Investment Highlights EXECUTIVE SUMMARY. Institutional Quality Boutique Office Building. Class A Amenity Package; Four Sides Of Window Line

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1 EXECUTIVE SUMMARY

2 EXECUTIVE SUMMARY Holliday Fenoglio Fowler, L.P. ( HFF ), as exclusive representative for Owner, is pleased to present this offering for the sale of the leasehold interest in 1717 Rhode Island Avenue (the Property), a 10-story, 157,050 square-foot boutique office Investment Highlights building located at the confluence of Rhode Island Avenue, Connecticut Avenue, and M Street in the heart of the Central Business District ( CBD ) of Washington, DC. Proximate to four Metrorail lines Red, Orange, Blue, and Silver and some of downtown Washington, DC s most renowned amenities, the Property offers its tenants an increasingly sought-after creative office experience in a highly walkable, amenity-rich, live-work-play environment. Now the East Coast hub for $62 billion tech titan Uber Technologies, Inc. ( Uber ), the Property is 100% leased long-term. Five tenants Uber and Steve Case s Revolution and Case Foundation included Institutional Quality Boutique Office Building Class A Amenity Package; Four Sides Of Window Line 100% Leased Long-Term; Minimal Rollover Through 2025 Uber s East Coast Hub; Name Brand Tech Tenancy occupy 147,967 square-feet (94% of RBA) through 2025 and beyond a weighted average remaining lease term of approximately 9 years Rhode Island Avenue is a coveted core investment opportunity that possesses all of the intangibles creative office, Metrorail access, and a walkable, highlyamenitized location sought after by the innovative companies fueling Washington DC s economy of tomorrow. Investors will benefit from not only the credit and stability of the in-place tenancy, but also a future mark-to-market opportunity with Uber s lease as Washington DC s space market fundamentals continue to improve long-term. 2 Metrorail Access Red, Orange, Blue, & Silver Lines 24-7 Live-Work-Play Environment Superior Washington, DC Market Fundamentals Attractive In-Place Ground Lease Free & Clear Of Existing Debt

3 Chapman and Cutler LLP Institutional Quality Office Asset; Distinct Architectural Design; Timeless Appeal 10-story, 157,050 square-foot boutique office building that has been institutionally owned and maintained since completion in The seamless integration of historic townhouses on floors 1 through 4 provides 1717 Rhode Island Avenue a distinct architectural identity and timeless appeal that compliments a sought-after creative office experience. The Case Foundation A first-class amenity package private terraces on upper floors, brand new fitness center, 2-story lobby, and 3-level parking garage compliments the Property s four sides of window line and caters to Washington, DC s modern Class A office tenant. 100% Leased Long-Term; Uber s East Coast Hub; Name Brand Tech Tenancy 100% leased to 7 tenants today, with 5 tenants Uber, Steve Case s Revolution and Case Foundation, Chapman and Cutler LLP, Hattway Communications, and Transemantics, Inc. occupying 147,967 squarefeet (94% of RBA) through 2025 and beyond a weighted average lease term of approximately 9 years. The Property serves as Uber s East Coast hub, which will handle the company s logistics and operations along the East Coast. The $62 billion tech titan is poised for explosive growth and expansion both domestically and globally, with its Washington, DC location playing a vital role in its future success. Property Overview Address 1717 Rhode Island Avenue, NW Washington, DC Year Built 2004 Developer Karchem Properties Steve Case s Revolution and Case Foundation have occupied 1717 Rhode Island Avenue since From Silicon Valley to Washington, DC, Steve Case continues to invest in people and ideas that can change the world, promoting entrepreneurship, disruption, philanthropy, and civic engagement across a broad spectrum of industries. Significant tenant investment over and above Landlord s allowance reinforces commitment to their space, and the Property, long-term. Zoning Land Area Rentable Area C-3-C; Dupont Circle Overlay District 0.48 Acres (20,837 SF) 157,050 SF Stories 10 Typical Floorplate(s) 11,600-19,500 SF Parking 106 Below Grade Spaces (0.7 per 1,000 SF) Major Tenants Uber Technologies, Inc. (72,905 SF; Jan-26 LXD) ALPS Management LLC (Steve Case) (40,423 SF; Jan-26 LXD) Chapman and Cutler LLP (14,508 SF; Mar-27 LXD) Transemantics, Inc. (11,370 SF; May-26 LXD) 3

