Lawrencemarketplace LAWRENCE | KANSAS Lawrencemarketplace LAWRENCE | KANSAS

OFFERING MEMORANDUM

LAWRENCEmarketplace LAWRENCE | KANSAS LAWRENCEmarketplace LAWRENCE | KANSAS

EXCLUSIVELY LISTED BY:

ZACHARY TURNER MARK RUBLE JAMIE MEDRESS Associate Senior Managing DIrector Executive Managing Director National Retail Group Net Leased Investments Net Leased Investments COLUMBUS OFFICE ARIZONA OFFICE ARIZONA OFFICE P: (614) 360-9032 C: (614) 961-9943 P: (602) 687-6766 F: (602) 687-6710 P: (602) 687-6778 C: (602) 687-6717 [email protected] [email protected] [email protected] License: OH SAL.2018003592 License: AZ SA550593000 License: AZ SA108228000

SCOTT WILES CRAIG FULLER ERIN PATTON Senior Vice President Investments Senior Vice President Investments Senior Vice President Investments Executive Director, National Retail Group Executive Director, National Retail Group Executive Director, National Retail Group CLEVELAND OFFICE CLEVELAND OFFICE COLUMBUS OFFICE P: (216) 264-2026 C: (216) 870-9424 P: (216) 264-2043 C: (216) 407-2430 P: (614) 360-9035 C: (614) 323-3345 [email protected] [email protected] [email protected] License: OH SAL.2005013197 License: OH SAL.2008001551 License: OH SAL.2004010274 LAWRENCEmarketplace

ANCHORED BY PLANET FITNESS AND OFFICE DEPOT: NNN LEASES THROUGH 2025 AND 2026

LAWRENCEmarketplace LAWRENCE | KANSAS

90,982 9.56 100% 1974/ 2014

SQUARE ACRES OCCUPIED BUILT/ FEET RENOVATED LAWRENCEmarketplace OFFERING SUMMARY LAWRENCE | KANSAS Offering Price $10,805,000 Cap Rate 8.00% Gross Leasable Area (GLA) 90,982 SF Price/SF $118.76 Year Built/Renovated 1974/2014 Lot Size 6.27 AC Occupancy 100%

VITAL DATA

Current Net Operating Income $864,318 Year 1 Cash-on-Cash Return 11.21% 10-Year Uneveraged IRR 8.97% 10-Year Leveraged IRR 16.67%

PROPOSED NEW FINANCING

Loan Amount $7,563,500 Loan-to-Sale Ratio 70.00% Interest Rate 4.25%

MAJOR TENANTS Amortization 25 Years Term 10 Years Tenant GLA Lease Exp. Lease Type Loan Constant 6.50% Office Depot 35,254 SF 7/2025 NNN Debt Service Coverage Ratio 1.76 Planet Fitness 21,587 SF 6/2026 NNN Breakaway Indoor Play 12,291 SF TBD (8 Year) NNN DEMOGRAPHIC SUMMARY The Mattress Hub 7,507 SF 4/2029 NNN

1 Mile 3 Miles 5 Miles MAJOR AREA EMPLOYERS 2018 Population 13,106 75,302 97,133 Major Employers Employees Industry 2023 Population Projection 13,170 77,100 101,662 The University of Kansas 9,872 Education 2018 Households 5,808 30,459 39,552 Lawrence Public Schools 1,831 Education 2023 Households Projection 5,910 31,517 41,849 Vangent 1,500 Information Services Average Household Income $56,021 $68,713 $75,092 City of Lawrence 1,431 Government Median Household Income $41,307 $46,152 $52,186

OFFERING HIGHLIGHTS

» 100% Occupied 90,982 Square Foot Shopping Center in Lawrence, Kansas

» Less Than 1-Mile from University of Kansas – Annual Enrollment Over 28,150

» 27,000 Cars/Day Passing in Front of Property on Iowa Street

» Complimentary Tenant Mix - Fitness, Food, Active Entertainment, Office Supplies/Electronics, and Specialty Stores

» Anchored by Planet Fitness and Office Depot – NNN Leases through 2025 and 2026 Respectively

» Average Weighted Remaining Lease Term of 6.5 Years

» Leveraged IRR in Year-10 of 16.67%

» Minimal Deferred Maintenance: Complete Renovation in 2014 with New Buildouts

» Ease of Management: Only 7 Tenants – NNN Leases – 94% TAX/INS/CAM Recovery

» Ideal Site Layout with Over 500 Feet of Frontage Along Iowa Street – Lawrence’s Main Throughway – First Shopping Center South of University of Kansas

» Located in Southern-Lawrence’s #1 Trade Area; Only Locations for Target, Home Depot, Menard’s and Kohl’s

