Holliday Fenoglio Fowler, L.P. (“HFF”) Is an Illinois Licensed Real Estate Broker 30,000+ Vehicles Per Day

Holliday Fenoglio Fowler, L.P. (“HFF”) is an Illinois licensed real estate broker 30,000+ Vehicles Per Day

22 Half-Day Road 157,000+ PARKING DECK Vehicles Per Day

94 Tri-State Tollway

CDW CENTER (25 & 75 BUILDINGS)

100 BUILDING

Holliday Fenoglio Fowler, L.P. (“HFF”) is pleased to present the unique opportunity to acquire the fee simple interest in Tri-State International Office Center (the “Portfolio”, INVESTORS ARE 200 BUILDING “Property” or “Tri-State”), a 559,204 RSF, fully amenitized, five (5) building office portfolio located in Lincolnshire, IL. The Portfolio is 79.3% leased and derives income stability from its WELCOME TO BID

anchor tenant, CDW, a Fortune 500 Company (#220) who recently relocated their headquar- ON THE PORTFOLIO 300 BUILDING ters to the Property, fully occupying two buildings. CDW Center (209,021 RSF or 37.4% of the OR CDW CENTER Portfolio) is fully leased until November 2028 and has a parking ratio of 6.0 / 1,000 RSF due to the recently completed parking deck. The remaining 100, 200 & 300 Buildings (350,183 SEPARATE FROM RSF or 62.6% of the Portfolio) currently has 115,652 RSF of vacancy or 20.7% of the Portfolio, THE 100, 200 & offering a significant value-add component. The Portfolio features a balanced tenant roster with 7.8 years of remaining lease term, and benefits from fantastic visibility and access from 300 BUILDINGS the adjacent Tri-State Tollway. Further, the Property is proximate to the affluent North Shore communities, which are home to the Chicago area’s executives and decision makers.

2 EXECUTIVE SUMMARY

Stable Cash Flow with Value-Add Upside

The combination of the five assets presents a unique opportunity to acquire SUMMARY OF PRIMARY TENANTS the long-term stable cash flow provided by CDW at CDW Center (the 25 & 75 CURRENT REMAINING SUMMARY OF PRIMARY TENANTS BUILDING LEASED RSF % SHARE (1) RENT/RSF EXPIRES TERM Buildings) and further enhance returns through the stabilization of the 100, CDW 25 & 75 209,021 37.4% $16.25 Nov-28 11.3 yrs 200 & 300 Buildings of the complex. LTD Commodities 200 & 300 61,633 11.0% $12.50 Aug-22 5.1 yrs

Solo Cup 300 22,715 4.1% $13.75 Sep-21 4.1 yrs The 100, 200 & 300 Buildings sit southwest of CDW Center and are connected Wells Fargo Bank, NA 300 22,371 4.0% $13.50 Jun-20 2.8 yrs by ground-level enclosed walkways. These buildings represent a value-add

(2) opportunity through the lease up of the 115,652 RSF or 33.0% of current NEC Enterprise Communication Technologies 300 19,111 3.4% $19.00 Dec-28 11.4 yrs vacancy, which will enhance immediate cash flow and drive residual value. Opus Capital Markets (3) 100 18,789 3.4% $19.50 Sep-19 2.2 yrs

Melinta Therapeutics 300 17,031 3.0% $13.79 Jun-22 4.8 yrs

Total / Weighted Average Lease Term 370,671 66.3% 8.6 yrs

(1) Proportionate Share is based on Portfolio total of 559,204 RSF (2) NEC Enterprise’s contractual LXD is 6/14/19; an amendment is out for signature, which analysis assumes is executed. The amendment includes Tenant downsizing by 8,042 RSF effective 6/19. (3) Opus pays Gross Rent

Tri-State International, constructed between 1984 and 1989, sits on 37.4 acres at the four-way interchange of the Tri-State Tollway (I-94) KEY PORTFOLIO STATISTICS and Half Day Road (Route 22), complemented by beautiful landscaping. The Portfolio is a newly upgraded, fully amenitized offering with Building Address: 25-300 Tri-State International a conference center, 135-seat auditorium, and amenity center in the 200 Building, and a fitness center and deli (currently undergoing ren- Rentable Area: 559,204 RSF ovations) in the 300 Building. A recently completed 4-story parking structure was constructed for CDW’s employees and is immediately Land Site: 37.4 Acres northeast of CDW Center, which contributes to the Property’s above average 4.3 / 1,000 RSF parking ratio. % Leased: 79.3%

Stories: 3, 4 or 5 Inclusive of the parking deck construction, current ownership has invested over $15.1 million since 2013 to upgrade the amenities and to Typical Floor Plate: 19,900 - 39,000 RSF implement other substantial improvements to the building systems, parking lot, building lobbies and multi-tenant corridors & restrooms.

