THE BRIDGE CENTER Lone Tree, Colorado

Offering Memorandum NON-ENDORSEMENT & DISCLAIMER NOTICE

CONFIDENTIALITY & DISCLAIMER The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap. All rights reserved.

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ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. THE BRIDGE CENTER LONE TREE, COLORADO

EXCLUSIVELY LISTED BY

BARRY HIGGINS Senior Vice President Investments Denver, Colorado Office 303.328.2012 [email protected] License CO EA 748415

OFFICES NATIONWIDE AND THROUGHOUT CANADA WWW.MARCUSMILLICHAP.COM

THE BRIDGE CENTER LONE TREE, COLORADO

TABLE OF CONTENTS

EXECUTIVE SUMMARY COMPETITIVE COMPARABLES SECTION 1 SECTION 4 01 Investment Overview • Investment Highlights 23 Sales Comparables • Rent Comparables

PROPERTY DESCRIPTION MARKET OVERVIEW SECTION 2 SECTION 5 07 Property Details • Regional Map • Property Photos 33 Location Overview • Location Highlights Market Aerial • Demographics

FINANCIAL ANALYSIS SECTION 3 15 Pricing Details • Operating Data • Rent Roll

EXCLUSIVELY LISTED BY: This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, as- sumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap ACT ID Y0050314 EXECUTIVE SUMMARY

THE BRIDGE CENTER THE BRIDGE CENTER // EXECUTIVE SUMMARY THE BRIDGE CENTER //

It sits just off South Yosemite Street and Park Meadows Boulevard just two blocks from the just two blocks from the Street and Park Meadows Boulevard Yosemite It sits just off South is virtually in the heart of shopping, entertainment and C-470 interchange. Bridge Center Lone Tree. the major employment district of 15 years and in 2017 extended their Panera Bread, has been in occupancy for The anchor, The Panera Bread system consists of approximately 2,200 lease for an additional ten years. Canada. Having been publicly traded on NASDAQ (PNRA) locations in the United States and in a $7.5 billion acquired by JAB Holding Company, for many years, Panera was recently owns and operates this location also owns and operates all transaction. The Franchisee who along with 98 other Panera Bread locations in several 38 Panera Bread locations Colorado other states. offered free of debt thus allowing a new purchaser the This investment opportunity is being historically low interest rates. on the property at today’s opportunity to place new financing LONE TREE, CO 24,486 SQUARE FOOT 24,486 SQUARE FOOT SHOPPING CENTER IN SHOPPING CENTER IN Bridge Center is a highly visible asset just south of the General Growth Park Meadows Mall, a 1.6 million square foot shopping foot shopping Mall, a 1.6 million square of the General Growth Park Meadows a highly visible asset just south Bridge Center is is above The average household income and Nordstrom. Macy’s JCPenney, tenants such as Dillard’s, mall including anchor five years. over nine percent over the next is estimated to increase a three mile radius, and the population $140,000 within INVESTMENT OVERVIEWINVESTMENT Meadows Park the in located Center, Bridge the investors qualified to present exclusively to pleased is Millichap & Marcus by anchored is opportunity investment office/retail occupied percent 98 This Colorado. Tree, Lone of District Entertainment national brand restaurant retailer. Panera Bread, a

THE BRIDGE CENTER // EXECUTIVE SUMMARY 2 INVESTMENT HIGHLIGHTS

►► Satellite Retail/Office Space to Park Meadows Mall

►► 98.98% Occupied

►► Anchored by Panera Bread

►► Panera Bread’s lease Extended to 04/2027 with Options, 5% Escalator in Year Six and Options

►► Some Medical Tenants On Site

►► Highly Visible with High Traffic Counts

►► Outstanding Demographics with Average Household Income Exceeding $140,000

►► One of the Most Dense Retail Areas in the Denver MSA

% PD 1999 24,486 98.98% 3.50 AC $277.71 CASH FLOW 9.07 (Douglas County) 2231-03-3-05-019 2231-03-3-05-020 2231-03-3-05-020 Reinforced Concrete

% CAP RATE

7.17

Year Built Year Lot Size Construction Assessor APN Price/SF Occupancy Net Leasable Area Zoning OFFERING PRICE 6,800,000 THE BRIDGE CENTER THE BRIDGE CO 80124 Drive, Lone Tree, 9233 Park Meadows OFFERING HIGHLIGHTS OFFERING $

