Confidential Offering Memorandum

OCALA RETAIL CENTER Ocala, 3 Tenant Retail Center

Michael J. Fennessy Dietz Commercial 36400 Woodward Avenue, Suite 240 Bloomfield Hills, Michigan 48304 Phone: 248.646.7722 Fax: 248.646.1177 Email: [email protected] www.dietzcommercial.com confidentiality memorandum disclaimer OCALA RETAIL CENTER

Dietz Commercial has been retained as the exclusive broker regarding the sale of the Ocala Retail Center located in Ocala, Florida.

This Offering Memorandum has been prepared by Dietz Commercial for use by a limited number of parties, and does not purport to provide a necessarily accurate summary of the property or any of the documents related thereto, nor does it purpose to be all-inclusive or to contain all of the information which prospective investors may need or desire. All projections have been developed by Seller and designated sources, and are based upon assumptions relating to the general economy, competition and other factors beyond the control of Seller and, therefore, are subject to variation. No representation is made by Dietz Commercial or Seller, as to the accuracy or completeness of the information contained herein, and nothing contained herein is or shall be relied on as, a promise or representation as to the future performance of the property. Although the information contained herein is believed to be correct, Seller and its employees disclaim any responsibility for inaccuracies, and expect prospective purchasers to exercise independent due diligence in verifying all such information. Further, Dietz Commercial, Seller, or their employees disclaim any and all liability for representations and warranties, expressed and implied, contained in, or for omission from, the Offering Memorandum or any other written or oral communication transmitted or made available to the recipient. The Offering Memorandum does not constitute a representation that there has been no change in the business or affairs of the property or Seller since the date of preparation of the Offering Memorandum. Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser.

Additional information and an opportunity to inspect the property will be made available upon written request to interested and qualified prospective investors.

Seller and Dietz Commercial each expressly reserve the right, at their sole discretion to reject any or all expressions of interest or offers regarding the property, and/or terminate discussions with any entity at any time with or without notice. Seller shall have no legal commitment or obligations to any entity viewing this Offering Memorandum or making an offer to purchase the property unless and until such offer is approved by Seller, and the Board of Directors of Seller, a written agreement for the purchase of the property has been fully executed, delivered, and approved by Seller, and its legal counsel, and any conditions to Seller obligations thereunder have been satisfied or waived.

This Offering Memorandum and the contents, except such information which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting the Offering Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not photocopy or duplicate it, that you will not disclose the Offering Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Seller and Dietz Commercial, and that you will not use the Offering Memorandum or any of the contents in any fashion or manner detrimental to the interest of Seller and Dietz Commercial.

If you have no interest in the property at this time, please return the Offering Memorandum forthwith.

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Disclaimer table of contents OCALA RETAIL CENTER

I. Executive Summary

 Photographs 1-2  General Information 3  Investment Highlights 4  Aerial Photograph 5  Maps 6

II. Tenant Information

 Rent Roll 7  Tenant Description 8,9  Survey 10  Photograph 11

III. The Market

 Area Information 12,13  Neighborhood Description 14,15

IV. Financial Summary

 2018 Pro-Forma 16

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TabofCont

EXECUTIVE SUMMARY

OCALA RETAIL CENTER photographs

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OCALA RETAIL CENTER photographs

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Photosusenow1final 2 general information OCALA RETAIL CENTER

Property: Ocala Retail Center 9548 SW Highway 200 Ocala, FL 34481

Location: Property is located on SR 200 along the westerly side of the Wal-Mart Supercenter access road just east of SR 484.

Square Footage: 5,000 sf

Age: 2007

Number of Tenants: 3

Occupancy: 100%

Tenants: Five Guys Burgers (2,000 sf – corporate store) Lee’s Famous Recipe (1,800 sf) T-Mobile (1,250 sf)

Acreage: 1.08 acres

Zoning: B-4, Regional Business/Commercial

Parcel #: 35342-000-06

Parking: 40 spaces (8 per 1,000 sf)

Comments: Property was constructed in 2007 with impact glass and originally included a Starbucks (with drive-thru). Shortly after opening, Starbucks closed 900 stores which included this location and in 2010, Lee’s Famous Recipe Chicken subleased Starbucks space in 2010 and recently executed a direct lease with the ownership through 2/28/2026. Property is an out- parcel to the Wal-Mart Supercenter in the dominant retail corridor.

