Build Out - SVN | The Kase Group

Applebee's NNN Leased Offering
For Sale
| Jonesboro (Atlanta), GA
$2,960,000
Offering Highlights
Kase Abusharkh
Long Term NNN Lease
Annual 1% Increases in Rent
48 Unit Operator with Over $100 Million in Annual
Sales
Managing Director
925.348.1844
kase@svn.com
Jacob Abusharkh
Managing Director
415.269.2474
jacob@svn.com
Excellent Store Sales - Solid Unit Level Performer
Zero Landlord Obligations
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Applebee's NNN Leased Offering
Disclaimer | Confidentiality
The material contained in this Investment Offering Brochure
is furnished solely for the purpose of considering the
purchase of the property within and is not to be used for
any other purpose. This information should not, under any
circumstances, be photocopied or disclosed to any third
party without the written consent of Sperry Van Ness or
Owner, or used for any purpose whatsoever other than to
evaluate the possible purchase of the Property.
The only party authorized to represent the Property Owner
(“Owner”) in connection with the sale of the Property is the
Sperry Van Ness Advisor listed in this proposal, and no
other person is authorized by the Owner to provide any
information or to make any representations other than
contained in this Investment Offering Brochure. If the
person receiving these materials does not choose to pursue
a purchase of the Property, this Offering Brochure must be
returned to Sperry Van Ness.
Neither the Sperry Van Ness Advisor nor the Owner make
any representation or warranty, express or implied, as to
the accuracy or completeness of the information contained
herein, and nothing contained herein is or shall be relied
upon as a promise or representation as to the future
performance of the Property. This Offering Brochure may
include certain statements and estimates by Sperry Van
Ness with respect to the projected future performance of
the Property. These Assumptions may or may not be proven
to be correct, and there can be no assurance that such
estimates will be achieved. Further, the Sperry Van Ness
Advisor and the Owner disclaim any and all liability for
representations or warranties, expressed or implied,
contained in or omitted from this Investment Offering
Brochure, or any other written or oral communication
transmitted or made available to the recipient. The
recipient shall be entitled to rely solely on those
representations
and warranties that may be made to it in any final, fully
executed and delivered Real Estate Purchase Agreement
between it and Owner.
The information contained herein is subject to change
without notice and the recipient of these materials shall not
look to Owner or the Sperry van Ness Advisor, nor any of
their officers, employees, representatives, independent
contractors or affiliates, for the accuracy or completeness
thereof. Recipients of this Investment Offering Brochure are
advised and encouraged to conduct their own
comprehensive review and analysis of the Property.
This Investment Offering Brochure is a solicitation of
interest only and is not an offer to sell the Property. The
Owner expressly reserves the right, at its sole discretion, to
reject any or all expressions of interest to purchase the
Property and expressly reserves the right, at its sole
discretion, to terminate negotiations with any entity, for any
reason, at any time with or without notice. The Owner shall
have no legal commitment or obligation to any entity
reviewing the Investment Offering Brochure or making an
offer to purchase the Property unless and until the Owner
executes and delivers a signed Real Estate Purchase
Agreement on terms acceptable to Owner, in Owner’s sole
discretion. By submitting an offer, a prospective purchaser
will be deemed to have acknowledged the foregoing and
agreed to release the Owner and the Sperry Van Ness
Advisor from any liability with respect thereto.
To the extent Owner or any agent of Owner corresponds
with any prospective purchaser, any prospective purchaser
should not rely on any such correspondence or statements
as binding Owner. Only a fully executed Real Estate
Purchase Agreement shall bind the property and each
prospective purchaser proceeds at its own risk.
