OFFERING MEMORANDUM

sonoma, caJack in the Box | short term Lease

JACK IN THE BOX

2Activity ID: Z0100586

SONOMA, CA|

The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property now, please return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical 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, PCBs or asbestos, the compliance with local, 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 offering memorandum 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 the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

Joseph Lising First Vice President Investments Newport Beach Office (949) 419-3227 Direct(949) 419-3210 FaxJoseph.Lising@marcusmillichap.com CA License: 01248258

CONFIDENTIALITY AGREEMENTINVESTMENT ADVISORSRainier Nanquil Net Leased Properties Group Newport Beach Office (949) 419-3206 Direct(949) 419-3210 Fax Rainier.Nanquil@marcusmillichap.com CA License: 01946959

Oscar Torres Marketing Team Newport Beach Office (949) 419-3231 Direct(949) 419-3210 Fax Oscar.Torresl@marcusmillichap.com

Matthew Godman Marketing Team Newport Beach Office (772) 200-5554 Direct(949) 419-3210 FaxMatthew.Godman@marcusmillichap.com

JACK IN THE BOX

3Activity ID: Z0100586

SONOMA, CA|

• No Landlord Responsibilities

• Tenant is Responsible for Taxes, CAM, Insurance, Roof, andStructure Maintenance

• Ideal Investment for a Passive Investor of 1031 Exchange Buyer

Executive Summary

• Four Years Remaining on Base Term with Jack in the Box Inc.

• High Barrier of Entry Location - No New Drive-Thru RestaurantsPermitted in the City

• Rare Opportunity to Own One of Three Drive-Thru Restaurants in thewhole City of Sonoma

Short Term Lease | Rare Existing Drive-Thru Restaurant

• Next Rental Increase: September 2020 (5% CAP)

• Lease Features CPI Increases (Capped at 8%) with Four (5) YearTenant Options to Renew

• Increases Return on Investment

Rental Increases | Hedge Against Inflation

Ease of Management | Absolute NNN

List Price $2,409,811

CAP Rate 4.75%

Price Per Square Foot GLA $1,013.37

Price Per Square Foot Land $145.59

East Aerial

West Aerial

JACK IN THE BOX

6Activity ID: Z0100586

SONOMA, CA|

Investment SummaryOffering Price

List Price $2,409,811

CAP Rate 4.75%

Net Operating Income $114,466

Price Per Square Foot GLA $1,013.37

Price Per Square Foot Land $146.05

Property DetailsAddress 602 W Napa St, Sonoma, CA 95476

APN 127-221-020

GLA 2,378

Lot Size 16,500

Year Built / Renovated 1968 / 1998

Zoning Commercial

Parking Stalls 19*

Lease SummaryLease Type Absolute NNN

Tenant Jack in the Box Inc.

Roof & Structure Tenant Responsibility

Guarantee Corporate Guarantee

Lease Commencement July 24, 1997

Lease Expiration May 12, 2023

Rental Increases CPI Every 5 Years (8% Max)

Options to Extend Four (5) Year Options

Right of First Refusal Yes; 20 Days

Annualized Operating DataYears Annual Rent CAP Rate

2019 $114,466 4.75%

2020 $120,189 4.99%

2021 $120,189 4.99%

2022 $120,189 4.99%

2023 $120,189 4.99%

Option 1 $129,804 5.39%

Option 2 $140,188 5.82%

Option 3 $151,403 6.28%

Option 4 $163,516 6.79%

*Adjacent parking lot not a part; contact broker for more information

Property Aerial

JACK IN THE BOX

8Activity ID: Z0100586

SONOMA, CA|

Market Overview

Just 40 miles north of the Golden Gate Bridge, the city of Sonoma and the surrounding Sonoma Valley provide the “perfect blend” of a friendly, small-town, wine-country community with the entrepreneurial culture of the San Francisco Bay Area.

The City serves as the economic hub for the rural Sonoma Valley, which has a population of about 39,000. Tourism and agriculture are the major economic drivers for Sonoma Valley. It is the birthplace of California’s famed wine industry and home to more than 100 wineries and tasting rooms and is a destination favored by visitors from around the world for its food, culture, scenery and vitality. It is estimated that close to a million visitors each year are attracted to Sonoma Valley’s wineries, art galleries, historical sites, spas, restaurants, races, festivals and other special events. Sonoma Valley is within an easy drive of several colleges and universities, including Napa Valley College, Santa Rosa Junior College, and Sonoma State University, home to the Wine Business Institute and the new, highly acclaimed Green Music Center. 2015 City of Sonoma Median Home Sales Price: $510,000 2014 Median Household Income: $62,343 2014 Unemployment rate = 4.7%

Sonoma County is located just north of the San Francisco Bay Area. Home to over 7,6 million resdidents. Sonoma County is the heart of the United States’ wine industry, with close to 60,000 acres of vineyards and over 425 wineries.

