OFFERING MEMORANDUM

ACTUAL LOCATION

Two Corporate Leases With Increases Attractive 3+ Acre Parcel Excellent New York City MSA Location 270 & 280 NJ-10 | EAST HANOVER, NJ CONTENTS

MARC MANDEL STEVE SCHRENK Investment Summary 03 Managing Director Director Investment Advisory Investment Advisory Tenant Overviews 06 484.532.4212 484.532.4213 [email protected] [email protected]

Financial Analysis 09 J.B. BRUNO JON MIKULA Director Senior Managing Director

Investment Advisory Debt Placement CONTACTS Location Overview 13 973.549.2022 973.549.2006 [email protected] [email protected]

Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the property to marke t it for sale. Information concerning the property described herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and JLL, its officers, directors, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. REI & Panera Bread | East Hanover, NJ | 2 INVESTMENT Summary REI & Panera Bread | East Hanover, NJ

REI & Panera Bread | East Hanover, NJ | 3 The Offering

Jones Lang LaSalle Americas, Inc. (“JLL”) is pleased to exclusively offer the opportunity to acquire two, corporately leased properties located along one of the prime retail corridors in Northern New Jersey (the “Property”). REI & Panera Bread operate on a 3.15-acre parcel along New Jersey Route 10 (NJ-10) with 9 and 5+ years of remaining term, respectively. Both leases contain 10% rental increases every 5 years. Despite the current coronavirus pandemic, the tenants continue to successfully operate as a result of their business model and services. REI, the nation’s leading outdoor retailer, has experienced an explosion of interest in outdoor activities, while Panera Bread has altered its services and begun offering curbside pick-up and a host of delivery options. The Panera Bread site also features a drive-thru, which will continue to bode well for the tenant in today’s environment. Both tenants have remained current on all rental payments throughout the pandemic.

The sought-after infill location sees over 30,000 VPD and is surrounded by other notable shopping centers and destinations. Hanover Commons, East Hanover Plaza, and Livingston Shopping Center are located within 1.5 miles of the Property and feature some of the most sought-after retail tenants in the country such as The Home Depot, Target, Costco, Dick’s Sporting Goods, Marshalls, Burlington, Nordstrom Rack, T.J. Maxx and more. The strong retail trade area, combined with the convenient highway network of I-80, I-280, and I-287 makes this section of NJ-10 a prime retail destination.

The Property is located inEast Hanover Township in Morris County, New Jersey. Located roughly 25 miles west of New York City and 17 miles from the Newa rk Liberty International Airport, the location benefits from its proximity to large metropolitan areas and attractive, highly affluent demographics. Morris County has an estimated population of 491,845 people, making it the state’s 10th-most populated county. There are nearly 150,000 people located within a 5-mile radius of the Property, earning an average household income of more than $190,000. Further, there are 2,100 business enterprises operating in industrial parks, contemporary office complexes and retail stores throughout the Township.

PROPERTY SUMMARY

270 & 280 NJ-10 Address East Hanover, NJ 07936

Price $18,324,000 Cap Rate 5.50% NOI * $1,007,839 Combined Building Size 28,485 SF Parcel Size 3.15 Acres Year Built 2009 (REI); 2016 (Panera Bread) Recreational Equipment Inc. & Tenants Panera Bread Remaining Lease Term 9 Years (REI); 5+ Years (Panera Bread) Remaining Options 1 x 5 (REI); 2 x 5 (Panera Bread) 30,000 VPD Rental Increases 10% Every 5 Years

* Pricing is based off the 2020 projected NOI, as well as Panera Bread’s rental increase in 2021. REI & Panera Bread | East Hanover, NJ | 4 Investment Highlights

REI & Panera Bread are operating on corporate leases with 9 and 5+ years of remaining term, respectively. Both tenants feature attractive rental increases –REI contains 10% increases every 5 years throughout the lease, while Panera Bread features 10% escalations in each option period.

The two tenants are operating on a 3.15-acre parcel along New Jersey Route 10. NJ-10 is a main artery in the area that boasts 30,000 VPD. NJ-10 also connects travelers to Interstate 287 (150,000 VPD) and Interstate 280 (92,000 VPD).

