Corporate Del Taco

GROUP OFFERING MEMORANDUM

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CORPORATE DEL TACO - GENERATIONAL TROPHY ASSET NEW 20-YEAR ABSOLUTE NET GROUND LEASE WITH ZERO LANDLORD RESPONSIBILITIES FRONTS ALONG ICONIC WILSHIRE BOULEVARD WHICH CONNECTS WORLD-RENOWN BEVERLY HILLS TO THE FAMOUS SANTA MONICA BEACHES RARE OPPORTUNITY TO OWN 1 OF 10 DRIVE-THRU RESTAURANTS IN THE WHOLE CITY OF SANTA MONICA SANTA MONICA, CALIFORNIA OFFERING MEMORANDUM Confidentiality Agreement The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap.

This offering memorandum has been prepared to provide summary, unverified financial and physical 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 footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, 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 offering memorandum 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Net Leased Disclaimer Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. OFFERING MEMORANDUM TABLE OF CONTENTS

PROPERTY FINANCIAL MARKET DESCRIPTION ANALYSIS OVERVIEW Investment Highlights - 5 Financial Summary - 9 Santa Monica - 10 Area Map - 6 Third Street Promenade - 11 Property Photos - 7 Santa Monica Place - 12 Tenant Overview - 8 Santa Monica Pier - 13 Rodeo Drive - 14 Market Information - 15 INVESTMENT HIGHLIGHTS CORPORATE DEL TACO | SANTA MONICA, CA

BRAND NEW CORPORATE GUARANTEED DEL TACO (NASDAQ: TACO) New 20 Year Ground Lease with Corporate Del Taco (566 Locations in 16 States) Absolute Net Lease (Zero Landlord Responsibilities) Great Hedge Against Inflation - Lease Features CPI Increases (Capped at 10%) with Four, 5-Year Tenant Options to Renew Tenant Just Completed Full Exterior & Interior Conversion - $1.3M in Capital Expenditures (Not Including FF&E) High Barrier of Entry Location - No New Drive-Thru Restaurants Permitted in the City Rare Opportunity to Own One of Ten Drive-Thru Restaurants in the whole City of Santa Monica

AAA LOCATION – GENERATIONAL TROPHY ASSET - LOS ANGELES/ SANTA MONICA, CALIFORNIA Located on Iconic Wilshire Boulevard, Which Oversees Over 32,712 VPD; Close Proximity to I-10 (Exceeds 289,000 VPD) and I-405 (Exceeds 374,000 VPD) 480,000 People within a 5-mile Radius with an Average Household Income of $130,000+ Only 2.4 Miles from Santa Monica Pier (Over 8.7 Million Visitors in 2017 with the Average Visitor Spending $166 a Day; $1.96 Billion Dollars generated by tourism to local economy) and 1.8 miles From the Pristine Santa Monica Coastline 1.9 Miles to Third Street Promenade - A 156,084-Square Foot Upscale Shopping, Dining and Entertainment Complex – 6.3 Million Visitors Annually 5.5 Miles to Rodeo Drive - More Than 100 World-Renowned Stores and Hotels Near VA West Los Angeles Health Care Centers – 600 Beds and 600,000 Patients a Year and Ronald Reagan UCLA Medical Center – 34,000 Patients a Year Los Angeles International Airport (8.7 Miles) - Second-Busiest Commercial Airport in the Nation with 48.3M Visitors in 2017 2.8 Miles from UCLA Campus which has 45,000+ Annual Students 12.6 Miles from USC Campus which has 45,500+ Annual Students 1.3 Miles from University High School which has 1,671 Annual Students 1.7 Miles from Santa Monica High School which has 2,950 Annual Students 1.3 Miles from Santa Monica Community College which has 30,000 Annual Students

5 AREA MAP CORPORATE DEL TACO | SANTA MONICA, CA

WILL ROGERS STATE HISTORIC PARK RONALD REAGAN UCLA MEDICAL Third STREET PROMENADE CENTER UNIVERSITY 0F CALIFORNIA, LOS ANGELES RIVIERA LOS ANGELES (45,000+ STUDENTS) CENTURY CITY NATIONAL CEMETARY BRENTWOOD PARK

BRENTWOOD PAUL REVERE MIDDLE SCHOOL (2,073 STUDENTS) WESTGATE VA GREATER RODEO DRIVE LOS ANGELES BRENTWOOD HEALTHCARE CENTER THE RIVIERA COUNTRY CLUB COUNTRY CLUB UNIVERSITY HIGH SCHOOL (1,671 STUDENTS) WEST LOS ANGELES SANTA MONICA PLACE BROCKTON AVENUE ELEMENTARY SCHOOL (258 STUDENTS) FRANKLIN ELEMENTARY PACIFIC SCHOOL PALISADES (818 STUDENTS) SAWTELLE

