Staples ONTARIO, OR OFFERING MEMORANDUM

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1 OFFERING MEMORANDUM

2 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. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

3 NET LEASED DISCLAIMER 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.

4 TABLE OF CONTENTS Section 1 PRICING AND FINANCIAL ANALYSIS Section 2 PROPERTY DESCRIPTION Section 3 DEMOGRAPHIC ANALYSIS

5 PRICING AND FINANCIAL ANALYSIS Staples

6 PRICING AND FINANCIAL ANALYSIS TENANT OVERVIEW Property Name Staples Property Address 125 SE 13th ST Ontario, OR Property Type Net Leased Office Supply Rentable Square Feet 24,050 Tenant Trade Name Ownership Tenant Sales Volume Net Worth Lease Guarantor Credit Rating Rating Agency Stock Symbol Staples Public Corporate Store $24.38 Billion $12.28 Billion Corporate Guarantee BBB- Standard & Poors SPLS Lease Commencement Date Rent Commencement Date Lease Expiration Date Term Remaining on Lease 2 Years Lease Type Double Net Roof and Structure Landlord Responsible Lease Term 15 Years Year 1 Net Operating Income $222,463 Increases In Option Periods Options to Renew Options to Terminate Options to Purchase First Right of Refusal Two 5-Year Options No No No No. of Locations Headquartered Web Site Franchisee Profile Years in the Business Other Concepts Owned 2,281 Worldwide Framingham, MA Years N/A This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 1

7 PRICING AND FINANCIAL ANALYSIS FINANCIAL OVERVIEW Location 125 SE 13th ST Ontario, OR Price $2,600,000 Down Payment 30% / $780,000 Rentable Square Feet 24,050 Price/SF $ CAP Rate 8.56% Year Built 1998 Lot Size Type of Ownership 82,012 SF Fee Simple Annualized Operating Data Rent Increases Annual Rent Monthly Rent Option 1: April 1, 2019 $244, $20, Option 2: April 1, 2024 $269, $22, Base Rent ($9.25/SF) $222,463 Net Operating Income $222,463 Capital Reserves $4,810 Net Cash Flow Before Debt Service $217,653 Debt Service $140,933 Debt Coverage Ratio 1.58 Net Cash Flow After Debt Service 9.84% / $76,720 Principal Reduction $41,424 Total Return 15.15% / $118,144 Tenant Summary Tenant Trade Name Ownership Tenant Lease Guarantor Lease Type Roof and Structure Lease Term Staples Public Corporate Store Corporate Guarantee Double Net Landlord Responsible 15 Years Lease Commencement Date Rent Commencement Date Lease Expiration Date Term Remaining on Lease Increases Options 2 Years In Option Periods Two 5-Year Options Financing FIRST TRUST DEED Loan Amount $1,820,000 Loan Type Proposed New Interest Rate 5.0% Amortization 25 Years Loan information is time sensitive and subject to change. Contact your local Marcus & Millichap Capital Corporation representative. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 2

8 PRICING AND FINANCIAL ANALYSIS FINANCING Existing Financing Loan Type Free and Clear Proposed Financing FIRST TRUST DEED Loan Amount $1,820,000 Loan Type Proposed New Interest Rate 5.0% Amortization 25 Years Debt Coverage Ratio 1.58 This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 3

9 PROPERTY DESCRIPTION Staples

10 PROPERTY DESCRIPTION INVESTMENT OVERVIEW Sale Price: $2,600,000 Cap Rate: 8.56% Current Mo. Rent: $18,539 Lease Type: Double Net Remaining Lease Term: 2 Years Options: Two 5-Year Investment Highlights Established Staples Location Below Market Rent New Winco Development One Block Away Great Visibility from Interstate 84 New Roof in 2015 Only National Office Supply Chain in the Market About the Investment The subject property is a free standing 24,050 square foot Staples in Ontario, Oregon. Staples currently has a "BBB-" credit rating from Standard & Poors. Staples has two years remaining on a 5-Year option that they executed in Staples has great visibility from Interstate 84 and is located in the main retail hub of Ontario. Other nationally recognized retailers in the area include Walmart, Home Depot, Walgreens, K-Mart, McDonalds, Verizon, Dollar Tree, Aaron's, and Chevron. Ontario continues to attract national and regional retailers who benefit from not only the Ontario community but shoppers from nearby Idaho communities who want to take advantage of the lack of sales tax in Oregon. Ontario is the largest city in Eastern Oregon and lies right on Idaho and Oregon border. It is the closest city to the Idaho border along Interstate 84 and is halfway between Portland and Salt Lake City. The region's primary industry is the cultivation of potatoes, beets, and onions. However, in recent years Ontario has seen a strong growing retail-based economy. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 5

