NET LEASE INVESTMENT OFFERING JEWEL-OSCO (Albertsons | Chicago MSA) 12803 Harlem Avenue Palos Heights, Illinois 60463 TABLE OF CONTENTS TABLE OF CONTENTS I. Executive Profile II. Location Overview III. Market & Tenant Overview Executive Summary Photographs Demographic Report Investment Highlights Drones Market Overview Property Overview Aerial Tenant Overview Rent Schedule Site Plan Map NET LEASE INVESTMENT OFFERING DISCLAIMER STATEMENT DISCLAIMER The information contained in the following Offering Memorandum is proprietary and strictly confidential. STATEMENT: It is intended to be reviewed only by the party receiving it from The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group. This Offering Memorandum has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. The Boulder Group has not made any investigation, and makes no warranty or representation. The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. NET LEASE INVESTMENT OFFERING EXECUTIVE SUMMARY EXECUTIVE The Boulder Group is pleased to exclusively market for sale the fee simple interest in a single tenant absolute triple net SUMMARY: leased Jewel-Osco grocery store located within the Chicago MSA in Palos Heights, Illinois. The property is strategically located at a signalized intersection in an affluent residential community. Jewel-Osco is committed to this location as evidenced by their recently executed 20 year lease which expires in October 2037. The lease is enhanced by a guaranty from Albertsons Companies, Inc., rental escalations and eight 5-year renewal option periods. This is a high performing location with above average sales per square foot. Jewel-Osco is a supermarket chain with more than 185 stores throughout the Chicagoland area, Indiana and Iowa. Jewel-Osco is a wholly owned subsidiary of Albertsons Companies, Inc., the second largest traditional grocer in the United States. The 57,685 square foot building sits on a 9.97 acre parcel in an affluent suburb of Chicago. The property is strategically located at the signalized intersection of Harlem Avenue and 127th Street, two primary thoroughfares in the area. The property has excellent visibility and easy interchangeable access to the 49,300 vehicles per day that drive through the intersection. There are over 66,260 people living within a three mile radius of the property with average annual household incomes of $94,320 per year. The property is located near a number of retailers including Walgreens, Ace Hardware, McDonald’s, Wendy’s, The UPS Store, Jiffy Lube and a number of national banks. The property is also located within close proximity to multiple residential communities, local businesses, and schools. Alan B Shepard High School, Independence Junior High and Navajo Heights School are all within two and one-half mile from the Jewel-Osco property. Trinity Christian College, a four-year liberal arts college, and Palos Health Community Hospital, a 428 bed hospital with over 580 physicians, are located within two miles of the property. There are 20 years remaining on the corporate guaranteed lease which expires October 31, 2037. The absolute triple net lease features rental escalations throughout the term as seen on the ‘Rent Schedule’ (Page 5). Jewel-Osco, which is part of Albertsons Companies (2,300+ stores and approximately 173,000 employees nationwide), is the leading grocer by market share in the Chicago MSA. -1- NET LEASE INVESTMENT OFFERING INVESTMENT HIGHLIGHTS INVESTMENT Investment Opportunity to Acquire a Grocery Store Leased to Illinois’ Premier Grocer HIGHLIGHTS: • Jewel-Osco is the leading grocer by market share in the Chicago MSA • Jewel-Osco operates more than 185 stores throughout the Chicagoland area, Indiana and Iowa • Jewel-Osco was acquired in 2013 by Albertsons Companies, LLC, the second largest supermarket chain in the United States Corporate Guarantee from Albertsons Companies, Inc.,, The Second Largest Traditional Grocer in the United States • Largest privately held and second largest traditional grocer in the United States • Approximately 34 million customers per week • Operates stores across 35 states and the District of Columbia under 20 well-known banners • Over 2,300 stores and approximately 173,000 employees nationwide Long Operating History • Established customer base • Recently executed a new long-term lease (20 years) showing commitment to the location • Above average store sales Attractive Lease Structure • Long term lease with 20 years remaining • Absolute triple net lease with no landlord responsibilities • Rental escalations in the primary term and each renewal option period -2- NET LEASE