583 Pacific Street, Stamford, CT

Offering Memorandum For Sale / Investment Opportunity

ITY UN ORT PP NE O ZO

Presented by: Kravet Realty LLC • 203.430.7811 • [email protected] Confidentiality & Disclaimer Statement This Offering Memorandum contains select information pertaining to the business and affairs of the Property at 583 Pacific Street, Stamford, CT. It has been prepared by Kravet Realty LLC. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Kravet Realty LLC. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by 583 Pacific Street, Stamford, CT from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness or this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum from 583 Pacific Street, Stamford, CT, you agree:

1) The Offering Memorandum and its contents are confidential;

2) You will hold it and treat it in the strictest of confidence; and

3) You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Kravet Realty LLC expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of 583 Pacific Street, Stamford, CT or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Kravet Realty LLC or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

P. 2 Table of Contents

Executive Summary ...... 4

Proforma Pre-Construction ...... 6

Proforma Post-Construction ...... 7

Proposed Plans ...... 8 - 9

Federal Opportunity Zones ...... 10 - 11

Lease Comps ...... 12

Site Map ...... 13

Overview ...... 14

Demographics* ...... 16 - 19 Population ...... 16 Education ...... 17 Income ...... 18 Unemployment ...... 19

*City of Stamford; Economic Development

P. 3 Executive Summary

Rare opportunity to acquire a stabilized asset with a secure rental stream in a sale leaseback from a credit worthy company, and the investor or fund can take full advantage of the recently passed opportunity zone . This fully leased asset has approvals to build an additional 20,000 s.f. thereby doubling the initial basis which enables the investor, or opportunity fund, to fully realize the benefits of the recently passed legislation.

Although most opportunity zones have the inherent risk of investing in blighted areas, this asset is located in the path of the amazing gentrification of the that has been on going for the past several years.

Further enhancing this rare opportunity is the premier location within the zone, just a few short blocks to the Stamford train station which serves as a direct commute to NewYork City, just 45 minutes away.

Additional flexibility includes the current ownership willingness to master lease the asset, providing the pricing expectations are realized. The term and square footage being master leased will be part of the investor or funds offer to purchase. The offering plan and suggested pricing are guidelines, the expenses are actual (2017).

P. 4 P. 5 583 Pacific Proforma Pre-Construction

TENANT SQ. FT. PRICE/SF ANUAL RENT TOTALS Existing: Caro Home Master Lease* 1st Floor 4,200 $30.00 $126,000.00 NNN 1st Floor Studio 1,000 $25.00 $25,000.00 2nd Floor 5,000 $20.00** $100,000.00 NNN $251,000.00

Poster Restoration/Art Studio 4,800 $20.88 $100,224.00

TOTAL GROSS INCOME $351,224.00

EXPENSE Real Estate Taxes $36,142.00 Insurance $6,348.00 Maintenance $7,200.00 Super $6,000.00 Utilities (E,G&W) $19,200.00 Management Fee $8,640.00 TOTAL EXPENSES $83,530.00

CAM Reimbursement (Caro Home only - 57%) $47,612.10

EXISTING NOI PRE-CONSTRUCTION $315,306.10

ASKING PRICE $5,900,000.00

TI ALLOWANCE $100,000.00

TOTAL INVESTMENT $6,000,000.00

CAP RATE 5.25%

*Term to be negotiated; Minimum 5 years **TI Allowance $20/sf

P. 6 583 Pacific Street, Stamford, CT 583 Pacific Proforma Post -- -Construction

Potential Income

SQ. FT. PRICE/SF ANNUAL RENT TOTALS Existing: Caro Home Master Lease* 1st Floor 4,200 $30.00 $126,000.00 NNN 1st Floor Studio 1,000 $25.00 $25,000.00 2nd Floor 5,000 $20.00 $100,000.00 NNN

