Ashley Furniture Algonquin, Il

ASHLEY FURNITURE ALGONQUIN, IL

OFFERING MEMORANDUM 2 INVESTMENT OVERVIEW 3 INVESTMENT OVERVIEW

• Ashley HomeStore in Algonquin, Illinois | 50 INVESTMENT OVERVIEW Miles Northwest of Chicago • Nearly 9.5 Years Remaining on a Double-Net (NN) Lease With 4 Percent Rent Increases Marcus & Millichap is pleased to present Ashley HomeStore in Every Five Years Algonquin, Illinois; 50 miles northwest of Chicago. After 10 years of successful operation at this location, the tenant demonstrated • Tenant Has Operated at this Location for More commitment by exercising two of their five-year extension Than 10 Years and Exercised Two of their options early in December 2016. One, five-year extension option remains. Ashley Furniture currently has 9.5 years remaining on Five-Year Renewal Options Early in December a double-net (NN) lease with minimal landlord responsibilities. 2016 | One, Five-Year Extension Remains The lease features 4 percent rent bumps every five years. The lease is guaranteed by Rockledge Furniture, Limited Liability • The Lease is Guaranteed by Rockledge Company (LLC), which is a 20-unit entity and a wholly owned Furniture, Limited Liability Company (LLC) | subsidiary of Ashley Furniture Industries, Incorporated (Inc). 20-Unit Entity and Wholly Owned Subsidiary This Ashley HomeStore benefits from its visibility on South of Ashley Furniture Industries, Incorporated Randall Road with more than 350 feet of frontage. South Randall (Inc) Road is a major north-south corridor connecting Crystal Lake and Aurora, stretching 31 miles and seeing more than 33,900 vehicles per day (VPD). The asset is located within a dense trade • Ideally Located Along South Randall Road | area. There is nearly two million square feet of retail within three One of the Busiest Corridors West of Chicago miles, anchored by strong national credits including: Wal-Mart, | More Than 33,900 Vehicles Per Day (VPD) Target, Home Depot, Lowes, Costco, and Trader Joe’s.

The asset also benefits from affluent demographics. There are • Dense Regional Trade Area | Nearly Two more than 139,000 residents with an average household income Million Square Feet of Retail within Three (AHHIC) greater than $104,000 within five miles. Additional Miles Anchored by Strong National Credits tenants in the immediate vicinity include: Meijer, Kohl’s, | Wal-Mart, Target, Home Depot, Lowes, HomeGoods, T.J. Maxx, Dollar Tree, The RoomPlace, CVS/ Pharmacy, JCPenney, Walgreens, The Great Escape, Enterprise, Costco, Trader Joe’s Hobby Lobby, Golden Corral, Sleep Number, Chili’s, FedEx, Sonic, Chase Bank, and many more. • Significant Capital Contributions to Randall Road Corridor | More Than $15 Million in Active Construction Permits | Walmart Remodel, New Burger King, Urgent Care Center, and Much More

• Affluent Demographics | More Than 139,000 Residents With An Average Household Income (AHHI) Greater Than $104,000 Within Five Miles

FINANCIAL OVERVIEW LEASE SUMMARY

LEASE COMMENCEMENT PRICE $9,300,000 4/6/2007 DATE

CAP RATE 7.50% LEASE EXPIRATION DATE 4/5/2027

NOI $700,000 LEASE TERM 10 Years

TERM REMAINING 9.5 Years PRICE PER SQUARE FOOT $186.00 INCREASES 4% Every 5 Years RENT PER SQUARE FOOT $14.00 OPTIONS TO RENEW 1, 5-Year YEAR BUILT 2006 FIRST RIGHT OF REFUSAL Yes

APPROXIMATE LOT SIZE +/- 4.46 Acres OPTION TO TERMINATE One Time Option: 4/5/2022

GROSS LEASEABLE AREA 50,000 ANNUALIZED OPERATING DATA TYPE OF OWNERSHIP Fee Simple ANNUAL MONTHLY BASE RENT INCREASES RENT RENT Rockledge Furniture, LEASE GUARANTOR Limited Liability 4/6/2017 4/5/2022 $700,000 $58,333 Company (LLC) 4/6/2022 4/5/2027 $728,000 $60,667 4% LEASE TYPE Double-Net (NN) RENEWAL OPTIONS

