’s after the acquisition by Roark Capital; that share was reduced to 12.3% upon the purchase of , and was sold back to Inspire Brands on August 16, 2018, for 450 million dollars, a 38 percent premium.

In addition to its classic Roast Beef and Beef ‘n Cheddar sandwiches, Arby’s products also include deli-style Market Fresh line of sandwiches, Greek gyros, Curly Fries and Jamocha Shakes. Its headquarters are in Sandy Springs, Georgia, a suburb of Atlanta which uses Atlanta mailing addresses. In 2019, there were 3,472 restaurants. There are locations in five countries outside the United States: Canada, Turkey, , , Egypt, and South Korea.

HEADQUARTERS Sandy Springs, Georgia, United States

NO. OF LOCATIONS 3,472 (as of 2019)

SERVICES Franchising United States, Canada, Turkey, Qatar, Kuwai, AREA SERVED Egypt, South Korea PARENT Inspire Brands

WEBSITE www.arbys.com

16 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 17 2 FINANCIAL ANALYSIS FINANCIAL ANALYSIS

RENT ROLL PRICING

TENANT SF SF % LEASE START LEASE EXP OPTIONS RENT** RENT/SF ANNUAL INCREASE Arby's (Franchisee) 1,793 100% 2005 3/31/2035 3-5 Yr $11,000.00 $6.13 10% Every 5 Yrs Arby’s - 3777 Midway Drive Address: TOTAL 1,793 100% - - - $11,000.00 $6.13 - San Diego, CA 92110 * The tenant just signed a new 15 year lease 4/2020. Price: $3,520,000 ** Landlord agreed to reduce the rent to $8,500 per month from July 1, 2020 until June 30, 2023. Commencing on July 1, 2023, the rent shall reinstate until $11,000/ Mo. The reduction in rent is an incentive for Tenant to renovate the the building in compliance with Tenant’s Franchise Agreement. Landlord will credit a buyer the Building SF: 1,793 SF amount of $2,500 per month as per the Close of Escrow until June 30, 2023. Price/SF (Building): $1,963 OPTIONS Land SF: 12,095 SF Price/SF (Land): $291 OPTIONS DATES ANNUAL RENT Option 1 4/1/2035-3/31/2040 $175,692.00 CAP Rate: 3.75% Option 2 4/1/2040-3/31/2045 $193,260.00 Tenants: Arby’s Option 3 4/1/2045-3/31/2050 $212,586.00 Rent/SF: $6.13

Lease Term: 15 Years OPERATING DATA Lease Type: NNN INCOME AND EXPENSE CURRENT Options: 3 - 5 Years Scheduled Lease Income $132,000 Effective Gross Income $132,000 Annual Increase: 10% Every 5 Years Expenses NNN Net Operating Income $132,000

20 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 21 3 COMPARABLES ANALYSIS SALES COMPARABLES

PRICE/SF PRICE/SF PRICE/SF PRICE/SF ADDRESS SALE PRICE BUILDING SF (BUILDING) LAND SF (LAND) CAP RATE SALES DATE ADDRESS SALE PRICE BUILDING SF (BUILDING) LAND SF (LAND) CAP RATE SALES DATE

5560 E 7th St 28651 Marguerite Pkwy 1 Dunkin Donuts $3,555,000 2,359 $1,506.99 18,165 $195.71 4.50% 9/12/2019 7 Avery Center $3,789,000 2,759 $1,373.32 18,295 $207.11 4.50% 7/22/2019 Long Beach, CA 90804 Mission Viejo, CA 92692

2201 N Bellflower Blvd 6912 Miramar Rd 2 Wendy’s $5,555,500 2,404 $2,310.94 22,651 $245.27 4.50% 1/22/2020 8 Miramar Center $1,880,000 1,390 $1,352.52 17,424 $107.90 4.18% 6/28/2019 Long Beach, CA 90815 San Diego, CA 92121

