Walgreens Net Lease and Asset Repositioning Opportunity

163-30 Cross Bay Boulevard | Howard Beach, NY 11414

CONFIDENTIAL OFFERING MEMORANDUM PROPERTY TOUR & OFFER PROCESS Property Visitation: Prospective purchasers WILL NOT BE AFFORDED the opportunity to visit interior of the property site due to current tenant's operations. DO NOT DISTURB THE CURRENT OCCUPANTS. Offer Submission: Offers should be submitted in the form of a non-binding Letter of Intent to Miguel Jauregui at [email protected]. Terms and conditions of Purchasers’ offer should at the minimum include: • Offer price • Earnest money deposit • Due diligence and closing period • Description of Purchaser qualifications and proof of funds

LEGAL DISCLAIMERS This Confidential Offering Memorandum (“Memorandum”) is solely for the use of the purchaser. While the information contained in this Analysis has been compiled from sources we believe to be reliable, neither Greysteel nor its representatives make any representations or warranties as to the accuracy or completeness of the information contained in this Analysis. All financial information and projections are provided for reference only and are based on assumptions relating to the general economy, market conditions and other factors beyond our control. Purchaser is encouraged to conduct an independent due diligence investigation, prepare independent financial projections, and consult with their legal, tax and other professional advisors before making an investment decision. Greysteel does not have authority to legally bind the owner and no contract or agreement providing for any transaction shall be deemed to exist unless and until a final definitive contract has been executed and delivered by owner. All references to acreage, square footage, distance, and other measurements are approximations and must be independently verified.

SALES FINANCE Miguel Jauregui Lance Ahmadian Umar Khan Romain Sinclair Corey Schwartz Director Senior Investment Associate Senior Investment Associate Investment Associate Director 212.658.1471 202.559.7000 718.679.9097 718.285.8986 718.209.1573 [email protected] [email protected] [email protected] [email protected] [email protected]

INVESTMENT SALES FINANCIAL SERVICES TRANSACTION SERVICES Matt Marchione Jake Ruppert Ari Firoozabadi* Duerk Brewer Mark Bittenbender Business Development Associate Finance Associate President & CEO Chief Operating Officer Senior Vice President Yassi Ghashghai Rebecca Wiley Brett Burkhart Director Corporate Services Director of Marketing Lead Research Analyst Max Freeman Christine Diot Bart Boyle Senior Transaction Coordinator Senior Designer Financial Analyst

*For more information or to inquire about Greysteel, please contact Ari Firoozabadi, President & CEO ([email protected] | 202.417.3873).

© 2019 Greysteel / 2 04 12 20 Investment Property Market Overview Overview Overview Investment Highlights Interior Photos Area Highlights Investment Summary Property Aerial Economic Highlights Site Survey Area Community Businesses Lifestyle Highlights Tenant Overviews Retail Map Demographic & Income Profile Report Area Residential Neighborhoods Regional Map

• Investment Highlights

• Investment Summary

• Site Survey

• Tenant Overviews Looking South Down Cross Bay Boulevard Investment Highlights

In-Place Return As of April 2019, the in-place cap rate on this absolute NNN investment will be 6.0%, providing a headache-free safe haven for capital within an aggressive $16,350,000 New York City market. Asking Price Attractive Rent Increases Property boasts a generous increase of 12% in 2024 with a total of 10 years remaining on the lease. % SF Corporate Guarantee 6.0 23,618 Leased to Duane Reade with a corporate guarantee from its parent company, Capitalization Rate Available Air Rights Walgreens, an S&P BBB rated company.

Sublease Tenant Property Information This Key Food location strongly appeals to the middle to high income demographics of the area, as illustrated by a strong sales per square foot Block / Lot 14076 / 118, 147, 148, 150, 155 average of $1,200. Lot Dimensions 203.03'x175' (irr)

Tenant Improved Building Lot Area 33,342 Square Feet Although the building was built in 2009, the sublease tenant, Key Food, invested their own capital into substantially renovating the Property in 2014, illustrating a long-term Building Dimensions 93'x110' (irr) commitment to the location. Building Size 9,724 Square Feet

Asset Repositioning Stories / Parking 1 Story (22') / 42 Spaces Available air rights of 23,618 square feet, for a total of 33,342 buildable square feet, on a block-through property with 180’ of frontage on Cross Bay Year Built / Renovated 2009 / 2014 Boulevard and 203’ of frontage on 92nd Street. Zoning / FAR R3-1, R2, C2-2 / 1.00

Central Location Buildable Area 33,342 Square Feet Cross Bay Boulevard is the main commercial strip of Howard Beach, a white-collar community with an average household income of $90,000. Air Rights 23,618 Square Feet

Neighboring Tenancy Assessment (18/19) $2,690,054 Immediate vicinity includes well-known locally owned businesses, such as Russo's Taxes (18/19) $282,832 on the Bay and Lenny's Clam Bar, and national retailers like Gap, Petco, Planet Fitness, Starbucks, Chipotle, CVS, and Launch Trampoline Park.

