R E T A I L A D V I S O R S

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1 IHOP 4725 Showcase Blvd, Memphis, TN Offering Memorandum R E T A I L A D V I S O R S

2 CONFIDENTIALITY & DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of IHOP located at 4725 Showcase Blvd, Memphis, TN ( Property ). It has been prepared by Matthews Retail Advisors. 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 Seller or Matthews Retail Advisors. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of 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 for the Property, 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 Seller. Owner and Matthews Retail Advisors 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 Property 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 Seller or Matthews Retail Advisors 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. Matthews Retail Advisors

3 Table of Contents Pricing & Financial Analysis INVESTMENT Overview... 2 INVESTMENT HIGHLIGHTS... 2 EXECUTIVE SUMMARY...3 COMPANY Overview...4 PROPERTY DESCRIPTION PHYSICAL DESCRIPTION...7 BIRD S EYE... 8 REGIONAL MAP... 9 TENANT MAP...10 DEMOGRAPHICS CITY Overview Memphis, TN...12 DEMOGRAPHICS REPORT...13 EXcluSIVELY LISTED BY: Gary Chou Director Restaurant Practice Group direct MOBILE gary.chou@matthews.com License No James Jim Holleman Broker of Record License No

4 Matthews Retail Advisors

5 Pricing & Financial Analysis

6 INVESTMENT Overview Investments Highlights strong corporate tenant corporately Guaranteed - DineEquity, Inc. is one of the largest full-service restaurant companies in the world with revenue in excess of $650 million and locations in approximately 17 countries.100% leased to national tenant, IHOP, a subsidiary of DineEquity, Inc. (NYSE: DIN) ihop has Three (3), 5-Year Options to extend the current lease with 10% rental increases every 5 years excellent retail location Strong Corridor of National Tenants - National tenants in area include Boost Mobile, Dollar Tree, ALDI, Taco Bell, Orion Federal Credit Union, Captain D s, Popeye s, Sonic Drive Thru Right Off the Highway - IHOP is located just off of Interstate 240 which traffics over 168,000 vehicles per day The property is less than 3 miles away from Memphis International Airport which is the busiest cargo airport in the United States ABSOLUTE NNN INVESTMENT Zero landlord responsibility making this investment great for out of state investors looking for passive income P. 2 Matthews Retail Advisors OFFERING MEMORANDUM IHOP

7 PRICING ANALYSIS EXECUTIVE SUMMARY IHOP 4725 Showcase Blvd Memphis, TN List Price...$2,466,373 cap Rate - Current % Gross Leasable Area...4,694 SF Lot Size... ± 1.08 Acres (47,085 SF) Year Built Annualized Operating Data - IHOP Monthly Rent Annual Rent Rent/SF Current - 1/12/2018 $16, $203, $43.40 Option 1: 1/13/2018-1/12/2023 $18, $223, $47.74 Option 2: 1/13/2023-1/12/2028 $20, $246, $52.52 Option 3: 1/13/2028-1/12/2033 $22, $270, $57.77 Tenant Summary Tenant Trade Name IHOP Type of Ownership Fee Simple Lease Guarantor Corporate Lease Type NNN Roof and Structure Tenant Responsible Original Lease Term 20 Lease Commencement Date 1/13/1998 Rent Commencement Date 1/13/1998 Lease Expiration Date 1/12/2018 Term Remaining on Lease 2 Increase 10% Increases Every 5 Years Options Three (3), 5-Year Options IHOP OFFERING MEMORANDUM Matthews Retail Advisors P. 3

8 COMPANY OVERVIEW Property Name IHOP Property Type Casual Dining Restaurant Parent Company Trade Name DineEquity, Inc Ownership Public Credit Rating B Rating Agency Standard & Poor s Revenue M Net Income M Stock Symbol DIN Board NYSE No. of Locations ±1700 No. of Employees ±40,000 Headquartered Glendale, CA Web Site Year Founded 1958 For 54 years, the IHOP (International House of Pancakes) family restaurant chain has served world famous pancakes and a wide variety of breakfast, lunch and dinner items while offering an affordable, everyday dining experience with warm and friendly service. Consumers can also enjoy a line of premium breakfast products called IHOP at HOME available at leading retailers. IHOP is a United States-based restaurant owned by DineEquity, with 99% of the restaurants run by independent franchisees. Founded in 1958 by Al and Jerry Lapin, along with early investors Al and Trudy Kallis, the first International House of Pancakes opened in the Los Angeles suburb of Toluca Lake, California. in 1961, the company began being publicly traded under the name International House of Pancakes. As of 1993, average sales per IHOP exceeded $1 million and system-wide sales of IHOP reached $1 billion in P. 4 Matthews Retail Advisors OFFERING MEMORANDUM IHOP

9 PROPERTY DESCRIPTION

10 P. 6 Matthews Retail Advisors OFFERING MEMORANDUM IHOP

11 PROPERTY PHYSICAL DESCRIPTION THE OFFERING Property Name...IHOP Property Address Showcase Blvd Memphis, TN Assessor s Parcel Number SITE DESCRIPTION Number of Stories...One Year Built Gross Leasable Area (GLA)... ± 4,694 SF Lot Size... ± 1.08 Acres (47,085 SF) Type of Ownership...Fee Simple Parking Surface Spaces Parking Ratio : 1,000 SF Landscaping...Professional Topography... Generally Level IHOP OFFERING MEMORANDUM Matthews Retail Advisors P. 7

12 BIRD S EYE P. 8 Matthews Retail Advisors OFFERING MEMORANDUM IHOP

13 PROPERTY REGIONAL DESCRIPTION MAP IHOP OFFERING MEMORANDUM Matthews Retail Advisors P. 9

14 TENANT MAP P. 10 Matthews Retail Advisors OFFERING MEMORANDUM IHOP

15 DEMOGRAPHICS

16 DEMOGRAPHIC ANALYSIS CITY Overview Memphis, TN City Overview Memphis In 2013 Memphis had a population of 653,450, making it the largest city in the state of Tennessee, the largest city on the Mississippi River, the third largest city in the Southeastern United States, and the 20th largest in the United States. The greater Memphis metropolitan area, including adjacent counties in Mississippi and Arkansas, had a 2010 population of 1,316,100. This makes Memphis the second-largest metropolitan area in Tennessee, surpassed only by metropolitan Nashville. Memphis is the youngest of Tennessee s major cities. The city s central location has led to much of its business development. Located on the Mississippi River, and intersected by five major freight railroads and two Interstate Highways, I-240 and I-55, Memphis is ideally located for commerce in the transportation and shipping industry. The city is home to Memphis International Airport, the world s second busiest cargo airport (following Hong Kong), which serves as a primary hub for FedEx Express shipping. Recently, Nike expanded their distribution center in Memphis, located 1.8 miles from the Wendy s subject site, making it the single largest distribution center in the United States. Top Employers Rank Employer Number of Employees 1 Federal Express Corporation 30,000 2 Memphis City Schools 16,000 3 United States Government 14,800 4 Methodist Healthcare 10,000 5 Baptist Memorial Healthcare Corp. 8,000 6 Shelby County Government 7,183 7 Memphis City Government 6,680 8 Wal-Mart Stores, Inc. 6,500 9 Naval Support Activity Mid-South 5, Tennessee State Government 5,247 Memphis is the home of three Fortune 500 companies: FedEx, AutoZone, and International Paper. With more than 10 million visitors each year and more than 60 tourist attractions, the city provides around 35 thousand jobs in tourism and hospitality in Memphis and Shelby County. P. 12 Matthews Retail Advisors OFFERING MEMORANDUM IHOP

17 DEMOGRAPHICS ANALYSIS REPORT Population 1-Mile 3-Mile 5-Mile 2020 Projection 12,558 91, , Estimate 12,199 90, , Census 11,890 90, , Census 10,979 96, ,488 Growth % -6.05% -5.40% Growth % -0.31% -0.19% Growth % 0.62% 0.70% Households 1-Mile 3-Mile 5-Mile 2020 Projection 4,286 34,770 85, Estimate 4,140 34,324 84, Census 4,000 34,019 83, Census 4,055 37,644 90,211 Growth % -9.63% -7.24% Growth % 0.90% 0.99% Growth % 1.30% 1.44% Income 1-Mile 3-Mile 5-Mile $0 - $15, % 17.94% 18.15% $15,000 - $24, % 16.59% 14.84% $25,000 - $34, % 14.36% 13.59% $35,000 - $49, % 14.48% 13.70% $50,000 - $74, % 17.37% 16.08% $75,000 - $99, % 9.14% 8.78% $100,000 - $124, % 4.16% 4.71% $125,000 - $149, % 2.63% 3.22% $150,000 - $199, % 1.55% 2.77% $200,000 - $249, % 0.63% 1.24% $250,000 - $499, % 0.87% 2.03% $500, % 0.28% 0.89% 2015 Est. Average Household Income $45,413 $50,583 $60, Est. Median Household Income $35,656 $36,152 $38,745 IHOP OFFERING MEMORANDUM Matthews Retail Advisors P. 13

18 IHOP 4725 Showcase Blvd Memphis, TN OFFERING MEMORANDUM Gary Chou Director Restaurant Practice Group direct MOBILE License No James Jim Holleman Broker of Record License No Matthews Retail Advisors 841 Apollo Street, Suite 150 El Segundo, CA