Offering Memorandum - Property Line

INVESTMENT OPPORTUNITY

Katy, Texas Kenneth Mayberry

Director (214) 572-8466 [email protected]

Fritz Konker

Associate (214) 572-8471 [email protected]

DOWNTOWN HOUSTON

CYPRESS LAKES HIGH SCHOOL

McFEE ELEMENTARY SCHOOL

FLUFFY DONUTS

W. LI 13,238 TTLE YOR K VEHIC LES P ROAD ER DA Y

ADER O R P Y R LES F N. EHIC V 0 ,12 2 3

Y KE BE SU

MILLENNIUM CLEANERS

Y A D

SUBJECT PROPERTY

EAG RAN DENT CAR

EMPIRE EA CHINESE BUFFET DONUTS DELIGHT RED CARPET LUXURY RESTAURANT NAILS

E

S W

SHERIDAN ELEMENTARY SCHOOL

AST E T

I. Executive Summary Executive Summary Investment Highlights Investment Overview Area Demographics Rent Schedule Location Overview Tenant Summary

THORNTON MIDDLE SCHOOL

4 4 5 5 5 5 5

II. Tenant Profile Tenant Overview Subject Property Rendering

6 7

III. Lease Abstract Lease Abstract

YASMEEN SALON EYSI’S BEBE NAILS EAUTY UPPLY

GLE NCH TAL RE

Table of Contents

8

IV. Market Information

BEAR CREEK BAPTIST CHURCH VIOLET NAILS S&R LIQUORS T. JIN’S CHINA CAFE MARQUIS FAMILY DENTISTRY

Local Area Photographs Aerials Location Overview Site Plan Location Maps 1, 3, & 5 Mile Radii Demographics

10 12 15 17 18 19

V. Valuation Methodology Valuation Methodology Confidential Memorandum & Disclaimer Information About Brokerage Services

23 24 25

Executive Summary Whataburger - Katy, TX

Executive Summary Capview Partners has been exclusively retained to offer a corporate Whataburger ground lease located in Katy, Texas. The property consists of a 3,312 square foot single tenant building on 43,000 square feet of land. The Whataburger property is located on Fry Road just north of the intersection with Little York Road. With anchor tenants like Kroger and a new Wal-Mart Supercenter, this intersection is the primary retail destination in its trade area and benefits from over 45,000 cars per day. The Whataburger ground lease benefits from a brand new 15 year primary term and 7% rent escalations every five (5) years.

Investment Highlights • • • •

4

Corporate Lease to Whataburger Restaurants LP with 700 locations in 10 states and over $1 billion in annual sales New 15 year primary term with four (4) five (5) year options 7% rent escalations every five (5) years in primary term and options Just north of Kroger anchored grocery center and new Wal-Mart Supercenter

Executive Summary Whataburger - Katy, TX

Area Demographics

Investment Overview Price: Cap Rate: Year 1 NOI:

$963,000 6.75% $65,000

Population

2009

2014

One Mile

2,539

3,288

Price/SF Building: Price/SF Land:

$290.76 $22.40

Five Mile

Rent/SF Building: Rent/SF Land:

$19.62 $1.51

Average Household Income

2009

2014

One Mile

$89,397

$90,915

Building Size: Land Size:

3,312 SF 43,000 SF

Three Mile

$88,519

$89,115

Five Mile

$85,621

$85,585

Rent Commencement: Primary Term: Term Remaining: Rental Escalations: Option Periods:

June 1, 2010 (projected) 15 years 15 years 7% every five (5) years Four (4) five (5) year options

Three Mile

Primary Term Rent Schedule

69,895

86,687

187,451

224,929

Option Period Rent Schedule

Years

Monthly

Annually

Years

Monthly

Annually

1 - 5

$5,417

$65,000

16 - 20

$6,636

$79,628

6 - 10

$5,796

$69,550

21 - 25

$7,100

$85,202

11 - 15

$6,202

$74,418

26 - 30

$7,597

$91,166

31 - 35

$8,129

$97,547

Location Overview The subject property is located adjacent to a Taco Bell just north of the intersection of Fry Road and W. Little York Road in the northern section of Katy, Texas. The immediate trade area is growing substantially with the recent addition of a Wal-Mart Supercenter on the southeast corner of the same intersection. The Wal-Mart is across the street from a Kroger anchored shopping center. Other major retailers in the area include Chase Bank, Sonic Drive-In, McDonald’s, Advance Auto Parts and Wells Fargo Bank. Katy is approximately 16 miles west of downtown Houston. Its Katy Independent School District is the fastest-growing school district in the Houston Metro area and one of the fastest-growing in the state. Katy is expected to continue to grow over the next decade as Houston leads the country as one of the fastest growing large cities.

