ARCHER STATION LA Fitness, Ross Dress for Less, AT&T & Athletico Physical Therapy 2620-2640 W Pershing Road Chicago, IL 60632 TABLE of CONTENTS

Home , Archer Avenue, Pershing Road (Chicago)

NET LEASE INVESTMENT OFFERING

ARCHER STATION LA Fitness, Ross Dress for Less, AT&T & Athletico Physical Therapy 2620-2640 W Pershing Road Chicago, IL 60632 TABLE OF CONTENTS

TABLE OF CONTENTS

I. Executive Profile II. Financial Overview III. Location Overview IV. Market & Tenant Overview Executive Summary Class C Tax Incentive Photographs Demographic Report Investment Highlights Rent Roll Aerial Market Overview Property Overview ProForma Analysis Site Plan Tenant Overview Maps

NET LEASE INVESTMENT OFFERING DISCLAIMER STATEMENT

DISCLAIMER The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended STATEMENT: to be reviewed only by the party receiving it from The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group.

This Offering Memorandum 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. The Boulder Group has not made any investigation, and makes no warranty or representation.

The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group 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.

NET LEASE INVESTMENT OFFERING EXECUTIVE SUMMARY

EXECUTIVE The Boulder Group is pleased to exclusively market for sale Archer Station, a fully leased four tenant shopping center located in SUMMARY: the city of Chicago. Archer Station is fully leased to LA Fitness, Ross Dress for Less, AT&T and Athletico Physical Therapy. The center is positioned in a densely populated urban in-fill location with significant barriers to entry. LA Fitness is a free standing building with a long term lease with 14 years remaining.

Archer Station is strategically located at the signalized intersection of Archer Avenue and Pershing Road in the city of Chicago. This intersection experiences traffic counts in excess of 36,000 vehicles per day. The surrounding area is densely concentrated with commercial and residential buildings providing for significant barriers to entry. There are over 46,000 people living within a one mile radius of the property. The property is benefitted by its proximity to Interstate 55 which is located approximately one-half mile north of the property. Interstate 55 is the primary artery linking Chicago to its southwest suburbs and experiences traffic counts in excess of 172,000 vehicles per day. The 35th & Archer CTA Orange Line “L” Station is located blocks from the property and links residents in the surrounding area to downtown.

Archer Station is a green development and includes features such as permeable pavers in the parking lots as well as all of the buildings having been built to a higher energy efficiency level: ASHRAE + 14%.

The original 15 year LA Fitness lease expires on February 28, 2031. The lease features 10% rental escalations every five years throughout the primary term and in each of the four 5-year renewal option periods. The 10 year Ross Dress for Less lease commenced December 2016. The lease features a 10% rental escalation in the sixth lease year and escalations in each of the four 5-year renewal option periods. AT&T executed a new 7 year lease that features a 10% rental escalation in the sixth lease year. Athletico executed a new 7 year lease with a 5.9% rental escalation in the fifth lease year and annual escalations in each two 5-year renewal option periods.

NET LEASE INVESTMENT OFFERING EXECUTIVE SUMMARY

EXECUTIVE LA Fitness is a privately-owned American health club chain with over 800 clubs across the United States and Canada. LA SUMMARY: Fitness is the dominant market leader in the Chicago MSA with approximately 40 locations in the area. The LA Fitness has generated substantial traffic to the property from residents of the surrounding neighborhood and has experienced significant new membership enrollment since opening.

Ross Dress for Less is an off-price apparel and home fashion retailer with 1,500 locations in 34 states and the District of Columbia. Ross Stores, Inc. is an investment grade rated company with a Standard and Poor’s rating of A-. The company is publicly traded on the NASDAQ (ROST) with a market capitalization in excess of $24 billion.

AT&T is the largest telecommunications company in the word and the second largest provider of mobile in the United States. As of 2016, it is the 17th-largest mobile telecom operator in the world, with 130.4 million mobile customers. AT&T is a publicly traded company (NYSE: T) with a market capitalization in excess of 146.8 Billion. AT&T is an investment grade rated company with a Standard & Poor’s rating of BBB. The guarantor of the lease is Custom Communications, Inc. which operates 84 AT&T retail stores.

