Smokey Bones. Rockford, IL Chicago MSA. OFFERING MEMORANDUM

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www.preservewestcapital.com

OFFERING MEMORANDUM

Smokey Bones

Rockford, IL | Chicago MSA

This property is listed in conjunction with Illinois-licensed real estate broker Quantum Real Estate Advisors.

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TABLE OF CONTENTS

Preserve West Capital (“Broker”) has been retained on an exclusive basis to market the property described herein (“Property”).

Broker has been authorized by the Seller of the Property (“Seller”) to prepare and distribute the enclosed information

(“Material”) for the purpose of soliciting offers to purchase from interested parties. More detailed financial, title and tenant lease information may be made available upon request following the mutual execution of a letter of intent or contract to purchase between the Seller and a prospective purchaser. You are invited to review this opportunity and make an offer to purchase based upon your analysis. If your offer results in the Seller choosing to open negotiations with you, you will be asked to provide financial references. The eventual purchaser will be chosen based upon an assessment of price, terms, ability to close the transaction and such other matters as the Seller deems appropriate.

The Material is intended solely for the purpose of soliciting expressions of interest from qualified investors for the acquisition of the Property. The Material is not to be copied and/or used for any other purpose or made available to any other person without the express written consent of Broker or Seller. The Material does not purport to be all-inclusive or to contain all of the information that a prospective buyer may require. The information contained in the Material has been obtained from the Seller and other sources and has not been verified by the Seller or its affiliates. The pro forma is delivered only as an accommodation and neither the Seller, Broker, nor any of their respective affiliates, agents, representatives, employees, parents, subsidiaries, members, managers, partners, shareholders, directors, or officers, makes any representation or warranty regarding such pro forma. Purchaser must make its own investigation of the Property and any existing or available financing, and must independently confirm the accuracy of the projections contained in the pro forma.

Seller reserves the right, for any reason, to withdraw the Property from the market. Seller has no obligation, express or implied, to accept any offer. Further, Seller has no obligation to sell the Property unless and until the Seller executes and delivers a signed agreement of purchase and sale on terms acceptable to the Seller, in its sole discretion. By submitting an offer, a purchaser will be deemed to have acknowledged the foregoing and agreed to release Seller and Broker from any liability with respect thereto.

Property walk-throughs are to be conducted by appointment only. Contact Broker for additional information.

Disclaimer

PROPERTY HIGHLIGHTS 1

PROPERTY INFORMATION 2

TENANT INFORMATION 3

SITE PLAN 4

AERIALS 5

ABOUT THE AREA 7

DEMOGRAPHICS 9

Putnam Daily Partner 415.445.5107

putnam@preservewc.com CA RE License #01750064

Michael Maffia Managing Partner 415.373.4060

mike@preservewc.com CA RE License #01340853 Jeff Christian

Managing Director 707.938.9600 x102 jeff@firststreetco.com CA RE License #01461046

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PRESERVE WEST CAPITAL & FIRST STREET | 1

PROPERTY HIGHLIGHTS

15 Year NNN Lease to Smokey Bones with Approximately 13 Years Remaining

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Scheduled 5% Rental Escalations in Primary Term & Options

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No Landlord Maintenance Responsibilities

Pandemic-Resistant Use Well-Adapted to Carry Out Business

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Smokey Bones Recently Overhauled Technology and E-Commerce Systems to Provide Additional Delivery and Pickup Options, Achieving 100% ROI in 2021

Prominent Retail Location Outparcel to Target-Anchored Center

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Major Retail Tenants in Surrounding Area Include Sam’s Club, Walmart Supercenter, ALDI, Meijer, Walgreens, CVS, & More

Robust Demographics in Surrounding Area

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Total Daytime Population of 138,681 within 5 Miles of Site

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Average Household Income of $86,981 within 3 Mile Radius

Excellent Access and Visibility Near Junction of State Street & Perryville Road

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Combined AADT of 59,900

Rockford is 4th-Largest City in Illinois

Approximately 2 Hours from Downtown Chicago

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PROPERTY INFORMATION

PRICE

$4,583,000

6.00% Return

Location

The property is located at 6690 East State Street in Rockford, Illinois.

Lot Size

Approximately 0.94 acres or 40,946 square feet.

Improvements

A 7,205 square foot retail restaurant building for Smokey Bones.

Lease

Leased to Smokey Bones Bar & Fire Grill and guaranteed by Barbeque Integrated, Inc. for 15 years from March 30, 2019 through March 31, 2034 at a current annual rent of $275,000. There are two (2) five-year options to renew the lease. Rent is to increase by 5% in year 11 and at the start of each option period. The lease is net with tenant responsible for all taxes, insurance, and maintenance.

Annual Rent

Financing

The property will be delivered free and clear of permanent financing.

Years Annual Rent Return

Years 1-10 $275,000 6.00%

Years 11-15 $302,500 6.60%

Years 16-20 (Option 1) $332,750 7.26%

Years 21-25 (Option 2) $366,025 7.99%

PRESERVE WEST CAPITAL & FIRST STREET | 2

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ABOUT THE TENANT

Smokey Bones Bar & Fire Grill serves a variety of BBQ and classic American foods, including smoked meats, wings, burgers, salads and soups, pasta, sandwiches, and more at 66 locations throughout the Eastern and Midwestern U.S.. In 2020, the company overhauled its technology infrastructure to enable “any time, anywhere” ordering, including delivery and pickup options; over the course of a single year, the company achieved 100% return on investment in the new technology. The company has also launched several digital-only brands, including the Wing Experience and The Burger Experience, which offer direct-to-consumer digital ordering experiences and are also available through delivery apps.