Tenant Summary Whataburger Restaurants LP is a privately held regional quick service restaurant specializing in hamburgers. The company operates approximately 700 restaurants in Texas, Arizona, New Mexico, Oklahoma, Louisiana, Arkansas, Mississippi, Alabama, Florida and Georgia. The company moved its corporate headquarters to San Antonio from Corpus Christi in 2009. The move to a larger city is part of an effort to better position the company for its long term growth plans. In 2007 Whataburger surpassed $1 billion in annual sales, a benchmark that relatively few quick service restaurant companies reach. According to QSR magazine, only 21 of the top 50 chains had system wide sales of $1 billion or more.

5

Tenant Profile Whataburger - Katy, TX

Tenant Overview

Whataburger was founded in 1950 by Harmon Dobson. He opened his first store in Corpus Christi, Texas, which grew to 17 stores by 1960. Whataburger has historically been known for its distinctive A-framed, orange-and-white striped roofed buildings. While few of these original A-framed buildings are still in operation, new buildings still retain some of the distinguishing features from the original prototypes. Today, Whataburger Restaurants LP continues its tradition as a privately held regional quick service restaurant specializing in hamburgers. The company operates approximately 700 restaurants in Texas, Arizona, New Mexico, Oklahoma, Louisiana, Arkansas, Mississippi, Alabama, Florida and Georgia. The company moved its corporate headquarters to San Antonio from Corpus Christi in 2009. The move to a larger city is part of an effort to better position the company for its long term growth plans. In 2007 Whataburger surpassed $1 billion in annual sales, a benchmark that relatively few quick service restaurant companies reach. According to QSR magazine, only 21 of the top 50 chains had system wide sales of $1 billion or more.

Whataburger Restaurants LP Headquarters, San Antonio, Texas

6

Tenant Profile Whataburger - Katy, TX

Subject Property Rendering

7

Lease Abstract Whataburger - Katy, TX

Lease Abstract Tenant Name Whataburger Restaurants LP Lease Structure NNN Ground Lease Building Square Feet 3,312 square foot (approx.) free standing building Land Square Feet 43,000 Primary Term of Lease 15 years Option Periods Four (4) five (5) year renewal options with 7% rent escalations every five (5) years 8. Utilities Charges Tenant shall pay all public utility charges, including heat, water, sewer, electricity, telephone and other utility services on the Premises during the term of this Lease. 9. Taxes and Assessments In addition to the rental payments specified herein, Tenant shall pay, as they become due, all ad valorem, personal property, and other taxes levied against the Premises during the Initial Term, any Option Term and any tenancy after either, including all taxes, special assessments, charges, dues and other amounts levied against the Premises. 10. Liability Insurance Tenant shall, at its expense, provide and keep in force general liability insurance containing bodily injury and property damage combined single limit coverage of not less than Five Million Dollars ($5,000,000.00) per each occurrence. Such policies shall cover the entire Premises. 11. Casualty Insurance Tenant shall, at its expense, maintain and keep in force standard fire, extended coverage, vandalism and malicious mischief insurance on the building and improvements located on the Premises. 16. Maintenance and Repairs Except as otherwise expressly provided in this Lease, Landlord shall not be required to maintain or repair any portion of the Premises or any improvements located thereon. 21. Assignment-Subletting by Tenant Tenant may not assign this Lease or sublease all or a part of the Premises without Landlord’s prior written consent, said consent not to be unreasonably withheld or delayed. Any attempt by Tenant to do any of these actions directly, indirectly (such as through a conveyance of an ownership interest in Tenant) or by operation of law shall be void from its inception and of no force or effect. For the purpose of this Lease, a “Permitted Transfer” shall mean a transfer of this Lease to an entity which (i) directly or indirectly controls Tenant (ii) is under direct or indirect control with Tenant; (iii) is under common direct or indirect control with Tenant, and under each circumstance remains similarly related to Tenant thereafter; (iv) is the purchaser of all of Tenant’s Houston-based locations, or (v) is a vehicle with which Tenant becomes a public company through a listed securities exchange. As used in the preceding sentence, “control” shall mean the ownership of fifty percent (50%) of more of the voting securities or rights of the controlled entity. Notwithstanding the forego-

