Offering Memorandum OFFERING MEMORANDUM

TRADER JOE’S, PIER 1 IMPORTS, & HEALTHY LIVING MARKET 200-222 DORSET ST & 59 GARDEN ST. SOUTH BURLINGTON, VT 05403

™ MatthewsCLICK Retail Advisors HERE TO1 SEE PROPERTY VIDEO Trader Joe’s, Healthy Living Market, Pier 1 | Burlington,

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EXCLUSIVELYLISTED BY:

ARON CLINE KYLE MATTHEWS VP & SENIOR DIRECTOR CHAIRMAN & CEO

DIRECT +1.949.432.4509 DIRECT +1.310.919.5757 MOBILE +1.310.403.4984 MOBILE +1.310.622.3161 [email protected] [email protected]

EL WARNER SVP & NATIONAL DIRECTOR YVES BRADLEY BROKER OF RECORD DIRECT +1.310.579.9690 POMERLEAU REAL ESTATE MOBILE +1.858.752.3078 [email protected] Matthews Retail Advisors 081.0004317 Offering Memorandum TABLEOF CONTENTS EXECUTIVE SUMMARY 4 OFFERING SUMMARY // INVESTMENT HIGHLIGHTS FINANCIAL SUMMARY // DEBT ASSUMPTIONS FINANCIAL SUMMARY 8 RENT ROLL // INCOME & EXPENSES // LEASE EXPIRATION SCHEDULE // 10-YEAR ROLLOVER // SUMMARY TENANT PROFILE // CASH FLOW PROPERTY OVERVIEW 14 PHYSICAL DESCRIPTION // REGIONAL MAP // TENANT MAP // AERIALS AREA OVERVIEW 22 SOUTH BURLINGTON, VT // TOP EMPLOYERS // DEMOGRAPHICS ECONOMIC DEVELOPMENT // BURLINGTON MSA // LOCAL ATTRACTIONS UNIVERSITY OF VERMONT // SOUTH BURLINGTON CITY CENTER TENANT OVERVIEW 32 TRADER JOE’S OVERVIEW // PIER 1 IMPORTS // HEALTHY LIVING MARKET

Matthews Retail Advisors 3 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

BURLINGTON AIRPORT ±2 MILES

CITY CENTER PROPOSED $300MILLION DEVELOPMENT

Dorset St ± 8,000 ADT

4 Matthews Retail Advisors EXECUTIVESUMMARY Offering Memorandum

offering summary Aron Cline and the Matthews Retail Advisors are pleased to exclusively offer for Trader Joe’s & Pier One Imports have approximately 8 years remaining on 10 sale to qualified investors a prime trophy location dual grocery anchored year leases with 10% increases every 5 years while Healthy Living Market has shopping center located in South Burlington, VT. Trader Joe’s, Healthy Living approximately 11 years remaining with 3% annual increases. Trader Joe’s is Market, and Pier One Imports is located directly across the street from University performing incredibly well at this location as it benefits from its strategic location Mall and within close proximity to the University of Vermont. across the street from University Mall and up the street from the University of Vermont. Whole Foods and other Tenants such as Walmart, Lowe’s, and Home Trader Joe’s and Pier One Imports were built in 2014 and is of high quality Depot have been trying to penetrate this market for years and have been construction while Healthy Living Market was built in 2008 and is the staple high unsuccessful. end grocery store in town. The immediate trade area has incredibly high barriers to entry making it very difficult for tenant’s to relocate or for new construction to Currently a developer and the city have a proposal to build a 300,000 shopping be approved. Trader Joe’s is a privately owned company with over 460 locations center which will consist of a new City Hall, restaurants, office space, apartments, throughout the Country, has very strong brand recognition nationwide, and has along with parking, and many other retailers. One of the main access points larger profit margins than traditional grocery stores. to this new development will be Garden Street, which will take traffic and pedestrians past Trader Joe’s, Pier One Imports, and Healthy Living Market.

Matthews Retail Advisors 5 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont investment highlights HIGH QUALITY - RECENTLY NEW HIGH END CONSTRUCTION WITH HIGHLY SOUGHT AFTER NATIONAL TENANTS

• Trophy Location Net Lease Trader Joe’s, Healthy Living Market, and Pier One Imports – Strong real estate fundamentals with incredibly high barriers to entry. The long term lease structures provide passive income and security – Trader Joe’s & Pier One have approximately 8 years remaining on their primary term with 10% rental increase in less than 3 years. Healthy Living Market has 3.0% annual increases giving this investment opportunity strong rental growth over the entire hold period.

• Excellent location – subject property is located across the street from University Mall along a main retail corridor.

• Located in a growing area of upper income households. Average Household income within a 5-mile radius is $77,252.

• Located near the only major airport in the State of Vermont. Strong tourist destination during ski season. South Burlington is close proximity to Smuggles ski resort, Stowe resort, and J peak resort and has approximately 1200 to 1300 hotels rooms for tourists to stay, shop, and dine while on vacation.

• Located about 2 miles from the University of Vermont which has approximately 13,000 students.

• The city and a developer are currently working through a massive development project with a proposed 300,000 SF City Center directly behind the Subject Property. The City Center will entail a Library, City Hall, a park, middle school, restaurants, shops, office, apartments, and parking.

STRONG INFILL LOCATION WITH AFFLUENT DEMOGRAPHICS • Over 9,344 people within a 1-mile radius, with Average Household Income of $71,847.

• Over 61,986 people within a 3-mile radius, with Average Household Income of $69,485.

• Over 90,991 people within a 5-mile radius, with Average Household Income of $77,252.

• Other dominant tenants in this trade area include: Kohl’s, Sears, Outback Steakhouse, AT&T, DMV, Vitamin Shoppe, Comcast, Sleep Number, Barnes & Noble, Rite Aid, UPS, Holiday Inn, Double Tree, Home Wood Suites.

IDEAL 1031 EXCHANGE PROPERTY • Net leased Trader Joe’s & Pier One Imports with minimal management responsibilities – Landlord only responsible for roof and structure. Both buildings have roof warranties. Healthy Living Market is absolute NNN where the Tenant self manages their own parcel and building.

• Trader Joe’s is one of America’s favorite grocery stores that is privately owned and has a history of being incredibly popular and successful.

• Pier One Imports is a public company on the New York Stock Exchange and has annual revenue exceeding 1.27 Billion

• Healthy Living Market is a family run organic grocery store that caters well to the demographics of S Burlington, VT.

• Pride of ownership asset with recent high quality construction.

