FOR SALE Forhigh Profile SALE Shopping Centre South Centre Common High Profile Shopping Lethbridge,Center AB South Centre Common 20 Southgate Blvd S Lethbridge

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FOR SALE FORHigh Profile SALE Shopping Centre South Centre Common High Profile Shopping Lethbridge,Center AB South Centre Common 20 Southgate Blvd S Lethbridge | AB

Kris Sotiros, Associate Agron Miloti, Broker Shay Robertson Vice-President | Capital Markets President | Capital Markets Client Services | Capital Markets 403.531.4337 403.531.4336 403.531.4505 [email protected] [email protected] [email protected] FOR SALE High Profile Shopping Centre THE OPPORTUNITY South Centre Common Lethbridge, AB Devencore (Alberta) Ltd. is pleased to announce the exclusive sale offering of South Centre Common, a high profile retail shopping center located in Lethbridge, Alberta (the “Subject Property”). Constructed between 2014 and 2016, the property is 96% leased to a strong and synergistic mix of national and local tenants including the Canadian Imperial Bank of Commerce, Dollarama, Party City, Great Clips, Browns Social House, 9 Round, Medicine Shoppe Pharmacy, Southgate Medical Centre and others. Located along a significant retail and service oriented corridor, the asset is situated at the corner of Southgate Boulevard and Mayor Magrath Drive, affording high exposure and high traffic counts. The asset is modern, attractively designed and shadow anchored by major grocery tenants including Costco and Superstore. Observed condition of the asset is excellent and features a going in 2020 NOI of $1,316,038 (+/-) escalating to $1,368,206 (+/-) NOI in 2022. Furthermore, we believe there is the potential to grow net rental rates on several of the larger national tenants at renewal, combined with steady year over year net rental rate growth over time on the remaining tenancies, boosting overall income and future value. This combination of an attractive, well located and well tenanted retail asset in a strong secondary market, with a diversified economy that benefits from Alberta oil and gas but is not necessarily dependent on energy prices, combined with principal paydown and potential future net rental rate growth presents a compelling investment opportunity.

SALIENT DETAILS

Asking Price $21,000,000

NOI 2020 $1,316,038 / 6.27% Cap

NOI 2022 $1,368,206 / 6.52% Cap

Municipal Address 20 Southgate Blvd. South, Lethbridge, AB

LINC 0031 449 796

Legal Description Plan 0514195, Block 1, Lot 28

Site Size 3.87 Acres / 168,577 SF (+/-)

Net Rentable Area 47,448 SF (+/-)

Occupancy 96% - Final CRU Pending

Parking Stalls 150 (+/-)

WWW.DEVENCORE.COM Year Built 2014 - 2016 FOR SALE High Profile Shopping Centre HIGHLIGHTS South Centre Common Lethbridge, AB • The asset features four attractive, modern retail buildings. CIBC features a drive through service area

• Shadow anchored by major grocery tenants Costco to the west of the subject site and Superstore to the south

• Access to the site is convenient for retail customers from Southgate Boulevard S., and Mayor Magrath Drive which is one of the highest volume transportation corridors in Lethbridge

• Observed condition of the asset is impressive. Landscaping, parking lot and curbing are observed to be in excellent condition

• With a site coverage of approximately 28%, the asset features ample tenant and customer parking with approximately 3.16 stalls / 1,000 sf (+/-)

• Area tenants include Costco, Superstore, Walmart, Home Depot, Best Buy, Lowe’s, Bed Bath and Beyond, Dollarama, the Brick, State and Main, Cora, Pet Smart, Canadian Tire and others

• Going in 2020 NOI $1,316,038 (+/-) 6.27% Cap Rate

• 2022 NOI $1,368,206 (+/-) 6.52% Cap Rate

• WALT 4.95 years (+/-) WWW.DEVENCORE.COM FOR SALE High Profile Shopping Centre THE TENANTS South Centre Common Lethbridge, AB

WWW.DEVENCORE.COM FOR SALE High Profile Shopping Centre MARKET OVERVIEW South Centre Common Lethbridge, AB

Lethbridge is the largest city in southern Alberta and third largest by population after Calgary and Edmonton. Known as the commercial, financial, transportation and industrial center of southern Alberta, Lethbridge’s economy features diversification beyond oil and gas, including agriculture and food processing. Even during times of recent economic contraction in Alberta due to energy prices, Lethbridge’s economy and population base continued to experience steady growth. Recent economic reporting from the Conference Board of Canada indicates Lethbridge’s economy surpassed Alberta’s economic trends due to steady job creation and a growing population base approaching 100,000 people. Lethbridge features a trading area population of 341,180 including parts of British Columbia. Half of the workforce is employed in health, education, retail and hospitality sectors and the top five employers are government-based. The only university south of Calgary is in Lethbridge, and two of the three colleges in southern Alberta have campuses in the city. Average Lethbridge household income is $94,367 (+/-) per year which is above the national average, providing a built in customer base for retail and service oriented tenants. Although Lethbridge features a diversified economy outside of energy, as Alberta works to reduce the price differential of WCS crude pricing through transportation of our resources to new markets (including pipelines and locomotives), combined with other factors including the potential expansion and construction of new local refineries, Lethbridge will undoubtedly benefit from the next phase of energy based economic expansion in Alberta.