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Applebee's NNN Leased Offering
Table of Contents
1. PROPERTY OVERVIEW
4
Complete Highlights
5
Executive Summary
6
Tenant Summary
7
Concept Summary
8
2. FINANCIAL OVERVIEW
Rent Roll
9
10
3. LOCATION OVERVIEW
11
Location Maps
12
Site Plan
13
14
4. DEMOGRAPHICS
Demographics Report
15
Demographics Map
16
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Applebee's NNN Leased Offering
1
Property Overview
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4
Applebee's NNN Leased Offering
Complete Highlights
Offering Highlights
Long Term NNN Lease
Annual 1% Increases in Rent
48 Unit Operator with Over $100 Million in Annual
Sales
Excellent Store Sales - Solid Unit Level Performer
Zero Landlord Obligations
Located in Major Retail Trade Area
Asset Sits Just West of the GGP Operated Southlake
Mall with Anchor Tenants Including Macy's and Sears
Nearby Tenants Include Dollar General, Office Depot,
Wells Fargo, O'Reilly Auto Parts, Ross, Walmart, Sam's
Club, and Many Others
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Applebee's NNN Leased Offering
Executive Summary
Applebee's NNN Leased Offering
6727 Tara Boulevard • Jonesboro (Atlanta), GA 30236
Investment Overview
Sale Price
CAP
Lot Size
Building Size
Year Renovated
Market
Sub Market
Cross Streets
$2,960,000
7.30 %
1.65 Acres
5,512 SF
2011
Atlanta MSA
Clayton County
Tara Blvd & Flint Trl
Property Overview
Property
This is a rare opportunity to purchase an absolute NNN leased Applebee's. The tenant is NRP, a 48 unit
Applebee's operator. NRP's parent company is Argonne Capital Group, a 353 unit operator with over
$620,000,000 in annual sales. The lease calls for zero landlord obligations, annual increases in rent,
and six 5 year options to renew beyond the initial term. Argonne Capital Group does not guarantee the
lease.
Location
Jonesboro is a city in Clayton County, Georgia. The city is the county seat of Clayton County. As of the
2010 census, the county's total population was 259,424. Clayton County is within the five-county core
of the Atlanta Metropolitan Area, and is the county in which most of Hartsfield-Jackson Atlanta
International Airport lies.
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Applebee's NNN Leased Offering
Tenant Summary
Tenant Overview
Argonne Capital Group: The parent company of Neighborhood Restaurant Partners (“the Tenant”) is Argonne
Capital Group (“Argonne” or “ACG”) which is the largest owner and operator of Applebee’s and IHOPs in the
Country. In total, Argonne Capital Group owns 353 IHOPs and Applebee’s in ten states highlighting the firm’s
ability to build protect and develop the brand successfully and profitably. Total system wide sales are in
excess of $620 million.
ACG was founded in 2003 by Michael Klump, a veteran real estate investor. Since its inception, Argonne
Capital and its affiliates have raised over $240 million of equity capital to facilitate the acquisition of
corporate and real estate assets. Specifically, Mr. Klump and his management team have proven their
knowledge and expertise for the IHOP and Applebee’s brands by growing ACG’s restaurant count from 35 to
over 350 through new unit development and add-on acquisitions. As President of Argonne, Mr. Klump
oversees site selection, development and operations of all new and existing locations that NRP owns, operates
and develops.
Argonne’s expertise is augmented by a veteran restaurant management team led by Joe Langteau, an
seasoned executive with over 37 years of industry experience. Prior to joining the ACG team in 2005, Mr.
Langteau was President & CEO of AmeriKing, Inc., the largest Burger King franchisee with 315 restaurants. Mr.
Langteau also spent 6 years as President & COO of Scott’s Restaurants/priszm brandz, a franchisee of 500
KFC, 200 Pizza Hut and 50 Taco Bell restaurants in Canada. Mr. Langteau serves on the IHOP Franchisee Board
of Advisors representing 390 franchisees through working in partnership with IHOP Corp senior management.
Corporate Information
No. of Locations
353
Sales
$620 Million (2011)
Area Serviced
GA, FL, TX, UT, CA, ID, MT,
WY, CO, SD
Concepts
Applebee's and IHOP
NRP: THE TENANT
Neighborhood Restaurant Partners (“Tenant”) was formed in 2010 through the acquisition of eight Applebee’s
restaurants in San Antonio, Texas. Since formation, NRP’s comparable sales have grown by over 13.0%, driven
by remodeled locations and improved restaurant operations. Following the successful San Antonio acquisition,
in October 2011, Argonne expanded its Applebee’s holdings by acquiring 40 additional Applebee’s in the
Atlanta area, with exclusive development rights for 50 counties. In Fiscal Year 2011, Neighborhood Restaurant
Partners generated pro forma sales of $104 million.
