BLUE RHINO, a Division of Ferrellgas | Greater Denver Metro, Colorado

BLUE RHINO, a division of Ferrellgas | Greater Denver Metro, Colorado

RON WEBERT J. MARK LARSON HERRICK JOHNSON Principal Vice Chairman Senior Vice President 303.501.8777 213.623.2022 951.276.3632 [email protected] [email protected] [email protected] BRE License #00546735 BRE License #01013436 BLUE RHINO, a Division of Ferrellgas | Commerce City, Colorado TABLE OF CONTENTS

SECTION I - EXECUTIVE OVERVIEW SECTION III - VALUATION UNDERWRITING SUPPORT Executive Summary...... 4 Investment Analysis...... 16 Property Overview...... 5 SECTION IV - TENANT INFORMATION SECTION II - PROPERTY DESCRIPTION Rent Roll...... 18 Property Description...... 7 Tenant Summary...... 19 Property Photos...... 8 Aerial View...... 10 Leased Area Aerial View...... 11 Local Map...... 12 Regional Map...... 13 Denver Metro Map...... 14

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No warranty or representation has been made to accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice. SECTION I

EXECUTIVE OVERVIEW BLUE RHINO, a Division of Ferrellgas | Commerce City, Colorado EXECUTIVE SUMMARY

PRICE: $6,900,000

AREA: 14,410± SF plus 4.8 acres

NET OPERATING INCOME: $368,208

TENANT: Blue Rhino, a division of Ferrellgas, LP

LEASE GUARANTOR: Ferrellgas, LP - NYSE: FGP

OCCUPANCY: 100%

LEASE EXPIRATION: September 30, 2025

USE: Natural Gas Refueling Facility - Tenant requires entire site to facilitate operations, storage and distribution.

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No warranty or representation has been made to accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice. BLUE RHINO, a Division of Ferrellgas | Commerce City, Colorado PROPERTY OVERVIEW

Blue Rhino, a division of Ferrellgas LP, the nation’s second largest provider of propane in the United States, is located at 9771 Hanover Court East in Commerce City, Colorado, also home to industrial users FedEx, Sinclair Oil, Midwest Motor Express, Saia Freightlines, Weyerhauser, Purina, a regional distribution facility for Home Depot, among many. This mission critical propane canister refueling facility is just south of Interstate I-76 and north of East 96th Avenue, in the greater Denver Metro Area. It is a central and critical location for servicing the 3 million people in the Denver area, as well as the 7 million potential customers of the Intermountain West; including Utah to the west, Kansas and Nebraska to the east, Wyoming and Idaho to the north as well as New Mexico to the south. This is only one of nine filling and distribution locations in the U.S. The single tenant industrial asset is comprised of two buildings totaling 14,410 square feet (including 3,500 square feet of mezzanine), one 6,500 square feet and the other Introduction containing 4,410 square feet. One building is for canister refurbishment while the other is for filling and palletizing canisters. Blue Rhino, in order to facilitate its operations, must utilize the entire 4.8+ acres of land which includes the improvements and a large tarmac that is an integral part of the property as it is utilized for storage of filled canisters ready to be shipped and empty canisters ready for refurbishment, re-filled and shipped. The property was a build to suit in 2003 and has permitting that is difficult to obtain as well as custom piping and plumbing designed to accommodate this use, which obviously insures the likelihood of continued long term tenancy. The facility ships approximately 1.5 million canisters annually to a wide array of customers including Lowes, Home Depot, C-Stores, among many. The property is within a 20 minute drive of the Denver International Airport and the asset is a perfect investment for an investor looking for a long term hold of a well located, stabilized Net Leased property, with an excellent credit tenant.

