2019 CONSTRUCTION CEDAR PARK, TX AUSTIN MSA OFFERING MEMORANDUM Representative Photo TABLE OF CONTENTS 03 EXECUTIVE OVERVIEW 04 FINANCIAL OVERVIEW 08 TENANT OVERVIEW 09 AREA OVERVIEW LISTED BY: MICHAEL MORENO SENIOR ASSOCIATE DIR: (949) 432-4511 MOB: (818) 522-4497 [email protected] LIC NO: 01982943 (CA) RAHUL CHHAJED SENIOR ASSOCIATE DIR: (949) 432-4513 MOB: (818) 434-1106 [email protected] LIC NO: 01986299 (CA) ARON CLINE SVP & SENIOR DIRECTOR DIR: (949) 432-4509 MOB: (310) 632-0233 [email protected] LIC NO: 01904371 (CA) BROKER OF RECORD KYLE MATTHEWS LIC NO: 9005919 (TX) Representative Photo QUIKTRIP 2 CEDAR PARK, TX PROPERTY HIGHLIGHTS » Brand New Construction Corporate Sale Leaseback — EXECUTIVE OVERVIEW Brand new 15-year Absolute NNN Lease » High-Quality Development — 2019 Generation 3 QuikTrip Store » Scheduled Rental Increases — Lease features Ten (10) Five (5) QUIKTRIP Year Options with fixed rental increases that provide a major hedge 2019 CONSTRUCTION against inflation CEDAR PARK, TX » Ideal 1031 Exchange Property — Offers a potential investor a very passive net lease investment » Offered For Sale At Development Cost — The property is being sold at $5,060,302 development cost, not to make a profit, like most net leased investment opportunities. This provides an additional layer of security for a future landlord as LIST PRICE the tenant is not assigning a rent that is unsustainable to make a profit on the sale. » Accelerated Depreciation Opportunity - Subject property gives a future landlord the 5.50% ability to utilize accelerated depreciation to receive significantly higher after tax cash flow on this property than other net lease investments (See page 7) CAP RATE LOCATION HIGHLIGHTS » Top MSA (Austin, TX) — Corner location in the fastest-growing large city in the country in $278,316 Austin, TX. ANNUAL RENT » Top Austin Submarket — Cedar Park was recently ranked in as the #6 top city for families in the entire country » Robust Population Growth — Population within a 3-mile radius has grown 33.44% over the last 8 years and is expected to grow an additional 17.00% over the next 5 years » Affluent Demographics — Average Incomes within a 3-mile radius is $113,382 Matthews Real Estate Investment Services » Strategic Highway Intersection Location — The property has been strategically built on is pleased to offer to qualified investors the intersection of Whitestone (FM 1431) and New Hope Dr, two of the main thoroughfares the fee simple interest in a Brand New through Austin. state of the art convenience store leased » Ideally Positioned Highway Access — Property is situated on FM 1431 which becomes RM 1431 and serves as the main access point to Austin, Texas from rural areas of Central Texas. to QuikTrip Corporation. This brand new 15 » Store is situated on street that directly leads to city’s year Absolute NNN lease provides investors Major Retail Corridor Access Point — main retail corridor which features a lineup of national tenants such as Walmart, Target, long-term passive cash flow and ease of Costco, The Home Depot, HEB Grocery, Academy Sports, Hobby Lobby, McDonald’s, Wendy’s, ownership. and USPS, amongst many others. Located in one of the country’s top MSAs TENANT HIGHLIGHTS (Austin, TX), the subject property gives a » 12th Largest Convenience Store Chain — QuikTrip is one of the