2816 MACARTHUR ROAD WHITEHALL, PA La-Z-Boy TABLE of CONTENTS

2816 MACARTHUR ROAD WHITEHALL, PA La-Z-Boy TABLE OF CONTENTS

Section 1: Offering Summary Section 3: Location Overview Property Analysis...... 5 Area Demographics...... 12 Lead Agents: Investment Overview & Highlights...... 6 Economy and Travel...... 13 Derrick Dougherty First Vice President Financing Details...... 7 Economic Drivers...... 14 Philadelphia, PA Lease Abstract...... 8 Regional Map...... 15 215.531.7026 [email protected] Competition Map...... 9 License: PA RS305854 Section 2: Tenant Overview Tenant Description...... 10 Steven Garthwaite National Retail Group In The News...... 11 Philadelphia, PA 215.531.7025 [email protected] NON-ENDORSEMENT PA RS332182 AND DISCLAIMER NOTICE NON-ENDORSEMENTS Scott Woodard Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing National Retail Group package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or Philadelphia, PA endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing PA RS329242 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 Mark Krantz DETAILS. National Retail Group Philadelphia, PA PA RS336064 | NJ 1537786 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 Financing Contact: 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 Stehen Filippo or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the M&M Capital Corporation property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's Director-Capital Markets New York, NY or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial 212.430.5288 condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The [email protected] 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 Our Locations: 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 Philadelphia, PA King Of Prussia, PA 2005 Market Street #1510 200 N. Warner Road service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved. Philadelphia, PA 19103 King Of Prussia, PA 19406 P: 215.531.7000 P: 215.531.7000 New York, NY 260 Madison Avenue Marcus & Millichap Real Estate Investment Services of Seattle, Inc. Broker of Record: Sean Beuche 5th Floor License: RB062197C License: PA RM424190 New York, NY 10016 Whitehall Mall

Lehigh Valley Mall

Whitehall Square

Macarthur Towne Centre

Whitehall-Coplay Middle School (1,036 Total Enrolled) Subject

MACARTHURProperty RD (32,396 VPD) Lehigh Valley Mall

Whitehall Mall

US HWY 22 (80,528 VPD)

Macarthur Towne Centre

MACARTHUR RD (32,396 VPD)

Whitehall Square

Subject Property MACARTHUR RD (32,396 VPD) Whitehall-Coplay Middle School (1,036 Total Enrolled) US HWY 22 (80,528 VPD)

Whitehall-Coplay School District (4,293 Total Enrolled) La-Z-Boy PROPERTY OVERVIEW Lease Summary Rent Schedule

Tenant LaZboy Term Annual Rent % Increase Guarantor Corporate Years 1-5 $434,520.00 $ Lease Type NNN Years 6-10 $456,246.00 5%

Roof and Structure Landlord Option Terms List Price: Base Lease Term 10 Years Years 11-15 $479,058.30 5% $6,207,428

Lease Commencement 10/30/2016 Years 16-20 $503,011.22 5%

Lease/ Rent Expiration 10/31/2026 Years 21-25 $528,161.78 5% Rent Increases 5% In Year 6 and Options Years 26-30 $554,569.86 5% % Cap Rate: 7.00%

Lease Type NNN

Lot Size: 1.42 Acres

2816 Macarthur Rd Whitehall, PA

DD&P | 5 La-Z-Boy OVERVIEW & HIGHLIGHTS

Marcus and Millichap is pleased to offer the opportunity to acquire the fee simple interest (land & building ownership) in a NNN leased, corporate guaranteed, La-Z-Boy investment property located in Whitehall, PA. La-Z-Boy is an American furniture manufacturer based in Monroe, Michigan that makes home furniture, recliners, sofas and employs more than 11,000 people. The tenant has 7 years remaining in their initial term with 4 (5-year) option periods to extend. The lease features a 5% rental increase in October 2022 and during each option period, steadily growing NOI and hedging against inflation. The lease is NNN with few landlord responsibilities making it an ideal, management free investment opportunity for a local or out of state investor.

La-Z-Boy is strategically located on MacArthur Road which serves as the primary retail thoroughfare in the immediate trade area averaging 33,990 vehicles passing by daily. The asset is positioned adjacent to the MacArthur Town Center whose anchor tenants, Lowe’s, ALDI, Chick-fil-A, and McDonalds promote crossover traffic to the site. Additionally, the site sits 2 miles north from The Lehigh Valley Mall, (1,180,840 SF) a popular luxury mall anchored by Macy’s, Apple, Pottery Barn, Boscov’s, and JCPenney, further increasing consumer draw to the trade area. Moreover, the asset is directly next to the Whitehall-Coplay School District Campus, home to the local Middle and High School, (approximately 2,000 students) providing a direct consumer base from which to draw. The 3-mile trade area is supported by a dense population of over 102,577 residents with an average household income of $62,479.

