Walgreens | Petco 800 Waverley Road, North Andover, Massachusetts 01845 CONFIDENTIALITY and DISCLAIMER

OFFERING MEMORANDUM EXCLUSIVE NET – LEASE OFFERING

Walgreens | Petco 800 Waverley Road, North Andover, Massachusetts 01845 CONFIDENTIALITY AND DISCLAIMER

Marcus & Millichap hereby advises all prospective some properties, including newly-constructed facilities or the subject property, the future projected financial purchasers of Net Leased property as follows: newly-acquired locations, may be set based on a tenant’s performance of the property, the size and square footage projected sales with little or no record of actual of the property and improvements, the presence or The information contained in this Marketing Brochure has performance, or comparable rents for the area. Returns absence of contaminating substances, PCB’s or asbestos, been obtained from sources we believe to be reliable. are not guaranteed; the tenant and any guarantors may the compliance with State and Federal regulations, the However, Marcus & Millichap has not and will not verify fail to pay the lease rent or property taxes, or may fail to physical condition of the improvements thereon, or the any of this information, nor has Marcus & Millichap comply with other material terms of the lease; cash flow financial condition or business prospects of any tenant, or conducted any investigation regarding these matters. may be interrupted in part or in whole due to market, any tenant’s plans or intentions to continue its occupancy Marcus & Millichap makes no guarantee, warranty or economic, environmental or other conditions. Regardless of the subject property. The information contained in this representation whatsoever about the accuracy or of tenant history and lease guarantees, Buyer is Marketing Brochure has been obtained from sources we completeness of any information provided. responsible for conducting his/her own investigation of all believe to be reliable; however, Marcus & Millichap has matters affecting the intrinsic value of the property and not verified, and will not verify, any of the information As the Buyer of a net leased property, it is the Buyer’s the value of any long-term lease, including the likelihood contained herein, nor has Marcus & Millichap conducted responsibility to independently confirm the accuracy and of locating a replacement tenant if the current tenant any investigation regarding these matters and makes no completeness of all material information before should default or abandon the property, and the lease warranty or representation whatsoever regarding the completing any purchase. This Marketing Brochure is not terms that Buyer may be able to negotiate with a accuracy or completeness of the information provided. All a substitute for your thorough due diligence investigation potential replacement tenant considering the location of potential buyers must take appropriate measures to verify of this investment opportunity. Marcus & Millichap the property, and Buyer’s legal ability to make alternate all of the information set forth herein. expressly denies any obligation to conduct a due diligence use of the property. examinationof this Property for Buyer. NON-ENDORSEMENT NOTICE By accepting this Marketing Brochure you agree to release Any projections, opinions, assumptions or estimates used Marcus & Millichap Real Estate Investment Services and Marcus & Millichap Real Estate Investment Services, Inc. in this Marketing Brochure are for example only and do hold it harmless from any kind of claim, cost, expense, or (“M&M”) is not affiliated with, sponsored by, or endorsed not represent the current or future performance of this liability arising out of your investigation and/or purchase by any commercial tenant or lessee identified in this property. The value of a net leased property to you of this net leased property. marketing package. The presence of any corporation’s depends on factors that should be evaluated by you and logo or name is not intended to indicate or imply your tax, financial and legal advisors. CONFIDENTIALITY AND DISCLAIMER affiliation with, or sponsorship or endorsement by, said corporation of M&M, its affiliates or subsidiaries, or any Buyer and Buyer’s tax, financial, legal, and construction The information contained in the following Marketing agent, product, service, or commercial listing of M&M, advisors should conduct a careful, independent Brochure is proprietary and strictly confidential. It is and is solely included for the purpose of providing tenant investigation of any net leased property to determine to intended to be reviewed only by the party receiving it lessee information about this listing to prospective your satisfaction with the suitability of the property for from Marcus & Millichap and should not be made available customers. your needs. to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been ALL PROPERTY SHOWINGS ARE BY APPOINTMENT Like all real estate investments, this investment carries prepared to provide summary, unverified information to ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP significant risks. Buyer and Buyer’s legal and financial prospective purchasers, and to establish only a preliminary AGENT FOR MORE DETAILS. advisors must request and carefully review all legal and level of interest in the subject property. The information financial documents related to the property and tenant. contained herein is not a substitute for a thorough due While the tenant’s past performance at this or other diligence investigation. Marcus & Millichap has not made locations is an important consideration, it is not a any investigation, and makes no warranty or guarantee of future success. Similarly, the lease rate for representation, with respect to the income or expenses for Photo: Petco Headquarters: 10850 Via Frontera, San Diego, CA Table of Contents

