Walgreens Fern Valley Road - LOUISVILLE, KENTUCKY ACTUAL PROPERTY

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1 Walgreens ACTUAL PROPERTY

2 Investment Overview Marcus & Millichap is pleased to present this above average performing Walgreens in Louisville, Kentucky s most populous city. This offering is a leasehold interest with three and a half years remaining on both Walgreen s lease and the ground lease. Walgreen s lease runs coterminous with the ground lease, and both leases feature eight, five-year options with rent increases. Walgreens has 4 percent rent increases in the first, third, fifth, and seventh renewal options and the ground rent increases by 10 percent in first, third, fifth, and seventh renewal options. This lease has a corporate guaranty from Walgreen Co, a fortune 500 company that did $117-billion in sales in Walgreens is located one off the signalized, hard corner intersection of Fern Valley Road and Preston Highway, which sees more than 53,000 Vehicles per Day. This asset is also two miles from Louisville International Airport, the seventh busiest cargo airport in the world, and third busiest in the United States. In less than two miles from this asset, there is more than two and a half million square feet of retail. Within five miles of this asset, there are more than 200,000 people and more than 84,000 households. Other retailers in the vicinity include: Sam s Club, Home Depot, Kroger, PetSmart, AutoZone, LA Fitness, Dillard s, J.C. Penny, Sears, and More. Walgreens With Above Average Sales in Louisville, Kentucky The Most Populous City in Kentucky More Than 200,000 People in Five Miles of this Asset Leasehold Interest with Three and a Half Years Remaining on Both Walgreen s Lease and the Ground Lease Walgreen s Lease Runs Coterminous with the Ground Lease Both Leases Feature Eight, Five-Year Options with Rent Increases Corporate Guaranty New York Stock Exchange (NYSE: WBA) Standard & Poor s (S&P): BBB- #19 Fortune 500 (June 2016) Two Miles from Louisville International Airport Seventh Busiest Cargo Airport in the World One Off Signalized, Hard Corner Intersection of Fern Valley Road & Preston Highway 53,000 Vehicles per Day More Than 2.5-Milllion Square Feet of Retail in Less Than in Less Than Two Miles Other Retailers in the Vicinity Include: Sam s Club, Home Depot, Kroger, PetSmart, AutoZone, LA Fitness, Dillard s, J.C. Penny, Sears, and More. Actual Property

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4 Financial Overview Offering Summary PRICE $2,600,000 CAP RATE 8.75% NOI $227,500 PRICE PER SQUARE FOOT $ RENT PER SQUARE FOOT $15.05 YEAR BUILT 2000 LOT SIZE 1.54 Acres GROSS LEASEABLE AREA 15,120 TYPE OF OWNERSHIP Leasehold LEASE GUARANTOR Corporate Guaranty LEASE TYPE Double-Net (NN) ROOF AND STRUCTURE Landlord Responsible Lease Summary LEASE COMMENCEMENT DATE 9/1/2000 LEASE EXPIRATION DATE 8/31/2020 LEASE TERM 20 Years TERM REMAINING 3.5 Years INCREASES 4% in Options OPTIONS TO RENEW 8, 5-Year Options OPTIONS TO TERMINATE None OPTIONS TO PURCHASE None FIRST RIGHT OF REFUSAL Yes Actual Property

5 Tenant Overview - Walgreens Founded in 1901, Walgreens Boots Alliance, Incorporated is the nation s largest drugstore chain. Charles R. Walgreen built the chain from a single drugstore where he created his own drug products. By 1919 there were 20 stores, and in 1927 the Company went public. Three years later, the store count was well over 500. Today, Walgreens operates over 8,200 stores in all 50 states, DC, Puerto Rico and the United States Virgin Islands. More than 400 of its stores offer medical services through its Healthcare Clinics. Additionally, the Company operates digital businesses that include: Walgreens.com, drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com. In December 2014, Walgreen acquired the remaining 55 percent of European retailer and wholesaler Alliance Boots, and reorganized under a holding company called Walgreens Boots Alliance, Incorporated., headquartered in Chicago. The Walgreen chain now constitutes the Retail Pharmacy United States of America (USA) Division of Walgreens Boots Alliance, Incorporated. TENANT PROFILE TENANT TRADE NAME Walgreens OWNERSHIP Public TENANT Corporate Store LEASE GUARANTOR Corporate Guarantee NUMBER OF LOCATIONS 8,200+ HEADQUARTERED Deerfield, IL WEB SITE SALES VOLUME $117.4 Billion (2016) NET WORTH $42.4 Billion (2016) STOCK SYMBOL WBA BOARD New York Stock Exchange CREDIT RATING BBB- RATING AGENCY Standard & Poor s RANK #19 in Fortune 500 (June 2016) In October 2015, Walgreens Boots Alliance announced an agreement to acquire all outstanding shares of Rite Aid for $9.00 per share in cash, for a total enterprise value of about $17.20 billion, including acquired net debt. The transaction is expected to close in the second half of calendar year Upon completion of the merger, Rite Aid will be a wholly owned subsidiary of Walgreens Boots Alliance, and is expected to initially operate under its existing brand name. Working together, decisions will be made over time regarding the integration of the two companies. Once the acquisition closes, Walgreens Boots Alliance plans to further transform Rite Aid s stores to better meet consumer needs. Actual Property