HIGHLIGHTS: • La-Z-Boy (NYSE: LZB) has over 350 locations and a market cap of $1.56 billion

• Rare 5% increases throughout the initial term and option periods, generating healthy NOI growth

• Tenant Renewal Options: 4 Periods of 5 Years, Each Bringing the Potential Lease Term to 30 Years

• Ideal, management-free investment for an out-of-state, passive investor

• Situated in the highly coveted Whitehall submarket in the path of growth. Located on MacArthur Road with immediate access to the Lehigh Valley Thruway, providing access from all around Allentown

• MacArthur Road serves as the primary retail thoroughfare in the immediate trade area with nearby national/credit tenants including GIANT, Burlington Coat Factory, DICK’S, Walmart, Wawa, Burger King, and Wendy’s

• Positive Real Estate Fundamentals | Located Less Than 3-Miles from Downtown Allentown

• Over the past 5 years, La-Z-Boy has seen a sales increase of $310 million, an operating income increase of over $60 million and a 65.6% increase in share price 6 | La-Z-Boy La-Z-Boy Director - Capital Markets (212) 430-5288 FINANCING DETAILS STEPHEN FILIPPO [email protected] Marcus & Millichap Capital Corporation 260 Madison Avenue, 5th Floor New York, NY 10016

Financing Summary Returns Year 1

Price $6,207,429 CAP Rate 7.00% Down Payment (25%) $1,551,857 Cash-on-Cash 9.39% Loan Amount $4,655,571 Total Return 16.73% Interest Rate 3.80% Debt Coverage Ratio 1.50 Amortization 25 Years Term 2026

Operating Data

Income Year 1

Net Operating Income $434,520 Debt Service ($288,752) Net Cash Flow After Debt Service 9.39% $145,768 Principal Reduction $113,808 Total Return 16.73% $259,577

DD&P | 7 La-Z-Boy LEASE ABSTRACT

Tenant La-Z-Boy, Whitehall, PA

Guarantor Corporate

Square Footage 22,411 SF

Commencement Date 10/30/2016

Expiration Date 10/31/2026

Initial Term 10 Year Base Term

Option Notice Tenant must exercise option (6) months prior to Lease expiration

Estoppel/SNDA Tenant to provide certificate upon written request of Landlord

Taxes Tenant is responsible for Real Estate taxes

Insurance Tenant is responsible for Insurance expenses

CAM Tenant is responsible for CAM expenses

Utilities Tenant is responsible for Utility expenses Landlord is responsible for repair & replacement of the Premises' structure; Landlord is responsible for the replacement of the Roof & Structure roof, Tenant is responsible for the maintenance of roof HVAC Landlord is responsible for HVAC replacement, Tenant is responsible for HVAC maintenance (Maint & Replacement)

Permitted use Premises may be used for any lawful retail purpose

Required Occupancy Tenant may cease operation of business w/in Premises, while remaining responsible for Lease obligations

Assignment Note Tenant may assign lease w/ consent of Landlord, however shall remain liable for Lease obligations

