CAPITAL ONE RETAIL CONDO 501 BROADWAY – SOHO – NEW YORK CITY OFFERING MEMORANDUM Confidentiality & Disclaimer

THE NNN PRO GROUP

CAPITAL ONE RETAIL CONDO 501 BROADWAY – SOHO – NEW YORK CITY OFFERING MEMORANDUM confidentiality & disclaimer

Marcus & Millichap hereby advises all prospective purchasers guarantors may fail to pay the lease rent or property taxes, or Federal regulations, the physical condition of the of Net Leased property as follows: may fail to comply with other material terms of the lease; cash improvements thereon, or the financial condition or business flow may be interrupted in part or in whole due to market, prospects of any tenant, or any tenant’s plans or intentions to The information contained in this Marketing Brochure has economic, environmental or other conditions. Regardless of continue its occupancy of the subject property. The been obtained from sources we believe to be reliable. tenant history and lease guarantees, Buyer is responsible for information contained in this Marketing Brochure has been However, Marcus & Millichap has not and will not verify any of conducting his/her own investigation of all matters affecting obtained from sources we believe to be reliable; however, this information, nor has Marcus & Millichap conducted any the intrinsic value of the property and the value of any long- Marcus & Millichap has not verified, and will not verify, any of investigation regarding these matters. Marcus & Millichap term lease, including the likelihood of locating a replacement the information contained herein, nor has Marcus & Millichap makes no guarantee, warranty or representation whatsoever tenant if the current tenant should default or abandon the conducted any investigation regarding these matters and about the accuracy or completeness of any information property, and the lease terms that Buyer may be able to makes no warranty or representation whatsoever regarding provided. negotiate with a potential replacement tenant considering the the accuracy or completeness of the information provided. All location of the property, and Buyer’s legal ability to make potential buyers must take appropriate measures to verify all As the Buyer of a net leased property, it is the Buyer’s alternate use of the property. of the information set forth herein. responsibility to independently confirm the accuracy and completeness of all material information before completing By accepting this Marketing Brochure you agree to release NON-ENDORSEMENT NOTICE any purchase. This Marketing Brochure is not a substitute for Marcus & Millichap Real Estate Investment Services and hold it your thorough due diligence investigation of this investment harmless from any kind of claim, cost, expense, or liability Marcus & Millichap Real Estate Investment Services, Inc. opportunity. Marcus & Millichap expressly denies any arising out of your investigation and/or purchase of this net (“M&M”) is not affiliated with, sponsored by, or endorsed by obligation to conduct a due diligence examination of this leased property. any commercial tenant or lessee identified in this marketing Property for Buyer. package. The presence of any corporation’s logo or name is CONFIDENTIALITY AND DISCLAIMER not intended to indicate or imply affiliation with, or Any projections, opinions, assumptions or estimates used in sponsorship or endorsement by, said corporation of M&M, its this Marketing Brochure are for example only and do not The information contained in the following Marketing affiliates or subsidiaries, or any agent, product, service, or represent the current or future performance of this property. Brochure is proprietary and strictly confidential. It is intended commercial listing of M&M, and is solely included for the The value of a net leased property to you depends on factors to be reviewed only by the party receiving it from Marcus & purpose of providing tenant lessee information about this that should be evaluated by you and your tax, financial and Millichap and should not be made available to any other listing to prospective customers. legal advisors. person or entity without the written consent of Marcus & Millichap. By acceptance of this information, the recipient ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. Buyer and Buyer’s tax, financial, legal, and construction agrees to treat this information as strictly confidential, not to PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR advisors should conduct a careful, independent investigation use it for any purpose other than in connection with an MORE DETAILS. of any net leased property to determine to your satisfaction analysis of the potential sale of the property from the owner with the suitability of the property for your needs. as contemplated herein and that the owner of the property may enforce these restrictions. This Marketing Brochure has Like all real estate investments, this investment carries been prepared to provide summary, unverified information to significant risks. Buyer and Buyer’s legal and financial advisors prospective purchasers, and to establish only a preliminary must request and carefully review all legal and financial level of interest in the subject property. The information documents related to the property and tenant. While the contained herein is not a substitute for a thorough due tenant’s past performance at this or other locations is an diligence investigation. Marcus & Millichap has not made any important consideration, it is not a guarantee of future investigation, and makes no warranty or representation, with success. Similarly, the lease rate for some properties, including respect to the income or expenses for the subject property, newly-constructed facilities or newly-acquired locations, may the future projected financial performance of the property, be set based on a tenant’s projected sales with little or no the size and square footage of the property and record of actual performance, or comparable rents for the improvements, the presence or absence of contaminating area. Returns are not guaranteed; the tenant and any substances, PCB’s or asbestos, the compliance with State and Table of Contents

