Walmart Neighborhood Market Ground Lease OFFERING MEMORANDUM 3520 Richmond Road, Texarkana, Texas

Net Lease Investment Services

In association with: Christopher Sheldon Andrew Bogardus Christina Campanella Ed Colson Jr., CCIM +1 415 677 0441 +1 415 677 0421 +1 415 677 0456 TX Lic #635820 [email protected] [email protected] [email protected] CA Lic #01806345 CA Lic #00913825 NY Lic #10401243503 Net Lease Investment Services

Disclaimer

The information contained in this marketing brochure (“Materials”) is proprietary The information contained in the Materials has been obtained by Agent from and confidential. It is intended to be reviewed only by the person or entity receiving sources believed to be reliable; however, no representation or warranty is made the Materials from DTZ (“Agent”). The Materials are intended to be used for regarding the accuracy or completeness of the Materials. Agent makes no the sole purpose of preliminary evaluation of the subject property/properties representation or warranty regarding the Property, including but not limited to (“Property”) for potential purchase. income, expenses, or financial performance (past, present, or future); size, square footage, condition, or quality of the land and improvements; presence or absence The Materials have been prepared to provide unverified summary financial, of contaminating substances (PCB’s, asbestos, mold, etc.); compliance with laws property, and market information to a prospective purchaser to enable it to and regulations (local, state, and federal); or, financial condition or business establish a preliminary level of interest in potential purchase of the Property. The prospects of any tenant (tenants’ intentions regarding continued occupancy, Materials are not to be considered fact. The information contained in the Materials payment of rent, etc). A prospective purchaser must independently investigate is not a substitute for thorough investigation of the financial, physical, and market and verify all of the information set forth in the Materials. A prospective purchaser conditions relating to the Property. is solely responsible for any and all costs and expenses incurred in reviewing the Materials and/or investigating and evaluating the Property.

By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set forth herein.

Walmart Neighborhood Market i Net Lease Investment Services

Investment Offering & Highlights

The Offering

• Approximately 6.103 acres of land, ground leased to Walmart Neighborhood Market for 20 years and guaranteed by Wal-mart Stores, Inc., beneath a brand new 41,921 square foot supermarket and 754 square foot fuel station built in 2015. The improvements were constructed and owned by the tenant.

• Price: $6,890,000 – 4.50% Cap Rate

Tenant / Lease

• Walmart Stores, Inc. is ranked #1 on the Fortune 500

• Walmart had revenues of $476 billion, net income of $16 billion and a total stockholders’ equity of $76 billion for the fiscal year ending January 2014

• S&P rated “AA” investment grade credit

• New 20 year ground lease with no landlord maintenance responsibilities

• Extremely attractive 10% rental increase in Year 11 and 5% rental increases every 5 years starting in the options

Real Estate / Area Strengths

• Brand new construction

• Located at the intersection of Richmond Road and Moores Road

• Solid real estate intrinsics at $25.91 per square foot (land)

• Large lot size

• Richmond Road is a major retail corridor in northwestern Texarkana with solid traffic counts

