REPRESENTATIVE IMAGE

HOUSTON, TEXAS MSA

HFF L.P., on behalf of the owner, is pleased to exclusively offer for sale the newly constructed Chick-Fil-A (the “Property”) pad site at Palmer Plaza in Texas City, TX, just southeast

of Houston. Chick-fil-A occupies ±0.9129 acres of land in Texas City, TX and has signed a 15-year absolute bondable NNN lease which is estimated to commence on February,

2019. Shadow anchored by two leading grocery stores, HEB and Aldi, Chick-fil-a is well-positioned in a location with a high volume of foot traffic, which is also generated by a third

grocery store, Kroger, located across Palmer Highway. This opportunity offers investors a stable asset with a high quality, investment grade tenant and no landlord responsibilities.

I N V E S T M E N T S U M M A R YLocation Palmer Plaza

Texas City, TX 77590

Tenant Chick-fil-A, Inc (Corporate Lease)

Site Area 0.9129 acres

Lease Type Absolute “Bondable” NNN

Construction Commencement Date

Fall 2018

Construction Completion Date

March 1, 2019

Rent Commencement Date February 2019

Lease Expiration Date January 2034

Monthly NOI $9,791.67

Annual NOI $117,500.00

Option Periods Six – 5 Year Options (30 Years) with 10% increases

Traffic Count Palmer Highway: 28,000 VPD 36th St N: 12,051 VPD Total: 40,051 VPD

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E X E C U T I V E S U M M A R Y

REPRESENTATIVE IMAGE

Trinity Bay

George BushPark

Trinity River NationalWildlife Refuge

Anahuac NationalWildlife Refuge

Galveston Bay

East Bay

George BushInternational

Airport

George BushInternational

Airport

William P. HobbyAirport

William P. HobbyAirport

HOUSTON

WASHINGTON

MAGNOLIA

HEMPSTEAD

WALLER

CYPRESS

JERSEY VILLAGE

ALDINE

HUMBLE

PORTER

NEW CANEY

CLEVELAND

ATASCOCITAHUFFMAN

DAYTONLIBERTY

SARATOGA

SOUR LAKE

CROBY

MONT BELVIEU

HIGHLANDS

CHANNELVIEW

BAYTOWN

JACINTO CITY

GALENA PARK

BELLAIRE

MEADOWSPLACE

PECAN GROVE

MISSION BEND

RICHMOND

ROSENBERGEAST BERNARD

NEEDVILLE

WHARTON

ROSHARON

FRESNO

PEARLAND

FRIENDSWOOD WEBSTER

SEABROOKKEMAH

BACLIFF

SAN LEON

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HITCHCOCK

TEXAS CITY

GOAT ISLANDBOLIVAR

PENINSULA

SANTA FE

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DEER PARKPASADENA

LA PORTE

BELLVILLE

SEALY BROOKSHIRE KATY

CINCO RANCH

PINEHURST

TOMBALL

THEWOODLANDS

SPRING

CONROE

SUGAR LAND

LEAGUE CITY

GALVESTON

HOUSTON

WASHINGTON

MAGNOLIA

HEMPSTEAD

WALLER

CYPRESS

JERSEY VILLAGE

ALDINE

HUMBLE

PORTER

NEW CANEY

CLEVELAND

ATASCOCITAHUFFMAN

DAYTONLIBERTY

SARATOGA

SOUR LAKE

CROBY

MONT BELVIEU

HIGHLANDS

CHANNELVIEW

BAYTOWN

JACINTO CITY

GALENA PARK

BELLAIRE

MEADOWSPLACE

PECAN GROVE

MISSION BEND

RICHMOND

ROSENBERGEAST BERNARD

NEEDVILLE

WHARTON

ROSHARON

FRESNO

PEARLAND

FRIENDSWOOD WEBSTER

SEABROOKKEMAH

BACLIFF

SAN LEON

DICKINSON

HITCHCOCK

TEXAS CITY

GOAT ISLANDBOLIVAR

PENINSULA

SANTA FE

ALVIN

MANVEL

GREATWOOD

HUNTERSCREEK VILLAGE

DEER PARKPASADENA

LA PORTE

BELLVILLE

SEALY BROOKSHIRE KATY

CINCO RANCH

PINEHURST

TOMBALL

THEWOODLANDS

SPRING

CONROE

SUGAR LAND

LEAGUE CITY

GALVESTON

69

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HEB & ALDI

Grocery Anchored

15-YEAR Remaining Term

ABSOLUTE BONDABLE

NNN Lease

$117,500 YEAR 1 NOI

10% Increases Every Five Years

MAILBOXMONEY

$4.4M* AVG. SALES

Average Chick-fil-A Store - QSR Magazine

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S I T E P L A N

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As part of a $3.5M renovation of Palmer Plaza, located on the northeast corner of Palmer Highway and 36th Street North in Texas City, Chick-fil-A has signed a 15-

year lease on a front pad shadow anchored by HEB and Aldi. Chick-fil-A is building the restaurant at its sole cost and will continue to make rental payments during

construction beginning in February 2019. The redevelopment includes adding new tenants such as Aldi and Ross Dress for Less, improving the aesthetics with better

lighting, signage and landscaping as well as removing overhead lines that has already played a prominent role in attracting credit tenants. Additionally, existing tenant

Dollar Tree will relocate within the shopping center.

