OFFERING MEMORANDUM ™

SOUTH TAMPA, EXCLUSIVELY LISTED BY

ARON CLINE CALVIN SHORT CHAD KURZ JOSH BISHOP SVP & Senior Director SVP & Senior Director SVP & National Director VP & Director LIC# 01927216 (CA) LIC# 01911198 (CA) LIC# 688810 (TX) DIRECT (949) 432-4509 MOBILE (818) 632 0233 LIC# 01904371 (CA) BROKER OF RECORD KYLE MATTHEWS [email protected] LIC# CQ1052263 (FL) , FLORIDA

0 4 | Executive Summary

T a b l e 0 6 | Financial Overview of Contents 1 4 | Tenant Overview

1 6 | Area Overview

™ INVESTMENT HIGHLIGHTS ›› Strong Credit Tenant – Sprouts Farmers Market (NDAQ: SFM) is one of the nation’s top natural organic retailers with more EXECUTIVE than 285 stores throughout 13 states. OVERVIEW ›› Long-Term Corporate Lease – 15-year primary lease term with 4, 5-year options to renew. Sprouts also has rental increases throughout the lease.

›› Brand New, High-Quality Construction Grocery Store (Sprouts Famers Market) – The store was built and opened in 2017 and is one of South Tampa’s newest retail developments. Roofs and mechanical systems are under warranty and can be transferable to a purchaser.

INVESTMENT SUMMARY ›› Robust Demographics - The subject property is located in the heart of South Tampa which is an affluent and dense trade area.

›› Irreplaceable Location - The Property is situated along the primary signalized thoroughfare of Tampa, Highway. Property Name Dale Mabry Highway has approximately 37,500 cars per day. Furthermore, the Property is situated in close proximity to Sprouts Farmers Market numerous schools, many of which are among the best in the state. The Property is located less than 5 miles from Tampa International Airport, 1.5 miles from the area and just over 3 miles from the Tampa Central Business District. Property Address 1547 S Dale Mabry Highway • Strong Incomes - The average household income within a 1-mile radius is north of $130,743, which is more than double the Tampa, FL 33629 national average and shows the strength of the location. Further, the average household income within a 3-mile radius of the subject property is $94,809, and there are over 93,619 residents and 109,865 daytime employees, which combined is a customer base north of 203,481. GLA ± 29,929 SF

Lot Size ± 2 AC / 87,120 SF

Year Built 2017

4 • High Barriers to Entry – Given the density of the ›› Sprouts is actively expanding throughout the ›› On Sprouts Farmers Market’s (NASDAQ: SFM) corridor and surrounding area, this is essentially Southeast and already has 12 locations in Georgia, earnings conference call on February 22nd, a landlocked area making it extremely difficult 4 in Florida, 4 in Alabama and 4 in Tennessee. company management discussed a number of for tenants to relocate or for new competition to factors underlying a projected 2018 revenue penetrate the market. ›› For the 3rd quarter, ending Oct-2017, Sprouts increase of 11.5% to 12.5%, and expected reported net sales of $1.2 Billion (16% increase), comparable sales, or “comps” improvement of ›› Sprouts Farmers Market - With 285 stores in 13 comparable store sales growth of 4.6% and net 2.5% to 3.5% - Positive outlook! states, Sprouts Farmers Market (Nasdaq: SFM) income growth of 32%. is one of the nation’s largest natural organic ›› Surrounding Retailers – Trader Joe’s, Whole retailers. Sprouts’ 2018 outlook calls for the ›› In January 2018, Sprouts announced a new Foods, Publix, Fresh Market, Target, TJ Maxx, opening of 30 new stores this year. partnership with privately held grocery delivery Sam’s Club, Walmart, Total Wine and Beer, company Instacart, aimed at expanding the HomeGoods, Stein Mart, amongst many others. ›› Sprouts had sales of $3.6 billion in 2015, which company’s current delivery capability to each of represented an increase of 24% from prior year. its major markets, beginning with a phased roll- Adjusted EBITDA was $243 million in 2015, out in its home base state of Arizona. which was an increase of 3% from prior year.

