STRONG ECONOMIC PROFILE ACROSS KNOXVILLE RACEWAY …

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PIZZA HUT 15-YEAR ABSOLUTE NET (NNN)1201 W. Larson St., Knoxville, Iowa 50138

OFFERING MEMORANDUM

HEALTHY RENT-TO-SALES

STRONG ECONOMIC PROFILE

Representative Photo

ACROSS KNOXVILLE RACEWAY

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OFFERING MEMORANDUM

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The 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 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 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.

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.

CONFIDENTIALITY & DISCLAIMER STATEMENT


OFFERING MEMORANDUM

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OFFERING INCLUDES

PRICING & FINANCIAL ANALYSIS Investment Highlights

Executive Summary

COMPANY OVERVIEW

TENANT OVERVIEW

PROPERTY OVERVIEW Aerial Maps

LOCATION OVERVIEW City Overview

Economic Overview

Demographic Analysis

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Established 1958

Largest Pizza Company in the World

Over 16,500 Locations in 106 Countries

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. © 2018 Marcus & Millichap Activity ID Z0390709

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• BRAND NEW 15-YEAR LEASE

• ABSOLUTE TRIPLE-NET

• ZERO LANDLORD RESPONSIBILITIES

• VERY HEALTHY RENT-TO-SALES RATIO – CONSERVATIVE

• FIVE PERCENT BUMPS EVERY FIVE YEARS

• OPEN & OPERATING SINCE 1972

• DIRECTLY ACROSS KNOXVILLE RACEWAY –

SPRINT CAR CAPITAL OF THE WORLD, OVER 24,000 SEATS

• MINUTES FROM 3M (NYSE: MMM) PLANT - FORTUNE 500

• MINUTES FROM HORMEL FOODS (NYSE:HRL) - FORTUNE 500

• ACROSS HY VEE

• MINUTES FROM LOCAL AIRPORT

• MINUTES FROM IA5

• MINUTES FROM HOSPITAL & CLINICS

• CLOSE TO MILITARY BASE

• MINUTES FROM YOUNG'S PARK

• SINGLE TENANT NET LEASED ASSET

• GLOBALLY RECOGNIZED BRAND LOCATED IN 106 COUNTRIES

Marcus & Millichap is pleased to offer this Pizza Hut property paired with an

absolute net long term lease with zero landlord responsibilities. Pizza Hut, is

the largest pizza company in the world.






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LIST PRICE

CAP RATE

INCREASES

LEASE TERM

OPTIONS

LOT SIZE

BUILDING SIZE

PRICE PER FOOT

YEAR BUILT

TYPE OF OWNERSHIP

GUARANTY

$901,581

6.00%

5% Every 5 Years

15 Years

Four 5-Year Options

0.75 Acres

2,620 SF

$344

1972

Fee Simple

Franchisee

NET OPERATING INCOME $54,095

$54,095

$54,095

$54,095

$54,095

$54,095

$56,800

$56,800

$56,800

$56,800

$56,800

$59,640

$59,640

$59,640

$59,640

$59,640

$62,622

$65,753

$69,040

$72,492

$4,508

$4,508

$4,508

$4,508

$4,508

$4,733

$4,733

$4,733

$4,733

$4,733

$4,970

$4,970

$4,970

$4,970

$4,970

$5,218

$5,479

$5,753

$6,041

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

YEAR 7

YEAR 8

YEAR 9

YEAR 10

YEAR 11

YEAR 12

YEAR 13

YEAR 14

YEAR 15

OPTION 1

OPTION 2

OPTION 3

OPTION 4

RENT SCHEDULE ANNUAL RENT MONTHLY RENT

$20.65

$20.65

$20.65

$20.65

$20.65

$21.68

$21.68

$21.68

$21.68

$21.68

$22.76

$22.76

$22.76

$22.76

$22.76

$23.90

$25.10

$26.35

$27.67

RENT PER SF





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OWNERSHIP

SYMBOL

S & P RATING

FOUNDED

NUMBER OF LOCATIONS

HEADQUARTERED

WEBSITE

CEO OF YUM!

SUBSIDIARY OF YUM! BRANDS, INC.

NASDAQ: YUM

BB (YUM! BRANDS)

JUNE 15, 1958 (PIZZA HUT)

13,000+

PLANO, TEXAS

WWW.PIZZAHUT.COM

DAVID W GIBBS

Pizza Hut is an American restaurant chain and international franchise that offers different

styles of pizza along with side dishes including salad, pasta, buffalo wings, breadsticks, garlic

bread and desserts. Corporately known as Pizza Hut, Inc., it is a subsidiary of Yum! Brands, Inc.,

the world's largest restaurant company. As of 2012, there were more than 6,000 Pizza Hut

restaurants in the United States, and more than 5,139 store locations in 94 other countries and

territories around the world. Pizza Hut was Founded in Wichita, Kansas in 1958.

Yum! Brands, Inc, is an American fast food company. A Fortune 500 corporation, Yum operates

the licensed brands Taco Bell, KFC, Pizza Hut, and WingStreet worldwide. Based in Louisville,

Kentucky, it is one of the world's largest fast food restaurant companies in terms of system

units—with 42,692 restaurants (including 8,927 that are company-owned, 796 that are

unconsolidated affiliates, 30,930 that are franchised, and 2,039 that are licensed) around the

world in over 130 countries. In 2015, Yum!'s global sales totaled US$13.105 billion.

Corporate Headquarters | Plano, TX





http://www.pizzahut.com/

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1201 W. Larson Knoxville, Iowa 50138





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Representative Photos

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MARKET OVERVIEW

OWNERSHIP

FOUNDED

NUMBER OF LOCATIONS

HEADQUARTERED

WEBSITE

CEO

PRIVATE

Knoxville is a city in Marion County, Iowa, United States. The population was 7,313 at the 2010 census. It is the county seat of Marion County. Knoxville is

home of the National Sprint Car Hall of Fame & Museum, located next to the famous Knoxville Raceway dirt track. Knoxville is located in south-central Iowa,

some 25 miles southeast of Des Moines. The area was originally inhabited by Native Americans of the Sac and Fox tribes. Knoxville was founded in 1845

when Joseph Robinson and James Montgomery, Commissioners from Scott and Wapello County, selected the site for Knoxville and designated it as the

county seat. They named Knoxville in honor of General Henry Knox, hero of the Revolutionary War. The City’s main streets are named after Robinson and

Montgomery.

Systematic coal mining in Marion County began with the Union Coal Company's mine in Flagler, 4 miles (6.4 km) east of Knoxville in around 1874 or 1875. For

several years, the Number 5 mine in Flagler was one of the most productive in Iowa, employing around 150 men and working a coal vein over 8 feet (2.5 m)

thick. The Oak Hill coal company also had mines in Flagler.

KNOXVILLE IOWA





MARKET OVERVIEW

ECONOMY

The economy of Marion County, IA employs

17,220 people. The economy of Marion County,

IA is specialized in Manufacturing; Agriculture,

Forestry, Fishing, Hunting; and Educational

Services. The largest industries in Marion

County, IA are Manufacturing (4,182),

Educational Services (2,331), and Healthcare &

Social Assistance (2,220), and the highest paying

industries are Mining, Quarrying, Oil, Gas

Extraction ($85,185), Utilities ($71,012), and

Finance & Insurance ($39,416). Marion County,

Iowa, is home to widely known international

companies. With an abundant, skilled workforce

and great business incentives, our area’s large

employers continue to grow and thrive.

TOP EMPLOYERS ARE:Pella CorporationVermeer CorporationPella Regional Health Center3M Company (NYSE: MMM) Fortune 500Central CollegePella Community SchoolsKnoxville Community School DistrictKnoxville Hospitals & ClinicsPrecision Pulley & IdlerKnoxville RacewayHormel Foods (NYSE: HRL) Fortune 500Pleasantville Community SchoolsChristian Opportunity CenterSmokey Row Coffee Co. LLC





MARKET OVERVIEW

LOCATION:

CAPACITY:

OWNER:

OPENED:

MAJOR EVENTS:

1000 N LINCOLN ST KNOXVILLE IA

24,172

MARION COUNTY FAIR ASSOCIATION

LATE 1800’S AS HORSE RACING TRACK

GOODYEAR KNOXVILLE NATIONALS

LUCAS OIL LATE MODEL NATIONALS

ARNOLD MOTOR SUPPLY 360 NATIONALS

USAC NON-WING KNOXVILLE NATIONALS

Knoxville Raceway is a semi-banked 1/2 mile dirt oval raceway located at

the Marion County Fairgrounds in Knoxville, Iowa, United States. Races at

the "Sprint Car Capital of the World" are held on Saturday nights from

April through September each year. Some special events may start as

early as Wednesday and build up to Saturday. Regular events include 305

cubic inch, 360 cubic inch and 410 cubic inch sprint car racing.

Each August, the Raceway holds the paramount sprint car event in the

United States, the Knoxville Nationals. The track is governed by the 24-

member fair board elected by Marion County residents.





MARKET OVERVIEW

OWNERSHIP

FOUNDED

NUMBER OF LOCATIONS

HEADQUARTERED

WEBSITE

CEO

PRIVATE

Knoxville Hospital & Clinics’ proud tradition of providing high-quality, progressive, and compassionate healthcare started in 1935. Over the years, our

healthcare system has grown, adding new locations and services, medical staff and modern technology, but you’ll still find the same family-oriented, friendly

service that’s been the cornerstone of this organization since the day we opened. KHC staff are dedicated to delivering exceptional, patient-centered services.

So, it’s not surprising that surgery patients reported 100% patient satisfaction scores month after month for 12 consecutive months (March 2017- February

2018) for smooth check-in, cleanliness, courtesy and respect, and for being given clear written instructions. Surveys are conducted by a national, third-party

survey firm Press Ganey.

Knoxville Hospital & Clinics is a full-service healthcare organization, caring for individuals throughout central and south central Iowa. From its busy family

practice clinics in Knoxville, Melcher-Dallas, Pella, and Pleasantville, to its specialty clinics, hospital, emergency and imaging departments, physical rehab

facility, and surgical suites at Knoxville, we offer a broad spectrum of services. Over the years, Knoxville Hospital & Clinics has been a leader in bringing the

latest technological innovations, from its advanced imaging services and surgical technologies to the latest robotics-assisted partial and total knee

replacement system.





MARKET OVERVIEW

OWNERSHIP

FOUNDED

NUMBER OF LOCATIONS

HEADQUARTERED

WEBSITE

CEO

PRIVATE

3M is a global innovation company that never stops inventing. Over the years, we have worked to improve daily life for hundreds of millions of people all over

the world. We have made driving at night easier, made buildings safer, and made consumer electronics lighter, less energy-intensive and less harmful to the

environment. We even helped put a man on the moon. Every day at 3M, one idea always leads to the next, igniting momentum to make progress possible

around the world. We are a world-class operation with a central place in 3M's worldwide tape and adhesive manufacturing. We offer diverse opportunities in

many roles across this complex plant. Our Mission is to focus our technologies, platforms, resources, and people on delivering our promises to our customers.

The construction of 3M Knoxville began in 1973. Production operations started in 1974 in a temporary facility on the south side of Knoxville and moved to the

present site in 1975. The facility has expanded several times since 1975 with the last expansion occurring in 2007. Currently the plant occupies over a half a

million sq. ft. of manufacturing and warehouse space. 3M Knoxville manufactures pressure sensitive tapes that are sold worldwide into the industrial,

automotive, and construction markets. Knoxville, one of three 3M facilities in the state of Iowa, is a high-tech, multidivisional facility serving five major

divisions.





MARKET OVERVIEW

OWNERSHIP

FOUNDED

NUMBER OF LOCATIONS

HEADQUARTERED

WEBSITE

CEO

PRIVATE

Hormel Foods Corporation is an American food products company founded 1891 in Austin, Minnesota by George A. Hormel. Originally focusing on the

packaging and selling of ham, SPAM, sausage and other pork, chicken, beef and lamb products to consumers, by the 1980s Hormel began offering a wider

range of packaged and refrigerated food brands. The company changed its name to Hormel Foods in 1995. Hormel serves 80 countries with brands such as

Applegate, Columbus Craft Meats, Dinty Moore, Jennie-O and Skippy. In 2018, the company reported annual revenues of 4.6 billion dollars.

The Knoxville, Iowa, plant is located just 40 minutes southeast of Des Moines. The plant currently produces a million pounds of dry sausage a week. There are

approximately 150 production professionals working various shifts within the plant. The plant produces both retail and foodservice products for a variety of

customers. Some of the products produced include Homeland® hard salami, Rosa Grande® pepperoni and Hormel®Pillow Pack® pepperoni. The city of

Knoxville has a population of 7,300. It is the home of the National Sprint Car Museum and that, along with a half-mile dirt racetrack, brings people from all over

the country to watch sprint car racing. It is also minutes away from Lake Red Rock, Iowa’s largest lake.





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Representative Photos





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Source: © 2017 Experian

Created on August 2018

POPULATION 3 Miles 5 Miles 7 Miles 2022 Projection

Total Population 8,152 9,929 11,574 2017 Estimate

Total Population 8,136 9,790 11,359 2010 Census

Total Population 8,191 9,856 11,397 2000 Census

Total Population 8,584 9,934 11,319Current Daytime Population

2017 Estimate 8,485 9,646 10,513

HOUSEHOLDS 3 Miles 5 Miles 7 Miles 2022 Projection

Total Households 3,484 4,136 4,738 2017 Estimate

Total Households 3,447 4,048 4,617Average (Mean) Household Size 2.33 2.38 2.41

2010 CensusTotal Households 3,467 4,072 4,628

2000 CensusTotal Households 3,493 3,990 4,481

Occupied Units2022 Projection 3,484 4,136 4,7382017 Estimate 3,806 4,449 5,057

HOUSEHOLDS BY INCOME 3 Miles 5 Miles 7 Miles 2017 Estimate

$150,000 or More 2.23% 2.45% 2.62%$100,000 - $149,000 10.11% 11.45% 12.37%$75,000 - $99,999 12.79% 14.25% 14.76%$50,000 - $74,999 24.12% 24.04% 24.08%$35,000 - $49,999 14.37% 13.87% 13.83%Under $35,000 36.39% 33.94% 32.35%