8 | La-Z-Boy La-Z-Boy COMPETITION MAP

MILES FROM Address SUBJECT

Subject 2816 MacArthur Rd Whitehall, PA -

Aarons 2544 MacArthur Rd Whitehall, PA .5

Big Lots 2631 MacArthur Rd, Whitehall, PA 1

Ashley Furniture 2030 MacArthur Rd Whitehall, PA 1.4

Mealey's 2180 MacArthur Rd Whitehall, PA 1.5

Raymour & Flan- 1937 MAcArthur Rd Whitehall, PA 1.5 igan

Bobs Discount 740 Lehigh Valley Mall Whitehall, PA 1.8

Big Lots 740 Lehigh Valley Mall Whitehall, PA 1.9

Aarons 1841 S 4th St Allentown, PA 5.4 Subject Property

5 Mile Radius 3 Mile Radius 1 Mile Radius

DD&P | 9 La-Z-Boy Portfolio TENANT DESCRIPTION

La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and re- tails upholstery furniture products, accessories, and casegoods furniture products in the United States, Canada, and internationally. It operates through Upholstery, Case- goods, and Retail segments. The Upholstery segment manufactures and imports up- OWNERSHIP: holstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, LA-Z-BOY INCORPORATED sectionals, modulars, ottomans, and sleeper sofas. It sells its products directly to La-Z-Boy Furniture Galleries stores, operators of La-Z-Boy Comfort Studio locations, England Custom Comfort Center locations, dealers, and other independent retailers. FOUNDED 1927 The Casegoods segment imports, markets, and distributes casegoods (wood) furniture, including bedroom sets, dining room sets, entertainment centers, and occasion- INDUSTRY TYPE al pieces, as well as manufactures upholstered furniture. This segment sells its prod- Furniture ucts to dealers, La-Z-Boy Furniture Galleries stores, and other independent retailers under the American Drew, Hammary, and Kincaid brands. NO. OF LOCATIONS The Retail segment sells upholstered furniture, casegoods, and other accessories to 360+/- the end consumer through its retail network. It operates a network of 156 company-owned La-Z-Boy Furniture Galleries stores. La-Z-Boy Incorporated also produces HEADQUARTERED reclining chairs; and manufactures and distributes residential furniture. The compa- MOR N OE, MI ny was formerly known as La-Z-Boy Chair Company and changed its name to La-Z- Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is based in Monroe, Michigan. 2019 REVENUE $1.72 Billion La-Z-Boy includes various companies and brands including La-Z-Boy Residential, La- Z-Boy Kids, La-Z-Boy Hospitality, Lea Furniture, American Drew, Kincaid Furniture, Bauhaus USA Furniture, Hammary Furniture and England Furniture Incorporated. WEBSITE: www.la-z-boy.com

10 | La-Z-Boy La-Z-Boy Portfolio IN THE NEWS

La-Z-Boy Shares Aren’t Taking a Break By: Corrie Driebusch Aug 23, 2019

In a stumbling market, La-Z-Boy Inc. shares are energized. The furniture retailer is up 14% so far this year, outpacing the broader market as well as the broader retail segment. The latest boosts for the stock were some upbeat results, announced this week.

Upholstery sales were better than some analyst expectations, and other analysts cheered the company’s adjusted operating income and sales coming in above their estimates.

Sitting PrettyShares of La-Z-Boy are up this year, rising in recent sessions on the heels of solid earnings.

In its wholesale segment, higher-priced items bolstered upholstery sales. The results sent shares up 4.9% on Thursday, and the stock is one of the few gainers on Friday while the broader market slumps.

It is also a standout among home furnishing stocks. Residential furniture-maker HG Holdings Inc. was down 5.1% Friday, Bassett Furniture Industries Inc. fell 5.6% and Ethan Allen Interiors Inc. was off 2.2%.

There are still some concerns, however, for La-Z-Boy.

“In a vacuum where investors did not have to worry about a potential recession and/or China tariffs, La-Z-Boy would be a compelling buy,” said Robert Griffin, an analyst at Raymond James. Mr. Griffin added, however, that retail earnings over the past two weeks point to a relatively healthy U.S. consumer. Furthermore, La-Z-Boy’s balance sheet remains solid.

On its earnings call, La-Z-Boy executives addressed the trade situation and its potential impact on the company.

In regard to tariffs on materials coming from China, Kurt Darrow, the CEO, said La-Z-Boy increased its pass-through charge on products to account for the tariff increase on these goods.

However, he emphasized that the impact wasn’t too large.

Mr. Darrow also noted that approximately two-thirds of the company’s covers are converted into “cut and sew kits” in its Mexican facility and therefore not subject to the China tariffs.

“While the current tariff is at 25% due to our supply-chain strategy, our pass-through charge to customers is roughly only 3.5% on non-powered upholstery and about 4% on powered products, positioning us well,” he said.

DD&P | 11 Whitehall, PA Positioned Between Two Major MSA's AREA DEMOGRAPHICS Part of the New York MSA and Philadelphia Media Market Rich History With Excellent Demographics Whitehall, a neighboring township to the city of Allentown is located in one of the fast- est-growing counties in Pennsylvania. Lehigh County is located in the Lehigh Valley region of the U.S. state of Pennsylvania. It is part of the New York City metropolitan area, but also borders the Delaware Valley. 84,531 $67,376 3.80% RADIUS 1 MILE 3 MILE 5 MILES Population AVG. HH Income Population Growth within a 3 mile radius within a 3 mile radius within a 3 mile radius Average HH Income $77,791 $67,376 $68,282

Median HH Income $65,841 $55,147 $52,215

Population 8,660 84,531 207,877 Households(#) 3,588 33,158 79,922 43% 3.9% 0.5% Median Age 43.90 38.90 38.50 College Educated Unemployment Rate Job Growth Rate Allentown, PA within a 3 mile radius Allentown, PA

12 | La-Z-Boy Lehigh County, PA ECONOMY & TRAVEL

Local Economy - Allentown, PA With a population of 118,032 as of the 2010 census, Allentown it is the third most Top Employers populated city in the state. Located in Lehigh County in the Lehigh Valley region of the Organization/Company Industry Type U.S. state of Pennsylvania it is part of the New York City MSA, but also borders the Lehigh Valley Hospital Center Healthcare