Neighborhood Restaurant Partners Florida:
Neighborhood Restaurant Partners Florida (“NRP Florida”) was formed in May 2012 to acquire 51 Applebee’s
locations in Tampa, FL and Orlando, FL. With sales per location of nearly $3.0 million, NRP Florida is a leader in
the Applebee’s system. In Fiscal Year 2012, NRP Florida is projected to generate sales of nearly $150 million.
By implementing a similar store remodel strategy to that of NRP, Argonne expects meaningful continued
growth in the coming years.
Sunshine Restaurant Partners:
In 2007, Argonne formed Sunshine Restaurant Partners to acquire the exclusive license rights to IHOP for the
state of Florida and 24 counties in south Georgia. Operating 152 restaurants (68 sub-franchisees) and
producing over $200 million in system sales, SRP aims to reach over 250 locations in their territory and is
currently the largest franchisee within the IHOP system.
ACG Texas, LP:
In 2004, ACG Texas, LP was formed with the acquisition of 35 IHOPS in the state of Texas. Having developed
27 additional stores since acquisition, the entity now operates 62 IHOP locations. This makes ACG Texas, LP,
the nation’s second largest IHOP franchisee. In 2011, total sales exceeded $115 million driven by strong new
unit development and impressive comparable store sales growth.
Peak Restaurant Partners:
Peak Restaurant Partners was formed in 2011 to purchase 40 IHOP’s in seven Mountain Region states. Peak or
“PRP” is the fifth largest IHOP franchise group in the U.S. Specifically, Peak Restaurant Partners has 19
locations in Utah, 8 in California, 5 in Idaho, 4 in Montana, 2 in Wyoming, and 1 in both Colorado and South
Dakota. Revamping older locations and tackling an aggressive marketing campaign, the entity is working hard
to build the IHOP brand in Mountain Region. Since acquiring the business in March 2011, ACG has
strengthened operations, improved financial reporting and positioned PRP to deliver over $49 million in total
sales for Fiscal Year 2012.
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The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness.
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7
Applebee's NNN Leased Offering
Concept Summary
Tenant Overview
Applebee’s International, Inc., is an American company which develops, franchises, and operates
the Applebee's Neighborhood Grill and Bar restaurant chain. As of November 2010, there were
2,000 restaurants operating system-wide in the United States, one US territory and 16 other
countries. The company is headquartered in Kansas City, Missouri after moving from Lenexa,
Kansas in September 2011.
The Applebee's concept focuses on casual dining with mainstream American dishes such as
salads, shrimp, chicken, pasta, and "riblets" (which is considered Applebee's signature dish). All
Applebee's restaurants feature a bar area and serve alcoholic beverages (except where prohibited
by law).
The Applebee's chain was started by Bill and T. J. Palmer who opened their first restaurant, T.J.
Applebee’s Rx for Edibles & Elixirs, in Decatur, Georgia, on January 1, 1980. After opening their
second restaurant the pair sold their company to W. R. Grace and Company in 1983. As part of the
transaction, Bill Palmer was named president of the Applebee's Division, an indirect subsidiary of
W. R. Grace and Company. In that capacity, Palmer guided the operation from its entrepreneurial
beginnings to a full-fledged franchise system. He became an Applebee's franchisee in 1985 and
today owns more than three-dozen Applebee's restaurants.
In 1986, the name of the concept was changed to Applebee's Neighborhood Grill & Bar to reflect
the Palmers' original concept of a place people could call their own. In 1988, Applebee's
International, Inc., became the restaurant chain's franchiser when Kansas City franchisees Abe
Gustin and John Hamra purchased the rights to the Applebee's concept from W. R. Grace.
Today, with more than Applebee's is the world's largest casual dining restaurant chain. From 1993
to 2005, Applebee's opened 100 or more new restaurants each year. The company estimates the
development potential of the Applebee's concept in the United States to be at least 3,000
restaurants.