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GenInfo 3 investment highlights OCALA RETAIL CENTER

Purchase Price: $2,302,446

2018 Pro-forma Net Operating Income: $149,659

Capitalization Rate: 6.50%

Occupancy: 100%

Terms: Cash

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OCALA RETAIL CENTER aerial photograph

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5 area maps OCALA RETAIL CENTER f

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TENANT INFORMATION

OCALA RETAIL CENTER rent roll

Square Lease Lease Annual Rent Tenant % of Expense Notes Feet GLA Commencement Expiration Rent PSF Options

Five Guys Operations (d/b/a PRS of 3 – 5 year options remaining 2,000 40% 09/24/2007 11/30/2022 $77,000 $38.50 Note 1 Five Guys C1, T,I (1) $46.59 (2) $51.24 (3) $56.37 Burgers) $51,300 $28.50 3/1/19 $52,326 Stillwell $29.07 3/1/20 $53,373 Enterprises, Inc. $30.24 3/1/21 $54,440 PRS of 4 – 5 year options with 2% annual (d/b/a Lee’s 1,800 36% 06/10/2016 02/28/2026 $30.85 Note 2 3/1/22 $55,529 C2,T,I increases compounded annually. Famous Recipe $31.47 3/1/23 $56,639 Chicken) $32.10 3/1/24 $57,772 $32.74 3/1/25 $58,928 TCC Wireless, PRS of 2 – 5 year options LLC (d/b/a 1,200 24% 04/28/2017 04/28/2022 $21,600 $18.00 Note 3 C3, T, I (1) $19.80 (2) $27.78 T-Mobile) $29.98/ TOTALS 5,000 100% $149,900 avg.

The following codes apply to the recovery methodology of the individual tenants. More specific lease information is included in the Lease Abstracts included in this Offering Memorandum.

C1= Tenant pays pro-rata share of common area maintenance expenses. The CAM expenses shall not exceed 105% on a non-cumulative basis payable by tenant in the previous year. CAM includes 15% of operating expenses. The capped amount in 2017 is $6,656 for CAM which resulted in landlord expense of $241.00. C2= Tenant pays pro-rata share of common area maintenance expenses. Administrative fee is 15%. CAM expenses which shall not increase by more than 5% per year (to be calculated on a non-cumulative basis). C3= Tenant pays their pro-rata share of common area maintenance expenses. The CAM expenses include a 10% of CAM administrative fee and total CAM shall not increase by more than 5% per year (calculated on a cumulative basis). T = Tenant pays pro-rata share of real estate taxes. I = Tenant pays pro-rata share of insurance expenses.

Notes

(1) Five Guys Burgers Corporate took over an assignment of the original lease with Gator Burger Bet, LLC on October 1, 2013 and now is the guarantor of the lease. Five Guys Operations, LLC extended the lease on October 3, 2017 through November 30, 2022.

(2) Lee’s Famous Recipe Chicken initially subleased space from Starbucks in June 2010 (Starbucks originally occupied the space) and in March 2018, Lee’s Famous Recipe Chicken executed a direct lease with the current ownership through 2/28/2026.

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tenant description OCALA RETAIL CENTER

Early in 2003, Jerry and Janie, together with the “Five Guys” began offering franchise opportunities. In just under 18 months, Five Guys Enterprises sold options for more than 300 units. The overwhelming success of franchising a local restaurant made national news, with articles in trade publications such as Nation’s Restaurant News, Restaurant Business Magazine and the Franchise Times.

Now, 30 years after Five Guys first opened, there are almost 1,500 locations worldwide and another 1,500 units in development. Five Guys continues to receive generous media attention and has grown a cult-like following around the world.

www.fiveguys.com

Lee Cummings, the nephew of Colonel Harland Sanders (founder of KFC), spent much of his childhood in the kitchen of his Henryville, Indiana home. Lee hit the road with his uncle Harland in 1952 selling their own special blend of spices along with their famous pressure cookers, which later became part of KFC’s “Secret Recipe”. In three years, Lee and the Colonel opened over 800 KFC stores. After the sale of KFC in 1962, Lee Cummings started developing his recipe, later to be known as “Famous Recipe”. In 1966, Lee along with Harold Omer started “Harold’s Take-Home” in Lima, Ohio where Lee first introduced his Famous Recipe Chicken. The word spread about this great new recipe and later that year the first franchise unit was opened in Columbus, Ohio.