GROSS INCOME CARO HOMES $251,000.00

New Construction 20,000 $40.00 $800,000.00 NNN

TOTAL POTENTIAL GROSS INCOME $1,051,000.00

Vacancy @ 5% -$52,550.00

POTENTIAL GROSS INCOME $998,450.00 Investment Initial Acquisition Cost (Includes TI Allowance $100,000 for 2nd Floor) $6,000,000.00

New Construction Costs 20,000 $250.00** $5,000,000.00

Leasing Brokerage Fees @ 5% 20,000 $100,000.00

TOTAL ACQUISITION COST $11,100.000.00

INITIAL CAP RATE ` 9%***

*Term to be negotiated; Minimum 5 years **Includes all soft costs - legal and architectural. City of Stamford has fully approved the 20,000 square foot addition. ***Assumes all leases are assumed to be NNN, therefore no expenses have been accouned for,

Kravet Realty LLC P. 7 Proposed Plans

P. 8 583 Pacific Street, Stamford, CT Kravet Realty LLC P. 9 Federal Opportunity Zones

Federal Opportunity Zones is a new tax incentive to direct private capital investment into designated zones. This program is designed to be transformative in urban redevelopment. Similar to the 1031 Like-Kind Exchange Provision, but with an added benefit and applicable to the sale of ANY appreciated property. The new tax provisions provide for a deferral of capital gains realized on sales of “any property” to an unrelated party where an amount equal to such gain is reinvested in a Qualified Opportunity Fund within 180 day. In addition, certain amounts of the capital gains tax attributable to the reinvested money may be permanently exempted from tax.

How It Works

• Taxpayers can invest capital gains from a sale or Exchangite with an unrelated person/party and invest in a Qualified Opportunity Fund. - Sales or exchange must occur by December 31, 2026. - Proceeds must be reinvested in Qualified Opportunity Fund with 180 days of sale/exchange. - Taxpayer has the ability to dispose of Fund investment and replace with a different Fund investment within 180 days.

• A Qualified Opportunity Fund can be any corporation or partnership organized for the purpose of investing in Qualified Opportunity Zone Property which is: - Stock or partnership interest in a qualified opportunity zone business, which has an active business in a zone. - Qualified opportunity zone property is acquired in 2018 or later, and is either first used in the zone or substantially improved - A Fund can hold qualified property directly as well.

• Qualified Opportunity Fund must have assets of which 90% constitute qualified opportunity zone property.

• Any form of capital may be invested in a Qualified Opportunity Fund, but tax benefits, including th 10-year step-up in basis to fair market value only available for capital gains invested.

• Qualified Opportunity Fund self-certifies and report assets with IRS Form 8996 - Funds can choose their tax year and month for becoming a Qualified Opportunity Fund

• Future regulations anticipated which would afford a Qualified Opportunity Fund the ability to sell/transfer Qualified Opportunity Zone Property if the proceeds are reinvested in other Qualified Opportunity Zone Property.

P. 10 583 Pacific Street, Stamford, CT Tax Benefits • Deferral of capital gains until 2026 - Applicable to any capital gains - Eligible investors include: individuals, corporations, partnerships, trusts, estates, regulated investment companies and real estate investment trusts. - Recognition date is earlier of: 2026 or when fun interest sold

• Reduction of capital gains invested in the Qualified Opportunity Fund - 10% if Opportunity Fund investment held for 5 years - 15% if Opportunity Fund investment held for 7 years

• No gain on the sale or exchange of the interest in the Qualified Opportunity Fund if held for 10 years

Who Can Benefit

• Investors : Almost any person or entity with capital gains

• Entrepreneurs and Family Offices : Can potentially invest in a third-party Fund or invest in a self-directed and controlled Fund for carrying out a redevelopment project

• Fund Managers : A new fund vehicle with the ability to receive significant fees for managing assets in distressed areas and incurring some additional risk

• Developers : A new source of equity capital to get a project to the point of construction financing

• Landlords and Tenants : A Fund can invest in the real estate, in addition to tenant improvements, equipment and fixtures, and even in the operating business

Source: Sills Cummis & Gross P.C.

