SINGLE TENANT GROCERY STORE LOCATED IN THE MID-ATLANTIC REGION

ACTUAL LOCATION KROGER 1401 N MAIN STREET | SUFFOLK, VA 23434 CLICK TO VIEW INVESTMENT ADVISORS PROPERTY VIDEO MARC MANDEL Managing Director 484.532.4212 [email protected]

STEVE SCHRENK Director 484.532.4213 [email protected]

FINANCING ADVISOR

MICHAEL PAGNIUCCI Director 484.532.4172 [email protected]

LOCAL MARKETING ADVISOR MAIN STREET - 26,000 VPD

JORDAN LEX Senior Director 202.533.2517 [email protected]

This Offering Memorandum has been prepared by Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) for use by a limited number of recipients. All information contained herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained herein. Further, the Offering Memorandum does not constitute a representation that no change in the business or affairs of the property or the Owner has occurred since the date of the preparation of the Offering Memorandum. All analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the recipient. JLL and Owner and their respective officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon or relate to the use of the information contained in this Offering Memorandum.

Additional information and an opportunity to inspect the property may be made available, in Owner’s or JLL’s sole discretion, upon written request by interested and qualified prospective investors.

Owner and JLL each expressly reserves the right, in its sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligations to any recipient reviewing this Offering Memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

The recipient (“Recipient”) agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum, which is a matter of public record, or is provided from sources available to the public (b) the Recipient, the Recipient’s employees, agents and consultants who have a valid need to know business reason to know such information (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the need to know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of JLL and the Owner, (c) the Recipient and the need to know parties will not use or permit to be used this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner or JLL or for any purpose other than use in considering whether to purchase the property, and (d) recipient will notify each of the need to know parties of the terms of this agreement and will be responsible for breach of same by any of the need to know parties. The Recipient and the need to know parties agree to keep this Offering Memorandum and all confidential information contained herein permanently confidential and further agree to use this Offering Memorandum for the purpose set forth above. If the Recipient has no interest in the property, or if in the future the Recipient or owner discontinue such negotiations, the Recipient will return this Offering Memorandum to JLL. Investment Summary KROGER | 1401 N MAIN STREET | SUFFOLK, VA · · ·

INVESTMENT SUMMARY

JLL is pleased to exclusively offer a premier net lease opportunity to acquire a single tenant Kroger Grocery Store (The Property) located in Suffolk, VA. Kroger recently purchased this lease from Farm Fresh, recognizing there was limited grocery competition in the immediate area - the nearest Kroger location is more than 9 miles away. They also recently renewed their lease and officially opened for business at this location in December 2018, thus reaffirming their commitment to the site. Additionally, Kroger subleases approximately 14,000 square feet of its space to Belk, a tenant in the adjoining property. This sublease was in-place prior to Kroger’s occupancy. Suffolk, VA, located near Norfolk, is a fast-growing suburb which has seen population growth of 5% in the past 8 years. The Property is in the heart of the Suffolk retail corridor on Main Street and is surrounded by notable national retailers such as Walmart, Lowe’s, Starbucks, Chick Fil A, and Panera. The Property has exposure to over 26,000 VPD at a fully signalized intersection. Suffolk is in the MSA with miles of waterfront property on the Nansemond and , and is the largest city in by land area, as well as the 14th largest in the Country. The Kroger Co. is one of world’s largest food retailers, with fiscal 2019 sales of $122.3B. According to creditntell, Kroger, which is an essential retailer and open for business amid the COVID-19 pandemic, saw a 30% surge in comparable store sales in March 2020. The company features an investment grade credit rating of BBB by S&P. The Kroger Family of Companies serves eight and a half million customers and 443,000 associates who shop or work in 2,796 retail food stores under a variety of local banner names in 35 states and the District of Columbia. Kroger offers an expanding ClickList service – a personalized, order online, pick up at the store service – and has partnered with Ocado, an automated grocery delivery company, in order to “internet-proof” its operations. In addition, Kroger and its subsidiaries operate 2,255 pharmacies, 784 convenience stores, 319 fine jewelry stores, 1,445 supermarket fuel centers and 38 food production plants in the United States. www.kroger.com

