Kwik Trip Ground Lease 1605 Annapolis Lane Plymouth, Mn 55441

CONFIDENTIAL OFFERING MEMORANDUM

KWIK TRIP GROUND LEASE 1605 ANNAPOLIS LANE PLYMOUTH, MN 55441

CAPITAL MARKETS | INVESTMENT PROPERTIES AFFILIATED BUSINESS DISCLOSURE & CONFIDENTIALITY AGREEMENT

CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing interests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transaction described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of theroperty. P

This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the “Owner”), to be all- inclusive or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Additional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchasers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner. Neither the Owner or CBRE, Inc, nor any of their respective directors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluating a possible purchase of the real property.

The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agreement(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc. 01 EXECUTIVE SUMMARY

02 PROPERTY DESCRIPTION

03 SALE COMPARABLES

04 FINANCIAL ANALYSIS

05 MARKET OVERVIEW 01

EXECUTIVE SUMMARY 01 | EXECUTIVE SUMMARY

Asking Price: Cap Rate: Price PSF: $2,130,000 6.25% $441

INVESTMENT Absolute Triple Net Corporate Ground Lease, HIGHLIGHTS No Landlord Responsibilities Current lease through April 2024, with three 5-year renewal options. Great Location, Highly Visible Home Depot Outparcel Strong Demographics, Median Household Income of $86,000+ and Population of 60,790+ Within a Three-Mile Radius

5 | KWIK TRIP | PLYMOUTH, MN 01 | EXECUTIVE SUMMARY

THE OFFERING

CBRE, Inc. has been retained The current tenant is Kwik Trip Inc. who is a sublessee to BP Products North America Inc., who is the lease guarantor by the property owner as the and signed a 20-year Corporate Ground Lease commencing on April 25, 1999 and expiring on April 24, 2019. BP exercised the first five-year renewal option on January 22, 2002, extending the expiration date to April 24, exclusive marketing advisor 2024. The tenant has three additional five-year renewal options with 10% rent increases in each option period. As for the disposition of the triple net the lease is absolute net in nature, the tenant is responsible for procuring and paying for all operating expenses including real estate taxes, insurance, utilities, and repairs and maintenance of all structural and non-structural leased sublessee Kwik Trip (the items. Therefore, the landlord will have no responsibilities whatsoever. The lease is corporate guaranteed by BP “Property”) at 1605 Annapolis Products North America Inc.

Lane, Plymouth, MN 55441. The 4,830-square foot building was constructed in 1999 on a 1.12-acre outparcel to the Plymouth Home Depot Center. The site is located on the north side of County Road 6, just east of the I-496 Freeway interchange located in the Plymouth Submarket approximately 15 miles northwest of Minneapolis. The Property has high visibility from County Road 6, as well as the I-496 Freeway and is easily accessible via Annapolis Lane North. The traffic counts along County Road 6 are roughly 13,000 VPD. The area can be characterized as primarily oriented to commercial and industrial uses including the adjacent Home Depot, Discount Tire, a furniture store, Tile By Design, some light industrial uses and multi-tenant flex type industrial/office uses. Other nearby national retailers include Wallgreens, Michael’s, Starbucks, McDonalds, Burger King, Cub Foods, Best Buy and Target. The Property benefits from a population of 60,000+ within a three-mile radius with a high median household incomeof $86,000+. Plymouth is Minnesota’s 7th largest city with a stable affluent population. The median home value exceeds $293,000 within a 3-mile radius.

6 | KWIK TRIP | PLYMOUTH, MN INVESTMENT CONTACT Representatives will be available for tours only on a pre-scheduled basis, please do not contact the tenant directly. Inspection inquiries should be directed to:

BILL O’CONNOR Senior Vice President CBRE, Inc. 2000 Town Center, Suite 500 Southfield, MI 48075 P: +1 248 351 2045 E: [email protected]

DAVID HESANO First Vice President CBRE, Inc. 2000 Town Center, Suite 500 Southfield, MI 48075 P: +1 248 351 2014 E: [email protected] 02

PROPERTY DESCRIPTION 02 | PROPERTY DESCRIPTION

Property Kwik Trip (Guaranty by BP) Ground Lease

1605 Annapolis Lane Address Plymouth, MN 55441

County Hennepin

Parcel Number 27-118-22-31-0019

Building Size 4,830 SF per survey

Year Built 1999

Parcel Size 1.12 Acres

Zoning Commercial

Number of Floors One

Parking Adequate Surface Parking Spaces

The site is accessible via curb cuts along Annapolis Ingress / Egress Lane North through the Home Depot parking lot. There are access easements in place.

