Vision Design Prototype Representative Photo...Irvine, CA 92612 Phone: (949) 221–1800 Fax: (949) 221–1830 INVESTMENT ADVISORS: Christopher DePierro Managing Director [email protected]

Vision Design PrototypeRepresentative Photo

EL POLLO LOCO7820 FOLSOM BOULEVARD, SACRAMENTO, CA 95826

The information contained herein has been carefully compiled from sources we consider reliable, and while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date. The proforma revenues and expenses set forth in this brochure do not constitute a representation, warranty, or guaranty of any of the numbers set forth herein or of any economic value attributable to the property or income that may be derived therefrom. Independent estimates of proforma revenues and expenses should be developed before any decision is made on whether to invest in the property.

18301 Von Karman Avenue Suite 800

Irvine, CA 92612

Phone: (949) 221–1800

Fax: (949) 221–1830

www.farislee.com

INVESTMENT ADVISORS:

Christopher DePierroManaging [email protected](949) 221-1824R.E. License No 01158321


PRICING ANALYSIS 14 AREA OVERVIEW 17PROPERTY OVERVIEW 4

STATEMENT OF CONFIDENTIALITY & DISCLAIMERFaris Lee Investments (“FLI”) has been engaged as the exclusive financial advisor to the Seller in connection with Seller’s solicitation of offers for the purchase of the property known as El Pollo Loco, City of Sacramento, County of Sacramento, State of California. Prospective purchasers are advised that as part of the solicitation process, Seller will be evaluating a number of factors including the current financial qualifications of the prospective purchaser. Seller expressly reserves the right in its sole and absolute discretion to evaluate the terms and conditions of any offer and to reject any offer without providing a reason therefore. Further, Seller reserves the right to terminate the solicitation process at any time prior to final execution of the Purchase Agreement.

The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property, and it is not to be used for any other purpose or made available to any other person without the express written consent of Seller or FLI. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by FLI from sources it deems

reasonably reliable. Summaries of any documents are not intended to be comprehensive or all-inclusive, but rather only outline some of the provisions contained therein and qualified in their entirety by the actual document to which they relate.

No representation or warranty, expressed or implied, is made by the Seller, FLI, or any of their respective affiliates as to the accuracy or completeness of the information contained herein. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the Property site or used in the construction or maintenance of the building at the Property site.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase

Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or FLI or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

Prospective purchasers are not to construe the contents of this Offering Memorandum or any prior or subsequent communication from FLI or Seller or their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents as legal, tax, or other advice. Prior to submitting an offer, prospective purchasers should consult with their own legal counsel and personal and tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment.

TABLE OF CONTENTS


PROPERTY OVERVIEW

PRICING

Pricing: $2,615,000

NOI: $102,000

Cap Rate: 3.90%

INVESTMENT SUMMARY

Faris Lee Investments is pleased to offer for sale the leased fee interest (land) in a brand new (under construction) freestanding drive thru, single tenant, Absolute NNN ground leased El Pollo Loco Inc, located in Sacramento, CA. The tenant, El Pollo Loco, is responsible for constructing the building to its prototypical specifications, and is estimated to open in January 2018. Upon opening, El Pollo Loco will have 20 years of initial term remaining on the NNN ground lease, which features 10% increases every 5 years throughout the initial term and 10% rental increases at the beginning of each Option Period.

El Pollo Loco is a subsidiary of El Pollo Loco Holdings, Inc., which is a publicly traded company, with 2016 revenues of $380.12 million 2016 net income of $18.34 million, 2016 assets of $471.30 million, and 470 El Pollo Loco locations in Arizona, California, Nevada, Utah, and Texas

LOCATION SUMMARY

El Pollo Loco is strategically located at the SWQ of Folsom Boulevard and Power Inn Road/Howe Road (72,000 VPD) , and is also one block south of the on / off ramp of Interstate 50 (175,000 VPD). The property is located on an outparcel to a Home Depot anchored center, which creates strong tenant synergy and crossover foot traffic. El Pollo Loco also benefits from being located at the signalized intersection of Folsom Blvd. & Hornet Drive, which is one of the main streets leading directly to Cal State University - Sacramento. Cal State University – Sacramento (30,000 Students) is located within walking distance of the property, and further creates a built in customer base and strong consumer demand in the immediate trade area. Additionally, there are more than 367,000 permanent residents with an average household income higher than $70,000 within 5 miles of the subject property, and approximately 85,000 daytime employees within a 3 mile radius.

