KFC - 2017 December - LoopNet
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December
2017
Remodel
Subject Property
Confidential Offering Memorandum
KFC
411 N. Highway 52 | Moncks Corner, South Carolina
Outstanding Sales | Absolute NNN Lease | 10+ Years Base Term Remaining
Offered
Exclusively by Table of Contents
Blaise Bennett About the Investment
bbennett@stanjohnsonco.com The Offering..……………………………………………………3 Tenant Overview….……………………………...……...…9
P: +1 312.777.2449 Investment Highlights…..…………………………….....4 Location Summary………..….……………………………10
Property Description...................….…………..……5 Strip Map….…………………................……………………11
Brandon Duff Lease Abstract..………………………………….……………6 Regional Map..……….…....…………………………………12
bduff@stanjohnsonco.com Rent Roll…………...….....................................……7-8 Demographics..............................................……13
+1 312.240.0162
Tom Fritz
tfritz@stanjohnsonco.com
+1 312.777.2445
Confidentiality and Restricted Use Agreement
Matt Spangenberg This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration
of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as
mspangenberg@stanjohnsonco.com stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and
+1 312.777.2442 consent of SJC.
This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains
descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be
Brandt Fuller interested in the Property. Such information is not all inclusive and is not represented to include all information that may be
bfuller@stanjohnsonco.com material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information
contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof.
+1 312.777.2446 All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety
by reference to the actual documents and/or financial statements, which upon request may be made available. An interested
party must conduct its own independent investigation and verification of any information the party deems material to
consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.
In Association With:
Van Barron The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate
with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all
SC Lic. #68884 faults, without representation or warranty of any kind except for any customary warranties of title.
BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have
received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively,
the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to
SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your
complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees,
Stan Johnson Company representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates,
officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising
303 East Wacker Drive | Suite 1111 from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide
this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms,
Chicago, Illinois 60601 conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary
P: +1 312.240.0127 | F: +1 312.240.0158 damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief,
including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be
required to post a bond when obtaining such relief.
stanjohnsonco.com
Subject Property
The Offering
Purchase Price: $1,255,750
Stan Johnson Company, on behalf of Ownership, as its exclusive advisor, is pleased to
offer for sale the opportunity to acquire the fee simple interest in the Kentucky Fried
Chicken (KFC) property located at 411 North Highway 52 in Moncks, SC (the “Property”).
The Property is comprised of +/- 2,299 square feet, and is currently leased to Star Brands Investment Summary
II, LLC, a franchise management company that oversees corporate operations of 21 QSR Location 411 N Highway 52; Moncks Corner, SC 29461
Property Type Retail, Free Standing Restaurant
units, including a Hardee’s franchise and 20 KFC locations. The lease is absolute NNN in
Building Size +/- 2,299 SF
nature with no management responsibilities, and currently has over 10 years remaining
Land Area +/- 0.37 Acres
on the base lease term, which calls for annual rental increases throughout the base term
Year Built 1989
and four (4), five (5) year renewal options. Tenant recently completed a $150k remodel to
Tenant Star Brands II, LLC
both interior and exterior of the property in order to update the building to the latest KFC Lease Type Absolute NNN
American Showman prototype demonstrating a great deal of commitment to the site and Base Lease Term/Remaining 15 Years / 10+ Years
further indicating a high likelihood of future lease renewals. Rental Increases Lesser of 1.5% or 1.25x the change in CPI
Tenant Financial Reporting Yes, see Lease Abstract
absolute
NNN 10+
years of base lease term
lease w/no management remaining
responsibilities
Only KFC within a
POSITIVE
15+ TRENDING
mile radius
YOY SALES
Offering Summary
Price $1,255,750
December 2017 Remodel Cap Rate 6.00%
to Latest KFC “American In-Place NOI/Annual Rent $75,345
Showman” Prototype Annual Rental
Ownership Interest Fee Simple Absolute
Increases
Encumbrances Delivered Free & Clear
Kentucky Fried Chicken • Moncks Corner, SC • 3
Investment Highlights
Recent “American Showman” Remodel
Tenant recently completed a $150k remodel to both interior and exterior renovations
in order to update the building to the latest KFC “American Showman” prototype
demonstrating a great deal of commitment to the site and a strong indication of future
lease renewals.
