Walmart NHM (Summerhill)-OM.Indd

Walmart Neighborhood Market Ground Lease OFFERING MEMORANDUM 3302 Summerhill Road, Texarkana, Texas

Net Lease Investment Services

In association with: Christopher Sheldon Andrew Bogardus Ed Colson Jr., CCIM +1 415 677 0441 +1 415 677 0421 +1 858 546 5423 [email protected] [email protected] [email protected] Lic #01806345 Lic #00913825 TX Lic #635820 Net Lease Investment Services

Disclaimer

The information contained in this marketing brochure (“Materials”) is proprietary The information contained in the Materials has been obtained by Agent from and confi dential. It is intended to be reviewed only by the person or entity receiving sources believed to be reliable; however, no representation or warranty is made the Materials from DTZ (“Agent”). The Materials are intended to be used for regarding the accuracy or completeness of the Materials. Agent makes no the sole purpose of preliminary evaluation of the subject property/properties representation or warranty regarding the Property, including but not limited to (“Property”) for potential purchase. income, expenses, or fi nancial performance (past, present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence The Materials have been prepared to provide unverifi ed summary fi nancial, of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws property, and market information to a prospective purchaser to enable it to and regulations (local, state, and federal); or, fi nancial condition or business establish a preliminary level of interest in potential purchase of the Property. The prospects of any tenant (tenants’ intentions regarding continued occupancy, Materials are not to be considered fact. The information contained in the Materials payment of rent, etc). A prospective purchaser must independently investigate is not a substitute for thorough investigation of the fi nancial, physical, and market and verify all of the information set forth in the Materials. A prospective purchaser conditions relating to the Property. is solely responsible for any and all costs and expenses incurred in reviewing the Materials and/or investigating and evaluating the Property.

By receiving the Materials you are agreeing to the Conﬁ dentiality and Disclaimer set forth herein.

Walmart Neighborhood Market i Net Lease Investment Services

Investment Off ering & Highlights

The Off ering

• Approximately 5.84 acres of land, ground leased to Walmart Neighborhood Market for 20 years and guaranteed by Wal-mart Stores, Inc., beneath a brand new 42,452 square foot supermarket and 176 square foot fuel station built in 2014/2015. The improvements were constructed and owned by the tenant.

• Price: $6,070,000 – 4.15% Cap Rate

Tenant / Lease

• Walmart Stores, Inc. is ranked #1 on the Fortune 500

• Walmart had revenues of $476 billion, net income of $16 billion and a total stockholders’ equity of $76 billion for the ﬁ scal year ending January 2014

• S&P rated “AA” investment grade credit

• New 20 year ground lease with no landlord maintenance responsibilities

• Extremely attractive 10% rental increase in Year 11 and 5% rental increases every 5 years starting in the options

Real Estate / Area Strengths

• Brand new construction

• Located at the northeast corner of Summerhill Road and College Drive

• Solid real estate intrinsics at $24 per square foot (land)

• Large lot size

• Summerhill Road is a major retail corridor in central Texarkana with solid traffi c counts

