Subject Property

Offering Memorandum GSA-SSA/ODAR 4319 Brady Street | Davenport, IA 52806 Confidentiality and Restricted Use Agreement

This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC. Offered Exclusively by This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties Brian Corriston of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation Associate Director and/or financial information contained herein are qualified in their entirety by reference to the actual documents [email protected] and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC. In Association With: The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the Carol Adams right to negotiate with any number of interested parties at any time. The Property is offered and sold by its IA #B65112000 owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title.

BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request Stan Johnson Company by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the 10333 Richmond Avenue | Suite 740 Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, Houston, TX 77042 you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, P: +1 832.476.3440 representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not stanjohnsonco.com provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief. Section One Executive Summary The Offering Offering Price: Cap Rate: $2,450,000 8.50% Stan Johnson Company is pleased to offer for sale to qualified investorsthe rare opportunity to acquire the Social Security Investment Highlights Administration (SSA) building located in desirable Davenport, IA. The property Investment Grade Credit | Property is secured by a fifteen (15) year primary lease term and is 100% is governed by the General Services guaranteed by the Federal Government (S&P rating of AA+) and occupied by the Social Security Administration (GSA). Administration.

Office of Disability Adjudication and Review (ODAR) | An additional indication of SSA’s commitment to this This is a new 15-year lease with 10 years site is ODAR, which occupies +/-1,000 SF of the property for video conferencing and disability claims review. firm and commenced on March 1, 2012. The Social Security Administration’s (SSA) administrative appeals operation is one of the largest administrative The property is leased through February judicial systems in the world. SSA issues more than half a million hearing and appeal dispositions each year. Under 28, 2027 to the United States Government the Office of Hearings Operations (OHO), administrative law judges (ALJ) conduct hearings and issue decisions. and is occupied by the United States Social Security Administration (SSA). The tenant District Office Along| with the closing of a nearby SSA, the strategic importance of this location is also indicated by utilizing this office as a District Office, which oversees several other SSA offices in the region. has the option to cancel the lease at any time after February 28, 2022 by giving High Probability of Renewal | Strategic location was remodeled/expanded in 2012. According to GSA Rollover 90 days’ notice to Landlord. There are no data, the GSA has a renewal probability of 96.6% and an average length of tenancy of 32.3 years. renewal options. Landlord is responsible for all maintenance and repairs on this Value-Add Potential | The offering consists of 3.67 acres. The zoning allows for an additional 18,000 square feet modified gross lease. Tenant pays additional of office to be developed. GSA is currently seeking an additional site in Davenport. Adding an additional facility rent each year for increases to operating on the vacant land would be ideal, as GSA is already shouldering the cost of the entire site and could amortize expenses by CPI over the base year amount. those costs over the additional buildings. Tenant also pays taxes in excess of the base Development Opportunity | This investment opportunity provides the investor with multiple options to develop year tax amount. additional land to the GSA or non-GSA tenant, increasing the yield and value of initial investment.

Major Regional Hub | Davenport, IA is the state’s 3rd largest city and a regional economic hub for employment, education, health care services and shopping. It’s the largest city within the , which is also comprised of Bettendorf, IA, Moline, IL, and Rock Island, IL with a population of 381,342.

Property Summary Primary Commercial Corridor | The property features excellent visibility along Brady Street, the region’s primary commercial corridor, anchored by a 1 million SF regional mall. Brady Street stretches from I-80 extending south 4319 Brady Street Address: to the in downtown Davenport. Davenport, IA 52806 Strong Daytime Population | 152,878 people within 5 miles. (8,757 employees), Deere & +/- 11,877 SF Gross Company (7,200 employees), and Genesis Health System (5,115 employees) are all within a 5-mile radius of the Building Size (SF): +/- 10,827 SF (ANSI/ site. BOMA) Low Cost of Living & Business | Located along the Mississippi River with convenient access to a regional Ownership Interest: Fee Simple interstate system including I-80, I-88, and I-74 makes the cost of doing business and cost of living among the lowest in the nation.