LAWRENCEmarketplace LAWRENCE | KANSAS

INVESTMENT OVERVIEW

Marcus & Millichap, on behalf of ownership, is pleased to present, Lawrence Marketplace, a 90,982 square foot shopping center located in Lawrence, Kansas. The subject property underwent extensive renovations in 2014 which revitalized the center, making it a go-to destination in Southern-Lawrence’s main retail corridor. Lawrence Marketplace is currently 100% occupied by a variety of prominent tenants which include Fitness, Food, Active Entertainment, Office Supplies/Electronics, and Specialty Stores. Office Depot is the centers largest tenant, occupying 35,254 square feet which equates to 39% of GLA and 27% of the center’s gross income. Office Depot has had success at this site since 1997 due to its strong location and below market rent. This is evident by their recent early-renewal which runs through 2025 and is bound by triple-net terms. These triple-net terms include prorata reimbursement for TAX/CAM/INS, as well as roof repair and replacement expenses. Planet Fitness is the centers second largest tenant, occupying 21,587 square feet, 24% of GLA and 28% of gross income. Planet Fitness opened in 2016 after commencing a 10-year triple-net lease. Other complimentary tenants at the site include Trek Bikes, Mattress Hub, HuHut Mongolian Grill and Breakaway Indoor Play. Trek and Mattress Hub are both leased into 2029, while HuHut is occupied into 2027. 4 of the 7 tenants have rent increases in year-5 of their leases providing meaningful rent growth over the hold period, as well as significant increases in their option terms. With proposed financing, Leveraged IRR in year-10 is 16.67%. Prospective purchasers will benefit from a national tenant base, long-term leases, ease of management, strong RET/ INS/CAM expense recovery, and irreplaceable real estate within walking distance of University of Kansas.

Lawrence Marketplace is located less than one-mile south of University of Kansas, the state’s largest university with annual enrollment of over 28,150 students. The subject property is situated within the vibrant retail corridor along Iowa Street which sees over 27,000 vehicles per day. Iowa Street is the major north-south commercial thoroughfare that functions as the primary retail corridor for the south side of Lawrence. Lawrence marketplace is the first substantial shopping center commuters see when entering the corridor from the north and has the most frontage of any multi-tenant center along Iowa Street. Retailers in the immediate vicinity include Target, Walmart, Home Depot, Menards, Kohl’s, Hobby Lobby, Five Below, Ross, T.J. Maxx, Dillon’s and an array of small-shop tenants and quick service providers. Immediate demographics in the surrounding area are dense and mature, with population counts of 13,106 within 1-mile, 75,302 within 3-miles, and 97,113 within 5-miles. Average household income is above the national average at $75,092.

Lawrence is located 35 miles west of Kansas City and 25 miles east of Topeka. Lawrence is the county seat of Douglas County and sixth-largest city in Kansas. Lawrence is a college town and the home to both the University of Kansas and Haskell Indian Nations University. More recently, the area has become a hotbed for families moving from Kansas City and surrounding areas. Lawrence is one of the fastest growing cities with population growth of 10.55% since 2010. Lawrence has a diverse economy spanning education, industrial, agricultural, government, finance and scientific research. Most of these are related to the University of Kansas, which is the largest employer in Lawrence.

FUTURE BUILDING LAWRENCEmarketplace LAWRENCE | KANSAS

property Property Name Lawrence Marketplace Property Address 2525 Iowa Street Lawrence, KS 66046 SITE DESCRIPTION Gross Leasable Area 90,982 SF Ownership Fee Simple Year Built 1974 Lot Size 6.27 AC Number of Stories One Parking +/- 252 Spaces Available Topography Level Zoning Commercial PARCELS Number of Tax Parcels One Parcel Number(s) 111-11-0-10-05-001.00-0 CONSTRUCTION Foundation Concrete Slab Framing Steel Exterior Masonry Parking Surface Asphalt Roof TPO mechanical HVAC Roof Mounted Fire Protection To Code Utilities All Local Providers

ACCESS POINTS The property is accessed by one entrance from Iowa Street and two entrances from West 25th Street.

