REAL ESTATE SERVICES PROPOSAL 14041 Worth Avenue

Prepared For: Alliance Partners HSP, LLC

Mr. Paul Stanton

Prepared by: Mr. Joe Credit George Galloway Ray Schupp Andrew Rose TABLE OF CONTENTS

Section I – Executive Summary Who is Next Realty? Strategy & Approach

Section II – Site Analysis Location Map Site Aerial Property Highlights S.W.O.T. Analysis

Section III – Competitive Analysis

Section IV - Marketing Plan Merchandising Plan Single Tenant Building Timing Multi-Tenant Building Timing Demographic Comparison Section IV - Professional Profile Team Member Profiles References / Significant Clients 2

WHO IS NEXT REALTY MID-ATLANTIC, LLC?

• Next Realty Mid-Atlantic founded by George Galloway in 1999, with corporate office in Chicago.

• DC office has six professionals and a full marketing and administrative staff based in McLean, Virginia.

• Full service real estate services and brokerage firm specializing in the leasing of retail shopping centers and mixed-use projects, tenant representation and development.

• Next Realty will provide the technical expertise, integrity and professionalism necessary to execute a successful project leasing program.

• We take a long term view of Landlord relationships; how long and how often our clients return to Next Realty for assistance in the leasing of their assets. 3

WHO IS NEXT REALTY MID-ATLANTIC, LLC?

• Next Realty has worked for many Landlords with their leasing strategies including:

4 STRATEGY AND APPROACH

• Next Realty is equipped with the local market knowledge, the retail- tenant and broker contacts, and the deal-making experience to identify, negotiate and secure tenants for Alliance Partners HSP, LLC and 14041 Worth Avenue.

• Start to finish, Next Realty will: – Perform a comprehensive market and trade area analysis. – Propose a merchandising and leasing strategy consisting of the full-range of tenant-prospects that should be contacted. – Design an effective property marketing campaign. – Contact, qualify and follow-up with all potential prospects. – Draft and negotiate proposals for interested tenant-prospects. – Assist Alliance Partners HSP, LLC in all lease negotiations. – Provide continual follow-up throughout the entire leasing process, from proposal generation to store-opening.

5 STRATEGY AND APPROACH

Next will produce the following to give 14041 Worth Avenue the most possible coverage in the retail market, including the following: ● Next Realty Mid-Atlantic Leasing Signage On Site, Several Locations ● Property Brochure ● Dedicated Property Website (http://www.nextrealty.com/lease/DC/14041worthave.html or www.14041worthave.com) ● Digital Media Communication (5,000 + retail oriented recipients) ● Retail Listing Services (Co-Star & Loopnet)

6 IF YOU HIRE NEXT REALTY

• We will endeavor to find Alliance Partners HSP, LLC the best possible tenant at the highest possible rent. • We will pound the pavement and leave no stone left unturned – we will be industrious, creative, and responsive. • At all times we will represent Alliance Partners HSP, LLC with the highest level of professionalism. • We will leverage our networks and contact every retailer that makes sense for your space. • We will work your project as if it is only opportunity we will get to work with Alliance Partners HSP, LLC. In fact, it is, if we do not live up to your expectations. • No one will work harder for you than Next Realty!

7 LOCATION MAP

8 SITE AERIAL

9 14041 WORTH AVENUE PROPERTY HIGHLIGHTS

● Approximately 155,112 square foot building located peripheral to Potomac Mills Mall in Woodbridge, VA. ● Prime location at Northeast corner of Worth Avenue, the main entrance to Potomac Mills from Prince William County Parkway, and Potomac Mills Circle (mall ring road). ● Site possesses good visibility to the mall - situated directly across Worth Avenue from a newly-expanded Wal-Mart Supercenter and Sam’s Club as well as the exterior entrances of JC Penney, Burlington Coat Factory as well as future Christmas Tree Shops at Buy Buy Baby. ● Easily accessed location within a very successful, super-regional trade area.

