subject property mcdonald’s restaurant (ground...

McDonald’s Restaurant (Ground Lease) 3260 South Cobb Drive | Smyrna (Atlanta), GA 30080

Subject Property

Kroger-Anchored Outparcel | Atlanta MSA Acquisition Opportunity | 10% Rental Escalations

Absolute NNN Ground Lease | 18+ Years of Remaining Term | Highly Visible Location

Confidentiality and Restricted Use Agreement

Stan Johnson Company303 East Wacker Drive | Suite 1111 Chicago, IL 60601 P: +1 312.240.0127 | F: +1 312.240.0158stanjohnsonco.com

Brandon Duff Regional [email protected] P: +1 312.240.0162

Brad Feller Senior [email protected] P: +1 312.240.0194

Isaiah Harf Associate [email protected] P: +1 312.777.2437

In association with:Joey OdomGA Lic# 357615

Offered Exclusively byThis Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC.

This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.

The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title.

BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief.

Table of Contents

Section 1 - About the Investment

The Offering .......................................................................................................................................................5

Investment Highlights ..................................................................................................................................6

Pricing and Property Overview .............................................................................................................7

Lease Abstract & Rent Schedule ..........................................................................................................8

Site Plan ................................................................................................................................................................9

Strip Map ...........................................................................................................................................................10

Tenant Overview .............................................................................................................................................11

Section 2 - Location Information

Location Overview ....................................................................................................................................... 13

Aerial View ........................................................................................................................................................ 14

Subject Property Photos ..........................................................................................................................15

Surrounding Retail Photos ...................................................................................................................... 16

Demographics .................................................................................................................................................17

About the InvestmentSection One

Subject Property

Section 1 • McDonald’s Ground Lease • Smyrna (Atlanta), GA • 5

SE

Subject Property

The OfferingStan Johnson Company is pleased to exclusively offer for sale to qualified investors, the opportunity to purchase a 100% fee-simple interest in the McDonald’s ground lease property located at 3260 South Cobb Drive in Smyrna (Atlanta), GA (the “Property”). The Property is a signalized outparcel to The Crossings at Four Corners, a brand new Kroger-anchored redevelopment project which includes 60,000 square feet of additional retail space occupied by T-Mobile, Wing Stop, Papa John’s, No. 1 China, Nail Style, etc., as well as the development of several outparcels.

Smyrna is historically one of the fastest growing cities in the State of Georgia, and it is one of the most densely populated cities in the metro area. The Property is in an area that features excellent demographics, with a population in excess of 221,630 and average household income of $71,271 within a five mile radius. Located one mile northwest of the Atlanta city limits and approximately ten miles northwest of downtown Atlanta, the Property is strategically positioned on South Cobb Drive (SR 280) that runs into Interstate 285 which connects to Atlanta.

McDonald’s USA, LLC (“McDonald’s”) is operating under a 20 year ground lease with over 18 years of base lease term remaining, followed by four, five-year renewal options. The lease features 10% rental increases every ten years throughout the base term, a 10% rental increase at the beginning of the first option period and 5% rental increases at the beginning of each remaining option period. The lease is Absolute Net with no landlord responsibilities for operating or capital expenses related to the Property.

This is a corporate lease with McDonald’s, sitting on a land parcel with incredible long-term upside while providing an investor with secure and stable cash flow. McDonald’s has a Market Cap of $114.19 Billion and holds an S&P rating of BBB+/Stable. The company has over 1.8 million employees, serves 70 million customers daily, and has locations in over 100 countries across the world.

S COBB DR (34,429 VPD)

CONCORD RD SE (19,844 VPD)

McDonald’s


Investment Highlights

Subject Property Photos

Signalized Outparcel to Kroger-Anchored Shopping CenterLocated at the entrance of The Crossings at Four Corners, a brand new 93,000 square foot, Kroger-anchored redevelopment project which includes 60,000 square feet of additional retail space occupied by T-Mobile, Wing Stop, Papa John’s, No. 1 China, Nail Style, etc., as well as the development of several outparcels. Upon completion, the entire redevelopment could reach 230,000 square feet

Excellent Remaining Lease Term Property features more than 18 years of remaining base lease term, followed by four, five year renewal options, offering excellent long-term cash flow

