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O F F E R I N G M E M O R A N D U M

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E X C L U S I V E L Y L I S T E D B Y

D O n M o r t e n s o nBROKER OF RECORDLIC # LC635678000

a n d r e w i va n k o v i c h

Associate

Andrew. Ivankovich@matthews.comDIR (214) 692-2037MOB (626) 807-3586LIC # 678815 (TX)

B r a d e n C r o c k e t t

Associate VP & Director

Braden.Crockett@matthews.comDIR (214) 692-2040MOB (714) 345-6206LIC # 01946071 (CA)

T E N A N T C I T Y , S T A T E | 3

C O N T E N T S

4 INVESTMENT OVERVIEWInvestment Highl ights

5 FINANCIAL ANALYSISAnnual ized Operat ing Data

1 0 TENANT OVERVIEWCarl ’s Jr Overview

1 2 AREA OVERVIEWHolbrook OverviewSnowflaked, AZ

6 PROPERTY OVERVIEWSite Descr ipt ion Parcel MapSurrounding Tenants

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• 20-Year with StarCorp, LLC (145 Units)

• Low Price Point

• Absolute NNN Investment – No Landlord Responsibilities

• 20 Year Lease Will Commence Upon the Close of Escrow

• Tenant Showing Strong Commitment Site By Extendingthe Lease For a total of 20 Years

• Rare 1.5% Annual Rent Increases – Great Hedge AgainstInflation

• Building Renovated in 2012

• Average Household Income Over $56,000 - Above theNational Average

• Relatively Little Competition

• Surrounded by National Retailers such as Tractor Supply,McDonald’s, Dollar General, & Taco Bell

• West Coast Real Estate

• Carl Karcher Enterprises (CKE) Is One of the LargestNational QSR Concepts in the World and Has Over 3,100Carl’s Jr and Hardee’s Locations

i n v e s t m e n t h i g h l i g h t s

e x e c u t i v e s u m m a r y

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Annualized Operating DataNOI Increase Cap Rate

Year 1 $60,375.00 1.50% 5.75%

Year 2 $61,281.00 1.50% 5.84%

Year 3 $62,200.00 1.50% 5.92%

Year 4 $63,133.00 1.50% 6.01%

Year 5 $64,080.00 1.50% 6.10%

Year 6 $65,041.00 1.50% 6.19%

Year 7 $66,017.00 1.50% 6.29%

Year 8 $67,007.00 1.50% 6.38%

Year 9 $68,012.00 1.50% 6.48%

Year 10 $69,032.00 1.50% 6.57%

Year 11 $70,068.00 1.50% 6.67%

Year 12 $71,119.00 1.50% 6.77%

Year 13 $72,185.00 1.50% 6.87%

Year 14 $73,268.00 1.50% 6.98%

Year 15 $74,367.00 1.50% 7.08%

Year 16 $75,483.00 1.50% 7.19%

Year 17 $76,615.00 1.50% 7.30%

Year 18 $77,764.00 1.50% 7.41%

Year 19 $78,931.00 1.50% 7.52%

Year 20 $80,115.00 1.50% 7.63%

Tenant Summary

Tenant Trade Name Carl’s Jr

Type of Ownership Fee Simple

Lease Guarantor Franchisee (145 Units)

Lease Type Absolute NNN

Original Lease Term 20 Years

Lease Commencement Date Close of Escrow

Rent Commencement Date Close of Escrow

Increases 1.5% annuallty

Options Three, 5-Year Options

f i n a n c i a l a n a ly s i s

Property Name

Location

List Price

Year Built

Address

Zip Code

Carl’s JR

Hobrook, AZ

$1,050,000

1986 (2012 renovated)

1635 Navajo Blvd

86025

cap rate

5.75%

Square Footage

± 2,337

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Col

lege

Blv

d ±

40,11

6

t h e o f f e r i n g

Property Name Carl’s Jr

Property Address1635 Navajo Blvd

Holbrook, AZ 86025

APN 109-38-003

Site DescriptionNumber of Stories One

Year Built/Renovated 1986/2012

Gross Leasable Area (GLA) ± 2,337 SF

Lot Size ± 0.92 Acres (40,075 SF)

