Rare, Chicago Infill Wendy's 133-147 S Western Ave | Chicago, Il

RARE, CHICAGO INFILL WENDY'S 133-147 S WESTERN AVE | CHICAGO, IL

Capital Markets | Net Lease Property Group AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT

CBRE, Inc. operates within a global family of companies with many subsidiaries Property will be made available to interested and qualified prospective purchasers. and/or related entities (each an “Affiliate”) engaging in a broad range of In this Memorandum, certain documents, including leases and other materials, commercial real estate businesses including, but not limited to, brokerage are described in summary form. These summaries do not purport to be complete services, property and facilities management, valuation, investment fund nor necessarily accurate descriptions of the full agreements referenced. Interested management and development. At times different Affiliates may represent parties are expected to review all such summaries and other documents of various clients with competing interests in the same transaction. For example, whatever nature independently and not rely on the contents of this Memorandum this Memorandum may be received by our Affiliates, including CBRE Investors, in any manner. Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, offer to purchase the Property and may be the successful bidder for the Property. Affiliates or representatives make any representation or warranty, expressed or You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor implied, as to the accuracy or completeness of this Memorandum or any of its any involved Affiliate will have any obligation to disclose to you the involvement contents, and no legal commitment or obligation shall arise by reason of your of any Affiliate in the sale or purchase of the Property. In all instances, however, receipt of this Memorandum or use of its contents; and you are to rely solely on CBRE, Inc. will act in the best interest of the client(s) it represents in the your investigations and inspections of the Property in evaluating a possible transaction described in this Memorandum and will not act in concert with or purchase of the real property. otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in The Owner expressly reserved the right, at its sole discretion, to reject any or all a manner consistent with the law and any fiduciary duties owed to the client(s) expressions of interest or offers to purchase the Property, and/or to terminate it represents in the transaction described in this Memorandum. discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment This is a confidential Memorandum intended solely for your limited use and or obligation to any entity reviewing this Memorandum or making an offer to benefit in determining whether you desire to express further interest in the purchase the Property unless and until written agreement(s) for the purchase of acquisition of the Property. the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or This Memorandum contains selected information pertaining to the Property and waived. does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the “Owner”), to be all-inclusive or to contain all or By receipt of this Memorandum, you agree that this Memorandum and its part of the information which prospective investors may require to evaluate a contents are of a confidential nature, that you will hold and treat it in the strictest purchase of real property. All financial projections and information are provided confidence and that you will not disclose this Memorandum or any of its contents for general reference purposes only and are based on assumptions relating to to any other entity without the prior written authorization of the Owner or CBRE, the general economy, market conditions, competition and other factors beyond Inc. You also agree that you will not use this Memorandum or any of its contents the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions in any manner detrimental to the interest of the Owner or CBRE, Inc. and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are If after reviewing this Memorandum, you have no further interest in purchasing approximations. Additional information and an opportunity to inspect the the Property, kindly return this Memorandum to CBRE, Inc.

© 2017 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. RARE, CHICAGO INFILL WENDY'S

133-147 S WESTERN AVE | CHICAGO, ILLINOIS OFFERING MEMORANDUM

TABLE OF CONTENTS

Investment Overview...... 4 Property Overview...... 8 Market Overview...... 11

FOR MORE INFORMATION Primary Contact: Financing Contact: PLEASE CONTACT: Michael Kaider CBRE Geoffrey Harris NNN Specialist 700 Commerce Drive +1 602 735 5615 First Vice President Suite 550 [email protected] +1 630 573 7015 Oak Brook, IL 60523 [email protected]

