EXECUTIVE SUMMARY

INTRODUCTION

Holliday Fenoglio Fowler, L.P. (‘HFF”) is pleased to present 1111 Superior (the “Property”), a 559,299 RSF office tower strategically located

at “Main and Main” of , ’s central business district. The Property’s efficient floor plates, superior amenities and prime views

of Lake Erie within an urban environment combine to present a rare opportunity for investors. Expertly managed and environmentally

conscious, 1111 Superior is one of the few office buildings indowntown Cleveland to achieve the LEED Silver Certification.

Anchored by the Cleveland Metropolitan School District (“CMSD,” S&P: AA; 92,358 RSF or 15.7% of the Property), 1111 Superior is 83.4%

leased overall to a highly diverse tenant base with no single industry representing more than 24% of the leased square footage. The second

largest tenant, Asurint, moved to the Property in 2016 and has recently expanded their leased footprint to 70,364 RSF or 11.7% of the

Property. Asurint’s lease and subsequent expansions are indicative of the Property’s recent leasing activity, as over 220,000 RSF of new

and expansion leases have been executed since 2015. An investor is well positioned to capitalize on this leasing momentum in order to lease

the 41,780 RSF of contiguous high-rise vacancy on the 23rd through 25th floors, and backfill the top three (3) floors of the Property totaling

41,999 RSF once IBM gives back this space, anticipated to occur as early as 2019.

KEY PROPERTY STATISITICS

Property Address: 1111 Superior Avenue East, Cleveland, OH 44114 Submarket: Cleveland CBD; Nine-Twelve District Stories: 28 Stories, 350' Tall Rentable Square Feet: 599,299 RSF Year Built/Renovated: 1983/1995/2014 Total Percent Leased: 83.4% Remaining W.A.L.T.: 5.3 years Slab to Slab Ceiling Height: 10'6" Finished Ceiling Height: 8'6" Architect: Skidmore, Owings, & Merrill / Hatfield Building Engineering: Jaros, Baum, and Bolles Parking: 509 Covered Spaces (0.85 / 1,000) Typical Floor Plate: 23,454 Walk Score: 96 Transit Score: 86 Real Estate Tax Parcel: 101-35-038 Site Area (SF): 55,665 Site Area (Acres): 1.278 Zoning: G-R-E5; General Retail Business FAR: 11 Environmental Certification: LEED Silver

2 EXECUTIVE SUMMARY

SUMMARY OF PRIMARY TENANTS % CURRENT REMAINING TENANT INDUSTRY FLOORS RSF SHARE COMMENCE. EXP. BY RENT ESCALAT. TERM (YRS) Cleveland Metropolitan School District (1) Education 17-19 92,358 15.4% Aug-13 Jul-23 $16.75 $0.50 5.1 Asurint (2) Technology 20-22 70,364 11.7% Feb-16 Jan-27 $16.50 Varies 8.6 MetLife Services & Solutions Legal Services 8-9 47,529 7.9% Nov-99 Nov-28 $15.76 Varies 10.4 IBM Corporation (3) Technology 26-28 41,999 7.0% Jul-16 Sep-21 $16.50 $0.50 3.3 Plante & Moran, PLLC Accounting 12 23,781 4.0% Oct-05 Dec-22 $16.50 $0.30 4.5 Weighted Average / Total 276,031 46.1% $16.46 6.6

(1) CMSD currently pays $16.75/RSF on 76,763 RSF (1st, 14th, 17th through 19th floors) and $15.75/RSF on 12,973 RSF located on the 2nd Floor. All office space escalates $0.50/RSF annually. Tenant also leases 2,622 RSF of storage space (included in the above total RSF) at $10/RSF through LXD. (2) Asurint will expand into 16,000 RSF effective 5/1/18; and 7,454 RSF effective 2/1/19. Tenant’s rent shall increase to $18.00/RSF on 2/1/22 with no further escalations. (3) IBM’s contractual LXD is 9/30/21, but analysis assumes Tenant exercises their termination option effective 9/30/19, which requires 9 months notice and Termination Fee of $780,775.29.