10+ Years Base Lease Term Remaining
Base lease term runs through September 2028, offering investors the opportunity for
long-term cash flow.
Absolute NNN Lease Structure
Property offers investors a passive investment with no landlord responsibility
throughout the base lease term or option periods.
Annual Rental Escalations
Lease features annual rental escalations of the lesser of 1.5% or 1.25x the change in CPI
through base term and option periods, offering investors a hedge against inflation.
Ongoing Tenant Entity-Level and Unit-Level Financial Reporting
Lease calls for both, Tenant Entity-Level, and Unit-Level Financial Reporting, to be
provided to Landlord in accordance with GAAP standards, within 45 days after the end
of each fiscal quarter and within 120 days after the end of each fiscal year.
Highly Visible Location
Property is located at the fork of U.S. 52 and U.S. 17, a position that sees traffic counts
in excess of 44k VPD.
Dense Retail Corridor
Property is located within a dense retail corridor along U.S. 52, surrounded by other
national tenants including Walmart, Walgreens and Food Lion, as well as numerous
other restaurants.
Limited Competition
The Property is the only KFC within a 15+ mile radius.
Proximity to Santee Cooper Office Complex
Property is less than one mile from Santee Cooper, one of South Carolina’s largest
power providers, who employs personnel of over 1,200 at their Moncks Corner office
Subject Property Photos complex.
Kentucky Fried Chicken • Moncks Corner, SC • 4
Property Description
LOCATION
The Property is located at the fork of U.S. 52 and U.S. 17 in the city
of Moncks Corner, County of Berkeley, and State of South Carolina
Moncks
PROPERTY TYPE
Corner
Primary: Retail, Free Standing, Single Tenant
Sub-Property Type: Quick Service Restaurant
PROPERTY PARCEL ID
Berkley County: 1430102019
YEAR BUILT
1989
LAND AREA
+/- 0.37 Acres
IMPROVEMENTS
The Property consists of one single story building totaling
approximately 2,299 total square feet, and includes a Drive-Thru
OWNERSHIP INTEREST & LEASE TYPE
Fee Simple Ownership & Absolute NNN Lease with no management
responsibilities
PARKING
+/- 12 total spaces
Charleston
LANDSCAPING & IRRIGATION
Property features attractive combination of grass, concrete
hardscapes, curbed median dividers, with grass, shade trees, and
irrigation
TENANT & OCCUPANCY
The Property is 100% leased to Star Brands II, LLC, who is doing N
business as Kentucky Fried Chicken
Kentucky Fried Chicken • Moncks Corner, SC • 5
Lease Abstract
Location
411 N Highway 52; Moncks Corner, SC 29461
(Exhibit B)
Documentation Lease Agreement dated September 17, 2013
Tenant/Lessee
Star Brands II, LLC
(Signing Entity) (Intro)
Doing Business As
Kentucky Fried Chicken
(Intro)
Total Square Footage
2,299 SF
(Intro)
Lease Commencement Date
9/17/2013
(Intro)
Lease Expiration Date
9/30/2028
(Section 3.01)
Initial Lease Term
15 Years / 10+ Years Remaining
(Section 3.01)
Annual Base Rent
$75,345
(Section 4.01)
Rental Esclations
Lesser of 1.5% or 1.25x the change in CPI
(Section 2.4)
Extended Options & Notice
Four (4), Five (5) Year Renewal Options w/written notice at least 120 days prior to expiration of Initial Term or Extended Term
(Section 3.02)
Real Estate Taxes Lessee shall pay, prior to the earlier of delinquency or the accrual of interest on the unpaid balance, all taxes and assessments of every type or nature assessed
(Section 6.01) against or imposed upon the Property
Lessee maintains all-risk property insurance for 100% of the full insurable replacement cost values; commercial general liability insurance for not less than $2mm/
Insurance
occurrence and $2mm/aggregate per location; worker's compensation insurance; business interruption insurance; automobile liability insurance; and boiler &
(Section 6.03(a)(i-vii))
machinery insurance
Utilities Lessee shall contract, in its own name, for an pay when due all charges for the connection and use of water, gas, electricity, telephone, garbage collection, sewer
(Section 6.02) use and other utility services supplied to the Property.
