OFFERING MEMORANDUM MACY’S FURNITURE @ SQUARE

CLICK HERE FOR AN AERIAL TOUR OF THE SITE

SCOTT LOGAN / Senior Associate JOSEPH BLATNER / Senior Vice President (503) 200-2023 / [email protected] (503) 200-2029 / [email protected] MACY’S FURNITURE @ WASHINGTON SQUARE

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. © 2018 Marcus & Millichap. All rights reserved. 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. NET LEASED DISCLAIMER 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. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

OREGON BROKER OF RECORD: ADAM LEWIS ACTIVITY ID: ZAA0210327

2 MACY’S FURNITURE @ WASHINGTON SQUARE

TABLE OF CONTENTS

ABOUT THE PROPERTY 01 02 INVESTMENT SUMMARY PROPERTY DETAIL PAGE 4 PAGE 7 Executive Summary Location Overview Rent Roll Property Photos Aerial Maps Tenant Overview

ABOUT THE MARKET 03 MARKET OVERVIEW PAGE 14 Location Overview Demographics

3 MACY’S FURNITURE @ WASHINGTON SQUARE

Nearby traffic counts exceed 112,000 vehicles per day

01 INVESTMENT SUMMARY

4 MACY’S FURNITURE @ WASHINGTON SQUARE EXECUTIVE SUMMARY

9009 SW HALL BLVD MACY’S FURNITURE TIGARD, 97223 CAP RATE CURRENT PROPOSED PRICING

7.50% AVG CAP THRU EXP. $10,656,133 7.92% furniture NET OPERATING INCOME $799,210 GUARANTOR Macy’s Department Stores, Inc.

10% Increases LEASE TYPE NNN INCREASES Every 5 Years

LEASE COMMENCEMENT 11/1/2007 BUILDING SIZE 50,808 SF

LEASE EXPIRATION DATE 1/31/2028 LOT SIZE 2.50 Acres

REMAINING TERM 8.5 Years Remaining YEAR BUILT 1988

ZONING MUC PARKING 129 Spaces (Mixed-Use Commercial) (Unused Subterranean Spaces Available) MMCC FINANCING TERMS

FINANCING TERMS CASH FLOW ANALYSIS LOAN AMOUNT $7,459,293 DEBT SERVICE -$487,427 DOWNPAYMENT $3,196,840 CASH FLOW $311,783 LOAN-TO-VALUE 70.00% CASH-ON-CASH 9.75% INTEREST RATE 4.30% AMORTIZATION 25 YEARS TERM 7 YEARS Quote provided by Collin Kautz of MMCC Portland 5 MACY’S FURNITURE @ WASHINGTON SQUARE RENT ROLL

TENANT INFO LEASE TERMS CURRENT RENT RENT INCREASES LEASE

NAME BUILDING SIZE COMMENCEMENT EXPIRATION ANNUAL BASE RENT DATE ANNUAL RENT OPTIONS TYPE

MACY’S (4) 5-YEAR FURNITURE 50,808 SF 11/1/2007 1/31/2028 $799,209.84 8/1/23 $879,130.82 NNN OPTIONS GALLERY

*Lease includes a 30-day estoppel deadline.

