Offering Memorandum MATTRESS FIRM STATE STREET 7227 WEST STATE STREET BOISE, ID SITE CL AY ANDERSON, MBA, CPA MIKE CHRISTENSEN

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1 Sta te St SITE od wo len G St Offering Memorandum MATTRESS FIRM STATE STREET 7227 WEST STATE STREET BOISE, ID CL AY ANDERSON, MBA, CPA MIKE CHRISTENSEN clay.anderson@colliers.com mike.christensen@colliers.com

2 STATE STREET MATTRESS FIRM Table of Contents Property Profile Financials Site Layout Location Tenant Profile Demographics Area Overview Contact Clay Anderson, MBA, CPA Mike Christensen Confidentiality Agreement Colliers International has been engaged as the exclusive marketing team to the Seller in connection with Seller s solicitation of offers for the purchase of the property known as Mattress Firm-State Street, 7227 West State Street located at the southeast corner of West State Street and Glenwood Street, in the City of Boise, County of Ada, State of Idaho (the Property ). Prospective purchasers are advised that as part of the solicitation process, Seller will be evaluating a number of factors including the current financial qualifications of the prospective purchaser. Seller expressly reserves the right in its sole and absolute discretion to evaluate the terms and conditions of any offer and to reject any offer without providing a reason therefore. Further, Seller reserves the right to terminate the solicitation process at any time prior to final execution of the Purchase Agreement. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property, and it is not to be used for any other purpose or made available to any other person without the express written consent of Seller. The material is based in part by information supplied by the Seller and in part by financial information obtain from sources it deems reasonably reliable. Summaries of any documents are not intended to be comprehensive or all-inclusive, but rather only outline some of the provisions contained therein and qualified in their entirety by the actual document to which they relate. No representation or warranty, expressed or implied, is made by the Seller, or any of their respective affiliates as to the accuracy or completeness of the information contained herein. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the Property site or used in the construction or maintenance of the building at the Property site. A prospective purchaser s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or any of their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property. Prospective purchasers are not to construe the contents of this Offering Memorandum or any prior or subsequent communication from the Seller or their affiliates or any of their respective officers, directors, shareholders, owners, employees, or agents as legal, tax, or other advice. Prior to submitting an offer, prospective purchasers should consult with their own legal counsel and personal tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment. COLLIERS INTERNATIONAL P. 2

3 PROPERTY OVERVIEW Property Profile Address 7227 W State Street Boise, Idaho Year Built 2015 Size 4,812 SF Valuation Price $3,004,600 Cap Rate 6.50% Net Operating Income $195,300 Land Size Zoning Lease Type Lease Term Parking ±0.445 Acres C-2 City of Garden City NNN 10 years left on a 12 year lease Multiple 5 year renewal options 17 spaces Representative Image Representative Image COLLIERS INTERNATIONAL P. 3

4 FINANCIALS Rent Schedule 7/1/2017-6/30/18 $195,300 7/1/2018-6/30/19 $195,300 7/1/2019-6/30/20 $205,065 7/1/2020-6/30/21 $205,065 7/1/2021-6/30/22 $215,318 7/1/2022-6/30/23 $215,318 7/1/2023-6/30/24 $226,084 7/1/2024-6/30/25 $226,084 SITE State St Glenwood St 7/1/2025-6/30/26 $237,388 7/1/2026-6/30/27 $237,388 Loan PERSI Loan: Assumable Valuation Price $3,004,600 Balance: $1,540,000 Rate: 4.0% Cap Rate 6.50% Net Operating Income $195,300 Amortization: 30 year COLLIERS INTERNATIONAL P. 4

5 SITE PLAN '-0" (2) SPACES AT 9'-0"=18'-0" 9'-2" '-0" (5) SPACES AT 9'-6"=47'-6" '-0" 4'-2" 6'-2" 45'-10" 5'-0" 6'-0" 8'-0" 8'-0" (9) SPACES AT 9'-0"=81'-0" 14' " '-4" 12'-8" 2'-4" 105'-0" 10'-0" ' " SD1.2 THIS DRAWING CONTAINS INFORMATION WHICH IS THE PROPRIETARY PROPERTY OF ALC ARCHITECTURE. NO UNAUTHORIZED REUSE OR DUPLICATION OF THESE PLANS OR ANY INFORMATION CONTAINED HEREIN, WITHOUT THE EXPRESS WRITTEN CONSENT OF ALC ARCHITECTURE. State Street THIS Mattress DRAWING IS NOT TO Firm BE USED FOR CONSTRUCTION OFFERING UNTIL IT IS SIGNED MEMORANDUM BY THE ARCHITECT. COPYRIGHT SITE PLAN SCALE: 1" = 10'-0" COLLIERS INTERNATIONAL P. 5

