Offering Memorandum Confidentiality and Disclaimer

Red Lobster 2847 Washington Road Augusta, Georgia 30909

Representative Photo

OFFERING MEMORANDUM CONFIDENTIALITY AND DISCLAIMER

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

TABLE OF CONTENTS

I. Investment Overview II. Pricing and Financial Analysis III. Property Overview IV. Demographics Investment Overview Financial Overview Location Overview Demographic Report Tenant Overview Aerial Photo Property Photo Surrounding Property Photos Local Map Regional Map Investment Overview

Executive Summary | Investment Highlights

Property Name Red Lobster Long-Term Triple-Net Lease | Above Market Lease Term 2847 Washington Road This Red Lobster is subject to a brand new 25-year absolute triple-net Location Augusta, GA 30909 (NNN) lease, with 23.5 years remaining. Price $4,606,056 Corporate Guarantor | 705 Locations in the US & Canada CAP Rate 6.25% The lease is subject to a corporate guarantee, adding additional security NOI $287,879* throughout the term of the lease, through 705 corporate locations.

Price Per SF $570 Attractive Rental Increases & Renewal Options Building Size 8,079 SF The rent will increase by two percent annually, including through the four, Lot Size 1.91 Acres five year tenant renewal options, providing investors with a strong inflation hedge. Date of Remodel 11/19/2012

*Priced off of 2017 Rent Increase

Marcus & Millichap is pleased to present the exclusive listing for Red Lobster located at 2847 Washington Road in Augusta, Georgia. The property is roughly 8,079 square feet and is situated on approximately 1.91 acres of land.

This Red Lobster is subject to a 25-year triple-net (NNN) lease, with roughly 23.5 years remaining on the lease. Current annual rent is $287,879. The rent is scheduled to increase by two percent annually, including through the four, five year tenant renewal options.

Red Lobster is the largest seafood restaurant concept in the world and is an iconic full service brand with broad demographic appeal and significant advertising budget. Red Lobster is led by an experienced management team with a history of success leading the brand(average 27+ years experience across executive team). The company generates $2.5 billion in revenue and is the 5th largest causal dining concept in North America. Red Lobster was recently acquired by Golden Gate Capital.

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. © 2013 Marcus & Millichap W0331243 4 Executive Summary

Tenant Overview

• Red Lobster is the largest seafood restaurant concept in the world and is an iconic full service brand with broad demographic appeal and a significant advertising budget (2nd largest in casual dining). • The Company was founded in 1968 and currently operates 705 restaurants throughout the United States and Canada and has 43 franchised restaurants in international markets. • Red Lobster is led by an experienced management team with a history of success leading the brand (average 27+ years experience across executive team). • The company generates $2.5B in revenue and is the 5th largest casual dining concept in North America. The Transaction

• 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 net worth and >$200M of liquidity. • Golden Gate Capital has a long, successful track record and significant experience with multi-unit restaurant and retail businesses.

Tenant Overview

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.

Tenant Overview

Red Lobster Timeline 1968 Bill Darden opens the first Red Lobster in 1970 Lakeland, Florida General Mills acquires Red Lobster and rapidly expands nationally 1983 Our 1st Canadian restaurant opens in 1984 Ontario Out Lobsterfest® promotion begins, giving guests the best variety of lobster anywhere 1988 We introduce our famous and delicious Cheddar 1989 Bay Biscuits® We operate 450 US and 55 Canadian restaurants 1996 We introduce "Walt's Favorite Shrimp", 2003 named after one of our earliest employees We celebrate our 35th anniversary of serving fresh, delicious seafood 2004 Endless Shrimp® is introduced, and becomes 2006 an annual guest-favorite 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 2013 Grill Masters in every restaurant We celebrate our 45th anniversary and operate more than 700 locations worldwide 2014 Acquisition by Golden Gate Capital (“GGC”)

Tenant Overview

Strong Market Position Significant Scale With Broad Geographic Reach

• Red Lobster is the largest seafood restaurant concept in the world and the 5th largest casual dining concept in the United States with over $2.5 billion in annual sales and 705 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. • 5th largest overall casual dining concept in the US.

~50% Share in Seafood Casual Dining 5th Largest Casual Dining Concept in the US

Tenant Overview

Iconic Brand With Unparalleled Customer Loyalty Healthy and Recently Remodeled Restaurant 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 7 years. healthier “good for you” and special meal occasions. • $1.4 billion in overall capital expenditure investment over the • The brand has a strong foundation of loyal guests, who visit 1-2 past 10 years. 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 the base. most indispensable brand among major casual dining concepts, • 99% of restaurants are cash flow positive. further indicating strong consumer loyalty.

Indispensability vs. Peers New Bar Harbor Format

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

Tenant Overview

Red Lobster is led by an experienced management team with prior success leading the brand.

