LONG TERM TRIPLE-NET (NNN) CORPORATE LEASE · LONG TERM TRIPLE-NET (NNN) CORPORATE LEASE. 02 JAMES...

PAD SITE TO COSTCO SHOPPING CENTER | LANCASTER, CAEL POLLO LOCO

LONG TERM TRIPLE-NET (NNN) CORPORATE LEASE

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JAMES CAPITAL ADVISORS

MARKETING PACKAGE

CONTENTS

CONTACT INFORMATION

PAGE

Investment Summary

Lease Summary

Retail Aerial

Site Plan

Rent Schedule

About the Brand

Location Overview

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NINA VALTCHANOVAssociate(424) 325-2624

42839 10th St W.Lancster, CA 93534

EL POLLO LOCO - ANCHORED TO COSTCO SHOPPING CENTER | LANCASTER, CA03

EL POLLO LOCO - LANCASTER, CA

INVESTMENT SUMMARY

Tenant

Street Address

City

State

Zip

GLA

Lot Size

Year Built

$3.3M4.00%$132K

Remaining Lease Term

*Pricing based off rental increase in 2020

±16 Years

El Pollo Loco, Inc. (NASDAQ: LOCO)

42839 10th St W.

Lancaster

CA

93534

2,973 SF

0.84 AC

2015

Exceptional Triple Net Asset for the Passive InvestorEl Pollo Loco operates on a Ground Lease with tenant fully responsible for maintenance and repairs, utilities, insurance and taxes, providing the landlord with a zero maintenance asset.

Strong Retail CorridorNational tenants within a mile radius includes Costco, Wendy’s, Lowes, Target, Ross Dress for Less, Big 5 Sporting Goods and Kaiser Permanente among others, which further drives traffic to the site and supports sales growth.

Lease Guaranteed by Public CompanyThis lease is fully backed by El Pollo Loco Inc., which produced over $435M in revenue fiscal year 2018. The company has been in business for over 45 years and operates 500 stores.

Long Term LeaseThe lease features an initial term of 20 years with a current 16 years remaining as well as an additional three options to extend until 2049, indicating a strong commitment to the site.

$3,300,000*PURCHASE PRICE

4.00%CAP RATE

$132,000NET OPERATING INCOME



LEASE SUMMARY

Lease Type

Type of Ownership

Original Lease Term

Commencement Date

Lease Expiration

Term Remaining

Increases

Options

Real Estate Taxes

Insurance

Repairs & Maintenance

Roof & Structure

Lease Guarantor

Tenant Name

Years in Business

Number of Locations

NNN Ground Lease

Corporate Store

20 Years

10/26/2015

10/25/2035

15.5+ Years

10.00% Every Five Years

Two (2), 5-Year & One (1), 4-Year

Tenant Responsible

Tenant Responsible

Tenant Responsible

Tenant Responsible

Corporate

El Pollo Loco, Inc.

45 Years

500

Large Lot in Signalized Corner of Costco WholesaleThis location serves the benefit of being anchored to a Costco Wholesale Center on a large sized parcel comprising a total of 36,590 sq.ft, providing ample parking space for visitors.Solid Rent Growth - 10% Increases Every 5 YearsThere are 10% rental increases built into the lease every 5 years, providing the landlord with positive rent growth and a hedge against inflation.2nd Largest MSA NationwideThis asset is part of the Los Angeles MSA which is the 30th largest metropolitan area in the world and the second largest metropolitan area in the United States with a total population of nearly 18.8 million people in 2017.Strong DemographicsThere are over 185,000 people within 5 miles of the subject property with an estimated average household income of $70,658. High Traffic CountsThis property is ideally located adjacent to Hwy 14 and the intersection of West Avenue L and 10th Street West, with total traffic counts of over 163,000 and 60,000 vehicles passing daily respectively.