Highly Visible and Accessible Atlanta MSA LocationLocated on South Cobb Drive and just off of Concord Road with approximately 56,626 combined VPD. Property is also located approximately ten miles northwest of downtown Atlanta

Absolute NNN Ground LeaseNo landlord responsibilities for repair or maintenance of the Property throughout the base lease term or option periods offering investors a truly passive investment

Rental Increases Throughout the Base Term and Options The lease features 10% rental increases every ten years throughout the base term, a 10% rental increase at the beginning of the first option period and 5% rental increases at the beginning of each remaining option period

Excellent Real Estate FundamentalsA premier asset with all of the intangibles (location/credit/high residual value/rent growth/long term lease) – a true trophy long-term real estate investment with the benefit of hands-free management of a Net Leased property

Strong Retail Trade AreaThe Retail Trade Area features an outstanding lineup of national tenants including Planet Fitness, Advance Auto Parts, Dunkin Donuts, Citi Trends, Goodwill, Dollar General, Ruby Tuesday, Chick-Fil-A, Aaron’s, Family Dollar, Walgreens, Taco Bell, Burger King, and Rite Aid, among many others

Dense and Excellent Surrounding Area DemographicsProperty benefits from population in excess of 221,630 and average household income of $71,271 within a five mile radius


Pricing Overview

Property Overview

McDonald’s Restaurant

Offering Price: $3,563,218

Offering Cap Rate: 4.35%

Annual Rent: $155,000

Tenant: McDonald's USA, LLC

Property Type: Food Service

3260 South Cobb Drive | Smyrna (Atlanta), GA 30080

Total Building Size (SF): 3,915 SF

Lot Size (Acres): 1.10 Acres

Year Built: 2014

Property ID: 17-0380-0-001-0

Encumbrances: None, Delivered Free & Clear N

McDonald’s


Rent Schedule

Tenant: McDonald's USA, LLC

Address: 3260 South Cobb Drive Smyrna (Atlanta), GA 30080

Year Built: 2014

Land Area (Acres): +/- 1.10 Acres

Building Size (SF): +/- 3,915 SF

Rent Commencement: August 29, 2014

Lease/Rent Expiration: August 28, 2034

Base Lease Term: 20 Years

Base Lease Term Remaining: 18+ Years

Annual Base Rent: $155,000

Annual Base Rent PSF: $39.59 PSF

Rent Increases: 10% every 10 years in the Base Term

Renewal Options: 4, 5 Year Options

Option Increases: 10% at the beginning of the first option and 5% at the beginning of each remaining option

Lease Type: Absolute NNN Ground Lease

LL Responsibility: None

Type of Ownership: Fee Simple Interest in Ground

ROFR: None

Property ID: 17-0380-0-001-0

Encumbrances: None, Delivered Free & Clear

Lease Abstract

Subject Property

Period Dates Annual Rent Monthly Rent Annual Rent PSF

1-10 8/29/2014 - 8/28/2024 $155,000 $12,916.67 $39.59

11-20 8/29/2024 - 8/28/2034 $170,500 $14,208.33 $43.55

Option 1

21-25 8/29/2034 - 8/28/2039 $187,550 $15,629.16 $47.91

Option 2

26-30 8/29/2039 - 8/28/2044 $196,927 $16,410.62 $50.30

Option 3

31-35 8/29/2044 - 8/28/2049 $206,774 $17,231.15 $52.82

Option 4

36-40 8/29/2049 - 8/28/2054 $217,113 $18,092.71 $55.46


Site Plan

SOUTH COBB DR (34,429 VPD)

CO

NC

OR

D R

D (19,844 V

PD)

McDonald’s

W

S. COBB DRIVE (34,429 VPD)CONCORD ROAD SE (19,844 VPD)

BRINKLEY PARK

TOLLESONPARK

KING SPRINGSELEMENTARY

SCHOOL

Subject Property

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McDonald’s is the world’s largest chain of hamburger fast food restaurants. The company has more than 1.8 million employees, serving approximately 70 million customers daily in over 100 countries across the world.

The golden arches franchise began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald. In 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc later joined the company as a franchise agent in 1955. He subsequently purchased the chain and oversaw its worldwide growth.

McDonald’s primarily sells hamburgers, cheeseburgers, chicken, French fries, breakfast items, coffee, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruit.

