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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 T H E N N N P R O G R O U P

Wendy’s Sale-Leaseback828 South Kalamazoo Street, Paw Paw, Michigan 49079

Recent Image Reactivation

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.

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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.

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Table of Contents

Financial Overview

Offering TermsInvestment Highlights & OverviewConcept OverviewLease SummaryRecent Sale Comparables

Location Overview

Location Highlights & OverviewSurrounding Aerial MapLocal MapRegional Map

Demographics

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Property Name Wendy’sProperty Address 828 South Kalamazoo Avenue

Paw Paw, Michigan 49079Initial Annual Rent $110,000Rent per SF $38.34Building Size 2,869 SFLot Size 1.24 AcresYear Built 2016

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

The subject investment opportunity is a Wendy's located in Paw Paw,Michigan. The Franchisee, Meritage Hospitality Group has been in theWendy's system for nearly 40 years and operates 167 units throughouteight states. Meritage Hospitality Group is the nation's only publicly-traded "Wendy's Old Fashioned Hamburgers" restaurant franchisee. Thislease will be backed by 165+ Meritage Hospitality Group Wendy'slocations.

The tenant will enter into a brand new, 20-year triple-net (NNN) sale-leaseback with absolutely no landlord responsibilities upon the close ofescrow. The building is comprised of roughly 2,869 square feet and sitson approximately 1.24 acres of land. The site has recently beenremodeled consistent with Wendy’s brand new model called the ImageActivation remodel. The lease will call for rental increases every fiveyears equal to the lesser of 5 percent or the change in CPI over theprevious five years. The lease will also be subject to six, five-year tenantrenewal options.

Offering Terms Investment Highlights

Long-Term 20-Year Absolute Triple-Net (NNN) Sale-Leaseback Above Market Lease Term 167 Unit Operator Throughout Eight States Image Reactivation Remodel Recently Completed Strong Tenant | Meritage Hospitality Group Leader in the Quick Service Restaurant Industry Six, Five-Year Tenant Renewal Options

Investment Overview

Financial Summary

Price NOI CAP Rate$2,000,000 $110,000 5.50%

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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 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

Wendy’s is an American international fast food chain restaurant foundedby Dave Thomas on November 15, 1969, in Columbus, Ohio. The companymoved its headquarters to Dublin, Ohio on January 29, 2006. As of 2016,Wendy’s is the world's number three hamburger chain in terms oflocations (behind McDonald's and Burger King), with more than 6,500 of itsWendy's Old Fashioned Hamburger eateries in the US and about 29 othercountries.

The Wendy's chain offers made-to-order burgers and fries as well as suchalternative menu items as baked potatoes, chili, and salads. The chain isknown for its square hamburgers, sea salt fries and the Frosty, a form ofsoft serve ice cream mixed with frozen starches. About 1,400 of therestaurants are owned by the company, while the rest are franchised.Wendy's and its affiliates employ more than 47,000 people in its globaloperations. In fiscal year 2015, the firm had $1.9 billion (USD) in companyrevenue.

2015 PERFORMANCE

ABOUT WENDY’S TENANT OVERVIEW2016 Outlook –The Company is focused on multiple growth initiatives in2016, including the integration of recently acquired and newly developedrestaurants. They expect to continue their growth trends with financialtargets of:

Revenue: +31.1%

EBITDA Growth: +94.8%

Net Income: +154.7%

Meritage stock finished 2015 at $11.25 per share, a 115% appreciation forthe year. During the year the company issued $.06 in special dividends,representing a 100% increase over the previous year.

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Lease SummaryAnnualized Operating DataProperty Name Wendy’s

Property Type Net Leased Quick Service Restaurant

Ownership Fee SimpleTenant Meritage Hospitality GroupGuarantor Franchisee

Lease Term 20 YearsLease Commencement Close of EscrowLease Expiration 20 Years from Close of EscrowLease Type Absolute Triple-Net (NNN)Roof & Structure Tenant Responsible

Options to Renew Six, Five-Year OptionsRental Increases Five Percent Every Five Years

Rent Increases Annual Rent Monthly RentYear 1 $110,000 $9,166.67 Year 2 $110,000 $9,166.67 Year 3 $110,000 $9,166.67 Year 4 $110,000 $9,166.67 Year 5 $110,000 $9,166.67 Year 6 $115,500 $9,625.00 Year 7 $115,500 $9,625.00 Year 8 $115,500 $9,625.00 Year 9 $115,500 $9,625.00

Year 10 $115,500 $9,625.00 Year 11 $121,275 $10,106.25 Year 12 $121,275 $10,106.25 Year 13 $121,275 $10,106.25 Year 14 $121,275 $10,106.25 Year 15 $121,275 $10,106.25 Year 16 $127,339 $10,611.56 Year 17 $127,339 $10,611.56 Year 18 $127,339 $10,611.56 Year 19 $127,339 $10,611.56 Year 20 $127,339 $10,611.56

