DUTCH BROS. COFFEE GROUND LEASE

Lakewood, CO

REPRESENTATICE

DUTCH BROS. COFFEE GROUND LEASESWC LOOP 202 & HIGLEY ROADGILBERT, AZ 85296

Offering Memorandum

CONSTRUCTION PHOTOAS OF 1/10/2019

OPENING MARCH

2019

AERIAL PHOTO DUTCH BROS. COFFEE GROUND LEASE

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap ACT ID ZAA0070021


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DOWNTOWNGILBERT

PHOENIX-MESAGATEWAYAIRPORT

CHANDLERMUNICIPAL

AIRPORT

4,380 STUDENTS

212 BEDS

14,000 STUDENTS

SANTAN VILLAGE

SANTAN VILLAGEMARKETPLACE

AERIAL PHOTO

3

DUTCH BROS. COFFEE GROUND LEASE



Starbucks

E AGRITOPIA LOOP N

2,500 STUDENTSMASTER PLANNED COMMUNITY GARDENS

& CLUBHOUSE

FUTUREDEVELOPMENT

S HIGLEY RD28 ,000 CPD

57 ,400 CPD

MEDICAL OFFICEBUILDINGS

NO BUILD AREA




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FUTURE

DEVELOPMENT

W I L L I A M S F I E L DH I G H S C H O O L

1,800 STUDENTS

MEDICAL OFFICE

BUILDINGS

S HIGLEY RD28 ,000 CPD

57 ,400 CPD

2,500 STUDENTS

MASTER PLANNED COMMUNITY GARDENS

& CLUBHOUSE


5


DUTCH BROS. COFFEE GROUND LEASESWC Loop 202 & Higley RoadGilbert, AZ 85296

FINANCIAL SUMMARY

Price $1,528,000

Down Payment 100% $1,528,000

Cap Rate 4.50%

Building SF 804 SF

Net Cash Flow 4.50% $68,750

Year Built 2019

Lot Size .78 Acres

LEASE SUMMARY

Lease Type Absolute Triple-Net (NNN) Ground Lease

Tenant Higley/202 DB LLC, dba Dutch Bros. Coffee

Guarantor 5 Year Guarantee by Thompson/McCarthy Coffee Co.

Roof & Structure Tenant Responsible

Est. Lease Commencement Date March 2019

Est. Lease Expiration Date February 2034

Lease Term 15 Years

Rental Increases 10% Every 5 Years

Renewal Options 4, 5 Year Options

BASE RENT $68,750

Net Operating Income $68,750

Total Return 4.50% $68,750

EXECUTIVE SUMMARY

LEASE YEARS ANNUAL RENT CAP RATE

1 - 5 $68,750.00 4.50%

6 - 10 $75,625.00 4.95%

11 - 15 $83,187.50 5.44%

OPTIONS ANNUAL RENT CAP RATE

Option 1 $91,506.25 7.03%

Option 2 $100,656.88 7.25%

Option 3 $197,255.68 7.46%

Option 4 $191,510.37 7.25%

ANNUALIZED OPERATING DATA




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TENANT OVERVIEW

Dutch Bros. Coffee was founded in 1992 in Grants Pass, Oregon by Dane and Travis Boersma, brothers of Dutch descent. Today, Dutch Bros. Coffee is the country’s largest, privately held drive-thru cof-fee company. Dutch Bros. now has approximately 325 stores open in 7 states and is planning on heavy growth over the next 5 years.

The company donates over $2 million a year to its local communi-ties and nonprofit organizations.

Dutch Bros. Coffee roasts all its own coffee, a three-bean blend sourced from direct relationships with Salvadorian, Brazilian, and Colombian coffee plantations. In October 2014, the company an-nounced the release of Dutch Bros. Single-Serve Cups compatible with Keurig-style brewers. In 2012, the Company launched its own energy drink, Blue Rebel, and in May 2016 introduced Cold Brew Coffee.

https://dutchbros.com

FRANCHISEE OVERVIEW: Thompson/McCarthy Coffee Co.