Property Highlights ●● Net Leased Single Tenant Industrial Asset - Multiple Renewal Options ●● Outstanding Credit - NYSE: FGP - $2 Billion Annual Revenue ●● Well Located Property ●● 100% Leased - Stabilized Income ●● Annual Rent Increases of 2% ●● Outstanding 1031 Exchange Opportunity ●● Convenient Access to I-76, I-70, I-235 & I-25 Freeways

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No warranty or representation has been made to accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice. SECTION II

PROPERTY DESCRIPTION BLUE RHINO, a Division of Ferrellgas | Commerce City, Colorado PROPERTY DESCRIPTION

Property Description

Address: 9771 Hanover Court East Commerce City, Colorado 80640

Building Square Footage: 14,410± Square Feet

Land Area: 4.8± Acres - Includes .7 acres leased on adjacent property

Parking: 21 Spaces plus 12 spaces for delivery vehicles and trailers

Construction Type: Steel and Masonry

Number Of Buildings: Two Buildings (6,500± SF and 7,910± SF, including 3,500± SF of mezzanine space)

Clear Height: 20 Feet

Assessor’s Parcel Number: 1721-15-4-01-008

Zoning: M-2 / Medium Density Industrial

Year Built: 2003

Doors: Two Dock High and Three Ground level

Roof: Flat

Ingress/Egress: Via Hanover Court East, just off of East 96th Avenue and Heinz Way

Cylinder Storage: Approximately 63,000 units on premises

Storage Tank: One 30,000± gallon propane tank

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Leased Area of .7 Acres 9731 Hanover Court East Commerce City, CO 80640

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No warranty or representation has been made to accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice. SECTION III

VALUATION UNDERWRITING SUPPORT BLUE RHINO, a Division of Ferrellgas | Commerce City, Colorado INVESTMENT ANALYSIS

Blue RhinoRhinoBlue Blue RhinoRhinoBlue Denver MSA Denver MSA 5-Year Cash Flow Analysis 5-Year Cash Flow Analysis Fiscal Year Beginning July 2018 Fiscal Year Beginning July 2018

INITIAL INVESTMENT MORTGAGE DATA 1ST LIENLIEN1ST INITIAL INVESTMENT MORTGAGE DATA 1ST LIENLIEN1ST Purchase Price $6,900,000 Loan Amount $0 Purchase Price $6,900,000 Loan Amount $4,140,000 +Acquisition Costs $0 Interest Rate 5.000% +Acquisition Costs $0 Interest Rate 5.000% -Mortgage(s) $0 Amortization Period 25 Years -Mortgage(s) $4,140,000 Amortization Period 25 Years +Loan Fees & Points $0 Periodic Payment $0 +Loan Fees & Points $41,400 Periodic Payment $24,202 Initial Investment $6,900,000 Annual Debt Service $0 Initial Investment $2,801,400 Annual Debt Service $290,424 CASH FLOW CASH FLOW Year 11Year Year 22Year Year 33Year Year 44Year Year 55Year Year 11Year Year 22Year Year 33Year Year 44Year Year 55Year For the Year Ending For the Year Ending Jun-2019Jun-2019 Jun-2020Jun-2020 Jun-2021Jun-2021 Jun-2022Jun-2022 Jun-2023Jun-2023 Jun-2019Jun-2019 Jun-2020Jun-2020 Jun-2021Jun-2021 Jun-2022Jun-2022 Jun-2023Jun-2023 POTENTIAL RENTAL INCOME (PRI) $378,000 $385,560 $393,271 $401,137 $409,159 POTENTIAL RENTAL INCOME (PRI) $378,000 $385,560 $393,271 $401,137 $409,159 -Vacancy / Credit Loss $0 $0 $0 $0 $0 -Vacancy / Credit Loss $0 $0 $0 $0 $0 EFFECTIVE RENTAL INCOME $378,000 $385,560 $393,271 $401,137 $409,159 EFFECTIVE RENTAL INCOME $378,000 $385,560 $393,271 $401,137 $409,159 +Other Income $0 $0 $0 $0 $0 +Other Income $0 $0 $0 $0 $0 GROSS OPERATING INCOME (GOI) $378,000 $385,560 $393,271 $401,137 $409,159 GROSS OPERATING INCOME (GOI) $378,000 $385,560 $393,271 $401,137 $409,159 -Operating Expenses $9,792 $12,000 $12,240 $12,485 $12,734 -Operating Expenses $9,792 $12,000 $12,240 $12,485 $12,734 NET OPERATING INCOME (NOI) $368,208 $373,560 $381,031 $388,652 $396,425 NET OPERATING INCOME (NOI) $368,208 $373,560 $381,031 $388,652 $396,425