Rent Schedule Initial Term Rent Bump Monthly Rent Annual Rent Rent/SF Current - 04/19/2024 – $81,573 $978,880 $100.67 04/20/2024 - 04/19/2029 12% $91,362 $1,096,345 $112.75 Renewal Option 1 (10 years) 04/20/2029 - 04/19/2039 Greater of 95% of fair market rent or 112% of last year of initial term Renewal Option 2 (10 years) 04/20/2039 - 04/19/2044 112% of the increased rent of Renewal Option 1 04/20/2044 - 04/19/2049 125.44% of the increased rent of Renewal Option 1

Parcel Area Breakdown Lease Summary Loan Summary Block / Lot Square Feet Lease Guarantor Walgreens (S&P Rating: BBB) Principal Balance $8,384,000 14076/118 17,100 Rent Commencement Date 04/20/2009 Interest Rate 4.375% 14076/155 3,442 Lease Expiration Date 10/31/2028 Origination Date 03/2016 14076/150 8,000 Extension Options Two 10-Year Renewal Options Maturity Date 03/2026 14076/148 3,200 Lease Type Absoulte NNN Debt Service $45,900 14076/147 1,600 Sublease Tenant Almonte Bay Food Corp. ("Key Food") Rate Adjustment 03/2023 Total 33,342

Key Food

Corporate Identity Key Foods Stores Co-Op, Inc. Locations 270 Website www.keyfood.com Description Key Food Stores was founded in Brooklyn, New York, in 1937 as a cooperative of independently-owned supermarkets and convenience stores. The chain’s headquarters and main locations are in New York, but the company has locations in New Jersey, Massachusetts, Connecticut, and Pennsylvania, and has 270 active locations with plans for expansion. Key Food sells a wide variety of supermarket and convenience store items, including produce, meat, beverages, snacks, dairy, prepared foods, coffee, alcohol, and many other products that are typically found in major supermarket retailers. Key Food operates under several banners, with other store locations operating under the names of Key Fresh & Natural, Urban Market, Food Dynasty, Food World, Food Universe Marketplace, The Food Emporium, and SuperFresh. Key Food completed its purchase of 23 stores from bankrupt competitor A&P in 2015, which included branches of Waldbaums, Food Basics USA, Food Emporium, A&P, and Pathmark. Following this acquisition, the company became the largest grocer in New York City. Key Food and its acquired A&P are primarily supplied by C&S Wholesale Grocers.

Walgreens

Parent Company Walgreens Boots Alliance (NASDAQ: WBA) Corporate Identity The Walgreen Company Credit Rating Baa2 (Moody’s), BBB (Fitch), BBB (S&P) Locations 9,650 Website www.walgreens.com Description Walgreens is an American company which operates as the second-largest pharmacy store chain in the United States behind CVS Health. It specializes in filling prescriptions, health and wellness products, health information, and photo services. As of August 31, 2018, the company operated 9,650 locations in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The retail chain reports that approximately 78% of United States residents live within five miles of a Walgreens store, or one of their subsidiaries – Duane Reade or Rite Aid. In 2014, the company agreed to purchase the remaining 55% of Switzerland-based Alli- ance Boots that it did not already own to form a global business. Under the terms of the purchase, the two companies merged to form a new holding company, Walgreens Boots Alliance Inc., on December 31, 2014. Walgreens became a subsidiary of the new company, which retains its Deerfield headquarters and trades on the Nasdaq under the symbol WBA. As of 2019, Walgreens Boots Alliance, Inc. had approximately 244,000 employees between its almost 8,100 stores nationwide. The company reported revenue of $131.5 billion in fiscal 2018, along with a net income of over $5 billion.