• Average household incomes of over $85,000 within 1 mile

Walmart Neighborhood Market ii

Table of Contents

Disclaimer i

Investment Offering & Highlights ii

Investment Overview 1

Walmart Neighborhood Market 2

Site Plan 3

Aerials 4

Location Map 6

Texarkana Area Map 7 Economy 8 Education 8 Transportation 9

Demographics 10

Investment Overview

Location Annual Rent 3520 Richmond Road, Texarkana, Texas Years Annual Rent Return 1 - 10 $310,065 4.50% Lot Size 11 - 20 $341,072 4.95% Approximately 6.103 acres – 265,846± square feet 21 - 25 (Option 1) $358,125 5.20% 26 - 30 (Option 2) $376,031 5.46% Improvements 31 - 35 (Option 3) $394,833 5.73% Completed in 2015, a 41,921± square foot single story retail building and 754 square foot fuel station for WALMART NEIGHBORHOOD MARKET. 36 - 40 (Option 4) $414,575 6.02% 41 - 45 (Option 5) $435,303 6.32% • The improvements are built and owned by the tenant. The improvements are not for sale. 46 - 50 (Option 6) $457,068 6.63% 51 - 55 (Option 7) $479,922 6.97% Lease 56 - 60 (Option 8) $503,918 7.31% Leased to WAL-MART REAL ESTATE BUSINESS TRUST dba WALMART 61 - 65 (Option 9) $529,114 7.68% NEIGHBORHOOD MARKET, and guaranteed by WAL-MART STORES, INC., for 66 - 70 (Option 10) $555,570 8.06% 20 years from March 2015 until March 2035. The annual net rent of $310,065 71 - 75 (Option 11) $583,348 8.47% increases by 10% in Year 11. The lease is triple net with the tenant responsible 76 - 80 (Option 12) $612,515 8.89% for all taxes, insurance and maintenance, including roof and structure. There are fifteen 5-year options to renew with 5% increases in each option. 81 - 85 (Option 13) $643,141 9.33% 86 - 90 (Option 14) $675,298 9.80% Rent Per Square Foot 91 - 95 (Option 15) $709,063 10.29% $7.40 net per year – $0.62 net per month (as applied to building)

Price: $6,890,000 – 4.50% Cap Rate Financing The property will be delivered free and clear of permanent financing.

*Seller needs to close after July 18, 2015

Walmart Neighborhood Market 1 Net Lease Investment Services

Walmart Neighborhood Market

WALMART NEIGHBORHOOD MARKET, a subsidiary of WAL-MART STORES, INC., (NYSE: WMT), is a chain of grocery stores launched by Walmart in 1998. With over 286 Neighborhood Markets in the United States, they feature a wide variety of products, including fresh produce, deli foods, fresh meat and dairy items, health and beauty aids, one-hour photo and traditional photo developing services, drive-through pharmacies, stationery and paper goods, pet supplies, and household chemicals. The Neighborhood Market is Walmart’s smaller grocery concept which gives customers a more convenient shopping experience than the typical Walmart Supercenter. The Supercenter is typically 160,000 square feet and in contrast the Neighborhood Market is approximately 40,000 square feet and has a fuel center for increased convenience. Walmart’s strategy is to open another 270 of these small-format stores and have a total of 500 operating by early 2015.

For the fiscal year ended January 31, 2014, Wal-Mart Stores, Inc., reported total revenue of $476 billion, net income of $16.02 billion and stockholder’s equity of $76.25 billion.

Additional information can be found at www.walmart.com.

WAL-MART STORES INC., GUARANTEES THE LEASE.

Walmart Neighborhood Market 2 MOORES LANE Site Plan Net Lease Investment Services

MONUMENT SIGN

Multi-Tenant Retail Building (NAP)

DRIVE-THRU C.C.

C.C. STORM WATER DETENTION AREA DETENTION WATER STORM DELIVERY

VAN DOCK DOORS

SHARED TENANT SIGN S E R

V C.C. I 7 C 5 E 4

B S L F D G 41,921± SF R I CH VAN C.C.

MOND

VAN

TRASH COMPACTOR C.C.

R C.C. O A D

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RICHMOND R

MINTON’S SPORTSPLEX

CORNERSTONE O SUBWAY AD METHODIST

RETIREMENT WILLIAMS COMMUNITY MEMORIAL DAY MIDSOUTH BANK SCHOOL BROOKDALE SENIOR LIVING

MOORES LANE

Multi-Tenant TEXARKANA FIRST BANK Retail Building TEXANA BANK NA (NAP)

