NNN OUTPARCEL LEASED TO JASON’S DELI WITH DRIVE-THRU IN GROWING TEXAS SUBMARKET ACTUAL LOCATION 3260 FM 365 | Port Arthur, TX Offering Memorandum Investment Summary 03 Investment Highlights 05 Tenant Overview 06 Financial Analysis 08 Location Overview 10 Market Overview 13 Contacts 15 MARKETING ADVISORS DEBT ADVISOR MARC MANDEL STEVE SCHRENK JOHN INDELLI MATTHEW PUTTERMAN Managing Director Director Director Director 484.532.4212 484.532.4213 713.852.3407 713.852.3524 [email protected] [email protected] [email protected] [email protected] Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and JLL, its officers, directors, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. © 2020 Jones Lang LaSalle IP, Inc. All rights reserved. Investment Summary Jason’s Deli | Port Arthur, TX 3 Investment Summary Jason’s Deli | Port Arthur, TX JLL is pleased to exclusively offer the opportunity to acquire the fee simple interest in a single tenant, NNN ground lease p roperty corporately leased to Deli Management, Inc. (the “Property”, dba Jason’s Deli), in Port Arthur, TX. The Tenant, which is headquartered just 16 miles awa y in Beaumont, TX, recently extended their current term – they now have 11+ years remaining on their original, 15-year term. The lease features attractive, 10% rental increases nearly every 5 years throughout the term and renewal periods. The Property is situated on a 0.86-acre parcel that sits alongside E Farm to Market Rd (FM) 365 – a main artery in the area that carries more than 31,000 VPD. This strategic location combined with the available drive-thru feature, will bode extremely well for this Jason’s Deli, which is more than 10 miles away from its next closest location. Consumer traffic in and around the premises is extremely dense in large part due to the close proximity of US-69. US-69 is a 345-mile corridor that carries more than 58,000 VPD and connects Port Arthur to major cities such as Beaumont, Lufkin, Tyler and Denison. The region is also heav ily supported by I-10, which provides east-west access to Houston, TX and Lake Charles, TX, respectively. These transportation avenues, among others, allow t he Central Mall to draw from a surrounding trade area that consists of more than 330,000 residents within a 20-mile radius and an average household income exceeding $72,000. Jason’s Deli was founded in 1976 and now operates 275 stores across 28 states. The company serves an array of sandwiches, pas tas, salads and soups to customers who are on the go and value healthy eating options. In fact, Jason’s Deli was the first major restaurant concept in the U.S. to ban artificial trans fat and eliminate high-fructose corn syrup. In a recent report published by QSR Magazine, Jason’s Deli ranked #7 among the top 50 QSRs i n terms of 2018 average sales per unit ($2,520,000). PROPERTY SUMMARY Address 3260 FM 365, Port Arthur, TX 77642 Price $1,440,000 Cap Rate 6.00% NOI $86,625 Lease Type NNN Ground Lease Building Size 5,500 SF Parcel Size 0.86 Acres Year Built 2014 Tenant Deli Management, Inc. Remaining Term 11+ Years (Expiration 7/31/2031) One (1), Three (3) Year Option & Two (2), Five Renewal Options (5) Year Options Rental Increases 10.00% Every Five (5) Years, Except Option 1 © 2020 Jones Lang LaSalle IP, Inc. All rights reserved. 4 Jason’s Deli recently extended their lease and now The Property is conveniently situated along FM has 11+ years remaining on its NNN Ground Lease; 365, a main artery in the area that features more the Lease features attractive, 10% rental increases than 31,000 VPD, which should bode well for nearly every 5 years, inclusive of the option periods Jason’s Deli’s drive-thru feature The Central Mall features an anchor lineup of Target, There is a strong selection of nationally recognized Dillard’s, JCPenney, and Bed Bath & Beyond – all of retailers surrounding the mall such as Lowe’s, Best which demand a large, active consumer base that Buy, McDonald’s and Chick-fil-A, further driving will increase consumer traffic within the mall consumers to the area parking lot and the surrounding roadways Port Arthur, TX is a member of Jefferson County Jason’s Deli is headquartered in Beaumont, TX, which and the greater Beaumont-Port Arthur MSA; The is just 16 miles away from the Property; the company metro has over 419,000 residents was ranked #7 among the top 50 QSRs in terms of average sales per unit in 2018 (QSR Magazine) 5 Jason’s