By 1967, the fifth franchise unit was opened in Springfield, Ohio. Later that year, units followed in Dayton, Ohio and Cincinnati, Ohio as well as Kalamazoo, Michigan.

In 1970 Lee’s Famous Recipe went international with the opening of three units in Trinidad and by 1972 there were more than 100 units in the thriving chain. By 1979, the number of units had doubled to 200 and in 1981 Lee sold the chain to Shoney’s Restaurants in Nashville, Tennessee. Shoney’s continued to operate Lee’s along with their own Captain D’s and Shoney’s Restaurants until 1995, when Lee’s was sold to RTM Restaurant Group in , .

In May 2003, the chain had 29 company owned locations and 125 franchised locations. In October 2003, Lee’s Famous Recipes Inc. purchased the chain from RTM. In April 2013, Famous Recipe Group, LLC purchased the chain from Lee’s Famous Recipes Inc. FRG has aggressive franchising plans for the brand.

www.leesfamousrecipe.com

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tenant description OCALA RETAIL CENTER

TCC Wireless is one of the largest T-Mobile premium retailers in 12 states with 130+ stores.

T-Mobile US provides wireless voice, messaging, and data services in the United States, Puerto Rico and the U.S. Virgin Islands under the M-Mobile, MetroPCS and GoSmart Mobile brands. The company operates the third largest wireless network in the U.S. market with over 65.5 million customers and annual revenues of $32 billion. Its nationwide network reaches 98% of Americans through its EDGE 2G/HSPA 3G/HSPA+ 4G/4G LTE networks, as well as through roaming agreements. As of 2018, J.D. Power and Associates, a global marketing-information-services firm, ranked the company highest among major wireless carriers for retail-store satisfaction four years consecutively and highest for wireless customer care two years consecutively.

The company owns licenses to operate a 1900 MHz GSM PCS digital cellular network and a 1700 MHz UMTS AWS digital cellular network that covers areas of the continental U.S., Alaska, Hawaii, Puerto Rico and the US Virgin Islands. It provides coverage in areas where it does not own radio frequency spectrum licenses via roaming agreements with other operators of compatible networks. In addition to its cellular mobile network, T-Mobile US operates a nationwide Wi-Fi Internet access network under the T-Mobile HotSpots brand. The T-Mobile HotSpot service offers access to a nationwide network of approximately 8,350 access points, installed in venues such as Starbucks coffeehouses, FedEx Office and Print Centers, Hyatt Hotels and resorts, Red Roof Inns, Sofitel hotels, Novotel hotels, the airline clubs of American Airlines, Delta Air Lines, United Airlines and US Airways and airports.

www.t-mobile.com

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OCALA RETAIL CENTER survey

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Survey 10

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THE MARKET area information OCALA RETAIL CENTER Ocala is a city located in Northern Florida. As of the 2013 census, its population, estimated by the United States Census Bureau, was 57,468, making it the 45th most populated city in Florida. It is the seat of Marion County and the principal city of the Ocala, Florida Metropolitan Statistical Area, which had an estimated 2013 population of 337,362.

The nearby community of Silver Springs developed around the Silver Springs, a group of artesian springs on the Silver River. In the 19th century, this site became Florida’s first tourist destination. Today, well known for glass-bottom boat tours of the area, Silver Springs is owned by the State of Florida and was incorporated into Silver Springs State Park in 2013. Other nearby natural attractions include the Ocala National Forest and the Florida Trail. Several prominent man-made attractions in the Ocala area existed in the past, such as the Western-themed theme park (operated from 1963 to 1984) and the water park (operated from 1978 to 2016).

GEOGRAPHY

According to the United States Census Bureau, the city has a total area of 38.63 square miles, all land. The surrounding farms are famous for their thoroughbred horses, in terrain similar to Kentucky bluegrass. Ocala is also known for nearby Silver Springs, Florida, site of one of the largest artesian spring formations in the world and Silver Springs Nature Theme Park, one of the earliest tourist attractions in Florida.

