Fazoli s Restaurant North Prospect Champaign, IL Offering Memorandum For Sale Investment Property FOR MORE INFORMATION:

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1 Fazoli s Restaurant 2029 North Prospect Champaign, IL Offering Memorandum For Sale Investment Property *actual subject photograph FOR MORE INFORMATION: Shawn Bakke License No shawn.bakke@colliers.com Gregory Ching License No gregory.ching@colliers.com Peter Block Executive Vice President Broker of Record 6250 N. River Rd, Ste Rosemont, IL S. Figueroa St, Ste 3500 Los Angeles, CA 90017

2 Table of Contents > EXECUTIVE OVERVIEW Offering Summary...4 Investment Summary Asset Highlights > FINANCIAL OVERVIEW Financial Summary...6 Investment Summary...7 > Property OVERVIEW Property Photos...10 Property Aerial...12 Surrounding Property Photos...13 > TENANT OVerviEW Tenant Summary...16 Fazoli s Lease Summary...17 > TRADE AREA OVERVIEW Local Area Overview...19 Local Map...20 Local Area Statistics...21 Demographics Regional Map...22 FAZOLI S COLLIERS INTERNATIONAL 2

3 Fazoli s > Executive Overview Offering Offering Summary...4 Summary...4 Investment Summary Investment Summary Asset Highlights Asset Highlights FAZOLI S COLLIERS INTERNATIONAL 3

4 EXECUTIVE OVERVIEW Offering Summary Investment Summary Colliers International presents the fee simple interest in a Fazoli s Restaurant ( Property ) The subject property is a NNN leased quick service restaurant, with a new ten year lease signed by corporate Fazoli s in Champaign, Illinois. As the property is a single tenant property, no expenses affect the base rent. Performance of the lease are guaranteed by Corporate Fazoli s Asset Highlights: Pro Forma Cap Rate 2015: 7.70% Corporate-backed lease with 10% Rent Increases every five years including the option terms Signalized corner location out-parcel to Staples shopping center Baytown Square tenants include: Pier 1 Imports, Dollar Tree, Petsmart, Shoe Carnival, Michael s, BestBuy, Dick s Sporting Goods Adjacent to Chili s and a Wendy s Subject site has a drive through window > Property overview List Price $1,115,100 Cap Rate 7.00% Property Address North Prospect Ownership...Fee Simple Building Size (SF, NAP)... ±3,000 Lot Size Acres / 36,266 SF Year Built > Financial overview Proposed Debt...$780,570 / 70% Down Payment...$334,530 / 30% Base Rent...$78,057 NOI $78,057 Cash on Cash Return (In-Place) % Total Yield % Directly across from a Lowe s, Steak n Shake, Target Center, Walmart, Burger King, Ruby Tuesday fazoli s COLLIERS INTERNATIONAL 4

5 Fazoli s > Financial Overview Financial Summary...6 Investment Summary...7 FAZOLI S COLLIERS INTERNATIONAL 5

6 FINANCIAL OVERVIEW Financial Summary Property / loan assumptions Building Size (SF) 3,000 Lot Size (Acres) 0.83 Land Area SF 36,266 Year Built: 1995 Lease Commencement 8/5/2010 Lease Term 10 Lease Termination 8/5/2020 Rent Increases 10% every 5 Options: Four 5-year Loan Type Proposed New Loan Amount $780,570 Interest Rate 4.50% Amortization 25 Maturity Date 10 Down Payment Percentage 30% Down Payment $334,530 LTV 70% Purchase Assumptions / Annualized operating data Purchase Price $1,115,100 Cap Rate - Year % Price PSF $ $/SF Land Gross $30.75 Pro Forma Cap Rate (Aug. 2015) 7.70% 10-yr Avg Cap 7.79% Unleveraged IRR 8.55% Leveraged IRR 19.69% Year 1 Total Base Rent (occupied space) $78,057 Net Operating Income $78,057 (Less Debt Service) $(52,641) Net CF after Debt Service $25,416 Cash on Cash Yield 7.60% Principal Reduction $17,515 Total Return $42,931 Total Yield 12.83% FAZOLI S COLLIERS INTERNATIONAL 6

7 FINANCIAL OVERVIEW Investment Summary UNLEVERAGED Cash Flow Analysis Investment Years Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Lease Years Acquisition Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Reversion Acquisition Cost $(1,115,100) Base Rent (occupied space) $78,057 $78,057 $85,863 $85,863 $85,863 $85,863 $85,863 $94,449 $94,449 $94,449 $94,449 Cap Rate 7.00% 7.00% 7.70% 7.70% 7.70% 7.70% 7.70% 8.47% 8.47% 8.47% 8.47% Sales Proceeds $1,259, % Unleveraged Cash Flows $(1,115,100) $78,057 $78,057 $85,863 $85,863 $85,863 $85,863 $85,863 $94,449 $94,449 $1,353,769 Taxable Income Investment Years Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Net Operating Income: $78,057 $78,057 $85,863 $85,863 $85,863 $85,863 $85,863 $94,449 $94,449 $94,449 $94,449 (Less Loan Interest) $(35,126) $(34,337) $(33,514) $(32,653) $(31,754) $(30,814) $(29,831) $(28,805) $(27,732) $(26,612) $(25,440) (Less Depreciation) $(22,874) $(22,874) $(22,874) $(22,874) $(22,874) $(22,874) $(22,874) $(22,874) $(22,874) $(22,874) $(22,874) Taxable Income: $20,058 $20,846 $29,475 $30,336 $31,235 $32,175 $33,157 $42,770 $43,843 $44,964 $46,135 = option years FAZOLI S COLLIERS INTERNATIONAL 7