RETAIL AERIAL



SITE PLAN



RENT SCHEDULE

PERIOD

10/26/2020 - 10/25/2025

10/26/2025 - 10/25/2030

10/26/2030 - 10/25/2035

10/26/2035 - 10/25/2040

10/26/2040 - 10/25/2045

10/26/2045 - 10/25/2049

TERM

Base Term

Base Term

Base Term

1st Option

2nd Option

3rd Option

ANNUAL RENT

$132,000.00

$145,200.00

$159,720.00

$175,692.00

$193,261.20

$212,587.32

MONTLY RENT

$11,000.00

$12,100.00

$13,310.00

$14,641.00

$16,105.00

$17,715.61

INCREASE

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

CAP RATE

4.00%

4.40%

4.84%

5.32%

5.86%

6.44%



ABOUT THE COMPANY

New Brand Strategy

Throughout March, El Pollo Loco rolled out a new logo, advertising, tagline, menu boards, and point-of-purchase materials. The comprehensive refresh continues a “transformation agenda,” El Pollo Loco outlined in March 2018. The company reported systemwide same-store sales gains of 4.4 percent in Q4, including a 3.7 percent lift at company-run units and a 5.1 percent uptick at franchised locations (195 restaurants are in the comps base). The 4.4 percent mark was El Pollo Loco’s best results since the first quarter of 2015 and draws an impressive two-year stack of 5.8 percent. El Pollo Loco went public in July 2014 and is today trading at an average of $15 a share with a total market capitalization of $532M as of November 18th 2019.

El Pollo Loco is a highly differentiated growth restaurant concept that specializes in fire-grilling fresh, citrus-marinated chicken in front of our guests. They operate within the fastest growing segment of the restaurant industry. El Pollo Loco offers high-quality food typical of fast casual restaurants while providing the speed, convenience and value typical of traditional quick-service restaurants.”

Every day in every restaurant they marinate and fire-grill their fresh chicken on open fire grills, hand slice avocados and make their salsas, guacamole and cilantro dressings from scratch. Their open kitchens reveal their authentic, timeless cooking processes and allow their guests to enjoy the theater of their fresh chicken fire-grilled and hand cut by our Grill Masters to make burritos, salads, tostadas, bowls, stuffed quesadillas and chicken entrees.”

4545YEARS IN BUSINESS 532$532 M

MARKET CAPITALIZATIONLOCOLOCONASDAQ TICKER

500500LOCATIONS 435$435 M

ANNUAL SALES66NUMBER OF STATES



1. Kaiser Permanente43112 15th St West, Lancaster, CA 93534

1 MILE FROM SUBJECT PROPERTY

2. Museum of Art and History665 W Lancaster Blvd, Lancaster, CA 93534

3 MILES FROM SUBJECT PROPERTY

3. The BLVD2301 W Lancaster Blvd, Lancaster, CA 93536


4. Lancaster Auto Mall1130 Auto Mall Dr, Lancaster, CA 93534

0.7 MILES FROM SUBJECT PROPERTY

5. Palmdale Regional Airport41000 20 St E, Palmdale, CA 93550


6. Performing Arts Center750 W Lancaster Blvd, Lancaster, CA 93534


LOCATION OVERVIEW



LOCATION OVERVIEW

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KAISER PERMANENTEKaiser Permanente operates in eight states and is the largest managed care organization in the United States.

LANCASTER AUTO MALLLancaster Auto Mall is the number one auto center in the Antelope Valley with over 3,000 vehicles to choose from.

MUSEUM OF ART AND HISTORYThe Lancaster Museum of Art and History (MOAH) has become the focal point for fine art in the region.

PALMDALE REGIONAL AIRPORTPalmdale Regional Airport a public airport that is capable of handling up to 300,000 passengers annually.

THE BLVDThe BLVD is fast becoming the premier regional destination for shopping, dining, entertainment and the arts.

Performing Arts CenterThe marquee list of performers who have graced the LPAC stage reads like a Who’s Who of entertainment’s elite.



