red lobster - real estate website templates lobster - 47… · red lobster. 479 n. telegraph road....

Red Lobster479 N. Telegraph Road

Waterford, MI 48328

OFFERING MEMORANDUME X C L U S I V E N E T – L E A S E O F F E R I N G

Marcus & Millichap hereby advises all prospectivepurchasers of Net Leased property as follows:

The information contained in this Marketing Brochure hasbeen obtained from sources we believe to be reliable.However, Marcus & Millichap has not and will not verifyany of this information, nor has Marcus & Millichapconducted any investigation regarding these matters.Marcus & Millichap makes no guarantee, warranty orrepresentation whatsoever about the accuracy orcompleteness of any information provided.

As the Buyer of a net leased property, it is the Buyer’sresponsibility to independently confirm the accuracy andcompleteness of all material information beforecompleting any purchase. This Marketing Brochure is nota substitute for your thorough due diligence investigationof this investment opportunity. Marcus & Millichapexpressly denies any obligation to conduct a due diligenceexamination of this Property for Buyer.

Any projections, opinions, assumptions or estimates usedin this Marketing Brochure are for example only and donot represent the current or future performance of thisproperty. The value of a net leased property to youdepends on factors that should be evaluated by you andyour tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and constructionadvisors should conduct a careful, independentinvestigation of any net leased property to determine toyour satisfaction with the suitability of the property foryour needs.

Like all real estate investments, this investment carriessignificant risks. Buyer and Buyer’s legal and financialadvisors must request and carefully review all legal andfinancial documents related to the property and tenant.While the tenant’s past performance at this or otherlocations is an important consideration, it is not aguarantee of future success. Similarly, the lease rate for

some properties, including newly-constructed facilities ornewly-acquired locations, may be set based on a tenant’sprojected sales with little or no record of actualperformance, or comparable rents for the area. Returnsare not guaranteed; the tenant and any guarantors mayfail to pay the lease rent or property taxes, or may fail tocomply with other material terms of the lease; cash flowmay be interrupted in part or in whole due to market,economic, environmental or other conditions. Regardlessof tenant history and lease guarantees, Buyer isresponsible for conducting his/her own investigation of allmatters affecting the intrinsic value of the property andthe value of any long-term lease, including the likelihoodof locating a replacement tenant if the current tenantshould default or abandon the property, and the leaseterms that Buyer may be able to negotiate with apotential replacement tenant considering the location ofthe property, and Buyer’s legal ability to make alternateuse of the property.

By accepting this Marketing Brochure you agree to releaseMarcus & Millichap Real Estate Investment Services andhold it harmless from any kind of claim, cost, expense, orliability arising out of your investigation and/or purchaseof this net leased property.

CONFIDENTIALITY AND DISCLAIMER

The information contained in the following MarketingBrochure is proprietary and strictly confidential. It isintended to be reviewed only by the party receiving itfrom Marcus & Millichap and should not be made availableto any other person or entity without the written consentof Marcus & Millichap. This Marketing Brochure has beenprepared to provide summary, unverified information toprospective purchasers, and to establish only a preliminarylevel of interest in the subject property. The informationcontained herein is not a substitute for a thorough duediligence investigation. Marcus & Millichap has not madeany investigation, and makes no warranty orrepresentation, with respect to the income or expenses for

the subject property, the future projected financialperformance of the property, the size and square footageof the property and improvements, the presence orabsence of contaminating substances, PCB’s or asbestos,the compliance with State and Federal regulations, thephysical condition of the improvements thereon, or thefinancial condition or business prospects of any tenant, orany tenant’s plans or intentions to continue its occupancyof the subject property. The information contained in thisMarketing Brochure has been obtained from sources webelieve to be reliable; however, Marcus & Millichap hasnot verified, and will not verify, any of the informationcontained herein, nor has Marcus & Millichap conductedany investigation regarding these matters and makes nowarranty or representation whatsoever regarding theaccuracy or completeness of the information provided. Allpotential buyers must take appropriate measures to verifyall of the information set forth herein.