Approximately 13,000 VPD Along County Road 6 and Traffic Counts Annapolis Lane North

Exterior Walls Concrete Block/Brick

Structure Structural Steel

Roof Asphalt Shingle Gable Style Roof

HVAC Roof Mounted Unit

Fire Protection Assumed To Code

9 | KWIK TRIP | PLYMOUTH, MN 02 | PROPERTY DESCRIPTION PROPERTY AERIAL

WATER TOWER CIRCLE

ANNAPOLIS LANE NORTH

SUBJECT PROPERTY

COUNTY ROAD 6

10 | KWIK TRIP | PLYMOUTH, MN 03

SALE COMPARABLES 03 | SALE COMPARABLES

TermTERM BUILDINGBuilding NAME/ Name YEARYear BuildingBUILDING Size CapCAP CreditCREDIT SaleSALE DateDATE SALESSales PricePRICE Price/SFPRICE/SF RemainingREMAINING CommentsCOMMENTS ADDRESSAddress BUILTBuilt SIZE(SF) (SF) RateRATE RatingRATING (Years)(YEARS)

The tenant is Kwik Trip Inc., a sublessee to BP Products North America Inc., who is the lease guarantor who signed a 20-year Corporate Ground Lease commencing on April 25, 1999 and expiring on April 24, 2019. BP Kwik Trip (Guaranty by BP) Ground Lease exercised the first five-year renewal option on January 22, 2002 extending the 1605 Annapolis Lane 1999 4,830 $2,130,000 $441 6.25% 7.3 Not Rated expiration date to April 24, 2024. The tenant has three additional five-year Plymouth, MN renewal options with 10% rent increases in each option period. The lease is absolute net, the tenant is responsible for all operating expenses including real estate taxes, insurance, utilities, and repairs and maintenance of all structural and non-structural items.

This was the sale of a lease hold interest of a 6,300 SF convenience store/gas Royal Farms station situated on 3.62 acres. The station has eight fuel pumps and a 1 2501 Church St. N/A 6,300 7/10/2017 $7,256,637 $1,152 5.65% 20.0 Not Rated carwash. The tenant signed a 20 year ground lease in March of 2017. The Philadelphia, PA NNN lease has 10 percent rent increases every ten years with three 10-year renewal options.

Stripes Stripes has 18 years remaining on their initial 20 year lease. The tenant has 2 919 Fredricksburg 2016 4,700 3/9/2017 $2,087,500 $444 5.75% 18.0 Not Rated four five-year renewal options. The ground lease is $120,00 per year with San Antonio, TX increases of 7% every five years.

Quik Trip has 3.5 years remaining on their initial 15 year lease. QuikTrip is Quik Trip a privately held company and is a $10 billion company with 690+ stores in 3 6400 Preston Rd. 2004 4,903 12/21/2016 $3,986,000 $813 5.75% 3.5 Not Rated 11 states. They are a privately held company. They are on a NNN lease with Plano , TX zero landlord responsibility.

Quik Trip has 10 years remaining on their initial 15 year lease. QuikTrip is a Quik Trip privately held company and is a $10 billion company with 690+ stores in 11 4 4645 West Main St. 2010 5,109 10/28/2016 $5,175,000 $1,013 5.50% 10.0 Not Rated states. They are are a privately held company. They are on a NNN lease Frisco, TX with zero landlord responsibility.

Quik Trip The tenant just renewed last option on the lease agreement. QuikTrip ranked 5 10315 West 13th St. N 1990 3,246 8/31/2016 $860,000 $265 6.73% 5.0 Not Rated by Forbes as 28th largest private company with $11B in revenue. They have Wichita, KS been at the site for 30 years.

Quik Trip 6 2968 Forest Lane 2001 5,000 8/30/2016 $744,000 $149 6.51% 5.0 Not Rated The tenant is on a NNN lease. Dallas, TX

Sheetz The 15 year lease began in September 2014 at a rate of $140,000 per year 7 8206 Kings Hwy. 2014 6,489 6/15/2016 $2,738,000 $422 5.11% 13.0 Not Rated absolute net. 3% rent increases in year 6 and year 11 with seven 5 year King George, VA renewal options with 3% rent increases each renewal period.

The sale is of a 5,809 freestanding 24-hour convenience store with fuel Sheetz stations and surface perking lots. The property is leased on a 15 year term 8 5200 New Bern Ave. 2005 5,809 6/8/2016 $3,127,500 $538 5.10% 14.0 Not Rated commencing in 2016. Base rent is $159,000 annually flat for the 15 year Raleigh, NC term. This is an absolute net lease with renewal options with rent increases of 10%.

