burger king- 19+ year nnn lease - constant...

MONTEVIDEO, MN

Burger King- 19+ YearNNN Lease

OFFERING MEMORANDUM

CONFIDENTIALITY AND DISCLAIMER

The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

MONTEVIDEO, MN

Burger King- 19+ Year NNN Lease

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

NON-ENDORSEMENT NOTICE

NET LEASED DISCLAIMER

Burger King- 19+ Year NNN LeaseMONTEVIDEO, MN

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

Section 1 PRICING AND FINANCIAL ANALYSIS

Section 2 PROPERTY DESCRIPTION

Section 3 DEMOGRAPHIC ANALYSIS

TABLE OF CONTENTS



PRICING AND FINANCIAL ANALYSIS

Annualized Operating Data

586 South West 1st StreetMontevideo, MN 56265

Price $1,323,655

Down Payment 100% / $1,323,655

Rentable Square Feet 3,300

Price/SF $401.11

CAP Rate 6.00%

Year Built 1997

Lot Size 1.47 Acres

Type of Ownership Fee Simple

Location

Rent Increases Annual Rent Monthly Rent

2/26/2016 - 2/28/2017 $78,633.00 $6,552.75

3/1/2017 - 2/28/2018 $79,419.33 $6,618.28

3/1/2018 - 2/28/2019 $80,213.52 $6,684.46

3/1/2019 - 2/28/2020 $81,015.66 $6,751.30

3/1/2020 - 2/28/2021 $81,825.82 $6,818.82

3/1/2021 - 2/28/2022 $82,644.07 $6,887.01

3/1/2022 - 2/28/2023 $83,470.51 $6,955.88

3/1/2023 - 2/28/2024 $84,305.22 $7,025.43

3/1/2024 - 2/28/2025 $85,148.27 $7,095.69

3/1/2025 - 2/28/2026 $85,999.75 $7,166.65

3/1/2026 - 2/28/2027 $86,859.75 $7,238.31

3/1/2027 - 2/28/2028 $87,728.35 $7,310.70

3/1/2028 - 2/28/2029 $88,605.63 $7,383.80

3/1/2029 - 2/28/2030 $89,491.69 $7,457.64

3/1/2030 - 2/28/2031 $90,386.61 $7,532.22

3/1/2031 - 2/28/2032 $91,290.47 $7,607.54

3/1/2032 - 2/28/2033 $92,203.38 $7,683.61

3/1/2033 - 2/28/2034 $93,125.41 $7,760.45

3/1/2034 - 2/28/2035 $94,056.66 $7,838.06

3/1/2035 - 2/28/2036 $94,997.28 $7,916.44

Base Rent ($24.07/SF) $79,419

Net Operating Income $79,419

Total Return 6.00% / $79,419

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Tenant Trade Name Burger King

Ownership Private

Tenant Franchisee

Lease Guarantor Franchisee Guarantee

Lease Type Absolute Net

Roof and Structure Tenant Responsible

Lease Term 20 Years

Lease Commencement Date February 26, 2016

Rent Commencement Date February 26, 2016

Lease Expiration Date February 28, 2036

Term Remaining on Lease 19+ Years

Increases 1% Annually

Options Four, Five-year Options


Tenant Summary


This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Chicago, Inc. © 2017 X0330370Marcus & Millichap. All rights reserved.

FINANCIAL OVERVIEW

Year Annual Rent Cap Rate

2017 $79,419 5.85%

2018 $80,213 5.91%

2019 $81,015 5.97%

2020 $81,825 6.03%

2021 $82,644 6.09%

2022 $83,470 6.15%

2023 $84,305 6.21%

2024 $85,148 6.27%

2025 $85,999 6.33%

2026 $86,859 6.40%

2027 $87,728 6.46%

2028 $88,605 6.53%

2029 $89,491 6.59%

2030 $90,386 6.66%

2031 $91,290 6.72%

2032 $92,203 6.79%

2033 $93,125 6.86%

2034 $94,056 6.93%

2035 $94,997 7.00%

Avg Cap Rate During Term 6.41%

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Property Name Burger King- 19+ Year NNN Lease

Property Address 586 South West 1st Street

Montevideo, MN 56265

Property Type Net Leased Restaurant Fast Food


Tenant Trade Name Burger King

Ownership Private

Tenant Franchisee

Lease Guarantor Franchisee Guarantee from 84-Unit Operator & Personal Guarantees from Both Principals