Athletico Physical Therapy is in the field of physical therapy, orthopedic rehabilitation, sports medicine and athletic training. Athletico began in Chicago in 1991 and today has over 330 facilities throughout Arizona, Illinois, Indiana, Iowa, Michigan, Missouri, Ohio, South Dakota and Wisconsin, and employs over 4,000 clinical and administrative staff, and offers more than 40 specialty rehabilitation, outreach, and fitness services. Athletico is benefited by the adjacent LA Fitness which has experienced significant new membership enrollment since opening.

NET LEASE INVESTMENT OFFERING INVESTMENT HIGHLIGHTS

INVESTMENT • Located in the city of Chicago HIGHLIGHTS: • Rare new construction in-fill location

• New green development construction

• New long term leases

• Leases feature rental escalation in the primary term

• Tenants are industry leaders

• Significant barriers to entry due to the densely concentrated immediately area

• Positioned at a heavily trafficked signalized intersection

• Over 46,000 people living within a one mile radius of the property

• Approximately one-half mile south of Interstate 55 (172,000 vehicles per day)

• Located blocks southwest from the CTA Orange Line ‘L’ 35th/Archer Station

NET LEASE INVESTMENT OFFERING PROPERTY OVERVIEW

Property The Class C tax incentive is a real estate tax incentive program PROPERTY established to provide tax relief to developers of properties OVERVIEW: Net Operating Income: $1,516,891 that were once subject to environmental contamination, but have been remediated and put into a commercial use. The Cap Rate: 6.50% incentive reduces taxes by an amount of 60% for the first Price: $23,841,615 ten years, 40% for the 11th year, 20% for the 12th year, and terminates thereafter. Landlord to pay the reduced Class C Class C Tax Incentive taxes while the Tenant reimburses the Landlord for the full NPV of Tax Incentive: $1,851,497 assessed amount. 100% of the additional income for Ross Dress for Less, AT&T & Athletico Physical Therapy is Total Purchase Price: $25,693,112 retained by the Landlord. For LA Fitness, 33% will be passed on to the Tenant with the Landlord retaining the remaining 67% as additional income. *See box for explanation and calculation of Class C Tax Incentive

CLASS C TAX Ross Dress for Less LA Fitness AT&T & Athletico INCENTIVE Year Tax Incentive Year Tax Incentive Year Tax Incentive SCHEDULE: 1 $106,500 1 $114,168 1 $20,448 2 $106,500 2 $114,168 2 $20,448 3 $106,500 3 $114,168 3 $20,448 4 $106,500 4 $114,168 4 $20,448 5 $106,500 5 $114,168 5 $20,448 6 $106,500 6 $114,168 6 $20,448 7 $106,500 7 $114,168 7 $20,448 8 $106,500 8 $114,168 8 $20,448 9 $106,500 9 $114,168 9 $20,448 10 $106,500 10 $114,168 10 $20,448 11 $71,000 11 $76,112 11 $13,632 12 $35,500 12 $38,056 12 $6,816

NPV $817,799 NPV $876,681 NPV $157,017 TOTAL NPV $1,851,497

Note: The tax credit was calculated by discounting the future tax credit payments at a rate of 6.5% to obtain the net present value. For the purpose of analysis, the tax credit schedule has been annualized.

NET LEASE INVESTMENT OFFERING RENT ROLL

RENT Square Commencement Expiration Options Annual Rent Step-Up CAM/TAX/ ROLL: Tenant Feet Date Date Rent Escalations Date INS

LA Fitness 40,000 February 10, 2016 February 28, 2031 Four 5-Year $960,000 $1,056,000 Year 6 NNN $1,161,600 Year 11 $1,277,760 Option 1 $1,405,536 Option 2 $1,546,090 Option 3 $1,700,699 Option 4

Ross Dress For Less 25,000 December 27, 2016 January 31, 2027 Four 5-Year $418,750 $460,500 Year 6 NNN $506,500 Option 1 $557,250 Option 2 $613,000 Option 3 FMV* Option 4

AT&T 2,100 January 17, 2017 January 31, 2024 Two 4-Year $81,900 $90,090 Year 6 NNN $90,090 Option 1 $99,099 Option 2

Athletico 2,720 December 28, 2016 December 31, 2023 Two 5-Year $92,480 $97,920 Year 5 NNN $99,878 Option 1 $110,274 Option 2

Total 69,820 $1,553,130

* Under no circumstance shall the rent in the fourth option be lower than the rent in the preceding third option period