Financial Overview ➢ Investment Highlights and Overview ➢ Tenant Overview Pricing & Financial Analysis ➢ Lease Summary ➢ Recent Sale Comparables Property Overview ➢ Location Highlights and Overview ➢ Surrounding Area Map ➢ Property Photos ➢ Surrounding Area Photos ➢ Regional Map ➢ State Map Photo: Walgreens Lake Cook Corporate Campus - Deerfield, IL

INVESTMENT OVERVIEW Services information This Year Built Lot Size Petco SF Walgreens SF Total Building SF (Petco) Lease Term Remaining (Walgreens) Lease Term Remaining Base Annual Rent CAP Rate Price Address Property Name information Price $15,865,440 is a service and bears has mark been all Financial Summary of risk secured Marcus for any Offering Terms & from Millichap inaccuracies sources Real we . Any Estate believe projections, $991,590 NOI Investment to be reliable, opinions, Services, 800 Waverley Avenue, but Walgreens and Petco assumptions Y we 0330533 North Andover, MA make no or representations estimates $15,865,440 6.25% CAP Rate used 4.42 Acres 2.50 Years 11,053 SF 14,692 SF 25,745 SF 15+ Years $991,590 herein or warranties, are 6.25% for 2007 example expressed purposes or ➢ ➢ ➢ ➢ ➢ ➢ implied, animals resources companion Founded services multi communities daily Founded $ one the Walgreens 2007 square Waverley Marcus 991 only - Easy Credit, Walgreens options currently Walgreens of Strong Several Located Car Proximity Winthrop lease as and half , . - 590 to channel living do the the feet . everywhere not & From . accuracy . years in in Road represent Access Petco for Millichap is . Property Demographics and 1901 “BBB” animals 1965 across Shopping has subject where of pet Within access the the Downtown remaining To in Avenue Investment Highlights is is current information , 15 Corporate , | North owners, subject Walgreens’ Boston, situated at Petco’s . . they Rating years Investment Overview the 15 or is to to future By the . References pleased a Walking Andover, Centers . Years live goods nation, performance 25 remaining to on providing the goal Signalized on - MA by Boston a year and to | the Guarantee square 12 goal 4 company Over Standard to of and . is Remaining 42 - | work the and year lease Massachusetts double and footage Distance present to Located property is acres on services, personalized 180 to or . provide double . a Medical The the age . Marcus Hard Combined - works be net central are of , 000 & existing a approximate (NYSE company & consumers’ land Approximately Millichap lease - Walgreens Poor’s to net | and the Corner toward People . Centers . Long . Real part lease Major The Buyer : The with best WBA) customer pharmacy, annual lease Estate provides must total property sustainability of with Investment over of verify quality Term first Within with and Area rent | people’s building the Waverley approximately 15 choice Investment Petco ten, service the Thirty health Lease for of years was a Traffic most five life 5 both space located for lives constructed and Mile - and Minutes remaining : year and possible Road convenient, health Walgreens tenants safety Drivers is and wellness two renewal Radius Grade reliable 25 at and , 745 800 and and the for for By on in is :

