Representative Photo THE LEARNING EXPERIENCE...THE LEARNING EXPERIENCE ... Representative Photo. NON-ENDORSEMENT & DISCLAIMER NOTICE. CONFIDENTIALITY & DISCLAIMER. The information

THE LEARNING EXPERIENCEIN LEAGUE CIT Y, T X

Offering Memorandum

Representative Photo

NON-ENDORSEMENT & DISCLAIMER NOTICECONFIDENTIALITY & DISCLAIMERThe 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 a service mark of Marcus & Millichap Real Estate Investment Services, Inc.

© 2017 Marcus & Millichap. All rights reserved.

NON-ENDORSEMENT NOTICEMarcus & 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.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.

PLEASE CONSULT YOUR MARCUS & MILL ICHAP AGENT FOR MORE DETAILS.

THE LEARNING EXPERIENCEI N L E A G U E C I T Y , T X

MITCHELL KIVENAssociate

Associate Member - National Retail GroupChicago O’Hare Office

Tel: 773.867.1587 Fax: 773.867.1510

[email protected] IL 475.164486

BRIAN PARMACEKFirst Vice President InvestmentsDirector - National Retail Group

Chicago Downtown OfficeTel: 312.624.7010Fax: 312.327.5410


EXCLUSIVELY L ISTED BY

O F F I C E S N A T I O N W I D E A N D T H R O U G H O U T C A N A D A

WWW.MARCUSMILLICHAP.COM

Actual Property

TIM SPECKBroker of Record

First Vice President/District ManagerDallas Office

Tel: [email protected]

THE LEARNING EXPERIENCE2351 FM 646 RD W,

DICKINSON, TX 77539

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07 19

16EXECUTIVE SUMMARYSECTION 1 Investment Overview • Investment Highlights

PROPERTY DESCRIPTIONSECTION 2 Property Details • Regional Map • Property Photos

MARKET OVERVIEWSECTION 4 Location Overview • Location Highlights • Demographics

FINANCIAL ANALYSISSECTION 3 Pricing Details

TABLE OF CONTENTS

EXCLUSIVELY LISTED BY:


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, as-sumptions 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. © 2017 Marcus & Millichap ACT ID Z0000000

7.15% CAPBRAND NEW CONSTRUCTION | 16 YEAR LEASE | 10% INCREASES EVERY FIVE YEARS

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EXECUTIVESUMMARY

THE LEARNING EXPERIENCE

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OFFERING HIGHLIGHTS

2351 FM 646, Dickinson, TX 77539

OFFERING PRICE

$3,776,000CAP RATE

7.15%VITAL DATA

Price $3,776,000

Cap Rate 7.15%

Cash on Cash Return 7.72%

Price/SF $377.60

Gross Square Feet 10,000 SF


MMCC QUOTE

Interest Rate 4.75%

Amoritization 25 Years

Fixed Term 5 Years

LTV 65%

Loan quotes are time sensitive and subject to change, please contact Dean Giannakopoulos with Marcus & Millichap Capital Corp for more information. Direct: (312) 327-5423

STRONG LOCATION ON A DENSE RETAIL CORRIDOR


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INVESTMENT OVERVIEWMarcus & Millichap is pleased to present the fee simple interest in The Learning Experience, located in League City, Texas: a new construction childcare center, net leased to the nation’s fastest growing childcare & early education company. While the typical Learning Experience lease is 15 years, this investment carries a 16 year lease with 10 percent increases every five years, as well as a five-year limited corporate guarantee. The standards for assigning franchisees to Learning Experience childcare centers are very high, as is the cash investment that the franchisee and franchisor make in the business. Correspondingly, the high success rate enjoyed by franchisees should give confidence to most investors seeking an above market return.

Located within the Houston MSA (the 4th largest in the United States), League City and the surrounding suburbs support a growing population and strong economy. Given the high visibility of this site, on a dense retail corridor, The Learning Experience in League City is positioned to generate strong revenues for its operator, as well as serving to increase TLE’s brand awareness. From a demographics perspective, the site selection for the League City location far exceeds the standards set by The Learning Experience. The population density within a three mile radius is 50 percent greater than TLE’s density requirements, while household incomes within a three mile radius are about 42 percent higher than TLE’s already high standard for average household incomes.