$8,620,000 ASKING PRICE

8.50% CAP RATE

$732,654 NOI

4 Investment Summary KROGER | SUFFOLK, VA · · ·

INVESTMENT HIGHLIGHTS

The Kroger Co. is one of the world’s largest Limited grocery competition Population growth over 5% in food retailers, with fiscal 2019 sales of with only ALDI, Food Lion and the past 8 years within 5 miles $122.3B and an investment grade credit Walmart located within three of the property rating of BBB Stable (S&P) miles of the property

With proximity to Norfolk, Suffolk has benefited Well located asset situated in the main retail corridor from the strong military presence in the area and in Suffolk with exposure to over 26,000 VPD and has grown rapidly as a result. The consistent demand is surrounded by various national retailers such as from the government agencies in the area has driven Walmart, Lowe’s, Starbuck’s, Chick Fil A and Panera various corporations and suppliers of the military to Bread to name a few the area, most notably Lockheed Martin and Raytheon

Comparable Kroger supermarket sales surged 30% in March 2020, amid the COVID-19 pandemic. Kroger has implemented multiple strategies to combat the virus, such as enhanced sanitation practices, educational floor decals, plexiglass barriers, traffic monitoring, free grocery pick up and pharmacy shipping, and contact-free payment solutions.

KROGER | SUFFOLK, VA Investment Summary 5 · · · INVESTMENT SUMMARY · TENANT OVERVIEW · FINANCIAL ANALYSIS · MARKET OVERVIEW

- REINHART FOODSERVICE LLC - MASSIMO BEVARAGE USA - GOLDEN STATE FOOD CORP.

460 NANSEMOND QVC DISTRIBUTION SENTARA OBICI CENTER ACADEMY HOSPITAL

58 40,000 VPD

MAIN STREET 26,000 VPD 642 337 13

604

BUS 460 SUFFOLK SHOPPING CENTER BUS 460

JOHN F KENNEDY MIDDLE SCHOOL

AMERIGAS

BUS SONOCO 58 PRODUCTS CO. PLANTERS FEDERAL CREDIT UNION

SUFFOLK GOLF COURSE 32

6 Investment Summary KROGER | SUFFOLK, VA 6 InVEStmEnt SUmmARy KROGER | SUFFOLK, VA 13 **14,309 SF of the total Premises is subleased to Belk

BAYPORT CREDIT UNION

PROPERTY LOT LINE MAIN STREET - 26,000 VPD Tenant Overview KROGER | 1401 N MAIN STREET | SUFFOLK, VA · · ·

CORPORATE OVERVIEW TENANT OVERVIEW Tenant Trade Name The Kroger Co. Kroger spans many states with store formats that include grocery and multi- US Headquarters Cincinnati, OH department stores, convenience stores and jewelry stores. They operate under Stock Ticker KR (NYSE) two dozen banners, all of which share the same belief in building strong local ties and brand loyalty with their customers. They believe that their Customer Credit Rating BBB (S&P) base is becoming increasingly diverse – not only in terms of ethnicity, but also Numbr of Locations 2,757 in terms of income levels, household mix and purchasing patterns. Their wide 560,000 variety of store formats is their key strengths that set them apart from their Number of Employees competitors. KROGER’S RESPONSE TO COVID-19 The Kroger Family of Companies serves eight and a half million customers • Sanitation practices and 443,000 associates who shop or work in 2,757 retail food stores under a • Educational floor decals variety of local banner names in 35 states and the District of Columbia. Kroger • Plexiglass barriers and its subsidiaries operate an expanding ClickList offering – a personalized, • Traffic monitoring order online, pick up at the store service – in addition to 2,255 pharmacies, 784 • Free grocery pick up and pharmacy shipping convenience stores, 319 fine jewelry stores, 1,445 supermarket fuel centers • Contact-free payment solutions and 38 food production plants in the United States. Kroger is recognized • Converting locations into dark stores to fulfill curbside pick-up only orders as one of America’s most generous companies for its support of more than 100 Feeding America food bank partners, breast cancer research and OTHER COVID-19 RELATED NEWS awareness, the military and their families, and more than 145,000 community • Comparable Kroger supermarket sales increased 30% in March 2020 organizations including schools. A leader in supplier diversity, Kroger is a proud • Kroger has hired 100,000 people since the coronavirus emergency was declared member of the Billion Dollar Roundtable. • Since March, Kroger has invested $700 million in bonus pay for associates and protections for workers, customers and communities www.kroger.com

