Buddy's Pizza

Buddy’s Pizza Sale-Leaseback 33605 Plymouth Road, Livonia, Michigan 48150

OFFERING MEMORANDUM EXCLUSIVE NET – LEASE OFFERING Table of Contents

Financial Overview Investment Highlights & Overview Lease Summary Concept Overview Investment Summary

Location Overview Location Highlights & Overview Surrounding Aerial Map Surrounding Area Photos

Demographics Population Income Employment FINANCIAL OVERVIEW 33605 Plymouth Road, Livonia, Michigan 48150 PRICE: $2,950,000 | 5.75%CAP | RENT: $169,625 PROPERTY DESCRIPTION HIGHLIGHTS Property Buddy’s Pizza Property Address 33605 Plymouth Road ➢ Brand New 20-Year Triple Net (NNN) Sale-Leaseback City, State, ZIP Livonia, Michigan 48150 ➢ Premier, Market-Leading Specialty Pizza Brand Based in Detroit Building Size (SF) 6,309 ➢ Rental Escalations of 10% Every 5 Years Lot Size (Acres) +/- 1.87 ➢ Celebrated, Iconic Brand Well-Positioned in Respective Markets THE OFFERING ➢ Attractive Unit Economics with Highly Scalable Business Model Net Operating Income (NOI) $169,625 CAP Rate 5.75% Purchase Price $2,950,000 LEASE SUMMARY Property Name Buddy’s Pizza Property Type Net-Leased Restaurant Ownership Fee Simple Tenant / Guarantor Buddy’s Livonia LLC Guarantor Buddy’s Holding Company LLC Lease Term 20 Years Estimated Rent Commencement Close of Escrow Lease Expiration 20 Years From Close of Escrow Lease Term Remaining 20 Years Lease Type Triple-Net (NNN) Roof & Structure Tenant Rental Increases 10% Every 5 Years Options to Renew Four (4), Five (5) Rental Increases in Options 10% Every 5 Years

Marcus & Millichap is pleased to present the exclusive listing for a Buddy’s Pizza ANNUALIZED OPERATING DATA located in Livonia, Michigan. The property consists of approximately 6,309 Initial Annual Rent $169,625 square feet of building space and is situated on approximately 1.87 acres of land. The property is subject to a 20-year Triple-Net (NNN) lease. The base rent Base Term Rental Escalations 10% Every 5 Years will be $169,625 with rental escalations of 10% every 5 years. The increases will RENT SCHEDULE continue through the 4, 5-year tenant renewal options. Lease Year Annual Rent Monthly Rent TENANT SUMMARY Year 1 $169,625 $14,135 Year 2 $169,625 $14,135 More than 72 years since the introduction of “The Original Detroit-Style Square Pizza”, and with 12 locations throughout metro Detroit, Buddy’s continues to Year 3 $169,625 $14,135 serve Detroit’s original square pizza, made-from-scratch soups, and their Year 4 $169,625 $14,135 celebrated antipasto salads. Over time, Buddy’s has added a variety of items to Year 5 $169,625 $14,135 the menu that have kept up to date with on trend menu offerings such as multi grain crust, vegan options, and gluten-free pizzas. To continue pleasing the Year 6 $186,588 $15,549 broad spectrum of clientele that visits the restaurant, Buddy’s has partnered Year 7 $186,588 $15,549 with a local brewery to offer “Buddy Brew” and “Bocce IPA”, ale’s that satisfy Year 8 $186,588 $15,549 the increasing demand for craft beer. As Buddy’s Pizza continues to expand their concepts and ideas, their footprint continues to broaden as the 13th Year 9 $186,588 $15,549 location will open at the Detroit Zoo. Year 10 $186,588 $15,549 Year 11 $205,246 $17,104 Year 12 $205,246 $17,104 Year 13 $205,246 $17,104 Year 14 $205,246 $17,104 Year 15 $205,246 $17,104 Year 16 $225,771 $18,814 Year 17 $225,771 $18,814 Year 18 $225,771 $18,814 Year 19 $225,771 $18,814 Year 20 $225,771 $18,814 CAP Rate 5.75% Purchase Price $2,950,000

GREAT FOOD COMES FIRST Buddy’s Pizza was established in the 1930’s and began serving the original Detroit-style square pizza on the corner of Six Mile Road and Conant Street in 1946. Offering traditional Sicilian-style square pizza, made-from-scratch soup, celebrated antipasto salad and more. The restaurant uses only the freshest ingredients and original family recipes.

