// MCMINNVILLE, OR CORPORATE 20-YEAR ABSOLUTE NET LEASE

Offering Memorandum

EXCLUSIVELY LISTED BY JOSEPH BLATNER // Senior Vice President 503.200.2029 // [email protected] NON-ENDORSEMENT & DISCLAIMER NOTICE

CONFIDENTIALITY & DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap. All rights reserved. Broker of Record: Adam Lewis | Activity ID: ZAA0210388

NON-ENDORSEMENT NOTICE Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. SAFEWAY MCMINNVILLE, OREGON

TABLE OF CONTENTS

EXECUTIVE SUMMARY FINANCIAL ANALYSIS SECTION 1 SECTION 2 01 Investment Overview • Investment Highlights 15 Rent Roll • Rent Schedule Property Details • Aerial Map • Tenant Overview

MARKET OVERVIEW SECTION 5 19 Location Overview • Location Highlights • Demographics

OFFICES NATIONWIDE AND THROUGHOUT CANADA WWW.MARCUSMILLICHAP.COM 56,379

OCCUPIED SQUARE FEET

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, as- sumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap ACT ID ZAA0210388 EXECUTIVE SUMMARY

SAFEWAY | MCMINNVILLE, OR SAFEWAY // EXECUTIVE SUMMARY // SAFEWAY

1 NEW 20-YEAR NEW WITH INCREASES ABSOLUTE NET LEASE ABSOLUTE

%

$771,506 6/28/2019 6/30/2039 56,379 SF 5.10 Acres 5.10 Acres 1998 / 2013 1998 / 2013 Safeway, Inc Safeway, Absolute Net (8) 5-Year Options (8) 5-Year CAP RATE 5.35 Companies, Inc. 1.5% annual increases at start of Years 2-5 at start of Years 1.5% annual increases 7.5% increases every 5 years after Year 10 every 5 years after Year 7.5% increases

OFFERING PRICE 14,420,673 CORPORATE WEST | MCMINNVILLE, OR 97128 2490 N, OR-99 OFFERING HIGHLIGHTS OFFERING SAFEWAY LEASE TYPE LEASE COMMENCEMENT DATE LEASE EXPIRATION / RENOVATED YEAR BUILT BUILDING SIZE LOT SIZE INCREASES OPTIONS TENANT GUARANTOR NET OPERATING INCOME NET OPERATING $ Building Size, Lot Size, and Year Built/Renovated are approximate. Buyer will need to verify during their Due Diligence review. Building Size, Lot Size, and Year (1)

SAFEWAY // EXECUTIVE SUMMARY 2 NEW 20-YEAR ABSOLUTE NET LEASE WITH INCREASES 20 SAFEWAY // EXECUTIVE SUMMARY // SAFEWAY

3

Approximately 34 million customers per week Approximately 34 million customers the District of Columbia under 21 well-known banners Over 2,200 stores in 34 states and 270,000 employees nationwide Corporate Guarantee from Albertsons Companies, Inc., the second-largest traditional grocer Companies, Inc., the second-largest traditional grocer Corporate Guarantee from Albertsons $60.5 Billion in revenue for 2018 US as of 2018 Third-largest, private company in the in the United States