• Interior Photos

• Property Aerial

• Area Community Businesses

• Retail Map

• Area Residential Neighborhoods

• Regional Map Looking North Down Cross Bay Boulevard INTERIOR PHOTOS PRIMOS PIZZA SUBS & WINGS ShellBank Basin MOTHER TRUCKER'S EATERY

CROSS BAY BOULEVARD (26,630 AADT)

92ND STREET

164TH AVENUE

163RD AVENUE 91ST STREET

90TH STREET

CORNER OF 163 ST AND CROSS BAY BOULEVARD

157TH AVENUE AND CROSS BAY BOULEVARD

GROUND 157ST AVE ShellBank Basin

FLATLANDS AVE 159ST AVE

FOUNTAIN AVE 158TH AVE

CROSS BAY BLVD

BELT PKWY

BETTS CREEK 84TH ST 160TH AVE

161ST AVE

162ND AVE

SHORE PKWY

GATEWAY CENTER GATEWAY CENTER 164TH AVE RESTAURANTS OLIVE GARDEN APPLEBEE'S Pizzeria OUTBACK STEAKHOUSE 165TH AVE RED LOBSTER SMASH BURGER 5 BELOW SPRING CREEK PARK PANERA BREAD BUFFALO WILD WINGS BELT PKWY STAR BUCKS PIZZA STUDIO

OLD MILL CREEK

RETAIL MAP 163RD AVENUE AND 91ST STREET

SHELLBANK BASIN

162ND AVENUE

HILLSIDE AVE FOREST 25 PARK

278

HIGHLAND PARK 678

ATLANTIC AVE SPRINGFIELD BLVD

BROOKLYN WOODLAWN BLVD ATLANTIC AVE

BELT PKWY 27 878 HOWARD

SPRING CREEK BEACH IDLEWILD PARK PARK

3 MILES BELT PKWY

KEY FOOD

CROSS BAY BLVD

FLATBUSH AVE

BROAD CHANNEL

BELT PKWY

• Area Highlights

• Economic Highlights

• Lifestyle Highlights

• Demographic & Income Profile Report Looking North Down Cross Bay Boulevard AREA HIGHLIGHTS

Queens, New York Queens is the easternmost of the five boroughs of New York city, abutting the number of jobs added to the economy is ten times more than the amount lost Brooklyn and Long Island, and is the largest of the five boroughs of New York during the recession. The borough has many development projects in the pipeline, City by land area. Queens is the second-largest economy of the five boroughs has set new employment records, and has a dwindling unemployment rate. A very of New York City behind Manhattan. The borough has seen a 25% increase in promising future for Queens is on the horizon. population since 1980, reaching a record 2.4 million in 2017. The substantial increase is primarily driven by immigration. Queens is the most culturally diverse county in the United States, and is home to the second-largest population of immigrants in the country. The borough’s population growth and roaring economic success is due in large part to the economic diversity that immigrants have contributed to the economy. Immigrants represent 47% of the borough’s population, constitute more than half of the work force, and make up 69% of the self-employed entrepreneurs. Queens is New York City’s ambassador to the rest of the world, with the city’s two major airports within the borough. John F. Kennedy and LaGuardia airports are economic keystones and are expected to continue creating thousands of new jobs during, and after, the major upgrades both airports are currently undergoing. The importance of transportation jobs in the borough cannot be understated – 96% of air transportation jobs and 58% of all transportation jobs in all of New York City are located in Queens. Long Island City, Flushing, Jamaica, and Far Rockaway are undergoing robust economic growth. More than 110,000 private sector jobs have been added to the Queens market since the recession ended in 2009, with positions in healthcare, leisure and hospitality, and professional and business services accounting for the vast majority them. Employment in the private sector grew tremendously in

2017, reaching a record 567,800 jobs - an increase of nearly 24% since 2009; THE QUEENSBORO BRIDGE BETWEEN MANHATTAN ISLAND AND QUEENS IN NEW YORK

Regional Economic Highlights: (Source: U.S. Bureau of Labor Statistics as of November 2018)

25%

MAJOR GROWTH SECTORS The borough has seen a 25% increase in % Education and Health Services; population since 1980, reaching a record 9,980,700 3.3 Professional and Business Services; 2.4 million in 2017. The substantial TOTAL NONFARM UNEMPLOYMENT Mining, Logging, and Construction increase is primarily driven by immigration EMPLOYMENT RATE

