Rendering

CVS - Ground Lease | Offering Flyer 17651 Redland Road, Rockville, MD 20855 This Offering Flyer is brought to you by:

SINGLE TENANT NET LEASE TEAM

Peter Snell 202.420.7761 [email protected]

Kelly McCann 202.420.7774 [email protected] TABLE OF CONTENTS Sophia Veale 202.780.1260 1 - 2 The Offering [email protected] 3 The Tenant BROKER OF RECORD 4-6 The Market David Fritz 443.574.1410 [email protected] 7-10 The Location BOR - #98083

MARKETING TEAM

Ashley Katen 202.420.7770 [email protected]

Kelly Atkinson 202.420.7762 [email protected]

William Ide 202.420.7769 [email protected] Offering Summary

MARKET DRIVE-THRU RENTABLE WASHINGTON, D.C. MSA LANE SQUARE FEET

9,965 SF

RELOCATION STORE BRAND NEW CORPORATELY BACKED CONSTRUCTION S&P RATED

BBB

1 Investment Highlights

PRICE | $6,400,000 17651 Redland Road, Rockville, 20855

This offering consists of a new CVS Pharmacy absolute net ground lease located in Rockville, Maryland and only 13 miles from Washington, DC. Using the latest CVS prototype, the property is under construction and will open in 2018. The offering has multiple ingress and egress point with easily accessibility at the signalized, hard corner of Redland Road and Muncaster Mill Road, benefiting from daily vehicular traffic counts of over 12,000 and 22,000 respectively. By relocating from a previous in-line property (the shopping center across the street) to a freestanding store with a drive-thru lane, this CVS Pharmacy is subject to a statistic that proves an increase in customer count and net revenue. Notable tenants moving in to the region include Wegmans as the anchor for the Twinbrook Quarter redevelopment project, Trader Joe’s as the anchor for Travilah Square Shopping Center and a massive new H&M scheduled to open at Pike & Rose later this fall.

This offering also benefits from a corporate guarantee backed by CVS Health Corporation which has 9,800+ locations throughout North America. The company generated $184.8 billion in net revenues in 2017 and is currently the largest retail pharmacy in the .

2 Tenant Summary

TENANT OPERATIONS CVS Health Corporation (NYSE: CVS) is the parent company of CVS Pharmacy, CVS MinuteClinic, with more than 1,100+ walk-in health care clinics, and CVS Caremark, Company Type Public which manages more than 94 million plan members. This also includes 246,000 employees, 68,000+ retail network pharmacies, and 62 million ExtraCare Members. Credit Rating BBB The company is rated BBB by S&P and is ranked the largest retail pharmacy in the U.S. Rating Agency S&P In 2017, CVS Health Corporation reported $184.8 billion in revenue, a net income of $6.62 billion, and over $95 billion of total assets. CVS Pharmacy currently operates Stock Symbol CVS more than 9,800+ drugstore locations in 49 states and serves around 5 million Board NYSE customers daily.

Headquarters Woonsocket, RI Over the last fifteen years, the CVS Health Corporation has dramatically expanded in 2017 Revenues $184.8 Billion acquisitions and revenue. In 2006, CVS acquired 700 freestanding drugstore locations from for $2.93 billion in revenue. In 2008, the company acquired Long’s Number of Locations 9,800+ Drug Corporation acquiring an additional 521 stores in California, Arizona, , Number of Employees 264,000+ and Nevada. In 2015, the company combined with Target Corporations to add 1,672 in-store pharmacy operations across 47 states for $1.9 billion in revnue. In addition, Year Founded 1866 during 2016, CVS Pharmacy’s Retail/LTC Segment filled approximately 1.2 billion prescriptions and held approximately 23.8% of the United States retail pharmacy market.

CVS has strong annual rent per square foot compared with its major competitors, totaling more than $840 per square foot versus an average of $680 per square foot. Newer stores range in size from approximately 11,000 to 15,000 square feet and typically include a drive-thru pharmacy as opposed to older stores which ranged from 5,000 to 30,000 square feet not including a drive-thru.

3 Market Overview

WASHINGTON, DC

POPULATION FACTS WASHINGTON, D.C. MSA With a population of over 6 million, the Washington, DC Metropolitan Statistical Area (MSA) includes the District of Columbia, the seat of the United States Government, as well as 22 counties and jurisdictions 6,146,460 6,539,875 within Maryland and Virgina. Home to 15 Fortune 500 Companies, employment is primarily information- 2017 Population 1.25% 2022 Population based and focused on government, lobbying, defense contracting, data processing and news reporting. 2017-2022 Population Growth Rate Many of the nation’s leading media outlets, think tanks and universities are located in the region. The economy of the Washington, DC MSA is insulated due to the infrastructure of the Federal Government. HOUSING STATS Educational opportunities are abounding with prominent universities including George Washington University, American University, Howard University, Georgetown University and the University of Maryland. Roughly half of the DC residents age of 25 or older hold a graduates degree or higher. $125,292 2.66 $489,098 Average Household Average Average Home Income Household Size Value A large hospitality sector supports the more than 20 million annual visitors throughout the year. Residents and visitors alike have access to numerous public buildings and landmarks, as well as, extraordinary EDUCATION museums, theaters and restaurants. Some notable attractions include the White House, the National Mall and the United States Capitol building.