6 LOCATION COLLIERS INTERNATIONAL P. 6

7 TENANT PROFILE The company set out to be a different kind of mattress retailer; focused on creating a unique shopping experience for the customer with a large selection of quality, brand name bedding products, competitive pricing and knowledgeable, well-trained associates. Over the next several years, Mattress Firm grew to new heights, with the addition of corporate owned and franchise owned stores. By 2002, the company owned and operated approximately 250 locations across the United States and was considered the secondlargest independent retailer in the country. Mattress Firm soon introduced a new store design, opened several new Super-Centers offering a greater selection from top bedding manufacturers, introduced same-day Red Carpet delivery and created the Firm Network, a unique in-store television network featuring programming to educate consumers about sleep and the guidance for selecting the right mattress for their personal needs. Whether the customer has snoring problems, backaches or just trouble falling asleep, Mattress Firm now had more options to provide sleep solutions for their customers. As new research emerged showing the link between proper sleep and good health, Mattress Firm responded to the growing demand for specialty mattresses by expanding its non-innerspring product selection to include memory foam mattress sets such as Tempur- Pedic products. With more than 3,500 company-operated and franchised stores across 48 states, Mattress Firm Holding Corp. (NASDAQ: MFRM) has the largest geographic footprint in the United States among multi-brand mattress retailers. Founded in 1986, Houston-based MFRM is the nation s leading specialty bedding retailer with over $3.5 billion in pro forma sales in MFRM, through its brands including Mattress Firm, Sleepy s and Sleep Train, offers a broad selection of both traditional and specialty mattresses, bedding accessories and other related products from leading manufacturers, including Serta, Simmons, Tempur-Pedic, Sealy, Stearns & Foster, King Coil and Hampton & Rhodes. Mattress Firm... Save Money. Sleep Happy. COLLIERS INTERNATIONAL P. 7

8 DEMOGRAPHICS 1 Mile 3 Miles 5 Miles POPULATION 2016 Estimated Population 10,086 61, , Projected Population 10,678 65, , Census Population 9,078 57, , Census Population 8,876 58, ,332 Projected Annual Growth 2016 to % 1.1% 1.6% HOUSEHOLD 2016 Estimated Households 4,541 25,704 68, Projected Households 5,016 28,265 75, Census Households 4,019 23,654 61, Census Households 3,588 21,716 52,126 INCOME 2016 Est. Average Household Income $65,602 $71,655 $74, Est. Median Household Income $50,014 $57,288 $59,690 MISC Est. Median Home Value $186,436 $188,165 $205, Est. Median Rent $708 $684 $ Est. Labor Pop. Over 16 Years 8,399 50, , Est. Total Housing Units 4,705 26,503 70, Est. Total Household Expenditure $239 M $272 M $735 M COLLIERS INTERNATIONAL P. 8

9 AREA OVERVIEW The Boise Valley is strategically located in the Mountain Time Zone in Southwestern Idaho, providing easy non-stop access to all major cities on the West Coast, the Pacific Northwest and the Intermountain West. Of the West s major metropolitan areas, 12 are within 800 miles of the Boise Valley. The Boise Airport (BOI) is located less than five miles from downtown Boise and handles more than three million travelers each year. # 1Lowest Cost Metro in the Pacific U.S. April 2016 Most Caring City in America December 2015 Best Cities to Live November 2015 Top 100 Best Place to Live September 2015 TOP 10 Best Place to Live in March 2016 Best Air Quality April 2016 Hottest Housing Markets of January 2016 #2 in Up-And-Coming Cities for Recent College Grads June 2015 COLLIERS INTERNATIONAL P. 9