EXECUTIVE SUMMARY 3 THE OFFERING

CBRE’s Net Lease Property Group is pleased to exclusively present than 50,000 visitors daily and generates $3.4 billion in economic the opportunity to acquire a 100% fee simple interest in an absolute activity annually. NNN Wendy’s ground lease located in Chicago, Illinois. Chicago is one of the most dynamic markets in the nation with a population near The Wendy’s Company operates the world’s #3 hamburger chain in 9.65 million. The brand-new prototype store has an original term of terms of locations (behind McDonald’s and Burger King), with more 15 years, strong rental increases, and three 5-year options to extend. than 6,500 franchise and company restaurants in the U.S. and 29 other countries and U.S. territories worldwide. Of the 6,500 Wendy’s The Property is highly visible at the northeast corner of Western restaurants worldwide, 75% of them are franchised. They offer fresh, Avenue and Adams Street, only three miles west of Chicago’s CBD and never frozen hamburgers as well as fries, salads, and chili among other just north from a full access interchange at Interstate 290 (Eisenhower items. Expressway). Traffic counts near the site are exceptional, exceeding 26,750 VPD at Western/Adams intersection and 218,600 VDP on Interstate 290. Residents also enjoy numerous public transportation options with the Chicago Transit Authority (CTA) train and bus stops within a short walking distance from the Property.

The Property is located in the West Town neighborhood of Chicago and ideally located less than one mile west of the United Center – the largest sports and entertainment arena in the United States and home of the Chicago Blackhawks and Chicago Bulls. The United Center creates an outstanding draw to the area and visitors heading to and from the arena will drive directly by Wendy’s.

Additional draws to area include Fulton Market and the Illinois Medical District. Fulton Market covers 217 acres and is home to a variety of businesses including the brand-new headquarters for Google and McDonald’s. The area has experienced significant growth in recent years, a trend that is expected to continue. The Illinois Medical District, home of four world-class hospitals, covers 560 acres and is the largest urban medical district in the United States. The district receives more REPRESENTATIVE PHOTO

4 WENDY'S — CHICAGO, IL FINANCIAL OVERVIEW

Offering Price $2,778,000

Cap Rate 4.50%

Rent $125,000.00

Lease Structure Absolute NNN Ground Lease

Land Area ± 0.46 Acres / 20,164 Square Feet WENDY'S RENT SCHEDULE

Building Size 3,515 Square Feet LEASE YEARS ANNUAL MONTHLY

Year Built 2017 Year 1 - 5 $125,000.00 $10,416.67

Year 6 - 10 $137,500.00 $11,458.33 Parking 20 Spaces (5.7 per 1,000 SF)

Year 11 - 15 $151,250.00 $12,604.17 Tenant Wendy's Properties, LLC Option 1: Year 16 - 20 $166,375.00 $13,864.58 Guarantee Quality Is Our Recipe, LLC Option 2: Year 21 - 25 $183,012.00 $15,251.00 Lease Term 15 Years Option 3: Year 26 - 30 $210,313.00 $17,526.08

Lease Commencement August 1, 2017

Construction Completion July 2017

Renewal Options Three 5-Year Options

10% every 5 years in base term, 10% in Rental Increases Option 1 & 2, and 15% in Option 3.

Landlord Responsibilities None

EXECUTIVE SUMMARY 5 INVESTMENT HIGHLIGHTS

IRREPLACEABLE, DENSE, URBAN, CORPORATE GUARANTY INFILL REAL ESTATE

The opportunity to acquire fee interest in a corporate guaranteed Located in Chicago’s West Town neighborhood, Wendy’s serves a absolute NNN Wendy’s ground lease in Chicago, Illinois. The dynamic, densely populated trade area that benefits from incredible Wendy’s Company is the world’s 3rd largest quick-service traffic on both weekdays and weekends. Within one mile of the hamburger company and includes more than 6,500 franchise and Property is a population of 34,578 residents and approximately company restaurants in the U.S. and 29 other countries and U.S. 171,406 residents live within the two-mile extended trade area. territories worldwide. EXCEPTION PROXIMITY TO CHICAGO ATTRACTIONS

