ASHLEY FURNITURE & GORDMANS - APPLETON,WI OFFERING MEMORANDUM

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1 ASHLEY FURNITURE & GORDMANS - APPLETON,WI OFFERING MEMORANDUM

2 NON-ENDORSEMENT AND DISCLAIMER NOTICE Confidentiality and Disclaimer The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure 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. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap 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. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc Marcus & Millichap. All rights reserved. Non-Endorsement Notice Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS. ASHLEY FURNITURE HOMESTORE & GORDMANS Grand Chute, WI

3 FINANCIAL OFFERING OVERVIEW SUMMARY FINANCIAL OVERVIEW #3

4 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS 4731 W Lawrence St, Appleton, WI PRICING AND OFFERING VALUATION SUMMARY MATRIX MAJOR EMPLOYERS Price $12,545,000 Down Payment 25.00% Price Per Square Foot (GLA) $ Gross Leasable Area (GLA) 104,138 Year Built/Renovated 2000/2004 EMPLOYER # OF EMPLOYEES Kimberly-Clark 2,748 Pierce Manufacturing Inc 2,502 R R Donnelley 2,105 Sca Tissue North America LLC 1,579 Miller 1,400 County of Outagamie 1,245 Appleton Medical Center Inc 1,230 Material Logistics & Svcs LLC 1,200 St Elizabeth Hospital Inc 1,057 McCain Foods Usa Inc 1,000 Presto Products Company 758 Plant Lot Size AC DEMOGRAPHICS VITAL DATA Cap Rate - Current 7.50% Net Operating Income - Current $940,910 Net Cash Flow After Debt Service - Current $365,267 Cash on Cash Return - Current 11.65% 1-Miles 3-Miles 5-Miles 2015 Estimate Pop 3,541 37, , Census Pop 3,357 36, , Estimate HH 1,759 16,309 50, Census HH 1,663 15,884 48,862 Median HH Income $59,192 $56,545 $53,703 Per Capita Income $38,845 $31,798 $28,661 Average HH Income $77,996 $72,610 $68,299 4

5 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS 4731 W Lawrence St, Appleton, WI PRICING AND VALUATION RENT MATRIX ROLL RENT ROLL Tenant Square Percentage Lease Lease Annual Rental Footage Pro Rata Commence Expiration Rent Rate Options Lease Structure Ashley Furniture 48, % 9/1/2004 8/31/2021 $326, $6.70 One - Five Year NNN 9/1/2017 $332, $6.82 Option 1 $343, $7.03 Gordman's 55, % 3/24/2004 6/30/2020 $622, $11.25 Three - Five Years NNN Option 1 $650, $11.75 Option 2 $677, $12.25 Option 3 $705, $12.75 Occupied 104, % $949, $9.12 5

6 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS 4731 W Lawrence St, Appleton, WI PRICING INCOME AND VALUATION AND EXPENSES MATRIX INCOME & EXPENSE SUMMARY Current Per SF INCOME Occupied Space $949,484 Vacant Space Gross Potential Rental Income $949,484 $9.12 Expense Reimbursements Taxes $182,808 Insurance $9,620 CAM $95,000 Management/Admin $15,163 Total Expense Reimbursement $302,591 $2.91 Gross Potential Income (GPI) $1,252,075 $12.02 Vacancy/Collection Allowance $0 Effective Gross Income (EGI) $1,252,075 $12.02 Total Operating Expenses $311,165 $2.99 NET OPERATING INCOME $940,910 $9.04 Reserves $0.10 $10,414 Debt Service $556,224 Net Cash Flow after Debt Service $374,272 $3.59 OPERATING EXPENSES Taxes $182,808 $1.76 Insurance $9,620 $0.09 CAM $95,000 $0.91 Management Fee $23,737 $0.23 Total Operating Expenses $311,165 $2.99 NOTES 6

7 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS 4731 W Lawrence St, Appleton, WI PRICING PRICE AND & FINANCING VALUATION OPTIONS MATRIX LOCAL BANKS REGIONAL BANKS Net Operating Income (NOI) $940,910 Net Operating Income (NOI) $940,910 List Price $12,545,000 List Price $12,545,000 Loan To Value (LTV) 75.00% Loan To Value (LTV) 75.00% Loan Amount $9,408,750 Loan Amount $9,408,750 Interest Rate 3.50% Interest Rate 4.00% Loan Term 5 Loan Term 10 Loan Amortization 25 Loan Amortization 25 Annual Loan Payment $565,229 Annual Loan Payment $595,954 Debt Coverage Ratio (DCR) 1.66 Debt Coverage Ratio (DCR) 1.58 Recourse Yes Recourse Yes Down Payment $3,136,250 Down Payment $3,136,250 Cash Flow $365,267 Cash Flow $334,542 Reserves $10,414 Reserves $10,414 Cash on Cash Return 11.65% Cash on Cash Return 10.67% Please contact Michael Hughes (Marcus & Millichap MMCC) for financing options on this property. 7