Year Built / Renovated: 1984-1989 / 2013-Present Due to this recent capital infusion, a future investor is able to immediately capture new tenants seeking accessibility, visibility and Class A

Parking Spaces: 2,394 Amenities all while providing an economical alternative to competing buildings on Route 60 (Townline Road) or Lake Cook Road.

Parking Ratio: 4.3 / 1,000 RSF

3 Sub Portfolio Summary CDW Center – Single Tenant Net Lease Opportunity “The Lincolnshire Due to the flexibility and uniqueness of the assets within the Portfolio, investors are CDW Center (209,021 RSF) comprises the 25 & 75 Buildings and represents location marks a new welcome to bid on the Portfolio in its entirety, or submit an offer on CDW Center a true single-tenant net lease investment opportunity with an astounding chapter in the CDW (209,021 RSF) separate from the 100, 200 & 300 Buildings (350,183 RSF). The fol- remaining term of 11.3 years with no termination option. CDW, a Fortune 500 success story. This lowing summaries and charts outline the potential sub-portfolios based on their Company (#220), is a leading multi-brand technology solutions provider to beautiful facility return profile. business, government, education and healthcare organizations in the United will position us for States, Canada and the United Kingdom, which recently relocated their head- even more growth quarters to the Property in 2015. CDW leases 100% of CDW Center through and enable our teams to more effectively November 2028, and is responsible for all operating expenses and taxes for collaborate and the building, and the adjacent 4-story, 932-space parking structure – which innovate for our was constructed exclusively for the Tenant. partners and customers.” Further evidence of CDW’s long term commitment to the site is the $30/RSF – Tom Richards, CDW Chairman and CEO spent by the tenant above their $62.50/RSF Tenant Improvement allowance.

Source: http://www.cdwnewsroom.com/cdw-opens-new-executive-office-inlincolnshire/#AdH3kFQt0Ww6tVx4.99

CDW CENTER Investment Profile: Single Tenant Triple Net Lease Land Site: 14.8 acres (645,607 SF) Remaining Term: 11.3 years (11/28 LXD) Stories: 4 Completed / Renovated: 1989 / 2015-16 Typical Floor Plate: 27,450 RSF Parking Ratio: 6.0 / 1,000 RSF Guarantor: CDW Corporation Rent / RSF: $16.25 with $0.50 annual escalations Renewal Options: Two (2) five (5) year Options at Market

4 EXECUTIVE SUMMARY

100, 200 & 300 Buildings – Value Add Investment The 100, 200 & 300 Buildings of Tri-State represent 350,183 RSF through a collection of three interconnected buildings and are 67.0% occupied. The 100, 200 & 300 Buildings provide 115,652 RSF of vacancy allowing an investor to take full advantage of the current leasing momentum in the North Suburban submarket. The North Suburban submarket currently boasts a direct Class A vacancy rate of 12.8%, down from 15.5% in 2010, representing overall net absorption of approximately 810,000 RSF. This represents the phenomenal opportunity for an investor to implement an aggressive leasing program in order to capitalize on the surrounding corporate environment and the North Suburban submarket’s fundamentals. An investor can also complete a number of capital projects, such as upgrading the remaining restrooms and corridors in the 300 Building, replacing the roofs and upgrading the elevators.

In addition to this upside opportunity, the existing major tenants at the 100, 200 & 300 Buildings provide income stability. The six largest tenants at the 100, 200 & 300 Buildings occupy 43.9% of the Property, and on an average weighted basis, have been at the Property for more than 11 years. This includes LTD Commodities which has leased space at Tri-State International since 1998, and Wells Fargo whose lease commenced in 2002. This speaks to their combined commitment to the Property which further provides stability of cash flow.

