Spirit Valley Mall

For Sale in conjunctionSpirit with Valley Marcus and Millichap: Mall Westport Shopping Center, Baxter, MN215 N Central Ave, Duluth, MN

➢ 89% Occupied Shopping Center

➢ Westgate Mall Shadow-Anchored | Tenants Include Herberger’s, Big Lots, Dunham Sports, Payless and JOANN

➢ Mostly NNN Leases | 83 Percent of the GLA has NNN Leases

➢ Upside in Converting Gross Leases to NNN and to Market Rents Email for further info: [email protected] ➢ Key Tenants include Pizza Hut, Keller Williams, and Anytime Fitness Executive Summary | 4 SPIRIT VALLEY MALL

ADDRESS: 215 N Central Avenue, Duluth, Minnesota 55807 Pricing

Price: $3,038,000 PRICE CAP RATE NOI Cap Rate: 8.65% $3,038,000 8.65% $262,651 Gross Leasable Area: 70,850

Price Per Square Foot: $42.88

Lot Size: 6.19 +/- Acres

Investment Highlights SQ FOOTAGE LEASE TYPES ACREAGE ➢ Multi-Tenant Retail Mall | 98% Occupied 70,850 NNN & Gross 6.19 Acres

➢ Strong Tenant Mix | National, Regional & Local Tenants Demographics ➢ High Upside Potential | Converting Leases from Gross to Triple Net 1-Mile 3-Mile 5-Mile

➢ Additional Upside in Converting Month-to-Month Population 6,535 26,475 59,440 Leases to Long-Term Leases Average HH $49,239 $58,810 $55,627 Income ➢ Immediate Access to Interstate 35

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Services, Inc. © 2015 Marcus & Millichap ACT ID Z0260290 Operating Statement | 5 SPIRIT VALLEY MALL

SUMMARY PROPOSED NEW FINANCING PROJECTED EXPENSES

Price: $3,038,000 First Loan Amount: $2,126,600 Common Area Maintenance

Down Payment: $911,400 Terms: 5.20% Interest Electricity (1) $47,296 Current CAP: 8.65% 25 Year Amortization (2) Gas $5,890 Cash on Cash: 10.57% 5 Year Term Water/Sewer (2) $30,615 Square Feet 70,850 Monthly Payment: $12,680.95 Janitorial/Trash Removal $32,878 Cost per Square Feet: $42.88 Annual Payment: $152,171.38 Parking Lot Sweeping/Maint. $4,344 Debt Coverage Ratio: 1.73 Telephone $919 Year Built: 1975 Snow Removal $16,912 Lot Size: 6.19 Acres

CURRENT OPERATING DATA EXPENSES Supplies $3,173

Current Annualized Data Taxes: $1.43 $101,076 Repair/Maintenance $50,680

Scheduled Gross Income: $569,576 Insurance: $0.30 $21,243 Total CAM $192,707

Tax Reimbursement: $19,948 Common Area Maintenance: (4) $2.72 $192,707 Real Estate Taxes $101,076

Insurance Reimbursement: $5,152 Management Fee: 4.00% $24,070 Insurance $21,243 CAM Reimbursement: $38,033 TOTAL EXPENSES: $339,076 TOTAL Expenses: $315,026 Admin. Reimbursement: $709 Per Rentable Square Foot $4.79 UNDERWRITING ASSUMPTIONS Total Income: $633,418 (1) Access Music pays 46% of Electric Bill Vacancy Factor: $31,671 5.00% (2) Landlord pays China King’s gas, heat, water & Gross Operating Income: $601,747 sewage

Less Expenses: $339,096 (3) Cost Cutterz pays percentage rent of 5% over $150,000 in sales and reimburses for mgmt Net Operating Income: $262,651 8.65% (4) CAM expenses based on 2-year average of 16/17 expenses Capital Reserves: $14,170 ($.20)