This property is a brand new Wawa gas station/convenience store with a new 20 year, absolute net ground lease that commenced in June 2015 at a base Wawa Ground Lease rent of $225,000, or $37.86 per square foot of building, or $2.75 per 9 1031 Dunlawton Ave. 2015 5,943 2/25/2016 $4,639,175 $781 4.85% 19.0 Not Rated square foot of land area. There is a 5% increase after 10 years and 5% Port Orange, FL increases every 5 years thereafter. There are six, 5-year options that incorporate 5% increases every 5 years. This property sold in February 2016 for $ 4,639,175 based on an OAR of 4.85%. COMPARABLE AVERAGES Comparable Average $620$620 5.66%5.66% 11.9 Average TermAverage Remaining Term Remaining

12 | KWIK TRIP | PLYMOUTH, MN 03 | SALE COMPARABLES

AVERAGE CAP RATE AVERAGE PRICE PSF Average Cap Rate Average Price per Square Foot

7.0% 6.73% $1,200 $1,152 6.51% Subject Property 6.25%

$1,013 5.75% 5.75% 6.0% 5.65% 5.50% Comp Average Cap Rate 5.66% $1,000 5.11% 5.10% 4.85% 5.0% $813 $781 $800 Comp Average Price per SF $620 4.0%

$600 $538

3.0% $444 Subject Price per SF $422 $400 $445

2.0% $265

$200 $149 1.0%

$0 0.0% 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9

13 | KWIK TRIP | PLYMOUTH, MN 04

FINANCIAL ANALYSIS 04 | FINANCIAL ANALYSIS

Asking Price: Cap Rate: Price PSF: $2,130,000 6.25% $441

FINANCING TERMS: The building is being offered on an all cash basis and is offered free and clear of existing financing.

15 | KWIK TRIP | PLYMOUTH, MN Kwik Trip (Guaranty by BP) Ground Lease Year One Cash Flow Estimates 04 | FINANCIAL ANALYSISAll Cash Transaction Asking Price $2,130,000 Down Payment All Cash Rentable Square Feet 4,830 YEAR ONE CASH FLOWPrice ESTIMATESper Square Foot $441 CAP Rate 6.25% YEAR ONE INCOME PER MONTH PSF Income 1/20181/2018 - - 12/201812/2018 Per Month Per SF PRICE: Base Rent $2,130,000 Kwik Trip (BP S&P Rated A-) 6/1/1999 - 4/24/2024 DOWN PAYMENTS: 6.5 Years Remaining 4,8304,830 SFSF $133,100 $11,092 $27.5627.56 All Cash Transaction Total Base Rent $133,100 $11,092 $27.56 Scheduled Base Rental Revenue $133,100 $11,092 $27.56 RENTABLE SQUARE FOOTAGE: ExpenseEXPENSE Reimbursement REIMBURSEMENT Revenue - Tenant REVENUE to Procure - Tenantand Pay to Direct Procure and Pay Direct 4,830 Insurance $0 $0.00 $0.00 Common Area Maintenance $0 $0 $0.00 PRICE PER SQUARE FOOT: Real Estate Taxes $0 $0 $0.00 Total Expense Reimbursement Revenue $0 $0 $0.00 $441 Gross Potential Income $133,100 $11,092 $27.56 CAP RATE: Vacancy/Collection Allowance 0.00% $0 $0 $0.00 6.25% Effective Gross Income $133,100 $11,092 $27.56 OperatingOPERATING Expense EXPENSE Estimates ESTIMATES- Tenant To Procure and Pay Direct Insurance $0 $0 $0.00 Common Area Maintenance $0 $0 $0.00 Real Estate Taxes $0 $0 $0.00

Kwik Trip (Guaranty by BP) Ground Lease Net Proceeds All Cash Transaction

Price Range $2,130,000 $2,130,000 $2,048,000 Closing Costs Professional Fees $15,000 $15,000 $15,000 Closing Fee1 $600 $600 $600 Recording Fee2 $46 $46 $46 Conservation Fee and Wire Proceeds3 $30 $30 $30 Third Party Reports $0 $0 $0 State Deed Tax / Transfer Tax 4 $3.40 $7,242 $7,242 $6,963 Commission 5 5.00% $106,500 $106,500 $102,400 Total Closing Costs $129,418 $129,418 $125,039 Existing Debt Retirement $0 $0 $0 Total Net Proceeds $2,000,582 $2,000,582 $1,922,961 Total Common Area Expenses 1 The closing fee is estimated to be approximately $600 and is customarily a fee that is paid by the seller. $0 $0 $0.00

2 The recording fees are $46.00 per document and typically paid by the seller. 3 The Conservation Fee is $5.00 and the Wire Proceeds Fee is $25.00 and these are both typically paid by the seller.

