6611 S. HALSTED STREET CHICAGO | ILLINOIS OFFERING MEMORANDUM FOR SALE - INVESTMENT OPPORTUNITY PRESENTED BY: JUSTIN KAUFMANN PETER BLOCK Associate Executive Vice President DIRECT +1 847 384 2821 DIRECT +1 847 384 2840 EMAIL [email protected] EMAIL [email protected] TABLE OF CONTENTS EXECUTIVE SUMMARY Executive Summary ..................................4 Investment Highlights ..............................5 PROPERTY INFORMATION Property Description ................................ 7 Property Aerial........................................8 Retail Map ...............................................9 Parcel Map ............................................ 10 Tenant Overview ..................................... 11 FINANCIAL OVERVIEW Financial Analysis ................................. 13 MARKET OVERVIEW Area Map ..............................................20 Vacancy Rate ......................................... 21 Demographics ........................................ 23 EXECUTIVE SUMMARY EXECUTIVE SUMMARY Colliers International is pleased to present for sale a three tenant O’Reilly’s Auto Parts & Family Dollar anchored, 31,982 square foot strip center located at 6611 S. Halsted Street in Chicago, IL. The center is approximately 75% leased by national tenants with the current vacancy providing upside potential. The property is located just South of Kennedy-King College (City Colleges of Chicago) and the Halsted Green Line Station. Additionally, this property is a few blocks south of a new Whole Foods Anchored development. Originally built in 1970, the in-line space was renovated in 1999 and the O’Reilly building in 2011. This quality asset provides a buyer with the unique opportunity to capture each of these well-known single tenant users in a multi-tenant property with additional upside available through the leasing of the vacant space. Family Dollar recently exercised a five year option, exhibiting a long-term commitment to this site. 6611 S Halsted is one of the only strip centers of its kind along this heavily-traveled portion of the Halsted Street retail corridor that boasts a vacancy rate of only 2%. The property is being offered for sale at a 6.75% cap rate or $3,556,000. 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 4 EXECUTIVE SUMMARY INVESTMENT HIGHLIGHTS 75% LEASED INVESTMENT OPPORTUNITY to high quality tenants including O’Reilly’s Auto Parts and Family Dollar with upside through lease up. Dense In-Fill Location Located in a very strong retail trade area OFFERING SUMMARY Submarket Currently features a direct vacancy rate of less ASKING PRICE: $3,556,000 than 2%. Rental rates for both tenants are significantly below market. CAP RATE: 6.75% PROFORMA IRR: 17.04% Tremendous Retail Synergy and Regional Draw Neighboring retailers include: Walgreens, Dunkin OCCUPANCY: 75% Donuts, Aldi, US Bank, Kennedy-King College SIZE: 31,982 SF White Castle, Church’s Chicken, US Cellular, Checker’s Drive-in, Jackson Hewitt, the US Post O’REILLY remaining Office and others primary term: 7 years FAMILY DOLLAR Outstanding Demographics remaining term: 5 years 323,000 people within a 3-mile radius of the property and almost 807,000 people within a 5-mile radius. The intersection of Halsted & 67th Streets boast a traffic count of more than 20,000 cars per day north/south and 16,500 cars per day east/west. Central Location Located one block away to the south of the Kennedy-King College (City Colleges of Chicago) and another ½ block away from the Halsted Green Line Station 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 5 PROPERTY INFORMATION PROPERTY INFORMATION OFFERING PRICE BUILDING SIZE $3,556,000 31,982 SF O’Reilly: 10,000 SF IN PLACE NOI Family Dollar: 14,085 SF $240,034 VACANT: 7,807 SF CURRENT YIELD YEAR BUILT 6.75% 1970/ Renovated 1999 1998/ Renovated 2011 PROPERTY ADDRESS 6611 S. Halsted St. TENANCY Chicago, IL O’Reilly Auto Parts, Family Dollar LAND SIZE 1.39 AC OCCUPANCY *2 parcels 75% 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 7 PROPERTY INFORMATION PROPERTY AERIAL 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 8 PROPERTY INFORMATION RETAIL MAP HAL S TED ST . ( 20, 100 VPD NEW WHOLE FOODS ANCHORED SHOPPING CENTENTERR ) ENGELWOOD US POST HEALTH OFFICE CENTER KENNEDY-KING COLLEGE 6611 S. HALSTED MARQUETTE RD (16,500 VPD) 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 9 PROPERTY INFORMATION PARCEL MAP 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 10 PROPERTY INFORMATION TENANT OVERVIEW O’Reilly Auto Parts at 6611 S. Halsted in Chicago, IL has been at this location since November 2010. O’Reilly Auto Parts is one of the largest specialty retail- ers of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, serving both professional service providers and do-it- yourself customers. O’Reilly