Attractive retail destinations such as Hanover Commons, East Hanover Plaza, and Livingston Shopping Center surround the Property. These shopping centers are home to sought-after retailers including The Home Depot, Target, Costco, Dick’s Sporting Goods, Marshalls, Burlington, Nordstrom Rack, T.J. Maxx and more.

Both REI and Panera Bread have successfully navigated the coronavirus pandemic by implementing services such as curbside pick-up and multiple delivery options. Additionally, REI has benefitted recently from increased interest in outdoor activities, and Panera Bread’s drive-thru feature is extremely attractive in today’s environment.

The Property benefits from very strong demographics. There are nearly 150,000 people within a 5-mile radius who earn an average household income of $190,000. The Property is also just 26 miles away from the largest city in the United States –New York City (8+ million people).

REI & Panera Bread | East Hanover, NJ | 5 5 TENANT Overviews REI & Panera Bread | East Hanover, NJ

REI & Panera Bread | East Hanover, NJ | 6 REI Overview

Recreational Equipment, Inc. (REI) was founded in 1983 when a group of 23 climbing friends, united by their love for the outdoors, decided to source quality and affordable gear for their adventures. The local, outdoor co-op works to help its customers experience the power of nature. They bring top-quality gear and apparel, expert advice, rental equipment, and inspiring stories to their customers daily. Today, the REI community has 19 million lifetime members, more than 13,000 employees and 165 stores in 39 states and the District of Columbia. Annually, more than 70% of REI’s annual profits are invested back into the outdoor community through dividends to REI members, employee profit-sharing and retirement, and investments in nonprofits dedicated to the outdoors. rei.com

CORPORATE OVERVIEW Ownership Member-Owned Cooperative Credit Rating NR Headquarters Kent, WA # of Locations 165

REPRESENTATIVE PHOTO REI & Panera Bread | East Hanover, NJ | 7 Panera Bread Overview

What began in 1980 as a small, 400 SF cookie store in Boston, MA has become a leading restaurant brand with more than 2,300 bakery-cafes in the United States and Canada. Today, Panera employs 140,000 associates and achieves systemwide sales in the billions. The company continues to innovate and grow through digital sales, healthy food, loyalty, and multiple channels of access to their offerings. In 2018, Panera was voted the Sandwich Shop Brand of the Year (2018 Harris Poll Equitrend®). On July 18, 2017, Panera was acquired by JAB Holding Co., ending its 26-year run as a public company on a high note. Panera was the best-performing restaurant stock of the last 20 years, delivering a total shareholder return up 86-fold dating back to July 18, 1997. Panera’s stock generated annualized returns of 25% during the same time frame, outperforming Warren Buffet’s Berkshire Hathaway. The partnership with JAB will allow Panera to make long-term, industry-leading decisions, and in turn, improve the future earnings for all their stakeholders. panerabread.com

CORPORATE OVERVIEW Parent Company JAB Holding Company: BBB+ (S&P) Ownership Private Credit Rating A- (S&P) # of Locations 2,300+ Headquarters Luxembourg

REPRESENTATIVE PHOTO REI & Panera Bread | East Hanover, NJ | 8 FINANCIAL Analysis REI & Panera Bread | East Hanover, NJ

REI & Panera Bread | East Hanover, NJ | 9 Lease Abstract

LEASE DETAIL TENANT RESPONSIBILITY DETAIL

Address 280 NJ-10, East Hanover, NJ 07936 Maintenance Tenant shall make all repairs to the Demised Premises to keep the & Repairs Demised Premises in good order and repair. Tenant Recreational Equipment Inc. Building Size 23,985 SF Tenant shall provide and keep in force all insurance policies Insurance outlined in Section 14.02. Parcel Size 3.15 Acres Year Built 2009 Taxes Tenant shall pay its Pro Rata Share of Impositions.

