denny's - corporate ground lease · fl broker of record fort lauderdale office tel: (954)...

Offering Memorandum

DENNY'S - CORPORATE GROUND LEASE4541 Hypoluxo Rd • Lake Worth, FL 33463POTENTIAL VALUE-ADD (SEE P. 7)

N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E

Confidentiality and DisclaimerThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap Real

Estate Investment Services of Florida, Inc. ("Marcus & Millichap") and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This

Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The

information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with

respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the

presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the

financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing

Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus

& Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided.

All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment

Services, Inc. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement NoticeMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name

is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or

commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

DENNY'S - CORPORATE GROUND LEASE

Lake Worth, FL

ACT ID Z0510166

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Ryan NeeFL Broker of Record

Fort Lauderdale Office

Tel: (954) 245-3450

Fax: (954) 245-3410

[email protected]

License: FL BK3154667

N E T L E A S E D D I S C L A I M E R

Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not

verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty

or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before

completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus &

Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of

this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to

your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal

and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a

guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a

tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors

may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to

market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own

investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant

if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant

considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost,

expense, or liability arising out of your investigation and/or purchase of this net leased property.

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PROPERTY SUMMARY

OFFERING SUMMARY

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NOTES: After discussions with Corporate Denny’s regarding their 60-day first Right of Refusal, it is believed that they are not likely to exercise their option to

purchase and the response time is expected to be much shorter than 60 days.

DENNY'S - CORPORATE GL (VALUE ADD POTENTIAL)

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OFFERING SUMMARY

NOTE: SEE PAGE 7 FOR VALUE-ADD DETAILS.

OFFERING SUMMARY

Price $1,788,343

Net Operating Income $86,538

Capitalization Rate – Current 4.84%

Price / SF $627.49

Rent / SF $30.36

Lease Type NNN

Gross Leasable Area 2,850 SF

Year Built / Renovated 1997 / 2016

Lot Size 0.86 acre(s)

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EXECUTIVE SUMMARY

OFFERING SUMMARY

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FINANCINGLoan Amount $1,073,006

Loan Type Financed - New Loan

Loan to Value 60.00%

Interest Rate / Amortization 5.20% / 25 Years

Annual Loan Payment $76,780


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OFFERING SUMMARY

MAJOR EMPLOYERS

EMPLOYER # OF EMPLOYEES *

US Post Office 1,901

Walmart 949

City of Boynton Beach 945

Palm Beach State College 938

Home Depot The 870

Western Beef Lake Worth LLC 813

Target 554

National Mentor Holdings Inc 512

National Assemblers 501

RC Aluminum Industries Inc 493

Highlight Realty Network 450

Walgreens 444

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles

2017 Estimate Pop 14,835 125,743 334,232

2010 Census Pop 13,565 115,029 307,372

2017 Estimate HH 4,602 46,581 131,673

2010 Census HH 4,269 43,146 122,802

Median HH Income $59,750 $55,167 $47,171

Per Capita Income $22,949 $26,547 $26,490

Average HH Income $73,952 $71,379 $66,959

* # of Employees based on 5 mile radius

NOTE: SEE PAGE 7 FOR VALUE-ADD DETAILS.


OFFERING SUMMARY

▪ Corporately Guaranteed Ground Lease

▪ Outlot to Walmart Supercenter

▪ Adjacent to Hypoluxo Village Shoppes, a 78,223 SF Retail Plaza

▪ Denny’s Recently Exercised their Last 5-Year Option Demonstrating Commitment to

the Site Through October 15th, 2023

▪ 2017 Estimated Population 334K within 5 Miles of Site

▪ Successful Denny's Location Since 1998

▪ Florida is an Income Tax-Free State

▪ Property offers potential upside in rent increase when lease ends in 5 years.

INVESTMENT HIGHLIGHTS

The subject property is a rare, corporately guaranteed ground lease of a Denny's Classic Diner, ideally situated as an outlot to a Walmart Supercenter in Lake Worth, FL.

Having been in this location since 1998, Denny's recently exercised their last 5-year option demonstrating commitment to site through October 15th, 2023. The current

operator subleases from corporate Denny’s and is an experienced franchisee of the Denny's concept.

In addition to the Walmart Supercenter, the property is adjacent to Hypoluxo Village Shoppes, a 78,223-square foot plaza anchored by Western Beef Supermarket;

McDonalds; Chase Bank and Dollar Tree. Other retailers in the immediate area include Checkers, Dunkin Donuts, Jiffy Lube, Subway, Publix Pharmacy and TD Bank.

Lake Worth is a city located in central Palm Beach County, Florida. It is a principal city of the Miami metropolitan area, which was home to an estimated 6,012,331 people in

2015. 2017 estimates for the subject property show a population of 15K within 1-mile, 125K within 3-miles and 334K within 5-miles.

This Denny's location is located near the intersection of Hypoluxo Road and Military Trail both of which feature more than 30,000 vehicles per day.

Given the fact that this property is an outlot to Walmart with other strong retailers in the immediate area, has direct access and visibility to two streets with 30,000+ VPD and

334K people within 5 miles, you will find it difficult to find a better located Denny’s.

With a lease ending in 5 +/- years for such a desirable location such as this, it provides the buyer with long term security along with upside for future rent increases.