Automotive, Inc. (NASDAQ: ORLY) was founded in 1957 by the O’Reilly family and has 4,257 stores in operation in 42 states as of June 2014. The company is on track with its plan for growth and expansion of an additional 200 new locations in 2014. O’Reilly’s has a Moody’s rating of Baa2 and S&P rating of BBB. Since July 1999, Family Dollar has been located at 6611 S. Halsted in Chicago, IL. It is a true representation of the success and growth that Family Dollar Stores, Inc. (NASDAQ: FDO) has had since it was founded in 1959 in Charlotte, North Carolina by entrepreneur, Leon Levine. The company is head- quartered in Matthews, North Carolina. There are over 8,000 stores in 46 states with 50,000 team members to make sure the company continues to succeed. Family Dollar and Dollar Tree are expected to merge in early 2015. Family Dollar Stores, Inc. operates a chain of self-service retail discount stores primarily for low- and middle-income consumers in the United States. Customers are offered a mix of quality name brand products they use every day; from consumable products such as household paper products and expanded food assortment, to treasures for every home and even quality apparel for men, woman and children. A mix of seasonal products, greeting cards, gift-wrap and much more are offered as well. 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 11 FINANCIAL OVERVIEW FINANCIAL OVERVIEW 6611 S. Halsted Executive Summary Property Description Total Net Rentable Area (RSF) 31,892 Analysis Start Date March 1, 2015 Address 6611 S. Halsted Occupancy as of Analysis Start 75.52% Chicago, IL Holding Period 10 years Unleveraged - All Cash Analysis Purchase Price $3,556,059 Gross Residual Value $4,781,388 Purchase Price per RSF $111.50 Gross Residual Value per SF $149.92 Year 1 NOI $240,034 Exit Cap Rate 8.50% Cap Rate on In-Place Income 6.75% Cost of Sale 3.00% Holding Period & Associated Returns Year 3 Year 5 Year 10 Cash Flow IRR Cash Flow IRR Cash Flow IRR $.500 M 4.70% $1.441 M 7.84% $4.017 M 9.80% Leveraged - w/Debt Financing (1) Loan-To-Value 70% Equity Contribution $2,624,863 Interest Rate 5.00% Amortization (Yrs) 25 Holding Period & Associated Returns Year 3 Year 5 Year 10 Cash Flow IRR Cash Flow IRR Cash Flow IRR $.088 M 2.95% $.790 M 13.45% $2.830 M 17.04% 1) Assumes the same disposition assumptions as the all cash analysis 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 13 FINANCIAL OVERVIEW 6611 S. Halsted Market Leasing Assumptions General Assumptions Analysis Start Date 3/1/2015 Net Rentable Area Occupancy as of Start Date 75.52% Occupied 24,085 75.52% Holding Period 10 years Available 7,807 24.5% Space Type Retail Total 31,892 100.0% Reimbursements Net Purchase Price Annual Growth/Inflation Rate Purchase Amount $3,556,059 Expenses 2.00% Per NRA $111.50 Property Taxes 2.00% General Vacancy (1) 5.00% Market Assumptions Renewal Probability 75.00% Reserves/Capital Expenditures $0.10/SF/Yr. Market Rent $14.00 Market Escalations 3.00% New Renewal Tenant Improvements $10.00 $0.00 Rent Abatement $3.00 None Commissions $3.00 $0.00 1) Based on Full Occupancy; otherwise, pro-rated for current vacancies. Commences in Yr. 2, upon stabilization. 2) Market terms were prorated for tenants who had option periods for 5 years only. Lease Up Assumptions - Current Vacancies Tenant Leasing Available Rent Improvemen Free Rent Commission # Space RSF Lease Start Lease End Term (Yrs) Year 1 Rent Escalation Recoveries ts (Mos) s Vacant 7,807 9/1/2015 8/31/2025 10 $14.00/SF 3.00% Net $10.00/SF None $3.00/SF *All renewals are at market terms that do not currently have options. 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P. 14 FINANCIAL OVERVIEW 6611 S. Halsted Rent Roll Original Occupancy Lease Current Term Start Base Rent Tenant Suite Size (RSF) Bldg Share Lease Type Date Expiration Date $/SF Escalations Options / Renewals O'Reilly Automotive Stores, Inc. 10,000 31.36% Net 12/1/11 11/31/21 12/1/11 $10.77 $11.04/SF as of 12/1/16 1x5 Yrs. @$11.70/SF w/No Esc. 1x5 Yrs. @$12.40/SF w/No Esc. 1x5 Yrs. @$13.15/SF w/No Esc. Family Dollar, Inc. 14,085 44.16% None 1/1/10 12/31/19 1/1/15 $9.03 - 1x5 Yrs. @$9.73/SF w/No Esc. Market Terms on 5 Yr. Renewals Thereafter *Market renewals have no escalations in annual rent; Tenant also does not pay T&O expenses during renewal periods. 24,085 75.52% 6611 S. Halsted Lease Expiration Schedule Year # Expirations Rentable Area % of NRA 2016 0 0 0.00% 2017 0 0 0.00% 2018 0 0 0.00% 2019 0 0 0.00% 2020 1 14,085 44.16% 2021 0 0 0.00% 2022 1 10,000 31.36% 2023 0 0 0.00% 2024 0 0 0.00% 2025 1 14,085 44.16% 2026 1 7,807 24.48% 16,000 14,000 12,000 10,000 8,000 14,085 14,085 6,000 10,000 4,000 7,807 2,000 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 6611 S HALSTED OFFERING MEMORANDUM | COLLIERS INTERNATIONAL P.