8

Lease Abstract Whataburger - Katy, TX ing provisions of this Section 21 (a), in no event shall Tenant be permitted to use a series of more than one of the permitted assignments or permitted transfers of this Lease or permitted sales or conveyances of the capital stock or other entity interests in Tenant to “spin-off’ or otherwise transfer or assign this Lease to third party unrelated to Tenant. 33. Change of Building upon Termination Landlord shall not, after the termination of this Lease, use on the Premises any trademark, trade name, service mark, sign structure or form of advertising indicative of the WHATABURGER trade names, trade marks, logos, symbols, or image (collectively the “Protected Property”). Tenant, at its option and expense, may make, or cause to be made, changes in signs and building appearance (appearance change does not contemplate structural change), including the removal or change of distinctive signs and colors which in the opinion of the owner of the Protected Property are indicative of a “WHATABURGER” affiliate or otherwise mimic, infringe upon, or encroach upon the Protected Property. Said changes must be made by Tenant within thirty (30) days after the termination of this Lease. 53. Special Provisions

e. Competitor Exclusions

During the Initial Term, any Option Term or any tenancy thereafter, Landlord agrees not to rent or sell any portion of the Shopping Center owned by Landlord as of the Effective Date, to or for any business whose primary business is the sale of prepared hamburgers including, but not limited to, Wendy’s, McDonald’s, Burger King, Sonic, Jack-in-the-Box, Dairy Queen, Steak-nShake, A&W or Prince’s; provided, however, that the foregoing restriction shall not apply to (i) the Premises, or (ii) any restaurant exceeding two thousand five hundred (2,500) contiguous square feet and not having a drive-through, such as Fuddruckers, Prince’s, Chili’s and Red Robin. For purposes hereof, a business shall be deemed to have the sale of prepared hamburgers as its primary business if such business derives twenty percent (20%) or more of its gross sales from the sale of prepared hamburgers.

9

Market Information Whataburger - Katy, TX

Local Area Property Photographs

Wal-Mart Located as an anchor to multiple in-line retail buildings on the SEC of N. Fry Rd. and W. Little York.

Kroger Located on the SWC of N. Fry Rd. and W. Little York, Kroger is anchor to Bank of America, Sonic, and a Kroger Fuel Center.

Taco Bell Located directly South and adjacent to the Subject Property.

Chase Located South of the Subject Property, Chase occupies the NWC of N. Fry Rd. and W. Little York.

10


Local Area Property Photographs

McDonald’s Located to the East of the Subject Property and directly across from the Taco Bell.

Bank of America Located in a larger format building, Bank of America is an outparcel to Kroger and adjacent to Sonic.

Sonic Located along N. Fry Rd., Sonic is uniquely situated in parallel to the thoroghfare and is an outparcel to Kroger.

Wachovia Occupying the NE hard corner across from the Subject Property, Wachovia is currently being marketed at a sale price of $1,520,000.