8 FINANCIAL OVERVIEW Investment Summary LEVERAGED Cash Flow Analysis Investment Years Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Lease Years Acquisition Aug-13 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Reversion Equity Investment (Down Pmt) $(334,530) NOI $78,057 $78,057 $85,863 $85,863 $85,863 $85,863 $85,863 $94,449 $94,449 $94,449 $94,449 (Less Debt Service) $(52,641) $(52,641) $(52,641) $(52,641) $(52,641) $(52,641) $(52,641) $(52,641) $(52,641) $(52,641) $(52,641) Net CF after Debt Service $25,416 $25,416 $33,222 $33,222 $33,222 $33,222 $33,222 $41,808 $41,808 $41,808 $41,808 Cash on Cash 7.60% 7.60% 9.93% 9.93% 9.93% 9.93% 9.93% 12.50% 12.50% 12.50% 12.50% Principal Reduction $17,515 $18,303 $19,127 $19,988 $20,887 $21,827 $22,809 $23,836 $24,908 $26,029 Sales Proceeds $1,259,320 Debt Repayment $(565,339) Leveraged Cash Flow $(334,530) $42,931 $43,720 $52,349 $53,210 $54,109 $55,049 $56,031 $65,644 $66,717 $761,818 Percentage Yield 12.83% 13.07% 15.65% 15.91% 16.17% 16.46% 16.75% 19.62% 19.94% Loan amortization Investment Years Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Interest $35,126 $34,337 $33,514 $32,653 $31,754 $30,814 $29,831 $28,805 $27,732 $26,612 $25,440 Principal Reduction $17,515 $18,303 $19,127 $19,988 $20,887 $21,827 $22,809 $23,836 $24,908 $26,029 $27,201 Balance $780,570 $763,055 $744,751 $725,624 $705,636 $684,749 $662,922 $640,113 $616,277 $591,368 $565,339 $538,139 Debt Service ($52,641) FAZOLI S COLLIERS INTERNATIONAL 8

9 Fazoli s > Property Overview Property Photos...10 Property Aerial...12 Surrounding Property Photos...13 FAZOLI S COLLIERS INTERNATIONAL 9

10 PROPERTY OVERVIEW Property Photographs Side view of property View of subject property FAZOLI S COLLIERS INTERNATIONAL 10

11 PROPERTY OVERVIEW Property Photographs Drive Through Window Subject Property View Menu Board FAZOLI S COLLIERS INTERNATIONAL 11

12 PROPERTY OVERVIEW Property Aerial FAZOLI S COLLIERS INTERNATIONAL 12

13 PROPERTY OVERVIEW Surrounding Property Photographs Out-parcel Dollar Tree and Staples Out-parcel Petsmart FAZOLI S COLLIERS INTERNATIONAL 13

14 PROPERTY OVERVIEW Surrounding Property Photographs Lowe s Hardware located across the street Payless Shoe Source located across the street FAZOLI S COLLIERS INTERNATIONAL 14

15 Fazoli s > Tenant Overview Tenant Summary...16 Fazoli s Lease Summary...17 FAZOLI S COLLIERS INTERNATIONAL 15

16 TENANT OVERVIEW Tenant Summary: Fazoli s FAZOLI S is a privately owned company, currently operating 240 restaurants in 25 states. Sun Capital Partners, Inc. acquired Fazoli s in Sun Capital has a number of investments in the quick-service and casual dining restaurant segment, including: El Torito, Chevy s, Acapulco s, Soup Plantation, Sweet Tomatoes, Boston Market, Bruegger s, Captain D s, and Real Mex Business WirePress Release: Fazoli s Fri, May 24, :00 PM EDT -FastCasual.com ranked Fazoli s number one of 50 fast-casual restaurant chains and designated it Brand of the Year. CEO Carl Howard was placed second on its list of top 20 fast-casual industry leaders. SUN CAPITAL PARTNERS INC On October 21, 2006, Sun Capital Partners Inc. purchased Fazoli s for an estimated $100 million price tag, replacing CEO Kuni Toyoda The private investment firm specializes in leveraged buyouts and equity and debt investments. After acquisition, Sun Capital provides operating advice and additional capital to its portfolio companies. It targets firms with $50 million to $5 billion in annual sales. Sun Capital has some $8 billion of capital under management. Sun Capital Partners Inc. is putting Captain D s LLC up for sale, according to a report from Dow Jones. Tenant Name...Fazoli s Headquartered...Lexington, KY Locations Owner...Sun Capital Partners During the past couple of years under Sun Capital s ownership, Captain D s Seafood Kitchen staged a turnaround, refreshing its restaurant design and upgrading its menu. The company reported its first same-store sales increase in eight years in 2011, and in fiscal 2012, samestore sales increased 9.2 percent at companyowned restaurants and 7.5 percent for franchised restaurants a record for the brand. with Bob Weissmueller, a veteran executive of McDonald s. FAZOLI S COLLIERS INTERNATIONAL 16