4 The transfer tax for Hennepin County is $3.40 per $1,000 of the sales price. This fee is typically paid by the seller as customary in Hennepin County. 5 The commission is to be split 50/50. Management Fee 0.0% $0 $0 $0.00

Replacement Reserve $0.00 $0 $0 $0.00 Total Expenses $0 $0 $0.00

NETNet OperatingOPERATING Income INCOME $133,100 $11,092 $27.56$27.56

16 | KWIK TRIP | PLYMOUTH, MN 04 | FINANCIAL ANALYSIS LEASE ABSTRACT

Kwik Trip (lease guaranteed by BP Products North TENANT Tenant has the option to purchase at any time during the America, Inc. term of the lease or any extention period. Tenant has 30 days to indicate a desire to purchase upon notification of a GUARANTOR BP Products North America, Inc. OPTION TO desire to sell by the lessor. If the lessee chooses to purchase PURCHASE property after a moratorium period of 60 days the lessor has up to one year anniversary of the date of the lessor’s LEASED AREA (SF) 4,830 notice to make any offer to sell or to accept any offer to purchase without further notice. LEASE TYPE Absolute Net TERMINATION None OPTION COMMENCEMENT DATE April 25, 1999 RIGHT OF None EXPIRATION DATE April 24, 2024 FIRST REFUSAL

LEASE TERM 5 Years Tenant may assign the lease or sublet the property without the consent of the lessor. The lessor shall remain responsible ASSIGNMENT for the payment of rent and for the performance of the YEAR ONE ANNUAL $133,100 other terms. RENT

ESTOPPEL 10 Days RENT ESCALATIONS 10% In Each 5-Year Renewal Period CERTIFICATE

RENTAL OPTIONS Three, Five Year Options OPERATING Real Estate Taxes: Tenant COSTS Insurance: Tenant RENTAL ABATEMENTS None

PERCENTAGE RENT ROOF AND None Tenant CLAUSE STRUCTURE

17 | KWIK TRIP | PLYMOUTH, MN 04 | FINANCIAL ANALYSIS TENANT AND COMPANY OVERVIEW

TENANT AND COMPANY OVERVIEW Formerly majority state-owned, the British government privatized the company in stages between 1979 and 1987. British Petroleum merged BP P.L.C., formerly British Petroleum, is a British multinational oil and with Amoco in 1998, becoming BP Amoco plc, and acquired ARCO and gas company headquartered in London. It is one of the world’s seven Burmah Castrol in 2000, becoming BP plc in 2001. From 2003 to 2013, oil and gas “supermajors, whose performance in 2012 made it the BP was a partner in the TNK-BP joint venture in Russia. world’s sixth-largest oil and gas company, the sixth-largest energy company by market capitalization and the company with the world’s BP has been directly involved in several major environmental and safety twelfth-largest revenue (turnover). It is a vertically integrated company incidents. Among them were the 2005 Texas City Refinery explosion, operating in all areas of the oil and gas industry, including exploration which caused the death of 15 workers and resulted in a record-setting and production, refining, distribution and marketing, petrochemicals, OSHA fine; Britain’s largest oil spill, the wreck of Torrey Canyon; and the power generation and trading. It also has renewable energy interests 2006 Prudhoe Bay oil spill, the largest oil spill on Alaska’s North Slope, in biofuels and wind power. which resulted in a US$25 million civil penalty, the largest per-barrel penalty at that time for an oil spill. As of 31 December 2016, BP had operations in 72 countries worldwide, produced around 3.3 million barrels per day of oil equivalent, and The 2010 Deepwater Horizon oil spill, the largest accidental release of had total proved reserves of 17.81 billion barrels of oil equivalent. oil into marine waters in history, resulted in severe environmental, health The company has around 18,000 service stations worldwide. Its and economic consequences, and serious legal and public relations largest division is BP America in the United States. In Russia BP owns repercussions for BP. 1.8 million gallons of Corexit oil dispersant were a 19.75% stake in Rosneft, the world’s largest publicly traded oil and used in the cleanup response, becoming the largest application of such gas company by hydrocarbon reserves and production. BP has a chemicals in US history. The company pleaded guilty to 11 counts of primary listing on the London Stock Exchange and is a constituent of felony manslaughter, two misdemeanors, one felony count of lying the FTSE 100 Index. It has secondary listings on the Frankfurt Stock to Congress, and agreed to pay more than $4.5 billion in fines and Exchange and the New York Stock Exchange. penalties, the largest criminal resolution in US history. On 2 July 2015, BP and five states announced an $18.5 billion settlement to be used for BP’s origins date back to the founding of the Anglo-Persian Oil Clean Water Act penalties and various claims. Company in 1908, established as a subsidiary of Burmah Oil Company to exploit oil discoveries in Iran. In 1935, it became the BP has operations in 72 countries worldwide with the global headquarters Anglo-Iranian Oil Company and in 1954 British Petroleum. In 1959, in London, United Kingdom. As of December 2016, it had 74,500 the company expanded beyond the Middle East to Alaska and it employees worldwide. BP operations are organized into two main was one of the first companies to strike oil in the North Sea. British business segments, Upstream and Downstream. Since 1951, BP has Petroleum acquired majority control of Standard Oil of Ohio in 1978. annually published its Statistical Review of World Energy, which is considered an energy industry benchmark.

