EXCLUSIVE OFFERING MEMORANDUM 1905 North Prince Street, Clovis, NM 88101 Table of Contents I. Executive Summary 3 II. Market Overview 5 III. Tenant Overview 10 Executive Summary Executive Summary The Offering JLL is pleased to offer for sale the fee-simple interest in a single tenant, freestanding Albertsons (the “Property” or“ Asset”) located in Clovis, New Mexico. The Asset is operating under an absolute NNN lease with zero landlord responsibilities and over 12 years of primary term. The Property also benefits from 10% rental increases every five years and six 5-year option periods. This offering represents an exceptional opportunity to acquire a long-term, absolute NNN Albertsons property with strong store sales and limited competition from like-kind retailers in the immediate area. Long-Term Lease with Substantial Rent Growth Albertsons . The tenant is operating under an absolute net lease structure with zero landlord Property Overview responsibilities and more than 12 years remaining on the primary term of the lease. 1905 North Prince Street The Asset also boasts 10% rent escalations every five years during the primary term. Address: Clovis, NM 88101 Excellent Location within Strong Trade Area Tenant: Albertsons . The Property is located within a shopping center featuring numerous national NOI / PSF: $618,889 / $14.23 tenants including Hobby Lobby, Goodwill, and Harbor Freight that help to drive additional traffic. The Property also has excellent frontage along Prince Street, with Asking Price: $9,170,000 exposure to over 24,000 vehicles per day. Cap Rate: 6.75% Strong, Upward-Trending Store Sales Building Size: 43,484 SF . This Albertsons location has seen above average, upward-trending store sales over Lot Size: 3.77 Acres the past few years. Sales information is available upon request. Lease Type: NNN Landlord Responsibilities: None Rent Schedule Primary Term Expiration: 10/31/2030 Period Annual Monthly Rent PSF Years Remaining*: 12.75 years Current – 10/31/2020 $618,889 $51,574 $14.23 Options to Extend: 6 x 5-year options 11/1/2020 – 10/31/2025 $680,777 $56,731 $15.66 Base Rent Escalations: 10% every 5 years during base term. 11/1/2025 – 10/31/2030 $748,855 $62,405 $17.22 Greater of 95% of FMV or rent in final OPTION PERIODS Option Rent Escalations: year of base term Greater of 95% of FMV or rent in final year Options 1-6 of base term Year Built: 1984 *As of 2/1/2018 Proprietary and confidential 4 Market Overview Clovis, New Mexico Clovis Overview Demographic Information Clovis is a city in eastern New Mexico with a population of approximately Albertsons - Clovis 38,000 residents. 1-mile radius 3-miles radius 5-mile radius Clovis is home to Cannon Air Force Base which is approximately 7 miles POPULATION southwest of downtown. The history of the base began in the late 1920s and 2022 Projection 11,442 43,806 46,266 has supported a number of military aircrafts over the years. The base has had 2017 Estimate 11,188 42,100 44,499 a positive impact of the local economy, with over 5,800 military and civilian 2017 Number of Households 4,312 15,641 16,482 personnel currently working at Cannon. The Clovis area has also seen rapidly declining and low vacancy rates over ESTIMATED HH INCOME the past couple of years for retail assets, going from 2.9% in Q1 2016 to just Less than $35,000 49.7% 45.2% 44.8% 0.6% in Q1 2018, demonstrating the strong demand for retail in the area. $35,000 - $49,999 13.1% 12.0% 12.1% Clovis’ surrounding area plays host to significant agriculture and ranching $50,000 - $74,999 14.4% 16.8% 16.9% activities. There are several processing plants for peanut and cotton farming $75,000 - $99,999 12.4% 11.3% 11.5% as well as cattle ranching used for both meat and dairy production. The More than $100,000 23.0% 14.7% 14.6% Southwest Cheese Company has operated a plant in Clovis since 2004, Average HH Income $50,345 $55,168 $55,261 employs over 200 people, and is one of the largest plants of its kind in the Median HH Income $35,309 $39,946 $40,268 world. Music has also contributed to the culture and economy of Clovis since the city originated. Retail Market Snapshot as of 1Q2018 As of 1Q2018 Albertsons (20 mile radius) Total Inventory (SF) 2,787,251 Total Vacancy 0.6% 12-Month Net Absorption (SF) 22,249 NNN Rental Rate $15.43 Downtown Clovis Proprietary and confidential 6 Aerial Map The Asset benefits from various retailers, institutions and living communities in the immediate area. Albertsons shares a parking lot with numerous national retailers including: Hobby Lobby, Harbor Freight Tools, IHOP, and Dollar General, which helps to draw additional traffic to the area. North Plains Mall, a 303,000 square foot enclosed mall, is less than 1 mile from the Asset and draws nearly 100,000 consumers across Eastern New Mexico and West Texas. 