EXCLUSIVELY LISTED INVESTMENT OFFERING 5585 Twin Knolls Road Columbia [-Washington DC], MD

A Rare Opportunity To Own a Strong Performing Walgreens located in the middle of a Master Planned Community with 10% Rental Increases every 10-Years

EXCLUSIVELY MARKETED BY: TED DOWDING DIRECT 858.999.7431 | Broker License Number CQ1054183 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Executive Summary

OMDM exclusively presents this rare opportunitity to acquire this strong performing freestanding Walgreens in Columbia, . In August, 2009, Walgreens signed a 60-year Ground Lease with 25-years on the primary term, followed by Seven 5-year renewal options. There are currently 16+ years remainig on the primary term. This lease features structured rent increases of 10% every 10 years throughout base term and all of the option periods. This site boasts outstanding residual value as it sits upon a signalized 2.62 acre parcel paired with strong local market demographics and traffic counts (58,000+ vehicles per day). Columbia has a population over 100,000 and is the most populous census designated place in Maryland. Howard County has the highest income and educational levels of any county in the State of Maryland, and is the 6th highest in the nation.

This Investment is priced at $9,850,000 which represents a 4.75% capitalization rate on current income, with a blended cap rate at the asking price of 5.80% over the entirety of the lease.

Financial Overview Annualized Operating Data

Price $9,850,000 Rent Increases Annual Rent Price/SF $664 Years 11 thru 20 $467,500 Occupancy 100% Years 21 thru 30 $514,250 + $46,750 Rentable Square Feet 14,820 Years 31 thru 40 $565,675 + $51,425 CAP Rate 4.75% | 5.80% Blended Years 41 thru 50 $622,242 + $56,567 Year Built 2009 Years 51 thru 60 $684,466 + $62,224 Lot Size 2.62 Acres NOI $467,500 Lease Type NNN Ground Lease Total Return $467,500 Rental Income Grows 46.4% Very Rare 10% Rent Increases every 10 years (+$216,966/year + $18,080/month) over the entirety of the Lease 02 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Property Overview

5585 Twin Knolls Road, Columbia, MD

Year Built: 2009 Lot Size: 2.62 Acres Building Size: 14,820 SF 18.4 Miles from Downtown Baltimore Property Highlights

- Rare 10% Rental Increases Every 10-Years

- High Traffic Counts. 51,500+ VPD. Affluent Growing Local Market

- STRONG Store Sales History | Established, Proven Location

- Absolute NNN Ground Lease - No Landlord Responsibilities

- Over 2,500,000 Square Feet of Retail and Office Parks Recently Developed within 2 miles of the property.

- The only free-Standing Drug Store with a Drive-thru in Columbia.

- Strong Demographics; Ideal for a Pharmacy

- High Average Household Income Levels of 109k-150k in a 1 to 5 Mile Radius. 03 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Lease Overview

Tenant Trade Name Walgreens Ownership Public Tenant Corporate Store Lease Guarantor Corporate Guarantee Credit Rating BBB Rating Agency Standard & Poor's Stock Symbol WAG

Lease Commencement Date 12/12/2007 Rent Commencement Date 08/18/2009 Lease Expiration Date 08/31/2069 Firm Term Remaining 16+ Years Lease Type Absolute NNN Ground Lease Roof and Structure Tenant Responsible Lease Term 60 Years Increases 10% Every 10 Years Options to Renew 7 x 5 Options to Terminate No Options to Purchase No First Right of Refusal No