18 | KWIK TRIP | PLYMOUTH, MN 04 | FINANCIAL ANALYSIS TENANT AND COMPANY OVERVIEW

TENANT AND COMPANY OVERVIEW UNITED STATES As of 2014 the company employs about 15,000 people in the UK, The United States operations comprise nearly one-third of BP’s worldwide but the number has decreased since then. BP has a major corporate business interests and the United States is the country with the greatest campus in Sunbury-on-Thames which is home to around 3,500 concentration of its employees and investments. BP employs approximately employees and over 50 business units. Its North Sea operations are 16,000 people in the United States. In 2016, the BP’s production in the headquartered in Aberdeen, Scotland. BP’s trading functions are United States included 335,000 barrels per day of oil and 1.656 billion based at 20 Canada Square in Canary Wharf, London. BP has three cubic feet per day (46.9 million cubic meters per day) of natural gas. major research and development centers in the UK. BP’s major subsidiary in the United States is BP America, Inc. based in BP operates more than 40 offshore oil and gas fields, four onshore Houston, Texas, which is the parent company for the BP’s operations terminals and a pipeline network that transports around 50%t of the in the country. BP Exploration & Production Inc., a 1996 established oil and gas produced in the UK, according to the company. As of Houston-based subsidiary, is dealing with oil exploration and production, 2011, BP had produced 5 billion barrels of oil and gas equivalent including Gulf of Mexico activities. BP Corporation North America, Inc., in the North Sea and as of 2012 its level of production was about provides petroleum refining services as also transportation fuel, heat and 200,000 barrels per day, BP has invested more than £35 billion in light energy, and petrochemical products. BP Products North America, the North Sea since the 1960s, and in 2012 announced its plans to Inc., a 1954 established Houston-based subsidiary, is engaged in the invest another £10 billion until 2017. The company announced that exploration, development, production, refining, and marketing of oil it is focusing its investment in the UK North Sea into four development and natural gas. BP America Production Company, a New Mexico-based projects including the Clair, Devenick, Schiehallion and Loyal, and subsidiary, engages in oil and gas exploration and development. BP Kinnoull oilfields. BP is the operator of the Clair oilfield, which has Energy Company, a Houston-based subsidiary, is a provider of natural been appraised as the largest hydrocarbon resource in the UK. gas, power, and risk management services to the industrial and utility sectors and a retail electric provider in Texas. In Saltend near Hull, BP operates a petrochemicals plant that produces acetic acid and acetic anhydride used in the production of BP’s upstream activities are divided into three business areas which are pharmaceuticals, textiles and other chemical products. Deepwater Gulf of Mexico, the Lower 48 states, and Alaska. BP is a leading acreage holder and producer of oil and natural gas in the Deepwater There are 1,200 BP service stations in the UK. Gulf of Mexico. The company produces nearly 10% of its global output in the region, over 249,000 barrels per day of oil equivalent, as of 2015. BP’s production is from more than ten fields, including Atlantis, Mad Dog, Na Kika, and Thunder Horse fields operated by the company itself.

