BURGER KING - matthews.com€¦ · industry during the first decade of the 1900s, when steel output tripled. In recent times, the Port of Brownsville has become a major economic hub

OFFERING MEMORANDUM

BURGER KING 1300 CENTRAL BLVD, BROWNSVILLE, TX 78520

Matthews Retail Group

CONFIDENTIALITY & DISCLAIMER STATEMENTThis Of fer ing Memorandum contains se lec t in format ion per ta in ing to the bus iness and af fa i rs of Burger King located at 1300 Central Blvd, Brownsville, TX 78520 (“Proper ty”). I t has been prepared by Mat thews Retai l Group . This Of fer ing Memorandum may not be al l - inc lus ive or contain a l l o f the in format ion a prospect ive purchaser may desi re. The in format ion contained in th is Of fer ing Memorandum is conf ident ia l and furn ished sole ly for the purpose of a rev iew by a prospect ive purchaser of the Proper ty. I t i s not to be used for any other purpose or made avai lable to any other person wi thout the wr i t ten consent of Sel le r or Mat thews Retai l Group . The mater ia l i s based in par t upon in format ion suppl ied by the Sel ler and in par t upon f inancia l in format ion obtained f rom sources i t deems re l iable. Owner, nor thei r of f icers, employees, or agents makes any representa t ion or warranty, express or impl ied, as to the accuracy or comple teness of th is Of fer ing Memorandum or any of i t s contents and no legal l iabi l i ty i s assumed or shal l be impl ied wi th respect there to. Prospect ive purchasers should make thei r own projec t ions and form thei r own conclus ions wi thout re l iance upon the mater ia l contained herein and conduct thei r own due di l igence.

By acknowledging your receipt of th is Of fer ing Memorandum for the Proper ty, you agree:

1. The Of fer ing Memorandum and i t s contents are conf ident ia l ;

2. You wi l l ho ld i t and t reat i t in the s t r ic tes t o f conf idence; and

3. You wi l l not , di rec t ly or indi rec t ly, disc lose or permi t anyone e lse to disc lose th is Of fer ing Memorandum or i t s contents in any fashion or manner det r imenta l to the in teres t of the Sel ler.

Owner and Mat thews Retai l Group express ly reser ve the r igh t , a t thei r so le discre t ion, to re jec t any and al l express ions of in teres t or of fers to purchase the Proper ty and to terminate discuss ions wi th any person or ent i ty rev iewing th is Of fer ing Memorandum or making an of fer to purchase the Proper ty un less and unt i l a wr i t ten agreement for the purchase and sale of the Proper ty has been fu l ly executed and del ivered.

I f you wish not to pursue negot ia t ions leading to the acquis i t ion of the Proper ty or in the fu tu re you discont inue such negot ia t ions, then you agree to purge al l mater ia ls re la t ing to th is Proper ty inc luding th is Of fer ing Memorandum.

A prospect ive purchaser ’s so le and exc lus ive r igh ts wi th respect to th is prospect ive t ransact ion, the Proper ty, or in format ion provided herein or in connect ion wi th the sale of the Proper ty shal l be l imi ted to those express ly provided in an executed Purchase Agreement and shal l be subjec t to the terms thereof. In no event shal l a prospect ive purchaser have any other c la ims agains t Sel le r or Mat thews Retai l Group or any of thei r af f i l ia tes or any of thei r respect ive of f icers, Di rec tors, shareholders, owners, employees, or agents for any damages, l iabi l i ty, or causes of act ion re la t ing to th is so l ic i ta t ion process or the market ing or sa le of the Proper ty.

This Of fer ing Memorandum shal l not be deemed to represent the s ta te of af fa i rs of the Proper ty or cons t i tu te an indicat ion that there has been no change in the s ta te of af fa i rs of the Proper ty s ince the date th is Of fer ing Memorandum.

Table of ContentsPRICING & FINANCIAL ANALYSIS

Investment Highlights ................................................... 2Executive Summary ..................................................... 3Company Overview ................................................... 4

PROPERTY DESCRIPTIONPhysical Description ..................................................... 7Tenant Map ................................................................ 8Regional Map ............................................................. 9Bird’s Eye ................................................................. 10

DEMOGRAPHICSCity Overview | Brownsville, TX ................................. 12Demographics Report ................................................ 13

EXCLUSIVELY L ISTED BY:Jay CeitlinBroker of Record License No. 510276

Kevin ChangAssociate DIRECT +1.310.919.5828 MOBILE +1.951.616.8918 [email protected] License No. 01976724

Gary ChouDirector | Restaurant Practice Group DIRECT +1.310.919.5827 MOBILE +1.714.928.8016 [email protected] License No. 01911222