5 203,481 Daytime Population within a 3-mile radius

FINANCIAL OVERVIEW

FINANCIAL HIGHLIGHTS

List Price $14,250,000

ANNUALIZED OPERATING DATA

Base Rent PSF Monthly Rent Annual Rent Increases Cap Rate Year 1-10 $26.75 $66,716.75 $800,601 - 5.62% Year 11-15 $27.75 $69,210.83 $830,530 $1.00/SF 5.81% Option 1 $28.75 $71,704.92 $860,459 $1.00/SF 6.02% Cap Rate Option 2 $29.75 $74,199.00 $890,388 $1.00/SF 6.23% 5.62% Option 3 $30.75 $76,693.08 $920,317 $1.00/SF 6.44% Option 4 $31.75 $79,178.17 $950,246 $1.00/SF 6.65%

TENANT SUMMARY

SFM, LLC dba Tenant Trade Name Original Lease Term 15 Years Sprouts Farmers Market Rent Commencement Date 5/24/17 Type of Ownership Fee Simple Term Remaining Lease Expiration Date 5/23/32 Lease Guarantor SFM, LLC Corporate Rental increases of $1.00/SF Increase S Dale mabry highway ±37,500 ADT ± 14 Years Lease Type NN after 10th year of initial term Roof & Structure Landlord Responsibility Options Four, 5-Year Options 6 203,481 Daytime Population within a 3-mile radius

S Dale mabry highway ±37,500 ADT

7 LEASE ABSTRACT

»» Sprout’s pays no more than $1.00/SF in CAM costs during the first full calendar year. After first year, CAM Costs shall not exceed PRS from prior year by more than 3%. Cap excludes snow and ice removal or other costs with respect to extraordinary weather events. Tenant does not pay an Administrative or Management Fee. »» Tenant’s Proportionate Share is equal to Tenant’s SF/Total GLA of Shopping Center.

INSURANCE REIMBURSEMENTS »» Tenant pays pro rata share of Insurance expenses. During the first calendar year only, Sprout’s pays no more than $0.75/SF for Insurance costs, with no cap TENANT NAME thereafter. This first-year cap is NOT applied in the cash flow projections herein. SFM, LLC »» Tenant’s Proportionate Share is equal to Tenant’s SF/Total GLA of Shopping d/b/a Sprouts Farmers Market Center.

DEMISED PREMISES REAL ESTATE TAX REIMBURSEMENTS ± 29,929 SF »» Tenant pays pro rata share of Real Estate Tax expenses. During the first calendar year only, Sprout’s pays no more than $1.75/SF for Real Estate Taxes, with no LEASE TERM cap thereafter. This first-year cap is NOT applied in the cash flow projections Tenant has a fifteen (15) year lease herein. »» In connection with the second change in ownership, Tenant has a 60-month REMAINING RENEWAL OPTION(S) reassessment protection given that the property is transferred during the first Four, Five-year options 7 lease year of the term of this lease. Upon a ““ Transfer Reassessment”” the Tenant shall not be obligated to pay any portion of their Pro Rata Share of the RENEWAL OPTION NOTICE Transfer Increase continuing until the last day of the 60th full calendar month Notice of 210 days after Transfer Reassessment date. Tenant’s Proportionate Share is equal to Tenant’s SF/Total GLA of Shopping Center. COMMON AREA MAINTENANCE REIMBURSEMENTS »» If the Premises is ever taxed separately from the other portions of the Shopping »» Tenant pays pro rata share of Common Area Maintenance expenses. Center, Tenant will pay all Real Property taxes assessed against the Premises, as Reimbursable CAM expense include: (a) parking lot restriping, repaving and well as Tenant’s Proportionate Share of any Real Property Taxes assessed against resurfacing; (b) cleaning and sweeping; (c) landscaping; (d) snow and rubbish the Common Area. removal; (e) receptacle maintenance and trash removal; (f) maintaining signs; and (g) painting. 8 MAINTENANCE & REPAIRS ESTOPPEL REQUIREMENT »» Tenant shall maintain, at its costs, regular trash removal from its dedicated Within 30 days. dumpster(s)/compactor(s). Tenant responsible for all maintenance repairs, and replacement of all parts of the HVAC system exclusively serving the Premises. CONTINUOUS OPERATION Tenant shall also maintain the interior of the Premises in good order. Not required. »» Landlord is responsible for (a) repairing all damage to the Premises or Common Area caused by subsidence, settling of land or other structural or latent defects; ASSIGNMENT & SUBLEASING (b) maintaining the following in good condition and repair: roof and roof »» Tenant may upon at least 30 days’ Notice to Landlord, but without requirement membrane repairs, all structural portions of the premises, soffits and exterior to obtain Landlord’s consent, assign this Lease or sublet all or any portion of installation and finish systems, sump pumps, storefront (excluding plate glass), the Premises so long as the Premises continues to be used for a lawful retail use and floor slab; and (c) making all repairs and replacements to the Premises or that does not violate any of the restrictions set forth in Exhibit G, G-1 or G-2 Common area required by reason of the negligence of Landlord. of Lease.