THE BRIDGE CENTER // EXECUTIVE SUMMARY 4 Regional Map

THE BRIDGE CENTER THE BRIDGE CENTER // PROPERTY DESCRIPTION PROPERTY THE BRIDGE CENTER //

5 THE BRIDGE CENTER // PROPERTY DESCRIPTION

THE BRIDGE CENTER

Local Map 6 RETAIL MARKET AERIAL

SUBJECT THE BRIDGE CENTER // EXECUTIVE SUMMARY THE BRIDGE CENTER //

7 PARK MEADOWS MALL PARK SOUTH DENVER MARKETPLACE COSTCO CENTENNIAL PROMENADE CENTENNIAL QUEBEC VILLAGE SUBJECT PROPERTY ENTERTAINMENT DISTRICT ENTERTAINMENT MEADOWS MARKETPLACE PROPOSED RE-DEVELOPMENT SITE PROPOSED RE-DEVELOPMENT AERIAL

THE BRIDGE CENTER // EXECUTIVE SUMMARY 8 AERIAL

Located less than one mile from Bridge Center, Park Meadows Mall is Colorado’s biggest and best shopping mall and known as “Colorado’s only retail resort”. It boasts 185 stores and restaurants, and is anchored by Dillard’s, Nordstrom, Dick’s Sporting Goods and Macy’s. Park Meadows is also home to the Colorado flagship stores of several national tenants, including Arhaus Furniture, Nordstrom and Pottery Barn. In addition to the 12 quick-serve restaurants in the dining hall, there are 14 full-service restaurants on premise. Park Meadows Mall is a recipient of ICSC’s International Design and Development Award and the Urban Land Institutes Award of Excellence, and is currently owned by General Growth Properties.

PARK MEADOWS MALL

COSTCO PROPOSED RE-DEVELOPMENT SITE THE BRIDGE CENTER // EXECUTIVE SUMMARY THE BRIDGE CENTER //

SUBJECT PROPERTY

9 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, as- sumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap ACT ID Y0050314 FINANCIALFINANCIAL ANALYSISANALYSIS

THETHE BRIDGE BRIDGE CENTER CENTER THE BRIDGE CENTER // FINANCIAL ANALYSIS THE BRIDGE CENTER //

1711 PRICING DETAILS OPERATING DATA

PRICE $6,800,000 INCOME YEAR 1

THE BRIDGE CENTER // FINANCIAL ANALYSIS Down Payment 30% / $2,040,000 Scheduled Base Income $766,284

Price Per SqFt $277.81 Expense Reimbursements $140,512 Effective Gross Income $906,796 Rentable Built Area (RBA) 24,486

Vacancy (2.5%) ($22,670) Occupancy 98.98% Gross Effective Income $884,126 RETURNS Total Operating Expenses $396,734 CAP Rate 7.17% Net Operating Income $487,392

Cash-on-Cash 9.07%. Debt Service $302,284

Debt Coverage Ratio 1.61 Net Cash Flow After Debt Service $185,108 (9.07%)

FINANCING OPERATING EXPENSES YEAR 1

Loan Amount 70% / $4,760,000 Real Estate Taxes* $219,000

Loan Type New Loan Insurance $8,000

Interest Type 4.875% Repairs & Maintenance $10,207 Trash $3,594 Amortization 30 Years Water & Sewer $10,771 Term 10 Years Gas & Electric $83,258 *Loan information is subject to change. Contact your Marcus and Janitorial $18,951 Millichap Capital Corporation representative. HVAC Maintenance $6,291

Professional Fees $6,275

Fire, Security & Misc. $3,720

Management Fee (3% of EGI) $26,667

Total Expenses $396,734

Expenses/SF $16.20

*Lone Tree Business Improvement District includes real estate taxes, snow removal, lot sweeping, landscaping and sprinkler repair and maintenance. 12 RENT ROLL

SQUARE ANNUAL $/ ESCALATION ESCALATED EXPENSE TENANT LEASE COMM. LEASE EXP. RENT/MO. LEASE TYPE OPTIONS FEET SF DATE(S) RENT(S) REIMB.

Vacant 250 $24.00 $500 NNN $338

Dr. Allison Fall 500 03/01/2016 04/30/2019 $33.60 $1,400 Gross One, 3 Year Option

06/01/2019 $7,800 Eco Salon 2,216 06/01/2016 02/28/2021 $40.61 $7,500 Gross Two, 5 Year Options 06/01/2020 $8,112

Allstate Insurance 1,000 07/01/2018 06/30/2023 $24.00 $2,000 Gross N/A Base Year One, 5 Year Option

06/01/2019 $23,809 06/01/2020 $24,195 06/01/2021 $24,581 2015 Base Office Evolution 9,266 06/01/2016 05/31/2026 $29.08 $23,423 06/01/2022 $24,967 Year 06/01/2023 $25,353 06/01/2024 $25,739 06/01/2025 $26,125

Panera Bread 4,000 04/01/2017 03/31/2027 $27.83 $9,276 NNN 04/01/2022 $9,833.33 $4,460 Four, 5 Year Options