NOT NOT A PART A PART LAWRENCEmarketplace LAWRENCE | KANSAS TENANT & LEASE SUMMARIES

OFFICE DEPOT

Office Depot, Inc. provides business services and LAWRENCE MARKETPLACE // PROPERTY ANALYSIS supplies, products, and technology solutions. Rent Commencement 8/1/1997 The company operates in three divisions: Business Solutions, Retail, and CompuCom. Lease Expiration 7/31/2025 The Business Solutions division offers office supply products and services through sales Gross Leasable Area 35,254 SF forces, catalogs, and telesales, as well as through Internet Websites in the United States, Puerto Option Term (2) 5-year Rico, U.S. Virgin Islands, and Canada. The Retail division operates a chain of retail stores, which offer office supplies; technology products and solutions; business machines and Pro Rata Share of Project 38.75% related supplies; print, cleaning, breakroom, and facilities products; and furniture in the United States, Puerto Rico, and the U.S. Virgin Islands. Its stores also provide printing, Headquartered Boca Raton, FL reproduction, mailing, and shipping services. As of April 4, 2019, this division operated 1,350 office supply stores. The CompuCom division sells information technology (IT) No. of Locations 1,378 outsourcing services and products in the United States, Canada, and Costa Rica. The company offers its products under various labels, including Office Depot, OfficeMax, Website www.officedepot.com Foray, Ativa, TUL, Realspace, WorkPro, Brenton Studio, Highmark, and Grand & Toy. Office Depot, Inc. was founded in 1986 and is headquartered in Boca Raton, Florida. Stock Symbol & Exchange ODP (NASDAQ)

PLANET FITNESS

Planet Fitness, Inc., together with its subsidiaries, Rent Commencement 6/17/2016 franchises and operates fitness centers under the

Planet Fitness name. It operates through three Lease Expiration 6/30/2026 segments: Franchise, Corporate-Owned Stores, and Equipment. The Franchise segment is involved in Gross Leasable Area 21,587 SF franchising business in the United States, Puerto Rico, Canada, the Dominican Republic, and Panama. The Option Term (2) 5-year Corporate-Owned Stores segment operates corporate- Pro Rata Share of Project 23.73% owned stores in the United States and Canada. The Equipment segment engages in the sale of fitness Headquartered Hampton, NH equipment to franchisee-owned stores in the United States. The company has over 1,800 stores in 50 states, No. of Locations 1,800+ the District of Columbia, Puerto Rico, Canada, the Dominican Republic, Panama, and Mexico. Planet Fitness, Inc. was founded in 1992 Website www.planetfitness.com and is headquartered in Hampton, New Hampshire. Stock Symbol & Exchange PLNT (NYSE)

19 TENANT & LEASE SUMMARIES

BREAKAWAY INDOOR PLAYGROUND

Breakaway Indoor Playground is anIndoor

LAWRENCE MARKETPLACE // PROPERTY ANALYSIS Rent Commencement TBD Playground and party venue targeted for children 0-12 years of age. Breakaway has a three Lease Expiration 8 Year level play structure and an interconnected Gross Leasable Area 12,291 SF pretend play city. Breakaway’s mission is to provide a safe, clean, and fun environment for Option Term (2) 5 Year kids to do what they do best: PLAY. Pro Rata Share of Project 13.51% Breakaway Indoor Playground’s facility was strategically designed with parents in mind. Headquartered Edmond, OK Breakaway provides a safe, clean environment where parents can join their children in play, or relax with coffee and free wifi. Some of the features include a 3 level, 2,000sf No. of Locations 2 playground structure, tunnels, wave slides and spiral slides, 3 level ball blaster arena, Website www.breakawayok.com trampoline with foam pit, obstacle courses, pretend play interconnected city, party rooms, infant/toddler soft play area, adult lounge area, and a calming/nursing Room. Stock Symbol & Exchange N/A

THE MATTRESS HUB

The Mattress Hub is built on the slogan “Sleep Rent Commencement 5/1/2019 Well. Live Well”—it’s a corporate philosophy. Lease Expiration 4/30/2029 Founded in 2008 in Wichita, Kansas, The Mattress Hub has evolved from a strictly brick Gross Leasable Area 7,507 SF

and mortar presence in five locations across Option Term (2) 5 Year Kansas, to having a full e-commerce option for Pro Rata Share of Project 8.25% people across the United States. Founder, Ryan Headquartered Wichita, KS Baty, believes that good sleep helps people be their best and live their best lives and he is committed to helping make the world a No. of Locations 12

more well rested place. Website www.mattresshub.com

Stock Symbol & Exchange N/A

20 TENANT & LEASE SUMMARIES

WAGMORE CANINE ENRICHMENT: TRAINING CENTER

Wagmore Canine Enrichment is a pet sitting,

LAWRENCE MARKETPLACE // PROPERTY ANALYSIS Rent Commencement 3/1/2019 dog walking, training and behavior problem Lease Expiration 2/29/2020 solving service that offers group and private training services. Wagmore Canine Enrichment Gross Leasable Area 5,889 SF

are non-aversive, positive reinforcement Option Term None trainers. Wagmore Canine Enrichment’s goal is to build the relationship customers Pro Rata Share of Project 6.47% have with their dogs so that it becomes a loved and respected member of their family. Headquartered Lawrence, KS The classes are operated by Jerri Johnson and Jeannene Loewenstein, who are both Animal Behavior College Certified Dog Trainers, CPDT-KA and A Level I Certified Pet No. of Locations 1

