INVESTMENT OPPORTUNITY ** FUTURE REMODEL PLANNED ** DEL TACO (CORPORATE LEASE) NEW 15-YEAR LEASE EXTENSION ABSOLUTE NNN LEASE PALM SPRINGS, CA OFFERED AT: $2,880,000 | 4.00% CAP OFFERED AT $2,027,000 | 6% CAP Actual Property EXECUTIVE SUMMARY PROPERTY INFORMATION TENANT OVERVIEW AREA OVERVIEW ** FUTURE REMODEL PLANNED ** TABLE OF CONTENTS EXECUTIVE SUMMARY 4 Executive Summary 5 Investment Highlights 6 Lease Summary & Rent Overview 7 Lease Abstract PROPERTY INFORMATION 9 Location Maps 10 Property Photos 11 Neighboring Tenants 12 Aerials TENANT OVERVIEW 19 About Del Taco AREA OVERVIEW 21 Palm Springs Overview 22 The Coachella Valley 23 Riverside County Overview 24 Demographics Confidentiality Agreement & Disclosures EXCLUSIVELY LISTED BY RYAN BARR RYAN BENNETT Principal Principal 760.448.2446 760.448.2449 [email protected] [email protected] TODD WALLER DRE Lic#01338994 DRE Lic#01826517 Principal 608.327.4001 [email protected] Actual Property DEL TACO | Palm Springs, CA | 2 EXECUTIVE SUMMARY DEL TACO Palm Springs, CA DEL TACO | Palm Springs, CA | 3 Actual Property EXECUTIVE SUMMARY PROPERTY INFORMATION TENANT OVERVIEW AREA OVERVIEW • Offering Summary • Investment Highlights Lease Summary & Rent Schedule Lease Abstract -- OFFERING SUMMARY -- RAQUET CLUB INVESTMENT HIGHLIGHTS PROPERTY OVERVIEW GARDEN VILLAS Offering Price: $2,880,000 Address: 2444 N Palm Canyon Dr Palm Springs, CA 92262 Net Operating Income: $115,200 Property Size: 2,251 SF Cap Rate: 4.00% Land Size: 0.50 Acre Price/SF: $1,279 Ownership: Fee Simple Lease Type: Absolute NNN Lease Year Built: 1982 (Future Remodel) Lee & Associates is pleased to exclusively offer for sale the opportunity to acquire the fee simple interest (land & building) in a Del Taco investment property located in the Palm Springs, CA (the “Property”). Originally built in 1982 as a build to suit for Naugles, the Property is currently leased by Del Taco Corporate on a long term lease that consists of a 2,251-square-foot retail NORTHGATE 111 43 @RACQUET building with a drive-thru lane and outdoor patio seating. SHOPPING CENTER CLUB The subject property is leased to Del Taco (corporate), an American quick service restaurant chain specializing in American- style Mexican cuisine as well as American foods such as burgers, fries, and shakes. The chain serves over 3 million visitors each week at its approximately 600 restaurants across 15 states and reports sales revenues of roughly $513 million (2019). Del Taco (formerly Naugles) has operated at this location since 1982 and has executed multiple lease extensions, the most recent a 15-year extension in October 2020 that commences January 1, 2021. The Absolute NNN lease features 10% rent increases every five years in the Primary Term and in the Option Periods. 111 The tenant has committed to completing a full remodel of the building at their own expense to meet the latest Del Taco prototype façade. The building ideally has a drive through lane and window for pull up service helping to insulate the tenant W RACQUET CLUB RD (8,100 CPD) from business closures due to COVID-19. Drive through buildings along CA Highway 111 are extremely hard to replicate due COMBINED to moratoriums in place within the Coachella Valley. 