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Offering Memorandum

DEL TACOLynwood, CA

Representative Photo

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â© 2017 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & 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 YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

DEL TACOLynwood, CAACT ID Y0130231

N E T L E A S E D D I S C L A I M E R

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.

OFFERING SUMMARY

Price $3,995,000

Net Operating Income $150,000

Capitalization Rate – Current 3.75%

Price / SF $1,650.83

Rent / SF $61.98

Lease Type Absolute Net

Year Built / Renovated 2017

Lot Size 0.48 acre(s)

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EXECUTIVE SUMMARY

OFFERING SUMMARY

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FINANCING

Down Payment All Cash

Net Cash Flow 3.75% / $150,000

Cash on Cash Return 3.75%

DEL TACO

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DEL TACO

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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

Kaiser Permanente 5,492

Fallas Discount Stores 2,506

Charles Drew Univ Mdcine Scnce 2,377

Parks & Recreation Dept 2,310

Health Services Dept of 1,732

St Francis Medical Center of 1,570

Lacoe 1,500

Bicycle Club Casino 1,300

County of Los Angeles 1,300

McDonalds 1,265

Tap Operating Co LLC 1,200

Animo Charter School Mid 1,184

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 49,992 363,339 945,439

2010 Census Pop 48,660 353,505 919,532

2016 Estimate HH 10,686 84,319 239,036

2010 Census HH 10,419 81,985 231,770

Median HH Income $41,408 $41,162 $41,722

Per Capita Income $11,536 $12,723 $14,183

Average HH Income $52,528 $53,909 $55,430

* # of Employees based on 5 mile radius

DEL TACO

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OFFERING SUMMARY

§ Brand New 2017 Construction

§ Tenant has Executed 20-Year Corporate Lease

§ 10 Percent Rental Increases Every Five Years Including Options

§ Drive-Thru

§ Absolute Net Leased With Zero Landlord Responsibilities

INVESTMENT HIGHLIGHTS

Marcus & Millichap is pleased to present for sale this newly built Del Taco restaurant located in Lynwood, California. The subject property is

located on the corner of Long Beach Boulevard and Orchard Avenue. The tenant has signed a new 20-year triple-net lease. This lease will

include fixed 10 percent rental increases every five years, and four five-year options to renew.

The building has a drive-thru and the tenant is scheduled to have rent commence in July 2017.

INVESTMENT OVERVIEW

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12

TENANT PROFILES

DEL TACO

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Del Taco

General Information

Tenant Name Del Taco

Website www.deltaco.com

Rentable Square Feet 2,420 SF

Lease Commencement 7/1/2017

Lease Expiration 6/1/2037

Founded in 1964, Del Taco is the nation’s second largest Mexican quick service

restaurant chain. The first Del Taco restaurant opened in Yermo, California on

September 16, 1964 and has since become known for serving Mexican and

American food prepared fresh in every restaurants’ working kitchen. At Del Taco,

menu items are made to order with fresh ingredients, including cheddar cheese

grate from 40-pound blocks, handmade pico de gallo salsa, lard-free beans slow-

cooked from scratch, and marinated chicken grilled in the restaurant. The menu

includes classic Mexican dishes such as tacos, burritos, quesadillas, and nachos,

as well as American favorites including hamburgers, crinkle-cut fries, and shakes.

With nearly 550 restaurants in 16 states, Del Taco serves more than three million

guests each week.

Del Taco is led by chairman and CEO Paul Murphy and is headquartered in Lake

Forest, California. In their most recent quarterly results release system-wide

comparable restaurant sales showed growth of 3.3 percent and company-owned

comparable restaurant sales growth of 3.1 percent, marketing the 11 th and 6 th

consecutive quarter of gains, respectively. The chain posted a total revenue of

$100 million which represents 2.5 percent growth over the previous year’s second

quarter results. Comparable restaurant sales increased 3.3 percent system-wide

for the fiscal second quarter ended June 14, 2016, resulting in an impressive 9.3

percent two year growth rate cycling over the second strongest quarter of 2015.

The Del Taco system has now generated comparable restaurant sales growth for

11 consecutive quarters. Company-owned comparable restaurant sales increased

3.1 percent, marking the 16 th consecutive quarter of comparable restaurant sales

growth. Franchise comparable restaurant sales increased 3.6 percent. Del Taco is

not a highly leveraged company as are many competitors in the QSR industry.

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12622-12626 Long Beach Boulevard, Lynwood, CA 90262

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMEDEL TACO

PRICING AND VALUATION MATRIX

PROPERTY NAME

DEL TACO

7

REGIONAL AND LOCAL MAP

AERIAL PHOTO

DEL TACO

8

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PROPERTY SUMMARY

OFFERING SUMMARY

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NOTES

DEL TACO

9

OFFERING SUMMARY

10% Every 5 Years

20

8

DEL TACO

COMPARABLES MAP

10

DEL TACO(SUBJECT)