Panera Bread* N/A 04/01/2017 03/31/2027 N/A $1,686

Sandler 250 06/01/2014 05/31/2019 $75.59 $1,638 Gross One, 5 Year Option THE BRIDGE CENTER // FINANCIAL ANALYSIS THE BRIDGE CENTER // 01/01/2019 $2,021 Solution for Tuition 500 01/01/2018 12/31/2020 $48.00 $2,000 Gross One, 5 Year Option 01/01/2020 $2,042

*Additional Rent for Catering Area, Exterior Facilities, and Common Area Bathrooms

13 RENT ROLL CONT’D.

SQUARE ANNUAL $/ ESCALATION ESCALATED EXPENSE THE BRIDGE CENTER // FINANCIAL ANALYSIS TENANT LEASE COMM. LEASE EXP. RENT/MO. LEASE TYPE OPTIONS FEET SF DATE(S) RENT(S) REIMB.

09/04/2019 $3,957.69 09/04/2020 $4,155.57 RE/MAX 2,004 09/05/2015 09/04/2023 $21.50 $3,769 NNN $2,508 One, 5 Year Option 09/04/2021 $4,363.35 09/04/2022 $4,581.52

04/30/2019 $4,616.63 04/30/2020 $4,801.30 RE/MAX 2,500 05/01/2016 09/04/2023 $20.49 $4,439 NNN $3,129 04/30/2021 $4,993.35 04/01/2022 $5,193.08

Waxing the City 2,000 01/01/2014 09/30/2019 $20.92 $3,626 Gross 01/01/2019 $3,771.00 One, 5 Year Option

Key Bank ATM N/A 06/01/2018 5/31/2021 N/A $2,600 Gross Two, 5 Year Options Drive-Thru

Total Square Feet: 24,486 Total Monthly Income: $63,857 Monthly Expense Reimbursement: $10,435

Total Occupied 24,236 Total Annual Income: $766,284 Annual Expense Reimbursement: $125,220 Square Feet:

Total Occupancy: 98.98%

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, as- sumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2017 Marcus & Millichap ACT ID Y0050314 COMPARABLE PROPERTIES

THE BRIDGE CENTER THE BRIDGE CENTER // COMPARABLE PROPERTIES COMPARABLE THE BRIDGE CENTER //

17 THE BRIDGE CENTER // COMPARABLE PROPERTIES

2 3 1 5

18 LEASE COMPARABLES – SUMMARY

THE BRIDGE CENTER

1 MEADOWS SHOPPING CENTER 2 LONE TREE ENTERTAINMENT DISTRICT1 3 MELLOW MUSHROOM 4 STRAWBERRY HILL 5 PARK MEADOWS STRIP CENTER THE BRIDGE CENTER // COMPARABLE PROPERTIES COMPARABLE THE BRIDGE CENTER //

19 LEASE COMPARABLES THE BRIDGE CENTER // COMPARABLE PROPERTIES

1 MEADOWS SHOPPING CENTER THE BRIDGE CENTER 8848 Maximus Dr. Lone Tree, CO 9233 Park Meadows Dr. Lone Tree, CO ASKING RENT/SF $20.00-$25.00

Occupancy 87.00% ASKING RENT/SF $24.00-$35.00 Available SF 2,587 SF Occupancy 98.98% Lease Type NNN Available SF 250 SF Date of Survey 8/14/2018 Lease Type NNN

ADDITIONAL INFO

Year Built 1986 / 2005

ADDITIONAL INFO Gross Leasable Area 19,755 SF

Year Built 1999 KEY TENANTS Gross Leasable Area 24,486 SF Clothes Mentor Arch Pizza California Closets Mr. Donut

20 2 LONE TREE ENTERTAINMENT DISTRICT 1 3 MELLOW MUSHROOM 9535 Park Meadows Dr. Lone Tree, CO 9271 Park Meadows Dr. Lone Tree, CO

ASKING RENT/SF $22.00-$26.00 ASKING RENT/SF $24.00

Occupancy 87.27% Occupancy 100%

Available SF 2,600 SF Available SF 6,795 SF

Lease Type NNN Lease Type NNN

Date of Survey 8/14/2018 Date of Survey 8/14/2018

ADDITIONAL INFO ADDITIONAL INFO

Year Built 2000 Year Built 2000

Gross Leasable Area 20,416 SF Gross Leasable Area 6,795 SF THE BRIDGE CENTER // COMPARABLE PROPERTIES COMPARABLE THE BRIDGE CENTER // KEY TENANTS KEY TENANTS

Rio Grande Mexican Restaurant Xanadu Total Wellness Robusto Room Woodhouse Day Spa Swingers Lounge and Indoor Golf