PROPERTY OVERVIEW · 5

INVESTMENT SUMMARY

Vehicles Per Day

Folsom Boulevard: 17,000

Howe Avenue / Power Inn Road: 55,000

U.S. Interstate 50: 175,000

PARCEL NUMBERS

PARCEL ACRES SQUARE FEET079-0230-044-0000 0.83 36,300

PARCEL MAP

TRAFFIC COUNTS (COSTAR)PROPERTY SPECIFICATIONSRentable Area: 2,993 SFSF Land Area: 36,300 SF / 0.83 AcresYear Built: 2017Zoning: C-2 - General Commercial

Ownership: Leased Fee (Land)Guaranty: CorporateTenant: El Pollo Loco

Address: 7820 Folsom Boulevard, Sacramento, CA 95826Access: There are two (3) access points, two (2) along Folsom Boulevard and one (1) along Power Inn Road.Improvements: There is approximately 2,993 SF of existing building area.Parking: There are approximately 30 dedicated parking stalls on the owned parcel. The parking ratio is

approximately 10 parking stalls per 1,000 SF of leasable area.


PROPERTY SPECIFICATIONS

CORPORATE GUARANTY BY STRONG REGIONAL TENANT - EL POLLO LOCO (NASDAQ: LOCO)

El Pollo Loco is a wholly owned subsidiary of El Pollo Loco Holdings, Incorporated. The company franchises, licenses, owns, and operates quick-service restaurants. As of September 2017, the company operated approximately 460 company-owned and franchised restaurants in Arizona, California, Nevada, Texas, and Utah. The company was founded in 1980 and is headquartered in Costa Mesa, California.

Company Type: Public (NASDAQ: LOCO)2017 Employees: 5,3552016 Revenue: $380.12 Million2016 Net Income: $18.34 Million2016 Assets: $471.30 Million2016 Equity: $265.18 Million

BRAND NEW FAVORABLE 20 YEAR NNN GROUND LEASE WITH STRUCTURED INCREASES

Q Ground lease features 10% rental increases every 5 years throughout the initial term and option periods

Q Provides Investor with Long Term NOI Growth and Stability

ABSOLUTE NNN GROUND LEASE / LEASED FEE OWNERSHIP Q Minimal landlord management - passive investment Q Ideal investment to satisfy a 1031 exchange

NEW EL POLLO LOCO DRIVE THRU “VISION” DESIGN PROTOTYPE / HIGH QUALITY CONSTRUCTION

Q Tenant responsible for construction of Building Improvements. Q The building is being constructed to tenant’s exact specifications Q Features the latest El Pollo Loco “vision” brand design and store concepts

DYNAMIC SIGNALIZED LOCATION SOLIDIFIED BY MAJOR ANCHOR TENANT / UNIQUE TRAFFIC GENERATORS

Q El Pollo Loco is strategically located on an outparcel to a Home Depot anchored center

Q Surrounded by numerous hotels and high schools

LOCATED ADJACENT TO CALIFORNIA STATE UNIVERSITY - SACRAMENTO (30,000 STUDENTS)

Q El Pollo Loco sales will benefit greatly from its close proximity to California State University - Sacramento

Q The asset is located at the signalized intersection of Folsom Boulevard & Hornet Road, which leads directly to the College Campus

OUTSTANDING DEMOGRAPHICS IN IMMEDIATE TRADE AREA Q Subject property is located in an affluent trade area within Sacramento,

which has more than 367,000 permanent residents with an average household income in excess of 70,000 within a 5-mile radius

Q Additionally the site benefits from over 85,000 employees within a 3-mile radius

DIVERSE ECONOMIC GENERATORS / CALIFORNIA STATE CAPITOL Q Sacramento economy is thriving due to a diverse economic base driven by

the Life Science Industry, Agriculture Industry, and the State Government Q Approximately 170,000 new residents moved to Sacramento from 2014-