NOI: $208,041

GSA-SSA • Davenport, IA 4 Section Two Property Overview Lease Abstract

Tenant: GSA Paid by Landlord and reimbursed by Tenant through the Operating Cost Base. If heating or Agency: Social Security Administration Utilities: cooling is required on an overtime basis, such Credit: S&P AA+ services shall be provided at the hourly rate established in the contract. Address: 4319 Brady Street, Davenport, IA 52806 Landlord pays taxes each year out of gross rent. The estimated baseline year tax amount Interest: Fee Simple Taxes: is $46,000. Tenant pays any increase over the +/- 11,877 SF Gross Building Size: baseline amount. +/- 10,827 SF (ANSI/BOMA) Landlord pays insurance which is included in the Land: 3.67 Acres Insurance: gross rent. Tenant does not reimburse Landlord Commencement: March 1, 2012 for any insurance cost increases

Expiration: February 28, 2027 Landlord is responsible for the maintenance and Remaining Term: 9 Years Modified Gross Lease: repair of the leased premises and parking areas. Remaining Firm Term: 4 Years

Annual Gross Rent: $330,093 Parking: There are 65 on-site parking spaces. Annual Expenses: $127,052

Net Operating Income: $208,041 The lease extends through February 28, 2027. There are no renewal options. However, GSA has Renewal Options: a renewal rate of 96.6% with an average tenancy of 32.3 years. Landlord is responsible for all Operating Expenses. The Operating Costs Base (OCB) is $47,000 per year. Rent is adjusted each year by the percentage change in CPI over the OCB amount. Operating Costs include cleaning Operating Costs: services, supplies, materials, maintenance, trash removal, landscaping, water, sewer charges, heating, electricity, and administrative expenses. Management fees, insurance, and taxes are not included.

Subject Property

GSA-SSA • Davenport, IA 6 Rental Income Expenses - 2017

January: $27,432 Gas: $2,067 Electric: $12,185 February: $27,431 Sewer/Water: $3,737 $27,431 March: Janitorial: $19,738

April: $27,431 Snow Removal: $2,075 Lawn Care: $4,035 May: $27,546 Trash Removal: $1,053 June: $27,546 HVAC Maint: $7,860

July: $27,546 Plumbing Maint: $606 Other Maint: $6,282 August: $27,546 Security: $4,105 September: $27,546 Pest Control: $880

October: $27,546 Taxes Base: $46,000 Property Mgmt: $7,200 November: $27,546 Insurance: $4,229 December: $27,546 Total Expenses: $122,052

Total: $330,093 Net Operating Income: $208,041 Rent Schedule

Annualized Total Tenant Months Cost of Monthly Shell Improvement Total Rent Services Rent Allowance

1-3 - $47,000 - $47,000 $3,916.97

4-120 $221,100 $47,000 $50,851.82 $318,951.82 $26,579.32 (Current)

121-180 $271,960 $47,000 - $318,960 $26,580 Subject Property

GSA-SSA • Davenport, IA 7 Tenant Overview

The Social Security Administration (SSA) is an independent agency of the U.S. federal government that administers Social Security, a social insurance program consisting of retirement, disability, and survivors' benefits. The SSA also issues Social Security numbers and administers the Supplemental Security Income (SSI) Program from more than 1,400 offices around the country, including its regional headquarters in Atlanta, Boston, , Dallas, Denver, Kansas City, New York, Philadelphia, , and Seattle. The SSA operates primarily with an annual federal budget of about $13 billion and some $66 billion in contributions from workers. President Franklin D. Roosevelt created Social Security and the administration in 1935.

About 40 million people visit the SSA's field offices and more than 37 million people call the agency daily for filing claims and asking questions. The SSA pays benefits to about 67 million people and issues more than 16 million new and replacement social security cards.