Annual Rent $110,000

CAP Rate 5.50%

Price $2,000,000

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Recent Sales Comparables

Wendy’s | 20-Year Lease | Ponte Vedra, FL

Close of Escrow: 12/10/2015 Square Feet: 3,500

Price: $2,400,000 Price / SF: $685

CAP Rate: 5.00% Term Remaining: 20 Years

Net Operating Income: $120,000 Rental Increases: Five Percent Every Five Years

Option Periods: Six, Five Year Options

Wendy’s | 20-Year Lease | Braselton, GA


Price: $2,285,714 Price / SF: $596


Net Operating Income $120,000 Rental Increases: Five Percent Every Five Years


Wendy’s | 20-Year Lease | Powder Springs, GA


Price: $2,400,000 Price / SF: $864.24


Net Operating Income: $120,000 Rental Increases: Five Percent Every Five Years


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This Wendy’s property is located at 828 South Kalamazoo Street in Paw Paw,Michigan. Paw Paw is a village in the south of Michigan and the county seat ofVan Buren County. It is about 20 miles southwest of the city of Kalamazoo.


Location HighlightsLocation Overview

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Major National Tenants In Surrounding Area Include: Walmart, Save-a-lot,Ford, Chevrolet, Pizza hut, Taco Bell, Walgreens, McDonalds, Subway,Arby’s, and Burger King

Minute Maid & Coca- Cola Facilities | Two Miles from Subject Property City of Kalamazoo | 20 Miles Northeast of Subject Property

Paw Paw, Michigan

Surrounding Retail and Points of InterestThe subject property is well-positioned, benefiting from its close proximity tomany major national and local retailers. Major national retailers in the areainclude: Walmart, Save-a-lot, Ford, Chevrolet, Pizza Hut, Taco Bell, Walgreens,McDonalds, Subway, Arby’s, and Burger King as well as many others. Thesubject property is located approximately one mile from Bronson LakeViewHospital, which saw 20,000 patient visits last year. Additionally, Minute Maidand Coca-Cola both have facilities two miles from the subject property.

Traffic Counts and DemographicsPaw Paw has approximately 8,439 individuals residing within a three-mileradius of the property and more than 17,000 within a five-mile radius. TheWendy’s property is on the corner of South Kalamzoo Street and G E Fadel St.Traffic counts exceed 15,000 vehicles per day. It is also right off U.S. Interstate94 which goes east/west across Michigan, through cities such as Kalamazoo,Battle Creek, Ann Arbor, and Detroit.

Kalamazoo, MichiganKalamazoo is a city in the southwest region of Michigan. It is the countyseat of Kalamazoo County. Kalamazoo is the major city of the Kalamazoo-Portage. It is equidistant from the major American citiesof Chicago and Detroit, each fewer than 150 miles away. One of Kalamazoo'smost notable features is the Kalamazoo Mall, an outdoor pedestrian shoppingmall. The city created the mall in 1959 by closing part of Burdick Street to autotraffic, although two of the mall's four blocks have been reopened to autotraffic since 1999. Kalamazoo is home to Western Michigan University, a largepublic university, Kalamazoo College, a liberal arts school, and KalamazooValley Community College, a two-year community college.


SURROUNDING AREA MAP


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Kalamazoo, MI

Paw Paw, MI

16This 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

PopulationIn 2014, the population in your selected geography is 17,513. The population haschanged by 5.33% since 2000. It is estimated that the population in your area will be18,154 five years from now, which represents a change of 3.66% from the currentyear. The current population is 49.05% male and 50.94% female. The median age ofthe population in your area is 39.6, compare this to the Entire US average which is37.3. The population density in your area is 222.54 people per square mile.

IncomeIn 2014, the median household income for your selected geography is $36,722,compare this to the Entire US average which is currently $51,972. The medianhousehold income for your area has changed by -8.97% since 2000. It is estimatedthat the median household income in your area will be $44,185 five years from now,which represents a change of 20.32% from the current year. The current year percapita income in your area is $17,451, compare this to the Entire US average, which is$28,599. The current year average household income in your area is $48,041,compare this to the Entire US average which is $74,533.

EmploymentIn 2014, there are 8,699 employees in your selected area, this is also known as thedaytime population. The 2000 Census revealed that 51.48% of employees areemployed in white-collar occupations in this geography, and 48.40% are employed inblue-collar occupations. In 2014, unemployment in this area is 7.05%. In 2000, theaverage time traveled to work was 24.1 minutes.

1-Mile 3-Mile 5-Mile

2010 3,153 8,600 17,864

2014 3,103 8,439 17,513

2019 3,175 8,830 18,155

POPULATION

1-Mile 3-Mile 5-Mile

Average $46,429 $54,721 $61,082

Median $35,081 $44,364 $51,016

2014 HOUSEHOLD INCOME

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Employers # of Employees

Pfizer 6,100

Bronson Hospital 3,000

National City Bank 2,922

TOP EMPLOYERS IN KALAMAZOO

T H E N N N P R O G R O U P

MI Broker of RecordSteven ChabenMM REIS, IncTwo Towne Square, Suite 450Soutfield, MI 48076Tel: (248) 415-2600Fax: (248) 352-3813License: 6502133659

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