NET LEASE INVESTMENT OFFERING PROFORMA ANALYSIS

PROFORMA Income ANALYSIS: Base Rent $1,553,130

Recoveries CAM/Insurance $174,550 Real Estate Taxes 418,920 Administration Fee1 13,955 Total Recoveries $607,425

Gross Rental Income $2,160,555 Vacancy Allowance (0%) $- Effective Gross Income $2,160,555

Expenses CAM/Insurance2 $(174,550) Real Estate Taxes3 (418,920) Management Fee4 (43,211) Reserves (6,982) Total $(643,663)

Net Operating Income $1,516,891

Notes: 1) LA Fitness pays an administration fee equal to 10% of CAM. Ross pays an administration fee equal to 5% of CAM. AT&T pays an administration fee equal to 5% of CAM. Athletico pays an administration fee equal to 15% of CAM. 2) CAM/Insurance is an estimiate. 3) Taxes are an estimate. 4) A management fee equal to 2% of the effective gross income was used for this analysis.

NET LEASE INVESTMENT OFFERING PHOTOGRAPHS

View Archer Station Drone Video

NET LEASE INVESTMENT OFFERING AERIALS

35TH & ARCHER ORANGE LINE STOP

MCKINLEY PARK

ARCHER AVENUE 24,500 VPD

PERSHING ROAD 12,300 VPD

NET LEASE INVESTMENT OFFERING AERIALS

35TH & ARCHER ORANGE LINE STOP

MCKINLEY PARK

STOCKYARDS INDUSTRIAL PARK

NET LEASE INVESTMENT OFFERING SITE PLAN WEST PERSHING ROAD WEST 38TH STREET

S O U T H A R C H E R A V E

SOUTH ROCKWELL STREET

SUBJECT PROPERTY

NET LEASE INVESTMENT OFFERING MAPS

Lake Michigan

NET LEASE INVESTMENT OFFERING MAPS

Lake Michigan

NET LEASE INVESTMENT OFFERING DEMOGRAPHIC REPORT

DEMOGRAPHIC Population .5-Mile 1-Mile 3-Mile REPORT: Total Population 14,872 46,343 89,352 Total Households 4,112 12,949 22,157

Income .5-Mile 1-Mile 3-Mile

Average Household Income $47,390 $49,459 $47,292 MARKET OVERVIEW

MARKET Chicago OVERVIEW: Chicago is the most populous city in the Midwestern United States and the third most populous city in the United States with 2,700,000 residents. Chicago is the county seat of Cook County, the second largest county in the United States. The Chicago MSA is the third most populated metropolitan area in the United States with 9,580,567 residents. The MSA covers over 1,300 square miles and six counties. Chicago has many nicknames, the best-known being the Windy City.

The Chicago metropolitan area is home to the corporate headquarters of 57 Fortune 1000 companies, including Boeing, McDonald’s, Motorola, Discover Financial Services and United Airlines. Chicago is a major hub for industry, telecommunications and infrastructure and O’Hare International Airport is the second busiest airport in the world in terms of traffic movement.

The metro is a major financial center in North America, and is home to the largest futures exchange in the United States, theCME Group. Chicago is third in the world on the Global Financial Centers Index which ranks the competitiveness of financial centers based on people, business environment, market access, infrastructure and general competitiveness. As of 2014, Chicago had the third largest gross metropolitan product in the United States at $610 billion.

The city of Chicago also hosts 12 Fortune Global 500 companies and 17 Financial Times 500 companies. The city claims one Dow 30 company: aerospace giant Boeing, which moved its headquarters from Seattle to the Chicago Loop in 2001. Two more Dow 30 companies, Kraft Foods and McDonald’s are in the Chicago suburbs, as are Sears Holdings Corporation and the technology spin-offs of Motorola. The headquarters of United Continental Holdings, are in the United Building and its operations center and its United Airlines subsidiary are in the Willis Tower in Chicago.

In 2014, Chicago attracted 50.17 million domestic leisure travelers, 11.09 million domestic business travelers and 1.308 million overseas visitors. These visitors contributed more than $13.7 billion to Chicago’s economy. Upscale shopping along the Magnificent Mile and State Street, thousands of restaurants, as well as Chicago’s eminent architecture, continue to draw tourists. The city is the United States’ third-largest convention destination. A 2011 study by Walk Score ranked Chicago the fourth most walkable of fifty largest cities in the United States. TENANT OVERVIEWS

TENANT LA Fitness OVERVIEWS: LA Fitness is a privately-owned American health club chain with over 800 clubs across the United States and Canada. The company was formed in 1984 and is based in Irvine, California. LA Fitness is the dominant market leader in the Chicago MSA with approximately 40 locations in the area.