EXCLUSIVE RIGHTS PARKING »» Tenant shall have the exclusive right in the Shopping Center to conduct the »» The Common Area shall at all times contain no less than the sum of 3.55 parking operation and sale of any of the following activities or merchandise: operation spaces per 1,000 square feet of Gross Floor Area for the entire Shopping of a grocery store, meat or seafood market or produce market, or the sale of Center, plus any additional parking spaces required by applicable laws. any such items; the sale of vitamins and supplements, ethnic foods, natural or health food, pet food, or packaged ice cream; the sale of natural cosmetics, EARLY TERMINATION natural health or beauty products; the sale of packaged beer and wine for off- »» Not stipulated in Lease. premises consumption; the operation of a full service bakery; and the operation of an over-the-counter delicatessen offering sliced or butchered meats and cheeses for off-premises consumption. All other Shopping Center Tenants are prohibited from engaging in Tenant’s exclusive except on an Incidental Basis, provided that there shall be no exception for the sale of fresh meat, seafood, and produce. Incidental Basis means the sale of such items occupies the lesser of: 250 sf of Gross Floor Area or 3% of the sales area of the subject premises »» Tenant’s Exclusive shall not restrict the following specific uses: (i) an ice cream, smoothie or frozen yogurt shop; (ii) a cosmetic store such as ULTA or Sally’s Beauty; (iii) and a hair salon or barber shop.

9 SITE PLAN

10 U.S. SPROUTS LOCATIONS

NV UT CA 8 5 CO 32 MO 108 KS 5 3 NC 1 34 6 TN AZ 10 OK NM 7 AL GA TX 4 16 42 4 FL

11 AIRPORTAIRPORTS AERIAL INMAP THE PAGE TAMPA 8 AREA

tampa international airport

st. petersburg clearwater international airport

12 GROCERS IN THE MARKET

henderson bouleavard sc

dale mabry sc

BRITTON PLAZA

13 TENANT OVERVIEW

SPROUTS FARMERS MARKET Sprouts Farmers Market, Inc., together with its subsidiaries, operates as a retailer of fresh, natural, and organic food in the United States. The company’s retail stores offer fresh produce, bulk foods, vitamins and supplements, grocery, meat and seafood, deli, bakery, dairy, frozen foods, body care and natural household items, beer and wine, and dairy alternatives. Sprouts Farmers Market aims to sell products that are minimally processed and free of artificial flavors, colors, preservatives and synthetic ingredients. The company says that 90% of its products meet this standard. The company sells many USDA-certified organic foods and products that aim to be environmentally friendly and ecologically responsible. As of November 3, 2016, it operated 285 stores in 13 states. Sprouts Farmers Market, Inc. was founded in 2002 and is headquartered in Phoenix, Arizona.