Care Technicians. Website www.wagmoreinc.com

Stock Symbol & Exchange N/A

HUHOT MONGOLIAN GRILL

HuHot Mongolian Grills, LLC opened its first restaurant in Missoula, MT in Rent Commencement 4/13/2017 1999. It was a short time later in 2002 that the first franchisee opened a Lease Expiration 4/30/2027 store in Omaha, NE. Now, the fastest growing Mongolian grill concept in the Gross Leasable Area 4,692 SF United States is moving forward with full force. Business strategies include Option Term (3) 5 Year focus on internal business operational optimization & differentiated growth by emphasizing fast, fresh, healthy, customer- Pro Rata Share of Project 5.16% oriented full service restaurants. Headquartered Missoula, MT HuHot is a bold, exciting oasis in a desert of boring restaurant concepts. Our branding efforts mirror Genghis Khan’s attitude toward the world… ripe for conquest. Like No. of Locations 60+ Genghis Khan viewed rival nations, we also look at our competition with confident disdain. These themes are carried throughout all of our marketing and are included Website www.huhot.com in our in-store materials. Adults and kids alike find themselves caught up in the excitement with each visit to HuHot. Stock Symbol & Exchange N/A

21 TENANT & LEASE SUMMARIES

TREK BICYCLE

Trek Bicycle Corporation is a bicycle and cycling

LAWRENCE MARKETPLACE // PROPERTY ANALYSIS Rent Commencement 11/23/2019 product manufacturer and distributor under Lease Expiration 11/22/2029 brand names Trek, Electra Bicycle Company, Gary Fisher, Bontrager, Diamant Bikes, Villiger Bikes Gross Leasable Area 3,762 SF

and, until 2008, LeMond Racing Cycles and Klein. Option Term (2) 5 Year With its headquarters in Waterloo, Wisconsin, Trek Pro Rata Share of Project 4.13% bicycles are marketed through 1,700 dealers across Headquartered Waterloo, WI North America, subsidiaries in Europe and Asia as well as distributors in 90 countries worldwide. 99% of Trek bicycles are manufactured outside the United States, in countries No. of Locations 1,700+

including the Netherlands, Germany, Taiwan and China. Website www.trekbikes.com

Stock Symbol & Exchange N/A

LAWRENCEmarketplace LAWRENCE | KANSAS

UNIVERSITY OF KANSAS 27,690 STUDENTS & 2,663 STAFF MEMBERS

LESS THAN ONE MILE FROM THE UNIVERSITY OF KANSAS University of Kansas Less than 1 mile from Lawrence Marketplace

The University of Kansas (KU) is a public research university with its main campus in Lawrence, Kansas, and several satellite campuses, research and educational centers, medical centers, and classes across the state of Kansas. University of Kansas Less than 1 mile from Lawrence Marketplace

Founded March 21, 1865, the university was opened in 1866. The University of Kansas is a large, state-sponsored university with five campuses. KU is a member of the Association of American Universities and it is classified among “R-1: Doctoral Universities – Highest Research Activity” by the Carnegie Classification of Institutions of Higher Education. Kansas’s athletic teams compete in NCAA Division I sports as the Jayhawks, as members of the Big 12 Conference. They field 16 varsity sports, as well as club-level sports for ice hockey, rugby, and men’s volleyball.

27,690 13 2,663 400+ STUDENTS ACADEMIC STAFF DEGREE & SCHOOLS CERTIFICATE PROGRAMS PRICING & FINANCING SUMMARY

PRICING

List Price $10,805,000

LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS Down Payment 30% / $3,241,500

Year 1 Net Operating Income $864,318

Price Per SqFt $118.76

Gross Leasable Area (GLA) 90,982 SF

Occupancy 100.00%

RETURNS

Cap Rate 8.00%

Year 1 Cash-on-Cash Return 11.21%

10 Year Unleveraged IRR 8.97%

10 Year Leveraged IRR 16.67%

PROPOSED FINANCING

Loan Amount $7,563,500

Loan-to-Value Ratio 70.00%

Interest Rate 4.25%

Amortization 25 Years

Term 10 Years

Annual Debt Service $491,692

Monthly Debt Service $40,974

Debt Service Coverage Ratio 1.76

Loan Constant 6.50%

*Loan information is subject to change. Contact your Marcus and Millichap Capital Corporation representative. 27 RENT ROLL