SSA is headquartered in Woodlawn, Maryland, just to the west of Baltimore, at what is known as Central Office. The agency includes 10 regional offices, 8 processing centers, approximately 1,400 field offices, and 37 Teleservice Centers. SSA also operates an extensive international program to service the needs of Social Security beneficiaries living abroad.

Social Security is the largest social welfare program in the United States. For the year 2014, the net cost of social security was $906.4 billion dollars which accounted for 21% of government expenditure. The President’s SSA 2017 budget of $13.1 billion will allow the agency to build a workforce to execute its multi-year plan to eliminate the hearings backlog and invest in its IT infrastructure. The money will also be used to expand its efforts to prevent and deter fraud by adding new units to its Cooperative Disability Investigation (CDI) program and to continue to support its SSA fraud prosecutors.

Social Security Administration Headquarters – Woodlawn, MD

GSA-SSA • Davenport, IA 8 Property Summary

The Property is located along the city’s primary north-south commercial thoroughfare, North Brady Street (23,500 VPD), and is directly across the street from the North Park Mall. This 1.07 million square foot mall features Dillard’s, JCPenney, Sears, Von Maur, Barnes & Noble, and Younkers, and is surrounded by numerous retail and restaurant outlots. The North Park Mall serves a trade area that spans a 50-mile radius and includes more than 370,000 residents. Davenport’s trade area encompasses major national retailers including Walmart Supercenter, Sam’s Club, Home Depot, Lowe’s, Menard’s, SuperTarget, Dick’s Sporting Goods, Gander Mountain, Dunham’s Sporting Goods, Best Buy, Kohl’s, OfficeMax, Gordman’s, Michael’s, Petco, American Appliance, Big Kmart, Shoe Carnival, Dollar Tree, Toys R Us, Babies R Us, Maurice’s, Guitar Center, and Jo-Ann Fabrics, among others. The above mentioned retailers are all located within a 3-mile radius. The subject property is centrally located within this vibrant trade area, which assures a stable and growing property value for the owner long into the foreseeable future.

The subject building was constructed for office use in 1982 with a renovation / expansion that was completed in early 2012 for the Government Services Administration and specifically the U.S. Social Security Administration. The single-story freestanding building features 11,877 sf of gross building area of which there are 10,827 sf usable, as determined by general GSA standards. The majority of the “usable” square footage is the foyer and public restroom space, which is “usable” to most replacement tenants. The building features high visibility and exposure along Brady Street with primary access into the site located along Brady Street. A Salvation Army is located directly to the south and a Carpetland store is located directly to the north of the property. The site features abundant parking for 65 vehicles.

The property consists of 3.67 acres of land. The zoning allows for an additional 18,000 sf of office to be developed. GSA is currently seeking an additional site in Davenport. Adding an additional facility on the vacant land would be ideal, as GSA is already shouldering the cost and could amortize the costs over both buildings. Convenient regional access is provided by a full interchange with I-80, just 2 miles north of the subject property. In addition, full access to I-74 is just 2.5 miles east along US-Route 6. The Brady Street corridor consists primarily of retail development as well as office, multi-family housing, and light industrial, stretching 2 miles north and 2.5 miles south leading directly to the Mississippi River and downtown Davenport.

Subject Property

GSA-SSA • Davenport, IA 9 Site Map

65 Parking Spaces

GSA-SSA • Davenport, IA 10 Section Three Market Overview Location Overview

Davenport is a city in and the county seat of Scott County in east central along the Mississippi River. Davenport is the regional beacon and hub of the metropolitan Quad-Cities (population 474,937) and the third largest city in Iowa. Davenport’s population density is thirty times the average density of Iowa and twenty times the average density of the United States. As the county seat of Scott County, the city is nationally recognized as the 2007 “Most Livable Small City” in the country. Davenport offers some of the nation’s best schools, unique, friendly neighborhoods, and the highest quality public services.