TRI-STATE INTERNATIONAL – 100, 200 & 300 BUILDINGS Investment Profile: Value Add Opportunity Land Site: 22.6 acres (984,682 SF) Building Address: 100 Tri-State 200 Tri-State 300-Tri-State Rentable Area: 110,097 RSF 89,404 RSF 150,682 RSF Total Rentable Area: 350,183 RSF % Leased: 52.9% 45.5% 90.0% Overall % Leased: 67.0% Remaining Term: 4.3 years Stories: 3 5 4 Completed: 1984 1986 1986 Renovated: 2015-16 Typical Floor Plate: 38,900 RSF 19,000 RSF 38,000 RSF Parking: 1,140 spaces

5 Fully Amenitized Property North Shore Location with Superior Accessibility Tri-State International Office Center offers tenants an unparalleled suite of on-site amenities, most Tri-State International benefits from its excellent positioning at the four-way interchange of the Tri-State Tollway and Half of which have been recently upgraded. These distinctive and highly desirable amenities help Day Road (Route 22), near the prestigious North Shore. The North Shore is recognized for some of the Chicago area’s to position the Property as a best-of-the-best asset in the market. On-site amenities include a most affluent and well-educated communities, where many executives and decision-makers are just a few miles away. recently expanded fitness center with locker rooms (4,218 RSF), deli (3,143 RSF), 135-seat audito- Within a one mile radius of the Property, over 75.8% of the population possesses a bachelor’s degree or higher level of rium (3,580 RSF), conference room (916 education, and the average household income is $236,722. These are astounding numbers compared to Lake County RSF), and amenities center (835 RSF). as only 43.1% have earned a bachelor’s degree or higher and the average household income is $120,529. With many AMENITY UPGRADE COSTS The deli is currently undergoing renova- Fitness Center $88,082 executives and professionals calling the area home, the immediate area boasts a median housing value of $661,750, tion with a targeted completion date in Locker Room $34,513 which demonstrates the desirability of the region. Tri-State International Portfolio is well-positioned to tap the diverse April 2017, with budgeted costs of up to Auditorium Upgrades $157,685 and skilled labor pool clustered in the Greater North Shore area. $400,000. To the right is a summary of Deli (Budgeted) $400,000 Total $680,281 the capital costs associated with upgrad- TRI-STATE INTERNATIONAL – SKILLED LABOR POOL (1) Deli's cost estimated per budget 1-MILE 3-MILE 5-MILE LAKE ing Tri-State International’s amenities. RADIUS RADIUS RADIUS LINCOLNSHIRE COUNTY ILLINOIS

% Attaining Bachelor's Degree or Higher 75.8% 71.7% 61.4% 68.2% 43.1% 32.2%

Highly Attractive and Economic Alternatives Average Household Income $236,722 $206,130 $157,001 $177,351 $120,529 $84,285 Current asking rates at Tri-State International Office Center offer a significant discount to Class Median Housing Value $661,750 $636,174 $464,824 $530,609 $276,478 $193,011 A alternatives in the area, while still providing physical characteristics and amenities consistent with these higher cost buildings. Tri-State International sits on Half Day Road (Route 22) which The Property’s adjacency to the Tri-State Tollway provides tre- is halfway between Lake Cook Road in Deerfield, and Townline Road (Route 60) in Lake Forest, mendous signage opportunities, along with superior accessibility when traveling along the Tri-State Tollway. However, the Class A net asking rents for office to the surrounding area. The Property is only 17 miles from O’Hare buildings along these two corridors range from $16.50 to $22.00 per RSF, compared to Tri- International Airport which services over 87 million passengers State International’s net asking rates of $13.50 per RSF. This is a 29% discount to the average with non-stop flights to over 200 destinations. Two other regional rental rate across these properties, which totals approximately 2.1 million square feet. As this airports, the Chicago Executive Airport and Waukegan National market leading competitive set of assets continues to tighten and asking rents continue to rise, Airport are respectively 8 and 19 miles from the Property and serve a number of value-focused office tenants will consider fully amenitized alternatives such as Tri- as an amenity to corporations and their executives. In fact, the State International Office Center. Waukegan National Airport has reached prominence as a base of operations for “Chicagoland’s Fortune 500 Flyers.” 6 EXECUTIVE SUMMARY