CASCADE PLAZA

WASHINGTON SQUARE MALL

MACY’S FURNITURE

6 MACY’S FURNITURE @ WASHINGTON SQUARE

Washington Square is one of the top $ grossing malls per square foot in the US

02 PROPERTY DETAIL

7 MACY’S FURNITURE @ WASHINGTON SQUARE EXECUTIVE SUMMARY

OVERVIEW

Marcus & Millichap is proud to present Macy’s Furniture Gallery at Washington Square, a two-story retail structure with over 50,000 square feet of rentable space. This net leased department store is attached to Washington Circle Plaza shopping strip, which in turn is attached to Target to the west. The Macy’s Furniture Gallery is corporate guaranteed by Macy’s Department Stores, Inc. The tenant has occupied this space since 2007 and has another 8.5 left years on their lease, ending on January 31, 2028. The triple net structure leaves minimal landlord responsibility. The subject property is located between downtown Tigard and Beaverton just 20 minutes from Downtown Portland. This Macy’s Furniture Gallery is directly across the street from Washington Square Mall, a premier shopping stop for people throughout the metro Portland area. Washington Square Mall, at 1,446,000 square feet, has more than double the national average of sales per square foot with $1,261 compared to $457 for the US. The area is a core retail destination with a high concentration of retail plazas and strips within a one-mile radius of the subject property. The plazas are surrounded by corporate office parks, making the neighborhood a hub of day-time activity. The immediate area boasts an average household income in excess of $100,000. Macy’s Furniture sits in the heart of the suburbs of Portland and is easily accessible from that runs up and down the entire West Coast. HIGHLIGHTS

• Triple Net Lease with 8.5 Years Remaining • Corporate Guarantee from Macy’s Department Stores, Inc.; $25B in Sales for 2018 • 9.75% Cash-On-Cash Return • Property Sits within Close Proximity to Route 217 with Traffic Counts Exceeding 112,000 Vehicles Per Day • Prime Location in Washington Circle Plaza Across the Street from Washington Square Mall, One of the Top Grossing Malls in the United States • Easy Access to Downtown Portland, Only 20 Minutes by Car and 45 Minutes by Public Transportation • Immediately Surrounded by 50+ National and Local Retailers Such as Macy’s, Dick’s Sporting Goods, Tesla, JCPenny, Target, Nordstom Rack, Red Robin, Office Depot, Starbucks, and More • Median Household Income in the Area is $78,514 (34% Higher than the Current National CLICK HERE FOR AN Average) and Has Increased by 48% Since 2000 AERIAL TOUR OF THE SITE • Located within Qualified Opportunity Zone • Zoning Is Mixed-Use Commercial - No Max FAR with 200 Foot Height Limit 8 MACY’S FURNITURE @ WASHINGTON SQUARE PROPERTY PHOTOS

WASHINGTON SQUARE MALL

WASHINGTON SQUARE MALL

MACY’S FURNITURE

*Subject parcel outline is not exact

9 LEGEND MACY’S FURNITURE @ WASHINGTON SQUARE Business Parks 217 Shopping Centers Portland 210 Golf Club Trimet MAX Line Allen Business Park

Red Tail SW HALL BLVD Golf Center Progress Plaza SUBJECT PROPERTY & Square MACY’S FURNITURE Creekside Corporate Park 9009 SW HALL BLVD SW HALL BLVD TIGARD, OREGON 97223 Cascade Plaza Nimbus VPD: 30,700 Corporate Center Washington Square Mall Washington Square VPD: 112,190

Scholls 210 Business Center

Cascade Boulevard Center 217

$ Washington Square Mall, at 1,446,000 square feet, has more than double the national average of sales per square foot with $1,261 compared to $457 for the US. *source: macerich.com/Leasing/Property/183 10 MACY’S FURNITURE @ WASHINGTON SQUARE

20+ National Retailers

CASCADE PLAZA WASHINGTON SQUARE MALL

MACY’S FURNITURE 9009 SW HALL BLVD TIGARD, OREGON 97223

SW HALL BLVD

*Source: costar.com VPD: 30,700* 11 MACY’S FURNITURE @ WASHINGTON SQUARE PARCEL MAP

PORTLAND

SW Hall BlvdWASHINGTON GREEN

*Subject parcel outline is not exact

12 MACY’S FURNITURE @ WASHINGTON SQUARE TENANT OVERVIEW

MACY’S DEPARTMENT STORES, INC.