Financial Overview

Investment Highlights & Overview Projected Cash Flow Statement Investment Summary Sales Comparables Rental Comparables Tenant Overview

Location Overview

Location Overview Market Overview – Manhattan Market Overview- SoHo Surrounding Area Map Floor Plans and Other Info Subway Map Local Map Regional Map Property Photos Surrounding Area Photos

Demographics FINANCIAL OVERVIEW Reimbursements RentalEscalations in Option Period 2 RentalEscalations in Option Period 1 RentalEscalations Term Base Options to Renew TypeLease Remaining TermLease ExpirationLease CommencementLease Date TermLease Guarantor Tenant Ownership Type Property Per SF Rent SF Price Per Operating Net Income Annual Rent RateCAP Price Ownership Block /Lot Estimated Condo (SF) Size City, State, Zip Address Property Name Property PRICE: Located at 501 Broadway Services information This information is a service and bears has mark been all of risk secured Marcus $46,000,000 for any & from Millichap inaccuracies sources Real *Based on 8/1/19 rental increase, seller will credit the difference in rent at closing. thein at differencerentcredit will *Based seller 8/1/19on increase, rental we . PROPERTY DESCRIPTION PROPERTY Any Estate believe projections, LEASE SUMMARYLEASE Investment THE OFFERING THE to be reliable, opinions, Services, RE Tax Increases Over $99,327; CAM $99,327; Increases Over Tax RE but assumptions Inc we 10% . © make 2013 | – Increase no or Marcus representations Between Broome &Spring Streets estimates 5.31% Modified Triple Net (NNN)Modified Triple Net & Millichap used Two, Five Two, 10% Every Three Years Three Every 10% in Year 13 and Year 15 and Year 13 in Year herein or New York, NY 10012 NY York, New (Activity warranties, net, utilities direct are Capital Capital One Bank Capital Capital One, N.A. Net Leased Leased Bank Net ID for 501 Broadway 501 : CAP | NOI: $2,441,668CAP |NOI: Z - example expressed 0330904 Year Options Year $46,000,000 $2,541,000* $2,441,668 Fee Simple 484 / 1001 484 100% FMV 100% 7/31/2025 3/15/2013 Corporate purposes 12 Years 12 7+ Years 7+ ) or $ 5.31% Public implied, 5,091 9,035 $292 only as – and to do the not accuracy Credit of Tenant Credit Lease Economics Real represent ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ of Estate Fundamentals: Estate the the BROADWAY Revenues of $27.237 Billion Billion in 2017 of $27.237 Revenues RatingsInvestment Grade Capital One Financial Corp. resets Rentto inOptionFair MarketValue 15. Period 2 theof First Option Period, With an Additional 10%Increase inYear RentalIncreases Upon in Options: Increases Rent Execution 10% The (5)Five Options: Renewal(2), Two Yields Years Three Every RentalIncreases: 10% Lease (NNN) RemainingModified Triple on Years Year the Original 7+ 12 Household Average Income Exceeding$130,000 Individuals Within a Three Than 1,000,000 More Flagships and National Retailers World Expenditures Institutionally and Major/UpcomingOwned Managed:No Capital Features Constructed Recently (2007) information current 501 or future - . Class Broadway Class Broadway Location References : : performance to square of INVESTMENT HIGHLIGHTS INVESTMENT the footage property or age . Marcus are – - S&P S&P (BBB+) approximate $43.3 Billion Billion MarketCap $43.3 – & Millichap Modern Design – Strategically Situated Among Major - . Real Buyer Year Tenant Renewal Options Tenant Renewal Year Estate must – – Investment Moody’s Moody’s (Baa1) verify Strong Inflation Protected the – - Attractive Physical Mile Radius with an Mile – - Net Fitch (A - )