DOUGLAS PARK WILDWOOD SCHOOL PROVIDENCE SAINT MCKINLEY ELEMENTARY (713 STUDENTS) JOHN HEALTH SCHOOL UCLA MEDICAL CENTER CENTER, SANTA (500 STUDENTS) MONICA WESTSIDE PAVILION ROOSEVELT CROSSROADS SCHOOL FOR ARTS ELEMENTARY AND SCIENCES SCHOOL SANTA MONICA CATHOLIC (1,174 STUDENTS) EDISON LANGUAGE (831 STUDNETS) HIGH SCHOOL (545 STUDENTS) MEMORIAL ACADEMY PARK (449 STUDENTS) SANTA MONICA CITY OF SANTA MONICA WOODLAWN PICO MAR VISTA CEMETARY SANTA MONICA VENICE / ABBOT CLOVER COLLEGE PARK NATIONAL SEPULVEDA KINNEY (2.5 MILES) (30,000 STUDENTS) SHOPPING CENTER

MCDONALDS SANTA MONICA MUNICIPAL AIRPORT SANTA MONICA PIER SANTA MONICA HIGH SCHOOL JOHN ADAMS MIDDLE SCHOOL (2,950 STUDENTS) (1,030 STUDENTS)

6 PROPERTY PHOTOS CORPORATE DEL TACO | SANTA MONICA, CA

7 TENANT PROFILE TENANT OVERVIEW CORPORATE DEL TACO | SANTA MONICA, CA

Del Taco (NASDAQ: TACO) offers a unique variety of both Mexican and American favorites such as burritos and fries, prepared fresh in every restaurant’s working kitchen with the value and convenience of a drive-thru. Del Taco’s menu items taste better because they are made with quality ingredients like fresh grilled chicken and carne asada steak, hand-sliced avocado, hand-grated cheddar cheese, slow-cooked beans made from scratch, and new creamy Queso Blanco. The brand’s UnFreshing Believable® campaign further communicates Del Taco’s commitment to provide guests with the best quality and value for their money. Founded in 1964, today Del Taco serves more than three million guests each week at its more than 560 restaurants across 14 states.

In their most recent Quarterly results release, comparable restaurant sales increased 3.7% system-wide for the fiscal first quarter 2018, resulting in a 7.9% increase on a two-year basis. The Del Taco system has now generated comparable restaurant sales growth for 18 consecutive quarters. Company-operated comparable restaurant sales increased 2.6%, marking 23 consecutive quarters of comparable restaurant sales growth. Company restaurant sales increased 3.8% to $105.1 million compared to $101.2 million in the fiscal first quarter 2017.

Del Taco is not a highly leveraged company as are many competitors in the QSR industry.

COMPANY SUMMARY Stock Symbol (NYSE): TACO Enterprise Value: $533.7 Million No. of Locations: 566 Year Founded: 1964 Headquartered: Lake Forest, CA

8 FINANCIAL SUMMARY CORPORATE DEL TACO | SANTA MONICA, CA

CORPORATE DEL TACO 2423 Wilshire Blvd. Santa Monica, CA 90403 OFFERING SUMMARY CLICK TO VIEW Price $5,000,000 AERIAL VIDEO Cap Rate 3.5% Gross Leasable Area (GLA) +/- 2,724 SF (746 SF of Upstairs Storage Space) Lot Size 8,816 SF Year Built/Remodeled 1964/2018 Ownership Ground Lease

LEASE STRUCTURE Lease Term 20 Years Lease Type Absolute-Net Lease Commencement Date Close of Escrow Lease Expiration Date 20 Years After COE Increases CPI (Max 10%)/5 Years Term Remaining 20 Years Options to Extend Four, 5-Year

ANNUALIZED OPERATING DATA RENT INCREASES* ANNUAL RENT MONTHLY RENT Rent Commencement - Year 5 $175,000.00 $14,583.33 Year 6 - Year 10 $192,500.00 $16,041.67 Year 11 - Year 15 $211,750.00 $17,645.83 Year 16 - Year 20 $232,925.00 $19,410.42 Year 1 Net Operating Income 3.50% / $175,000.00

*Rental Increases Estimated From Max Increase Potential of 10%

9 SANTA MONICA OVERVIEW CORPORATE DEL TACO | SANTA MONICA, CA

Santa Monica is a charming seaside town with all of the culture, events and urban amenities of a bustling metropolis. The blend of Santa Monica’s natural beauty, award winning dining, incomparable hotel collection and famed shopping options, all on one of California’s most iconic stretches of shoreline, creates a truly unforgettable seaside destination.

National Geographic ranked Santa Monica as one of the “Top Ten Beach Cities in the World” – putting Santa Monica in a class with Barcelona, Sydney and Rio de Janerio and has been recognized as one of the top ten sustainable cities in the United States. In recent years, a wave of tech and Internet start-up companies have rolled into town, earning Santa Monica the nickname of ‘Silicon Beach’. Santa Monica’s 8.3 square miles have been made to be extremely bike-friendly with wellmarked lanes and routes. Bicycles are one of the most scenic and economical ways to navigate the city.

Click here to take a tour of the city!

10 THIRD STREET PROMENADE THIRD STREET PROMENADE CORPORATE DEL TACO | SANTA MONICA, CA

Third Street Promenade is said to be the pinnacle of Southern California shopping and dining. This upscale, outdoor mall is located less than 2 miles away from the subject property and is visited by over 6.3 million people every year. With little to no downtime between leases, it generates a staggering $517 Million in retail sales annually. Some of the notable retailers include Apple, Banana Republic and an official Tesla retail store. The newly installed expo station at 4th and Colorado is estimated to bring in an additional 40,000 riders every day.

Third Street Promenade consists of three open-air, car-free blocks that are anchored by upscale Santa Monica Place. With everything from fresh farmers-market produce to designer fashions, it’s a shopper’s nirvana. Likewise, foodies rejoice in the numerous restaurants featuring locally sourced ingredients and craft cocktails. Life pulses around each corner with hotel guests, street performers, shoppers, office workers, diners, barflies, and moviegoers. New to the mix: The terminus of the Metro Expo Line, which opened in 2016, ferries riders by light rail between Santa Monica and Downtown Los Angeles.

Click here to see Downtown Santa Monica/Third Street Promenade has to offer!

11 SANTA MONICA PLACE CORPORATE DEL TACO | SANTA MONICA, CA

Santa Monica Place is a sophisticated 475,000 SF shopping mall and is a must-visit destination delivering three levels of exciting retail and dining. From Nordstrom to an innovative Bloomingdale’s concept store, and an array of the city’s best shops-Louis Vuitton, Tiffany & Co., Nike, The Disney Store, Hugo Boss, Uniqlo, Barney’s New York, Tory Burch, Michael Kors, Ted Baker London, Coach, kate spade new york, Diane von Furstenberg, ArcLight Cinemas, Gourmandise School of Sweets & Savories and more - Santa Monica Place is the epicenter of relaxed, celebrity-inspired style.

12 SANTA MONICA PIER CORPORATE DEL TACO | SANTA MONICA, CA

Located only 2.4 miles away from the subject property lies the famous Santa Monica pier. This pier was frequented by 8.7 Million visitors in 2017 and is considered one of the premier attractions in all of Southern California. This iconic site has been serving its visitors for over 100 years and includes a variety of restaurants, attractions and shopping to suit anyone’s desires.

The Santa Monica Pier is a bustling locale which evokes the atmosphere of an historic beach front carnival and houses a number of entertainment venues, including: The Santa Monica Looff Hippodrome (carousel), a National Historic Landmark; Pacific Park, LA’s only admission-free amusement park with rides, games, food and retail shops; the Santa Monica Pier Aquarium; the La Monica Ballroom; and the Playland Arcade.

13 RODEO DRIVE CORPORATE DEL TACO | SANTA MONICA, CA

Rodeo Drive - undeniably one of the most famous streets on the globe. Beverly Hills is known around the world as one of the most fashionable places to shop. With more than 100 world-renowned stores and hotels comprising its three magnificent blocks within the Golden Triangle, it is easy to become lost in the street’s splendor and charm. A two-mile street that features a variety of designer stores and independent boutiques. When roaming this street, you can expect to find high end shops like Gucci, Louis Vuitton, Hermes and a variety of other international brand names.

Rodeo Drive in Beverly Hills embodies all the glam of the big screen. Flagship locations for some of the most prestigious brands in the world are lined up, all polished and elegant!

14 MARKET INFORMATION CORPORATE DEL TACO | SANTA MONICA, CA

MAJOR EMPLOYERS UCLA Medical Center, Santa Monica 2,351 Employees Santa Monica College 1,977 Employees City of Santa Monica 1,870 Employees Providence Saint John’s Health Center 1,750 Employees Santa Monica‐Malibu USD 1,457 Employees RAND Corporation 862 Employees

The City of Santa Monica is a beachfront city in western Los Angeles County, California, United States. Situated on Santa Monica Bay, it is bordered on three sides by the city of Los Angeles – Pacific Palisades to the north, Brentwood on the northeast, West Los Angeles on the east, Mar Vista on the southeast, and Venice on the south. The Census Bureau population for Santa Monica in 2010 was 89,736. The City is approximately 52 miles northwest of Orange County, 133 miles north west of San Diego, and 381 miles south of San Francisco. Santa Monica is accessible from the San Diego Freeway (I-405), the Santa Monica Freeway (I-10), and the Pacific Coast Highway (SR-1).

ECONOMIC INDICATORS Unemployment 4.4% Median Home Price $1,757,800 Retail Vacancy 1.8% Residential Vacancy 2.2%

15 2423 WILSHIRE BLVD SANTA MONICA, CA 90403

EXCLUSIVELY LISTED Peter Deltondo Director, Net-Leased Properties Group Vice President (949) 419-3200 ext. 3267 [email protected] Lic: 01797033

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