HISTORIC SUBURBAN V. CBD CUMULATIVE ABSORPTION

8,000,000 6.00% Strength of the Suburbs 7,000,000

6,000,000 5.00% Absorption (%) Recent media reports have portrayed a central business district in Chicago that significantly 5,000,000 4.00% out-paces suburban markets in both real estate fundamentals and investment potential. 4,000,000 3.00% Contrary to such reports, suburban fundamentals continue to improve and often outper- 3,000,000 2.00% 2,000,000 form the CBD in key indicators including cumulative absorption, which has outpaced CBD Cumulative Absorption (RSF) 1,000,000 1.00% absorption by over 2.3 million RSF since 2010. The continued strength of economic growth - 0.00% 2010 2011 2012 2013 2014 2015 2016 in the Chicago suburban markets provides well informed investors the opportunity to enter a rising market at a highly competitive basis. Cumulative CBD Absorption (RSF) Suburban Resurgence: 2.4 million RSF of net absorption in the Cumulative Suburban Absorption (RSF) suburbs since 2014, versus 1.6 million RSF of net aborption in the CBD

Suburban corporate and infrastructure investment # of Investments $ of Investments (million) # of Jobs Created growth has also outpaced investment growth in the Chi- cago CBD. In the last two years, over 70% of investments and jobs created have been attributed to the suburbs as D D , D B B B

opposed to the Chicago CBD. Companies are invest- C C C

ing over $2.2 billion in the Chicago suburbs, of which

S S S over $307M is being invested within the North Suburban B B B R R R Submarket with major recipients including Lincolnshire U U U B B B S U S U , S U , and neighboring Bannockburn, Northfield and Gurnee. Such robust investment likely foreshadows institutional investors return to suburban markets.

Source: Conway New Plant & Expansion 2016 Report 7 21

137

Chicago’s Premier Office Submarket LAKE FOREST The North Suburban submarket’s strong demographics and high-end housing stock provide an exceptional labor pool that keeps vacancy rates con-

60 sistently below the suburban average and makes it the premier option for Chicago area companies. Of the 23 Fortune 500 companies headquartered

21 in Suburban Chicago, 15 are located in the North Suburban Submarket – including CDW, which is headquartered at the Property. Many of the Chicago LINCOLNSHIRE area’s largest employers are concentrated in the North Suburban submarket including Abbott Laboratories, Allstate, Anixter, Aon Hewitt, Astellas, CVS

22 22 Caremark, Hospira, Illinois Tool Works, Takeda and Walgreens. HIGHLAND PARK

