KFC

1922 West Osage Street – Pacific, Missouri 63069

OFFERING MEMORANDUM

Table of Contents

Financial Overviews

Investment Highlights & OverviewDisposition RangeLease Summary

Concept/Tenant Overview

Location Overviews

Location Highlights & OverviewSurrounding Aerial MapProperty PhotosSurrounding Area Photos

Demographics

Population IncomeEmployment

1922 West Osage Street – Pacific, Missouri 63069

PRICE: $1,058,689 | 5.95% CAP | RENT: $62,992

3This 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 informationand 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 aservice mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap

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FINANCIAL OVERVIEW

PROPERTY DESCRIPTION

Property KFC

Property Address 1922 West Osage Street

City, State, ZIP Pacific, Missouri 63069

Year Built 2002

Building Size (SF) 3,728

Lot Size (Acres) 1.00 Acre

Type of Ownership Fee Simple

THE OFFERING

Price $1,058,689

CAP Rate 5.95%

Annual Rent $62,992

Rent / SF $16.90

Price / SF $284

LEASE SUMMARY

Property Name KFC

Property Type Net Leased Restaurant

Ownership Private

Tenant / Guarantor 68-Unit Franchisee Guarantee

Lease Term 20 Years

Lease Commencement Close of Escrow

Lease Expiration 20 Years from Close of Escrow

Lease Term Remaining 20 Years

Lease Type Triple-Net (NNN)

Roof & Structure Tenant Responsible

Options to Renew Four, Five-Year Options

Rental Increases 1.25% Starting in Year 6

➢ Brand New 20-Year Triple-Net (NNN) Sale-Leaseback

➢ 1.25% Annual Rental Increases Starting in Year 6

➢ Four (4), Five (5)-Year Tenant Renewal Options

➢ Located 34 Miles from Downtown St. Louis

➢ 68-Unit Guarantee from Morgan Foods Inc.

HIGHLIGHTS

4This 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 informationand 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 aservice mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap

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FINANCIAL OVERVIEW

Lease Year Annual Rent Monthly Rent

Years 1 – 5 $62,992 $5,249

Year 6 $63,779 $5,315

Year 7 $64,577 $5,381

Year 8 $65,384 $5,449

Year 9 $66,201 $5,517

Year 10 $67,029 $5,586

Year 11 $67,867 $5,656

Year 12 $68,715 $5,726

Year 13 $69,574 $5,798

Year 14 $70,443 $5,870

Year 15 $71,324 $5,944

Year 16 $72,216 $6,018

Year 17 $73,118 $6,093

Year 18 $74,032 $6,169

Year 19 $74,958 $6,246

Year 20 $75,895 $6,325

CAP Rate 5.95%

Purchase Price $1,058,689

INVESTMENT SUMMARY

Marcus & Millichap is pleased to present the exclusive listing for a KFC

located at 1922 West Osage Street in Pacific, Missouri. Built in 2002, the

property consists of 3,728 square feet of building space and sits on 1.00 acre

of land.

This KFC property is subject to a brand new 20-year triple-net (NNN) sale-

leaseback that will commence at the close of escrow. The current rent is

$62,992 and is subject to 1.25% annual rental increases beginning in year 6.

Additionally, the tenant has four, five-year renewal options. The lease is

guaranteed by Morgan Foods Inc., a 68-unit entity.

ANNUALIZED OPERATING DATA

1922 West Osage Street – Pacific, Missouri 63069

PRICE: $1,058,689 | 5.95% CAP | RENT: $62,992

DemographicsTENANT OVERVIEW

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KFC Corporation, based in Louisville, Kentucky, is one of the few brands inAmerica that can boast a rich, decades-long history of success andinnovation. It all started with one cook who created a soon-to-be world-famous recipe more than 70 years ago, a list of secret herbs and spicesscratched out on the back of the door to his kitchen. That cook was ColonelHarland Sanders, of course, and now KFC is the world’s most popularchicken restaurant chain, specializing in that same Original Recipe® alongwith Extra Crispy™ chicken, home-style sides and buttermilk biscuits. Thereare more than 18,000 KFC outlets in 115 countries and territories aroundthe world. And you know what? There’s still a cook in a kitchen in everylast one of them, freshly preparing delicious, complete family meals ataffordable prices.

About KFC:

IT’S MADE THE HARD WAY

Hand breaded, freshly prepared

and Finger Lickin’ Good®! Our

chicken isn't made the fast way or

the easy way.

Then, our fresh chicken is carefully

rolled 7 times in our secret blend of

11 herbs & spices before being

rocked 7 times and then pressure

cooked at a low temperature to

preserve all the great taste we’re

known for around the world.

