WALGREENS (Acquired Rite Aid)

OFFERING MEMORANDUM | 96 DOLSON AVENUE MIDDLETOWN, NEW YORK 2 INVESTMENT OVERVIEW 3 INVESTMENT OVERVIEW

• Walgreens in Middletown, New York | 70 Miles North of New York INVESTMENT OVERVIEW City • Originally Constructed as Rite Aid Relocation Store in 2007 Marcus & Millichap is pleased to present Walgreens in Middletown, New York; located 70 miles north of New York City. Originally • High Performing Store Selected constructed as a Rite Aid Relocation Store in 2007, this asset was to Undergo Full Walgreen’s acquired by Walgreens in June 2017, and due to its high performance Rebranding as Part of Their was selected to undergo the full Walgreens rebranding. The lease Acquisition of Rite Aid in June 2017 will be guaranteed by a wholly-owned subsidiary of Walgreens Boots Alliance, Incorporated (Inc). There are currently 10 years • Nearly 10 Years Remaining on remaining on the original 20-year, double-net (NN) lease with a Double-Net (NN) Lease with minimal landlord responsibilities. Walgreens ranked number 17 on the June 2017 Fortune 500 List. Minimal Landlord Responsibilities

The subject property has more than 225 feet of frontage along Dolson • Recently Upgraded to Wellness Avenue, a dense thoroughfare with more than 605,000 square Concept | Features Double Drive feet of retail. National credit anchors include: National Wholesale Thru and GNC’s Store-Within-A- Liquidators and ShopRite. This asset was recently upgraded to the Store Concept | Reserved for Top Wellness Concept, featuring a double drive through and GNC’s 25 Percent of Stores store-within-a store concept only utilized in top 25 percent of stores. More than 21,000 vehicles pass this asset daily. This asset • Dense Demographics | More Than also benefits from an affluent market with strong demographics. 60,000 Residents Within Five There are more than 60,000 residents with an average household Miles income (AHHI) that exceeds $80,000 in the five-mile radius.

Additionally, Walgreens is less than five miles from Orange Regional • Strong Retail Corridor | More Than Medical Center, boasting more than 380 beds, 600 doctors, 605,000 Square Feet of Retail, outpatient services, diagnostic imaging, and laboratory services. Anchored by National Wholesale Orange County Community College sits half a mile north with more Liquidators and ShopRite than 6,000 students enrolled. • National Tenants Committing Additional tenants in the immediate vicinity include: McDonald’s, Capital to Middletown Market | IHOP, Dunkin’ Donuts, AutoZone, Wendy’s, Taco Bell, KeyBank, New Development Golden Corral Dollar General and many more. and New Construction Burger King Within Two Miles

• Additional Tenants in the Immediate Vicinity Include: McDonald’s, IHOP, Dunkin’ Donuts, AutoZone, Wendy’s, Taco Bell, KeyBank, Dollar General, Dairy Queen, NAPA Auto Parts, and Many More

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. 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. Marcus & Millichap is a trademark of © 2018 Marcus & Millichap. Activity ID: Z0330388 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of © 2018 Marcus & Millichap. Activity ID: Z0330388 4 FINANCIAL OVERVIEW 5 LEASE SUMMARY

FINANCIAL OVERVIEW 96 DOLSON AVENUE MIDDLETOWN, NEW YORK 10940 LEASE SUMMARY

PRICE $8,892,307 LEASE COMMENCEMENT DATE 9/1/2007 OFFICIAL LETTER STATING

CAP RATE 6.50% LEASE EXPIRATION DATE 12/31/2027 WALGREENS ACQUISITION

NOI $578,000 LEASE TERM 20 Years

PRICE PER SQUARE FOOT $610.57 TERM REMAINING 10 Years RENT PER SQUARE FOOT $39.69 2.5% In Each INCREASES Option Period YEAR BUILT 2007 OPTIONS TO RENEW 4, 5-Years APPROXIMATE LOT SIZE 0.85 Acres

GROSS LEASEABLE AREA 14,564

TYPE OF OWNERSHIP Fee Simple

Wholly-Owned Subsidiary LEASE GUARANTOR of Walgreens Boots Alliance, Incorporated (Inc)

LEASE TYPE Double-Net (NN)

ROOF AND STRUCTURE Landlord Responsible

Founded in 1901, Walgreens Boots Alliance, Incorporated is the nation’s largest drugstore chain. Charles R. Walgreen built the chain from a single drugstore 211 Maybrook where he created his own drug products. By 1919 there were 20 stores, and in 209 Hoewells 416 1927 the Company went public. Three years later, the store count was well over 211 17 Scotchtown 208 500. Today, Walgreen operates over 8,200 stores in all 50 states, DC, Puerto Rico Otisville Washington 211 207 and the United States Virgin Islands. More than 400 of its stores offer medical Cuddebackville Heights Michigan 84 Rock Tavern services through its Healthcare Clinics. Additionally, the Company operates digital 17M businesses that include: Walgreens.com, drugstore.com, Beauty.com, SkinStore. Corners 211 207 com and VisionDirect.com. 211 Campbell Hall Gode roy In December 2014, Walgreen acquired the remaining 55 Percent of European S S

U Middletown U retailer and wholesaler Alliance Boots, and reorganized under a holding company I I Mechanicstown 209 D D called Walgreens Boots Alliance, Incorporated; headquartered in Chicago. The E A A

I Hamptonburgh

R R

Walgreen chain now constitutes the Retail Pharmacy United States of America

E E

Division of Walgreens Boots Alliance, Incorporated. 1

L 84 I

I Kipps

Rite Aid said in March 2018 that it has transferred 1,651 of the 2,186 stores included 17 3

Huguenot 5 in the deal with Illinois-based Walgreens, one of the country’s largest pharmacy 6 SITE operators. New Hampton 94 The remaining stores are expected to be transferred by the spring. 84 Goshen The store-sale deal was announced last summer following a failed attempt by 6 208 Walgreens to buy Rite Aid outright. The original Walgreens-Rite Aid deal was TENANT PROFILE State Hill unveiled in 2015 but came apart amid regulatory scrutiny. 6 84 Ridgebury TENANT TRADE NAME Walgreens Boots Alliance, Incorporated209 (Inc) Howell 94 TENANT Walgreens 6 South 6 OWNERSHIP Public Johnson Blooming 6 Chester Greenville Grove Wholly-Owned Subsidiary of Walgreens 84Boots 17A 208 LEASE GUARANTOR 284 Alliance, Incorporated (Inc) 94 6 NUMBER OF LOCATIONS 13,200+ 1-Mile 3-Mile 5-Mile 1-Mile 3-Mile 5-Mile 1-Mile 3-Mile 5-Mile POPULATION HOUSEHOLDS HOUSEHOLD (HH) INCOMES Westtown Marycrest 6 SALES VOLUME $117.3-Billion (2016) 2000 Population 8,163 35,765 54,466 2000 Households 3,122 13,129 19,726 2017 Average HH Income $63,924 $76,264 $81,802 NET WORTH $30.2-Billion (2016) 2010 Population 9,328 40,133 60,421 2010 Households 3,521 14,549 21,635 2017 Median HH In- come $53,020 $60,211 $66,474 2017 Population 9,860 41,262 62,363 2017 Households 3,728 14,988 22,408 CREDIT RATING BBB 2017 Per Capita In- $24,169 $27,702 $29,393 2022 Population 10,086 41,990 63,512 2022 Households 3,815 15,257 22,832 come

ABOUT MIDDLETOWN

Middletown is a city in Orange County, New York. It lies in New York’s Hudson Valley region, near the Wallkill River and the foothills of the Shawangunk Mountains. Situated between Port Jervis and Newburgh, Middletown falls within the New York metropolitan area.

Incorporated in 1888, the city grew in the 19th and early 20th centuries as a stop on several lower New York State railroads, attracting several small manufacturing businesses. The surrounding area is partly devoted to small dairy farms. Mediacom Communications Corp, the Galleria at Crystal Run, SUNY Orange, Walmart, Touro College of Osteopathic Medicine, and the Times Herald-Record are major employers in Middletown.

Shopping in the area includes The Shoppes at Orange Plaza and Galleria at Crystal Run, a mall just east of Middletown, and a long retail strip along Route 211 on the east side of town.

The downtown area, particularly North Street and East/West Main Street, has a variety of ethnic eateries and various small shops. A children’s science museum, called The Interactive Museum, and several churches are located in the neighborhood. The city also has movie theaters, the historic Paramount Theatre, a local arts council, bowling alleys, WALL and WOSR radio stations and Thrall Library downtown. Middletown is also host to the Orange County Fair each summer.

SUNY Orange, previously known as Orange County Community College is located in Middletown. Its campus includes the historic Webb Horton House, more commonly known as Morrison Hall. It also has a campus in Newburgh, and three satellite campuses, but the main campus is in Middletown. A total of more than 6,100 students attend SUNY Orange.

Health care services are provided at Orange Regional Medical Center, a new hospital completed in 2011. It is a major employer in the region.

The Highland Lakes State Park is the nearest State Park. Good choices for hiking, biking, and country drives are nearby.

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. Marcus & Millichap is a trademark of © 2018 Marcus & Millichap. Activity ID: Z0330388 MARCUS & MILLICHAP HEREBY ADVISES ALL PROSPECTIVE PURCHASERS OF NET LEASED PROPERTY AS FOLLOWS:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

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 net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your 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 past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on 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 of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. WALGREENS (Acquired Rite Aid)

96 DOLSON AVENUE MIDDLETOWN, NEW YORK 10940

BROKER OF RECORD: JD PARKER | MARCUS & MILLICHAP | NEW YORK, NY | LICENSE: 31PA1159742