NEW, 20-YEAR LEASE NEW, ALBERTSONS COMPANIES, INC. COMPANIES, ALBERTSONS • • • • • • New, 20-year absolute net lease with 1.5% annual increases at start of years 2-5, then 7.5% increases at start of years 2-5, then 7.5% 20-year absolute net lease with 1.5% annual New, year 10. increases every five years starting after ABSOLUTE NET LEASE provides owner with a passive investment and no landlord The absolute net lease structure maintenance responsibilities. anchors like JC Penny, Ross Dress For Less, Petco, and a new Marshalls set to open in Fall 2019. Marshalls set to open in Fall 2019. Ross Dress For Less, Petco, and a new anchors like JC Penny, WinCo, JoAnn Fabrics, like , is dense with other national retailers The surrounding area is the Cascade Steel Rolling Directly east of the subject property and more. Goodwill, Subway, people. Oregon Route 99 is the employing over 400 Steel Industries company, Mills, a Schnitzer to connecting the city to both Portland directly through McMinnville and main highway cutting drive. within an hour’s the north and Salem to the south, each CENTER ROUTE 99 SHOPPING SHOPPING 20,000 VPD WITH OVER ANCHOR OF ANCHOR OF OFF OREGON OFF OREGON DIRECT ACCESS DIRECT ACCESS LARGE, 18-ACRE LARGE, 18-ACRE GREAT VISIBILITY VISIBILITY GREAT The subject property is a Safeway location guaranteed by their corporate parent company, Albertsons Companies, Inc. A new, 20- Inc. A new, Albertsons Companies, company, corporate parent guaranteed by their Safeway location property is a The subject every five of years 2-5 then 7.5% increases 1.5% annual increases at start executed June 2019 and includes year lease was just in anchor an is property The increases. 7.50% with each renew, options to five-year eight, are There 10. year after starting years other Oregon. The Plaza includes off Oregon Route 99 in McMinnville, an 18-acre shopping center directly McMinnville Plaza, INVESTMENT OVERVIEWINVESTMENT

SAFEWAY // EXECUTIVE SUMMARY 4 INVESTMENT HIGHLIGHTS

►► Absolute Net Lease - No Landlord Responsibilities Whatsoever

►► Corporate Guarantee from the Second-Largest Traditional Grocer in the United States

►► Anchor of Large Shopping Center Along Main McMinnville Highway with Traffic Counts in Excess of 20,400 Vehicles Per Day

►► Multiple Points of Ingress/Egress Allowing Easy Access

►► Located in Dense Retail Area Surrounded by 25+ National Retailers like Walmart, WinCo, Joann Fabrics, Goodwill, Dollar Tree, and More

►► Number of Households in the Area Has Increased by Over 30% Since 2000 and Household Income Increased by Over 20%

GUARANTEED BY WELL-LOCATED IN LOCATED ON 2ND-LARGEST U.S. DENSE RETAIL HIGHWAY CONNECTED TRADITIONAL GROCER CORRIDOR TO PORTLAND & SALEM AERIAL VIEW Tice Park

McMinnville is located in western Oregon. The subject property is directly on Oregon Route 99, the main highway through McMinnville. By this route, the city is less than an hour’s drive to Portland, the state’s largest city, and only 30 minutes to

SAFEWAY // PROPERTY DESCRIPTION Salem, the state capital. The majority of all national retail in McMinnville lies along OR-99, making the subject property ideally located.

OR-99 WEST

Memorial Elementary School

Michelbook Country Club

Duniway Middle School

106 OR-99 WEST McDonald’s CASCADE STEEL ROLLING MILLS

VPD: 20,400* Mac Track Yamhill County SUBJECT PROPERTY Fair & Rodeo OR-99 WEST Great Oregon SAFEWAY Wine Company Oregon 2490 N OR-99 WEST Wine Services MCMINNVILLE, OR 97128 Patton Middle School

Cast-Away McMinnville Concrete High School

Remy Winery The Eyrie Vineyards

Grain Station DESCRIPTION PROPERTY // SAFEWAY Brew Works

Joe Dancer Park 7 BIRD’S EYE The subject property is an anchor for McMinnville Plaza, an 18-acre shopping center along Oregon Route 99 West. The Safeway parcel outline is outlined in red and makes up 5.10 acres of the Plaza. The other anchors include JC SAFEWAY // PROPERTY DESCRIPTION Penny, Petco, Ross Dress For Less, Famous Footwear, and a Marshalls set to open in fall 2019.

VPD: 20,400* OR-99 WEST Aspen Dental

Burger King

COMING FALL 2019

8 CASCADE STEEL Advanced ROLLING MILLS Mechanical Services The Muffler Mazatlan Doctor Mexican Platt Electric Supply Grow Geek Air Liquide Garden Supply America Corp

McMinnville Self Storage Mac Track

VPD: NE LAFAYETTE AVE 10,500*

Lafayette Place Apartments DESCRIPTION PROPERTY // SAFEWAY

*Source: LandVision™ **Subject parcel outline is not exact 9 TENANT OVERVIEW

Safeway, Inc. is an American chain founded in 1915. It is a subsidiary of Albertsons Companies Inc. (Lease Guarantor). Safeway’s primary base of operations is in the western and central United States, with some stores located in the Mid- Atlantic region of the Eastern Seaboard.