No Landlord Responsibilities

04 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Competitor Map

Only Free-Standing Drug Store with a Drive-thru in Columbia

8.6 Miles from algreens closest W

05 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Demographic Overview

The Mall in Columbia with 202 Stores, 6 Anchor Tenants &, 1,400,000 SF of Retail

(75,022 VPD) Talbott Srings Columbia Pike Elementary School

2017 1 mile 3 mile 5 mile - Very Strong Traffic Counts Population 12,769 99,910 199,125 Households 5,481 39,787 74,900 - Affluent Local Market with Avg. HH Families 3,143 25,974 51,770 Incom of $107k-$152k/Year Average Household Size 2.33 2.51 2.65 Owner Occupied Housing Units 2,482 25,709 51,305 - Ideal Median Age For A Pharmacy 37-40 Renter Occupied Housing Units 2,999 14,078 23,595 Median Age 36.2 39.2 39.1 Oakland Mills Average Household Income $96,490 $125,635 $136,612 Middle & High Schools 2022 Popuation 13,490 105,640 213,099 Households 5,788 41,979 79,867 Families 3,290 27,220 54,924 Average Household Size 2.33 2.51 2.66 Owner Occupied Housing Units 2,603 27,089 54,701 Renter Occupied Housing Units 3,185 14,889 25,166 Median Age 36.9 40.1 39.9 Average Household Income $107,941 $139,865 $152,029 Strong Projected Market Growth Rates Over Next 5-Years 06 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Property Aerial

07 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Investment Property Recap Asking Price: Lease Overview $9,850,000 Tenant: Walgreens (NYSE: WAG) Lease Guarantor: Walgreens Corporate Guarantee Asking CAP Rate: Building SF: 14,820 Year Built 2009 4.75% Absolute NNN Ground Lease NOI: Lease Type: Zero Landlord Responsibilities Lease Term: 16 Years Remaining $467,500 Increases: 10% Every 10 years $38,958/mo.

Entirety of Lease Blended Cap Rate Cap Rate 5.80% Increasing Cash Flow

Rent Increases Annual Rent Rent Increase Cap Rate

8.00% 6.95% Current Rent $467,500 Current 4.75% 7.00% 6.32% 6.00% 5.74% 5.22% Years 21-30 $514,250 Years 21-30 5.22% 5.00%

4.00% Years 31-40 $565,675 Years 31-40 5.74% 3.00%

2.00% 4.75% Years 41-50 $622,242 Years 41-50 6.32% 1.00%

Current Years 21-30 Years 31-40 Years 41-50 Years 51-60 Years 51-60 $684,467 Years 51-60 6.95% 08 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Walgreens Company Summary

Tenant History Walgreens is the largest drug retailing chain in the United States and has grown primarily through organic growth versus how its largest competitor, CVS, has grown through chain acquisitions. Walgreens built out its national platform through its corporate real estate department heavily during the 90’s continuing through around 2008. By 2007, Walgreen had opened its 6,000th store and by 2009 they became the only national pharmacy to operate in 50 states including Puerto Rico. In 2012, Walgreens made a bold move by purchasing a 45% interest in Alliance Boots and subsequently in 2014 exercised its option to purchase the remaining 55% of the Switzerland based Alliance Boots to merge and create a new holding company named Walgreens Boots Alliance. After the initial acquisition in 2012, Walgreens credit rating was lowered from A down to BBB due to debt it incurred during the purchase; however, Walgreens remains investment grade and property values have not been adversely affected by the lower credit rating. Walgreens stock price has actually more than doubled since its acquisition of Alliance Boots.

Notable Acquisitions In 2010, Walgreens announced its largest acquisition ever of Duane Reade for $1.075 billion and established an irreplaceable footprint in the New York metropolitan area. In 2011, Walgreens made a move to purchase Drugstore.com to establish an online presence.

In 2012, Walgreens purchased a mid-south drugstore chain operating under USA Drug, Super D Drug, Mays Drug, Med-X and Drug Warehouse banners which had 144 locations collectively throughout Arkansas, Kansas, Mississippi, Missouri, New Jersey, Okla- homa and Tennessee.

Walgreens most recent acquisition was in September 2013 for Kerr Drug’s who operated 76 drugstores throughout North Carolina.

*Walgreens company information received from Walgreens investor relations.