Lease Commencement Date February 26, 2016

Rent Commencement Date February 26, 2016

Lease Expiration Date February 28, 2036

Term Remaining on Lease 19+ Years

Lease Type Absolute Net

Roof and Structure Tenant Responsible

Lease Term 20 Years

Increases 1% Annually

Options to Renew Four, Five-year Options

Options to Terminate None

Options to Purchase None

First Right of Refusal None

No. of Locations Operated by Franchisee 84


This King rules one whopper of a fast-food empire. Burger King Worldwide operates the world's number two hamburger chain by sales (behind

McDonald's) with over 13,000 restaurants in the United States and more than 100 other countries. In addition to its popular Whopper sandwich, the

chain offers a selection of burgers, chicken sandwiches, salads, and breakfast items, along with beverages, desserts, and sides. Many of the

eateries are stand-alone locations offering dine-in seating and drive-through services; the chain also includes units in high-traffic locations such as

airports and shopping malls. Burger King Worldwide is owned and operated by Restaurant Brands International.

TENANT OVERVIEW

Note: Personal guarantees expire after five years.


PROPERTY DESCRIPTION

Marcus & Millichap is pleased to present this 3,300-square foot Burger King located in Montevideo, Minnesota. Burger King has over 19 years remaining on an absolute triple net (NNN) lease with annual escalations in rent. The tenant reports annual unit level sales and features a strong rent-to-sales ratio of eight percent. The lease has a franchisee guaranty from an operator of 84 Burger King locations and offers personal guarantees from both principals.

Burger King is located on the signalized hard corner of South West 1st Street and U.S. 212, an intersection that sees over 10,000 vehicles per day. The highly visible site faces limited competition in the town of Montevideo. Burger King is one of two drive-thru fast food restaurants in town. McDonald's is the other drive-thru in town, and is located over two miles away.

Investment Highlights

■ 3,300-Square Foot Burger King in Montevideo, Minnesota

■ Lease is Guaranteed by an 84-Unit Burger King Franchiseeand Offers Two Personal Guarantees

■ One Percent Annual Rental Escalations

■ Over 19 Years Remaining on an Absolute NNN Lease | LongTerm Operating History, Tenant Has Operated Location for18 Years

■ Tenant Reports Annual Unit Level Sales | 8% Rent to SalesRatio

■ Located on the Signalized Hard Corner Intersection of SouthWest 1st Street and U.S. 212 | Over 10,000 Vehicles Per DayPass Through Intersection

■ Minimal Competition: One of Two Drive-Thru Fast FoodRestaurants to Serve the Town of Montevideo | McDonald'sOver Two Miles Away

■ Manager Has Worked With Franchisee for Over 15 Years

4




INVESTMENT OVERVIEW

Note: Personal guarantees expire after five years.

Every day, more than 11 million guests visit Burger King restaurants around the world. And they do so because our restaurants are known for serving high-quality, great-tasting, and affordable food. Founded in 1954, Burger King is the second largest fast food hamburger chain in the world. The original HOME OF THE WHOPPER®, our commitment to premium ingredients, signature recipes, and family-friendly dining experiences is what has defined our brand for morethan 50 successful years.

Burger King is the number two fast food hamburger chain, globally, with more than $16 billion in annual system-wide sales and nearly 350,000 team members, worldwide. The Burger King concept has a market capitalization of roughly $10 billion.

3G Capital is a global investment firm focused on long-term value, with a particular emphasis on maximizing the potential of brands and businesses. The firm and its partners have a strong history of operational excellence, board involvement, deep sector expertise and an extensive global network. 3G Capital works in close partnership with management teams at its portfolio companies and places a strong emphasis on recruiting, developing and retaining top-tier talent. In October 2010, 3G Capital completed the acquisition of Burger King, one of the most widely-recognized consumer brands in the world. In December 2014, 3G Capital purchased Tim Hortons. The acquisition merged Burger