5 FINANCIAL OVERVIEW Projected Cash Flow Statement

Schedule Of Prospective Cash Flow In Inflated Dollars for the Fiscal Year Beginning 7/1/2018

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 For the Years Ending Jun-2019 Jun-2020 Jun-2021 Jun-2022 Jun-2023 Jun-2024 Jun-2025 Jun-2026 Jun-2027 Jun-2028

REVENUE ______Base Rental Revenue $2,310,000 $2,521,750 $2,541,000 $2,541,000 $2,773,925 $2,795,100 $2,795,100 $3,051,318 $3,074,610 $3,356,449 Real Estate Taxes (Full AV) 31,398 39,189 47,431 56,181 65,440 75,259 85,670 96,694 108,385 120,772 Condo CAM Reimbursement 44,187 45,517 46,879 48,286 49,733 51,229 52,764 54,349 55,975 57,658 ______Effective Gross Revenue 2,234,415 2,437,044 2,446,690 2,436,533 2,658,752 2,668,612 2,656,666 2,900,275 2,910,250 3,178,019

Operating Expenses Real Estate Taxes (Full AV) 130,729 138,511 146,763 155,503 164,769 174,588 184,994 196,023 207,711 220,100 421a RE Tax Savings (15,213) (5,176) 0 0 0 0 0 0 0 0 Condo CAM 44,190 45,514 46,879 48,287 49,736 51,226 52,764 54,348 55,977 57,657 ______Total Operating Expenses 159,706 178,849 193,642 203,790 214,505 225,814 237,758 250,371 263,688 277,757

Rent Credit* 215,789 14,061 ______Net Operating Income 2,441,668 2,441,668 2,441,668 2,441,677 2,674,593 2,695,774 2,695,776 2,951,990 2,975,282 3,257,122 *Seller to provide rent credit at closing

Capital One Retail Condominium 501 Broadway PROJECTED FLOW CASH STATEMENT New York, NY

The ground floor condominium features 3,659 square feet, 4,694 square feet of lower level space and 682 square feet of additional space. The annual rent is $2,541,000 annually ($211,750 monthly) and features ten percent (10%) rental increases every three years. The asset is conveniently located on Broadway which experiences unrivaled foot traffic coupled with exceptional subway access in one of the most profound retail arteries in the world. The strategic positioning of this property resulted in deposits of over $119 Million at this location.

Annualized Operating Data Annual Rent $2,541,000* Net Operating Income $2,441,668 Base Term Rental Escalations 10% Every Three Years Rental Escalations in Options See Rent Schedule *Based on 8/1/19 rental increase, seller will credit the difference in rent at closing. RENT SCHEDULE Lease Year Annual Rent Monthly Rent 08/2016 – 07/2019 $2,310,000 $192,500 08/2019 – 07/2022 $2,541,000 $211,750 08/2022 – 07/2025 $2,795,100 $232,925 Option Period 1 08/2025 – 07/2027 $3,074,610 $256,218 08/2027 – 07/2030 $3,382,071 $281,839 Option Period 2 08/2030 – 07/2035 100% FMV 100% FMV

CAP Rate 5.31% FINANCIAL OVERVIEW FINANCIAL Purchase Price $46,000,000

SUBJECT PROPERTY SALES COMPS Property Name Capital One Bank Property Address 114 Prince Street 503 Broadway Between Spring Street & Property Address 501 Broadway New York, NY 10012 Broome Street Between Spring Street & Broome Street Ground Level (SF) 3,659 Ground Level (SF) 2,750 13,600 Asking Price $49,750,000 Sale Price $41,729,429 $279,996,800