McDonald’s is the leading global food service retailer with more than 36,000 restaurants worldwide. More than 80% of chain’s restaurants are owned and operated by independent local franchisees. A McDonald’s restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation’s revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated locations. This subject location is operated by Corporate.

As of December 31, 2015, McDonald’s

Corporation (NYSE: MCD) had total revenues in excess of $25.4 billion, a net income of $4.5 billion and a net worth in excess of $7.1 billion. McDonald’s holds an S&P rating of BBB+/ Stable.

Tenant Overview

TENANT PROFILE

Company: McDonald’s Corporation

Ownership: Public

Stock Symbol: MCD

Board: NYSE

Total Revenue: $25.4 Billion

Net Income: $4.5 Billion

Net Worth: $7.1 Billion

Market Cap:(As of 5/12/2016)

$114.19 Billion

Credit Rating: BBB+/ Stable

Rating Agency: Standard & Poor’s

Headquarters: Oak Brook, IL

Number of Locations: 36,000+

Website: http://www.mcdonalds.com

Years in Business: 76

Employees: 1.8 Million

Source: Yahoo! Finance

Representative Photos

Location InformationSection Two

Subject Property


Smyrna is a city in Cobb County, Georgia, 10 miles from Downtown Atlanta and only one mile northwest of the city limits. It is strategically positioned adjacent to the northern intersection of I-285 and I-75, just west of the Cumberland Mall and Cobb Galleria. The area has historically been one of the fastest growing areas in the State of Georgia, and one of the most densely populated suburban areas in the Atlanta metro area, boasting a population increase of 25% since 2000 to an estimated 221,630 residents today.

Smyrna’s residents are young, well-educated and affluent, with an average age of 35.8, nearly 56% of the population having at least an Associate’s degree, and an average household income of $76,473. Sperling’s Best Places ranked Smyrna as the 4th Best City for Young Adults in Georgia for 2014.

With an ideal location at the northwest corner of I-75 and I-285, and a 20-minute drive to downtown Atlanta, Smyrna has attracted a diverse array of companies. Major employers within the city include IBM, United Distributors, UCB, Glock, Atlanta Bread Company, Publix Super Markets, Kroger, Murata Electronics, and Graphcom.

The undisputed “Capital of the South,” Atlanta is known for its strong, diverse economy, a pro-business environment, easy access, excellent quality of life and relatively low cost of living. As a result, the city is one of the most rapidly growing urban areas in the country, and has been consistently ranked as the best or one of the best markets for business. In fact, Atlanta is ranked the No. Four city in the U.S. for having the most Fortune 500 headquarters.

Location Overview

Downtown Atlanta, GA

Smyrna, GA

Market Village Town Center - Smyrna, GA Atlanta, GA


McDonald’s

Smyrna Population (within 5 miles):

221,630

Dobbins Air Reserve Base

I-285 (156,989 VPD)

I-75 (281,180 VPD)

US 41 (44,044 VPD)

Cumberland Mall

Cobb Galleria


Subject Property Photos

McDonald’s


Surrounding Retail Photos


3260 South Cobb Drive | Smyrna, GA 30080 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.

Population

2015 Population 9,289 87,144 221,630

2020 Population 9,675 91,636 234,757

2010-2015 Annual Rate 0.52% 0.79% 1.02%

2015-2020 Annual Rate 0.82% 1.01% 1.16%

2015 Median Age 36.6 34.4 33.6

Households

2015 Total Households 3,889 36,223 92,502

2020 Total Households 4,065 38,070 98,280

2010-2015 Annual Rate 0.56% 0.71% 1.04%

2015-2020 Annual Rate 0.89% 1.00% 1.22%

2015 Average Household Income $61,431 $69,094 $71,271

N

Demographics

McDonald’s

going beyond

The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.

Stan Johnson Company303 East Wacker Drive | Suite 1111Chicago, IL 60601P: +1 312.240.0127 | F: +1 312.240.0158

stanjohnsonco.com

Brandon DuffRegional [email protected]+1 312.240.0162

Brad FellerSenior [email protected]+1 312.240.0194

Isaiah [email protected] +1 312.777.2437

In association with:Joey OdomGA Lic# 357615

Offered Exclusively by

subject property mcdonald’s restaurant (ground...

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