Walmart NeighborhoodSKF USA, Market Inc. 2ii Table of Contents

Disclaimer i

Investment Off ering & Highlights ii

Investment Overview 1

Walmart Neighborhood Market 2

Site Plan 3

Aerials 4

Location Map 6

Texarkana Area Map 7 Economy 8 Education 8 Transportation 9

Demographics 10

Investment Overview

Location Annual Rent 3302 Summerhill Road, Texarkana, Texas Years Annual Rent Return 1 - 10 $251,889 4.15% Lot Size 11 - 20 $277,078 4.56% Approximately 5.84 acres – 254,390± square feet 21 - 25 (Option 1) $290,932 4.79% 26 - 30 (Option 2) $305,478 5.03% Improvements 31 - 35 (Option 3) $320,752 5.28% Completed in 2014/2015, a 42,452± square foot single story retail building and 176 square foot fuel station for WALMART NEIGHBORHOOD MARKET. 36 - 40 (Option 4) $336,790 5.55% 41 - 45 (Option 5) $353,629 5.83% • The improvements are built and owned by the tenant. The improvements are not for sale. 46 - 50 (Option 6) $371,311 6.12% 51 - 55 (Option 7) $389,876 6.42% Lease 56 - 60 (Option 8) $409,370 6.74% Leased to WAL-MART REAL ESTATE BUSINESS TRUST dba WALMART 61 - 65 (Option 9) $429,839 7.08% NEIGHBORHOOD MARKET, and guaranteed by WAL-MART STORES, INC., for 66 - 70 (Option 10) $451,331 7.44% 20 years from January 2015 until January 2035. The annual net rent of $251,889 increases by 10% in Year 11. The lease is triple net with the tenant responsible 71 - 75 (Option 11) $473,897 7.81% for all taxes, insurance and maintenance, including roof and structure. There are 76 - 80 (Option 12) $497,592 8.20% ﬁ fteen 5-year options to renew with 5% increases in each option. 81 - 85 (Option 13) $522,472 8.61% 86 - 90 (Option 14) $548,595 9.04% Rent Per Square Foot 91 - 95 (Option 15) $576,025 9.49% $5.93 net per year – $0.49 net per month (as applied to building)

Financing Price: $6,070,000 – 4.15% Cap Rate The property will be delivered free and clear of permanent ﬁ nancing.

Walmart Neighborhood Market 1 Net Lease Investment Services

Walmart Neighborhood Market

WALMART NEIGHBORHOOD MARKET, a subsidiary of WAL-MART STORES, INC., (NYSE: WMT), is a chain of grocery stores launched by Walmart in 1998. With over 286 Neighborhood Markets in the United States, they feature a wide variety of products, including fresh produce, deli foods, fresh meat and dairy items, health and beauty aids, one-hour photo and traditional photo developing services, drive-through pharmacies, stationery and paper goods, pet supplies, and household chemicals. The Neighborhood Market is Walmart’s smaller grocery concept which gives customers a more convenient shopping experience than the typical Walmart Supercenter. The Supercenter is typically 160,000 square feet and in contrast the Neighborhood Market is approximately 40,000 square feet and has a fuel center for increased convenience. Walmart’s strategy is to open another 270 of these small-format stores and have a total of 500 operating by early 2015.

For the ﬁ scal year ended January 31, 2014, Wal-Mart Stores, Inc., reported total revenue of $476 billion, net income of $16.02 billion and stockholder’s equity of $76.25 billion.

Additional information can be found at www.walmart.com.

WAL-MART STORES INC., GUARANTEES THE LEASE.

Walmart Neighborhood Market 2 Site Plan Net Lease Investment Services

DRIVE-THRU PALLET / BALE STORAGE AREA C.C.

WASTE BIN AREA C.C.

RETAINING WALL SUMME WITH FENCE DELIVERY C.C. DOCK DOORS 42,452± SF VAN

C.C.

R H

VAN

R OAD C.C. C.C.

STORMWATER DETENTION AREA SERVICE BLDG 176 SF

COLLEGE DRIVE Walmart NeighborhoodFedEx GroundMarket 73 TTEXARKANAEXARKANA HIGHHIGH SCHOOLSCHOOL

Net Lease Investment Services EELLISLLIS PPOTTERYOTTERY

PPETEETE MANKINSMANKINS NISSANNISSAN L

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D D TTRINITYRINITY CCITYITY CCOLLISIONOLLISION TTEXASEXAS MIDDLEMIDDLE SCHOOLSCHOOL GATEWAY TIRE & SERVICE CENTER

BBRIGHTONRIGHTON MMANORANOR LONE OAK PLAZA AAPARTMENTSPARTMENTS KKEYEY IINSURANCENSURANCE SSUMMERHILLUMMERHILL SSTORAGETORAGE GGROUPROUP PATTERSONSPATTA E CCAMERAAMERA SSHOPHOP & IIMAGINGMAGING CCENTERENTER TTEXASEXAS MIDDLEMIDDLE SCHOOLSCHOOL

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Walmart NeighborhoodFedEx GroundMarket 47 SUMMERHI