We could find an easier way to make

chicken, but then we couldn’t put our

name on it.

Each fresh batch of the world’s best

chicken starts with our cooks

inspecting each individual piece.

Ampex Brands was formed in 2005 to acquire 18 Long John Silver’srestaurants, and has since grown tremendously, landing as the 21st largestfranchisee in the US according to The 2015 Mega 99 Rankings. Currently,Ampex owns and operates around 300 units of KFC, Taco Bell, Tim Hortons,Long John Silver’s and A&W in Arkansas, Louisiana, Texas, Oklahoma, Ohio,Pennsylvania, West Virginia, Illinois, New York and Missouri, and employsover 6,000 team members.

AMPEX Brands

Pac i f ic , MO

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AERIAL1922 West Osage Street – Pacific, Missouri 63069

HIGHLIGHTS

➢ Active Retail Corridor - Major National Tenants Include: Dollar General, BP, McDonald’s, Taco Bell, and CVS

➢ Strategically Located Directly Off of U.S. Interstate 44 – Attractive Traffic Counts of Over 65,604 Vehicles Per Day

➢ Borders the Pacific Palisades Conservation Area

➢ Located 34 Miles from Downtown St. Louis – Second Largest City in Missouri

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LOCATION OVERVIEW

ADTC 14,890

Pacific, Missouri

* Based on a 5-mile radius

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

Location District 8 700

Southwestern Illinois Health F 677

ANDERSON HOSPITAL 670

Walmart 620

Fairmount Park Inc 400

US Dept of the Air Force 254

First Student Inc 200

Home Instead Senior Care 200

Ameren Illinois 170

District 11 150

Home Depot The 150

Porters Steakhouse 142

ADTC 65,604

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LOCATION OVERVIEWThis KFC property is located at 1922 West Osage Street in Pacific, Missouri. Pacific islocated in eastern Missouri and falls in both Franklin and St. Louis counties. It is locatedon the Meramec River and borders the Pacific Palisades Conservation Area.

Surrounding Retail and Points of Interest

The subject property is well-positioned in a dense retail corridor, benefitting from itsproximity to major national and local retailers. Major national retailers in the areainclude: CVS, Star Bank, Mobil, Pilot, Subway, Philips 66, Hardee’s McDonald’s, BP, TacoBell, Moto Mart, American Family Insurance, and Dollar General, as well as manyothers. Both the Union Pacific Railroad and historic Route 66 run through the town.East Central College is located approximately 13 miles from the subject property. Thecollege is home to 3,200 students.

Traffic Counts and Demographics

There are approximately 10,055 people within a three-mile radius of this property and16,237 within a five-mile radius. The property is situated on West Osage Street, whichhas an average daily traffic count of 14,890 vehicles. The subject property also benefitsfrom its close proximity to U.S. Interstate 44, which has an average daily traffic count of65,604.

St. Louis, Missouri

St. Louis falls is the second largest city in Missouri. It was developed on the westernbank of the Mississippi River, the largest river in North America, which forms the statesborder with Illinois. The city is known throughout the country and the world for theGateway Arch, a 630-foot tall arch in downtown St. Louis. The economy of St. Louisrelies on service, manufacturing, trade, transportation of goods, and tourism. The city ishome to several major corporations, including, Anheuser-Busch, Express Scripts,Peabody Energy, Ameren, Ralcorp, Monsanto, and Sigma-Aldrich. In 2015 the GrossMetropolitan Product was nearly $146 Billion, of which the manufacturing industry leadthe way, conducting nearly $11 Billion in business. St. Louis has a rich culturalbackground that is predominately French. This is reflected in many of the historicalbuildings throughout the city. The city, however, is defined by its musical scene. Genressuch as Blues, Jazz, and Ragtime all trace their roots back to St. Louis. In addition, St.Louis is home to many professional sports teams, including the St. Louis Cardinals of theMLB, and the St. Louis Blues of the NHL.