LONG ESTABLISHED Macy’s, Inc. is one of the nation’s premier retailers. With fiscal 2018 sales of $24.971 billion and approximately 130,000 employees, the company operates more than 690 department stores under the nameplates Macy’s and Bloomingdale’s, and approximately 190 specialty stores that include Bloomingdale’s The Outlet, Bluemercury and Macy’s Backstage. Macy’s, Inc. operates stores in 43 states, as well as online at macys.com, bloomingdales.com and bluemercury.com. CREATIVE BEGINNINGS Macy’s began as a small, fancy dry goods store that opened on the corner of 14th Street and 6th Avenue in New York City in 1858 and grew to be one of the largest retailers in the world. Always the innovator, Macy’s is known for several firsts that changed the retail industry. Macy’s was the first retailer to promote a woman, Margaret Getchell, to an executive position, making business history. Macy’s pioneered such revolutionary business practices as the one-price system, in which the same item was sold to every customer at one price. Known for its creative merchandising, Macy’s was the first to introduce such products as the Idaho baked potato and colored bath towels. Macy’s also was the first retailer to hold a New York City liquor license. ICONIC BRAND Macy’s, Inc. is a premier omnichannel retailer with iconic brands that serve customers through outstanding stores, dynamic online sites and mobile apps. Both Macy’s and Bloomingdale’s are known worldwide, and each has its own unique identity and customer focus. Bluemercury is widely recognized as the nation’s largest and fastest-growing luxury beauty products and spa retail chain. source: macysinc.com/about $24.9B 190 130,000+ IN 2018 SALES SPECIALTY STORES US EMPLOYEES 13 MACY’S FURNITURE @ WASHINGTON SQUARE

03 MARKET OVERVIEW

14 MACY’S FURNITURE @ WASHINGTON SQUARE LOCATION OVERVIEW TIGARD, OR

Tigard, Oregon’s 12th largest city, has a population of over 50,000 people. The city is part of the Portland metropolitan area. Tigard is connected to Downtown Portland by Interstate 5 and Oregon Route 99W as well as Trimet’s public transportation lines including the WES Commuter Rail line. Companies based in Tigard include Consumer Cellular, Gerber Legendary Blades, LaCie, and Stash Tea Company, among others. The city is also home to the Washington Square mall, one of the top grossing malls in the United States. Developed on unincorporated territory, Tigard was awarded the right to annex Washington Square in 1986. The mall holds 210 stores sitting at more than 1,400,000 square feet. The mall brings in sales of more than $1000 per square foot to the city. The subject property sits adjacent to Washington Square Mall in Washington Circle Plaza. With a diverse economy, strong schools and outstanding parks, Tigard is one of the most livable cities in Oregon. Residents enjoy access to more than 16 miles of paved trails and nearly 550 acres of parks and open spaces. The city, in partnership with downtown and business stakeholders, has revitalized its downtown with public art, LED street lights and multiple trail connections, creating a walkable destination for residents and visitors alike. PORTLAND MSA

The Portland-Vancouver metro is located near the confluence of the Columbia and Willamette rivers and stretches across the Oregon border into Washington State. The metro contains approximately 2.4 million residents, with more than 640,000 people residing in Portland, the area’s most populous city. The Portland, Oregon-Vancouver, Washington metro contains more than 2.3 million residents with a projected annual growth rate of 1.1 percent over the next five years. Portland is a city with one of the best mass-transit systems in the country, lowest cost of doing business on the West Coast and has more than 20 years of recorded positive net migration. Lower land costs than other West Coast metros, a skilled labor pool and affordable, abundant power attract companies to the region. The favorable tax structure, with no state income taxes in Washington and no sales tax in Oregon, also lures businesses. The metro’s economy has shifted from timber to industries that include athletic/outdoor activities, clean tech, advanced manufacturing and software. These new industries include a diverse group of companies based in the metro like Nike, Daimler, Oregon Iron Works, Intel and IBM. The metro contains more than 37,000 acres of parks and provides numerous outdoor opportunities, including activities at Mount Hood and Hood River. As the area continues to grow it is expected to add nearly 120,000 people over the next five years, resulting in the formation of nearly 64,000 households.