SAFEWAY // PROPERTY DESCRIPTION Safeway began in April of 1915 when Marion Barton Skaggs purchased his father’s 576-square-foot grocery store in American Falls, Idaho. Skaggs’ business strategy to give his customers value and to expand by keeping a narrow profit margin, proved successful. By 1926, he had opened 428 Skaggs stores in 10 states. He almost doubled the size of his business that year when he merged his company with 322 Safeway stores and incorporated as Safeway, Inc. M.B. Skaggs’ value vision still drives Safeway, though on a dramatically larger scale. Safeway currently has 1,300 locations in 19 states.

Today, Safeway operates as a banner of Albertsons Companies, one of the largest food and drug retailers in the United States with a strong local presence on a national scale. Albertsons Cos. operates stores across 34 states and the District of Columbia under 21 well-known banners including Albertsons, Safeway, , -Osco, Shaw’s, Acme, Tom Thumb, , United , , Star Market, Haggen and Carrs, as well as meal kit company .

The Albertsons Companies family of stores is composed of more than 2,200 supermarkets employing over 270,000 people. Alberstons Companies boasted $60.5 billion in annual sales for 2018. Albertsons Companies Inc. operates over 2,200 stores under 21 brands serving 34 million customers weekly.

10 SAFEWAY // PROPERTY DESCRIPTION PROPERTY // SAFEWAY

ALBERTSONS COMPANIES IS THE SECOND-LARGEST TRADITIONAL GROCER IN US

11 SAFEWAY // PROPERTY PHOTOS 12 ANCHOR OF 18-ACRE SHOPPING CENTER, MCMINNVILLE PLAZA 1.5% 7.5%

ANNUAL INCREASES AT INCREASES EVERY 5 YEARS START OF YEARS 2-5 STARTING AFTER YEAR 10

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, as- sumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap ACT ID ZAA0210388 FINANCIAL ANALYSIS

SAFEWAY | MCMINNVILLE, OR SAFEWAY // FINANCIAL ANALYSIS // SAFEWAY

15 RENT ROLL

TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES LEASE

NAME SIZE COMMENCEMENT EXPIRATION ANNUAL BASE RENT YEARS 1-5 YEARS 6-10 OPTIONS TYPE SAFEWAY // FINANCIAL ANALYSIS

7.5% increases (8) 5-year options 1.5% annual ALBERTSONS COMPANIES every 5 years with 7.5% rental ABSOLUTE 56,379 SF 6/28/2019 6/30/2039 $771,506 increases at start SAFEWAY starting after increases until start NNN of Years 2-5 Year 10 of FMV adjustments

16 RENT SCHEDULE

RENT SCHEDULE

LEASE YEARS INCREASES ANNUAL RENT RENT/SF

7/1/2019 -- $771,506 $13.68 7/1/2020 1.50% $783,079 $13.89 7/1/2021 1.50% $794,825 $14.10 7/1/2022 1.50% $806,747 $14.31 7/1/2023 1.50% $818,848 $14.52 7/1/2029 7.50% $880,262 $15.61 7/1/2034 7.50% $946,282 $16.78

OPTION YEARS INCREASES ANNUAL RENT RENT/SF

Option 1 7.50% $1,017,253 $18.04 Option 2 7.50% $1,093,547 $19.40 Option 3 7.50% $1,175,563 $20.85 SAFEWAY // FINANCIAL ANALYSIS // SAFEWAY Option 4 7.50% $1,263,730 $22.41 Option 5 7.50% $1,358,510 $24.10 Option 6 TBD FMV* FMV Option 7 TBD FMV* FMV Option 8 TBD FMV* FMV

*Greater of (i) the then current FMV rental rates or (ii) rent in the previous option period

17 35,923 46,466 TOTAL POPULATION WITHIN TOTAL POPULATION WITHIN 5-MILE RADIUS IN 2000 5-MILE RADIUS IN 2018

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, as- sumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap ACT ID ZAA0210388 MARKET OVERVIEW

SAFEWAY | MCMINNVILLE, OR SAFEWAY // MARKET OVERVIEW // SAFEWAY

19 LOCATION OVERVIEW McMinnville is the county seat and largest city in Yamhill County, Oregon. McMinnville is at the confluence of the North and South Forks of the Yamhill River in the Willamette Valley. The population of McMinnville is just over 34,000. Oregon Route 99 West runs directly through the city and connects it to downtown Portland, 38 miles to the north, and Salem, the state capital, 26 miles south.