• Kim served as President of Red Lobster from FY2005 to FY2011, a period of consistent, above-market Kim Lopdrup growth for the brand CEO • Prior to his return to Red Lobster, Kim served as President of Specialty Restaurant Group and New (28 years in Restaurant Business Industry) • Before joining Darden, Kim served as EVP and COO of North America for Burger King, and at Dunkin’ Brands as VP of Marketing and CEO of its international division • BBA, College of William & Mary; MBA with distinction, Harvard Business School

• 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 (25 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 (31 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 (27 years in Restaurant management roles at TGI Friday’s Industry) • BA, Widener University; MBA, University of Texas

Private Equity Sponsor

• Golden Gate Capital (GGC) is a San Francisco-based Private Equity firm with over $12 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. Select Restaurant and Retail Investments

Financial Offering Summary

Property Name Red Lobster Annualized Operating Data Rent Increases Annual Rent Monthly Rent Property Type Net Leased Restaurant Year 4 $ 287,879 $ 23,990 Year 5 $ 293,636 $ 24,470 Ownership Private Year 6 $ 299,509 $ 24,959 Year 7 $ 305,499 $ 25,458 Private Equity Sponsor Year 8 $ 311,609 $ 25,967 Tenant Red Lobster Restaurants, LLC Year 9 $ 317,841 $ 26,487 Guarantor Red Lobster Intermediate Holdings, LLC Year 10 $ 324,198 $ 27,017 Year 11 $ 330,682 $ 27,557 Year 12 $ 337,296 $ 28,108 Lease Term 25 Years Year 13 $ 344,042 $ 28,670 Lease Commencement 7/28/2014 Year 14 $ 350,923 $ 29,244 Lease Expiration 7/31/2039 Year 15 $ 357,941 $ 29,828 Year 16 $ 365,100 $ 30,425 Lease Term Remaining 23.5 Years Year 17 $ 372,402 $ 31,033 Lease Type Triple-Net (NNN) Year 18 $ 379,850 $ 31,654 Roof & Structure Tenant Responsible Year 19 $ 387,447 $ 32,287 Year 20 $ 395,196 $ 32,933 Year 21 $ 403,100 $ 33,592 Options to Renew Four, Five Year Option Periods Year 22 $ 411,162 $ 34,263 Rental Increases Two Percent Annually Year 23 $ 419,385 $ 34,949 Year 24 $ 427,773 $ 35,648 Year 25 $ 436,328 $ 36,361 Annual Rent $287,879* CAP Rate 6.25% Price $4,606,056

*Priced off of 2017 Rent Increase

Location Highlights | Property Description

 Dense Population: There are approximately 50,000 people within a three-mile radius of this property and more than 133,000 within a five- mile radius  Strong Traffic Counts: Washington Road benefits from an average daily LOCATION OVERVIEW traffic count of over 36,000 vehicles. Nearby Carl Sanders Highway brings an additional 57,000 vehicles to the immediate area This Red Lobster is located on 2847 Washington Road in Augusta,  Strong Retail Presence: McDonalds, Krispy Kreme, Outback Steakhouse, Georgia. Augusta is best known for being the location of the Masters Zaxby’s, Jersey Mikes Subs, Hooters, Carabba’s Italian Grill and Bonefish Golf tournament hosted at Augusta National, located less than one Grill, are all located in close proximity mile from the subject site.  Augusta National golf course is located less than one mile from the subject site There are approximately 50,000 people within a three-mile radius of this property and more than 133,000 within a five-mile radius. The property is situated off of Washington Road, benefitting from an average daily traffic count of over 36,000 vehicles. Nearby Carl Sanders Highway bring an additional 57,000 vehicles to the immediate area.

The subject property is well-positioned in a strong retail corridor benefitting from proximity to major national and local retailers. This Red Lobster is positioned in the middle of a stretch of Restaurants including McDonalds, Krispy Kreme, Outback Steakhouse, Zaxby’s, Jersey Mikes Subs, Hooters, Carabba’s Italian Grill and Bonefish Grill, among others. Retail locations surrounding this site include Publix, Kroger, Walgreens, Whole Foods and the Designer Shoe Warehouse.

Augusta is located in North Western Georgia, bordering South Carolina. With an estimate population of 580,000, Augusta is the third largest city and the second largest metro area in Georgia. Top area employers include Textron Specialized Vehicles, Covidien, International Paper and Kellogg’s. Augusta underwent a rapid population growth in the 1990’s and this Red Lobster location is in a prime area to service this area.

Aerial Photo | Surrounding Area

Property Photo

Surrounding Area Photos

Local Map

Regional Map

Demographic Summary Report

Population POPULATION In 2014, the population in your selected geography is 132,508. The population has 1-Mile 3-Mile 5-Mile changed by 4.73% since 2000. It is estimated that the population in your area will be 136,043 five years from now, which represents a change of 2.66% from the current 2010 8,011 48,788 128,502 year. The current population is 47.40% male and 52.59% female. The median age of the population in your area is 36.5, compare this to the Entire US average which is 37.3. The 2014 8,175 50,313 132,509 population density in your area is 1,687.09 people per square mile. 2019 8,372 51,460 136,043 Income In 2014, the median household income for your selected geography is $41,912, 2014 HOUSEHOLD INCOMES compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 12.05% since 2000. It is estimated that 1-Mile 3-Mile 5-Mile the median household income in your area will be $45,980 five years from now, which represents a change of 9.70% from the current year. Average $55,809 $76,543 $64,792 Median $41,795 $49,009 $41,913 The current year per capita income in your area is $28,301, compare this to the Entire US average, which is $28,599. The current year average household income in your area TOP EMPLOYERS IN AUGUSTA is $64,791, compare this to the Entire US average which is $74,533. Employer Employment In 2014, there are 74,010 employees in your selected area, this is also known as the Savannah River Site daytime population. The 2000 Census revealed that 65.62% of employees are employed in white-collar occupations in this geography, and 34.31% are employed in blue-collar US Army Signal Center occupations. In 2014, unemployment in this area is 7.15%. In 2000, the average time Medical College of Georgia traveled to work was 21.1 minutes.