ROOF AND STRUCTURE Landlord 4/6/2027 4/5/2032 $952,342 $79,362 31%

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. 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. Marcus & Millichap is a trademark of © 2016 Marcus & Millichap. Activity ID: Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of © 2016 Marcus & Millichap. Activity ID: 6 TENANT OVERVIEW 7 DEMOGRAPHICS Village of 14 Lakewood 59 12 Coral Cary Lake 47 Barrington North TENANT OVERVIEW - ASHLEY HOME FURNITURE DEMOGRAPHICS 31 Fox River Barrington Grove Trout Valley 22 20 S Lake Zurich IU D A 22 Ashley Furniture Industries, Incorporated (Inc) is an American home furnishings R 14 Lake in manufacturer and retailer, headquartered in Arcadia, Wisconsin. The company E IL the Hills is owned by father and son team Ron and Todd Wanek. Ashley Furniture M 12 5 S manufactures and distributes home furniture products throughout the world. IU 59 D Huntley A Ashley Furniture Industries sells home furnishings and accessories available 90 R Algonquin E Deer through two distribution channels: independent furniture dealers and more than Harmony IL M Park 750 Ashley Furniture HomeStores. The HomeStores are independently owned 31 62 and operated by Ashely Furniture licensees in the United States, Canada, 3 Barrington Mexico, Central America, and Japan. The company has manufacturing and E IL distribution facilities in Wisconsin, Mississippi, Pennsylvania, North Carolina, 47 M SITE 14 Florida, China, and Vietnam. 1

68 20 90 31 Carpentersville 59 62 Inverness

Allens Gilberts 47 72 West Dundee Hampshire Corners 72 Sutton 62 TENANT PROFILE Sleepy Hollow South 72 72 90 Barrington TENANT TRADE NAME Ashley Furniture HomeStore 31 72 59 62 OWNERSHIP Private Pingree Grove Rockledge Furniture, 90 TENANT Wildwood Hoffman 90 Limited Liability Company (LLC) 47 Valley 72 Estates Rockledge Furniture, 20 31 LEASE GUARANTOR Burlington Limited Liability Company (LLC) west Highland 58 1-Mile 3-Mile 5-Mile 1-Mile 3-Mile 5-Mile 1-Mile 3-Mile58 5-Mile Acres 58 NUMBER OF LOCATIONS 15+ Locations POPULATION HOUSEHOLDS HOUSEHOLD (HH) INCOMES Elgin 59 HEADQUARTERED Arcadia, Wisconsin 2000 Population 4,484 28,365 106,591 2000 Households 1,605 9,366 34,464 2017 Average HH Income $131,884 $128,021 $104,853 2010 Population 8,203 38,192 135,956 2010 Households 2,653 12,764 44,584 2017 Median HH Income $113,731 109,201 $86,961 WEB SITE www.ashleyfurniturehomestore.com 2017 Population 8,892 40,515 139,849 2017 Households 2,904 13,575 45,830 2017 Per Capita Income $43,071 $42,895 $34,361 2022 Population 9,193 41,481 142,051 2022 Households 3,008 13,905 46,542

ABOUT ALGONQUIN, ILLINOIS

Algonquin is a dynamic, progressive community with beautiful neighborhoods and vibrant commercial districts. Located northwest of Chicago, Algonquin is one of the area’s premier suburbs with excellent schools, beautiful parks, and tree-lined residential streets. Throughout its history, Algonquin has distinguished itself for its unique innovations and progressive planning to provide citizens with some of the most effective municipal services in Illinois.

Algonquin is known as “The Gem of the Fox River Valley”, since its downtown is nestled in the heart of Illinois’ Fox River Valley. Established randall road corridor in 1890 and long known as a small river community, the village is making The Randall Road corridor is a regional shopping, dining, and entertainment a transition into a major regional hub, as it has experienced considerable corridor that is home to a variety of commercial centers, including lifestyle centers suburban growth over the past 20 years. Now stretching all the way west to such as Algonquin Commons, the Algonquin Galleria, and the Esplanade, power the busy Randall Road corridor, Algonquin has become a major commercial centers like Woods Creek Commons, Oakridge Court, and River Pointe, as well as destination, with popular shopping centers and restaurants, as well as stand-alone big-box stores and small retail shops. The retail corridor also extends a growing corporate campus. Additionally, the village continues to see partially into nearby Lake in the Hills and Carpentersville. In addition to serving the considerable residential growth. The population increased more than 82 needs of the local western Algonquin area, the corridor also functions as a major percent within one mile of the subject property from 2000 to 2010. destination serving a vast region that includes McHenry County and Kane County.

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. Marcus & Millichap is a trademark of © 2016 Marcus & Millichap. Activity ID: MARCUS & MILLICHAP HEREBY ADVISES ALL PROSPECTIVE PURCHASERS OF NET LEASED PROPERTY AS FOLLOWS:

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property. ASHLEY FURNITURE ALGONQUIN, IL

2451 SOUTH RANDALL ROAD | ALGONQUIN, ILLINOIS 60102

BROKER OF RECORD: STEVEN WEINSTOCK | MARCUS & MILLICHAP | OAK BROOK TERRACE, IL 60181 | LICENSE: 471.011175