6 Matthews Retail Advisors Offering Memorandum

debt Quote (Asset free and clear)

Principle Loan Amount $19,038,500 Loan to Value 65% Interest Rate 3.85% Loan Term 10 Years FINANCIAL SUMMARY Interest Only 3 Years Amortization (37th Month) 30 Years Price $29,290,000 Property Size (NRA) 55,152 Interest Only Price Per SF $531 Monthly Debt Service (Months 1- 36) $61,082 Current Occupancy 100% Annual Debt Service $732,982 Investment Returns Cap Rate - Yr 1 5.25% Principle and Interest Cash on Cash - Yr 1 7.85% Monthly Debt Service (37th Month) $89,254 Annual Depreciation $751,026 Annual Debt Service - Amortized $1,071,049 Debt Debt $19,038,500 Required Equity (65% LTV) $10,251,500 Operating Data Effective Gross Income $1,724,241 Operating Expenses $186,249 Net Operating Income - Yr 1 $1,537,991 Cash Flow Before Taxes - Yr 1 $805,009 Major Tenants Healthy Living Market 28,938 SF Pier 1 Imports 13,518 SF Trader Joe’s 12,696 SF

Matthews Retail Advisors 7 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

8 Matthews Retail Advisors FINANCIALSUMMARY Offering Memorandum

rent roll

Lease % of Contract Rental Rate Rent Per SF Rent Increases Unit Tenant Lease Start SF Options End GLA Yearly Monthly Year Month Date Increases $858,782 Jan-18 $884,545 Jan-19 $911,082 Jan-20 $938,414 Jan-21 $966,566 A Healthy Living Market Jan-08 Dec-27 28,938 52.5% $858,782 $71,565.15 $29.68 $2.47 Jan-22 2x5 yrs $995,563 Jan-23 $1,025,430 Jan-24 $1,056,193 Jan-25 $1,087,879 Jan-26 $1,120,515

Aug-19 $423,789 B Pier 1 Imports Jul-14 Jul-24 13,518 24.5% $385,263 $32,105 $28.50 $2.38 3x5 yrs Aug-23 $466,236

Jun-19 $319,114 C Trader Joe’s Jul-14 Jun-24 12,696 23.0% $290,104 $24,175 $22.85 $1.90 3x5 yrs Jun-23 $351,025

Occupied Totals - In Place 55,152 100.0% $1,534,148 $127,846 $27.82 $2.32 Vacant Totals 0 0.0% 0 0 0.00 $0.00 Totals 55,152 100.0% $1,534,148 $127,846 $27.82 $2.32

“Pricing based off the rent increase for Healthy Living on 1/1/2017.

*The total NOI we are using is factoring in the 3.0% rental increase that takes place on January 1 2017 for Healthy Living Market. The rent is currently $833,769 and will increase to $858,782 in January of 2017.

Matthews Retail Advisors 9 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

income & expenses lease expiration schedule

Annual % Aggregate % Year 1 Year Ending Sq. Ft. Year of Total of Total Total $/SF 1 Dec-17 0 0.00% 0.00% Income 2 Dec-18 0 0.00% 0.00% 3 Dec-19 0 0.00% 0.00% Rental Income $1,534,148 $27.82 4 Dec-20 0 0.00% 0.00% 5 Dec-21 0 0.00% 0.00% Expense Reimbursements $190,092 $3.45 6 Dec-22 0 0.00% 0.00%

Effective Gross Income $1,724,241 $31.26 7 Dec-23 0 0.00% 0.00% 8 Dec-24 26,214 47.53% 47.53% Expenses 9 Dec-25 0 0.00% 47.53% 10 Dec-26 0 0.00% 47.53% CAM $38,427 $0.70 11 Dec-27 28,938 52.47% 100.00% Total 55,152 100.00% Insurance $12,082 $0.22

Real Estate Taxes $135,741 $2.46

Non-Reimbursable Expenses $0 $0.00 10-year rollover 100.00% Operating Expenses $186,249 $3.38 80.00%

Net Operating Income $1,537,991 $27.89 60.00%

40.00% Operating Expense Ratio 10.8% 20.00%

0.00% *Note expenses and reimbursements shown above are for Trader Joe’s and 1 2 3 4 5 6 7 8 9 10 11 Pier 1 Imports only. Healthy Living Market pays operating expenses directly as they self-manage their parcel. Year Annual % of Total Aggregate % of Total

10 Matthews Retail Advisors Offering Memorandum

SUMMARY TENANT PROFILE

INCOME DISTRIBUTION Tenant Name In Place Rent % of Income Expiration Date

Anchors/Junior Anchors

Healthy Living Market $858,782 55.98% Dec-27 NATIONAL/CREDIT TENANT 45% Pier 1 Imports $385,263 25.11% Jul-24 55% LOCAL/REGIONAL TENANT Trader Joe’s $290,104 18.91% Jun-24

Subtotal $1,534,148 100.00% Weighed Avg. Total $1,534,148 100.00% Lease Term 9.48 Yrs

Matthews Retail Advisors 11 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

assumptions

Analysis Period Cash Flow Projection Begin Date January 1, 2017 Holding Period for Net Present Value 10 Years Area Measures Net Rentable Area in SF 55,152 General Projection Assumptions Cost of Living Growth per Annum 3.00% General Expense Growth per Annum 3.00% Real Estate Tax Growth per Annum 3.00% Market Rent Growth per Annum 3.00% Exit Cost of Sale 1.00% Leasing Assumptions - Shops and Restaurants Market Rent $22.00 - $28.50/SF/Yr Renewal Probability 75.00% Downtime 9 Months Tenant Improvement Allowance $25/SF Leasing Commissions 6.00% Free Rent None Annual 3%/10 Increase Escalations each 5-year period Operating Expenses NNN Term 10 Years

12 Matthews Retail Advisors Offering Memorandum

cash flow

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 For the Years Ending Dec-2017 Dec-2018 Dec-2019 Dec-2020 Dec-2021 Dec-2022 Dec-2023 Dec-2024 Dec-2025 Dec-2026 Dec-2027 ______Potential Gross Revenue Base Rental Revenue $1,534,149 $1,559,912 $1,617,007 $1,681,317 $1,709,469 $1,738,466 $1,768,333 $1,832,738 $1,905,141 $1,937,777 $1,971,393 ______Scheduled Base Rental Revenue 1,534,149 1,559,912 1,617,007 1,681,317 1,709,469 1,738,466 1,768,333 1,832,738 1,905,141 1,937,777 1,971,393