8 OFFERING SUMMARY PROPERTY OVERVIEW #8

9 INVESTMENT OVERVIEW OFFERING SUMMARY Marcus & Millichap is pleased to present Ashley Furniture Homestore & Gordmans in Appleton, Wisconsin. This opportunity consists of a 104,138 square foot two-tenant power center built in 2000 and renovated to tenant specific needs in The property was of class A construction and is situated on acres. The roof is newer, only three years old. Gordmans moved into their space in March of 2004, signing a ten year lease which has been extended now runs through June of In addition to their initial term they have three - five year options to extend the lease. They are on a full triple-net lease reimbursing for taxes, insurance, common area maintenance and admin. Gordmans is doing an extensive remodel to their space. Ashley Furniture Homestore also moved into their space in 2004 and extended now runs through August of The have one remaining five year option to extend their current term. They too are on a full triple-net lease reimbursing for taxes, insurance, common area maintenance and management. There is potential to build outlot buildings in the front of the parking lot area facing W College Ave. See proposed drawings on page 12. The property sits just off interstate 41 in a densely populated retail corridor with big name retailers such as Walmart, Menards, Costco, Hobby Lobby, Barnes & Noble, The Home Depot, Old Navy, Bed Bath & Beyond, Office Max, Target, Sears, Macy s, JCPenny, Sam s Club and dozens more. In addition to Fox River Mall which has 136 stores. High Traffic counts pass directly by the center each day on W College Ave at over 18,000 and over 75,000 per day on interstate 41. INVESTMENT HIGHLIGHTS Two Tenant Mid-Box Retail Building Both Leases Triple Net Including Management/Admin Reimbursement Built In 2000 & Renovated For Tenant Specific In 2004 (Class A Build) Both Have Options To Extend Their Initial Lease Terms Densely Retail Corridor Including Near Fox River Mall Over 117,000 Residents Within Five Miles With An Average Household Income of $68,299 Outlot Potential In Front Parking Lot Area Facing W College Ave # 9

10 REPRESENTATIVE PHOTO OFFERING CITY INFORMATION SUMMARY Appleton is a city in Outagamie, Calumet and Winnebago counties in the state of Wisconsin. One of the Fox Cities, it is situated on the Fox River, 30 miles southwest of Green Bay and 100 miles north of Milwaukee. Appleton is the county seat of Outagamie County. The population was 72,623 at the 2010 census. Of this, 60,045 were in Outagamie County, 11,088 in Calumet County, and 1,490 in Winnebago County. Appleton is the principal city of the Appleton, Wisconsin Metropolitan Statistical Area, which is included in the Appleton- Oshkosh-Neenah, Wisconsin Combined Statistical Area. Appleton serves as the heart of the Fox River Valley, and is home to the Fox Cities Performing Arts Center, Fox River Mall, Neuroscience Group Field at Fox Cities Stadium, Appleton International Airport, and the Valley's two major hospitals: St. Elizabeth Hospital and ThedaCare Regional Medical Center-Appleton. Located in Wisconsin's Fox Cities region, Grand Chute is the commercial and retail center for the area. The Fox River Mall anchors a regional shopping, hospitality and entertainment district. Grand Chute is home to the main campus of Fox Valley Technical College; Fox Cities Stadium; Gordon Bubolz Nature Preserve; several community and neighborhood parks; and, an extensive network of pedestrian and bicycle facilities. At 20,919, Grand Chute was the largest town by population in the state of Wisconsin as of the 2010 census. Second largest was the town of Somers, now that the former town of Menasha has incorporated to become the village of Fox Crossing in #

11 REPRESENTATIVE PHOTO COMPANY OFFERING INFORMATION SUMMARY Ashley HomeStore is a furniture store chain that sells Ashley Furniture products. Opened in 1997, the chain comprises over 450 HomeStore locations in North America and 520 locations worldwide. The chain has both corporate and independently owned and operated furniture stores. The first Ashley HomeStore opened in Anchorage, Alaska in Since then, the company has become the #1 home furniture retailer in North America. They have stores located throughout the United States, Canada, Mexico, Central America, and Japan. Though many Ashley HomeStores are independently owned and operated, all of the furniture sold is manufactured by Ashley. The 100th HomeStore store opened in 2003, the 200th in It became the fastest-growing furniture chain and top selling furniture brand worldwide in 2006 and open its 300th store in In February 2014, Ashley Homestores opened its 500th Homestore in Longview, Texas and has since opened an additional 20 stores across the globe. In April 2015, Ashley Furniture HomeStores made its first incursion in South America by opening its first store in Santiago, Chile The parent company of Ashley HomeStore, Ashley Furniture Industries, headquartered in Arcadia, Wisconsin, is the world's largest home furniture manufacturer. Owned by father and son team, Ron and Todd R. Wanek, the company manufactures and distributes home furnishings throughout the globe. The company employs more than 18,000. The company is building a 3.8 million square foot manufacturing and distribution complex in North Carolina Revenue: $3.3 billion USD Number of employees: 4,000 Headquarters: Brandon, Florida Arcadia, Wisconsin Information provided by: 11 #