INVESTMENT OFFERING INVESTMENT HIGHLIGHTS INVESTMENT Modern Grocery Store Format HIGHLIGHTS: • Built in 2012 • Drive-thru pharmacy • Abundant parking with over 290 parking spaces • Exceptional visibility and easy access Strategic Location • Located within the Chicago MSA • Positioned at a signalized intersection which experiences traffic counts of 49,300 vehicles per day • Affluent community with attractive demographics • Over 66,260 people living within a three mile radius with average annual household incomes of $94,320 per year • Retailers located in the immediate area include Walgreens, Ace Hardware, McDonald’s, Wendy’s, The UPS Store, Jiffy Lube and a number of national banks Desirable Market • Chicago is the most populous metropolitan area in the Midwestern United States • The area is one of the world’s largest and most diversified economies, with more than four million employees and generating an annual gross regional product of over $561 billion. • The region hosts more than 400 major corporate headquarters, including 31 in the Fortune 500 -3- NET LEASE INVESTMENT OFFERING PROPERTY OVERVIEW PROPERTY Price: $16,576,782 OVERVIEW: Cap Rate: 5.50% Net Operating Income: $911,723 Rental Escalations: (See ‘Rent Schedule’ on Next Page) Renewal Options: Eight 5-Year (See ‘Rent Schedule’ on Next Page) Lease Commencement Date: November 1, 2017 Lease Expiration Date: October 31, 2037 Tenant: New Albertson’s, Inc. d/b/a Jewel-Osco Guaranty: Albertsons Companies, Inc. Year Built: 2012 Lease Type: Absolute NNN - No Landlord Responsibilities Parking: 292 Spaces Building Size: 57,685 SF Land Size: 9.97 Acres -4- NET LEASE INVESTMENT OFFERING RENT SCHEDULE Current Monthly Increase Tenant Square Feet Term Yearly Rent Rent Rent (%) Jewel-Osco 57,685 SF Current - October 31, 2018 $911,723 $75,977 $911,723 November 1, 2018 - October 31, 2019 $77,117 $925,399 1.50% November 1, 2019 - October 31, 2020 $78,273 $939,280 1.50% November 1, 2020 - October 31, 2021 $79,447 $953,369 1.50% November 1, 2021 - October 31, 2022 $80,639 $967,670 1.50% November 1, 2022 - October 31, 2023 $80,639 $967,670 -- November 1, 2023 - October 31, 2024 $80,639 $967,670 -- November 1, 2024 - October 31, 2025 $80,639 $967,670 -- November 1, 2025 - October 31, 2026 $80,639 $967,670 -- November 1, 2026 - October 31, 2027 $80,639 $967,670 -- November 1, 2027 - October 31, 2028 $86,687 $1,040,245 7.50% November 1, 2028 - October 31, 2029 $86,687 $1,040,245 -- November 1, 2029 - October 31, 2030 $86,687 $1,040,245 -- November 1, 2030 - October 31, 2031 $86,687 $1,040,245 -- November 1, 2031 - October 31, 2032 $86,687 $1,040,245 -- November 1, 2032 - October 31, 2033 $93,189 $1,118,263 7.50% November 1, 2033 - October 31, 2034 $93,189 $1,118,263 -- November 1, 2034 - October 31, 2035 $93,189 $1,118,263 -- November 1, 2035 - October 31, 2036 $93,189 $1,118,263 -- November 1, 2036 - October 31, 2037 $93,189 $1,118,263 -- Option 1 November 1, 2037 - October 31, 2042 $100,178 $1,202,133 7.50% Options Option 2 November 1, 2042 - October 31, 2047 $107,691 $1,292,293 7.50% Option 3 November 1, 2047 - October 31, 2052 $115,768 $1,389,215 7.50% Option 4 November 1, 2052 - October 31, 2057 $124,450 $1,493,406 7.50% Option 5 November 1, 2057 - October 31, 2062 $133,784 $1,605,411 7.50% Option 6 November 1, 2062 - October 31, 2067 $143,818 $1,725,817 7.50% Option 7 November 1, 2067 - October 31, 2072 FMV* FMV* FMV* Option 8 November 1, 2072 - October 31, 2077 FMV* FMV* FMV* -5- * Tenant shall pay equal to the greater of the rent of the proceeding lease year or fair market value. PHOTOGRAPHS -6- NET LEASE INVESTMENT OFFERING DRONES -7- NET LEASE INVESTMENT OFFERING AERIAL -8- NET LEASE INVESTMENT OFFERING AERIAL -9- NET LEASE INVESTMENT OFFERING SITE PLAN -10- NET LEASE INVESTMENT OFFERING MAP Lake Michigan -11- NET LEASE INVESTMENT OFFERING DEMOGRAPHIC REPORT DEMOGRAPHIC Population 1-Mile 3-Mile 5-Mile REPORT: Total Population 8,880 66,266 246,653 Total Households 3,209 26,433 96,353 Income 1-Mile 3-Mile 5-Mile Median Household Income $93,314 $69,905 $64,588 Average Household Income $123,663 $94,320 $84,858 -12- NET LEASE INVESTMENT OFFERING MARKET OVERVIEW MARKET Palos Heights, Illinois OVERVIEW: Palos Heights is a city in Cook County, Illinois with a population of over 12,850 people. The city is a suburban community located approximately 19 miles southwest of the City of Chicago. Palos Heights has won the “Governor’s Home Town Award” multiple times. Founded in 1959, Palos Heights has developed into a mature and dynamic city with a variety of commercial, office, residential, institutional, and recreational uses.