Del Taco

Del Taco

Del Taco

McDonalds

Wendy's

Jack in the Box

Denny's

Popeye's

Starbucks

SALES COMPARABLES

1

2

3

4

5

7

8

6

9

11

12622-12626Long BeachBoulevard

Del Taco Del Taco-2 Del Taco-3 McDonalds Wendy's Jackin the Box

Denny's Popeye's Starbucks0

1

1

2

2

3

4

4

5

5

6

Avg. 4.25%

PROPERTY NAME

DEL TACO

COMPARABLES

Average Cap Rate

SALES COMPARABLES

SALES COMPS AVG

12

12622-12626Long BeachBoulevard

Del Taco Del Taco-2 Del Taco-3 McDonalds Wendy's Jackin the Box

Denny's Popeye's Starbucks$0.00

$300.00

$600.00

$900.00

$1,200.00

$1,500.00

$1,800.00

$2,100.00

$2,400.00

$2,700.00

$3,000.00

Avg. $1,350.76

PROPERTY NAME

DEL TACO

COMPARABLES

Average Price Per Square Foot

SALES COMPARABLES

SALES COMPS AVG

PROPERTY NAME

MARKETING TEAM

DEL TACO

COMPARABLES

rentpropertyname1

rentpropertyaddress1

rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

DEL TACO12622-12626 LONG BEACH BOULEVARD, LYNWOOD,

CA, 90262

SUBJECT PROPERTY

Asking Price $3,995,000

Price/SF $0.00

CAP Rate 3.75%

Year Built 2017

Lease Term Remaining 20.1 Years

DEL TACO20259 VALLEY BOULEVARD, WALNUT, CA, 91789

1

Close Of Escrow 5/20/2016

Sales Price $1,550,000

Price/SF $798.97

CAP Rate 4.00%

GLA 1,940 SF

Year Built 1988

DEL TACO1398 FOOTHILL BOULEVARD, LA VERNE, CA, 91750

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Price/SF $1,801.60

CAP Rate 4.50%

GLA 1,875 SF

Year Built 1985

PROPERTY NAME

MARKETING TEAM

DEL TACO

COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

DEL TACO1595 SEPULVEDA BOUELVARD, TORRANCE, CA, 90501

3



Price/SF $905.80

GLA 1,932 SF

Year Built 1988

MCDONALDS14530 BALDWIN PARK TOWNE CENTER, BALDWIN PARK, CA, 91706

4



Price/SF $963.76

CAP Rate 3.63%

GLA 3,891 SF

Year Built 1989

WENDY'S27544 THE OLD ROAD, VALENCIA, CA, 91355

5



Price/SF $1,408.08

CAP Rate 4.63%

GLA 3,835 SF

Year Built 1984

PROPERTY NAME

MARKETING TEAM

DEL TACO

COMPARABLES

rentpropertyaddress1 rentpropertyaddress1

rentpropertyname1


15

SALES COMPARABLES

JACK IN THE BOX835 WEST CARSON , TORRANCE, CA, 90502

6



Price/SF $1,231.80

CAP Rate 4.15%

GLA 2,692 SF

Year Built 1980

DENNY'S11195 LONG BEACH BOULEVARD, LYNWOOD, CA, 90262

7



Price/SF $1,025.00

CAP Rate 5.22%

GLA 4,000 SF

Year Built 1998

POPEYE'S12520 WASHINGTON BOULEVARD, WHITTIER, CA, 90602

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Price/SF $1,160.75

CAP Rate 4.25%

GLA 2,311 SF

Year Built 2016

PROPERTY NAME

MARKETING TEAM

DEL TACO

COMPARABLES

rentpropertyname1


rentpropertyname1


rentpropertyname1


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SALES COMPARABLES

STARBUCKS601 WEST MANCHESTER BOULEVARD, INGLEWOOD, CA, 90301

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Price/SF $2,861.11

CAP Rate 3.60%

GLA 900 SF

Year Built 2016

MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

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CREATED ON MAY 9, 2017

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMEDEL TACO

PRICING AND VALUATION MATRIX

PROPERTY NAME

DEL TACO

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DEMOGRAPHICS

1 Miles 3 Miles 5 Miles

POPULATION2021 Projection 50,746 368,048 957,364

2016 Estimate 49,992 363,339 945,439

2010 Census 48,660 353,505 919,532

2000 Census 48,098 345,057 895,586

INCOME

Average $52,528 $53,909 $55,430

Median $41,408 $41,162 $41,722

Per Capita $11,536 $12,723 $14,183

HOUSEHOLDS

2021 Projection 10,868 85,423 242,193

2016 Estimate 10,686 84,319 239,036

2010 Census 10,419 81,985 231,770

2000 Census 10,058 79,889 226,518

HOUSING

2016 $288,833 $293,704 $329,920

EMPLOYMENT

2016 Daytime Population 31,829 260,672 733,746

2016 Unemployment 11.88% 10.93% 10.20%2016 Median Time Traveled 31 31 31

RACE & ETHNICITY

White 32.87% 34.77% 37.11%

Native American 0.50% 0.51% 0.57%

African American 15.68% 17.37% 16.44%

Asian/Pacific Islander 0.38% 0.92% 3.15%

www.MarcusMillichap.com

Michael C. Matter

Senior AssociateAssociate Director, Net Leased Properties GroupLong Beach OfficeTel: (562) 257-1200

Fax: (562) 257-1210

[email protected]

License: CA 01435801

P R E S E N T E D B Y

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