Expense Reimbursement Revenue Common Area Maintenance 42,270 43,538 44,844 46,189 47,575 49,002 50,472 51,986 53,546 55,152 56,807 Insurance 12,082 12,444 12,818 13,202 13,598 14,007 14,426 14,859 15,306 15,764 16,237 Real Estate Taxes 135,741 139,814 144,008 148,328 152,777 157,361 162,082 166,944 171,952 177,111 182,424 ______Total Reimbursement Revenue 190,093 195,796 201,670 207,719 213,950 220,370 226,980 233,789 240,804 248,027 255,468

______Total Potential Gross Revenue 1,724,242 1,755,708 1,818,677 1,889,036 1,923,419 1,958,836 1,995,313 2,066,527 2,145,945 2,185,804 2,226,861 ______Effective Gross Revenue 1,724,242 1,755,708 1,818,677 1,889,036 1,923,419 1,958,836 1,995,313 2,066,527 2,145,945 2,185,804 2,226,861 ______Operating Expenses Common Area Maintenance 38,427 39,580 40,767 41,990 43,250 44,547 45,884 47,260 48,678 50,139 51,643 Insurance 12,082 12,444 12,818 13,202 13,598 14,006 14,427 14,859 15,305 15,764 16,237 Real Estate Taxes 135,741 139,813 144,008 148,328 152,778 157,361 162,082 166,944 171,953 177,111 182,425 ______Total Operating Expenses 186,250 191,837 197,593 203,520 209,626 215,914 222,393 229,063 235,936 243,014 250,305 ______Net Operating Income 1,537,992 1,563,871 1,621,084 1,685,516 1,713,793 1,742,922 1,772,920 1,837,464 1,910,009 1,942,790 1,976,556 ______Cash Flow Before Debt Service 1,537,992 1,563,871 1,621,084 1,685,516 1,713,793 1,742,922 1,772,920 1,837,464 1,910,009 1,942,790 & Taxes ======Investment Returns

1. Debt Service $732,982 $732,982 $732,982 $1,071,049 $1,071,049 $1,071,049 $1,071,049 $1,071,049 $1,071,049 $1,071,049 Cash Flow after Debt Service $805,010 $830,889 $888,102 $614,467 $642,744 $671,873 $701,871 $766,415 $838,960 $871,741 Cash/Cash 7.85% 8.11% 8.66% 5.99% 6.27% 6.55% 6.85% 7.48% 8.18% 8.50% Cap Rate 5.25% 5.34% 5.53% 5.75% 5.85% 5.95% 6.05% 6.27% 6.52% 6.63% Notes 1. Please note note we we have have assumed assumed interest interest only payments only paymentsin years 1 -3 inof yearsthe analysis. in years 1-3 of the analysis

Value $29,290,000 $29,782,848 $30,872,430 $32,099,493 $32,638,009 $33,192,751 $33,764,042 $34,993,238 $36,374,808 $36,999,100 $ Return - $492,848 $1,582,430 $2,809,493 $3,348,009 $3,902,751 $4,474,042 $5,703,238 $7,084,808 $7,709,100 NOI Growth 1.7% 3.7% 4.0% 1.7% 1.7% 1.7% 3.6% 3.9% 1.7% NOI Growth Terminal Value (OAR + 75 Bps) $32,937,613 Selling Costs $329,376 Resale Value $32,608,237

Matthews Retail Advisors 13 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

14 Matthews Retail Advisors PROPERTYOVERVIEW Offering Memorandum

SITE DESCRIPTION Trader Joe’s, Pier 1 Imports & Property Name Healthy Living Market Address 200-222 Dorset St. & 59 Garden St. Location South Burlington, VT 05403 Cross Street Market Street Square Footage (GLA) 55,152 Land Area ±215,938 SF (±4.96 Acres) APN(s) 0570-00222 & 0570-00200 Year Built / Renovated Healthy Living Market 2008 Trader Joe's/Pier One Imports 2014 Zoning C1 Parking Spaces (Approximate) ±300 Parking Ratio 5:45:1,000

PARCEL MAP

0570-00222

0570-00220

DORSET STREET

Matthews Retail Advisors 15 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

BURLINGTON AIRPORT ±2 MILES

CITY CENTER PROPOSED $300 MILLION DEVELOPMENT

16 Matthews Retail Advisors Offering Memorandum site plan G ARDEN STREET

DORSETT STREET

Matthews Retail Advisors 17 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

LOCAL MAP

REGIONAL MAP

18 Matthews Retail Advisors Offering Memorandum

TENANT MAP

Matthews Retail Advisors 19 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

SOUTHBOUND BURLINGTON AIRPORT ±2 MILES

CITY CENTER PROPOSED $300MILLION DEVELOPMENT

20 Matthews Retail Advisors Offering Memorandum

BURLINGTON AIRPORT ±2 MILES

NORTHBOUND

Matthews Retail Advisors 21 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

SOUTH BURLINGTON, VT Located between the shores of beautiful and the , South Burlington is Vermont’s second largest city. Often considered one of the best places for outdoor enthusiasts to live and play. The City supports a vibrant hospitality, retail, medical, and corporate business community with regional and national reach.

The city includes a central hub called City Center, which serves as the main business district. Residential neighborhoods surround City Center to the east and south. A mix of strip commercial and residential neighborhoods border Lake Champlain to the southwest. There is shopping on Burlington’s Church Street Marketplace, theatre and music at the Flynn Center for the Performing Arts, and classes and lectures at the University of Vermont, and other nearby colleges and community centers.

The area is consistently one of the country’s most desirable places to live. South Burlington is known for excellent public schools, recreational opportunities, dedicated city services, and livable neighborhoods. South Burlington public schools rank in the top 1% nationally.

1% Public schools rank in the Top 2nd Largest city in Vermont 6 Colleges and Universities 9th Best city to live in 9th AREA OVERVIEW City with the lowest unemployment

22 Matthews Retail Advisors Offering Memorandum

WHY SOUTH BURLINGTON, VT? SOUTH BURLINGTON TOP EMPLOYERS

• Public Schools rank in the top 1% nationally # EMPLOYERS • Outstanding restaurants 1 Vermont National guard 2 GE Healthcare • Convenient access to world-class health care at Vermont’s University Hospital 3 Ben & Jerry’s and Medical Center 4 Fairpoint Communications • Nearby Burlington International Airport 5 Lane Press

• Several higher learning institutions

• Home to the largest shopping mall in Vermont

• One of the top 10 cities with lowest unemployment DEMOGRAPHICS Income 1 Miles 3 Miles 5 Miles • Named a top city for outside activities, the arts, safety and overall quality of life 2016 Est. Average $71,847 $69,485 $77,252 Household Income