TWIN CITY TITLE

CORPORATE DRIVE

SHERWIN- WILLIAMS PAINTS

HEALTHCARE EXPRESS FARMERS BANK RICHMOND R & TRUST

O RED RIVER AD CREDIT UNION THE SANCTUARY MEDICAL SPA

MOORIS LANE

GUARANTY BANK & TRUST WEST VILLAGE SHOPPING CENTER

DOLLAR GENERAL Walmart Neighborhood Market 4 SUMMERHILL R

RICHMOND R

O 30 AD CHRISTUS ST. MICHAEL HEALTH SYSTEM

RICHMOND R

O RICHMOND AD RANCH SHOPPING CENTER CENTRAL TEXARKANA MALL PAVILION TOWN WEST SHOPPING CENTER

30 RICHMOND R

OAD S

I L

R O A TEXARKANA D

NEW BOSTON ROAD COLLEGE

395 NEW BO

S TON R

OAD

87 NEW BOSTON ROAD

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R I C

D S MOORES LANE U M M

E MOORES LANE R H

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D Location A A D O

K E

E The property is located at 3520 Richmond Road R C

559 N at Moores Lane, 3 miles north of Interstate 30.

M O M

C National and regional tenants in the immediate 71 CHRISTUS area include Subway, Dollar General, Sonic Drive- MCKNIGHT ROAD E ST. MICHAEL IV DR In, Wendy’s, Sam’s Club, Subway, Kohl’s, Payless EL A H HEALTH IC M . ShoeSource, Chick-fil-A, Office Depot, Starbucks, ST

SYSTEM S

R U I Dollar Tree and Super 1 Foods . C M H M M E O IV E R R ND D L H L R A I O M L A L ARKANSAS BOULEVARD

D R

O 59 A D

CENTRAL M

M W. 40TH STREET

MALL O

J E KENNEDY LANE F F

E E R IV DR S L O AL M N

E N

U 30 E

RI 93 CHM O ND R OA COLLEGE DRIVE D

A COLLEGE DRIVE

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L S 559 S

U B B E

M O U M L

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R V E. 24TH STREET H A E. 24TH STREET I R L

L D

R O W. 29TH STREET A

D NEW BOSTON ROAD TEXARKANA

OL D COLLEGE BO S T O N R N O 71 EW A TUCKER STREET RICHM

O B D ND ROAD OS TO N RO A E. 18TH STREET D E. 18TH STREET

T E E R T

82 R E E L

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F W W. 20TH STREET E

S O VE I N DR NEW BOSTON ROAD

N A E 82 E 59 AW V R L

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E S R B H O 6 I Walmart Neighborhood Market U L

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A R D D T EE TR H S 8T 93 E.

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. MARTIN LUTHER KING BOULEVARD W

W. 7TH STREET

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T 67 H STREE wW. 7T 44 59 40 Location 40 Fort Smith Oklahoma City 69

40 35 71

75 Little Rock 40 59

35 530

59 Ardmore Pine Blu

70 70 79 30

Paris 82 167

30 TEXARKANA 82 79

69 35 82 30 El Dorado

49 Fort Worth 425 Dallas 79

20 20 Shreveport 20 Monroe 35E

35W 49

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Texarkana

Texarkana (population 36,411) is located in Bowie County at the Texas-Arkansas state Texarkana Pavilion, located at the northeast corner of I-30 and US-59. Tenants border. Together with neighboring Texarkana, Arkansas, it forms the Texarkana, TX- include TJ MAXX, Shoe Carnival, Old Navy, Bed Bath & Beyond, Lane Bryant, Texarkana, AR MSA with a total population of 143,486. Staples, Best Buy, and Cinemark.