NET OPERATING INCOME (NOI) $368,208 $373,560 $381,031 $388,652 $396,425 NET OPERATING INCOME (NOI) $368,208 $373,560 $381,031 $388,652 $396,425 -Annual Debt Service 1st Lien $0 $0 $0 $0 $0 -Annual Debt Service 1st Lien $290,424 $290,424 $290,424 $290,424 $290,424 CASH FLOW BEFORE TAXES $368,208 $373,560 $381,031 $388,652 $396,425 CASH FLOW BEFORE TAXES $77,784 $83,136 $90,607 $98,228 $106,001

Value using Acquisition Cap Rate $7,000,000 $7,140,000 $7,283,000 $7,429,000 $7,577,000 Value using Acquisition Cap Rate $7,000,000 $7,140,000 $7,283,000 $7,429,000 $7,577,000 Loan Balance $0 $0 $0 $0 $0 Loan Balance $4,054,637 $3,964,907 $3,870,586 $3,771,439 $3,667,220 Loan to Value 0.00% 0.00% 0.00% 0.00% 0.00% Loan to Value 57.92% 55.53% 53.14% 50.77% 48.40% Debt Service Coverage Ratio 0.00 0.00 0.00 0.00 0.00 Debt Service Coverage Ratio 1.27 1.29 1.31 1.34 1.36 Before Tax Cash on Cash 5.34% 5.41% 5.52% 5.63% 5.75% Before Tax Cash on Cash 2.78% 2.97% 3.23% 3.51% 3.78%

SALES PROCEEDS INVESTMENT PERFORMANCE SALES PROCEEDS INVESTMENT PERFORMANCE Projected Sales Price (EOY 5) $7,702,000 Internal Rate of Return (IRR) 6.69% Projected Sales Price (EOY 5) $7,702,000 Internal Rate of Return (IRR) 8.59% Acquisition CAP Rate 5.34% Acquisition CAP Rate 5.34% Cost of Sale $308,080 Cost of Sale $308,080 Year 1 Cash-on-Cash 5.34% Year 1 Cash-on-Cash 2.78% Mortgage Balance 1st Lien $0 Mortgage Balance 1st Lien $3,667,220 Gross Rent Multiplier 18.25 Gross Rent Multiplier 18.25 Sales Proceeds Before Tax $7,393,920 Loan to Value 0.00% Sales Proceeds Before Tax $3,726,700 Loan to Value 57.92% Debt Service Coverage Ratio 0.00 Debt Service Coverage Ratio 1.27

Mark Larson, Vice Chairman Mark Larson, Vice Chairman Lee & Associates Lee & Associates 515 S. Flower Street 36th Floor, Los Angeles CA 90071 515 S. Flower Street 36th Floor, Los Angeles CA 90071

Phone: 2136232022 © Copyright 2011-2018 CRE Tech, Inc. All Rights Reserved. Phone: 2136232022 © Copyright 2011-2018 CRE Tech, Inc. All Rights Reserved. Email: [email protected] | lee-associates.com Email: [email protected] | lee-associates.com DISCLAIMER: Year 5 sales price based on estimated NOI in year 6. All information is based on estimated forecast and are intended for the purpose of example projections and analysis. DISCLAIMER: Year 5 sales price based on estimated NOI in year 6. All information is based on estimated forecast and are intended for the purpose of example projections and analysis. The information presented herein is provided as is, without warranty of any kind. Lee & Associates nor CRE Tech, Inc. assume any liability for errors or omissions. This information is not The information presented herein is provided as is, without warranty of any kind. Lee & Associates nor CRE Tech, Inc. assume any liability for errors or omissions. This information is not intended to replace or serve as substitute for any legal, investment, real estate or other professional advice, consultation or service. intended to replace or serve as substitute for any legal, investment, real estate or other professional advice, consultation or service. Page 1 of 2 Page 1 of 2 Page 16