Asking $/SF $13,596 $/SF $15,174 $20,588 RENTAL AND SALES SALES AND COMPARABLES RENTAL

RENTAL COMPS ASKING RENT COMPS Property Name Sketchers Footwear Melissa Property Address 530 Broadway 500 Broadway Property Address 568-578 Broadway 543 Broadway Between Spring Street & NE Corner of Prince Street AKA 114 Mercer Street Corner of Spring Street Broome Street Ground Level (SF) 10,250 4,242 Ground Level (SF) 2,280 4,200 Annual Rent $8,712,500 $2,748,816 Annual Rent $2,300,000 $2,940,000 Asking $/SF $850 $648

$/SF – Ground Level $1,009 $700 RENTAL AND SALES SALES AND COMPARABLES RENTAL

Capital One Financial Corporation is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $236.8 billion in deposits and $365 billion in total assets as of December 31, 2017. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index. The bank is the 10th largest in the US with 755 branches and 2,000 ATMs. In 2017, Capital One grew revenues by $1.7 billion and increased earnings per share even as they continued their investments in growth, transformation, and risk management. The combination of strong revenue growth and careful expense management resulted in better operating efficiency. They have improved our efficiency ratio by over 300 basis points since 2015, including over 100 basis points in 2017. They posted 2017 GAAP net income of $1.98 billion, or $3.49 per share, which included a $1.77 billion one-time reduction in net income due to

December’s Tax Act legislation. TENANT OVERVIEW TENANT

Surrounding Retail and Points of Interest The subject property is strategically positioned on Broadway benefiting from the abundance of major retailers, high-end boutiques, luxury hotels, and world renowned restaurants in the area. Retailers have opened many new flagship stores including: Nike, Adidas, Zara, Dolce & Gabbana, and Tory Burch. Various major retailers in the area include: Bloomingdales, H&M, Forever 21, MAC, Madewell, Prada, Lululemon, Kate Spade, Balenciaga, Vince Camuto, AllSaints, as well as many others.

Demographics and Pedestrian Traffic SoHo has 51,240 individuals residing in the neighborhood, with a total of 26,527 households. The average household income in the neighborhood is $143,313 representing a 7% increase since 2010. The average household net worth is $1,108,237 and the median home sale price in the neighborhood exceeds $2,381,250. Pedestrian activity on Broadway is ranked as the highest in the entire New York City area, comparing to Times

Square and Fifth Avenue. LOCATION OVERVIEW LOCATION

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, assumptions 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 12 Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2013 Marcus & Millichap (Activity ID: Z0330904) Metro Economy Manhattan is home to more than 1.6 million residents who are New York City is home to 49 Fortune 500 companies, more than any part of a much bigger population system; the New York City other metro in the country, and most are located in Manhattan. The metropolitan area is the largest in the United States, with city serves as the epicenter for a wide variety of industries, making the approximately 20 million inhabitants in three states. New York performance of its local economy integral to the nation. City consists of five boroughs with more than 8.5 million people. New York City is one of the leading financial centers in the world, with Employers many international banks and financial firms maintaining offices in the More than half of Manhattan’s labor market is involved in city. Wall Street is a major driver of the local economy, as a significant financial activities and services sectors. This is because New York number of people are employed directly in the securities industry. The City is the headquarters of some of the largest U.S.-based city is a hub for the media, communications and publishing industries. consulting businesses, accounting offices, insurance companies The major television networks have substantial operations in and legal firms, as well as the United Nations. In addition, Manhattan, while hundreds of newspapers and magazines and several Manhattan is the financial center of the country and home to music-recording companies are headquartered in the city. In addition, the New York Stock Exchange. Many of the world’s top banks New York City is the advertising capital of the United States and has a and securities firms are located here. Major employers in the growing presence in the Internet/new media field. The entertainment finance industry based in Manhattan include Goldman Sachs, and tourism industries are crucial to the Manhattan economy, with JPMorgan Chase and Morgan Stanley. numerous theaters and attractions drawing billions of dollars each year. Media conglomerate Time Warner is the largest company in the information sector, employing thousands of people in Manhattan is also an important location for many retailers, both Manhattan from its headquarters at the Time Warner Center in national and local. Retail sales in the borough typically grow faster Midtown. Google also has thousands of workers on payroll, and than the U.S. rate; this year, Manhattan will exceed the national sales other large media employers are Viacom and Verizon. growth average with a rate of 9.3 percent. In addition, many major technology firms are expanding in the borough

The education and health services sector accounts for 13 MARKET OVERVIEW percent of jobs in Manhattan. Large employers include New York University, Columbia University, New York-Presbyterian Healthcare, and Mount Sinai Hospital.

