CVS Pharmacy & Zwanger-Pesiri Radiology

OFFICE DEPOT | ANNAPOLIS, MD TABLE OF CONTENTS

CVS Pharmacy & Zwanger-Pesiri Radiology Fee Simple Modified Gross | Harlem, NY

Offering Memorandum Table Of Contents

Executive Summary 3

Tenant Summary 4

Floor Plans 6

Location Overview 9

Surrounding Retail 10

Geographic Location 11

Retail Map 12

Demographics 13 Executive Summary

Avison Young, engaged as the exclusive agent for Ownership, is pleased to offer for sale 324 West 125th Street in Manhattan’s Harlem neighborhood (“Property.”) The property consists of a newly constructed two-story retail building located on the southeast corner of St. Nicholas Avenue and Investment Highlights West 125th Street. The Property offers 100 feet of frontage along West 125th Street and is fully occupied with two • Located at one of Manhattan’s busiest intersections in-place tenants, CVS and Zwanger Pesiri. CVS and Zwanger both signed 20-year leases in 2018, and • Newly opened CVS branch under long term lease have 18 years remaining on their respective leases. • Outstanding location in Harlem one block east of the 125th Street Subway Station, 125th Street is the epicenter of Harlem’s incredible retail transformation. Home to major institutions, such as the Apollo Theater, this corridor has welcomed major national brands including Whole which services the A C B D trains Foods, H&M, American Eagle, Burlington, and Bath & Body works, with other brands expecting to • Direct proximity to the West 125th Street / Frederick Douglas Boulevard bus stop, soon arrive and increase the cache of retail in the area. which services the Bx 60 102 101 buses 15 SBS Asset Summary • Moody’s Baa2 rated tenant NOI (With Abated Taxes) $1,907,686 • Recently constructed building with minimal landlord responsibilities Real Estate Taxes (Abated) $169,661 • Generational quality asset Real Estate Taxes (Unabated) $413,858 • Generous rent escalations every five years NPV of Remaining ICAP $3,108,003 • Below market in-place rents Rent / Month $173,833 Blended Rent / SF $93 Rentable Square Feet 22,535 Gross Square Feet 26,918 Property Level Income & Expenses Zoning C4-4D, 125th Land Area 8,983 Rental Revenue Size (SF) $ / SF Total Tenant(s) CVS & Zwanger Pesiri CVS - Base Rent 11,895 $97 1,150,000 Credit Rating Baa2 Zwanger Pesiri - Base Rent 10,640 $88 936,000 Stock Symbol CVS Reimbursement Income 4,705 Ownership Type Fee Simple Effective Gross Revenue 2,090,705 Guarantor CVS Caremark Corporation & Zwanger-Pesiri Radiology Group, LLP Lease Type Modified Gross Operating Expenses Landlord Responsibilities Roof & Structure Insurance Client Provided $7,725 Year Built 2017 Lease Term Remaining 18 Years Real Estate Taxes (2020/2021) ICAP Abatement $169,661 Lease Expiration CVS - April 2038; Zwanger Pesiri - February 2038 Capital Reserves Pro-Forma $5,634 Options CVS - One (1), Five (5) Year; Zwanger - One (1), Ten (10) Year Total Operating Expenses $183,019 OpEx % of EGI 8.8%

Asking Price: $40,500,000 | 4.71% Cap Rate Net Operating Income $1,907,686

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 3 Tenant Summary

About CVS Pharmacy CVS is a U.S. retail and healthcare company owned by CVS Health (NYSE: CVS). This company was originally founded in Lowell, Massachusetts, in 1963. CVS offers more than 9,900 branches nationwide and has 203,000 employees (as of 2017). CVS Pharmacy had a revenue of $134 billion and net income of $6.0 billion in 2018 and 2017, respectively. According to Drug Channels, CVS Health Corporation is the largest US pharmacy based on total prescription revenues, as of 2019.

