burger king - constant...

705 Vernon Avenue - EAST FERGUS FALLS, MINNESOTA 56537

Burger K ing

ACTUAL PROPERTY

o f f e r i n g m e m o r a n d u m

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of © 2016 Marcus & Millichap. Activity ID: Y0330993 1


Financia l Overv iew

Annualized Operating Data

Base Rent Annual RentMonthly

Rent

Current 10/31/2017 $73,504 $6,125

11/1/2017 10/31/2018 $74,423 $6,202 1.25%

11/1/2018 10/31/2019 $75,353 $6,279 1.25%

11/1/2019 10/31/2020 $76,295 $6,358 1.25%

11/1/2020 10/31/2021 $77,249 $6,437 1.25%

11/1/2021 10/31/2022 $78,214 $6,518 1.25%

11/1/2022 10/31/2023 $79,192 $6,599 1.25%

11/1/2023 10/31/2024 $80,182 $6,682 1.25%

11/1/2024 10/31/2025 $81,184 $6,765 1.25%

11/1/2025 10/31/2026 $82,199 $6,850 1.25%

11/1/2026 10/31/2027 $83,226 $6,936 1.25%

11/1/2027 10/31/2028 $84,267 $7,022 1.25%

11/1/2028 10/31/2029 $85,320 $7,110 1.25%

11/1/2029 10/31/2030 $86,387 $7,199 1.25%

11/1/2030 10/31/2031 $87,466 $7,289 1.25%

11/1/2031 10/31/2032 $88,560 $7,380 1.25%

11/1/2032 10/31/2033 $89,667 $7,472 1.25%

11/1/2033 10/31/2034 $90,788 $7,566 1.25%

PRICE $1,176,064

CAP RATE 6.25%

NOI $73,504

PRICE PER SQUARE FOOT $358.01

RENT PER SQUARE FOOT $22.38

YEAR BUILT 1972

APPROXIMATE LOT SIZE 0.94 Acres

GROSS LEASEABLE AREA 3,285

TYPE OF OWNERSHIP Fee Simple

LEASE GUARANTOR Corporate Guaranty

LEASE TYPE Absolute Net

ROOF AND STRUCTURE Tenant Responsible

LEASE COMMENCEMENT DATE 10/31/2014

LEASE EXPIRATION DATE 10/31/2034

LEASE TERM 20 Years

TERM REMAINING 17+ Years

INCREASES 1.25 Percent Annually

OPTIONS TO RENEW Four, Five-Year Options

OPTIONS TO TERMINATE None

OPTIONS TO PURCHASE None

FIRST RIGHT OF REFUSAL None

Offering Summary

Lease Summary

ACTUAL PROPERTY



Investment Overv iew

• Burger King in East Fergus Falls, Minnesota | 60 Miles South of Fargo, North Dakota and 170 Miles North of Minneapolis, Minnesota

• Tenant Demonstrates Commitment | Plans to Commit Significant Capital | “20/20” Renovation Scheduled for 2019

• More than 17 Years Remaining on Absolute Net Lease | Zero Landlord Responsibilities

• Strong Inflation Hedge | 1.25 Percent Annual Rent Increases Over the Base Term and in Four, Five-Year Renewal Options

• Lease is Corporately Guaranteed by Meridian Restaurant Unlimited, Limited Company Plus a Full Term Personal Guaranty from Both Principals | 100-Unit Franchisee Restaurant Operator Across Multiple Concepts

• Less Than Three Miles From Minnesota Community and Technical College and Fergus Falls Senior High School | Combined Enrollment is More Than 9,500 Students

• Irreplaceable Hard Corner Location | Intersection of East Vernon Ave and South Burlington Ave

• Half of A Mile From Fergus Falls Largest Employer | Lake Region Healthcare | 100 Bed-Hospital

• Additional Tenants in the Immediate Vicinity Include: Casey’s General Store, Dairy Queen, Domino’s Pizza, Walgreens, Subway, Pizza Hut, Applebee’s, Walmart Supercenter, Target, McDonald’s, Arby’s, The Home Depot, Wells Fargo, O’Reilly Auto Parts, Verizon, Anytime Fitness, and More.

Marcus & Millichap is pleased to present this 3,285-square foot Burger King in East Fergus Falls, Minnesota; which is 60 miles south of Fargo, North Dakota and 170 miles north of Minneapolis, Minnesota. There are more than 17 years remaining on Burger King’s absolute net lease, where the tenant is responsible for all expenses associated with the asset. The lease features 1.25 percent annual rent increases over the base term and in the four, five-year renewal options.

The lease is corporately guaranteed by Meridian Restaurant Unlimited, Limited Company, as well as a strong, full-term, personal guaranty from its principals. Meridian Restaurant Unlimited, Limited Company is a 100-unit franchisee restaurant operator across multiple concepts. The tenant plans to invest significant capital: the “20/20” renovation is scheduled for 2019, demonstrating Burger King’s commitment to the site.