C H I C K - F I L- A L E A S E A B S T R A C TAddress: Palmer Plaza

Texas City, TX 77590

Lessee: Chick-Fil-A, Inc (Corporate Lease)

Trade Name: Chick-Fil-A

Site Area: 0.9129 Acres

Rent Commencement Date: February 2019

Term: 15 Years (After the Rent Commencement Date)

Base Rent: Years Monthly NOI Annual NOI

Year 1 - Year 5 $9,791.67 $117,500.00

Year 6 - Year 10 $10,770.83 $129,250.00

Year 11 - Year 15 $11,847.92 $142,175.00

Year 16 - Year 20 (Option Period I) $13,032.71 $156,392.50

Year 21 - Year 25 (Option Period II) $14,335.98 $172,031.75

Year 26 - Year 30 (Option Period III) $15,769.58 $189,234.93

Year 31 - Year 35 (Option Period IV) $17,346.53 $208,158.42

Year 36 - Year 40 (Option Period V) $19,081.19 $228,974.26

Year 41 - Year 45 (Option Period VI) $20,989.31 $251,871.69

Taxes, Insurance, Maintenance: Paid by Tenant directly to billing authority

Tenant Renewal Notice: 9 months before the expiration of the current term

Permitted Use: Any lawful retail purpose, including a restaurant

Vesting of Buildings and Improvements: Upon the expiration or sooner termination of the Lease, and so long as Tenant has no further leasehold or ownership interest in the real property constituting the Demised Premises, title to any buildings or improvements located on the Land (as such term is defined in the Lease), including those constituting the Demised Premises, will vest in and becomethe full and absolute property of Landlord.

Casualty: "If the building upon the land shall be destroyed or damaged by fire or other casualty: A) to any extent during the last 5 years of the initial term or any extension period OR B) At any other time to the extent 25% or more of the full replacement value, Tenant may elect to terminate the lease with 60 days notice. Tenant is responsible for demolition and debris removal with written notice from landlord. If tenant does not elect to terminate the lease, they shall restore the improvements to prior condition and continue paying rent."

4

L E A S E A B S T R A C T

With more than 2,300 stores in 47 states and Washington D.C., Chick-Fil-A has become the largest quick service chicken restaurant

chain in the United States. The privately held company is headquartered in College Park, Georgia, was founded in 1946, and has the

largest revenue per restaurant of any other fast food chain in the US ($4+ million in 2017). Even though it is closed on Sunday, Chick-

fil-A generates more revenue per restaurant than McDonald’s, Starbucks, and Subway combined. The Company has the 8th largest

revenue of all quick service restaurants ($9 Billion in 2017 with 49 consecutive years of sales growth) despite having about 3000 less

stores than the smallest competitor in the top-7. The fast-food chain, best known for its Chick-fil-A® Chicken Sandwich, has seen

consistent growth by adding 75 to 80 stores yearly and only accepting 0.4% of franchisee applicants.

C U S T O M E R E X P E R I E N C E R A N K S A M O N G T H E B E S TChick-Fil-A is able to maintain the highest revenue per restaurant amongst fast food chains due to customer loyalty, a unique menu,

and a friendly staff providing an enjoyable dining experience.

• Recognized for customer experience in the 2018 Temkin Experience Ratings survey

• Earned the top spot in American Customer Satisfaction Index’s 2018 survey of customer satisfaction.

• Named “Best Franchise Brand” in 2018 by Airport Revenue News.

• The Temkin Report found that fast food chains had the 4th highest loyalty rating of 20 industries, only trailing supermarkets, hotels,

and retailers

• Ranked #1 quick service restaurant for “Consumers Choice – Best Overall” category by the Technomic 2018 Consumers’ Choice

Awards

• Only restaurant brand named to the Top 10 “Best Companies to Work For” by 24/7 Wall Street

• Ranked 4th overall, scoring an 81.68 out of 100 on Harris Poll’s Reputation Quotient (80.00 or higher is considered excellent)

• Chick-fil-A locations generate more revenue than any other fast-food restaurant in the U.S. The average franchise of the chicken

company saw $4.4M in sales in 2016, according to restaurant trade publication QSR. The next-closest chains in per-store sales were