CVS provides prescription drugs, over-the-counter medication, and various cosmetics, along with many other goods, such as food and beverages. This retail chain also has over 1,100 MinuteClinics and Diabetes Care Centers, which provide various healthcare and retail clinic Rent Schedule - CVS services. Although the majority of these centers are located within the company’s pharmacies, Term Increases Annual Rent Rent / SF some are situated at other external locations. Sept. 30, 2018—May 31, 2023 - $1,150,000 $97 CVS also has a strong online presence. According to Compete.com, CVS.com collected up to 26 June 1, 2023—May 31, 2028 10.0% $1,265,000 $106 million online visitors in 2008. June 1, 2028—May 31, 2033 10.0% $1,391,500 $117 June 1, 2033—April 30, 2038 10.0% $1,530,650 $129 May 1, 2038—May 31, 2038 10.0% $1,683,715 $142

1963 $134 B 203,000 9,967 Founded Revenue (2018) Employees (2017) Locations (2018)

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 4 Tenant Summary

About Zwanger-Pesiri Radiology The Harlem office joins Zwanger-Pesiri’s other borough offices, to offer city residents the best radiological care available. In addition to the new Harlem location, Zwanger-Pesiri Radiology has one facility in Cobble Hill, Brooklyn, one facility in Parkchester, Bronx, four offices throughout Queens, and 25 offices across Long Island. The Harlem office provides 3T MRI, Low-Dose CT, Rent Schedule - Zwanger Pesiri Ultrasound, X-ray, 3D Mammography and Bone Density (DEXA) scans. Term Increases Annual Rent Rent / SF Zwanger-Pesiri Radiology prides itself on being a patient-centric practice. In 1953, Dr. Jerome 3/1/18 – 2/28/23 - $936,000 $88 Zwanger sought to change the patient experience. He founded a radiology practice with 3/1/23 – 2/29/28 10.0% $1,029,600 $97 the goal of providing patients and physicians modern medical diagnostics in a caring and 3/1/28 – 2/28/29 10.0% $1,132,560 $106 compassionate environment. He began the practice out of his house, which became our current 3/1/29 – 2/28/30 2.5% $1,160,874 $109 Massapequa office. He began a partnership with Dr. E.J. Pesiri in 1958, which continued until July of 2001, when Dr. Pesiri retired. Dr. Zwanger continued to practice part-time until he retired in 3/1/30 – 2/28/31 2.5% $1,189,896 $112 June 2008. 3/1/31 – 2/29/32 2.5% $1,219,643 $115 3/1/32 – 2/28/33 2.5% $1,250,134 $117 Now, for over 65 years, Zwanger-Pesiri has been establishing the gold standard in radiology with an unmatched level of patient-centered care, research, education, and commitment to the 3/1/33 – 2/28/34 2.5% $1,281,388 $120 community. ZP has surpassed every hospital, every health system, every multi-specialty practice, 3/1/34 – 2/28/35 2.5% $1,313,422 $123 and every outpatient radiology facility in virtually every facet of radiology. 3/1/35 – 2/29/36 2.5% $1,346,258 $127 3/1/36 – 2/28/37 2.5% $1,379,914 $130 3/1/37 – 2/28/38 2.5% $1,414,412 $133

1953 $25-50 M 1,001-5,000 25 Founded Revenue(1) Employees(1) Locations

(1) Information gathered from Glassdoor.com

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 5 Floor Plans

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Common Areas / BOH = 3,832 SF 1 R 7 :

E A W 8 N 9 O 2 H W P 1 ARCHITECTURE, D.P.C. G Tenant Area B Tenant Area A = 4,258 SF 789 SF Tenant Area B = 893 SF

Total Floor Area = 8,983 SF

Tenant Area A DESCRIPTION 4,258 SF DATE REV NO. REVISIONS:

95 SF CLIENT: PROJECT TITLE:

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S T E V E N G A M B I N O , R A THIS DRAWING AND ALL INFORMATION CONTAINED HEREIN IS AUTHORIZED FOR USE ONLY BY THE PARTY FOR WHOM THE WORK WAS CONTRACTED OR TO WHOM IT IS CERTIFIED. THIS DRAWING MAY NOT BE COPIED, REUSED, DISCLOSED, DISTRIBUTED OR RELIED UPON FOR ANY OTHER PURPOSE WITHOUT THE WRITTEN CONSENT OF GAMBINO+LAPORTA ARCHITECTURE,D.P.C. COPYRIGHT 2014, G L A A L L R I G H T S R E S E R V E D

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CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 6 Floor Plans

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150 I

Common Areas / BOH = 520 SF 1 R 7 :

E A W 8 SF N 9 O 2 H W P 1 ARCHITECTURE, D.P.C. G Tenant Area A = 7,637 SF

Tenant Area B = 795 SF

Total Floor Area = 8,952 SF

Tenant Area A 7,637 SF DESCRIPTION DATE REV NO. REVISIONS:

Tenant Area B 645 SF CLIENT: PROJECT TITLE:

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CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 7 Floor Plans

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Tenant Area B = 8,952 SF 8 N 9 O 2 H W P 1 ARCHITECTURE, D.P.C. G Total Floor Area = 8,983 SF

Tenant Area B 8,952 SF DESCRIPTION DATE REV NO. REVISIONS: CLIENT: PROJECT TITLE:

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CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 8 Location Overview

Harlem, NY During this transition, it continues to be important to maintain a solid foundation Long known for its intimate jazz clubs, soul food institutions and African-American for the existing and incoming businesses. This includes providing a safe and secure heritage, Harlem draws a diverse crowd of locals and visitors. Trendy eateries, stylish environment, visible signage, clean streets, etc. clubs and hip bars make for an energetic nightlife scene. The area features a mix of 19th- Understanding who the target market(s) is for businesses on 125th Street is integral to century brownstones and modern high-rises. Its main artery, 125th Street, is home to the marketing to them. The more the target markets are understood, the better the retail iconic Apollo Theater, as well as chain stores and restaurants. and services can continue to serve the existing and changing residential, office, and Harlem, district of New York City, U.S., occupying a large part of northern Manhattan. visitor populations. Harlem as a neighborhood has no fixed boundaries; it may generally be said to lie Lastly, in a time when businesses are facing stiff competition from local and international between 155th Street on the north, the East and Harlem rivers on the east, 96th Street e-commerce based retailers it is important to remember that consumers are still looking (east of Central Park) and 110th Street and Cathedral Parkway (north and west of Central for unique experiences. With Harlem’s unique position as a center of rich culture and Park) on the south, and Amsterdam Avenue on the west. history, businesses along 125th Street have the ability to provide an exclusive experience Transportation and highlight niche products, thereby creating a unique proposition to visit Harlem. Harlem is an accessible neighborhood and has excellent access to public transportation. With the pace of transformation only expected to accelerate, Harlem, and the businesses The approximate time to commute from Midtown, Manhattan to the retail corridors of on 125th Street, are poised for more growth as the customer base and retailer base 125th Street, Frederick Douglass Blvd, and Lenox Avenue is 15 minutes. These prime areas continues to strengthen. are accessible by the A, D, 1, 2 and 3 subway lines. Buses are also an attractive and fast transportation option, running from Downtown, Manhattan into the Harlem, along with many crosstown options for prime streets, such as 125th Street. The neighborhood of Harlem is serviced by the IRT Lenox Avenue, IND Eighth Avenue, and IND Concourse Subway Lines. These stations provide access to the 2, 3, A, B, C, and D trains. Some bus routes that provide service within this neighborhood include the Bx6, Bx19, Bx33, M1, M2, M3, M4, M60-SBS, M100, M101, M7, M10, and M116, along with many others. 125th Street Harlem’s 125th Street has been experiencing significant change and growth over the past decade. It is moving from a local and residential neighborhood to a core destination in New York City, boasting national retailers and brands in addition to its local shops. Harlem’s unique history and cultural heritage and its newer dining experiences are an important aspect of the attraction for visitors and tourists to the area as well. In addition, there are several new developments, retail, educational, and residential that will spur the growth of the neighborhood. This includes ongoing major development projects by Columbia University as well as other office and residential projects. As retail growth is fed by office and residential density, this bodes well for businesses along 125thStreet.