Matthews Retail Group

Pricing & Financial Analysis

OFFERING MEMORANDUM | Burger KingP. 2 Matthews Retail Group

PRICING AND FINANCIAL ANALYSIS PROPERTY DESCRIPTION DEMOGRAPHICS

STABILIZED CASH FLOW

• 1% annual increases or 8.5% of gross sales – Great hedge against inflation

• Four (4) five (5) year options with additional rent increases• Nationally and internationally recognized quick-serve restaurant

tenant – Burger King• Second largest Burger King Franchisee – Sun Holdings Inc.

operates over 250 unique Burger King units and has over 550 units of franchised businesses in total

IDEAL 1031 EXCHANGE PROPERTY

• Absolute NNN lease with zero landlord obligations – Ideal for out-of-state cash flow investors

STRONG RETAIL LOCATION

• Located in the right off US-77 BUS which leads straight to Brownsville City Hall and the Gladys Porter Zoo

• Dominant Retail Corridor - surrounding national retailers in the immediate area include Walgreens, Whataburger, Dairy Queen, Dollar General, CVS Pharmacy, H-E-B, Cash America Pawn, McDonald’s, Subway among others.

• Over 81,000 people within a 3-mile radius, with Average Household Income of $44,911

• Over 169,025 people within a 5-mile radius, with Average Household Income of $46,212

Investment HighlightsECONOMIC GROWTH VIA TECH MIGRATION

• SpaceX, the leading privately funded space exploration company, is currently constructing a private launch site in Brownsville, projected to bring $85M to the Local Economy in contracted jobs and $51M in Annual Salaries thereafter by 2024.

• STARGATE (Spacecraft Tracking and Astronomical Research into Gigahertz Astrophysical Transient Emission) has also started construction and has received over $10M in Funding to provide support for spaceflight operations via radio-frequency technology.

Matthews Retail Group P. 3Burger King | OFFERING MEMORANDUM

PRICING AND FINANCIAL ANALYSIS PROPERTY DESCRIPTION DEMOGRAPHICS PRICING AND FINANCIAL ANALYSIS PROPERTY DESCRIPTION DEMOGRAPHICS

Executive Summary

BURGER KING1300 CENTRAL BLVD BROWNSVILLE, TX 78520

List Price ....................................................................... $1,222,000*CAP Rate - Current .................................................................. 9.00%Gross Leasable Area ........................................................... 4,437 SFLot Size ........................................................................ ±1.14 AcresYear Built ..................................................................................2003

Annualized Operating DataMonthly Rent Annual Rent Rent/SF CAP Rate

Current - 1/31/2016 $7,000.00 $84,000 $18.93 6.87%

2/1/2016 - 1/31/2017 $9,166.67 $110,000 $24.79 9.00%

2/1/2017 - 1/31/2018 $9,258.33 $111,100 $25.04 9.09%

2/1/2018 - 1/31/2019 $9,350.92 $112,211 $25.29 9.18%

2/1/2019 - 1/31/2020 $9,444.43 $113,333 $25.54 9.27%

Tenant Summary

Tenant Trade Name Burger King

Type of Ownership Fee Simple

Lease Guarantor Franchisee

Lease Type NNN

Roof and Structure Tenant Responsible

Original Lease Term 17 Years, 4 Months Years

Lease Commencement Date 9/26/2002

Rent Commencement Date 10/1/2002

Lease Expiration Date 6/30/2020

Term Remaining on Lease 4.83

Increases 1% Increases Annually OR 8.5% of Gross Sales

Options Four (4) 5-Year Options

*Priced reflects upcoming rental increase in January 2016 at an increase of 1% annually thereafter



Company Overview

Property Name Burger King

Property Type Net Leased Quick Service Restaurant

Parent Company Trade Name Restaurant Brands International Inc.

Ownership Public

Credit Rating B+

Rating Agency Standard & Poor’s

Revenue $1.97 B

Net Income $117.7 M

Stock Symbol QSR

Board NYSE

No. of Locations ±13,000

No. of Employees ±34,000

Headquartered Miami, FL

Web Site http://www.bk.com/

Year Founded 1953

Burger King is a global chain of hamburger fast food restaurants headquartered in Miami, Florida. The company began in 1953 as Insta-Burger King. but after financial difficulties in 1954, two large franchisees in Miami, purchased the company and renamed it Burger King. In 2002, a third set of owners, a partnership of TPG Capital, Bain Capital, and Goldman Sachs Capital Partners, took it public. Eight years later, 3G Capital of Brazil acquired a majority stake in BK and the new owners promptly initiated a restructuring of the company to reverse its declining market share. 3G, along with partner Berkshire Hathaway, merged the company with Canadian-based doughnut chain Tim Hortons under a new Canadian-based parent company, Restaurant Brands International which was founded on August 25, 2014. The multinational giant currently serves customers in US and Canada, Europe, Middle East and Africa, Latin America, the Caribbean, and Asia Pacific.


