BARTELL DRUGS | 9600 15TH AVE SW | SEATTLE, WA. BARTELLDRUGSWHITECENTER.COM 2 Affiliated Business Disclosure Additional information and an opportunity to inspect the Property CBRE, Inc. operates within a global family of companies with many will be made available to interested and qualified prospective subsidiaries and/or related entities (each an “Affiliate”) engaging in a purchasers. In this Memorandum, certain documents, including broad range of commercial real estate businesses including, but not leases and other materials, are described in summary form. These limited to, brokerage services, property and facilities management, summaries do not purport to be complete nor necessarily accurate valuation, investment fund management and development. At times descriptions of the full agreements referenced. Interested parties different Affiliates may represent various clients with competing are expected to review all such summaries and other documents interests in the same transaction. For example, this Memorandum of whatever nature independently and not rely on the contents of may be received by our Affiliates, including CBRE Investors, Inc. or this Memorandum in any manner. Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the Neither the Owner or CBRE, Inc, nor any of their respective directors, “Property”) may submit an offer to purchase the Property and may officers, Affiliates or representatives make any representation or be the successful bidder for the Property. You hereby acknowledge warranty, expressed or implied, as to the accuracy or completeness that possibility and agree that neither CBRE, Inc. nor any involved of this Memorandum or any of its contents, and no legal Affiliate will have any obligation to disclose to you the involvement of commitment or obligation shall arise by reason of your receipt of any Affiliate in the sale or purchase of the Property. In all instances, this Memorandum or use of its contents; and you are to rely solely however, CBRE, Inc. will act in the best interest of the client(s) it on your investigations and inspections of the Property in evaluating represents in the transaction described in this Memorandum and a possible purchase of the real property. 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 The Owner expressly reserved the right, at its sole discretion, to prospective offeror, but rather will conduct its business in a manner reject any or all expressions of interest or offers to purchase the consistent with the law and any fiduciary duties owed to the client(s) Property, and/or to terminate discussions with any entity at any it represents in the transaction described in this Memorandum. time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or Confidentiality Agreement obligation to any entity reviewing this Memorandum or making an This is a confidential Memorandum intended solely for your limited offer to purchase the Property unless and until written agreement(s) use and benefit in determining whether you desire to express further for the purchase of the Property have been fully executed, delivered interest in the acquisition of the Property. and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived. This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state By receipt of this Memorandum, you agree that this Memorandum of affairs of the Property or the owner of the Property (the “Owner”), and its contents are of a confidential nature, that you will hold and to be all-inclusive or to contain all or part of the information which treat it in the strictest confidence and that you will not disclose prospective investors may require to evaluate a purchase of real this Memorandum or any of its contents to any other entity without property. All financial projections and information are provided for the prior written authorization of the Owner or CBRE, Inc. You also general reference purposes only and are based on assumptions agree that you will not use this Memorandum or any of its contents relating to the general economy, market conditions, competition in any manner detrimental to the interest of the Owner or CBRE, and other factors beyond the control of the Owner and CBRE, Inc. Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All If after reviewing this Memorandum, you have no further interest in references to acreages, square footages, and other measurements purchasing the Property, kindly return this Memorandum to CBRE, are approximations. Inc. TABLE OF CONTENTS 01 THE INVESTMENT 02 THE LOCATION 03 THE PROPERTY 04 THE TENANT 05 THE COMPETITIVE SET DINO A. CHRISTOPHILIS DANIEL TIBEAU PARKER KSIDAKIS Senior Vice President Associate Associate +1 206 292 6152 +1 206 292 6052 +1 206 292 6158 [email protected] [email protected] [email protected] 3 4 THE INVESTMENT Downtown Seattle BARTELL DRUGS “Absolute Net” Lease with Zero Landlord Responsibilities The lease requires zero landlord obligations with the tenant List Price $5,142,000 responsible for all operating costs, including taxes, insurance, maintenance, mechanical systems (HVAC, plumbing, electrical), Price Per SF $412.02 and exterior cleaning. Further, the tenant is responsible for all long-term capital items and structural elements including the roof, foundation, exterior walls, and parking areas. There will be NOI $257,400 no landlord costs or obligations throughout the term of the lease. Low Rental Rate, Recent Lease Renewal Cap Rate 5.01% with Rent Escalations 9600 15th Ave SW The original lease term was scheduled from 2006 through 2021, Address Seattle, WA 98106 with seven 5-year renewal options. In 2017, the tenant agreed to exercise the first 5-year renewal option early in exchange for Building Size 12,480 SF a reduced rent. Therefore, the lease expiration was extended from October 2021 to October 2026, while the original rent of $264,000/year was reduced to the current rent of $257,400/year. Occupancy 100% Based on the new lease terms, the existing rent of $257,400/year will increase to $269,100/year in November 2021. The existing Site Size 32,168 SF lease rate of $20.63/sf is substantially lower than most other stand-alone drug stores in the region. Investors can benefit from 1980 / Building expanded the stability of a low rental rate and extended lease term, while Year Built long-term yields will be maximized with the scheduled 4.55% and renovated in 2001 rent increase in 2021. Parcel Number 320380-0005 Parking 32 open spaces Parking Ratio 2.56:1 CB-SO, Community Business Zoning - Special Overlay 5 6 Close-In Seattle Location with Explosive Submarket Growth Located only 7 miles south of downtown Seattle, the White Center neighborhood has directly benefited from the enormous growth in the region. Population density continues to push outward from the core to the areas such as White Center. The most notable project is the 100-acre Greenbridge Master-Planned Community, located only 4 blocks from the subject. Started in 2006, the project will add over 1,000 housing units when completed. Over 75% of this project has been completed to date, with an additional 111 units currently under construction by a private developer. The project offers a combination of “for-rent” and “for-sale” housing options surrounding a new community center, library, and 56,000 square feet of commercial/retail uses. The project has transformed the area and elevated White Center to among the fastest growing submarkets in South Seattle. Family-Owned, Regional Drugstore Chain - Oldest in the Nation, Since 1890 Bartell Drugs is touted as the oldest family-owned drugstore chain in the country. Founded in 1890, the company has expanded to over 68 locations in markets surrounding the Seattle MSA. Operating with minimal corporate debt, the company has strategically chosen to dominate the Puget Sound, rather than expand into other markets with a less established demand base. Most recent reports show increasing store sales and store expansion financed by internal funds, rather than new debt. The company is continually adapting to consumer demand, introducing drive-thru stations, 1-hour pharmacy delivery through Amazon Prime, and most notably, partnering with Kaiser Permanente to offer in-store health clinics with on-site medical staff, called CareClinic. Most new Bartell Drugs stores offer these new business lines and select older-format stores are retrofitted to accommodate. The subject location is well-configured to accommodate a drive-thru terminal and an in-store health clinic. BARTELL DRUGS $465 MILLION Fiscal Year 2017 Revenue 3.33% Year-over-Year Revenue Growth 68 Store Locations 7 8 200+ UNITS Multiple sites (under construction) Westwood Village 400,000 SF Target & QFC- anchored THE Unicorn Two Bar 22,000 SF LOCATION (Under Construction) BARTELL Starbucks & DRUGS Popeyes Chicken (Built 2018) 39 UNITS DubSea Apartments 39 Units (Built 2017) Downtown Downtown Seattle Bellevue 80 Units under construction (Materra at Greenbridge) 1,000+ UNITS Greenbridge Master Planned Community (Built 2007-2019) 31 single-family homes under construction (Windrose) 284 UNITS Seola Gardens Master Planned Community (Built 2007-2014) 298 UNITS Southside Apartments 298 Units (Built 2018) 9 10 HIGH-GROWTH SUBMARKET Westwood VIllage 28 Apartment 32 Apartment 32 Apartment Shopping Center Units Units Units 8 Townhouse Units 66-Apartment Units Self-Storage Facility 4-Stories 8 Townhouse SW Roxbury Street Units BARTELL DRUGS City of Seattle Unincorporated King County Pro-Business Policies in White Center, Just Blossoming Restaurant-Bar Scene Outside of Seattle Jurisdiction and Taxation Accompanies Improving Demographics Bartell Drugs – White Center is located on the south side of Roxbury White Center is quickly becoming a cultural, commercial, and Street, just outside of Seattle city limits in Unincorporated King County.