Tim Hortons ™ 2906 Center Avenue| Essexville, MI Tim Hortons, Essexville, MI | 1 ™

OFFERING MEMORANDUM

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2 | Offering Memorandum contents 04 investment highlights

06 financial OVERVIEW

08 tenant overview

10 property OVERVIEW

12 area OVERVIEW exclusively listed by

gary chou

SVP & Senior Director [email protected] DIR (310) 919-5827 MOB (714) 928-8016 LIC # 01911222 (CA)

Kyle Matthews BROKER OF RECORD LIC # 6505399495

Representative Photo

Tim Hortons, Essexville, MI | 3 Executive summary

4 | Offering Memorandum investment highlights

LONG-TERM, WORRY-FREE INVESTMENT • Long-Term Lease – Tenant to sign brand new 20-year lease with 4, 5-year options at the close of escrow • Absolute NNN Lease – Zero landlord responsibilities with tenant taking care of taxes, insurance, maintenance, roof and structure

• Growing Cash Flow – 7.50% increases scheduled every 5 years in the base term and options

STRATEGICALLY PICKED LOCATION • Ideal Retail Area – Outparceled to Kroger and JOANN Fabrics and Crafts – Other national tenants in the immediate area include Walgreens, McDonald’s, Taco Bell, KFC, Wendy’s, Pizza Hut, and Little Caesars, among others

• Traffic Counts – Over 23,800 VPD on Center Avenue

• Healthy Demographics – There are over 6,800 people living in a 1-mile radius (39,000 in a 3-mile and 65,100 in a 5-mile)

SEASONED OPERATOR OF AN EXCELLENT BRAND • Operator is Kava Restaurants, LLC - a 24+ unit operator of Tim Hortons with strong plans for expansion through acquisition and by organic growth

• Tim Hortons – Restaurant Brands International acquired Tim Hortons at end of 2014 – The concept has over 4,600 locations across 9 countries – Annual revenues exceed $3B

Tim Hortons, Essexville, MI | 5 financial overview

6 | Offering Memorandum Financial overview

Tenant Summary

Tenant Trade Name Tim Hortons Type of Ownership Fee Simple Tim Hortons Lease Guarantor Kava Restaurants, LLC 2906 Center Avenue Lease Type NNN Essexville, MI 48732 Roof and Structure Tenant Responsible Original Lease Term 20 Years List Price �� $1,263,000 Lease Commencement Date Close of Escrow CAP Rate - Current ��6.20% Lease Expiration Date TBD Gross Leasable Area �� ± 2,600 SF Term Remaining on Lease 20 Years Lot Size ��± 0.68 Acres Increases 7.50% Every 5 Years Options Four, 5-Year Options

Annualized Operating Data Monthly Rent Annual Rent Increases Rent/SF Cap Rate Current Rent Period $6,526.00 $78,312.00 7.50% $30.12 6.20% Rent Period 2 $7,015.45 $84,185.40 7.50% $32.38 6.66% Rent Period 3 $7,541.61 $90,499.31 7.50% $34.81 7.16% Rent Period 4 $8,107.23 $97,286.75 7.50% $37.42 7.70% Option 1 $8,715.27 $104,583.24 7.50% $40.22 8.28% Option 2 $9,368.92 $112,427.04 7.50% $43.24 8.90% Option 3 $10,071.59 $120,859.08 7.50% $46.48 9.57% Option 4 $10,826.95 $129,923.40 7.50% $49.97 10.29%

Tim Hortons, Essexville, MI | 7 tenant overview

8 | Offering Memorandum Property Name Tim Hortons Parent Company Trade Name Restaurant Brands International Ownership Public No. of Locations ± 4,613 No. of Employees ± 100,000 Headquartered Oakville, Ontario, Canada Website www.timhortons.com Year Founded 1964

TENANT OVERVIEW

Tim Hortons Inc. (known internationally as Tim Hortons Cafe and Bake Shop, colloquially known as Timmy’s or Tim’s) is a Canadian multinational fast food restaurant. As of December 31, 2016, it had a total of 4,613 restaurants in nine countries. The chain’s focus on top quality, always fresh product, value, great service and community leadership has allowed it to grow into the largest quick service restaurant chain in Canada specializing in always fresh coffee, baked goods, and homestyle lunches.