2016 Est. Median $61,264 $49,649 $57,178 Household Income

Population 1 Mile 3 Miles 5 Miles 2021 Projection 2,698 25,656 38,391 2016 Estimate 2,615 24,878 36,962 2010 Census 2,457 23,671 34,773 2000 Census 2,358 21,644 31,138 Growth 2016 - 2021 3.17% 3.12% 3.87%

Households 1 Miles 3 Miles 5 Miles 2021 Projection 1,330 10,974 18,992 2016 Estimate 1,293 10,600 18,228 2010 Census 1,221 10,018 17,056 2000 Census 1,269 9,846 16,280 Growth 2016 - 2021 2.87% 3.53% 4.19%

Matthews Retail Advisors 23 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

ECONOMIC DEVELOPMENT The city includes a central hub called City Center, which serves as the main buildings and other features consistent with a downtown. Opportunities for business district. Residential neighborhoods surround City Center to the more downtown development will also drive growth to City Center reducing east and south. A mix of strip commercial and residential neighborhoods development pressure on more environmentally sensitive areas. border Lake Champlain to the southwest. The city is in the planning and design phase of a redevelopment project to revitalize the City Center core. Revitalizing the city center will focus not on the attraction of global companies, but instead on the nurturing of local, creative and environmentally friendly The vision for City Center is to effectively blend existing neighborhoods, businesses. Environmentalism isn’t just ingrained in the city’s diverse commercial areas, natural areas, undeveloped properties, and undeveloped economy; it’s the driver for much of its economic growth. For example, Seventh lands into the true downtown of South Burlington. The downtown will provide Generation, maker of eco-friendly household products, is headquartered on increased connectivity through new cross streets; support an integrated Burlington’s beautiful Lake Champlain waterfront. Outside the city, Green mix of housing, retail, and employment; and be a primary focus point for Mountain Power and Vermont Electric Cooperative are working together compact, walkable development within the City. to build a new wind farm that will add jobs in the growing green sector. Creativity and entrepreneurship define Burlington. The town is a haven for City Center will have all of the characteristics of a downtown; housing, writers and artists, and that innovative spirit energizes white-collar workers office, retail and civic uses as well as grid streets, bike and pedestrian as well and creativity is the lifeblood of Burlington businesses. facilities, public green and open spaces, Community Library and other public

24 Matthews Retail Advisors Offering Memorandum

BURLINGTON AREA The Burlington Metropolitan Area is the largest metropolitan area in Vermont BURLINGTON AREA TOP EMPLOYERS and has an estimated population of 216,300, approximately one third of Vermont’s total population. The Burlington area has a largely service-based # EMPLOYERS economy. There are 191 businesses in retail trade, mainly concentrated 1 Fletcher Allen Health Care around the City Center near Dorset St and Williston Rd. Burlington’s major 2 University of Vermont industries include tourism, health care, and financial services. Important 3 Chittenden Bank economic forces in South Burlington include the University Mall, four 4 Adecco grocery stores centrally located in City Center, and the Development plan 5 HowardCenter for City Center. 6 GE Healthcare There are 131 establishments in health care and assistance and 116 in 7 Ben & Jerry’s Homemade, Inc professional, scientific, and technical service industries. In 2015, South 8 FairPoint Communications Burlington was first in the state for gross retail and use sales with $1,888,48 9 Westaff The area had a gross metro product of $12.1 billion in 2015. 10 TD Bank

Burlington is home to Fletcher Allen Health Care and The University of Vermont, two of the city’s largest employers. The city is known for ice cream maker Ben & Jerry’s, which was founded there in 1978. Corporate headquarters located there include: , Bruegger’s, Seventh Generation and Lake Champlain Chocolates. The city has been listed as one of the Best Small places for Business and Careers. Matthews Retail Advisors 25 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

26 Matthews Retail Advisors Offering Memorandum

LOCAL ATTRACTIONS

CHURCH ST MARKETPLACE LAKE CHAMPLAIN THE GREEN MOUNTAINS

More than 100 shops and restaurants line this Some 120 miles long and up to 12 miles wide, the Just outside of Burlington, rolling foothills rise up four-block cobblestone pedestrian mall, but sixth largest body of fresh water in the United to create world-class hiking and skiing terrain. Burlington’s hub is about more than bistros States sits directly west of Burlington. It serves as In the warmer months, visit the peaks at Mount and boutiques — it’s also the cultural center for a glittering backdrop to the city year-round, but Mansfield and Camel’s Hump; once the snow impromptu political marches, street performers is primarily a playground May through October. falls, grab your skis to carve your way down and events. The Marketplace is recognized as Begin with a stroll through scenic Waterfront Park the mountain at the nearby resorts — Bolton one of the most successful pedestrian malls in the before taking a cruise on the Spirit of Ethan Allen Valley, Stowe, Mad River Glen, Sugarbush and country. III and see some spectacular vistas of the lake and Smugglers’ Notch are all within a one-hour drive. beyond.

FLYNN CENTER UNIVERSITY MALL MAGIC HAT BREWING COMPANY

This former movie theater features live music an The University Mall, often referred to as the U-Mall, The South’s finest ballroom opens its oak dance annual Discover Jazz Festival in June, comedy, is an enclosed shopping mall in South Burlington, floor for everything from ballroom dancing to Broadway shows and dance performances. Its Vermont. At 610,693 square feet it is the largest corporate functions. The historic Coliseum was downtown location makes it an ideal spot for shopping mall in Vermont, and is one of two built in 1924, and purchased by the City of St. dinner and a show. It is one of the largest theaters enclosed malls serving the Burlington metropolitan Petersburg in 1989. The Coliseum has undergone in and has been the beating heart of area. The mall encompasses approximately 75 extensive renovations, making it one of the Tampa culture in Burlington. shops, including two sit-down restaurants, and a Bay area’s most unique multi-use facilities. The food court. Coliseum is located in downtown St. Petersburg in the local historic district.

Matthews Retail Advisors 27 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

subject property PROPOSED SOUTH BURLINGTON CITY CENTER

28 Matthews Retail Advisors Offering Memorandum south burlington city center Situated directly behind the Subject Property, the vision for City Center is to effectively blend existing neighborhoods, commercial areas, natural areas, undeveloped properties, and undeveloped lands into the true downtown of South Burlington. The downtown will provide increased connectivity through new cross streets; support an integrated mix of housing, retail, and employment; and be a primary focus point for compact, walkable development within the City.