DEERFIELD

FORTUNE 500 HEADQUARTERS IN CHICAGO MSA 41 CHICAGO FORTUNE 500 2015 REVENUES

RANKING COMPANY RANKING INDUSTRY (IN MILLIONS) LOCATION WHEELING

■ 1 Walgreens Boots Alliance 19 Food and Drug Stores $103,444 Deerfield,IL 68 68 2 Boeing 24 Aerospace & Defense $96,114 Chicago, IL NORTHBROOK 3 Archer Daniels Midland 41 Food Production $67,702 Chicago, IL 83 4 United Continental 80 Airlines $37,864 Chicago, IL 53 ■ 5 Allstate 81 Insurance $35,653 Northbrook, IL WINNETKA ■ 6 Mondelez International 94 Food Consumer Products $29,636 Deerfield, IL 7 Exelon 95 Utilities: Gas and Electric $29,447 Chicago, IL 8 McDonald's* 109 Food Services $25,413 Oak Brook, IL 9 Sears 111 General Merchandisers $25,146 Hoffman Estates,IL GLENVIEW 94 10 US Foods Holding 122 Wholesalers: Food & Grocery $23,128 Rosemont, IL WILMETTE ■ 11 AbbVie 123 Pharmaceuticals $22,859 North Chicago, IL ■ 12 Abbott Laboratories 138 Medical Products & Equip. $20,661 Abbott Park, IL EVANSTON ■ 13 Illinois Tool Works 211 Industry Machinery $13,405 Glenview, IL 294 ■ 14 CDW 220 Information Tech. Services $12,989 Lincolnshire, IL 15 R.R. Donnelley & Sons 255 Publishing, Printing $11,257 Chicago, IL 16 Navistar International 281 Motor Vehicles and Parts $10,140 Lisle,IL 90 ■ 17 Discover Financial Services 283 Commercial Banking $10,002 Riverwoods, IL SKOKIE ■ 18 W.W. Grainger 285 Diversified Wholesalers $9,973 Lake Forest, IL ■ 19 Baxter International 286 Medical Products & Equip. $9,968 Deerfield, IL NILES To Downtown Chicago 20 Univar 315 Miscellaneous $8,982 Downers Grove, IL ■ 21 Tenneco 334 Motor Vehicles and Parts $8,209 Lake Forest, IL 22 LKQ 369 Diversified Wholesalers $7,193 Chicago, IL 23 Dover 377 Industrial Machinery $7,029 Downers Grove, IL ■ 24 Anixter International 391 Diversified Wholesalers $6,596 Glenview, IL ■ 25 Baxalta 420 Pharmaceuticals $6,149 Bannockburn, IL Tenants enjoy the excellent white collar labor force, high image 26 Jones Lang LaSalle 436 Real Estate $5,966 Chicago, IL 27 Old Republic International 442 Insurance $5,766 Chicago, IL office parks and lower Lake County property taxes. The scarcity ■ 28 Packaging Corp of America 446 Packaging, Containers $5,742 Lake Forest, IL 29 Motorola Solutions 451 Network & Commun. Equip. $5,695 Chicago, IL of land sites in prime locations, heightened regulation of develop- 30 Ingredion 456 Food Production $5,621 Westchester, IL 31 Arthur J Gallagher 471 Diversified Financials $5,392 Itasca, IL ment and the soaring cost of construction will mitigate speculative ■ 32 Essendant 477 Wholesalers: Elect. & Off. Equip. $5,363 Deerfield, IL 33 Telephone & Data Systems 496 Telecommunications $5,176 Chicago, IL development, contributing to rent growth and lower vacancy rates. Source: Fortune (2016) Suburban-based Headquarters ■ North Suburban-based Headquarters *McDonald’s will be moving to downtown Chicago in 2018 8 21 EXECUTIVE SUMMARY

137

LAKE FOREST Substantial Discount to Replacement Cost

60 Tri-State International provides investors the opportunity to acquire a Class A office portfolio at a substantial discount

21 LINCOLNSHIRE to replacement cost, providing a competitive basis for years to come. Due to the dearth of available land sites and the rising cost of construction, the replacement cost of a similar asset would be in excess of $360 per rentable square

22 22 HIGHLAND foot. New developments would require net rents in excess of $33 per rentable square foot, which is approximately 2.5 PARK

94 times the Property’s current market rents. This spread creates the ideal path to rent growth and a hedge against future

DEERFIELD

41 speculative development in the area.

WHEELING

68 68 NORTHBROOK

53 WINNETKA

GLENVIEW 94 WILMETTE SUBURBAN CLASS A OFFICE NET RENTAL RATE COMPARISON REPLACEMENT COST/SF

EVANSTON $40.00 294 Land $35

59% discount to Core & Shell $160 $33.00 /RSF replacement rents 90 SKOKIE Tenant Improvements $75 $30.00

NILES To Downtown Chicago Parking $50 S

Total Hard Costs $320 T N

R E $20.00 Lease Commissions $26

Financing Costs $10 GROSS $13.50 /RSF

Other Soft Costs $5 $10.00 Total Soft Costs $41

Total Development Cost ($/GSF) $361 $- Yield on Cost 9.00% New Tri-State Construction International Net Rents $33

9 Contact Information Investment Contacts Debt Contacts HFF Chicago Bryan D. Rosenberg Christopher S. Carroll 181 West Madison | Suite 3900 Associate Director Managing Director Chicago, IL 60602 312.300.7282 312.980.3609 Telephone: 312.528.3650 [email protected] [email protected] Fax: 312.528.3651

Patrick M. Shields Trent R. Niederberger Associate Director Director 312.528.3685 312.528.3682 [email protected] [email protected]

Mark B. Katz Senior Managing Director 312.980.3604 [email protected] Leasing Contacts Jeffrey M. Bramson Jonathon Connor Senior Managing Director/Managing Broker Vice President – Colliers International 312.528.3687 847.698.8246 [email protected] [email protected]

Jaime M. Fink Steve Kling Senior Managing Director Principal – Colliers International 312.528.3683 847.698.8256 [email protected] [email protected]

Yoonjin Choo Real Estate Analyst 312.980.3606 [email protected]

©2017 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 24 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 sales, 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.