8 Tenant Overview KROGER | SUFFOLK, VA SENTARA OBICI HOSPITAL

460 SUFFOLK SHOPPING CENTER NORTH MAIN STREET U.S HIGHWAY 460 (VPD 27,500)

FINANCIAL ANALYSIS KROGER | 1401 N MAIN STREET | SUFFOLK, VA · · ·

LEASE ABSTRACT $8,620,000 8.50% $732,654 ASKING PRICE CAP RATE NOI

LEASE DETAIL TENANT RESPONSIBILITY DETAIL 1401 N Main Street Address Suffolk, VA 23434 Maintenance and Tenant shall maintain and replace at its sole cost the roof, roof covering, interior Repairs elements, nonstructural portions of the loading docks, HVAC, downspouts Tenant Kroger

Lot Area 5.69 Acres Tenant agrees to maintain at its own expenses during the term all insurance Insurance required under the lease. Tenant shall reimburse landlord their pro rata share of Building Size 67,216 SF (14,309 SF subleased to Belk) insurance costs under the lease

Year Built 1998 Taxes Tenant shall pay taxes for the demised premises directly to the taxing authority Annual Rent $732,654 Tenant shall pay for all utilities consumed on the premises direct to the service Lease Type Fee Simple: NN+ Utilities provider

Lease Commencement 12/29/1998 In addition to minimum rent, tenant shall pay as percentage rent to landlord a Percentage Rent sum equal to 1% of gross sales in each lease year in excess of minimum rent for Kroger Lease Assumption 5/02/2018 such year divided by .75%

Lease Expiration 1/31/2024 Landlord shall have the right once per lease year to access tenants gross sales Sales Reporting records for the past 2 years with 15 days notice Remaining Lease Term 3.5 Years

Remaining Options Five (5) Options of Five (5) Years CAM The Tenant is self maintaining the premises

RENT SCHEDULE LANDLORD RESPONSIBILITY DETAIL

Description Dates Annual Rent Rent Increase Maintenance and Landlord shall at its sole cost and expense maintain and replace the structural portions of the premises Current Term 2/1/2019 - 1/31/2024 $732,654 10.10% Repairs Option Term 2/1/2024 - 1/31/2029 $799,870 9.17% Insurance Landlord agrees to maintain during the term all insurance required under the lease Option Term 2/1/2029 - 1/31/2034 $867,086 8.40% STORE SALES Option Term 2/1/2034 - 1/31/2039 $934,302 7.75% Year Annual Sales Sales PSF Option Term 2/1/2039 - 1/31/2044 $1,001,518 7.19% 2016 $20,380,700 $385 Option Term 2/1/2044 - 1/31/2049 $1,068,732 6.71% 2017 $19,427,841 $367 * 2018 sales were excluded as the rebranding from Farm Fresh 2018 - - to Kroger occurred and did not accurately depict true sales

2019 $21,168,063 $400 10 Financial Analysis KROGER | SUFFOLK, VA · · ·

SITE PLAN

$732,654 HOLLY LANE NOI

N MAIN STREET - 26,000 VPD

,0 SF

SF

14,0 SF ACCESS ROAD CRED I B A Y T P UNIO N OR T

KROGER | SUFFOLK, VA Financial Analysis 11 Joint Base Langley-Eustis 10 j ST Poquoson

ST31 Joint Base Langley-Eustis ST40

Newport News ¤£13 Hampton Chesapeake Bay James River

¤£17 ¦¨§6464

664 Naval Station Norfolk ST620 ¦¨§664 Joint Exp Base Little Crk-Ft Story j

¤£460 Norfolk Portsmouth

¤£258 Atlantic Ocean Virginia Beach ST35

Chesapeake Suffolk Alf Fentress Chesapeake

¤£58

ST671

ST616 ¤£17

ST684 ST32 Chesapeake NSGA Northwest Annex ST615

j ¤£13

Ma¤£158 rkeST37 t Overview ST168 KROGERj | 1401 N MAIN STREET | SUFFOLK, VA Joint Base Langley-Eustis 10 j ST Poquoson · · ·