The Property has attracted office users from a INVESTMENT HIGHLIGHTS multitude of sources including competitive and non-competitive CBD properties (approximately Contemporary Iconic Diverse Office Tower Tenancy 62% of recent new tenants), new businesses

(19%), adjacent suburbs and submarkets (14%), High-Yield, State-of-the-Art Value-Add Returns Tenant Amenities and even other states who considered the entire downtown office market before selecting 1111 Sought After Diminishing CBD High Rise Vacancy Office Supply Superior (5%). Many of these companies seek efficient space, which positions 1111 Superior as Mark-to-Market Tenant Migration Opportunity to the CBD the office building of choice with its 20’6” column spacing, optimum bay depth and 10 potential corner offices per floor. The upsurge of adaptive PREVIOUS TENANT LOCATIONS reuse activity has also displaced Class B and C office tenants into Class A space. 1111 Superior provides upside for an investor through the lease 62% 19% 14% 5% up of the 99,747 RSF (16.6% of the Property) of DOWNTOWN NEW SUBURBS ANOTHER existing vacancy, and the ability to mark leases ENTRANT METRO to market upon renewal, thereby enhancing NOI over the hold period.

3 EXECUTIVE SUMMARY

PROPERTY

599,299 RSF, 28-Story Class A trophy office tower

One of the few LEED Silver certified buildings in

Designed by world-renowned Architect Skidmore, Owings and Merrill

LOCATION

“Main & Main”, epicenter of downtown Cleveland

Central location in the Nine-Twelve Financial District

Gateway to the Theater District and Center

AMENITIES & FEATURES

Vibrant, recently renovated lobby with modern floor-to-ceiling LED illuminated wall

The lobby also features marble floors, marble columns, and 18’ ceilings

Unimpeded views of Lake Erie, City of Cleveland, and surrounding parks

Brand-new conferencing facilities with multiple video screens, break-out rooms, and lounge

Brand-new, state-of-the-art fitness facility features weights, cardio equipment, showers, exposed ceilings, and Lake Erie views

Separate yoga room that is adjacent to the fitness facility

TENANCY

Over 220,000 RSF of new/expansion leases have been executed since 2015; occupancy increased from 50% in 2014 to 83.4% today

30.3% of the Property is leased to Investment Grade tenancy

Diverse tenant base with no one industry representing more than 24% of building

Attracts tenants from the CBD, suburbs, and out- of-state

MARKET

Over 5 million SF in adaptive reuse projects drastically improved Cleveland office fundamentals

New multi-housing supply supports the live-work- play lifestyle downtown

4 EXECUTIVE SUMMARY

MARK TO MARKET OPPORTUNITY WITH BELOW MARKET RENTS

1111 Superior presents an ideal opportunity to increase rents, bridging the gap between in-place rents and the current market rents for the Property, which are currently $17.50/RSF for the low-rise floors (Floors 1-15) and $19.00/RSF for the high-rise floors (Floors 16-28). The weighted average in-place rental rate at the Property is currently $16.41/RSF which is $1.00 to $2.50 less than the Property’s market rents.

Significant opportunity lies within the 23 tenants, totaling 181,209 RSF or 30.2% of the Property, that roll between 2018 and 2022. These tenants together have an in-place rental rate of $16.31/RSF and upon expiration will be 12.3% below market. This includes IBM who leases the top three floors of the building totaling 41,999 RSF, which represents a prime mark to market opportunity as Tenant’s rent will be more than

13% below market, whether they exercise their termination option (effective 9/30/19) or hold the space through lease maturity (9/30/21). 1111

Superior’s rollover profile and current vacancy will allow an investor to increase future revenues by marking leases to market upon renewal, thereby substantially enhancing the Property’s revenues and value throughout the investment period.