10 14041 WORTH AVENUE PROPERTY HIGHLIGHTS

73 Parking Spaces

220 Parking Spaces

354 Parking Spaces

● Multiple access points and ample parking provide for a strong retail site. ● Site serviced by full-movement, lighted intersection off of Worth Avenue as well as two full- movement entrances off the mall ring road and an additional right-in/right-out on Worth Avenue. ● 735 parking spaces dedicated for retail use with access to 220 additional spaces across the street, at the mall by right. 11

14041 WORTH AVENUE PROPERTY HIGHLIGHTS

DEMOGRAPHICS 3 Mile 5 Miles 10 Miles POPULATION 118,441 219,556 436,438 HOUSEHOLDS 38,426 71,101 142,773 MEDIAN HH INCOME $81,414 $93,599 $109,186 DAYTIME POPULATION 62,560 103,314 203,518

DEVELOPMENT FACTS

PROPOSED RETAIL SPACE 155,112 SF

LOT SIZE ~12.50 Acres

ZONING B-1

CEILING HEIGHT 24 Feet ON-SITE PARKING PROVIDED 735 Spaces OFF-SITE PARKING PROVIDED 220 spaces 12 S.W.O.T. ANALYSIS

Helpful Harmful to achieving the objective to achieving the objective

• Centrally located within the regional retail node of • Previously occupied for office/flex will add to

Dale City, on the Mall ring road. conversion costs • Multiple full-movement access points and a traffic •Façade changes need to be created to controlled intersection. accommodate retail storefronts. •Parking field on multiple sides of the building • Large space may require splitting to accommodate provides greater potential for a split scenario. prospective tenants which may prove costly • Multiple loading docks to accommodate multiple • Good exposure to mall traffic but some retailers will tenants if space is split. prefer visibility to Prince William Parkway or • Shape of building lends well to splitting for Smoketown Road. Internal Origin Internal multiple users.

(attributes of the property) S W • High ceiling space • Super-regional trade area with strong, national- • Deed restrictions with mall limits prospect pool,

credit co-tenancy. could be a challenge working with Simon. • Types of neighboring retailers provide for daily • Pool of tenants for the entire building could be trips past site providing significant exposure. limited based on retailers’ expansion plans. • Adjacent to Potomac Mills Mall, the largest • Fairly mature regional trade node, most national discount retail outlet destination in Virginia. retailers and virtually all categories are already • Road network equipped to handle significant present within the market. traffic and provides for relatively easy access to • Special Exception required for tenants over 80,000 site. square feet. External Origin • Proven trade Oarea for most tenants and • Multiple sites with vacancyT competing for tenants.

(attributes of the environment) categories

13 COMPETITIVE ANALYSIS – POTOMAC MILLS MALL

Property: Potomac Mills Mall

Address: 2700 Potomac Mills Circle Retail SF: 1,519,000 SF Parking: 7,445 spaces Tenants: AMC Theatres, Bloomingdale's-Outlet, Costco, H&M, jcpenney, Last Call by Neiman Marcus, Modell‘s, Nike Factory Store, Nordstrom Rack, Off Broadway Shoes, Saks OFF 5TH Notes: Adding Cheesecake Factory, Bobby Flay, Christmas Tree Shops, Buy Buy Baby

14 COMPETITIVE ANALYSIS – PARKWAY CROSSING WEST

Property: Parkway Crossing West Address: 2542 Prince William Parkway Anchor Space 25,240 SF Available: (Roomstore) Asking Rent: $16 p.s.f. / $3.00 NNN Parking Provided: 128 spaces Tenants: Target, Value City Furniture

Notes: Stand-alone former RoomStore Furniture store available.

15 COMPETITIVE ANALYSIS – POTOMAC TOWN CENTER

Property: Potomac Town Center Address: I-95 Between Opitz & Dale Boulevards Retail SF: 550,000 SF Rent Comps: •Golfsmith (18,414 SF): $17 p.s.f. •REI (26,000 SF): $26 p.s.f. Tenants: Wegman’s, Old Navy, REI, ULTA, DSW, Golfsmith, PF Changs, Travinia, Firebirds, White House Black Market, Chicos, Ann Taylor Loft Notes: Commercial Office (500,000 SF) 500 Residential Units 16 COMPETITIVE ANALYSIS – SMOKETOWN STATION

Property: Smoketown Station Address: Prince William Parkway & Worth Avenue Retail SF: 494,506 SF Anchor Space Available: •12,593 SF (Ulta) •12,000 SF (Fashion Bug)