NON-ENDORSEMENT NOTICE

Marcus & Millichap Real Estate Investment Services, Inc.(“M&M”) is not affiliated with, sponsored by, or endorsedby any commercial tenant or lessee identified in thismarketing package. The presence of any corporation’slogo or name is not intended to indicate or implyaffiliation with, or sponsorship or endorsement by, saidcorporation of M&M, its affiliates or subsidiaries, or anyagent, product, service, or commercial listing of M&M,and is solely included for the purpose of providing tenantlessee information about this listing to prospectivecustomers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENTONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAPAGENT FOR MORE DETAILS.

CONFIDENTIALITY AND DISCLAIMER

Table of Contents

Financial Overview

Offering TermsInvestment Highlights & OverviewConcept Overview Lease Summary

Location Overview

Location Highlights & OverviewSurrounding Aerial MapProperty PhotoLocal MapRegional Map

Demographics

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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 theinformation 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 InvestmentServices is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap 5

Marcus & Millichap is pleased to present the exclusive listing for aRed Lobster located 470 N. Telegraph Road in Waterford, MI. Theproperty consists of approximately 9,327 square feet of buildingspace and sits on 2.1 acres of land.

This Red Lobster is subject to a 20-year triple-net (NNN) lease, withroughly 18 years remaining on the lease. Current annual rent is$222,376. The rent is scheduled to increase by two percent annually,including through the four, five year tenant renewal options.

Red Lobster is the largest seafood restaurant concept in the worldand is an iconic full service brand with broad demographic appealand significant advertising budget. Red Lobster is led by anexperienced management team with a history of success leading thebrand (average 27+ years of experience across the executive team).The company generates $2.5 billion in revenue and is the 5th largestcasual dining concept in North America.

Offering Terms Investment Highlights

Investment Overview

Financial Summary

Long-Term Absolute Triple-Net (NNN) Lease | 18 YearsRemainingCorporate Guarantee | Backed By 705 Corporate LocationsFour, Five-Year Tenant Renewal OptionsTwo Percent Annual Rent Increases, Including Through Option

Periods

Property Name Red LobsterLocation 479 N. Telegraph Road

Wateford Twp, MI 48328Price $3,867,409 CAP Rate 5.75%Net Operating Income $222,376 Price Per SF $415 Rent Per SF $23.84 Building Size (SF) 9,327Lot Size 2.1 Acres

Purchase Price NOI CAP Rate$3,867,409 $222,376 5.75%

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6This 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 bearsall 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. © 2013 Marcus & Millichap

• Red Lobster is the largest seafood restaurant concept in theworld and is an iconic full service brand with broaddemographic appeal and a significant advertising budget (2nd

largest in casual dining).

• The Company was founded in 1968 and currently operates704 restaurants throughout the United States and Canadaand has 43 franchised restaurants in international markets.

• Red Lobster is led by an experienced management team witha history of success leading the brand (average 27+ yearsexperience across executive team).

• The company generates $2.5B in revenue and is the 6th

largest casual dining concept in North America.

• On July 28th, 2014, Golden Gate Capital (“GGC”) acquiredRed Lobster from Darden Restaurants.

• Red Lobster is now an independently owned company,completely separate from Darden Restaurants.

• Red Lobster is well capitalized with >$200M net worth and>$200M of liquidity.

• Golden Gate Capital has a long, successful track record andsignificant experience with multi-unit restaurant and retailbusinesses.

The Transaction

OUR HISTORY

FRESH IS IN OUR FOODEach day, you’ll find an updated selection of fresh fish onour Today’s Fresh Fish menu, not to mention live Mainelobster, freshly baked Cheddar Bay Biscuits™, crisp saladsand a host of fresh seafood recipes waiting to beexplored.

FRESH IS IN OUR KNOWLEDGENo one knows seafood better than we do. As globalseafood buyers, we have employees stationedthroughout the world who inspect our seafood themoment it comes out of the water. They ensure it meetsstandards that are second to none. Then, the renownedchefs at our culinary center deliver the fresh expertisethat turns it all into something truly special.

FRESH IS IN OUR DEDICATIONWe hold ourselves to the highest standards for service,quality and a welcoming atmosphere. And we’re focusedon doing what’s right – for our employees, in ourcommunities and in the world.

FRESH IS IN OUR COMMITMENTYou deserve the freshest food and thinking. So every timeyou visit one of our seafood restaurants or our onlineseafood store, you’ll find an uncommon commitment todeliver the best of the sea with fresh energy and freshideas that we hope will make you want to come backagain and again.