5 FINANCIAL OVERVIEW PETCO OVERVIEW

PETCO FAST FACTS: PETCO HAS BEEN PART OF PETS AND PET PARENTS’ LIVES • Founded in 1965 in San Diego 1,500 SINCE 1965 WHEN FOUNDER WALTER EVANS OPENED A MAIL-ORDER VETERINARY SUPPLIES BUSINESS IN LA MESA, Plus stores serving all 50 United CALLIFORNIA IN SAN DIEGO COUNTY. • 85 Plus Unleashed by Petco Stores OVER THE LAST 50 YEARS, PETCO HAS BECOME THE TRUSTED • More than 25,000 Associate SOURCE FOR HIGH QUALITY, PREMIUM PET PRODUCTS AND Partners Nationwide SERVICES IN LOCAL NEIGHBORHOODS ACROSS THE UNITED STATES. • More than 10,000 Different Pet- Related Products for Dogs, Cats, PETCO PROVIDES THE PRODUCTS, SERVICES, ADVICE AND EXPERIENCES THAT KEEP PETS PHYSICALLY FIT, MENTALLY Fish, Reptiles, Amphibians, Birds ALERT, SOCIALLY ENGAGED AND EMOTIONALLY HAPPY. and Small Animals EVERYTHING WE DO IS GUIDED BY OUR VISION FOR HEALTHIER PETS. HAPPIER PEOPLE. BETTER WORLD. • Complete Pet Care and Services, Including: PETCO OPERATES MORE THAN 1,500 STORES ACROSS THE UNITED STATES, MEXICO AND PUERTO RICO, INCLUDING - Grooming MORE THAN 85 UNLEASHED BY PETCO LOCATIONS, A - Dog training SMALLER FORMAT NEIGHBORHOOD SHOP; PRESCRIPTION SERVICES AND PET SUPPLIES FROM THE LEADING - In-store Vaccination Clinics VETERINARY-OPERATED PET PRODUCT SUPPLIER, DRS. - Prescription Services and Pet FOSTER AND SMITH; AND PETCO.COM. Supplies Available Through Drs. THE PETCO FOUNDATION, AN INDEPENDENT NONPROFIT Foster and Smith ORGANIZATION, HAS SERVED AS A VOICE FOR COMPANION ANIMALS ACROSS THE COUNTRY SINCE 1999. EACH YEAR, THE PETCO FOUNDATION HELPS ANIMAL-WELFARE ORGANIZATIONS FIND LIFELONG, LOVING HOMES FOR MILLIONS OF ORPHANED PETS, AS WELL AS FUND SPAY AND NEUTER EFFORTS, ANIMAL ASSISTED THERAPY PROGRAMS AND HUMAN EDUCATION. TODAY, THE FOUNDATION HAS INVESTED MORE THAN $175 MILLION SINCE INCEPTION TO IMPROVE THE WELFARE OF COMPANION ANIMALS ACROSS THE NATION.

Walgreens the nation's largest drugstore chain, constitutes the Retail Pharmacy United States of America Division of Walgreens Boots Alliance, Incorporated (Nasdaq: WBA), the first global pharmacy-led, health and wellbeing enterprise. More than 8 million customers interact with Walgreens each day in communities across America, using the most convenient, multichannel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice. Walgreens operates 8,229 drugstores with a presence in all 50 states, the District of Columbia, Puerto Rico and the United States Virgin Islands. Walgreens digital business includes Walgreens.com, drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com. Walgreens also manages more than 400 Healthcare Clinic and provider practice locations around the country.

Retail Pharmacy United States of America Division of Walgreens Boots Alliance, Incorporated Our Retail Pharmacy United States of America Division’s principal retail pharmacy brands are Walgreens and Duane Reade. Together, they form the largest drugstore chain in the United States of America.

Our Division operates 8,230* drugstores in 50* states, the District of Columbia, Puerto Rico and the United States Virgin Islands. As of August 2014, approximately 76% of the population of the United States of America lives within five miles of a Walgreens.

We sell prescription and non-prescription drugs, as well as general merchandise, including household items, convenience and fresh foods, personal care, beauty care, photofinishing and candy. We provide customers with convenient, omni-channel access to consumer goods and services, pharmacy, and health and wellness services in communities across America. We offer our products and services through drugstores, as well as through mail, telephone and online. We also provide specialty pharmacy, home infusion and respiratory services and operate retail clinics.

