OFFERING MEMORANDUM

PANERA BREAD & ASPEN DENTALMORGANTON, NORTH CAROLINA

REPRESENTATIVE PHOTO

SUBJECTPROPERTY

WESTERN PIEDMONTCOMMUNITY COLLEGE

1,834 STUDENTS560 EMPLOYEES

15,0

00 CP

D

70

SOUTH MOUNTAINS STATE PARK

267,000 VISITORS ANNUALLY

40

70

BUS

70

70

18

181

70SUBJECTPROPERTY

Mcdonalds

INDUSTRIAL

NEW CONSTRUCTION600 NEW JOBS

QUAKER MEADOW GOLF COURSE

APPROVED $195.5 MILLION EXPANSION

1,400 EMPLOYEES

BROUGHTON HOSPITALNEW $155M CAMPUS

1,400 EMPLOYEES

WESTERN PIEDMONTCOMMUNITY COLLEGE

1,834 STUDENTS560 EMPLOYEES

NORTH CAROLINA SCHOOL FOR THE DEAF

$73M EXPANSTION COMING 2021

MORGANTON HEIGHTS

11,000 CPD

9,900 CPD

19,000 CPD

15,000 CPD

46,000 CPD

LIBERTY MIDDLE538 STUDENTS

ROBERT L PATTON HIGH962 STUDENTS

FREEDOM HIGH1,214 STUDENTS

SOUTH MOUNTAINS STATE PARK

267,000 VISITORS ANNUALLY

J IVERSON RIDDLE DEVELOPMENT CENTER

1,000 EMPLOYEES

NORTH CAROLINA SCHOOL OF

SCIENCE & MATHNEW $58M CAMPUS

Rent RollTENANT GLA % OF

GLAANNUAL

RENT RENT/SF RENTCOMMENCEMENT

LEASETERM OPTIONS CHANGES ON CHANGES TO

Panera Bread 4,500 SF 56% $155,250 $34.50 Est. March/April 2019 15 Years Three, 5-Year Year 6Year 11

Option 1Option 2Option 3

$170,775$187,830$197, 235$207,090$217,440

Aspen Dental 3,500 SF 44% $112,000 $32.00 2/8/2019 10 Years Three, 5-Year Year 6Option 1Option 2Option 3

$123,200$135,520$149,065$163,975

TOTAL 8,000 SF 100% $267,250

ADDRESS:657 W. Fleming Drive, Morganton, NC 28655

Price $ 4,276,000

Cap Rate 6.25%

NOI $267,250

Gross Leasable Area 8,000 SF

Year Built 2019

Lot Size 1.908 +/- Acres REPRESENTATIVE PHOTO

Demographics• 100% Occupied by Panera Bread and Aspen Dental

• 15-Year Lease with Panera Bread, the Largest Franchisee with 280 Locations

• 10-Year Corporate Lease with Aspen Dental

• 10% Increases Every 5 Years

• Brand New 2019 Construction with a Drive-Thru, Minimal Landlord Responsibilities

• 70 Miles Northwest of Downtown Charlotte

• Serving 89,293 Residents in Burke County

• Outparcel to Walmart Supercenter, Dick’s, TJ Maxx, Ross, Belk, and Staples

• Hard Corner Location, Highly Visible to 15,000 Cars/Day Along Primary Commercial Corridor

• Strong Daytime Population, 26,866 Employees within 5 Miles

• 1.5 Miles to Western Piedmont Community College with 1,834 Students and 560 Employees

• Surrounded by Several K-12 Schools with 8,163 Students

• Down the Street from New $58 Million North Carolina School of Science & Math Campus

• Minutes to New $155 Million Broughton Hospital Campus on 275 Acres with 1,200 Employees and CHS Blue Ridge Hospital with 1,400 Employees

• Close Proximity to Pisgah-Nantahala National Forest with 6.8 Million Visitors Annually, 3rd Most Visited National Forest in U.S.

Investment Highlights

POPULATION 1-MILES 3-MILES 5-MILES

2018 Population 3,063 18,819 34,725

2023 Population 3,107 18,912 35,200

HOUSEHOLDS

2018 Households 1,173 7,389 13,353

2023 Households 1,191 7,505 13,697

INCOME2018 Average Household Income $65,052 $60,492 $59,175

EMPLOYEES2018 Number of Employees In Area 4,283 20,702 26,866

34,725Population within

a 5-Mile Radius

$59,175Average Household Income

within a 5-Mile Radius

26,866Number of Employees within a 5-Mile Radius

Founded in 1960, Covelli Enterprises has grown to become the largest franchisee in the Panera system with over 280 Panera locations in North America and Canada. Covelli Enterprises is currently the 4th largest franchisee in the United States and the largest Panera Bread franchisee. Previous owner and operator of 45 McDonald’s franchises, Covelli currently controls, owns and operates 280 Panera locations in 7 states, as well as in Canada. In addition to Panera Bread, Covelli Enterprises is also a franchisee of several Dairy Queen and O’Charley’s Restaurants.

Recognized as having the highest rated restaurant operations and business practices in the industry, Sam Covelli has continually won operational awards for sales, exceptional service, cleanliness, and customer service.