Restaurant Brands International Inc. (“RBI”) is one of the world’s largest quick service restaurant companies with more than $27 billion in system-wide sales and over 23,000 restaurants in more than 100 countries and U.S. territories. RBI owns three of the world’s most prominent and iconic quick service restaurant brands – Tim Hortons, Burger King, and Popeyes. These independently operated brands have been serving their respective guests, franchisees and communities for over 40 years.

Restaurant Brands International Inc. is committed to growing the Tim Hortons, Burger King, and Popeyes brands by leveraging their respective core values, employee and franchisee relationships, and long track records of community support. The brands benefit from the global scale and shared best practices that come through common ownership under Restaurant Brands International Inc.

Tim Hortons, Essexville, MI | 9 property overview

10 | Offering Memorandum the offering

Property Name Tim Hortons 2906 Center Avenue Property Address Essexville, MI 48732 Assessor’s Parcel Number 09-070-023-400-665-00 parcel map

Site Description Number of Stories One Type of Ownership NNN Gross Leasable Area (GLA) ± 2,600 SF Lot Size ± 0.68 Acres (29,621 SF) Parking ± 19 Parking Surfaces Parking Ratio 7.31 : 1,000 SF Topography Generally Level

CENTER AVENUE ±23,800 ADT ±7,400 ADT

N SCHEURMANN RD

Tim Hortons, Essexville, MI | 11 AREA overview

12 | Offering Memorandum SAginaw bay

Essexville, mi

Essexville is part of the Bay City, Michigan Metropolitan Statistical Area and is often associated with its larger, western neighbor. Best described today as a bedroom community, Essexville is primarily a residential community whose residents commute to job opportunities within the Saginaw- Bay City-Midland region. Essexville’s neighborhoods and residential properties are well maintained with over 85% of single family homes owner occupied. The Woodside Avenue Business District has a collection of convenience and specialty businesses. The Saginaw River waterfront within the City of Essexville is utilized for bulk storage of petroleum products, cement, stone, agricultural products. Essexville is the closest port to the Saginaw Bay.

Tim Hortons, Essexville, MI | 13 demographics

POPULATION 1 Mile 3 Mile 5 Mile HOUSEHOLDS 1 Mile 3 Mile 5 Mile 2022 Projection 6,763 38,278 64,036 2022 Projection 3,089 16,500 27,663 2017 Estimate 6,801 38,971 65,147 2017 Estimate 3,082 16,664 27,925 2010 Census 6,879 40,385 67,412 INCOME 1 Mile 3 Mile 5 Mile 2017 Est. Average 2000 Census 6,657 42,097 70,149 $67,979 $57,009 $59,633 Household Income

economic development While Kennett is home to just under 11,000 residents, it is the main source of business and commerce for up to 100,000 individuals within a 30-mile radius of the city. It is the largest city in the Boot Heel, a mostly agricultural area producing goods like cotton, soybeans, rice, and watermelon that are distributed nationwide. National distribution of goods is made easy by the roadway systems put in place by the Missouri Department of Transportation.

14 | Offering Memorandum surrounding tenants

Tim Hortons, Essexville, MI | 15 16 | Offering Memorandum CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offering Memorandum contains select information pertaining to the business and affairs of Tim Hortons located at 2906 Center Avenue, Essexville, MI 48732 (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1. The Offering Memorandum and its contents are confidential;

2. You will hold it and treat it in the strictest of confidence; and

3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. exclusively listed by

gary chou

SVP & Senior Director

[email protected] DIR (310) 919-5827 MOB (714) 928-8016 LIC # 01911222 (CA)

Kyle Matthews BROKER OF RECORD LIC # 6505399496

Tim Hortons ™ 2906 Center Avenue | Essexville, MI 18 | Offering Memorandum