The 110 mile long Ocklawaha River flows north from Central Florida until it joins the St. Johns River near Palatka, Florida.

Marion County is also home of the Ocala National Forest which was established in 1908 and is now the second largest national forest in the state. The Florida Trail, also known as the Florida National Scenic Trail, cuts through Ocala National Forest. Silver Springs State Park was formed as Silver River State Park in 1987, out of land the state purchased around the Silver Springs attraction to spare it from development. The state took over Silver Springs itself in 1993 and incorporated it into the park in 2013.

CLIMATE

Ocala has two distinct seasons: the dry season (October – May) and the wet season (June- September). During the dry season, there is almost uninterrupted sunshine with very little rainfall. In January, the morning low temperatures are often in the 30s and 40s, but the cloudless sunny weather typically warms the dry air up to near 70 by the afternoon. During the wet season, afternoon thunderstorms are a daily occurrence. These storms are often severe (unofficially, Ocala is known to have more cloud-to-ground lightning per square mile than any other city in the world). The typical morning low temperatures during the wet season are in the 70’s and typical daytime high temperatures are in the 90’s. Due to the city being relatively far away from the moderating influence of the Atlantic Ocean and the Gulf of Mexico, Ocala’s summertime high temperatures are often the highest in the state while winter night temperatures are often the lowest compared to other cities on the peninsula.

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Area InfoUSE area information OCALA RETAIL CENTER

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Area InfoUSE neighborhood description OCALA RETAIL CENTER

The general neighborhood that has the greatest impact upon the highest and best use of the subject property is described as the land area lying along or near the SR 200 corridor in southwest Marion County. The economic neighborhood is physically described as the “corridor” of land uses within the economic influence of SR 200 lying west of I-75 and north of CR 484. This neighborhood is not limited to those properties that include actual frontage, but is also inclusive of those parcels that are influenced by the right of way in some regard.

SR 200 is the thoroughfare of greatest impact within the neighborhood. It includes a six lane paved road with grassy median, and forms the central corridor of the neighborhood as it extends in a northeasterly/southwesterly direction from Ocala. Primary includes to the west of I-75 include both residential and commercial uses that provide support for one another. An ample retired population exists within a number of large age-restricted residential developments including On Top of the World, Pine Run, Oak Run, Palm Cay, Marion Landing, Fore Ranch, and others. On Top of the World (including Indigo East and Candler Hills) is a planned community projected to include over 20,000 residents. Its presence has been influential in the increase in property values along SR 200 and in residential and commercial speculation throughout the area. Other developments have been constructed in the area to capitalize on the national marketing efforts of these larger developments, including Marion Landing, Countryside Farms, Palm Cay, Sun Country Estates, Saddlebrook and Kingsland Country Estates. The newest of these residential communities, Fore Ranch, is a Pulte Homes development that is located north of SR 200 about one mile southwest of the SR 200/I75 interchange.

While there remains much vacant land available for development, commercial construction along the SR 200 corridor has been well received as a result of the demand for service-oriented businesses by the surrounding residential base. Retail concerns include the 103rd Street Center, Steeplechase Shopping Center, Friendship Center at On Top of the World, Kingsland Plaza, Circle Square Center, Pigeon Plaza, Shoppes at Jasmine, Jasmine Plaza, Jasmine Center, Heathbrook Commons, and several freestanding retail centers. The most recent retail development in the neighborhood includes the Canopy Oak Shopping Center (Public anchor) with Wells Fargo out-parcel located at the SR 200/SW 80th Ave intersection and the Lowe’s Center with (5) vacant out-parcels located at the SR 200/SW 90th Street intersection. As well, several branch bank facilities have been constructed including Bank of America, Renasant, Regions, SunTrust and Ameris, as well as McDonald’s, Checkers and Wendy’s fast food restaurants, and CVS and Walgreens pharmacies.

The majority of professional office spaces is provided by older buildings and rental units within a number of the retail strip centers. However, the absence of professional office space within the neighborhood is currently being filled by professional and medical office development within Jasmine Walk located just south of the intersection of SR 200 and SW 60th Avenue. Additional medical office uses are provided by Medical Park West, TimberRidge and a number of freestanding medical and dental offices. The neighborhood also includes West Marion Community Hospital, a 125 bed full-service hospital with ancillary medical office space.