CONTRACT RENTS UPON EXPIRATION VS. MARKET RENT GROWTH (2018-2022)

$22.00 12%

$20.54 $21.00 $19.94 10% $20.00 $19.36 $18.80 $19.00 $18.25 8%

$18.00 6% $17.00 $17.55 $17.47 $17.52 Rent / RSF

$16.00 4% % RSF Expiring $16.10

$15.00 2% $14.79 $14.00

$13.00 0% 2018 2019* 2020 2021 2022

* Includes IBM % RSF Expiring Weighted Average Rent/RSF Upon LXD Average Market Rent/RSF

5 EXECUTIVE SUMMARY LOCAL AMENITIES

RESTAURANTS RETAIL ➊ Oasis Café ➊ PNC Bank A CONTEMPORARY, ICONIC OFFICE TOWER ➋ Urban Farmer ➋ CVS Pharmacy ➌ Pho Thang Café ➌ Rocket Fizz 1111 Superior has been successfully repositioned as a top-tier office tower ➍ Captain Tony's Pizza ➍ The Tea Lab ➎ Tomaydo Tomahhdo ➎ The Restock CLE amidst a Cleveland office market in which over 5 million square feet of office ➏ Guys Pizza Co. ➏ Surroundings Home Décor space has been redeveloped into residential and hospitality uses over the last ➐ Porcelli's Bistro ➐ Nick's Sports Corner ➑ Tea House Noodles ➑ Peterson Nut six years. At 28 stories and 599,299 RSF, the Property offers an encyclopedic ➒ Potbelly Sandwich Shop ➒ U.S. Bank ➓ Anna in the Raw ➓ Budget Car Rental amenity package in an irreplaceable live-work-play location. Tremendous ⓫ Winking Lizard ⓫ West Marine ⓬ ⓬ leasing success followed the 2014 renovation, evidenced by over 220,000 Asia Kitchen Heinen's ⓭ 45h Street Bar and Grill ⓭ FedEx Office RSF of positive absorption in the last 3 years. 1111 Superior’s unmistakable ⓮ Pickwick & Frolic ⓮ Victoria's Secret & PINK ⓯ Butcher and the Brewer ⓯ Brooks Brothers curtain reflective glass design is a product of the world-class architect ⓰ Zocalo Mexican Grill & Tequileria ⓰ Payless ShoeSource ⓱ ⓱ Skidmore, Owings, & Merrill, whose other notable projects include the Willis Society Lounge Claire's ⓲ Red, the Steakhouse ⓲ GameStop Tower, the One World Trade Center, and the Burj Khalifa. The Property was ⓳ Chinato ⓳ The Children's Place ⓴ Barrio ⓴ Papyrus completed in 1983 as the headquarters for Eaton Corporation, extensively 21 Sushi 86 21 Bath & Body Works 22 Helio Terra Vegan Café 22 FirstMerit Bank renovated in 1995 and 2014, and remains one of the most iconic properties in 23 Flannery's Pub the Midwest region. 24 Lola ATTRACTIONS 25 Pizzafire ➊ Convention Center of Cleveland 26 Noodlecat ➋ Cleveland City Hall 27 Pura Vida by Brandt Evans ➌ First Energy Standium 28 Mirch Masala ➍ Great Lakes Science Center 29 Tilted Kilt ➎ Rock and Roll Hall of Fame and Museum 30 Lincoln Tap House ➏ Voinovich Bicentennial Park 31 Hyde Park Prime Steakhouse ➐ The Cathedral of St. John the Evangelist 32 Hard Rock Café ➑ 33 Morton's The Steakhouse ➒ House Blues Cleveland 34 Muse Restaurant ➓ Hilarities 35 Take 5 Rhythm and Jazz Tapas ⓫ Quicken Loans Arena 36 Johnny's Little Bar ⓬ Progressive Field 37 Johnny's Downtown ⓭ Cleveland Grays Armory Museum 38 Taza Lebanese Grill ⓮ Hanna Theatre 39 Drop Bar ⓯ Connor Palace 40 Nauti Mermaid ⓰ State Theatre 41 Bar Louie ⓱ Ohio Theater 42 Blue Point Grille ⓲ 43 Cleveland Chop ⓳ Ambassador Bowling Lanes 44 Panini's Bar & Grill ⓴ FBI 45 Harry Buffalo 21 JACK Casino 46 City Tap Cleveland 22 The Bonfoey Gallery 47 The Clevelander Bar & Grill 23 Tower City Cinemas 48 Brickstone 24 Dive Bar 49 HotSpot Café 25 Tequila Ranch 50 Becky's 51 Barristers Delit Restaurant HOTELS 52 Otto Moser's Restaurant ➊ The Westin Cleveland 53 Cibreo Cleveland ➋ Hampton Inn 54 Green Rooster Farms ➌ Hyatt Regency 55 Dunkin' Donuts ➍ Marriott Downtown 56 Barley House ➎ Hilton Cleveland 57 XO Prime Steaks ➏ Holiday Inn Express 58 Inn of the Barristers ➐ the Kimpton Schofield Hotel ➑ Metrpolitan Hotel COFFEE ➒ Wyndam Cleveland ➊ Starbucks ➓ Radisson Hotel ➋ Rising Star Coffee Roasters ⓫ Renaissance Hotel ➌ Erie Island Coffee Co. ⓬ The Ritz-Carlton 6 ➍ Ontario Street Café ⓭ Hilton Garden Inn ➎ Phoenix Coffee Co. ⓮ Residence Inn EXECUTIVE SUMMARY