Annual Rent $844,272 Utilities Tenant shall pay for all utility charges outlined in Article VIII. Rent/SF $35.20 Tenant shall pay its Pro Rata Share of all Common Area Expenses, Lease Type Fee Simple: NN together with an additional 10% Administrative Fee. The Tenant's CAM Roof & Structure Landlord Responsibility contribution shall not increase by more than 5% of 'Controllable Common Area Expenses' during the preceding year. Rent Commencement 9/25/2009 Lease Expiration 9/30/2029 Remaining Options One (1), Five (5) Year Option LANDLORD RESPONSIBILITY DETAIL Landlord shall maintain and repair the roof, foundation, subfloor Maintenance RENT SCHEDULE and floor, exterior walls, any load-bearing interior walls, and all & Repairs structural portions of the Building. Description Dates Annual Rent % Increase Landlord shall procure and maintain all insurance policies outlined Insurance Current Term 10/1/2019 - 9/30/2024 $844,272 - in Section 14.02.

Current Term 10/1/2024 - 9/30/2029 $928,699 10.00% Landlord shall maintain all Common Areas including the parking Option Term 10/1/2029 - 9/30/2034 $1,021,521 10.00% CAM area per Section 11.05 of the lease, subject to Tenant reimbursement.

REI & Panera Bread | East Hanover, NJ | 10 Lease Abstract

LEASE DETAIL TENANT RESPONSIBILITY DETAIL

Address 270 NJ-10, East Hanover, NJ 07936 Tenant, at its sole cost and expense, will make all necessary repairs to Maintenance the Building and other Improvements on the Demised Premises Tenant Panera LLC & Repairs (including the sidewalks, outdoor seating area, drive thru facility and Building Size 4,500 SF landscaping adjacent to the Building). Parcel Size 3.15 Acres Tenant shall provide and keep in full force all insurance which is required by Section 14 of the Lease, including but not limited to, Insurance Year Built 2016 liability insurance, fire insurance and worker's compensation Annual Rent $158,950 insurance. Specialty Rent $6,446 Taxes Tenant shall pay its Pro Rata Share of Impositions. Tenant shall make its own arrangements directly with the utility Rent/SF $36.75 Utilities company and pay for all utilities consumed within the Premises. Lease Type NNN Ground Lease As long as Lease between REI and Landlord shall remain in full force Roof & Structure Tenant Responsibility and effect, Tenant shall pay to Landlord the sum of $5,966.25 and ten Special Rent cents ($0.10) per square foot of floor area within the Building located Rent Commencement 2/2/2016 Payments on the Demised Premises per annum, to be paid in the same manner Lease Expiration 2/28/2026 and at the same time as Minimum Rent. Remaining Options Two (2), Five (5) Year Options Tenant shall pay its Pro Rata Share of Landlord's costs and expenses incurred during the maintenance, repair and replacement of all RENT SCHEDULE CAM common facilities, per section 11.04 of the Lease, including 20% of all costs as an 'Administrative Fee'. Description Dates Annual Rent % Increase

Current Term 2/2/2016 - 2/1/2021 $144,500 - LANDLORD RESPONSIBILITY DETAIL Current Term 2/2/2021 - 2/28/2026 $158,950 10.00% Landlord shall keep the Parking Area properly paved and in good order Option Term 1 3/1/2026 - 2/28/2031 $174,845 10.00% and repair throughout the Term, including the curbs within. Landlord CAM shall keep the Parking Area properly drained and shall provide painted Option Term 2 3/1/2031 - 2/28/2036 $192,330 10.00% stripes to designated parking spaces. Landlord shall keep the Parking Area reasonably free of snow and ice.

REI & Panera Bread | East Hanover, NJ | 11 Net Operating Income Breakdown

REI & Panera Bread 2020 Projection 2019 Actual 2018 Actual 2017 Actual REVENUES Minimum rental 1,003,222 988,772 988,772 988,772 Specialty rent 6,446 6,446 6,446 6,446 Total Property Rentals 1,009,638 995,188 995,188 995,188

Tenant exp reimb - CAM 103,347 155,999 170,429 113,879 PY CAM reconciliation - (2,663) 5,346 (1,950) Real estate tax reimbursement 49,293 49,350 47,902 46,393 Other income 338 450 450 450 Total Revenue 1,162,646 1,198,354 1,219,346 1,153,991

EXPENSES Cleaning (24,113) (27,465) (23,630) (22,600) Security - - (492) (257) Snow removal (35,935) (90,293) (104,679) (66,339) Landscaping (8,125) (21,497) (13,097) (8,884) Roof & structure (999) (1,661) (2,275) (2,401) Parking lot R&M (11,545) (27,369) (9,970) (2,618) Repairs and maintenance (453) (514) (859) (742) Insurance (12,718) (11,137) (10,035) (10,381) Total CAM Expenses (93,888) (179,935) (165,038) (114,221)

Real estate taxes (49,293) (49,350) (47,902) (46,393) Operating expense - non-CAM - (1,800) - - Management fees - non-CAM (11,626) (11,984) (12,193) (11,540) Total Expenses (154,808) (243,068) (225,134) (172,154) Net Operating Income 1,007,839 955,286 994,212 981,837 * Pricing is based off the 2020 projected NOI, as well as Panera Bread’s rental increase in 2021.