With more than 425 wineries, miles of rugged Pacific coastline, towering redwood forests, and its close proximity to San Francisco’s Golden Gate Bridge, Sonoma County is a traveler’s dream vacation spot in California. Sonoma County represents the best of Northern California — premium wine, farm-to table dining, unique resorts and spas, and over 50 state and regional parks. Breathtaking Highway 1 delights visitors with crashing waves, sea lions and otters sunning on the beaches, and fantastic sunsets that color the sky in brilliant hues. Tasting rooms in the world-class Sonoma wine region range from simple and rustic to elaborate wine castles.

More than 2,300 businesses are located in Sonoma Valley, with a total of almost 20,000 employees. The largest private sector employers in the Sonoma Valley include the Sonoma Raceway, Fairmont Sonoma Mission Inn, St. Francis Winery, The Lodge at Sonoma, Sonoma Market/Glen Ellen Village Market, MacArthur Place Hotel, and Sebastiani Winery. Other major employers include the Sonoma Developmental Center, Sonoma Valley Hospital, and the Sonoma Valley Unified School District. A growing number of employers can be found in the Valley’s light industrial corridor along Eighth St. East.

Sonoma is a community offering a premium lifestyle and an unsurpassed physical setting to its citizens. It is an increasingly sought after destination for visitors not only from the Bay Area, but state-wide and even internationally. The Sonoma Valley Film Festifal and the Sonoma Jazz Festival are two examples of events that draw thousands of attendees from near and far. Still, it is only an hour’s drive to San Francisco. There has been over 1 million square feet of winery related new industrial construction on Eighth Street East in the past few years. Nearly all of that has been absorbed. There will be a continuing and growing demand for this type of space as the local economy continues to expand.

Sonoma County, CA

Sonoma, CA

Sonoma County bustling with Hotel ExpansionSonoma County’s hoteliers are playing catch-up to make room for the growing number of visitors. The lodging industry is undergoing unprecedented expansion with about a dozen properties slated to open in the next few years.

Developers are betting Sonoma County can keep delivering more tourists. It’s averaging about 7.5 million visitors a year. Those visitors are staying in more than 7,000 hotel rooms and 3,700 campground and recreational vehicle spaces, according to Sonoma County Tourism figures.

The big hotel addition this year will be the spring opening of Hotel E in downtown Santa Rosa. Veteran developer Hugh Futrell is leading the project. The 100-year-old beaux arts building is undergoing a conversion into a boutique hotel with 39 rooms, conference space and a wine bar. A second phase with more than 30 rooms is slated to open later in the year, with a restaurant from the well-known San Francisco restaurant chain Perry’s and a coffee shop.

JACK IN THE BOX

9Activity ID: Z0100586

SONOMA, CA|

Market Overview

Sonoma Plaza is a popular getaway destination for people from all over the SF Bay Area and Sonoma locals, too.Within one block there are 30+ wine tasting rooms, 25+ amazing restaurants, a huge variety of shopping choices and more. A park for kids and picnics, events, food and wine tours and historical sightseeing. It’s easy to see why Sonoma Plaza must be on your to do list. https://sonomaplaza.com/about/

Mission San Francisco Solano was the 21st, last, and northernmost mission in Alta California. It was the only mission built in Alta California after Mexico gained independence from Spain. The difficulty of its beginning demonstrates the confusion resulting from that change in governance. The mission building is now part of the Sonoma State Historic Park and is located in the city of Sonoma, California.

https://en.wikipedia.org/wiki/Mission_San_Francisco_Solano_(California)

The vintage, open-air design of the early San Francisco Cable Cars that offers a scenic view unmatched by any other touring vehicle. As you embark on a journey full of rich local history, you will meet fellow wine tasting enthusiasts, enjoy a Sonoma wine tasting tour at four unique Sonoma Valley Wineries, and learn what makes Sonoma Valley such a popular destination for wine tasting tours, wine lovers and foodies all over the world.

https://www.sonomavalleywinetrolley.com/

Wine Trolley Sonoma MissionSonoma Raceway, formerly Sears Point Raceway and Infineon Raceway is a 2.52-mile (4.06 km) road course and drag strip located on the landform known as Sears Point in the southern Sonoma Mountains in Sonoma, California, USA. The road course features 12 turns on a hilly course with 160 feet (49 m) of total elevation change. It is host to one of only three Monster Energy NASCAR Cup Series races each year that are run on road

https://en.wikipedia.org/wiki/Sonoma_Raceway

Sonoma Raceway

Stretching from the Pacific Ocean in the west to the Mayacamas Mountains in the east, Sonoma County is the largest wine producer in Northern California’s Wine Country region, which also includes Napa, Mendocino, and Lake Counties. Sonoma County wines enjoy global recognition and have won countless national and international wine awards since the 19th century.