24,000 CPD The subject property is ideally located at the intersection of N. Palm Canyon Dr/Hwy 111 & W. Racquet Club Rd., providing N PALM CYN DR (16,000 CPD) excellent visibility and signage to over 24,000 cars per day and providing for easy in/out access via the drive thru. The N. Palm Canyon Dr./Hwy 111 corridor is the main travel route between Interstate 10 and downtown Palm Springs. It’s home to the city’s core shopping district which features vintage boutiques, numerous hotels, and restaurants. It’s also home to services such as the Desert Regional Medical Center, a 385-bed regional medical center with emergency services and the only designated Level II trauma center in the Coachella Valley. The subject property is located within the iconic City of Palm Springs, approximately 107 miles east of Los Angeles and 125 miles northeast from San Diego. Known for its hot springs, golf courses, trendy hotels and spas, it’s a popular spot for Southern California residents looking for a weekend getaway, as well as a popular destination for snowbirds - people who live in cold climates and seek out warm weather during the winter. The permanent population is estimated to be 48,518, with 111 another 27,000 to 30,000 people arriving in the winter, bringing the total population to almost 80,000 residents during the THE INN AT PALM winter season. SPRINGS With an estimated 12 million visitors on average, tourism is the one contributor to the local economy. employing over 19,000 people. Tourism generates over $4 billion per year, bringing in sales tax of approximately $486 million. Additionally, with more golf courses than any other region in the state, the Coachella Valley is the most popular golf vacation destination in California. Housing, commercial, and renewable power developments are on the rise in Coachella Valley, increasing the economic impact from the construction industry. Palm Springs is currently experiencing a housing boom due to low interest rates and a strong Actual Property demand to relocate from more urban areas. Most homes are receiving multiple offers, and often selling over asking prices. DEL TACO | Palm Springs, CA | 4 EXECUTIVE SUMMARY PROPERTY INFORMATION TENANT OVERVIEW AREA OVERVIEW Offering Summary • Investment Highlights • Lease Summary & Rent Schedule Lease Abstract -- INVESTMENT HIGHLIGHTS -- DEL TACO CORPORATE LEASED INVESTMENT OPPORTUNITY | ICONIC CITY OF PALM SIGNALIZED INTERSECTION OF N. PALM CANYON DR./HWY 111 & W. RACQUET CLUB RD. SPRINGS | 15-YEAR ABSOLUTE TRIPLE-NET (NNN) LEASE | FUTURE BUILDING REMODEL AT (24,000+ CPD) | MAIN TRAVEL ARTERY IN/OUT OF DOWNTOWN PALM SPRINGS | QUICK THE TENANT’S EXPENSE ACCESS TO INTERSTATE 10 • Highly Desirable Corporate Del Taco Investment in Iconic City of Palm Springs • Strategically located near the signalized Intersection of N. Palm Canyon Dr./Hwy 111 & W. • 2nd Largest Mexican QSR in the U.S with 600 Locations Across 15 States Racquet Club Rd. (combined 24,000+ CPD) • Revenues of $513M (2019) • Excellent visibility and signage along major travel corridor in/out of downtown Palm • Del Taco has committed to a full remodel of the Building to their Latest Prototype Façade Springs from Interstate 10 • COVID-19 Resilience due to Drive Through & Outdoor Patio Seating • Multiple entrances from N. Palm Canyon Dr. & W. Racquet Club Rd. SUCCESSFUL 38-YEAR OPERATING HISTORY | PROVEN LOCATION | ABSOLUTE NNN LEASE | N. PALM CANYON DR. HOME TO PALM SPRING’S CORE SHOPPING DISTRICT | 10 MINUTES 10% RENT BUMPS IN PRIMARY TERM & OPTIONS TO FAMOUS