JFK International Airport (1.6 miles): The Madelaine Chocolate Company (4.6 miles): • Busiest international air passenger gateway in the United States and the • An American family-owned and run company operating for over 60 years busiest airport in the New York City airport system • Leaders in the novelty chocolate and panned chocolate industry, offering • Handled more than 58.9 million passengers in 2017, making it the 6th customers a wide variety of products using premium quality chocolate and at busiest airport in the United States an affordable price • The airport's 6 operating airline terminals are served by 4 runways and 128 • One of Queens’ larger employers, with over 400 staff producing 100,000 aircraft gates pounds of chocolate into Easter eggs, Chanukahgelt, and other confections LaGuardia Airport (8.8 miles): • Serving nearly 30 million passengers annually, LaGuardia is the 20th busiest airport in the United States • LaGuardia employs approximately 12,400 individuals and contributes nearly $20 billion in economic activity • Generates 136,000 total jobs and almost $7 billion in annual wages as salaries

JFK INTERNATIONAL AIRPORT (1.6 MILES)

Long Island Railroad (3.4 miles): • The busiest commuter railroad in North America, and also the oldest railroad still operating under its original name in the U.S. • Carries an average of 301,000 customers each weekday on 735 daily trains, providing service for over 80 million customers each year • As of 2018, the Long Island Railroad has over 7,000 employees

Jamaica Hospital Medical Center (3.5 miles): • Jamaica Hospital is a 408-bed, not-for-profit teaching hospital, currently serving a population greater than 1.2 million in Queens and eastern Brooklyn • The hospital’s Level I Trauma Center and Stroke Center is one of the busiest in New York and the only one in South Queens • Nearly 120,000 patients have been treated in the hospital’s Emergency LAGUARDIA AIRPORT (8.8 MILES) Department, and approximately 300,000 patients have been seen in its Ambulatory Care Centers

Spring Creek Park (0.5 miles): Gateway Center (1.7 miles): • A public park and recreation area that consists of three large areas: Spring • Shopping mecca for local residents featuring nationwide retailers such as Creek North, Spring Creek South, and Gateway Center Parkland Target, Best Buy, Home Depot, Bed Bath & Beyond, BJ’s Wholesale Club, Old • Contains the largest amount of undeveloped land and wetlands in the Navy, and more northern Jamaica Bay area • Houses over thirty-five retailers, including Pier 1, JC Penney, TJ Maxx, Nordstrom Rack, GAP Factory, Carters, ShopRite, P.C. Richard & Son, Raymour Aqueduct Racetrack (1.4 miles): & Flanigan, Burlington, DSW, and New York & Co. • The only racetrack in New York City, occupying approximately 210 acres in • Features meticulously landscaped courtyards and gardens, as well as bars, South Ozone Park restaurants, and the beautiful Gateway ArtWalk • New York Racing Association has invested more than $18 million in capital Linden Boulevard Multiplex Cinemas (1.7 miles): improvements at Aqueduct since 2013 • In 2017, the racetrack had its most significant reconstruction project in • Popular local cinema house featuring stadium seating, concession stands, and decades, replacing the inner dirt course with a second turf course, installing a a lobby food court state-of-the-art irrigation system, and renovating the main track to facilitate • Owned by National Amusements, Inc., which operates movie screens in year round racing Connecticut, Massachusetts, New York, Rhode Island, Ohio, Argentina, Brazil, and the United Kingdom, and owns the Showcase SuperLux, Cinema de Lux, Showcase Cinemas, and Multiplex Cinemas brands

AQUEDUCT RACETRACK (1.4 MILES)

Resorts World Casino (1.6 miles): • The only casino in New York City, offering over 6,000 slots and electronic table games to 10 million guests annually • Generates over $2 billion for the State’s education system each year • A subsidiary of the Genting Group, which has five public companies listed RESORTS WORLD CASINO (1.6 MILES) on the stock exchanges of Malaysia, Singapore and Hong Kong, with a combined market capitalization of $45 billion

TOTAL RESIDENTIAL RENTER OCCUPIED POPULATION TOTAL EMPLOYEES HOUSING UNITS

MILES 2018 2023 MILES 2018 MILES 2018 2023 1 15,368 15,632 1 7,634 1 1,269 1,155 3 376,684 386,303 3 169,632 3 69,002 67,405

MEDIAN AVERAGE MEDIAN AGE HOUSEHOLD INCOME HOUSEHOLD INCOME

MILES 2018 2023 MILES 2018 2023 MILES 2018 2023 1 47.3 47.7 1 $94,982 $104,464 1 $126,045 $144,345 3 35.8 37.2 3 $52,922 $59,816 3 $72,569 $86,110

212.658.1471 • www.greysteel.com

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