Offering Memorandum MATTRESS FIRM — STATE STREET 7227 WEST STATE STREET | BOISE, ID

State St

SITE Glenwood St

CLAY ANDERSON, MBA, CPA | 208 489 6177 | [email protected] MIKE CHRISTENSEN | 208 472 2866 | [email protected] STATE STREET MATTRESS FIRM

Confidentiality Agreement Colliers International has been engaged as the exclusive marketing team to the Seller in connection with Seller’s solicitation of offers for the purchase of the property known as Mattress Firm-State Street, 7227 West State Street located at the southeast corner of West State Street and Glenwood Street, in the City of Boise, County of Ada, State of Idaho (the “Property”). Prospective purchasers are advised that as part of the solicitation process, Seller will be evaluating a number of factors including the current financial qualifications of the prospective purchaser. Seller expressly reserves the right in its sole and absolute discretion to evaluate the terms and conditions of any offer and to reject any offer without providing a reason therefore. Further, Seller reserves the right to terminate the solicitation process at any time prior to final execution of the Purchase Agreement. 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, and it is not to be used for any other purpose or made available to any other person without the express written consent of Seller. The material is based in part by information supplied by the Seller Table of Contents and in part by financial information obtain from sources it deems reasonably reliable.

Map data ©2016 Google 2000 ft Summaries of any documents are not intended to be comprehensive or all-inclusive, but Property Profile 3 rather only outline some of the provisions contained therein and qualified in their entirety by the actual document to which they relate. Financials 4 No representation or warranty, expressed or implied, is made by the Seller, or any of their respective affiliates as to the accuracy or completeness of the information contained herein. Site Layout 5 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, Location 6 including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the Property Tenant Profile 7 site or used in the construction or maintenance of the building at the Property site. A prospective purchaser’s sole and exclusive rights with respect to this prospective Demographics 8 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 Area Overview 9 Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller 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. Contact Prospective purchasers are not to construe the contents of this Offering Memorandum or any prior or subsequent communication from the Seller or their affiliates or any of their Clay Anderson, MBA, CPA Mike Christensen respective officers, directors, shareholders, owners, employees, or agents as legal, tax, or 208 489 6177 other advice. Prior to submitting an offer, prospective purchasers should consult with their 208 472 2866 own legal counsel and personal tax advisors to determine the consequences of an [email protected] [email protected] investment in the Property and arrive at an independent evaluation of such investment.

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 2 PROPERTY OVERVIEW

Property Profile Valuation

Address 7227 W State Street | Boise, Idaho 83714 Price $3,255,000

Year Built 2015 Cap Rate 6.0%

Size 4,812 SF Net Operating Income $195,300

Land Size ±0.445 Acres

Zoning C-2 | City of Garden City

Lease Type NNN

Lease Term 10 years left on a 12 year lease | Multiple 5 year renewal options

Parking 17 spaces

Representative Image Representative Image

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 3 FINANCIALS

Rent Schedule 7/1/2017-6/30/18 $195,300 7/1/2018-6/30/19 $195,300 7/1/2019-6/30/20 $205,065 7/1/2020-6/30/21 $205,065 7/1/2021-6/30/22 $215,318 SITE 7/1/2022-6/30/23 $215,318 Glenwood St 7/1/2023-6/30/24 $226,084 State St 7/1/2024-6/30/25 $226,084 7/1/2025-6/30/26 $237,388 7/1/2026-6/30/27 $237,388

Loan Valuation PERSI Loan: Assumable Price $3,255,000

Balance: $1,540,000 Cap Rate 6.0%

Rate: 4.0% Net Operating Income $195,300 Amortization: 30 year

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 4 SITE PLAN

2.2

2.3

32.16

32.8

32.2

3 " 4 14'-9 24'-4"

32.6 32.1 32.8

(5) SPACES AT 9'-6"=47'-6" 32.4 3.6 32.9 1 " 2 32.18 2'-9

10'-0"

2.1

32.3 32.6 32.15 (9) SPACES AT 9'-0"=81'-0"

18'-0" 32.17

32.8

9'-2" 32.4 4'-2"

3.1 6'-2" "0-'81="0-'9 TA SECAPS )2( SECAPS TA "0-'81="0-'9

32.6 32.14 3.6 32.2 8'-0"

105'-0"

8'-0" 32.10 32.5 45'-10"

6'-0" 3.6 32.4

15'-0"

5'-0" 5'-0"

3.1

2'-4"

12'-8"