17 TENANT OVERVIEW Lease Summary Tenant Name...Fazoli s Lease Commencement...8/5/2010 Lease Expiration...8/5/2020 Option Term...Four 5-year Rent Increases...10% every 5 Gross Leasable Area...3,000 SF Lease Summary base rent Lease Years Annual Rent Monthly Rent annual rent / sf Rent Incr $78,057 $6, $ $85,863 $7, $28.62 $7,806 / 10% Option $94,449 $7, $31.48 $8,586 / 10% $103,894 $8, $34.63 $9,445 / 10% $114,283 $9, $38.09 $10,389 / 10% $125,712 $10, $41.90 $11,428 / 10% *Representative photo FAZOLI S COLLIERS INTERNATIONAL 17

18 Fazoli s > Trade Area Overview Local Area Overview...19 Local Map...20 Local Area Statistics...21 Demographics Regional Map...22 FAZOLI S COLLIERS INTERNATIONAL 18

19 TRADE AREA OVERVIEW Local Area Overview Champaign, IL Founded in 1854, the City of Champaign (above) is the County s largest city with a population of 75,254, and is located in the heart of Champaign County in east central Illinois. Champaign is the home of the University of Illinois (left), one of the preeminent research institutions in the world. Specifically, Interstate-74 is merely three blocks away from the subject property, which spans southeast to the Champaign-Urbana area, intersecting with I-57 and I-72. The concept of I-72 across Missouri was to create the Kansas City-Chicago Expressway, demographics 1 - Miles 3 - Miles 5 - Miles Projected Growth ( ) 4.4% 4.4% 4.9% Projected Population (2015) 7,708 74, ,540 Estimated Population (2010) 7,378 71, ,182 Census Population (2000) 5,476 71, ,182 Historical Annual Growth % 14.14% 9.97% 2000 Average HH Income $49,911 $43,706 $55,050 FAZOLI S COLLIERS INTERNATIONAL 19

20 TRADE AREA OVERVIEW Local Map Subject Property FAZOLI S COLLIERS INTERNATIONAL 20

21 TRADE AREA OVERVIEW local Area statistics Champaign, IL Interstate 57 serves as a shortcut route for travelers heading between the south and Chicago, bypassing St. Louis, Missouri, while providing easy access to Shawnee National Forest (right) and many colleges in the region. Champaign is located 135 miles south of Chicago (below), 124 miles west of Indianapolis, Indiana, and 178 miles northeast of St. Louis, Missouri (right). The City of Champaign s business climate is thriving, with strong growth in: a) Manufacturing b)high Tech Research c) Logistics demographics 10 - Miles 15 - Miles 20 - Miles Projected Growth ( ) 3.67% 3.16% 2.95% Projected Population (2018) 161, , ,636 Estimated Population (2013) 156, , ,508 Census Population (2000) 140, , ,230 Historical Annual Growth % 9.16% 8.51% 2000 Average HH Income $59,150 $59,934 $60,442 Fazoli s COLLIERS INTERNATIONAL 21

22 TRADE AREA OVERVIEW Regional Map Subject Property Chicago FAZOLI S COLLIERS INTERNATIONAL 22

23 CONFIDENTIALITY & DISCLAIMER Confidentiality & Disclaimer Statement This Offering Memorandum contains select information pertaining to the business and affairs of the Property at 2029 North Prospect Champaign, IL It has been prepared by Colliers International. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Owner or Colliers International. The material is based in part upon information supplied by the Owner and in part upon financial information obtained by Colliers International from sources it deems reliable. Neither Owner, nor their officers, employees, or agents make any representation or warranty, express or implied, as to the accuracy or completeness or this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence. By acknowledging your receipt of this Offering Memorandum from Colliers International, you agree: 1) The Offering Memorandum and its contents are confidential; 2) You will hold it and treat it in the strictest of confidence; and 3) You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner. Owner and Colliers International expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered. If you wish not to pursue negotiations leading to the acquisition of the Fazoli s or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Owner or Colliers International or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. 23 FAZOLI S

24 Fazoli s Offering Memorandum FOR MORE INFORMATION: Shawn Bakke shawn.bakke@colliers.com Gregory Ching gregory.ching@colliers.com COLLIERS INTERNATIONAL 865 S. Figueroa Street, Suite 3500 Los Angeles, CA 90017