24,000 VPD 24,000 Proprietary and confidential 7 Property Photos Proprietary and confidential 8 Grocery Store Location Map – Clovis With the exception of Lowes Marketplace and Walmart, there is extremely limited national grocery store competition in the Clovis area. The only major full service grocery store is Lowes Marketplace, which is located less than 1.0 miles away. The Property’s stronger location along the main Clovis retail corridor help to its advantage which is proven by its strong store sales. Proprietary and confidential 9 Tenant Overview Albertsons Overview COMPANY OVERVIEW Company Albertsons Founded 1939 Headquarters Boise, ID Stores 2,300 Employees 273,000 2017 Net Sales $59.7 Billion Albertsons Overview In February of 2018, Albertsons announced its plans to buy all remaining Rite Aid drug stores not being sold to Walgreens Boot Alliance Inc. The deal will create a company with expected 2018 revenue of $83 billion as the companies try to navigate the changes in the food and health care industries. This will also enable Albertsons to go public on the New York Stock Exchange. The combined company will have 4,900 locations, including 4,350 pharmacy counters. Albertsons currently operates 2,300+ stores across 33 states under 18 well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Randalls, and United Supermarkets. Albertsons operates in 121 Metropolitan Statistical Areas in the United States and is ranked #1 or #2 by market share in 68 percent of them. The company provides their customers with a service-oriented shopping experience, including convenient and value-added services through nearly 1,700 pharmacies and over 370 adjacent fuel centers. All Albertsons banners focus on superior customer service and operating their stores to the highest standards, which includes delivering fresh offerings, well-stocked shelves, and clean and brightly lit departments. Albertsons employs 273,000 people who serve more than 33 million customers each week. Albertsons embodies the powerful combination of strong local presence and national scale. The company has leading positions in many of the largest and fastest- growing MSAs in the United States. Given the long operating history of its banners, many of their stores form an important part of the local communities and neighborhoods in which they operate and occupy “First-and-Main” locations. The combination of local presence and national scale provides Albertsons with competitive advantages in brand recognition, customer loyalty and purchasing, marketing and advertising and distribution efficiencies. Albertsons is currently owned and controlled by Cerberus Capital Management (“Cerberus”) and a consortium of retail real estate investors and operators with deep vertical experience in the grocery space. Cerberus is a best-in-class private equity sponsor and turnaround expert that has been successful in aggregating a portfolio of well-respected grocery banners and achieving both cost synergies ($800 MM by 2018) and top line revenue growth. The $800 million in annual cost reductions come from its 2015 merger with Safeway and integrating Albertson’s and Safeway’s IT systems, distribution centers, and its industry leading rewards program. Further, the merger with Safeway has had many other financial benefits, including better working capital management and the ability to negotiate favorable deals with vendors through large economies of scale. Proprietary and confidential 11 JLL Contacts Sales Team Matthew Berres Scott Bailey +1 949 885 2933 +1 424 901 8204 [email protected] [email protected] Production Support Daniel Smith Alex Sands +1 312 228 3264 +1 312 228 3253 [email protected] [email protected] www.theinvestor.jll © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof..