IHOP 4725 Showcase Blvd, Memphis, TN 38118

Offering Memorandum

™ R E T A I L

A D V I S O R S

C O NFIDEN T IALI T Y & DI S CLAI M ER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of IHOP located at 4725 Showcase Blvd, Memphis, TN 38118 (“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. I t 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 res pective 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

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

E XCLU S IVELY LIST ED BY: Gary Chou

Director | Restaurant Practice Group direct +1.310.919.5827 MOBILE +1.714.928.8016 [email protected] License No. 01911222

James “Jim” Holleman Broker of Record License No. 235328

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Matthews Retail Advisors

Pricing & Financial Analysis

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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

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Matthews Retail Advisors

OFFERING MEMORANDUM | IHOP

PRICING ANALYSIS EXECUTIVE SUMMARY

IHOP 4725 Showcase Blvd Memphis, TN 38118 List Price............................................................................................$2,466,373 CAP Rate - Current �����������������������������������������������������������������������������������8.25% Gross Leasable Area ��������������������������������������������������������������������������4,694 SF Lot Size ................................................................... ± 1.08 Acres (47,085 SF) Year Built ��������������������������������������������������������������������������������������������������������1996

Annualized Operating Data - IHOP Monthly Rent

Annual Rent

Rent/SF

Current - 1/12/2018

$16,956.32

$203,475.84

$43.40

Option 1: 1/13/2018 - 1/12/2023

$18,651.95

$223,823.42

$47.74

Option 2: 1/13/2023 - 1/12/2028

$20,517.15

$246,205.77

$52.52

Option 3: 1/13/2028 - 1/12/2033

$22,568.86

$270,826.34

$57.77

Tenant Summary Tenant Trade Name

IHOP

Type of Ownership

Fee Simple

Lease Guarantor Lease Type Roof and Structure Original Lease Term

NNN Tenant Responsible 20

Lease Commencement Date

1/13/1998

Rent Commencement Date

1/13/1998

Lease Expiration Date

1/12/2018

Term Remaining on Lease

IHOP | OFFERING MEMORANDUM

Corporate

2

Increase

10% Increases Every 5 Years

Options

Three (3), 5-Year Options

Matthews Retail Advisors

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COMPANY OVERVIEW

Property Name Property Type Parent Company Trade Name Ownership Credit Rating Rating Agency

IHOP Casual Dining Restaurant DineEquity, Inc Public B Standard & Poor’s

Revenue

654.98 M

Net Income

36.459 M

Stock Symbol

DIN

Board

NYSE

No. of Locations

±1700

No. of Employees Headquartered Web Site Year Founded

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Matthews Retail Advisors

±40,000 Glendale, CA www.ihop.com 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 1998.

OFFERING MEMORANDUM | IHOP

PROPERTY DESCRIPTION

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Matthews Retail Advisors

OFFERING MEMORANDUM | IHOP

PROPERTY PHYSICAL DESCRIPTION DESCRIPTION

THE OFFERING Property Name �������������������������������������������������������������������������������������������������IHOP Property Address............................................................... 4725 Showcase Blvd Memphis, TN 38118 Assessor’s Parcel Number ������������������������������������������������������� 07-4001-0-0236

SITE DESCRIPTION Number of Stories ���������������������������������������������������������������������������������������������One Year Built..............................................................................................................1996 Gross Leasable Area (GLA) �������������������������������������������������������������� ± 4,694 SF Lot Size........................................................................... ± 1.08 Acres (47,085 SF) Type of Ownership................................................................................Fee Simple Parking................................................................................... 100 Surface Spaces Parking Ratio................................................................................... 21.3 : 1,000 SF Landscaping.........................................................................................Professional Topography.................................................................................... Generally Level

IHOP | OFFERING MEMORANDUM

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BIRD’S EYE

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OFFERING MEMORANDUM | IHOP

PROPERTY REGIONAL DESCRIPTION MAP

IHOP | OFFERING MEMORANDUM

Matthews Retail Advisors

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TENANT MAP

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Matthews Retail Advisors

OFFERING MEMORANDUM | IHOP

DEMOGRAPHICS

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DEMOGRAPHIC CITY OVERVIEWANALYSIS | Memphis, TN Top Employers

City Overview | Memphis Rank

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.

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

5,247

10

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.

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OFFERING MEMORANDUM | IHOP

DEMOGRAPHICS REPORT DEMOGRAPHIC ANALYSIS Population 2020 Projection 2015 Estimate 2010 Census 2000 Census Growth 2000-2010 Growth 2010-2015 Growth 2015-2020

1-Mile

3-Mile

5-Mile

12,558 12,199 11,890 10,979 8.30% 2.60% 2.94%

91,090 90,526 90,805 96,656 -6.05% -0.31% 0.62%

213,439 211,948 212,356 224,488 -5.40% -0.19% 0.70%

Households 2020 Projection 2015 Estimate 2010 Census 2000 Census Growth 2000-2010 Growth 2010-2015 Growth 2015-2020

1-Mile

3-Mile

5-Mile

4,286 4,140 4,000 4,055 -1.35% 3.49% 3.51%

34,770 34,324 34,019 37,644 -9.63% 0.90% 1.30%

85,727 84,510 83,677 90,211 -7.24% 0.99% 1.44%

1-Mile

3-Mile

5-Mile

17.33% 14.76% 17.28% 14.49% 19.34% 9.89% 4.18% 1.66% 0.77% 0.20% 0.08% 0.03% $45,413 $35,656

17.94% 16.59% 14.36% 14.48% 17.37% 9.14% 4.16% 2.63% 1.55% 0.63% 0.87% 0.28% $50,583 $36,152

18.15% 14.84% 13.59% 13.70% 16.08% 8.78% 4.71% 3.22% 2.77% 1.24% 2.03% 0.89% $60,482 $38,745

Income $0 - $15,000 $15,000 - $24,999 $25,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $124,999 $125,000 - $149,999 $150,000 - $199,999 $200,000 - $249,999 $250,000 - $499,999 $500,000+ 2015 Est. Average Household Income 2015 Est. Median Household Income

IHOP | OFFERING MEMORANDUM

Matthews Retail Advisors

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IHOP 4725 Showcase Blvd Memphis, TN 38118 OFFERING MEMORANDUM

Gary Chou

Director | Restaurant Practice Group direct +1.310.919.5827 MOBILE +1.714.928.8016 [email protected] License No. 01911222

™

James “Jim” Holleman Broker of Record License No. 235328

Matthews Retail Advisors | 841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.Matthews.com