FOURTH QUARTER HIGHLIGHTS: » COMPANY NAME Sprouts Farmers Market, Inc. » Net sales of $1.1 billion; a 16% increase from the same period in 2016 »» Comparable store sales growth of 4.6% and two-year comparable store sales growth of 5.3% TYPE Public (NASDAQ: SFM) »» Net income of $40 million; a 133% increase from the same period in 2016

INDUSTRY Grocery / Health Food Store FISCAL YEAR 2017 HIGHLIGHTS:

HEADQUARTERED Phoenix, Arizona »» Net sales of $4.7 billion; a 15% increase from the same period in 2016 »» Comparable store sales growth of 2.9% and two-year comparable store sales growth of 5.6% YEAR FOUNDED 2002 »» Net income of $158 million; a 27% increase from the same period in 2016

WEBSITE www.sprouts.com

14

Davis Islands

Hyde Park Villages

Palma Cela Golf & Country Club

S Dale mabry highway ±37,500 ADT

15 AREA OVERVIEW

TAMPA, FLORIDA The City of Tampa is the largest city in Hillsborough County and is the county seat and the third most populous city in Florida. It is located on the west coast of Florida, approximately 200 miles northwest of Miami, 180 southwest of Jacksonville, and 20 miles northeast of St. Petersburg. The population of the city represents approximately one-third of the total population of Hillsborough County. Tampa’s economy is founded on a diverse base that includes tourism, agriculture, construction, finance, healthcare, government, technology, and the port of Tampa.

Tampa is part of the metropolitan area most DEMOGRAPHICS DISTANCE TO commonly referred to as the “ Area”. Population 1-Mile 3-Mile 5-Mile Tampa is part of the Tampa-St. Petersburg- Clearwater, Florida Metropolitan Statistical Area. 2023 Projection 15,158 102,059 199,777 The four-county area is composed of roughly 2.9 2018 Estimate 14,469 96,578 188,178 million residents, making it the second largest 2010 Census 13,687 88,307 170,017 metropolitan statistical area in the state, and the Growth 2018-2023 4.76% 5.67% 6.16% fourth largest in the Southeastern United States, ST. PETERSBURG ±15 MILES behind Miami, Washington, D.C., and Atlanta. Growth 2010-2018 5.71% 9.37% 10.68% The Greater Tampa Bay area has over 4 million Households 1-Mile 3-Mile 5-Mile residents and generally includes the Tampa and 2023 Projection 6,658 46,470 90,254 Sarasota metro areas. 2018 Estimate 6,336 43,735 84,609 In the next five years, Hillsborough 2010 Census 5,959 39,427 75,305 ORLANDO ±80 MILES County’s population is projected to grow Growth 2018-2023 5.08% 6.25% 6.67% significantly faster than the state of Florida Growth 2010-2018 6.33% 10.93% 12.36% Households 1-Mile 3-Mile 5-Mile

By 2022, Hillsborough County’s population will Average Household Income $143,330 $107,543 $94,388 be nearly 1.5 million Median Household Income $104,950 $68,244 $58,053 MIAMI ±210 MILES 16 EDUCATION The Tampa MSA is a magnet for young, educated people. Hillsborough County’s millennial population is growing 13 percent faster than the nation as a whole, according to U.S. Census data. Three public universities located within a short drive of Tampa Bay – University of South Florida, University of Central Florida, and University of Florida – are home to more than 150,000 students, over 60 percent of whom will stay in Florida upon graduation. Tampa Bay has more than 80 colleges, universities, and technical schools producing thousands of graduates for area employers each year. Approximately 92,000 veterans are in the active labor force as well, offering employers an invaluable source of uniquely trained personnel.

The University of South Florida Muma College of Business boasts one of the nation’s best accounting schools, a top-ranked entrepreneurship center, a nationally-ranked MBA program, and a world-class research faculty. More than 2,200 students are enrolled in the Sykes College of Business at the University of Tampa, recognized by The Princeton Review as one of the top 300 business schools in the world for nine consecutive years. University of Tampa’s Sykes College of Business has also been ranked the 7th best for value for the price, beating out University of Notre Dame, Harvard University, and Duke University. Additionally, Hillsborough County Public Schools and Hillsborough Community College provide a variety of training programs for area employers, developing customized curriculum to meet specific business needs.