No warranty or representation has been made to accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice. SECTION IV

TENANT INFORMATION BLUE RHINO, a Division of Ferrellgas | Commerce City, Colorado RENT ROLL

Property: 9771 Hanover Court East Commerce City, Colorado 80640

Tenant: Blue Rhino, a division of Ferrellgas, LP, a Missouri Limited Partnership

Lease Commencement: January 1, 2004

Lease Expiration: September 30, 2025

Lease Guarantor: Ferrellgas, LP - NYSE: FGP

Current Rent: $31,500 per month; next increase April 1, 2019

Use: Natural Gas Refueling Facility

Option: Two Seven and One Half (7.5) Year Options

Square Feet: Approximately 14,410 square feet; 10,910 SF in two buildings & 3,500 SF of Mezzanine

Rent Increases: Two percent (2%) annual increases

Security Deposit: None

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The company was founded in 1939 by Alfred Carl (A.C.) Ferrell On February 9, 2004, Ferrellgas announced its blockbuster merger in Kansas. Established as A.C. Ferrell Butane Gas Company, the with Blue Rhino Corporation, the nation’s largest provider of business prospered during World War II and the immediate post- propane by portable tank exchange. Under the terms of the war years. The company sold gas heaters and floor furnaces from agreement, Ferrellgas purchased shares of Blue Rhino (the its storefront on Commercial Street in downtown Atchison. In 1947, company was traded on the Nasdaq under the symbol RINO) A.C. Ferrell erected a bulk plant on a rail siding in East Atchison to in a transaction worth approximately $340 million. On the day of help supply bottled gas to local customers the merger agreement, James Ferrell called tank exchange the fastest growing portion of the retail propane industry. In 2004 the In 1965, the company had reverted to selling strictly propane and company had a nationwide exchange network of 29,000 selling had dwindled to only four employees. James Ferrell, the son, locations. That number has since grown to more than 45,000 selling renamed the company Ferrellgas. The company expanded across locations. Blue Rhino was founded in 1994, around the same time the Missouri River to acquire a Rushville, Missouri dealer in 1968. of Ferrellgas Partners, L.P.’s initial public offering, and remains In the next 10 years, the company acquired other Midwestern headquartered in Winston-Salem, North Carolina. dealers and established a wholesale operation, and profited amid the energy crises of 1973 and 1979. During that time, the Ferrellgas Known mostly for its exchange of 20-pound barbeque grill headquarters shifted, moving first to Platte City, Missouri before tanks, Blue Rhino boasts other product lines. Global Sourcing, a moving further east to Kearney. Its expansion continued, opening company acquired by Blue Rhino in 2000, is the world’s largest Ferrell North America, a propane and feedstock distribution arm, supplier of barbeque grills. Its products are sold across North in 1977. To accommodate a growing staff, new offices were America, South America, Europe, and Asia. Global Sourcing constructed in Liberty, Missouri, in 1981 and 1983. Those offices, products include Uniflame-branded barbeque grills, as well as which remain in use by corporate support employees today, patio heaters, outdoor fireplaces, mosquito eliminators, charcoal would serve as Ferrellgas’ headquarters until 2004, with the and electric grills, and indoor fireplaces sold under SkeeterVac, company moved its executive offices to their current location in Endless Summer, and other private labels. nearby Overland Park, Kansas.

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No warranty or representation has been made to accuracy of the foregoing information. Terms of sale or lease and availability are subject to change or withdrawal without notice.