Offering Memorandum

SHOPKO 22422 IA-9 • Cresco, IA 52136 NON-ENDORSEMENT AND DISCLAIMER NOTICE

Confidentiality and 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. © 2018 Marcus & Millichap. All rights reserved.

Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

SHOPKO Cresco, IA ACT ID Z0120216

2 NET LEASED DISCLAIMER

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 todetermineto 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.

3 SHOPKO

OFFERINGOFFERING SUMMARY SUMMARY EXECUTIVE SUMMARY

OFFERING SUMMARY Price $2,187,500 MAJOR EMPLOYERS Net Operating Income $175,000 Capitalization Rate – Current 8.00% # OF EMPLOYEES Price / SF $69.44 EMPLOYER * Rent / SF $5.56 Featherlite Inc 700 Lease Type NNN Regional Hlth Svcs Howard Cnty 150 Gross Leasable Area 31,500 SF Featherlite Interiors Division 142 Year Built / Renovated 2010 EVANS MEMORIAL HOME 99 Lot Size 3.04 acre(s) County Board of Supervisors 77 Plantpeddler Wholesales 76

FINANCING Crestwood Elementary School 75 Down Payment All Cash Crestwood Elmntary Junior High 70 Net Cash Flow 8.00% / $175,000 Smico 70 Cash on Cash Return 8.00% Alum-Line Inc 60 Total Return 0.00% / $175,000 Cresco Union Savings Bank 60 USDA Cresco Service Center 51

DEMOGRAPHICS

1-Miles 3-Miles 5-Miles 2017 Estimate Pop 689 4,319 4,853 2017 Census Pop 693 4,400 4,938 2017 Estimate HH 310 1,812 2,021 2017 Census HH 311 1,845 2,054 Median HH Income $38,923 $46,384 $46,981 Per Capita Income $22,158 $26,266 $26,345 Average HH Income $48,057 $61,723 $62,396

* # of Employees based on 5 mile radius

4# SHOPKO

OFFERING SUMMARY INVESTMENT OVERVIEW

The subject property is a freestanding, 31,500-square foot building, occupied by Shopko Hometown. located in Cresco, IA. The property sits just Highway 9 which is the most northern of Iowa's eastwest highways, traversing the entire northern tier of counties. The property benefits from minimal local competition, and the nearest Shopko Hometown located over 30 miles away.

This store was originally opened as an Alco but was remodeled and converted into a Shopko Hometown. The tenant is operating under a 15-year NNN lease withlandlord responsibilities limited to the Foundation, exterior walls and the roof and structural components of Building. ShopKos Current rent rate is well below the average for Shopko, at just $5.55 per square foot. There is a rental increase of 3% in 2021 and a 5% increase every five years after that.

Shopko is a $3 billion retailer that operates over 330 stores in 21 states throughout the Midwest, Mountain, North Central and Pacific Northwest regions. They provide quality name-brand merchandise, great values, and optical services in small to mid-sized cities.

Headquartered in Green Bay, , Shopko Stores is a $3 billion retailer that operates over 363 stores in 24 states throughout the Central, Western and Pacific Northwest. formats include 131 Shopko stores; 222 Shopko Hometown locations; five Shopko Express Rx stores, a convenient neighborhood drugstore concept; and five Shopko Pharmacy locations.

INVESTMENT HIGHLIGHTS

. Corporate Guarantee | $3 Billion Retailer that Operates over 363 Stores in 24 States

. Long-Term, Nearly Full Term Remaining on the Original 15-Year Lease . Attractive Rent Escalations of 5% Every Five Years . Prime Retailer of Cresco, nearest Shopko is 85 Miles Away . Low Price per Square Foot at $69 Price per Square Foot

5 PROPERTYSHOPKO NAME

PRICINGPRICING ANDANDLOCATIONLOCATION VALUATIONVALUATIONTENANT SUMMARYOVERVIEWOVERVIEW MATRIXMATRIX

22422 IA-9, Cresco, IA 52136

CLOSE PROXIMITY TO:

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PRICINGPRICINGREGIONAL ANDANDLOCATION VALUATIONVALUATIONTENANT AND LOCAL SUMMARYOVERVIEW MATRIXMATRIX MAP 22422 IA-9, Cresco, IA 52136

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AERIAL PHOTO

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OFFERINGOFFERING SUMMARY SUMMARY PROPERTY SUMMARY

NOTES

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PRICINGPRICING ANDANDLOCATION VALUATIONVALUATIONTENANTMARKETINGDEMOGRAPHICS SUMMARYOVERVIEW MATRIXMATRIX TEAM

CREATED ON FEBRUARY 13, 2018

1 Miles 3 Miles 5 Miles POPULATION 2022 Projection 682 4,305 4,835 2017 Estimate 689 4,319 4,853 2010 Census 693 4,400 4,938 2000 Census 748 4,484 5,056

INCOME Average $48,057 $61,723 $62,396 Median $38,923 $46,384 $46,981 Per Capita $22,158 $26,266 $26,345

HOUSEHOLDS 2022 Projection 308 1,820 2,029 2017 Estimate 310 1,812 2,021 2010 Census 311 1,845 2,054 2000 Census 318 1,841 2,055

HOUSING 2017 $79,766 $93,647 $97,635

EMPLOYMENT 2017 Daytime 726 5,198 5,521 Population 2017 4.41% 3.92% 4.10% Unemployment 2017 Median Time 11 13 14 Traveled

RACE & ETHNICITY White 95.61% 96.52% 96.70% Native American 0.00% 0.00% 0.00% African American 0.36% 1.11% 0.99% Asian/Pacific 0.61% 0.37% 0.36% Islander

Source: © 2015 Experian

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