Lessee is responsible for keeping all of the building, structures, and improvements erected on the Property in good order and repair including roof, HVAC, other
Maintenance & Repairs
electrical and mechanical systems; all structural, non-structural, exterior and interior repairs and replacements to any building, structures or improvements erected
(Section 7.01)
on the Property
Landlord Maintenance Responsibilities None
Financial Reporting Within 45 days after the end of each fiscal quarter and within 120 days after the end of each fiscal year, Lessee shall deliver (a) complete financial statements
(Section 9.03) including a balance sheet, profit and loss statement, statement of cash flow and all other related schedules.
Right of First Refusal None
Purchase Option None
Kentucky Fried Chicken • Moncks Corner, SC • 6
Rent Roll
Rent Schedule
Base Lease Lease Renewal
Lease Lease
Tenant SF Lease Term Annual
Commencement Expiration Monthly Annual Rental Type Type
Term Remaining Period Dates Base Rent
Base Rent Base Rent Increase
PSF
10/1/2017 - 9/30/2018 $6,279 $75,345 $32.77 1.5%
10/1/2018 - 9/30/2019 $6,373 $76,477 $33.27 1.5%
10/1/2019 - 9/30/2020 $6,469 $77,624 $33.76 1.5%
10/1/2020 - 9/30/2021 $6,566 $78,788 $34.27 1.5%
10/1/2021 - 9/30/2022 $6,664 $79,970 $34.78 1.5%
Base 10/1/2022 - 9/30/2023 $6,764 $81,170 $35.31 1.5%
10/1/2023 - 9/30/2024 $6,866 $82,387 $35.84 1.5%
10/1/2024 - 9/30/2025 $6,969 $83,623 $36.37 1.5%
10/1/2025 - 9/30/2026 $7,073 $84,877 $36.92 1.5%
10/1/2026 - 9/30/2027 $7,179 $86,150 $37.47 1.5%
Star Brands II,
15 Absolute 4, 5-Year
LLC +/- 2,299 9/17/2013 9/30/2028 10+ Years 10/1/2027 - 9/30/2028 $7,287 $87,443 $38.04 1.5%
Years NNN Options
D/B/A
10/1/2028 - 9/30/2029 $7,396 $88,754 $38.61 1.5%
10/1/2029 - 9/30/2030 $7,507 $90,086 $39.18 1.5%
Option 1 10/1/2030 - 9/30/2031 $7,620 $91,437 $39.77 1.5%
10/1/2031 - 9/30/2032 $7,734 $92,808 $40.37 1.5%
10/1/2032 - 9/30/2033 $7,850 $94,201 $40.97 1.5%
10/1/2033 - 9/30/2034 $7,968 $95,614 $41.59 1.5%
10/1/2034 - 9/30/2035 $8,087 $97,048 $42.21 1.5%
Option 2 10/1/2035 - 9/30/2036 $8,209 $98,504 $42.85 1.5%
10/1/2036 - 9/30/2037 $8,332 $99,981 $43.49 1.5%
10/1/2037 - 9/30/2038 $8,457 $101,481 $44.14 1.5%
Kentucky Fried Chicken • Moncks Corner, SC • 7
Rent Roll - cont’
Rent Schedule
Base Lease Lease Renewal
Lease Lease
Tenant SF Lease Term Annual
Commencement Expiration Monthly Annual Rental Type Type
Term Remaining Period Dates Base Rent
Base Rent Base Rent Increase
PSF
10/1/2038 - 9/30/2039 $8,584 $103,003 $44.80 1.5%
10/1/2039 - 9/30/2040 $8,712 $104,548 $45.48 1.5%
Option 3 10/1/2040 - 9/30/2041 $8,843 $106,116 $46.16 1.5%
10/1/2041 - 9/30/2042 $8,976 $107,708 $46.85 1.5%
Star Brands II, 10/1/2042 - 9/30/2043 $9,110 $109,324 $47.55 1.5%
15 Absolute 4, 5-Year
LLC +/- 2,299 9/17/2013 9/30/2028 10+ Years
Years 10/1/2043 - 9/30/2044 $9,247 $110,964 $48.27 1.5% NNN Options
D/B/A
10/1/2044 - 9/30/2045 $9,386 $112,628 $48.99 1.5%
Option 4 10/1/2045 - 9/30/2046 $9,526 $114,317 $49.72 1.5%
10/1/2046 - 9/30/2047 $9,669 $116,032 $50.47 1.5%
10/1/2047 - 9/30/2048 $9,814 $117,773 $51.23 1.5%
*Assumes annual increases of 1.5%
Income Statement
Investment Year 0 1 2 3 4 5 6 7 8 9 10
Revenue
Rental Income $75,345 $76,477 $77,624 $78,788 $79,970 $81,170 $82,387 $83,623 $84,877 $85,301
Total Revenue $75,345 $76,477 $77,624 $78,788 $79,970 $81,170 $82,387 $83,623 $84,877 $85,301