In 2006, the group became the franchisees for an area in the Phoe-nix Valley, from Cave Creek to Santan Freeway, 35th Avenue on the west side to Queen Creek. Today, they have 20 stores completed under the company name, Thompson McCarthy Coffee Co. Total sales for the franchise are among the highest in Dutch Bros. due to the number of stores and the higher than average sales. Over the next 18 months, they plan to build out and open 4 more new stores.

AERIAL PHOTO

7




Starbucks

LOCATION OVERVIEWINVESTMENT HIGHLIGHTS• New 15-Year Absolute Triple-Net (NNN) Ground Lease

• Brand New Construction – Scheduled to Open March 2019

• Ten Percent Rental Increases Every Five Years

• 240,477 Residents in Growing Gilbert Trade Area – Phoenix MSA

• Hard Corner Location at the Intersection of S Higley Road & E Agritopia Loop (28,000+ CPD)

• Excellent Visibility – Located Directly Off the Loop 202 Freeway (57,400+ CPD)

• Outparcel to LA Fitness – Scheduled to Open March 2019

• Situated in Agritopia, a Unique 166-Acre Mixed-Use Master Planned Community in Gilbert

• High Growth Area – Households Projected to Increase 29%+ in Immediate Area by 2022

• Close Proximity to SanTan Village, an Open-Air Super Regional Shopping Center

• Average Household Income Exceeds $108K in 3-Mile Radius

PROPERTY DESCRIPTION

DEMOGRAPHICS

As part of the Phoenix MSA, Gilbert, Arizona has evolved into one of the fastest growing communities and the largest town in the United States. Encompassing 72.6 square miles, just southeast of Phoenix, Gilbert has transformed from an agricultural community to a thriving and economically-diverse suburban community.

Gilbert’s booming housing industry is coupled with booming business. With a targeted focus in the Science, Technology, Engineering and Math industries, Gilbert is home to many companies with focuses in Advanced Manufacturing, Aerospace and Defense, Bio-Technology, Clean Technology and Renewable Energy.

Gilbert boasts a nationally ranked K-12 education system including public schools, unique magnet and charter schools, with an average graduation rate of 90%. Nearly 40% of Gilbert residents hold a bachelor’s degree or higher and the median household income is $80,080.

As Gilbert approaches build-out over the next decade, the estimated population is expected to reach 330,000. With a continued focus on building the latest satellites, conducting cancer research and producing algae technology, Gilbert will continue to grow and thrive and uphold its reputation as being clean, safe and vibrant.

As one of the primary beneficiaries of the massive shift in the U.S. population from north to south, the Phoenix metro has had little difficulty finding workers. Phoenix claims five Fortune 500 headquarters, including Freeport-McMoRan, Republic Services, Insight Enterprises, Avnet and PetSmart. Construction, high-tech manufacturing, healthcare and tourism dominate the Phoenix economy. The local economy has strengthened since the recession, with retail sales projected above 8 percent this year and hotel occupancy levels rising.

High-tech manufacturing has been a powerful driver in the local economy for two decades. The region’s relatively low cost of doing business has encouraged several manufacturers to remain and expand in the area, while luring others. The strengthening economy has drawn job seekers to the area, boosting the housing market.

Income 1-Mile 3-Miles 5-Miles

2017 Est. Average Household Income $98,211 $108,678 $99,328

2017 Est. Median Household Income $81,997 $87,863 $78,945

2017 Est. Per Capita Income $34,302 $34,908 $33,312

Population 1-Mile 3-Miles 5-Miles

2022 Projection 17,324 112,221 282,379

2017 Estimate 13,835 91,718 240,477

Growth 2017 - 2022 25.22% 22.35% 17.42%

Households 1-Mile 3-Miles 5-Miles

2022 Projections 6,274 37,175 96,648

2017 Estimate 4,832 29,411 80,541

Growth 2017 - 2022 29.83% 26.40% 20.00%




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CONSTRUCTION PHOTOSAS OF 1/10/2019

AERIAL PHOTO

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Starbucks

SITE PLAN

HEAR

TLAN

D LA

NE

B.S.L.47'-0"

26'-0"DRIVEWAY

SANTAN FREEWAY

MAINENTRY

34,000 S.F.