19 | KWIK TRIP | PLYMOUTH, MN 04 | FINANCIAL ANALYSIS TENANT AND COMPANY OVERVIEW

UNITED STATES The United States operations comprise nearly one-third of BP’s worldwide As of 2016, the company operated nine North Slope oilfields in the Greater business interests and the United States is the country with the greatest Prudhoe Bay area, producing 107,900 barrels per day. BP is the largest concentration of its employees and investments. BP employs approximately partner with just under 50% ownership stake in the 800-mile (1,300 km) 16,000 people in the United States. In 2016, the BP’s production in the long Trans-Alaska Pipeline System. United States included 335,000 barrels per day of oil and 1.656 billion cubic feet per day (46.9 million cubic meters per day) of natural gas. In 2014, BP moved its onshore unit in the United States to a new business called U.S. Lower 48 Onshore to compete in the burgeoning shale gas BP’s major subsidiary in the United States is BP America, Inc. based in industry dominated by smaller companies. It has 7.5 billion barrels (1.19 Houston, Texas, which is the parent company for the BP’s operations billion cubic meters) material resource base on 5.7 million acres (23,000 in the country. BP Exploration & Production Inc., a 1996 established km2). It has shale positions in the Woodford, Oklahoma, Fayetteville, Houston-based subsidiary, is dealing with oil exploration and production, Arkansas, Haynesville, Texas, and Eagle Ford, Texas shales. It has including Gulf of Mexico activities. BP Corporation North America, Inc., unconventional gas (shale gas or tight gas) stakes also in Colorado, New provides petroleum refining services as also transportation fuel, heat and Mexico and Wyoming, primarily in the San Juan Basin. light energy, and petrochemical products. BP Products North America, Inc., a 1954 established Houston-based subsidiary, is engaged in the BP operates Whiting Refinery in Indiana and Cherry Point Refinery exploration, development, production, refining, and marketing of oil in Washington, and has a stake in the Husky Energy-operated Toledo and natural gas. BP America Production Company, a New Mexico-based Refinery in Ohio. Since the early 2000s, the company has been focusing subsidiary, engages in oil and gas exploration and development. BP its refining business on processing crude from oil sands and tight oil from Energy Company, a Houston-based subsidiary, is a provider of natural shales. On the US West Coast, BP primarily operates service stations under gas, power, and risk management services to the industrial and utility the ARCO brand. sectors and a retail electric provider in Texas. The company owns two petrochemical plants in the U.S. Its petrochemical BP’s upstream activities are divided into three business areas which are plant in Texas City, located on the same site as the formerly owned Texas Deepwater Gulf of Mexico, the Lower 48 states, and Alaska. BP is a leading City Refinery, produces industrial chemicals including propylene and acreage holder and producer of oil and natural gas in the Deepwater styrene. BP’s Cooper River, South Carolina petrochemical plant produces Gulf of Mexico. The company produces nearly 10% of its global output in PTA, which is used in the production of fiber for clothing, packaging and the region, over 249,000 barrels per day of oil equivalent, as of 2015. optical films. BP’s production is from more than ten fields, including Atlantis, Mad Dog, As of May 2017, BP operated 13 wind farms in seven states in the U.S., and Na Kika, and Thunder Horse fields operated by the company itself. held an interest in another in Hawaii. In 2016, the company generated 4.389 TW·h of wind power.

20 | KWIK TRIP | PLYMOUTH, MN 04 | FINANCIAL ANALYSIS TENANT AND COMPANY OVERVIEW

OTHER LOCATIONS In Egypt, BP produces approximately 15% of the country’s total oil BP operates the Kwinana refinery in Western Australia, which can process production and 40% of its domestic gas. The company also has offshore up to 146,000 barrels per day (23,200 m3/d) of crude oil and is the gas developments in the East Nile Delta Mediterranean, and in the West country’s largest refinery, supplying fuel to 80%t of Western Australia. BP Nile Delta, where the company has a joint investment of US$9 billion with is a non-operating joint venture partner in the North West Shelf, which RWE to develop two offshore gas fields. produces LNG, pipeline gas, condensate and oil. The NWS venture is Australia’s largest resource development and accounts for around one BP is active in offshore oil development in Angola, where it holds an interest third of Australia’s oil and gas production. There are approximately in a total of nine oil exploration and production blocks covering more 1,400 BP service stations in Australia with over 1,000 of them owned by than 30,000 square kilometers (12,000 sq mi). This includes four blocks independent operators. it acquired in December 2011 and an additional block that is operated by Brazilian national oil company, Petrobras, in which it holds a 40% stake. BP operates the two largest oil and gas production projects in the Azerbaijan’s sector of the Caspian Sea, the Azeri–Chirag–Guneshli BP has a stake in exploration of two blocks of offshore deepwater assets offshore oil fields, which supplies 80% of the country’s oil production, in the South China Sea. and the Shah Deniz gas field. It also and develops the Shafag-Asiman In India, BP owns a 30% share of oil and gas assets operated by Reliance complex of offshore geological structures.[200][201][202] In addition, it Industries, including exploration and production rights in more than 20 operates the Azerbaijan’s major export pipelines through Georgiasuch as offshore oil and gas blocks, representing an investment of more than Baku–Tbilisi–Ceyhan, Baku–Supsa and South Caucasus pipelines. US$7 billion into oil and gas exploration in the country. BP’s refining operations in continental Europe include Europe’s second- BP has major liquefied natural gas activities in Indonesia, where it operates largest oil refinery, located in Rotterdam, the Netherlands, which can the Tangguh LNG project, which began production in 2009 and has a process up to 377,000 barrels (59,900 m3) of crude oil per day. capacity of 7.6 million tons of liquid natural gas per year. Also in that In addition to its offshore operations in the British zone of North Sea, BP country, the company has invested in the exploration and development of has interests in the Norwegian section of the sea through its stake in Aker coalbed methane. BP. As of December 2015, BP holds a 19.75% stake in Russia’s state- BP operates in Iraq as part of the joint venture Rumaila Operating controlled oil company Rosneft. Organization in the Rumaila oil field, the world’s fourth largest oilfield, where it produced over 1 million barrels per day (160×103 m3/d) of oil equivalent in 2011.