32.4

32.13

9 SD1.2

SITE PLAN THIS DRAWING CONTAINS INFORMATION WHICH IS THE PROPRIETARY PROPERTY OF ALC ARCHITECTURE. NO UNAUTHORIZED REUSE OR DUPLICATION OF THESE PLANS OR ANY INFORMATION CONTAINED HEREIN, SCALE: 1" = 10'-0" WITHOUT THE EXPRESS WRITTEN CONSENT OF ALC ARCHITECTURE. State StreetTHIS Mattress DRAWING IS NOT TO Firm BE USED FOR CONSTRUCTION| OFFERING UNTIL IT IS SIGNED MEMORANDUM BY THE ARCHITECT. COLLIERS INTERNATIONAL P. 5 COPYRIGHT © LOCATION

The company set out to be a different kind of mattress retailer; As new research emerged showing the link between proper sleep focused on creating a unique shopping experience for the customer and good health, Mattress Firm responded to the growing demand with a large selection of quality, brand name bedding products, for specialty mattresses by expanding its non-innerspring product competitive pricing and knowledgeable, well-trained associates. selection to include memory foam mattress sets such as Tempur- Pedic® products. Over the next several years, Mattress Firm grew to new heights, with the addition of corporate owned and franchise owned stores. With more than 3,500 company-operated and franchised stores By 2002, the company owned and operated approximately 250 across 48 states, Mattress Firm Holding Corp. (NASDAQ: MFRM) locations across the United States and was considered the second- has the largest geographic footprint in the United States among largest independent retailer in the country. multi-brand mattress retailers. Founded in 1986, Houston-based MFRM is the nation’s leading specialty bedding retailer with over Mattress Firm soon introduced a new store design, opened several $3.5 billion in pro forma sales in 2015. MFRM, through its brands new Super-Centers offering a greater selection from top bedding including Mattress Firm, Sleepy’s and Sleep Train, offers a broad manufacturers, introduced same-day Red Carpet delivery and selection of both traditional and specialty mattresses, bedding created the Firm Network, a unique in-store television network accessories and other related products from leading manufacturers, featuring programming to educate consumers about sleep and the including Serta, Simmons, Tempur-Pedic, Sealy, Stearns & Foster, guidance for selecting the right mattress for their personal needs. King Coil and Hampton & Rhodes.

Whether the customer has snoring problems, backaches or just Mattress Firm... Save Money. Sleep Happy. trouble falling asleep, Mattress Firm now had more options to provide sleep solutions for their customers.

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 7 DEMOGRAPHICS

1 Mile 3 Miles 5 Miles POPULATION 2016 Estimated Population 10,086 61,878 168,091

2021 Projected Population 10,678 65,230 177,091 2010 Census Population 9,078 57,928 152,506 2000 Census Population 8,876 58,273 134,332 Projected Annual Growth 2016 to 2021 1.2% 1.1% 1.6%

HOUSEHOLD 2016 Estimated Households 4,541 25,704 68,400 2021 Projected Households 5,016 28,265 75,208

2010 Census Households 4,019 23,654 61,223 2000 Census Households 3,588 21,716 52,126

INCOME

2016 Est. Average Household Income $65,602 $71,655 $74,452 2016 Est. Median Household Income $50,014 $57,288 $59,690

MISC. 2016 Est. Median Home Value $186,436 $188,165 $205,010 2016 Est. Median Rent $708 $684 $658 2016 Est. Labor Pop. Over 16 Years 8,399 50,392 134,852 2016 Est. Total Housing Units 4,705 26,503 70,417 2016 Est. Total Household Expenditure $239 M $272 M $735 M

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 8 AREA OVERVIEW

The Boise Airport (BOI) is located less than five miles from downtown The Boise Valley is strategically located in the Mountain Time Zone in Boise and handles more than three Southwestern Idaho, providing easy non-stop access to all major cities on the million travelers each year. West Coast, the Pacific Northwest and the Intermountain West. Of the West’s major metropolitan areas, 12 are within 800 miles of the Boise Valley.

# Lowest Cost Metro in the Pacific U.S. www.competitivealternatives.com – April 2016 Best Place to Live in 2016 www.mensjournal.com – March 2016 Most Caring City in America www.wallethub.com – December 2015 Best Air Quality www.Realtor.com – April 2016

Best Cities to Live www.247wallst.com – November 2015 Hottest Housing Markets of 2016 www.Zillow.com – January 2016

Top 100 Best Place to Live 2015 www.livability.com – September 2015 #2 in “Up-And-Coming Cities for Recent College Grads” 1 10 TOP www.Forbes.com – June 2015

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 9 AREA OVERVIEW

Quality of Life Referred to as the “Treasure Valley”, the region is home to about 675,000 people. The workforce of roughly 330,000, live within a 45-minute draw area. Known for its extraordinary quality of life and affordable cost of living (currently one of the lowest in the western states, according to the ACCRA Cost of Living Index), the Treasure Valley is consistently ranked by Forbes, The Wall Street Journal, Livability and Inc. Magazine as one of the best places in the U.S. to live and work.