Two prime reasons: climate and soil. Sonoma County offers grape growers a wide variety of climate and soil conditions, known as terroir.The climate is ideal for growing grapes, with long, dry, sunny, warm-but-rarely-hot summer days buttressed by cool nights, ocean breezes and fog.

Sonoma County’s wealth of unique terroirs is reflected in the county’s 18 distinct American Viticultural Areas (known as AVAs or appellations), each with its own distinctive characteristics.

https://www.sonomacounty.com/articles/sonoma-wine-country

Sonoma Valley Wine Country

Surrounding Local Attractions

On October 8, 2017 the North Bay fires started which destroyed over 6,000 structures in Sonoma County, and burned nearly 2,600 acres of Sonoma County Regional Parks. The fires burned for many days during which time tens of thousands of people across the County were evacuated or displaced from their homes.

Nearly 1,700 acres or 50% of Hood Mountain Park and Preserve burned. The 35-foot long Trail Bridge on the Lower Johnson Ridge Trail burned, as did the culvert at Pond Trail. The foot bridge on the Lower Johnson Ridge Trail, a 6-foot wide and 35-foot long bridge, was destroyed. A 45-foot long culvert that ran under the Pond Trail was vaporized. The Lower Johnson Ridge trail from Panorama Trail to Orchard Meadow is closed to the public.

The culvert has been replaced and work there is complete. The damage to the bridge and the abutments have been assessed, and work to complete engineering and permitting for replacement has begun. Bridge construction is scheduled to be completed in Spring of 2019.

https://sonomacounty.ca.gov/Parks/Planning/Hood-Mountain-Fire-and-Fire-Suppression-Repair/

Hood Mountain Fire & Fire Suppression Repair

Sonoma County Highlights

Sonoma Plaza

JACK IN THE BOX

10Activity ID: Z0100586

SONOMA, CA|

Market Demographics

Population 1 Miles 3 Miles 5 Miles

2022 Population 11,050 34,972 39,496

2017 Population 10,738 34,175 38,721

2010 Population 9,886 32,399 36,779

2000 Population 13,138 32,816 37,898

Households by Income 1 Miles 3 Miles 5 Miles

$150,000 or More 16.01% 17.59% 18.93%

$100,000 - $149,000 15.55% 15.28% 15.41%

$75,000 - $99,999 13.44% 13.96% 13.58%

$50,000 - $74,999 14.43% 15.64% 15.64%

$35,000 - $49,999 10.53% 11.97% 11.83%

Under $35,000 30.05% 25.55% 24.60%

Average Household Income $101,097 $108,896 $113,813

Median Household Income $55,049 $69,012 $71,200

Per Capita Income $47,248 $45,086 $46,820

Households 1 Miles 3 Miles 5 Miles

2022 Households 5,178 14,660 16,423

2017 Households 4,968 14,096 15,850

2010 Households 4,615 13,385 15,066

2000 Households 4,443 12,761 14,503

16,423 ±Households within a Five-mile Radius

Demographic Summary

1 MI.3 MI.

5 MI.

JACK IN THE BOX

11Activity ID: Z0100586

SONOMA, CA|

Market Demographics

HouseholdsThere are currently 4,988 households in your selected geography. The number of households has changed by 12.27% since 2000. It is estimated that the number of households in your area will be 5,178 five years from now, which represents a change of 3.81% from the current year. The average household size in your area is 2.15 persons.

PopulationIn 2017, the population in your selected geography is 10,738. The population has changed by 15.85% since 2000. It is estimated that the population in your area will be 11,050.00 five years from now, which represents a change of 2.91% from the current year. The current population is 45.55% male and 54.45% female. The median age of the population in your area is 49.50, compare this to the US average which is 37.83. The population density in your area is 3,414.32 people per square mile.

Household IncomeIn 2017, the median household income for your selected geography is $65,049, compare this to the US average which is currently $56,286. The median household income for your area has changed by 45.53% since 2000. It is estimated that the median household income in your area will be $78,162 five years from now, which represents a change of 20.16% from the current year. The current year per capita income in your area is $47,248, compare this to the US average, which is $30,982. The current year average household income in your area is $101,097, compare this to the US average which is $81,217.

Race and EthnicityThe current year racial makeup of your selected area is as follows: 82.11% White, 0.60% Black, 0.25% Native American and 2.98% Asian/Pacific Islander. Compare these to US averages which are: 70.42% White, 12.85% Black, 0.19% Native American and 5.53% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 23.66% of the current year population in your selected area. Compare this to the US average of 17.88%.

EmploymentIn 2017, there are 6,352 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 65.28% of employees are employed in white-collar occupations in this geography, and 33.78% are employed in blue-collar occupations. In 2017, unemployment in this area is 3.90%. In 2000, the average time traveled to work was 26.00 minutes.

Geography - 1 Mile Radius

34,175±Population within a Three-mile Radius