www.orioncp.com 12505 & 12515 Aurora Avenue N., Seattle, WA 98133 JACK IN THE BOX/KRISPY KREME Ground Lease Investment Scott Clements David Butler P 206.445.7664 P 206.445.7665 C 206.793.1074 C 425.890.7919 E [email protected] E [email protected] 12505 & 12515 Aurora Ave N., Seattle, WA 98133 TABLE OF CONTENTS EXECUTIVE SUMMARY/investment HIGHLIGHts 1 SITE overvieW 2 3 TENANT overvieW 4 vaLuation ANALysis 5 MARKET overvieW 6 DEMOGRAPHICS The information contained herein was obtained from sources believed reliable, however, ORION Commercial Partners LLC makes no guarantees, warranties, or representations as to the completeness or accuracy thereof. The presentation of this property is submitted subject to errors, omissions, change of price or conditions prior to sale or lease, or withdrawal without notice. Jack in the Box/Krispy Kreme | ORION Commercial Partners | 2 EXECUTIVE summary Investment HIGHLIGHts Offering Price $4,650,000 Cap Rate 5.44% NOI $253,125 Total Building Area 6,974 SF Total Land Area 61,195 SF Price Per Square Foot $75.98 Year Built 2003 THE OFFERING ORION Commercial Partners is excited to offer for sale the Jack in the Box and Krispy Kreme Absolute NNN Ground Lease Investment located at 12505 Aurora Avenue N. in Seattle, WA. Built in 2003 on a corner pad site fronting Lowe’s, this 2-tenant ground lease benefits from strong traffic counts and high density just minutes from downtown Seattle. This rare “in-city” opportunity provides the passive investor with stabilized upside via rental increases every five years with no landlord responsibilities. Krispy Kreme is midway through its first of three renewal options while Jack in the Box has approximately eight years remaining in their initial 20-year lease term. Jack in the Box/Krispy Kreme | ORION Commercial Partners | 3 investment HIGHLIGHts » Absolute NNN Ground Lease Both Jack in the Box and Krispy Kreme are responsible for any and all expenses associated with the property. Buildings shall become the property of the owner upon expiration of the leases and all subsequent options. » Tenant Strength Founded in 1951, Jack in the Box, Inc. operates over 2,200 quick serve restaurants in 21 states and Guam. In 2014 the sales were over $1.49 billion. Krispy Kreme Doughnuts, Inc. operates over 1,000 stores in the U.S. and Canada. In 2014 the sales were over $460 million. KremeWorks Washington, LLC operates 10 locations in Washington, Oregon, Hawaii and British Columbia. » Strong Demographics Located within the Seattle city limits, there are over 27,000 people living within 1 mile of the subject property and over 148,000 people within a 3 mile radius. Additionally this property falls within a major retail corridor with over 45,000 VPD passing by the subject property. Jack in the Box/Krispy Kreme | ORION Commercial Partners | 4 SITE OvervieW: PHotos Jack in the Box/Krispy Kreme | ORION Commercial Partners | 5 SITE overvieW: parceL MAP Aurora Ave N Ave Aurora 36,869 VPD 36,869 Parcel # 192604-9432 9,046 VPD N 125th St Jack in the Box/Krispy Kreme | ORION Commercial Partners | 6 SITE overvieW: REtaiL AERIAL Lake Washington Jackson Park Golf Northgate Course Mall Haller Lake Ingraham Northwest High School Hospital N 115th St N 130th St N 125th St 125th N Stone Ave N 9,046 VPD 9,046 36,869 VPD Aurora Ave N Linden Ave N 17,461 VPD SUBJECT Linden Ave N PROPERTY Bitter Lake Jack in the Box/Krispy Kreme | ORION Commercial Partners | 7 TENANT overvieW ABOUT JacK IN THE box Founded in 1951, Jack in the Box Inc. is a restaurant company that operates Property Name Jack in the Box and franchises Jack in the Box® restaurants and—through a wholly owned Property Address 12505 Aurora Avenue N., Seattle, WA subsidiary—Qdoba Mexican Grill® restaurants in a combined 47 states plus the District of Columbia and Canada. Property Type Ground Lease Quick Serve Restaurant Rentable Square Feet 2,674 SF Jack in the Box is among the nation’s leading fast-food hamburger chains, Tenant Trade Name Jack in the Box, Inc. with more than 2,200 quick-serve restaurants in 21 states and Guam. As the first major hamburger chain to develop and expand the concept of drive-thru Ownership Public dining, Jack in the Box has always emphasized on-the-go convenience, with Tenant Corporate Store approximately 85 percent of the half-billion guests served annually buying food at the drive-thru or for take-out. In addition to drive-thru windows, most 2014 Annual Revenue 1.49 Billion restaurants have indoor dining areas and are open 18-24 hours a day. Stock Symbol JACK Board NASDAQ Jack in the Box pioneered a number of firsts in the quick-serve industry, including menu items that are now staples on most fast-food menu boards, Rank QSR Top 50 16 like the breakfast sandwich and portable salads. Today, Jack in the Box offers a selection of distinctive, innovative products targeted at the fast-food consumer, including hamburgers, specialty sandwiches, salads and