LEFTTURNONLY

3' VINYL FENCE,TYP.

20'-0"B.S.L.

AGRITOPIA LOOP

150' FIRE DEPARTMENT ACCESS RADIUS

150' FIRE DEPARTMENT ACCESS RADIUS

PHASE 1

SIGHT TRIANGLE

15'-0"LANDSCAPE

212'-0"

160'-0"

24'-7"

PROPOSED SPLITRAIL FENCE

EXISTING SPLITRAIL FENCE

16'-6

"

1SP-2

8

45 4523 2310

26

14

5

AA AA A AAA

OO

OO

OO

20'-0"B.S.L.

PARCEL 29'-6" 9'-0"

11

11

11

26'-0

"

DUTCH BROSCOFFEE 804 S.F.

PROPOSEDPROPERTY LINE

65'-0"R.O.W.

NOT A PARTOF PROJECT

3' VINYL FENCE, TYP.

5'-0

"B.

S.L.

EXISTING SIDEWALK,CURB AND GUTTER

DASH LINEINDICATES PHASE 2

Z A DIRECTIONAL SIGN'LEFT TURN ONLY'

THISSITE

S 99TH AVENUE

S MERCHANT ST

E SHEFFIELD RDEAST AGRITOPIA LOOP N

S HI

GLEY

RD

SANTAN FWY

C-

3'-8

"

SIDE and REAR ELEVATION

TRASH ENCLOSURE WALL (N.T.S.)C

A 2

FRONT ELEVATIONA 1

PLAN VIEW

7'-6

"

13'-4

"

3'-8

"3'

-0"

10'-0"

A2-

1' MIN.

10'-0"

SLOPE 1/4"PER FOOT

A1-

TRASH ENCLOSURESCALE: 1/4" = 1'-0"

4" CONCRETE SLABWITH 6" A.B.C.

STEEL GATE - SEE DIV.2.2.6, GATE SPEC. - SEE DETAIL D

1/2" EXPANSION JOINT

HOLES FORCANE BOLTS(4 TOTAL)

(3) 6" Ø BOLLARDS ATBACK OF ENCLOSURE.

DUMPSTER BY OTHERS(SHOWN FORREFERENCE ONLY)

REINF'D. CONC.SLAB & APRON

SMOOTH FACE CONCRETEBLOCK - PAINT TO MATCHBUILDING

2" CMU CAP UNITSAT TOP

STL. GATES AND 8"d.POSTS.

5"

7'-6

"

NOTE: VERIFY W/ CONST. MGR. IF CMUWALLS ARE TO BE TREATED WITH ANANTI-GRAFFITI COATING

8" PRECISIONCMU-REINF'D. 7'-6"

HIGHD-

6"

6" CHAMFER AT45°CONCRETE CURB

EQ.

NOTE 7

PER T.O.G. STANDARD DETAIL # 180

8" CMUWALL

TOP VIEW

2"

ALT. 16"CMU CORNER3-HINGES MIN.PER GATE LEAFWELDED OR CLAMPEDTO POST AND GATEFRAME8" DIA. SCHED.40 GALV. PIPESTEEL GATE POST(FILL W/ CONC., DOMETOP)

SEE FENCESPEC'S., DIV.2.2.6, FORCHAIN LINKGATE PANEL.

GATE POST (N.T.S.)D

HINGE-LEAFWELDED OR

CLAMPED TOPOST AND

GATE FRAME

ELEVATION

ROUND OFFCONCRETE CAP

1'

10'-6

"

1'EQ

.

7'-6

"

2

3'-0

"

12'-0

"MIN

.

CONCRETE FOOTING 8"X18" (TYP.)

2-1" DIA. GALV. STEEL CANE BOLTTO SECURE GATES.