LONG TERM COMMITMENT Wendy’s is located within minutes from downtown Chicago and numerous area attractions. Chicago welcomes nearly 40 million The brand-new prototype store will have 15 years of base term with visitors each year to see parks, art galleries, architectural wonders, 10% rental bumps every five years and zero landlord responsibilities. professional sports teams, and more. The United Center, located Wendy’s has three, 5-year options to extend each with strong rental less than one mile west of the Property, is the largest sports and increases. entertainment arena in the United States and draws a tremendous amount of traffic to the area and directly by the site. Additional EXCELLENT ACCESS & TRANSIT draws to area include Fulton Market - home of the brand-new ORIENTED SITE Google and McDonald’s headquarters and the Illinois Medical District – the largest urban medical district in the United States. Located at the northeast corner of Western Avenue (23,800 VPD) and Adams Street (2,950 VPD), the Property is easily accessible via a full access interchange at Interstate 290 (218,600 VPD), a heavily ROBUST CHICAGO MSA trafficked artery that runs through the Chicago MSA. Additionally, the property is surrounded by numerous public transportation Chicago is the 3rd largest MSA in the United States and one of the options including the Chicago Transit Authority’s (CTA) Western most attractive and dynamic markets in the nation with a population Blue line station, which is a five-minute walk from Wendy’s. over 9.65 million. Chicago boasts an attractive retail market, with the third largest economy in the nation, and over $121.9 billion in annual retail sales (2016 metro Chicago sales; Melaniphy). 6 WENDY'S — CHICAGO, IL AERIAL VIEW LOOKING EAST

MARKET OVERVIEW 7 PROPERTY OVERVIEW

8 WENDY'S — CHICAGO, IL TENANT OVERVIEW

The Wendy’s Company operates the world’s #3 hamburger chain in terms of locations (behind McDonald’s and Burger King), with more than 6,500 franchise and Company restaurants in the U.S. and 29 other countries and U.S. territories worldwide. Of the 6,500 Wendy’s restaurants worldwide, 75% of them franchised. They offer fresh, never frozen hamburgers as well as fries, salads, and chili among other items. Wendy’s was acquired in 2008 for $2.3 billion in stock by Triarc Companies, which later changed its name to Wendy’s/Arby’s. Wendy’s/Arby’s (NYSE:WEN). Wendy’s 2016 revenue was $1.4 billion and an average annual sales per domestic restaurant of $1.57 million. Wendy's employs over 12,100 people and is headquartered in Dublin, Ohio.

29 6,500+ Total Revenue Stock Symbol Countries Locations $1.4 Billion NYSE: WEN

Employees Founded in Headquarters Website 12,100 1969 Dublin, OH www.wendys.com

PROPERTY OVERVIEW 9 SITE PLAN

Flood Zone Disclosure: According to flood hazard maps published by the FEMA the site is within Zone X as indicated on Community Map Panel No. 17031C0418J, dated August 19, 2008, an area determined to be outside the 500-year floodplain determined to be outside the 1% and 0.2% annual chance floodplain. 10 WENDY'S — CHICAGO, IL MARKET OVERVIEW

MARKET OVERVIEW 11 CHICAGO MSA OVERVIEW

Chicago is one of the most attractive and dynamic markets in the nation. Chicago boasts an attractive retail market, with the third largest economy in the nation and over $120.9 billion in annual retail sales (2016 metro Chicago sales; Melaniphy). The market’s vibrant business climate, central geographic location, diversified economy and available human resources have helped Chicago achieve a prominent position as a world-class city in finance, international trade, manufacturing, transportation, culture and the arts.

One of Chicago’s biggest commercial advantages is its diversified economy and deep labor pool. With no single emphasis on any one business sector or industry, Chicago’s economy is like a well-balanced portfolio and is better equipped than most cities to weather a slowdown in any particular industry. The Chicago MSA has a highly diversified economic base and is home to more than 400 major corporate headquarters, including 33 Fortune 500 headquarters.

The Windy City, as it has been nicknamed, welcomes in nearly 40 million international and domestic visitors each year who come to see attractions including Chicago’s numerous parks, art galleries, architectural wonders, professional sports teams, universities, and more.