SAFEWAY // MARKET OVERVIEW The city is home to Oregon Mutual Insurance Company, Linfield College, Organic Valley creamery, Wings and Waves Waterpark, Joe Dancer Park, and Evergreen Aviation Museum, the home of Howard Hughes’ famed Spruce Goose flying boat. The historic downtown area (known as Third Street) is the heart of the city. Voted among the best main streets in America according to the American Planning Association, the downtown core hosts a variety of events and community celebrations.

Cascade Steel has been in McMinnville for over 40 years. The McMinnville location employs nearly 430 people. Other large employers include Willamette Valley Medical, employing 600 people; Oregon Mutual Insurance Company, employing nearly 300; Walmart, with 200; and Lowes Home Centers, with 150 employees.

Both Linfield College and a Chemeketa Community College campus are located in McMinnville. Linfield College boasts 48 majors to over 2,000 students and sits at the center of McMinnville on nearly 200 acres. The full system of Chemeketa Community College serves 30,000 students annually. Just 20 minutes from McMinnville is George Fox University. More than 4,100 students attend classes on the university’s residential campus in Newberg, Oregon. POPULATION Forbes consistently ranks George Fox among the top Christian colleges in the country in its annual INCREASED BY “America’s Best Colleges” rankings; the university was again listed in the 2017-18 list. 30% SINCE 2000 Known as a wine-lover’s heaven and a Pinot Noir paradise, McMinnville sits in the heart of the Willamette Valley, a 150-mile long valley that contains more than 19,000 acres of vineyards and 500+ wineries. The Willamette Valley was named Wine Enthusiast’s 2016 Wine Region of the Year. Wine- related tourism in all of Oregon has increased 167% from 2013 to 2016 alone. Reports indicate that HOUSEHOLD while national wine dollar sales in off-premise retail channels grew 2.1% versus one year ago, Oregon’s INCOME sales grew 17%. While the whole state has experienced a strong boom, Yamhill County has emerged as INCREASED BY the most powerful player in Oregon’s wine economy. From wholesale and retail impacts, plus tourism, wages, job numbers and revenue generated by property taxes in each of Oregon’s 36 counties, Yamhill 23% SINCE 2000 County rated higher than its neighbors. For 2016, Yamhill County’s wine-related revenue topped $687 million, just under the sum produced by the five surrounding counties combined at about $720 million.

20 MCMINNVILLE OREGON

LOCATION HIGHLIGHTS

►► Popular wine tourism destination and home to the world famous Evergreen Aviation and Space Museum

►► Home to one of Oregon’s most diverse employment sectors

►► Located 50 miles from the Pacific Ocean, 35 miles from Portland, and 26 miles from Salem, the state capital

►► McMinnville has an unemployment rate of 3.2%; the US average is 3.7%

►► Home to nationally ranked colleges such as Linfield College, Chemeketa Community College, and close to George Fox University and Portland Community College’s Newberg Campus SAFEWAY // MARKET OVERVIEW // SAFEWAY

YAMHILL COUNTY LOWER RATE OF HOME TO NATIONALLY BOASTS STRONGEST UNEMPLOYMENT THAN RANKED COLLEGES LIKE WINE SALES IN STATE NATIONAL AVERAGE LINFIELD AND CHEMEKETA

21 Population In 2018, the population in a five-mile radius of the subject property is 46,473. The population has changed by 29.34% since 2000. It is DEMOGRAPHICS HIGHLIGHTS estimated that the population in the area will be 49,693 five years from now, which represents a change of 6.93% from the current year. The current population is 48.29% male and 51.71% female. The median age POPULATION 3 MILES 5 MILES 10 MILES of the population in the area is 36.68, compare this to the US average which is 37.95. The population density in the area is 590.12 people per 2023 Projection 32,910 49,685 68,709 square mile. Total Population 2018 Estimate 31,216 46,466 64,603 Total Population Households