TENANT NAME RATE & AMOUNT FLOOR SF CHANGES CHANGES TYPE & SUITE NUMBER PER YEAR OPTIONS LEASE TYPE BLDG SHARE ON TO LEASE DATES & TERM PER MONTH

LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS 1 Office Depot $7.20 Aug-2025 $7.69 (2) 5 Year NNN Retail 35,254 $253,891 Aug-2030 $8.46 Aug-1997 to Jul-2025 38.75% $0.60 336 Months $21,158 2 Planet Fitness $9.65 Jul-2021 $10.15 (2) 5 Year NNN Retail 21,587 $208,315 Jul-2026 $10.65 Jun-2016 to Jun-2026 23.73% $0.80 Jul-2031 $11.15 121 Months $17,360 3 HuHot Mongolian Grill $23.44 May-2022 $25.04 (3) 5 Year NNN Retail 4,692 $110,000 May-2027 $27.55 Apr-2017 to Apr-2027 5.16% $1.95 May-2032 $30.31 121 Months $9,167 May-2037 $33.33 4 Wagmore Canine Enrichment: Training Center $8.15 - - None Gross Retail 5,889 $48,000 Mar-2020 to Feb-2025 6.47% $0.68 60 Months $4,000 5 The Mattress Hub $13.00 May-2024 $14.27 (2) 5 Year NNN Retail 7,507 $97,591 May-2029 $15.70 May-2019 to Apr-2029 8.25% $1.08 May-2034 $17.27 120 Months $8,133 6 TREK Bicycle $16.45 Nov-2024 $18.07 (2) 5 Year NNN Retail 3,762 $61,884 Nov-2029 $19.84 Nov-2019 to Nov-2029 4.13% $1.37 Nov-2034 $21.80 121 Months $5,157 7 Breakaway Indoor Play $10.01 Apr-2025 $10.74 (2) 5 Year NNN Retail 12,291 $123,000 Apr-2028 $11.50 Apr-2020 to Mar-2028 13.51% $0.83 Apr-2033 $12.25 96 Months $10,250

Occupied Space 90,982 Available Space 0 28 YEAR 1 INCOME & EXPENSE SUMMARY

INCOME ANNUAL - YEAR 1 PER SQUARE FOOT

Scheduled Base Rental Income (Occupied Space) $902,681 $9.92 Vacant Space at Market Rents $0 $0.00 LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS Gross Potential Rent Revenue $902,681 $9.92

Expense Reimbursement Income Real Estate Taxes $214,545 $2.36 Insurance $23,094 $0.25 Common Area Maintenance $32,016 $0.35 Management Fee $7,639 $0.08 Total Expense Reimbursement Income $277,294 $3.05

Gross Potential Income $1,179,975 $12.97 Vacancy Allowance $0 $0.00 EFFECTIVE GROSS INCOME $1,179,975 $12.97

OPERATING EXPENSES ANNUAL - YEAR 1 PER SQUARE FOOT

Real Estate Taxes $229,394 $2.52 Insurance $24,693 $0.27

Common Area Maintenance Lawn Maintenance $5,292 $0.06 Parking Lot Maintenance $3,060 $0.03 Grounds Trash Cleanup $5,158 $0.06 Fire Alarm Monitoring $666 $0.01 Snow & Ice Removal $2,185 $0.02 Solid Waste, Storm Water, Sewer $15,710 $0.17 Total Common Area Maintenance Expense $32,071 $0.35 Management Fee $29,499 $0.32 TOTAL OPERATING EXPENSES $315,657 $3.47 NET OPERATING INCOME - YEAR 1 $864,318 $9.50

29 LEASE RECOVERY SCHEDULE - DOLLAR AMOUNTS

REAL ESTATE COMMON AREA MANAGEMENT TENANT TAXES INSURANCE MAINTENANCE FEE TOTAL LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS Office Depot $88,886 $9,568 $13,049 $0 $111,503

Planet Fitness $54,428 $5,859 $7,743 $0 $68,030

HuHot Mongolian Grill $11,830 $1,273 $1,902 $0 $15,005

Wagmore Canine Enrichment: $0 $0 $1,017 $0 $1,017 Training Center

The Mattress Hub $18,927 $2,037 $2,646 $2,434 $26,044

TREK Bicycle $9,485 $1,021 $1,327 $1,220 $13,053

Breakaway Indoor Play $30,989 $3,336 $4,332 $3,985 $42,642

Total Reimbursement Income $214,545 $23,094 $32,016 $7,639 $277,294

Total Expense $229,394 $24,693 $32,071 $29,499 $315,657

Overage (Slippage) Amount ($14,849) ($1,599) ($55) ($21,860) ($38,363)

