www.ORIONcp.com Thomson Reuters Building 22817 102nd Place W, Edmonds, WA 98020

Scott Clements David Butler

P 206.445.7664 P 206.445.7665

C 206.793.1074 C 425.890.7919

E [email protected] E [email protected] table of contents

1 Executive Summary

Site Overview 2

Tenant Information 3

Financial Analysis 4

5 Market Overview

DEMOGRAPHICS 6

Thomson Reuters Building | ORION Commercial Partners | 2 Executive Summary

Investment Highlights The offering

Offering Price $4,050,000 ORION Commercial Partners is excited to offer for sale the Thomson Reuters Building in Edmonds, Washington. Built in 2007, the building Cap Rate 5.75% was impeccably constructed with high-level finishes, a secured covered Total Building Area 9,415 SF parking garage, elevator and many other high-end attributes. Located just above SR104, the property has great access to the ferries, downtown Total Land Area 20,037 SF Edmonds as well as Interstate 5.

NOI $232,791 The tenant, Thomson Reuters (www.thomsonrueter.com), is a major Year Built 2007 multinational mass media and information firm with a Moody’sB aa2 Investment Grade Credit Rating. The tenant has over 5 years remaining Tenant Thomson Reuters on a NNN lease with rental increases.

This opportunity offers the passive investor a superior quality building, an investment grade tenant with rental increases and a great location with minimal landlord responsibilities.

This statement with the information it contains is given with the understanding that all negotiations relating to the purchase, renting or leasing of the property described above shall be conducted through Orion Commercial Partners, LLC. The above information, while not guaranteed, has been secured from sources we believe to be reliable.

Thomson Reuters Building | ORION Commercial Partners | 3 Executive Summary

NNN Lease with Minimal Landlord Responsibilities

Thomson Reuters is responsible for any and all expenses associated with the property except for roof and structure.

Investment Grade Tenant

Thomson Reuters Corporation is a major multinational mass media and information firm with a Moody’sB aa2 Investment Grade Credit Rating. Its operations are headquartered in Manhattan, New York City, and currently operates in more than 100 countries, and has more than 60,000 employees around the world.

For eight consecutive years, FORTUNE has named Thomson Reuters to its list of the World’s Most Admired Companies, a leading report card on corporate reputations.

Strong Demographics

Located in Snohomish County, Edmonds is a waterfront bedroom community to Seattle with over 40,000 in population and an average household income of over $100,000 within 1 mile of property. The demographics are perfectly suited for the typical PCC client base.