PALM SPRINGS AERIAL TRAMWAY | PROXIMITY TO HOTELS, RESTAURANTS, • Del Taco (formerly a Naugles) has successfully operated at this location since 1982 BOUTIQUES | BLOCKS FROM DESERT REGIONAL MEDICAL CENTER • Recent 15-Year Lease Extension (Oct 2020) with 10% Rent Increases Every 5 Years • N. Palm Canyon Drive is home to Palm Spring’s Main Shopping District • Multiple Lease Extensions Reflect Strong Commitment to Site • Home to Popular Boutiques, Galleries, Restaurants, and Hotels • Absolute NNN Lease with Zero landlord responsibilities • Subject property is just 10 minutes from famous Palm Springs Aerial Tramway, which sees • 10% Rent Escalations Every 5 Years inclusive of Option Periods an average 1,500-2,000 riders on normal days and 3,500 people per day during the holidays • Only 1 Mile from Desert Regional Medical Center, a 385-bed regional medical center with FUTURE NEW RETAIL SURROUNDING SITE | ADJACENT TO ART COLONY: 10 ACRES OF PRIME emergency services (Center is the only designated Level II trauma center in the Coachella INFILL LAND | PROPOSED HIGH DENSITY RESIDENTIAL DEVELOPMENT Valley) • Future Retail Development Surrounding the Subject Property (Contact Broker for Details) • Adjacent to Art Colony, one of the last sizable fee-land infill properties remaining in Palm LOCATED IN PALM SPRINGS | POPULAR GETAWAY FOR SOUTHERN CALIFORNIA RESIDENTS Springs (+/- 10 Acres) | POPULATION NEARLY DOUBLES IN WINTER | ESTIMATED 12M VISITORS PER YEAR | MOST • Proposed High Density Residential Development (Residential Attached, Multi-Family, POPULAR GOLF DESTINATION IN CALIFORNIA | INCREASING HOUSING DEMAND Senior, or Hospitality) • Located only 107 Miles from Los Angeles, 125 Miles from San Diego • Popular destination for golf, recreation, music, art, and film • Ideal 2nd home market for part-time residents escaping “snow country” • Most popular golf destination in California • Strong housing market during Covid-19 has brought more tax & sale revenues to the area • Housing, commercial and renewable power developments on the rise in Coachella Valley DEL TACO | Palm Springs, CA | 5 EXECUTIVE SUMMARY PROPERTY INFORMATION TENANT OVERVIEW AREA OVERVIEW Offering Summary Investment Highlights • Lease Summary & Rent Schedule • Lease Abstract -- LEASE SUMMARY -- -- RENT SCHEDULE -- LEASE INFORMATION LEASE TERM TENANT: Del Taco LLC (Corporate) TERM START DATE END DATE NOI/YR NOI/MO NOI/SF/YR BUILDING SIZE: 2,251 SF Years 1 - 5 1/1/2021 12/31/2025 $115,200.00 $9,600.00 $51.17 LOT SIZE: 0.50 Acre Years 6-10 1/1/2026 12/31/2030 $126,720.00 $10,560.00 $56.30 RENT COMMENCEMENT: January 1, 2021 Years 11 - 15 1/1/2031 12/31/2035 $139,392.00 $11,616.00 $61.92 LEASE EXPIRATION: December 31, 2035 OPTION PERIODS - (2) 5-YEAR OPTIONS BASE TERM: 15 Years (New Extension - Commences 1/1/2021) Option 1 1/1/2036 12/31/2040 $153,331.20 $12,777.60 $68.12 REMAINING LEASE TERM: 15 Years Option 2 1/1/2041 12/31/2045 $168,664.32 $14,055.36 $74.93 OPTIONS TO RENEW: (2) 5-Year Options RENT INCREASES: 10% Increases Every 5 Years in Primary Term & Each Option LEASE TYPE: Absolute Triple-Net (NNN) Lease LANDLORD RESPONSIBILITIES: None ANNUAL RENT: $115,200 DEL TACO | Palm Springs, CA | 6 EXECUTIVE SUMMARY PROPERTY INFORMATION TENANT OVERVIEW AREA OVERVIEW Offering Summary Investment Highlights Lease Summary & Rent Schedule • Lease Abstract • -- LEASE ABSTRACT -- Utilities: 6.