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PROPERTY PHOTO

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PROPERTY PHOTO

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SURROUNDING AREA PHOTOS

1 Miles 3 Miles 5 Miles

POPULATION

2021 Projection 3,938 10,390 16,637

2016 Estimate 3,867 10,055 16,237

2010 Census 3,829 9,959 16,068

2000 Census 3,271 9,126 14,997

INCOME

Average $61,144 $66,153 $72,601

Median $50,492 $54,790 $59,072

Per Capita $24,876 $27,501 $27,333

HOUSEHOLDS

2021 Projection 1,607 4,157 6,117

2016 Estimate 1,567 3,997 5,914

2010 Census 1,545 3,942 5,825

2000 Census 1,269 3,539 5,215

HOUSING

2016 $132,519 $147,886 $163,850

EMPLOYMENT

2016 Daytime Population 5,026 11,209 14,939

2016 Unemployment 9.44% 8.33% 7.92%

2016 Median Time Traveled 28 29 31

RACE & ETHNICITY

White 92.87% 93.38% 91.89%

Native American 0.01% 0.02% 0.02%

African American 2.41% 2.39% 4.57%

Asian/Pacific Islander 0.56% 0.66% 0.65%

Demographics

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Marcus & Millichap hereby advises all prospective purchasersof 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 verify any ofthis information, nor has Marcus & Millichap conducted anyinvestigation regarding these matters. Marcus & Millichapmakes no guarantee, warranty or representation whatsoeverabout the accuracy or completeness of any informationprovided.

As the Buyer of a net leased property, it is the Buyer’sresponsibility to independently confirm the accuracy andcompleteness of all material information before completingany purchase. This Marketing Brochure is not a substitute foryour thorough due diligence investigation of this investmentopportunity. Marcus & Millichap expressly denies anyobligation to conduct a due diligence examination of thisProperty for Buyer.

Any projections, opinions, assumptions or estimates used inthis Marketing Brochure are for example only and do notrepresent the current or future performance of this property.The value of a net leased property to you depends on factorsthat should be evaluated by you and your tax, financial andlegal advisors.

Buyer and Buyer’s tax, financial, legal, and constructionadvisors should conduct a careful, independent investigationof any net leased property to determine to your satisfactionwith the suitability of the property for your needs.

Like all real estate investments, this investment carriessignificant risks. Buyer and Buyer’s legal and financial advisorsmust request and carefully review all legal and financialdocuments related to the property and tenant. While thetenant’s past performance at this or other locations is animportant consideration, it is not a guarantee of futuresuccess. Similarly, the lease rate for some properties, includingnewly-constructed facilities or newly-acquired locations, may

be set based on a tenant’s projected sales with little or norecord of actual performance, or comparable rents for thearea. Returns are not guaranteed; the tenant and anyguarantors may fail to pay the lease rent or property taxes, ormay fail to comply with other material terms of the lease; cashflow may be interrupted in part or in whole due to market,economic, environmental or other conditions. Regardless oftenant history and lease guarantees, Buyer is responsible forconducting his/her own investigation of all matters affectingthe intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacementtenant if the current tenant should default or abandon theproperty, and the lease terms that Buyer may be able tonegotiate with a potential replacement tenant considering thelocation of the property, and Buyer’s legal ability to makealternate use of the property.

By accepting this Marketing Brochure you agree to releaseMarcus & Millichap Real Estate Investment Services and hold itharmless from any kind of claim, cost, expense, or liabilityarising out of your investigation and/or purchase of this netleased property.

CONFIDENTIALITY AND DISCLAIMER

The information contained in the following MarketingBrochure is proprietary and strictly confidential. It is intendedto be reviewed only by the party receiving it from Marcus &Millichap and should not be made available to any otherperson or entity without the written consent of Marcus &Millichap. This Marketing Brochure has been prepared toprovide summary, unverified information to prospectivepurchasers, and to establish only a preliminary level of interestin the subject property. The information contained herein isnot a substitute for a thorough due diligence investigation.Marcus & Millichap has not made any investigation, andmakes no warranty or representation, with respect to theincome or expenses for the subject property, the futureprojected financial performance of the property, the size andsquare footage of the property and improvements, thepresence or absence of contaminating substances, PCB’s or

asbestos, the compliance with State and Federal regulations,the physical condition of the improvements thereon, or thefinancial condition or business prospects of any tenant, or anytenant’s plans or intentions to continue its occupancy of thesubject property. The information contained in this MarketingBrochure has been obtained from sources we believe to bereliable; however, Marcus & Millichap has not verified, andwill not verify, any of the information contained herein, norhas Marcus & Millichap conducted any investigation regardingthese matters and makes no warranty or representationwhatsoever regarding the accuracy or completeness of theinformation provided. All potential buyers must takeappropriate measures to verify all of the information set forthherein.

NON-ENDORSEMENT NOTICE

Marcus & Millichap Real Estate Investment Services, Inc.(“M&M”) is not affiliated with, sponsored by, or endorsed byany commercial tenant or lessee identified in this marketingpackage. The presence of any corporation’s logo or name isnot intended to indicate or imply affiliation with, orsponsorship or endorsement by, said corporation of M&M, itsaffiliates or subsidiaries, or any agent, product, service, orcommercial listing of M&M, and is solely included for thepurpose of providing tenant lessee information about thislisting to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FORMORE DETAILS.

MO Broker of Record: Bradley Barham – License #2005038930