Jason's Deli Restaurant Landlord Leases As a Tenant Under a Ground Lease

NNN OUTPARCEL LEASED TO JASON’S DELI WITH DRIVE-THRU IN GROWING TEXAS SUBMARKET

ACTUAL LOCATION

3260 FM 365 | Port Arthur, TX Offering Memorandum Investment Summary 03 Investment Highlights 05 Tenant Overview 06 Financial Analysis 08 Location Overview 10 Market Overview 13 Contacts 15

MARKETING ADVISORS DEBT ADVISOR MARC MANDEL STEVE SCHRENK JOHN INDELLI MATTHEW PUTTERMAN Managing Director Director Director Director 484.532.4212 484.532.4213 713.852.3407 713.852.3524 [email protected] [email protected] [email protected] [email protected]

Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and JLL, its officers, directors, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

JLL is pleased to exclusively offer the opportunity to acquire the fee simple interest in a single tenant, NNN ground lease p roperty corporately leased to Deli Management, Inc. (the “Property”, dba Jason’s Deli), in Port Arthur, TX. The Tenant, which is headquartered just 16 miles awa y in Beaumont, TX, recently extended their current term – they now have 11+ years remaining on their original, 15-year term. The lease features attractive, 10% rental increases nearly every 5 years throughout the term and renewal periods. The Property is situated on a 0.86-acre parcel that sits alongside E Farm to Market Rd (FM) 365 – a main artery in the area that carries more than 31,000 VPD. This strategic location combined with the available drive-thru feature, will bode extremely well for this Jason’s Deli, which is more than 10 miles away from its next closest location.

Consumer traffic in and around the premises is extremely dense in large part due to the close proximity of US-69. US-69 is a 345-mile corridor that carries more than 58,000 VPD and connects Port Arthur to major cities such as Beaumont, Lufkin, Tyler and Denison. The region is also heav ily supported by I-10, which provides east-west access to Houston, TX and Lake Charles, TX, respectively. These transportation avenues, among others, allow t he Central Mall to draw from a surrounding trade area that consists of more than 330,000 residents within a 20-mile radius and an average household income exceeding $72,000.

Jason’s Deli was founded in 1976 and now operates 275 stores across 28 states. The company serves an array of sandwiches, pas tas, salads and soups to customers who are on the go and value healthy eating options. In fact, Jason’s Deli was the first major restaurant concept in the U.S. to ban artificial trans fat and eliminate high-fructose corn syrup. In a recent report published by QSR Magazine, Jason’s Deli ranked #7 among the top 50 QSRs i n terms of 2018 average sales per unit ($2,520,000). PROPERTY SUMMARY

Address 3260 FM 365, Port Arthur, TX 77642 Price $1,440,000 Cap Rate 6.00% NOI $86,625 Lease Type NNN Ground Lease Building Size 5,500 SF Parcel Size 0.86 Acres Year Built 2014 Tenant Deli Management, Inc. Remaining Term 11+ Years (Expiration 7/31/2031) One (1), Three (3) Year Option & Two (2), Five Renewal Options (5) Year Options Rental Increases 10.00% Every Five (5) Years, Except Option 1 © 2020 Jones Lang LaSalle IP, Inc. All rights reserved. 4 Jason’s Deli recently extended their lease and now The Property is conveniently situated along FM has 11+ years remaining on its NNN Ground Lease; 365, a main artery in the area that features more the Lease features attractive, 10% rental increases than 31,000 VPD, which should bode well for nearly every 5 years, inclusive of the option periods Jason’s Deli’s drive-thru feature

The Central Mall features an anchor lineup of Target, There is a strong selection of nationally recognized Dillard’s, JCPenney, and Bed Bath & Beyond – all of retailers surrounding the mall such as Lowe’s, Best which demand a large, active consumer base that Buy, McDonald’s and Chick-fil-A, further driving will increase consumer traffic within the mall consumers to the area parking lot and the surrounding roadways

Port Arthur, TX is a member of Jefferson County Jason’s Deli is headquartered in Beaumont, TX, which and the greater Beaumont-Port Arthur MSA; The is just 16 miles away from the Property; the company metro has over 419,000 residents was ranked #7 among the top 50 QSRs in terms of average sales per unit in 2018 (QSR Magazine) 5 Jason’s Deli | Port Arthur, TX