ST31 Joint Base Langley-Eustis ST40 SUFFOLK OVERVIEW Newport News ¤£13 Hampton Chesapeake Bay James River Located in the Hampton Roads MSA with miles of waterfront property on the Nansemond and James River, Suffolk is a growing suburb of Norfolk with a population of approximately PREMIER LOCATION ¤£17 ¦¨§6464 90,000. Suffolk is the largest city in Virginia by land area as With its prominent waterfront location well as the 14th largest in the country. Suffolk is located in the Hampton Roads metropolitan area which also includes the and proximity to the Norfolk, 664 Naval Station Norfolk ST620 ¦¨§664 independent cities of Chesapeake, Hampton, Newport News, Suffolk has continued to expand Joint Exp Base Little Crk-Ft Story Norfolk, Portsmouth, and Virginia Beach, as well as other j smaller cities, counties, and towns of Hampton Roads. Early in its history, Suffolk was traditionally a land transportation Norfolk ¤£460 gateway to the areas east of the . The Portsmouth city developed into more than just a transportation modal Naval Air Station Oceana in the early 1900’s due to the growth of peanuts in the surrounding area which became a major industry for the city. Atlantic Ocean ¤£258 Suffolk eventually became home to Planter’s Peanuts in 1912 which still remains a major employer for the area today. With Virginia Beach ST35 its prominent waterfront location and proximity to the Norfolk, Suffolk has continued to expand and became an integral Chesapeake Suffolk Alf Fentress Chesapeake suburb for the Hampton Roads MSA.

¤£58

ST671

ST616 ¤£17

ST684 ST32 Chesapeake NSGA Northwest Annex ST615 j ¤£13

¤£158 ST37 ST168 j KROGER | SUFFOLK, VA Market Overview 13 · · ·

460

NORTH MAIN STREET U.S HIGHWAY 460 (VPD 27,500) SUFFOLK PLAZA SHOPPING CENTER SUFFOLK SHOPPING CENTER

SUFFOLK SHOPS

Main Street MARKETPLACE

MAIN STREET SHOPPES

SUFFOLK OVERVIEW With close proximity to Norfolk, Suffolk has benefited from the strong military presence in the area and has grown rapidly as a result. The consistent demand from the government agencies in the area has driven various corporations and suppliers of the military to the area, most notably Lockheed Martin and Raytheon. Despite the military concentration, Suffolk’s economy is diverse with major employers spread out across various industries including Planters Peanuts, Unilever, Lipton Tea, Wal-Mart, Kraft Foods and QVC. Suffolk benefits from a premier roadway infrastructure, providing convenient access across the state. Suffolk is served by U.S. Highways 17, 13, 58, 258, and 460. , part of the , crosses through the northeastern edge of the city and provides access across to almost all of Norfolk’s major thoroughfares including I-64, I-264, Highway 166 and Highway 168. Highway 460 is a heavily trafficked north/south arterial which leads directly into I-95, providing access into Richmond (75 miles) and Washington D.C (190 Miles).

14 Market Overview KROGER | SUFFOLK, VA · · ·

NORFOLK ECONOMIC OVERVIEW

The city’s major industries include financial, shipbuilding, military, and aerospace. Norfolk is located at the center of the Hampton Roads metropolitan area and enjoys a large natural harbor at the mouth of the Chesapeake Bay making it an ideal location for the largest Naval base in the world. The Hampton Roads Beltway ties into the Hampton Road Bridge Tunnel, Monitor Merrimac Memorial Bridge Tunnel/Hampton Road Beltway, and Chesapeake Bay Bridge Tunnel which allows for strong access to the other major cities in the Hampton Roads MSA via Interstate 664 and 64.

POPULATION (2018 ESTIMATE): 1.8 MILLION 2ND LARGEST MSA in the State of Virginia PROJECTED POPULATION GROWTH (2018-2023): Six Major Military Installations – Norfolk Naval Station, Naval Air Station, Fort Eustis, Yorktown, and Newport News 3% DEFENSE Shipyard, and Langley Airforce Base AVERAGE HOUSEHOLD INCOME: Two Major Logistics Touchpoints in Norfolk– Port of Virginia (2nd Largest on East Coast) and Norfolk Southern HQ $81,803 LOGISTICS (Owner of Largest Railroad Network in North America) % OF ADULTS WITH COLLEGE EDUCATION: 65.3% TECHNOLOGY Five Major Research and Tech Companies in the MSA. MEDIAN HOME VALUE: High-Wage Sector Now Responsible for Over 30% of GDP; BUSINESS SERVICES 4,600 Jobs Added in 2017 to bring total to 108,700, an $195,500 increase of 11% since 2010.