Our websites, which include: Walgreens.com and drugstore.com, receive an average of approximately 60 million plus visits per month. Integrated with our e-commerce platform, the Walgreens mobile application allows customers to refill prescriptions through scan technology, receive text messages alerting when a refill is due and other front-end functionality, such as photo and shopping features.

Walgreens Boots Alliance (Nasdaq: WBA) is the first global pharmacy-led, health and wellbeing enterprise in the world. The company was created through the combination of Walgreens and Alliance Boots in December 2014, bringing together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted health care services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years.

The company employs over 370,000 people and has a presence in more than 25 countries; it is the largest retail pharmacy, health and daily living destination in the United States of America and Europe. Including its equity method investments, Walgreens Boots Alliance is the global leader in pharmacy-led, health and wellbeing retail with over 12,800 stores in 11 countries. The company includes: the largest global pharmaceutical wholesale and distribution network with over 340* distribution centers delivering to more than 180,000† pharmacies, doctors, health centers and hospitals each year in 19* countries. In addition, Walgreens Boots Alliance is the world's largest purchaser of prescription drugs and many other health and wellbeing products.

Its portfolio of retail and business brands includes: Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as increasingly global health and beauty product brands, such as: No7 and Botanics. More company information is available at www.walgreensbootsalliance.com. Walgreens is now a Wholly Owned Subsidiary of Walgreens Boots Alliance, Incorporated Walgreens has grown from a single corner in Chicago in 1901, to the Walgreens Boots Alliance Common Stock will Trade on Nasdaq under WBA best corners in America. New Global Enterprise Combines Walgreens, the largest drugstore chain in the Alliance Boots has grown from two European businesses: Boots the United States of America; Boots, the market leader in European retail pharmacy; Chemist, established as a community pharmacy in Nottingham, United and Alliance Healthcare, the leading international wholesales and distributer. Kingdom in 1849 and now an international leader in health and beauty Together, WBA spans more than 25 countries, with over 12,800 stores, over retailing. 370,000 employees, and more than 340 pharmaceutical distribution centers Alliance Healthcare, which developed from its distribution roots in serving more than 180,000 pharmacies and other points of care. European countries in the 19th century to become an international Headquarters Deerfield, Illinois leader in pharmaceutical wholesaling. In addition, more than 6,000 Comprised of Three Divisions Retail Pharmacy United States of America, Retail independent pharmacists across eight European countries are Pharmacy International, and Pharmaceutical Wholesale benefitting as members of its Alphega Pharmacy network. Step 1 in Strategic Transaction Completed in August 2012, when Walgreens invested approximately $4.0 billion in cash and 83.4 million shares of its common stock in exchange for a 45 percent equity ownership stake in Alliance Boots. Step 2 in Strategic Transaction Completed in December 2014, when Walgreens acquired the remaining 55 percent of Alliance Boots in exchange for approximately $5.3 billion in cash and 144.3 million shares of stock. 8 Representative Photo

PRICING AND FINANCIAL ANALYSIS Services information This Rental Increases Options to Renew Roof & Structure Lease Type Remaining Lease Term Lease Expiration Commencement Lease Lease Term Guarantor Tenant Property Type Property Name 06/30/2007 information is a service and bears has mark been Annual Rent all Lease of risk CAP CAP Rate secured Marcus for Price any & from - Millichap inaccuracies 06/30/2032 Year sources Real we . Any Estate believe projections, Investment to be reliable, opinions, Services, but assumptions Annual Rent Y we 0330533 $660,000 make no or representations estimates Net Ten, Landlord Responsible Corporate Guaranty used - Leased Drug Store herein or FiveYear Options Double warranties, are Monthly Rent $11,000,000 for $660,000 example $55,000 06/30/2032 06/30/2007 expressed 6.00% Walgreens Corporate - Net (NN) purposes 15 Years 25 Years or implied, only Flat as and to do the not accuracy represent Guarantor Tenant Property Type Property Name 2/1/2020 Rental Increases Options to Renew Roof & Structure Lease Type Remaining Lease Term Lease Expiration Commencement Lease Lease Term Current of the the current information Annual Rent Lease CAP CAP Rate or future . References Price – – performance 1/31/2020 5/31/2027 5/31/2027 Year to square of the footage property or age . Marcus are approximate & Annual Rent Millichap Net $364,749 $331,590 10% Eachin Option Period . Real Buyer - Leased Pet Supply Estate must Landlord Investment Corporate verify the Double Monthly Rent Two, Five $4,876,440 $331,590 Responsible $30,396 $27,633 1/31/2020 6.80% 2.50 Years Corporate - 9/1/2007 Guaranty Net (NN) 12 Petco Years Store - Year