Tenant Overview

OWNERSHIP: TENANT: WEBSITE:

Private

Franchisee

www.panerabread.com

Aspen Dental Management, Inc. (“ADMI”) provides administrative and business support services to Aspen Dental branded dental practices. ADMI licenses the “Aspen Dental” brand name to the independently owned and operated dental practices that use its business support services. ADMI does not own or operate the dental practices, employ or in any way supervise the dentists providing dental care, and control over the care provided is the sole responsibility of the independent practice and the dentists they employ.

700+LOCATIONS

HEADQUARTERED IN

East Syracuse, NY

FOUNDED

1998 TEAM MEMBERS

$500Billion

SALES VOLUME

10,000

OWNERSHIP: TENANT: WEBSITE:

Private

Corporate

www.aspendental.com

MORE THAN

280+LOCATIONS

HEADQUARTERED IN

Warren, Ohio

FOUNDED

1960EMPLOYS OVER

25,000TEAM MEMBERS

REPRESENTATIVE PHOTOREPRESENTATIVE PHOTO REPRESENTATIVE PHOTO

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. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service

mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap ACT IDZAA0090217

LEASE SUMMARIES

LANDLORD RESPONSIBILITIES

Landlord shall be responsible for all maintenance, replacement and repair to the roof, parapets, flashing, gutters, downspouts, canopies and awnings, floor slab, support columns, footers, subfloor, outer walls, common area lights and structural portions of the building. Landlord shall also be responsible for all maintenance, replacement and repair of exterior and underground utility installations and electrical conduit and wire not solely serving the premises.

TENANTRESPONSIBILITIES

Tenant shall make and pay for all maintenance, replacement and repair necessary to keep the premises in a good state of repair, including maintenance replacement and repair of the windows, doors and door frames. Tenant shall install the HVAC and maintain a service contract on the unit.

COMMON AREA MAINTENANCE

Tenant shall pay its pro rata share of CAM, including a 5% admin fee. Annual increases in CAM shall not increase more than 5% excluding utilities and snow and ice removal.

TAXES Tenant shall pay its pro rata share of real estate taxes.

INSURANCE Tenant agrees to carry commercial general liability insurance, property damage insurance, and employer’s liability insurance.

Tenant shall reimburse Landlord for its pro rata share of Landlord’s insurance, including general liability insurance and property damage insurance.

ASSIGNMENT & SUBLETTING

Tenant shall not assign or sublet the lease without Landlord’s written consent, and shall not be relieved of any liability or obligations of the lease.

ESTOPPEL Tenant shall have 20 days from receipt of request to provide an executed estoppel.

LANDLORD RESPONSIBILITIES

Landlord shall maintain the roof and exterior building walls and structural components of the premises.

TENANTRESPONSIBILITIES

Tenant shall, at Tenant’s sole cost and expense, keep the premises, including any interior plumbing systems, in good and sanitary condition and repair, including the HVAC. Tenant shall replace all broken glass and maintain and repair all of Tenant’s store front signage.

COMMON AREA MAINTENANCE

Tenant shall pay its pro rata share of CAM, including a 5% admin fee. Annual increases in CAM shall not increase more than 3% excluding snow and ice removal, insurance and utility expenses for common areas.

TAXES Tenant shall pay its pro rata share of real estate taxes.

INSURANCE Tenant shall procure and maintain commercial general liability insurance, property insurance, employer’s liability insurance and all-risk insurance.

Tenant shall reimburse Landlord for its pro rata share of Landlord’s insurance, including general liability insurance, all-risk property and casualty insurance and rent insurance.

ASSIGNMENT & SUBLETTING

Tenant shall not assign or sublet the lease without Landlord’s written consent, and shall not be relieved of any liability or obligations of the lease.

ESTOPPEL Tenant shall have 15 Days from receipt of request to provide an executed estoppel.

W FLEMING DR.

DRIVETHRU

Site Plan

MORGANTON HEIGHTS SHOPPING CENTER

Morganton is a city and country seat in Burke County, North Carolina. The largest county in western North Carolina, Burke County is location at the foot of the Blue Ridge Mountains.

The state of North Carolina is a major employer in Morganton. State-operated facilities include Broughton Hospital and the North Carolina School of the Deaf. Others include businesses catering to the many tourists who travel through the area.

Southern Railway services Morganton and Burke County by rail and approximately 30 major truck carriers provide ground/freight transportation.

Charlotte and Asheville are about an hour’s drive away. Charlotte’s Douglas International Airport is approximately 70 miles from Morganton and offers about 500 flights per day. General aviation and charter services, as well as housing for numerous corporate and private aircraft are available at the Foothills Regional Airport approximately eight miles northeast of Morganton. This facility is a joint venture between the City of Morganton, Burke County, the City of Lenoir and Caldwell County.

Morganton, NC

5 5 M I L E SAsheville, NC

7 0 M I L E SDowntown Charlotte

1 . 7 M I L E SDowntown Morganton

T O L O C A L A T T R A C T I O N SPROXIMITY

SUBJECTPROPERTY

CONFIDENTIALITY & 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 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.

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.

NET-LEASED DISCLAIMER

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.

PANERA BREAD & ASPEN DENTALMORGANTON, NORTH CAROLINA

BEN YELMBroker of Record

CHARLESTON, NORTH CAROLINA License: 303785