Nationally Recognized Dining Experience Buddy’s has a multitude of accolades and high praise from well- known print and online media sources, strengthening its brand recognition and exposure to markets outside of the Metro Detroit area. It is recognized for its delicious pizza and memorable dining experience, winning awards year after year, and for their overwhelming charitable involvement, making Buddy’s a respected and celebrated brand in any community it joins. National Brand Presence “Buddy’s Pizza crust is one of the best in America.” – GQ voted Buddy’s top 15 best pizza in the country. “Buddy’s Pizza invented and perfected Detroit’s signature square pizza style” – Business Insider, March 2015 Rich Heritage | Destination Dining BEGINNINGS “Today, it carries on the legacy by capturing the hearts and taste buds of Detroiters and travelers alike.” –Paula Deen Magazine, In the 1930’s, Buddy’s existed as a “blind Pig”, skirting the State and Federal April 2014 laws that governed the on-site sale and usage of alcohol. Owner August “The Detroit Staple has been around for 70 years, and you bet that “Gus” Guerra made sure “booze” was available. In 1944, Gus turned the next time I visit the Motor City, Buddy’s will be my first stop” – blind pig into a legitimate tavern, but with WWII still raging, business was Oprah.com, August 2016 suffering. In 1946, Sicilian style pizza was added to the menu. Gus baked the Celebrated Reputation for Quality and Compassion Sicilian style pizza using a blue steel pan, given to him by a friend who worked in the automotive business. The unique recipe began drawing crowds of neighbors and out-of-towners who would repeatedly return to indulge on the Detroiter-favorite dish. The Legend of the Original Detroit Style Square Pizza was born.

• Founded in 2005, CapitalSpring is one of the most active private investors focused on the restaurant industry. • The firm currently manages assets in excess of $1.3 billion and has completed investments in the operations of over 50 different restaurant brands and 4,000 restaurant locations. The team specializes in providing creative capital solutions to the branded restaurant industry. • As CapitalSpring’s strategy has broadened and their capital base has continued to flourish, they still remain one of the most active institutional investors exclusively dedicated to restaurant ventures. • CapitalSpring has recently acquired a controlling stake in Buddy’s Pizza in order to accelerate new store growth across the Midwest and expand the brand’s iconic footprint. • CapitalSpring has a large presence across the United States with offices in Nashville, Los Angeles, Atlanta, and New York.

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This information has beenThissecuredinformationfrom sourceshaswebeenbelievesecuredto befromreliable,sourcesbut wewemakebelieveno representationsto be reliable,or warranties,but we makeexpressedno representationsor implied, as toorthewarranties,accuracy of theexpressedinformationor .implied,Referencesastotosquarethe accuracyfootage orofagetheareinformationapproximate. References. Buyer must toverifysquarethe informationfootage or age and bears all risk for anyareinaccuraciesapproximate. Any.projections,Buyer mustopinions,verify assumptionsthe informationor estimatesand bearsused allhereinriskareforforanyexampleinaccuraciespurposes. Anyonly andprojections,do not representopinions,the assumptionscurrent or futureor performanceestimates usedof thehereinpropertyare. Marcusfor example& MillichappurposesReal EstateonlyInvestmentand do notServicesrepresentis a the 6 service mark of Marcus ¤tMillichaporRealfutureEstateperformanceInvestment Services,of the propertyInc. © 2013. MarcusMarcus&&MillichapMillichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap 6 LOCATION OVERVIEW

HIGHLIGHTS ➢ Major Retailers in Surrounding Area Include: Walmart, Costco, Home Depot, and Target

➢ Outstanding Traffic Counts | Interstate-96 and Plymouth ADTC 202,100 Road | Combined 226,200 Vehicles a Day