LOCATION OVERVIEW

Lancaster, CAThe City of Lancaster is a thriving community of roughly 160,000+ located approximately one hour north of Los Angeles. Clean air, attainable housing, wide open spaces, and a close-knit community make Lancaster the ideal place for families. Endless potential for growth, along with a strong commitment to business from local leaders, earned Lancaster the “Most Business-Friendly” Eddy Award from the Los Angeles Economic Development Corporation in 2007.

Lancaster’s most recent and grandest accomplishment locally is the City’s revitalized epicenter. Forty new businesses provided 1,100 construction jobs and 802 permanent jobs within the City’s core. By offering the BLVD Boot Camp and BLVD Holiday Retail Marketing programs, Lancaster provided more than 400 hours of small business training through 23 different programs. Lancaster has served more than 150 business owners, operators and entrepreneurs.

The City of LancasterLancaster City is part of the Antelope Valley located in Northern Los Angeles County, with a total population of 160,316 according to the United States Census Bureau as of 2017.

Los Angeles County Real Estate MarketThe Greater Los Angeles Area has seen a steady growth in rental rates the past decade and overall vacancies experienced a low of 9.7% in Q2 2019, a trend which is expected to continue into Q4.

Big 8 Softball ComplexAdjacent to the site lies the Big 8 Softball Complex which consists of eight championship softball fields and is the main hub for the regions tournaments which is host to 1,260+ teams annually.

Antelope Valley CollegeLocated within a three-mile radius from the subject property lies the Antelope Valley College which serves nearly 12,000 students in the surrounding area.



DEMOGRAPHICS

POPULATION

2024 Projection

2019 Estimate

2010 Census

Growth ‘19 - ‘24

Growth ‘10 - ‘19

HOUSEHOLDS

2024 Projection

2019 Estimate

2010 Census

Growth ‘19 - ‘24

Growth ‘10 - ‘19

Average Income

Median Income

3-Mile

85,397

83,234

74,303

2.60%

12.02%

3-Mile

29,555

28,744

25,344

2.82%

13.42%

$61,016

$44,071

1-Mile

12,597

11,630

6,828

8.31%

70.33%

1-Mile

5,363

4,961

2,967

8.10%

67.21%

$49,387

$38,879

5-Mile

185,447

183,693

179,511

1.01%

2.27%

5-Mile

58,733

58,116

56,707

1.06%

2.48%

$70,656

$52,704



DEVELOPMENTS

The Promenade at Amargosa CreekThe Promenade at Amargosa Creek is a new 115-acre, mixed-use development currently in the planning stages. The Center will be located in the thriving 10th Street West corridor surrounded by Lowe’s Home Improvement Warehouse, Target, Costco Wholesalers and the Lancaster Auto Mall. Also included in the master plan is a 30-acre expansion of auto dealerships along Avenue K-8 across from the existing dealerships within the Lancaster Auto Mall; 535,000 square feet of retail space, 88,000 square feet of pad space for major anchors, restaurant and other retail uses; 165,000 square feet of hotel space; 471,000 square feet of office space; and 67,000 square feet of theater space for a total of 1.326 million square feet of proposed commercial development.

The Village at Martin CrossingThe Village at Martin Crossing is a 14.68-acre development that is composed of 80,000 square feet of major retailers, 30,000 square feet of shops, and 20,000 square feet of pad sites. The development is roughly half a mile from the subject property at the intersection of ‘L’ Avenue and 15th Street West.

Lancaster Business ParkHome to 100 companies employing over 4,100 people, the Business Park has attracted many nationally known firms including Morton Manufacturing, Deluxe, Inc., Deutrel Industries, and Lance Camper. Offering sites from one-half to 15 acres, these fully improved light industrial parcels and quality office building sites provide a park-like master-planned environment.