09 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Walgreens Locations by State

10 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Walgreens Locations by State

1 of 89 Walgreens in Maryland

Alabama 115 Idaho 40 Mississippi 78 Oklahoma 117 West Virginia 17 Alaska 8 Illinois 610 Missouri 219 Oregon 77 Wisconsin 228 Arizona 250 Indiana 201 Montana 14 Pennsylvania 131 Wyoming 11 Arkansas 83 Iowa 70 Nebraska 60 Rhode Island 26 Puerto Rico 120 California 646 Kansas 70 Nevada 84 South Carolina 110 US Virgin Islands 1 Colorado 160 Kentucky 98 New Hampshire 32 South Dakota 14 Connecticut 95 Louisiana 154 New Jersey 191 Tennessee 254 Delaware 65 Maine 15 New Mexico 69 Texas 712 Washington DC 6 Maryland 89 New York 486 Utah 48 Florida 861 Massachusetts 168 North Carolina 263 Vermont 3 Georgia 204 Michigan 232 North Dakota 1 Virginia 141 Hawaii 19 Minnesota 154 Ohio 250 Washington 139

11 Walgreens 55585 Twin Knolls Rd, Columbia, MD 21045 Location Overview This Walgreens location is situated in the heart of Columbia at the intersection of Thunder Hill Road and Little Patuxent Parkway (). The subject property is less than one mile east of , a premiere shopping destination. After a major expansion, The Mall in Columbia added Nordstrom and The Plaza at The Mall in Columbia. The Plaza, an outdoor complex featuring restaurants and entertainment, is home to the first L.L. Bean store in Maryland, P.F. Chang’s China Bistro, Uno Chicago Grill, Champ's Restaurant & Bar and a state-of-the-art AMC Theatres Columbia 14. To the east of the site along Route 175, an additional 2,000,000 square feet of retail and office parks have been developed. The new commercial projects at Route 175’s with I-95 (about 2 miles from the subject property) have created a new node for the submarket.

The subject property is located strategically between these two commercial corridors, only to be surrounded by a dense, suburban population base.This location has strong appeal to the neighborhood shopper wishing to avoid the congestion by The Mall and the I-95/Route 175 Interchange area.This is the only free-standing drug store in Columbia. Most pharmacies are located inside of big box stores. CVS/pharmacy has two locations - one near the interchange of I-95 and Route 175 in Ellicott City and one to the south near the interchange of Routes 32 and 29 in Elkridge. Rite Aids’s closest stores are in Ellicott City. With the affluence and density of this market, this site will thrive due to this lack of competition. Further, this fact again speaks to the uniqueness of the site, and the difficulty that drug stores have in developing prospective locations in this corridor.

12 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Columbia is named the #1 place in the US to live! An Article from Time’s Money Magazine Money Magazine named Columbia the #1 Best Place to Live in the U.S. Close to both Baltimore and D.C., we’re known for our flourishing business environment, quality education, outdoor activities, state-of-the-art community amenities, luxury residences, and popular mall. We’re a destination for music and the arts and home to the newly renovated Merriweather Post Pavilion. This vibrant, established community is thriving, growing, and will soon be among the area’s new urban destinations. More excitement is coming with expanded downtown neighborhood districts connected by pedestrian paths and walkways. Say hello to your perfect place.