21 | KWIK TRIP | PLYMOUTH, MN 04 | FINANCIAL ANALYSIS TENANT AND COMPANY OVERVIEW

BP’s Canadian operations are headquartered in Calgary and the company operates primarily in Alberta, the Northwest Territories, and Nova Scotia. It purchases crude oil for the company’s refineries in the United States, has oil sands holdings in Alberta and four offshore blocks in Nova Scotia. The company’s Canadian oil sands leases include joint ventures with Husky Energy in the Sunrise Energy Project (50%), and Devon Energy in Pike, and a partnership with Value Creation Inc. in the development of the Terre de Grace oil sands lease. The BP’s investment in the Sunrise Project is £1.6 billion and it is expected to start production in 2014. In May 2017, it was reported that BP is considering to sell-off its oil sands assets.

BP is the largest oil and gas producer in Trinidad and Tobago, where it holds more than 1,350 square kilometers (520 sq mi) of offshore assets and is the largest shareholder in Atlantic LNG, one of the largest LNG plants in Western Hemisphere.

In Brazil, BP holds stakes in offshore oil and gas exploration in the Barreirinhas, Ceará and Campos basins, in addition to onshore processing facilities. BP also operates biofuel production facilities in Brazil, including three cane sugar mills for ethanol production.

22 | KWIK TRIP | PLYMOUTH, MN 05

MARKET OVERVIEW 05 | MARKET OVERVIEW

The property is located on a 1.24-acre site on the north side of County Road 6, just east of the I-496 Freeway interchange located in the Plymouth EDUCATION Submarket approximately 12 miles northwest of Minneapolis. The building Plymouth is served by five public school systems as well as two institutes is located as an outparcel in the Home Depot Center which includes Home of higher education, including Association Free Lutheran Bible School and Depot, Discount Tire and a Kwik Trip Gas Station Convenience Center. Seminary and Central Baptist Theological Seminary. Its quality education system produces a skilled workforce. PLYMOUTH The city of Plymouth is the seventh largest city in Minnesota and the third JOBS largest suburb in Metro Minneapolis, covering 35 square miles in southeast Plymouth is home to a thriving commercial-industrial base, consisting Hennepin County. The city is located approximately 12 miles northwest of more than 53,000 jobs. The Unemployment Rate in Plymouth is well of downtown Minneapolis and has a 2017 population of 70,576+ and below the national average at 3.3%. Major local employers in Plymouth an above average median household income of $80,000+. include Wayzata Public Schools, Aimia, Select Comfort, Medtronic, St. Plymouth is an affluent suburb of Minneapolis, with single-family Jude Medical, Prudential, City of Plymouth, Honeywell, Nilfisk-Advance, residential neighborhoods, commercial developments, and access to and US Foods. Future job growth over the next ten years is predicted to area freeways. Plymouth enjoys a strategic location in the region and be 39.18%. is readily accessible via local freeways to all of the metropolitan area. Interstate 494 runs through Plymouth as does Hwy. 55. Hwy. 169 is on the city’s eastern border and I-394 is within four miles from the center of Plymouth.

Plymouth was named by Money Magazine the number one city in which to live in the United States with populations of 50,000 to 300,000 in 2008. The magazine gave top honors to Plymouth because of its inclusion of residential areas, industry, parks, schools, and other aspects which make Plymouth a self-contained and essentially autonomous city.

24 | KWIK TRIP | PLYMOUTH, MN 05 | MARKET OVERVIEW

QUICK FACTS ABOUT MINNEAPOLIS-ST. PAUL-BLOOMINGTON METRO AREA

MINNEAPOLIS ECONOMY:

The “twin cities” serve as a regional center for the upper Midwest and The unemployment rate in Minneapolis-St. Paul-Bloomington Metro northern Great Plains. The fully cosmopolitan area is a balanced industrial, Area is 3.70 percent (U.S. avg. is 5.20%). Recent job growth is commercial, educational, and cultural center, and functions much as one Positive. Minneapolis-St. Paul-Bloomington Metro Area jobs have city. The area is one of the most economically diverse in the country, serving Increased by 1.35 percent. as headquarters to large firms in agriculture, food, banking, technology, retailing, healthcare, and transportation. A few of the well-known companies COST OF LIVING: include General Mills, 3M, US Bancorp, United Healthcare, and retailers Compared to the rest of the country, Minneapolis-St. Paul-Bloomington Target and Best Buy. Job growth is still fairly modest, but overall, the Twin Metro Area’s cost of living is 11.40% higher than the U.S. average. Cities have a strong and prosperous feel. POPULATION: The twin downtown areas sit on either side of the Mississippi River. Both are modern with attractive buildings, clean streets, entertainment, nightlife, As of 2014, Minneapolis-St. Paul-Bloomington Metro Area’s parks, museums, and other first-class cultural amenities. Minneapolis is population is 3,524,580 people. Since 2000, it has had a population more progressive, energetic and cosmopolitan while St. Paul is the smaller, growth of 36.04 percent. quieter and more traditional of the two. Both downtowns are well used and aided by a network of elevated interior walkways called “skyways” TRANSPORTATION: connect buildings and attractions—a feature necessitated by the harsh, winter climate. According to one source, the area has more theatres, Average Commute time is 25 minutes. The National Average is 26 dance companies, and classical concerts per capita than any city outside minutes. of New York. Because Minneapolis-St. Paul is not a tourist destination, the REAL ESTATE: local population enjoys these amenities almost exclusively. The population is highly educated, schools have an excellent reputation, and there is an The median home cost in Minneapolis-St. Paul-Bloomington Metro abundant intellectual energy among the area’s citizens. Area is $228,900. Home appreciation the last 10 years has been -9.62%. SCHOOLS: Minneapolis-St. Paul-Bloomington Metro Area public schools spend$13,296 per student. The average school expenditure in the U.S. is $12,383. There are about 16.4 students per teacher in Minneapolis-St.