Barbeque Integrated, Inc. is the corporate entity of Smokey Bones.

The company is a portfolio company of private equity firm Sun Capital Partners, Inc., which currently manages more than $6.4 billion in assets, including more than 2,000 restaurants.

PRESERVE WEST CAPITAL & FIRST STREET | 3

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SIGN

E STATE STREET

N M ILL R O AD

7,205 SF

SITE PLAN

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E S ta te S t (3 2 ,8 0 0 AAD T )

N Mill Rd N Trainer Rd

New Development

STATE STREET MARKET FOREST PLAZA

Rockford Public Library

WEST VIEW

AERIAL

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E S ta te S

t ( 3 2 ,8

0 0 AAD

T ) N Mill Rd

N Perryville Rd (27,100 AADT)

Rockford Public Library PERRYVILLE SHOPPING CENTER

New Development

EAST VIEW

AERIAL

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General Overview

Rockford (population 148,655) is the 4th-largest city in Illinois, located approximately 90 miles west of Chicago.

The city is the largest city in Illinois outside of the Chicago Metropolitan Area. Major industries in the area include advanced manufacturing, aerospace, transportation and logistics, automotive manufacturing, and healthcare.

The greater Chicago region boasts one of the world’s largest and most diversified economies, with an annual gross regional product of more than $561 billion and no single industry employing more than 20% of the population.

The region is home to more than 400 major corporate headquarters and 31 Fortune 500 companies; notable businesses based in the region include Boeing, Kraft Heinz, McDonald’s, Motorola, Discover Financial Services, United Continental Holdings (formerly United Airlines), Walgreens, Aon, J.P. Morgan Chase, Caterpillar Inc., Abbot Laboratories, and more. The area is additionally home to a significant concentration of high-tech startups. Chicago is a major global financial center and is home to the largest futures exchange in the world, operated by the Chicago-based CME Group, which owns the Chicago Board of Trade, Chicago Mercantile Exchange, New York Mercantile Exchange, the Commodities Exchange, Inc., and the Down Jones Indexes.

The region is also home to numerous major colleges and universities, including the University of Chicago, Northwestern, Concordia University, Dominican University, DePaul University, and many more.

The greater Chicago area benefits from a central location in the upper Midwest and is served by numerous airports, highways, rail lines, and ports. O’Hare International Airport is the second busiest airport in the world by aircraft traffic and is a hub for American Airlines and United. The region is also home to Midway International Airport, which serves primarily domestic flights, Chicago Rockford International Airport, and Gary/Chicago International Airport. In addition, Chicago is the main freight rail hub in North America, with six of the seven Class I railroads converging in the city. Seven mainline and four auxiliary interstate highways (55, 57, 65, 80, 94, 190, 290, 294, 355) serve the greater Chicago region in addition to numerous state highways and expressways.

ABOUT THE AREA

SITE

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Site Information

The subject property is centrally located with excellent access and visibility outparcel to a Target and Homegoods anchored shopping center along East State Street (32,800 AADT) in close proximity to its junction with North

Perryville Road (27,100 AADT). The site benefits from robust demographics with a total daytime population of 138,681 within a 5 mile radius. Average household income within 3 miles of the site is $86,981.

The property benefits from a prominent retail location in close proximity to shopping centers, major retail tenants, schools, and employers. Nearby retail centers include State Street Market, featuring Schnucks, Burlington, and Dollar Tree; Forest Plaza, with tenants including Five Below, Kohl’s, and Marshalls; Perryville Shopping Center, featuring Best Buy and Ross; and Cherryvale Mall, anchored by Macy’s. Other major retail tenants in the surrounding area include Sam’s Club, Walmart Supercenter, ALDI, Meijer, Walgreens, CVS, and more.

The property is also located in close proximity to Rockford University, with a student body of 943, as well as OSF Saint Anthony Medical Center, a 241-bed hospital and one of the city’s largest employers.

ABOUT THE AREA

SITE

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PRESERVE WEST CAPITAL | 9

Top Employers in

Rockford # of

Employees

Rockford Public Schools

4,890

Mercyhealth/Rockford Health

4,520

Fiat Chrysler Automobiles

3,749

SwedishAmerican Health

System

3,375

UPS

2,203

OSF Healthcare

2,200

UTC Aerospace Systems

2,200

Woodward Governor Company

1,900

PCI – Packaging

Coordinators Inc.

1,800

Wal-Mart

1,470

Population Summary 1 Mile 1 3 Miles 5 Miles

2010 Total Population 6,608 48,067 130,194

2021 Total Population 6,600 47,133 128,607

2026 Total Population 6,434 45,775 124,600

2021 Total Daytime Population 12,976 56,675 138,681

Average Household Income

2021 $83,985 $86,981 $79,143

2026 $91,872 $95,901 $87,537

Average Home Value

2021 $175,076 $171,235 $161,849

2026 $213,020 $204,094 $196,840

DEMOGRAPHICS

6690 E State St | Rockford, IL 61108

2021 POPULATION

128,607

AVG. HOME VALUE

$175,076

AVG. HOUSEHOLD INCOME

$86,981

PRESERVE WEST CAPITAL & FIRST STREET | 9

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Michael Maffia Managing Partner 415.373.4060

mmaffia@preservewc.com CA RE License #01340853 Putnam Daily

Partner 415.445.5107

putnam@preservewc.com CA RE License #01750064

Jeff Christian Managing Director 707.938.9600 x102 jeff@firststreetco.com CA RE License #01461046

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