NET LEASE INVESTMENT OFFERING

SHOPKO HOMETOWN 2105 Lazelle Street Sturgis, 57785 TABLE OF CONTENTS

TABLE OF CONTENTS

I. Executive Profile II. Location Overview III. Market & Tenant Overview Executive Summary Aerial Demographic Report Investment Highlights Site Plan Market Overview Property Overview Map Tenant Overview

NET LEASE INVESTMENT OFFERING DISCLAIMER STATEMENT

DISCLAIMER The information contained in the following Offering Memorandum is proprietary and strictly confidential. STATEMENT: It is intended to be reviewed only by the party receiving it from The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group.

This Offering Memorandum 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. The Boulder Group has not made any investigation, and makes no warranty or representation.

The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group 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.

NET LEASE INVESTMENT OFFERING EXECUTIVE SUMMARY

EXECUTIVE The Boulder Group is pleased to exclusively market for sale the fee simple interest in a single tenant absolute triple SUMMARY: net leased Hometown property located in Sturgis, South Dakota. The property is strategically located just off of Interstate 90 near Fort Meade. Shopko is committed to this location as evidenced by their long operating history at this location (since 1984). There are approximately 13 years remaining on the Shopko lease that features a low rent per square foot ($5.82), significant rental escalations and two 10-year renewal option periods. This is a high performing location with above average sales per square foot.

The 30,500 square foot building is well located within the regional trade area. The Shopko Hometown is the only national within 16 miles. The property is strategically located just off of Interstate 90 and near other retailers including McDonald’s, Wells Fargo, O’Reilly Auto Parts and Harley-Davidson. The Shopko Hometown is also near Fort Meade, a training site for the South Dakota National Guard and an Army National Guard Officer Candidate School. Additionally, the Shopko Hometown is near Sturgis Elementary School and Sturgis Williams Middle School which drives additional traffic to the property.

There are approximately 13 years remaining on the lease that expires May 31, 2031. The triple net lease features rental escalations every three years and two 10-year renewal option periods. Sturgis is notable as the location of one of the largest annual motorcycle events in the world, which is held annually on the second full week of August. Attendance has historically been around 500,000 people, reaching a high of over 700,000 in 2015. The event generates around $800 million in revenue. Shopko operates more than 360 stores in 24 states throughout the Central, Western and Pacific Northwest regions. The company was founded in 1962 and is headquartered in Green Bay, .

NET LEASE INVESTMENT OFFERING INVESTMENT HIGHLIGHTS

INVESTMENT • Long term lease with approximately 13 years remaining HIGHLIGHTS: • Absolute triple net lease with no landlord responsibilities

• Significant rental escalations in primary term and renewal option periods

• Strong location with favorable unit level performance

• 34 year operating history at this location

• Only national pharmacy within 16 miles of the property

• Low rent per square foot ($5.82)

• Retailers in the immediate area including McDonald’s, Wells Fargo, O’Reilly Auto Parts and Harley-Davidson

• Sturgis is notable as the location of one of the largest annual motorcycle events in the world (generates approximately $800 million in revenue)

• Located near Sturgis Elementary School and Sturgis Williams Middle School which drives additional traffic to the property

• Tenant is a privately held $3 billion retailer that operates over 360 locations in 24 states

NET LEASE INVESTMENT OFFERING PROPERTY OVERVIEW

PROPERTY Price: $2,125,784 OVERVIEW: Cap Rate: 8.35% Net Operating Income: $177,503 Rental Escalations: Every 3 Years* Renewal Options: Two 10-Year Lease Expiration Date: May 31, 2031 Tenant: Specialty Shops Holding Co. – d.b.a. Shopko Hometown Lease Type: Absolute Triple-Net (NNN) Rentable Square Feet 30,500 SF Lot Size: 2.7 Acres

* The Base Rent increases by the lesser of: (i) 1.25 multiplied by the product of (A) the Base Rent in effect and (B) the CPI Increase or (ii) 6% of the Base Rent. (Most recent escalation occurred on 6/1/2018).

