Offering Memorandum

TACO BELLChattanooga, TN

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. © 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.

TACO BELLChattanooga, TNACT ID Y0140295

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 $700,000

Net Operating Income $77,728

Capitalization Rate – Current 11.10%

Price / SF $294.37

Rent / SF $32.69

Lease Type NNN

Gross Leasable Area 2,378 SF

Year Built / Renovated 1997

Lot Size 1.31 acre(s)

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EXECUTIVE SUMMARY

OFFERING SUMMARY

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FINANCING

Down Payment All Cash

Net Cash Flow 11.10% / $77,728

Cash on Cash Return 11.10%

TACO BELL

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TACO BELL

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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

BLUECARE 4,167

Kenco Logistic Services Inc 2,500

Republic Parking System Inc 2,184

County Executive Office 1,400

Securitas Critical 1,002

Alstom Power Inc 900

Tva 829

U S Cavalry 806

Seaboard Farms of Chattanooga 800

Hilton 769

Public Works Dept 763

Mueller Co LLC 728

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2016 Estimate Pop 1,505 8,122 27,120

2010 Census Pop 1,459 7,890 26,068

2016 Estimate HH 659 3,449 11,509

2010 Census HH 635 3,339 10,969

Median HH Income $46,663 $63,445 $30,493

Per Capita Income $38,459 $47,377 $27,205

Average HH Income $87,747 $111,383 $63,072

* # of Employees based on 5 mile radius

TACO BELL

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OFFERING SUMMARY

§ Absolute Triple Net Lease - Zero Landlord Responsibilities

§ Guaranteed by Largest Taco Bell Franchisee (Tacala +/- 260 Stores)

§ Tennessee is an Income Tax Free State

INVESTMENT HIGHLIGHTS

Marcus & Millichap is pleased to present an absolute net leased Taco Bell located at 3715 Modern Industries Parkway in Chattanooga, Tennessee. This Taco Bell is 2,378

square feet and is situated on a 1.31 acre lot, adjacent to the Country Inn & Suites. Other nearby tenants include Holiday Inn Express, Ramada Hotel, Super 8 Motel,

McDonald's, Logan's Roadhouse, Waffle House, Ace Hardware, and a Walmart Supercenter.

The lease has just under one year remaining and is guaranteed by Tacala, LLC, the largest Taco Bell franchisee.

Chattanooga, a city in southeastern Tennessee, is set along the Tennessee River in the foothills of the Appalachian Mountains. There are over 27,120 residents within a

five-mile radius, and an expected population growth of 4.59 percent for the immediate one-mile radius of the subject.

INVESTMENT OVERVIEW

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PROPERTY SUMMARY

OFFERING SUMMARY

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TACO BELL

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OFFERING SUMMARY

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0.9

NATIONAL NET-LEASED RETAIL REPORT

THIRD QUARTER 2016

Capital Markets Recent Marcus & Millichap Transactions

§ Global capital markets have remained stable over the past few weeks, even as

Brexit and the continued devaluation of the Chinese yuan have induced bouts of

volatility into stock and bond markets. Meanwhile, U.S. economic data has proved

resilient, with increases in retail sales and steady hiring supporting a measured

pace of growth. Additionally, higher bond prices have lowered prospective yields,

boosting the appeal of commercial real estate.

§ As the current economic cycle has continued, retail vacancy descended to 5.8

percent by the end of the second quarter. A focus on net-leased construction for

pre-leased tenants and mixed-use developments has limited development activity

in relation to prior cycles, supporting robust increases in average asking rents.

Builders will deliver 46 million square feet of retail space this year, with more than

two-thirds of new supply slated as single-tenant structures. This environment will

sponsor a fourth straight year of average asking rent growth, with advancement

projected to exceed inflation over the same period.