201 S Rancho Santa Fe 1050 W El Norte Pky Rd Jack In The Box $2,925,000 2,899 $1,008.97 43,560 $67.15 4.21% 11/26/2019 $2,765,000 2,604 $1,061.83 33,106 $83.52 4.77% 9/10/2019 3 9 KFC Escondido, CA 92026 San Marcos, CA 92078

810 N Euclid St 9211 Telegraph Rd 4 Taco Bell $2,420,000 1,711 $1,414.38 20,081 $120.51 4.20% 1/3/2020 10 Popeyes $3,000,000 2,500 $1,200.00 13,599 $220.60 4.30% 2/22/2019 Anaheim, CA 92801 Pico Rivera, CA 90660

15482 Goldenwest St 31769 The Old Rd 5 Dunkin Donuts $3,500,000 2,251 $1,554.86 22,651 $154.52 4.29% 8/12/2019 11 Jack In The Box $3,100,000 2,570 $1,206.23 31,363 $98.84 4.20% 2/26/2020 Westminster, CA 92683 Castaic, CA 91384

AVERAGE $3,267,227 2,401 $1,377.71 24,488 $147.48 4.35% - 344 W Manchester Blvd 6 Carl’s Jr. $3,450,000 2,962 $1,164.75 28,475 $121.16 4.25% 2/11/2020 Inglewood, CA 90301

24 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 25 SALES COMPARABLES SALES COMPARABLES | PRICE/SF

1 5560 E 7th St - Dunkin Donuts 2 2201 N Bellflower Blvd - Wendy’s 11 3 1050 W El Norte Pky - Jack In The Box 4 810 N Euclid St - Taco Bell 5 15482 Goldenwest St - Dunkin Donuts 6 344 W Manchester Blvd - Carl’s Jr. 7 28651 Marguerite Pkwy - Avery Center 6 10 8 6912 Miramar Rd - Miramar Center 1 4 9 201 S Rancho Santa Fe Rd - KFC 2 5 10 9211 Telegraph Rd - Popeyes 11 31769 The Old Rd - Jack In The Box 7 SALES COMPARABLES | CAP RATE 3777 Midway Dr - Arby’s

9 3

8

26 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 27 4 AREA OVERVIEW SAN DIEGO, CA

San Diego is a city in the U.S. state of California on the coast of the Pacific Ocean, approximately San DiegoCalifornia's Beach City EMPLOYER EMPLOYEES 120 miles south of Los Angeles and immediately adjacent to the border with Mexico. With an estimated population of 1,425,976 as of July 1, 2018, San Diego is the eighth-largest city in the United States Navy 38,455 United States and second-largest in California. The city is known for its mild year-round climate, natural deep-water harbor, extensive beaches, long association with the United States Navy, and University of California, San Diego 29,986 recent emergence as a healthcare and biotechnology development center. Sharp HealthCare 17,807 With near perfect weather year-round, 70 miles of spectacular coastline, world-class attractions and a thriving urban core, complete with a sophisticated art, dining and nightlife scene, San Diego County of San Diego 17,384 has earned the name California’s beach city. San Diego Unified School District 14,120

The largest sectors of San Diego's economy are defense/military, tourism, international trade, and Qualcomm, Inc. 11,600 research/manufacturing. The city is the seat of San Diego County and is the economic center of the region as well as the San Diego–Tijuana metropolitan area. San Diego's main economic City of San Diego 11,387 engines are military and defense-related activities, tourism, international trade, and manufacturing. The presence of the University of California, San Diego (UCSD), with the affiliated UCSD Medical Scripps Health 10,853 Center, has helped make the area a center of research in biotechnology.

Anchored by 70 miles of beautiful coastline but brimming with vibrant arts and cultural, dynamic dining and entertainment, here you'll see why San Diego is called "California's Beach City."