17 CULTURE EVENTS SPORTS Tampa is home to many different performing arts venues, One of the most well-known events in Tampa is the Tampa has four professional sports teams: Tampa Bay theaters, and museums. Popular theaters include David A. celebration of “Gasparilla,” a mock pirate invasion held Buccaneers (NFL), Tampa Bay Rays (MLB),Tampa Bay Straz Jr. Center for the Performing Arts, Tampa Theatre, and every year since 1904. Residents often refer to the event Lightning (NHL), and the Tampa Bay Rowdies (AFL). Gorilla Theatre. Some popular Tampa organizations include as Tampa’s “Mardi Gras.” The invasion is led by the pirate Each team has brought home victories and keep building the Florida Orchestra, Opera Tampa, and Stageworks ship, “Jose Gasparilla,” and is followed by numerous parades a growing fan base, specifically in baseball. For decades, Theatre. One of the most popular museums in the area is and city activities. This event brings in over 400,000 Major League Baseball has had spring training facilities the Museum of Science and Industry. It has several floors attendees and contributes tens of millions of dollars to and minor league baseball teams in the area. The New York of exhibits that relate to science, as well as, the only domed Tampa’s economy. Yankees hold their spring training in Tampa, which brings IMAX theater in Florida. out a large crowd each year. 18 TOURISM The city of Tampa operates over 165 parks and beaches covering 2,286 acres within city limits; 42 more in surrounding suburbs covering 70,000 acres are maintained by Hillsborough County. These areas include Hillsborough River State Park, just northeast of the city. Tampa is home to a number of attractions and theme parks, including Busch Gardens Tampa, Adventure Island, the Lowry Park Zoo, and the Florida Aquarium.

The Lowry Park Zoo features over 2,000 animals, interactive exhibits, rides, educational shows and more. The zoo serves as an economic, cultural, environmental and educational anchor in Tampa. Well-known shopping areas include International Plaza and Bay Street, Westshore Plaza, the district, and Village. is home to the Palma Ceia Design District.

The Tampa Port Authority currently operates three cruise ship terminals in Tampa’s . The Port of Tampa is the year-round home port for Carnival Cruise Lines’ MS Carnival Inspiration and MS Carnival Legend.

19 ECONOMY DEFENSE AND SECURITY • Tampa Bay has emerged as a driving force behind the growing convergence of defense and technology, and as a leader in the defense and security industries. In addition to having one of the largest veteran workforces in the nation, Tampa Bay is home to MacDill Air Force Base, the only military installation that hosts two, four- star Combatant Commands, U.S. Central Command (USCENTCOM) and U.S. Special Operations Command (USSOCOM). Thirty-eight additional mission partners operating from MacDill AFB, as well as specialized security and intelligence firms, help to make Tampa and Hillsborough County a top market for defense contractors. Locally, a $14 billion military industry has developed around areas of community expertise, including cybersecurity and information technology, intelligence and analysis, training and simulation, and advanced manufacturing, with nascent opportunities in biotechnology and rehabilitative health. Tampa Bay has one of the largest veteran workforces in the country, with roughly 92,000 former service men and women in the metro area’s active labor pool and is home to nearly one-quarter of Florida’s 1.7 million veterans. MacDill AFB is also the largest employer in Hillsborough County, adding more than 15,000 highly trained military and civilian personnel to the talent pipeline, with the skills and security clearances desired by industry employers.

INFORMATION TECHNOLOGY • Florida is ranked third in the nation for high-tech establishments, and the Florida High Tech Corridor, anchored by the Tampa Bay region, has been named one of the top tech job hot spots in the United States. Holding 20 percent of the state’s IT positions, Tampa is ranked among the Top Ten Best American Cities to Work in Tech, according to SmartAsset. In the past five years, local IT jobs have grown at nearly twice the rate of overall average job growth, and are projected to increase by 10 percent over the next five-year period. Florida’s software and computer systems design and integration industry are one of the largest in the U.S., with nearly 12,600 firms. The Tampa metro area ranks first in Florida in terms of the concentration of .NET developers, data warehousing specialists, and Hadoop developers.