7'-6

"

1'-6

"

2'-6"

6'-0

"

NOTE 8NOTE 9

NOTE 10

NOTE 11

NOTE 12

3'-0

"

NOTE 14NOTE 6

10"

NOTE 2NOTE 5

NOTE 13

NOTE 1

NOTE 3

NOTE 4

NOTE:1. EXPANSION JOINT FILLER SHALL BE 1/2" BITUMINOUS TYPE PREFORMED

EXPANSION JOINT FILLER ASTM D-1751.2. USE CLASS A CONCRETE AS PER MAG SECTION 725 EXCEPT AS NOTED IN SAFETY

POST DETAIL.3. 6" REFLECTIVE ENGINEERS TAPE (3M HIGH DENSITY YELLOW PRESSURE

SENSITIVE TAPE OR APPROVED EQUIVALENT),4. 4" OR 6" DIA X 8.5' STEEL POST, SCHEDULE 40, GALVANIZED. FILL WITH GROUT

AND CROWN TOP5. USE CLASS B CONCRETE.6. 6" CONCRETE PAD7. 8"X8"X16" CMU WALL8. 1- #4 BAR CONTINUOUS.9. 2" SOLID CMU CAP10. #4 BARS @ 8" ON CENTER (GROUT CELLS SOLID FULL HEIGHT)11. 4" OPENING AT LOW POINT.12. 2 #4 BARS CONTINUOUS.13. ALTERNATE14. FINISH GRADE

4" .

1'-0"

1. GATES SHALL BE FULLHEIGHT OF SCREEN WALLS.2. GATES SHALL BE DESIGNEDTO FULLY SCREEN ENCLOSEDBIN (S). OPEN MESH OR RAILDESIGNS ARE NOTPERMITTED

A R C H I T E C ST , I N C

SWC LOOP 202 AND HIGLEY ROADGILBERT, AZ 85296

DUTCH BROS HIGLEY RD. & LOOP 202

01-16-2018 (PRELIMINARY) RKAA# 17143.00

SP-1 2 0 1 7 R K A AARCHITECTS, INC. ALLR I G H T S R E S E R V E D .THIS DRAWING IS ANI N S T R U M E N T O FS E R V I C E . I T I S T H EPRO P ER TY O F RKAAARCHITECTS, INC. ANDM A Y N O T B EDUPLICATED, USED ORDISCLOSED WITHOUTWRITTEN PERMISSIONO F T H E ARC H IT EC T .

©

VICINITY MAP

SITE NOTES

SITE DATA304-27-013M

GC (GENERAL COMMERCIAL)241,603 S.F. (5.54 ACRES)

191,306 S.F. (4.39 ACRES)

34,804 S.F.

18.1 %

227 SPACES14 SPACES

241 SPACES

241 SPACES

7 SPACES10 SPACES

28

PARCEL NUMBER:ZONING:GROSS SITE AREA:NET SITE AREA:

BUILDING AREA:

SITE COVERAGE: BLDG./NET SITE AREA

PARKING REQUIRED:EXERCISE AND RECREATION INDOOR - 34,000/150 S.F.RESTAURANTS, BEVERAGE SERVICE - 804/75 S.F. + 1080/400 S.F.(OUTDOOR DINING AREA)TOTAL PARKING REQUIRED:

TOTAL PARKING PROVIDED:

ACCESSIBLE SPACES REQUIRED:ACCESSIBLE SPACES PROVIDED:

BICYCLE PARKING PROVIDED:

1. All utility lines less than 69 KV on or contiguous to the site shall be installed or relocated underground.2. All trash enclosures shall include fully opaque screening gates, finished and painted to match theenclosure. Screening gates shall not open into vehicular drive aisles. Trash enclosures are not required inindustrial districts if located inside an enclosed yard which is screened by a perimeter wall at least 6 feet inheight.3. All outdoor storage areas for storage of materials and equipment shall be fully screened from view by a6' solid masonry wall. Industrial storage screen walls shall be finished where they are exposed to public viewfrom streets or adjacent non-industrial uses.4. S.E.S. panels and any other above ground utility cabinet shall be fully screened from view from streets orfrom areas accessible to customers and the general public. Screening may be accomplished by any one of thefollowing methods:

a. Fully recessing the cabinet into the building and enclosing it by a solid door or doors separate from thecabinet;

b. Screening with a decorative masonry wall of the same height as the panel. The screen wall may beL-shaped, U-shaped or a straight wall parallel to the cabinet, depending on the location of the cabinet;