Loan Payments: $152,171

Pre Tax Cash Flow: $96,310 10.57%

Plus Principal Reduction: $42,594

Total Return Before Taxes: $138,904 15.24%

% of Lease Lease Monthly Annual Annual Increase New Annual Lease Option Suite Tenant Sq. Ft. Total Start End Rent Rent PSF Date Rent Reimb. Type Terms H China King Buffet 5,000 7.06% 12/1/2010 12/31/2021 $4,500.00 $54,000.00 $10.80 Gross A-1(A) Discount Duluth 13,800 19.48% 1/1/2018 12/1/2018 $4,000.00 $48,000.00 $3.48 Gross (1) 1-yr A-1(B) Vineyard Chapel 3,428 4.84% 1/1/2014 MTM $800.00 $9,600.00 $2.80 Gross A-1 Greystar Electronics 3,956 5.58% 9/1/2001 MTM $3,138.00 $37,656.00 $9.52 Gross

A-2 Dollar Tree 11,208 15.82% 7/1/2009 1/31/2020 $7,005.00 $84,060.00 $7.50 $49,835 NNN (1) 5-yr *Tenant has Co-Tenancy with Kmart United States Postal A-3 1,728 2.44% 4/1/2005 3/31/2020 $1,422.72 $17,072.64 $9.88 $7,683 NNN Service A-4 Lake Superior PT 2,034 2.87% 11/1/2010 MTM $2,034.00 $24,408.00 $12.00 Gross (2) 2yr A-6 Anytime Fitness 5,840 8.24% 10/1/2012 9/30/2025 $5,350.00 $64,200.00 $10.99 10/1/2020 $11.50 Gross (2) 5-yr Modified A-10 MKG International 3,200 4.52% 7/1/2013 MTM $2,400.00 $28,800.00 $9.00 $959 Gross B-1 From Topknots to Tails 1,200 1.69% 11/1/2012 MTM $1,275.00 $15,300.00 $12.75 Gross B-3 Cost Cutters (3) 1,047 1.48% 5/1/1984 MTM $1,512.93 $18,155.16 $17.34 $5,365 NNN Serenity Tax & B-4 2,923 4.13% 7/1/2018 6/30/2023 $1,600.00 $19,200.00 $6.57 7/1/2019 $7.80 Gross (1) 5-yr Bookkeeping 7/1/2020 $9.03 7/1/2021 $10.26 B-5/6 Soul Sisters 2,483 3.50% 6/1/2010 2/28/2021 $2,000.00 $24,000.00 $9.67 3/1/2019 $10.15 Gross 3/1/2020 $10.51 B-7 WeStyle Fashion 640 0.90% 9/1/2015 4/30/2019 $650.00 $7,800.00 $12.19 Gross B-8 Access Music Therapy 1,120 1.58% 2/1/2018 1/31/2021 $1,075.00 $12,900.00 $11.52 Gross Solutions Ins (TJB B-9 8,000 11.29% 3/1/2015 2/28/2020 $7,315.00 $87,780.00 $10.97 3/1/2019 $11.14 Gross (2) 5-yr Agencies) Option I 3/1/2020 1.5% Annual Option II 3/1/2025 1.5% Annual Vineyard Meeting B-10 1,920 2.71% 5/1/2010 MTM $450.00 $5,400.00 $2.81 Gross Rooms B-11 Vacant 837 1.18% $837.00 $10,044.00 $12.00 B-12 Vineyard Office 486 0.69% MTM $100.00 $1,200.00 $2.47 Gross Current Totals 70,850 100% $47,465 $569,576 $8.04 $63,133

Occupied 70,013 98.82% $46,628 $569,576 $7.99

Vacant 837 1.18% $837 $10,004 $12.00 Tenant Profiles | 7 SPIRIT VALLEY MALL

Greystar Electronics was founded in 1993 in Duluth, Minnesota Dollar Tree, Inc. is an American chain of discount variety stores and is a manufacturer of cable assemblies and wire harnesses that sells items for $1 or less. Headquartered in Chesapeake, for the aviation industry, both for commercial use and for Virginia, it is a member company of Fortune 500 and operates defense. They are known for their collaborative process and 13,600 stores throughout the 48 contiguous U.S. states and hands on attitude with the end goal of building long lasting, Canada. Its stores are supported by a nationwide logistics mutually beneficial relationships with government agencies and network of eleven distribution centers. The company operates commercial customers. one-dollar stores under the names of Dollar Tree and Dollar Bills. The company also operates multi-price-point variety chains under the names Deals and Family Dollar. Dollar Tree competes in the dollar store and low-end retail markets.

Headquarters: Duluth, Minnesota Headquarters: Chesapeake, Virginia No. of Locations: 1 No. of Locations: 13,600 Symbol: Private Symbol: NASDAQ: “DTR” Website: www.greystarelectronics.com Website: www.dollartree.com Square Footage: 3,956 Square Footage: 11,208 Lease Start: September 1, 2001 Lease Start: September 1, 2009 Lease Expiration: MTM Lease Expiration: January 31, 2020

K-Mart expected to vacate by 9/30/18. In such event, if 12 month average gross sales volume decreases for the period after Co-Tenant Vacates, then Tenant can pay 3% of gross sales, and Tenant shall have the right to terminate upon 30 days’ notice. Tenant Profiles | 8 SPIRIT VALLEY MALL

The United States Postal Services (USPS) is an independent Anytime Fitness is a 24-hour health and fitness club agency of the United States federal government responsible for headquartered in Woodbury, Minnesota. Anytime Fitness, providing postal service in the United States and is one of the according to Forbes, is the world’s “Fastest-Growing Fitness Club” few government agencies explicitly authorized by the United and “Largest Co-Ed Fitness Franchise” with an average of more States Constitution. The USPS was formed in 1971, 47 years ago, than 300 new gyms each year. There are now more than 4,000 in Washington, D.C. where the headquarters remain today. franchised locations in 30 countries. The gym facilities are open There are over 639,780 employees in the USPS today. 24 hours a day, 365 days out of the year. In 2015, Entrepreneur Magazine ranked Anytime Fitness first on its global franchise list.

Headquarters: Washington, D.C. Headquarters: Woodbury, Minnesota No. of Employees: 639,789 No. of Locations: 4,000+ Symbol: Independent Symbol: Private Website: www.usps.com Website: www.anytimefitness.com Square Footage: 1,728 Square Footage: 5,840 Lease Start: April 1, 2005 Lease Start: October 1, 2012 Lease Expiration: March 31, 2020 Lease Expiration: September 30, 2025 Tenant Profiles | 9 SPIRIT VALLEY MALL

Cost Cutters salons of NE Minnesota and NW Wisconsin are Music Therapy is the clinical and evidence-based use of music dedicated to providing you and your family with convenient interventions to accomplish individualized goals within a haircare services by professional stylists who care about your therapeutic relationship by a credentialed professional who has needs. The perfect hair salon for busy, value-conscious families, completed an approved music therapy program. Music Cost Cutters offers a relaxed haircare experience with no therapists asses emotional well-being, physical health, social appointments and no hassle. Cost Cutters welcomes you to visit functioning, communication abilities, and cognitive skills through any of their 8 locations across Minnesota and Wisconsin. musical responses. Access Music Therapy is based on theory, practice and research. The American Music Therapy Associations (AMTA) promotes a vast amount of research exploring the benefits of music as therapy.

Headquarters: Duluth, Minnesota Headquarters: Duluth, Minnesota No. of Locations: 8 No. of Locations: 1 Symbol: Private Symbol: Private Website: www.costcuttersduluth.com Website: www.accessmusictherapy.com Square Footage: 1,047 Square Footage: 1,120 Lease Start: May 1, 1984 Lease Start: February 1, 2018 Lease Expiration: MTM Lease Expiration: January 31, 2021 Investment Overview | 11 SPIRIT VALLEY MALL

INVESTMENT HIGHLIGHTS Marcus & Millichap is pleased to exclusively present for your acquisition review Spirit Valley Mall. A shopping center comprised ➢ 70,850 Square Foot Shopping Mall of 1 buildings totaling 64,052 square feet in Duluth, Minnesota. The center is positioned at the intersection of I-35 & Central Ave. With Great visibility, and tenancy.