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 9 Surrounding Retail

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY Harlem, NY Noteworthy Neighbors

Subway US Social Security Administration Apollo Theater College of New Rochelle Old Navy Dollar Tree Popeyes Chase Bank McDonald’s Gap Party City PC Richards & Son Whole Foods Geographic Location

324 W 125th St New York, NY 10027 Subject Site

Boston, MA 207 Miles

New York, NY Pittsburgh, PA 375 Miles Philadelphia, PA 105 Miles

Baltimore, MD 203 Miles Washington, DC 236 Miles

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 11 Retail Map

Subject Site Metropolitan Transportation Authority (MTA), is the home of the 125th Street Subway Station - the 36th busiest subway station of New York City’s 472 subway stations. The 125th Street station serves the A, C, B & D lines from the northern St. Nicholas Ave Bronx, through Manhattan, Queens and southern Brooklyn. The 125th Street station sees an average of 28,000-weekday ridership and over 9,400,000 annual ridership, providing an immense increase to the daily foot traffic surrounding. The property was built in 2016 and is W 125th St operated by two strong tenants with a remaining base-lease term of +18 years. Each lease features attractive rental increases throughout the base lease term, offering a significant hedge against inflation.

Frederick Douglas Blvd

Street or V f ie k w c i

Location Interstate 36th Busiest Signalized Corner Highlights Location Subway Station Location Demographics

.5 Miles 1 Mile 1.5 Miles Population

2019 Population 62,131 131,806 227,544 2024 Population 63,881 134,983 232,398 2019 Median Age 34.7 34.1 35.2 Households 2019 Total Households 25,359 52,729 91,798 2024 Total Households 26,094 54,053 93,670

.5 Miles Median Household Income .75 Miles 2019 Median Household Income $45,975 $49,230 $44,234 1 Mile 2024 Median Household Income $55,418 $58,568 $53,680 Average Household Income 2019 Average Household Income $76,942 $81,649 $77,419 2024 Average Household Income $92,703 $98,522 $92,466

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 13 $25 BILLION OPTIMIZE YOUR Investment Sales Volume Brokered REAL ESTATE TRANSACTIONS $10 BILLION AND HOLDINGS Financing Transaction Volume Brokered 90 YEARS Avison Young’s Capital Markets group offers comprehensive real estate transaction services Combined Industry Experience to a global client base. A trusted advisor to real estate owners and operators for more than • Creative deal structuring and sales strategies 30 years, Avison Young sources investment opportunities and provides investment sales execution for clients throughout Canada, the U.S., Europe and Asia. • Strong buyer and lender relationships • Principals’ established market credibility Our capital markets experts are senior professionals who work seamlessly cross-border to • Extensive past and active leasing assignments deliver real estate solutions. Our expertise has expanded organically in all asset classes, in the submarket including office, industrial, retail, multi-family, hospitality, leisure, land development. We have a proven track record in representing an international range of buyers and sellers, including • Experienced, knowledgeable, creative and responsive REITS, pension funds, insurance companies, private equity firms, opportunity and hedge support funds, and both public and private companies. Our success is measured by our clients’ results, with more than US $5 billion in transactions annually.

MARKET KNOWLEDGE, GLOBAL RELATIONSHIPS We combine Avison Young’s local, national and international experience with our research tools and teams to gain exceptional access to both domestic and international WE’RE GLOBAL buyers seeking investment and development opportunities. We have also built valuable CANADA, GERMANY, IRELAND, MEXICO, POLAND, relationships bringing off-market investment and sales transactions to private and ROMANIA, SOUTH KOREA, UNITED KINGDOM, UNITED institutional clients. STATES | AVISONYOUNG.COM

CVS PHARMACY & ZWANGER-PESIRI RADIOLOGY | 14 For more information, please contact

James Nelson Brent Glodowski Jonathan Hipp Richard Murphy Christopher Johnson Principal, Head of Tri-State Investment Sales Director Principal - Head of US Net Lease Group Senior Vice President Associate Director [email protected] | 212.729.6585 [email protected] | 212.230.5996 [email protected] | 703.787.4725 [email protected] | 571.449.8234 [email protected] | 212.732.7676

Alexandra Marolda Angela Mulder David Krasnoff Gabi Simon Senior Associate Senior Associate Executive Director, Capital Markets Director, Capital Markets [email protected] | 212.277.5558 [email protected] | 212.219.7054 [email protected] | 212.729.7896 [email protected] | 212.277.5524

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