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Street Street 8 th CONVOCATION W 3 10 Carnegie Avenue CENTER East 18 13 49 10 7 EXECUTIVE SUMMARY

STRATEGIC LOCATION WITH SUPERIOR AMENITY SET

Positioned at the core of downtown Cleveland, 1111 Superior is universally accepted as being located at the “Main & Main” in the CBD

along Superior Avenue, effectively the main thoroughfare of the CBD. In addition to its prominent street address, 1111 Superior overlooks

Cleveland’s greatest asset, Lake Erie, and provides tenants with access to the recently redesigned Ralph J. Perk Plaza Park, as well as the

Theater District, bike share system and the metro light rail system. The recent park renovations include raised grassy hills, a metal pergola

with a translucent red canopy, and an acre of open space frequently used for lunch breaks, food trucks and free concerts.

In addition to its strategic location, 1111 Superior’s comprehensive amenity package includes the on-site David’s Deli, which supplies tenants

with a variety of fresh foods throughout the day including breakfast options, salads, sandwiches, homemade soups and more, along with

catering services. Furthermore, recent capital expenditures totaling $1.6 million include extensive improvements to the lobby, fitness center

and conference facilities, which have collectively repositioned 1111 Superior as one of the most desirable office towers downtown. All of these

amenities are provided to tenants at no cost, and have been instrumental in securing high quality tenancy such as Asurint, Plante Moran and

IBM. An investor may also consider the potential for a roof-top terrace on the 26th floor, which would further separate the Property from its

competitive set.

8 EXECUTIVE SUMMARY

ESTABLISHED INSTITUTIONAL TENANCY AND TENANT DIVERSITY

The anchor tenants at the 1111 Superior are some of the most established firms in both Cleveland and the country. MetLife Services & Solutions, under its prior Hyatt Legal Plans arm is the country’s largest provider of legal voluntary benefits with a client base of over 3 million people in

2,000 organizations. Plante & Moran was named the “Best Accounting Firm to Work For” by Vault Guide to the Top 50 Accounting Firms for quality of life, business outlook, culture, and worklife balance. Cleveland Metropolitan School District serves almost all of the City of Cleveland, and represents the second largest PreK-12 district in the state of Ohio with enrollment of 38,949 students. Finally, International Business

Machines has generated the most patents of any business in the last 25 years and operates in over 170 countries.