We invite you to come in and experience our commitment to quality for yourself. Whether it’s choosing your favorite fresh fish from our “Today’s

Fresh Fish” menu, or selecting your favorite seafood to be prepared over our wood-fired grill, Red Lobster is the place you can enjoy fresh, delicious

seafood now and for generations.

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1968

Bill Darden opens the first Red Lobster in Lakeland, Florida1970

General Mills acquires Red Lobster and rapidly expands nationally 1983

Our 1st Canadian restaurant opens in Ontario

Out Lobsterfest® promotion begins, giving guests the best variety of lobster anywhere

1984

We introduce our famous and delicious Cheddar Bay Biscuits®

1988

1989

We operate 450 US and 55 Canadian restaurants

We introduce "Walt's Favorite Shrimp", named after one of our earliest employees

1996

2003

We celebrate our 35th anniversary of serving fresh, delicious seafood 2004

Endless Shrimp® is introduced, and becomes an annual guest-favorite promotion2006

"Today's Fresh Fish" gives guests a daily selection of national and local fresh fish favorites 2008

We introduce Wood-Fire Grills and Certified Grill Masters in every restaurant2013

We celebrate our 45th anniversary and operate more than 700 locations worldwide 2014

Acquisition by Golden Gate Capital (“GGC”)

Red Lobster Timeline

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Strong Market Position Significant Scale With Broad Geographic Reach

~50% Share in Seafood Casual Dining 6th Largest Casual Dining Concept in the US

• Red Lobster is the largest seafood restaurant concept in the world with over $2.5 billion in annual sales and 704 restaurants.

- $2.5B LTM Sales.- $3.5M AUV.

• The Company is the category killer in the seafood casual dining space, holding almost 50% market share.

- Largest share of any restaurant concept in any segment.

• 6th largest overall casual dining concept in the US.

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Iconic Brand With Unparalleled Customer Loyalty

Indispensability vs. Peers

• Red Lobster has strong consumer appeal and broad usage across multiple dining out occasions, including high-crave, healthier “good for you” and special meal occasions.

• The brand has a strong foundation of loyal guests, who visit 1-2 times per month and account for more than 50% of sales.

• Red Lobster is the clear leader in casual dining seafood, and the most indispensable brand among major casual dining concepts, further indicating strong consumer loyalty.

• Over $320 million invested in remodels covering >90% of restaurants over the past 7 years.

• $1.4 billion in overall capital expenditure investment over the past 10 years.

• New Bar Harbor format has strong appeal across customer base.

• 100% of restaurants are cash flow positive.

Indispensability (How difficult it would be for me to ‘give up’ ever going there again ) - % very difficult (10 out of 10) shown

Healthy and Recently Remodeled Restaurant Base

New Bar Harbor Format

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13This 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 theinformation 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 InvestmentServices is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap

Lease Summary Annualized Operating Data

Property Name Red Lobster

Property Type Net Leased Restaurant

Ownership Private

Private Equity Sponsor

Tenant Red Lobster Hospitality, LLCGuarantor Red Lobster Intermediate Holdings, LLC

Lease Term 20 YearsLease Commencement 12/23/2014Lease ExpirationLease Term Remaining 18Lease Type Triple-Net (NNN)Roof & Structure Tenant Responsible

Options to Renew Four, Five Year Option PeriodsRental Increases Two Percent Annually

Rent Increases Annual Rent Monthly RentYear 1 $213,570 $17,797 Year 2 $217,928 $18,161 Year 3 $222,376 $18,531 Year 4 $226,824 $18,902 Year 5 $231,360 $19,280 Year 6 $235,987 $19,666 Year 7 $240,707 $20,059 Year 8 $245,521 $20,460 Year 9 $250,431 $20,869

Year 10 $255,440 $21,287 Year 11 $260,549 $21,712 Year 12 $265,760 $22,147 Year 13 $271,075 $22,590 Year 14 $276,497 $23,041 Year 15 $282,027 $23,502 Year 16 $287,667 $23,972 Year 17 $293,420 $24,452 Year 18 $299,289 $24,941 Year 19 $305,275 $25,440 Year 20 $311,380 $25,948

Annual Rent $222,376

CAP Rate 5.75%

Price $3,867,409

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Indianapolis, IN

This property is located at 479 N. Telegraph Road in Waterford, Michigan.Waterford Township is a charter township in the geographic centerof Oakland County, Michigan. Detroit is located approximately 40 milessoutheast of Waterford Township.