ROAD

R I C H MOND ROAD

30 CCHRISTUSHRISTUS SST.T. MMICHAELICHAEL HEALTHHEALTH SYSTEMS

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R O AAD RRICHMONDICHMOND D RRANCHANCH SSHOPPINGHOPPING CENTER CCENTRALENTRAL TEXARKANAKAANANAA MMALLALL PAVILIONON TTOWNOWN WWESTEST SSHOPPINGHOPPING CENTERCENTER

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NEW BOSTON ROAD CCOLLEGEOLLEGE

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87 NEW BOSTON ROAD

Walmart Neighborhood Market 5 I C

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The property is located at 3302 Summerhill Road 559 at College Drive, 1½ miles southeast of Interstate 30, 1.2 miles north of New Boston Road (Highway

CO MMON CREEK ROAD CO 82), and 3.3 miles east of Interstate 369. 71 CHRISTUS MCKNIGHT ROAD E ST. MICHAEL RIV National and regional tenants in the local area L D E A HEALTH CH I . M include CVS, Subway, McDonald’s, Arby’s, ST SYSTEM

SUM R Walgreens, Hobby Lobby, Albertsons, Ross Dress IC H M M

O E for Less, Golden Corral, Wells Fargo, Lowe’s, RIVE N D R D RO L H AL I M L Walmart Supercenter, Academy Sports, Ashley AD L

R 59 OAD Furniture HomeStore, GameStop, Dollar General,

A Olive Garden, Home Depot, Starbucks, Kohl’s, O

E Best Buy, Big Lots, AutoZone, Whataburger, Sonic

N Drive-In, and Books-A-Million. CENTRAL O M M W.W. 440TH0TH STREETSTREET

MALL O

KENNEDY LANE

IVE R LL D MA

SUBJECT

RI 93 CHMON D RO A COLLEGE DRIVE D

COLLEGECOLLEGE DRIVEDRIVE

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D NEW BOSTON ROAD TEXARKANA

OL D COLLEGE BO S T O N R NE O TUCKER STREET 71 W A RICHMO B D ND ROAD OS TO N RO A D

WHEELER STREET W. 20TH STREET

IVE DR NEW BOSTON ROAD 59 N 82 AW L

T S

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ER S BOULB H Walmart NeighborhoodO Market 6 ILL R U L E V

O A

A R 44 59 40 Location Oklahoma City 40 Fort Smith 69

40 35 71

75 Little Rock 40 59

35 530

70 Ardmore 59 Pine Bluff

70 70 79 30

Paris 82 167

300 TEXARKANA 82 79

69 35 82 30 El Dorado

Fort Worth 49 425 Dallas 79

20 20 Shreveport 20 Monroe 35E

35W 49 Walmart Neighborhood Market 7 Net Lease Investment Services

Texarkana

Texarkana (population 36,411) is located in Bowie County at the Texas-Arkansas state Texarkana Pavilion, located at the northeast corner of I-30 and US-59. Tenants border. Together with neighboring Texarkana, Arkansas, it forms the Texarkana, TX- include TJ MAXX, Shoe Carnival, Old Navy, Bed Bath & Beyond, Lane Bryant, Texarkana, AR MSA with a total population of 143,486. Staples, Best Buy, and Cinemark.