HIGH POPULATION GROWTH ALTERNATIVE-ENERGY LOW BUSINESS COSTS The Portland-Vancouver metro Alternative-energy companies are The cost of doing business is among has recorded more than 20 years attracted to the local educated the lowest on the West Coast, of positive net migration thanks to workforce and research institutions supported by no state income tax in expanding industries. and are moving to the region. WA and no sales tax in OR. 15 MACY’S FURNITURE @ WASHINGTON SQUARE DEMOGRAPHICS Population In 2018, the population in a five-mile radius of the subject property is 334,409. The population has changed by 20.01% since 2000. It is 10 Miles estimated that the population in the area will be 347,676 five years from now, which represents a change of 3.97% from the current year. The current population is 48.69% male and 51.31% female. The median age of the population in the area is 39.38, compare this to the US average which is 37.95. The population density in the area is 4,246 people per square mile. 5 Miles PORTLAND Households 3 Miles There are currently 139,758 households in a five-mile radius of the subject property. The number of households has changed by 21.65% since 2000. It is estimated that the number of households in the area will be 146,401 five years from now, which represents a change of 4.75% from the current year. The average household size in the area is 2.37 persons.

Income In 2018, the median household income for a five-mile radius of the subject property is $78,514, compare this to the US average which is currently $58,754. The median household income for the area has changed by 47.89% since 2000. It is estimated that the median household income in the area will be $92,995 five years from now, which represents a change POPULATION 3 Miles 5 Miles 10 Miles of 18.44% from the current year. 2023 Projection 146,446 347,676 1,102,552 The current year per capita income in the area is $45,943, compare this 2018 Estimate 141,769 334,409 1,053,636 to the US average, which is $32,356. The current year average household 2010 Census 131,458 306,272 952,311 income in the area is $109,582, compare this to the US average which is 2000 Census 122,263 278,662 840,686 Current Daytime Population 170,572 371,260 1,233,789 $84,609. HOUSEHOLDS 3 Miles 5 Miles 10 Miles Housing 2023 Projection 62,091 146,401 471,082 2018 Estimate 59,477 139,758 445,944 The median housing value in a five-mile radius of the subject property 2010 Census 54,817 127,177 398,161 was $400,557 in 2018, compare this to the US average of $201,842. In 2000 Census 50,051 114,885 349,122 2000, there were 69,526 owner occupied housing units in the area and HOUSEHOLDS BY INCOME 3 Miles 5 Miles 10 Miles there were 45,359 renter occupied housing units in the area. The median 2018 Estimate rent at the time was $647. $150,000 or More 15.39% 18.83% 16.78% $100,000 - $149,000 18.89% 19.08% 17.97% Employment $75,000 - $99,999 14.23% 14.19% 14.60% In 2018, there are 171,682 employees in the selected area, this is $50,000 - $74,999 15.41% 15.27% 16.54% $35,000 - $49,999 11.99% 10.85% 10.57% also known as the daytime population. The 2000 Census revealed that Under $35,000 24.10% 21.78% 23.55% 73.76% of employees are employed in white-collar occupations in this Average Household Income $98,541 $109,582 $103,384 geography, and 26.31% are employed in blue-collar occupations. In Median Household Income $72,493 $78,514 $73,994 2018, unemployment in this area is 3.68%. In 2000, the average time traveled to work was 26 minutes. Source: ©2018 Experian 16 OFFERING MEMORANDUM MACY’S FURNITURE @ WASHINGTON SQUARE

EXCLUSIVELY LISTED BY: SCOTT LOGAN / Senior Associate JOSEPH BLATNER / Senior Vice President www.NetLeasedRetail.com (503) 200-2023 / [email protected] (503) 200-2029 / [email protected] *Subject parcel outline is not exact