11


RED CARPET LUXURY RESTAURANT NAILS

DONUTS DELIGHT

SUBJECT PROPERTY

YASMEEN SALON KEYSI’S BEBE NAILS BEAUTY SUPPLY

SHERIDAN ELEMENTARY SCHOOL

EMPIRE EAST CHINESE BUFFET

EAGLE RANCH DENTAL CARE

MILLENNIUM CLEANERS

FLUFFY DONUTS

Southeastern Exposure


Y D DA A R RO PE Y S FR LE N. EHIC V 0 2 1 , 32

W. L 13,238 ITTLE YOR K VEHIC LES P ROAD ER DA Y

DOWNTOWN HOUSTON

Whataburger - Katy, TX

Market Information

12

W

S

T. JIN’S CHINA CAFE MARQUIS FAMILY DENTISTRY

VIOLET NAILS S&R LIQUORS

BEAR CREEK BAPTIST CHURCH

THORNTON MIDDLE SCHOOL

E

RED CARPET LUXURY RESTAURANT NAILS

DONUTS DELIGHT

N. FRY ROAD 32,120 VEHICLES PER DAY

LOWELL ELEMENTARY SCHOOL


Market Information

13 EMPIRE EAST CHINESE BUFFET

SUBJECT PROPERTY

13 W. ,2 L 38 IT V TLE EH IC YO LE R S KR P O ER A D D AY



DOWNTOWN HOUSTON

S

VIOLET NAILS S&R LIQUORS

BEAR CREEK BAPTIST CHURCH

W

E

T. JIN’S CHINA CAFE MARQUIS FAMILY DENTISTRY

YASMEEN SALON KEYSI’S BEBE NAILS BEAUTY SUPPLY

MILLENNIUM CLEANERS

FLUFFY DONUTS


Eastern Exposure

Zoom-in Exposure

SUBJECT PROPERTY

Y D OA ER DA R S P FRY N. HICLE VE 20 1 , 32

Whataburger Katy,TXTX Whataburger -- Katy,

Market Information

14 EMPIRE EAST CHINESE BUFFET


E W

S


Location Overview

Houston, TX - Overview Houston is the fourth-largest city in the United States and the largest city in the state of Texas. As of the 2008 U.S. Census estimate, the city had a population of 2.2 million within an area of 600 square miles (1,600 km2). Houston is the seat of Harris County and the economic center of the Houston–Sugar Land–Baytown metropolitan area—the sixth-largest metropolitan area in the U.S. with a population over 5.7 million. Houston’s economy has a broad industrial base in the energy, manufacturing, aeronautics, transportation, and health care sectors and is a leading center for building oilfield equipment; only New York City is home to more Fortune 500 headquarters in the city limits. The Port of Houston ranks first in the United States in international waterborne tonnage handled and second in total cargo tonnage handled. The city has a population from various ethnic and religious backgrounds and a large and growing international community. It is home to many cultural institutions and exhibits—attracting more than 7 million visitors a year to the Houston Museum District. Houston has an active visual and performing arts scene in the Theater District and is one of few U.S. cities that offer year-round resident companies in all major performing arts. Houston is recognized worldwide for its energy industry—particularly for oil and natural gas—as well as for biomedical research and aeronautics. Renewable energy sources—wind and solar—are also becoming popular economic bases in Houston. The ship channel is also a large part of Houston’s economic base. Because of these strengths, Houston is designated as a beta world city by the Globalization and World Cities Study Group and Network. Houston is considered to be the energy capital of the world, five of the six supermajor energy companies maintain a large base of operations in Houston. The Houston–Sugar Land–Baytown MSA’s Gross Area Product (GAP) in 2008 was $440.4 billion, slightly larger than Belgium’s, Malaysia’s, Venezuela’s or Sweden’s Gross Domestic Product (GDP). When comparing Houston’s economy to a national economy, only 21 countries other than the United States have a gross domestic product exceeding Houston’s regional gross area product.

15


Katy, Texas

Cinco Ranch Development, Katy, Texas

Katy, TX - Overview Katy is home to a diversified economy and a consistently expanding population base 16 miles west of downtown Houston. Katy is served by the Houston Community College System and the University of Houston system and its Katy Independent School District is the fastestgrowing school district in the Houston Metro area and one of the fastest-growing in the state. Katy is expected to continue to grow over the next decade as Houston leads the country as one of the fastest growing large cities.

Katy, TX - Economy Igloo Corporation is headquartered west of Katy in unincorporated Waller County. Additionally, Academy Sports and Outdoors has its corporate offices and product distribution center in unincorporated western Harris County. There is continual retail growth throughout Katy to accommodate the rapid residential growth. Major retail growth is now being focused on the Katy Fort Bend Road near the east entrance to the Katy Mills shopping mall and North Fry Road.

