OFFERING MEMORANDUM Actual Location Doug Aronson Broker of Record Krystal Senior Managing Director Steven R. Reisig SLN Capital Markets SRSA Commercial Real Estate, Inc. License # 20846 1045 ELLIS AVENUE 757.282.6510 (Virginia) | 561.220.5750 (Florida) JACKSON, MS 39209 [email protected] CONTACT US CONFIDENTIALITY OFFERING & DISCLAIMER STATEMENT PROCEDURE This confidential memorandum contains selected information pertaining to the Offers should be submitted in the form of a standard non-binding Letter of Intent business and affairs of the Property and has been prepared by S.L. Nusbaum Realty and must specify the following: Co. primarily from information supplied by the Owner and sources deemed reliable, but not guaranteed. It does not propose to be all-inclusive, nor does it contain all the . Price (Call for pricing guidance) information which a prospective purchaser may require or desire. Neither the Owner, . Length of Inspection Period nor any of its officers, directors, employees or agents, nor S.L. Nusbaum Realty Co. Lengthf o Closing Period makes any representation or warranty, expressed or implied, as to the accuracy or completeness of this confidential memorandum or any of its contents, and no legal . Amount of earnest money deposit at execution of a Purchase and Sale Contract liability is assumed or is to be implied by any of the aforementioned with respect . Amountf o additional deposit upon expiration of Inspection Period thereto. Prospective offers are advised to verify the information independently. The Owner reserves the right to change the price or any information in this memorandum, or to withdraw the Property from the market at any time, without notice. This Doug Aronson Broker of Record confidential memorandum shall not be deemed an indication of the state of affairs of Senior Managing Director Steven R. Reisig the Property or the Owner since the date of preparation of this memorandum. By SLN Capital Markets SRSA Commercial Real Estate, Inc. your receipt of this confidential memorandum, you agree that the information License # 20846 contained herein is of confidential nature and you will not disclose this memorandum 757.282.6510 (Virginia) | 561.220.5750 (Florida) or any part of its contents to any other person, firm or entity without prior [email protected] authorization from S.L Nusbaum Realty Co. S.L. NUSBAUM Realty Co. 1700 Wells Fargo Center 440 Monticello Avenue Norfolk, VA 23510 757.627.8611 | slnusbaum.com TABLE OF CONTENTS ABOUT THE ASSET FINANCIAL SUMMARY TENANT OVERVIEW PAGE PAGE PAGE 4 5-6 7-8 MARKET OVERVIEW AERIAL MAPS DEMOGRAPHICS PAGE PAGE PAGE 9 10-11 12 ABOUT SLN THE TEAM PAGE PAGE 13 14 PRICE: $667,000 ABOUT THE ASSET CAP RATE: 6.00% SLN Capital Markets, a division of S.L. Nusbaum Realty Co., is pleased to exclusively market for sale the property leased to Krystal located at 1045 Ellis Avenue, Jackson, MS. The Krystal restaurant, which includes a drive-thru, is an approximately 2,051 SF building sitting on .45 acres. It is located one mile off I-20 and is in walking distance to Westland Plaza shopping mall, Provine High School, Hardy Middle School and several residential neighborhoods. This Krystal property has approximately 10 years of initial term left on its lease along with six, 5-year options. 4 PRICE: $667,000 FINANCIAL SUMMARY CAP RATE: 6.00% Net Operating Income (NOI) $40,000 Land Area 0.45 AC Building Size 2,051 SF Year Built 1984 (renovated in 2015) Tenant Name Krystal Guarantor Corporate Ownership Type Fee Simple Lease Type NNN INVESTMENT HIGHLIGHTS Landlord Responsibilities None > Low price point deal Rent Commencement October 16, 2015 > 10-year NNN lease Lease Expiration May 31, 2030 > No landlord responsibilities > High-volume store Increases See Page 6 > Located near neighborhoods and schools Options Six (6), 5-Year > One of the longest-running restaurant chains in America 5 PRICE: $667,000 FINANCIAL SUMMARY CAP RATE: 6.00% RENT SCHEDULE LEASE YEAR ANNUAL RENT MONTHLY RENT 06.01.20 – 05.31.23 $40,000.00 $3,333.33 06.01.23 – 05.31.24 $40,800.00 $3,400.00 06.01.24 – 05.31.25 $41,616.00 $3,468.00 06.01.25 – 05.31.26 $47,575.31 $3,964.61 06.01.26 – 05.31.27 $48,051.06 $4,004.26 06.01.27 – 05.31.28 $48,531.57 $4,044.30 06.01.28 – 05.31.29 $49,016.88 $4,084.74 06.01.29 – 05.31.30 $49,507.06 $4,125.59 Options Tenant has six (6) 5-year options with the annual rent increasing by 1% over the previous year’s rent. 6 TENANT OVERVIEW Krystal is an iconic American fast-food restaurant chain headquartered outside Atlanta, Georgia. It is known for its small square hamburgers with steamed onions. In 2020, Fortress Investment Group, a New York based private equity firm with approximately $43.5 billion of assets under management, purchased the Krystal chain. There are approximately 300 units in the southeast including Mississippi, Kentucky, South Carolina, Georgia, Florida, Arkansas, Alabama, Louisiana and Tennessee. 