REI & Panera Bread | East Hanover, NJ | 12 LOCATION Overview REI & Panera Bread | East Hanover, NJ

REI & Panera Bread | East Hanover, NJ | 13 Surrounding Retail

REI & Panera Bread | East Hanover, NJ | 14 Regional Map

150,000 People

REI & Panera Bread | East Hanover, NJ | 15

Site Plan

THRU

- DRIVE

REI & Panera Bread | East Hanover, NJ | 16 NEW YORK CITY – 25 MILES East Hanover, New Jersey

East Hanover Township is located in eastern Morris County, New Jersey, 25 miles west of New York City and 15 miles west of Newark. The Township has a total area of 8.136 square miles and is bordered by Parsippany and Hanover to the west, Florham Park to the south, West Caldwell, Roseland and Livingston to the east, and Montville to the north. East Hanover is headquarters for Novartis and Nabisco and there are more than 2,100 other business enterprises operating in industrial parks, contemporary office complexes and retail stores throughout the Township.

Residents in East Hanover are mostly married couples and families –accounting for more than 80% of the households. Household growth in this area is limited due to the already densely populated area. The Township has an estimated 2019 population of nearly 11,000 in roughly 3,700 households. This is expected to remain to remain relatively constant due to the lack of new-housing. The median household income is just under $130,000.

Morris County is situated in the center of Northern New Jersey and is bordered by Union and Essex Counties to the east; Passaic County to the north; Sussex and Warren Counties to the west; and Somerset and Hunterdon County to the south. Its rolling landscape is dotted with lakes and r ivers, which form most of its boundaries with neighboring counties. The County combines natural beauty and pleasant suburban living with proximity to metropolitan surroundings. Morris County has an area of 469 square miles that stretches 30 miles from east to west and 30 miles north to south, making it New Jersey’s 7th largest county. It is located approximately 25 miles west of New York City and 90 miles northeast of Philadelphia.

Morris County, which contains 39 municipalities, had an estimated 2019 population of 491,845 people, making it the state’s 10th-most populated county. Morris County is widely considered to have one of the most productive and highly educated work forces in the country. As of 2018, the median household income was $112,288 and nearly 54% of the population achieved a bachelor’s degree or greater. The County is consistently ranked amongst thewealthiest counties in the United States, providing businesses and families with an incentive to locate within Morris County. The Bureau of Economic Analysis ranked the county as having the

16th-highest per capita income of all 3,113 counties in the United States (and the second highest in New Jersey) as of 2009. MorrisCounty

REI & Panera Bread | East Hanover, NJ | 17 East Hanover, New Jersey (Environics Analytics) Demographic Information 1-Mile 3-Miles 5-Miles POPULATION 2010 Census 4,509 39,653 143,609 2020 Estimate 4,495 41,704 149,638 2025 Projection 4,494 42,513 152,840 ESTIMATED HH INCOME 2020 Average HH Income $170,978 $198,802 $190,108 2020 Median HH Income $125,560 $151,498 $135,793 HOUSEHOLDS 2010 Census 1,667 14,216 51,662 2020 Estimate 1,670 14,958 53,841 2025 Projection 1,669 15,284 54,958

25 Miles To New York City

REI & Panera Bread | East Hanover, NJ | 18 MARC MANDEL STEVE SCHRENK J.B. BRUNO JON MIKULA Managing Director Director Director Senior Managing Director Investment Advisory Investment Advisory Investment Advisory Debt Placement 484.532.4212 484.532.4213 973.549.2022 973.549.2006 [email protected] [email protected] [email protected] [email protected]

REI & Panera Bread | East Hanover, NJ | 19