The cities of Davenport and Rock Island, IL were recently recognized by the U.S. Conference of Mayors and Waste Management Inc for their visionary and broadly participatory waterfront development plan, called RiverVision. The two neighboring cities are working together on a revitalization and economic development program which will change their cities for generations to come. Davenport offers an Enterprise Zone providing a variety of incentives, including income tax credits, property tax exemptions and job training assistance; a Downtown Redevelopment Fund designed to help correct the aesthetics of downtown; and a Commercial/Industrial Revolving Community Loan Fund which uses federal CDBG dollars to assist job creation for businesses downtown. RiverVision is serving as a magnet for new population and investment. Davenport has seen steady population growth, a declining crime rate, and a low rate of unemployment. It was ranked as the most affordable metropolitan area in 2010 by Forbes. In 2007, Davenport, along with neighboring Rock Island, also won the City Livability Award.

Davenport offers a Class A office park and a large-scale industrial area that is easily accessible. The city’s biggest labor industry is manufacturing. John Deere is the single largest employer, employing 7,200 workers in the Quad Cities and 4,948 at its north side Davenport plant alone. Other major employers in Davenport and the Quad Cities are Rock Island Arsenal with 8,757 employees, Genesis Health System with 5,125 employees, Trinity Regional Health System with 3,333, regional grocery store Hy-Vee with 3,138 and Davenport Community School District with 2,237 employees. Downtown Davenport has many points of interest including the , the Davenport Skybridge, , , and IMAX Theater, (home of the Quad City River Bandits baseball team), and the Centennial Bridge. Entertainment venues include the Chicago, Milwaukee, St. Paul and Pacific Freight House (The Freight House). The area is easily served by three Interstates and three US Highways: Interstate 80 (4 miles north), Interstate 280 (5 miles west), and Interstate 74 / US Route 6 (3 miles east). US Route 61 and US Route 67 also go through the area. US-67 crosses over to via the Rock Island Centennial Bridge.

GSA-SSA • Davenport, IA 12

Quad Cities - Davenport, IA; Bettendorf, IA; Rock Island, IL & Moline, IL DAVENPORT PUBLIC WORKS

E 46th St (4,780 VPD)

State Hwy Rte 6 (30,200 VPD)

SELECT SPECIALTY HOSPITAL QUAD CITIES

IOWA NATIONAL GUARD BRADY STREET STADIUM GARFIELD PARK

EISENHOWER ELEMENTARY GARFIELD ASSUMPTION SCHOOL ELEMENTARY HIGH SCHOOL SCHOOL OAKDALE MEMORIAL TRINITY GARDENS LUTHERAN N Brady St (23,500 VPD) SCHOOL VANDER VEER BOTANICAL GENESIS PARK N MEDICAL CENTER ST. AMBROSE UNIVERSITY

GSA-SSA • Davenport, IA 13 Demographics

4319 Brady Street | Davenport, IA 52806 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.

Population

2017 Population 7,326 80,503 152,878

2022 Population 7,718 83,539 157,249

2010-2017 Annual Rate 1.17% 0.80% 0.59%

2017-2022 Annual Rate 1.05% 0.74% 0.57%

Households

2017 Total Households 3,406 32,777 61,324

2022 Total Households 3,575 33,959 62,990

2010-2017 Annual Rate 1.03% 0.70% 0.50%

2017-2022 Annual Rate 0.97% 0.71% 0.54%

2017 Median Household Income $43,670 $48,163 $48,688

2017 Average Household Income $58,932 $65,193 $67,022

2017 Per Capita Income $26,960 $26,964 $27,292

GSA-SSA • Davenport, IA 14 Offered Exclusively by

going beyond

Brian Corriston Associate Director [email protected]

In Association With: Carol Adams IA #B65112000

Stan Johnson Company 10333 Richmond Ave | Suite 740 Houston, TX 77042 P: +1 832.476.3440 stanjohnsonco.com

The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.