30 LEASE RECOVERY SCHEDULE - METHODOLOGY

PRO RATA REAL ESTATE COMMON AREA MANAGEMENT ADMINISTRATIVE TENANT SHARE TAXES INSURANCE MAINTENANCE FEE FEE LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS

Office Depot 38.75% Pro Rata Pro Rata Pro Rata None 5% of CAM

4% of CAM (excl Snow, Planet Fitness 23.73% Pro Rata Pro Rata Pro Rata None Water/Sewer)

HuHot Mongolian Grill 5.16% Pro Rata Pro Rata Pro Rata None 15% of CAM

Wagmore Canine Enrichment: 6.47% None None Water/Sewer Only None None Training Center

The Mattress Hub 8.25% Pro Rata Pro Rata Pro Rata Pro Rata None

TREK Bicycle 4.13% Pro Rata Pro Rata Pro Rata Pro Rata None

Breakaway Indoor Play 13.51% Pro Rata Pro Rata Pro Rata Pro Rata None

31 ARGUS CASH-FLOW ASSUMPTIONS

LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS PROPERTY TIMING Start of Analysis Apr-2020 End of Analysis Mar-2030 Analysis Period 10 Years

PROPERTY OPERATING PARAMETERS

MARKET RENTS GENERAL VACANCY CAPITAL EXPENSE

Square Feet Per Year Varies Year 1 None Capital Reserves ($0.10/SF) $9,098 Lease Type NNN Thereafter 5% of Small Shop

GROWTH RATES OPERATING EXPENSES MARKET LEASING ASSUMPTIONS

Market Rents Real Estate Taxes $229,394 Renewal Probability 75% Year 1 2% Insurance $24,693 Market Rent (SF/Year) Varies Year 2 2% Common Area Maintenance $32,071 Downtime 6 Months Year 3 2% Management $29,499 Tenant Improvements $10/SF Year 4 2% Total Operating Expenses $315,657 Leasing Commissions 5% Thereafter 2% Rent Escalation None Operating Expenses 2% Amount Reimbursed by Tenants $277,294 Lease Term 5-10 Years Real Estate Taxes 2% Lease Type NNN Capital Reserves 2% CPI 2%

32 SCHEDULE OF PROSPECTIVE CASH FLOW - 10 YEAR MODEL

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 FOR THE YEARS ENDING: MAR-2021 MAR-2022 MAR-2023 MAR-2024 MAR-2025 MAR-2026 MAR-2027 MAR-2028 MAR-2029 MAR-2030 Potential Gross Revenue Base Rental Revenue $902,681 $910,776 $920,349 $920,974 $936,221 $972,578 $983,328 $996,798 $1,007,124 $1,019,738 LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS Absorption & Turnover Vacancy (7,968) (8,127) Scheduled Base Rental Revenue 902,681 910,776 920,349 920,974 928,253 964,451 983,328 996,798 1,007,124 1,019,738

Expense Reimbursement Revenue Real Estate Taxes 214,545 218,837 223,212 227,678 232,231 251,902 258,334 263,501 268,773 274,147 Insurance 23,094 23,556 24,029 24,508 24,998 27,116 27,807 28,365 28,932 29,511 Common Area Maintenance 32,016 32,657 33,312 33,975 34,564 36,324 37,245 37,991 38,753 39,527 Management 7,639 7,604 7,701 7,740 7,871 8,250 8,373 8,499 8,608 8,730 Total Reimbursement Revenue 277,294 282,654 288,254 293,901 299,664 323,592 331,759 338,356 345,066 351,915

Total Potential Gross Revenue 1,179,975 1,193,430 1,208,603 1,214,875 1,227,917 1,288,043 1,315,087 1,335,154 1,352,190 1,371,653 General Vacancy (18,680) (19,079) (19,165) (12,012) (13,597) (21,733) (22,352) (22,483) (23,198) EFFECTIVE GROSS REVENUE 1,179,975 1,174,750 1,189,524 1,195,710 1,215,905 1,274,446 1,293,354 1,312,802 1,329,707 1,348,455

Operating Expenses Real Estate Taxes 229,394 233,982 238,662 243,435 248,303 253,270 258,335 263,502 268,772 274,147 Insurance 24,693 25,187 25,691 26,204 26,728 27,263 27,808 28,364 28,932 29,510 Common Area Maintenance 32,071 32,712 33,367 34,035 34,714 35,408 36,118 36,840 37,575 38,327 Management 29,499 29,369 29,738 29,893 30,398 31,861 32,334 32,820 33,243 33,711 Total Operating Expenses 315,657 321,250 327,458 333,567 340,143 347,802 354,595 361,526 368,522 375,695