9%

No High 22% School Some Diploma 18% College 50% High School Bachelor's/Grad/ Graduate Prof Degree

EMPLOYMENT

72% White Collar 13% 4.3% Blue Collar Unemployment 15% Rate Services

4 Submarket Overview

MONTGOMERY COUNTY

This offering is ideally located between Rockville and Gaithersburg in Montgomery County, which is one of the most populous jurisdictions in Maryland. Situated just north of Washington, DC, Montgomery County is among the most affluent counties in the Nation with a median household income of $99,435. The unemployment rate, as of March 2017, was 3.3% which is lower than the state of Maryland at 3.9% and the national average of 4.5%. Montgomery County historically has had the lowest unemployment rate in the state and leads the nation with the highest percentage of residents over 25 years old that hold an advanced degree.

In addition to a high employment rate and household income, Montgomery County also has access to one of the best public transportation systems in the area. These metrorail and bus systems make the commute to and from Washington, DC exceptionally accessible.

This offering also thrives largely due its proximity along major highways in Montgomery County, and Interstate 370. Both of these highways have significantly benefited from the newly completed Intercounty Connector (ICC) roadway, an 18-mile limited access toll road connecting Montgomery County to Prince George’s County, Maryland. By providing additional access throughout two of the most populous counties in the state, the ICC has been a great success and has helped to facilitate continued growth in the region.

Inside a 5 mile radius of the offering alone, Montgomery County has approved real estate development projects totally over 175,000 square feet of retail space, 375,000 square feet of office space, 1,000 single family dwellings and 2,000 multi-family dwellings. With many other developments taking place around the county, the region is expected to continue its rapid state of growth over the next five years with an estimated growth over one percent by 2022. Notable retail tenants moving in to the region include Wegmans as the anchor for the Twinbrook Quarter redevelopment project, Trader Joe’s as the anchor for Travilah Square Shopping Center and a massive new H&M scheduled to open at Pike & Rose later this fall.

5 Site Demographics

Demographics represent a 5 mile radius

6 Area Map

MARYLAND

7 Trade Area

Montgomery Village Center

Montgomery County Airpark Business Park Airport Lake Forest Mall

Gaithersburg Shopping Center Gaithersburg Airpark Airport

Montgomery Village 270 Plaza

Montgomery Village Crossing 178,150 (2017 (136,913 SF)

ADT) Redmill Shopping Center

Gaithersburg Square Shopping Center Diamond Square Redland Shopping Center

Quince Orchard

N F r e Gaithersburg Plaza d e r Festival At i ADT) c 32,190 Muddy Branch k (2017 Derwood R o a d d oa e R rov d G a dy ha o 355 S R

270 d n la ed R 39,822 (2017 ADT) SHADY GROVE 370 Rockville

8 Bird’s Eye View

MUNCASTER MILL ROAD - 22,350 ADT

REDLAND ROAD - 12,050 ADT

9 Site Survey / Renderings

MUNCASTER MILL ROAD - 22,350 ADT

REDLAND ROAD - 12,050 ADT

10 CONFIDENTIALITY & CONDITIONS Disclaimer: The information contained in the following Offering Memorandum is confidential and furnished solely for the purpose of your review in connection with a potential purchase of the subject property, as applicable. It is intended to be reviewed only by the party receiving it from KLNB and should not be made available to any other person or entity without the written consent of KLNB. Additional information about the Property will be made available to qualified prospective purchasers upon request. Without the prior written consent of KLNB, the Receiving Party will not, and will direct its Representatives not to, disclose to any person either the fact that any investigation, discussions or negotiations are taking place concerning a Possible Transaction. This Memorandum does not purport to be all-inclusive or to contain all the information which prospective purchasers may desire and is a summary upon which prospective purchasers are not entitled to rely. Certain documents and materials are described herein in summary form. The information contained herein is not a substitute for a thorough due diligence investigation. KLNB 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 Offering Memorandum has been obtained by third parties and is not guaranteed as to its accuracy or completeness; however, KLNB has not verified, and will not verify, any of the information contained herein, nor has KLNB conducted any investigation regarding these matters. All potential buyers must take appropriate measures to verify all of the information set forth herein.

Non-Endorsement Notice: KLNB is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this offering memorandum. The mention of any corporation’s logo or name is for the purpose of providing tenant lessee information about this listing to prospective purchasers and not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of KLNB, its affiliates or subsidiaries, or any agent, or service of KLNB.

Peter Snell CVS - Ground Lease | Offering Memorandum 202.420.7761 17651 Redland Road, Rockville, MD 20855 [email protected]