DOWNTOWN & GASLAMP QUARTER HILLCREST LITTLE ITALY NORTH & SOUTH PARK

30 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 31 POINTS OF INTERESTS

SEAWORLD SAN DIEGO SeaWorld San Diego is an animal theme park, oceanarium, outside aquarium and marine mammal park, in San Diego, California, United States, inside Mission Bay Park. Adjacent to the property is the Hubbs-SeaWorld Research Institute, which conducts research on marine biology and provides education and outreach on marine issues to the general public, including information in park exhibits. BELMONT PARK Belmont Park is a historic amusement park located on Ocean Front at Surfrider Square in the Mission Bay area of San Diego, California. In addition to providing recreation and amusement, it also was intended as a way to help Spreckles sell land in Mission Beach. Located on the beach, it attracts millions of people each year. The park’s most iconic attraction is the historic Giant Dipper roller coaster, which is considered a local landmark.

BALBOA PARK Balboa Park is a 1,200-acre urban cultural park in San Diego, California, United States. In addition to open space areas, natural vegetation zones, green belts, gardens, and walking paths, it contains museums, several theaters, and the world-famous San Diego Zoo. There are also many recreational facilities and several gift shops and restaurants within the boundaries of the park. SAN DIEGO ZOO The San Diego Zoo is a zoo in Balboa Park, San Diego, California, housing more than 3,500 animals of more than 650 species and subspecies. Its parent organization, San Diego Zoo Global, is one of the largest zoological membership associations in the world, with more than 250,000 member households and 130,000 child memberships, representing more than a half million people. OLD TOWN Old Town is a neighborhood of San Diego, California. It is the oldest settled area in San Diego and is the site of the first European settlement in present-day California. It contains Old Town San Diego State Historic Park and Presidio Park, both of which are listed on the National Register of Historic Places.

32 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 33 DEMOGRAPHICS DEMOGRAPHICS 1 MILE 3 MILES 5 MILES

2020 Total Population: 17,165 113,289 339,471 1.43 MILLION Pop Growth 2020-2025: 2.02% 2.30% 2.65% Total Population of San Diego, CA. The median age is 35.4. $109,330 339,471 Average Age: 37.20 38.30 38.80 Average HH income within 3-m radius Population within 5-m radius 2020 Total Households: 7,644 49,886 155,472 Male Female 50% 50% Avg Household Size: 2.10 2.00 2.00 EDUCATION 2020 Owner Occupied Households: 2,583 20,645 56,501

2020 Renter Occupied Households: 5,061 29,241 98,971

2020 HOUSEHOLDS BY HOUSEHOLD INCOME

<$25,000 1,408 6,775 23,073 56,501 98,971 $25,000 - $50,000 1,289 7,750 24,390 10% 15% 27% 45% Owner Occupied Households Renter Occupied Households $50,000 - $75,000 1,418 8,103 25,808 Less Than High School High School or GED Some College or Bachelor’s Degree or Higher within 5-m radius within 5-m radius Associates Degree $75,000 - $100,000 835 6,348 20,013 $100,000 - $125,000 916 6,064 16,702

$125,000 - $150,000 705 3,748 11,285

$150,000 - $200,000 485 4,741 15,811

$200,000+ 589 6,357 18,390

2020 Median Household Income $70,251 $84,117 $80,577

$84,117 28,067 2020 Average Household Income $91,605 $109,330 $106,176 Median HH income within 3-m radius Businesses within a 5-m radius

34 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 35 BRANDON MICHAELS STEVEN SCHECHTER Senior Managing Director of Investments First Vice President Investments San Diege, CA 92110 Senior Director, National Retail Group National Retail Group Tel: (818) 212-2794 Tel: (818) 212-2793 3777 MIDWAY DRIVE Fax: (818) 212-2710 Fax: (818) 212-2710 [email protected] [email protected] Drive-thru License: CA #01434685 License: CA #01089464 www.BrandonMichaelsGroup.com www.BrandonMichaelsGroup.com