16


Site Plan

N. FRY ROAD 32,120 VEHICLES PER DAY

17


N. FRY ROAD 32,120 VPD

Location Maps

8 VPD

13,23

D

0 VP

32,12

18

Market Information Site Map Whataburger - Katy, TX

Prepared by STDBonline Whataburger - Katy, TX One, Three & Five Mile Radii Centered on Subject Property Site Type: Ring

©2009 ESRI

On-demand reports and maps from Business Analyst Online. Order at www.esri.com/bao or call 800-292-2224

Latitude: 29.861309 Longitude: -95.720379 Rings: 1, 3, 5 Miles

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19

Market Information

Demographic and Income Profile


Prepared by STDBonline

Whataburger Katy, TX One Mile -Demographics

Latitude: 29.861309 Longitude: -95.720379 Radius: 1 Miles

Site Type: Ring Summary

2000

2009

2014

2,056

2,539

3,288

Households

630

822

1,061

Families

543

697

892

Average Household Size

3.26

3.09

3.10

Owner Occupied HUs

569

715

933

Renter Occupied HUs

61

107

128

29.4

30.3

30.9

Population

Median Age Trends: 2009-2014 Annual Rate

Area

State

National

Population

5.31%

1.79%

0.91%

Households

5.24%

1.76%

0.94%

Families

5.06%

1.59%

0.74%

Owner HHs

5.47%

2.41%

1.19%

Median Household Income

0.06%

0.79%

2000 Households by Income

0.80%

2009

2014

Number

Percent

Number

Percent

Number

< $15,000

26

4.1%

13

1.6%

15

Percent 1.4%

$15,000 - $24,999

29

4.6%

26

3.2%

32

3.0%

$25,000 - $34,999

44

7.0%

24

2.9%

27

2.5%

$35,000 - $49,999

118

18.8%

35

4.3%

38

3.6%

$50,000 - $74,999

205

32.7%

283

34.4%

379

35.7%

$75,000 - $99,999

112

17.9%

193

23.5%

241

22.7%

$100,000 - $149,999

75

12.0%

174

21.2%

238

22.4%

$150,000 - $199,000

13

2.1%

52

6.3%

65

6.1%

5

0.8%

22

2.7%

27

2.5%

$200,000+ Median Household Income

$60,436

$77,688

$77,913


$66,869

$89,397

$90,915

Per Capita Income

$20,592

$27,054 2000

Population by Age

$27,467 2009

2014

Number

Percent

Number

Percent

Number

Percent

0-4

207

10.1%

263

10.4%

340

10.3%

5-9

219

10.7%

235

9.2%

310

9.4%

10 - 14

215

10.5%

213

8.4%

278

8.4%

15 - 19

158

7.7%

183

7.2%

214

6.5%

20 - 24

87

4.2%

148

5.8%

182

5.5%

25 - 34

393

19.1%

419

16.5%

600

18.2%

35 - 44

437

21.3%

453

17.8%

514

15.6% 13.4%

45 - 54

206

10.0%

362

14.2%

442

55 - 64

81

3.9%

168

6.6%

263

8.0%

65 - 74

34

1.7%

65

2.6%

102

3.1%

75 - 84

15

0.7%

25

1.0%

36

1.1%

3

0.1%

7

0.3%

9

0.3%

Number

Percent

Number

Percent

Number

White Alone

1,396

67.9%

1,532

60.4%

1,864

56.7%

Black Alone

227

11.0%

309

12.2%

405

12.3%

85+

2000 Race and Ethnicity

American Indian Alone Asian Alone Pacific Islander Alone Some Other Race Alone Two or More Races Hispanic Origin (Any Race)

2009

2014 Percent

7

0.3%

10

0.4%

13

0.4%

91

4.4%

137

5.4%

192

5.8%

3

0.1%

4

0.2%

6

0.2%

253

12.3%

425

16.7%

639

19.4%

79

3.8%

121

4.8%

169

5.1%

572

27.8%

979

38.6%

1,463

44.5%

Data Note: Income is expressed in current dollars. Source: U.S. Bureau of the Census, 2000 Census of Population and Housing. ESRI forecasts for 2009 and 2014. ©2009 ESRI