NET OPERATING INCOME 864,318 853,500 862,066 862,143 875,762 926,644 938,759 951,276 961,185 972,760

Leasing and Capital Costs Tenant Improvements 16,255 Leasing Commissions 3,774 Structural Reserves 9,098 9,280 9,466 9,655 9,848 10,045 10,246 10,451 10,660 10,873 Total Leasing and Capital Costs 9,098 9,280 9,466 9,655 9,848 30,074 10,246 10,451 10,660 10,873

NET CASH FLOW BEFORE DEBT SERVICE 855,220 844,220 852,600 852,488 865,914 896,570 928,513 940,825 950,525 961,887

Debt Service Interest Payments 318,093 310,570 302,720 294,531 285,986 277,071 267,770 258,066 247,941 237,377 Principal Payments 173,599 181,123 188,972 197,162 205,706 214,621 223,922 233,627 243,751 254,315 Total Debt Service 491,692 491,693 491,692 491,693 491,692 491,692 491,692 491,693 491,692 491,692

NET CASH FLOW AFTER DEBT SERVICE $363,528 $352,527 $360,908 $360,795 $374,222 $404,878 $436,821 $449,132 $458,833 $470,195

33 INDIVIDUAL LOAN AND DEBT SERVICE SUMMARY

LOAN NO. 1 - PROPOSED NEW FINANCING

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 FOR THE YEARS ENDING: MAR-2021 MAR-2022 MAR-2023 MAR-2024 MAR-2025 MAR-2026 MAR-2027 MAR-2028 MAR-2029 MAR-2030 LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS Minimum Debt Service

Interest Payments $318,093 $310,570 $302,720 $294,531 $285,986 $277,071 $267,770 $258,066 $247,941 $237,377

Principal Payments 173,599 181,123 188,972 197,162 205,706 214,621 223,922 233,627 243,751 254,315

Total Minimum Debt Service 491,692 491,693 491,692 491,693 491,692 491,692 491,692 491,693 491,692 491,692

Reductions & Retirement

Principal Balloon or Call 5,446,702

Total Reductions & Retirement 5,446,702

TOTAL CASH FLOW PAID TO LENDER $491,692 $491,693 $491,692 $491,693 $491,692 $491,692 $491,692 $491,693 $491,692 $5,938,394

Principal Balance Summary

Beginning Principal Balance $7,563,500 $7,389,901 $7,208,778 $7,019,806 $6,822,643 $6,616,938 $6,402,317 $6,178,395 $5,944,768 $5,701,017

Periodic Principal Reductions (173,599) (181,123) (188,972) (197,162) (205,706) (214,621) (223,922) (233,627) (243,751) (254,315)

Principal Balloon Payments (5,446,702)

Ending Principal Balance $7,389,901 $7,208,778 $7,019,806 $6,822,644 $6,616,937 $6,402,317 $6,178,395 $5,944,768 $5,701,017

Interest Rates

Interest Rate on Principal 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25%

Cash Flow Coverage Ratios

Cash to Total Interest Charged 271.72% 274.82% 284.77% 292.72% 306.23% 334.44% 350.58% 368.62% 387.67% 409.80%

Cash to Minimum Debt Service 175.78% 173.58% 175.33% 175.34% 178.11% 188.46% 190.92% 193.47% 195.49% 197.84%

Loan To Value Ratios

Loan to Purchase Price 70.00% 68.39% 66.72% 64.97% 63.14% 61.24% 59.25% 57.18% 55.02% 52.76%

Loan to Capitalized Value 72.19% 71.43% 68.99% 67.17% 64.27% 58.91% 56.26% 53.58% 51.02% 48.35%

34 SOURCES & USES OF CAPITAL

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 FOR THE YEARS ENDING: MAR-2021 MAR-2022 MAR-2023 MAR-2024 MAR-2025 MAR-2026 MAR-2027 MAR-2028 MAR-2029 MAR-2030 Sources of Capital

Net Operating Gains $864,318 $853,500 $862,066 $862,143 $875,762 $926,644 $938,759 $951,276 $961,185 $972,760 LAWRENCE MARKETPLACE // FINANCIAL ANALYSIS Debt Funding Proceeds 7,563,500

Initial Equity Contribution 3,241,500

Net Proceeds From Sale 12,083,544

TOTAL SOURCES OF CAPITAL $11,669,318 $853,500 $862,066 $862,143 $875,762 $926,644 $938,759 $951,276 $961,185 $13,056,304

Uses of Capital

Property Purchase Price $10,805,000

Total Debt Service 491,692 491,693 491,692 491,693 491,692 491,692 491,692 491,693 491,692 491,692

Tenant Improvements 16,255

Leasing Commissions 3,774

Capital Costs & Reserves 9,098 9,280 9,466 9,655 9,848 10,045 10,246 10,451 10,660 10,873