10 FINANCIAL OVERVIEW Services information This information is a service and bears has mark been all of risk secured Marcus for any & from Millichap inaccuracies sources Real we . Any Estate believe projections, Investment to be reliable, opinions, Services, but assumptions Inc we . © make 2013 no or Marcus representations Option Net Rate: CAP5.50% Price: $5,881,817 Close of 3/9/2015 Escrow: Walgreens Option Net Rate: CAP5.50% Price: $8,950,000 6/1/2015 Close of Escrow: Walgreens Option Net Rate: CAP6.00% Price: $11,,000,000 N/A Close of Escrow: Subject Property: estimates & Millichap Operating Income: $323,500 Operating Income: $492,400 Operating Income: $660,000 used Periods: Periods: Ten, Five Periods: Ten, Five Periods: Ten, Five herein or warranties, are | Round| Milwaukee,| WIYears | 17 Remaining for example expressed Walgreens purposes Rock,TX or implied, only - - - Year Options Year Options Year Options as and to do the | 14 Years| 14 Remaining not | 15 | accuracy represent - Year Lease of the the current information or future . References | Andover,North MA performance to square of the footage Rental Term Remaining: 15+ Years Price / SF:$748 Square Feet: Guarantor: Guarantor: Corporate Rental Term Remaining: 14 Years Price / SF:$412 Square Feet: Guarantor: Rental Term Remaining: 17 Years Price / SF:$569 Square Feet: Guarantor: Corporate Guarantee property or age . Marcus Increases: Flat Increases: Flat Increases: Flat are approximate & Millichap Corporate Guarantee 14,259 15,740 14,692 . Real Buyer Estate Rent/ SF:$22.69 Rent/ SF:$31.28 must SF SF SF Investment Guarantee verify the

11 RECENT SALES COMPARABLES Services information This information is a service and bears has mark been all of risk secured Marcus for any & from Millichap inaccuracies sources Real we . Any Estate believe projections, Investment to be reliable, opinions, Services, but assumptions Inc we . © make 2013 no or Marcus representations Option Net Rate: CAP8.21% Price: $2,420,000 11/10/2015 Close of Escrow: Petco Option Net Rate: CAP6.80% Price: $4,876,440 N/A Close of Escrow: Subject Property: estimates & Millichap Operating Income: $199,500 Operating Income: $331,590 used | WestDundee, IL | Years3 Remaining Periods: Periods: Two, Five Periods: Two, Five herein or warranties, are for example expressed Petco purposes or implied, only | North| Andover, MA | Years2.5 Remaining - - Year Options Year Options as and to do the not accuracy represent of the the current information or future . References performance to square of the footage Rental Term Remaining: 2.5 Years Price / SF:$441 Square Feet: Guarantor: Rental Term Remaining: 3 Years Price / SF:$127 Square Feet: Guarantor: Corporate Guarantee Option Period property or age . Marcus Increases: In Each Option Option EachIncreases: In Period Increases: 10% in 2/2020 and 10% in Each are approximate & Millichap Corporate Guarantee 19,000 19,000 11,053 . Real Buyer Estate must SF SF Investment verify the