Thomson Reuters Building | ORION Commercial Partners | 4 Site Overview

Parcel Map

SUBJECT PROPERTY

Thomson Reuters Building | ORION Commercial Partners | 5 Site Overview

Regional Map

PUGET SOUND Washington State Ferries

Yost PaRk EDMONDS BOWL

Westgate Elementary School

SUBJECT PROPERTY WoodWay

Photo Credit: Aerolistphoto.com

Thomson Reuters Building | ORION Commercial Partners | 6 Site Overview

Local Map

SUBJECT PROPERTY

Thomson Reuters Building | ORION Commercial Partners | 7 Site Overview

Regional Trade Area Map

EVERETT, WA 18 MILES

SUBJECT PROPERTY

KIRKLAND, WA 20 MILES

SAMMAMISH, WA SEATTLE, WA BELLEVUE, WA 32 MILES 16 MILES 24 MILES

Thomson Reuters Building | ORION Commercial Partners | 8 Tenant Overview

About Thomson Reuters

Thomson Reuters Corporation is a major multinational mass media and 8% of revenue) will be divested in the second half of 2016 and financial information firm founded in Toronto, Ontario, Canada. Its operations are leverage as measured by total debt to EBITDA will be in a range of headquartered at 3 Times Square in Manhattan, New York City while 3x-3.25x over the rating horizon. its legal domicile offices are located at 333 Bay Street in Downtown Projections of free cash flow (after dividends) to adjusted debt in Toronto, Canada. the range of 4-7% over the next twelve months. The free cash flow Thomson Reuters was created by the Thomson Corporation’s purchase expectation is driven by rationalization cost savings, the gradual mix of British-based Reuters Group on 17 April 2008, and is majority owned shift to solutions businesses from print products in the Legal division by The Woodbridge Company, a holding company for the Thomson and improving EBITDA performance in the F&R segment. Better product family. Thomson Reuters was ranked as Canada’s “leading corporate and sales execution has led to increased migration of customers to the brand” in the 2010 Interbrand Best Canadian Brands ranking. flagship Eikon desktop product and higher operating cash flow from the shutdown and consolidation of legacy platforms. A high dividend payout Thomson Reuters operates in more than 100 countries, and has more ratio limits conversion of EBITDA to free cash flow. Though Thomson than 60,000 employees around the world. Reuters has the financial capacity to reduce debt, we anticipate the Financial Rating or Baa2 bulk of cash flow and divestiture proceeds will continue to be prioritized toward dividend distributions and share repurchases, and to a lesser Thomson Reuters’ Baa2 senior unsecured rating reflects the sizable extent, re-investment and acquisitions. revenue and cash flow generated from #1 or #2 market positions providing information and workflow solutions built upon integrated Thomson Reuters Corporation are publicly listed on the New York Stock content to business and professional customers in large global industries Exchange and Toronto Stock Exchange (symbol: TRI). such as finance and law. A high percentage of recurring subscription Awards & Recognitions revenue, entry barriers, and good business, customer and global geographic diversity provide stability to cash flows. The company is in Thomson Reuters has been recognized by some of the most important the midst of a multi-year turnaround and striving to lift organic revenue and influential publications and organizations around the world. Most growth from a range of -1% to +1% to the mid-single digit range. Revenue recently recognized as: from ongoing businesses will grow in the low single digits impacted World’s Most Admired Companies, 2009-2016 by foreign currency headwinds, downward pricing adjustments in the For eight consecutive years, FORTUNE has named Thomson Reuters to Financial & Risk (F&R) segment, its largest unit, increasing competition its list of the World’s Most Admired Companies, a leading report card and challenging market conditions in banking and financial institutions, on corporate reputations. They ranked 2nd in Financial Data Services, highlighting the dependence on cyclical client spending. The Baa2 rating and ranked 1st compared to competitors in this category in people incorporates expectations that the Intellectual Property & Science unit management, social responsibility and global competitiveness. (the smallest of Thomson Reuters’ businesses accounting for roughly

Sources: www.moodys.com, www.thomsonreuters.com & www.en.wikipedia.org/wiki/Thomson_Reuters

Thomson Reuters Building | ORION Commercial Partners | 9 Financial Analysis

Rent Roll

Rentable Term Term Annual Rent Option Tenant Rent/SF Expenses Sq. Ft. Begins Ends Rent Increases Periods

$260,726 effective Thomson Reuters 9,415 03/01/07 12/31/21 $24.54 232,791 None NNN 01/01/2019 (a 12% increase)

Thomson Reuters Building | ORION Commercial Partners | 10 Financial Analysis

Valuation Analysis

Price: $4,050,000 Loan Information

Proposed Down Payment: 35.00% $1,417,500 Proposed First Loan Amount: $2,632,500 Current Cap Rate: 5.75% Interest Rate: 4.15% Approximate Net Rentable SF: 9,415 sf Amortization: 25 Approximate Lot Size: 20,037 sf Annual Debt Service: $(169,371) Year Built: 2007 Loan Maturity: Ten years Cost Per Net Rentable SF: $430.16 Rent Per Net Rentable SF: $24.72 NNN

2016 Annualized Data 2016 Operating Expenses

Gross Potential Rental Income: $232,791 Real Estate Taxes (2016): Tenant Paid Plus Recaptured Operating Expenses: $59,609 Insurance: Tenant Paid Less Vacancy and Credit Loss: $- Repairs: Tenant Paid Gross Operating Income: $292,500 Maintenance: Tenant Paid Less Operating Expenses: $59,604 Utilities: Tenant Paid Net Operating Income: $232,791 Management/Admin: Tenant Paid Less Annual Debt Service: $(169,371) Pre-Tax Cash Flow: $63,420 4.47% Total Non-Recaptured Expenses: $- Plus Principal Reduction: $61,279 Total Estimated Property Expenses: $59,609 Pre-Tax Return: $124,699 8.80% Property Expenses/Net RSF: $6.33

*as a percent of down payment

This statement with the information it contains is given with the understanding that all negotiations relating to the purchase, renting or leasing of the property described above shall be conducted through Orion Commercial Partners, LLC. The above information, while not guaranteed, has been secured from sources we believe to be reliable.