On July 16, 2007, IHOP Corp. announced that it agreed to buy Applebee's International for about
$2.1 billion. Applebee's shareholders would receive $25.50 in cash per share, representing a
4.6% premium to the closing price on July 13, 2007. After the acquisition, IHOP Corp. changed its
name to DineEquity, Inc. DineEquity, which franchises nearly all of its restaurants, said it hoped to
employ that strategy with Applebee's. “We believe we have an opportunity to re-energize the
brand and get franchisees, employees and guests all sort of thinking about the brand in a different
way,” Julia Stewart, DineEquity's chairman and chief executive officer, said. “Obviously, we have
opportunities to find points of differentiation – things that no one has but Applebee’s – and I think
the future is very bright.”
As part of the company's new marketing campaign and slogan, Wanda Sykes was hired to voice
the chain's new mascot, the Applebee's Apple. The character appears in commercials touting
Applebee's various specials and stating the new slogan, "Together is good." or saying, "Get it
together, baby!" as the slogan appears at the bottom right of the screen. A new campaign started
on February 25, 2008, without Sykes' character (the spokesapple) with its slogan, "It's a whole
new neighborhood." The commercials used both the company's original and new logos.
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8
Applebee's NNN Leased Offering
2
Financial Overview
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The information listed above has been obtained from sources we believe to be reliable, however, we accept no responsibility for its correctness.
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9
Applebee's NNN Leased Offering
For Sale |
6727 Tara Boulevard | Jonesboro (Atlanta), GA 30236
Tenant
Name
NRP
GLA
5,512 SF
Rent Roll
$2,960,000
Lease
Start
Lease
End
Annual
Rent
Rent/SF
Increases
Options
10/13/2011
10/12/2031
$216,202
$39.22
Rent increases
1% annually
Tenant has six 5
year options to renew
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10
Applebee's NNN Leased Offering
3
Location Overview
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11
Applebee's NNN Leased Offering
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Location Maps
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12
Applebee's NNN Leased Offering
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Aerial Photo
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13
Applebee's NNN Leased Offering
4
Demographics Analysis
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14
Applebee's NNN Leased Offering
Demographics Analysis
1, 3, 5 Mile Demographics Report
6727 Tara Boulevard | Jonesboro (Atlanta), GA 30236
1 Mile
3 Miles
5 Miles
3,346
25,543
63,733
2.8
3.0
3.0
$109,523
$118,557
$123,651
$42,575
$45,229
$48,124
Median Age - Male
29
29
30
29
30
29
Median Age - Female
29
31
32
9,526
77,347
193,201
1,800
18.9%
16,260
21.0%
38,673
20.0%
5,740
60.3%
46,063
59.6%
122,567
63.4%
1,785
18.7%
12,246
15.8%
26,591
13.8%
255
2.7%
5,426
7.0%
11,850
6.1%
0
0.0%
1
0.0%
63
0.0%
0
0.0%
212
0.3%
406
0.2%
1,489
15.6%
7,395
9.6%
15,194
7.9%
Total Number of Households
Total Number of Persons per Household
Average House Value
Average Household Income
Median Age
Total Population
Total Population - White
Total Percent - White
Total Population - Black
Total Percent - Black
Total Population - Hispanic
Total Percent - Hispanic
Total Population - Asian
Total Percent - Asian
Total Population - Hawaiian
Total Percent - Hawaiian
Total Population - Indian
Total Percent - Indian
Total Population - Other
Total Percent - Other
* Demographic information provided by BuildOut, LLC
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15
Applebee's NNN Leased Offering
Demographics Analysis
1, 3, 5 Mile | Radius Map
6727 Tara Boulevard | Jonesboro (Atlanta), GA 30236
1 Mile
3 Mile
5 Mile
Total Population
9,526
77,347
193,201
Total Number of Households
3,346
25,543
63,733
$42,575
$45,229
$48,124
29
30
30
Average Household Income
Median Age
* Demographic information provided by BuildOut, LLC
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16
Presented by |
Kase Abusharkh
Jacob Abusharkh
Managing Director
Managing Director
925.348.1844
415.269.2474
kase@svn.com
jacob@svn.com
All Sperry Van Ness® Offices Independently Owned & Operated. | © 2011 All rights reserved. |www.svn.com