Commuting in the Valley The major interstate serving the Treasure Valley is I-84, running through the metro area’s major cities (Boise, Meridian, Nampa and Caldwell). Branching off to the northeast is I-184, which runs into downtown Boise. Daily commutes are easy, with several U.S. and state highways providing direct routes and minimal traffic. The average commute time is only 18 minutes. Public transportation is handled by ValleyRide, Treasure Valley Transit and ACHD Commuteride.

What about logistics? There are 50 motor freight companies traveling 5 interstates, 20 U.S. highways and 30 state highways that serve the Boise Valley. More than 1,600 miles of rail line through Union Pacific and Burlington Northern Santa Fe provide connection points to Canada, Mexico and the U.S. They are aided by the state’s regional line and 6 short line railroads. Annually, the rail system transports over 11 million tons of freight.

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 10 AREA OVERVIEW Vibrant Communities Minutes from rivers, lakes and mountains, the Boise Valley is open 24/7 for any type of outdoor adventure.

Recreation Diversity Located 17 minutes from downtown Boise, While Idaho may not be known for diversity, more than 90 different languages are spoken in the the Bogus Basin Ski Area offers day and Boise School District. The Boise Valley is home to one of the oldest synagogues in the western lighted night skiing. The Boise River runs United States. Over 800 new citizens (refugees) are welcomed to the Boise Valley each year through downtown and is accessible through from over 20 foreign countries. The City of Boise has been recognized for its work helping these a greenbelt system with over 25 miles of bike new citizens acclimate to their new country and helps other communities around the country with paths and 850 acres of parks. With world- their programs. There are more than 24 language courses available through local universities and class golf courses, hiking, fishing and mountain community education programs and an international baccalaureate program is available. Annual biking, the recreation opportunities are virtually diversity events and resources include the Soul Food Extravaganza, PRIDE activities, Hispanic unlimited within a 30-minute drive. Cultural Center and the Black History Museum. The Mexican Consulate also has an office in Boise.

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 11 AREA OVERVIEW

IDAHO TAX OVERVIEW Sales and Use Tax in Idaho is 6%. This would apply to items purchased or consumed in Idaho. Exemptions are available for CORPORATE equipment and raw materials used directly in manufacturing, MINIMUM processing, or fabrication; clean rooms used in semiconductor 7% INCOME TAX and semiconductor equipment manufacturing; and any equipment $7.25/hr WAGE or material used in research and development activities. SALES & We do not tax services including telecommunication services, 6% USE TAX and utilities such as water, gas, electricity, or natural gas. In our STATE UNEMPLOYMENT region we do not have any local option sales tax. 1.91% INSURANCE RATE Property Tax personal (machinery/equipment) and real (land/ buildings) – based on market value. 2013 Rates: Ada County Average Range: 1.1% - 1.8% #2 BEST Canyon County Average Range: 1.5% - 2.5% 1.6%-7.8% PERSONAL INCOME TAX Elmore County Average rate: 1.8% STATE Property tax rate RATE RANGE Idaho does not have an inventory tax. Rate range on a bracketed (2013 Tax Foundation Study) system based on income levels Corporate Income Tax – Computed at 7.4% of the Idaho taxable income of a corporation. Corporations that are taxable in Idaho and another state or country or are part of a unitary group of corporations, use a 3 factor formula to ascertain how much of PROPERTY the business is conducted in Idaho. The apportionment formula is UNION MEMBERSHIP made up of a property factor, a payroll factor, and a sales factor. EXEMPTION These three factors, with the sales factor being double weighted 7.1% (NAT’L AVG: 11.9%) First $100,000 of personal for all taxpayers except for electrical and telephone companies, property is exempt from taxation are totaled and divided by 4 to compute the Idaho apportionment factor. The Idaho apportionment factor is then applied to the IDAHO IS A business income of the corporation to compute income assigned to Idaho. Non-business income allocable to Idaho is added to the right to work income apportioned to Idaho to arrive at Idaho taxable income. STATE

State Street Mattress Firm | OFFERING MEMORANDUM COLLIERS INTERNATIONAL P. 12 CLAY ANDERSON, MBA, CPA 208 489 6177 [email protected]

MIKE CHRISTENSEN 208 472 2866 [email protected]

Colliers International Boise | 755 W Front Street, Suite 300 | Boise, Idaho 83702 | 208 345 9000 | www.colliers.com/boise

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