Offering Memorandum: Grocery Outlet !

Single-Tenant Net Lease building For Sale in beautiful Coos Bay,

(Coos Bay Store) Overview:

(Coos Bay Store)

Opportunity Highlights:

1385 Newmark Ave., Coos Bay, OR Sale Price: $1,918,332 Cap Rate: 6.25% Lease Type: Absolute NNN

At Current Location: 20+ years Map of Grocery Outlets in Remaining Lease Yrs: 7.5+ Oregon and Washington Add’l Lease Options: (3) 5-Yr Option Rent Increases: 10% Each

Coos Bay Grocery Outlet Tenant: Grocery Outlet

Founded in 1946, Grocery Outlet is one of the fastest-growing discount grocers in the US. With over 300 stores throughout California, Oregon, Washington, Idaho, Nevada, and Pennsylvania, revenue is over $2 Billion per year, and dozens of new stores are planned for opening by the end of the 2018-2019 period. (300th Store) Grocery Outlet has two key strategies, both of which are being executed brilliantly:

1) Stores are managed not by employees nor franchisees, but by semi-independent operators who are carefully selected and intensively trained as true entrepreneurs. These “store owners”, as Grocery Outlet calls them, are well-supported, highly motivated, and have wide discretion to make the most-successful local decisions.

2) Merchandise is sourced through opportunistic discount purchases from large food distributors, allowing deeply- discounted prices on many items. To (Typical Store) compliment these “extreme value” packaged goods, fresh-food and produce sections are added, so customers are easily attracted to “shop Grocery Outlet first”.

Due to the outstanding success of their business model, and with a desire to grow as quickly as possible, Grocery Outlet allowed themselves to be acquired in 2014 by Hellman and Friedman (H&F), a large private-equity firm. As part of the friendly acquisition, H&F encouraged the third-generation family management of Grocery Outlet to stay on, and continue to out-perform. Today, family management still runs the show, fostering rapid growth and strategic continuity.

Grocery Outlet, especially at its less-urban stores, is one of the most highly - resistant and -resistant tenants in the US commercial real estate market. In addition to its high level of Amazon-resistance, this Coos Bay store has an Absolute NNN lease, signed and guaranteed by Grocery Outlet (Typical Store) Incorporated, and backed by massive private equity, providing the best of all possible worlds. Location: Coos Bay, OR

The City of Coos Bay is everything an Oregon-coastal destination town should be. Surrounded by dense forests on the East, and beautiful ocean beaches and boat harbors to the West. There is enough population to make Coos Bay an incorp- orated city, but not enough overcrowding to generate the noise, smog, or traffic jams common to urban America. Forestry, farming, fishing, and a wealth of tourism all compete as livelihoods here. The people and the pace of life are a bit more relaxed.

The Grocery Outlet in Coos Bay has been here for over 20 years, and is quite popular. Almost every adult that lives within 20 miles knows the Coos Bay Grocery Outlet store, and exactly how to get there… it is a hist- orically-proven fixture of the local economy.

When evaluating STNL properties, the length of the lease is important, but also important is that your tenant will stay bright and renew at the end of the lease. This is where the Coos Bay Grocery Outlet shines. Many competing just-built “dollar store” properties have a long lease… but are located in tiny, unremarkable towns or on the periphery of rural areas that are completely unproven locations. What is the value of the property if the dollar store loses money, “goes dark”, or fails to renew their lease ? Grocery Outlet in Coos Bay has been here for over 20 years, and is a busy, busy, busy store. This high volume of customer traffic is due to the widespread positive reputation of Grocery Outlet in Coos Bay. We believe that the vibrant health of this long-established tenant, this destination location, and a corporately- guaranteed Absolute NNN lease, makes this the kind of outstanding Single Tenant Net Lease property that provides the stability that smart STNL buyers are always looking for.

The Seller would prefer to keep this property, but needs cash to meet changing family obligations. Lease: Financial Details

Lease Periods Start Date End Date Lease Rent Cap Rate Yield Lease Rent 1 01/01/17 12/31/21 $9,991.31 6.25% 7% Lease Rent 2 01/01/22 12/31/26 $10,490.88 6.56% 8.78% Option 1 01/01/27 12/31/31 $11,539.97 7.22% 12.19% Option 2 01/01/32 12/31/36 $12,693.97 7.94% 16.32% Option 3 01/01/37 12/31/41 $13,963.37 8.73%

Notes for table above: 1) Cap rates and yields are based on a purchase price of $1,918,332. 2) Calculation of yield is based on a new loan with the following parameters: 6.0% Fixed rate, 65% LTV, 25-Year amortization, 15-year term. Those terms are typical, but no warranty is made that Buyer can obtain such a loan. 3) No guarantee can be given that the tenant will exercise its options.

Lease: Abstract of Terms

1) Tenant is responsible for payment of all utilities. 2) Tenant is responsible for payment of all property taxes. 3) Tenant is responsible for all property maintenance. 4) Tenant is specifically responsible for roof and parking lot (asphalt) maintenance. 5) Tenant is responsible for payment of property (building) insurance. 6) Tenant is responsible for payment of liability insurance, with landlord as an additional named insured. 7) Landlord is responsible for the structural parts of the building and underground utilities.

Note and disclaimer: The list of tenant responsibilities above, and the description of the lease as “Absolute NNN”, are merely descriptive headings; there is no fixed industry standard for the exact elements of an “Absolute NNN” lease. Therefore Buyer must specifically examine all clauses of the lease, to determine, in his/her sole discretion, if the elements of the lease are suitable for his/her business purpose, without relying on the purely-descriptive representations made in the “Abstract of Terms” above.

Nevertheless, the current ownership reports that, in fulfillment of the essential intent of an “Absolute NNN” lease, its unreimbursed expenses for the entire period of ownership have been $0.00. Contact Information:

NOTE: Please do not take pictures, inspect the property, or speak with managers or public in the store until you have contacted us for permission.

This property is being sold directly by its corporate owner. Terms of the sale are “all cash”, or “cash to new loan”. A 2% commission is available to a Buyer’s broker. If you are a broker, please do not solicit owner to list this property.

For more information, contact:

Sanford Jacobs Manager, Oregon Coastal Properties, LLC [email protected] 510-207-3802