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INVESTMENT OVERVIEW

6



The Offering

Property Burger King- 19+ Year NNN Lease

Property Address 586 South West 1st Street

Montevideo, MN 56265

Assessor's Parcel Number 36-0119600

Zoning Commercial

Site Description

Number of Stories 1

Year Built 1997


Lot Size 1.47 Acres

Type of Ownership Fee Simple


PROPERTY SUMMARY

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PROPERTY PHOTOS

Local Map Regional Map

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AREA MAPS

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AERIAL PHOTO


DEMOGRAPHIC ANALYSIS

1 Mile 3 Miles 5 Miles

2000 Population 2,678 6,210 6,785

2010 Population 2,739 6,204 6,735

2014 Population 2,610 5,934 6,445

2019 Population 2,612 5,864 6,363

2000 Households 1,161 2,667 2,862

2010 Households 1,155 2,641 2,831

2014 Households 1,096 2,514 2,696

2019 Households 1,094 2,489 2,668

2014 Average Household Size 2.36 2.30 2.30

2014 Daytime Population 1,659 3,610 3,844

2000 Owner Occupied Housing Units 69.11% 67.52% 67.91%

2000 Renter Occupied Housing Units 24.05% 24.89% 24.41%

2000 Vacant 6.84% 7.59% 7.68%



2014 Vacant 11.17% 11.06% 11.15%



2019 Vacant 11.87% 11.64% 11.72%

$ 0 - $14,999 15.1% 13.6% 13.3%

$ 15,000 - $24,999 11.0% 12.9% 12.7%

$ 25,000 - $34,999 11.5% 12.3% 12.2%

$ 35,000 - $49,999 14.6% 15.1% 15.1%

$ 50,000 - $74,999 24.1% 23.6% 23.7%

$ 75,000 - $99,999 11.4% 10.3% 10.7%

$100,000 - $124,999 5.8% 5.7% 5.7%

$125,000 - $149,999 2.8% 2.9% 3.0%

$150,000 - $199,999 2.2% 1.8% 1.8%

$200,000 - $249,999 0.5% 0.6% 0.6%

$250,000 + 1.1% 1.4% 1.4%

2014 Median Household Income $48,025 $46,330 $46,868

2014 Per Capita Income $25,412 $25,859 $25,653

2014 Average Household Income $59,959 $60,182 $60,502

Demographic data © 2012 by Experian.

11




DEMOGRAPHIC REPORT

Geography: 5 miles

Population

In 2014, the population in your selected geography is 6,445. The population has changed by -5.00% since 2000. It is estimated that

the population in your area will be 6,362 five years from now, which represents a change of -1.27% from the current year. The

current population is 48.08% male and 51.91% female. The median age of the population in your area is 41.6, compare this to the

Entire US average which is 37.3. The population density in your area is 81.84 people per square mile.

Households

There are currently 2,696 households in your selected geography. The number of households has changed by -5.78% since 2000. It

is estimated that the number of households in your area will be 2,667 five years from now, which represents a change of -1.07%

from the current year. The average household size in your area is 2.30 persons.

Income

In 2014, the median household income for your selected geography is $46,868, compare this to the Entire US average which is

currently $51,972. The median household income for your area has changed by 37.94% since 2000. It is estimated that the median

household income in your area will be $53,572 five years from now, which represents a change of 14.30% from the current year.

The current year per capita income in your area is $25,652, compare this to the Entire US average, which is $28,599. The current

year average household income in your area is $60,502, compare this to the Entire US average which is $74,533.

Race & Ethnicity

The current year racial makeup of your selected area is as follows: 91.96% White, 0.58% Black, 0.07% Native American and 0.67%

Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and

5.02% Asian/Pacific Islander.

People of Hispanic origin are counted independently of race. People of Hispanic origin make up 7.71% of the current year

population in your selected area. Compare this to the Entire US average of 17.13%.

Housing

In 2000, there were 2,105 owner occupied housing units in your area and there were 756 renter occupied housing units in your area.

The median rent at the time was $323.

Employment

In 2014, there are 3,843 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed

that 49.84% of employees are employed in white-collar occupations in this geography, and 50.29% are employed in blue-collar

occupations. In 2014, unemployment in this area is 6.08%. In 2000, the average time traveled to work was 15.3 minutes.


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SUMMARY REPORT

Number of people living in a given area per square mile.


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POPULATION DENSITY

The number of people employed in a given area per square mile.


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EMPLOYMENT DENSITY

Average income of all the people 15 years and older occupying a

single housing unit.


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AVERAGE HOUSEHOLD INCOME

MONTEVIDEO, MN

OFFERING MEMORANDUM


Offices Throughout the U.S. and Canada

www.MarcusMillichap.com

Presented By:

Craig PattersonBroker

Marcus & MillichapLicense: MN: 40206188

Tel: (952) 852-9700Fax: (952) 852-9710

burger king- 19+ year nnn lease - constant...

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