TimberRidge, located across from the subject, was developed in 1991 by the Munroe Regional Health System, owner of the Munroe Regional Medical Center in Ocala. It was originally planned to include a hospital with complimentary ancillary medical-related uses. However, it was never built but instead improved with the TimberRidge Emergency facility with Imaging Center, TimberRidge Nursing & Rehabilitation Center and 13 medical office buildings. In addition, there is a vacant building pad and sufficient surplus land for future development of the hospital and a number of other medical-related concerns. The location of this medical park in the heart of the retired community of Marion County is ideal for its intended purpose.

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NeighDesc 14 neighborhood description OCALA RETAIL CENTER

While commercial uses dominate the frontage of SR 200, many residential subdivisions are situated away from the heavy traffic on SW 103rd Street Road, SW 60th Avenue, SW 80th Avenue, and SW 49th Avenue with the Kingsland Country Estates area. They include Whispering Pines, Forest Glenn, Ocala Waterway Estates, Oak Crest Estates, Kings Court, Majestic Oaks, Hidden Lake, Woods & Meadows East, Cherrywood Estates, Emerald Point, Sandy Pines, Alejandria Estates, Glen Manor, Meadow Ridge and Marco Polo Village. As well, Hardwood Trails, Bradford Farms, Harvest Meadow, JB Ranch and Meadow Glenn have recently been completed. These subdivisions generally offer moderate pricing and are attractive to buyers desiring proximity to the SR 200 corridor.

Although intense residential and commercial uses are most prevalent within the neighborhood, some agricultural uses still exist. Historically, the southwest portion of Marion County was used for agricultural utilization. This is mainly due to the rich soils which are conducive to grazing and crop production. However, the remaining agricultural uses within the neighborhood are experiencing a transition from agricultural to commercial and residential use. These uses have become extremely popular throughout the neighborhood and include a mixture of intense residential development, rural residential uses and retail establishments.

The subject property is located in a relatively new developed area that encompasses much of the land area located at the northeast corner of the intersection of SR 200 and CR 484. The most significant development is the Wal-Mart Supercenter, which has spawned a number of nearby ancillary retail uses. The Oak Ridge Business Center includes 12 platted lots and has been developed with several strip centers (Campus Center, Blue Oaks Center, Triple Crown Plaza, Oakridge Plaza, Five Guys Plaza, Country Oaks Shopping Center and Mercantile Center) and freestanding buildings (Advance Auto Parts, Chili’s, Bob Evans, Soapy Car Wash and Murphy Oil fuel station), and a Walmart Superstore. Notable uses in the centers include Amscot, AT&T, Rite Care Pharmacy, IHOP, Campus USA Credit Union, Dominoes, Pinch-A-Penny, Beef O’Brady’s, Bealls, Sherwin Williams and Dollar Tree.

In conclusion, the SR 200 corridor is one of the most exclusive commercial corridors in Marion County. The overall market acceptance of SR 200 can be traced back to the early 1980’s with the completion of the Paddock Mall and ancillary satellite retail developments as well as the significant retired population to the southwest. The commercial concerns within the neighborhood are supported by the residential base of the retirement community and the surrounding area. As a result, it can be expected that commercial and residential development along SR 200 will continue into the foreseeable future.

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FINANCIAL SUMMARY 2018 pro-forma OCALA RETAIL CENTER

INCOME:

Base Rent (Note 1) $149,900 RET Reimbursements 14,340 Insurance Reimbursement 8,719 Lawn & Maintenance Reimbursement 5,559 Common Utilities Reimbursement 3,982 Administrative/Management Reimbursement (Note 2) 5,798

Total Operating Income: $188,298

EXPENSES: (Note 3)

Real Estate Taxes $14,340 Insurance 8,719 Lawn & Maintenance 5,800 Common Utilities 3,982 Administrative & Management Fee 5,798

Total Expenses: (38,639)

NET OPERATING INCOME: $149,659

Notes:

(1) Base Rents are the March, 2018 rents annualized.

(2) Tenants’ contribute an administrative fee based on the percentages of CAM detailed on the Rent Roll. The same amount was expensed as a management fee which could be paid to the ownership or a 3rd party manager.

(3) Expenses and expense reimbursements were taken from the ownerships’ 2017 CAM reconciliations.

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