Delaware Valley and is a part of the Philadelphia media market. Saint Luke's Hospital Healthcare

Amazon Distribution

Lehigh Valley Physician Group Healthcare

Mack Trucks Inc. Manufacturing

Lehigh County Public Works

Allentown School District Education

Air Products & Chemicals Inc. Chemical Sales

B Braun Medical Inc. Manufacturing

The township’s main north-south road is MacArthur Road (PA 145), which has an interchange with US 22 in the south and crosses PA 329 in the north. PA 145 heads south into Allentown and north to Walnutport. US 22 passes east-west through the southern portion of Whitehall Township on a freeway called the Lehigh Valley Thruway, with interchanges at PA 145 and Fullerton Avenue.

US 22 in eastern PA is a four lane expressway between Interstate I-78 is a highway in the Northeast United Easton and Interstate 78 to the west; it is dually 78 States, running 144 miles (231 km) from I-81 northeast of designated with the Lehigh Valley Thruway in Allentown. Harrisburg, Pennsylvania, through Allentown, Pennsylvania

Interstate 476 connects the Philadelphia metropolitan North of Allentown in Whitehall Township, a seven-mile) 476 area with the Lehigh Valley, the Poconos, and the Wyoming portion of PA 145 is known as MacArthur Road. PA 145 is Valley. the main north-south arterial into Allentown.

DD&P | 13 Allentown, PA ALLENTOWN, PA: LOCATION OVERVIEW • Allentown was one of only six communities in the country to have been named a “national success story” in April 2016 by the Urban Land Institute.

• The city’s downtown redevelopment and transformation has generated nearly $1,000,000,000 in new development projects as of April 2019

The city of Allentown, located in Eastern Pennsylvania, is the principal city of the Greater Allentown Area and the county seat for Lehigh County. With a population of 118,032 as of the 2010 census, it is the third most populated city in the state, after Philadelphia and Pittsburgh and is the third most-populous municipality. Today, Allentown is a city pulsating with gentrification. It is also well equipped with agencies that represent civilization at it’s best-churches, hospitals, clubs, fraternal societies, recreational centers, schools and colleges, a historical society, an art institute as well as a daily newspaper.

PPL: • PPL is a energy company headquartered in Allentown delivering electricity to 10.5 million 5 12.26% customers in Pennsylvania, Kentucky, and Great $7.4B Britain. MAJOR COLLEGES/ MANUFACTURING POPULATION UNIVERSITIES IN CONTRIBUTION TO GROWTH SINCE • With 12,512 employees, PPL is the largest publicly THE MSA OVERALL GDP 2000 traded company headquartered in Allentown, PA.

90miles 8,500 835,000 TO NEW YORK SEATS IN THE PPL LEHIGH VALLEY IS CITY AND 70 TO CENTER (MULTI HOME TO NEARLY PHILADELPHIA PURPOSE CENTER) 1M RESIDENTS

14 | La-Z-Boy La-Z-Boy

Bethlehem Allentown

Reading

Pottstown DISCLAIMER NOTICE:

Lead Agents: Marcus & Millichap hereby advises all prospective purchasers of Single Tenant Net Leased property as follows:

Derrick Dougherty The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, First Vice President Philadelphia, PA Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any 215.531.7026 investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about [email protected] the accuracy or completeness of any information provided. License: PA RS305854

As the Buyer of a single tenant property, it is the Buyer’s responsibility to independently confirm the accuracy and Steven Garthwaite National Retail Group completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for Philadelphia, PA your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation 215.531.7025 to conduct a due diligence examination of this Property for Buyer. [email protected] PA RS332182 Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a single tenant property to you depends on factors Scott Woodard that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and National Retail Group Philadelphia, PA construction advisors should conduct a careful, independent investigation of any single tenant property to determine to your PA RS329242 satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s Mark Krantz National Retail Group past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, Philadelphia, PA the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on PA RS336064 | NJ 1537786 a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation Financing Contact: of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of Stehen Filippo locating a M&M Capital Corporation Director-Capital Markets replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able New York, NY to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make 212.430.5288 alternate use of the property. [email protected] By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold Our Locations: it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this single Philadelphia, PA King Of Prussia, PA tenant property. 2005 Market Street #1510 200 N. Warner Road Philadelphia, PA 19103 King Of Prussia, PA 19406 P: 215.531.7000 P: 215.531.7000 New York, NY 260 Madison Avenue 5th Floor New York, NY 10016 2816 MACARTHUR ROAD WHITEHALL, PA