Almost all of SoHo is included in the SoHo-Cast Iron Historic District, which was designated by the New York City Landmarks Preservation Commission in 1973, extended in 2010, and was listed on the National Register of Historic Places and declared a National Historic Landmark in 1978. It consists of 26 blocks and approximately 500 buildings, many of them incorporating cast- iron architectural elements.

SoHo is bounded by Houston Street on the northern side, Canal Street on the south, Crosby Street on the east, and Sixth Avenue to the west. SoHo's chain outlets are clustered in the northern area of the neighborhood, along Broadway and Prince and Spring Streets. The sidewalks in this area are often crowded with tourists and with vendors selling jewelry, T-shirts, and other works. SoHo is known for its commercialization and eclectic mix of boutiques for shopping. New York City’s tourist visitor numbers have increased to a record breaking 60.3 million in 2016, up from 48.8 million in 2010. MARKET OVERVIEW

H G B S P R P R O R U A O R I I N S N O T D M N C O E G E N S S S S S T T T T R T R R R R E E 5 E E E E E 0 E E E T T T 1 T T

BROADWAY BROADWAY Frontage The retail unit has 29.25 feet of frontage on Broadway, 30 feet FLOOR PLANS of frontage on Mercer Street, and 200 feet of block-through depth. 3,659 SF Zoning It is located in an M1-5B zoning district which permits many industrial and commercial uses. The building is also located within the SoHo Cast Iron Historic District.

Ceiling Heights Ground Floor – 20 Feet Lower Level – 12 Feet Sub-lower Level – 8 Feet

Common Area Maintenance 4,694 SF Tenant is responsible for reimbursing ownership for CAM charges. The charges include payroll, cleaning, water & sewer, insurance, and repairs & maintenance. CAM charges are expected to total $44,187 in 2018.

Prohibited Use •To sell/display any pornographic or obscene material •Live Performances, including Nude/Semi-Nude or Sex 682 SF Club/Massage Parlor •Laundromat/Dry Cleaner •Bar/Restaurant/Café/Cabaret •To sell tickets for lotteries/games of chance Services information This information is Annually WalkMinute N Million12.7 Annually Riders Station Lafayette B, D, F Annually WalkMinute 6 Annually Walk8 Minute A, C a service and Line at Spring Street Station Station Spring StreetLine at & bears has mark been R all & of risk , secured Line at Prince Street Station Station Prince Streetat Line Marcus E for & any Line at Spring Street Station Station Spring Line at Street & from M Millichap inaccuracies sources Line atBroadway Line – – Real we . Any 5.4 Million5.4 Riders Million3.8 Riders – Estate believe projections, 3.8 Million3.8 Riders Investment – to be 6 Minute Walk6 Minute reliable, opinions, Services, but assumptions Inc we . © make 2013 no or Marcus representations estimates - – & 3 Millichap used – – herein or (Activity warranties, 4 – are ID for : Z example expressed 0330904 purposes ) or implied, only as and to do the not accuracy represent of the the information current or future . References performance to square of the footage property or age . Marcus are approximate & BROADWAY Millichap 501 . Real Buyer Estate must Investment verify the 6

17 SUBWAY MAP LOCAL MAP LOCAL

INCOME Average $149,395 $132,937 $130,392 Median $93,222 $75,904 $80,875 Per Capita $83,803 $65,375 $64,544

HOUSEHOLDS 2020 Projection 14,042 117,276 523,353 2015 Estimate 14,077 113,789 496,375 2010 Census 13,206 106,639 460,681 2000 Census 13,815 102,800 409,452

HOUSING Total Housing Units - 14,908 119,728 532,617 2015

RACE & ETHNICITY White 73.7% 58.3% 65.3% Native American 0.1% 0.2% 0.3% African American 2.7% 4.4% 7.3%

Asian/Pacific Islander 17.7% 29.7% 17.6% DEMOGRAPHICS SOHO NYC