real ice cream shakes. Hamburgers represent the core of the menu, including the signature Jumbo Jack®, Sourdough Jack®, Ultimate Cheeseburger and the 100% Sirloin Burger. And, because value is important to fast-food customers, the company also offers value-priced products on “Jack’s Value Menu,” including tacos, chicken nuggets, a chicken sandwich and the Breakfast Jack®. In addition to offering high-quality products, Jack in the Box recognizes that an increasing number of quick-serve customers also want the ability to customize their meals. Whether that means forgoing the bun and sauce in favor of a low- carb burger, or substituting ingredients to create the exact mix of flavors to suit an individual’s personal tastes, customers have that flexibility at Jack in the Box. “We don’t make it ‘til you order it®.” So, regardless of the order, each meal is served hot and fresh to customers. Based in San Diego, Jack in the Box Inc. has more than 22,000 employees. Jack in the Box/Krispy Kreme | ORION Commercial Partners | 8 TENANT overvieW ABOUT Krispy KREME Krispy Kreme Doughnuts, Inc. is an American global doughnut company and This Krispy Kreme is owned and operated by Kremeworks, LLC. Today, coffeehouse chain based in Winston-Salem, North Carolina. In 1937 Krispy Kremeworks operates 10 Krispy Kreme doughnut shops in Washington, Kreme founder Vernon Rudolph bought a yeast-raised recipe from a New Oregon, Hawaii and British Columbia. Kremeworks LLC was formed in 2001 and Orleans chef, rented a building in what is now historic Old Salem in Winston- established as a joint venture with Krispy Kreme Doughnuts, Inc. Kremeworks, Salem, NC, and began selling to local grocery stores. The delicious scent of LLC’’s franchise opened with record breaking success in Issaquah, Washington cooking doughnuts drifted into the streets, and passers-by stopped to ask on October 30, 2001. if they could buy hot doughnuts. So, he cut a hole in an outside wall and started selling hot Original Glazed doughnuts directly to customers on the sidewalk. Special business ordering from churches, schools, clubs and other organizations took an upswing in 1955, and has grown steadily. Using the Fund Raising Plan to sell doughnuts has enabled many schools to buy uniforms and take school trips. The Plan has also helped organizations buy air conditioners, pianos, and libraries for schools. It has helped to fund scholarship programs. Krispy Kreme began a phase of rapid expansion in the 1990s, opening stores outside the southeastern United States where most of their stores were located. Then, in December 2001, Krispy Kreme opened its first store outside the U.S. in Mississauga, Ontario, Canada, just outside Toronto. Since 2004, Krispy Kreme has rapidly expanded its international operations, now including almost 100 stores in Mexico alone. Krispy Kreme proudly announced the launch of its Krispy Kreme Signature Coffee Blends at participating U.S. and Canada locations. Three specially crafted coffee blends “WORTHY” of its one-of-a-kind doughnuts. This also Property Name Krispy Kreme opened the door for speciality coffee blends. In September 25, 2013, Krispy Kreme announced their expansion into Colombia, the first South American Property Address 12505 Aurora Avenue N., Seattle, WA country that Krispy Kreme will have presence at. Property Type Ground Lease Quick Serve Restaurant Rentable Square Feet 4,300 SF Products are sold in Krispy Kreme stores, grocery stores, convenience stores, gas stations, Wal-Mart, Target and Shaws stores in the United States. Tenant Trade Name Kremeworks, LLC Internationally, doughnuts are sold in Loblaws supermarkets, Petro-Canada Ownership Public gas stations, and as freestanding stores in Canada, along with BP Service Stations and BP Travel Centres and 7-Eleven stores in Australia. In the United Tenant Franchise Kingdom, Tesco supermarkets, Tesco Extra, and most Tesco service stations 2014 Annual Revenue 460 Million carry Krispy Kreme products. Service stations Moto, Welcome Break & Road Stock Symbol KKD Chef also carry self-service cabinets. Board NYSE On February 24, 2015, Krispy Kreme opened its 1,000th shop in Kansas City, Rank QSR Top 50 34 Kansas. The first customer received one dozen of free donuts per week for a year. Jack in the Box/Krispy Kreme | ORION Commercial Partners | 9 FINANCIALS RENT ROLL RENT EXPIRATION MONTHLY TENANT SIZE COMMENCEMENT ANNUAL RENT OPTIONS RENT INCREASES DATE RENT DATE (2) 5 year options with Jack in the Box 2,674 SF 06-30-2003 06-30-2023 $8,437.50 $101,250.00 fixed increases (see chart 11.2% every 5 years below). Rental Increase 06/30/18 - 06/30/23 $9,492.19/month $113,906.25/year Option 1 06/30/23 - 06/30/28 $10,678.71/month $128,144.53/year Option 2 06/30/28 - 06/30/33 $12,013.55/month $144,162.60/year (2) 5 year options with Krispy Kreme 4,300 SF 06-01-2003 05-31-2018 $12,656.25 $151,875.00 fixed increases (see chart 11.2% every 5 years below).