12 REPRESENTATIVE PHOTO COMPANY OFFERING INFORMATION SUMMARY Born in 1915 out of a small retail store at the corner of 16th and Chicago in Omaha, Nebraska, Gordmans is proud to celebrate more than 100 years in business. Fashion trends may come and go, but Gordmans has thrived knowing that low-cost, highquality apparel and décor are always on-trend. Today, Gordmans operates 106 stores in 22 states, along with an online shopping site that allows guests to shop anytime, anywhere. The company was started by Sam Richman, a Russian immigrant, who opened a small clothing store in Omaha. A few years later, he was joined by Dan Gordman, a former Bloomingdales executive who was headed west to start a new career. Dan s 32 Chevy, bound for California, broke down in Omaha. While awaiting repairs, Dan met Esther Richman, daughter of Sam Richman, whom he would soon marry. His fated stop for car repairs also led to a lifelong business relationship with her father, Sam. Out of this, Richman Gordman stores were born. Richman Gordman prospered, leading to progressively faster expansion. Over several decades, the company added stores in Omaha and elsewhere in Nebraska, along with communities in Iowa and Kansas. Centralized checkouts, shopping carts, self-service shoe departments and racetrack-shopping configurations for easier store navigation were all introduced by Dan. In 1975, a second group of retail stores, Half Price Stores, was launched. By 1990, the company had grown to 16 Richman Gordman stores and 16 Half Price Stores. In 2000, all of the stores were renamed Gordmans. Gordmans was sold to Sun Capital Partners, one of the largest private equity firms in the country, in September A successful initial public offering of common stock for Gordmans occurred in 2010, as well as a secondary public offering in From 2012 to 2014, Gordmans increased its store base by over 30%. In fiscal year 2014, revenues reached $635 million. In 2015, the Company will open six new stores. Gordmans believes in giving back to the communities in which it operates. Since 2000, Gordmans has supported Partners in Education and has contributed more than $1 million to public school systems in markets where Gordmans has stores. In 2012, Forbes magazine ranked Gordmans No. 29 on its 2012 list of America s 100 best small-cap companies based on sales and earnings growth. Apparel magazine ranked Gordmans No. 48 on its 2014 list of the Top 50 leading apparel retailers, noting Gordmans grewards Loyalty program and focus on destination businesses such as juniors, misses, young men s apparel and home décor. Information provided by: 12 #

13 REPRESENTATIVE PHOTO OFFERING OUTLOT POTENTIAL SUMMARY 13 #

14 PROPERTY PHOTOS 14

15 PROPERTY PHOTOS 15

16 AERIAL PHOTO 16

17 OFFERING COMPARABLES SUMMARY COMPARABLES 17 #

18 8 COMPARABLES MAP ASHLEY FURNITURE HOMESTORE & GORDMANS (SUBJECT) Willow Lakes Plaza The Shoppes at Green Oaks - Kohls Anchored Felch Street Center Town Square Shopping Center Micro Center and Burlington Coat Factory Hobby Lobby/Dunham's Sports Fox River Commons SALES COMPARABLES 18

19 COMPARABLE CHARTS 8.20% 8.00% 7.80% 7.60% 7.40% 7.20% 7.00% 6.80% 6.60% 6.40% CAP RATE COMPARISON 8.00% 7.75% 7.50% 7.49% 7.56% 7.43% 7.25% 6.98% 6.99% SUBJECT AVG $ $ PRICE/SF COMPARISON $ $ $ $ $ $ $ $ $ $ $ $ $80.00 $60.00 $40.00 $20.00 $- SUBJECT AVG 19

20 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS MARKETING COMPARABLES TEAM SALES COMPARABLES ASHLEY FURNITURE HOMESTORE & GORDMANS 4731 W LAWRENCE ST, GRAND CHUTE, WI, WILLOW LAKES PLAZA 3802 MIDWAY ROAD, GOSHEN, IN, THE SHOPPES AT GREEN OAKS - KOHLS ANCHORED 6650 WHITMORE LAKE ROAD, BRIGHTON, MI, rentpropertyname1 rentpropertyname1 rentpropertyname1 SUBJECT PROPERTY List price $12,545,000 Cap Rate 7.50% Price/SF $ GLA 104,138 SF Year Built 2000 Close Of Escrow 4/21/2016 Sales Price $15,580,000 Price/SF $ CAP Rate 6.98% GLA 139,141 SF Year Built 1999 Close Of Escrow 9/22/2016 Sales Price $13,100,000 Price/SF $ CAP Rate 7.49% GLA 103,231 SF Year Built 2005 rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 20