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12 PROPERTY DESCRIPTION PROPERTY PHOTOS This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 6

13 PROPERTY DESCRIPTION AREA MAPS Local Map Regional Map This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 7

14 DEMOGRAPHIC ANALYSIS Staples

15 DEMOGRAPHIC ANALYSIS DEMOGRAPHIC REPORT 1 Mile 3 Miles 5 Miles 2000 Population 2,901 17,855 27, Population 2,894 19,026 29, Population 2,854 18,908 29, Population 2,867 19,293 29, Households 912 6,541 10, Households 942 7,039 10, Households 934 7,023 10, Households 941 7,201 11, Average Household Size Daytime Population 3,544 8,525 11, Owner Occupied Housing Units 42.08% 56.76% 60.12% 2000 Renter Occupied Housing Units 45.86% 35.00% 32.24% 2000 Vacant 12.06% 8.23% 7.64% 2014 Owner Occupied Housing Units 50.20% 60.02% 61.69% 2014 Renter Occupied Housing Units 49.80% 39.98% 38.31% 2014 Vacant 10.07% 8.45% 8.39% 2019 Owner Occupied Housing Units 50.56% 60.21% 61.76% 2019 Renter Occupied Housing Units 49.44% 39.79% 38.24% 2019 Vacant 9.80% 8.45% 8.45% $ 0 - $14, % 22.1% 20.1% $ 15,000 - $24, % 14.7% 15.2% $ 25,000 - $34, % 12.9% 12.8% $ 35,000 - $49, % 15.2% 15.8% $ 50,000 - $74, % 17.4% 19.6% $ 75,000 - $99, % 8.8% 8.3% $100,000 - $124, % 4.5% 4.0% $125,000 - $149, % 1.8% 1.8% $150,000 - $199, % 1.4% 1.5% $200,000 - $249, % 0.5% 0.4% $250, % 0.7% 0.7% 2014 Median Household Income $27,773 $35,212 $37, Per Capita Income $12,307 $18,258 $18, Average Household Income $37,413 $48,579 $48,719 Demographic data 2012 by Experian. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 9

16 DEMOGRAPHIC ANALYSIS SUMMARY REPORT Geography: 5 miles Population In 2014, the population in your selected geography is 29,121. The population has changed by 4.04% since It is estimated that the population in your area will be 29,631 five years from now, which represents a change of 1.75% from the current year. The current population is 48.66% male and 51.33% female. The median age of the population in your area is 35.4, compare this to the Entire US average which is The population density in your area is people per square mile. Households There are currently 10,859 households in your selected geography. The number of households has changed by 6.20% since It is estimated that the number of households in your area will be 11,117 five years from now, which represents a change of 2.37% from the current year. The average household size in your area is 2.65 persons. Income In 2014, the median household income for your selected geography is $37,112, compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 18.46% since It is estimated that the median household income in your area will be $45,522 five years from now, which represents a change of 22.66% from the current year. The current year per capita income in your area is $18,356, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $48,719, compare this to the Entire US average which is $74,533. Race & Ethnicity The current year racial makeup of your selected area is as follows: 78.55% White, 0.51% Black, 0.11% Native American and 1.53% Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander. People of Hispanic origin are counted independently of race. People of Hispanic origin make up 29.23% of the current year population in your selected area. Compare this to the Entire US average of 17.13%. Housing In 2000, there were 6,656 owner occupied housing units in your area and there were 3,569 renter occupied housing units in your area. The median rent at the time was $400. Employment In 2014, there are 11,467 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 46.77% of employees are employed in white-collar occupations in this geography, and 53.26% are employed in blue-collar occupations. In 2014, unemployment in this area is 8.65%. In 2000, the average time traveled to work was 17.6 minutes. Demographic data 2012 by Experian. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Seattle, Inc Marcus & Millichap. All rights reserved. 10

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