➢ Laurel Park Place | 70+ Stores | 500,000+ SF of Retail Space | History of Exceeding Class A Mall Sales Per SF Numbers ADTC 24,100 ➢ Westland Shopping Center | 100+ Inline Stores

➢ Premier Location | Benefits from Excellent Positioning Less Than Four Miles From Major Motorways I-96, I-275, and MI-14

MAJOR EMPLOYERS EMPLOYER # OF EMPLOYEES Ford 6,313 Medcart Specialty Pharmacy 5,014 Kohlberg & Co LLC 3,029 Anchor Staffing Inc 2,000 Auto Workers AFL CIO 182 2,000 Robert Bosch LLC 1,641 Garden City Hosp Foundation 1,500 St Mary Mercy Gift Shop 1,500 Ayc 1,400 Roush 1,255 Spectrum Community Services 1,005 Livonia, Michigan Acro Uk Inc 1,000

Surrounding Retail and Points of Interest The immediate area surrounding the subject property boasts a wide array of national and local retailers including: Home Depot, Walmart, Target, Walgreens, Costco and many others. In addition to these retailers, located within five and a half miles of this Buddy’s Pizza is Laurel Park Place, a 506,000 square foot upscale fashion mall featuring over 70 restaurants and stores, as well as the attached Livonia Marriott hotel. Livonia also features three shopping centers, Wonderland Village & Livonia Marketplace, and Westland Center located two miles, two and a half miles, and six miles respectively, from this Buddy’s Pizza. Wonderland Village is anchored by national tenants such as Walmart and Target and Livonia Marketplace features a second Walmart, along with a Sears and Kohl’s. Westland Shopping Center features more than 100 inline stores. There are also two colleges, Madonna University and Schoolcraft College, located two and eight miles respectively, from the subject property that combine to bring over 18,000 students to the area each year.

Traffic Counts and Demographics The city of Livonia has a population of approximately 94,000 and has approximately 91,814 individuals residing within a three-mile radius of the property and 259,631 individuals within a five-mile radius. This Buddy’s Pizza is located at 33605 Plymouth Road, near the intersecting corner where Plymouth and Farmington Road connect. The corner of Plymouth Road and Farmington Road has an average daily traffic count of more than 24,000 vehicles. Plymouth Road is located less than a mile and a half from Interstate-96 which boasts a phenomenal average daily traffic count in Livonia of over 201,000 vehicles.

Livonia, Michigan Livonia is located in the western suburbs of Metro Detroit. The city is ideally located halfway between downtown Detroit and Ann Arbor. With great hotels, fantastic shopping and dining options, and easy access to all major freeways to move around the region, Livonia is the place to stay and play for many visitors to the Detroit metropolitan area. The city is just 20 to 30 minutes from the museums, professional sporting events, theaters and casinos of downtown Detroit. Another popular destination, the Henry Ford, which includes Greenfield Village, Henry Ford Museum and the Ford Rouge Factory Tour, is also just 15 to 20 minutes outside Livonia.

5 Miles 1 Mile 3 Miles 5 Miles POPULATION 2022 Projection 6,515 91,404 258,838 2017 Estimate 6,558 91,814 259,631 2010 Census 6,675 93,723 265,050 3 Miles 2000 Census 6,937 97,681 274,967

INCOME Average $85,734 $71,690 $73,774 Median $68,510 $58,545 $59,191 Per Capita $34,771 $30,563 $30,757 1 Mile HOUSEHOLDS 2022 Projection 2,657 39,053 108,605 2017 Estimate 2,645 38,900 107,827 2010 Census 2,691 39,709 110,086 2000 Census 2,699 40,338 111,285

HOUSING 2017 $155,074 $145,252 $134,438

EMPLOYMENT 2017 Daytime 12,762 102,858 265,787 Population 2017 Unemployment 4.05% 4.30% 4.56% 2017 Median Time 25 Mins 25 Mins 26 Mins Traveled