Major National Tenants In Surrounding Area: Sam’s Club, Harbor FreightTools, Toys R US Dollar Tree, Family Dollar, Dollar General, Big Lots, CitiTrends, Game Stop

Strong Demographics | Approximately 158,000 Individuals Within 5-MileRadius | 5-Mile Average Household Income $71,540

Strong Traffic Counts | N. Telegraph Road | Approximately 35,538Vehicles Per Day


Location Highlights Location Overview

Surrounding Retail and Points of InterestThe subject property is well-positioned in a retail corridor, benefiting from itsclose proximity to major national and local retailers. Major national retailers inthe area include: Sam’s Club, Harbor Freight Tools, Toys R US Dollar Tree,Family Dollar, Dollar General, Big Lots, Citi Trends, Game Stop, ABCWarehouse, CVS, Walgreens, Rite Aid, Popeye's, Taco Bell, Arby’s, Applebee’s,Tim Horton’s, Advanced Auto Parts, O’Reilly Auto Parts, and Chevrolet as wellas many others.

Traffic Counts and DemographicsThere are approximately 77,716 individuals residing within a three-mileradius of the property and approximately 157,918 within a five-mile radius.This Red Lobster Property is located on N. Telegraph Road which has trafficcounts of 35,538 vehicles per day.

Detroit, MichiganDetroit is the most populous city in Michigan and the largest city on theUnited States-Canada border. Detroit is a major hub for automotivemanufacturing, and is home of General Motors. Other companiesheadquartered in Detroit include Quicken Loans, Ally Financial, Little Caesars,DTE Energy, American Axle and Shinola. Detroit Public Schools is the largestschool district in Michigan, with roughly 122,000 students enrolled. The Cityof Detroit anchors the second-largest economic region in the Midwest,behind Chicago, and the thirteenth-largest in the United States. Detroit and itsneighboring Canadian city Windsor are connected through a tunnel andvarious bridges, with the Ambassador Bridge being the busiest internationalcrossing in North America. Detroit Metropolitan International Airport servesmore than 32,513,555 passengers annually. Detroit’s Midtown has aresidential occupancy rate of over 96%.

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Waterford Township, MI ADTC 31,598

ADTC 86,794

ADTC 35,638

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 theinformation 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 InvestmentServices is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap

SURROUNDING AREA MAP


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Detroit, MI


PopulationIn 2014, the population in your selected geography is 157,918. The population haschanged by -3.01% since 2000. It is estimated that the population in your area will be158,635 five years from now, which represents a change of 0.45% from the currentyear. The current population is 49.10% male and 50.89% female. The median age ofthe population in your area is 37.9, compare this to the Entire US average which is37.3. The population density in your area is 2,006.44 people per square mile.

IncomeIn 2014, the median household income for your selected geography is $47,486,compare this to the Entire US average which is currently $51,972. The medianhousehold income for your area has changed by 0.44% since 2000. It is estimated thatthe median household income in your area will be $53,860 five years from now, whichrepresents a change of 13.42% from the current year.

The current year per capita income in your area is $28,705, compare this to the EntireUS average, which is $28,599. The current year average household income in yourarea is $71,539, compare this to the Entire US average which is $74,533.

EmploymentIn 2014, there are 100,353 employees in your selected area, this is also known as thedaytime population. The 2000 Census revealed that 58.77% of employees areemployed in white-collar occupations in this geography, and 41.04% are employed inblue-collar occupations. In 2014, unemployment in this area is 9.64%. In 2000, theaverage time traveled to work was 28.1 minutes.

1-Mile 3-Mile 5-Mile

2010 9,601 76,276 154,407

2014 9,760 77,716 157,918

2019 10,137 77,516 158,635

POPULATION

1-Mile 3-Mile 5-Mile

Average $52,576 $56,914 $71,540

Median $38,386 $39,478 $47,486

2014 HOUSEHOLD INCOME

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TOP EMPLOYERS IN DETROIT

Detroit, MI

Employers # of Employees

Ford Motor Co. 55,342

General Motors 41,861

Chrysler 32,597

Michigan Broker of Record: Steven ChabenLicense #: 6502133659

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