6 Tenant Overview Jason’s Deli | Port Arthur, TX Jason’s Deli Overview Jason’s Deli was founded in 1976 by Joe Tortorice Jr. Tortorice Jr. opened the first location in Beaumont, TX, which is just 16 miles away from the Subject Property. The fast-casual restaurant chain has grown nationally since and now operates 275 locations across 28 states. Family owned and community focused, Jason’s Deli takes pride in both customer service and the quality of their ingredients. Their menu consists of sandwiches, wraps, pastas, soups, Corporate Overview salads, desserts and more. They also offer kids menus, as well as catering options. All their Ownership Private dining options are made without any trans fats, processed MSG, high-fructose corn syrup, dyes, artificial flavors, nor artificial colors. # of Locations 275

Jason’s Deli was recently included in QSR Magazine’s report of the 2019 Top 50 Fast Food US Headquarters Beaumont, TX Chains in America. According to the report, the company accomplished sales of nearly $655 million in 2018. Further, they were ranked #7 in terms of 2018 average sales per unit Company Website jasonsdeli.com ($2,520,000).

© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. Financial Analysis Jason’s Deli | Port Arthur, TX 8 Financial Analysis Jason’s Deli | Port Arthur, TX $1,440,000 6.00% Lease Abstract Asking Price Cap Rate

LEASE DETAIL TENANT RESPONSIBILITY DETAIL Address 3260 FM 365, Port Arthur, TX 77642 Tenant, at its sole cost and expense, shall keep all parts of the Premises not required to be maintained by Landlord under Article 8 in good order and repair. Tenant Deli Management, Inc. Maintenance The foregoing will obligate Tenant to repair, maintain and replace, without Parcel Size 0.86 Acres & Repairs limitation, the foundations, roof, walls, storefronts, all entrances and vestibules, Building Size 5,500 SF partitions, the glass in all doors and windows of the Premises, all interior portions of the Premises, and all other responsibilities outlined in the Lease. Year Built 2014 Tenant shall keep in force the following insurance, subject to specific terms Annual Rent $86,625 outlined in the Lease: (i) Commercial General Liability Insurance, (ii) Business Auto Liability Insurance, (iii) Workers Compensation Insurance, (iv) in the event Rent / SF $15.75 Insurance Tenant proposes to sell beer, wine or liquor, Liquor Liability or Dram Shop Lease Type NNN Ground Lease Insurance, (v) Umbrella Excess Liability insurance, (vi) and "All Risk" property Roof & Structure Tenant Responsibility insurance Rent Commencement 7/28/2014 Tenant shall pay to Landlord the Taxes on the Premises. Tenant shall also pay before due all taxes, assessments, license fees and public charges imposed on Lease Expiration 7/31/2031 Taxes its interest in this Lease, business operation, trade fixtures and other personal Lease Term Remaining 11+ Years property, and tenant improvements on the Premises. One (1), Three (3) Year Option & Two (2), Five (5) All fees and charges for electricity, water, sewer, gas and all other utility services Remaining Options Year Options used or consumed in the Premises or in providing heating and air-conditioning to Utilities the Premises, including all sales and other taxes or fees applicable to the sale or RENT SCHEDULE supply of such utilities, will be paid promptly by Tenant directly to the entity collective the same. Period Start Date End Date Annual Rent % Increase Tenant shall pay Landlord Tenant's share of Operating Costs as additional rent Additional under this Lease. Tenant's initial share will be equal to the product obtained by Current Term (Years 1-5) 7/28/2014 7/31/2019 $78,750 Rent multiplying (a) $1.50 by (b) the number of square feet in the Building. Each year, Current Term (Years 6-10) 8/1/2019 7/31/2024 $86,625 10.00% the Tenant's share of Operating Costs shall be increased by 2.50%. Current Term (Years 11-15) 8/1/2024 7/31/2029 $95,288 10.00% LANDLORD RESPONSIBILITY DETAIL Current Term (Years 16-17) 8/1/2029 7/31/2031 $104,816 10.00% Landlord's responsibilities as to the parking areas on the Premises is limited to Option Term 1 (Years 18-20) 8/1/2031 7/31/2034 $104,816 0.00% Maintenance routine sweeping, crack repairs and the like, but in no event will Landlord be and Repairs Option Term 2 (Years 21-25) 8/1/2034 7/31/2039 $115,298 10.00% responsible for repaving the parking areas on the Premises. Option Term 3 (Years 26-30) 8/1/2039 7/31/2044 $126,828 10.00% Landlord shall carry: (a) Commercial General Liability Insurance on that portion of the Center which Landlord owns or which Landlord leases as a tenant under a RADIUS RESTRICTION Insurance ground lease or sublease, and (b) "All Risk" property insurance covering the If during the Term and any extensions thereof Tenant directly or indirectly operates, improvements in and to that portion of the Center which Landlord owns or which manages or has any interest in any other full service Jason's Deli restaurant Landlord leases as a tenant under a ground lease. operated under the same or similar trade name as Tenant within 5 miles of any outside boundary line of the Center, then Landlord will have the right to: (a) terminate the Lease; or (b) increase the Minimum Annual Rent payable by thereafter by 50%.

