Flowers Foods 3800 S County Rd 1276, Midland, TX 79706 ™ OFFERING MEMORANDUM CONFIDENTIALITY & DISCLAIMER STATEMENT

This Offering Memorandum contains select information pertaining to the business and affairs of Flowers Foods located at 3800 S County Rd 1276, Midland, TX 79706 (“Property”). It has been prepared by Matthews Retail Advisors . This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Retail Advisors . The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1. The Offering Memorandum and its contents are confidential;

2. You will hold it and treat it in the strictest of confidence; and

3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Retail Advisors expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Retail Advisors or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum. TABLE OF CONTENTS

PRICING AND FINANCIAL ANALYSIS PRESENTED BY Investment Overview ...... 2 Financial Overview ...... 3 Josh Bishop Company Overview 4 VP & Director PROPERTY DESCRIPTION License No. 01940394 O 310.919.5823 Property Overview ...... 6 M 315.730.6228 Bird’s Eye ...... 7 [email protected] Tenant Map - Retail ...... 8 Tenant Map - Industrial Companies ...... 9 Regional Map ...... 10

DEMOGRAPHICS Demographics Report ...... 12 City Overview ...... 13 Kyle Matthews Broker of Record License No. 678067

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PRICING AND FINANCIAL ANALYSIS ™ Investment Overview

Investment Highlights

• 15-Year NN+ lease with ± 14 Years Remaining

• Building was renovated for Flowers Foods in 2015

• 1% Annual rent increase during base term & 1.5% annual rent increases during option periods

• Seller will provide buyer with a 10-year roof warranty that will commence at the close of escrow

• Very minimal Landlord responsibility: Landlord responsible for roof and structure only

• Tenant responsible for parking lot, HVAC, CAM, taxes, and insurance

• Subject property is in a major industrial sector of Midland, TX and is 3 miles from Midland International Airport

• Midland is located 20 miles east of Odessa and has an estimated population of 132,950 residents

• Flowers Foods, Inc. has strong investment grade credit, S&P rated BBB- & Moody’s rated Baa2

• The property is 100% leased to Flowers Baking Co. of Tuscaloosa, LLC, a wholly owned subsidiary of Flowers Foods Inc.

• Flowers Foods is the second-largest producer and marketer of packaged bakery foods, serving over 90% of the United States population with baked goods

• Flowers Foods operates over 47 bakeries in 16 states, producing fresh baked products for some of the top brands including Hostess, Nature’s Own, White Wheat, Bunny Bread, Sunbeam, Wonder Bread, Tastykake, Mary Jane, Holsum, Hattie’s and more

2 Financial Overview

EXECUTIVE SUMMARY ANNUALIZED OPERATING DATA 3800 S County Rd 1276 Monthly Rent Annual Rent Increases CAP Rate Midland, TX 79706 List Price ...... $1,294,602 Current - 11/30/2017 $7,012.43.00 $84,149.16 $6.19 6.50% 1% Annual Gross Leasable Area ...... ± 13,581 SF Years 3 - 15 CAP Rate - Current ...... 6.50% Increases Year Built / Renovated ...... 1983 / 2015 Two (2), Five (5) Year 1.5% Annual Options Increases Lot Size ...... ± 2.33 Acres (101,495 SF)

TENANT SUMMARY Tenant Trade Name Flowers Foods Type of Ownership Fee Simple Lease Type NN+ Roof and Structure 10 Year Warranty Original Lease Term 15 Years Rent Commencement Date 11/5/2015 Lease Expiration Date 11/30/2030 Term Remaining on Lease ± 14.00 Years 1% Annual Increases in the Base Term; 1.5% Annual Increases Increases in Options Options Two (2), Five (5) Year Options

3 ™ Company Overview

Property Name Flowers Foods Property Type Net Leased Distribution Center Parent Company Trade Name Flowers Foods, Inc. (NYSE: FLO) Ownership Public Credit Rating (S&P) BBB- Revenue $3.77 B Net Income $189 M No. of Locations ± 46 No. of Employees ± 10,900 Headquartered Thomasville, Georgia Website www.flowersfoods.com Year Founded 1919 TENANT OVERVIEW As one of the largest wholesale bakeries in the US, Flowers Foods’ flour products business is flourishing. Flowers Foods bakes, markets, and distributes fresh breads, buns, rolls, corn and flour tortillas, and sweet bakery goodies to retail food and foodservice customers in the western, southern, and northeastern US. The company’s brand names include Cobblestone Mill, Nature’s Own, Tastykake, and Whitewheat. Flowers Foods makes snack cakes, pastries, donuts, and frozen bread products for retail, vending, and co-pack customers nationwide. It also rolls out hamburger buns for national fast-food chains. Flowers Foods bought several bread brands, including Wonder, and about 20 bakeries from Hostess Brands. GEOGRAPHIC OUTREACH Flowers Foods operates in 18 states in US Southeast, Mid-Atlantic, New England, Southwest, California and select markets in Nevada, the Midwest, and the Pacific Northwest. STRATEGY The company focuses on developing new and core markets through new customers, new products, strong brands, and acquisitions. From its stronghold in the Southeast, Flowers Foods has been expanding its retail and wholesale reach, moving north and west Flowers Foods in 2014 opened the Knoxville, Tennessee plant that was acquired as a part of the Hostess Brands deal in 2013. Acquisitive Flowers Foods purchases other businesses to grow and enter new markets. The company has completed more than 100 acquisitions during the past 40 years.