A 300 million dollar project, South Burlington’s City Center initiative, which encompasses much of this District [Central District], will support this objective by establishing and enhancing public buildings and gathering spaces, and building or reconstructing a series of streets that would connect to the principal corridors of the area. Combined, these provide opportunities for housing and employment in an area well served by public transit and existing public utilities, and create linkages to existing neighborhoods in the area.

Plans are in the works for a 300,000-square-foot mixed-used building on Market Street; work on roads and parks in the 106-acre downtown zone between Williston Road and Dorset Street is set to start in 2016. The project would include a public library, a recreation center, a sports arena, a new city hall, among many other public buildings.

Matthews Retail Advisors 29 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

UNIVERSITY OF VERMONT University of Vermont is a public situated along the shores of Lake Champlain and minutes from the trails, outdoor activities and country vistas of the Green Mountains. The school has established a national reputation with most students being out of state students. It draws students from 40 states and 65 countries.

Known for its academic and research opportunities in the health professions and environmental sciences, UVM receives $132 million in research and external grant funding, and over 90% of seniors are engaged in research, an internship or other experience-based learning.

With its $348 million in annual expenditures and more than 3,300 employees, the University of Vermont is an economic engine at full throttle. The money and brains supplied drive growth in Burlington and Vermont.

UVM - COLLEGE OF MEDICINE & MEDICAL CENTER The largest hospital complex in the state, the UVM Medical Center, has its primary facility on the UVM campus and is affiliated with the UVM College of Medicine. Both UVM College of Medicine and the Medical Center are highly ranked institutions in the nation.

The University of Vermont College of Medicine was ranked by U.S. News & World Report as 4th on the “Top Medical Schools — Primary Care” list and 8th on the “Top Medical Schools — Rural Medicine” list. The University has also been ranked as the most beautiful medical school in the US.

The University of Vermont Medical Center has been rated as “high performing” in heart failure care in the U.S. News & World Report “Best Hospitals for Common Care” ratings. The magazine also named twenty-one physicians to its Top Doctors list and recognized five specialties as High Performing for 2012-2013. Twelve of the physicians on the Top Doctors list were ranked in the best 1% of specialists in the nation.

30 Matthews Retail Advisors Offering Memorandum

$60 MILLION MULTI-PURPOSE ARENA FOR UVM PROPOSED IN SOUTH BURLINGTON The University of Vermont and the City of South Burlington announced a joint study to consider the feasibility of constructing a multi-purpose arena on a site in South Burlington. As envisioned, the arena would provide a high quality venue for UVM athletic events and other university programs, as well as concerts, family entertainment, like Disney on Ice, and could serve as a site for conventions and trade shows.

The arena would also serve as an important recreational facility for South Burlington residents. The arena would not be on the UVM campus but across the interstate near or on Dorset Street. Two locations were suggested: Somewhat adjacent to the current University Mall or on the other side of the street in what is envisioned as the City Center (the large undeveloped area running behind the Blue Mall and San Remo Drive). The UMall is separately considering a major redevelopment of its space which could be integrated with the UVM arena project.

Such a multi-purpose arena would provide significant benefits beyond UVM and the City of South Burlington. The multi-purpose arena will serve as a powerful economic stimulus to the whole region and be a high quality venue that all Vermonters can enjoy.

Matthews AreaRetail Overview Advisors 31 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

32 Matthews Retail Advisors TENANTOVERVIEW Offering Memorandum

tenant overview

Trader Joe’s is an American privately held chain of specialty grocery stores based in Los Angeles, Tenant Trader Joe’s California. Approximately half of the stores are located in California, with the highest prevalence in Southern California. It is a market leader in organic and fresh food groceries in the United Company Name Trader Joe’s States. Trader Joe’s stocks about 4,000 items, 80% of which bear one of its own brand names. Ownership Private

GEOGRAPHIC REACH Revenue $9.37 B Trader Joe’s largest market is California, home to about 175 of its stores. Illinois, Massachusetts, New York, and Washington are also important market for the ever-expanding chain, as each is No. of Locations ±457 home to about 20 Trader Joe’s supermarket. No. of Employees ±10,000

STRATEGY Headquartered Monrovia, CA Originally a West Coast company, more than a third of its stores are in California. Trader Joe’s under CEO Dan Bane has been aggressively adding stores and expanding into new market, Web Site www.traderjoes.com including Florida, Texas, and upstate New York. In fiscal 2013 it added more than 30 stores. Year Founded 1958 Deep-discount giant ALDI has taught Trader Joe’s a lesson in offering a limited assortment of specialty foods and low prices. Trader Joe’s and other non-traditional grocery retailers, such as Costco Wholesale and organic giant Whole Foods, have been adept at stealing market share from the big supermarket chains. Trader Joe’s exotic mix of private-label and imported specialty products and hip vibe draws shoppers into its stores despite its limited selection relative to traditional grocery chains.

Matthews Retail Advisors 33 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

TRADER JOE’S LEASE ABSTRACT

Tenant: Trader Joe’s East, Inc., a Massachusetts corporation

Term 10 years

Effective Date of Lease: July 30, 2012 Lease Date and Commencement Date: May 16, 2014 Commencement ( Rent Commencement Date: May 16, 2014 2nd Amendment) Lease Termination Date: June 30, 2024

Options 3 successive five (5) year options

Periods Annually 5/16/14 – 5/31/19 $290,103.60 $22.85/SF 6/1/19 – 6/30/24 Increase by the lesser of CPI or 10%, but not less than the previous 5 years Minimum Rent and Options: Options to Extend 7/1/24 – 6/30/29 Increase by the lesser of CPI or 10%, but not less than the previous 5 years 7/1/29 – 6/30/34 7/1/34 – 6/30/39

Percentage Rent None

• Rent Adjustment is every 5 Lease Years, commencing on the first day of the 6th Lease Year. The first Lease Year, per Sec 2(j), is the period from the RCD to the last day of the 12th full calendar month thereafter. The expiration date of the Primary Term, per Sec 2(c), is on the last day of the month immediate- ly following the 10th anniversary of the RCD. • CPI = Revised Consumer Price Index for Urban Wage Earners and Clerical Workers, All Items (1982-84=100) applicable for the Boston-Brockton-Nashua, Special Rent Provisions MA-NH-ME-CT metropolitan area published by the Bureau of Labor Statistics of the Department of Labor (the “Index”) (free rent, rent abatement, off- • Tenant Pro Rate Share = 48.43% (12,696 / 26,214) sets, CAM exclusions, • Note the Shopping Center definition excludes the Healthy Living premises and its land parcel. non-nets, etc) • Consent Amount (Sec 20(i)) - Landlord shall not spend any one-time, non-capital expenditure item greater than $10,000 without obtaining Tenant’s prior consent. Tenant may elect to pay for its Pro Rata Share of such expenditure in annual installments though remaining Term. • CAM cap at lesser of CPI or 4% of prior year’s CAM, excluding taxes, insurance, utilities, snow removal, and security (Sec 20(f)(vii)) • Real Estate Taxes excludes increases due to ownership transfer (Sec 7(c))

