United Taste of America | FOOD HALL

HUYNHING RESTAURANT DEVELOPMENT GROUP | 2015

2550 Alton Parkway | Irvine, California

Project Overview

United Taste of America food hall features a multicultural, homemade, local diverse food hub serving the City of Irvine and the entire Orange County region.

The project site is located in the Irvine Business Complex - an area of Irvine, CA currently experiencing rapid growth and residential developments. Major freeways, John Wayne airport, UC Irvine and Diamond Jamboree Plaza are within 2 miles of the proposed site location. The site is surrounded by office towers, industrial warehouses and apartment complexes - making it an ideal site with ample daytime and nighttime traffic.

2550 Alton Parkway

United Taste of America is a 10, 020 sq. ft. multicultural food hall with 7-9 tenant spaces for local Orange County food and drink vendors. Food halls are the latest culinary trend, born of an era in which the old way of buying and consuming is new again. Unlike traditional mall food courts, food halls offer a unique dining experience that highlights small, local vendors combined with communal seating, which allow for social interaction.

United Taste of America will feature local and artisanal food vendors and will be anchored by a craft beer tasting room. The concept of the food hall is to be fast, casual yet provide quality gourmet meal options. The food hall is two stories with food tenants on the first floor and a beer tasting room located on the top floor. Seating is communal with long benches and tables and outdoor lounge seating on the second floor.

Project Proposal

United Taste of America is a 10, 020 sq. ft. multicultural food hall with 7-9 tenant spaces for local Orange County food and drink vendors. Food halls are the latest culinary trend, born of an era in which the old way of buying and consuming is new again. Unlike traditional mall food courts, food halls offer a unique dining experience that highlights small, local vendors combined with communal seating, which allow for social interaction.

United Taste of America will feature local and artisanal food vendors and will be anchored by a craft beer tasting room. The concept of the food hall is to be fast, casual yet provide quality gourmet meal options. The food hall is two stories with food tenants on the first floor and a beer tasting room located on the top floor. Seating is communal with long benches and tables and outdoor lounge seating on the second floor.

The building design concept of United Taste of America is an industrial, warehouse vibe – keeping in theme with the industrial and commercial history of IBC.

Building design elements include: open and exposed ceilings; roll-up garage doors to allow for natural lighting; and wood panels.

Architecture Details

total area: 77,101.2 sf

building street setback line

building side setback

alton pkwy

millik

an

ave

.

1inch ≈ 38.5 ft

parking lot: 83 spaces

loading zone

building area: around 10,020 SFtwo-story food hall

(see details in floor plan)

30 f

t.25 f

t.

24 f

t.24 f

t.

40 f

t. 26ft.26ft.

166.7

ft.

60 ft. x 167 ft.

36ft.36ft.

25 ft.25 ft.

Proposed Site Plan

Proposed Floor Plan

60 ft. x 167 ft.

20”x25”

98 ft x 40 ft

First Floor

Second Floor

CAP RATE 7%

NET CASH FLOW / NOI $ 180,645 / $322,677 **

TOTAL LAND AREA 77,101 SF (1.77 ACRES)

TOTAL BUILDING AREA 10,020 SF

TOTAL RENTABLE AREA 7,400 SF

PARKING SPACES 83

ZONING 5.1 IBC MULTI-USE

TARGETED TENANTS

Brodard’s – Vietnamese spring rollsBayhawk Ales – Local breweryLocal food trucks - i.e. The Burnt Truck, Dos ChinosEl Toro Bravo – Homemade tortillasStrickland’s Ice Cream - local, homemade small batchSlapfish – seafood shackKean Coffee – specialty coffee

** Details in Appendix A

Project Profile

• 67% of IBC residents have a Bachelor’s degree or higher indicating a well-educated population.

• IBC is an upper-middle class neighborhood with a median household income of $77, 289.

IBC Neighborhood Highlights

• IBC is experiencing growth with as much as 15,000 residential units planned for the mixed-use neighborhood.

• Unlike other planning villages in Irvine with traditional single-family homes set around green space, IBC is geared towards the young working professional population (20-30 age group) who desire a more urban lifestyle with food and shops all within a short distance.