SALES & MARKETING As a leading US baker, the company’s products are available to consumers through traditional supermarkets and their in-store deli/bakeries, food service distributors, convenience stores, mass merchandisers, club stores, wholesalers, casual dining and quick-serve restaurants, schools, hospitals, dollar stores, and vending machines. Flowers Foods’ direct-store-delivery system is comprised of 5,100 independent distributors who own the rights to distribute certain brands of the company’s fresh packaged bakery foods in their geographic territories. Also, Flowers Foods has about 600 company-owned distributors and distributorships available for sale. The warehouse segment’s fresh snack cakes and frozen breads and rolls are sold nationally direct to customers’ warehouses by frozen and non-frozen contract carriers.

4 PROPERTY DESCRIPTION ™ Property Overview

THE OFFERING Property Name ...... Flowers Foods Property Address ...... 3800 S County Rd 1276 Midland, TX 79706 Assessor’s Parcel Number ...... 0049800.003.0050 Zoning ...... C-3

SITE DESCRIPTION Number of Stories One Year Built 1983 Gross Leasable Area (GLA) ± 13,581 SF Lot Size ± 2.33 Acres (101,495 SF) Type of Ownership ...... Fee Simple Landscaping Professional Topography ...... Generally Level

CONSTRUCTION Foundation Concrete Slab Framing ...... Steel Exterior Metal Parking Surface ...... Asphalt Roof Pitched

6 PROPERTY DESCRIPTION Bird’s Eye

W Industrial Ave I-20 Blvd E ± 16,000 ADT S County Rd 1276

7 ™ Tenant Map - Retail Tenants

8 PROPERTY DESCRIPTION Tenant Map - Industrial Companies

9 ™ Regional Map

10 PROPERTY DESCRIPTION DEMOGRAPHICS ™ Demographics Report

Population 3-Mile 5-Mile 10-Mile 2021 Projection 919 7,751 195,982 2016 Estimate 810 6,812 178,938 2010 Census 634 5,281 154,377 2000 Census 420 3,488 133,637 Growth 2016-2021 13.43% 13.79% 9.53% Growth 2010-2016 27.72% 29.00% 15.91% Growth 2000-2010 51.13% 51.39% 15.52%

Households 2021 Projection 357 3,148 75,121 2016 Estimate 313 2,760 68,598 2010 Census 242 2,128 59,237 2000 Census 152 1,261 51,885 Growth 2016-2021 14.12% 14.06% 9.51% Growth 2010-2016 29.43% 29.71% 15.80% Growth 2000-2010 59.03% 68.69% 14.17%

Income $0 - $15,000 4.87% 5.46% 5.89% $15,000 - $24,999 8.75% 7.41% 7.23% $25,000 - $34,999 8.01% 6.80% 8.06% $35,000 - $49,999 10.37% 9.13% 12.85% $50,000 - $74,999 16.95% 16.48% 17.35% $75,000 - $99,999 14.17% 13.75% 13.39% $100,000 - $124,999 12.10% 13.36% 11.48% $125,000 - $149,999 7.63% 7.72% 7.79% $150,000 - $199,999 7.22% 8.16% 6.72% $200,000 - $249,999 3.39% 4.05% 3.26% $250,000 - $499,999 4.67% 5.43% 3.98% $500,000+ 1.87% 2.24% 2.00% 2016 Est. Average Household Income $101,038 $108,329 $98,433 2016 Est. Median Household Income $76,846 $83,560 $73,013

12 DEMOGRAPHICS City Overview

MIDLAND, TEXAS At the midpoint between Dallas and El Paso in the heart of the Permian Basin, Midland is a city that achieves a balance between traditional charm and modern amenities. It is the county seat of Midland County and a commercial center of the region.

With the lowest unemployment rate in the United States, Midland has a community that is active in its economic development. It is this engagement that has ensured continued prosperity for the region. Midland’s economic base is concentrated mainly in the oil and gas industry; however, ranching and agriculture, health care, retirement and transportation contribute to the stability and diversity of the economy.

Largely due to the availability of post-secondary and higher education resources within the Midland area, the community’s work force is well- educated and proactive. Access to this hard-working labor pool is essential in a competitive global environment, giving the surrounding businesses an advantage. The University of Texas Permian Basin campus brings 3,500 students to the area in addition to a health science center run by Texas Tech.

Health care services have continued to expand to meet the needs of the growing populace, which has exceeded 100,000. Community support has enabled Midland to offer medical services rivaling those in the largest cities.

A low cost of living, affordable housing and award winning health care services have made Midland an ideal home for families and retirees. Oil money brought an attractive skyscraper-centered downtown, which is teeming with cultural and recreational opportunities from unique museums and delicious food to exciting music and nightlife.

TOP EMPLOYERS - MIDLAND, TEXAS 1. Midland Independent School District 2. Dawson Geophysical 3. Midland Memorial Hospital and Medical Center 4. Walmart 5. City of Midland

13 ™ Flowers Foods 3800 S County Rd 1276, Midland, TX 79706 OFFERING MEMORANDUM

Josh Bishop VP & Director License No. 01940394 O 310.919.5823 M 315.730.6228 [email protected]

Kyle Matthews Broker of Record License No. 678067

841 Apollo Street, Suite 150 | El Segundo, CA 90245 | www.matthews.com ™