SE corner of Locust Street and Loop 288, Denton, Texas

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1 1400 DALLAS DRIVE, DENTON, TX Telephone (940) ; Fax (940) SE corner of Locust Street and Loop 288, Denton, Texas Map of location What type of retail is best suited for this location? The types of retail best suited for this location Grocery Store, Discount Clothing (Ross, TJ Maxx), Home Improvement, Restaurants, Neighborhood Services, and Sporting Goods as well as smaller outlets depending on configuration. This intersection is a primary location for many businesses. Considering the connectivity to 288, I35E and the proposed expansion of N Locust (FM 2164), it will be a primary intersection into and out of Denton. The south west corner of this intersection is currently being developed and has some pad sites available from $6.00 to $10.00 per foot; the north west corner has previously been approved by the city for commercial development and around 7,500 roof tops, but financial constraints have stalled the project to an undetermined time. Significant activity is planned for this immediate area from these two developments and this parcel is ideally placed to benefit from both.

2 Map of existing retailers in the area Comparable Rates for Retail The retail submarket in this area is almost non-existent, but beginning to develop. Denton is currently undergoing very rapid growth. The closest existing retail, except for the aforementioned pad sites, is comprised of very old buildings in the downtown and north of downtown area. Rental rates in this area have a pretty big range due to the complexities of being developed so long ago. There are virtually no projects in this area that have a neighborhood center concept. These rates will vary from about $12-18 NNN Currently under construction is a very large, high-end regional retail development called Rayzor Ranch. This will be located at the intersection of University Drive and I-35, on the NE and SE corners. Rental rates in this development are targeted to range between $18-24 NNN. It is master planned to consist of 1.5 Million SF of retail and will replace the older indoor mall on the south side of Denton as the shopping destination for the area. Although this will likely be the choice for higher end retailers in the area, it will not lend itself well to the grocers, home improvement stores, discount clothing chains, and other neighborhood type services due to congestion and location. Rayzor Ranch will be more of a regional shopping destination. The development is planned to be over a billion dollars and will bring in a very large number of employees and shoppers into the area from outlying locations. As mentioned above, also under construction is the property directly across North Locust to the west of the subject called the Gardens of Denton Retail Center. Due to the lack of similar size, location and legitimate competing products, it is difficult to provide information on other sites. Although, within a few miles there are tracts of available land available with similar prices to the subject and up, but they are not in the same class. The most similar to any new development, except for the projects mentioned above, would be an area West of I-35 on Lillian Miller parkway. Several smaller Office/Retail properties have been developed in this area. Although, much of the product could lend itself to retail use, most has been taken by office users due to the lack of

3 decent office product in the trade area. Rental rates in this area are $17-20 NNN with very little if any vacancy. What makes this a good site for a retailer? There are three very strong driving forces that make this area a great location for a retailer. One of which currently exists, while two are based on future development. First, this property is located in between three existing destination points for families within the city of Denton. Immediately north of Windsor Parkway and immediately west of Locust Street, one-half mile south of the subject, is a recreational complex that contains eleven baseball fields and a park as well as a large elementary school. Any child that plays baseball in Denton 6 th grade or below, will use this facility. The fields are used 8-9 months per year and games and practices are held every weeknight and on the weekends. This currently generates a lot of traffic by the subject property. One and a half miles from the subject further down Windsor Parkway to the west, the City of Denton has a very large sports complex that has several soccer fields, football fields, baseball/softball fields (for older kids and adults), a large park, indoor recreation facility, exercise facility, tennis courts, and a driving range. Again, this has a significant impact on the weeknight and weekend traffic. Also, at the NW corner of Sherman (428) and 288, about a mile east of the subject, the City of Denton has a water park and the reasonably new high school stadium. Although, these are more seasonal, they still contribute to traffic in the surrounding areas. Second, the approved developments north and south of the bypass (288) between I-35 and North Locust Street (2164) will create approximately 15,000 new rooftops in the area when completed. The subject property is on the afternoon side of the intersection and makes this the primary property at this intersection for many retailers. Third, the City of Denton has a current population of about 130,000 and is forecast to be over 150, and over 200,000 before 2030 depending on the source. Denton is consistently showing up in "Best of " recognitions by national media which brings more interest in relocating in the area. From 2000 to 2010 Denton County grew by huge 53% during a significantly down economy, and projections estimate that the county will reach over 1,000,000 in the not too distant future. Even if this future growth estimate were cut in half because of an uncertain economic impact, this represents significant growth on either timeframe. Much of this growth is anticipated to be in this sector and Rayzor Ranch, when complete, will draw folks from throughout the county and beyond to Denton as a premier shopping destination. Another benefit of the subject property is that it will be on the return home side of many people visiting from the south side of town. The I-35 path around the west side of Denton is not without congestion. With the addition of Rayzor Ranch, this will add to this problem. Since many users of the City of Denton s facilities will do so at peak retail times, this will likely create an additional traffic nuisance many will try to avoid. The loop will provide an alternate means around the city which will drive traffic by the subject property. Also, there is no way to tell the impact that the DART rail system will have on the community. Denton has been very aggressive in pursuing rail access through the Dallas system and this will happen in the near future. By the time Denton is included, the rail system will provide access to both airports, Downtown Dallas (current), Downtown Fort Worth (current, through Dallas) and several other areas throughout the Metroplex. Denton s aggressive pursuit of amenities (existing and proposed) will definitely benefit developers who have the same vision for growth.

4 Acreage /- acres Subject property is bordered by the bypass (288) on the north, Locust Street (2164) on the west, and a very small section of Hercules Lane on the south. 288 is a 4 lane divided highway with a single lane access road on the north border of the property. Locust Street is a two lane paved asphalt road with no paved shoulder along the subject property. Hercules Lane is 4 lanes at the intersection with Locust Street, but is only two lanes at the small access point on the south end of the subject property. Locust Street has the right of way under the Loop 288 with no stop lights or stop signs currently. The access roads of the bypass have stop signs at Locust Street. Hercules Lane has a stop sign at Locust Street. Subject property is approximately 2.7 miles from I-35 where I35 intersects the bypass 288. Approximately 7 acres down the east and south boundaries of the parcel have been identified for electrical easement that can be used for vehicle traffic, dumpsters, etc. It may be paved if desired, and various other uses of the easement are acceptable. Additionally, a 2 to 3 acre retention pond will be required on the extreme south end of the property close to Hercules Lane. These requirements are located on the parcel in a manner to minimize architectural and user difficulty. Labor Pool The labor pool is driven largely by an abundance of college students. This will allow retailers to hire competent help at 75-85% of what is normal in a non-college market. Required Improvements The city will likely require access improvements to and from the subject property. Working with them in this fashion will provide mutual benefit to purchaser. Sales price Sellers' are offering the property at an average of just $2.70 a foot for the entire acres with development of the area approved and moving forward. The area is seeing a marked increase in activity and price. Topography Subject property is higher on the east (back) side gradually sloping to the street. A portion of the property may fall within the 500 year flood plane, but reclaiming the property with soil on location should be an easy solution, if desired. Zoning Current Zoning and use is agricultural

5 Designation on Land Use Plan Land was designated for commercial development (CM-E) and residential development with 3 units per acre for some of the property and 6 units per acre for the rest. Rezoning is not anticipated to be a problem. Utilities All utilities are on site or across the street, but will need to be verified.