You know the phrase “50 is the new 30?” Apparently, that applies to cities and towns, too. Columbia, Md., turns 50 next year, and it’s never looked better. One of the most successful planned communities in the country, Columbia is a magnet in the Baltimore–Washington corridor, attracting families in search of good schools and businesses hungry for educated employees. A planned community—where covenants limit everything from new construction to the color you can paint your home—isn’t for everyone (though there are three of them in our Best Places top 10). But Columbia is clearly thriving. It ranks in the top 5% of the 823 places on this year’s list for job growth and economic opportunity. The schools are among the state’s best. And in this pricey corner of the country, Columbia’s median home price is just over $300,000, 11% less than in Gaithersburg, one county over. “I sometimes tell people this is a little bit like the Land of Oz,” says Gary Ahrens, a retired high school teacher and counselor who sells real estate for Keller Williams. The prices may be right, but Columbia also owes its success to an idea—or maybe it’s an ideal. Founded in the late ’60s, the town made the concept of community building part of the master plan. Each of the 10 bucolically named villages (Wilde Lake, Oakland Mills) includes a mix of residences— apartments, townhomes, and single-family houses—to promote socioeconomic diversity. Individual homes don’t have mailboxes; they’re collected in groups on each cul-de-sac or block to encourage neighborly mixing. Some people worship at a church or synagogue, but others prefer an “interfaith center,” where the faiths rotate through a communal space. The master plan guides economic development as well. Offices and retail centers are sprinkled strategically around the villages. Mid-rise office buildings are clustered downtown between the Columbia Mall and , which is surrounded by an exercise path, restaurants, and the town’s celebratory symbol of inclusiveness: the 35-foot-high metal sculpture The People Tree. Downtown is going through its own midlife growth spurt. The Howard Hughes Corp. is overseeing the creation of 4.3 million square feet of office space, 1.2 million square feet of retail, and 5,500 residential units. The hope is to create a more walkable (and bikeable) core, stretching from the mall to the lake and including the area around the celebrated Merriweather Post Pavilion amphitheater. “The quality of life here is already amazing,” says Greg Fitchitt, VP for development at Howard Hughes. “We’re trying to create a 21st-century urban village.” One knock on planned communities is the fees levied to maintain their vision, and Columbia has two of them. The annual fee runs about $1,000 a year on a median-priced home and helps maintain the town’s vast communal greeneries and other amenities. (The master plan sets aside 36% of the town’s land for open space.) There is also an optional fee for the pools and recreational facilities that starts at $67 a month for a family membership. At almost 50, Columbia is welcoming its third generation, and the sense of community is flourishing in the most human of ways. The population is 55% white, 25% black, 12% Asian, and 8% Latino. Growing up as one of the few African-Americans in nearby Catonsville, Calvin Ball watched Columbia with envy. When he got married, Ball, now a college administrator, told his wife, Shani, there was only one place he would raise their children. “He was so happy when he talked about Columbia,” says Shani. “That’s because diversity is not only tolerated here. It’s celebrated.” The complete article can be read here : http://time.com/money/4480692/columbia-maryland/

Why we love it : A planned community that prizes economic and social diversity. Population: 102,221 #1 Columbia, MD Median Home Price: 310,000 Property Tax: $4,442 Unemployment rate: 3.5% Commute time: 29 minutes 13 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Columbia's History

The Rouse Company accumulated over 14,000 acres, 10 percent of Howard County (located between Baltimore & Washington), from 140 separate owners. This acquisition was funded by Connecticut General Life Insurance, at an average price of $1,500 per acre ($0.37/m²). In October 1963, the acquisition was revealed to the residents of Howard County, putting to rest rumors about the mysterious purchases. These had included the theory that the site was for a laboratory to study diseases and another that the site was intended to become a giant compost heap.

At this unveiling, described Columbia as a planned new city which would avoid the leap-frog and spot development threatening the county. The new city would be complete with jobs, schools, shopping, and medical services, and a range of housing choices. The property taxes from commercial development would cover the additional services with which housing would burden the county. The planning process for Columbia included not only planners, but also a convening of a panel of nationally recognized experts in the social sciences, known as the Work Group. Meeting for two days, twice a month, for half a year, the Work Group suggested innovations that the planners should try in education, recreation,religion, and health care, as well as ways of improving social interactions. Open classrooms, the interfaith centers, and the then-novel idea of a Health Maintenance Organization (HMO) with a group practice of doctors (the Columbia Medical Plan) sprung from these meetings. Columbia was not incorporated; some governance, however, was to be provided by the Columbia Association, which manages common areas and functions as a homeowners' association with regard to private property. The first manager of the Columbia Association was John Estabrook Slayton, who died in early 1967. The community center in Wilde Lake, the Slayton House, was named after him for the contributions he made to the early planning of Columbia.