Panera Bread and Whataburger, at $2.7M each. - Biznow June 7, 2018

TOP FAST FOOD CHAINS

Rank Company

1 Chick-Fil-A 2 In-N-Out Burger3 Raising Cane’s4 La Madeleine5 Torchy’s Tacos6 Five Guys7 Lion’s Choice8 P. Terry’s9 Habit

10 Mod Pizza

TOP FAST FOOD CHAINS

Company Score

Chick-Fil-A 87Panera Bread 81Papa John's 80

Pizza Hut 80Subway 80Arby's 79

Chipotle 79Domino's 79

Dunkin Donuts 78

Starbucks 78

S A N D L E M A N ’ S A W A R D S O F E X C E L L E N C E 2 0 1 8

A M E R I C A N C O N S U M E R S A T I S F A C T I O N I N D E X 2 0 1 8

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T E N A N T P R O F I L E

$4.4 MILLION

Average Revenue per Store

#1 FAST FOOD

Chain

#1 NATIONWIDE

in Customer Loyalty

8TH LARGEST

fast-food chain (revenue)

1

Source: QSR Magazine Source: Delish & Fox Business Source: QSR Magazine Source: Sandleman’s Awards of Excellence

* The top ten chains were excellent in taste and the quality of their food. Other factors were health and kid appeal.

* The American Customer Satisfaction Index (ACSI®) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States.

Chick-fil-A is shadow anchored by two leading grocers, HEB and Aldi, with a third grocer,

Kroger, located across Palmer Highway. With Palmer highway frontage, the property will

be easily accessible and visible to both residential and workforce customers. Alternatively,

the restaurant is a part of a major retail redevelopment which has already attracted credit

tenants that generate significant foot traffic to the shopping center. Surrounded by multiple

residential neighborhoods, Chick-fil-A will benefit from the family-oriented population,

which experienced growth rates among the highest in Houston due to the growth of the

petrochemical industry. Texas City is a busy deep-water port on Texas’ Gulf Coast, as well

as a petroleum-refining and petrochemical-manufacturing center; this creates a demand

for jobs allowing an increase in disposable income. In efforts to increase population density

and job opportunities, Texas City has been authorized to offer developers incentives

designed to promote economic development such as commercial and retail projects under

Chapter 380 of the local government code. The population was 48,558 in 2017, making it

the third-largest city in Galveston County, behind League City and Galveston.

6

L O C A T I O N H I G H L I G H T S

DEMOGRAPHIC

Population 1-mile 3-mile 5-mile

2023 Projection 8,069 49,284 71,2182018 Estimate 7,580 46,596 66,9482010 Census 6,906 42,489 60,3812000 Census 6,868 41,999 58,074

Population Growth2000 to 2010 0.6% 1.2% 4.0%2010 to 2018 9.8% 9.7% 10.9%2018 to 2023 6.5% 5.8% 6.4%

HH Income 2018 Est. Average Household Income $57,280 $63,942 $67,826

Home Value 2018 Est. Median All Owner-Occupied Housing Value $93,806 $102,177 $110,746

Trinity Bay

5-Mile 10-Mile

George BushPark

Trinity River NationalWildlife Refuge

Anahuac NationalWildlife Refuge

Galveston Bay

East Bay

George BushInternational

Airport

George BushInternational

Airport

William P. HobbyAirport

William P. HobbyAirport

69

610

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1010

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45

45

105

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146

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321146

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PALMER HIGHW

AY | 28,000 VPD

PALMER HIGHW

AY | 28,000 VPD

STATE HIGHWAY 146

STATE HIGHWAY 146

N 34TH STREET N 34TH STREET

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TEXAS CITY REFINERIES TEXAS CITY REFINERIES

®

8

T E X A S C I T Y O V E R V I E W

Texas City is defined by it’s particularly strong economic base, which is built around the petrochemical industry, good educational institution capacity, and a strong health care industry. Texas City employers employ a highly skilled, technical workforce which should be an attraction to newly developing markets in science education products and systems, health care products, and home health care services. Part of the economic development focus of the city will be on recruiting and encouraging new business developments that target these areas. Efforts will be directed toward firms which could be the most successful in the Texas City area, and which can best take advantage of the community’s resources

E C O N O M Y The Texas City economy has long been based on heavy industry, particularly shipping

at the Port of Texas City, as well as petroleum and petrochemical refining. The Texas

City Industrial Complex is a leading center of the petrochemical industry. Within this

complex, the Galveston Bay Refinery operated by Marathon is the second-largest

petroleum refinery in Texas and third-largest in the United States. The Port of Texas

City became the third-leading port in Texas by tonnage and ninth in the nation. In

recent decades, the city’s planners have made efforts to diversify the economy into

tourism, health care, and many other sectors. As early as 1974, Texas City was placed

on the top-ten list for the EPA superfund. Outdated practices for the disposal of toxic

waste have continued there for years.