20


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Page 1 of 2

Market Information

Demographic and Income Profile Whataburger - Katy, TX Prepared by STDBonline

Whataburger TX Three Mile- Katy, Demographics



2000

2009

2014

Population

35,988

69,895

86,687

Households

11,089

21,413

26,467

9,426

17,873

21,875

3.24

3.26

3.27

Owner Occupied HUs

9,723

18,443

23,056

Renter Occupied HUs

1,366

2,971

3,411

30.3

31.3

31.6

Families Average Household Size


Area

State

National

4.4%

1.79%

0.91%

Households

4.33%

1.76%

0.94%

Families

4.12%

1.59%

0.74%

Owner HHs

4.57%

2.41%

1.19%

-0.33%

0.79%

Population

Median Household Income 2000 Households by Income

0.80%

2009

2014

Number

Percent

Number

Percent

Number

< $15,000

498

4.5%

516

2.4%

566

Percent 2.1%

$15,000 - $24,999

690

6.2%

768

3.6%

928

3.5%

$25,000 - $34,999

978

8.8%

1,055

4.9%

1,177

4.4%

$35,000 - $49,999

1,896

17.1%

1,400

6.5%

1,459

5.5%

$50,000 - $74,999

3,199

28.8%

6,329

29.6%

8,789

33.2%

$75,000 - $99,999

1,897

17.1%

4,996

23.3%

5,810

22.0% 19.8%

$100,000 - $149,999

1,479

13.3%

4,290

20.0%

5,249

$150,000 - $199,000

366

3.3%

1,389

6.5%

1,702

6.4%

$200,000+

109

1.0%

671

3.1%

789

3.0%


$61,179

$77,186

$75,913


$68,276

$88,519

$89,115

Per Capita Income

$21,301

$27,120 2000

Population by Age

$27,213 2009

2014

Number

Percent

Number

Percent

Number

0-4

3,489

9.7%

6,773

9.7%

8,278

Percent 9.5%

5-9

3,693

10.3%

6,417

9.2%

7,988

9.2%

10 - 14

3,676

10.2%

6,061

8.7%

7,606

8.8%

15 - 19

2,879

8.0%

5,321

7.6%

6,101

7.0%

20 - 24

1,543

4.3%

3,840

5.5%

4,742

5.5%

25 - 34

5,992

16.7%

10,245

14.7%

13,931

16.1%

35 - 44

7,706

21.4%

12,170

17.4%

13,210

15.2%

45 - 54

4,283

11.9%

10,727

15.3%

12,353

14.3%

55 - 64

1,593

4.4%

5,317

7.6%

7,864

9.1%

65 - 74

753

2.1%

1,985

2.8%

3,213

3.7%

75 - 84

313

0.9%

814

1.2%

1,094

1.3%

66

0.2%

227

0.3%

307

0.4%

Number

Percent

Number

Percent

Number

White Alone

25,449

70.7%

44,154

63.2%

51,574

59.5%

Black Alone

3,549

9.9%

8,042

11.5%

10,243

11.8%

85+


American Indian Alone Asian Alone Pacific Islander Alone Some Other Race Alone

2009

2014 Percent

154

0.4%

325

0.5%

413

0.5%

1,808

5.0%

4,156

5.9%

5,580

6.4%

24

0.1%

57

0.1%

85

0.1%

3,784

10.5%

10,174

14.6%

14,744

17.0%

Two or More Races

1,219

3.4%

2,988

4.3%

4,048

4.7%

Hispanic Origin (Any Race)