21 THE BRIDGE CENTER // COMPARABLE PROPERTIES

4 STRAWBERRY HILL 5 PARK MEADOWS STRIP CENTER 9068 Frosstrom Dr. Lone Tree, CO 10025 Park Meadows Dr. Lone Tree, CO

ASKING RENT/SF $20.00 ASKING RENT/SF $18.00

Occupancy 100% Occupancy 100%

Available SF 0 SF Available SF 0 SF

Lease Type NNN Lease Type NNN

Date of Survey 8/14/2018 Date of Survey 8/14/2018

ADDITIONAL INFO ADDITIONAL INFO

Year Built 2006 Year Built 2001 / 2012

Gross Leasable Area 10,000 SF Gross Leasable Area 7,314 SF

KEY TENANTS KEY TENANTS

State Farm Insurance Nail Salon Rocky Mountain Law Enforcement Karate Studio Physical Therapy Clinic Federal Credit Union

THE BRIDGE CENTER // COMPARABLE PROPERTIES SALES COMPARABLES – SUMMARY

THE BRIDGE CENTER

1 MEADOWS SHOPPING CENTER 2 MELLOW MUSHROOM 3 THE MEADOWS AT LONE TREE 4 LAKEWOOD CITY CENTER

24 2 4 1 2 3 25 PROPERTYTHE BRIDGE NAME CENTER HERE // // COMPARABLE COMPARABLE PROPERTIES PROPERTIES SALES COMPARABLES THE BRIDGE CENTER // COMPARABLE PROPERTIES

THE BRIDGE CENTER 1 MEADOWS SHOPPING CENTER 9233 Park Meadows Dr. Lone Tree, CO 8848 Maximus Dr. Lone Tree, CO

SALES PRICE $6,800,000 SALES PRICE $5,128,000

Year Built 1990 Sale Date 5/30/2018

Cap Rate 7.17% Year Built 1986 / 2005

Price Per SF $277.81 Cap Rate 6.50%

Price Per SF $259.58

NOTES Meadows Shopping Center was 100 percent occupied at the time of sale. .

26 2 MELLOW MUSHROOM 3 THE MEADOWS AT LONE TREE 9271 Park Meadows Dr. Lone Tree, CO 9234 Park Meadows Dr. Lone Tree, CO

SALES PRICE $3,215,000 SALES PRICE $5,150,000

Sale Date 6/21/2018 Sale Date 1/7/2017

Year Built 2000 Year Built 1986 / 2005

Cap Rate Owner/User Cap Rate 6.60%

Price Per SF $386.14 Price Per SF $321.25

NOTES NOTES The building was vacant at the time of sale and sold to an owner user, and is The Meadows at Lone Tree is directly across the street from The Bridge Center. next door to Subject. THE BRIDGE CENTER // COMPARABLE PROPERTIES COMPARABLE THE BRIDGE CENTER //

27 THE BRIDGE CENTER // COMPARABLE PROPERTIES

4 LAKEWOOD CITY CENTER 650-670 Wadsworth Blvd. Lakewood, CO

SALES PRICE $8,400,000

Sale Date 2/12/2017

Year Built 1993

Cap Rate 7.01%

Price Per SF $192.00

NOTES Lakewood City Center is located across the street from the Belmar Shopping Center, which is Lakewood’s largest shopping destination.

THE BRIDGE CENTER THE BRIDGE CENTER // MARKET OVERVIEW THE BRIDGE CENTER //

31 DENVER METRO AREA Developers Encouraged by Denver’s Strong Demographic Trends Tight vacancy in and around urban core triggers strong rent growth. Aided by sub- Construction 4 percent retail vacancy in the Central Denver and Colorado Boulevard/Cherry Development reaches its highest level since 1.6 million sq. ft. Creek submarkets, the metro’s overall rate continued to plummet over the past 2009 with the delivery of 1.6 million square feet. 12 months. Household growth well above national levels and intense apartment will be completed Northern submarkets receive much of this year’s THE BRIDGE CENTER // MARKET OVERVIEW development lured retailers to the Front Range, contributing to Denver’s shrinking new supply. vacancy. Rent growth corresponded to the strong space demand by eclipsing 4.5 percent for the second straight year ending in March. Asking rent gains in Aurora and West Denver were most pronounced, as the measure surpassed 10 percent in Vacancy Strong pre-leasing activity in 2018 contributes both areas. Aurora carries potential for considerably more rent growth in the near basis point 30 to metrowide vacancy sliding to 4.8 percent. The future, as the area’s rents are among the lowest in the metro. decrease in vacancy decrease will mark the ninth straight year-end vacancy drop. Foot traffic driving retailers to set up shop in Denver.As job creation advanced at a brisk pace in the past four quarters, Denver’s retail development remained robust. Grocery chains continued to expand their footprint with the addition of several Rents King Soopers and Natural Grocers locations. Fitness centers also strengthened Average asking rent logs strong growth as the figure 5.1% increase in climbs to $19.07 per square foot. This rise exceeds their presence within the metro as VASA Fitness and 24 Hour Fitness constructed asking rents space in Lakewood and Castle Rock, respectively. the prior five-year growth rate of 3.6 percent.