CREDIT QUALITY INSTITUTIONAL TENANCY MOODY'S S&P FITCH RSF % FLOORS COMMENCEMENT EXPIRATION TOTAL TERM

Cleveland Metropolitan School District A2 AA A- 92,358 15.4% LL, 1-2; 17-19 Aug-13 Jul-23 10.0 Yrs MetLife A3 A- A 47,529 7.9% 8-9 Oct-99 Nov-28 29.2 Yrs IBM (1) A1 A+ A+ 41,999 7.0% 26-28 Jul-16 Sep-21 5.3 Yrs Title Insurance A3 A A 12,382 2.1% 6 Jul-13 Feb-19 5.7 Yrs Total / Weighted Average 194,268 32.4% 13.4 Yrs

(1) IBM's contractual LXD is 9/30/21, however analysis assumes tenant exercises their termination option effective 9/30/19, which requires 9 months notice and termination fee of $780,755.29.

The tenant mix is also well-diversified representing a range of industries including legal services, technology, education, F.I.R.E., business services and more, with no single sector accounting for more than 24% of the total tenant base. Tenants range from start-ups to well- established firms, international and locally based law firms, financial and insurance companies, and two (2) major Fortune 500 companies

(MetLife and IBM).

9 EXECUTIVE SUMMARY

ADAPTIVE REUSE CATALYZES CLEVELAND’S RENAISSANCE

Over 5 million square feet has been redeveloped from office to

residential and hospitality over the last six years in Cleveland.

This trend has improved overall office fundamentals by reducing

the existing supply and simultaneously increasing the demand

and occupancy of CBD office. The apartment unit conversions

accommodated the burgeoning downtown population that

has grown 79% since 2000 (which includes a 77% increase

in millennial residents), as the residential occupancy stayed

consistent at 95% year over year. A larger downtown population

was met with an increase of homegrown and new to market

retailers. The hospitality sector also added 1,000 rooms, further

displacing more office product. The ongoing adaptive reuse

activity that Cleveland is experiencing will continue to improve

the ongoing desirability of 1111 Superior.

The surge in apartment construction has also made the

downtown area a more vibrant and livable employment hub. In

2016, a total of $2.3 billion was invested into re-purposing and

developing office, hotel, residential, and public infrastructure CORPORATE MIGRATION TO THE CBD

in downtown Cleveland, which has activated the CBD as a live- Seeking to tap a broader talent pool and immerse themselves

work-play destination. The Cleveland labor market is seeing in Downtown Cleveland’s renaissance, suburban tenants have

improvement as May 2017 experienced an increase in 6,300 continued their unprecedented migration into the CBD, collectively

jobs in business services and government employment sectors leasing over 469,000 RSF since 2015. Businesses have often cited

among others. As companies continue to grow, the office non-financial factors as being the driving factor behind relocating to

market is expected to continue to experience positive trends. the CBD. The paramount contributing factor is the ability to recruit

This healthy employment market has forced employers to pay and retain top talent from the young, growing workforce living within

more attention to their real estate decisions in order to attract the city. Downtown Cleveland’s public infrastructure, unparalleled

and retain talent. This is driving the migration trend to urban, amenity base, vast cultural institutions and recreational activities,

amenity-rich locations. Companies are also targeting more and recent population growth combine to create the ideal live-work-

centrally located buildings that offer creative and collaborative play environment, further contributing to the downtown migration.

work environments. The Cleveland office market is poised to Recent significant corporate relocations include Fox Sports (30,789

benefit significantly from this broader trend of urbanization RSF), New York Life Insurance (107,296 RSF), Council for Economic

since companies no longer view office space as a commodity Opportunities (44,801 RSF), The Millennia Companies (45,072 RSF),

but as an amenity critical to talent attraction. Fisher Phillips (16,690 RSF), Electronic Merchant Systems (45,000

RSF) and the NRP Group (41,307 RSF).

10 EXECUTIVE SUMMARY

UNSURPASSED VIEWS AND FUNCTIONALITY

1111 Superior has unimpeded views of Lake Erie and 360° views of downtown Cleveland on the higher floors. The curtain glass exterior provides an abundance of windows and natural light for its tenants. Its saw-toothed floorplate can function either as separate tenant bays or provide up to 10 potential corner offices for a single tenant floor. This efficient floor plate design offers expansive interior space and optimum bay depth for office planning flexibility. Additionally, future ownership has the unique opportunity to add value by creating a roof-top deck on the 26th floor.