§ Capital markets remain highly competitive, with a broad assortment of fixed-rate

products available through commercial banks, life-insurance companies and

CMBS lenders. Loans are generally offered at terms up to 10 years at maximum

leverage of 65 to 75 percent. For 10-year terms, rates will typically reside in the

high-3 to mid-4 percent range, depending on leverage and underwriting criteria.

Floating bridge loans and financing for repositionings are typically underwritten with

LTVs above 80 percent, while pricing at 300 basis points above Libor for recourse

deals and extending to 470 basis points above Libor for non-recourse transactions.

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Property Name City, State Sales Price Price perSq. Ft. Cap Rate

Walgreens Weston, FL $11,236,053 $718 4.74%

CVS Vernon, NJ $9,750,000 $737 5.05%

Natural Grocers Wheat Ridge, CO $7,130,435 $475 5.75%

Red Lobster Knoxville, TN $4,667,299 $486 6.00%

IHOP Amarillo, TX $4,000,000 $1,053 6.25%

On The Border Fort Worth, TX $3,517,500 $593 6.47%

Wendy's Chino, CA $3,500,000 $968 4.76%

Chick-fil-A Dallas, TX $3,400,000 $50 3.75%

Perkins Blaine, MN $2,835,000 $65 6.53%

PDQ Clearwater, FL $2,796,610 $559 5.90%

McDonald's Las Vegas, NV $2,650,000 $487 5.74%

O'Reilly Auto Parts Bradenton, FL $2,637,803 $352 5.25%

Boston Market North Miami, FL $2,550,000 $955 4.49%

Family Dollar Glendale, AZ $2,400,018 $288 5.50%

Red Lobster Hattiesburg, MS $2,276,079 $400 6.20%

KFC Tilton, NH $2,037,037 $852 5.40%

Dollar General Stephens City, VA $1,950,000 $214 6.45%

Applebee's Sidney, OH $1,935,541 $372 5.45%

Arby's Waycross, GA $1,876,000 $586 6.17%

Five Guys Wooster, OH $1,800,000 $468 6.75%

Starbucks Valdosta, GA $1,750,000 $1,000 5.10%

MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

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CREATED ON MARCH 29, 2017

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX

PROPERTY NAMETACO BELL

PRICING AND VALUATION MATRIX

PROPERTY NAME

TACO BELL

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DEMOGRAPHICS

1 Miles 3 Miles 5 Miles

POPULATION2021 Projection 1,597 8,336 27,131

2016 Estimate 1,505 8,122 27,120

2010 Census 1,459 7,890 26,068

2000 Census 1,259 7,508 27,129

INCOME

Average $87,747 $111,383 $63,072

Median $46,663 $63,445 $30,493

Per Capita $38,459 $47,377 $27,205

HOUSEHOLDS

2021 Projection 704 3,570 11,578

2016 Estimate 659 3,449 11,509

2010 Census 635 3,339 10,969

2000 Census 530 3,094 11,130

HOUSING

2016 $161,940 $229,128 $159,153

EMPLOYMENT

2016 Daytime Population 3,829 10,382 54,251

2016 Unemployment 4.81% 5.16% 9.65%2016 Median Time Traveled 20 22 22

RACE & ETHNICITY

White 93.43% 94.25% 65.29%

Native American 0.28% 0.10% 0.17%

African American 1.80% 1.98% 29.54%

Asian/Pacific Islander 2.44% 1.90% 1.11%

www.MarcusMillichap.com

Armond Aivazyan

Associate

Associate Member, National Retail GroupLos Angeles OfficeTel: (213) 943-1846

Fax: (213) 943-1810

armond.aivazyan@marcusmillichap.com

License: CA 01954384

Yannis Papadakis

Associate

Associate Member, National Retail GroupLos Angeles OfficeTel: (213) 943-1827

Fax: (213) 943-1810

yannis.papadakis@marcusmillichap.com

License: CA 01957169

Jody McKibben

Regional Manager

Tel: (615) 997-2860License: TN 307629

P R E S E N T E D B Y