KROGER | SUFFOLK, VA Market Overview 15 · · ·

NORFOLK ECONOMIC ENGINES ECONOMIC ENGINES

WAREHOUSING & DISTRIBUTION CENTERS The Port of Virginia’s success has generated significant synergies with some of the biggest companies in the United States who have invested nearly $750 million to build eight million square feet of warehouse and distribution space which employ over 8,000 workers. 39 warehousing and distribution centers have been developed in the Newport News region by retail and wholesale giants Wal-Mart, Target, Ace Hardware, Lumber Liquidators, and Keurig Green Mountain primarily due to its proximity to a world class port facility and logistic infrastructure.

NASA LANGLEY RESEARCH CENTER Established in 1917, Langley has approximately 3,300 civil service and contract employees focused on improving today’s military and civilian aircrafts. Langley scientists and engineers have won the Collier Trophy, which is awarded to those who have made the greatest achievement in aeronautics or astronautics in America, on five separate occasions. In April 2017, NASA Langley broke ground on a $95.6 million project consisting of a new laboratory where it will hatch sensing technologies to aid space NASA Langley Research Center exploration, improve unscrewed flight, and study Earth’s atmosphere.

NATIONAL INSTITUTE OF AEROSPACE Formed by a consortium of the nation’s leading research universities and colleges, the Hampton-based institution focuses on aerospace and atmospheric research. NIA recently opened the NIA Research and Innovation Laboratories in 2012.

National Institute of Aerospace

VMASC provides expertise in computer modeling, simulation, and visualization to government agencies and industry. With over 100 industry, government and academic

VMASC

16 Market Overview KROGER | SUFFOLK, VA 10 UV £¤60 UV167 UV143

UV665 Chesapeake Bay

James River

Hampton Roads Willoughby Bay

64 ¨64 Naval Station Norfolk ¦§ · · · Batten Bay

¦¨§664664 UV620

Elizabeth River

TRADE AREA DEMOGRAPHICS Tidewater Comm Col-Portsmouth UV644 UV600 £¤460 Old Dominion University Nansemond River UV628 664 ¦¨§664 UV164 POPULATION UV10 £¤258 £¤13 3 MILES 5 MILES Norfolk

264 2010 Census 33,302 42,471 UV605 Portsmouth ¦¨§264 2019 Estimate 35,081 45,131

Norfolk Naval Shipyard 464 36,371 46,955 UV603 ¦¨§464 2024 Projection UV604

UV337 £¤58 POPULATION GROWTH Hampton Roads Executive Airport ¦¨§6464 UV609 UV607 3 MILES 5 MILES £¤17

64 Historical Growth: 2010 to 2019 5.34% 6.26% ¦¨§64

Projected Growth: 2019 to 2024 3.68% 4.04% UV632

UV608 UV739 UV165 Suffolk HOUSEHOLDS UV168

£¤13 £¤58 Chesapeake UV165 3 MILES 5 MILES UV610 3 MILES 2010 Census 12,169 15,531 UV642 UV615 UV647 Suffolk Municipal Airport 2019 Estimate 12,956 UV61616,586 UV604 Chesapeake Regional Airport 5 MILES UV168 13,485 17,287 £¤17 2024 Projection UV643

Historical Growth: 2010 to 2019 6.47% 6.79% UV32 UV634 Projected Growth: 2019 to 2024 4.08% 4.23% UV660

Great Dismal Nat'l Wildlife Ref 2019 Est. Average Household Income $69,959 UV$74,158189 UV668 j UV615 2019 Est. Median Household Income $52,292 $56,846 UV673 Lake Drummond 666 UV £¤13

KROGER | SUFFOLK, VA Market Overview 17 INVESTMENT ADVISORS MARC MANDEL KROGER Managing Director 484.532.4212 [email protected]

STEVE SCHRENK Director 484.532.4213 [email protected]

FINANCING ADVISOR

MICHAEL PAGNIUCCI Director 484.532.4172 [email protected]

LOCAL MARKETING ADVISOR

JORDAN LEX Senior Director 202.533.2517 [email protected]