Thomson Reuters Building | ORION Commercial Partners | 11 Market Overview

About Edmonds

Edmonds, a vibrant city located just 15 miles north of Seattle and 18 miles south and commercial expansion. The Port district was formed in 1948 and began of Everett in Snohomish County, is easy to reach by Amtrak and Sound Transit waterfront improvements. Completion of Interstate 5 and increased growth in commuter rail, Community Transit buses, Washington State Ferries, automobiles the Puget Sound region led to a gradual change in the character of the city with and bicycles. Edmonds was a well-established town by the turn of the century more emphasis on residential development and a decline in the retail importance and the present urban form preserves many characteristics of its historic origins. of the downtown. The community’s location along the west-facing slopes of Puget Sound provides The City provides many amenities for residents and visitors. An active arts and many amenities, including extensive views of the water and Olympic Mountains, cultural community contributes to the strong sense of civic pride widely shared access to four beaches and waterfront parks, and convenient access to a in the community. There are numerous well-kept residential neighborhoods, a compact, walkable downtown area. viable economic base, and an active, involved citizenry.

The community that became the City of Edmonds grew out of a homestead As of April 2015, the population of the City of Edmonds has grown to 40,490. and logging operation started by George Brackett in 1876. Incorporated in 1890, The rate of population growth has been relatively stable at about 1% per year the original townsite is now occupied primarily by the downtown and adjacent with major increases occurring primarily as a result of annexations in the 1960s residential areas. The Great Northern Railroad reached the town in 1891 and for and 1970s. Based on a slower forecasted continued growth of approximately many years provided access for goods and passenger travel. Although fires 0.5% per year, the population in 2035 is projected to be 45,550. destroyed many of the waterfront mills, shingle production continued to be the Over the last decade, employment within the city has grown somewhat faster primary industry in the city into the 1940s. Ferry service to Kingston began in than population, increasing at a rate of just over 2% per year. In 2000, the city 1923 when a ferry terminal was built near the location of the existing ferry dock. had an estimated 10,154 jobs, while by 2013 that figure had risen to 13,232 jobs. The present ferry terminal was built in the early 1950s after acquisition of the The largest portion of those jobs are in services (69.7%). Retail trade accounts ferry system by the State of Washington. for 12.3%, while education and government account for 8.3%, finance, insurance, The city continued to grow during the 1940s and 50s, resulting in a more active real estate and wholesale, trade and utilities - 5.2%, and construction and role of the municipality in providing water, sewer and streets for residential manufacturing - 4.6%.

Sources: www.edmondswa.gov & www.wikipedia.org

| ORION Commercial Partners | 12 Demographics

Radius 1 Mile 3 Mile 5 Mile Radius 1 Mile 3 Mile 5 Mile Population: Households: 2020 Projection 14,456 97,473 215,180 2020 Projection 6,149 41,020 88,754 2015 Estimate 13,545 91,030 200,742 2015 Estimate 5,760 38,310 82,794 2010 Census 12,641 85,653 189,049 2010 Census 5,391 36,139 78,230 Growth 2015-2020 6.73% 7.08% 7.19% Growth 2015 - 2020 6.75% 7.07% 7.20% Growth 2010-2015 7.15% 6.28% 6.19% Growth 2010 - 2015 6.84% 6.01% 5.83% 2015 Population Hispanic Origin 597 7,155 15,993 Owner Occupied 4,311 24,729 52,911 2015 Population by Race: Renter Occupied 1,450 13,581 29,883 White 11,555 71,483 152,465 2015 Avg Household Income $101,049 $87,263 $85,933 Black 344 3,873 9,423 2015 Med Household Income $83,452 $66,510 $65,883 Am. Indian & Alaskan 117 861 2,075 2015 Households by Household Inc: Asian 993 10,476 26,411 Less than $25,000 841 6,513 14,715 Hawaiian & Pacific Island 42 356 935 $25,000 - $50,000 802 8,047 17,061 Other 493 3,982 9,434 $50,000 - $75,000 930 6,612 14,340 U.S. Armed Forces 11 112 247 $75,000 - $100,000 911 5,028 11,302 $100,000 - $125,000 604 3,707 8,296 $125,000 - $150,000 522 2,791 5,533 $150,000 - $200,000 683 3,219 6,443 $200,000+ 469 2,394 5,103

Source: www.costar.com

Thomson Reuters Building | ORION Commercial Partners | 13 Demographics

Demographic Ring - 1, 3, 5 Miles

5 Miles

3 Miles

1 Mile

Thomson Reuters Building | ORION Commercial Partners | 14