Property Description





Physical Description

THE OFFERINGProperty Name ....................................................................Burger King

Property Address ....................................................... 1300 Central Blvd

Brownsville, TX 78520

Assessor’s Parcel Number ....................................019356-0010-001000

SITE DESCRIPTIONNumber of Stories ...........................................................................One

Year Built ...................................................................................... 2003

Gross Leasable Area (GLA) .......................................................4,437 SF

Lot Size ............................................................................. ±1.14 Acres

Type of Ownership ................................................................ Fee Simple

Parking ...................................................................±54 Surface Spaces

Parking Ratio ...............................................................12.17 : 1,000 SF

Landscaping ........................................................................Professional

Topography ....................................................................Generally Level

CONSTRUCTIONFoundation .......................................................................Concrete Slab

Framing ...................................................................................... Wood

Exterior ...........................................................................Painted Stucco

Parking Surface .........................................................................Asphalt

Roof ................................................................................................Flat



Tenant Map



Regional Map



Bird’s Eye


Demographics



City Overview | Brownsville, TX

Brownsville is located at the southernmost tip of Texas, on the northern bank of the Rio Grande, directly north and across the border from Matamoros, Tamaulipas, Mexico. The 2014 U.S. Census Bureau estimate placed the Brownsville-Harlingen metropolitan area population at 420,392, making it the ninth most populous metropolitan area in the state of Texas.

The Brownsville urban area is one of the fastest growing in the United States. The city's population dramatically increased after it experienced a boom in the steel industry during the first decade of the 1900s, when steel output tripled. In recent times, the Port of Brownsville has become a major economic hub for South Texas, where shipments from Mexico, other parts of the United States and the world arrive. Brownsville's economy is mainly based on its international trade with Mexico through the North American Free Trade Agreement (NAFTA), and is home to one of the fastest growing manufacturing sectors in the nation. Brownsville has often been recognized as having one of the best pro-business climates in the United States, and the city has also been ranked among the least expensive places to live in the U.S.

In September 2014, SpaceX, a privately funded space exploration company, begun construction of a private launch site which will bring $85M to the local economy with contractual jobs and $51M in annual salaries there after by 2024. In synergy to the private launch pad, STARGATE (Spacecraft Tracking and Astronomical Research into Gigahertz Astrophysical Transient Emission) begun construction in October 2014 and has received over $10M in funding to provide support for spaceflight operations via radio-frequency technology.

Like the rest of the South Texas Coast, Brownsville is an excellent place for visitors. Some common attractions that draw tourists include outdoor activities, museums, art galleries, theaters, and shopping. Boca Chica Beach is a nearby beach known for its pristine conditions and undeveloped state. It offers a wide, sandy beach that is accessible to vehicles and allows visitors to camp, fish, surf, or sunbathe.

Source: Wikipedia



Demographics Report

Population 1-Mile 3-Mile 5-Mile2020 Projection 12,766 83,145 169,0252015 Estimate 12,890 80,984 162,3052010 Census 13,248 79,693 156,7692000 Census 14,286 74,541 133,028Growth 2015-2020 -0.96% 2.67% 4.14%Growth 2010-2015 -2.70% 1.62% 3.53%

Households2020 Projection 4,230 25,910 48,6822015 Estimate 4,233 25,172 46,7542010 Census 4,278 24,636 45,1462000 Census 4,296 21,782 36,566Growth 2015-2020 -0.08% 2.93% 4.12%Growth 2010-2015 -1.05% 2.18% 3.56%

Income$0 - $15,000 28.49% 28.13% 24.92%$15,000 - $24,999 15.78% 17.49% 17.60%$25,000 - $34,999 11.93% 12.50% 12.94%$35,000 - $49,999 10.58% 12.10% 12.83%$50,000 - $74,999 15.76% 14.22% 14.98%$75,000 - $99,999 6.61% 6.20% 6.80%$100,000 - $124,999 4.39% 4.08% 4.56%$125,000 - $149,999 2.13% 1.70% 1.99%$150,000 - $199,999 1.96% 1.63% 1.66%$200,000 - $249,999 0.80% 0.73% 0.71%$250,000 - $499,999 1.23% 0.87% 0.73%$500,000+ 0.35% 0.36% 0.28%2015 Est. Average Household Income $47,898 $44,911 $46,2122015 Est. Median Household Income $29,792 $28,506 $30,776

BURGER KING1300 Central BlvdBrownsville, TX 78520OFFERING MEMORANDUM

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

Jay CeitlinBroker of Record License No. 510276

Gary ChouDirector | Restaurant Practice Group DIRECT +1.310.919.5827 MOBILE +1.714.928.8016 [email protected] License No. 01911222

Kevin ChangAssociate DIRECT +1.310.919.5828 MOBILE +1.951.616.8918 [email protected] License No. 01976724

Documents

BURGER KING - matthews.com€¦ · industry during the first decade of the 1900s, when steel output tripled. In recent times, the Port of Brownsville has become a major economic hub