Sophisticated childcare programs like The Learning Experience have become increasingly essential to families, particularly dual income households working in the modern economy. The childcare business also has inherent resistance both to economic downturns and to e-com-merce.

Please contact your preferred Marcus & Millichap broker for more information about this opportunity.

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► Brand New Construction | 16 Year Lease

► 10 Percent Increases Every Five Years

► $107,141 Ave HH Income

► 11 Percent Population Growth Within Five Years

► 600 Feet From Elementary School

► Located in TX | Income Tax Free State

► Residual Use | Building Has No Interior Load Bearing

Columns, Making It Easy to Repurpose

► 1.24 Acres of Land, Includes a 5,000 SF Playground

► Class A Finishes | High End Build-Out

SCHOOLS SHOPPING CENTER MAJOR HIGHWAY

INVESTMENT HIGHLIGHTS

CLOSE PROXIMITY TO:




LOCATED 30 MILES SOUTHEAST OF DOWNTOWN HOUSTON

THE FOURTH LARGEST MSA IN THE UNITED STATES

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PROPERTYDESCRIPTION


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TENANT DETAILSThe Learning Experience is the fastest growing childcare and early education company in the United States. A typical TLE has a 15 year lease;

however, this asset carries a 16 year lease, negotiated by the developer, which includes a 5-year limited corporate guarantee. The success

rate for franchisees is incredibly high, and the standards for assigning operators to new Learning Experience centers are equally rigorous.


Property Address 2351 FM 646, Dickinson, TX, 77539

Tenant Name The Learning Experience

Website www.thelearningexperience.com

Parent Company The Learning Experience

Headquartered Deerfield Beach, FL

Rentable Square Feet 10,000 SF

Estimated Rent Commencement 6/1/2018

Estimated Lease Expiration 5/31/2034

No. of Locations 200+

Actual Property

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ADVANTAGES OF CHILDCARE AS A NET-LEASED INVESTMENTThe childcare industry is forecasted to increase at an average annual rate of 3.4 percent to become a $62.1 Bil-

lion industry over the next five years. The industry as a whole is growing every year, as dual income families be-

come the dominant household structure in our economy. In fact, 64.7 percent of households with children under

six are dual income families. As demographic trends become manifest – millennials start families of their own,

etc. – this will continue to drive additional growth in the industry. Furthermore, evidence supports the long-lasting

benefits to childhood development that sophisticated, early education childcare programs like those developed by

The Learning Experience provide.

Relative to comparable net-leased retail investments, childcare as an asset type is service oriented

and resistant to e-commerce. It is also has inherent advantages to weather the effects of recession and

economic downturns, especially compared to conventional brick & mortar retail.



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MARKET DRIVERS ► Strong Traffic Counts - Over 20,000 VPD - Positioned on Going-to-Work Side of Traffic

► Located 1/2 Mile From Inland Owned Power Center, 1/2 Mile From Cloverleaf Entrance to I-45

► Located 0.6 Miles From H.E.B. Plus Grocery Store

► Easy Access - Branded Signage - 160 ft of Frontage on FM 646

► Located at the Entrance to Bay Colony Master Planned Community

AREA AMENITITES ► Over 46,000 People Within a Three Mile Radius

► Home to 110,000 Square Foot University of Texas Specialty Care Center

► Thirty Miles South of Houston

► 600 Feet From Bay Colony Elementary School

► Close Proximity to Major Retail


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LOCAL ATTRACTIONS

► H.E.B. 0.6 Miles from site

► Walmart 1.1 Miles from site

► Walgreens 0.4 Miles from site

RETAIL RESTAURANTS SCHOOLS

► Lowe’s 1.2 Miles from site

► Kohl’s 0.8 Miles from site

► Home Depot 1.3 Miles from site

► TJ Maxx 1.1 Miles from site

► Kroger 1.4 Miles from site

► Best Buy 1.5 Miles from site

► Target 1.2 Miles from site

► Hobby Lobby 1.3 Miles from site

► 24-Hour Fitness 1 Mile from site

► Starbucks 1.2 Miles from site

► Chili’s 0.9 Miles from site

► Chick-Fil-A 1 Mile from site

► McDonald’s 0.9 Miles from site

► Burger King 1.1 Miles from site

► Bay Colony Elementary School 0.3 Miles from site

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2/15/2018 Google Maps

https://www.google.com/maps/@29.6020168,-95.196588,11z 1/1

Map data ©2018 Google, INEGI 2 mi


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LOCATED 0.6 MILES FROM H.E.B. PLUS GROCERY STORE