SAFEWAY // MARKET OVERVIEW 2010 Census 29,481 43,377 60,274 There are currently 16,442 households in a five-mile radius of the subject Total Population property. The number of households has changed by 31.18% since 2000. 2000 Census It is estimated that the number of households in the area will be 17,911 25,669 35,923 51,126 Total Population five years from now, which represents a change of 8.93% from the current year. The average household size in the area is 2.70 persons. Daytime Populations 36,956 46,425 60,911 Total Population

HOUSEHOLDS 3 MILES 5 MILES 10 MILES Income

2023 Projection In 2018, the median household income for a five-mile radius of the subject 11,947 17,909 24,772 Total Households property is $49,444, compare this to the US average which is currently $58,754. The median household income for the area has changed by 2018 Estimate 11,123 16,439 22,877 22.83% since 2000. It is estimated that the median household income in Total Households the area will be $58,390 five years from now, which represents a change 2010 Census of 18.09% from the current year. 10,620 15,509 21,525 Total Households The current year per capita income in the area is $24,811, compare this 2000 Census to the US average, which is $32,356. The current year average household 9,077 12,532 17,635 Total Households income in the area is $68,297, compare this to the US average which is $84,609. 2018 Estimate 2.61 2.7 2.72 Average Household Size

HOUSEHOLDS BY INCOME 3 MILES 5 MILES 10 MILES Housing The median housing value in the five-mile radius was $226,441 in 2018; 2018 Estimate compare this to the US average of $201,842. In 2000, there were 8,126 $150,000 or More 6.71% 6.85% 7.87% owner-occupied housing units in the area and there were 4,408 renter- occupied housing units in the area. The median rent at the time was $544. $100,000 - $149,000 11.90% 11.83% 13.55% $75,000 - $99,999 10.23% 11.53% 12.75% $50,000 - $74,999 17.99% 19.31% 19.89% $35,000 - $49,999 15.41% 15.58% 15.19% Employment Under $35,000 37.75% 34.92% 30.76% In 2018, there are 16,472 employees in the five-mile radius; this is also known as the daytime population. The 2000 Census revealed that Average Household Income $66,442 $68,296 $73,631 50.00% of employees are employed in white-collar occupations in this geography, and 49.87% are employed in blue-collar occupations. In Median Household Income $46,393 $49,442 $54,956 2018, unemployment in this area is 5.10%. In 2000, the average time Per Capita Income $24,603 $24,811 $26,563 22 traveled to work was 25 minutes. COUNTY DEMOGRAPHICS

TRAVEL TIMES FROM MCMINNVILLE

Salem, Oregon 30 Minutes

Portland, Oregon 1.0 Hour

Oregon Coast 1.0 Hour

Bend, Oregon 1.6 Hours

Seattle, Washington 3.5 Hours

Vancouver, BC, Canada 6.0 Hours YAMHILL COUNTY POPULATION YAMHILL COUNTY OREGON STATE

2023 Projection 112,807 4,311,581 Total Population 2018 Estimate 106,203 4,125,256 Total Population 2010 Census 99,194 3,831,074 Total Population 2000 Census 84,996 3,420,901 Total Population

HOUSEHOLDS BY INCOME YAMHILL COUNTY OREGON STATE

2018 Estimate MARKET OVERVIEW // SAFEWAY

$150,000 or More 7.6% 9.6% $100,000 - $149,000 13.4% 14.1% $75,000 - $99,999 14.0% 13.7% $50,000 - $74,999 19.7% 19.2% $35,000 - $49,999 15.7% 12.9% Under $35,000 29.5 21.7%

Average Household Income $73,347 $79,512 Median Household Income $55,973 $58,172

23 SAFEWAY // PROPERTY PHOTOS 24 GREAT VISIBILITY ON OR-99 WEST WITH TRAFFIC COUNTS OVER 20,000 VPD

OREGON ROUTE 99 W SAFEWAY // MCMINNVILLE, OR

EXCLUSIVELY LISTED BY

JOSEPH BLATNER Senior Vice President Investments Portland Office Direct 503.200.2029 Office 503.200.2000 [email protected]