Asking Rent: •Ulta: $25 p.s.f. / $5.45 NNNs •Fashion Bug: $17 p.s.f. / $4.60 NNNs Rent Comps: •LA Fitness (47,328 SF): $17.50 p.s.f./$50 p.s.f. TI •Dick’s Sporting Goods (57,437 SF): $15.50 p.s.f./$55 p.s.f. TI Tenants: Dicks Sporting Goods, LA Fitness, Best Buy, PetSmart, Shoppers Food Warehouse 17 COMPETITIVE ANALYSIS – POTOMAC FESTIVAL SHOPPING CENTER

Property: Potomac Festival Shopping Center Address: Potomac Mills Road & Opitz Blvd Retail SF: 337,649 SF Rent Comps: •Savers (29,761 SF): $10.73 p.s.f. / $5 NNNs •Everest College (35,402 SF): $19 p.s.f. / $5 NNNs •Swim Kids (10,200 SF): $11 p.s.f. / $5 NNNs •Paul Mitchell (9,685 SF): $17 p.s.f. / $5 NNNs Tenants: HH Gregg, Savers, Everest College, David’s Bridal, Staples, Outback, Sakura, Hard Times Café Notes: Significant shop-space vacancy still remains. 18 COMPETITIVE ANALYSIS – PRINCE WILLIAM SQUARE SHOPPING CENTER

Property: Prince William Square Shopping Center

Address: 14200 Smoketown Road Retail SF: 232,957 SF Anchor Space Available •55,000 SF: Mid-Teens & Asking Rent: p.s.f. / $3.71 NNNs •32,120 SF (Conway): Low-Teens p.s.f. / $3.71 NNNs Rent Comps: •JoAnn Fabrics (23,840 SF): Low-to-Mid Teens p.s.f. / $3.71 NNNs Tenants: Ashley Furniture, Harbor Freight Tools, JoAnn Fabrics, Conway, Rainbow, Dairy Queen Notes: 55,000 SF medical office space & Conway space coming available. 19 SINGLE TENANT BUILDING TIMING (Likely best case scenario)

•Tenant Identification •Identify prospect - 30 to 90 days •Negotiate LOI, receive real estate committee approval within 90 to 180 days from tenant identification •Lease negotiation - 45 to 90 days after REC approval •Preparation of plans, permits, construction* •Tenant plans prepared - 30 to 60 days after lease execution •Special Exception for tenant over 80,000 square feet - 240 to 365 days in Prince William County (might be concurrent with plans) •Exterior and interior improvements 120-180 days •Tenant opens 4th quarter 2014 to early 2015

*Consulted with Teel Construction on permitting and construction assumptions **Does not contemplate approvals that may be required from Simon – which could take 3-6 months 20 MULTI-TENANT BUILDING TIMING (Likely best case scenario)

•Tenant Identification •Identify prospects - 60 to 120 days •Negotiate LOI’s, receive Real Estate Committee approvals - 90 to 180 days from tenant identification •Lease negotiations - 45 to 90 days after REC approvals •Preparation of plans, permits, construction* •Tenant plans prepared - 30 to 60 days after lease execution •Plan approval from Prince William County - 60 to 90 days •Landlord construction (split and upgrade utilities, demise spaces, construct common areas and interior corridors, new exterior facades, deliver as cold dark shell) - 150 to 180 days from permits •Tenant construction - 60 to 90 days from delivery of premises •Tenants open 4th quarter 2014 to early 2015

*Consulted with Teel Construction on permitting and construction assumptions **Does not contemplate approvals that may be required from Simon – which could take 3-6 months 21 TEAM MEMBER BIO: GEORGE GALLOWAY

George Galloway entered the commercial real estate industry in 1984, after receiving his Bachelor of Business Administration from Southern Methodist University in Dallas, Texas. George has extensive knowledge and experience in planning and implementing store positioning, site acquisition and disposition strategies in over 40 major retail markets across the United States. His primary client base over the last 26 years has been national credit retailers, restaurant groups and shopping center owners.

Galloway opened Next Realty’s Washington office in May 1999 after several years with Northwest Atlantic Real Estate Services, where he served as Executive Vice President and Managing Member. Prior to that he served as Senior Vice President and Regional Manager for Staubach Retail Services from 1987 to 1994. He began his career at Henry S. Miller/Grubb & Ellis in 1984.