2015

FREEWAY LOCATION Q The property is located one block south of the on / off ramp of Lincoln

Highway / Interstate 50 (175,000 vehicles per day) and Howe Road, which is a major freeway interchange serving the trade area


INVESTMENT HIGHLIGHTS


AERIAL VIEW


LOCATION MAP

DRIVE-THRU ELEVATION

FRONT ELEVATION


“VISION” DESIGN RENDERINGS


AERIAL VIEW

Folsom Boulevard

Driv

e-Th

ru

SITE PLAN NOT TO SCALE



SITE PLAN EXTERIOR SIGNAGE


AERIAL VIEW


PRICING ANALYSIS

EL POLLO LOCO HOLDINGS

El Pollo Loco is a wholly owned subsidiary of El Pollo Loco Holdings, Incorporated. The company franchises, licenses, owns, and operates quick-service restaurants under the El Pollo Loco brand. The company boasts having 21 straight quarters of positive comparative restaurant sales as of January 2017. In September 2017, the company operated approximately 460 company-owned and franchised restaurants in Arizona (22 locations), California (373 locations), Nevada (27 locations), Texas (34 locations), and Utah (4 locations). In the company’s 2017 yearly report, it preludes to expanding by approximately 1,900 restaurants nationwide, with growth focused on southwest Texas and by maintaining balanced opening in existing markets. El Pollo Loco also plans to continue to grow its franchise base and improve its performance in non-core markets to reach their goal. The company was founded in 1980 and is headquartered in Costa Mesa, California.

Company Type: Public: (NASDAQ: LOCO)2017 Employees: 5,3552016 Net Income: $18.34 Million2016 Equity: $265.18 Million

Fiscal Year End: December2016 Revenue: $380.12 Million2016 Assets: $471.30 MillionWebsite: www.elpolloloco.com

Annual$/SF

2,993 $8,500 $2.84 $102,000 $34.08 Jan-2023 10% $9,350 $3.12 $112,200 $37.49 Absolute 1/1/2018 12/31/2037Jan-2028 10% $10,285 $3.44 $123,420 $41.24 NNN EstimatedJan-2032 10% $11,314 $3.78 $135,762 $45.36

Notes: Tenant has a 30 day Right of First Refusal

MonthlyRent$/SF

Current Monthly

Rent

CAM Recovery

Type

LeaseStart

LeaseExpires

CurrentAnnual

Rent

AnnualRent$/SF

IncreaseDate Increase Monthly

RentMonthly

$/SFAnnual

RentLease Options

Option 1: $12,445/moOption 2: $13,869/moOption 3: $15,058/mo

Size (SF)Tenant

El Pollo Loco 2 (5-year) & 1 (4-year)

Rental Increases

(Ground Lease)

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness. PRICING ANALYSIS · 15

RENT ROLL

TENANT SYNOPSIS

Financial Information Lease Type: Ground LeasePrice: $2,615,000

Property SpecificationsRentable Area: 2,993 SFLand Area: 0.85 AcresYear Built: 2017Address: 7820 Folsom Boulevard

Sacramento, CA 95826APN: 079-0230-044-0000Tenant: Corporate

Estimated Operating Information In-Place Jan-2023

Gross Potential Rent $102,000 $112,200Plus Recapture NNN NNN

Effective Gross Income $102,000 $112,200Less Expenses (NNN) (NNN)

Net Operating Income $102,000 $112,200

Cap Rate: 3.90% 4.29%

Tenant is responsible for taxes, insurance, CAM, roof and structure. Landlord has zero responsibilities.

The above information has been obtained from sources we believe to be reliable, however we cannot accept responsibility for its correctness.

