Holliday Fenoglio Fowler, L.P. (“HFF”) Executive Summary is an Illinois licensed real estate broker Executive Summary NORTH SHORE VALUE-ADD INVESTMENT OPPORTUNITY Holliday Fenoglio Fowler, L.P. (“HFF”) is pleased to present the opportunity to purchase a supremely located boutique Class A office building in Northbrook (the “Property”). Accented by a striking and well-maintained landscape and located in the heart of downtown Northbrook, the Property provides dynamic floor plate versatility which enables it to effectively accommodate both large and small tenants' needs alike. Current ownership has invested in physical capital improvements leaving a new investor with the ability to renovate and upgrade common areas. These improvements will help brand 1200 Shermer as the premier boutique office building in the area. At 66.6% occupancy, 1200 Shermer provides a value-add investment opportunity in the top suburban market in Chicago. The building’s current occupancy is well-below market occupancy levels for similar office product, and therefore offers investors an opportunity to acquire the only Class A building in downtown Northbrook at below replacement costs. A new owner will be able to complete ongoing renovations and continue to capture the built-in tenant demand from Northbrook and its surrounding suburbs. 2 Executive Summary TAKING NORTHBROOK’S PREMIER BOUTIQUE OFFICE BUILDING TO THE NEXT LEVEL 1200 Shermer is the only Class A multi-tenant building in downtown Northbrook, which is one of Chicago’s most affluent communities. 1200 Shermer’s diverse floor plates and unrivaled location position the Property to capture local small and mid-sized businesses. With moderate capital improvements, the Property will be well-positioned to continue to attract the type of executive who desires to office 5-10 minutes from home, walk to nearby restaurants and shops and utilize public transportation via the Metra. The Property benefits from the aforementioned advantages, which catapult 1200 Shermer into a category of its own as Northbrook’s premier boutique office building. Over the last 3 years, 1200 Shermer’s owner has demonstrated commitment to the Property by infusing capital into the Property’s parking lots, roof, and security system. These improvements have aided the building in attracting and retaining new and current tenants, respectively. A future owner of 1200 Shermer has the exceptional opportunity to exploit the recently completed upgrades and carry out planned renovations including corridor, lobby, and elevator modernizations, which would position 1200 Shermer as Northbrook’s premier boutique office into the future. UNPARALLELED LOCATION Located just west of the Edens Expressway (Interstate 94) and east of the Tri-State Tollway (Interstate 294), the Property is nestled between two well-traversed interstates that provide convenient access to commuters. 1200 Shermer is located 24 miles north of the Chicago Central Business District (“CBD”) in the heart of Chicago’s North Shore, which is home to many of Chicago’s key corporate decision makers. Shermer Road is located directly off of Illinois Route 43, a major north-south state road that runs through Cook County and beyond. More importantly, the Northbrook Metra rail stop is a 5 minute walk from the Property, providing urban commuters with an efficient transportation alternative within walking distance. Moreover, the close proximity to the Metra provides executives who live in Northbrook and work at 1200 Shermer convenient access to the CBD. 1200 Shermer’s ideal location near heavily traveled interstates as well as dependable rail transportation enables tenants at the Property to pull from both urban and suburban labor pools. Source: Costar 3 ExecutiveDeerfield Summary Rd 43 ABUNDANT NEARBY AMENITIES 94 Waukegan Rd 1200 Shermer is situated amongst numerous restaurants and retailers, providing tenants with several dining and shopping options close by. 21 Francesca’s North and Georgie V’s reside directly across from the Property, and the Meadow Shopping Center Plaza, containingLake CookStarbucks, Rd Lou Malnati’s Pizzeria, famous for its Chicago deep dish pizza, and Marcello’s Father 41 94 and Son are located a short 3 minute walk from the Property. Additionally, 83 ay lw Sunset Foods, a local full-service neighborhoodol grocery store (inclusive 94 T te Edens Spur (Toll Road) ta of the Northshore University Health SystemS Pharmacy) is adjacent to the i- r T aforementioned Francesca’s North, providing tenants with a quality grocery Meadow Shopping Plaza 68 Northbrook Grill & Tap and pharmacy outlet in 1200 Shermer’s backyard. 