6 Sh A er i al O verview ep F e r n Va l l ey Ro ad - L OUISVI LLE, KENTUCKY PROPERTY ADDRESS y JEFFERSON MALL ll e R d d 00 n le vi,6 VP r Fe l Va 00 rs Fern Valley Rd Louisville, KY R 7 8, V P D he V P D D 24 sto n H wy O ut er Lo op Pre, ,4 00 V P D Pre In te rst ate -65 / Dr. Ma rtin Lut har Kin g, J Louisville r. E xpy International Airport 131,90 sto n H wy 24, 400 VPD 0 V PD NORTH

7 Area Overview & Demographics Greenwood W Orell W 31W Shively 1931 Praririe Village W Parkwood Penile 1865 Louisville Hollyvilla SITE 1 MILE 1932 Seneca Gardens Middletown 1703 Estates Audubon Park Louisville International Airport Knopp Lynnview Heritage Creek Brooks Hunter Hollow Hillview West Buechel Pioneer Village 3 MILE RADIUS Spring Mill MILE RADIUS Middletown Jeffersontown Hopewell Ashville Seatownville Thixton Whitefield Mile 3-Mile 5-Mile Population 2000 Population 10,274 54, , Population 10,256 54, , Population 10,529 56, , Population 10,787 57, ,283 1-Mile 3-Mile 5-Mile Households 2000 Households 4,191 21,916 79, Households 4,105 22,072 83, Households 4,221 22,736 84, Households 4,327 23,313 86,415 1-Mile 3-Mile 5-Mile Household (HH) Incomes 2016 Average HH Income $45,552 $47,588 $57, Median HH Income $32,695 $37,842 $44, Per Capita Income $18,261 $19,181 $23,811

8 Market Overview - Louisville, Kentucky Introduction to Louisville Louisville, Kentucky is the largest city in the state and the 16th largest in the country. Louisville has 90 attractions, 17,000 hotel rooms, and 2,500 restaurants to satisfy visitors and residents alike. The city was founded in 1778 by George Rogers Clark and named after King Louis XVI. It lies on the Ohio River near the border with Indiana. The metro area is widely referred to as Kentuckiana, and residents of Louisville are known as Louisvillians. The city is best known for the Kentucky Derby, the most popular event in horse racing and known as the most exciting two minutes in sports. Louisville Culture The four most popular attractions Louisville has to offer are the Louisville Slugger Museum, with the world s largest bat; the Louisville Science Center, Glassworks, a space housing works from 50 glass artists; and the Frazier Historical Arms Museum. The downtown area is alive with performing arts venues, such as the Kentucky Center, which hosts local and national theater programming. The East Market Street Neighborhood has become an attraction due to its restaurants and art galleries. There are many charming neighborhoods in the city, including Old Louisville with its 19th-century charm. Louisville Sports and Leisure There are many spectator sports to enjoy in Louisville. The 13,000-seat Slugger Field is home to the Louisville Bats, the Cincinnati Red s top minor league affiliate. The field is known as one of the best in minor league baseball and the Bats have an impressive record. The University of Louisville s men s basketball team plays at Freedom Hall. Churchill Downs is the site of the Kentucky Derby, the most famous horse racing event in the country. The Valhalla Golf Club is located in Louisville and hosted the 1996 and 2000 PGA Championships. The city has one of the best skate parks in the country, the Louisville Extreme Park. High school sports enjoy a high degree of popularity in the city, with schools like Trinity, Saint Xavier, and Male winning an impressive number of titles. Photo: Nicholas Henderson; CC BY 2.0