fastest growing convenience potential landlord the opportunity to own store chains in the country and currently operates 780+ stores across multiple states. real estate leased to one of the premier » 28th Largest Private Company — QuikTrip was recently ranked by Forbes as the 28th largest convenience store operators in the country. private company with over $11 Billion in Revenue. » Private Credit Rating of NAIC2 — Equivalent to S&P BBB+ (Investment Grade Credit) » Top Tier Retailer — First gas retailer to earn a “Top Tier” rating from GM, BMW, Honda, VW, Audi, & Toyota MATTHEWS™ 3 FINANCIAL OVERVIEW QUIKTRIP LEASE SUMMARY TENANT QuikTrip LEASE TYPE NNN TYPE OF OWNERSHIP Fee Simple PARCEL MAP LEASE GUARANTOR Corporate ROOF AND STRUCTURE Tenant Responsible ORIGINAL LEASE TERM (YEARS) 15 LEASE COMMENCMENT DATE At Close of Escrow RENT COMMENCMENT DATE At Close of Escrow LEASE EXPIRATION DATE 15 Years After Close of Escrow TERM REMAINING ON LEASE 15 Years W Whitestone Blvd ±31,000 VPD 25 Basis Point Increase On Cap Rate In INCREASES Each Option Period OPTIONS Ten (10) Five (5) Year Options ANNUALIZED OPERATING DATA LEASE COMMENCE MONTHLY RENT ANNUAL RENT CAP NNN Base Term - 2034 $23,193.00 $278,316.00 5.50% LEASE TYPE Option 1 - 2034-2039 $24,247.00 $290,964.00 5.75% 15 YEARS Option 2 - 2039-2044 $25,302.00 $303,624.00 6.00% Option 3 - 2044-2049 $26,356.00 $316,272.00 6.25% TERM REMAINING Option 4 - 2049-2054 $27,410.00 $328,920.00 6.50% Option 5 - 2054-2059 $28,464.00 $341,568.00 6.75% 2019 Option 6 - 2059-2064 $29,518.00 $354,216.00 7.00% CONSTRUCTION Option 7 - 2064-2069 $30,573.00 $366,876.00 7.25% Option 8 - 2069-2074 $31,627.00 $379,524.00 7.50% Option 9 - 2074-2079 $32,681.00 $392,172.00 7.75% Option 10 - 2079-2084 $33,735.00 $404,820.00 8.00% QUIKTRIP 4 CEDAR PARK, TX SURROUNDING AREA 5-MILE RADIUS POPULATION: HOUSEHOLDS: SCHOOLS: MEDICAL CENTERS: 145,192 48,008 20 19 Hur Industrial Park Grand Mesa at Crystal Falls Cedar Bark Park GI Zoning — Land Available Residential Development 5-acre fenced-in dog park with natural pond, dog showers, and more Homes range from $500K to $1.2 M MATTHEWS™ 5 ONE OF THE FIRST LOCATIONS IN THE AUSTIN AREA Mason Elementary School 1-MILE POPULATION W Whitestone Blvd ±31,000 VPD GROWTH 18.77% 2017-2022 29.92% 2010-2017 76.49% 2000-2010 QUIKTRIP 6 CEDAR PARK, TX ACCELERATED DEPRECIATION OPPORTUNITY This subject property offers a potential investor the opportunity to receive additional cash flow in comparison to other net leased assets through accelerated depreciation. Assuming a 45% income tax bracket an investor can expect to see over 35% in additional cash flow from this asset compared to a similar priced net leased asset that doesn’t offer accelerated depreciation. Representative Photo QUIKTRIP ACCELERATED DEPRECIATION BREAKDOWN Purchase Price $5,060,302.00 Depreciable Value (80%) $4,048,241.60 Cap Rate 5.50% NOI $278,316.00 15 Year Depreciation $269,882.77 Taxable Income $8,433.23 Income Taxes $3,794.95 Cash Flow After Taxes $274,521.05 INCOME TAXES: $4,054 CASH FLOW (AFTER TAXES): $293,048 *We encourage you to verify these numbers with your accountant. Matthews Real Estate Investment Services doesn't warranty the accuracy of these numbers. Representative Photo MATTHEWS™ 7 SITE PLAN CEDAR PARK, TX LOCATION ±4,840 SF GLA ±2.99 AC LOT SIZE 57 PARKING SPACES QUIKTRIP 8 