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The information contained in this Marketing Brochure has been obtained from sources believed to be reliable, but the accuracy or completeness of the information contained therein cannot be guaranteed. James Capital Advisors, Inc. (“Broker”) has not, and will not, verify any of this information, nor has Broker conducted, nor will it conduct, any investigation regarding these matters. Broker makes no representations, guar-antees, or warranties of any nature about the accuracy or completeness of any information provided. The information provided in this brochure is in no way a substitute for a thorough due diligence investigation by Buyer. Broker has made no investigation of, and has made no representations, guarantees, or warranties of any nature, with regard to income and expenses for this property nor the future financial performance of the property. In addition, Broker has made no investigation of, and has made no representations, guarantees, or warranties as to the size and square footage of the property, the presence of any contaminating substances at the property, the physical condition of the property or compliance with any State, Local or Federal regulations. In addition, Broker has made no investigation of, and has made no representations, guarantees, or warranties of any nature, with regard to the financial condition or future financial condition of any tenants, nor any future plans or intentions of tenants with regard to the continued occupancy of the property. All parties are aware that Broker has no affirmative obligation to conduct a due diligence examination of the property for any Buyer. Any and all projections or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. Therefore, Broker assumes no legal responsibility for accuracy or completeness of this information, and expressly disclaims all representations, guarantees, or warranties related thereto. The value of the property to any Buyer depends on numerous factors that must be evaluated by Buyer and Buyer’s legal, tax, construction, and financial advisors. Buyer and Buyer’s advisors should conduct a thorough, independent investigation of the property to determine its suitability for Buyer’s intended usage. This investment, as with all real estate investments, carries a substantial risk. As such, Buyer and Buyer’s legal and financial advisors are strongly advised to request and review all legal and financial documentations related to the property and tenants.

A tenant’s past performance is not a guarantee of future performance. The lease rate stated for some properties may be based on a tenant’s projected sales with little or no record of actual performance or com-parable rents for the area in question. Returns are in no way guaranteed. Tenants may fail to pay the rent or property taxes or any other tenant obligations under the terms of the lease or may default under the terms of such lease. Regardless of tenant’s history of performance, and/or any lease guarantors and/or guarantees, Buyer is responsible for conducting Buyer’s own investigation of all matters related to any and all tenants and lease agreements. Broker is not, in any way, responsible for the performance of any tenant or for any breach or default by any tenant of any terms of any lease agreement related to the property. Further, Buyer is responsible for conducting Buyer’s own independent investigation of all matters related to the value of the property, including, but not limited to, the value of any long-term leases. Buyer must carefully evaluate the possibility of tenants vacating the property or breaching their leases and the likelihood and financial impact of being required to find a replacement tenant if the current tenant should default and/or abandon the property. Buyer must also evaluate Buyer’s legal ability to make alternate use of the property in the event of a tenant abandonment of the property.

CONFIDENTIALITYThis Marketing Brochure and the information contained within, is propriety and strictly confidential. It is intended to be used only by the party receiving it from Broker. It should not be made available to any other person or entity without the express written consent of Broker.

RELEASEThis Marketing Brochure has been prepared to provide basic, unverified information for prospective purchasers. By accepting this Marketing Brochure, the recipient agrees to release and hold harmless Broker from any claim, demand, liability or loss arising out, or relating in any way, to the information contained in this Marketing Brochure and from Buyer’s investigation of the property. In no event shall James Capital Advisors, Inc. or Broker be liable to any party for any direct, indirect, special, incidental, or consequential damages of any kind whatsoever arising out of the use of this Marketing Brochure or any information contained herein.

NON-ENDORSEMENTBroker is not affiliated with, endorsed by or sponsored in any way by any tenant or lessee identified in this Marketing Brochure. The presence of any entity’s logo or name is not intended in any way to indicate affiliation, sponsorship or endorsement by said entity of Broker.

JAMES CAPITAL ADVISORS, INC.

DISCLAIMER

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FOR INQUIRIES

PLEASE CONTACT

NINA VALTCHANOVAssociate

(424) [email protected] RE Lic. 02084952

MIKE JAMESManaging Director


REED MELILLOSenior Director


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