™TACO BELL12 0 1 S W H K D O D G E N L O O P | T E M P L E , T X

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

Year Built

1983

Square Footage

± 1,670

List Price

$1,850,000

Cap Rate

5.00%

Property Name

Taco Bell

Term Remaining

± 11.75 Years

JOSH BISHOPVP & Directorjosh.bishop@matthews.comDIR 214.692.2289MOB 315.730.6228LIC # 688810 (TX)

CHAD KURZSVP & National Directorchad.kurz@matthews.comDIR 214.692.2927MOB 562.480.2937LIC # 01911198 (CA)

KYLE MATTHEWSBROKER OF RECORDLIC # 9005919 (TX)

BROKER OF RECORD

LISTED BYSCOTT HENARDSVP & Regional Directorscott .henard@matthews.comDIR 214.692.2046MOB 972.998.7373LIC # 684841 (TX)

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BROKER OF RECORD

E X E C U T I V EO V E R V I E W

• The Best Corner in Temple: Property sits on a strong signalized corner with 15 traffic lanes and combined traffic counts of over 50,000 VPD, arguably the best real estate in Temple

• Dominant Grocer Outparcel: Property is an outparcel to H-E-B Grocery Anchored Center; - H-E-B is a top 20 retailer in the US, one of the 15th largest private companies in the US, and was recently ranked the Retailer of the Year

• Dominant Retail Area: Nearly 2,000,000 square feet of retail in the immediate vicinity anchored by Temple Mall, Walmart SuperCenter, Lowe’s Home Improvement, and Sam’s Club

• Property Sits Between Two Large Hospitals: Baylor Scott & White is located just to the north with ±650 beds and Baylor Scott & White Children’s Hospital is located just to the East with over 100 beds

• The Heart of Texas: Temple, TX sits in the middle of Texas between San Antonio - Austin and Dallas - Fort Worth along Interstate 35

• Rapid Growth: Anticipated population growth of more than 8.10% over the next 5 years

TENANT HIGHLIGHTS

LEASE HIGHLIGHTS

LOCATION, LOCATION, LOCATION:

• Strong Store Performance: Tenant reports store sales that are well above the national average and lease includes percentage rent clause

• Strong Rent Growth: Rent will increase nearly 5% in less than two years and an additional 10% in 7 years • Absolute NNN Lease: Extremely passive investment with tenant covering all expenses relating to the property • Long-Term Lease: Nearly 12 years remains on original lease term with 4, 5-year options

• E-Commerce Proof Concept: Taco Bell is resistant to the “Amazon Effect” and has experienced strong store sales growth

• Large Taco Bell Operator: Tacala is one of the largest and most respected Taco Bell operators in the country with over 280 locations

• Great Rent to Sales Ratio: Tenant is performing at a low 5% rent to sales ratio

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

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FINANCIAL HIGHLIGHTS

LIST PRICE

$1,850,000

CAP RATE

5.00%

TERM REMAINING

± 11.75 YEARS

TENANT SUMMARY

Tenant Trade Name Taco Bell

Type of Ownership Ground Lease

Lease Type NNN

Roof & Structure Tenant Responsibility

Rent Commencement Date 5/1/1983

Lease Expiration Date 7/31/2029

Increases Yes

Extensions Four, 5-Year Extensions

ANNUALIZED OPERATING DATA

Annual Rent Rent/SF Cap Rate

Current - 7/31/2019 $92,500.00* $55.39 5.00%

8/1/2019 - 7/31/2024 $96,800.00 $57.96 5.23%

8/1/2024 - 7/31/2029 $106,480.00 $63.76 5.76%

Extension 1 FMR

Extension 2 FMR

Extension 3 FMR

Extension 4 FMR

EXECUTIVE SUMMARY

Property Name Taco Bell

Property Street 1201 SW H K Dodgen Loop

City, State, Zip Temple, TX 76502

Gross Leasable Area ± 1,670 SF

Year Built 1983

Lot Size ± 0.68 Acres

F I N A N C I A LO V E R V I E W

*Base rent is $88,000, percentage rent is $4,250 for a combined $92,500. Base rent increases to $96,800 on 8/1/2019

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T E N A N T O V E R V I E W

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Operating as a subsidiary of Yum! Brands, Inc., Taco Bell Corp. owns operates, and franchises a chain of Mexican-inspired quick service restaurants in the United States. The company’s restaurants offer made to order and customizable tacos, burritos, quesadillas, gorditas, nachos, chalupas, beverages, desserts and sides, and other specialty items. As the leading Mexican-inspired quick service restaurant brand, Taco Bell and its more than 350 franchise organizations proudly serve over 42 million customers each week through nearly 7,000 restaurants across the nation, as well as through its mobile, desktop and delivery ordering services. Overseas, Taco Bell has over 250 restaurants, with plans to add 2,000 more restaurants internationally within the next decade. In 2016, Taco Bell was named as one of Fast Company’s Top 10 Most Innovative Companies in the World. Taco Bell plans to have 8,000 restaurants by the year 2023, which is anticipated to add an estimated 100,000 jobs nationwide.

TACALA COMPANIESDick Reese and Don Ghareeb opened their first location in Columbiana, AL in 1989. Over the past three decades, Tacala has grown to over 280 locations in the Southeast and Texas. At the end of 2012, Altamont Capital Partners, a private equity firm with $500 million of capital under management, acquired a majority ownership in Tacala. In 2013, Tacala acquired Austaco, an 80-unit Taco Bell operation based in Texas because it was a perfect fit and gave the company more development opportunities going forward. Today, Tacala Companies is the largest Taco Bell franchisee in the system.

TACO BELL

P A R E N T C O M P A N Y T R A D E N A M E Y U M ! B R A N D S , I N C . ( N Y S E : Y U M )

H E A D Q U A R T E R E DI R V I N E , C A L I F O R N I A

W E B S I T EW W W .T A C O B E L L . C O M

# O F L O C A T I O N S± 6 , 5 0 0

# O F E M P L O Y E E S± 1 7 5 , 0 0 0

C R E D I T R A T I N G ( S & P )B B B

Y E A R F O U N D E D1 9 5 4

8

Oceanside Blvd ± 31,792

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PARCEL MAP

TENANT SUMMARY

Property Address1201 SW H K Dodgen Loop

Temple, TX 76502

SITE DESCRIPTIONNumber of Stories One

Year Built 1983

Lot Size ± 0.68 Acres (29,708 SF)

Type of Ownership Ground Lease

Parking ± 38 Surface Spaces

Parking Ratio 22.75 : 1,000 SF

Landscaping Professional

Topography Generally Level

THE OFFERING

P R O P E R T YO V E R V I E W

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

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TEMPLE, TXTemple is a city in Bell County, Texas and as of 2016, the city has a population of

73,600 according to a US census estimate. Located near the county seat of Belton,

Temple lies in the region referred to as Central Texas and is a principal city of the

Killeen–Temple–Fort Hood Metropolitan Statistical Area. The metro region has a

population of 450,051. Located off Interstate 35, Temple is 65 miles north of Austin

and 34 miles south of Waco.

Temple has developed as a small city with a number of arts and retail amenities not

typically associated with a smaller community. The primary economic drivers are

the extensive medical community (mostly due to Scott & White Medical Center) and

goods distribution based on its central location between the Dallas-Fort Worth, San

Antonio, and Houston metro areas, and proximity to larger neighbors Austin and

Waco.

POPULATION 1 Mile 3 Mile 5 Mile

2022 Projection 8,420 53,780 74,324

2017 Estimate 7,845 49,747 68,854

2010 Census 7,535 47,261 64,131

Growth 2017-2022 7.33% 8.11% 7.94%

HOUSEHOLDS 1 Mile 3 Mile 5 Mile

2022 Projection 3,875 23,071 30,915

2017 Estimate 3,541 21,016 28,213

2010 Census 3,264 19,309 25,526

Growth 2017-2022 9.42% 9.78% 9.58%

INCOME 1 Mile 3 Mile 5 Mile

2017 Est. Average Household Income

$55,081 $64,799 $67,048

DEMOGRAPHICS

A R E A O V E R V I E W

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Over a hundred years ago, the local economy began with the regional Santa Fe Railroad hospital. Temple now thrives in a complex economy, with both goods distribution and its reputation as a regional medical center leading the way. Baylor Scott & White is the largest employer in the area with over 12,000 employees, most of which are located at Scott & White Medical Center.

Temple is home to many regional distribution centers and is headquarters to two large, multi-national companies, Wilsonart International and McLane Company, as well as parent McLane Group. In addition to some manufacturing, there is also a developing customer service/call center industry. Temple is also home to the Temple Bottling Company which produces Dr. Pepper.

Temple is known as a regional medical center, with three major hospitals, Scott & White Medical Center, McLane Scott & White Children’s Hospital, and Olin E. Teague Veterans’ Medical Center. As a small city with such extensive medical facilities, Temple has the highest number of physicians per capita in the country with 230 physicians per 100,000 residents. Scott & White is the largest employer in town with about 12,000 employees. Temple is home to one of the Texas A&M College of Medicine campuses.

ECONOMY TOP EMPLOYERS

This Offer ing Memorandum contains select informat ion pertaining to the business and af fa i rs of Taco Bell located at 1201 SW H K Dodgen Loop, Temple, TX 76502 (“Property”) . 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:

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 TAT E M E N T

EXCLUSIVELY LISTED BY

KYLE MATTHEWSBROKER OF RECORDLIC # 9005919 (TX)

CHAD KURZSVP & NATIONAL DIRECTORchad.kurz@matthews.comDIR 214 .692.2927MOB 562.480.2937LIC # 01911 198 (CA)

JOSH BISHOPVP & DIRECTORjosh.bishop@matthews.comDIR 214 .692.2289MOB 315.730.6228LIC # 688810 (TX)

BROKER OF RECORD

™

TACO BELL12 0 1 S W H K D O D G E N L O O P | T E M P L E , T X

SCOTT HENARDSVP & REGIONAL DIRECTORscott .henard@matthews.comDIR 214 .692.2046MOB 972.998.7373LIC # 684841 (TX)

11-2-2015

Information About Brokerage ServicesTexas law requires all real estate license holders to give the following informaƟon about

brokerage services to prospecƟve buyers, tenants, sellers and landlords.

TYPES OF REAL ESTATE LICENSE HOLDERS: .• A BROKER is responsible for all brokerage acƟviƟes, including acts performed by sales agents sponsored by the broker. • A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.

A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents): • Put the interests of the client above all others, including the broker’s own interests; • Inform the client of any material informaƟon about the property or transacƟon received by the broker;• Answer the client’s quesƟons and present any offer to or counter-offer from the client; and • Treat all parƟes to a real estate transacƟon honestly and fairly.

A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:

AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a wriƩen lisƟng to sell or property management agreement. An owner's agent must perform the broker’s minimum duƟes above and must inform the owner of any material informaƟon about the property or transacƟon known by the agent, including informaƟon disclosed to the agent or subagent by the buyer or buyer’s agent.

AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a wriƩen representaƟon agreement. A buyer's agent must perform the broker’s minimum duƟes above and must inform the buyer of any material informaƟon about the property or transacƟon known by the agent, including informaƟon disclosed to the agent by the seller or seller’s agent.

AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parƟes the broker must first obtain the wriƩen agreement of each party to the transacƟon. The wriƩen agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligaƟons as an intermediary. A broker who acts as an intermediary:

• Must treat all parƟes to the transacƟon imparƟally and fairly; • May, with the parƟes' wriƩen consent, appoint a different license holder associated with the broker to each party (owner and

buyer) to communicate with, provide opinions and advice to, and carry out the instrucƟons of each party to the transacƟon. • Must not, unless specifically authorized in wriƟng to do so by the party, disclose:

ᴑ that the owner will accept a price less than the wriƩen asking price; ᴑ that the buyer/tenant will pay a price greater than the price submiƩed in a wriƩen offer; andᴑ any confidenƟal informaƟon or any other informaƟon that a party specifically instructs the broker in wriƟng not to

disclose, unless required to do so by law.

AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transacƟon without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.

TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH: • The broker’s duƟes and responsibiliƟes to you, and your obligaƟons under the representaƟon agreement. • Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.

LICENSE HOLDER CONTACT INFORMATION: This noƟce is being provided for informaƟon purposes. It does not create an obligaƟon for you to use the broker’s services. Please acknowledge receipt of this noƟce below and retain a copy for your records.

Licensed Broker /Broker Firm Name or Primary Assumed Business Name

License No. Email Phone

Designated Broker of Firm License No. Email Phone

Licensed Supervisor of Sales Agent/Associate

License No. Email Phone

Sales Agent/Associate’s Name License No. Email Phone

Regulated by the Texas Real Estate Commission

Buyer/Tenant/Seller/Landlord Initials

InformaƟon available at www.trec.texas.gov IABS 1-0

Date

Kyle Matthews/Matthews Retail Group Inc. 678067 kyle.matthews@matthews.com (310) 919-5757

Kyle Matthews 678067 kyle.matthews@matthews.com (310) 919-5757