Toll Brothers, Inc. Penland.Properties. 100% Occupied NNN Property Investment Grade Tenant Meridian, Idaho

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1 Toll Brothers, Inc. 100% Occupied NNN Property Investment Grade Tenant Meridian, Idaho Penland.Properties Chris Penland penland.properties 1

2 Purchase Price: $4,446,051 Capitalization Rate: 5.50% Occupancy: 100% NYSE Symbol: TOL Credit: BBB- 2 Annual Escalations: 3.00%

3 Quick Facts + $5.04 billion market capitalization and an investment grade credit rating of BBB- by Fitch Inc. + The Treasure Valley is the 3rd largest Metro Area in the Pacific Northwest and includes some of the fastest growing cities in the nation. + Meridian, Idaho is the 6th fastest growing city in the nation. + Meridian is the center of the Treasure Valley Metropolitan Statistical Area with a population of over 675,000, which includes Boise, Meridian, Nampa, Eagle, Kuna, Caldwell, and additional communities. + Toll Brothers, Inc. currently has 9 communities in the Treasure Valley. Home builder tenant is ideal based upon the current and future growth of the area Mile Road is a primary north south traffic arterial and the corridor is the most active in the Treasure Valley % increases, rarely seen in investment properties, quickly increases the cash flow and return on investment over the primary term. + Due to the 3.00% annual escalations, this 5.50% capitalization rate property will outperform a 6.50% capitalization rate property. 3

4 Toll Brothers, Inc. longevity, national operations, and credit strength provides certainty of income to a purchaser. The company boasts a $5.04 billion market capitalization and an investment grade credit rating of BBB- by Fitch Inc. Toll Brothers, Inc. recently acquired Coleman Homes, which originally constructed and occupied the building in Coleman Homes, now a Toll Brothers 4 Company, will continue its tenancy in the building. The property has high end distinctive architecture, extensive interior build out, and outstanding finishes throughout.

5 The Treasure Valley is the 3rd largest Metro Area in the Pacific Northwest and includes some of the fastest growing cities in the nation. This growth created a robust residential real estate market, which is one of the best in the nation. Toll Brothers, Inc. is an ideal tenant in this market based on the current and future home building in the area. DEMOGRAPHICS: Population: 675,000 Average Household Income: $62,500 Unemployment (3/2016): 3.8% BUILDING AREAS: Design Center Square Footage: 4,163 (37%) Office Square Footage: 7,195 (63%) Total Square Footage: 11,358 PROPERTY INFORMATION: Acreage: 1.45 Zoning: L-O Parcel: R Address: W. Sheryl Dr. Meridian, ID

6 Toll Brothers Communities 3 6 Meridian is the center of the Treasure Valley Metropolitan Statistical Area with a population of over 675,000, which includes Boise, Meridian, Nampa, Eagle, Kuna, Caldwell, and additional communities. Over the past 2 decades, Meridian s appeal and population growth transformed this city into one of the best in the nation. The combination of outstanding job opportunities, low cost of living, incredible quality of life, and countless amenities in the area created this phenomenal place to live and do business. 10-Mile Road in Meridian provides a strategically central location for any tenant and in particular home builders. It enables quick convenience on Interstate-84 for customers to visit the home design center from any of its 9 existing communities with additional 6 communities currently in development throughout the Treasure Valley. This strategic location and convenience were key in the tenant s site selection.

7 Eagle Road Corridor (Next I-84 Interchange) Current & Future Residential Building Market Click Here for Preliminary Plat Map 10-Mile Road Corridor Mixed Use Developments The Village Meridian Crossroads New 10-Mile I-84 Interchange Mixed Use Developments 7

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9 RENT ROLL Tenant Square Footage Analysis Period Base Rent PSF Annual Escalations (1/1) Term Start Expiration Toll Brothers, Inc. 11,358 $244,533 $ % 5+ 11/4/16 12/31/21 VALUE: Base Rent (4/1/17-3/31/18): $244,533 Capitalization Rate: 5.50% Purchase Price: $4,446,051 9

10 OUTPERFORMS A 6.50%: Toll Brothers, Inc. at a 5.50% Capitalization Rate: 5 Year Unleveraged Return: 7.65% 5 Year Leveraged Return: 14.93% Standard Single Tenant Property at a 6.50% Capitalization Rate: 5 Year Unleveraged Return: 7.37% 5 Year Leveraged Return: 14.48% LOAN ASSUMPTIONS: Loan to Value: 75% Interest Rate: 4.50% Amortization: 25 The 3% annual escalations significantly enhance returns over time. This creates rapidly increasing cash flow and cash on cash returns. Due to these annual escalations, the property will outperform a typical 6.50% NNN property with 10% increases every 5 years. ANALYSIS ASSUMPTIONS: Initial / Terminal Capitalization Rate: 5.50% Annual Escalations: 3.00% Cost of Future Sale at: 4.50% Initial / Terminal Capitalization Rate: 6.50% 5 Year Escalations: 10% Cost of Future Sale at: 4.50% Analysis Period 1/1/17-12/31/2021 LEASE NOTES: 2-5 Year Options subject to 3.00% annual increase per Section NNN Lease. Landlord responsible for cost to "maintain, repair, and replace the roof and roof membrane, the exterior walls, and the structural portions of the Building, and shall periodically paint the exterior walls of the building from time to time as determined to be necessary by Landlord" per Section

11 TREASURE VALLEY ACCOLADES 2nd Best City to Live In - 24/7 Wall St th Fastest Growing City in US - WalletHub th Best Place to Live - U.S. News & World Reports 2016 Top 10 Hottest Housing Markets - Zillow th Best Midsize Real Estate Market - WalletHub 2016 Top 20 America s Fastest Growing Cities - Forbes 2016 #1 Lowest Cost Metro in Pacific U.S. - KPMG 2016 #1 Hottest Job Market - Kipplingers 2016 Best City to Live in - Meridian, ID - USA Today 2015 #1 State for Job Growth - Governing.com 2015 DOWNLOAD CONFIDENTIALITY AGREEMENT LEARN MORE ABOUT THE TREASURE VALLEY For More Information Please Contact: Chris Penland Penland Properties @ penland.properties 2318 W. Dora Lane / Boise, ID ACCESS DOCUMENT 11 VAULT