Galloway offices in McLean, Virginia and is a licensed real estate broker in several states and the District of Columbia, and is active in ICSC, and serves on the Board of the Inova Hospital Foundation. George is married to Lien Galloway, an Associate General Counsel of The Peace Corps, and has 2 terrific daughters, Lan Anh and Christine Galloway.

22 TEAM MEMBER BIO: RAY SCHUPP

Ray Schupp joined Next Realty as an Associate in 2003 and was promoted to Principal in 2008. Ray specializes in retail tenant and landlord representation throughout the Mid-Atlantic Region and is a licensed salesperson in Virginia, Maryland, West Virginia, and the District of Columbia. Since joining Next Realty, Ray has played an active or lead role in the closing of over three million square feet of retail sale or lease transactions.

Ray’s list of retail clients served includes Target, Kohl’s, BJ’s Wholesale Club, Dick’s Sporting Goods, LA Fitness, Circuit City, Michaels Arts & Crafts, Books A Million, Golf Galaxy, Office Depot, McDonald’s, Texas Roadhouse, Hollywood Video, and T Mobile.

Currently, Ray is responsible for leasing approximately two million square feet of retail space in the Mid-Atlantic Region. Representing developers, Ray assists in all facets of the development; from site identification, acquisition, securing of anchor tenants, to project lease up. Ray’s experience ranges from urban retail in mixed use-developments to suburban shopping centers.

Ray graduated from Drew University with a B.A. in Economics and is a candidate for a Masters in Real Estate at Georgetown University. Ray is a native Washingtonian, and currently lives in Georgetown and offices in McLean, VA.

23 TEAM MEMBER BIO: ANDREW ROSE

Andrew Rose joined Next Realty as an Associate in 2007. Andrew specializes in retail tenant and landlord representation throughout the Mid-Atlantic region and is a licensed salesperson in Virginia, Maryland and the District of Columbia. Since joining Next Realty, Andrew has played an active role assisting in the closing of over 500,000 square feet of retail lease transactions.

Representing developers and retail tenants, Andrew assists in all facets of development; from site identification, acquisition, securing of anchor tenants, to project lease up. Andrew’s experience ranges from urban retail in mixed use-developments to suburban shopping centers.

Andrew graduated from the University of Maryland with a B.A. in Government and Politics in 2006 as well as a Masters in Real Estate Development in 2009. Andrew is a native Washingtonian and currently lives in Bethesda, MD and offices in McLean, VA.

24 REFERENCES

● Taylor Chess ● Jim Thompson Senior Vice President - Retail Managing Director The Peterson Companies Regency Centers 12500 Fair Lakes Circle, Suite 400 One Independent Drive, Suite 114 Fairfax, VA 22033 Jacksonville, FL 32202 Phone: (703) 631-7520 Phone: (904) 598-7620 [email protected] [email protected] ● Gordon Ashby ● Jack Waghorn Vice President of Leasing, Mid-Atlantic Region President Kimco Realty Corporation NV Retail Incorporated 170 W Ridgely Road, Suite 300 8230 Leesburg Pike, Suite 500 Lutherville, MD 21093 Vienna, VA 22182 Phone: (410) 684-2000 Phone: (703) 448-4311 [email protected] [email protected]

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SIGNIFICANT CLIENTS (PAST & PRESENT)

Target Stores Rave Theaters Kohl’s Department Stores The Home Depot BJ’s Wholesale Dicks Sporting Goods Office Depot Lowes Home Improvement Sun & Ski Sports LL Bean Organized Living Mercantile Stores CompUSA SteinMart, Inc. Fiesta Mart, Inc. Sportmart, Inc. IHOP Corporation Costco Wholesale Hechinger Company Elder Beerman Stores Company Fleming’ Prime Steakhouse & Wine Bar Muvico Theatres La Madeleine French Bakery & Café Biaggi’s Ristorante Italiano Corner Bakery Cafe Ace Hardware Corporation Circuit City Golf Galaxy Michael’s Arts & Crafts Texas Roadhouse Krispy Kreme Doughnuts

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