CHICAGO ACCOLADES

Top 10 Most Competitive City for Business in the World The Economist Intelligence Unit

Top 10 Best City for Building Wealth Bankrate.com, October 2015

#1 Top Metro in the U.S. for Corporate Investment Site Selection, March 2016

#1 North American city for foreign direct investment IBM, Global Location Trends

#2 Top Metro in the United States for the Number of Fast Growing Small Businesses Inc. 5000 List, 2015

12 WENDY'S — CHICAGO, IL CHICAGO MSA OVERVIEW

WHY CHICAGO?

• Chicago has a strong, globally diverse economy larger than that of many countries

• Chicago’s industry mix most closely matches that of the nation, with no single industry employing more than 20% of the workforce

• Chicago is one of the most cost-effective cities in the world for doing business, ahead of New York and Los Angeles, according to KPMG

• Chicago’s affordable cost of living and world-class cultural and rec- reational opportunities make it an excellent value for the city’s vibrant and diverse workforce TRANSPORTATION Chicago is one of the primary transportation hubs in the United States. • Chicago is a central transportation hub with direct flights between Chicago is home to O’Hare International Airport, the 3rd busiest airport more than 200 cities worldwide, and direct connections to six main the nation. According to the Chicago Department of Aviation, in 2016 jor U.S. Interstates the airport serviced nearly 78 million passengers to and from 208 destinations around the world via more than 48 passenger carriers. Chicago is • Chicago is hub of international business activity, with more than also home to Midway International Airport, which serviced more than 22 1,800 foreign-based companies and more than $100 billion in for- million passengers via five passenger carriers to 75 destinations in the US, eign direct investment Mexico, Jamaica, the Dominican Republic and Canada.

Several major interconnected expressways and interstate highways pass DEMOGRAPHICS though the Chicago area. Interstates 80, 88 and 290 are the main east/ The Chicago metropolitan statistical area is home to over 9.65 million residents, west routes. Interstates 55 and 57 provide access to the south and south- making it the third most populous MSA in the nation. The population is pro- western suburban areas. Communities to the north and northwest are ac- jected to grow 0.31% over the next five years to 9.80 million. Residents earn cessed via Interstates 90 and 94. North/south travel between the western an average household income of $87,508; more than 8% higher than the state suburbs is facilitated by Interstates 294 and 355. average of $80,916 and nearly 14% higher than the national average of $77,008.

MARKET OVERVIEW 13 CHICAGO MSA OVERVIEW

FORTUNE 500 COMPANIES IN THE CHICAGO MSA REVENUES RANK COMPANY SECTOR ($M) 19 Walgreens Boots Alliance Food and Drug Stores $103,444

24 Boeing Aerospace & Defense $96,114 41 Archer Daniels Midland Food Production $67,702

80 United Continental Holdings Airlines $37,864 81 Allstate Insurance: Property and Casualty (Stock) $35,653

94 Mondelez International Food Consumer Products $29,636 95 Exelon Utilities: Gas & Electric $29,447

109 McDonald’s Food Services $25,413 111 Sears Holdings General Merchandisers $25,146

122 US Foods Holding Wholesalers: Food and Grocery $23,128 123 AbbVie Pharmaceuticals $22,859

138 Abbott Laboratories Medical Products and Equipment $20,661 211 Illinois Tool Works Industrial Machinery $13,405

220 CDW Information Technology $12,989 255 R.R. Donnelley & Sons Publishing, Printing $11,257

281 Navistar International Motor Vehicles & Parts $10,140 FEB 2017 ESTIMATED EMPLOYED POPULATION BY OCCUPATION 283 Discover Financial Services Commercial Banks $10,002

285 W.W. Grainger Wholesalers: Diversified $9,973 286 Baxter International Medical Products and Equipment $9,968 2% 3% 315 Univar Wholesalers $8,982 4% Professional & Business Services 18% 334 Tenneco Motor Vehicles & Parts $8,209 5% Education & Health Services Retail & Wholesale Trade 369 LKQ Wholesalers: Diversified $7,193 377 Dover Industrial Machinery $7,029 7% Government 391 Anixter International Wholesalers: Diversified $6,596 Leisure & Hospitality 420 Baxalta Pharmaceuticals $6,149 Manufacturing 8% 16% 436 Jones Lang LaSalle Real Estate $5,966 Finance, Insurance & Real Estate 442 Old Republic International Insurance: Property and Casualty (Stock) $5,766 Transportation & Utilities 446 Packaging Corp. of America Packaging, Containers $5,742 10% Other Services 451 Motorola Solutions Network & Other Communications EQUIPMENT $5,695 Construction & Mining 456 Ingredion Food Production $5,621 15% 471 Arthur J. Gallagher Diversified Financials $5,392 12% Information 477 Essendant Wholesalers: Electronics and Office Equipment $5,363