4 EX E CUT IV E SUM M A RY Prominent CBD Location; 24-7 Live-Work-Play-Environment Prominently positioned adjacent to historic Cathedral of St. Matthew the Apostle at the confluence of Rhode Island Avenue, Connecticut Avenue, and M Street in the heart of downtown Washington, DC. Proximate to three Metrorail stations Dupont Circle, Farragut North, and Farragut West providing excellent access to the Red, Orange, Blue, and Silver lines and the broader Washington, DC metropolitan region 7th Floor Terrace via mass transit. The Property is easily accessed by car using Connecticut Avenue, 17th Street, and M Street, with each offering access to major commuter thoroughfares such as K Street, The Rock Creek and Potomac Parkway, The Whitehurst Freeway, I-66, and George Washington Parkway. The Property s location connects its tenants to the highly sought-after housing and amenities of both Dupont and Logan Circles, while maintaining direct access to the CBD s Golden Triangle one of downtown Washington DC s most vibrant and traditional office locations. This transit-fueled trifecta jobs, housing, and vibrant amenity base correspondingly creates a distinct 24-7 atmosphere in and around the Property, offering an unparalleled live-work-play experience coveted by Washington, DC s office tenancy of both today, and tomorrow. Superior Market Fundamentals; Embedded Long-Term Upside Chapman and Cutler LLP According to the latest report from the Association of Foreign Investors in Real Estate (AFIRE), the Washington, DC metropolitan area remains one of the fifteen premier global real estate investment markets and top six within the United States due to its strong market fundamentals, stable tenant base, and significant barriers to entry. As of 4th quarter 2016, the CBD submarket has a direct vacancy rate of 5.5% (6.3% total) and continues to outperform the national office market, which experienced 9.7% in total vacancy across all classes and 12.0% in total vacancy for Class A product alone. At 100% leased, 1717 Rhode Island Avenue outperforms the market both regionally and nationally. Asking rental rates for downtown Washington, DC office product built between 2004 and 2006 range from $53.00 to $68.00 PSF, fullservice, suggesting Uber s current rent $45.10 PSF, full-service is considerably below market. This presents investors with a compelling markto-market opportunity long-term with a blue chip tenant like Uber, who is very committed to the Property and its location. Over 2,000,000 square feet in neighboring office development or redevelopment is ongoing or planned throughout the northern CBD. With asking rents ± $55.00 PSF, triple net, and all-in replacement cost for these projects approaching $900 PSF, 1717 Rhode Island Avenue becomes a compelling basis play with tremendous upside as Washington, DC office market fundamentals continue to recover long-term. Attractive In-Place Ground Lease 1717 Rhode Island Avenue is situated on a 20,837 square foot (0.48 acres) site that is currently subject to a 99-year ground lease with the Catholic Church through December 1, 2099 (82 years remaining). The ground lease is at a competitive rate and has annual increases approximating 50% of CPI. Free & Clear Transaction The Property will be sold free and clear of debt, providing investors the opportunity to take advantage of today s low interest rate environment. 4

5 DUPONT CIRCLE P Street NW O Street NW Mas sach uset ts A ve N W SCOTT CIRCLE PARK W a e Isl d Rho ve N nd A 16th Street NW NW ticut Ave Connec 17th S treet N W M Street NW L Street NW K Street NW Holliday Fenoglio Fowler, L.P. ( HFF ) a Washington, DC licensed real estate broker. HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change. 5

6 1775 Pennsylvania Ave, NW 5th Floor Washington, DC hfflp.com James A. Meisel Stephen Dek Potts, Jr Andrew M. Weir Stephen C. Conley Matthew T. Nicholson Robert M. Jenkins FINANCING: Cary P. Abod