7 TENANT OVERVIEW Krystal Announces New Ownership The Original Quick-Service Restaurant Chain Reveals New Equity Partners ATLANTA - May 22, 2020: Krystal Restaurants LLC is pleased to announce that it has been acquired by funds managed by affiliates of Fortress Investment Group LLC (”Fortress”) and its operating partner, Golden Child Holdings, effective Monday, May 18, 2020. “The new partnership is excited to continue growing the brand, maintaining an overriding focus on enhancing customer experience,” said Angela Johnson, VP of Marketing for Krystal Restaurants, LLC. “Even during this unusual time, our iconic brand continues to perform well, and we see exceptional opportunities for growth looking ahead.” Krystal filed for bankruptcy in January 2020, and as part of the reorganization process, the company was marketed for sale, with Fortress emerging as the successful acquirer of the business. Both Fortress and Golden Child have strong ties to Atlanta, the South and the Krystal brand. Founded in 1998, Fortress Investment Group is a global investment manager with offices in Atlanta and approximately $43.5 billion of assets under management (as of Dec. 31, 2019). Golden Child is an active investor and manager in the restaurant sector and has extensive turnaround experience. Effective immediately, Thomas Stager, will take over operations as President. Mr. Stager is a tenured restaurant leader and operator who has led successful turnaround assignments in both franchisee and franchisor sectors with large brands including Pizza Hut and Arby’s. He replaces former President and COO Tim Ward, who along with former CFO Bruce Vermilyea, are no longer with the Company. More company plans will be announced in the near future. About Krystal Restaurants LLC Founded in Chattanooga, Tennessee, in 1932, Krystal Restaurants LLC is the original quick-service restaurant chain in the South and was selected to USA Today’s 2019 Top-10 Best Regional Fast-Food List. Krystal hamburgers are still served fresh and hot off the grill on the iconic square bun at 300 restaurants in 10 states. Krystal’s Atlanta-based Restaurant Support Center serves a team of over 6,000 employees. For more information, visit krystal.com 8 MARKET OVERVIEW MARKET OVERVIEW Jackson is the capital and most populous city of Mississippi with an estimated metro population of 595,000 in 2019. The city is nicknamed the “City with Soul” because of its rich history and southern culture steeped in the arts with plentiful musicians, painters and photographers. It is named after Andrew Jackson, the 7th president of the United States. MSA Virginia Beach Jackson is the anchor for the Jackson, Mississippi Metropolitan Statistical Area. It is the state's 2nd largest metropolitan area, because four counties in northern Mississippi are part of the Memphis metropolitan area. With a 2019 population estimated at 595,000, metropolitan Jackson is home to about one-fifth of Mississippi's population. LOCATION DISTANCE DRIVING TIME Hattiesburg, MS 93 Miles 1.5 Hours New Orleans, LA 186 Miles 2.5 Hours Memphis, TN 212 Miles 3 Hours 9 AERIAL MAP CAMELOT APARTMENTS (287 UNITS) ROBINSON ROAD ROAD ROBINSON WESTLAND PLAZA V - 7,000 VPD SITE HARDY MIDDLE SCHOOL ELLIS AVENUE - 13,000 VPD THE VINTAGE APARTMENTS (175 UNITS) PROVINE HIGH SCHOOL 10 AERIAL MAP THE VINTAGE APARTMENTS (175 UNITS) CAMELOT APARTMENTS (287 UNITS) WESTLAND PLAZA ROBINSON ROAD – 7,000 VPD V SITE 1.7 MILES = 6 MINUTE DRIVE JACKSON STATE UNIVERSITY JOHN R. LYNCH STREET (5,300 STUDENTS) 11 DEMOGRAPHICS POPULATION 1 MILE 3 MILE 5 MILE 2020 Total 9,586 57,296 114,061 2025 Projected Total 9,189 55,203 110,369 HOUSEHOLDS 1 MILE 3 MILE 5 MILE 2020 Total 3,657 19,387 40,941 2025 Projected Total 3,517 18,654 39,662 AVERAGE HOUSEHOLD INCOME 1 MILE 3 MILE 5 MILE 2020 Total $38,718 $38,319 $46,003 2025 Projected Total $41,940 $41,268 $50,185 12 SLN CAPITAL MARKETS ABOUT SLN CAPITAL MARKETS SLN Capital Markets, a division of S.L. Nusbaum Realty Co., specializes in the sale and S.L. NUSBAUM REALTY CO. SERVICE LINES purchase of single and multi-tenant net leased (NNN) properties, primarily leased long term to national and creditworthy tenants. We work with both private and institutional investors in the acquisition and disposition of their assets and advise and counsel Real Estate Development Leasing Accounting accordingly based on their needs. We employ the latest technology and provide up-to-date research to effectively market properties both nationally and internationally. Mixed-Use Development Retail/Shopping Centers Corporate Accounting and Payroll Commercial Development Office/Industrial Third Party Management/Accounting SLN Capital Markets is a one-stop source for: Multifamily Development Multifamily Third Party Accounting/Bookkeeping .