Texarkana is approximately 72 miles north of Shreveport, LA, 145 miles west of Little West Park Plaza, located along North I-30 frontage, features several stores/shops, Rock, AR, and 178 miles east of Dallas. along with a steakhouse. Businesses include Lafferty’s Home Center, Dogpatch Pet Shop, Golf USA, and Osaka Japanese Steakhouse. Economy Education Texarkana has a diversified economy based in regional agricultural processing, retail, wholesale and service center. Texarkana is home to Texas A&M University-Texarkana (also known as Texarkana A&M) and Texarkana College. Major employers in the area include: Texarkana A&M is a four-year branch of the Texas A&M University System offering career-oriented studies, awarding undergraduate, graduate and doctoral • Red River Army Depot • Wal-Mart degrees in the areas of business administration, arts and sciences, technology, • Christus St. Michael Health Care • International Paper engineering, mathematics and education. • Cooper Tire & Rubber Company • Wadley Regional Medical Center Texarkana College is a community college offering over 60 degrees and certificates • Domtar in Health Sciences, Liberal and Performing Arts and Workforce Education, among many other areas of study. Retail Texarkana is home to a retail shopping area that services over 300,000 people. Shopping centers are located along State Line Avenue, in historic Downtown Texarkana, and the central business district of Texarkana. Central Mall, located on Richmond Road, features many stores and restaurants including JCPenney, Sears, Dillard’s, Hibbett Sports, Bath & Body Works, Aeropostale, Bealls, Brick House Burgers, Claire’s, and Chuck E. Cheese’s. Richmond Ranch Shopping Center, located directly west of Richmond Road, is conveniently located on the north side of I-30. Anchor stores include Kohls, Target, PetSmart, Home Depot. Other tenants include Starbucks Coffee, Smashburger, and Chick-Fil-A. Town West Shopping Center, located off Richmond Road, across from Central Mall, Town West Shopping Center has several local specialty shops and stores. Other stores located in Town West Shopping Center include Ross, Hobby Lobby, Albertsons, and Wally’s Party Factory, a party supply store.

Walmart Neighborhood Market 8 Net Lease Investment Services

Texarkana (continued)

Transportation Highways Texarkana is bisected by Interstate 30 (I-30) which runs east to west connecting Little Rock, AR (at I-40) with Fort Worth Texas (at I-20). The Loop consists of Interstate 49 (I-49) and US Highway 151 (Hwy 151) in Arkansas and Interstate 369 (I-369) and US Highway 59 (Hwy 59) in Texas. I-30 completes the north portion of the Texarkana Loop, a beltway around the Texarkana area connecting Arkansas and Texas. Rail The Texarkana area is serviced by the Texarkana Union (Amtrak) Station located in downtown Texarkana along the state line. Amtrak provides daily service to the Texarkana area connecting it west to Los Angeles via Dallas, San Antonio, and El Paso and east to Chicago via Little Rock and St. Louis. Public Transportation The Texarkana Urban Transit District (T-Line) is the primary provider of mass transportation in Texarkana metropolitan area. The T-Line provides bus transportation to major areas of town along nine different routes in Texarkana, Texas and Arkansas. Air The Texarkana area is serviced by the Texarkana Regional Airport (TXK) located just off E. Broad Street (US Hwy 67) in Texarkana, Arkansas. TXK offers daily flights connecting to Dallas-Fort Worth International Airport through American Airlines. Dallas-Fort Worth International Airport (DFW) is the nearest international airport, located 200 miles west of Texarkana. DFW is the largest hub and headquarters for American Airlines. It is the largest airport in Texas and the second largest in the United States. DFW offers services to over 200 destinations worldwide.

Amtrak Texas Eagle Net Lease Investment Services

Demographics

2014 Summary 1 miles 3 miles 5 miles Population 4,796 31,927 67,184 Households 2,097 12,875 26,980 Families 1,339 8,351 17,234 Average Household Size 2.25 2.44 2.40 Owner Occupied Housing Units 1,190 7,083 14,608 Renter Occupied Housing Units 908 5,792 12,372 Median Age 41.5 37.5 36.8 Median Household Income $67,323 $49,262 $42,807 Average Household Income $85,090 $68,837 $60,066 2019 Summary Population 4,990 32,863 68,543 Households 2,195 13,251 27,539 Families 1,389 8,568 17,523 Average Household Size 2.24 2.44 2.40 Owner Occupied Housing Units 1,214 7,250 14,846 Renter Occupied Housing Units 982 6,001 12,693 Median Age 42.6 38.2 37.5 Median Household Income $78,754 $56,988 $49,867 Average Household Income $96,527 $80,709 $69,706 Trends: 2014-2019 Annual Rate Population 0.80% 0.58% 0.40% Households 0.92% 0.58% 0.41% Families 0.74% 0.51% 0.33% Owner Households 0.40% 0.47% 0.32% Median Household Income 3.19% 2.96% 3.10%

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