c. An alternative screening method approved by the Planning Department prior to issuance of any permits.5. The location of all electrical utility equipment shall be identified on the construction plans.6. Roof-mounted mechanical equipment shall be fully screened by either one of the following methods:

a. The parapet wall of the building shall equal or exceed the height of the mechanical units, or;b. By locating the mechanical equipment behind the roof planes in the case of mansard, hip or other than

flat roof.7. Roof mounted mechanical equipment enclosures or equipment screen walls shall not project above theroof parapet. To the extent permitted by law, satellite dishes shall be fully screened by a parapet wall.8. Ground mounted mechanical equipment shall be fully screened from view (from streets or surroundingcommercial uses) by a combination of decorative walls and an evergreen vegetative hedge equal to orexceeding the height of the equipment.9. Pneumatic tubes, whether metal or plastic, shall be either:

a. Enclosed in pilasters, columns or other architectural features of the canopy or building, or;b. Routed underground.

10. All backflow prevention devices 2” or larger shall be screened with landscape located within a 6' radiusof the device. All backflow preventers less than 2” shall be placed in a wire cage painted to match the primarybuilding color.11. All freestanding light poles shall:

a. Be located within landscaped areas or planter islands.b. Have concrete bases painted to match the primary building color or finished to match parking screen

walls. Concrete bases for light poles shall not exceed a height of 30” from adjacent grade.c. Be located to avoid conflict with trees.

12. Site lighting shall comply with the light and glare criteria set forth in Section 11.22.A of the ULDC,including a maximum freestanding light fixture height of 25'. The maximum height of a building mounted lightfixture is 14'. The maximum height of a freestanding light fixture located within 100' of a residential zoningdistrict or property designated for residential development in the General Plan is 14'.13. Landscaped areas adjacent to public right-of-way shall be mounded and naturally contoured. No morethan 50% of the required (right-of-way and landscaping tracts) landscaping fronting adjacent streets may beused for retention. Retention area side slopes shall be varied, and no slope shall exceed a 4:1 maximum.14. Commercial building downspouts shall be internalized. Industrial buildings may use exposeddownspouts if articulated with the architecture of the building and built with a durable material such as steel.15. Commercial development vehicular access points and pedestrian access ways shall include specialpaving treatment such as integral colored stamped concrete, Boamanite, or similar alternative. Location andmaterial shall be reviewed and approved by the Planning Department prior to the issuance of a buildingpermit.16. Customer, employee and visitor parking shall be screened from street view by low masonry walls. Theparking screen walls shall be finished on both sides using the same materials and colors, and a design tocomplement that of the main building.17. All exterior metal shall be finished or painted to match the approved project colors.18. Existing on-site plant material damaged during construction shall be replaced with comparable speciesand size.




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LOCAL MAP

Williams-Sonoma

MAP

3 MILESSanTan Village

Shopping Center

6 MILESDowntown

Gilbert

25 MILESPhoenix Sky HarborInternational Airport

18 MILESArizona State

University

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

By accepting this Marketing Brochure, you agree to treat the information contained herein regarding the lease terms as confidential and proprietary and to only use such information to evaluate a potential purchase of this net leased property.

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 care-ful, 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 finan-cial 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 fa-cilities 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 inter-rupted 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.

Net Leased Disclaimer

The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap.

This offering memorandum has been prepared to provide summary, unverified financial and physical 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, PCBs or asbestos, the compliance with local, 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 offering memorandum 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. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Confidentiality Agreement

exclusively listedMARK RUBLESenior Managing DirectorPHOENIX OFFICETel: (602) 687-6766Fax: (602) [email protected]

Exclusively listed by:

OFFICES NATIONWIDEwww.marcusmillichap.com

JAMIE MEDRESSExecutive Managing DirectorPHOENIX OFFICETel: (602) 687-6778Fax: (602) [email protected]

CHRIS LINDFirst Vice PresidentPHOENIX OFFICETel: (602) 687-6780Fax: (602) [email protected]

DUTCH BROS. COFFEE GROUND LEASE

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