Retirement & Penalties 5,446,702

Defined Uses of Capital 11,305,790 500,973 501,158 501,348 501,540 521,766 501,938 502,144 502,352 5,949,267

Cash Flow Distributions 363,528 352,527 360,908 360,795 374,222 404,878 436,821 449,132 458,833 7,107,037

TOTAL USES OF CAPITAL $11,669,318 $853,500 $862,066 $862,143 $875,762 $926,644 $938,759 $951,276 $961,185 $13,056,304

Unleveraged Cash On Cash Return

Cash to Purchase Price 7.92% 7.81% 7.89% 7.89% 8.01% 8.30% 8.59% 8.71% 8.80% 8.90%

NOI to Book Value 7.99% 7.89% 7.96% 7.95% 8.07% 8.52% 8.62% 8.72% 8.81% 8.90%

Cash to Purchase Price & Costs 7.92% 7.81% 7.89% 7.89% 8.01% 8.30% 8.59% 8.71% 8.80% 8.90%

Leveraged Cash On Cash Return

Cash To Initial Equity 11.21% 10.88% 11.13% 11.13% 11.54% 12.49% 13.48% 13.86% 14.15% 14.51%

Unleveraged Annual IRR 8.97%

Leveraged Annual IRR 16.67%

35 LAWRENCEmarketplace LAWRENCE | KANSAS

IOWA ST. 27,000 VPD RESIDENTS STABLE & MATURE MIDDLE INCOME DEMOGRAPHICS 75K Located in Southern-Lawrence’s 97K RESIDENTS IN RESIDENTS #1 Trade Area; Only Lawrence 3-MI 5-MI Locations for Target, Home Depot, Menard’s and Kohl’s. HOUSEHOLDS

$75K 39K AHHI IN 3-MI HOUSEHOLDS IN 5-MI

LAWRENCEmarketplace LAWRENCE | KANSAS DEMOGRAPHICS

POPULATION 1 MILE 3 MILES 5 MILES HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES

2018 Estimate Population By Age 13,106 75,302 97,133 Total Population 2018 Estimate Total Population 13,106 75,302 97,133 LAWRENCE MARKETPLACE // MARKET OVERVIEW 2023 Projection Under 20 Years 20.4% 23.7% 24.1% 13,170 77,100 101,662 Total Population 20 - 24 Years 21.9% 24.2% 20.4%

2010 Census 25 - 34 Years 20.3% 16.2% 16.0% 12,694 71,261 90,135 Total Population 35 - 44 Years 10.4% 10.2% 11.2% 45 - 54 Years 8.4% 8.1% 9.0%

HOUSEHOLDS 1 MILE 3 MILES 5 MILES 55 - 64 Years 9.2% 8.3% 9.1% 65+ Years 9.3% 9.4% 10.1% 2018 Estimate 5,808 30,459 39,552 Median Age 27.7 25.8 27.6 Total Households

2023 Projection 5,910 31,517 41,849 Population 25+ by Education Level Total Households 2018 Estimate Population Age 25+ 7,566 39,287 53,862 2010 Census 5,541 28,279 35,975 Elementary (0-8) 2.1% 1.2% 1.0% Total Households Some High School (9-11) 4.2% 3.8% 3.7% 2018 Owner Occupied 2,174 12,733 18,757 High School Graduate (12) 17.8% 15.8% 16.4% Total Households Associates Degree Only 6.1% 6.4% 6.6% 2018 Renter Occupied 3,635 17,726 20,795 Bachelors Degree Only 25.0% 27.7% 28.2% Total Households Graduate Degree 22.7% 25.2% 24.9% Some College, No Degree 21.4% 19.4% 18.6% HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES

Population by Gender 2018 Estimate 2018 Estimate Total Population 13,106 75,302 97,133 Under - $25,000 35.3% 30.5% 27.0% Female Population 6,472 37,540 48,671 $25,000 - $34,999 10.6% 10.3% 9.7% Male Population 6,634 37,762 48,462 $35,000 - $49,999 11.4% 12.0% 11.6% $50,000 - $74,999 17.2% 17.2% 17.6% $75,000 - $99,999 11.1% 10.5% 11.5% $100,000 - $124,999 6.2% 6.9% 8.2% $125,000 - $149,999 3.4% 4.3% 4.7% $150,000 or More 4.8% 8.3% 9.7%

Average Household Income $56,021 $68,713 $75,092 Median Household Income $41,307 $46,152 $52,186 38

NON-ENDORSEMENT AND DISCLAIMER NOTICE

CONFIDENTIALITY & DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap. All rights reserved.

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ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. LAWRENCEmarketplace LAWRENCE | KANSAS