25 | KWIK TRIP | PLYMOUTH, MN 05 | MARKET OVERVIEW LOCATION AERIAL

HWY 55

STARBUCKS

HWY 55

SUBJECT PROPERTY COUNTY ROAD 6

26 | KWIK TRIP | PLYMOUTH, MN 05 | MARKET OVERVIEW REGIONAL MAP

PLYMOUTH

SUBJECT PROPERTY

MINNEAPOLIS

ST. PAUL

BLOOMINGTON

27 | KWIK TRIP | PLYMOUTH, MN 05 | MARKET OVERVIEW DEMOGRAPHICS DEMOGRAPHIC BRIEF DEMOGRAPHIC BRIEF

1655 ANNAPOLIS LN N 1655 ANNAPOLIS LN N

POPULATION 1 MILE 3 MILES 5 MILES

2017 Population - Current Year Estimate 2,630 60,794 166,791 2022 Population - Five Year Projection 2,774 63,361 175,293 2010 Population - Census 2,432 57,536 154,200 2000 Population - Census 2,445 58,257 151,275

2010-2017 Annual Population Growth Rate 1.09% 0.76% 1.09% 2017-2022 Annual Population Growth Rate 1.07% 0.83% 1.00% 5 MILE HOUSEHOLDS

2017 Households - Current Year Estimate 1,067 25,833 70,238 2022 Households - Five Year Projection 1,120 26,842 73,512 2010 Households - Census 995 24,618 65,539 2000 Households - Census 960 23,392 61,203 3 MILE 2010-2017 Annual Household Growth Rate 0.97% 0.67% 0.96% 2017-2022 Annual Household Growth Rate 0.97% 0.77% 0.92%

2017 Average Household Size 2.46 2.31 2.34

HOUSEHOLD INCOME 1 MILE

2017 Average Household Income $113,662 $122,563 $115,779 2022 Average Household Income $127,574 $136,042 $128,853 2017 Median Household Income $79,678 $86,190 $82,482 2022 Median Household Income $86,563 $95,581 $91,139 2017 Per Capita Income $47,029 $52,475 $49,012 2022 Per Capita Income $52,503 $58,010 $54,266

HOUSING UNITS

2017 Housing Units 1 , 1 0 3 2 7 , 3 6 6 7 4 , 3 1 7 2017 Vacant Housing Units 36 3.3% 1,533 5.6% 4,079 5.5% 2017 Occupied Housing Units 1,066 96.6% 25,832 94.4% 70,238 94.5% 2017 Owner Occupied Housing Units 839 76.1% 17,093 62.5% 47,679 64.2% 2017 Renter Occupied Housing Units 227 20.6% 8,739 31.9% 22,559 30.4%

EDUCATION

2017 Population 25 and Over 1 , 9 0 8 4 4 , 0 9 1 1 2 0 , 1 6 2 HS and Associates Degrees 989 51.8% 17,652 40.0% 50,049 41.7% Bachelor's Degree or Higher 867 45.4% 25,373 57.5% 66,311 55.2%

PLACE OF WORK

2017 Businesses 609 4,198 7,972 2017 Employees 15,936 89,899 163,646

©2017 CBRE. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. Source: Esri Page 1 ProjectID:258303 28 | KWIK TRIP | PLYMOUTH, MN NAME LATITUDE LONGITUDE

1655 ANNAPOLIS LN N 44.9979628949189 -93.4539310406718

BILL O’CONNOR DAVID HESANO SENIOR VICE PRESIDENT FIRST VICE PRESIDENT CBRE, Inc. CBRE, Inc. +1 248 351 2045 +1 248 351 2014 [email protected] [email protected]

2000 TOWN CENTER BROKER OF RECORD SUITE 500 Mr. Blake R. Hastings CBRE Minneapolis | St. Paul Southfield, MI 48075

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