PRICING ANALYSIS · 16

TRANSACTION SUMMARY

AREA OVERVIEW

MAJOR INDUSTRIES

NEARBY ATTRACTIONS

TOP SCHOOLS

RECENT DEVELOPMENTS

FAST FACTS

A diverse and growing cityCalifornia State Capital Sacramento is the capital city of California. The city holds the county seat for Sacramento County, is the 6th largest city in California, and the 35th largest city in the United States. The cities metropolitan area includes seven counties, which has an estimated population of more than 2.5 million. The metropolitan area is the 4th largest in California and the 25th largest in the United States. Sacramento Growth Sacramento has experienced growth of nearly 1.5 percent, making the city the fasted growing city in California according to ABC News. This also is reflected in business. Sacramento is home to more than 22,000 businesses, with its main industries being agriculture, healthcare, government, and more.Population 495,700 residentsAHHI $72,000

Sacramento is experiencing development in the areaRailyards This new 244 acre site will transform the historic Union Pacific site into a dynamic urban environment. The site will feature 1 million square feet of retail, 2.3 million square feet of office, a hotel, residential housing, and more. Curtis Park RailyardCurtis Park Railyard is a 72-acres infill development site near the Sacramento City College. The development will include single family homes, condos, apartments, and 259,000 square feet of retail.Delta ShoresDelta Shores is a 800-acre master planned development that will encompass 1.3 million square feet of planned retail, 250,000 square feet of hotel and commercial uses, and 5,200 residents. Township 9A 65-acre development that will bring up 2,350 housing units, 150,000 square feet of retail, and more than 800,000 square feet of office.

Sacramento is greatly impacted by several industriesAgriculture Sacramento is home to companies such as Blue Diamond Growers, who supplies 80% of the worlds almond supply, as well as other major agriculture companies such as HP Hood, Imperial Valley Seeds, and more. The industry has an economic impact in excess of $3 billion and provides around 6,400 jobs.Clean Technology and Energy With strong regional initiatives for clean energy and technology, Sacramento has seen major growth in this sector. The industry is home to more than 200 companies in the area that support over 3,000 jobs and $846 million in annual sales. Life Science and Healthcare Life Science and Health care in Sacramento is a $8.64 billion industry in Sacramento. The industry supplies more than 98,000 jobs and provides 20% of the total payroll for the Sacramento region.

Sacramento enjoys access to several highly-ranked colleges and universitiesCalifornia State University - Sacramento Founded in 1947, CSU Sacramento enrolls more than 27,800 undergraduate students. The university has a regional economic impact of $816 million and more than $1 billion statewide. Additionally, the university sustains nearly 9,000 jobs in the region and statewide economy. University of California Davis UC Davis was founded in 1905 and has an enrollment in excess of 29,000 undergraduate students. The university supplies an estimated economic impact of $6.8 billion and provides 65,000 jobs within the local region. Sacramento City College Sacramento City College is a local community college with an enrollment of more than 24,000 students. The college employes over 800 faculty and staff.

Some of Northern California’s best attractions are just a short distance from Sacramento California Railroad Museum Visited by more than 500,000 visitors annually, the California Railroad Museum is a 225,000 square foot facility. The museum displays many exhibits demonstrating the 200 years of railroad history with California.Sutter’s Fort Visited by more than 100,000 guests annually, Sutter’s Fort is a California State Historic Park in Sacramento. The park displays exhibits of the many cultures that inhabited the area during the 1840’s. Sacramento Zoo The Sacramento Zoo is visited by more than 500,000 guests annually. The zoo was founded in 1927 and since has grown to house more than 500 animals. Additionally, the zoo experienced more than 1,500 volunteers in 2016 and will have it’s 90th anniversary in 2017.


SACRAMENTO OVERVIEW

UC DAVIS MEDICAL CENTERThe UC Davis Medical Center is a 142-acre medical center that is located within Sacramento. The center is owned and operated by the University of California Davis and additionally is the locations for the university’s medical school.

UC Davis Medical Center is the largest employer in Sacramento, with more than 10,500 full time and part time employees. The medical center is home to more than 620 licensed beds and in 2016 experienced more than 79,400 emergency room visits, 934,400 clinic and office visits, and had more than 33,000 admissions. Additionally, the center has a combined economic impact throughout Northern California of more than $3.4 billion and a direct impact of $1.6 billion.

The UC Davis school of medicine is also part of this medical center. The school employs more than 1,400 faculty and other academic personnel (full time and part time) and has more than 880 students. Additionally, the center has nearly 1,000 studies underway, for research in cancer, cardiovascular health, health policy, and much more.