8,903

24.7%

24,426

34.9%

35,268

40.7%



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21

Market Information

Demographic and Income Profile


Prepared by STDBonline

Whataburger Katy, TX Five Mile -Demographics



2000

2009

2014

111,476

187,451

224,929

Households

36,184

60,427

72,231

Families

29,225

48,187

57,103

3.07

3.10

3.11

Owner Occupied HUs

27,538

47,184

57,722

Renter Occupied HUs

8,646

13,243

14,509

30.6

31.6

31.9

Population

Average Household Size


Area

State

National

Population

3.71%

1.79%

0.91%

Households

3.63%

1.76%

0.94%

Families

3.45%

1.59%

0.74%

Owner HHs

4.11%

2.41%

1.19%


-0.6%

0.79%

2000 Households by Income

0.80%

2009

2014

Number

Percent

Number

Percent

Number

< $15,000

2,020

5.6%

2,081

3.4%

2,184

Percent 3.0%

$15,000 - $24,999

2,623

7.2%

2,462

4.1%

2,809

3.9%

$25,000 - $34,999

3,518

9.7%

3,497

5.8%

3,706

5.1%

$35,000 - $49,999

6,325

17.5%

5,095

8.4%

5,096

7.1%

$50,000 - $74,999

9,276

25.6%

18,050

29.9%

25,894

35.8%

$75,000 - $99,999

5,868

16.2%

12,668

21.0%

13,846

19.2%

$100,000 - $149,999

4,998

13.8%

10,712

17.7%

11,919

16.5%

$150,000 - $199,000

1,134

3.1%

3,959

6.6%

4,599

6.4%

483

1.3%

1,902

3.1%

2,179

3.0%

$200,000+ Median Household Income

$58,815

$72,793

$70,627


$67,526

$85,621

$85,585

Per Capita Income

$22,217

$27,408 2000

Population by Age

$27,276 2009

2014

Number

Percent

Number

Percent

Number

0-4

10,149

9.1%

16,948

9.0%

20,157

Percent 9.0%

5-9

10,875

9.8%

16,435

8.8%

19,811

8.8%

10 - 14

10,935

9.8%

15,778

8.4%

19,137

8.5%

15 - 19

8,967

8.0%

14,530

7.8%

16,024

7.1%

20 - 24

5,705

5.1%

11,358

6.1%

13,414

6.0%

25 - 34

17,892

16.1%

27,881

14.9%

36,019

16.0%

35 - 44

23,361

21.0%

31,096

16.6%

33,987

15.1%

45 - 54

14,668

13.2%

29,089

15.5%

31,379

14.0%

55 - 64

5,231

4.7%

15,617

8.3%

21,751

9.7%

65 - 74

2,401

2.2%

5,624

3.0%

9,218

4.1%

75 - 84

1,034

0.9%

2,382

1.3%

3,088

1.4%

256

0.2%

714

0.4%

945

0.4%

Number

Percent

Number

Percent

Number

White Alone

80,579

72.3%

118,167

63.0%

132,990

59.1%

Black Alone

9,504

8.5%

19,333

10.3%

23,815

10.6%

85+


American Indian Alone Asian Alone Pacific Islander Alone Some Other Race Alone Two or More Races Hispanic Origin (Any Race)

2009

2014 Percent

514

0.5%

1,006

0.5%

1,260

0.6%

5,879

5.3%

12,057

6.4%

15,657

7.0%

72

0.1%

121

0.1%

162

0.1%

11,338

10.2%

29,056

15.5%

40,925

18.2%

3,590

3.2%

7,712

4.1%

10,119

4.5%

26,504

23.8%

66,866

35.7%

93,513

41.6%


22


1/04/2010

Page 1 of 2

Valuation Methodology Whataburger - Katy, TX

Tenant A primary concern of any potential investor is the tenant’s ability to meet its financial obligations under the lease. The financial stability, credit worthiness and direction of the tenant all serve to provide insight into the future financial viability of the tenant. In addition, the brand strength of the tenant and the loyalty of its customers are important aspects when marketing the investment property to national investors. The local brand recognition of the tenant and its penetration into the trade area provides insight into business concepts’ future success.

Lease For credit tenants, or those with implied credit, one of the most important things to consider is the length of the primary lease term as well as any renewal options. The longer an investor has a credit tenant obligated under the terms of a lease, the more valuable the lease. It is also important to consider the time value of money over the life of the primary term and how, if at all, any rental increases serve to assuage the pressure of inflation. Finally, investors in this class of real estate should pay careful attention to the relative triple net nature of the lease. While some leases may be triple net in a technical sense, they may still require extraordinary landlord involvement. The most valuable leases require no landlord involvement for financial obligations or property management.

Trade Area and Physical Location The strength of the trade area and its ability to support and satiate national retail tenants will speak to the strength of the individual store as well as local area retail. The ability of the trade area to successfully support the tenant will determine things such as the tenant’s ability to stay open and operating throughout the primary term as well as the tenant’s desire to renew when given the option. The relative demographic strength of the population, average household income and the ability of the market to support retail will objectively quantify the strengths and weaknesses of some aspects of the location and will help investors more accurately compare similar investments. The physical location of the building is as important as the trade area it is located within. Items such as property condition, access, visibility, anchor and sub-anchor tenants, traffic flow and future development serve to explain the intrinsic value in a specific piece of real estate that may not be fully explained by the trade area alone.