Investment Trends

►► Sales tempo remained steady over the past 12 months as single-tenant assets in high-traffic locations garner extensive investor interest. Buyers place emphasis on quick-service restaurants on Broadway and Colfax Avenue extending from the city center to outer-ring suburbs. Initial returns for these properties may reach into the low-6 percent band.

►► Community centers and grocery-anchored strip centers remain attractive to out-of- state buyers as many of these assets provide value-add opportunities. Neighborhoods near the Denver Boulder Turnpike were areas of focus for investors, as household formation in these parts is intense and the need for modern retail establishments continues to grow.

* Cap rates trailing 12 months through 1Q18; 10-Year Treasury up to March 29, 2018 ►► Average cap rates for multi-tenant assets compressed 30 basis points to 6.6 percent in the past four quarters as bidding intensified for well-located properties. The average Sources: CoStar Group, Inc.; Real Capital Analytics price per square foot increased 12 percent to $316 during the same period.

32 DENVER METRO AREA 1 s t Q 18 - 12-M o n t h T r e n d

EMPLOYMENT CONSTRUCTION VACANCY RENTS

increase in total square feet basis point decrease in 4.8% increase in the 2.4% employment Y-O-Y 860,000 completed Y-O-Y 20 vacancy Y-O-Y average asking rent Y-O-Y

• Job creation in Denver remained • Deliveries nearly doubled in the • Net absorption of more than 1 • With tightening vacancy, market strong over the past four quarters past 12 months compared with million square feet drove metro rents posted a notable gain, as roughly 35,000 new workers the previous yearlong time frame. vacancy down to 5.1 percent. putting the average asking rent at were staffed. Trade, transportation Northern outer-ring suburbs Vacancy has decreased by an $18.08 per square foot. This and utilities added about 8,000 received much of the new supply, average of 50 basis points each increase sits well above the positions, supported by amplified specifically the Northeast Denver year ending in March since the previous five-year average of 3.2 industrial development. submarket, where roughly start of the economic expansion. percent. • Employment growth in the leisure 360,000 square feet was added • Despite more than 170,000 • With revitalization efforts planned and hospitality sector gained to inventory. square feet completed in Central for parts of West Denver, momentum in the past 12 months • About 1.2 million square feet of Denver, strong demand helped specifically in the Sun Valley as approximately 6,500 jobs were retail space is underway, with the submarket retain one of the neighborhood, the area’s strong created. completions extending into late lowest vacancy rates in the rent growth should persist in the 2019. metro. near future. THE BRIDGE CENTER // MARKET OVERVIEW THE BRIDGE CENTER //

nd 2 most highly educated #1 Best Places 6th Highest 2nd Best State to live STATE IN THE NATION – FORBES FOR BUSINESS AND Income County – CENSUS BUREAU CAREERS In The U.S. – FORBES – CNN MONEY 33 DENVER METRO AREA Submarket Trends Lowest Vacancy Rates 2Q18 THE BRIDGE CENTER // MARKET OVERVIEW Y-O-Y Vacancy Asking Y-O-Y% Submarket BasisPoint Rate Rent Change Change

Colorado Boulevard- 2.5% -20 $28.99 2.6% *Forecast **2017-2022 Cherry Creek Sales Trends Central 3.6% -20 $20.32 3.7% Investor Sentiment Remains Positive Despite Retail’s Evolving Climate Downtown 3.8% -170 $25.37 4.5% ►► Multi-Tenant: Limited listings have kept sales activity among multi-tenant properties restrained yet consistent in the past five years as owners opted to hold assets amid tight vacancy. Southwest 4.3% -140 $14.36 -14.4% ►► Single-Tenant: Investor demand for single-tenant assets continued to strengthen in the past 12 months. Fast-casual restaurants generating initial yields in the high-5 West 5.0% 110 $17.04 10.1% percent range garnered considerable interest Northeast 5.2% 10 $16.46 1.7%

Outlook: Strong household formation in the Southeast 5.5% 60 $19.87 2.8% outermost suburbs will lure retailers to the area, leading to continued investor interest Aurora 5.7% -170 $15.44 14.3% in Denver’s retail market. South 5.7% 100 $19.24 7.5%

Northwest 6.7% -140 $15.65 8.2%

Overall Metro 5.1% -20 $18.08 4.8% * Trailing 12 months through 1Q18 over previous time period

Pricing trend sources: CoStar Group, Inc.; Real Capital Analytics

34 CITY OF LONE TREE

The City of Lone Tree was incorporated in 1995 and is 10 square miles in size and currently boasts a Median Household Income of $149,232. It is a premier Colorado community connected by great neighborhoods, vibrant public spaces, a beautiful natural environment, and thriving businesses.