Cash Flow Before Debt Service $75,345 $76,477 $77,624 $78,788 $79,970 $81,170 $82,387 $83,623 $84,877 $85,301
*Year 1 ends 9/30/2018
*Assumes annual rental increases of 1.5%
Kentucky Fried Chicken • Moncks Corner, SC • 8
Tenant Overview
Tenant Profile
Star Brands II, LLC was formed in early 2011, alongside Star Brands, LLC to acquire the operations of existing
KFC locations. Star Brands took over a few corporately owned stores, while Star Brands II was used to purchase Company Profile
other stores from operators in struggling financial situations. Under Star Brands leadership, all units were brought Concept Kentucky Fried Chicken (KFC)
above KFC’s national sales per store average. Star Brands works with Blue Victory Holdings, Inc., a franchise-
management company, who oversees corporate operations and provides G&A support for all the units. Financials Industry Food Service – QSR
are available upon executed confidentiality agreement. See listing broker for details. No. of Locations 19,420
Type Subsidiary
Company Profile
Parent Yum! Brands
Yum! Brands (NYSE: YUM) is one of the world’s largest fast food restaurant companies with nearly 43,000 locations
Traded NYSE: YUM
around the world in over 130 countries.
Credit Rating BB/Stable (S&P)
Kentucky Fried Chicken (KFC) is a fast food restaurant that specializes in fried chicken. It is the world’s second-
FY2015 Revenue $13.1 billion
largest restaurant chain (as measured by sales) after McDonald’s, with nearly 20,000 locations globally in 123
countries and territories as of December 2015. The company is a subsidiary of Yum! Brands, a Fortune 500 FY2015 Net Income $1.3 billion
corporation based in Louisville, Kentucky, that also owns and operates the Taco Bell and Pizza Hut chains.
FY2015 EBITDA $2.7 billion
KFC’s core product offering is pressure fried, on-the-bone chicken pieces seasoned with Colonel Harland Sanders’ Net Worth (as of 3/19/2016) $156.0 million
“Original Recipe” of 11 herbs and spices. The product is typically available in either two or three piece individual
Market Cap (as of 6/14/2016) $33.6 billion
servings, or in a family size cardboard bucket, typically holding between 6 and 16 chicken pieces. Pieces are hand-
breaded at individual KFC outlets with wheat flour mixed with seasoning, then pressure fried in oil. It is KFC policy Headquarters Louisville, KY
to discard chicken if it has not been sold within 90 minutes in order to ensure freshness.
Website www.kfc.com
As well as its core chicken-on-the-bone offering, KFC’s major products include chicken burgers, wraps, a variety
of finger foods and side dishes such as French fries, coleslaw, barbecue baked beans, corn on the cob, mashed
potatoes, bread rolls and American biscuits.
KFC was ranked 11th in QSR Magazine’s 2015 QSR 50 in terms of U.S. systemwide sales.
Kentucky Fried Chicken • Moncks Corner, SC • 9
Location Summary
Moncks Corner is a town in and the county seat of Berkeley County in east central
South Carolina. As of the 2010 census, the population was 7,885, representing
a 32.5% increase from 2000 and continuing a trend of population growth every
decade since record keeping began in 1890.
Named for original landowner, Thomas Monck, the town is known for its old-
fashioned hospitality, southern charm and history, as well as its proximity to
Charleston, Lake Moultrie and the Francis Marion National Forest.