➢ 98% Occupancy | Fully Stabilized Spirit Valley Mall is currently 99.5 percent occupied with 1 unit with a total of 837square feet of releasable vacancy along with 4 tenants on month to month basis totaling 6,881square feet of ➢ Strong Tenant Mix | Anchors Include possible upside. The tenant base consists of a complimentary mix Dollar Tree, Anytime Fitness, Discount of local tenants and National tenants (Dollar Tree, USPS, Anytime Duluth & Solutions Insurance Fitness, Cost Cutters) that provides consumers with a wide range of products and services including restaurants, discount goods, and ➢ High-Upside | Converting Month-to- much more. Along with the Spirit Valley Mall, additional retail traffic Month Leases to Long-Term Leases drivers within the area include McDonalds, Menards, Super One Foods, Laura MacArther Elementary School, CVS, Taco Johns, ➢ Additional Upside in Converting Gross Walgreens, Whole Foods, and Arby’s. Leases to Triple Net The Spirit Valley Mall benefits from its strategic location off of I-35, a four-lane, North/South highway that is the major artery from ➢ Immediate Access to Interstate 35 Minneapolis/St. Paul to Duluth. Duluth has a population of 86,293 and is located in North East Minnesota 156 miles straight North of Minneapolis, Minnesota and straight West of Superior, WI 5 miles. ➢ Ideally Positioned down the street from This Center offers an incoming investor the opportunity to acquire Menards | Consistent Traffic Counts a stabilized shopping center with upside opportunity in a great market with limited competition. Property Photos | 12 SPIRIT VALLEY MALL Drone Photos | 13 SPIRIT VALLEY MALL Drone Aerial | 14 SPIRIT VALLEY MALL

Denfeld High School Market Aerial | 17 SPIRIT VALLEY MALL Regional Map | 19 SPIRIT VALLEY MALL

83 MILES 154 MILES 155 MILES Grand Rapids, Minneapolis, Eau Claire, Minnesota Minnesota Wisconsin Duluth Overview| 21 SPIRIT VALLEY MALL

DULUTH, MN MARKET OVERVIEW METRO HIGHLIGHTS OVERVIEW The Duluth-Superior metro is located along the north shore of Lake Superior, at TOURIST DESTINATION the westernmost point of the Great Lakes. The lake as well as nearby state and A variety of natural features as well as the Great Lakes Aquarium, Canal Park, Lake Superior Railroad Museum and the Glensheen Mansion draw visitors. The annual national parks and forests draw a multitude of visitors to the region for outdoor Grandma’s marathon is a Boston Marathon qualifier. activities. The metro consists of St. Louis and Carlton counties in Minnesota and PORTS Douglas County in Wisconsin. Duluth is the most populous city in the region with The combined facilities in Duluth, Minnesota, and nearby Superior, Wisconsin, form the largest port on the Great Lakes, shipping commodities worldwide. 86,000 residents and is the seat of St. Louis County. Residents of the city are well educated with nearly 33 percent holding a bachelor’s degree, well above the U.S. HIGHER EDUCATION level of 29 percent. The University of Minnesota Duluth, College of St. Scholastica, Lake Superior College, University of Wisconsin-Superior and Wisconsin Indianhead Technical College are all located within the metro. ECONOMY

▪ A large tourism industry is underpinned by the area’s natural beauty, Lake Superior and the many state and national parks and forests nearby. The region offers an abundance of outdoor activities and is also the gateway to the North Shore and the Boundary Waters Canoe Area. Fall colors attract many visitors to the region. ▪ Aviation is a sizable component of the economy. Cirrus Aircraft is headquartered and manufactured in Duluth. Kestrel Aircraft, AAR Corp., Monaco Air, the 148th Air National Guard and the Duluth International Airport also provide jobs in the area. ▪ Other major economic drivers include healthcare, manufacturing, data centers and logistics/transportation. DEMOGRAPHICS

2017 2017 2017 2017 MEDIAN POPULATION: HOUSEHOLDS: MEDIAN AGE: HOUSEHOLD INCOME: 279K 117K 40.9 $50,900 Growth Growth U.S. Median: U.S. Median: 2017-2022*: 2017-2022*: 1.8% 2.9% 37.8 $56,300