The City of Lone Tree is part of the Denver South Economic Development Partnership, and at the strategic crossroads of C-470 and I-25. 2016 will be a record year for transportation and community investment projects within the City of Lone Tree. Over $500 million expected in current and upcoming projects. Part of this investment will result in an increased I-25 capacity from six lanes to eight lanes and expanded Lincoln Avenue north-boundRidgeGate on-ramp to Easttwo lanes. Other improvements as a result of this investment are a new Lincoln Pedestrian Bridge, Lone Tree Library and RTD Southeast Light Rail• ExtensionLight to name-Rail a few. Construction Begins

The median SingleRidgeGate Family Home SalesEast Price is Project $675,000 and the Average Single Family Home Sales Price is $764,315. The unemployment rate is 2.6 percent with city population• doublingLone during Tree business Cityhours from Center a resident population will be of 13,175 the to a daytime populationprimary of 25,216. ThereTOD is 3.6 location million square feetand of Retail include space and 3.1 million square feet of Office space. The 2015 vacancy rates were 3.6 percent and 9.2 percent respectively.up Into 2015 11 there million was $1.6 BillionSF inoffice total Retail space Sales.

There are• over 39,000,00RidgeGate square feet Eastof office Villagespace, attracting will employers including Charles Schwab,include Level 3 Communications up to 2.3 and Skymillion Ridge Medical SF Center.retail Charles

Schwab has 3,200 employees as of January 1, 2016 and they are the largest private MARKET OVERVIEW THE BRIDGE CENTER // sector employerand in Douglas up County. to Level7,000 3 Communications, new homes a Fortune 500 employer, has 1,200 employees in the Lone Tree community. Sky Ridge Medical Center has 3,000 employees including both staff and contract positions. As more residential and commercial development continues to flourish in the area we see a continued demand for employment expansion and growth in Retail sales driving new retailers to the area and maintaining a steady increase in rental rates for existing and future Retail space. 35 The City and the South Suburban Parks and the November election, property owners voted to Recreation District are partnering to develop a small unanimously approve the BID’s taxing authority. On park on land that is now a detention pond at the December 2, 2015, the BID Board of Directors southeast corner of Park Meadows Drive and approved a 15 mill property tax on their own Kimmer Drive. The proposed park is currently in the properties to support property maintenance and design stage with a master plan expected to be upgrades within the designated BID area. The approved in 2016. Thanks to support from Douglas creation of a BID sets the groundwork for the north County, Entertainment District visitors will also side of the Entertainment District, to operate as a enjoy a new trail connection providing direct access single, unified destination and enables collaboration LONE TREE BUSINESS IMPROVEMENTbetween the EntertainmentDISTRICT District and the Lincoln on projects throughout the Entertainment District in Light Rail Station. an organized setting. In 2015, property owners in the Entertainment District came together for the first time as a unified group to establish a new Business Improvement Private Investments Many businesses have made recent improvements District (BID). A BID is a public-private partnership designed to enhance – further evidence of their commitment to the area THE BRIDGE CENTER // MARKET OVERVIEW economic development within its boundaries. The BID boundary includes and the vison for the Entertainment District. United most of the businesses located on the north side of Park Meadows Drive. Artists Theater renewed its lease and has completed As a statutorily authorized entity, a BID has the authority to maintain and a multi-million dollar interior renovation, including construct improvements and promote and market its facilities. To raise the installation of premium stadium seating. The revenue, a BID can levy ad valorem property taxes, charge fees or tolls, Brunswick Zone bowling center is under new and create special assessments. ownership by Bowlero Bowl and has completed exterior improvements, and is underway with interior improvements. Other businesses with In the summer of 2015, the Lone Tree BID was initiated by a petition recent enhancements include Mimi’s Cafe, Mellow from property owners that owned more than 50 percent of the land and Mushroom, Fox and Hound Sports Tavern and assessed value of the District. As a result of the petition, the City Council Starbucks. SkyVenture Indoor Skydiving underwent incorporated the BID by ordinance on September 1, 2015. Subsequently, a rebranding and now operates as iFly Indoor the BID Board of Directors referred tax questions to its voters to provide Skydiving. Finally, new businesses to the revenue for its operations. In the November election, property owners Entertainment District moved in this year too, voted to unanimously approve the BID’s taxing authority. On DecemberCreating 2, 2015, athe Business BID Board Improvementof Directors approved District a 15 millon include Re/Max Structure, and Grillin’ Wings and dollar property tax on their own properties to support property maintenanceIn 2015, and property upgrades owners within thein thedesignated Entertainment BID area. The Things from Denver. District came together for the first time as a unified creation of a BID sets the groundwork for the north side of the Entertainment District, to operate as a single, unified destination group to establish a new Business Improvement and enables collaboration on projects throughout the Entertainment District in (BID). an organized A BID setting. is a public-private partnership designed to enhance economic development within Many businesses have made recent improvements – further evidenceits boundaries.of their commitment The BID to theboundary area and includes the vision most for the of Entertainment District. United Artists Theater renewed its lease andthe has businesses completed locateda multi-million on the dollar north interior side ofrenovation, Park including the installation of premium stadium seating. The BrunswickMeadows Zone bowling Drive. center As is undera statutorily new ownership authorized by Bowlero entity, Bowl a and has completed exterior improvements, and is underway with interiorBID improvements. has the authority Other businesses to maintain with recent and enhancementsconstruct include Mimi’s Cafe, Mellow Mushroom, Fox and Hound Sports Tavernimprovements and Starbucks. and promote and market its facilities. To raise revenue, a BID can levy ad valorem property taxes, charge fees or tolls, and create special assessments. 36 In the summer of 2015, the Lone Tree BID was initiated by a petition from property owners that owned more than 50 percent of the land and assessed value of the District. As a result of the Contact petition, the City Council incorporated the BID by For more information about the Entertainment ordinance on September 1, 2015. Subsequently, District, please contact Jeff Holwell, Economic the BID Board of Directors referred tax questions to Development Director, at 720-509-1276. its voters to provide revenue for its operations. In LONE TREE ENTERTAINMENT DISTRICT

Recent public and private investments in the Lone Tree Entertainment District show a commitment to a new vision for the area. The Entertainment District is home to a variety of attractions, including a movie theater, bowling center, indoor skydiving, miniature golf, hotels, an athletic club, health spas, several restaurants and financial institutions. The District is located east of Yosemite Street along both the north and south sides of Park Meadows Drive.

The City of Lone Tree has long recognized the value of the Entertainment DistrictEntertainment and has always seen the potential District Improvements for creating a more cohesive district and gathering place. Originally developed in the 1990s, the area has many successful businesses, but has been challenged with fractured ownership;Recent multiple pulic andproperty private management investments in companies; the one . he panel included experts in real estate ree ntertainment District show a commitment to development, uran design, traffic engineering and no sense of place or focal point; uncertain entries and vague boundaries;a new no vision champion for the forarea. implementing he ntertainment a vision for maret analysis. hey reviewed technical reports the District; and a lack of safe pedestrian connections. District is home to a variety of attractions, including and interviewed property owners, usiness a movie theater, owling center, indoor sydiving, representatives, one ree residents and elected miniature golf, hotels, an athletic clu, health spas, officials. he panel then presented its findings to Over the years, there were several attempts by the City and propertyseveral owners restaurants to organize and afinancial collaborative institutions. approach he City Council, concluding that the original intent of District is located east of osemite Street along the ntertainment District as a destination venue to solving common problems. However, because there was no commonoth vision, the north those and effortssouth sides were of neverar Meadows sustained. was never realied in part ecause the vision was Still committed to the District, in 2012 the City Council engaged Drive. never well articulated. he panel encouraged continued pulic investment and leadership, ut the services of the Colorado Chapter of the Urban Land Institute’s only after a more specific vision was created. Technical Advisory Panel (TAP). The panel included experts in real ollowing the recommendations of the I panel, in estate development, urban design, traffic engineering and market pursuit of that vision, the City engaged the services analysis. They reviewed technical reports and interviewed property of a consultant team including Design, orris Design, Ricer/Cunningham and Matrix Design. he owners, business representatives, Lone Tree residents and elected consultants conducted community meetings, met officials. The panel then presented its findings to City Council, with focus groups, and engaged a wide variety of

staeholders MARKET OVERVIEW THE BRIDGE CENTER // in a dialogue aout one ree, what concluding that the original intent of the Entertainment District maes it uniue, and how the ntertainment as a destination venue was never realized in part because the District could e improved to meet the desires of the community. his pulic process, and the vision was never well articulated. The panel encouraged continued creation in of the Vision Book, helped further public investment and leadership, but only after a more specific define the potential for the district and identified vision was created. several potential pulic and private improvements in the area.