Co-Tenancy Provisions None and Remedies

Co-Tenancy Provisions and None Remedies

• Sec 6(b) – 6(f) – Landlord and Tenant shall not lease/use the shopping center for entertainment (theatre, skating rink, children’s play gym, birthday Restrictions/ parties such as Chuck E. Cheese), training/educational (beauty school), food service (except one fast casual restaurant without a drive-through, not to Reservations exceed 3,000 SF), office (except 2nd floor of the building), and other Noxious Uses such as check cashing or second-hand clothing stores. • See Common Area Changes, Expressive Activities, and Parking Area Limitations Construction Activities, in Other Provisions below

34 Matthews Retail Advisors Offering Memorandum

TRADER JOE’S LEASE ABSTRACT, cont.

Estoppel obligations and re- Within 20 days of request from either party, the other party shall provide a form estoppel certificate per Exhibit G. sponse time (Sec 22(c))

Security Deposit $0.00

Common Area Maintenance (1) Pro Rata Share (2) When due or monthly estimate as required by Landlord

Real Estate Taxes (3) Pro Rata Share n/a

Special Assessments Excluded Monthly

Fire/Casualty Insurance Pro Rata Share Monthly

Liability Insurance Pro Rata Share Monthly

Earthquake Insurance Pro Rata Share n/a

Merchant Association Excluded (Sec 31) n/a

Roof (4) Excluded n/a

Building Maintenance (5) Tenant responsible for interior costs directly. Monthly

Parking Lot Pro Rata Share n/a

Utilities Tenant pays n/a

Management Fee Included in Admin Fee Monthly

10% of CAM (excludes taxes, insurance, and salaries above the level of Administration Fee n/a shopping center manager)

HVAC (6) Tenant maintains, except the last 3 Lease Year

(1) CAM excludes all repairs required in the last 24 months of the lease term, because of building settlement or faulty materials or workmanship in Landlord’s construction. (Sec 16(b)). CAM also excludes capital improvements, expenditure exceeds $10,000 without Tenant’s consent, expenditure made more than 12 months ago, promotional or advertising expenses, environmental clean-up costs, late charges (Sec 20(f)(vi)) (2) The Shopping Center area excludes the Healthy Living parcel. Expense Detail (3) Note exclusions of tax increases due to ownership transfer and special assessment for initial infrastructure improvements (Sec 7(c)). (4) Landlord maintains roof, however, Tenant may repair the roof for Emergency Repairs and be reimbursed by Landlord. (5) Landlord responsible for exterior and structural elements at its cost. (6) Landlord is to provide Tenant with all warranties related to the HVAC system

Matthews Retail Advisors 35 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

36 Matthews Retail Advisors Offering Memorandum

tenant overview

Pier 1 Imports Inc. is a Fort Worth, Texas–based retailer specializing in imported home Tenant Pier 1 Imports furnishings and decor, particularly furniture, table-top items, decorative accessories, and seasonal decor. It is publicly traded on the New York Stock Exchange under ticker Company Name Pier 1 Imports, Inc. PIR. The company sells more than 6,000 items (imported from more than 50 countries) through more than 1,070 Pier 1 Imports stores across North America. Its stores offer Ownership Public a wide selection of indoor and outdoor furniture, lamps, vases, baskets, ceramics, Revenue $1.27 B dinnerware, candles, and other decorative accessories. Stock Symbol PIR GEOGRAPHIC REACH Board NYSE Pier 1 Imports operates about 990 stores in 49 US states and another 80 locations across Canada. The company supplies merchandise and licenses its name to in-store No. of Locations ± 1,070 departments at 47 Sears stores in Mexico and one in El Salvador. No. of Employees ± 22,000 STRATEGY Headquartered Forth Worth, TX Pier 1’s improved performance follows the downsizing of its store and distribution networks. Looking to the future, the retailer in 2012 unveiled a three-year plan to drive Web Site www.pier1.com sales and profitability. It has achieved its goal of boosting sales per retail square foot to Year Founded 1977 $200 (up from $184 in 2012) and achieving operating margins of at 10%.

Matthews Retail Advisors 37 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

pier one LEASE ABSTRACT

Tenant: Pier One Imports (U.S.), Inc., a Delaware corporation

Term 10 years

Lease Date and • Commencement Date: July 7, 2014 Commencement ( • Rent Commencement Date: July 22, 2014 2nd Amendment) • Lease Termination Date: July 31, 2024

Options 3 successive five (5) year options

Periods Annually 7/22/14 – 7/31/19 $385,263.00 $28.50/SF 8/1/19 – 7/31/24 $423,789.30 $31.35/SF Minimum Rent and Options: Options to Extend 8/1/24 – 7/31/29 $466,235.82 $34.49/SF 8/1/29 – 7/31/34 $512,737.74 $37.93/SF 8/1/34 – 7/31/39 $564,106.14 $41.73/SF

Percentage Rent None

Special Rent Provisions • Note the Shopping Center definition excludes the Healthy Living premises and its land parcel. (free rent, rent abatement, off- • CAM cap at 4% of prior year’s CAM, excluding snow and ice removal and utilities; first calendar year CAM cannot exceed the lesser of $2.00 PSF or sets, CAM exclusions, actual Pro Rata Share. (Sec 9.7) non-nets, etc) • For the use or purpose of selling or displaying for sale furniture, decorative household furnishings, or housewares primarily of an imported nature cus- Exclusives (Sec 7.5) tomarily sold in TENANT’S retail stores unless such use or purpose is incidental (doesn’t exceed 10% of the floor area). • The Exclusives doesn’t apply to Trader Joe’s. Within 60 days of request from either party, but not more than once every 12 months, the other party shall certify (a) as to whether this Lease has been sup- Estoppel obligations and plemented or amended; (b) as to the validity and force and effect of this Lease in accordance with its terms as then constituted; (c) as to the existence of any response time (Sec 28.4) default by the requesting party pursuant to this Lease; (d) as to the existence of any offsets, counterclaims or defenses on the part of the party so certifying; (e) as to the Commencement Date and the expiration date of the term of this Lease; and (f) as to the amounts of Fixed Rent payable under this Lease.

Security Deposit $0.00

Common Area Maintenance (1) Pro Rata Share (2) Monthly

Real Estate Taxes (3) Pro Rata Share When due, unless lender requires Monthly

Special Assessments Excluded n/a

38 Matthews Retail Advisors Offering Memorandum

pier one LEASE ABSTRACT, cont.

Liability Insurance (4) Pro Rata Share Upon Landlord invoice

Earthquake Insurance Silent n/a

Merchant Association Silent n/a

Roof (5) Excluded n/a

Building Maintenance (6) Tenant responsible for interior costs directly. n/a

Parking Lot Pro Rata Share Monthly

Utilities Tenant pays n/a

Management Fee Excluded n/a

Administration Fee 10% of CAM Monthly

HVAC (7) Tenant maintains, but Landlord to provide warranty (see note below) n/a

(1) CAM excludes capital improvements, supervisory personnel or property manager’s wages, casualty repairs, environmental clean-up costs, holiday decora- tions or promotional services, fire alarm monitoring, insurance, maintenance of pylon sign on which Tenant doesn’t have a panel. (Sec 9.6(b)) (2) The Shopping Center area excludes the Healthy Living parcel. The denominator for the Pro Rata Share cannot be less than 26,018 SF. (3) Note exclusions of tax increases due to ownership transfer (Sec 8.2(a)) and special assessment for initial infrastructure improvements. (Sec 8.5(b)) (4) Tenant is to reimburse Landlord for its Pro Rata share of insurance costs within 60 days from Landlord’s invoice (Sec 21.2(c)). Note CAM definition excludes Expense Detail insurance per Sec. 9.6(b), but insurance provision is covered in Sec 21.2. (5) Landlord maintains roof. (6) Landlord responsible for exterior and structural elements at its cost. (7) Landlord shall provide and assign Tenant with a one-year labor warranty for the HVAC systems and a five-year warranty for the HVAC compressor. (Sec 10.3)

Matthews Retail Advisors 39 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

healthy living market LEASE ABSTRACT

Tenant: Healthy Living Market Date Of Lease: Date Of Lease: Commencement January 1, 2008 Date: Lease Expiration: December 31, 2027 Lease Term: Twenty (20) years Renewal Options: Two (2) Five (5) year options at FMV Rent: $858,782.00 *Refer to Rent Roll on pg. 9 Shall commence on the date the project is substantially complete and shall continue until the 20th anniversary of the commencement date. Collectively, the construction term Occupancy Term: and occupancy term are sometime referred to herein as the “term”. 20 year lease Real Estate Taxes: Tenant to pay its pro rata share of real estate taxes, or pays taxes directly if Premises are assessed separately. Tenant pays pro rata share of Common Area Expenses, CAM is the total of all costs and expenses incurred by landlord or for which landlord is obligated in owning, managing, operating, servicing and maintain landlords property: a) all insurance premiums, deductibles and incidentals for the insurance carried by Landlord with respect to Landlords Common Area property and Landlords Building within which the Premises are located; b) all municipal and state-wide property tax assessments); all common utility costs lighting, electricity, and Expenses: other utility expenses charged to Landlord and not separately metered to tenant; d) all common maintenance costs including expenses for the removal of snow from the parking lot and walkways, and for the regular maintenance of the lawn, unless responsibility is otherwise assumed in writing by tenant. Landlord will insure Landlord’s building within which the premises are located and all of Landlords personal property therein against loss by fire, in such amounts as Landlord may consider reasonable, but in no event less than its full replacement value, by policies insurance shall be included in the CAM. Tenant, at Tenant’s own cost and expense, will Insurance: maintain a policy or policies of liability insurance insuring Tenant and Landlord (as an additional insured) against all claims or demands for personal injuries to or death of any person, and damage to or destruction or loss of property, which may or may be claimed to have occurred on the leased premises or in the same vicinity. Security Deposit: One month’s rent. Estoppel Certificates: Not less than five (5) days prior to notice. The original of such statement shall be delivered within fourteen (14) days If Landlords building is offered for sale at any time during the term hereof, then, in the event (and on each occasion during the term) that the landlord shall decide to offer for sale, Right of First Offer: directly, or indirectly, all or any portion of landlords building, the landlord will give to the tenant written notice by registered or certified mail (the”Offer Notice”) of such decision, describing the premises to be offered, the listing price and the general terms upon which the landlord has decided to offer the same. Tenant: Assignment Tenant may sublease or assign the Lease, subject to Landlord’s prior approval, but remains liable for all obligations. and Subletting: Landlord shall be responsible for maintain and repairing the structural components of Landlords building, all site work and landscaping, including parking areas and access drives for the Premises and all nonconforming work covered by landlord’s warranties or guarantees of others, to the quality and class at least equal to the original work. The ex- Repairs and pense of such maintenance and repairs shall be included in the CAM. Landlord is responsible for snow plowing of the parking areas and access drives unless such maintenance Maintenance: responsibility is otherwise assumed in writing by tenant. Landlord shall not be required to make any such repairs and replacements when the same were caused or occasioned by an act or mission or negligence of tenant or tenants subtenants, employees, agents, invitees, visitors, or contractors. Except for the Landlord’s negligence or willfull misconduct, or that of its agents or employees. The amount of two hundred fifty two thousand dollars ($252,000.00) per annum; plus Landlord ‘s Cost amortized over the Occupancy Term of this Lease at nine percent (9%) interest. Landlord ‘s Cost shall be defined as follows: all costs of constructing the Premises incurred pursuant to the terms of this Lease Agreement (including but not limited to construction costs, permit and design costs, engineering fees, legal costs not to exceed $5,000, and construction financing costs based upon interest at eight percent (8%) plus the amount of Landlord’s carrying costs for Landlord ‘s Property during the Construction Term, including, but not limited to, all real property taxes and assessments, insurance Base Rent: premiums and interest payments under the terms of the current mortgage encumbering Landlord ‘s Property. By way of example only, if Landlord’s Cost is $4,200,000, the Base Rent for the first month of the Occupancy Term would be $58,788.49 (i.e., $252,000 + 12 = $21,000 per month plus $37,788.49 which is the monthly payment that results from $4,200,000 amortized over 20 years at 9% interest). On the Commencement Date, Landlord will provide Tenant with a detailed and itemized certification of the amount of Land- lord’s Cost and calculation of Base Rent which may be audited by Tenant or Tenant’s representatives.