68 Dundee Rd 68 Sanders Rd Pfingsten Rd Pfingsten Shermer Road Townhome Development BALANCED ROLLOVER PROFILE WITH HIGH-PROFILE ANCHOR TENANT 294 With 15 tenants and a weighted average lease term of 5.4 years, the in- Waukegan Rd Walters Ave place tenancy at the Property provides a balanced rollover schedule that both Landwehr Rd Landwehr protects a future buyer from rollover exposure and provides steady cash flow Shermer Road Shermer in the near term. Specifically, the rollover exposure as a percentage of NRA Ave Western 94 21 for 2017 and 2018 is nominal at 6.4% and 3.0%, respectively. Additionally, the Edens Expressway 43 Property benefits from a world-renowned anchor tenant in Bank of America 83 Techny Rd (“BoA”) leasingCHICAGO over a third of the Property. BoA has leased space at 1200 EXECUTIVE Shermer since AIRPORT1997, and upon lease expiration in 2023, will have been a tenant at the Property for over 25 years. Willow Rd 4 Executive Summary Southwest Facing Aerial Shermer Road METRA LINE Meadow Shopping Plaza Milwaukee District North Line Station Shermer Road Townhouse Development Northbrook Grill & Tap Shermer Road Drive-Up 5 Executive Summary CRITICAL BANK OF AMERICA LOCATION Due to the potential congestion and disruption drive-through locations (of all types) can create, the city of Northbrook rarely gives retail operators approval for drive-throughs at their respective locations. The BoA branch at the Property serves as a critical location, providing easy access for their North Shore clientele. The building’s design provides BoA with vital drive-through access that would be difficult to replicate in the area. PROVEN & LOYAL TENANT BASE The loyal tenant base includes 15 tenants across the Professional Services and Healthcare industries. The tenant roster is anchored by Bank of America (BoA, S&P: BBB+; 34.1% NRA), which has the longest remaining term left of any tenant at the Property (7.6 years). Since year-end 2015, two current tenants (Edward D. Jones and Brandwein & Brandwein) renewed their leases at 1200 Shermer, and two new tenants have signed leases at the Property (Best Travel & Tours and Richard Saul), demonstrating existing tenants’ dedication to the Property as well as new tenants' desire to office at 1200 Shermer. Paramount Staffing uses 1200 Shermer as its headquarters location, while numerous other tenants utilize the Property as their sole location – a testament to the Property’s Class A location and draw. 6 Executive Summary CHICAGO’S PREMIER SUBURBAN OFFICE SUBMARKET The North Suburban submarket, which is home to 1200 Shermer, is Chicago’s strongest suburban submarket and routinely leads Chicago in occupancy rate, achievable net rents, and leasing velocity, both historically and at present. The Submarket is strategically located in Cook and Lake Counties, just north of the Kennedy Expressway (Interstate 90/94) and straddles both the Edens Expressway (Interstate 94) and the Tri-State Tollway (Interstate 294), all of which provide convenient access to commuters traveling in every direction. The North Suburban Submarket contains approximately 30.3 million RSF, or 23.9% of Chicago’s suburban office space inventory, and is located in the center of the suburban submarkets in a very high traffic, densely populated area. Of the 30.3 million RSF, 17.3 million RSF is Class A and 10.1 million RSF is Class B. Additionally, the Submarket not only offers the highest concentration of Class A space but is among the lowest Class A and Class B vacancy rates as well. In such a space-constrained market with limited viable development sites, few pending or upcoming foreclosures, and prohibitive land acquisition costs for development, any material absorption will quickly stabilize market fundamentals and lead to faster rent growth than in any other Chicago submarket. 7 Executive Summary BOOMING DEVELOPMENT ACTIVITY NORTHSHORE 770 Over the last 18 months, an abundance of development has broken ground or is in the approval phases in Northbrook due to the city’s positive financial outlook, its well-performing business community, high occupancy rates at its retailers and strong tax base. Development projects include retail centers, multifamily apartments and condominiums, and a medical facility (MeadowPark Office Complex). Most notably, the Shermer Road Townhome Development will be situated directly across the street from 1200 Shermer and will consist of approximately 82 townhome units. The proposed traditional buildings’ design will consist of brick and stone accents on the facades, and the units (approximately 1,700-2,400 square feet in size) are expected to sell for $500,000-$700,000 each. The development is projected to increase population density in downtown Northbrook, an advantageous result for 1200 Shermer. Source: Costar The highest profile recently delivered development is NorthShore 770, located two miles east of 1200 Shermer. One of the suburbs’ most anticipated mixed- use development projects in recent history, NorthShore 770 is a high-end retail and apartment development located at Skokie Boulevard and Dundee Road, and contains more than 100,000 square feet of chain retail (95% leased) anchored by a Mariano’s grocery store, and 347 rental units that range in size from 667 square feet to 1,341 square feet. Nationally recognized “fast-casual” restaurants such as Chipotle and Panera Bread operate in the retail portion of the development. The ultra-luxury apartment and retail building opened its doors in January 2016.