Type of Ownership Fee Simple

Parking ± 34 Surface Spaces

Parking Ratio 14.5 : 1,000 SF

Landscaping Professional

Topography Generally Level

p r o p e r t y O v e r v i e w

p a r c e l m a p

Navajo Blvd ± 6,000 ADT

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S U R R O U N D I N G T E N A N T S

l o c a l t r a d e a r e a

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C a r l’ s J r .Carl’s Jr. is an American-based fast food restaurant chain operated by CKE Restaurants Holdings, Inc., with locations primarily in the Western and Southwestern United States. In the spirit of the company’s founder, Carl Karcher, CKE believes it can best share in its success by offering support to its neighbors through its scholarship and charitable giving programs, including the Stars for Heroes campaign which raised $1 Million in 2011. CKE is also working toward greater sustainability with the help of company-wide initiatives, including the corporate Green Team.

STRATEGY

With over 3,600 total CKE franchised and company owned restaurants, and more than 1,500 Carl’s Jr. specific, CKE Restaurants Holdings, Inc. is dedicated to helping franchisees build growing restaurant operations that are sustainable for the long term. To this end, the strategy and core positioning of the Carl’s Jr. banner is oriented to building top-line sales that support franchise profitability via premium product strategy, strong restaurant fundamentals, and cutting-edge advertising. With best-in-class menus, innovative systems, and outstanding brand recognition, the company is poised for sustained growth around the world.

GEOGRAPHIC REACH

As of March 2016, CKE has a total of 3,664 franchised or company-operated restaurants in 44 states and 38 foreign countries and U.S. territories. Carl’s Jr. has announced plans to expand in Ontario, Canada’s “Golden Horseshoe,” a territory that includes Toronto, Mississauga, Oakville, Burlington, Hamilton, Brantford and London.

Company Name Carl’s Jr.

Parent Company Trade Name CKE Restaurants Holdings, Inc.

Ownership Private

No. of Locations ± 1,500

No. of Employees (All) ± 23,000

Headquartered Carpinteria, California

Website www.carlsjr.com

Year Founded 1941

C a r l ’ s J r | H o l b r o o k , A Z | 1 1

H o l b r o o k , A Z

Located along Historic Route 66 in northern Arizona in Navajo County, the city of Holbrook is a

community rich in history with diverse landscapes and abundant outdoor recreation. The spirit of

the wild west lives on in this city with its rodeos, evening hay-rides across the desert and country

cookouts.

As the county seat of Navajo County. Holbrook is an excellent location for the distribution of

products throughout the southwest. Principal industries in the county are tourism, coal mining,

manufacturing, timber production and ranching. Holbrook itself serves as the gateway to

Petrified Forest National Park, which is named for its large deposits of petrified wood and

fossils. Other nearby attractions consist of the Painted Desert, Homolovi State Park and the

White Mountains.

D e m o g r a p h i c s

POPULATION 1-Mile 3-Mile 5-Mile

2022 Projection 2,110 4,224 4,682

2017 Estimate 2,153 4,319 4,786

2010 Census 2,306 4,650 5,151

2000 Census 2,220 4,681 5,143

HOUSEHOLDS 1-Mile 3-Mile 5-Mile

2022 Projection 744 1,525 1,565

2017 Estimate 757 1,550 1,590

2010 Census 806 1,649 1,691

INCOME 1-Mile 3-Mile 5-Mile

2017 Est. Average Household Income

$51,044 $52,092 $52,122

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C a r l ’ s J r | H o l b r o o k , A Z | 1 3

s n o w f l a k e , a zLess than a half hour drive south of Holbrook, the town of Snowflake is a

growing hub of activities for businesses and visitors. Stretching along the ever-

flowing Silver Creek, Snowflake is central to many of the region’s attractions,

which range from prehistoric and native cultures to the north to the four-season

forested White Mountains to the south. While its name implicates otherwise,

the Snowflake community enjoys a mild year-round climate with less than ten

inches of annual snowfall. At an elevation of 5,600 feet, the town looks across

a sweeping plateau to distant mesas and mountain ranges.