CEDAR PARK, TX th The QuikTrip Corporation, more commonly known as QuikTrip (QT), is 12 LARGEST a Tulsa, Oklahoma–based chain of convenience stores that primarily CONVENIENCE RETAILER operates in the Midwestern, Southern, and Southeastern United States as well as in Arizona. ±780 The first QuikTrip was opened in 1958 in Tulsa by Burt Holmes and LOCATIONS Chester Cadieux. The company expanded outside of Oklahoma in 1968 and started selling gasoline in 1971. Chester's son, Chet, Jr., is the current CEO. ±22,534 Since 1991, QuikTrip has promoted its gasoline as "high quality" with EMPLOYEES an unconditional guarantee. In 2005, QuikTrip and Chevron were the first two retailers to earn a "Top Tier" rating from General Motors, BMW, Honda, Volkswagen, Audi, and Toyota. (The "Top Tier" rating exceeds the ±$11 Billion United States Environmental Protection Agency's standards for gasoline REVENUE additives.) WWW.QUIKTRIP.COM Top 20 2017 GROWTH CHAINS FORBES 2017 RANKINGS TEXAS EXPANSION • Quiktrip has announced plans to nearly double its presence in #33 Texas over the next few years AMERICA'S LARGEST PRIVATE COMPANIES • 100 new stores will be opened in the Austin and San Antonio metro areas, starting in Summer 2018 #165 • The decision to expand was brought on by a great deal of AMERICA'S BEST consumer enthusiasm and requests for the company to bring QT to the area EMPLOYERS • QT also has plans to expand the offering of the eco-friendly #132 E15 biofuel to 44 of its Dallas-Fort Worth locations BEST EMPLOYERS FOR NEW GRADS MATTHEWS™ 9 AREA OVERVIEW CEDAR PARK, TX Located approximately 16 miles northwest of the state capital, Cedar Park is a 2018 ACCOLADES major suburb of Austin and is home to over 76,800 residents. Since 2011, the city has seen a 30% growth in residents. It has also nearly doubled its property value in that time, from $3.5 Billion to nealry $7 Billion. #27 Cedar Park's strong economy is bolstered by a strong tech presence. Median MOST POPULAR MID-SIZE US CITY household income in the city is over $100,000, well above the state average. Median home value and employment also far out-pace the state and national averages. #77 SAFEST CITIES CEDAR PARK POPULATION GROWTH IN TEXAS 85,000 76,800 75,000 Currently the 13th #31 65,000 55,755 fastest-growing U.S. BEST SUBURBS 55,000 TO LIVE IN TEXAS TION 45,000 city, Cedar Park has 35,000 26,049 ranked consistently POPULA DEMOGRAPHICS 25,000 among the country's 15,000 5,161 POPULATION 1-MILE 3-MILE 5-MILE 5,000 Top 25 growing cities 3,474 2022 Projection 21,022 89,527 171,520 0 since 2011. 2017 Estimate 17,700 75,807 145,192 1980 1990 2000 2010 2017 2010 Census 13,624 57,517 104,669 YEAR Growth 2017-2022 18.77% 18.10% 18.13% Growth 2010-2017 29.92% 31.80% 38.72% HOUSEHOLDS 1-MILE 3-MILES 5-MILES 2022 Projection 6,291 27,314 54,009 2017 Estimate 5,599 24,274 48,008 2010 Census 4,594 19,666 36,550 Growth 2017-2022 12.36% 12.52% 12.50% Growth 2010-2017 21.88% 23.44% 31.35% INCOME 1-MILE 3-MILES 5-MILES Average Household $92,440 $103,743 $104,622 Income Median Household $85,319 $91,470 $91,309 Income QUIKTRIP 10 CEDAR PARK, TX CEDAR PARK RECENT DEVELOPMENTS THE PARKE FIREFLY AEROSPACE VOLTABOX The Parke is Cedar Park's most recent retail Firefly recently moved into a 30,000+ SF In 2015, Voltabox- a subsidiary of a tier 1 development, with over 400,000 SF of retail.