LA Fitness has grown substantially recently and their growth strategy in new markets has been to purchase existing competitors. For example, on November 30, 2011, the company completed the acquisition of 171 clubs for $153M from Bally Total Fitness. After the closing, LA Fitness began closing some former Bally Fitness clubs near existing LA Fitness facilities.

All LA Fitness gyms are open 7 days per week and many locations are open 24 hours per day. Locations feature state-of-the-art equipment and cardio machines, basketball and racquetball courts, locker facilities, juice bars and personal trainers.

LA Fitness is a privately-owned company, with major ownership interests held by private equity firms Seidler Equity Partners, CIVC Partners, and Madison Dearborn Partners.

Website: www.lafitness.com Number of Locations: 800 Headquarters: Irvine, CA

Ross Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. It primarily offers apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at everyday savings of 20% to 60% off department and specialty store regular prices primarily to middle income households; and dd’s DISCOUNTS stores sell its products at everyday savings of 20% to 70% off moderate department and discount store regular prices to moderate income households. As of March 7, 2016, it operated 1,500 off-price apparel and home fashion stores in 34 states, the District of Columbia, and Guam. Ross Stores, Inc. was founded in 1982 and is headquartered in Dublin, California.

Ross Stores Inc. is a publicly traded company on the NASDAQ (ROST) with a market capitalization in excess of $24 billion. Ross Stores, Inc. is an investment grade rated company with a Standard & Poor’s rating of A-.

Website: www.rossstores.com Number of Locations: 1,500 Stock Symbol: NASDAQ: ROST Market Capitalization: $24 Billion Credit Rating: S&P: A- (Investment Grade) Headquarters: Dublin, CA

NET LEASE INVESTMENT OFFERING TENANT OVERVIEWS

TENANT AT&T OVERVIEWS: AT&T can trace its origin back to the original Bell Telephone Company founded by Alexander Graham Bell after his invention of the telephone. AT&T is an American multinational telecommunications corporation headquartered in Dallas, Texas. The company’s offers telecommunications products and services.

AT&T is the largest telecommunications company in the world and the second largest provider of mobile in the United States. It is the 17th-largest mobile telecom operator in the world, with 130.4 million mobile customers.

AT&T is a publicly traded company (NYSE: T) with a market capitalization in excess of 146.8 Billion. AT&T is an investment grade rated company with a Standard & Poor’s rating of BBB.

The guarantor of the lease is Custom Communications, Inc. which operates 84 AT&T retail stores.

Website: www.att.com Stock Symbol: T (NYSE) Market Capitalization: $146.8 Billion Credit Rating: S&P: BBB (Investment Grade) Headquarters: Dallas, TX

Athletico Physical Therapy Athletico Physical Therapy is Chicagoland’s specialists in the field of physical therapy, orthopedic rehabilitation, sports medicine and athletic training. Athletico began in Chicago in 1991 and today has over 330 facilities throughout Arizona, Illinois, Indiana, Iowa, Michigan, Missouri, Ohio, South Dakota and Wisconsin, and employs over 4000 clinical and administrative staff, and offers more than 40 specialty rehabilitation, outreach, and fitness services.

Athletico has staff with expertise in treating the worker’s compensation population with such services as work conditioning, functional capacity evaluations, post-offer testing and ergonomic assessments. In addition, Athletico provides athletic training, physical therapy, occupational therapy, and fitness services to affiliations including high schools, colleges, and many professional sports teams.

Athletico provides the following services; complimentary injury screens, physical therapy, occupational/hand therapy, work comp, athletic training outreach, head injury and concussion management, specialized services, specialty techniques, fitness services, home health therapy staffing and golf performance center.

Website: www.athletico.com Number of Locations: 300+ Year Founded: 1991 Headquarters: Chicago, IL

NET LEASE INVESTMENT OFFERING Randy Blankstein President 847.562.0003 [email protected]

Jimmy Goodman Partner 847.562.8500 [email protected]

666 Dundee Road, Suite 1801 Northbrook, IL 60062