Average Household Income $57,317 $59,893 $61,588Median Household Income $48,925 $52,468 $54,120Per Capita Income $24,526 $25,010 $25,256

HOUSEHOLDS BY EXPENDITURE 3 Miles 5 Miles 7 MilesTotal Average Household Retail Expenditure

$63,292 $66,274 $67,901

Consumer Expenditure Top 10 Categories

Housing $16,017 $16,704 $17,086Transportation $11,033 $11,580 $11,892Shelter $9,215 $9,595 $9,805Food $6,539 $6,828 $6,998Personal Insurance and Pensions $5,536 $5,988 $6,254Health Care $4,528 $4,732 $4,837Utilities $3,460 $3,587 $3,663Entertainment $2,670 $2,803 $2,881Household Furnishings and Equipment

$1,683 $1,785 $1,837

Apparel $1,460 $1,541 $1,590

POPULATION PROFILE 3 Miles 5 Miles 7 MilesPopulation By Age

2017 Estimate Total Population 8,136 9,790 11,359Under 20 26.50% 26.45% 26.46%20 to 34 Years 17.24% 16.65% 16.30%35 to 39 Years 5.63% 5.81% 5.86%40 to 49 Years 11.04% 11.31% 11.59%50 to 64 Years 20.98% 21.40% 21.75%Age 65+ 18.58% 18.37% 18.04%Median Age 40.56 40.97 41.22

Population 25+ by Education Level2017 Estimate Population Age 25+ 5,519 6,665 7,746Elementary (0-8) 3.20% 2.88% 2.73%Some High School (9-11) 6.08% 5.48% 5.25%High School Graduate (12) 40.39% 40.20% 40.31%Some College (13-15) 23.28% 23.59% 23.54%Associate Degree Only 9.81% 10.19% 10.44%Bachelors Degree Only 13.01% 13.05% 12.94%Graduate Degree 3.83% 4.21% 4.41%

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Income

Population

Households

Employment

Race and Ethnicity

Housing

In 2017, the median household income for your selectedgeography is $52,468, compare this to the US average which iscurrently $56,286. The median household income for your areahas changed by 39.49% since 2000. It is estimated that themedian household income in your area will be $63,513 five yearsfrom now, which represents a change of 21.05% from the currentyear. The current year per capita income in your area is $25,010,compare this to the US average, which is $30,982. The currentyear average household income in your area is $59,893, comparethis to the US average which is $81,217.

In 2017, the population in your selected geography is 9,790. It isestimated that the population in your area will be 9,929.00 fiveyears from now, which represents a change of 1.42% from thecurrent year. The current population is 49.75% male and 50.25%female. The median age of the population in your area is 40.97,compare this to the US average which is 37.83. The populationdensity in your area is 124.42 people per square mile.

There are currently 4,048 households in your selected geography.The number of households has changed by 1.45% since 2000. It isestimated that the number of households in your area will be4,136 five years from now, which represents a change of 2.17%from the current year. The average household size in your area is2.38 persons.

In 2017, there are 5,375 employees in your selected area, this isalso known as the daytime population. The 2000 Census revealedthat 51.79% of employees are employed in white-collaroccupations in this geography, and 48.58% are employed in blue-collar occupations. In 2017, unemployment in this area is 5.06%.In 2000, the average time traveled to work was 24.00 minutes.

The current year racial makeup of your selected area is as follows:96.27% White, 1.50% Black, 0.02% Native American and 0.43%Asian/Pacific Islander. Compare these to US averages which are:70.42% White, 12.85% Black, 0.19% Native American and 5.53%Asian/Pacific Islander. People of Hispanic origin are countedindependently of race.

People of Hispanic origin make up 2.14% of the current yearpopulation in your selected area. Compare this to the US averageof 17.88%.

The median housing value in your area was $104,289 in 2017,compare this to the US average of $193,953. In 2000, there were2,902 owner occupied housing units in your area and there were1,088 renter occupied housing units in your area. The medianrent at the time was $362.

Source: © 2017 Experian





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Broker of Record:Barry A'HearnMM REIS425 Second St., SE #610Cedar Rapids, IA 52401License: B55614000


OFFERING MEMORANDUM

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