© 2020 Jones Lang LaSalle IP, Inc. All rights reserved. 9 Jason’s Deli | Port Arthur, TX Location Overview Surrounding Retail & Amenities. Jason’s Deli | Port Arthur, TX Location Overview Jason’s Deli | Port Arthur, TX Site Plan.

12 SURROUNDING RETAILERS

13 Jason’s Deli | Port Arthur, TX © 2018 Jones Lang LaSalle IP, Inc. All rights reserved. Market Overview Jason’s Deli | Port Arthur, TX Market Port Arthur, Texas Port Arthur, TX is located in Jefferson County, and is a member of the Beaumont-Port Arthur Metropolitan Statistical Area, which has over 419,700 residents. Together with its neighboring cities, Beaumont and Orange, Port Arthur makes up the southeast Texas’ Golden Triangle. The region has a lower cost of living compared to the rest of the state and country, and residents in the area enjoy a tax-friendly climate (no state nor income taxes).

The metro is home to Lamar university, which has an enrollment of more than 14,000 students. It is one of the fastest growing universities in Texas and is a member of The Texas State University System. The institution offers more than 100 programs of study leading to bachelor’s, master’s, and doctoral degrees. The 270-acre campus in the metro is about 90 miles east of Houston and about 25 miles west of Louisiana. In addition to education, the metro has a balance of recreational and cultural leisure activities. Music fans can attend The Symphony of Southeast Texas and annual Kinsel Lincoln Jazz and Blues Fest, art aficionados have access to various exhibits offered at the Art Museum of Southeast Texas and the Beaumont Art League, and outdoor lovers can enjoy Tyrell Park, a 900-acre Cattail Marsh where visitors can participate in horseback riding, biking, or golfing.

Two of the main drivers of the metro’s economy are the Ports of Port Arthur and Beaumont. These two ports are two of 10 seaports along Texas’ 367-mile coastline on the Gulf of Mexico. The Port of Port Arthur is the ultimate direct transfer facility for international shipping. Trade through the port in 2018 affected about 102,000 net jobs in Texas. Approximately $15.4 billion in gross domestic product is related to trade via the Port of Port Arthur.

PORT OF PORT ARTHUR Demographic Information

1-mile 3-mile 5-mile radius radius radius POPULATION

2020 Estimate

ESTIMATED HH INCOME

2020 Average HH Income

2020 Median HH Income

HOUSEHOLDS

2020 Estimate

Contact Information

9 Greenway Plaza, Suite 700 | Houston, TX 77046 1700 Market Street, Suite 3232 | Philadelphia, PA 19103 www.us.jll.com/capitalmarkets www.us.jll.com/capitalmarkets

Copyright © Jones Lang LaSalle IP, Inc. 2020 This publication is the sole property of Jones Lang LaSalle and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication. Jones Lang LaSalle Americas, Inc., California license # 01223413. Jones Lang LaSalle Americas, Inc. License # 19262. 15