WALGREENS Macon Road - MEMPHIS, TENNESSEE OFFERING MEMORANDUM ACTUAL PROPERTY

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1 WALGREENS OFFERING MEMORANDUM ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2017 Marcus & Millichap. Activity ID: Y

2 Financial Overview OFFERING SUMMARY PRICE $2,800,000 CAP RATE 10.00% NOI $280,000 PRICE PER SQUARE FOOT $ RENT PER SQUARE FOOT $18.52 YEAR BUILT 2000 APPROXIMATE LOT SIZE 1.96 Acres GROSS LEASEABLE AREA 15,120 TYPE OF OWNERSHIP Fee Simple LEASE GUARANTOR Walgreen Co. LEASE TYPE Double-Net (NN) ROOF AND STRUCTURE Landlord Responsible LEASE SUMMARY LEASE COMMENCEMENT DATE 12/1/2000 LEASE EXPIRATION DATE 11/30/2020 LEASE TERM TERM REMAINING INCREASES OPTIONS TO RENEW FIRST RIGHT OF REFUSAL OPTIONS TO PURCHASE FILE PHOTO FIRST RIGHT OF REFUSAL 20 Years 3+ Years None 8, 5-Year Options Yes None Yes ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2017 Marcus & Millichap. Activity ID: Y

3 Investment Overview Marcus & Millichap is pleased to present this 15,120-square foot Walgreens in Memphis, which is Tennessee s second largest city. Walgreens has been operating at this location for more than 15 Years. The tenant currently has more than three years remaining on a 20-year lease with eight, five-year renewal options. This double-net (NN) lease limits landlord s responsibilities to the roof, structure, and parking lot. The lease is backed by a corporate guaranty from Walgreens, which was ranked number 17 on the Fortune 500 list as of June The company registered $117.3 billion across more than 8,200 locations in The subject property sits on nearly two acres at the signalized, hard corner intersection of Macon Road and Whitten Road. This intersection sees more than 37,000 vehicles per day. There are also multiple points of ingress and egress with access available from both Whitten Road and Macon Road. This asset also benefits from strong demographics. There are more than 190,000 people with an average household income greater than $80,000 within five miles. Additional Tenants in the immediate vicinity include: Circle K, Dunkin Donuts, Walmart, Wendy s, Starbucks, McDonald s and more. Walgreens in Memphis Tennessee s Second Largest City More Than 15-Year Operating History Three Years Remaining with Eight, Five-Year Renewal Options Limited Landlord Responsibilities Corporate Guaranty NASDAQ: WBA Number 17 on Fortune 500 (June 2017) Standard & Poor (S&P): BBB Signalized, Hard Corner Intersection of Macon Road and Whitten Road More Than 37,000 Vehicles Per Day (VPD) Multiple Points of Ingress/Egress Vehicular Access from Both Macon Road and Whitten Road Strong Demographics More Than 190,000 People with an Average Household Income Greater than $80,000 in Five Miles Neighboring Tenants Committing Significant Capital to the Market Accredo Health Group Corporate Headquarters Performing $15 Million Renovation Additional Tenants in the Immediate Vicinity Include: Circle K, Dunkin Donuts, Walmart, Wendy s, Starbucks, McDonald s and more ACTUAL PROPERTY Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2017 Marcus & Millichap. Activity ID: Y

4 Tenant Overview - Walgreens ACTUAL PROPERTY TENANT PROFILE TENANT TRADE NAME Walgreens Boots Alliance, Incorporated OWNERSHIP Public TENANT Corporate Store LEASE GUARANTOR Corporate Guarantee NUMBER OF LOCATIONS 8,175+ HEADQUARTERED Deerfield, Illinois WEB SITE SALES VOLUME $117.3-Billion (2016) NET WORTH $30.2-Billion (2016) STOCK SYMBOL WBA BOARD NASDAQ CREDIT RATING BBB RATING AGENCY Standard & Poor (S&P) RANK Number 17 on Fortune 500 (June 2017) 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, Walgreen 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 Division of Walgreens Boots Alliance, Incorporated. 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. After failure to obtain Federal Trade Commission approval, Walgreens announced in June 2017 to formally end the merger agreement, and will instead pay $5-Billion to purchase 2,186 Rite Aids. After the new transaction closes, the company will convert most of those Rite Aids to the Walgreens brand. Walgreens expects the new transaction to be modestly accretive to adjusted diluted net earnings per share in the first full year after the initial closing and expects to realize more than $400 million in cost savings within three to four years, primarily from procurement, cost savings and other operational issues. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2017 Marcus & Millichap. Activity ID: Y

5 Aerial Overview Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2017 Marcus & Millichap. Activity ID: Y

6 Area Overview & Demographics 1-Mile 3-Mile 5-Mile Population 2000 Population 8,385 57, , Population 10,801 65, , Population 10,435 66, , Population 10,326 65, ,084 1-Mile 3-Mile 5-Mile Households 2000 Households 3,675 21,945 67, Households 4,540 24,865 74, Households 4,376 25,088 74, Households 4,328 25,041 74,341 1-Mile 3-Mile 5-Mile Household (HH) Incomes 2017 Average HH Income $55,464 $63,984 $80, Median HH Income $47,408 $52,009 $61, Per Capita Income $23,259 $24,294 $31,451 Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2017 Marcus & Millichap. Activity ID: Y

7 Market Overview - Memphis, Tennessee Memphis is located just south of the confluence of the Mississippi River and the Wolf River. The city registered a population of 652,717 in 2016, making it the second largest city in the state after Nashville. Memphis is the youngest of Tennessee s major cities. Founded in 1819 as a planned city by a group of wealthy Americans, among whom included judge John Overton and President Andrew Jackson. A resident of Memphis is referred to as a Memphian, and the Memphis region is known, particularly to media outlets, as Memphis and the Mid-South. The city s central geographic location has been strategic to its business development. Located on the Mississippi River and intersected by five major freight railroads and two Interstate Highways (Interstate-40 and Interstate-55), Memphis is ideally located for commerce in the transportation and shipping industry. Its access by water was key to its initial development, with steamboats plying the Mississippi river. Railroad construction strengthened its connection to other markets in the east and west. Today, Memphis is a growing city with several Fortune 500 companies headquartered in the city: FedEx Corporation (Number 58), AutoZone, Incorporated (Number 270), and International Paper Company (Number 133). The many FedEx packages passing through the city, makes Memphis International Airport the world s busiest cargo airport. High-tech industries, health care and biomedical research are also important segments of the city s economy. Known as the birthplace of the Blues and home of Elvis Presley, Memphis is one of America s top cities for tourism. The NBA s Memphis Grizzlies play at 19,000-seat FedEx Forum in the northern part of downtown. The city s minor league baseball team is the Memphis Redbirds, the triple-a affiliate of the St. Louis Cardinals. Redbirds home games are at AutoZone Park downtown. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of 2017 Marcus & Millichap. Activity ID: Y

8 Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.

9 WALGREENS Broker Of Record Jody McKibben 6 Cadillac Dr Ste 100 Nashville, TN Tel: (615) Fax: (615) License: