San Diege, CA 92110 3777 MIDWAY DRIVE · Roark Capital Group acquired 81.5% of Arby’s Restaurant Group in July 2011 and now wholly owns Inspire Brands. The Wendy’s Company held

3777 MIDWAY DRIVEDrive-thru

San Diege, CA 92110

A SINGLE TENANT NET LEASED ARBY’S IN A PRIME AND AFFLUENT SAN DIEGO LOCATION WITH OVER FIFTEEN YEARS

OF OUTSTANDING OPERATING HISTORY

TABLE OF CONTENTSTABLE OF CONTENTS

1PROPERTY OVERVIEW

2FINANCIAL ANALYSIS

3COMPARABLES ANALYSIS

4AREA OVERVIEW

INVESTMENT ADVISORS

CONFIDENTIALITY AND DISCLAIMER

The 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 foot-age 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. © 2018 Marcus & Millichap. All rights reserved.

NON-ENDORSEMENT NOTICE

Marcus & 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.

SPECIAL COVID-19 NOTICE All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermediaries between buyers and sellers. Marcus & Millichap and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making.

BRANDON MICHAELSSenior Managing Director of InvestmentsSenior Director, National Retail GroupTel: (818) 212-2794Fax: (818) [email protected]: CA #01434685www.BrandonMichaelsGroup.com

STEVEN SCHECHTERFirst Vice President InvestmentsNational Retail GroupTel: (818) 212-2793Fax: (818) [email protected]: CA #01089464www.BrandonMichaelsGroup.com

SOUTHERN CALIFORNIA'S PREMIER SALES TEAM

PROPERTY OVERVIEW1

SAN DIEGO INTERNATIONAL

AIRPORT

COLUMBIA COLLEGE - SAN DIEGO

ROBB FIELD SKATE PARK

SEAWORLD SAN DIEGO

PECHANGASPORTS CENTER

UNIVERSITY OFSAN DIEGO

OCEAN OCEAN BEACHBEACH

MIDWAY MIDWAY DISTRICTDISTRICT

MISSON HILLSMISSON HILLS

HILLCRESTHILLCREST

LIBERTY LIBERTY STATIONSTATION

TEMECULA TEMECULA HEIGHTSHEIGHTS

LOMA PORTALLOMA PORTAL

SEA

WO

RLD

DR

SEA

WO

RLD

DR

W MISSION BAY DR

W MISSION BAY DR

MIDWAY DR

MIDWAY DR

SAN DIEGO • CASAN DIEGO • CA

8 | Arby’s - 3777 Midway Drive, San Diego, CA 92110 Arby’s - 3777 Midway Drive, San Diego, CA 92110 | 9

The Brandon Michaels Group of Marcus & Millichap is pleased to present for sale a single tenant Arby’s, located at 3777 Midway Drive in San Diego, California. Arby’s has successfully operated at this location for over fifteen years, and recently signed a brand new 15 year absolute triple net lease in April 2020 with three 5 year options and eight percent increases every five years. The lease is backed by a 30+ unit Arby’s franchisee, and also has a personal guarantee in place for five years from the commencement of the lease.

Strategically located on a signalized corner, less than a mile from the 8 Freeway, Arby’s is ideally located in the affluent Point Loma sub-market of San Diego, a dense and affluent highly-amenities sub-market known as one of the strongest locations throughout San Diego. Centrally located in the heart of the Midway District, the subject property is within close proximity to Sea World, the Pechanga Arena of San Diego, University of San Diego, as well as a plethora of high-end national retailers, restaurants, banks, grocers, pharmacies, and hotels.

The 1,793 square foot building is situated on 12,095 square feet of land and benefits from high daily traffic counts north of 20,000 vehicles per day.. Lodging options within half mile radius include the Wyndham, Holiday Inn, Heritage Inn, Bay inn, and Green World Inn.

Arby’s benefits from close proximity to dense single family residential and nearby freeway access to the I-8. The subject property benefits from a dense and affluent local demographic, with a three mile population in excess of 113,289 and an average household income of over $91,000 within one mile and over $109,000 within three miles. Beyond local density, the location sees frequent tourist and visitor traffic.

3777 Midway Drive creates a unique and rare opportunity to purchase a single tenant net leased asset in Southern California’s fast growing residential community of San Diego. The Midway District provides strong daytime vehicle activity as well as nightlife activity from nearby venues such as the Pechango Arena, which seats 12,000 for indoor football, 12,920 for ice hockey and box lacrosse, 14,500 for basketball and tennis, 5,450 for amphitheater concerts and stage shows, 8,900–14,800 for arena concerts, 13,000 for ice shows and the circus, and 16,100 for boxing and mixed martial arts.

Arby’s Inc. is a leading global fast-food restaurant chain founded in 1964 with more than 3,500 restaurants worldwide. They currently have franchises in 48 states and 8 countries, and are headquartered in Atlanta Georgia. Annual total sales for 2019 equal 3.9 Billion. They are currently ranked as the third highest sandwich chain in sales.


San Diege, CA 92110

A SINGLE TENANT NET LEASED ARBY’S IN A PRIME AND AFFLUENT SAN DIEGO

LOCATION WITH OVER FIFTEEN YEARS OF OUTSTANDING

OPERATING HISTORY


INVESTMENT HIGHLIGHTS

CAM

INO

DEL RIO

WCA

MIN

O D

EL RIO W

SPORTS ARENA BLVD

SPORTS ARENA BLVD

MIDWAY DR

MIDWAY DR

ROSE

CRANS S

T

ROSE

CRANS S

T

PACIFIC HWY

PACIFIC HWY

PECHANGA ARENA SAN DIEGO


San Diege, CA 92110

EXCELLENT SAN DIEGO LOCATION STABLE AND SECURE INCOME STREAM WITH STRONG GUARANTEE

STRONG IMMEDIATE DEMOGRAPHICS & POPULATION DENSITY

• Prime Point Loma location in the heart of one of San Diego’sdensest and most affluent sub-markets

• Excellent Visibility and Frontage

• High daily traffic counts along a major San Diego thoroughfare

• Located on a signalized corner on Midway Drive

• Within 1-mile of the I-8 Freeway

• Within .5 Miles of the Pechango Arena

• Walk Score of 73/100, a very walkable area

• Transit score of 43

• Located along Bus Route

• National Retailers in Immediate Area Include Home Depot,Marshalls, Bank of America, Wendy’s, McDonald’s, Jack in theBox

• Traffic Counts in Excess of 20,000 vehicles per day

• 30+ Unit Arby’s Franchisee with Personal Guaranty forFive Years

• Arby’s has over 3500 locations Worldwide

• NNN Lease expires 2035 with three – 5 year options

• Rental increases of 10% every five years

• Management Free Investment

• Scheduled to do full renovation by 2023

• Rare opportunity to acquire a drive-thru restaurant site inSan Diego

• Average household Income of $91,605 within 1-Mile Radius

• Over 113,289 people within a 3- mile radius

• Strong Local Economy with significant job growth over amultitude of diverse sectors

PROPERTY HIGHLIGHTS


ADDRESS 3777 Midway DriveSan Diego, CA 92110

PRICE $3,520,000

BUILDING SF 1,793 SF

LAND SF 12,091 SF

PRICE/SF (BUILDING) $1,963

PRICE/SF (LAND) $291

CAP RATE 3.75%

APN NUMBER 441-250-21-00

ZONING Commercial

(CONTINUED) 3777 Midway DriveSan Diego, CA 92110

LEASE START DATE 2005

LEASE EXPIRATION DATE 3/31/2035

OPTIONS 3 - 5 years

INCREASES 10% every 5 years

LEASE GUARANTORSA Food Services

(30+ locations; personal guarantee for initial five years of new lease term)

2018 SALES REVENUE $37,289,511

$3,250,000PRICE

3.75%

1,793 SF

12,091 SF 15 Years

$6.13

CAP RATE

BUILDING SF

LAND SF LEASE TERM

LEASE TYPE

$3,520,000 1,793 SF NNN

3.75% 12,091 SF 15 Years

* The tenant just signed a new 15 year lease 4/2020.

PROPERTY DETAILS


SITE LOCATION

The subject property is located near the intersection of Midway Drive and Duke Street.

SQUARE FOOTAGES

The total building square footage is 1,793 SF. The total land square footage is 12,095 SF.

YEAR BUILT

The property was built in 1970.

TRAFFIC COUNTS

The traffic counts at the intersection of Midway Drive and Duke Street are 19,826 vehicles per day.

PARKING

18 surface parking spaces are available. The parking ratio is 10.03 per 1,000 SF.

ZONING

The zoning is Commercial.

APN NUMBER

The APN number is 441-250-21-00.

PARKING

18 spaces

ARBY’SDrive-Through

TRAFFIC COUNTS

19,826 vehicles

TENANT OVERVIEW


Arby’s is an American fast food sandwich restaurant chain with more than 3,300 restaurants system wide and third in terms of revenue. In October 2017, Food & Wine called Arby’s “America’s second largest sandwich chain (after Subway)”. Arby’s is owned by Inspire Brands, the renamed Arby’s Restaurant Group, Inc. (ARG).

Roark Capital Group acquired 81.5% of Arby’s Restaurant Group in July 2011 and now wholly owns Inspire Brands. The Wendy’s Company held a minority stake of 18.5% in Arby’s after the acquisition by Roark Capital; that share was reduced to 12.3% upon the purchase of Buffalo Wild Wings, and was sold back to Inspire Brands on August 16, 2018, for 450 million dollars, a 38 percent premium.

In addition to its classic Roast Beef and Beef ‘n Cheddar sandwiches, Arby’s products also include deli-style Market Fresh line of sandwiches, Greek gyros, Curly Fries and Jamocha Shakes. Its headquarters are in Sandy Springs, Georgia, a suburb of Atlanta which uses Atlanta mailing addresses. In 2019, there were 3,472 restaurants. There are locations in five countries outside the United States: Canada, Turkey, Qatar, Kuwait, Egypt, and South Korea.

HEADQUARTERS Sandy Springs, Georgia, United States

NO. OF LOCATIONS 3,472 (as of 2019)

SERVICES Franchising

AREA SERVED United States, Canada, Turkey, Qatar, Kuwai, Egypt, South Korea

PARENT Inspire Brands

WEBSITE www.arbys.com

ARBY’S IS AMERICA’S SECOND LARGEST SANDWICH CHAIN WITH MORE THAN 3,300 BRANCHES.

FINANCIAL ANALYSIS2

FINANCIAL ANALYSIS


TENANT SF SF % LEASE START LEASE EXP OPTIONS RENT** RENT/SF ANNUAL INCREASE

Arby's (Franchisee) 1,793 100% 2005 3/31/2035 3-5 Yr $11,000.00 $6.13 10% Every 5 YrsTOTAL 1,793 100% - - - $11,000.00 $6.13 -

RENT ROLL PRICING

OPTIONS DATES ANNUAL RENT

Option 1 4/1/2035-3/31/2040 $175,692.00Option 2 4/1/2040-3/31/2045 $193,260.00Option 3 4/1/2045-3/31/2050 $212,586.00

OPTIONS

OPERATING DATAINCOME AND EXPENSE CURRENT

Scheduled Lease Income $132,000

Effective Gross Income $132,000

Expenses NNN

Net Operating Income $132,000

Address: Arby’s - 3777 Midway DriveSan Diego, CA 92110

Price: $3,520,000

Building SF: 1,793 SF

Price/SF (Building): $1,963

Land SF: 12,095 SF

Price/SF (Land): $291

CAP Rate: 3.75%

Tenants: Arby’s

Rent/SF: $6.13

Lease Term: 15 Years

Lease Type: NNN

Options: 3 - 5 Years

Annual Increase: 10% Every 5 Years

* The tenant just signed a new 15 year lease 4/2020.** Landlord agreed to reduce the rent to $8,500 per month from July 1, 2020 until June 30, 2023. Commencing on July 1, 2023, the rent shall reinstate until $11,000/ Mo. The reduction in rent is an incentive for Tenant to renovate the the building in compliance with Tenant’s Franchise Agreement. Landlord will credit a buyer the amount of $2,500 per month as per the Close of Escrow until June 30, 2023.

COMPARABLES ANALYSIS3

SALES COMPARABLES


ADDRESS SALE PRICE BUILDING SF PRICE/SF (BUILDING) LAND SF PRICE/SF

(LAND) CAP RATE SALES DATE

15560 E 7th StDunkin DonutsLong Beach, CA 90804

$3,555,000 2,359 $1,506.99 18,165 $195.71 4.50% 9/12/2019

22201 N Bellflower BlvdWendy’sLong Beach, CA 90815

$5,555,500 2,404 $2,310.94 22,651 $245.27 4.50% 1/22/2020

31050 W El Norte PkyJack In The BoxEscondido, CA 92026

$2,925,000 2,899 $1,008.97 43,560 $67.15 4.21% 11/26/2019

4810 N Euclid StTaco BellAnaheim, CA 92801

$2,420,000 1,711 $1,414.38 20,081 $120.51 4.20% 1/3/2020

515482 Goldenwest StDunkin DonutsWestminster, CA 92683

$3,500,000 2,251 $1,554.86 22,651 $154.52 4.29% 8/12/2019

6344 W Manchester BlvdCarl’s Jr.Inglewood, CA 90301

$3,450,000 2,962 $1,164.75 28,475 $121.16 4.25% 2/11/2020

ADDRESS SALE PRICE BUILDING SF PRICE/SF (BUILDING) LAND SF PRICE/SF

(LAND) CAP RATE SALES DATE

728651 Marguerite PkwyAvery CenterMission Viejo, CA 92692

$3,789,000 2,759 $1,373.32 18,295 $207.11 4.50% 7/22/2019

86912 Miramar RdMiramar CenterSan Diego, CA 92121

$1,880,000 1,390 $1,352.52 17,424 $107.90 4.18% 6/28/2019

9201 S Rancho Santa Fe RdKFCSan Marcos, CA 92078

$2,765,000 2,604 $1,061.83 33,106 $83.52 4.77% 9/10/2019

109211 Telegraph RdPopeyesPico Rivera, CA 90660

$3,000,000 2,500 $1,200.00 13,599 $220.60 4.30% 2/22/2019

1131769 The Old RdJack In The BoxCastaic, CA 91384

$3,100,000 2,570 $1,206.23 31,363 $98.84 4.20% 2/26/2020

AVERAGE $3,267,227 2,401 $1,377.71 24,488 $147.48 4.35% -

SALES COMPARABLES


12

2

1

3

4

5

6

7

8

910

11

5560 E 7th St - Dunkin Donuts

2201 N Bellflower Blvd - Wendy’s

1050 W El Norte Pky - Jack In The Box

810 N Euclid St - Taco Bell

15482 Goldenwest St - Dunkin Donuts

344 W Manchester Blvd - Carl’s Jr.

28651 Marguerite Pkwy - Avery Center

6912 Miramar Rd - Miramar Center

201 S Rancho Santa Fe Rd - KFC

9211 Telegraph Rd - Popeyes

31769 The Old Rd - Jack In The Box

3777 Midway Dr - Arby’s

SALES COMPARABLES | PRICE/SF

SALES COMPARABLES | CAP RATE

3

45

10

11

6

7

8

9

AREA OVERVIEW4

SAN DIEGO, CA


San DiegoCalifornia's Beach City

DOWNTOWN & GASLAMP QUARTER HILLCREST LITTLE ITALY NORTH & SOUTH PARK

Anchored by 70 miles of beautiful coastline but brimming with vibrant arts and cultural, dynamic dining and entertainment, here you'll see why San Diego is called "California's Beach City."

San Diego is a city in the U.S. state of California on the coast of the Pacific Ocean, approximately 120 miles south of Los Angeles and immediately adjacent to the border with Mexico. With an estimated population of 1,425,976 as of July 1, 2018, San Diego is the eighth-largest city in the United States and second-largest in California. The city is known for its mild year-round climate, natural deep-water harbor, extensive beaches, long association with the United States Navy, and recent emergence as a healthcare and biotechnology development center.

With near perfect weather year-round, 70 miles of spectacular coastline, world-class attractions and a thriving urban core, complete with a sophisticated art, dining and nightlife scene, San Diego has earned the name California’s beach city.

The largest sectors of San Diego's economy are defense/military, tourism, international trade, and research/manufacturing. The city is the seat of San Diego County and is the economic center of the region as well as the San Diego–Tijuana metropolitan area. San Diego's main economic engines are military and defense-related activities, tourism, international trade, and manufacturing. The presence of the University of California, San Diego (UCSD), with the affiliated UCSD Medical Center, has helped make the area a center of research in biotechnology.

EMPLOYER EMPLOYEES

United States Navy 38,455

University of California, San Diego 29,986

Sharp HealthCare 17,807

County of San Diego 17,384

San Diego Unified School District 14,120

Qualcomm, Inc. 11,600

City of San Diego 11,387

Scripps Health 10,853


POINTS OF INTERESTSSEAWORLD SAN DIEGOSeaWorld San Diego is an animal theme park, oceanarium, outside aquarium and marine mammal park, in San Diego, California, United States, inside Mission Bay Park. Adjacent to the property is the Hubbs-SeaWorld Research Institute, which conducts research on marine biology and provides education and outreach on marine issues to the general public, including information in park exhibits.

BELMONT PARKBelmont Park is a historic amusement park located on Ocean Front at Surfrider Square in the Mission Bay area of San Diego, California. In addition to providing recreation and amusement, it also was intended as a way to help Spreckles sell land in Mission Beach. Located on the beach, it attracts millions of people each year. The park’s most iconic attraction is the historic Giant Dipper roller coaster, which is considered a local landmark.

BALBOA PARKBalboa Park is a 1,200-acre urban cultural park in San Diego, California, United States. In addition to open space areas, natural vegetation zones, green belts, gardens, and walking paths, it contains museums, several theaters, and the world-famous San Diego Zoo. There are also many recreational facilities and several gift shops and restaurants within the boundaries of the park.

SAN DIEGO ZOOThe San Diego Zoo is a zoo in Balboa Park, San Diego, California, housing more than 3,500 animals of more than 650 species and subspecies. Its parent organization, San Diego Zoo Global, is one of the largest zoological membership associations in the world, with more than 250,000 member households and 130,000 child memberships, representing more than a half million people.

OLD TOWNOld Town is a neighborhood of San Diego, California. It is the oldest settled area in San Diego and is the site of the first European settlement in present-day California. It contains Old Town San Diego State Historic Park and Presidio Park, both of which are listed on the National Register of Historic Places.


DEMOGRAPHICS

56,501Owner Occupied Households

within 5-m radius

98,971Renter Occupied Households

within 5-m radius

28,067Businesses within a 5-m radius

$109,330Average HH income within 3-m radius

$84,117Median HH income within 3-m radius

339,471Population within 5-m radius

DEMOGRAPHICS 1 MILE 3 MILES 5 MILES

2020 Total Population: 17,165 113,289 339,471

Pop Growth 2020-2025: 2.02% 2.30% 2.65%

Average Age: 37.20 38.30 38.80

2020 Total Households: 7,644 49,886 155,472

Avg Household Size: 2.10 2.00 2.00

2020 Owner Occupied Households: 2,583 20,645 56,501

2020 Renter Occupied Households: 5,061 29,241 98,971

2020 HOUSEHOLDS BY HOUSEHOLD INCOME

<$25,000 1,408 6,775 23,073

$25,000 - $50,000 1,289 7,750 24,390

$50,000 - $75,000 1,418 8,103 25,808

$75,000 - $100,000 835 6,348 20,013

$100,000 - $125,000 916 6,064 16,702

$125,000 - $150,000 705 3,748 11,285

$150,000 - $200,000 485 4,741 15,811

$200,000+ 589 6,357 18,390

2020 Median Household Income $70,251 $84,117 $80,577

2020 Average Household Income $91,605 $109,330 $106,176

Total Population of San Diego, CA. The median age is 35.4.

MaleEDUCATION

Female

1.43 MILLION

50%50%

Less Than High School10%

Bachelor’s Degree or Higher45%

Some College or Associates Degree

27%High School or GED15%


San Diege, CA 92110

BRANDON MICHAELSSenior Managing Director of InvestmentsSenior Director, National Retail GroupTel: (818) 212-2794Fax: (818) [email protected]: CA #01434685www.BrandonMichaelsGroup.com

STEVEN SCHECHTERFirst Vice President InvestmentsNational Retail GroupTel: (818) 212-2793Fax: (818) [email protected]: CA #01089464www.BrandonMichaelsGroup.com

Documents

San Diege, CA 92110 3777 MIDWAY DRIVE · Roark Capital Group acquired 81.5% of Arby’s Restaurant Group in July 2011 and now wholly owns Inspire Brands. The Wendy’s Company held