12 RECENT SALES COMPARABLES PROPERTY AND LOCATION OVERVIEW Location Highlights Location Overview

➢ Located Within Walking Distance to Major Area Traffic This Walgreens/Petco property is located at 800 Waverley Road in Drivers: Several Shopping Centers and Medical Centers North Andover, Massachusetts 01845. The Town of North Andover ➢ Strong Demographics | Over 180,000 People Within a is located in Essex County in the northeastern part of Massachusetts on the banks of the Merrimack River and approximately 24 miles Five-Mile Radius of the Property from Boston. ➢ Easy Access at the Signalized Hard Corner of Waverley Road and Winthrop Avenue Surrounding Retail and Points of Interest ➢ Proximity To Boston, Massachusetts | Located Approximately Thirty Minutes By Car From Downtown The property is situated on the hard corner of Waverley Road and Boston Turnpike Street. This Walgreens and Petco is well-positioned on a strong retail corridor home to many national and local retailers. Retail in the immediate area includes: Kohl’s, Dunkin Donuts, CVS Pharmacy, Staples, Pier 1 Imports, Chipotle, Jos A Bank, Chico’s, Citi Bank, Burger King, and Ace Hardware.

Traffic Counts and Demographics

There are approximately 95,000 people within a three-mile radius ADTC 30,000 of this property and more than 180,000 people within a five-mile radius. Since 2000 the population in North Andover has seen steady population growth at a rate of roughly 9 percent and is expected to continue this upward trend in the future. Traffic counts along Route 114 are approximately 30,000 vehicles per day (VPD).

North Andover, Massachusetts

North Andover is bordered by the towns of Andover, North Reading, Boxford, and Middleton and the cities of Methuen, Haverhill, and Lawrence - covering almost 27 square miles. North Andover is home to its own school system. It has an early childhood center, five elementary schools (Atkinson Elementary, Franklin Elementary,

Kittredge Elementary, Annie L. Sargent Elementary and Thomson OVERVIEW LOCATION Elementary), a middle school and North Andover High School.

Wood First United Ridge Methodist Homes Church

Coachman’s Ridge Condos (81 Condos)

New England Family Practice of Andover

16 SURROUNDING AREA PHOTOs AREA SURROUNDING

17 LOCAL MAP LOCAL

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, assumptions 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, Y0330533 19 DEMOGRAPHICS Population POPULATION In 2014, the population in your selected geography is 177,634. The population has 1-Mile 3-Mile 5-Mile changed by 9.16% since 2000. It is estimated that the population in your area will be 2010 11,251 92,000 172,790 181,179 five years from now, which represents a change of 1.99% from the current year. The current population is 48.00% male and 51.99% female. The median age of 2014 11,547 94,499 177,634 the population in your area is 35.9, compare this to the Entire US average which is 37.3. The population density in your area is 2,256.94 people per square mile. 2019 12,094 96,242 181,179 Income 2014 HOUSEHOLD INCOME In 2014, the median household income for your selected geography is $58,434, 1-Mile 3-Mile 5-Mile compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 30.76% since 2000. It is estimated Average $101,000 $82,573 $90,307 that the median household income in your area will be $68,301 five years from now, which represents a change of 16.88% from the current year. The current year per Median $75,052 $50,744 $58,434 capita income in your area is $32,146, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $90,307, TOP EMPLOYERS IN NORTH ANDOVER compare this to the Entire US average which is $74,533. Employment Employer # of Employees In 2014, there are 91,281 employees in your selected area, this is also known as the Eagle Tribune Publishing Company 500+

daytime population. The 2000 Census revealed that 63.84% of employees are DEMOGRAPHICS employed in white-collar occupations in this geography, and 36.11% are employed in Merrimack College 500+ blue-collar occupations. In 2014, unemployment in this area is 5.80%. In 2000, the Schneider Electric 500+ average time traveled to work was 28.8 minutes.

Mr. Tim Thompson Regional Manager Marcus & Millichap Real Estate Investment Services Brokerage [email protected] Boston Office 100 High Street Suite 1025 Boston, MA 02110 Office: (617) 896-7200 BOR License # 151664