LIFE SCIENCES AND HEALTHCARE • Over 3,000 life sciences and healthcare companies employing more than 62,100 workers operate in Tampa and Hillsborough County. Additionally, 14 percent of Florida’s biotech companies and 22 percent of the state’s pharmaceutical and medicine manufacturing workforce call the area home. Leading experts predict that over the next decade more than $1 trillion in healthcare spending will migrate to new players, new industry segments, and traditional companies that are delivering on value with an unrelenting focus on driving improved health outcomes and cost containment. The Tampa Bay region is gaining in global reputation as a growing hub for research and development in life sciences. USF Health, University of Tampa College of Natural & Health Sciences, Hillsborough Community College Health Sciences and Nursing programs, and Galen College of Nursing, along with emerging private industries, contribute to the region’s research and innovation as well as training the next generation of scientists, doctors, and technicians.

20 MANUFACTURING, DISTRIBUTION & LOGISTICS • Manufacturing has a long history in Tampa Bay, where it is a source of innovation to a wide range of industries. From precise military specifications to the creation and development of medical devices and manufacturing in highly regulated industries, Tampa businesses are pioneering the art of modern manufacturing technology. As the industry shows continued signs of recovery and expansion, Tampa and Hillsborough County are well- positioned to leverage this momentum. Currently, there are more than 2,800 manufacturers in the county, representing over 63,000 employees. Tampa and Hillsborough County manufacturers who recently announced major expansions include James Hardie, Tampa Tampa/Florida Structural Steel, and Acoustiblok. Manufacturing is also vital to attracting investment from overseas. Close to 500 foreign-owned companies representing more than 40 nations have set up shop in Tampa Bay. ‘s strategic location, at the intersection of the major east-west and north-south trade lanes and in close proximity to an expanded Panama Canal, makes it ideally positioned for businesses to benefit from expanded trade with Asia and the vibrant markets of Latin America. The Tampa International Airport (TPA) offers nonstop service to over 70 domestic and international destinations at fares lower than most major metro areas. Serving approximately 17 million people annually, TPA ranks among the top North American aviation facilities and has been consistently named one of the “most- loved” airports in the world.

FINANCIAL & PROFESSIONAL SERVICES • Financial and Professional Services is big business in Tampa Bay. Nearly one in four business and information services firms in Florida call Tampa Bay home, including some of the top names in banking, finance, and insurance. Tampa earned the #3 spot for Most Cost-Friendly Business Locations Among Large U.S. Cities, outranking popular cities such as Dallas, Boston, and New York. Ten percent of the nation’s Fortune 50 and nine percent of the Fortune 100 companies’ shared services operations are located here. As the fastest growing industry segment in the Tampa metro area, professional and business services have year-over-year employment gains of 4.7 percent and a total workforce of more than 210,000.

CORPORATE HEADQUARTERS • Tampa Bay is home to 19 corporate headquarters with over $1 billion in annual revenue, seven of which are Fortune 1000 companies. Almost 500 foreign-owned companies representing more than 40 nations are established in the community. As the commercial and industrial heart of the region, Hillsborough County – which includes the cities of Tampa, Plant City, and Temple Terrace – is a leading location for corporate site selection in North America. Companies operating in Tampa enjoy low labor costs, favorable corporate tax policies, no personal income tax, and stable, pro-business leadership. Collaboration between state and local government and industry has resulted in effective development packages, targeted financial incentives, expedited permitting, and streamlined regulatory processes. These conditions have made Hillsborough County an ideal place for companies such as Bristol-Myers Squibb, Depository Trust and Clearing Corporation, Citigroup, Amazon, and USAA.

21 OFFERING MEMORANDUM

SOUTH TAMPA, FLORIDA

EXCLUSIVELY LISTED BY

ARON CLINE SVP & Senior Director DIRECT (949) 432-4509 MOBILE (818) 632 0233 LIC# 01904371 (CA) [email protected]

CALVIN SHORT CHAD KURZ JOSH BISHOP SVP & Senior Director SVP & National Director VP & Director LIC# 01927216 (CA) LIC# 01911198 (CA) LIC# 688810 (TX)

BROKER OF RECORD KYLE MATTHEWS LIC# CQ1052263 (FL)

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