As of 2010, SSA Marine Company had plans to build a major new cargo container

shipping terminal known as the Texas City International Terminal at Shoal Point. The

project is intended to capitalize on the expansion of the Panama Canal, scheduled for

completion in 2014, which city officials expect to substantially increase trade between

the Gulf Coast and Asia.

The Port of Texas City, operated by the Port of Texas City / Texas City Terminal Railway,

is the eighth-largest port in the United States and the third-largest in Texas, with

waterborne tonnage exceeding 78 million net tons. The Texas City Terminal Railway

Company provides an important land link to the port, handling over 25,000 carloads

per year. The Port of Texas City’s success as a privately-owned port has been aided by

its shareholders, the Union Pacific and Burlington Northern Santa Fe railroads, whose

connections allow for expeditious interchange of their traffic.

E X P A N D I N G P E T R O C H E M I C A L M A R K E T Houston is home to the largest petrochemical complex in the nation and the second-

largest in the world. The Houston petrochemical complex represents 25% of U.S.

refining capacity and 40% of U.S. petrochemical capacity and is located along the 25-

mile Houston Ship Channel at the Port of Houston.

In the Texas Gulf Coast region, more than 20 Polyethylene projects worth more than

$50 billion are under construction and are scheduled to open within the coming years,

as companies invest in new ethylene crackers, propylene production units, refineries

and other expansion projects. The primary driver of this activity is that petrochemical

enterprises benefit directly from lower oil and natural gas prices, as this reduces their

cost to purchase their primary feed stocks for producing/refining plastics, resins, and

other petrochemical products, and transporting oil and natural gas across geographies.

9

T E X A S C I T Y O V E R V I E W

This flurry of petrochemical construction – as firms continue to take advantage of a

low-cost feed stock environment is expected to create tens of thousands of construction

jobs in the short-term and the need for thousands of blue-collar jobs in the longer-term.

E D U C A T I O N The Property is located in the Texas City Independent School District (TCISD), which

serves most of Texas City, and a portion of Tiki Island. On December 2, 2015, Texas

Education Agency Commissioner Michael Williams announced that Texas City ISD

would absorb the La Marque Independent School District (LMISD) effective July 1,

2016; the LMISD annexation increased the size of TCISD by about 33%

The school district accounts for nearly 9,000 students, 14 distinct campuses (4 high

schools, 3 middle schools, 7 elementary schools), and 10 Afterschool Centers on

Education (ACE) administered by the Texas Education Agency. Texas City ISD has

a proud past and a promising future. Graduates have gone on to write and direct

world-renown movies, play professional sports, lead military units, preside as judges

in courts, serve as State Senators, and more; they have become doctors, lawyers,

business owners, mayors and teachers.

Many graduates have returned to Texas City and La Marque to raise their own children

who are now on the path for their own success. The goals in Texas City ISD are high

and are being accomplished thanks to the continued effort by the district, students,

parents and the community. Texas City ISD has proven throughout the last century to

be one of the more innovative school districts in Texas.

ADDITIONAL INFORMATIONRYAN WEST Senior Managing Director | rwest@hfflp.com | 713-852-3535

JOHN INDELLI Director | jindelli@hfflp.com | 713-852-3407

CHARLES STRAUSS Analyst | cstrauss@hfflp.com | 713-212-6574

MARCUS MOODY Analyst | mmoody@hfflp.com | 713-852-3484

This Offering Memorandum has been prepared by HFF for use by a limited number of recipients. All information contained herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective

equity holders, officers, employees and agents makes any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained herein. Further, the Offering Memorandum does not

constitute a representation that no change in the business or affairs of the property or the Owner has occurred since the date of the preparation of the Offering Memorandum. All analysis and verification of the information contained

in the Offering Memorandum is solely the responsibility of the recipient. HFF and Owner and their respective officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon

or relate to the use of the information contained in this Offering Memorandum.

Additional information and an opportunity to inspect the property will be made available upon written request to interested and qualified prospective investors.

Owner and HFF each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice.

Owner shall have no legal commitment or obligations to any recipient reviewing this Offering Memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the

purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

The recipient (“Recipient”) agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum, which is a matter of public record, or is provided

from sources available to the public (b) the Recipient, the Recipient’s employees, agents and consultants (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the need to

know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of HFF and the Owner, and (c) the Recipient and the need to

know parties will not use or permit to be used this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner or HFF or for any purpose other than use in considering whether to purchase

the property. The Recipient and the need to know parties agree to keep this Offering Memorandum and all confidential information contained herein permanently confidential and further agree to use this Offering Memorandum for

the purpose set forth above. If the Recipient has no interest in the property, or if in the future the Recipient or owner discontinue such negotiations, the Recipient will return this Offering Memorandum to HFF.