RACE & ETHNICITY White 94.49% 85.67% 84.15% Native American 0.02% 0.01% 0.01% African American 1.23% 8.15% 9.19% Asian/Pacific Islander 2.00% 3.29% 3.43%

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. © 2017 Marcus & Millichap 12 Marcus & Millichap hereby advises all prospective purchasers be set based on a tenant’s projected sales with little or no asbestos, the compliance with State and Federal regulations, of Net Leased property as follows: record of actual performance, or comparable rents for the the physical condition of the improvements thereon, or the area. Returns are not guaranteed; the tenant and any financial condition or business prospects of any tenant, or any The information contained in this Marketing Brochure has guarantors may fail to pay the lease rent or property taxes, or tenant’s plans or intentions to continue its occupancy of the been obtained from sources we believe to be reliable. may fail to comply with other material terms of the lease; cash subject property. The information contained in this Marketing However, Marcus & Millichap has not and will not verify any of flow may be interrupted in part or in whole due to market, Brochure has been obtained from sources we believe to be this information, nor has Marcus & Millichap conducted any economic, environmental or other conditions. Regardless of reliable; however, Marcus & Millichap has not verified, and investigation regarding these matters. Marcus & Millichap tenant history and lease guarantees, Buyer is responsible for will not verify, any of the information contained herein, nor makes no guarantee, warranty or representation whatsoever conducting his/her own investigation of all matters affecting has Marcus & Millichap conducted any investigation regarding about the accuracy or completeness of any information the intrinsic value of the property and the value of any long- these matters and makes no warranty or representation provided. term lease, including the likelihood of locating a replacement whatsoever regarding the accuracy or completeness of the tenant if the current tenant should default or abandon the information provided. All potential buyers must take As the Buyer of a net leased property, it is the Buyer’s property, and the lease terms that Buyer may be able to appropriate measures to verify all of the information set forth responsibility to independently confirm the accuracy and negotiate with a potential replacement tenant considering the herein. completeness of all material information before completing location of the property, and Buyer’s legal ability to make any purchase. This Marketing Brochure is not a substitute for alternate use of the property. NON-ENDORSEMENT NOTICE your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services, Inc. obligation to conduct a due diligence examination of this Marcus & Millichap Real Estate Investment Services and hold it (“M&M”) is not affiliated with, sponsored by, or endorsed by Property for Buyer. harmless from any kind of claim, cost, expense, or liability any commercial tenant or lessee identified in this marketing arising out of your investigation and/or purchase of this net package. The presence of any corporation’s logo or name is Any projections, opinions, assumptions or estimates used in leased property. not intended to indicate or imply affiliation with, or this Marketing Brochure are for example only and do not sponsorship or endorsement by, said corporation of M&M, its represent the current or future performance of this property. CONFIDENTIALITY AND DISCLAIMER affiliates or subsidiaries, or any agent, product, service, or The value of a net leased property to you depends on factors commercial listing of M&M, and is solely included for the that should be evaluated by you and your tax, financial and The information contained in the following Marketing purpose of providing tenant lessee information about this legal advisors. Brochure is proprietary and strictly confidential. It is intended listing to prospective customers. to be reviewed only by the party receiving it from Marcus & Buyer and Buyer’s tax, financial, legal, and construction Millichap and should not be made available to any other ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. advisors should conduct a careful, independent investigation person or entity without the written consent of Marcus & PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR of any net leased property to determine to your satisfaction Millichap. This Marketing Brochure has been prepared to MORE DETAILS. with the suitability of the property for your needs. provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest Like all real estate investments, this investment carries in the subject property. The information contained herein is significant risks. Buyer and Buyer’s legal and financial advisors not a substitute for a thorough due diligence investigation. must request and carefully review all legal and financial Marcus & Millichap has not made any investigation, and documents related to the property and tenant. While the makes no warranty or representation, with respect to the tenant’s past performance at this or other locations is an income or expenses for the subject property, the future important consideration, it is not a guarantee of future projected financial performance of the property, the size and success. Similarly, the lease rate for some properties, including square footage of the property and improvements, the newly-constructed facilities or newly-acquired locations, may presence or absence of contaminating substances, PCB’s or