Kravet Realty LLC P. 11 Lease Comps Commercial Lease Comps

Address Price/Sq Ft Age

Station Place - Metro Tower $39.74 Proposed Stamford, CT

1 Dock Street 1883 $36.98 Stamford, CT Renov 1993

459 - 461 Pacific Street $49.66 2012 Stamford, CT

484 Pacific Street $42.19 1892 Stamford, CT

P. 12 583 Pacific Street, Stamford, CT Site Map

h Overview

Stamford is the 4th largest city in and considered the 8th largest in the area. The Financial Times ranks Stamford 7th among small US cities for encomic growth and 2nd for connectivity. Since 2014, over a dozen companies have created 3,000 jobs in Stamford.

The Stamford Transportation Center serves as a major hub for the New Haven line of the Metro North Railroad, the commuter rail system for metropolitan NY as well as Amtrak. The $3.5 billion redevelopment of the area south of the Stamford Transportation Center is one of the largest and most important development projects on the US East Coast.

The Trolley links the South End to Downtown. The free trolley is a valuable amenity to commuters,provides a quick and efficient way to get around and supports Stamford Downtown’s long-established goal to support a neighborhood where people can live, work, and play.

Downtown residents are a very desirable demographic with 65% in the 25 - 34 age group, who are earning a median income of $108,000 per year. is booming with exciting events, galleries, sculpture exhibits, movie and live theaters and hosts many popular events including Alive@Five Summer Concert Series, Brews on Bedford craft beer festival, Farmers Market, Art & Crafts Bedford and a Thanksgiving Day Parade featuring many giant helium balloons.

The South End is one of the most extensive waterfront & transit oriented developments in the nation; Harbor Point, as it is now called, encompasses over 100 acres on a 322 acre peninsula in Stamford’s historic waterfront. The 583 community will ultimately grow to over 7.5 million SF with over 4,100 residential Pacific units, 1.5 million SF of office, 490,000 SF of retail, hotel, marina and more than 15 acres of parks and open space.

Stamford is home to a multitude of large corporations giving it the largest financial district in New York Metro outside New York City itself and one of the largest concentrations of corporations in the nation.

P. 14 583 h Pacific Street

P. 15 Demographics Population Profile Stamford, CT Population Pyramid 2018 POPULATION 2018 Estimate 135,232 2023 Projection 142,425

Male Population Female Population

From 2010 - 2017, Stamford was the fastest growing city in the state, with a growth rate of 6.67%. The rapid growth can be attributed to the recent residential developments in Harbor Point and the Downtown neighborhoods, an expanding business presence, and excellent school districts.

P. 16 583 Pacific Street, Stamford, CT EduPcoaptuiolan tion Profile

100% Stamford

Connecticut

United States

75% ) % (

e e r g e D

50% h t i w

n o i t a l u p o

P 25%

0% High School Degree Bachelor’s Degree Graduate Degree or Higher or Higher

The State of Connecticut has one of the highest rates of educational attainment in the country. 38% of the population has a bachelor’s degree or higher, ranking CT as the 4th highest state for educational attainment; and about 17% of the population has a graduate degree, making us the 3rd 'Smartest' state. Almost 90% of Stamford’s population have a high school degree, while almost 50% hold a Bachelor's degree or higher, and 21% have earned an advanced Graduate degree.

Kravet Realty LLC P. 17 Income

Stamford Average Household Income Increased 12.5% since 2010

Stamford has seen a rapid increase in both the mean and median household income over the past 8 years. The State of Connecticut has the fifth highest median household income in the country at $71,000. With a mean household income of over $128,000 and a median of over $81,000, Stamford has a higher median household income than every state in the US.

P. 18 583 Pacific Street, Stamford, CT Unemployment

2008 - 2018

Kravet Realty LLC P. 19 CARO HOME - 1st Floor STUDIO SPACE - 1st Floor

CARO HOME - 2nd Floor