NET LEASE INVESTMENT OFFERING AERIAL

NET LEASE INVESTMENT OFFERING SITE PLAN

NET LEASE INVESTMENT OFFERING MAP

NET LEASE INVESTMENT OFFERING MAP

NET LEASE INVESTMENT OFFERING DEMOGRAPHIC REPORT

DEMOGRAPHIC Population 3-Mile 5-Mile 10-Mile REPORT: Total Population 7,785 8,715 12,601 Total Households 3,450 3,849 5,478

Income 3-Mile 5-Mile 10-Mile

Average Household Income $52,256 $54,680 $64,857

NET LEASE INVESTMENT OFFERING MARKET OVERVIEW

MARKET Sturgis, South Dakota OVERVIEW: Sturgis is a city in Meade County, South Dakota, . The population was 6,627 as of the 2010 census. Sturgis was originally named Scooptown, because many of the residents “scooped up” their pay from nearby Fort Meade. Its name was later changed to Sturgis in honor of the Civil War Union General Samuel D. Sturgis. In 1889, Sturgis was designated as the county seat of the newly formed Meade County. Fort Meade still serves as a training site for the South Dakota National Guard and an Army National Guard Officer Candidate School. It is also home of Fort Meade National Cemetery.

Sturgis is notable as the location of one of the largest annual motorcycle events in the world, which is held annually on the second full week of August. Motorcycle enthusiasts from around the world flock to this town during the Sturgis Motorcycle Rally. It was begun in 1938 by a group of Indian Motorcycle riders and was originally held for stunts and races. Attendance has historically been around 500,000 people, reaching a high of over 700,000 in 2015. The event generates around $800 million in revenue.

NET LEASE INVESTMENT OFFERING TENANT OVERVIEW

TENANT Shopko OVERVIEW: Shopko Stores Operating Co., LLC operates a chain of general merchandise stores in the United States. Its stores comprise jewelry and watches, home, kitchen and dining, furniture, electronics, toys, sports and team shop, health and beauty, and patio and seasonal departments; clothing and accessories for men, women, kids, and babies, as well as nursery furniture. The company’s stores also include in-store and optical centers. It also serves customers online. Shopko Stores Operating Co., LLC was formerly known as ShopKo Stores, Inc. The company was founded in 1962 and is headquartered in Green Bay, Wisconsin. It has distribution centers in DePere, Wisconsin; Boise, ; Omaha, ; and Lebanon, .

Shopko operates more than 360 stores in 24 states throughout the Central, Western and Pacific Northwest regions. Retail formats include more than 130 Shopko stores, providing quality name-brand merchandise, great values, pharmacy and optical services in small to mid-sized cities; 5 Shopko Express Rx stores, a convenient neighborhood drugstore concept; 5 Shopko Pharmacy locations; and more than 220 Shopko Hometown stores, a smaller concept store developed to meet the needs of smaller communities.

Shopko Stores Operating Co., LLC is an affiliate of , Inc., a leading private investment firm focused on leverage buyouts, equity, debt, and other investments in market-leading companies that can benefit from its in-house operating professionals and experience. Sun Capital affiliates have invested in and managed more than 340 companies worldwide. Sun Capital has offices in Boca Raton, Los Angeles, and New York, and affiliates with offices in London, Tokyo, and Shenzhen, China.

Website: www.shopko.com Founded: 1962 Number of Locations: 360+ Number of Employees: 16,900+ Headquarters: Green Bay, Wisconsin Parent Company: Sun Capital Partners, Inc.

NET LEASE INVESTMENT OFFERING Randy Blankstein President 847.562.0003 [email protected]

Jimmy Goodman Partner 847.562.8500 [email protected]

3520 Lake Avenue, Suite 203 Wilmette, IL 60091

www.bouldergroup.com