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FINANCIALANALYSIS

PROPERTY NAME HERE



7.72%CASH ON CASH RETURN AT LIST PRICE



FINANCIALANALYSIS


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PROPERTY SUMMARY

THE OFFERING

Property The Learning Experience

Property Address2351 FM 646

Dickinson, TX 77539

Price $3,776,000

Capitalization Rate 7.15%

Price/SF $377.60

ANNUALIZED OPERATING INFORMATION

INCOME $270,000

Net Operating Income $270,000

PROPERTY DESCRIPTION

Year Built / Renovated 2018

Gross Leasable Area 10,000 SF

Zoning Commercial

Type of Ownership Fee Simple

Lot Size 1.24 Acres

LEASE SUMMARY

Property Subtype Net Leased Child Care

Tenant The Learning Experience

Rent Increases 10% Every 5 Years

Guarantor Limited Corporate Guarantee

Lease Type Triple Net (Excludes Roof and Structure)

Estimated Rent Commencement June 1st, 2018

Estimated Lease Expiration May 31st,2034

Lease Term 16

Term Remaining on Lease (Years) 16

Renewal Options Two 5-Year Options

Tenant Responsibility All Expenses Excluding Roof and Structure

Right of First Refusal/Offer Yes

LEASE SUMMARY

YEAR ANNUAL RENT MONTHLY RENT RENT/SF CAP RATE

Current* $270,000 $22,500 $27.00 7.15%

Years 2-5 $270,000 $22,500 $27.00 7.15%

Years 6 - 10 $297,000 $24,750 $29.70 7.87%

Years 11 - 16 $326,700 $27,225 $32.67 8.65%

Option 1 (Years 16-21) $359,370 $29,948 $35.94 9.52%

Option 2 (Years 21-26) $395,307 $32,942 $39.53 10.47%

YEAR OF NEXT RENT INCREASE 2023

*Like all Learning Experience leases, this lease features a graduated rental stream that increases over the course of the first 12 months to a $22,500 monthly rent. The purpose of this is to allow the tenant time to ramp up their enrollment; however, unlike most TLE leases which are 15 years, this lease provides an extra year of income to an investor.

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107,289TOTAL POPULATION WITHIN 5-MILE RADIUS



MARKETOVERVIEW


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LOCATION OVERVIEWLeague City is a rapidly growing city located between Houston and Galveston, TX. With a population

of 102,010 and an annual expansion rate of just over five percent since 2000, League City contin-

ues to attract top-level residential and commercial developers. In 2016 there were over 10,000 new

residential construction starts due to the attractive job market and excellent accessibility, as League

City is centrally located on Interstate 45 and within 20 miles of two airports. Compared to other ma-

jor metropolitan areas, League City offers affordable housing and a relatively low cost of living, along

with robust parks and activities network (27 miles of hiking and bike trails, over 600 acres of parks).

The average household income in the community is $108,428, and this combined with one of the

region’s lowest unemployment rates (4.3%) sets the table for continued growth and appreciation of

assets. The city prides itself on a business-friendly climate with an economic base that includes the

aerospace, energy, medical, and tourism industries.

League City is located within the Houston MSA, the nation’s fourth most populous MSA, housing

2.3 million residents in the city proper and 6.8 million in the Houston Metro Area. The strong labor

force has contributed to a high-growth environment for businesses in the

area, evidenced by one of the lowest unemployment figures for a metro area

in the country. With expanding economic activity in the area (GDP expected

to more than double between 2015 and 2040), the world’s largest medical

complex at the Texas Medical Center, and the largest concentration of

engineers and architects in the country, as well as world-class entertainment

(Texans, Astros, Rockets) and retail districts, Houston serves as a

premier profit center for businesses and investors alike.