NOTE: SEE PAGE 7 FOR VALUE-ADD DETAILS

INVESTMENT OVERVIEW – POTENTIAL VALUE-ADD OPPORTUNITY

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OFFERING SUMMARY

▪ Corporately Guaranteed Ground Lease

▪ Outlot to Walmart

▪ Denny’s Recently Exercised their Last 5-Year Option Demonstrating Commitment to

the Site Through October 15th, 2023

▪ Successful Denny's Location Since 1998

▪ Rent escalation plus the possibility of acquiring the building resulting in additional

rent provide significant upside potential in this outstanding Denny’s location.

▪ Major traffic and retail corridor.

INVESTMENT HIGHLIGHTS

It is important to note that this Denny’s location offers the potential for significant upside at the termination of the lease. At lease termination, if Corporate Denny’s does not

renew the lease (call with questions on this), the building becomes the property of the landlord and could potentially result in a substantial increase in rent since the current

lease is a ground lease only. Keep in mind that the current operator is a franchisee and not Corporate Denny’s. A scenario where Corporate Denny’s does not renew the

lease and a new long term lease is signed with the existing operator at a substantially increased rent is entirely possible. Please see lease details below:

Excerpt from Lease: TENANT’S IMPROVEMENTS

Tenant shall have the right, but not the obligation, to construct, reconstruct, alter or other improvements on or about the Premises at any time and from time to

time during the term of the lease with Landlord’s prior consent. Any such buildings or improvements shall be considered property throughout the term. Any

improvements and fixtures attached to and a part of the Premises at the expiration or sooner termination of this Lease shall become the property of the Landlord

at that time.

All furniture, trade fixtures, equipment, signs, trade dress and other personal property on the Premises shall remain Tenant’s sole property and shall removed by

Tenant within 30 days after the scheduled expiration or earlier of this Lease.

To summarize, if Corporate Denny’s does not renew at the end of the lease term and the franchisee signs a long term lease, the building still becomes the property of the

landlord, with the likelihood of increased rent as a result.

In addition, current market comps suggest that rent for comparable properties is currently in the $35 - $50 psf range. Rent for this Denny’s location is currently at $30.36 psf

by building size suggesting there is opportunity for significant rent increase at market rate rent when the lease expires.

POTENTIAL VALUE ADD OPPORTUNITY

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TENANT SUMMARY

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Fiscal Year Ended December 27, 2017

Denny's Corporation

CREDIT RATING: C2 www.fdreports.com | www.creditntell.com | December 27, 2017

Feel like getting slammed for breakfast? The home of the Grand Slam Breakfast, Denny's is one

of the leading full-service, family-style restaurant chains in the US, with more than 1,710 of its

signature eateries located across the country. Typically open 24 hours a day, the chain is best

known for its menu of breakfast items, including eggs, pancakes, and combination plates carrying

such names as All-American Slam, Lumberjack Slam, and the aforementioned Grand Slam

Breakfast. Denny's also serves standard American fare (burgers, sandwiches, steak) for lunch

and dinner. The company owns and operates about 165 of its restaurants, while the rest are

franchised or operate under licensing agreements.

PRICING AND VALUATION MATRIX

PROPERTY NAMEDENNY'S - CORPORATE GROUND LEASE



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TENANT SUMMARY

General Information

Address203 East Main Street , Spartanburg, South Carolina, 29319, United States

Phone 864-597-8000

Website www.dennys.com

Store Base

Store Count 1,735

TTM Sales $529,169,000

Key Personnel

Chairman Debra L. Smithart-Oglesby

Chief Financial Officer Mark Wolfinger

President & CEO John C. Miller

Financial Markets

Stock Ticker DENN

Current Price $15.70 as of 5/11/18

52 Week High/Low $17.75 / $10.87

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4541 Hypoluxo Rd, Lake Worth, FL 33463

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX




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REGIONAL AND LOCAL MAP

AERIAL PHOTO


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SUBJECT PROPERTY(334K PEOPLE WITHIN 5 MILES)

Hypoluxo Center (26,920 sf mixed use plaza)

PROPERTY PHOTO


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SUBJECT PROPERTY(334K PEOPLE WITHIN 5 MILES)

PROPERTY PHOTO


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MARKETING TEAM

Source: © 2015 Experian

PROPERTY NAME

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CREATED ON MAY 11, 2018

LOCATION OVERVIEWTENANT SUMMARYPRICING AND VALUATION MATRIX




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DEMOGRAPHICS

1 Miles 3 Miles 5 Miles

POPULATION

2022 Projection 17,308 136,212 353,071

2017 Estimate 14,956 125,743 334,232

2010 Census 13,678 115,029 307,372

2000 Census 8,422 91,612 260,364

INCOME

Average $73,882 $71,379 $66,959

Median $59,725 $55,167 $47,171

Per Capita $22,969 $26,547 $26,490

HOUSEHOLDS

2022 Projection 5,470 51,122 141,701

2017 Estimate 4,648 46,581 131,673

2010 Census 4,312 43,146 122,802

2000 Census 2,876 36,234 108,831

HOUSING

2017 $214,817 $189,706 $169,771

EMPLOYMENT2017 Daytime Population

9,933 104,412 277,165

2017 Unemployment 5.63% 5.74% 6.20%

2017 Median Time Traveled

30 28 28

RACE & ETHNICITY

White 52.93% 65.12% 66.18%

Native American 0.01% 0.05% 0.07%

African American 31.72% 21.06% 20.73%

Asian/Pacific Islander

5.94% 3.84% 2.56%

denny's - corporate ground lease · fl broker of record fort lauderdale office tel: (954)...

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