TIMELESS, INSTITUTIONALLY MAINTAINED STRUCTURE

1111 Superior’s design, amenities, height, floor plates, and location truly make the Property a timeless asset that is exceptionally difficult to reproduce. Limited availability of quality development sites combined with replacement cost estimates of approximately $250 per RSF make new construction and competition highly unlikely in the CBD submarket. The Property further benefits from the depth of past institutional ownership that has maintained the the Property’s Class A status through required capital improvements.

Over $1.6 million of total capital improvements have been invested since 2014 to sustain the first class nature of the Property. Significant capital improvements include fitness center and equipment purchases of $525,484 and conference center expenditures of $492,446.

Furthermore, $418,000 has been invested in extensive modernizations to the lobby and other common areas. Ownership has also enhanced the quality of the mechanical systems through consistent improvements to both the HVAC and electrical systems. These improvements are expected to result in significant energy and operational efficiencies.

GROUND LEASE

The building is subject to a ground lease owned by the Bishop of the Diocese of Cleveland, which commenced on August 1st, 1980. In 2017, the term of the ground lease was extended to December 31, 2092, resulting in 74 years of remaining term. See pages 74 & 75 for a summary of the ground lease.

11 EXECUTIVE SUMMARY

DYNAMIC FAST GROWING ECONOMY LARGE CONCENTRATION OF FORTUNE 500 COMPANIES

Cleveland is one of the nation’s most Cleveland is home to a host of Fortune 500 companies. Major employers in the

dynamic economies and fastest area include:

growing cities. Cleveland’s population

grew 32% between 1990 and 2000,

outpacing every other Midwest city

over the same time period. While

most secondary markets experience

a “brain drain” in which they educate

their young people before they move

to other cities, Cleveland is undergoing

the exact opposite phenomenon.

Downtown Cleveland’s population has

grown 79% since 2000, and millennials

comprise the largest demographic,

having grown by 77% over the same

time period. These urban dwellers are

highly educated and have contributed

to a 140% increase in residents who

possess at least a bachelor degree.

12 EXECUTIVE SUMMARY

ABUNDANT TRANSPORTATION AMENITIES

1111 Superior is located in close proximity to the RTA light rail metro station which links the Property with Cleveland’s eastern, western, and southern suburbs.

Tenants have access to the Cleveland bike share system and the free Nine

Twelve Shuttle, which stops at the corner of Superior and 12th street, immediately adjacent to the Property. Furthermore, the garage offers two way entrances and exits allowing convenient ingress and egress from either direction.

1111 Superior’s location along East 12th Street places it adjacent to the cities most abundant supply of cheap surface parking. This combination of transit and parking options makes 1111 Superior an irreplaceable location.

13 Contact Information Investment Contacts Debt Contact HFF Chicago Jaime M. Fink Jason A. Bond 150 North Riverside | Suite 2500 Senior Managing Director Director Chicago, IL 60606 312.528.3683 312.980.3608 Telephone: 312.528.3650 jfi[email protected] [email protected] Fax: 312.528.3651 Jeffrey M. Bramson Ohio Contact Senior Managing Director/Managing Broker Christine Riniti 312.528.3687 203.858.3675 [email protected] [email protected]

Bryan D. Rosenberg Director 312.300.7282 [email protected]

Patrick M. Shields Director 312.528.3685 [email protected]

John Merrill Senior Managing Director 317.632.7503 [email protected]

Yoonjin Choo Analyst 312.980.3606 [email protected]

©2018 Holliday Fenoglio Fowler, L.P. (“HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 26 offices and is a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, advisory services, loan sales and commercial loan servicing. For more information, please visit hfflp.com or follow HFF on Twitter @HFF.

HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.