The area houses Arizona’s only pulp and paper mill, with other strong industries

including agriculture, manufacturing, ranching and more. Opportunities for

businesses to locate or expand in the region are unlimited. Snowflake itself

has been appointed as an Enterprise Zone by the state of Arizona, allowing for

businesses to gain a number of benefits for locating to the area. This has aided

in the significant growth of Snowflake and its neighboring town Taylor, making

them a strong influence in the economy of the northeastern section of the state.

1 . The Offer ing Memorandum and i ts contents are conf ident ia l ;

2 . You wi l l hold i t and treat i t in the str ictest of conf idence; and

3. You wi l l not , d i rect ly or indirect ly, d isclose or permit anyone else to disclose this Offer ing Memorandum or i ts contents in any fashion ormanner detr imental to the interest of the Sel ler.

Owner and Matthews Real Estate Investment Services expressly reserve the r ight , at their sole discret ion, to reject any and al l expressions of interest or of fers to purchase the Property and to terminate discussions with any person or ent i ty reviewing this Offer ing Memorandum or making an of fer to purchase the Property unless and unt i l a wr i t ten agreement for the purchase and sale of the Property has been ful ly executed and del ivered.

I f you wish not to pursue negot iat ions leading to the acquis i t ion of the Property or in the future you discont inue such negot iat ions, then you agree to purge al l mater ia ls relat ing to th is Property including this Offer ing Memorandum.

A prospect ive purchaser ’s sole and exclusive r ights with respect to th is prospect ive t ransact ion, the Property, or informat ion provided herein or in connect ion with the sale of the Property shal l be l imited to those expressly provided in an executed Purchase Agreement and shal l be subject to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims against Sel ler or Matthews Real Estate Investment Services or any of their af f i l iates or any of their respect ive of f icers , Directors , shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion relat ing to th is sol ic i tat ion process or the market ing or sale of the Property.

This Offer ing Memorandum shal l not be deemed to represent the state of af fa i rs of the Property or const i tute an indicat ion that there has been no change in the state of af fa i rs of the Property s ince the date this Offer ing Memorandum.

C O N F I D E N T I A L I T Y & D I S C L A I M E R S T A T E M E N T

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Carl's Jr located at 1635 Navajo Blvd, Holbrook, AZ 98503. I t has been prepared by Matthews Real Estate Investment Services. This Offer ing Memorandum may not be al l - inclusive or contain a l l of the informat ion a prospect ive purchaser may desire. The informat ion contained in th is Offer ing Memorandum is conf ident ia l and furnished solely for the purpose of a review by a prospect ive purchaser of the Property . I t is not to be used for any other purpose or made avai lable to any other person without the wri t ten consent of Sel ler or Matthews Real Estate Investment Services. The mater ia l is based in part upon informat ion suppl ied by the Sel ler and in part upon f inancial informat ion obtained from sources i t deems rel iable. Owner, nor their of f icers , employees, or agents makes any representat ion or warranty, express or impl ied, as to the accuracy or completeness of th is Offer ing Memorandum or any of i ts contents and no legal l iabi l i ty is assumed or shal l be impl ied with respect thereto. Prospect ive purchasers should make their own project ions and form their own conclusions without rel iance upon the mater ia l contained herein and conduct their own due di l igence.

By acknowledging your receipt of th is Offer ing Memorandum for the Property, you agree:

T E N A N T C I T Y , S T A T E | 1 5

BROKER OF RECORD

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e x c l u s i v e ly l i s t e d b y

O F F E R I N G M E M O R A N D U M

C a r l’ s J r 1 6 3 5 N A V A J O B LV D | H O L B R O O K , A Z

a n d r e w i va n k o v i c h

Associate

Andrew. Ivankovich@matthews.comDIR (214) 692-2037MOB (626) 807-3586LIC # 678815 (TX)

B r a d e n C r o c k e t t

Associate VP & Director

Braden.Crockett@matthews.comDIR (214) 692-2040MOB (714) 345-6206LIC # 01946071 (CA)

D O n M o r t e n s o n

LIC # LC635678000Broker of Record