Texarkana is approximately 72 miles north of Shreveport, LA, 145 miles west of Little West Park Plaza, located along North I-30 frontage, features several stores/shops, Rock, AR, and 178 miles east of Dallas. along with a steakhouse. Businesses include Laff erty’s Home Center, Dogpatch Pet Shop, Golf USA, and Osaka Japanese Steakhouse. Economy Education Texarkana has a diversiﬁ ed economy based in regional agricultural processing, retail, wholesale and service center. Texarkana is home to Texas A&M University-Texarkana (also known as Texarkana A&M) and Texarkana College. Major employers in the area include: Texarkana A&M is a four-year branch of the Texas A&M University System off ering career-oriented studies, awarding undergraduate, graduate and doctoral • Red River Army Depot • Wal-Mart degrees in the areas of business administration, arts and sciences, technology, • Christus St. Michael Health Care • International Paper engineering, mathematics and education. • Cooper Tire & Rubber Company • Wadley Regional Medical Center Texarkana College is a community college off ering over 60 degrees and certiﬁ cates • Domtar in Health Sciences, Liberal and Performing Arts and Workforce Education, among many other areas of study. Retail Texarkana is home to a retail shopping area that services over 300,000 people. Shopping centers are located along State Line Avenue, in historic Downtown Texarkana, and the central business district of Texarkana. Central Mall, located on Richmond Road, features many stores and restaurants including JCPenney, Sears, Dillard’s, Hibbett Sports, Bath & Body Works, Aeropostale, Bealls, Brick House Burgers, Claire’s, and Chuck E. Cheese’s. Richmond Ranch Shopping Center, located directly west of Richmond Road, is conveniently located on the north side of I-30. Anchor stores include Kohls, Target, PetSmart, Home Depot. Other tenants include Starbucks Coff ee, Smashburger, and Chick-Fil-A. Town West Shopping Center, located off Richmond Road, across from Central Mall, Town West Shopping Center has several local specialty shops and stores. Other stores located in Town West Shopping Center include Ross, Hobby Lobby, Albertsons, and Wally’s Party Factory, a party supply store.

Walmart Neighborhood Market 8 Net Lease Investment Services

Texarkana (continued)

Transportation Highways Texarkana is bisected by Interstate 30 (I-30) which runs east to west connecting Little Rock, AR (at I-40) with Fort Worth Texas (at I-20). The Loop consists of Interstate 49 (I-49) and US Highway 151 (Hwy 151) in Arkansas and Interstate 369 (I-369) and US Highway 59 (Hwy 59) in Texas. I-30 completes the north portion of the Texarkana Loop, a beltway around the Texarkana area connecting Arkansas and Texas. Rail The Texarkana area is serviced by the Texarkana Union (Amtrak) Station located in downtown Texarkana along the state line. Amtrak provides daily service to the Texarkana area connecting it west to Los Angeles via Dallas, San Antonio, and El Paso and east to Chicago via Little Rock and St. Louis. Public Transportation The Texarkana Urban Transit District (T-Line) is the primary provider of mass transportation in Texarkana metropolitan area. The T-Line provides bus transportation to major areas of town along nine diff erent routes in Texarkana, Texas and Arkansas. Air The Texarkana area is serviced by the Texarkana Regional Airport (TXK) located just off E. Broad Street (US Hwy 67) in Texarkana, Arkansas. TXK off ers daily ﬂ ights connecting to Dallas-Fort Worth International Airport through American Airlines. Dallas-Fort Worth International Airport (DFW) is the nearest international airport, located 200 miles west of Texarkana. DFW is the largest hub and headquarters for American Airlines. It is the largest airport in Texas and the second largest in the United States. DFW off ers services to over 200 destinations worldwide.

Amtrak Texas Eagle Net Lease Investment Services

Demographics

2014 Summary 1 miles 3 miles 5 miles Population 8,842 47,072 77,011 Households 3,616 19,246 30,131 Families 2,116 11,611 19,187 Average Household Size 2.43 2.32 2.41 Owner Occupied Housing Units 1,394 9,169 15,697 Renter Occupied Housing Units 2,222 10,077 14,434 Median Age 32.7 35.8 36.5 Median Household Income $33,511 $37,806 $39,618 Average Household Income $46,244 $52,713 $55,497 2019 Summary Population 8,947 47,698 78,137 Households 3,649 19,512 30,619 Families 2,125 11,705 19,405 Average Household Size 2.43 2.32 2.41 Owner Occupied Housing Units 1,395 9,204 15,883 Renter Occupied Housing Units 2,254 10,308 14,736 Median Age 33.3 36.5 37.2 Median Household Income $37,553 $42,776 $45,344 Average Household Income $53,073 $60,523 $64,112 Trends: 2014-2019 Annual Rate Population 0.24% 0.26% 0.29% Households 0.18% 0.27% 0.32% Families 0.08% 0.16% 0.23% Owner Households 0.01% 0.08% 0.24% Median Household Income 2.30% 2.50% 2.74%

Walmart Neighborhood Market 10