496 Telephone & Data Systems Telecommunications $5,176

14 WENDY'S — CHICAGO, IL REGIONAL MAP

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EXECUTIVE SUMMARY 15 TRADE AREA DEMOGRAPHICS

DEMOGRAPHIC HIGHLIGHTS WITHIN 2 MILES

171,406 $78,076 36.1% 72,178 total population avg. HH income income $75K—$500K households

164,517 52.1% 32.2 $407,639 daytime employees college degrees average age avg. home value

MARKET DEMOGRAPHICS

POPULATION 1 MILE 2 MILES 3 MILES

2016 Population 34,578 171,406 439,664

2021 Projection 35,591 176,561 454,490

DAYTIME EMPLOYEES 26,131 164,517 614,268

INCOME

2016 Avg. HH Income $64,058 $78,076 $80,619

2016 Median HH Income $40,537 $49,462 $50,417

Households with Income >$75K 31.6% 36.1% 35.8%

2021 Projected Avg. HH Income $68,686 $84,305 $87,440

AVERAGE AGE 33.3 32.2 31.5

EDUCATIONAL ATTAINMENT

Associate’s Degree 5.6% 4.9% 4.5%

Bachelor’s Degree 24.6% 28.5% 26.0%

Master’s Degree 16.2% 18.7% 17.7%

Total Degrees 46.4% 52.1% 48.2%

HOUSEHOLDS 14,558 72,178 176,641

AVG. HOME VALUE $371,833 $407,639 $400,395

16 WENDY'S — CHICAGO, IL POPULATION CONCENTRATION MAP

2016 POPULATION

1 Mile 3 Mile 5 Mile 34,578 171,046 439,664

DAYTIME POPULATION

1 Mile 3 Mile 5 Mile 26,131 164,517 614,268

POPULATION PER SQUARE MILE—2016

Over 15,000 10,000 to 15,000 5,000 to 10,000 2,500 to 5,000 Less than 2,500

MARKET OVERVIEW 17 HOUSEHOLD INCOME MAP

2016 AVERAGE HOUSEHOLD INCOME

1 Mile 3 Mile 5 Mile $64,058 $78,076 $80,619

HOUSEHOLDS EARNING OVER $75,000 ANNUALLY

1 Mile 3 Mile 5 Mile 4,594 26,002 63,298

AVERAGE HOUSEHOLD INCOME—2016

Over $100,000 $80,000 to $100,000 $60,000 to $80,000 $40,000 to $60,000 Less than $40,000

18 WENDY'S — CHICAGO, IL POPULATION CONCENTRATION MAP

PROJECTED POPULATION GROWTH 2016—2021

1 Mile 3 Mile 5 Mile 1,013 5,155 14,826

PROJECTED POPULATION GROWTH 2016—2021 (%)

1 Mile 3 Mile 5 Mile 0.58% 0.59% 0.67%

HISTORICAL POPULATION GROWTH 2021—2016 (%)

1 Mile 3 Mile 5 Mile 0.80% 0.81% 0.94%

POPULATION GROWTH 2000—2016

Over 15% 10% to 15% 5% to 10% Up to 5% Loss or no Growth

MARKET OVERVIEW 19 REPRESENTATIVE PHOTO

FOR MORE INFORMATION PLEASE CONTACT:

Primary Contact: Financing Contact:

Michael Kaider CBRE Geoffrey Harris NNN Specialist 700 Commerce Drive +1 602 735 5615 First Vice President Suite 550 [email protected] +1 630 573 7015 Oak Brook, IL 60523 [email protected]