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DEMOGRAPHICS HIGHLIGHTS

46,521

$101,577 37,338

TOTAL POPULATION IN A THREE MILE RADIUS

AVERAGE HOUSEHOLD INCOME IN A THREE MILE RADIUS

TOTAL HOUSEHOLDS IN A FIVE MILE RADIUS

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UNIT TYPE 1 MILE 3 MILES 5 MILES

2022 ProjectionTotal Population

9,301 49,366 114,207

2017 EstimateTotal Population

8,577 46,521 107,289

2010 CensusTotal Population

7,129 39,775 92,080

2000 CensusTotal Population

1,409 22,772 53,764

HOUSEHOLDS 1 MILE 3 MILES 5 MILES

2022 ProjectionTotal Households

3,344 17,419 40,443

2017 EstimateTotal Households

3,037 16,110 37,338

2010 CensusTotal Households

2,535 13,844 32,125

2000 CensusTotal Households

527 8,070 18,889

HOUSING UNITS 1 MILE 3 MILES 5 MILES

Occupied Units

2022 Projection 99.0% 96.3% 96.1%

2017 Estimate 98.6% 96.2% 96.0%

Owner Occupied 78.9% 76.1% 73.7%

Renter Occupied 21.1% 23.9% 26.2%

Vacant 1.4% 3.9% 4.0%

Units In Structure

2017 Estimate Total

Occupied Units98.6% 96.2% 96.0%

1 Person Units 82.7% 79.1% 77.1%

2 Person Units 0.2% 0.2% 0.5%

3-4 Person Units 0.1% 2.1% 1.9%

5-9 Person Units 1.5% 2.3% 2.7%

10-19 Person Units 8.3% 4.8% 4.8%

20-49 Person Units 2.3% 1.2% 1.5%

50 or more Person Units 4.1% 3.5% 2.2%

HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES

2017 Estimate

$150,000 or More 12.8% 16.2% 15.6%

$125,000 - $149,999 12.8% 9.4% 9.4%

$100,000 - $124,999 11.3% 10.5% 11.1%

$75,000 - $99,999 18.6% 14.4% 14.4%

$60,000 - $74,999 11.3% 10.9% 10.7%

$50,000 - $59,999 6.7% 7.0% 7.2%

$40,000 - $49,999 4.8% 5.1% 6.2%

$30,000 - $39,999 5.8% 7.8% 7.3%

$20,000 - $29,999 4.8% 6.7% 6.5%

$19,999 or Below 4.1% 5.2% 4.3%

Average Household Income $98,960 $101,577 $99,253

Median Household Income $82,028 $75,782 $75,676

Per Capita Income $35,040 $35,238 $34,618

HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES

Population By Age

2017 Estimate Total Population 8,577 46,521 107,289

Under 20 34.3% 31.2% 31.0%

20 - 34 Years 23.1% 20.1% 20.3%

35 - 44 Years 16.3% 15.0% 15.4%

45 - 54 Years 9.8% 12.5% 12.8%

55 - 64 Years 9.3% 11.1% 10.9%

Age 65+ 7.2% 10.1% 9.8%

Median Age 31.7 34.2 34.3

Population 25+ by Education Level

2017 Estimate Population Age 25+ 5,212 29,386 67,889

Elementary (0-8) 2.2% 4.2% 4.0%

Some High School (9-11) 3.2% 5.0% 4.5%

High School Graduate (12) 18.9% 22.9% 22.9%

Some College (13-15) 22.4% 22.0% 23.0%

Associate Degree Only 14.6% 9.9% 9.9%

Bachelors Degree Only 29.1% 23.9% 23.5%

Graduate Degree 9.4% 10.5% 10.7%

Population by Gender

2017 Estimate Total Population 8,577 46,521 107,289

Male Population 48.5% 48.7% 49.2%

Female Population 51.5% 51.3% 50.8%

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E X C L U S I V E LY L I S T E D B Y


MITCHELL KIVENAssociate

Associate Member - National Retail GroupChicago O’Hare Office

Tel: 773.867.1587 Fax: 773.867.1510


BRIAN PARMACEKFirst Vice President InvestmentsDirector - National Retail Group

Chicago Downtown OfficeTel: 312.624.7010Fax: 312.327.5410



TIM SPECKBroker of Record

First Vice President/District ManagerDallas Office

Tel: [email protected]

Documents

Representative Photo THE LEARNING EXPERIENCE...THE LEARNING EXPERIENCE ... Representative Photo. NON-ENDORSEMENT & DISCLAIMER NOTICE. CONFIDENTIALITY & DISCLAIMER. The information