Moncks Corner was granted the trademark “Capital of Santee Cooper Country” by
the South Carolina Secretary of State on September 9, 1999, and again on October Charleston, SC
21, 2004. The trademark is a symbol of the town’s abundant outdoor activities, such
as horseback riding, hiking, water sports, boating and the best freshwater fishing
in the South.
Santee Cooper, also officially known from the 1930’s as the South Carolina Public
Service Authority, is South Carolina’s state-owned electric and water utility that
came into being during the New Deal as both a rural electrification and public works
project that created two lakes and cleared large tracts of land while building hydro-
electric dams and power plants. The company is one of the largest power providers
in the state, directly serving more than 165,000 residential and commercial
customers with a diverse fuel and energy supply of coal, nuclear, oil, gas, hydro and
renewable sources. Santee Cooper’s corporate office complex is located in Moncks
Corner.
Berkeley County is the largest county in South Carolina, and was the fastest-growing
in the state and the 35th-fastest in the nation for 2010-2012. Located minutes from
downtown Charleston and less than two hours from Myrtle Beach, Hilton Head
Cypress Gardens Bridge - Moncks Corner, SC
and Savannah, Georgia, the county continues to grow, while business and industry
continue to prosper: Nucor Steel has invested $200 million in their Berkeley Plant
over the last five years; Google has spent over $1.2 billion on its Berkeley County
data center complex since 2007; high-voltage power cable manufacturer Nexans
recently built an $85 million facility in the county that added 200+ jobs; SPARC,
an IT company founded in 2009, will be investing over $11 million in their facility
and adding over 300 jobs over the next four years; and Volvo Cars broke ground
on their first American factory in September 2015, a $600 million facility that will
create 4,000 jobs and serve as the global production home of the S60 sedan.
Moncks Corner Profile
City Population: 7,885
Area: 7.4 sq mi
County: Berkeley
State: South Carolina
MSA: Charleston-North Charleston, SC
MSA Population: 664,607
Section 4 • Walgreens • Overland Park, KS • 10
*Population figures based on 2010 U.S. Census
Volvo Factory - Berkeley County, SC)
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Kentucky Fried Chicken • Moncks Corner, SC • 11Moncks
Corner
Moncks
Corner
Charleston
N
Kentucky Fried Chicken • Moncks Corner, SC • 12Demographics
411 N. Highway 52 | Moncks Corner, South Carolina 29461 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.
Population
2017 Population 1,982 11,831 21,435
2022 Population 2,106 12,962 23,762
2000-2010 Annual Rate 0.89% 0.60% 1.74%
2010-2017 Annual Rate 0.97% 1.50% 1.73%
2017-2022 Annual Rate 1.22% 1.84% 2.08%
2017 Median Age 37.9 38.9 38.2
Households
2017 Total Households 768 4,474 7,978
2022 Total Households 817 4,920 8,866
1 mile
2000-2010 Annual Rate 1.39% 0.83% 1.87%
2010-2017 Annual Rate 1.03% 1.63% 1.81%
2017-2022 Annual Rate 1.24% 1.92% 2.13% 3 mile
2017 Average Household Income $66,937 $61,754 $63,372
5 mile
N
Kentucky Fried Chicken • Moncks Corner, SC • 13Offered Exclusively by
Blaise Bennett
bbennett@stanjohnsonco.com going beyond
P: +1 312.777.2449
Brandon Duff
bduff@stanjohnsonco.com
+1 312.240.0162
Tom Fritz
tfritz@stanjohnsonco.com
+1 312.777.2445
Matt Spangenberg
mspangenberg@stanjohnsonco.com
+1 312.777.2442
Brandt Fuller
bfuller@stanjohnsonco.com
+1 312.777.2446
In association with:
Van Barron
SC Lic. #68884
Stan Johnson Company
303 East Wacker Drive | Suite 1111
Chicago, IL 60601
P: +1 312.240.0127 | F: +1 312.240.0158
stanjohnsonco.com
The information contained herein was obtained from sources believed reliable, however,
Stan Johnson Company makes no guaranties, warranties or representations as to the
completeness thereof. The presentation of this property for sale, rent or exchange is
submitted subject to errors, omissions, change of price or conditions, or withdrawal
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