21 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS MARKETING COMPARABLES TEAM SALES COMPARABLES FELCH STREET CENTER FELCH STREET, HOLLAND, MI, TOWN SQUARE SHOPPING CENTER 40 US HIGHWAY 41, SCHERERVILLE, IN, MICRO CENTER AND BURLINGTON COAT FACTORY 3700 HIGHWAY 100 S, MINNEAPOLIS, MN, rentpropertyname1 rentpropertyname1 rentpropertyname1 Close Of Escrow 4/21/2016 Sales Price $20,510,000 Price/SF $ CAP Rate 7.56% GLA 164,181 SF Year Built 1998 Close Of Escrow 4/14/2016 Sales Price $23,000,000 Price/SF $ CAP Rate 7.25% GLA 138,571 SF Year Built 2001 Close Of Escrow 8/12/2016 Sales Price $14,150,000 Price/SF $ CAP Rate 7.75% GLA 131,710 SF Year Built 1962 rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 21

22 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS MARKETING COMPARABLES TEAM SALES COMPARABLES HOBBY LOBBY/DUNHAM'S SPORTS W BLUEMOUND RD, BROOKFIELD, WI, FOX RIVER COMMONS 4705 W GRANDE MARKET DR, APPLETON, WI, rentpropertyname1 rentpropertyname1 rentpropertyname1 Close Of Escrow 8/25/2016 Sales Price $13,714,807 Price/SF $ CAP Rate 6.99% GLA 109,325 SF Year Built 1992 Close Of Escrow 3/5/2015 Sales Price $12,200,000 Price/SF $ CAP Rate 8.00% GLA 78,997 SF Year Built 1999 rentpropertyaddress1 rentpropertyaddress1 rentpropertyaddress1 22

23 PROPERTY ASHLEY FURNITURE NAME HOMESTORE & GORDMANS MARKETING COMPARABLES TEAM RENT COMPARABLES RENT COMPARABLES Tenant Date Provided Asking/ Square Rental Starting Footage Rate Lease Structure Ashley Furniture 2016 Current 48,805 $6.70 NNN Gordman's 2016 Current 55,333 $11.25 NNN Sears Outlet 2013 Starting 45,561 $8.50 NNN Bed Bath & Beyond, Barnes & Noble, Old Navy 2015 Current 78,997 $12.35 NNN Gander Mountain 2014 Starting 28,000 $12.16 NN TJ Maxx/Home Goods 2016 Current 50,000 $9.75 NNN Lazy Boy 2016 Current 23,000 $15.80 NNN Michael's 2008 Asking 24,741 $12.00 NNN Northern Tool + Equipment 2011 Asking 28,048 $14.00 NNN AVG 42,498 $11.39 rentpropertyaddress1 23

24 OFFERING DEMOGRAPHICS SUMMARY DEMOGRAPHICS 24 #

25 ASHLEY PROPERTY FURNITURE NAME HOMESTORE & GORDMANS PRICING AND LOCATION VALUATION TENANT MARKETING DEMOGRAPHICS SUMMARY OVERVIEW MATRIX TEAM CREATED ON NOVEMBER 2, Miles 3 Miles 5 Miles POPULATION 2020 Projection 3,841 38, , Estimate 3,541 37, , Census 3,357 36, , Census 2,887 34, ,550 INCOME Average $77,996 $72,610 $68,299 Median $59,192 $56,545 $53,703 Per Capita $38,845 $31,798 $28,661 HOUSEHOLDS 2020 Projection 1,959 17,306 52, Estimate 1,759 16,309 50, Census 1,663 15,884 48, Census 1,281 13,685 43,618 HOUSING 2015 $197,321 $157,348 $144,702 EMPLOYMENT 2015 Daytime Population 4,133 54, , Unemployment 5.56% 4.31% 5.01% 2015 Median Time Traveled RACE & ETHNICITY White 88.49% 85.97% 87.58% Native American 0.03% 0.10% 0.05% African American 1.68% 1.86% 1.77% Asian/Pacific Islander 6.66% 5.49% 4.90% Source: 2015 Experian 25#

26 ASHLEY FURNITURE & GORDMANS - APPLETON,WI Jeff R. Rowlett Vice President Investments Senior Director, National Retail Group Milwaukee Office License: WI: License: IL: Tel: (262)