10 AREA OVERVIEW Quality of Life Referred to as the Treasure Valley, the region is home to about 675,000 people. The workforce of roughly 330,000, live within a 45-minute draw area. Known for its extraordinary quality of life and affordable cost of living (currently one of the lowest in the western states, according to the ACCRA Cost of Living Index), the Treasure Valley is consistently ranked by Forbes, The Wall Street Journal, Livability and Inc. Magazine as one of the best places in the U.S. to live and work. Commuting in the Valley The major interstate serving the Treasure Valley is I-84, running through the metro area s major cities (Boise, Meridian, Nampa and Caldwell). Branching off to the northeast is I-184, which runs into downtown Boise. Daily commutes are easy, with several U.S. and state highways providing direct routes and minimal traffic. The average commute time is only 18 minutes. Public transportation is handled by ValleyRide, Treasure Valley Transit and ACHD Commuteride. What about logistics? There are 50 motor freight companies traveling 5 interstates, 20 U.S. highways and 30 state highways that serve the Boise Valley. More than 1,600 miles of rail line through Union Pacific and Burlington Northern Santa Fe provide connection points to Canada, Mexico and the U.S. They are aided by the state s regional line and 6 short line railroads. Annually, the rail system transports over 11 million tons of freight. COLLIERS INTERNATIONAL P. 10

11 AREA OVERVIEW Vibrant Communities Minutes from rivers, lakes and mountains, the Boise Valley is open 24/7 for any type of outdoor adventure. Recreation Diversity Located 17 minutes from downtown Boise, the Bogus Basin Ski Area offers day and lighted night skiing. The Boise River runs through downtown and is accessible through a greenbelt system with over 25 miles of bike paths and 850 acres of parks. With worldclass golf courses, hiking, fishing and mountain biking, the recreation opportunities are virtually unlimited within a 30-minute drive. While Idaho may not be known for diversity, more than 90 different languages are spoken in the Boise School District. The Boise Valley is home to one of the oldest synagogues in the western United States. Over 800 new citizens (refugees) are welcomed to the Boise Valley each year from over 20 foreign countries. The City of Boise has been recognized for its work helping these new citizens acclimate to their new country and helps other communities around the country with their programs. There are more than 24 language courses available through local universities and community education programs and an international baccalaureate program is available. Annual diversity events and resources include the Soul Food Extravaganza, PRIDE activities, Hispanic Cultural Center and the Black History Museum. The Mexican Consulate also has an office in Boise. COLLIERS INTERNATIONAL P. 11

12 AREA OVERVIEW IDAHO TAX OVERVIEW Sales and Use Tax in Idaho is 6%. This would apply to items purchased or consumed in Idaho. Exemptions are available for equipment and raw materials used directly in manufacturing, processing, or fabrication; clean rooms used in semiconductor and semiconductor equipment manufacturing; and any equipment or material used in research and development activities. We do not tax services including telecommunication services, and utilities such as water, gas, electricity, or natural gas. In our region we do not have any local option sales tax. Property Tax personal (machinery/equipment) and real (land/ buildings) based on market value Rates: Ada County Average Range: 1.1% - 1.8% Canyon County Average Range: 1.5% - 2.5% Elmore County Average rate: 1.8% Idaho does not have an inventory tax. Corporate Income Tax Computed at 7.4% of the Idaho taxable income of a corporation. Corporations that are taxable in Idaho and another state or country or are part of a unitary group of corporations, use a 3 factor formula to ascertain how much of the business is conducted in Idaho. The apportionment formula is made up of a property factor, a payroll factor, and a sales factor. These three factors, with the sales factor being double weighted for all taxpayers except for electrical and telephone companies, are totaled and divided by 4 to compute the Idaho apportionment factor. The Idaho apportionment factor is then applied to the business income of the corporation to compute income assigned to Idaho. Non-business income allocable to Idaho is added to the income apportioned to Idaho to arrive at Idaho taxable income. CORPORATE MINIMUM 7% INCOME TAX $7.25/hr WAGE SALES & 6% USE TAX STATE UNEMPLOYMENT 1.91% INSURANCE RATE #2 BEST STATE Property tax rate (2013 Tax Foundation Study) UNION MEMBERSHIP 7.1% (NAT L AVG: 11.9%) 1.6%-7.8% PERSONAL INCOME TAX RATE RANGE Rate range on a bracketed system based on income levels PROPERTY EXEMPTION First $100,000 of personal property is exempt from taxation IDAHO IS A right to work STATE COLLIERS INTERNATIONAL P. 12

13 CLAY ANDERSON, MBA, CPA MIKE CHRISTENSEN Colliers International Boise 755 W Front Street, Suite 300 Boise, Idaho This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s) All rights reserved