Public Commitment and Investment In , exciting changes egan taing shape. he City of one ree has long recognied the value Currently37 under construction, and expected to open of the ntertainment District and has always seen in late Decemer weather permitting, is a new the potential for creating a more cohesive district intersection and traffic signal at ar Meadows and gathering place. Originally developed in the Drive at immer Drive. his fourway traffic signal s, the area has many successful usinesses, and pedestrian crossing will create a more efficient ut has een challenged with fractured ownership and safer connection for automoiles and multiple property management companies no pedestrians accessing usinesses on the north and sense of place or focal point uncertain entries and south sides of ar Meadows Drive. vague oundaries no champion for implementing a vision for the District and a lac of safe pedestrian Between this new intersection and osemite Street connections. to the west, raised medians along ar Meadows Drive will e installed to improve traffic flow and Over the years, there were several attempts y the eliminate dangerous left turn movements coming City and property owners to organie a out of the ntertainment District from oth the collaorative approach to solving common north and the south. In , construction will prolems. owever, ecause there was no common egin on an additional lane on northound osemite vision, those efforts were never sustained. Still dedicated to vehicles turning right, or east, onto committed to the District, in the City Council ar Meadows Drive. his improvement will relieve engaged the services of the Colorado Chapter of the congestion in the area and improve access to ran and Institute’s Technical Advisory Panel usinesses.

DEMOGRAPHICS OVERVIEW

POPULATION 1 Miles 3 Miles 5 Miles HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 Miles Total Average Household Retail . 2022 Projection $86,105 $93,148 $95,491 Expenditure Total Population 10,650 75,454 225,612 . Consumer Expenditure Top 10 . 2017 Estimate Categories

THE BRIDGE CENTER // MARKET OVERVIEW Total Population 9,305 70,177 204,516 Housing $22,782 $24,561 $24,994 . 2010 Census Transportation $14,947 $16,818 $17,204 Total Population 8,251 63,035 184,376 Shelter $14,455 $15,489 $15,766 . 2000 Census Personal Insurance and Pensions $8,859 $9,625 $9,850 Total Population 5,171 52,582 140,806 Food $8,279 $8,937 $9,106 . Current Daytime Population Health Care $5,024 $5,962 $6,154 2017 Estimate 17,972 113,111 269,293 Cash Contributions $4,051 $5,088 $5,249 HOUSEHOLDS 1 Miles 3 Miles 5 Miles Entertainment $3,932 $4,364 $4,459 . 2022 Projection Utilities $3,708 $4,102 $4,195 Household Furnishings and $2,388 $2,515 $2,544 Total Households 4,873 32,094 89,583 Equipment . 2017 Estimate POPULATION PROFILE 1 Miles 3 Miles 5 Miles Total Households 4,062 28,832 79,452 . Population By Age Average (Mean) Household Size 2.38 2.45 2.55 2017 Estimate Total Population 9,305 70,177 204,516 . 2010 Census Under 20 23.94% 25.37% 27.32% Total Households 3,625 25,551 71,149 20 to 34 Years 28.18% 20.01% 18.12% . 2000 Census 35 to 39 Years 6.48% 6.68% 6.98% Total Households 1,965 19,125 50,653 40 to 49 Years 13.74% 14.88% 15.22% . Occupied Units 50 to 64 Years 18.18% 20.55% 20.20% 2022 Projection 4,873 32,094 89,583 Age 65+ 9.47% 12.54% 12.15% 2017 Estimate 4,144 29,401 81,000 Median Age 33.68 38.50 38.30 HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles . Population 25+ by Education Level . 2017 Estimate 2017 Estimate Population Age 25+ 6,320 48,326 137,500 $150,000 or More 29.77% 28.94% 28.77% Elementary (0-8) 0.14% 0.32% 0.35% $100,000 - $149,000 20.78% 23.73% 24.30% Some High School (9-11) 0.99% 1.07% 1.17% $75,000 - $99,999 10.82% 13.63% 13.51% High School Graduate (12) 15.74% 11.97% 11.90% $50,000 - $74,999 16.31% 14.48% 14.66% Some College (13-15) 23.89% 19.19% 19.12% $35,000 - $49,999 9.62% 7.95% 7.61% Associate Degree Only 6.74% 6.47% 6.78% Under $35,000 12.69% 11.29% 11.14% Bachelors Degree Only 33.91% 38.19% 38.02% Average Household Income $145,086 $141,147 $140,550 Graduate Degree 18.44% 22.35% 22.28% Median Household Income $101,121 $104,926 $105,556 Per Capita Income $63,337 $58,007 $54,737

38 THE BRIDGE CENTER

EXCLUSIVELY LISTED BY

BARRY HIGGINS Senior Vice President Investments Denver, Colorado Office 303.328.2012 [email protected] License CO EA 748415