Deli | Port Arthur, TX 6 Tenant Overview Jason’s Deli | Port Arthur, TX Jason’s Deli Overview Jason’s Deli was founded in 1976 by Joe Tortorice Jr. Tortorice Jr. opened the first location in Beaumont, TX, which is just 16 miles away from the Subject Property. The fast-casual restaurant chain has grown nationally since and now operates 275 locations across 28 states. Family owned and community focused, Jason’s Deli takes pride in both customer service and the quality of their ingredients. Their menu consists of sandwiches, wraps, pastas, soups, Corporate Overview salads, desserts and more. They also offer kids menus, as well as catering options. All their Ownership Private dining options are made without any trans fats, processed MSG, high-fructose corn syrup, dyes, artificial flavors, nor artificial colors. # of Locations 275 Jason’s Deli was recently included in QSR Magazine’s report of the 2019 Top 50 Fast Food US Headquarters Beaumont, TX Chains in America. According to the report, the company accomplished sales of nearly $655 million in 2018. Further, they were ranked #7 in terms of 2018 average sales per unit Company Website jasonsdeli.com ($2,520,000). © 2019 Jones Lang LaSalle IP, Inc. All rights reserved. Financial Analysis Jason’s Deli | Port Arthur, TX 8 Financial Analysis Jason’s Deli | Port Arthur, TX $1,440,000 6.00% Lease Abstract Asking Price Cap Rate LEASE DETAIL TENANT RESPONSIBILITY DETAIL Address 3260 FM 365, Port Arthur, TX 77642 Tenant, at its sole cost and expense, shall keep all parts of the Premises not required to be maintained by Landlord under Article 8 in good order and repair. Tenant Deli Management, Inc. Maintenance The foregoing will obligate Tenant to repair, maintain and replace, without Parcel Size 0.86 Acres & Repairs limitation, the foundations, roof, walls, storefronts, all entrances and vestibules, Building Size 5,500 SF partitions, the glass in all doors and windows of the Premises, all interior portions of the Premises, and all other responsibilities outlined in the Lease. Year Built 2014 Tenant shall keep in force the following insurance, subject to specific terms Annual Rent $86,625 outlined in the Lease: (i) Commercial General Liability Insurance, (ii) Business Auto Liability Insurance, (iii) Workers Compensation Insurance, (iv) in the event Rent / SF $15.75 Insurance Tenant proposes to sell beer, wine or liquor, Liquor Liability or Dram Shop Lease Type NNN Ground Lease Insurance, (v) Umbrella Excess Liability insurance, (vi) and "All Risk" property Roof & Structure Tenant Responsibility insurance Rent Commencement 7/28/2014 Tenant shall pay to Landlord the Taxes on the Premises. Tenant shall also pay before due all taxes, assessments, license fees and public charges imposed on Lease Expiration 7/31/2031 Taxes its interest in this Lease, business operation, trade fixtures and other personal Lease Term Remaining 11+ Years property, and tenant improvements on the Premises. One (1), Three (3) Year Option & Two (2), Five (5) All fees and charges for electricity, water, sewer, gas and all other utility services Remaining Options Year Options used or consumed in the Premises or in providing heating and air-conditioning to Utilities the Premises, including all sales and other taxes or fees applicable to the sale or RENT SCHEDULE supply of such utilities, will be paid promptly by Tenant directly to the entity collective the same. Period Start Date End Date Annual Rent % Increase Tenant shall pay Landlord Tenant's share of Operating Costs as additional rent Additional under this Lease. Tenant's initial share will be equal to the product obtained by Current Term (Years 1-5) 7/28/2014 7/31/2019 $78,750 Rent multiplying (a) $1.50 by (b) the number of square feet in the Building. Each year, Current Term (Years 6-10) 8/1/2019 7/31/2024 $86,625 10.00% the Tenant's share of Operating Costs shall be increased by 2.50%. Current Term (Years 11-15) 8/1/2024 7/31/2029 $95,288 10.00% LANDLORD RESPONSIBILITY DETAIL Current Term (Years 16-17) 8/1/2029 7/31/2031 $104,816 10.00% Landlord's responsibilities as to the parking areas on the Premises is limited to Option Term 1 (Years 18-20) 8/1/2031 7/31/2034 $104,816 0.00% Maintenance routine sweeping, crack repairs and the like, but in no event will Landlord be and Repairs Option Term 2 (Years 21-25) 8/1/2034 7/31/2039 $115,298 10.00% responsible for repaving the parking areas on the Premises.