Investment and Financing Conditions Though many accredited investors understand the concept of risk in relation to return, the inability to appropriately gauge the variables involved in the various forms of risk has resulted in the inability to accurately price real estate assets. This inability to price assets to market has created a large bid/ask spread in the returns expected from both the sellers and buyers of commercial real estate. Since risks relating to economic volatility, liquidity and intensity have grown and are all priced into the return expected on an asset, pricing expectations from an investment standpoint have shifted to compensate. The availability of third party financing drastically impacts the amount of competition for commercial real estate investments. In the current market, financing is rarely available without certain stipulations and covenants that make it undesirable. Many potentially interested investors cannot find the necessary leverage in order to provide competition for buyers investing with all cash. The lack of competition among buyers has allowed the few all-cash investors to dictate the market.

23

Confidential Memorandum and Disclaimer Whataburger - Katy, TX Capview Partners (“Agent”) has been engaged as the exclusive agent for the sale of a fee simple interest in approximately 0.987 acres or 43,000 square feet of land located in Katy, Texas by the Seller. The property is being offered for sale in an “as-is, where-is” condition, and Seller and Agent make no representations or warranties as to the accuracy of the information contained in this Offering Memorandum. The enclosed materials include highly confidential information and are being furnished solely for the purpose of review by prospective purchasers of the interest described herein. Your acceptance of this memorandum is an indication of your agreement to hold the contents of this memorandum in the strictest confidence and that you will not disclose information contained herein, in whole or in part, to any other parties without the prior written authorization from the Owner or Capview Partners. Each recipient, as a prerequisite to receiving the enclosed, should be registered with Capview Partners as a “Registered Potential Investor”. The use of this Offering Memorandum and the information provided herein is subject to the terms, provisions, and limitations of the confidentiality agreement furnished by Agent prior to delivery of this Offering Memorandum. The enclosed materials are being provided solely to facilitate the prospective investor’s own due diligence for which it shall be fully and solely responsible. The material contained herein is based on information and sources deemed to be reliable, but no representation or warranty, express or implied, is being made by Agent or Seller or any of their respective representatives, affiliates, officers, employees, shareholders, partners and/or directors as to the accuracy or completeness of the information contained herein. Summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of some of the principal provisions contained therein. Neither the Agent nor the Seller shall have any liability whatsoever for the accuracy or completeness of the information contained herein or any other written or oral communication or information transmitted or made available or any action taken or decision made by the recipient with respect to the Property. Interested parties are to make their own investigations, projections, and conclusions without reliance upon the material contained herein. Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. Seller and Agent each expressly reserve the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time, with or without notice. This offering is made subject to omissions, correction of errors, change of price or other terms, prior sale, or withdrawal from the market without notice. Agent is not authorized to make any representations or agreements on behalf of Seller. Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing additional investigation, and/or making an offer to purchase the Property unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered, and approved by owner and any conditions to owner’s obligations there under have been satisfied or waived. By taking possession of and reviewing the information contained herein, the recipient agrees that (a) the enclosed materials and their contents are of a highly confidential nature, will be held and treated in the strictest confidence, and shall be returned to Agent or Seller promptly upon request; and (b) the recipient shall not contact employees or tenants of the Property directly or indirectly regarding any aspect of the enclosed materials or the Property without the prior written approval of the Seller or Agent; and (c) no portion of the enclosed materials may be copied or otherwise reproduced without the prior written authorization of Seller or Agent or as otherwise provided in the Confidentiality and/or Registration Agreement executed and delivered by the recipient(s) to Capview Partners. If you have no interest in the Property at this time, please return this Offering Memorandum immediately to: Capview Partners 2525 McKinnon Suite 700 Dallas, Texas 75201

24

Information About Brokerage Services Whataburger - Katy, TX Approved by the Texas Real Estate Commission for Voluntary Use Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

Information About Brokerage Services

B

efore working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly. IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent. IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent. IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License

Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction: (1) shall treat all parties honestly; (2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner; (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and (4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property. With the parties’ consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party. If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.

Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records.

Buyer, Seller, Landlord or Tenant

Date

Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 or 512-465-3960.

01A

EQUAL HOUSING OP P O RT U N I T Y

TREC No. OP-K

25

Kenneth Mayberry Director (214) 572-8466 [email protected]

Fritz Konker Associate (214) 572-8471 [email protected]

CAPVIEW PARTNERS 2525 McKinnon Suite 700

Dallas, TX 75201

www.capviewpartners.com