40 Matthews Retail Advisors Offering Memorandum tenant overview

In 1986, with absolutely no knowledge of business, I bought a tiny one-year-old market located in the Blue Mall, Dorset Street, South Burlington, Vermont. I had been an English teacher, a psychotherapist, a mother… so why not “branch out” into the world of groceries and business ownership? (Looking back, it seems crazy!) One of my motivations was finding really good, clean food for my family. I had been raised in a home where bread was baked, meals were made from scratch, and the enjoyment of food was very important. Back in the 1980’s more and more processed foods were filling the shelves of supermarkets. I truly wanted to feed my family differently, and different choices seemed very hard to come by. I also had memories of the food markets I knew growing up; I remembered them as community meeting places, where neighbors ran into each other in the aisles. They seemed like much happier places to shop than the sterile,harshly-lit supermarkets I visited Tenant Healthy Living Market each week. So, why not own a tiny food market that was dedicated to exactly the kinds of Property Address 222 Dorset St, South Burlington, VT 05403 things I was searching for? Rentable SF 28,928 Those first few (like 10) years were difficult and rocky for me as a total business neophyte. Fortunately, I had the perfect business partner; my then husband, Peter Goldsmith, who Property Type Grocery Store brought a wealth of knowledge to the fledgling business. I was good at some things our Ownership Private little store required, and he was good at a whole other aspect! I am forever grateful for his input, brains, and energy. Our passion for food, community, and the mysteries of business Rating Agency Standard & Poor’s drove us on, and seven years later we doubled the size of the store to 2400 square feet. A No. of Locations 2 few years later I made the big move around the corner to 4 Market Street, where I bravely took on 5000 square feet, and seven years later took on an additional 2500, making our No. of Employees 150 store a whopping 8000 square feet when you included our little upstairs mezzanine. That mezzanine housed our offices where 30 or so of us worked in cramped quarters, fighting Headquartered South Burlington, Vermont over desks and computers. Web Site www.healthylivingmarket.com

In 1999 my son, Eli, graduated from college and came back to Healthy Living after 4 years Year Founded 1986 in Boston. In the summer of 2007 he and I broke ground (after 3 years of research and planning) on our current store; 35,000 square feet. At the time, this was a huge leap and a store size that most independent natural food stores never reach.

Matthews Retail Advisors 41 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

Two years later my daughter, Nina, having graduated from college and culinary school, returned to Vermont and to Healthy Living! With her, Nina brought a new energy and passion to learning and teaching, and founded the Healthy Living Learning Center, an innovative program of classes and demonstrations for non-professionals, designed to help people better connect with their food through . I now find myself working side by side with my kids, which is really a joy and makes Healthy Living a true family business.

In 2013 Healthy Living opened its second location in Saratoga Springs, NY. Our New York store employs over 100 staff, and as staff grows I am reminded that I went from one employee back in 1986 to almost 300 today, from 1200 square feet to 35,000 in both locations, from putting away the entire order by myself to having a team of grocery folks attacking it en masse, and from basically knowing zero about business to being pretty darn good at it! I find I still love the everyday routines, the guest interactions, the new product excitement, the seasonal changes, and the learning process. All that I’ve learned over the years about running a business translates to taking care of people… serving people, which is, I believe, a good way to live on this planet.

– Katy Lesser, Owner healthy living market’s commitment REALLY GREAT FOOD! Of course! That’s how we got started….searching for clean, healthy, unprocessed foods. Our team of Buyers “curate” our shelves and coolers, filling them with a selection of fantastic foods that meet our standards. And our Café and Bake Shop crank out terrific, creative things seven days a week!

OUR GUESTS Service and hospitality go hand-in-hand here for a great shopping experience. You might wonder: what’s the difference between service and hospitality? We believe there’s a big difference. To us, service is how we deliver our products to you; it’s the speed, efficiency and accuracy you get at the check-out, in the aisles, or at our Café. Hospitality is how you feel when you’re in our store and how you think about us after you’ve shopped; we want you to feel like we’re on your side, that we listen, and you leave happier than when you walked in! We want both our service and hospitality to excel!

42 Matthews Retail Advisors Offering Memorandum

Representational photo

OUR STAFF As the years have gone by, we’ve realized it’s simply an awesome opportunity to employ almost 300 people! This is our greatest joy: creating a community of bright, motivated workers who enjoy serving each other, our vendors, truck drivers, and our guests.

OUR COMMUNITY Twenty five years ago we started our Community Outreach Program because we felt it was important to support the community that’s loyal to us. Today that program gives to over 150 local, small non-profits every year. It’s a fantastic way for our outreach team and our staff to be involved in community events and projects.

ENVIRONMENTAL VISION For almost 30 years, Healthy Living Market and Café has been dedicated to caring for our environment with products, programs and projects that focus on both issues of global and local concern. It is of utmost importance to us that our community is informed and involved! We are committed to the health and safety of our team, the community we love, and the planet as a whole, and constantly find ways to expand our reach, participating in a wide variety of programs, instituting our own projects, and involving staff in our outreach. Read more on our environmental policy here.

OUR BOTTOM LINE Yes, we are dedicated to making a profit competitive with our peers in the natural foods industry. Profits are necessary for responsible change and expansion.

EACH OTHER For over 25 years we’ve prided ourselves on a workplace that includes a deep commitment to each other; working together harmoniously, getting the job done happily, finding ways to support each other every day. In our own little corner of the world, we are creating a happy community in the hope that it will affect the larger community around us. The ripple effect starts here at HL!

Source: HealthyLivingMarket.com

Matthews Retail Advisors 43 Trader Joe’s, Healthy Living Market, Pier 1 | Burlington, Vermont

CONFIDENTIALITY AND DISCLAIMER STATEMENT This Offering Memorandum contains select information pertaining to the business and affairs of Trader Joe’s, Pier 1 & Healthy Living Market located at 200 Dorset St. South Burlington, VT 05403. It has been prepared by Matthews Retail Advisors. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Retail Advisors. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1. The Offering Memorandum and its contents are confidential;

2. You will hold it and treat it in the strictest of confidence; and

3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Retail Advisors expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Retail Advisors or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

44 Matthews Retail Advisors Offering Memorandum

™

ARON CLINE VP & SENIOR DIRECTOR

DIRECT +1.949.432.4509 MOBILE +1.310.388.0788 [email protected]

EL WARNER SVP & NATIONAL DIRECTOR

DIRECT +1.310.579.9690 MOBILE +1.858.752.3078 [email protected]

KYLE MATTHEWS CHAIRMAN AND CEO

DIRECT +1.310.919.5757 MOBILE +1.310.622.3161 [email protected]

YVES BRADLEY BROKER OF RECORD POMERLEAU REAL ESTATE 081.0004317

OFFERING MEMORANDUM 200 Dorset St | South Burlington, VT 05403

Matthews Retail Advisors 45