CALIFORNIA STATE CAPITOL BUILDINGThe California State Capitol Building is located in the heart of Sacramento. The building began its construction in 1860, and was not completed until 1874. The building went under its most recent re-construction in 1971 to strengthen and reinforce the weakening structures. The project was finished in 1982.

The Capitol Building is home to the Legislature of California, which is comprised of 40 state Senators and the 80 members of the California general assembly. Additionally, the building is also the office for Governor Jerry Brown.

The California Capitol Building also is comprised of a museum within it. The building attracts more than 1 million visitors annually who come to see the historic building and the history behind it. The museum allows for tours of the building as well as Capitol Park, which includes a World Peace Rose Garden, plantings from around the world, and memorials and monuments.

POPULATION GROWTH SINCE 2000

32.85%

MEDIAN AGE IN SACRAMENTO

33.8 Yrs

HOME APPRECIATION IN THE LAST 12 MONTHS

8.90%

MEDIAN HOME VALUE$227,200

PREDICTED JOB GROWTH OVER THE NEXT 10 YEARS

38.34%

RECENT JOB GROWTH IN SACRAMENTO

2.27%

AVERAGE COMMUTE TIME24 Mins


SACRAMENTO FAST FACTS

DESCRIPTION (WWW.ROL3.SITESUSA.COM) 5 MILE3 MILE1 MILE2017 Estimated Population 10,273 139,325 367,354

2022 Projected Population 10,874 149,050 393,539

2010 Census Population 9,710 131,067 343,567

2000 Census Population 9,908 134,323 350,151

Projected Annual Growth 2017 to 2022 1.2% 1.4% 1.4%

Historical Annual Growth 2000 to 2017 0.2% 0.2% 0.3%

2017 Median Age 34.4 36.3 36.2

2017 Estimated Households 4,536 56,259 146,768

2022 Projected Households 4,712 58,920 153,852

2010 Census Households 4,326 53,483 138,204

2000 Census Households 4,393 55,392 141,848

Projected Annual Growth 2017 to 2022 0.8% 0.9% 1.0%

Historical Annual Growth 2000 to 2017 0.2% 0.1% 0.2%

2017 Estimated White 56.5% 54.9% 52.3%

2017 Estimated Black or African American 9.3% 10.5% 11.7%

2017 Estimated Asian or Pacific Islander 13.9% 14.9% 15.6%

2017 Estimated American Indian or Native Alaskan 1.2% 1.1% 1.2%

2017 Estimated Other Races 19.1% 18.6% 19.3%

2017 Estimated Hispanic 25.4% 25.9% 27.2%

2017 Estimated Average Household Income $65,967 $75,470 $70,426

2017 Estimated Median Household Income $50,718 $62,894 $57,207

2017 Estimated Per Capita Income $29,428 $30,620 $28,283

2017 Estimated Total Businesses 609 7,767 22,750

2017 Estimated Total Employees 7,496 84,886 271,112

2017 Estimated Employee Population per Business 12.3 10.9 11.9

2017 Estimated Residential Population per Business 16.9 17.9 16.1

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©2017, Sites USA, Chandler, Arizona, 480-491-1112 page 1 of 2 Demographic Source: Applied Geographic Solutions 04/2017, TIGER Geography


DEMOGRAPHICS

EL POLLO LOCO7820 FOLSOM BOULEVARD, SACRAMENTO, CA 95826

The information contained herein has been carefully compiled from sources we consider reliable, and while not guaranteed as to completeness or accuracy, we believe it to be correct as of this date. The proforma revenues and expenses set forth in this brochure do not constitute a representation, warranty, or guaranty of any of the numbers set forth herein or of any economic value attributable to the property or income that may be derived therefrom. Independent estimates of proforma revenues and expenses should be developed before any decision is made on whether to invest in the property.

18301 Von Karman Avenue Suite 800

Irvine, CA 92612

Phone: (949) 221–1800

Fax: (949) 221–1830

www.farislee.com

INVESTMENT ADVISORS:

Christopher DePierroManaging [email protected](949) 221-1824R.E. License No 01158321


Documents

Vision Design Prototype Representative Photo...Irvine, CA 92612 Phone: (949) 221–1800 Fax: (949) 221–1830 INVESTMENT ADVISORS: Christopher DePierro Managing Director [email protected]