This asset is located on an irreplaceable hard corner at the intersection of East Vernon Ave and South Burlington Ave. The subject property is also less than three miles from Minnesota Community and Technical College and Fergus Falls Senior High School; the combined enrollment at both schools is more than 9,500 students. Lake Region Healthcare, Fergus Falls’ largest employer, is half of a mile away, boasting more than 100 beds.

Additional tenants in the immediate vicinity include: Casey’s General Store, Dairy Queen, Domino’s Pizza, Walgreens, Subway, Pizza Hut, Applebee’s, Walmart Supercenter, Target, McDonald’s, Arby’s, The Home Depot, Wells Fargo, O’Reilly Auto Parts, Verizon, and Anytime Fitness.

ACTUAL PROPERTY



Tenant Overv iew - Burger K ing

Every day, more than 11-million guests visit Burger King restaurants around the world. And they do so because Burger King restaurants are known for serving high-quality, great-tasting, and affordable food. Founded in 1954, Burger King is the second largest fast food hamburger chain in the world. The original Home of the Whopper, Burger King’s commitment to premium ingredients, signature recipes, and family-friendly dining experiences is what has defined their brand for more than 50 successful years. In 2010, 3G Capital, a global multi-million-dollar investment firm focused on long term value creation, purchased Burger King Corporation, making it a privately-held company. In 2014, Burger King purchased Tim Hortons, and after the deal closed Burger King was renamed Restaurant Brands International, Incorporated. As of June 2017, 3G capital owns more than 96 percent of Restaurant Brands International.

Meridian Restaurants was founded in 2002 with 14 restaurants, and in 2016 they attained a long-term goal of 100 restaurants consisting of three top-tier brands across eight mid-western states: Burger King, El Pollo Loco, and Chili’s. The tenant; NDM Restaurants, Limited Company; is a wholly owned subsidiary of Meridian Restaurants Unlimited, Limited Company. The lease is corporately guaranteed by Meridian Restaurants Unlimited, Limited Company; as well as a full-term personal guaranty from the entity’s principals: David A. Harper and Stephan L Ralston.

Harper is a Senior Restaurant Operations Executive with more than 25 years of experience in multi-unit management, financial accountability, strategic planning, and project management in both franchisee and company operations. As of March 2016, Harper was an operating partner in more than 70 Burger Kings registering more than $68-Million in annual sales.

TENANT PROFILE

TENANT TRADE NAME Burger King

OWNERSHIP Private

TENANT NDM Restaurants, Limited Company

LEASE GUARANTOR

Meridian Restaurants Unlimited,

Limited Company + Full-Term Personal

Guaranty

NUMBER OF LOCATIONS 100 Units

HEADQUARTERED South Ogden, Utah

WEB SITEhttps://www.meridianrestaurantsunlimited.

com/



Aer ia l Overv iew



Area Overview & Demographics

1-Mile 3-Mile 5-Mile

P o p u l a t i o n2000 Population 14,466 16,451 19,816

2010 Population 13,885 15,935 19,385

2017 Population 14,014 15,876 19,002

2022 Population 14,165 16,005 19,094

Daytime Employment 2,500 32,479 14,743


H o u s e h o l d s


H o u s e h o l d ( H H ) I n c o m e s2000 Households 5,956 6,700 7,997

2010 Households 6,063 6,875 8,263

2017 Households 6,119 6,854 8,107

2022 Households 6,185 6,911 8,148

2017 Average HH Income $62,728 $65,426 $68,608 2017 Median HH Income $46,332 $48,440 $52,022 2017 Per Capita Income $27,389 $28,246 $29,271



Fergus Falls is a big, small town with many of the same features as a city several times its size. Attractions include golf courses, kayaking, bike paths, water sports-exercise clubs, coffee houses, classic 19th century architecture, book stores, a dance studio, movie theaters, restaurants and a vibrant arts scene.

The natural environment is a main attraction in the area. Fergus Falls is located beneath a major flyway for North American migratory birds. There are more than 1,000 lakes in Otter Tail County, and the beautiful Otter Tail River flows through the center of town. The nearby Prairie Wetlands Learning Center is an environmental education center established by the US Fish and Wildlife Service, and the center’s walking trails encourage visitors to enjoy the beauty of the prairie.

As the Otter Tail County seat, there are many government offices and services readily accessible in Fergus Falls. Shopping opportunities range from national chains to boutiques and antiques in the historic downtown. Located just off Interstate 94, the campus is only an hour from Fargo-Moorhead and less than three hours from Minneapolis-St. Paul.

Market Overview - Fergus Fal ls, Minnesota



Brokers Of RecordCra i g Pa t t e r son

Ma rcus & M i l l i c hap1350 Lagoon Avenue, Su i t e 840

Minneapo l i s , MN 55408Te l : (952 ) 852-9700Fax : (952 ) 852-9710L i cense : 40206188

Burger King

burger king - constant...

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