The physical plan, with neighborhood and village centers, also were decided upon at these meetings. Columbia's “New Town District” zoning ordinance gives the developer great flexibility about what to put where, without getting approval from the county for each specific project. The first village to be developed in Columbia was Wilde Lake. The first high school to open in Columbia was , which opened in 1971 as a model school for the nation. Constructed in the open classroom style, it was razed and reconstructed on the same site in 1996.Columbia proper consists only of that territory governed by the Columbia Association, but larger areas are included under its name by the post office and the census. These include several other communities which predate Columbia, includingSimpsonville, Atholton, and in the case of the census, Clarksville and Savage.

14 Walgreens 5585 Twin Knolls Rd, Columbia, MD 21045 Columbia's Master Plan

To achieve the goals set forth by the Work Group, Columbia's Master Plan called for a series of ten self-contained villages, around which day-to-day life would revolve. The centerpiece of Columbia would be the Mall in Columbia and man-made Lake Kittamaqundi.

Villages and neighborhoods

The village concept is aimed to provide Columbia a small-town feel (like Easton, Maryland, where James Rouse grew up). Each village comprises several neighborhoods. The village center may contain middle and high schools. All villages have a shopping center, recreational facilities, a community center, a system of bike/walking paths, and homes. Four of the villages have interfaith centers, common worship facilities which are owned and jointly operated by a variety of religious congregations working together.

Most of Columbia's neighborhoods contain single-family homes, townhomes, condominiums and apartments (though some are more exclusive than others). The original plan, following the neighborhood concept of Clarence Perry, would have had all the children of a neighborhood attend the same school, melding neighborhoods into a community and ensuring that all of Columbia's children get the same

- Village – Neighborhoods (in rough order of opening) - Wilde Lake – Bryant Woods, Faulkner Ridge, Running Brook, The Birches - Harper's Choice – Longfellow, Swansfield, Hobbit's Glen - Oakland Mills – Thunder Hill, Talbott Springs, Stevens Forest - Long Reach – Phelps Luck, Jeffers Hill, Locust Park, Kendall Ridge - Owen Brown – Dasher Green, Elkhorn, Hopewell - Hickory Ridge – Clemens Crossing, Hawthorn, Clary's Forest - Dorsey's Search – , Fairway Hills - Kings Contrivance – Dickinson, Huntington, Macgill's Common - River Hill – Pheasant Ridge, Pointers Run - Town Center – Vantage Point, Banneker, Amesbury, Creighton's Run, and Warfield Triangle 15 DISCLAIMER

DISCLOSURE

as to complete-ness, veracity, or accuracy, condition of the property, compliance or lack of compliance with applicable governmental require- ments, suitability, financial performance of the property, projected financial performance of the property for any party’s intended use or any and all other matters.

as to ac-curacy or completeness of the any materials or information provided, derived, or received. Materials and information from any source, whether written or verbal, that may be furnished for review are not a substitute for a party’s active conduct of its own due diligence to deter- due diligence for a party unless otherwise agreed in writing.

ALL PARTIES SHALL CONDUCT THEIR OWN INDEPENDENT INVESTIGATION AND DUE DILIGENCE. Any party contemplating or under contract or in escrow for a transaction is urged to verify all information and to conduct their own inspections and investigations including through appropriate third party independent professionals selected by such party. All financial data should be ver- ified by the party including by obtaining and reading applicable documents and reports and consulting appropriate independent professionals. ass

All data and assumptions regarding fina performance. Any estimates of market rents and/or projected rents that may be provided to a party do not necessarily mean that rents can be established at or increased to that level. Parties must evaluate any applicable contractual and governmental limita-tions as well as market con- ditions, vacancy factors and other issues in order to determine rents from or for the property.

Legal questions should be discussed by the party with an attorney. Tax questions should be discussed by the party with a certified public of the property and whether the property complies with applicable governmental requirements should be discussed by the party with appro- priate engineers, architects, contractors, other consultants and governmental agencies. All prop Deal Makers in compliance with all applicable fair housing and equal opportunity laws.

EXCLUSIVELY MARKETED BY: TED DOWDING DIRECT 858.999.7431