WWW.DEVENCORE.COM FOR SALE LOCATION & SURROUNDING RETAIL High Profile Shopping Centre South Centre Common Lethbridge, AB

Subject Property

WWW.DEVENCORE.COM FOR SALE LOCATION & SURROUNDING RETAIL High Profile Shopping Centre South Centre Common Lethbridge, AB

WWW.DEVENCORE.COM FOR SALE FORECASTED FINANCIAL PERFORMANCE High Profile Shopping Centre South Centre Common Lethbridge, AB

The asset features a going in 2020 NOI of $1,316,038 (+/-) equating to a 6.27% (+/-) capitalization rate on the $21,000,000 offering price, escalating to $1,368,206 (+/-) in year 2022, increasing cash yield to 6.60%. Combined with the strong, synergistic tenant mix, high exposure location, balance of tenant expiries, and steady economic growth in a diversified economy, the asset is composed to offer consistent economic performance. The Vendor indicates clear title can be provided, affording the Purchaser the opportunity to place attractive financing on the property. Current financing depending on Purchaser covenant is indicated at 75% LTV, 4.00% interest on a fixed 10 year term, alleviating fears of rising interest rates during the term. Given the mostly national tenant mix, a qualified purchaser may be able to obtain rates 25 to 50 bps lower than indicated above. Total returns including principal paydown are estimated at 14.13% for 2020, which would be further strengthened by lower interest rates.

Although we believe this well tenanted, developed and well-located asset will likely offer stable performance, we believe there is potential to further accelerate financial performance through four key metrics:

• Built in escalations providing automatic net rental rate growth • Moderate year over year net rental rate growth over time • Lifting net rental rates on the larger national tenancies at renewal time, currently significantly below the weighted average net lease rates PSF

Forecasting a .5% year over year net rental rate increase on tenancies with exception to Party City (2%), Southgate Medical Centre (2%) and Dollar Tree (2%), potential 2028 NOI could potentially be lifted to $1,471,188 (+/-), resulting in a projected 2028 cash yield of approximately 7.05% and potential projected sale price of approximately $24,500,000 assuming a 6.00% cap rate sale and gross profit of approximately $3,519,800.

2028 projected leveraged cash on cash returns could potentially rise to 9.09%, with projected total returns of 17.70% including principal paydown. We estimate the forecasted 2028 mortgage balance would be reduced to approximately $11,225,452 (+/-), affording the opportunity to potentially sell the asset and capture the delta between the remaining mortgage balance and sale price, estimated at approximately $13,274,548 in owner’s equity, or potentially place significant additional financing on the property to pursue additional opportunities.

WWW.DEVENCORE.COM FOR SALE High Profile Shopping Centre PHOTOS South Centre Common Lethbridge, AB

WWW.DEVENCORE.COM FOR SALE High Profile Shopping Centre ABOUT DEVENCORE South Centre Common Lethbridge, AB

FOUNDED IN MONTRÉAL A HISTORY ADVISORY IN 1972 Second oldest APPROACH Over 46 years of experience national real estate By seasoned and committed service provider in professionals Canada

GEOGRAPHICAL COVERAGE A BUSINESS PARTNER RESULTS Offices across Canada, including Calgary, Offering corporate Consistently ranked among Edmonton, Vancouver, Victoria, Toronto, Halifax strategic real estate the top for the most square with headquarters in Montréal services for over 20 footage transacted in Montréal years

WWW.DEVENCORE.COM FOR SALE High Profile Shopping Centre OUR STORY South Centre Common Lethbridge, AB

2017 Conception and development 2018 of Legal Services Strategic alliance with Transwestern 2017 Development and support during real estate business transformation

2007 2000 + Conception and Development of Project Development of management tools Management Services

1996 1990-2018 Conception and development of Corporate Services International expansion 1984 Exclusive representation of space users

1980-2017 1972 1981 National expansion Conception and development of Founded in Montréal WWW.DEVENCORE.COM Advisory Services FOR SALE High Profile Shopping Centre INTERNATIONAL COVERAGE South Centre Common Lethbridge, AB

WWW.DEVENCORE.COM FOR SALE High Profile Shopping Centre South Centre Common Lethbridge, AB

For more information people contact our Capital Markets Team:

The above particulars are submitted to the best of our knowledge and are subject to change without notice. Devencore (Alberta) Ltd. does not assume responsibility for any errors or omissions. We have no reason to doubt the accuracy of any information contained herein but we cannot guarantee it. The Purchaser must independently verify all information contained within this document, in addition to any supplementary information supplied by Devencore (Alberta) Ltd., upon entering into a conditional sales transaction with the Vendor, consulting appropriate legal, tax, appraisal, accounting, environmental, land survey, economic, financial, structural and/or other professionals as required. The Purchaser's ability to achieve certain net rental growth rates are subject to its Devencore (Alberta) Ltd. www.devencore.com T 403.265.9966 Suite 1010 736 6 Avenue SW own research, conclusionWWW.DEVENCORE.COMand understanding of the specific asset and market, as well as additional factors including but not limited to its experience, resources, knowledge, economic variables, and other factors. By receiving this information, you agree to keep the contents confidential. This information shall not be Calgary, AB T2P 3T7 distributed to any other party without first obtaining the written permission from Devencore and the potential Vendor. For additional information regarding this property, please contact Devencore only.