• The total population of IBC is currently about 9,000 with that number expected to grow as more and more residential developments are completed.

• Daily vehicle trips (both daytime and nighttime) on Alton Pkwy is about 6,000 – Alton Parkway being one of the busiest streets in Irvine. Alton Parkway connects Irvine to adjacent cities – Costa Mesa, Santa Ana, and Tustin.

PROFORMA HIGHLIGHTS**

TOTAL DEVELOPMENT COSTS $ 3,953,000

EFFECTIVE GROSS INCOME $ 358,530

UNLEVERAGED RETURN 9.07%

EXIST CAP RATE 7.00%

SPREAD 2.07%

IRR 33.72%

CASH ON CASH RETURN 5.71%

Financials

DEBT & EQUITY HIGHLIGHTS**

TOTAL CONSTRUCTION $ 3,953,000

Bank Loan

LOAN AMOUNT @ 80% LTC $ 3,162,400

RATE 6%

TERM 3 years

MONTHLY PAYMENT (INT-ONLY) $ 15,812.00

200 bps margin over 6 month LIBOR*P&I option avail, 30 yr amort, floor rate of 4.5%

**Details in Appendix A & B

Private Equity Loan (80/20 pari-passu)

LOAN AMOUNT (PRIVATE LENDER) $ 632,480

EQUITY (DEVELOPER) $ 158,120

RATE 12%

TERM 2 years

MONTHLY PAYMENT (INT-ONLY) $ 6,324.80

*6 month extension avail w/25 bps fee

• Bank debt paid off at point of stabilization (90% occupancy for 90 days)

• Pari passu (80/20) until the capital investors have received a 12.00% cumulative annual return (compounded quarterly); then

• 70% to “limited partners” (i.e., capital investors – split 70/30 between BGP/Developer) and 20% to Developer as “general partner” until LP’s have received both a 16% cumulative IRR (compounded quarterly) and a 70% profit margin on their total capital invested; then

• 60% to LP’s; 40% to GP thereafter.

Cash Flow Distribution (Waterfall)

Huynhing Retail DevelopmentInvestment Analysis2/11/15

Proforma

Rental Income / Return on CostsRSF Rent/Mo/SF Rent/YR/SF Expenses Annual Income

Lease 7,400 $4.25 $51.00 NNN $377,400

Vacancy 5% (370) $4.25 $51.00 NNN ($18,870)

Net Rental Income 7,030 $4.25 $51.00 $358,530

Total Development Costs $3,953,000

Unleveraged Return / Return on Total Costs (Going In or Build to Cap Rate) 9.07%

Spread 2.07%

Sale Analysis @ Completion

Estimated Value (current cap rates are lower)Sale or Exit Cap Rate 7.00% $5,121,857

Cost of Sale 2.00% ($102,437)

Net Proceeds from Sale $5,019,420

Less:

Total Development Costs (Includes Capital Investment) $3,953,000

Net Profit from Sale $1,066,420

Total Distribution to Capital Partner upon Sale

Capital Partner Initial Investment 40% $1,581,200

Profit Distribution to Capital Partner 50% $533,210

Total Distribution to Capital Partner (Includes Capital Investment) $2,114,410

IRR on Equity Investment @ Stabilization (1 year) 33.72%

Cash Flow Analysis

LTC Equity Capital Loan Debt Constant

Net Rental Income (Year 1) $358,530

Debt Service (assumes refinance) 60% $2,371,800 7.50% ($177,885)

Net Cash Flow $180,645

Distributions:

Distribution to Capital Partner @ $1,581,200 50% $90,323

Distribution to General Partner @ 50% $90,323

Total Cash Flow Distribution to Capital Partner $90,323

Total Cash on Cash Return to Capital Partner 5.71%

Appendix A

Appendix B

FOR LEASING INFORMATION CONTACT:

HUYNHING RESTAURANT DEVELOPMENT GROUP

NANCY HUYNH | LEASING DIRECTOR

NANCY.HUYNH@HUYNHINGRESTAURANTDEVELOPMENT.COM

888.888.8888